G20 Targets the Week of the Cycle of War

The G20 Leaders’ Summit for 2014 is being held on November 15th and 16th in Brisbane, Queensland, Australia. The principal meeting venue will be the Brisbane Convention and Exhibition Centre. There will be as many as 4,000 delegates and 3,000 media representatives in attendance.

It is curious that the comes right in line with the turn in the Cycle of War that is ideally targeting November 19th/20th this week. The Leaders’ Summit is the key important event in the G20 year calendar. While the summit is supposed to provide a valuable opportunity for leaders to discuss a wide range of global economic issues and to use their collective power to improve people’s lives as they market, the truth is just about anything but that. The first summit was in 1985 and it was all about trying to coordinate market manipulation by ganging together. For you see, they experienced that nobody could manipulate the dollar not even the Fed. Hence, the first meeting was known as the G5 (Group of 5 aka Gang of 5). Latter other countries wanted to join so it became the G8. Today it is known as the G20.

This post was published at Armstrong Economics on on November 15, 2014.

Equities – It’s Never Different This Time

This is an excerpt from this week’s premium update from the The Financial Tap, which is dedicated to helping people learn to grow into successful investors by providing cycle research on multiple markets delivered twice weekly. Now offering monthly & quarterly subscriptions with 30 day refund. Promo code ZEN saves 10%.
I’m going to spend little time on the equity markets this week, covering just the fundamentals of where the Cycle’s stand. I’m convinced now that the equity markets are peaking, into their final bull market speculative run that will soon end badly for these markets. But soon is a relative term, considering that this bull market is fast approaching its 6th anniversary.
A flat and tight week for the equity markets, I suspect because the S&P is already well into the Half Cycle Low that it’s keep a lid on the recent move. So I’m going to consider this sideways move as consolidation at that HCL juncture, where normally we would be seeing a decent drop into that Low. To me, this only highlights the speculative (runaway) move the markets currently find themselves in. The fact that after a 220 point record setting run that we’re not seeing even a token decline is indicative of where we stand in the bull market Cycle.

This post was published at ZenTrader on November 15, 2014.


The End Of The Monetary System As We Know It (TEOTMSAWKI) has never happened before on such a global basis and therefore it will be fraught with all manner of unexpected consequences. Even someone who is well aware of the impending collapse of fiat currencies can still make massive, wealth-destroying errors. Yet, when it comes to investment management, likely not 1 in 100 wealth managers is even aware of TEOTMSAWKI as even a possibility much less are taking active steps to guard their clients from the massive volatility and crisis’ to come.
Moreso, your average advisor for firms like Goldman Sachs and Morgan Stanley not only are drinking the Keynesian Kool-Aid but are actually incentivized by the system itself to keep putting people into the worst possible investments at the worst possible time. How else can you explain advisors and fund managers buying 10 year US Treasury Bonds at 2.3% at a time when actual monetary inflation is near 10% almost guaranteeing a loss of nearly all of your buying power during those ten years?
The answer is that they don’t even know that they don’t know what is really going on. They actually still call Treasury Bonds “risk free” assets when what they really are is return-free risk.
We recommend managing your own funds if you have the skill, ability or time… but many people simply don’t have one or all of those attributes and they look for an investment manager.
The trick is, however, finding one that has the same level of knowledge (or hopefully more) on what is really going on in the economic, financial and monetary system.
So, when on rare occassion I do find an investment manager or firm that understands TEOTMSAWKI is well in process, that Keynesian economics is “economics” in only the most egregious use of the word and they also have solid groundings in anarcho-capitalism my ears perk up.
In this particular case, it is Chris Casey, who also is a contributor to TDV and a longtime subscriber.
I had the pleasure to sit down with Chris and pick his brain on his investment philosophy and what he is currently seeing in the markets from his institutional side viewpoint. I think you’ll find many of his comments very insightful on the state of the market and wealth management today.
Jeff Berwick: Although WindRock Wealth Management is a US-based Registered Investment Advisor which manages money for wealthy individuals, you certainly seem different from other firms out there. One of those differences is your adherence to the Austrian school of economics which we at TDV obviously believe in. Why is that important to WindRock?
Christopher Casey: We think it’s a tremendous advantage. And you’re right – as far as I can tell, no other wealth advisory firm believes in and utilizes Austrian economics. We think it’s vitally important in designing portfolios. Austrian economists, unlike the mainstream Keynesian economists, understand what truly causes inflation and recessions – the artificial expansion of the money supply by central banks. Since these are the two greatest threats to anyone’s investment portfolio, this understanding is critical. This is why other wealth advisory firms herded their clients right over the cliff with the crash in technology stocks and later with all equities in 2008. They could not foresee these events, along with the collapse in housing prices, because they don’tcomport to their flawed models and theories. As of now, it is only a matter of time before the US equity markets experience some significant declines. By using Austrian economics, we have a time-tested tool to guide our decisions.

This post was published at Dollar Vigilante on November 14, 2014.

Potential Owners Per Ounce of Registered Comex Gold Back Over 50

Please note that this is not all the gold in Comex warehouses, merely that gold which is marked as deliverable at these prices.
Some like to use all the gold in their calculations but that seems a bit presumptuous, to consider gold merely being held by customers in storage in one of those warehouses as fair game at any price.
I am not calculating this for the purposes of a default, as you may recall. The open interest is only potential owners. The Comex is, after all, a largely paper market.
If there is a physical default it will more likely happen overseas, and come cascading back to London and New York, and the exchanges go up limit, none offered.
Let’s hope the imbalances between price, demand, and supply do not grow to the level.

This post was published at Jesses Crossroads Cafe on 15 NOVEMBER 2014 AT.

14/11/2014: Irish Construction Sector PMIs: A Bit Bubbly, A Bit Bonkers…

Ulster Bank and Markit published Construction PMI for Ireland, and the numbers signal huge uplift in activity across all sub-sectors, excluding Civil engineering. However, Civil Engineering post an above 50 reading (albeit consisted with virtually no growth) for the first time since Q1 2006.
So here we have it:
Total Activity PMI for Construction sector in Ireland rose to 64.9 in October, signalling huge rates of growth, despite few cranes being visible around. 3mo average through October is at 62.6 against 3mo average through July at 60.9. Similar rises were recorded in 6mo average through October. All of which suggests we should be seeing a massive boom. Of course we are not. Why? Because the levels from which the activity is rising are… well, microscopic.

This post was published at True Economics on Friday, November 14, 2014.

Several Bullish Supports Suggest Bears Should Temper Their Outlook

Net foreign purchases of US stocks turning up Corporate buybacks also acting as a support for the market Large potential short squeeze to serve as another bid Taken collectively, still too soon to turn bearish It’s always a good idea to periodically take a look at what the foreign community is doing in terms of net US equity purchases. The reason lies in the fact that they tend to buy at tops and sell at bottoms and can serve as a contrary indicator. We saw this not only in the 2000 and 2007 bull market peaks but also the 2003 and 2009 bear market bottoms.
So what do current levels of foreign purchases suggest for US stocks? They reflect more of a bottom than a top as net foreign purchases are coming off of multi-decade lows set earlier in the year and are close to moving into positive territory. Shown below is the S&P 500 on the top panel and the 1-year moving average of net foreign purchases on the bottom and you can clearly see that rising foreign purchases are associated with bullish moves in the stock market. Given the low level of current purchases we could continue to see an influx of foreign buying of US equities in the weeks and months ahead.

This post was published at FinancialSense on 11/14/2014.

India back to being world’s top gold consumer

India reclaimed its world’s top gold consumer crown from China as demand for jewellery surged almost 60% in the third quarter of the year, fresh data from the World Gold Council (WGC) shows.
Global demand, however, fell to its lowest in nearly five years as Chinese buying slid by a third and gold jewellery, the biggest single area of consumption, dropped 4% to 534 tonnes.
Overall, the south Asian nation —which had lost his position as the world’s No.1 gold consumer to China in 2011—bought 39% more gold in the run-up to Diwali and the start of the traditional wedding season.
The WGC said that a weakening of gold prices in rupee terms had boosted demand in India, and that confidence in the new government led by Narendra Modi had also contributed to the rise.

This post was published at Mining.com

Putin: Russian Economy Won’t Be Dominated by ‘Dollar Dictatorship’

Russia plans to leave the “dollar dictatorship” of market oil prices and turn to using the country’s national currency and the Chinese yuan, Russian President Vladimir Putin said Friday.
“We are leaving the dictatorship of the market where oil goods are based on the dollar and will increase the possibilities of using [other] national currencies: the ruble and the yuan,” Putin said in an interview with the Russian state news agency TASS.
On a November 9 meeting on the sidelines of the APEC summit Putin and Chinese President Xi Jinping discussed the possibility of using the yuan in transactions in fields of mutual cooperation.
Putin said in his Monday speech at the Asia-Pacific Economic Cooperation (APEC) summit in China that accounting in the ruble and yuan will most likely weaken the dollar’s influence on the global energy market.

This post was published at Sputnik News

Doug Noland: Financial Sphere Bubbles

The Fed and global central bankers gambled that Financial Sphere intervention, manipulation and inflation would spur real economy reflation.  It’s clear they’re playing a losing hand – it is also apparent that they are not willing to admit their flaws, failings or predicament.  The harsh reality is that central bankers cannot escape Financial Sphere fragility. 
When Global Financial Sphere fragility turned acute back in the summer of 2012 (i.e. Italy, European banks and the euro), Draghi, Bernanke and Kuroda adopted unprecedented measures.  They bought some time but at major costs, including the U.S. securities Bubble, a Bubble in European sovereign debt and unprecedented global leveraged speculation (how big is the “yen carry trade”?).  Several weeks back there were indications that Global Financial Sphere fragility was resurfacing.  And there were indications from Fed officials that more QE could be forthcoming, while Draghi and Kuroda came with more shock and awe monetary stimulus.
The latest Fed, ECB and BoJ show did wonders for U.S. and Japanese stock prices.  Yet yen and euro devaluation bolstered king dollar, much to the expense of commodity-related companies, currencies and countries.  Russia’s ruble was hit again this week, as geopolitics turned only more disconcerting.  There was also further indication of acute fragility unfolding in Brazil.  The Brazilian real dropped 1.65% and 10-year (real) yields jumped another 36bps to 12.92%.  Venezuela 10-year bond yields surged 123 bps to 19.73%.  It’s also worth noting that Mexican stocks were hit for 2.8%.  All in all, evidence mounts of serious EM vulnerability.  I’m sticking with the view that the global Bubble has been pierced and that contagion risks are mounting.  As for U.S. equities, the level of bullishness and complacency is just incredible.  Apparently nothing can get in the way of the mighty year-end rally.

This post was published at Prudent Bear

Stockman: Central Banks ‘Out of Control Fueling Bubble’

David Stockman, White House budget director under President Reagan, has warned about the dangers of a financial crisis for some time, and he's not backing down now.
"Each and every day the central banks in the world get more out of control fueling a bubble the likes of which we have never seen in modern times, if ever," he told Fox Business Network.
Stockman was referring to central bank easing programs. The Federal Reserve apparently plans to keep interest rates near zero until at least the middle of next year.
Meanwhile, the Bank of Japan recently announced a major increase in its monetary stimulus, and European Central Bank President Mario Draghi has said in recent weeks that the ECB will expand its accommodation, too.

This post was published at Newsmax

Economist Dean Baker: Many Americans Have Waved Goodbye to Their Nest Eggs

Many Americans are nearing retirement with only Social Security to support them and a mortgage that is far from paid off — and the situation might be getting worse.
According to Dean Baker, co-director of the Center for Economic and Policy Research, the nest egg that many could once rely on when they sold their homes and downsized has now vanished in a lot of cases.
In a column for Fortune, Baker noted that because home prices are still considerably below their 2007 peaks, the U.S. middle class has had no comparable gains in their household wealth during the current recovery.
"This is a bad picture for the country as a whole, but it is especially bad news for those at the edge of retirement," he wrote.

This post was published at Money News

The Precious Metals – The Bounce?

The metals bottomed during the week of November 3rd on schedule. It now appears if we achieve that rally we outline in the International Precious Metals Outlook, then a high on that seasonal target would ten to warn that we will decline to new lows once more falling into the Benchmark targets.
So far so good. It appears that everything is unfolding on schedule. This is just a tiny piece of the puzzle as a whole. Therefore, bottoming with the Benchmarks will most likely line up with the start of Big Bang in Sovereign Debt Defaults or suspensions. (Detroit suspended all its debt payments in 1937 but did not default since they made them good in 1963.
Watch the reversals. They are our target for reaction highs and support as we maneuver through the emotional crisis. The Gold Promoters still rant about how I say the metals are not manipulated illustrating their ignorance of markets and global economy as a whole. They seem hell-bent on just burying people showing no respect for their financial survival.

This post was published at Armstrong Economics on November 15, 2014.

15/11/2014: Emerging Markets Rot Drives Russian Economic Uncertainty

Some interesting data from the Policy Uncertainty Index for Russia (see I traced out the main news markers over the period covered by the index (click on the chart to enlarge):

Note: higher values of Index, greater attention to the domestic economic and economic policy uncertainty in the media.
There is a clear pattern of rising policy uncertainty from, roughly speaking, early 2008, with both geopolitical risks (Georgia conflict) and economic risks (the 2009 recession) as well as internal political risks (2012 elections) all coincident with amplification in uncertainty. Ukraine crisis period is clearly only comparable in uncertainty with the last Yeltsin elections (which almost lost to the Communist Party candidate).

This post was published at True Economics on Saturday, November 15, 2014.

U.S. Retail Offsets Eurozone Weakness

The positive Retail Sales report this morning has helped improve sentiment that was earlier showing a mixed picture due to the soft GDP read out of Europe. This morning’s economic readings spotlight the growth divergence between the U. S. and the rest of the developed world, which has been the primary driver of the dollar’s strength recently.
The Euro-zone economy barely stayed in positive territory in Q3, with GDP growth of 0.1% in Germany and 0.3% in France, the top two economies in the region; GDP growth in the third largest economy, Italy, came in the negative (the growth rates are from the preceding quarter, not year over year). Overall growth for the currency block as a whole came in modestly better than expected at 0.2%; GDP growth was 0.1% in Q2 when Germany had slipped into the negative territory.
On a comparable measurement basis, the U. S. economy expanded 0.9% pace in Q3 and 1.1% in Q2. Greece and Spain – two of the countries hardest hit by the Euro-zone’s financial crisis of the last few years – displayed a lot more economic vigor, with GDP growth of 0.7% and 0.5%. But they aren’t big enough to move the needle for the currency bloc’s roughly $12 trillion economy. Please note that the region’s economy still hasn’t reached the pre-crisis size of 2008; it is about 2% below that level.

This post was published at FinancialSense on 11/14/2014.

Ted Butler Quote of the Day 11-15-14

A little while back, I commented that I believed the big drop in the price of crude oil, by far the most important commodity in the world, was set off by futures positioning on the NYMEX and other derivatives trading exchanges. Specifically, I concluded that selling by technically motivated traders over the past few months was most responsible for the sharp drop in the price of crude oil, as well as the not coincidental price drops in silver, gold, copper, palladium and platinum.  I gave the documented quantities of contracts and equivalent amounts of material that were sold and can do so again on request.

What I have seen unfold over the past 40 years has been a steady progression of futures trading overwhelming actual supply and demand as the prime influence on price. I’m not suggesting that actual supply and demand don’t matter to price, just that they have been pushed aside for extended periods by the influence of derivatives positioning. I discovered it in COMEX silver nearly three decades ago and have seen it creep into most markets currently. What I am saying is that in the “old days” (30 to 40 years ago) it was strictly supply and demand that determined price; but that we have evolved into a modern era of derivatives trading overwhelming actual supply and demand as the prime price influence.

A small excerpt from Ted Butler’s subscription letter on 11-12-14.

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