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The single best idea is to learn the Bloomberg terminal with a dollar dynamics of the last twenty four hours. I was visualizing in my head way too early in the morning a chart of gold back on teen years. I want to walk through it. I think it's so important. The pros talk about standard deviation. The single best idea is to try to understand central limit theorem and the idea of percent change and how you gauge that looking at the past data. And one way we do this
to keep it short is standard deviation. One standard deviation is no big deal. Two standard deviations in the realm of okay, it's going to happen. And three standard deviations as a general statement indicates stress. If you take goal analgarithmic y axis back twenty years, twenty four years I think I did, and you plot it out. We are at two standard deviations right now with gold at fifty
three hundred, where is three standard deviations? Seven thousand, four hundred is a quick estimate, not to the dollar, but in the vicinity of seven thousand, four hundred is where I would suggest the recent two decades of gold indicates a stress. We talked about the stress today with win Thin. He's at the Bank of Nasau, Doctor Thin, iconic out of Columbia. With all of us work over the years under Robert Mandel and in the academics of his specific rim and Burma win Thin on this dollar moment.
Professor Mindel was a brilliant economist and I think any international economist should read his works today. It's still to me groundbreaking. He introduced whole idea of capital flows before capa flows.
Actually, is Donald Trump aware of the capitol flow risk when he says weak dollar?
Well, right now, they're having this sort of in this ott sweet spot where they're getting you know, they're getting weaker dollar without the spillover into other markets. But you know, we've seen time and time again in both development and immerging markets. You know the times when these moves get very disorderly, it's hard to get that genie back in the bottle.
That really well said. And of course one way to look at this is again to go to the Bloomberg terminal and I took dollar yen. Dollar yen has come in. It's a stronger yen. It's basically one sixty two down to one fifty two fifty three stronger yen fine, where does the end become ever stronger? And there's any number of interpretations of this, but to my quick eyeball in math too early in the morning, we have a way to go to get the real strong yen stress and
I would vary, I'm just making this real rough. It's like ten below from a one to fifty two to under one strong in week dollar. Basically, we're not there. And that's the idea of that the genies out of the bottle is maybe that where we're heading the genie will be rubbed at the FED today. It'll be an interesting day, to say the least constant hunter of EIU. On this moment.
For Jerome, PA, we're seeing elevated goods prices where goods prices had been zero to slightly negative for quite some time, because of course we have increased productivity in that sector of the economy. We obviously have China exporting disinflation or deflation to the rest of the world by their extraordinary supply that they provide, and the tariffs upended that, so something that was not contributing to higher inflation was actually contributing to lower inflation has gone away constants.
Under there in the separation between services and goods. Of course we'll do our fed covers a s afternoon we leave the Torsten Slock his essay today and pro productivity important on podcasts on Apple and Spotify, on YouTube podcasts. It's single best idea