Things changed a lot in the past two weeks. The US Fed’s promises to keep tightening financial conditions look a lot shakier than they did at the start of the month, thanks to a series of weak economic readings in the US.

I still think we need to be wary of central bankers but with bond yields softening again and plenty of money flows into the major markets things look less dangerous than they did in June. Not safe, mind you. Overvaluation is and will continue to be a problem. Overvalued, complacent markets are always in greater danger of a larger fall but I don’t see a near term catalyst for one.

The other big change in the past two weeks is that gold prices appear to have found another bottom. As I note in the editorial, the technical set up of the gold market is as favourable as it has been at any time since late 2015. That set up led to some very good times in the resource space. While it’s too early to tell if we’ll get a literal repeat, the odds of a good run through the second half of the summer look much better. That is as much as we could hope for heading into the heaviest reporting season of the year for exploration results. Companies that don’t disappoint with the drill should get some traction under these conditions.

I’ll continue to provide more frequent but also shorter editions through the next couple of months.

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In the last issue, I made the case that central banker’s real target these days is asset markets. They’re mumbling about inflation targets and getting laughed off by traders. Its clear markets are intent on pushing the envelop. Bullish sentiment is too high for traders to back off. They are going to call the central bank bluff.  How well and how long that works depends on how intent central bankers really are.

This isn’t the first time we’ve seen this. There are famous past episodes of central bankers wagging their fingers and telling traders to settle down, sounding a bit like a testy grade three teacher.

Remember Alan Greenspan’s famous “irrational exuberance” comment back in the 1990s? These lectures usually work about as well as a teacher telling a group of sugar rushed eight-year-olds to hush. The current US Fed chair is, if anything, having even less impact than Greenspan did 20 years ago.

Recent events and data make me even more convinced that central bankers, and the US Fed in particular, are terrified by markets they are convinced will end badly.

The latest inflation data shows—again– that the “transitory” low inflation ain’t so temporary. Maybe that reading came as a surprise (again) to FOMC members and other central bankers. That’s not a comforting thought. It certainly doesn’t reflect well on their forecasting abilities if it did.