Remember that story about China’s problems being fixed? Never mind!
Market Roundup
The country is back in the hot seat, with its currency, reserves, imports and exports all tanking. That, in turn, is raising fears about an August redux — after all, the crisis in China was a key reason our markets went pear-shaped back then.
Let’s start with the data. China has been bleeding reserves like mad in recent months thanks to the slumping economy, capital flight and other forces. Investors were hopeful that the outflows were slowing … but fresh November data put the kibosh on that.
Chinese forex reserves plunged $87.2 billion last month, more than double the losses economists were expecting. The country’s reserve hoard has now shrunk to $3.44 trillion — still substantial, but the lowest since February 2013.
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| Chinese exports have fallen, another sign of a troubling outlook for that country’s economy. |
At the same time, Chinese exports dropped 3.7% in November while imports fell 5.6%. Those figures were much worse than economists expected, with imports now down a record 13 months in a row.
The fresh figures are putting renewed pressure on the value of China’s yuan currency. Take a look at this chart, which shows where the yuan is trading in the offshore market in Hong Kong.
You can see we’re closing in on the panic lows we saw in August when the country launched its first surprise devaluation. That move caused the Dow Industrials to plunge more than 1,000 points in a single day.
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| Another big fall … |
Throw in the fact that crude oil, commodity stocks, junk bonds and other indicators have already undercut the August 2015 lows …
That the Dow Transports, Dow Utilities, Russell 2000 and other indices are badly lagging the Dow Industrials …
That the Treasury yield curve is continuing to flatten, while many sectors are dragging …
And you have to wonder. Specifically, just how long can the major U.S. averages keep trading at fantasyland levels while the foundation beneath them rots away? Maybe the answer is not long at all, if the market action today and yesterday is any indication.
Bottom line? If you haven’t already positioned your portfolios for more potential turmoil, by raising cash, selling some stock market winners, and buckling down, I wouldn’t wait much longer.
(Editor’s note: Mike has more investment recommendations in his Interest Rate Speculator service. Click here for more details.)
Now, let me hear from you. Should we be worried about a renewed meltdown in China? If many of the same conditions that were present in August are present again today, could the Dow plunge to the 15,600 level it hit back then? Or do you see more reason for optimism in the waning weeks of 2015? Share your thoughts below.
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The ongoing carnage in crude was topic number one at the website, and for good reason. Here are some of the thoughts you had.
Reader Chuck B. asked why the government isn’t stepping in to give this vital U.S. industry a helping hand the way they bailed out their banker buddies in the last crisis. His comments:
“The Federal Reserve guaranteed loans for a bunch of bankers who were going broke. Why can’t they do the same for the three dozen or so American oil drillers who have already filed for bankruptcy because of Saudi actions?
“Isn’t that a kind of economic war against this country? Isn’t oil supply a matter of national defense, if the Middle East oil becomes unobtainable due to all the goings on over there? But, of course, the drillers are not bankers, and not important to the administration or the Fed.”
Reader Freddy added: “If the feds had any guts, they would support and help the oil companies who really need it to go back to drilling as much oil as can be harvested out of the North American fields. Put those OPEC guys under so much pressure they would have nowhere else to go but cut their production. I wonder what they would do if we stop buying their oil and become self-sufficient, as many insiders in the oil patch believe we are able to do.”
Meanwhile, Reader Jim shared some thoughts about where things might go next based on his background in the industry. Those comments: “I have been in the oil business for forty years and have never seen anything quite like the current situation. The race to oversupply is unprecedented.
“The OPEC meeting was something of a surprise to me. Many of the members have to be feeling major pain — but the fact nothing was done or even said to stem the bleeding indicates to me this could go on a lot longer than many people think. We hit $10 in the late nineties and I’m not sure that is out of the question now.”
What impact would that have? Reader Ed P. said it’ll ultimately be a positive for the U.S.: “Let oil fall to $25. That will help Joe Sixpack who makes $40K per year. The Koch brothers and Rex Tillerson don’t need help from anyone.”
But Reader Joe G. countered by saying: “I learned in the Army that for every soldier, there were about six civilians supporting each one of us. So taking that into consideration, think about this …
“There will be probably 300,000 jobs lost in the U.S. energy companies, whether exploration and production, or transportation, or refineries. Now factor in the six multiple, and you have upwards of over 2,000,000 Americans potentially out of work or in reduced-quality jobs. Is that good for the economy?”
These are some great observations, and I appreciate you sharing them. I believe the Fed and the government is underestimating just how important the American energy industry has become in the last several years.
The surge in domestic production, transportation and related businesses helped create tens of thousands of well-paying jobs here — and promote energy self-sufficiency. Moreover, many of those jobs were in parts of the country that previously weren’t heavily dependent on the energy business. So plunging energy prices are no longer the huge positive for the economy they were in, say, the late 1990s when oil dropped to around $10 a barrel.
Then there’s the credit-quality issue. You simply can’t have the junk bond market melting down day in and day out — in part because of energy default concerns — without it tightening credit and hurting stock markets more broadly. Or in plain English, the credit problems are no longer “well-contained” to energy bonds — just like they weren’t “well-contained” to subprime mortgages a decade ago.
Am I being too cautious? Or do you think I’m on target? I’d love to hear from you below if you haven’t thrown your hat into the ring yet.
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China’s wealthy can see the writing on the wall, so they’re getting their money the heck out of Dodge. The Wall Street Journal reports that Chinese investors are pouring money into U.S. real estate, often without even visiting, to avoid government scrutiny, currency devaluation and other threats to their wealth. Both commercial and residential properties are being targeted.
Canadian Pacific Railway (CP) is continuing to pursue Northern Southern (NSC), raising its previous $28 billion bid for the railroad company. But NSC quickly rejected the sweetened offer as too cheap and fraught with regulatory risk.
Meanwhile, the chipmaker Fairchild Semiconductor International (FCS) said an unidentified party offered to buy the firm for $21.70 a share, or $2.46 billion. That would top a $20-a-share offer already on the table from ON Semiconductor (ON).
We saw more weakness in crude prices overnight, with both domestic and foreign oil benchmarks falling to their lowest levels since the Great Recession in 2009. The New York Times reported that roughly a quarter of a million energy sector workers have lost their jobs worldwide in the last year already. That number is certain to rise in the months ahead as more bankruptcies and defaults sweep through the industry.
Any thoughts on the influx of Chinese capital to our shores? The latest corporate merger fights? The ongoing decimation of the energy industry? Let me hear about it below.
Until next time,
Mike Larson
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Mike Larson graduated from Boston University with a B.S. degree in Journalism and a B.A. degree in English in 1998, and went to work for Bankrate.com. There, he learned the mortgage and interest rates markets inside and out. Mike then joined Weiss Research in 2001. He is the editor of Safe Money Report. He is often quoted by the Washington Post, Reuters, Dow Jones Newswires, Orlando Sentinel, Palm Beach Post and Sun-Sentinel, and he has appeared on CNN, Bloomberg Television and CNBC.
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Would you be surprised if the would be unidentified purchaser of Fairchild Semiconductor International was Chinese? I saw that the flow of capital OUT of China is booming. Where would it be flowing to except the U.S.?
It’s was flowing to high-priced real estate around the world.
…and with all this bad news, to think the fed is still likely to hike rates next week???
Let the free market work. We don’t need Fed or Capital Hill to come up with more government aid to the oil patch. Rescind the current laws and allow America to export oil. We get a lot of new jobs cash from other countries for our oil and a positive trade balance. No more government programs, just free-market solutions. AMEN!
Agreed, let the MARKET make all the corrections. NOT the Feds or bankers
leave our oil in the ground. Burn up foreign oil. Ours will still be in a safe place for our Great Grandchildren. After 50 years involved in crude in various ways, we must use ours only when world conditions forces us to. Our grandchildren will have better leaders than we do presently.
Has it ever occurred to you by then no one might be in need of it? They might all have migrated to Mars or any other safer place, the world probably by then will be kaput with all the climate change/terrorism that is happening.
My only concern is who appointed the Saudis as the world supplier?
No wonder there was so much politics as the Saudis and their friends were against lifting of sanctions on Iran nor cuba.
The Saudis have made so much dollars from the poor world on oil but times have changed and now it’s being discovered all over, they can as well as drink it as they never invested in industrialisation or for that matter brains to get them there, the only thing they have mastered is production of so called world terrorism and slavery in-house. Is it by coincidence that OPEE nations are also terrorist nations or is it TPEC?
Oil has everything to do with terrorism!
However America will stand at the Top whether China or Saudis empire collapse, India Taiwan Africa – emerging markets are there to replace them, Nigeria has enough oil and India enough factories.
Amazing. Free Market wants no govt intervention so we can sell oil abroad, while RMW wants a free market so we can leave the oil in the ground! Here’s the truth: OPEC artificially controlled the price of oil for ~50 years (NOT our govt). Now OPEC is in shambles, and Saudi Arabia is doing the free market thing: overproducing to cut prices and drive others out of business, just like Rockefeller used to do. Don’t like that? Sorry, but that’s the free market y’all are craving.
I agreed with “leaving our oil” in the ground for future use. If someone wants to sell you goods at a discounted rate, let them and enjoy the saving. Let them drain their resources. To subsidize the energy sector so that they can sell our resources cheap to the world is illogical and short-sighted, High oil price benefits the net producers such as Russia, and the Middle East countries, but hurts the net importers including USA. Don’t forget we are still NET IMPORTERS.
The current distortion in the US oil market is the direct result of years of zero interest rates and four rounds of quantitative easing. Free Markets work when you let them. Jim
Politicians seldom want people to be free, because then they lose control. ‘Can’t have that!
Chuck B
Of all the answers yours is the closest to the truth. They are the shepherds and we are the sheep to be shorn.
China’s economy is having difficulty, but so is Europe and the US.
China’s advantage, is that they are at War with no one. They will trade with anyone, no sanctions – period.
The West plans for the next quarter, China plans for the next Quarter century.
Thus, it is not important that China’s economy is slipping, but whose economy will survive without a revolution of some type.
How do you know the US govt is behind the drop in oil to get back at Russia for the Snowdon affair?
The conspiracy theory I have heard is that because of a weakening Western economy the Saudis were told we would no longer provide them with military protection unless they dropped the price of oil. Jim
Still looking for that grassy knoll shooter, Jim? The Saudis are just good free market oil dealers. Sorry you don’t like or accept that.
I don’t believe i. I just heard it and thought it might be of interest. Sorry. Jim
free market dictates price in the end anyway. the saudis know that so their aim was price stability, which was also the most profitable position overall.
Its tit for tat. Saudi Arabia will price their oil in yuan. The deal was military protection in exchange for pricing their product in US dollars. Its a broken deal now as America is “energy independent” Throw in the fact that there is a new King in SA whose ring has not yet been kissed by the Bush family and it a whole new ball game.
The Fed should hike rates by at least 50 basis points. This would accelerate China and more importantly Saudi Arabia’s selling foreign reserves and perhaps put a stop to the oil war and China’s currency manipulation.
Countries have no reason to sell. They just hold the bonds to maturity. They can play the long game, while you think the short game.
Think the Chinese are tanking now, just wait until the “Made In America” movements really gets going and we slowly stop buying their stuff….. Jobs come back to America and one of our biggest adversaries goes back into being the same third world communist dictatorship which it was before Nixon rolled over for the One World Group!…. :(
I wonder how many of those 2,000,000 plus potentially out of work workers and people dependent on the oil patch, that Joe G mentioned, have auto loans outstanding? There may be a LOT of repossessed vehicles on the used car market soon, which must drive down the prices both used and new vehicles go for. Not to mention houses and apartments at reduced prices or rents just to get someone in them to pay property taxes for the owners (often banks that have taken them over). Many other goods and services, could also fall in price, followed by wages, of course. Bankruptcies will become very common, and deflation could be here to stay for some time. Sorry if that seems negative, but it might be better than runaway inflation – at least until the inflated debts come due.
Deflation is always worse than inflation–leads to negative interest rates and depression. If you’re old, you may be able to ride it out with your cash, but for everyone else, it’s a disaster. Wonder where you fit, Chuck?
I can ride it out. I am one of the lucky few who had a good job for 28 years with benefits and a reasonable pension plus benefits. Living in Thailand I can even save money. I feel sorry for the up and coming young people. Unless your the next Albert Einstein you will have a tough row to hoe.
87 – ’nuff said.
All the Weiss predictions Euro to collapse and dollar to strengthen! Why is the Euro gaining against the dollar. ? This is inspite of the predicted flight to the dollar from China, Japan and Europe>> Could Weiss be wrong and the other variables in the equation point to a weakening dollar inspite of the predicted capital flows.
John
So far, Weiss is right. The dollar/ euro ratio is higher now than 10 -12 years ago.
Nothing goes straight up; 3 up and 2 back……. But the dollar has been gaining slowly but surely as RMW notes.
The real story is that the world is awash in debt out the wazoo. And most of that debt MUST be paid in dollars. Ergo….the demand for dollars slowly but surely drives up the cost of dollars. It might change at some point…but probably not any time soon.
I find it funny that a currency “printed” by a country that is in debt “up the wazoo” can be increasing in value. My country has a balanced budget. Something is out of wack and I feel like all thing out of wack there will be a day of reckoning. It will take time. In the end you will awaken and find that your sitting at a Monopoly board and you have just landed on Park Place.
The US has gained recoverable oil reserves “up the wazoo” by potentially trillions of barrels, as US frac/horizontal drilling technologies are improving in cost, and in percentage of shall oil extraction. Bakken shale layers are about 30 feet thick. Eagle Ford shale is around a hundred feet thick. The new Permian West Texas shales are 300 to over 1000 feet thick. “Robotic” drilling rigs with “wheels” can drill many holes in all directions from a single pad to lower cost by a third. Re-fracking old frac wells can add 2/3 production at less than 1/3 additional cost.
Money printed by the US essentially all goes to the super rich 1 percent, with little going to the masses, so that the printed money does not increase inflation of commodities. Even though the super rich 1 percent gets trillions in printed money, they are too few in numbers to increase demand for food, gasoline, and the like. How much food can a few thousand super rich people eat, even if they eat none stop 24/7? How many cars can a super rich person drive at one time? Much of the printed money goes to the super rich, and their super rich companies, and these money are hidden in off-shore tax haven banks, where the hidden printed money are not highly utilized.
US technology is still superior like frac oil technology. Once other countries challenged US technology like Japan, and Germany. Japan’s economy fell off a cliff (possibly a demographic cliff) a few decades ago, and it is still slow. Germany’s superior car technology has just take a hit from its scandal of cheating in fuel milage tests. Germany may be facing a coming demographic cliff too.
The biggest risk for the US is when the Republican Trickle-Down crew gain Presidential control. Ultra tax cuts for the rich creates huge deficits for the US Federal government that results in vast money printing to feed the rich. Ultra deregulation of Trickle-Down economics enables the really rich and crooked business people to rip-off the financial system without control to finally the banks get hugely rip-offed to need vast bank bailout by vast money printing. Printed money from the last 2008 bailout went to the rich bankers, while the middle class savers saw their savings accounts interest earnings reduced to near zero percent returns, resulting less money available for the middle class people to buy food and other commodities like gasoline, which with high-milage cars laws, which were reinstated by the Democrats, kicking in, the demand for gasoline is drastically reduced. Old SUV’s can get only 15 miles per gallon, while new SUV’s are rated up to around 30 miles per gallon after high-milage car laws are reinstated. Can a new Republican President once again remove high-milage car laws? Maybe, but it will take a couple of years, at least, to get a oil friendly Republican President into office.
What country is yours that has a balanced budget, but its currency is not increasing in value? For example, the swiss recently found their currency was too much in demand, and in becoming too strong. They devalued their currency. It may be that their goods became too expensive for other countries to purchase, when its currency became too strong. The rich exporting people and their companies don’t want their countries currencies to get too strong, even if a strong currency is better for the general population of their country at large to buy imported goods like gasoline at a lower price. But, the rich exporting companies care more about their own profits than the general population.
I find that I concur with your comments Ric. Turbulent times indeed. At 86 I likely won’t be around to witness the conclusion of all the turmoil. Nor would I want to be put in a position to decide the outcome of it.
the germans wouldn’t let draghi weaken the euro, which would have strengthened the dollar. fret not john, weiss is right. a stronger dollar is coming, as are higher rates and inflation. we’ve reached full employment, so demand for credit will uptick next year. this will move long-term rates higher and cause the fed to tighten, all leading to a stronger dollar.
we’ve turned a corner. time now to look for the end of the deflationary cycle and the beginning of the inflationary cycle. i shutter to think what this might do to the bond markets, especially high-yield bonds. look out below.
You have reached full employment with just 63% of the work force participating. 50% on some kind of government handout. A debt load heading for 20 trillion dollars and a total staggering debt of close to 200 trillion (did I really say that?) Any Fed tightening will be a one and done deal. You have to wean yourself off of that government Kool Aid.
i agree gordon, a long, slow process. we’re at 5% unrate and decreasing, with cheap oil and low interest rates. people are already buying cars like crazy and driving everywhere. the demand for money will allow banks to raise rates on loans, so the fed will need to keep the spread in line by raising the funds rate. it’s coming. we’ve finally turned the corner guys. we’ve got to start thinking in terms of inflation.
Prepare for Deflation for a long long Long time … And Pray for America to return to God.
Merry Christmas to All of you !
If we do not return to God as a nation, the USA will not exist. How, do we stop a fraction of our people from trying to destroy a nation that was dedicated to God in the beginning.
We happen to live in a time of GREAT change. Huge percentages of peoples are well educated. Europe, once a region that had a Judeo-Christian foundation for its society, laws and philosophy………has become largely secular. The U.S. is quickly following in their footsteps. Yes, the U.S. non believers are a fractional group…..but it is a huge fraction and it is NOW growing FAST, VERY FAST.
Please understand, I am not trying to offend you or anyone here, as I am a believer…..but this is the harsh truth IMO: many within the millennial generation look at a book like the Bible (or just the Torah) and laugh….or they could care less. They are just not impressed and don’t believe much or any of it. With access to huge information base of the internet, they are just not going to accept much of what the foundational scriptures for Judaism, Christianity and even Islam present. Stories and words that many tout as “the word of God” just will NOT pass their muster whether it be creation in 7 days, Jonah in the whale 3 days, walls of Jericho tumbling down with shouts, etc, etc, etc.
Myself…….I mostly only believe the red words of the NT. And I find some truths and inspiration in the Psalms and Proverbs. And i think that there are scattered other areas of beauty such as Isaiah.
God is a Character in a book. Anyone can write a book, and people may choose to believe in it. L. Ron Hubbard did, for example (Scientology). If people choose to believe, and allow others to choose for themselves, fine. The Spirit of what people call God, Yahweh, Allah, is in all of us, and we have the choice of whether to accept it or not. We are only human, after all; but strive for the best in us. Otherwise we will not survive and develop as a species.
Jehovah was a specific, identifiable, male entity that rode a fiery chariot. He instructed his people not to kill or steal and then promptly ordered them into their neighbors territory and demanded they kill every man, woman, child, and beast and steal all their stuff. Go figure. Jim
How lost you must feel at times!! Our way to God is through Christ that gave as standing in front of God. HIS Love for you is something that you must still experience in such a way that it will change your life forever!
There is NO substitute for DIVINE Love, the sooner you get it, the longer you will enjoy it!
“Christ in us, our hope of Glory”
Again Chuck I have to agree with you. Your most important statement is “strive for the best in us” Sadly chasing money greed has overpowered this part of our being. We are now like the money changers in the temple mentioned in the bible. Disclaimer I am not religious.
I wish people who write would STOP using letters such as “IMO”, “RN” and spell out what you are saying so the rest of us are able to fully understand what is being said in posted epistles.
Not everyone is with these abbreviations!
Ed and RMW: How would a “return to God” exactly work? How would our modern economy change? Or are you making a social commentary? Personally, I would urge a return to scientific thinking. Do you know what that is?
The “there are no atheist in a foxhole” effect may change a lot of attitudes towards your “scientific thinking”.
mule (<:
Let’s hope we don’t actually need foxholes, mule. Unfortunately, it could even come to that. Dig deep!
PAY ATTENTION TO THE MARKET INTERNALS, NOT PUNDITS
I would not pay much attention to Mike Larson’s Market Forecast(s). I would not invest based upon his timing signals either. The S&P 500 will probably bounce off this historic low and be at least 5% higher in six weeks. Within 6 months or so, up 13.5% from current levels. Not all Sectors will perform, least of all Energy and Materials ( Commodities). Consumer cyclical and Technology will definite be up this Winter and push the cap-weighted indexes up right along with them.
So, don’t panic and sell-out and don’t pay to much attention to pundits ( or anybody). Pay attention to traders who make money. Stay in the market and especially the right sectors that have the most momentum.
Mike Larson is not a stock trader. He should stick to political and economic commentary and leave the market analysis to more experience hands.
What gives you the impression that you’re right? Consumer cyclicals (IYC) is flat and down from it’s highs. Consumers are tapped out and loan debts are mounting. Technology is a little better but also looks vulnerable. Mike Larson is preparing you so you and I can keep our money safe. If the markets collapse from here, I hope your smart enough to protect your money as Mike Larson suggests.
Note of interest……just got an email on this from a good source….assuming it is correct:
Over the last nearly 16 years, since January 1, 2000, the S&P 500 has had a 2.38% average annual gain. That’s through last Friday’s large bump.
If you did not beat the market over all of those years…..factor in inflation and you are at, essentially……zero. That is sure encouraging for market investors! Not.
Well trying to predict the market directions is about the hardest job there is. I think you are doing pretty well, Mike. You probably should be more conservative but the market and the psychology behind it have been amazingly positive the past 6 years.
But now junk bonds are falling from grace, student loans are starting to increase in defaults and the Auto loans are doing likewise. Of course we all know that corporate debt has gotten out of control which isn’t a good sign considering the falling commodity markets.
And the world is in the greatest debt position it has ever been in, which means slowing GDP growth worldwide as economic forces or interest sucks more money from investment in growth. The drastically larger government means more taxes to support it which slow growth. I have never seen a more negative environment for GDP growth in my 60+ years.
All too true, Al McNal. I just can’t see much positive for the economy as a whole. More like a hole.
Looks like the VXX went above the Simple 10 day moving average. That means Volatility has signaled it’s a buy. Also the 14 Day ADX has the Green line above the red also confirming volatility as a buy. If the VXX RSI moves to 50, as it is at 49.61, then that’s 3 important signals signifying Watch-Out Below.
Just like coal ,oil will also be used much less after 10 years. So no point in having oil buried under the ground.dont conserve ,drill and consume.
Hydrocarbons are vital components of a huge number of products besides fuel, like plastics, fertilizer, and fibers. We have plenty of oil if we want it. Jim
The world is awash with oil and natural gas. The near energy future is in much higher efficiency solar, natural gas and 3rd and 4th generation molten salt nuclear reactors with much higher fuel efficiency and lifespan and far safer designs plus lower cost to build. Oil will remain and energy factor but I predict the price will never regain its former high levels unless an artificial scarcity is created.
Thanks to the advice of Dr. Weiss, and now Mike Larson, my money has been safely “dozing” along (yes, losing some minimal value due to inflation) following “Mr. Conservative†holdings…while none of my friends has increased their wealth with mostly-stock holdings, and in aggregate they’ve lost hundreds of thousands of dollars.
Sadly, because of our age, they will likely never live long enough to see their losses erased. But since my principal is still intact, I may live to realize a total reversal of my minimal “losses” and even see a substantial gain.
That potential gain you mention will only occur if you get out of cash at the right time. Otherwise your minimal losses will just continue to accumulate, until you end up with nothing (if you live long enough).
Actually, I’m not too worried about China and their woes. The stocks I currently hold weathered China just fine this past August. Their inclusion as one of the IMF’s reserve currencies could prove very harmful to the US. However, under certain conditions it could backfire on them. A lot depends on how much US debt people decide to dump and when.
For those of you who have buried coal as a fuel for power plants you better wait. The changes in this market are a comin next year.
On precious metals, I would expect their prices to fall once the interest rate increase is announced and, they may fall further afterwards, albeit at a slower pace. If you are going to invest here, wait. When you do, go for silver, not gold. Royalty companies, especially those heavy in silver, may be the best bet because they have their prices locked in and should stand to make the most profit. It still remains to be seen if all of the fortune tellers predicting metals to take off will happen or not. I’m probably 60-40 that it will happen, it just may take a while to be seen. If they do take off, I would expect to see other commodities rise as well. Take a look at the USCI commodity fund. It is rebalanced monthly. I’m currently not invested there but could be in the future.
***WHAT ABOUT GOLD AND SILVER AND MINING STOCKS-MIKE,WHAT DO YOU THINK ??? HOW CAN THEY POSSIBLY STAY AT THESE LOW LEVELS WITH ALL THAT IS GOING ON?….WORLD ECONOMY-SHAKEY! ! SEVERE POSSIBLE CREDIT DEFAULTS-LOOMING !! TERROR PANIC AND CRISIS…ISSIS !!! I HAVE LOADED UP !! AM I WRONG ???
Fool’s gold. You can’t eat it, and it doesn’t earn a dividend. Unless you plan to make a lot of jewelry, I think you’ll find the world’s complex economy can’t be levered to gold, whether there’s inflation or deflation. Wouldn’t put too much stock in Larry Edelson’s $5000/oz gold predictions.
Can’t much enjoy eating a wrinkled-up dollar bill or an electronic clump of pixels on a bank balance vulnerable to wholesale looting by the feds, either. Just as the Creator didn’t give us just one species of food to plant & eat (yay, more potatoes!) so we benefit from placing our financial trust in more than one fragile source of value.
Gold and silver are actually just commodities. Pretty, yes, but just pure elements. In reality, their rarity and beauty gave them a value in people’s minds. Printed bills also have a degree of beauty, and a certain rarity. This worked for awhile. Now, money is basically just bits and bytes. One EMP, and it all disappears. Food and water will be the only real money.
The variety of opinions here and multiple other newsletters…indicate mostly global financial volatility…best to be a nimble quick long/short….short term speculator…
will china sink our markets again, you ask? absolutely not. they never did to begin with. it was the other way around, we pop their bubble. china represents only a fraction of a percent of our economy, mike. look it up. china cannot hurt us in anyway whatsoever. we sneeze and china catches a cold, not the other way around. china buys cell phones and grain from us, things they’ll buy no matter what, and even if they didn’t wouldn’t amount to a hill of beans.
Well Apple gets something north of 50% of their sales in China, so more than a hill of beans for our largest company!
not enough to drag down our economy. even the entire commodity rout is barely able to, so no way could china.
Seems like the global economy and financial markets are on the verge of a $$ migraine headache. Oh what to do! Oh what to do! Rest your head on a $$$$$ bed!
Michael, The China economic downfall is nothing new and TOTALLY expected as Deflation spreads worldwide..As always, the equity markets will be the last of the capital markets to figure this out. In fact, ALL indicators are that the final tops are in and the next downfall/leg down from a technical and cyclical standpoint will be severe…All this nonsense about a robust jobs report is silly when compared to the employment PARTICIPATION rate. There are so many many canaries in the economic/financial/geopolitical coal mines, you can’t count them all. Katy bar the door!!
No one knows what China is doing? Their Secret Mission only we will know years from now.Guess! They are much smarter then…
If you are looking for evidence of Chinese capital showing up in our real estate markets you must look in the right places. I have a friend who married a Chinese woman and she relayed that the Chinese investors will pay whatever is necessary to purchase in a known urban location. West Coast Cities such as San Francisco, Seattle, and Los Angeles often have Chinese real estate agents who have been out selling their domestic competitors for several years now. There is often a back office operation that lines up the sales often sight unseen in China. But this only applies in large urban areas that are well known in China. If for instance you tried to market a property in Redding or Bakersfield, CA there would be no interest.
I had an interesting experience a couple of months ago where two customers in a local Home Depot in the Bay Area of California were discussing their pending purchase. The only thing out of the ordinary from my perspective is that they were both speaking Chinese and appeared to be recent immigrants.
I am not saying that is good or bad, I am just reporting what I have been told and seen.
Oh the poor oil billionaires are getting reamed by the Saudis. Never mind that thousands of Americans have died protecting them and 9/11 was the result of Saudi hatred toward us. Let’s ignore the trillions in debt we’ve run up so we can control the Middle East. Concerned about oil workers losing their jobs? What about the millions of manufacturing jobs sent to China, India and Vietnam, where was the concern? The corrupt politicians who have committed these economic atrocities are still in power. The fact that Obama and the Republican Party support the TPP should be enough evidence to show that it’s not right or left, it’s us or them.
It’s interesting that well to do Chinese see the U.S. as being a safer place than Shanghai or Xian. Let’s hope they are correct.
Most of our problems are due to who we elected as President and a do-nothing Congress.
If you want things to change you need to take your country back. It appears that the people elected a muslim or muslim sympathizer to President. One woman told me she voted for him because he had a cute butt (ugh). This is why we have so many problems. We do not take voting seriously and understand what each party stands for and the people running for election what do they really stand for. BO still has not shown a birth certificate. So we don’t even really know who our POTUS is. I am not predjudiced against Muslims but we need to elect American born people to our Congress and President….or at least to President.and Vice President.