Goldman Slashes EURUSD Forecast To 1.20

Having flip-flopped from forecasting EUR strength for the next 12 months in April (target 1.40), Goldman has rapidly ratcheted down its expectations for the flailing currency to 1.30 previously and now forecasts EURUSD at 1.20 in 12 months. As Goldman notes, “because we believe the dynamics of the Euro have fundamentally changed and because we expect cyclical outperformance of the US, a prolonged period of Euro undervaluation can be expected and this is reflected in our longer-term forecasts.” Trade accordingly…
Via Goldman Sachs,
1. We are revising down our EUR/$ forecast to 1.29, 1.25 and 1.20 in 3, 6 and 12 months (from 1.35, 1.34 and 1.30 previously). We are also revising our longer-term forecasts lower, bringing the end-2015 number down to 1.15 (from 1.27), that for end-2016 to 1.05 (from 1.23) and that for end-2017 to 1.00 (from 1.20). We switched from forecasting Euro strength to weakness in April, when we revised our 12-month forecast from 1.40 to 1.30, and the decline since then has been faster than we anticipated. Our latest forecast change aims to signal that the current move lower in EUR/$ has staying power and, in our view, is the beginning of a trend.

This post was published at Zero Hedge on 08/29/2014.

Summer Ends, Jackass Appears

In a continuance of our “holiday tradition”, Jim Willie stopped by Turdville yesterday to share his thoughts on current events and where he thinks this all headed.
The Jackass was his usual self, even if a bit under the weather. In this podcast, we discuss:
Yesterday’s announcement by Gazprom that they will begin accepting payment in rubles and yuan The escalation of US and EU sanctions against Russia and how they are failing/backfiring The growing isolation of the US as a economic superpower The eventual emergence of a new global currency regime This baby clocks in at slightly over 60 minutes so please try to pace yourself. You don’t want to overdo it.
TF
CLICK HERE TO LISTEN

This post was published at TF Metals Report By Turd Ferguson | Friday, August 29, 2014.

Should Retirement Plans For Individuals Hold Precious Metals And How?

Diversifying a portfolio is the first thing they teach you about investment, especially for retirement plans. With these funds, security is often prioritized over quick, short term speculation. For that reason, precious metals and other commodities have now become preferred choices for retirement plans for individuals. Traditionally, this is not allowed for qualified plans, but things have change and now investors are looking at innovative retirement plans for individualsto invest in commodities.
Why Precious metals work for retirement plans for individuals?
Retirement plans for individuals are often all about flexibility and security. Unlike a traditional 401k account with an employer, people look at retirement plans for individuals as it allows them to take better control of their retirement funds. Precious metals or commodities work because trading can be done quicker with less legality involved than other investments, say real estate for example.
A person can also choose to play safe with a buy-and-hold strategy, which can guard their nest egg against inflation. He or she can also choose to speculate and trade more often when opportunities arise.

This post was published at GoldSilverWorlds on August 29, 2014.

What the Heck Just Happened at the San Francisco Apple Store?

Not everyone is irrationally exuberant in my beloved and crazy San Francisco, serial epicenter of magnificent tech and real estate bubbles and their subsequent busts. The trench between those who are benefiting from the bubble and those who’re run over by it as it pushes rents into the stratosphere and inflates other essential costs of living just got a lot deeper with the arrest of security contractors for Apple who were protesting at the Apple Store downtown.
Ironically, just a few days ago, San Francisco was declared to have the fastest growing compensation for tech workers among 34 markets across the country: In 2013, the value of their wages, stock compensation, meals, and other benefits jumped 18.9% from prior year to an average of $156,500. The highest average compensation levels were in Santa Clara County in Silicon Valley at $196,000 and in San Mateo County in the middle of the Peninsula, at $291,500.
San Mateo County’s figures include the compensation of Facebook CEO Mark Zuckerberg. In addition to free lunches, a salary of $1, and some other benefits, he pocketed $3.3 billion via FB stock options, up from $2.3 billion the year before. Remove his stock option gains from the equation, and San Mateo County’s average tech compensation plummets to $210,000. If you then take the next 19 most remunerated individuals out, it’ll come down to a more realistic level.

This post was published at Wolf Street on August 29, 2014.

Can A National Quasi-Religion (Pro Sports) Go Broke?

Attending costly games is on the margins of the household budget. When the credit card gets maxed out, attending is no longer an option.
Please understand I’m not suggesting professional sports isn’t the greatest thing since sliced bread: I’m simply asking if attending pro sports games has become unaffordable to the average American.
Who cares as long as we can watch the games for free on television, right? That raises another issue: in the next recession, will advertisers still pay billions of dollars for broadcast TV ads on sports channels when ads on mobile devices distributed via Big Data analysis can directly target the (shrinking) populace who still has disposable income to spend?
Before we look at the money side of pro sports, let’s note the glorious shared experience of “our team” winning and hated rivals losing. Sports is one of the few experiences that unites a remarkably diverse populace, and one of the few spheres of life that isn’t politicized to ruination.
We all get to live vicariously through sports, and the stranger cheering beside us is suddenly a “friendly” in a largely hostile world.

This post was published at Of Two Minds on August 29, 2014.

HUI Timing Boxes

In the previous post it was mentioned that the 2013-2014 would-be bottoming grind in HUI has been almost exactly the duration of the 2010-2011 topping grind. Here is a visual to put with that statement.
The current yellow box is an exact duplicate of the 2010/11 box, which came with an over bought MACD crossed down. The breakdown candle implies that September would be the month that a break UP candle comes into play if this relationship has any predictive power.

This post was published at GoldSeek on 29 August 2014.

MUST READ: A Fraud By Any Other Name Is Still A Fraud

Once upon a time, there was a thing called a ‘free-market’ and for a time nations strove toward this ideal. To wit, a free market economy was a market-based economy where prices for goods and services would be set freely by the forces of supply and demand and allowed to reach their point of equilibrium without intervention by government policy, and it typically entailed support for highly competitive markets and private ownership of productive enterprises.
But power and belief shifted and faith now resides in governmental fiscal policy (spend more, tax less) and central banker interest rate policy (make money ever cheaper) to avoid the free markets down-cycles and extend its up-cycles infinitely. The central bank high priests have determined free markets are better replaced by command economies and further the priests’ purport they know appropriate levels of demand and supply…and absent the achievement of these levels, they will enforce their will even if the Fed’s programs are the likely cause that retards the Fed’s from achieving their stated goals!
But this has gone so far that now all we have is fiscal imbalances (the true nature is hidden by accounting fraud) and central bank centralized command of financial valuations. And I’m not being dramatic… I truly mean the Fed and central bankers are controlling the pricing of nearly everything financial (including sovereign debt / bonds, stocks, real estate, commodity prices, etc.) via interest rate targets and bond purchasing programs. The politicization and centralized control has turned the economic indexes into the central banks gauges which they actively ‘manage’.

This post was published at SRSrocco Report on August 29, 2014.

“Economic Pilot in Reverse”: US Consumer Spending Unexpectedly Dips; Zero for 79

Mainstream media headlines in the last two days offer an amusing look at GDP forecasts.
GDP Stronger Than Expected
Yesterday, the Financial Times reported US Rebound Stronger than First Thought.
The US economy’s second quarter bounce was stronger than previously thought, with the official annualised growth estimate increased from 4 per cent to 4.2 per cent.
The revision is more evidence of robust underlying growth in the world’s biggest economy as it swung back from a weather affected 2.1 per cent fall in the first quarter.

This post was published at Global Economic Analysis on August 29, 2014.

Chelsea Clinton is Quitting Her $600,000/Year NBC “Reporter” Job

Shortly after it was revealed by Politico that NBC had stooped to new lows in favoritist nepotism, having paid Chelsea Clinton an annual salary of $600,000 for “occasional” reporting work, in effect making her one of the highest paid if not the highest paid “reporter” in the world, the former first daughter quickly stunned everyone when, in the aftermath of her mother’s just as stunning commentary on personal wealth and what being “broke” in the New Normal apparently means, she stated rhetorically that “I was curious if I could care about money and I couldn’t.”
So, moments ago, to prove that she really no longer cares about such earthly things as money, since between her hedge fund husband and her parents, she has more than she can possibly spend in one lifetime, AP reported that Chelsea Clinton is finally quitting her job as a reporter at NBC News.

This post was published at Zero Hedge on 08/29/2014.

Stocks Catching Down To Treasury’s Fresh 15-Month Low Yields

It appears a combination of Cameron scaremongery and weak-spending-driven GDP downgrades has sparked a realization in stocks (for now) that maybe bonds are on to something. As 30Y Yields drop closer to a 3.05% handle (and fresh 15-month lows), stocks have rolled over notably this morning… Of course, it is Friday though and all that pent-up de-escalation buying power on the sidelines is just itching for new new highs in stocks.
Even short-term the divergence remains large…

This post was published at Zero Hedge on 08/29/2014.

Rethinking Japan’s ‘Lost Decades’

One of the great economic myths of our time is Japan’s ‘lost decades.’ As Japan doubles-down on inflationary stimulus, it’s worth reviewing the facts.
The truth is that the Japanese and US economies have performed in lock-step since 2000, and their performances have matched each other going as far back as 1980.
Either Japan’s not in crisis, or the US has been in crisis for a good thirty-five years. You can’t have it both ways.
Here’s a chart of per capita real GDP for both Japan and the US from 2000 to 2011. Per capita real GDP is the GDP measure that best answers the question: ‘is the typical person getting richer?’
The two curves look like they came from the same country:

This post was published at Ludwig von Mises Institute on August 29, 2014.

The Credit Gradient

The United States, and every country, is subject to a monetary authority and legal tender laws. Here in the U. S. we have the Federal Reserve, a central bank that plans money and credit. The Fed thought they had perfected their planning (but of course it cannot be perfected). They thought they had ended the boom and bust cycle, and brought us into a brave new era, their so-called great moderation that ended in 2008. All they really did was manage the banking system to the brink of insolvency.
Let’s try a thought experiment. Suppose the monetary central planner attempts to fix the problem of insolvency by massive injections of liquidity. The central bank buys bonds. It dictates rates near zero on the short end of the yield curve, and promises not to raise rates for years to come. What perverse outcome would we expect?
Arbitrageurs see a green light, telling them that they can safely borrow short to buy long bonds. As the price of a bond goes up, the rate of interest goes down – it’s a rigid mathematical inverse. This is how suppression of short-term rates causes suppression of long-term rates.
This poses a problem for investors. Every investor has a minimum yield he must earn in order to meet his goals, such as retirement. When the yield available in government bonds falls, this gives the investor a strong push to other bonds with higher yields. Some Treasury bond owners sell, and go into AAA corporate bonds. This, of course, pushes up bond prices and pushes down the yield. This pushes some AAA corporate investors into AA bonds. And so on.

This post was published at GoldSeek on 29 August 2014.

Chicago PMI Explodes To Biggest Beat In 10 Months, Employment Drops Further

Having collapsed to 13-month lows in July – with the biggest miss on record – Chicago’s PMI rebounded the way only US macro ‘soft-survey’ data can. After plunging from 62.6 in June to 52.6 in July, August printed a magnificent 64.3 – its highest since May – showing up this data’s noisy nature as entirely useless. From worst miss on record (and 13-month lows) to best beat in 10 months and 5 month highs… brilliant. It would seem ISM has entirely given up on any credibility at all… However, given this exuberance (in production and new orders), the employment sub-index dropped yet again.
“we’re gonna need a better seasonal adjustment”

This post was published at Zero Hedge on 08/29/2014.

Developing Countries’ Appetite Supports Gold

TENSION between Russia and Ukraine as well as escalating violence in the Middle East have helped support the price of gold this week as it is often regarded as an insurance against financial and political risk.
There are also signs of support from developing countries.
Russia, one of the world’s biggest holders of gold, increased its official reserves by nearly 340,000 troy ounces in July, to 35.5-million ounces, according to data from the International Monetary Fund (IMF). The amount of gold now held by Russia is the most since at least 1993.
Kazakhstan’s central bank added 45,000 ounces of gold to its reserves in July, to 5.1-million ounces.
The IMF said the central bank of Ecuador also increased its reserves in July, by 10,000 ounces, while Belarus cut its holdings by 79,000 ounces.
Turkey’s central bank reported a decline of nearly 138,000 ounces to the IMF, dropping its official reserves to 16.4-million ounces.

This post was published at Gold-Eagle on August 29, 2014.

Market Report: Summer doldrums coming to an end

The pattern of trading in precious metals changed for the better this week. After London’s bank holiday on Monday, for the first time in a long time the market opened in London’s pre-market with higher prices. This indicated Asian or Middle-Eastern physical demand was returning to the market. Predictably, prices drifted lower during London hours as paper trading took over, and all the gains were more or less lost by close of play on Comex in New York. It was a similar story on Wednesday. Yesterday, (Thursday) started the same way, but this time the move gained more traction; but volumes remain pitifully low, in common with open interest. Today this pattern was not repeated with gold kicking off unchanged on overnight levels. However, gold is up $15 on the week and feels more firmly based.
Measured by deliveries on the Shanghai Gold Exchange, Chinese demand is increasing, with last week’s figure rising to 46 tonnes, having increased every week in August. So far this year over 1,200 tonnes have been delivered, and the extension of trading and therefore potential demand into the Free Trade Zone is due to kick off in September.
The chart of the gold price and open interest on Comex is shown below.

This post was published at GoldMoney on 29 August 2014.

UMich Consumer Confidence Rises On Surge in “Hope”

While the government Conference Board confidence measure remains the most exuberant, University of Michigan Consumer Confidence continues to tread water. August final print rose to 82.5 from the preliminary data (79.2) driven by a surge in “hope” from 66.2 to 71.3 mid-month. Short-term inflation expectations fell on the month. Despite exuberant all-time highs in stocks, UMich has been flat for the entire year and is now at the least exuberant relative to Conference board data in almost 7 years.
A beat but flat-line all year

This post was published at Zero Hedge on 08/29/2014.

Here Come The Q3 GDP Downgrades…

Following the significantly weaker-than-expected spending data, the sell-side has begun its inglorious downgrades of the exuberant hockey-stick growth expectations they all extrapolated off Q1 lows… Goldman cut from 3.3% to 3.1% and Barclays slashed Q3 GDP expectations from 2.7% to a mere 2.2%.
Via Goldman,
BOTTOM LINE: The July personal spending numbers were softer than expected, while personal income and the PCE price index were close to expectations. We reduced our Q3 GDP tracking estimate by two-tenths to 3.1%.

This post was published at Zero Hedge on 08/29/2014.

5 reasons to buy silver & 2 reasons to sell

Today, we consider gold’s erratic little sister – the bi-polar metal that is silver.
There is no other metal on God’s earth that has so much potential to make its buyers millions. And there is no other metal that has so consistently failed to deliver.
Its proponents point to supply shortages and increased usage. Its detractors point to charts showing bear markets that go on for years.
If I could fast forward three years into the future, and I saw that silver was $200 an ounce, it wouldn’t surprise me.
But then if it was $5 an ounce, that wouldn’t surprise me either.
To reflect the numerous contradictions that accompany this metal, we give you five reasons you should buy it now – and two reasons you should sell it.
Five good reasons to buy silver Let’s start with some reasons to buy.
1. China’s supplies of silver are drying up On the Shanghai futures exchanges, physical metal – rather than paper derivatives – is traded. As a result, many declare that the action there is a truer reflection of what is going on in the real world.
Since March 2013, silver inventory has fallen by more than 90%. At the high, there was 1,143 tonnes of stock. Last week, that had fallen to just 103 tonnes. In July and August alone, there has been a 56% drop. That is some drawdown.
At this rate, China – a significant producer of silver, but also a consumer – will become a net buyer before the end of 2014, putting upward pressure on the price.
The exchange only came into being in 2012. Since then, there has been a correlation between the silver price and the exchange’s holdings. In other words, buying and selling on the exchange may be driving the price. As there is very little metal left to sell, selling pressure could dry up.

This post was published at TruthinGold on August 29, 2014.