Risk Ratio Indicating More Correction Coming [View article]
Nice article.
Your directional bias squares with that of Ed Yardeni who has observed a tight correlation between oil prices and the CRB index and believes the correction has further to go, though his latest data does not suggest, at the moment, a major collapse.
Today's correction came on the back of disappointing data out of China later followed by statements that China would take steps to encourage growth. Being oversold, and after parsing the meaningless noise from the G8 meeting to mean an end to "austerity", that's all the markets needed to correct upwards.
Of course structural problems remain within both the EMU and China, and much time will be required before either sets of problems can be resolved against a backdrop of slowing global growth.
Collapsing confidence, civil unrest, anemic growth, massive sovereign debt, a fraudulent CPI, desperate monetary policy, artificially low interest rates, lack of capital formation, a depreciating dollar and the threat of higher interest rates. To this tableau I would add intractable deficits, slowing global growth and imported inflation through higher material and commodity prices effected by the Fed and QE beneficiaries seeking higher yields in equities, emerging markets and commodities. I don't know how this will play out but I'm inclined to believe the debt crisis in Europe and stagnating economic growth will be the catalysts for larger adjustments in whatever forms they might take.
But, I know one thing: the governments around the world have an insatiable addiction to debt and spending and too little concern about growing their supply of paper money in circulation. Nothing has changed in this respect for centuries -- since before there was paper money in widespread. And, governments get to pay those debts off with cheaper paper money in the future if they allow inflation to run amok like a herd of bulls in a China shop. Governments don't want to hold their own currencies or that of any other country. They want to hold gold....at least those with holdings. ______________________...
Central banks in India, Russia and China were among those boosting their gold reserves last year; central banks now possess 18 percent of all gold ever mined.
Assuming central banks are not among those who stockpile ammunition and canned goods in preparation of an imminent revolution, then it can only be concluded that these banks and others view gold as a substitute currency and a store of value.
With widespread debasement of currency and the possibility of deflation followed by inflation, why not hold gold? As currencies lose value, gold increases in value; and gold does well during deflation and really shines during inflation.
While may be said to be a barbarous relic, it holds more value than debauched fiat currencies.
Richard Russell: Avoid Stocks - Except Gold Miners [View article]
Charles Nenner, an Amsterdam-trained ex-physician, ex-Goldman Sachs analyst and mathematician now based in Tel Aviv speaks seven languages and tracks dozens of markets and economies for clients to determine cycles in any instrument or activity for which there is sufficient data. He believes the financial system is stilll very vulnerable, the economy will weaken, the market will re-test the lows of March 09 and that investors should look to gold and commodities essential to living.
Greek Crisis: Who Is Really Being Bailed Out? [View article]
Doubtless, German and French banks will benefit from a Greek bailout as will all others that hold Greek bonds or debt.
In my eyes, though the primary driver behind this rescue effort is the EU and the ruling commission.
The leaders of the eurozone have a vested interest in continuation of the EU and defaullt of a member state would create a fissure within the community and reinforce doubts about the economic purposes of the zone and its structural viability.
Risk Ratio Indicating More Correction Coming [View article]
Your directional bias squares with that of Ed Yardeni who has observed a tight correlation between oil prices and the CRB index and believes the correction has further to go, though his latest data does not suggest, at the moment, a major collapse.
Today's correction came on the back of disappointing data out of China later followed by statements that China would take steps to encourage growth. Being oversold, and after parsing the meaningless noise from the G8 meeting to mean an end to "austerity", that's all the markets needed to correct upwards.
Of course structural problems remain within both the EMU and China, and much time will be required before either sets of problems can be resolved against a backdrop of slowing global growth.
Things Are About To Get Much Worse [View article]
The Gold Debate Rages On [View article]
______________________...
Central banks in India, Russia and China were among those boosting their gold reserves last year; central banks now possess 18 percent of all gold ever mined.
Assuming central banks are not among those who stockpile ammunition and canned goods in preparation of an imminent revolution, then it can only be concluded that these banks and others view gold as a substitute currency and a store of value.
With widespread debasement of currency and the possibility of deflation followed by inflation, why not hold gold? As currencies lose value, gold increases in value; and gold does well during deflation and really shines during inflation.
While may be said to be a barbarous relic, it holds more value than debauched fiat currencies.
Richard Russell: Avoid Stocks - Except Gold Miners [View article]
Greek Crisis: Who Is Really Being Bailed Out? [View article]
In my eyes, though the primary driver behind this rescue effort is the EU and the ruling commission.
The leaders of the eurozone have a vested interest in continuation of the EU and defaullt of a member state would create a fissure within the community and reinforce doubts about the economic purposes of the zone and its structural viability.
Thursday Outlook: Commodities, Emerging Markets [View article]