Economic Blogs

The Global Growth Funk

RGE Analysts' EconoMonitor - Mon, 02/05/2016 - 20:24
photo: International Monetary Fund NEW YORK – The International Monetary Fund and others have recently revised downward their forecasts for global growth – yet again. Little wonder: The world economy has few bright spots – and many that are dimming rapidly. Among advanced economies, the United States has just experienced two quarters of growth averaging 1%. […]
Categories: Economic Blogs

Iran’s Economy After the Sanctions Deal: Why the New US Hurdles?

RGE Analysts' EconoMonitor - Mon, 02/05/2016 - 20:24
photo: Nicolas Raymond Today, the Iran nuclear deal is effective. Yet, Iran’s efforts to attract foreign investment and accelerate growth and prosperity face new hurdles, which seem to reflect Washington’s efforts to dent the agreement. Last January, the nuclear agreement between, Iran and the five permanent members of the UN Security Council (US, China, France, Russia, […]
Categories: Economic Blogs

Our Left Arm was Covered with Bruises and Blood

The Daily Reckoning - Mon, 02/05/2016 - 19:58

This post Our Left Arm was Covered with Bruises and Blood appeared first on Daily Reckoning.

GUALFIN, Argentina – “What happened to you?”

Elizabeth noticed that our left arm was covered with bruises and blood.

“I don’t know. It could have come from working with the cows… or from when I rode the horse into quicksand.”

By the time you read this, later today, we’ll be on our way back to civilization, or at least to France. We drive back to Salta… fly to Buenos Aires… and then to Paris.

This year, we could only spend a few short weeks at the ranch. Our visit was squeezed in between various obligations – weddings, business meetings, and a college graduation.

But while we’re traveling, today and tomorrow, we’ll close the series on life at the ranch with a quick memoire of our last days.

Steer Clear of the Deep, Dark Sand

We rode out at dawn on Friday, accompanied by Jorge (our now-retired ranch foreman) and Elizabeth. The temperature was below zero. But the sun was shining, with no wind.

As long as we were in the sun, we were warm enough. But as soon as we entered the canyon leading to the north, a glacial cold fell upon us.

The glacially cold canyon leading north.
Photo credit: Elizabeth Bonner

Jorge and Elizabeth wisely wore heavy coats. We had just a couple of sweaters.

The purpose of this outing was to visit our closest neighbors – whose farm abuts ours on the northern side.

We had never seen their farm, nor the valley it is in. The reason for this ignorance is that a large mountain, El Colorado, stands between us. The only way to get there (other than driving for four hours) is on horse or on foot, following the river through the canyon cut by the river.

Don Bill ready to ride. Photo credit: Elizabeth Bonner

Our ranch has two rivers. Both are dry. So, this seemed like a good opportunity to follow the dry river bed through the canyon to the adjoining property, said to be about a three-hour ride.

Jorge was to be our guide, by virtue of the fact he had been there 45 years ago and said he wanted to go with us.

We would ride over together. Then, someone would meet us on the other side, in a truck, and take Jorge back to the city. We’d return to the ranch with the horses the way we came.

The ride through the canyon took about an hour.

We picked our way over rocks and around sand banks. Water appeared in the river as soon as we entered the canyon, a trickle at first, and later a full-flowing river about eight feet wide with about a foot of water.

This was the same river that was dry on our side of the mountain. The water must have gone underground on one side of our property and come up in the canyon.

That it should give us the slip like that hardly seemed fair, but there was no one to complain to.

On each side, red rocks rose hundreds of feet… in some places, sharp pieces of rock bristled from the side of the hill… in other places, huge boulders were worn smooth by wind and water. Like clouds, you could see what you wanted in the extravagant shapes – castles, towers, caverns, ships, planes… icebergs of red rock.

It reminded us of the Canyon de Chelly in Arizona, but smaller, tighter, and shorter. In places, it might have been about 100 feet wide… in others, the horses had to go single file.

We followed the river. The horses’ iron shoes slipped and clipped on the stones… or splashed in the water. At one point, Jorge turned to point to a patch of dark, wet sand and motioned us to stay clear of it. We obeyed… but saw nothing different about it from the miles of wet sand we had rode over already.

Finally, the canyon walls became more like hills…. and the river entered a large valley, with a dry ridge running down the middle and a much bigger mountain on the far side. It was watered by the confluence of two rivers, in addition to the one we followed to get there. And where there is water, there are fields, pastures, and people.

Grapes, Walnuts, and Alfalfa

Our horses stepped over a toma, where the river was blocked so the water could be diverted into a large irrigation canal.

To the left was a dirt road, and a pick-up truck parked nearby, under an algarrobo tree.

Soon, we saw a field of grapevines. A little further on, another was planted with walnut trees.

There were adobe houses… some of them handsomely positioned in a grove of walnut trees or on the edge of a vineyard. A few fields appeared to be abandoned. They hadn’t been irrigated or planted. And there were several large, green fields of alfalfa.

Jorge’s eyes lit up. Green alfalfa!

Jorge is a cattleman. Alfalfa is to a cattlemen like an all-girls’ college is to a sex maniac; once he’s seen it he can’t get his mind off of it.

Our alfalfa at the ranch is drying up and turning brown. We are out of water, so we will have to buy big rolls of the stuff – at about $50 a roll – from a friend in Molinos, an hour and a half away.

We estimated that there were about 50 acres covered with alfalfa. That’s a lot of $50 bills.

More to come… tomorrow.

Regards,

Bill Bonner
for Bonner and Partners

P.S. “A charmingly mordant take on the stock news of the day, accentuated by philosophical maunderings…” That’s how one leading financial magazine described the free daily email edition of The Daily Reckoning. You’ll find cutting-edge analysis from the complex worlds of finance, politics and culture. Presented in an entertaining style few can match. Click here now to sign up for FREE.

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Categories: Economic Blogs

A Currency War Battle That Europe and Japan Can’t Afford To Lose

Dollar Collapse Articles by John Rubino - Mon, 02/05/2016 - 17:47
The dollar is tanking lately. From a high of around 100 in December, the dollar index — which measures USD against a basket of foreign currencies — is down about 8%, and the decline is steepening. In counterintuitive currency war terms, that means the US is winning the latest battle. After three years of the […]
Categories: Economic Blogs

Gold Leaves $1,250 in the Rear View Mirror

The Daily Reckoning - Mon, 02/05/2016 - 16:23

This post Gold Leaves $1,250 in the Rear View Mirror appeared first on Daily Reckoning.

And now… today’s Pfennig for your thoughts…

Good day, and a marvelous Monday to you!

Well, today is starting out slow, as most of Asia, and Pan Asia is closed for holidays, as is a lot of Europe, as they still celebrate May Day, which fell on a Sunday, so naturally, they take Monday off. And I don’t believe that things in the U.S . will get hopping wild today either, unless the ISM Manufacturing Index which is scheduled to print, has a rabbit in its hat…

There are a ton of Central Bankers globally, out on the speaking circuit, headlined by the European Central Bank (ECB) President, Mario Draghi, who is probably going to throw the euro under the bus, as the currency trades nearer the 1.15 handle than it does the 1.14 handle this morning. There are a couple Fed members that will speak, and it will be interesting to see if they sing from the same song sheet. Historically, they don’t, but maybe this time they can share the same song sheet.

The Reserve Bank of Australia (RBA) meets late this afternoon, (tomorrow morning for them) and the latest poll of economists have 45% of them thinking that the RBA will go ahead and get this last rate cut out of the way at this meeting.  With the call very close to 50/50 for a rate cut or not, I’m still of the thought that the RBA would be prudent here, and wait to see if the latest inflation report was just a rogue report before cutting rates again. The A$ traders don’t seem to be on the same page as the economists, for they have pushed the A$ higher this morning ahead of the RBA meeting. You don’t see that every day!

Once again the Japan yen is stronger this morning that it was on Friday morning, and overnight a Bank of Japan (BOJ)  official (Aso) noted that he was concerned with the strong move of the yen. In the “old days” of currency trading, this kind of talk would be a precursor to intervention by the BOJ, but not any longer, the BOJ was handed their playbook at the Shanghai G20 meeting, and all the now have at their disposal to slowdown this move by yen traders is their mouths. And I don’t think the markets are concerned with what comes out of the mouths of the BOJ members. The Mighty Puff ceased his roar.

Gold has really pushed past $1,250, and the figure now appears to be in gold’s rear view mirror. It sure took a few frustrating times before finally moving past $1,250 for good. Not that I’m complaining. Much. And what really surprises me with this move is that it comes when the physical gold demand has backed off its previous strength. Not that it has dried up or anything like that, but demand backs off and the price of gold soars.

Hmmm… now, that’s a new one on me! But I’m not going to question the move, or sit here and tell you that it shouldn’t be happening, because all the time that physical demand was soaring, gold lingered and even lost ground, so that too was confusing to me! So, this makes up for the last four years of watching physical demand soar, but gold falter.

The Big data print this week will be the Jobs Jamboree on Friday. Right now, the experts are thinking that the job creation for April will remain around 200,000 to 215,000. I don’t get involved in the guessing what the number will be any longer, because I could never get my arms around the adjustments that the BLS would make to their surveys.

I’ll mention this once again, but why do the markets get all lathered up over “surveys” that the people that run the “surveys” then have to apply adjustments to? Seems all convoluted to me. Why wouldn’t we as a country use tax returns as a means of computing our total employment? Ok, that’s a discussion for some other day. But for this week, we’re stuck with the Jobs Jamboree as presented by the BLS on Friday.

As usual, China printed data on the weekend. They love to do this, so that the data can be absorbed by the markets without market movement. I don’t agree with this method, but I don’t think they care.

The Chinese printed their April PMI (manufacturing index) and for the second consecutive month, the index printed above 50 at 50.3, after a 50.2 print in March. I would say this is a stabilization of some degree for the Chinese and could mean that the country would hold off on further stimulus. And for this “stabilization” the renminbi saw depreciation in the overnight fixing. Yes, that’s opposite of what I would think would be the reaction by the Peoples Bank of China (PBOC), but remember, China boosted the renminbi by a large amount last week, and I’m sure they decided to make sure once again, that the markets didn’t think it was going to be a One-Way Street of appreciation.

The Russian ruble is seeing another strong positive move this morning, as the price of oil hasn’t really moved much, but that seems to be a good thing for the Petrol Currencies like the ruble, which doesn’t need any oil price weakness for sure!  The Central Bank of Russia (CBR) has pointed toward the high rate of inflation as a reason they can’t continue to cut rates further from their emergency rate hike levels. I think if the ruble continues to appreciate, that it will help with the inflation problem, and interest rates could get back to near normal, in Russia, which would still be above the majority of rates in the world.

Well, I’ve been reading so much about negative rates lately. There are articles on it everywhere, and of course not all of them are in agreement. But I’ll pin my colors to the mast of analysts like Grant Williams, who believe that while things may not be rotten in Denmark just yet, they will eventually.   

Speaking of Denmark, where rates have been negative for four years now (yes, can you believe it’s been four years of negative rates here?) the private sector is saving more than it did before there were negative rates. Last week, I even played this out for you and said that while most economists thought that negative rates would get people to spend, it was doing the opposite and getting them to save more to make up for the “tax” of negative rates. You have to think about this deeper though, and that’s where I come in!

Stop for a minute to really think about this. If the country you’re living in has decided that negative rates are necessary, wouldn’t you as a citizen of that country think that the sky was falling, and wonder where Chicken Little was? I know I would! And if the sky is falling what do you do as a citizen? Hunker Down, batten down the hatches, and run for cover, right? Now, did you think that the mental giants (NOT!) that come up with the idea for negative rates ever thought about this scenario? NO! They only saw the people pulling their money out of the bank and spending it. Well, that’s not working, and it’s not going to work either!

And sooner or later, these countries, like Denmark, the Eurozone, Switzerland, Sweden, and Japan will realize that negative rates are counter-productive. I shake my head in disgust at these Central Planners that don’t see this a counter-productive.

And when you think about it, the same is happening here in the U.S.  But we don’t have negative rates, Chuck!  OK, technically we don’t have negative rates, but we do have “real negative rates”.  If the Fed Funds rate is 0.50% to .75%  and inflation, using either method you want to use to calculate it is greater than the interest rate then the “real rate is negative”. And again, I think this is what’s happening here in the U.S. as citizens save more to protect future purchasing power.

Well, I already spilled the beans and told you that the U.S. Data Cupboard has the ISM Manufacturing Index today, and I think it will show some slippage from the March rebound. But not much movement, so no real market reaction in my opinion. We’ll also see Construction Spending for March, which seems so long ago to me now. And Fed member Dennis Lockhart will give the first of his two speeches this week today. Tomorrow, Fed member Loretta Mester will speak and this is where I was talking about how we’ll have to see if they sing from the same song sheet.

Well, gold is kicking tail and taking names later once again. I’m surprised at how silver, which had been outperforming gold up to last week, has lagged. But that’s OK, silver is still moving in the right direction, so no need to panic here. Gold is up $11.72 this morning, and has crossed the Rubicon. Gold is above $1,300 this morning, after adding $26 to its price on Friday. A nice day indeed, but as always, it could have been even better if not for some aftermarket selling by the you know whom.

Before I go to the Big Finish, I wanted to share this with you. I have a friend, Sean Hyman, who is a technical guru. He’s asked to speak to groups all over the world, and he shared this thought with me regarding the Dollar Index:

The U.S. Dollar Index is basically at its last rung of support around the 93 level. If it breaks that long-held support….’look out below’.

For 93 has held up every time over the past year and a half, but the technicals are looking weak and the metals are looking strong. So IF we break 93ish and close below it, it’s going to light the next fire under foreign currencies and metals and take them much higher than the rally we’ve seen in these on the mild drop in the dollar thus far.

The dollar index in case you don’t want to wait for the currency roundup is 92.87 this morning. Even a dull tool in the tool box like me, knows that’s below 93. Now it just has to close there.

I was reading Ed Steer’s letter this weekend, and he mentioned an article on ZeroHedge and I just had to go there to see if for myself. You can find the article here, or here is your snippet: 

While the U.S. Treasury’s semi-annual report on the foreign-exchange policies of major U.S. trading partners has traditionally been, pardon the pun, a paper tiger, as the U.S. has not named a single country as a currency manipulator since it did so to China in 1994, and it didn’t go so far as to blame any country as an outright manipulator in the just released April edition, there was a new addition to the latest report.

In an inaugural ‘monitoring list’, the US put five economies including China, Japan and Germany (as well as South Korea and Taiwan) on a new currency watch list, saying that their foreign-exchange practices bear close monitoring to gauge if they provide an unfair trade advantage over America.

This is about as direct a threat to the 3+2 nations not to engage in major currency devaluation whether through QE, NIRP or major interest rate changes as Jack Lew could come up with, and in some ways was to be expected in the aftermath of the G-20 meeting which as we found out this week, precluded any additional QE by the BOJ.

Recall that as part of the most recent G-20 accords, which many believe is what unleashed the steep slide in the dollar, the member nations agreed to refrain from FX intervention absent ‘disorderly markets.’ It also made clear what could push a country from merely the watch list to full blown manipulator status.

Chuck again. Hmmm…  Now I wasn’t trading currencies in 1985 when the Plaza Accord took place, and the dollar was set in motion to weaken for about nine years, but I bet it looked and sounded a lot like this, don’t you?

That’s it for today. I hope you have a marvelous Monday, and be good to yourself!

Regards,

Chuck Butler
for The Daily Pfennig

P.S. Will the Fed raise rates at its next meeting? Is China preparing to shock global markets by devaluing the yuan? You’ll find the answers to these questions and more in the free daily email edition of The Daily Reckoning. In a way you’re sure to find entertaining… even risqué at times. Click here now to sign up for FREE.

The post Gold Leaves $1,250 in the Rear View Mirror appeared first on Daily Reckoning.

Categories: Economic Blogs

The Devil Is Coming to the White House

The Daily Reckoning - Mon, 02/05/2016 - 16:04

This post The Devil Is Coming to the White House appeared first on Daily Reckoning.

At this weekend’s White House Correspondents Dinner, President Obama made a prediction:

“Next year at this time, someone else will be standing here in this very spot, and it’s anyone’s guess who SHE will be.”

You know I’m not a fan of predictions, but he’s probably right.

Considering that more and more Americans support socialism, are looking for “freebies” from the government, and expect someone else to take care of them…

I think Hillary has a fantastic shot at the White House. And then Slick Willy can get back to the intern business.

Oh, and if you thought Obama was bad, just wait until Wall Street’s Devil in Prada assumes control of the Oval Office.

Pathological Liar Extraordinaire

Mark Twain once said: “Politicians and diapers must be changed often, and for the same reason.”

It’s no secret that politicians lie.

It’s what they’re designed to do.

For example, Obama lied about Obamacare when he famously said, “If you like your insurance plan, you can keep your insurance plan.”

Not sure if that beats President Bill Clinton’s now classic, “I did not have sexual relations with that woman, Miss Lewinsky.”​

But it’s pretty close.

Obama also lied when he promised that Obamacare would reduce healthcare premiums by $2,500 per year.

Instead, average premiums have skyrocketed. For some groups, the rate hike has been as much as 78%.

And he lied when he said: “I didn’t raise taxes once.”

Obamacare is jam-packed with more hidden taxes than we can count… or even figure out.

And it’s not just Obamacare.

A few years ago, he said: “We have to turn the page on the bubble and bust mentality that created this mess,” referring to the 2008 financial collapse.

But he knows damn well how that mess was created.

He knows the Federal Reserve is responsible for the bubbles and the busts of the last 15 years.

And if you think he’s bad, just wait until you see Hillary in the White House…

When she gives a speech, the lies come so fast and so furious, I can’t keep track. An encyclopedia of Hillary lies might be a bestseller… or just useful as toilet paper.

Are You Ready for the Deep State’s Candidate?

Look, I think Hillary is a certified crook. From the cattle futures scam in the early days to the $153 million paid to her and Slick Willy over the last 15 years by Wall Street banks, it’s corruption on par with the Sopranos.

What’s really shocking is that she has a real chance at getting to the White House… even though her email scandal should have already put her in prison.

But not so fast…

According to the latest Rasmussen Reports survey, Republican presidential frontrunner Donald Trump and Democratic presidential frontrunner Hillary Clinton are tied nationally.

Is there a glimmer of hope?

At this point, it could go either way.

But Trump isn’t just up against Hillary.

He’s also up against the immensely powerful Deep State.

You see, for the past few decades, it hasn’t really mattered who was in the White House.

Presidents are mere marionettes controlled by the Wall Street bankers, the big corporations and the military industrial complex.

That’s no conspiracy, just fact.

They give orders. Our elected “representatives” obey… then check their bank accounts for their snack money.

This year could be different, though.

Trump is a wild card. Nobody knows if he will take orders from the Deep State. And the powers that be are clearly concerned Trump might take their power levers.

Meanwhile, Hillary is the establishment candidate. Even noted libertarian Charles Koch is touting her. She has been vetted by the Deep State and has amassed a massive fortune for her loyalty.

However, if Trump can unmask her as the crook she is, maybe he’ll have a chance. But it’s going to be a tough fight.

He’s up against a massive amount of vitriol. Have you seen the Trump protest videos? They’re loaded with topless girls screaming expletives, Mexican flag waving and the destruction of police cars. It’s a sad narrative about modern day America.

But don’t get me wrong.

I’m not ruling out Trump.

I’m simply pointing out the system is rigged. It’s likely we’ll just get more of the same in the next eight years.

I’m talking about more lies…

More taxes…

More market manipulations leading to boom and busts…

More government boondoggles, like negative interest rates that will hurt retirees and the middle class.

And there’s nothing you can do to change that.

The best we can do is to have a strategy that can profit from whatever is happening in the markets.

That means we have to be ready for up, down and surprise markets.

No one can predict the election. And no one can predict market direction.

But there are ways to get on the right side of trends… and make some money.

In a crazy world, where common sense has ceased to be common, that’s the best we can do.

Please send your feedback to coveluncensored@agorafinancial.com. Send me your thoughts on the upcoming election… and anything else.

Regards,

Michael Covel
for The Daily Reckoning

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Categories: Economic Blogs

Maximize Your Profits Using These 3 Crucial Candle Patterns

The Daily Reckoning - Mon, 02/05/2016 - 14:36

This post Maximize Your Profits Using These 3 Crucial Candle Patterns appeared first on Daily Reckoning.

Your trades are most profitable when you can pinpoint when a stock will most likely experience a reversal of fortune.

So it pays to know the early signs of a change in trend. And candlestick charts are some of the best market visuals you can use to get advance notice that a trend change is on the way.

We’ve used candlestick analysis to help spot some of our most profitable comeback plays this year. And if you take a few minutes to learn how to read candle charts, I can all but promise you’ll see bigger gains and instantly improve your trading profits.

I know many investors who aren’t familiar with candlestick charts are intimated by the bedlam of lines on the page. But once you understand the basics of candlesticks, you’ll be able to instantly absorb all the relevant information on any candlestick chart. More importantly, you’ll be able to use that information to perfect your buys and sells. And that means siphoning more money out of the markets.

Why use candles instead of a simple line chart? It all comes down to information. On a daily line chart, the closing price is plotted. That’s it. It’s not a problem if you’re only interested in the overall trend. But if you’re planning a trade, you want as much information as possible. That’s where candlesticks come in…

Candlestick charts not only show you the closing price of a given stock—but also its opening price, its high of the day, and its low of the day.

Take a look at this example:

Depending on your charting program, bullish and bearish candles might be different colors—so keep that in mind before venturing off on your own. Typically, candles with green or white real bodies are for bullish days, while red candles signify bearish days.

Now, as you can see, these candles convey a lot of information—even with just a quick glance. So let’s start putting all your newfound basic candle knowledge together. It’s time you learned some unique candlesticks that can help pave the way to fast, double-digit gains.

1. Hammer

A hammer is an important (and popular) reversal candlestick formation. A hammer is formed when a stock takes a huge dive at the open, then recovers and plows higher towards the close. What results is a hammer-like shape with a long lower shadow on the candle. And guess what? That’s bullish…

A hammer means one thing: all the sellers have been flushed out and buyers push the stock higher into the close. And when a hammer occurs at an important support area after a big swoon, you should pay close attention. Looking for hammers is a great way to bottom-fish for a trade on the long side. This is what it looks like when a hammer helps trigger a big run:

Beautiful, ain’t it? But what if a hammer shows itself during a strong uptrend? In this case, you’re looking at an entirely different outcome—and another name for this important reversal candle, as you’re about to find out…

2. Hanging man

Hanging man candles might look like hammers – but these actually have bearish implications.

When you see a hanging man in an uptrend, it’s an indication that the stock in question might be running out of steam.

Yes, a hanging man candle closes well off its lows. But the intraday selloff is a hint that buyers are becoming exhausted.

As you’ve probably already guessed after learning about hanging man and hammer candles, you can’t view these signals in a vacuum. A stock’s overall trend is vital to deciphering a candle’s meaning…

3. Engulfing candles

Sounds awful, right? But it’s another key reversal clue. An engulfing candle can give you strong indication as to when bulls or bears are gaining control to change a trend’s direction

As the name suggests, an engulfing candle’s real body completely engulfs the real body of the previous day’s candle.

Think about what this means. If a stock in a downtrend opens below the previous day’s close, then powers higher all day to close above the previous day’s open, it’s clear that buyers are quickly gaining an upper hand over the sellers. This action can lead to a rapid change in trend—and a chance for you to book fast double-digit gains.

Of course, the same is true for a bearish engulfing candle. If a stock in a strong uptrend experiences a day where it opens higher, then closes below the previous day’s open price, it’s probably a good idea to take profits…

So there you have it—three crucial candle patterns. Hopefully, this quick look into candles has given you a glimpse into the struggle between buyers and sellers and how you can take advantage of sharp reversals in your trading.

We’re just scratching the surface of countless candle formations used by traders around the world. If you’re interested in diving deeper into the candlestick game, I highly recommend Japanese Candlestick Charting Techniques by Steve Nison.

Nison is the man responsible for bringing candlestick charts to the West—and his book is considered by most pros to be the bible of candlestick charting. If you want to improve your trading, it’s well worth your time.

Sincerely,

Greg Guenthner
for The Daily Reckoning

P.S. Make money with charts–sign up for my Rude Awakening e-letter, for FREE, right here. Stop missing out on the next big trend. Click here now to sign up for FREE.

The post Maximize Your Profits Using These 3 Crucial Candle Patterns appeared first on Daily Reckoning.

Categories: Economic Blogs

When the Truth is Found to be Lies, Confidence in Currency Dies

The Market Oracle - Mon, 02/05/2016 - 14:15
In 1967 the Jefferson Airplane sang: “When the truth is found to be lies, And all the joy within you dies…”
Categories: Economic Blogs

How Brexit Could Help All of Europe

The Market Oracle - Mon, 02/05/2016 - 14:11
Ferghane Azihari writes: The United Kingdom (UK) is about to hold a referendum on June 23rd on whether it should leave or remain within the European Union (EU). Once unthinkable, the "Brexit" is becoming more and more plausible. It is seen by the mainstream media as a factor of uncertainty in Europe. For its critics, Brexit would lead to increasing nationalism and protectionism. Nevertheless, those same critics forget the European Union is not a free-trade area.
Categories: Economic Blogs

US House Prices Outpacing Official Inflation Rate, Household Income

The Market Oracle - Mon, 02/05/2016 - 14:07
Ryan McMaken writes: This week, the latest numbers from the S&P/Case-Shiller index showed continued significant home price growth in most of the 20 cities within the survey. The cities with the most growth were found in the Western US and, to a lesser extent, the South:
Categories: Economic Blogs

USD Still Declining...

The Market Oracle - Mon, 02/05/2016 - 13:18
USD is plummeting lower today. This is keeping USD/JPY suppressed, even though the Yen is not rallying at the moment. Bloomberg reports, “After falling for three months, the dollar is set to rebound, if this historical seasonal chart is any guide. The Bloomberg Dollar Spot Index, which tracks the greenback versus 10 peers, has appreciated in May in every year but one since 2007, according to a Bloomberg Seasonality Chart. That’s the best record among the 12 months.
Categories: Economic Blogs

Gold & Silver Rally Huge as Central Bankers & Analysts Flub

The Market Oracle - Mon, 02/05/2016 - 12:11
Welcome to this week’s Market Wrap Podcast, I’m Mike Gleason. Coming up we’ll hear from Frank Holmes, CEO and Chief Investment Officer at U.S. Global Investors and author of the book The Goldwatcher: Demystifying Gold Investing. Frank has a bullish outlook for the metals and comments on what’s ahead for gold and silver after a very strong start to the year. Will we see a pullback as we head into the summer? Hear Frank’s answer to this question and many others, coming up right after this week’s market update. Central bankers took center stage this week as both the U.S. Federal Reserve and Bank of Japan moved markets by NOT moving rates. On Wednesday, the Fed announced that it would refrain from hiking interest rates. Fed officials cited a down tick in some of their economic indicators as the primary reason for standing pat.
Categories: Economic Blogs

Stock Market Bounce Day

The Market Oracle - Mon, 02/05/2016 - 12:06
SPX appears to be completing its bounce today. Today is a Pi date, so the bounce may be over by the end of the day. Once through the 4.5 year trendline, there may be a panic event in stocks. A panic event may take place in as little as 4.3 days (30.1 hours) That may target May 9 as the next Master Cycle low. This is our preliminary target until we see how the decline develops.
Categories: Economic Blogs

Stock Market Uncertainty Following Two-Month Long Rally - Will It Continue?

The Market Oracle - Mon, 02/05/2016 - 12:00
Briefly: In our opinion, no speculative positions are justified. Our intraday outlook is neutral, and our short-term outlook is neutral. Our medium-term outlook remains bearish, as the S&P 500 index extends its lower highs, lower lows sequence: Intraday outlook (next 24 hours): neutral Short-term outlook (next 1-2 weeks): neutral Medium-term outlook (next 1-3 months): bearish Long-term outlook (next year): neutral
Categories: Economic Blogs

Stock Market Correction Underway "Upside Objective Reached"

The Market Oracle - Mon, 02/05/2016 - 10:28
Current Position of the Market SPX Long-term trend: The beginning of a lengthy correction is most likely underway! SPX Intermediate trend: Rally top. Analysis of the short-term trend is done on a daily basis with the help of hourly charts. It is an important adjunct to the analysis of daily and weekly charts which discuss longer market trends.
Categories: Economic Blogs

SILVER: Prospects for the Birth of a New Bull Run

The Market Oracle - Mon, 02/05/2016 - 10:21
The prospect for the birth of a new Bull-Run in Silver speaks to a broader cyclical theme that relates to a dying dollar bull, and a corollary cyclical sentiment shift back toward a strong market preference for tangible vs. paper assets. From its current cyclical low in December of 2015, Silver Bullion has risen 30%. In the broadest of terms, the above referenced theme would suggest the early adoption of a general pair's trade that was short the dollar and long commodities.
Categories: Economic Blogs

USD, Yen and an ‘Inflation Trade’ Update

The Market Oracle - Mon, 02/05/2016 - 10:10
The Fed has been trying to promote inflation. That is not the guy with the tin foil hat speaking, it is direct from FOMC statements targeting a higher inflation level, which is another way of saying they are targeting a lower US dollar level. From this we leaned toward that which would benefit from a declining USD. Precious metals (led by silver) are a prime beneficiary, with oil and some commodities remaining firm despite pressure on stock markets as corporate performance and economic signals continue to fade.
Categories: Economic Blogs

Did The Big Silver And Gold Market Event Arrive?

The Market Oracle - Mon, 02/05/2016 - 10:06
In a previous article (September 2015), I presented the following analysis (in italics) to show how we are close to a point were a significant event could happen in the bond market and/or gold & silver markets: Above, is a chart (from macrotrends.com) that shows the ratio of the gold price to the St. Louis Adjusted Monetary Base back to 1918. That is the gold price in US dollars divided by the St. Louis Adjusted Monetary Base in billions of US dollars. So, for example, currently the ratio is at 0.28 [$1 125 (current gold price)/ $4 019 (which represents 4 019 billions of US dollars)].
Categories: Economic Blogs
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