IN a surprisingly unexpected move, the Swiss National Bank threw in the towel on their Franc/Euro peg and threatened to move interest rates deeper into negative territory and announced a scrapping of the floor at 1.200.
The result - ABSOLUTE CHAOS across the currency markets, the oil markets and the gold markets.The result? The cross plummeted an astonishing 1400 points in the matter of 30 few minutes! Every single trader on the planet who was in that cross and expecting them to defend that floor that they have been so vocal about defending, within that brief time span, was financially obliterated.
This is what I HATE ABOUT CENTRAL BANKS - as I have said many times in the past, it is my personal opinion formed from years of trading and, I might add, from having been on the receiving end of something along this nature from the Bank of Japan at one time, Central Banks are the CHIEF CAUSE of MARKET VOLATILITY and instead of helping to create/maintain relatively calm and orderly markets, they inject disorder, chaos and devastation.
I just hope some of my readers were not trading that cross.
My take on this surprise is this - there was no reason for the SNB to do such a thing UNLESS they knew that a big bond buying program was coming from the ECB next week. Even though their interest rates were already negative, they were spending enormous amounts of their reserves in maintaining that 1.2000 peg. If the ECB were to go ahead on the bond buying/QE, the Euro would weaken ( at least that is what the market is expecting it to do and thus the reason for the strong downtrend in the common currency). A weaker Euro would exert even more pressure on the Euro/Swissie cross requiring even more ammunition to be wasted by the SNB.
Thus they threw in the towel and surrendered.
Gold certainly does like this!
The oil markets have gone beserk as a result as well.
Holy Atomic Pile Batman!
ReplyDeleteyup. everything is awesome. until it ain't.
This comment has been removed by the author.
ReplyDeleteThanks Dan.
ReplyDeleteThat nasty spike up in the USD is well underway....93+ by tonight? (edit: see link below)
Fwiw, the initial peg or 1.20 floor in the EURCHF happened at about the same time gold peaked back in Fall/2011.
I can't help but wonder if this move, coupled with a forthcoming EMU QE, will be significant enough to move gold to $1400 and consolidate long enough to form a base.
I guess depending on what chart you use it looks like USD 93+ has already happened.
http://finviz.com/futures_charts.ashx?t=DX
there is pressure for sure on many other currency crosses now. if gold starts acting like a currency here, certainly this event could finally mark the big bad bottom. too bad that i already lost all my retirement money buying all the other dips. thanks Turd, i thought i heard you say you were wrong, and that you were sorry. well, it will be interesting to watch anyway from the sidelines. and it makes me feel better knowing that at least a few hedge funds blew up this morning. i always hope that somehow, somewhere a little guy ends up with my retirement money... well just so long as this person isn't a compassionless, arrogant ass.
ReplyDeleteWouldn't be a bit surprised to learn Soros ran his GBP play of yore again--and made another $B...
ReplyDeleteInterestingly, I happened to be awake when it happened, and saw the reaction in real time. Pretty impressive! Also, it was at least 15 minutes (maybe longer) before an explanation was posted on the mainstream financial media (even the WSJ). Lesson? You're f@#$ if you don't have access to hi-$ services like a Bloomberg terminal--I'm sure they like it that way just fine...
So far the consensus in the gold blogosphere is that this Swiss National Bank move that removed the floor on the EURCHF/1.20 is the beginning of the end of CB's in general based off less than one days market activity and what it might portend going forward.
ReplyDeleteCouldn't it just simply be that the SNB obviously knows the ECB is about to unleash some form of QE and got out of the way of what would've been a foolosh monetary policy to stay in? Of course.
It's as simple as that. They did the right thing and got out of a bad trade/policy.
I'm not sure how one move today by the SNB signals the end of anything much less the hysterics that it signals some type of broader collapse among global CB's. Get a grip.
Admittedly, this was a huge move today by the SNB but does it mean that CB's are losing control?
If anything these types of moves prove to me that the CB's are nowhere near collapsing....not even close. The only way CB's become irrelevant is when money becomes irrelevant OR the Treasury Depts. of sovereign nations eventually takeover as the defacto CB's of their own countries.
CB's aren't going anywhere for quite awhile and certainly not tomorrows tomorrow because of todays singular SNB EURCHF move.
Maybe when Greece leaves Euroland by defaulting the situation will become clearer. Armstrong had a euro target weekly closing of 1.6- something that if occurred would be devastating to Euro CB, he said. It is already there today at 1.603, have to wait and see if it holds tomorrow.
DeleteSure banks will always exist but doesn't mean the economies to support them always will. There is no euro job creation unless you are in the limited administrative banking or government positions. It is a crime what banking has done to Euroland. Now to support the euro, CB banks will try buying each country's debt by issuing bonds. Good luck with that.
Despite what I said above I would admit that the ECB is a bird of a different feather and that it could disintegrate if/when the EU is no longer a viable union.
DeleteBut if/when that happens would it portend a collapse of other CB's as well. I don't think so.
It would gaurantee that the former EU members CB's reset and restart their own sovereign monetary policies and operations as it was before the EMU came into existence.
If people think todays turmoil is a big deal (and it is for now) just wait until England pulls out of the EU.
The Swiss have long liked a strong currency. I was astonished when they pegged to the euro in 2011.
ReplyDeleteThat said someone still likes a strong currency and drove for the gold referendum.
Perhaps the pressure just got to great when euroQE became inevitable.
In any case they will have expensive chocolate and clocks. But will be able to buy lots of Euroland goods.
The crime is not what banking has done to Euroland, but what their POLITICIANS have done. MA has covered this much better than I can.
ReplyDeleteThe Swiss might have done better to go for the gold option in November, which would have been much more creditable and respectable than this devastating move of delinking their currency at the last minute without notice, leaving many investors smashed.
ReplyDeletePD...I think the SNB had to do this unannounced or telegraphed.
DeleteIt's probably better they didn't string the market along for days or weeks like the future US rate hike is doing for example.
I'm sure I'd feel differently about this if the SNB move cost me some skin today. I'd be livid, no doubt.
I was wondering though what the consequence or alternative would've been if that Swiss gold initiative would've passed.
Would the SNB have been handcuffed today (or eventually) and unable to remove that EUR floor/peg if they were in the process of buying lots of gold to satisfy that gold initiative?
From the sound of it the SNB has had to spend a lot of francs on the EURCHF pairing since that peg was announced back in fall/2011. I don't think they could've continued depleting their capital reserves by keeping that peg in place AND also having to buy the gold their referendum initiative would've demanded they do.
I'm not sure they could've done both and if that's the case this SNB move today might've happened sooner than today.
I think some of us on here were wondering how long the SNB could keep that peg once the EUR hit 1.20 AND the USDEUR hit 1.20
Something was bound to give way sooner or later.
With the Greece election about 2 weeks away it seems all eye's will be on the EU for one reason or another.
It also seems like something drastic (cap. controls?) is about to surface from Moscow and the BOR...
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~Bank of Russia Seen Changing Tack After Leadership Shakeup~
By Anna Andrianova, Olga Tanas and Jason Corcoran
January 15, 2015 11:02 AM EST
The Kremlin is clearing the decks for the Russian central bank to help fight an economic slump and undo the damage wrought by the ruble’s steepest decline since 1998.
The choice for the biggest leadership change since Governor Elvira Nabiullina took charge in June 2013 “wasn’t a chance appointment” and will probably result in changes to monetary policy, Andrey Belousov, a Kremlin economic aide, told reporters in Moscow today.
The ruble extended gains a day after Dmitry Tulin, a former central banker who also worked at the International Monetary Fund...(cont.)
http://mobile.bloomberg.com/news/2015-01-15/russian-central-bank-seen-changing-tack-after-leadership-shakeup.html
Yep, changes at the BOR mean capital controls are coming....
Delete~☆~☆~☆~☆~☆~☆~☆~☆~☆~☆~
~Russia May Resort to Currency Restrictions If Outflows Continue to Mount~
By Andre Tartar and Anna Andrianova
January 16, 2015 4:55 AM EST
Russian net capital outflows probably doubled last year and the government may resort to currency restrictions if the pace doesn’t ease in 2015, according to a Bloomberg survey of economists.
CAPITAL CONTROLS are likely if private money leaves at a $240 billion annualized rate in 2015, or $60 billion this quarter, according to the median estimate of 14 economists. Outflows more than tripled to $48 billion in the fourth quarter from the previous three months, pushing last year’s total to $133.3 billion, according to the survey. That’s the most since in 2008 and compares with $61 billion in 2013. Russia last had inflows in 2007, according to central bank data.
Capital flight is bleeding an economy already squeezed by sanctions over Ukraine and...(cont.)
http://mobile.bloomberg.com/news/2015-01-16/russia-seen-keeping-option-of-capital-controls-if-outflows-mount.html
One only has to look at the Swiss central banks balance sheet as a percentage of their GDP to see why they gave up.
ReplyDeleteIts something like 90% of GDP Thats incredible!
Its the equivalent of the US Fed central bank having 15 trillion on their balance sheet. Try unwinding that balance sheet?
If ECB QE happens, the Swiss would have to burn their currency to the ground to keep that peg in place.
They knew it was over and gave up.
All central banks look to be heading down the same path as the Swiss to the point where they will have to make the same decision.
Monetary policy provides a short term fixes and highs but makes the original problem even worse in the long run.
Not a good thing...
ReplyDelete~50 000 servicemen will be drafted to the frontline in eastern Ukraine~
Ukrainian President Petro Poroshenko has issued a decree mobilising 50,000 servicemen to the frontline in eastern Ukraine.
Those eligible will receive notice papers calling them to service as soon as the Ukrainian parliament approves the measure.
The Ministry of Defense plans to draft healthy men and women, preferably with military experience. Tank operators, artillerymen, reconnaissance scouts and messengers aged 25 to 60 are in high demand.
Volodymyr Talalay, Major General: "We are not planning to draft untrained men for positions that require military efficiency. Military leaders are looking for those who have already been in the army or those who can serve within civilian professions."
Combat trainings for servicemen will take 10-15 days. Ministry of Defense officials say this timeframe is adequate to acquire combat skills and replace those soldiers who will be rotated out.
uatoday.tv
My hunch is that the reports of the death of central banking will turn out to be greatly exaggerated.
ReplyDeleteWhat this surge in gold clearly demonstrates is that the price can turn on a sixpence. Making predictions about its long-term demise, and putting out fatuous prognostications like gold $1000, as has been the wont in mainstream, is unrealistic and disingenuous, as there are just too many black swans out there waiting to devastate our fragile economy.This recent Swiss black swan is just a baby one, highlighting the weakness in Europe, so just imagine what a big one could do.
ReplyDeleteThis is the week close, and the support of the red channel is being broken this week, along with the lows of 2005 (1.16).
ReplyDeleteBesides, the BNS shot yesterday on the support area, and if it breaks...as I said, I see little before 1:1.
One thing : if I consider last time we plunged, and focus on the width of the channel, the equivalent would be a support zone now near 1.10.
But that's simply a comparison, nothing more;
Are we finally witnessing eurozone cracking down, just as the russian ruble?
Dang, I remember my first short at 1.35...thinking I was a bit late on the move! The beast is getting ugly, because long term supports are now being broken. Is the real avalanche going to start?
Gold : possible resistance at 1278 with the weekly upper bollinger band heading down. To be confirmed on fast time units intraday. But...with the panic regarding the euro, europeans fleeing once more towards Swiss Franc, USD, and GOLD, I wouldn't short much, nor without a close stop loss...
ReplyDeleteFor some time now gold has been considerably stronger than the dollar, which has been much stronger than all the other currencies. Meanwhile most of the other commodities have been sinking against the dollar. What does that say? Is gold now being regarded as more of a currency than a commodity and has regained its safe haven status? Gold also has other support, namely Chinese New Year, and Indian wedding season buying coming up for the next two months or so, plus the fact that the dollar is long overdue for a correction. In this period the European crisis will continue to unravel, providing a combination of factors that could entrench gold's sustained recovery.
ReplyDelete...and there goes USD/93 and the EURUSD/1.14 handle.
ReplyDeletehttp://www.marketwatch.com/investing/index/DXY
I don't know if SNB is really signalling ECB bond buying or simply couldn't hold the peg anymore.
ReplyDeleteIF the ECB "disappoints" the markets and doesn't proceed to any bond buying, woohoww, we could see a nice short term candle.
"Yummy, yummy, yummy, I got luv in my tummy." So sang The Animals pop group in the 70's. Well, gold is now in the mood for love, and to be loved, as you will see in the next few unfolding weeks of great global drama. Gold $1300 is a sine qua non, I would say, more like $1500 by the end of the year. Fear of the Fed will recede as the crisis develops, and the notion of raising interest rates this year become clearly just a bluff, which in fact it was all along.
ReplyDeleteCentral banking is not ending, what is ending is belief in what the central banks say to the markets.
ReplyDeleteThink back to the ratings agencies saying subprime is a triple AAA investment and they said it right up until it all collapsed.
The Swiss national bank made people believe right up until the last minute that the peg would stay, then it collapsed.
Now the markets believe the Fed can end QE forever and raise interest rates by mid 2015
Yet we have deflation taking hold again, so how?
MB, this is an astute comment. That which is disintegrating is belief. The recovery always hung on belief from the start, engendered by the so-called prestige of the jaw-boning governors of the Fed, and once that is gone, those anti-gravity levitation experts, will come
Deleteplummeting back to Earth.
The most we can expect is a token tweak of interest rates later in the year, if only to salvage a bit of credibility. Even that could have major ructions with markets cascading downwards around the world. The fall out could be so severe that the Fed would eschew any such future actions in the clearest way. Once the Fed has given up the ghost, so to speak, it would slingshot gold on its trajectory to the outer planets.
ReplyDeleteGold will fall back as soon as next week, when sentiment changes. Gold has no yield, is a hassle to store, etc. There are just so many better alternatives...
ReplyDeleteThe SNB did not go bust, blow up, or any of the other garbage ideas the gold "community" is shilling--quite the contrary: their move was a show of strength and independence.
As soon as the air starts leaking out of this knee-jerk move, gold will go back to being an excellent short--the gift that keeps on giving.
Gold is not the play anyways.....the miners are the play and they take zilch storage space. Most stocks or etf's don't pay interest either.
DeleteThis sounds like a sound plan and a way to get around the ECB itself directly buying bonds but instead using the national banks of each country.
ReplyDeleteAny collective QE that takes place will be the NB's buying their own bonds and not the bonds of other countries. That's always been a sticking point.
Greece being left out of the QE loop practically ensures a unique EU QE takes place but not until Greece quits the EU or they're expelled.
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~ECB Weighing QE Through National Central Banks, Spiegel Says~
By Jana Randow
January 16, 2015 12:28 PM EST
European Central Bank President Mario Draghi briefed German Chancellor Angela Merkel and Finance Minister Wolfgang Schaeuble on quantitative-easing plans under which national central banks would buy bonds issued by their own country, Spiegel magazine reported.
The plan, which tries to avoid a transfer of risk between member states, envisages purchases in line with the ECB’s capital key, with a limit of 20 percent to 25 percent on each country’s debt, Spiegel said in an article published today, without saying where it got the information. Greece will be excluded from the program because its bonds don’t fulfill the necessary quality criteria...(cont.)
http://mobile.bloomberg.com/news/2015-01-16/ecb-weighing-qe-through-national-central-banks-spiegel-says-1-.html
I think by Monday morning nobody will still be talking about the Swiss (except the goldbugs). It will be old news, yesterday's fish wrapper. Attention Deficit Disorder markets will move on to what will the ECB do.
ReplyDeleteThe biggest story of 2015 continues to be the oil crash and associated fallout, imho. If you want to watch something that matters, every day, for months and months, watch the oil story.
And just to make it clear where I stand, there is a massive stimulus program currently underway in the USA. The best kind. The Adam Smith Invisible Hand kind. The kind with a great track record of boosting both Main St and Wall St. It's called "Cheap Gas". It's unambiguously good (just to piss off the ZH-types :))
Rico, did you notice that gold went from $260 in 2000 to $1900 in 2011, and today stands at $1276? Since the beginning of December the HUI is up nearly 30% and etfs like JNUG, which I advocated, up nearly 80%. In 2015 gold is one of the best performing assets, and the HUI outstanding. Am I wedded to gold shares? Of course not, and will take my huge profits very soon, maybe investing in JDST for a correction. Overall, though, I think the path of gold will be up for the foreseeable future.
ReplyDeleteAnybody looking at the price action of IYR and XLU? Totally crazy. They are trading as if the 10-year is going down to 1%.
ReplyDeleteWho would have guessed that the Fed would have been able to design the "Perpetual Motion Machine" whereby the more you print, the lower interest rates go, and commodities crash creating the ultimate stimulus for the consumer.
Never before in history has the backdrop been so constructive for the consumer and small business. Any wonder why after all the fear and angst this week, that the Russell 2000 (IWM) is still within 4 bucks of lifetime, world record highs?
Yet reading the tea leaves, interest rates just keep falling saying the world is heading into a recession as the yield curve flattens more and more each day.
DeleteCentral banks and overly indebted consumers won't beat the natural debt deflation that is happening. Nature always wins in the end.
If only those world record highs were supported by fundamentals rather than CB stimulus. At some point the lesson will be relearned that there's no such thing as perpetual motion. And let's not forget the millions of consumers who work in the oil industry or other commodity related jobs. Not so rosy for them surely.
ReplyDeleteGood point, the Swiss central banks perpetual motion machine failed the other day, when they chose to save their currency rather than keep printing to maintain the peg.
DeleteThey gave up.
Dan, the following was posted on a site. It this correct?
ReplyDelete"BillD: Trader Dan .... his take on the impact on gold that the SNB move to strengthen the SFR was. He replied, "Gold ready to explode. Will reach $2500 in the next 18 months."
Jasper - thanks for the head's up on this.
DeleteIt is bad enough that I have some websites plagiarizing my work; now I have people making things up. What a corrupt world this is!
No, I did not write that my friend nor do I believe that.
Appreciate your looking out for me on this!
Illegitimi non carborundum!
DeleteIt just goes to show how deceptive or irrational some of the gold/silver promoter BS is.
There's people out there just making crap up because they know it'll be lapped right up and never questioned or fact checked.
It's A Mad Mad World (1963)
http://youtu.be/Sla845GW9YM
Besides China and Japan my takeaway from this is that the U.S./Fed owns $4.13 TRILLION OF THEIR OWN DEBT of the $6.11 TRILLION of total outstanding debt. (article below)
ReplyDeleteThink about that for a few seconds...and then consider the implications (or possibilities) when the U.S. holds the vast majority (75-80%) of their own debt and in essence owes itself it's own future debt obligations as those treasuries mature.
I wrote about this very possibility several years ago after QE started up and it was revealed what types of assets/bonds they were targeting. You could clearly see what they hoped to achieve by doing so.
After years, and many TRILLIONS of QE, you can see how much "progress" the Fed has made towards it's objective of owning most of it's own future debt obligations.
At some point all the QE asset purchases will come full circle and the US will either shelf those US held treasuries OR they'll use them upon maturity to monetize more of their own debt in the future.
They're monetizing/greasing their own skids down for future debt monetization OR the debt relief they'll provide to themselves.
This link will give you a better idea of how this will work out.
http://mobile.bloomberg.com/news/2014-10-24/fed-s-4-trillion-holdings-keep-boosting-growth-beyond-end-of-qe.html
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~China’s Treasury Holdings Decline as Japan’s Rise to Record~
By Brendan Murray
January 16, 2015 4:00 PM EST
China’s holdings of U.S. government debt declined in November for a third straight month, reaching the lowest level since January 2013, as Japan’s jumped to a record.
China, the largest foreign holder of Treasuries, had $1.25 trillion as of November, $2.3 billion less than a month earlier, according to Treasury Department data released Friday in Washington.
Japan, the second biggest, moved to within $8.9 billion of China’s lead, increasing its ownership by $19.1 billion to $1.24 trillion.
The two countries account for about two-fifths of all foreign ownership of Treasuries, which gained $53.5 billion in November to $6.11 trillion, the figures showed. Of that total, $4.13 trillion were government holdings.
The Treasury’s report, which also contains data on international capital flows, showed a net inflow of U.S. long-term securities of $33.5 billion after a $1.4 billion outflow in October. It showed a total cross-border outflow, including short-term securities such as Treasury bills and stock swaps, of $6.3 billion following a revised $179.5 billion inflow the prior month.
Data from China this week showed that the nation’s foreign-exchange reserves, the world’s largest stockpile, fell to $3.84 trillion in December from $3.89 trillion in September.
Bloomberg.com
What you are describing above Darkpurple is the failure of a countries currency in that no one else wants to buy their debt, so the only buyer left is their central bank.
DeleteDo you really think that would work when in the past it never has for other countries?
The value of that currency would eventually sink to zero against other currencies.
If this actually worked everyone would just print and buy their own currencies debt.
"If this actually worked everyone would just print and buy their own currencies debt."
DeleteMB...I think this is exactly what we're starting to witness. If everyone does it and no one calls anyone out on it then is it really such an unviable alternative?
China hasn't and won't say a peep about it because they need strong, healthy trading partners and in fact they're monetary policy is super loose from the looks of it as well.
I agree with your overall premise. I totally get it and I'm no CB apologist but I see a trend developing imho.
Instead of a classic/ instant debt jubilee is it possible the major CB's/Treasuries are slowly using time and the ability to purchase/retire their own debt as a slow, incremental defacto jubilee that takes years if not a decade or longer to accomplish the samething?
I think so.
Welcome to the new normal.
"same" "thing"...two words. :-p
DeleteIt looks that way Darkpurple.
DeleteThe idea seems to be give no alternative for holding a big currency as they are all alternating buying bonds on and off.
"This is the start of BIG BANG."
ReplyDeletehttp://armstrongeconomics.com/2015/01/17/the-euroswiss-has-been-warning-the-peg-could-not-hold/
DPH;
DeleteThis is one time where I do not agree with Marty.
I wrote some lengthy comments about this on my site. As I said in those comments, I do not fault the SNB for abandoning the peg. It was indeed a fruitless/hopeless task which was eating through their reserves as they loaded themselves to the gills with depreciating Euros.
What I do strongly disagree with and believe was immoral and corrupt, was them NOT GIVING ANY WARNING to the markets that they were going to abandon a peg which they themselves instituted and which they themselves were verbally defending and insisting would remain. In other words, they LIED to the market and the hundreds of thousands of small traders/investors, business owners, and institutional players who actually took them at their word. In my book, THEY ARE TO BLAME FOR THAT, regardless of the logic of holding the peg or abandoning it.
Central Bankers, by the very nature of their position and power over the financial markets, have a moral obligation to make their intentions clear to those markets.
I have to give credit to our own Federal Reserve and to the ECB, both of which have given the markets plenty of time to prep for their monetary actions. One may not agree with the decisions that they are making, but they are taking the moral and responsible route by clearly signaling their intentions. This allows the markets time to make adjustments to portfolios/trading positions.
For any Central Bank to do what the arrogant, conscienceless,reckless SNB did is inexcusable.
They could have done the same thing in a proper manner by beginning to signal this or what would have been better in my mind, announce a GRADUAL LOWERING of the floor over a series of 12 months or whatever. That would have accomplished the same exact thing but it would have done it on an orderly manner.
Thousands of traders were wiped out by this Swiss Hurricane because of the very manner in which they did it. That has taken down brokerage firms, wreaked havoc on institutional funds and battered Swiss business firms.
In my mind, there is no excuse whatsoever in the MANNER in which this bank went about this.
That Marty seems to be incapable of understanding the financial devastation produced by the MANNER, not the ACT itself, in which they abandoned the floor/peg is quite baffling to me.
Any trader of any serious length of experience will tell you that no Central Bank has ever acted in such a reckless manner before by not prepping the markets ahead of time and by clearly and unequivocally deliberately misleading the markets.
I guess we should expect these things however seeing that we live in a generation of such soulless men that they think nothing of the ruin, devastation and heartache they can unleash.
Maybe we should subpoena the cousins of these Swiss bankers to see how much money they made in their trading accounts by placing LONG SWISS FRANC positions ahead of the announcement that their cousins told them was coming....
Nice thoughts Dan, thanks for sharing that.
DeleteI can't fault the SNB undoing what they probably shouldn't have done in the first place.
As far as MA goes. Love the guys unique outlook and his intense out of the box thinking.
But I don't always agree with him either eventhough I mostly find his outlook to be thought provoking.
Good comments Dan. I didn't think much of it but since you put it this way I agree.
DeleteAnd the fact that friends and family could now retire.
With the cheapest money in history, commodity prices indexed to inflation now at 15-year lows, and the U.S. economy slowly improving, the rest of the world will eventually start catching up.
ReplyDeleteWe are still in the early stages of the biggest, longest economic boom since the 1990's.
Want proof? The institutional investor has spoken, driving up the consumer cyclicals in anticipation of the boom. But for now, many are still fearful and are continuing to pile into "safe havens" such as staples and utilities.
Just watch what happens when all this money rotates into industrial and deep cyclical stocks.
Mark so you are disagreeing with Armstrong's forecast on the big bang?
DeleteCopper and oil sure are not pointing to a boom, quite the opposite.
Mark equates a booming stock market with a booming economy which is a false assumption. The reality is the market now operates mostly independent of the state of economic activity.
DeleteThe Swiss are nothing more than the Germans' lapdogs. Always have been, always will. Whether the manner in which they acted was kosher or not is debatable. We have all seen the CB actions on Halloween and other dates too numerous to list. And yes, the ECB is on the list. These are broken, treacherous mkts and not for the faint of heart. BTW boys, I do not see many of you over at the new site? hmmmmm Have a good weekend !
ReplyDeletePleased to see you over there. Sure wish HDH and a couple others would make the jump. It is more different from this than I expected.
DeleteGood to hear i should give it a try really.
DeleteHi there,
DeleteMy current situation is idifferent from last year's.
Last year, I was living some of my time with my armenian wife in Armenia. Her parents were sometimes helping with our young kids, I was between two jobs, so plenty of time to post on Dan's blog during a few months. Even then, I was considering trading as a secondary activity, with a really small account on a CFD platform. My positions are very small when I trade. Last, I always wanted to be available on free sections on the web, as I don't want to have readers pay to see my own remarks and content : I'm not a trader nor a professional, I don't have the available time at the moment because now I'm living in Paris, with a full time job, without help for the kids lol, so...a bit crazy life.
As a simple reader, I consider Dan's new site is interesting provided I would handle a large enough account on CFDs and would be willing to trade regularly, which I can't do that.
But it's a simple matter of cicumstances. I'm quite curious and thankful for what I've learned here already, and if my situation changes once more, I'll be happy to give it a try.
Meanwhile as I said, a long as Dan allows us to post here for free as well, I would participate (or on the new site if there is free access / content somewhere.
As a writer, I would always post on free sections, as my philosophy is to exchange information and share with other people, as my investment and time invested in the blogs cannot be compared with Dan's in terms of effort.
I think it's Dan's new blog and it deserves the subscription given the time and effort to develop such a blog. Of course, a subscription is a filter as well as it eliminates unmotivated people, and those who are not really willing to trade somehow, which eventually is not such a bad thing if Dan is tired with trolls and gold bashers.
Have a nice weekend,
Oh, cry me a river. There were only two possible outcomes for the Swiss Franc. Either the peg could hold, or the peg could fail. Under no circumstances was the Swissy going to get weaker than the Euro. Only flat or stronger.
ReplyDeleteGoing big time leverage on a Swissy short is the stupidest thing I've ever heard of, and if some got wiped out, they deserve it for rank stupidity. So long, and thanks for playing.
Survival of the fittest continues in the marketplace.
In other news, consumer confidence and Obama's approval ratings are both spiking higher. Ongoing dividends from the Cheap Gas Stimulus Program. No wonder Loser Hedge and Automatic Dearth see it as a matter of blog survival to keep on telling their lemmings that cheap gas is a horrible bad thing. Good luck with that one!
ReplyDeletehttp://www.bloomberg.com/news/2015-01-16/consumer-sentiment-in-u-s-surges-to-11-year-high-as-fuel-drops.html
http://www.politicususa.com/2015/01/16/obama-skyrockets-americans-approve-disapprove-president.html
As for Dan's paid site, sorry but I've never paid that much for any subscription in my life. Never will. Back in the day, before internet, you almost had to in order to feel like you are getting something special, but still it didn't cost like that. Today, when there's enough free stuff on the web to completely mess yourself up? No.
ReplyDeleteI honestly believe we are all better off paying for nothing, and reading even less, on the web. It's all garbage.
Stick with raw data only. Prices. Charts. Research papers on investment and trading methodologies and cold, hard, rigorous, backtests thereof. Implement your own automatic mathematical triggers, and tune out EVERYTHING ELSE. You want to complain about "algos" all day long? That's because you rightly sense that the "algos" are constantly eating your lunch. I say, BE AN ALGO! Be a WINNER! Let the other guys be opinion chasing losers. FUNDAMENTALS = OPINION. (you know, they are like assholes, everybody has one) Everything that passes for FUNDAMENTALS on the web has already been passed through someone else's bias filters first. And then through yours, to make it even worse. Try as we might, we all end up reading only the stuff we agree with in the first place. Only the stuff that supports our positions. If we read "contrary opinion", it is really only to ridicule it. That doesn't make us "open minded", it just dig us in deeper.
Ignore all of it, and be better off. And for God's sakes don't pay for it.
Sorry Dan, but that's how I see it. I'll just go away now.
Good Luck everybody,
Eric O
Eric O;
DeleteIt is a sad commentary on the state of our current generation that someone who has reaped the advantages of my views for so long, felt free to post here for so long and enjoyed the comments of others and the interaction that my maintaining of this site has provided, that you felt the need to take a parting shot at my efforts at my new site instead of merely offering a dignified thank you and fading away.
There used to be such a thing as gratitude and graciousness in this world. You are living proof that such nobler aspects of man are slowing dying.
Good riddance to you.
Big Hat, No Cattle, as Charlie Finley used to say. $ Talks, Bullshit Walks. He was just a shoe clerk, Dan.
DeleteI should note that I view Dan's analysis as being about as opinion and bias free as can be found on the web, and that's why I've been supportive. But still, this is something we should all be able to do for ourselves, and for free.
ReplyDeletehe main point of reading others opinions is to compare investing strategies and ideas with others, to see why you may be right or wrong.
DeleteNo one thinks of everything so the more knowledge the better.
You got that right. B
DeleteEric, sorry to see you go. Enjoyed reading your postings here.
DeleteIn my opinion, it is quite fair to pay for a subscription--providing that one believes there are advantages of doing so—even if it does cost $40 or so a month.
However, one has to be able to get “in” & “out” of trades fast enough or “hold on” for a long time and hope all works out.
Take the Swiss Gold vote. How many jumped all in “hog” wild during that time? Did market sentiment at that time really SAY “bet the farm” on mining stocks? GDX?
Was it would more profitable to get in back then when market sentiment was more unfavorable in regards to mining shares. I thought market sentiment was saying stay away back then.
And didn’t the charts SAY there was more to the Swiss gold vote than just “cheese” back then? Even a General was ringing free warning bells about that cheesy deal back then. And then there was Armstrong’s Pop. But guess what…that Pop is actually happening now or did it happen back during the golden cheese vote. Sorry, my head is spinning with all these back room deals going on in the land of the CBs…. sort of like a gambling casino.
Ok, maybe the Swiss vote & their follow-up UN-pegging to the Euro are not related. And nobody was snitching to the Swiss about the Euro either before it all came down.
Anyways, Dan, I appreciate what you have given out for free. You are probably the best chart / market sentiment reader I have ever found. And I would join your paid site. But I have to believe your paid site can get us in & out of trades fast enough to make a profit. Unfortunately, timing has to be on cue…CBs are making a lot of sneaky, cheesy deals behind hidden doors in this current generation. This current generation is heading down a path of hell…in my opinion.
I don't think Dan's added value is about giving you hints realtime about getting in or out of a market, on short time units.
DeleteThis is creating dependency, without building up your skills.
The added value is about learning how to trade, because 99% of people get it wrong when they start, plus having a feeling of the pulse of a market, on slightly longer time units, not intraday, but still very valuable if you are doing swing trading, or long term investment.
It is very interesting to have his indcators confirming a trend (ADX, etc...), or pointing at a very unstable trend (long positions of commercials, hedge funds, etc... just as recently explained in the case of Oil --> anticipating further downwards pressure).
Plus to learn more about other commodity markets.
I mean if you don't know about the added value after several months reading this blog for free, never mind :)
@Eric Original
ReplyDeleteYou may be the greatest chart reading, price predicting, market historian of all time and you can still get crushed by these algos you embrace. It's easy to deride those firms that were on the wrong side of the CHF trade. Hindsight is indeed 20/20. The truth is when the market organism tries to exit a trade at once someone is left holding the bag of rocks. Do you really think you are the "smart one" whose special indicators will always rescue?
Who will bail you out?
I was just thinking about this MA sentiment the other day after the SNB move and in conjunction with my thoughts on the debt service the EM's will not be able to cope with trying to pay off USD denominated loans as the USD surges higher.
ReplyDeleteI TOTALLY agree with this latest MA piece and I'll add a little bit more of my thoughts as well.
~The dollar pegs are next~
http://armstrongeconomics.com/2015/01/18/the-dollar-pegs-are-next/
It seems to me that if/when the dollar pegs are removed that globalized trade/GT (and the idea of sustained globalization itself) will start to wither back towards the vine of nationalism.
At that point as globalized trade starts to sputter ( MA refers to it as " the worst depression in centuries") most countries will have to revert to a form once again of becoming protectionist economies.
The damage done fron receding GT will need to be repaired and in turn (US for example or any other country really) will need to rebuild their manufacturing infrastructure, energy sector (already underway) etc to cater to their domestic needs and markets and job growth.
It'll be every country for themselves once a dollar unpegging reaches a tipping point.
Major globalization of trade was always inevitable but it's sustainability would never become permanent imho.
Once all or most currencies become unpegged to the USD it'll be every struggling country for themselves unless or until regional currency blocks become the norm instead of a singular international reserve currency.
It seems to me that as the IMF/Washington becomes less relevant that the shadowy BIS will become more relevant if major currency issues develop. Will the IMF SDR's become as relevant as Rickards and others insist? Idk.
Might the BIS become more mainstream as this unpegging/deglobalization starts to unravel? It seems possible.
If globalization of trade becomes a victim of the eventual USD unpegging then the Bank for International Settlements would seemingly become more vital as an entity to facilitate those trades in whatever currencies or currency blocks that might eventually come into circulation.
The BIS might just become THE world bank by default out of necessity or by design if a global depression or severe sustained economic downturn (or major war) is in the future.
We live in extreme times and it seems like we're witnessing extreme measures or responses to some events or conditions that are starting to spiral into uncharted territory.
That's what I'm thinking and maybe it'll springboard some discussion on here.
Have a great day!
EUR USD
ReplyDeletehttp://i59.tinypic.com/330xr3k.png
Interesting to see that the dive is now even a bit bigger than last time (red channel very slightly larger).
Will it bounce from there? My indicators look ugly, with the MACD which didn't cross on the weekly time unit, usually quite a bearish signal.
So...a bounce could happen at any time...or not, with a panic move even more down, just as during 2008.
2 more weeks before the monthly close...next interesting signal on the long term time unit.
My guess is a short term bounce follow by a small down leg. You have been right on this trade for a while. Hope you made a lot of Euros.
DeleteTough times in Greece...
ReplyDelete~☆~☆~☆~☆~☆~☆~☆~☆~☆~
~In Greece's 'city of despair' the young vote with their feet~
https://en-maktoob.news.yahoo.com/greeces-city-despair-young-vote-feet-044326135--finance.html
~☆~☆~☆~☆~☆~☆~☆~☆~
...and still tougher times ahead?
We're about to watch a countries culture, economy and currency disintegrate before our eye's if/when Greece is no longer in the EU and the far leftist Syriza comes to power.
~Polls shows Greece's Syriza widening lead over conservatives~
Fri, Jan 16, 2015
ATHENS (Reuters) - Greece's anti-bailout Syriza party widened its lead over Prime Minister Antonis Samaras' conservatives ahead of a Jan. 25 snap election, a poll showed on Friday.
Alexis Tsipras' Syriza party led by 3.8 percentage points over Samaras' New Democracy party, the Rass survey conducted between Jan. 14 and 15 showed, up from 3 points in a poll conducted by the same company earlier this week.
yahoonews.com
A surging dollar is starting to expose those companies that were just surviving on the razors edge of solvency.
ReplyDeleteIs a slow-motion pinprick underway in the Chinese real estate bubble as the dollar strengthens?
~☆~☆~☆~☆~☆~☆~☆~☆~☆~☆~
~Kaisa on Brink of Dollar Default Spooks World’s Money Managers~
By Bloomberg News
January 18, 2015 11:00 AM EST■
As Europe grapples with terrorism and Switzerland scrapped a currency peg, the troubles of a Chinese developer that’s never reached $3 billion in market value became something investors from New York to London couldn’t ignore.
A missed $23 million interest payment by Kaisa Group Holdings Ltd. (1638) earlier this month puts it at risk of being the first Chinese real estate company to default on its dollar-denominated bonds. That may signal deeper risks for China’s already fragile and corruption-prone property market, which according to World Bank estimates accounts for about 16 percent of economic growth.
Chinese companies comprised 62 percent of ALL U.S. dollar bond sales in the Asia-Pacific region ex Japan last year, issuing $244.4 billion of the $392.5 billion total...(cont.)
http://mobile.bloomberg.com/news/2015-01-18/kaisa-on-brink-of-dollar-default-spooks-world-s-money-managers.html
More Swiss moves on tap?
ReplyDelete~☆~☆~☆~☆~☆~☆~☆~
~Switzerland could act on currency again, central banker says~
By John Revill
Published: Jan 18, 2015 5:38 p.m. ET
▪Swiss Franc is ‘greatly overvalued,’ central bank President Thomas Jordan says▪
ZURICH — The Swiss central bank is ready to intervene in the currency markets again to weaken the franc if necessary, the bank’s head said, just two days after the removal of a cap on the franc triggered a surge in the currency’s value.
Swiss National Bank President Thomas Jordan said the central bank was forced to scrap its policy of keeping minimum exchange rate of 1.20 Swiss francs a euro EURCHF, +0.00% due to divergent economic developments and mounting risk from its euro-buying operations.
The bank will continue to monitor the situation and act if necessary, Mr. Jordan said in an interview with Swiss newspaper Neue Zuercher Zeitung.
“We have said goodbye to the minimum exchange rate,” Mr. Jordan said in the interview published Saturday. “But we will continue to consider the exchange-rate situation in our decisions and intervene in the foreign-exchange market if necessary.”
Mr. Jordan said the franc remains “greatly overvalued.” He said he expects negative interest rates introduced by the SNB to make the franc less attractive, but ruled out introducing capital controls to further weaken demand for the currency.
marketwatch.com
This sounds like a pretty underwhelming number to me.
DeleteI guess the market will be the judge of that once Draghi announces the real numbers.
I would've guessed that they would wait until after the Greek election to implement any QE. I suppose they could always launch QE2 if need be if a Greek expulsion severely rattles markets.
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~Draghi’s Big Push Seen Delivering $635 Billion With QE This Week~
By Alessandro Speciale and Andre Tartar
January 18, 2015 7:01 PM EST
Mario Draghi is likely to announce a 550 billion-euro ($635 billion) bond-purchase program this week and won’t skimp too much on the details, economists say.
The European Central Bank president will make his biggest push yet to steer the euro area away from deflation by announcing quantitative easing on Jan. 22, according to 93 percent of respondents in a Bloomberg News survey. The median estimate of the size of the package tops the 500 billion euros in models presented to officials this month.
Draghi’s goal at a press conference after the Governing Council gathers will be to convince investors he has a strategy big and bold enough to reinvigorate the moribund economy. Speculation over his plans has already sent the euro to an 11-year low, with the fund flows probably contributing to the Swiss National Bank’s shock decision to end a cap on the franc...(cont.)
http://mobile.bloomberg.com/news/2015-01-19/draghi-s-big-push-seen-delivering-635-billion-with-qe-this-week.html
I am being very careful in short EUR trades (am out, in fact). I think no matter WHAT Draghi says Thurs, it will "disappoint" the mkts, and an epic short-covering rally will ensue. The sheer size of the short EUR bets is staggering, and is just sitting there like dynamite waiting for a match
DeleteI think you're right and judging by the EURUSD right now it looks like others might be starting to feel the same way.
DeleteCan't believe so many guys really think this Martin Armstrong guy is some kind of expert guru.
ReplyDeleteI have discarded all these guys into the waste bin, including:
Charles Nenner
Arch Crawford
Tom DeMark
Virtually every stock, commodity and currency strategist at the major banks
And every Elliot Wave guru
I have gotten to the point of reading charts only, and buying weakness in strong groups and selling strength in weak groups, just by watching simple charts.
Price and market action tells everything.
All these other guys with cycle theories, astrological predictions, or wild themed macro predictions based on geopolitical events are a complete waste of time.
I think Amrstrong is interesting regarding his anticipation of future flows.
DeleteHe only gives a theory. It needs to be confirmed by market movements.
But it's away from mainstream BS, and he seems to know a lot about how markets are interconnected.
Then again...he was forecasting that the euro would be the strong currency, because of deflation, until it didn't, then changed the speech.
But I like his interpretation of the castle of cards breaking from the periphery to the core, just as Eric de Groot.
Because in terms of currencies, this is precisely what is happening;
Confidence in currencies is collapsing. It has already begun. First from smallest countries, and now closer and closer to the core.
What will happen when only the USD remains as a safe heaven?
What if confidence there breaks as well?
What about gold then?
I like to read his blog, sometimes full of good ideas, just as I sometimes still read some other people's blogs I'm not going to mention anymore, because sometimes some articles are worth a read.
Have a nice day,
Mark you gotta admit he's been spot on the Usd, Dow, gold, pegs etc.
DeleteWhich was against the grain of what everyone else was saying, like main stream rock star Peter "smugface" Schiff.
"I like to read his blog, sometimes full of good ideas, just as I sometimes still read some other people's blogs I'm not going to mention anymore, because sometimes some articles are worth a read."
DeleteWait, would you please mention those "other" blogs one last time for me? I suspect anything you read Hubert is worth taking a look at.
I don't know enough about Armstrong to have a strong opinion. I do get a "crackpot" vibe from his writing, but he seems to have made a number of good calls. So I'm undecided.
~China's forex sales point to capital outflows~
ReplyDeleteJan 19, 2015 5:22 a.m. ET
BEIJING--China's banks recorded net sales of 118.4 billion yuan ($19.07 billion) of foreign exchange in December despite another big trade surplus during the month, suggesting renewed capital outflows amid concerns over the economy and the yuan...(cont.)
http://www.marketwatch.com/story/chinas-forex-sales-point-to-capital-outflows-2015-01-19-54852231
~☆~☆~☆~☆~☆~☆~☆~☆~☆~☆~
250% of GDP!!! :-o
~~~~~~~~~~~~
Opinion: Will China be the next forex peg to break?
By Craig Stephen
Jan 18, 2015 9:04 p.m. ET
▪Swiss action turns up heat on Chinese yuan▪
HONG KONG (MarketWatch) — The surprise move by Switzerland to scrap its currency ceiling against the euro EURCHF, +1.98% last week is a reminder there can be unexpected collateral damage from central banks waging currency wars. As markets digest last week’s turmoil, expect focus to turn to other fault lines on the global currency map.
Here China stands out, as like the Swiss, it runs an implicit currency peg that is becoming increasingly painful to maintain.
"China certainly has debt levels that would make deflation worrisome. Total debt levels are now estimated to be in excess of 250% of GDP."
http://www.marketwatch.com/story/will-china-be-the-next-forex-peg-to-break-2015-01-18
I am making a prediction here, in the wake of the "devastating drop" in the Shanghai and Shenzen stock markets overnight.
ReplyDeleteThe Chinese stock market will end up being the biggest equity bubble the world has ever seen, far surpassing the Nasdaq and Nikkei bubbles of yesteryear.
Why is that?
Sheer demographics.
The Chinese hands down are the most degenerate gamblers in the world. Just go to any Indian casino and check out the guys sitting around the Pai Gow table.
And just wait until BILLIONS of Chinese become fixated with gaming stocks on their smartphones. The mania that results from absolutely huge number of people in that country will be eye-popping.
And on top of that, once China emerges from its slowdown in growth, the next growth spurt is likely to be much more orderly and controlled by the Chinese Plutocrats, who are already doing the right thing by stamping out margin loans as a tool for speculation.
Equity markets all over the world are bubbles Mark, not just China.
DeleteThey are expecting their latest QE fix from the ECB this week, otherwise they will deflate.
The Pavlovian anticipation begins...
ReplyDelete~☆~☆~☆~☆~☆~☆~☆~☆~
~European stocks hit seven-year highs with ECB in mind~
By Carla Mozee
Jan 19, 2015 11:10 a.m. ET
LONDON (MarketWatch) — European shares rose Monday, with the markets benchmark hitting seven-year highs as investors weigh up the prospects for quantitative easing from the European Central Bank.
The Stoxx Europe 600 SXXP, +0.20% picked up 0.6% to 354.54, on track for its strongest close since early January 2008, according to FactSet data. That would add to gains of nearly 4% over the past two sessions.
Stocks on Monday reached session highs, after French President François Hollande said policy makers at the ECB meeting on Thursday “will take the decision to buy sovereign debt, which will provide significant liquidity to the European economy and create a movement that is favorable to growth.”...(cont.)
http://www.marketwatch.com/story/european-stocks-edge-higher-but-oil-shares-underperform-2015-01-19?link=MW_home_latest_news
Things are about to get a little bit more interesting in the ME.
ReplyDeleteNot only did Israel take out 6 Hezbollah commanders but they also scored this prize in the collateral damage.
At this rate it's only a matter of time before a US airstrike takes out some Iranian elements in Syria or Iraq whether it's intentional or not.
~☆~☆~☆~☆~☆~☆~☆~☆~☆~☆~
~Israeli airstrike kills Iranian general in Syria~
By Joseph Adinolfi
Jan 19, 2015 12:28 p.m. ET
NEW YORK (MarketWatch) -- Iran's Revolutionary Guards confirmed Monday to the BBC that an Iranian general was killed on Sunday during an Israeli airstrike in Golan Heights, a disputed region on the border of Syria and Israel. The general, Mohammad Ali Allahdadi, died alongside six Hezbollah fighters, according to the BBC.
A statement from the news website of the Revolutionary Guards said the general was "martyred while defending the shrines and innocent people of Syria." Iran and Hezbollah have long admitted their involvement assisting forces loyal to Syrian President Bashar al-Assad.
The motivation behind the attack remains unclear, according to the New York Times. Israeli news media, citing anonymous sources, has reported those killed had been planning an attack on Israel from Syria.
marketwatch.com
Apply Ockam's Razor, a method attributed to William Ockham, a 12th century philosopher, to understand the fundamentals of complex arguments: entias non sunt multiplicanda. Strip away the verbiage and superficialities. Most people get bogged down by detail, and cannot see the wood for the trees. The media intentionally spews out irrelevant pap to capture out attention for commercial reasons, or even to create entrenched beliefs in our minds, which can subsequently be milked indefinitely for profit. Believing these ideas can also cost us dear, especially in the investment game.
ReplyDeleteThe Swiss couldn't increase their gold reserves because of the effect it would have on their peg with the Euro, yet literally in a matter of minutes, they have the 'negative' effects anyways.
ReplyDeleteGet ready to cash in your huge gold share profits before Thursday.
ReplyDeleteAs has been written, “there is nothing new under the sun.”
DeleteAnd so every year, an old Sun must die and remain so for a count of 3 days. Thereafter, a new Sun is born and thus Christmas has once again passed by.
Oh, Rejoice—you permanent gold bulls—you are now fat & happy!!! A new Sun has been born. Wise gifts are given—your precious dollar & gold rises together. A true marriage indeed.
Now is the night, for your season of happiness is at hand.
The walls of Babylon have never been higher. The drawbridge has been raised and the waters are receding. Writing has been written on the wall.
What could possibly spoil this party?
1. Greek…A vote of shock…but not of Awe.
2. Euro…a snitch to the Swiss…but will they dare ease?
3. The dollar…if it were to fumble and to take a stumble could the marriage last?
Should we pass the cheese and hand the chocolate over?
Gold is good for at least 6 more weeks until the end of Chinese New Year and Indian Wedding season. It may correct this week and gold shares even more as it is overbought. By the end of March maybe many perceptions will have changed in the world and gold will "have legs" as they used to say on CNBC in the giddy days of the dotcom bubble.
ReplyDeleteProbably true Peter.
DeleteAlthough what does the Dow rate for overbought then?
The Dow has gone up thousands of points with hardly a down day for the last 2 years until recently?
Gold has gone up for a week for the first time in years.
The reason why I'm asking :)
ReplyDeletehttp://www.bloomberg.com/news/2015-01-19/denmark-strikes-back-at-speculators-as-peg-defenses-burnished.html
Anyone tried to short eur dkk? :)
DeleteGold in Euros retraced 50% of the whole upwards long-term move near 850.
ReplyDeleteAnd now it's about to retrace 50% of the downwards move from near 1400 to 850, at 1330 € per ounce. I'll keep a close eye on gold in euro terms.
Normal : I'm French and I bought my phyz gold in euros, not dollars. Most of my purchasing power is expressed in euros...when I'm not shorting Eur Usd :)
Just out...ECB Board call for $58 billion in bond payments per month.
ReplyDeleteSounds kind of underwhelming to me. We'll soon find out what the market thinks.
EURUSD starting to surge higher.
~ Central Bank Prophet Fears QE Warfare~
Deletehttp://www.telegraph.co.uk/finance/economics/11358316/Central-bank-prophet-fears-QE-warfare-pushing-world-financial-system-out-of-control.html
Just starting to dribble out...
Delete~ECB Executive Board’s QE Proposal Calls for Roughly €50 Billion in Bond Buys Per Month~
European Central Bank Purchases Would Last for a Minimum of One Year, According to People Familiar With the Matter
By BRIAN BLACKSTONE
FRANKFURT—A proposal from the European Central Bank’s Frankfurt-based executive board calls for bond purchases of roughly €50 billion ($58 billion) per month that would last for a minimum of one year, according to people familiar with the matter.
marketwatch.com
Thank you DPH. Your early post was very helpful to me. These gold shares are still holding up remarkably well in the light of this news. Maybe the correction will be very limited after all. Gold has much further to run.
DeleteYour welcome...hope it saved or made you a couple bucks or euros. :-)
DeleteGold is currently showing it's disapproval over the amount of the EU QE being proposed.
ReplyDelete50 billion euros a month spread out over the entire EU is peanuts relative to the size of the QE the market saw the US/Fed engage in.
Imho only madmen will trade Eur Usd these days, especially on short term units. Can't read or conclude anything on a 1 hour candle with those sorts of news.
DeleteI hedged what I had to into USD for my own comfort some time ago, just as I did with Gold some years ago in 2008.
But short term trading into this? Brrr...
Is this why the national banks of each country are in control of their own bond purchases?
DeleteWhat if a country/Germany decides it doesn't need to or want to participate? :-o
~☆~☆~☆~☆~☆~☆~☆~☆~☆~☆~
~Opinion: German opt-out could fatally weaken eurozone QE~
By David Marsh
Published: Jan 21, 2015 10:38 a.m. ET
•Bond-buying will deepen divisions without fixing the economy•
MarketWatch photo illustration/Getty Images
Mario Draghi (left) and Jens Weidmann
In the shadowy world of European Central Bank decision-making, all central banks are equal — but some are more equal than others.
Important concessions have been offered to the German Bundesbank to facilitate an announcement on sovereign-debt purchases after the ECB’s meeting on Thursday.
But those concessions could open further divisions within the 19-member economic and monetary union, without guaranteeing the effectiveness of the attempt to overcome the eurozone’s low inflation and rebuild political cohesiveness.
▪The QE program that ensues looks set to fall well short of the across-the-board quantitative easing that many financial-markets practitioners had been expecting▪
A significant additional factor in the complex ECB discussions on full-scale quantitative easing is last week’s Swiss National Bank decision to end its unilateral peg...(cont.)
http://www.marketwatch.com/story/german-opt-out-could-fatally-weaken-eurozone-quantitative-easing-2015-01-20?link=MW_home_latest_news
And today Sinclair posts those silly angeks again. After, not before a 170 dollar rise.
ReplyDeletePumping tops as always. There seems no limit to the damage he is willing to inflict on others.
A sociopathic serial financial murderer.
Yep the angels are coming back, more dogs pics on the way too.
DeleteWho knows maybe even "gold is going to and through 3500" again.
Central Banks can buy all the self issued bonds they want as they carry them on their books at made up market values. Only when a default takes place (no further payments of any kind or rollovers) does the true market value happen in their accounting sorta like having Swiss write downs everywhere after releasing from the peg.
ReplyDeleteThen outlying banks (acting like investment houses in debt nowadays) are the first to go bankrupt. So far, only Germany can absorb the losses and is the center of Euro banking with their stronger than the rest of them economy. Germany starts to falter then there is nothing left to support Euroland.
It is all about issuing debt and hiding the true value of that debt while waiting for an uptick in local economies that never comes. The more they try to 'fix' it, the worse it gets.
The only thing that could lead to a collapse of Euro banking faster is a wholesale flight of capital (bank runs) which would end in defaults anyway.
Are the “Fat & Happy” Permanent Gold bulls saying…or perhaps screaming…join our party and BUY?
ReplyDeleteMarket Watch closing numbers for today:
DUST + 5.77%
GDX -1.74%
GDXJ -1.5%
On the other side of the unknown, Armstrong’s theory of the day says,
“A daily closing back below 1284 will warn of a retest of support. A closing on Friday below 1287 will also warn of at least a temporary high. A closing back below 1255 will signal a correction is now likely.”
Despite a €60 BILLION per month infusion of fresh QE it looks like gold is finding formidable resistance around $1300.
ReplyDeleteIt looks like the current atmosphere the market operates in is a bit wary of what happened to gold during and after the humongous US QE experiment.
After TRILLIONS upon TRILLIONS of US QE and now the EU QE injecting €60 BILLION/month the stimulative buying effect on gold just doesn't seem to be there.
That in itself doesn't bode well for any significant sustainable rise in gold if this EU QE didn't light it's fuse in a significant obvious manner.
It'll take some other external event to launch gold higher. Judging by the rash of negative interest rate moves around the world and with murmers of currency unpegginngs in the air it seems like CB's are proactively preparing for something significant.
Maybe a shock from China's economy will be the catalyst to resusitate gold but in that event a sell off is just as likely.
It looks like the EURUSD is close to a 1.13 handle as the DXY closes in on 93.50
DeleteThe inaction of the yen is a bit of a surprise.
QE is actually gold negative. It keeping the competitor safe haven of bonds elevated. If QE were to end then gold would really fly.
DeleteWow...80 years!
ReplyDeleteBut are the figures or methodology accurate?
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~Oil drops under $47 as supplies hit highest levels in 80 years~
By Claudia Assis
Published: Jan 22, 2015 11:13 a.m. ET
SAN FRANCISCO (MarketWatch) -- Crude-oil futures dropped further on Thursday after a weekly supply report showed a larger-than-expected increase in crude inventories, and U.S. stockpiles were at the highest in EIGHT DECADES.
The U.S. Energy Information Administration said crude inventories rose by 10.1 million barrels on the week ended Jan. 16. Analysts polled by Platts had expected an increase of 2.5 million barrels for the week.
Moreover, at 387.9 million barrels, U.S. crude oil inventories "are at the highest level for this time of the year in at least the last 80 years," the EIA said in the report.
Gasoline stockpiles increased by 600,000 barrels, while distillates inventories declined by 3.3 million, the EIA said.
The analysts surveyed by Platts had expected gasoline stocks up 1.05 million barrels and distillate stocks, which include heating oil, up 167,000 barrels. Crude for March delivery CLH5, -3.16% was off $1.57, or 3.4%, at $46.11. It had traded at $47.14 moments before the EIA report was released.
marketwatch.com
DPH;
Deletenearly all of these stories that you are sending up here to post are being detailed over at my new site. I would urge the readers to check in over there where we cover these things in detail.
I figured as much Dan as you're usually on top of relevant breaking events.
ReplyDeleteI haven't utilized my initial 30 day free access yet (or however you descibed it) but I feel the time is growing close to do so.
Thanks for letting some of us continue to post here and keep the outside lights on. I'm sure the commentary within is even brighter.
DPH,
DeletePlease help keep the "lights" on as long as long as possible . I've not initiated the "30" days yet either.
It's harder to jump over there right now. I get no interest on deposit accounts and my farm property taxes again went up on average 75% this year. We are now at "break even" after paying taxes on farmland. And that is only if crop prices don't come down farther. If foreclosures haven't already begun, then they should begin later this year...in my opinion
I'm just glad I got out of TRX before it broke the $2.00 level last year.
I'd rather be in cash and watch the cash go to nothing than holding onto quick sugar high junior mining stocks.
What you sold your insurance when it went down 90%? You do know that Sinclair said that "few will be there in the end" a decade ago? Man your gonna miss out the "final and enormous payday" now.
DeleteJasper :)
DeleteStill have back up "hard" type of insurance. But in this type of tax environment, it is impossible to know how much it will take to keep the tax people fat & happy. And, the hard type has lost a tremendous amount of value since the Labor "smack" down of 2011...especially the white color. The metals have not kept up with cost-push tax inflation. It looks a little brighter now...but still...another new low could be on the horizon and take us.
In my opinion, Armstrong has a case for a tax deflation endgame play out. It happened to ancient Rome. Why not have a parallel repeat? Their taxes got so high on property taxes the citizens walked away….at least from Armstrong’s point of view.
We here in the Midwest are already experience it in farmland taxes. My farms have been taxed 1080% higher in just the last nine years!!! 1080% tax rate increase in a nine-year period is boarder-line robbery to say the least. Tea anyone?
Watching the juniors keep going down, well I got out completely last year. Yea, last November was a good entry point...but still, it is a gamble. I only buy and sell. I don't do stop losses...never trained myself how to do that.
As for the dollar, perhaps hold what you have and gamble for a lower low in the metals…maybe. Those mentioned on this site who prefer to not be one-way minded “Borg-like” thinkers may prevail over the perma-gold bulls again. The “Borg” always say buy, buy, & buy more. And the worst part is, they are never wrong no matter what. In my opinion, they do more harm than good.
The DXY has rocketed past 94 while the EUR is eye-balling 1.12 yet gold isn't budging like you might think it would.
ReplyDeleteWith the USD headed towards 100+ it's almost laughable that the same shills who derided and predicted a collapsing USD are now watching and predicting how a surgng dollar is a precursor to collapse.
They should've used the same "logic" when it came to gold approaching $2000 but they couldn't. Why would anyone continue to listen/subscribe to those who were completely wrong back then but who have now embraced the same outlook (resilient /strengthening USD) of those they used to mock or ridicule who hekd those beliefs?
They're making it up as they go along and hoping for short, loyal memories from the indoctrinated or newbs who weren't around who know any better...so far.
Looking back over the last 2-3 years at gold the trend and trajectory for lower highs and lower lows is still in place at this point. With gold laying there at $1300-ish that trend is still in place until it isn't.
Euro CB wanted par to maybe assist in trade and jump start local economies, I wonder if they expected par all in one day like instant gratification. Of course par will not happen in one day but the shortest distance between two points will show up on the long term charts in the future.
ReplyDeleteThe markets are wild with oil and Euro/US$ action. Gold going nowhere quick. Silver hinting at leading eventually.
Gold shares are howling for a correction. A swift investment in DUST or JDST may be profitable. But the party isn't over yet.
ReplyDeleteOff topic...
ReplyDeleteI'm not sure how this plays out in Yemen going forward especially given the France attack/AQP story but the current situation has long legs to it.
I guess the politically easiest and most likely outcome is the US Embassy gets evacuated but it seems just as likely that it gets fortified at some point soon and that a "surprise" insertion of US or French troops takes place.
Given the current spotlight on AQP in Yemen I don't see the US or France simply walking away and ignoring the sutuation.
Given the proximity of the Suez Canal to the Red Sea (and the geographical bottleneck at the Gulf of Aden between Yemen and Djibouti/Eretrea) I don't see the situation there being ignored or abandoned especially given the huge and strategic US base (Camp Lemonnier) in Djibouti.
Dated but informative...
http://www.washingtonpost.com/world/national-security/remote-us-base-at-core-of-secret-operations/2012/10/25/a26a9392-197a-11e2-bd10-5ff056538b7c_story.html
The situation in Yemen boils down to Sunni Saudi Arabia v. Shia Iran.
DeleteLook for Yemen to eventually undergo a cleaning out by SA and "friends". King Abdullah's death might speed up that process.
~☆~☆~☆~☆~☆~☆~☆~☆~☆~☆~
~The rise of the Houthis: A brief history of Yemen's new power brokers~
▪The past week has seen heavy fighting in the capital Saana, where the Houthis have gained almost complete control▪
January 22, 2015
In a speech broadcast to homes across Yemen on Tuesday evening, the leader of the group Ansar Allah, known locally as the Houthis, reassured millions of Yemenis that despite the rumors of a possible coup in the capital city of Sanaa, Abd Rabo Mansur Hadi was still their president.
But how did the leader of a political movement find himself in the position to disseminate such important information?
How has that man, Abd al-Malik al-Houthi, become one of the most powerful figures in the nation?
Ansar Allah was founded in the early nineties in Yemen’s northern province of Saada. Then known as the Believing Youth, residents of Saada had grown tired of the meddling influence of their neighbor to the north, Saudi Arabia.
The Houthis are Zaydis, a sect of Shia Islam prominent in northern Yemen, and the rapid spread of Wahhabism throughout the country had begun to worry community leaders.
In the post-9/11 world, the Houthis grew more and more concerned with the relationship then-President Ali Abdullah Saleh was fostering with the United States.
Already wary of foreign influence in Yemen, the Houthis began making their grievances known in the capital Sanaa.
Tensions between the burgeoning political movement and Saleh reached a head in 2004 when the government sent troops into Saada to arrest the then leader of the Houthis, Hussein al-Houthi.
During that attempted arrest, al-Houthi was killed by government forces and an insurgency was launched...(cont.)
http://www.globalpost.com/dispatch/news/regions/middle-east/150122/the-rise-the-houthis-everything-you-need-know-about-the-gro
Wow, talk about a bumpy treasury market...a 16.92% move down today in the German 10yr note...
ReplyDeletehttp://www.marketwatch.com/investing/bond/TMBMKDE-10Y?countrycode=BX
...and a 28% move higher in the Japan 10yr...
http://www.marketwatch.com/investing/bond/TMBMKJP-10Y?countrycode=BX
For historical reference here's a long term chart of the German 10 yr bund...move the calender to 1980
http://www.tradingeconomics.com/germany/government-bond-yield
...and here's a chart of the Japan 10 yr note...
http://www.tradingeconomics.com/japan/government-bond-yield
Gold is only up $10 which is a bit disappointing considering the size of the European QE. The gold shares look vulnerable for a correction. The likelihood of this happening tomorrow or Monday looks high. The Greek factor is not taken seriously in America, and is unlikely to affect the markets. After the correction one can buy back as there is plenty of steam left. Gold's significant rise with the US dollar, and even surpassing it for a prolonged period now, is impressive. This scenario may last for several weeks.
ReplyDeleteHad a 6% day in my main forex acct, courtesy of Mr. Draghi. Could have done wildly better with a bigger position, but I have been keeping a very tight rein. Still, not bad.
ReplyDeleteWhere to from here? It just seems to me that the short EUR trade has to give at least something back pretty soon, and I wouldn't mind getting some of that. Nonetheless, this is certainly a textbook example of the adage that hot markets can go much further and longer than one ever expects. As usual, we'll see.
P.S. EUR mighty close to the 61.8 Fib retracement on the MONTHLY. Maybe a solid bounce there?
ReplyDeleteBREAKING NEWS
ReplyDelete~Saudi TV Cuts To Koranic Verses With King Abdullah In Hospital: often signifying death of top royal~
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Tug-of-war volatility in oil dead ahead.
It's official...King Abdullah dies.
DeleteBreaking News...US starts evacuating embassy in Yemen.
DeleteDPH....you ever think of running your own blog? You obviously love posting news items which are always current and interesting stuff and your commentaries are generally thought provoking.
DeleteThanks kjm...I actually have my own blog albeit in deep hibernation but it's functional.
DeleteI never officially opened it up because I'm reluctant to put up with some of the internet BS I've witnessed that goes with the turf. But I'm re-thinking that.
Dan's been cool about letting us keep the lights on over here. Much appreciated.
Denmark digs in but will eventually have to unpeg lke the Swiss did.
ReplyDelete~¤~¤~¤~¤~¤~¤~¤~¤~¤~¤~¤~¤~¤~¤~~¤~¤~¤~¤~
~Denmark Is Ready to Dump Kroner on FX Market to Tame Hedge Funds~
By Frances Schwartzkopff and Peter Levring
January 22, 2015 6:01 PM EST
Denmark sent hedge funds and other speculators a clear message yesterday, daring them to test the full force of its monetary arsenal at their own peril.
The central bank signaled it is ready to step up currency interventions and continue cutting rates to stamp out any lingering speculation it may be unable to defend its euro peg.
“We have plenty of kroner,” Karsten Biltoft, head of communications at the central bank in Copenhagen, said in a phone interview. “We have the necessary tools in terms of interest-rate changes and interventions and we have a sufficient supply of Danish kroner.”
The comments follow the central bank’s second rate cut in less than a week, with Governor Lars Rohde lowering the benchmark deposit rate to a record minus 0.35 percent yesterday. That was more than expected by most economists surveyed by Bloomberg and followed a 15 basis-point cut on Monday. The easing comes as the European Central Bank unveils an historic bond-purchase program.
Since Switzerland abandoned its euro peg on Jan. 15, the Danes have fought back conjecture they’ll be next after the krone rose to its strongest against the euro in 2 1/2 years. Denmark sold a record 50 billion kroner ($7.7 billion) from Jan. 15-20 to weaken the currency, Svenska Handelsbanken AB estimates.
That’s equivalent to more than 10 percent of foreign reserves as of the end of
December...(cont.)
http://mobile.bloomberg.com/news/2015-01-22/denmark-cuts-key-deposit-rate-to-minus-0-35-to-drive-down-krone.html
When Gold broke through the support of its range, on the 2 week time unit, it made it to the mlh inf of the Andrew's pitchfork heading downwards.
ReplyDeleteSo...let's imagine Eur Usd does the same on the 2 month time unit.
Well...yes, it would mean around 0.85 indeed by spring 2016.
I'm not excluding this kind of price anymore. Let's see.
http://i60.tinypic.com/9uopj4.jpg
Wow...DXY over 95 & EUR hit a 1.12 handle overnight.
ReplyDeleteThe German 10 yr down another 14%
Gold is still yawning at $1300
Ok...upon further review the DXY hit 95.48 and the EURUSD hit a low of 1.118.
DeleteThe action looks to have subsided and is bouncing back but still...wow!
In other news, Putin is surrounding himself with "himself" and tuning out the noise.
We're in a ominous new phase in the Ukraine situation despite the best efforts of the media in downplaying it.
~☆~☆~☆~☆~☆~☆~☆~☆~☆~☆~
~Putin Said to Shrink Inner Circle as Hawks Beat Billionaires~
By Henry Meyer and Irina Reznik
January 23, 2015 8:50 AM EST
Vladimir Putin isn’t just angering leaders from Berlin to Washington. He’s irking some of his richest friends, too, by snubbing their pleas to end the conflict in Ukraine and ostracizing all but a handful of hardliners...
Sorry, here's the link...
Deletehttp://mobile.bloomberg.com/news/2015-01-22/putin-said-to-shrink-inner-circle-as-ukraine-hawks-trump-tycoons.html
? How do you end the conflict in Ukraine if you are not the only one who provokes it?
DeleteIf the prize is still about Crimea, the russian Cuba, this means escalation to full scale war. There will be no backing down on this. It's obvious.
I mean, come on, if you only listen to bloomberg... :)
Deletehttp://rt.com/news/225543-rt-isis-us-broadcaster/
As hoped for by the US/NATO....Putin will have no choice but to lash out.
DeleteDangerous game of chicken going on.
Just noticing gold experiencing a sell off at the moment. Looks like $1280 is a likely resting spot but below that it could gap down quickly towards $1250.
As Martin Armstrong cautions,
Delete“Can Gold continue to rise?”
“We need a closing ABOVE 1305 to keep gold neutral right now. Additional key resistance begins at 1310, 1319, 1321, and 1326. It may prove to be very difficult for gold to rise beyond this seasonal high in the face of a very strong dollar. Caution is the word that applies to gold right now.”
Well geese, could big boys of the Perma-gold pushers being playing the “13th” handle?
I’m not saying anything below is correct what-so-ever, but turning numbers are interesting to ponder over...I'm sure turning numbers are coincidences including the 1900 turning handle that occurred in 2011 during that cheesy labor day smack down.
From Robert Howard’s forbidden knowledge,
“And, the greatest power of all is created in the symbol(s) if the uninitiated NEVER discover that the symbol exists.”
There are 13 leaves on the left olive branch with 13 berries. 13 stripes on the middle shield. 13 arrows on the right. 13 stars above the eagles head. 13 letters in the "E Pluribus Unum" on the ribbon. 13 letters in Annuit Coeptis. There are 13 blocks top to bottom on the pyramid. Fritz Springmeir in his The 13 Bloodlines says these 13 blocks represent the 13 Satanic family's.”
This might seem farfetched but it seems possible to me the EU QE is a bumpy road and doesn't operate as smoothly or with the same continuity as the US QE appeared to have including the smooth taper it ended with.
ReplyDeleteI'm not saying this is about to abruptly end just as it's beginning but an unanticipated suspension or rethinking of the program seems possible. I don't see this running smoothly for years.
That's no dig at the EU or our European friends on here. It just seems to me that with so many countries involved and too many cooks in the EU ktchen that the QE recipe they're brewing under the conditions that NOW exist will differ from the circumstances that WILL come into play.
U'mm...looks like some of that future uncertainty or continuity of the EU QE as presently designed is already starting to rear it's head. That didn't take long.
ReplyDelete~¤~¤~¤~¤~¤~¤~¤~¤~¤~¤~¤~¤~¤~¤~¤~¤~
~30 Hours After Unleashing ECB QE, Coeure Suggests QE2~
http://www.zerohedge.com/news/2015-01-23/30-hours-after-unleashing-ecb-qe-coeure-suggests-qe2
Gold shares corrected right on cue. This weakness will continue into next week, probably resuming upward move on Wed/Thurs after the dear old Fed lady tells us to be patient - for a considerable time. If they changed the language the markets would crash, and we can't have that, can we? The interest rate increase, when it eventually comes, will be minimal, and not followed through on when they see the result. Analysts talk in a ridiculous way of "normalizing interest rates". This is clearly impossible, as the interest rate payments would constitute 50% of the annual budget if they were normal.
ReplyDeletePriditor1976 came and went; same for 0777, who I called out; so what is it with all of you chiselers who are not at that new site? You waste space showing references to your favorite blogs and so forth? We all also visit those sites and really do not need you to double post here, ladies. And as far as your lame geopolitical prognostications and so forth, please spare me. Belly up to the bar and put a cap on it. swb and have a good weekend!!
ReplyDeleteCalling everyone on here a chiseler is weak and the complaints meaningless.
DeleteCould it be that some of us are a bit more socially inclined or tolerant then thou?
Have a nice weekend and maybe step away from the bar ;-)
The World Bank blithely informs us with utmost certitude, and probably tongue in cheek because they know better than anyone what a shambles the world economies are, that gold will average $1225 in 2015 and $1240 in 2016. I am very surprised it wasn't $1226. Funny that this prediction is so similar to the big banks like Barclays, UBS, and Deutsche bank. Birds of a feather sticking together, you might say- and why do they sing this same song in unison, you might then ask?
ReplyDeleteThey know that if the cheap money is ever taken away the asset bubbles will deflate and the economic recovery will end and a recession will start.
DeleteThey can't afford higher interest rates, way too much debt to be financed now.
It is quite incredible how the markets just keep playing along with this charade Peter.
The capacity of humans to fool themselves and be fooled is amazing. An otherwise normally functioning brain can make black into white, or 2 x 2 equal 5 to keep the flame of Hope burning. It must be something to do with human survival. Imagine, if you will, tens of thousands of men charging against an enemy with blind obedience, to be slaughtered like sheep, for no discernible reason whatsoever, except to gratify the whim of a few elites. It is like that now, except our battle is not a physical one, but a financial one.
DeleteAlso, like I said a year ago or so, the Yen will not see 100 futures again for a long, long time; now I say the Euro will not see 1.20 for a long , long time, maybe 6 months or so, before it completely implodes; minimum objective .80 the old lows; forget parity, that is nothing for the sclerotic Europeans
ReplyDeletesigma 58 thank you eric king champion of all the charlans
ReplyDeleteHere's this weeks COT report...
ReplyDeletehttp://news.goldseek.com/COT/1422045184.php
I'm not great at deciphering/interpretting all the numbers or categories but it appears as though a lot of commercial shorts in both gold/silver were added.
At the current rate, by July 4th weekend:
ReplyDelete- Oil will be free
- Every sovereign bond rated BBB- or better will have a negative yield for all maturities
- All of us will be able to afford a Mercedes or BMW, yet the poor store manager in France won't even be able to afford a Ford Escort.
- Lululemon and Starbucks will be trading at 75 times earnings, and XOM will be trading at 4x earnings, and U.S. Steel will be bankrupt.
- Jamie Dimon and Lloyd Blankfein will be so rich, they will be able to put together private equity funds with their buddies and buy entire islands in Greece.
- General Jim's stock will be trading on the Pink Sheets with no volume.
- 2nd quarter Inflation will be negative print for the first time in history.
- Virtually any consumer item that can be financed will be at zero percent for 60 - 72 months, and credit card companies will be issuing blank checks to pay you 25 basis points in interest if you do a balance transfer and pay the 3% transaction fee.
Or in other words Mark, the biggest debt bubble in history, a world record high in debt, created from the cheapest interest rates in history.
DeleteAnd all it takes is the pin prick of higher interest rates to pop it.
Without a real economic recovery how do they exit would be a good question?
1) There is nothing remotely present that will cause interest rates to rise to any significant (not token/ceremonial) degree.
Delete2) If/when the debt bubble pops, there will be much rending of clothes/gnashing of teeth, but assuredly no Mad Max (except among the preppers). The rest of the world will muddle through, as the Baby Boom slowly dies off.
3) Most of my childrens' generation will live to see the entire 21st century, and, as they pass, will look back on their childhoods with bemused wonderment at the "primitive" conditions of today.
The world can only end once--think about it.
Interesting sidenote..........Honda came out totally against the practice of new car loans over 60 - 72 mos. Said it was stupid.
ReplyDeleteYou lot who do not subscribe to the new site mighty benefit from hearing Dan on Moneymetals.com.
ReplyDeleteMone Metals Exchange LLC. Weekly market wrap.
ReplyDeleteMike, the chiselers and freeloaders are all Big Hat and No Cattle Donkeys; they talk a good game but they all have fishhooks in their pockets when the check arrives. It is that simple; Dan should just shut the old site down pronto.
DeleteThanks Mike, appreciate that.
DeleteSteve, you're a poor salesman or representative of the payside if the attitude you're displaying out here is something anyone would want to look forward to on the payside. Lighten up, Francis.
Instead of lobbying on Dan's freeside to shut down something that doesn't even belong to you how about you just stop visiting here and trolling us?
Steve
DeleteThis is a good place for the wounded to lick their wounds. Dan is even generous enough to provide some of his excellent input in addition to maintaining this site. As it's a free site I can regard them as you do. Dan is making sure the Bots and Gold Promoters stay off..
I enjoy some of the posts here and especially like seeing you at both places.
Hope that people like me who have had a poor experience with the promoters can help some of the wounded.
Delete"This is a good place for the wounded to lick their wounds. Dan is even generous enough to provide some of his excellent input in addition to maintaining this site. "
DeleteMike nailed it
And that's probably all that needs to be said and recognized. I'm not exactly wounded but instead possibly recovering from too long of a dip in the dark, doomer pools of thought out there. What a waste of time/effort/money.
Dan kept this public side open for sound reasons and it's his analysis on the payside that will draw myself and others in when we're ready or ABLE in some cases.
Anything I might've mistakingly inferred in my last post about being reluctant to join based on a couple crabby comments from one infrequent public poster won't deter me from eventually seeking TD's unique and sound analysis. His outlook is the only reason I'll need although I'd be remiss to not recognize the smart comments that I'm is provided by others on there as well.
If some of my posts or the frequency bother or annoy some of you please let me kindly know.
I realize most folks are seeking astute trading idea's and comments in here regarding markets when they visit. That's not my core strength admittedly. But some of you are uniquely brilliant in your musings or technical analysis (HDH and others) and I never tire of them.
But with so many relevant and extreme markets or geoploitical events taking place it seems to me imho that instead of this public space being infrequently used that "something" being posted is better than "nothing".
I'm just trying to utilize the blank space here in the manner or intent that the owner gifted to us.
Everyone have a great weekend!
"...that I'm SURE is provided by others..."
Delete~~~~~~~~~~~~~~~~~~~~~~~~~~~
Am I the only one looking forward to see how the EUR might react to this tonight?
~☆~☆~☆~☆~•~☆~☆~☆~☆~☆~☆~
~Syriza Defeats Samaras to Win Greek Election: Exit Poll~
By Eleni Chrepa and Marcus Bensasson
January 25, 2015 1:11 PM EST
Alexis Tsipras’s Syriza party defeated Prime Minister Antonis Samaras’s New Democracy to place first in Greek elections, exit polls showed, after a backlash against years of budget cuts demanded by international creditors.
Tsipras’s Coalition of the Radical Left, known by its Greek acronym, took between 35.5 percent and 39.5 percent compared with 23 percent to 27 percent for New Democracy in Sunday’s election, according to an exit poll on state-run Nerit TV. To Potami, a party formed less than a year ago that’s a potential Syriza coalition partner, tied for third place with the far-right Golden Dawn on 6.4 percent to 8 percent.
The projected result may be enough for Syriza to govern alone, handing Tsipras, 40, an overwhelming mandate to confront Greece’s program of austerity imposed in return for pledges of 240 billion euros ($269 billion) in aid since May 2010.
The challenge now for Tsipras is to strike a balance between keeping his election pledges including a writedown of Greek debt and avoiding what Samaras repeatedly warned was the risk of an accidental exit from the euro...(cont.)
http://mobile.bloomberg.com/news/2015-01-25/syriza-defeats-samaras-to-win-greek-election-exit-poll.html
Doh you are spot on
DeleteDPH you are spot on thank you for posting here
DeleteThanks, same here "anon", I appreciate your input as well.
DeleteWell...not much volatility in the EUR...so far.
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~Euro falling as Syriza projected to win Greek election~
By Michael Kitchen
Jan 25, 2015 7:12 pm EST
LOS ANGELES (MarketWatch) -- The euro dropped to fresh lows of more than a decade late Sunday as official Greek projections showed anti-austerity party Syriza likely to finish first, possibly with enough seats to form a government on its own, raising questions over Greece's future in the eurozone. By around 7:00 p.m. U.S. Eastern time, the euro EURUSD, -0.29% was changing hands for $1.1174, off its level of around $1.1240 Friday.
Earlier in the day, the currency pair fell as low as $1.1098, its weakest point since mid 2003, less than a year after retaking parity with the U.S. dollar in 2002. Against the Japanese yen, the euro EURJPY, -0.31% dropped as far as ¥130.15, the lowest in more than a year. It soon rebounded to ¥131.25, but was still down from Friday's ¥132.45.
marketwatch.com
i'd be more likely to sign up for Dan's pay site if you were not there Steve. i am not going to pay good money too hang around with people that insult others for no good reason. do you put down people while hiding behind behind the anonymity of the internet because in real life you are a coward?
ReplyDeleteand if Dan does not show a public face, how are people going to find out about his private site?
DPH - please keep posting links. you have a knack for finding pertinent news stories to the subject matter here.
and i have not heard Dan complain once about your contributions, nor heard any complaints about any of the "freeloaders" that contribute thoughtful comments either.
fire away Steve because i don't give a rat's ass. life is too short.
have a nice weekend all.
Steve, what's the purpose of your comments? If you are trying to help Dan, you miss the point completely of the free site. The free site is needed to promote the paid site. If you are an example of what we would have in the free site it would have the reverse effect.
ReplyDeleteI wonder…could commodities have peaked somewhere between 2008-2012?
ReplyDeleteCurrently:
Crude Oil $45 + some change
Gold $1295
Silver $18.41
Wheat $5.21 “local grain Co. cash price”
Soybeans $9.52 “local grain Co. cash price”
Besides possibly soybeans, only 1 out of the 5 is actually holding 50% above its high…at least for now…Armstrong, I hope you are wrong about your yellow metal price prediction.
Crude oil, gold, silver wheat soybeans, ect, have risen 100’s of percents in the last 10 to 12 years so what’s the big deal?
Nothing, as long as we are not in a tulip-bulb commodity mania-bubble.
The Dutch Tulip bulb mania…“Bulb prices rose steadily throughout the 1630s…Tulip mania reached its peak during the winter of 1636-37” Bloomberg Business Week
Is this ABC News article a good sign for higher grain prices?
Cash grain prices have came down so far that “Deere to Lay off More Than 1,000 workers in Iowa, Illinois…. The world's biggest farm equipment maker said last fall that it expected its farm equipment sales and profits to fall in the new fiscal year. Falling commodity prices and lower farm income have hurt companies like Deere…”
nope
DeleteLooks like gold and silver bought the rumor and is now selling the news.
ReplyDelete"...The Independent Greeks (ANEL) won 4.7 percent of the popular vote and 13 seats.
The SYRIZA-ANEL alliance would have 163 seats, a governing majority.
Independent Greeks leader Panos Kammenos is set to meet SYRIZA leader Alexis Tsipras in the coming hours..."
http://www.freerepublic.com/focus/f-news/3250696/posts
Expect gold to rise tomorrow when you are again asked to be patient for a considerable time, and more juicy profits can be made in the gold shares. I think this will continue till the end of February, when gold starts coming into its weakest period of the year. But there are a lot of unknowns out there to hamper the recovery, or to reveal weakness in the economy. Any hint that interest rate rises are going to be delayed will be a strong catalyst for gold, and as the European situation keeps on deteriorating, this is certainly on the cards. Sustained weakness in the stock market may also support gold. Much turbulence lies ahead, with the new year having already started out quite badly on many fronts, so we shouldn't be too complacent about the so-called steady recovery, soothingly prognosticated by the big banks, which is their basis for negative calls on gold, and whose own affairs are utterly shambolic to put it mildly, far from inspiring any confidence that they can see further than the end of their proverbial nose.
ReplyDeleteInterest rates all over the world are falling signalling recession is coming.
DeleteWhat economic recovery the bond markets keep saying as yields keep falling towards 0% and negative rates.
Interest rate hikes will make the deflation even worse, yet the markets so want to believe in a recovery and the Fed still, that they ignore the bond markets message.
Since Fed's QE ended, the recovery is deflating away, even with 0% interest rates still here.
a shrewd and shatterproof slam of the shopworn shagadelic shinola shat shamelessly by the soothsaying shills. (because i had to look up shambolic)
DeleteWell, the EUR shorts are finally covering in a robust way today. Bears watching, for sure, as I am currently selling the rally. We'll see what happens--I'm certainly not going to stand in the way of any sustained USD reversal. Having said that, the appeal to the big hitters of preferentially holding EUR seems opaque, at best...
ReplyDeleteLife is but a walking shadow, a poor player
ReplyDeleteThat struts and frets his hour upon the stage,
And then is heard no more. Tis a tale
Told by an idiot, full of sound and fury,
Signifying nothing.
Here Shakespeare helps us understand the nature of the stock markets and the investment world, with the last two words being especially helpful in our analysis.
Talking about idiots the 'A team' will be at it again tomorrow with another injection of novocaine to soothe the market's troubled nerves. Usual 'considerable time' and 'patience' with possibly a dollop more. Dow goes bananas, gold up, and the jubilant gold shares along with.
The fool who persists in his folly will become wise.
ReplyDeleteWilliam Blake
Apple's results yesterday prove without a doubt.
ReplyDeleteHighest revenue and earnings, EVER.
Biggest cash hoard on its balance sheet, the biggest EVER.
Nothing, I mean NOTHING can stop the consumer, given the ideal backdrop of zero interest rates and ever collapsing gasoline and heating oil prices.
Poor George Celente who predicted an "armaggeddon" riot scenario was dead wrong once again.
And don't even get me started on the 45-year "veterans" who have been calling for that "devastating collapse" for 3 years now.
▪Greece Credit Swaps Surge to Signal 70%▪
ReplyDelete▪Probability of Default▪
by Katie Linsell
8:43 AM EST January 28, 2015
(Bloomberg) -- Greek sovereign bond risk is soaring as newly elected Prime Minister Alexis Tsipras seeks to overhaul the country’s debt agreements.
Credit-default swaps now signal a 70 percent probability the government will fail to meet its obligations within five years, up from 59 percent on Jan. 23. The contracts resumed trading in July for the first time since Greece undertook the biggest sovereign debt restructuring in 2012.
Sellers of default insurance paid out about $3 billion when Greece forced investors to exchange bonds at a loss as part of the restructuring. Tsipras promised to avoid a “catastrophic clash” with creditors and European governments...(cont.)
http://www.bloomberg.com/news/articles/2015-01-28/greece-credit-swaps-surge-to-signal-70-probability-of-default
It wouldn't take much for this to quickly escalate given all the parts that are in motion over in the ME.
DeleteIran being publicly drawn into the regional conflict in a bigger way at some point is a given. If you're Israel the quickest way to permanently scuttle the Iranian nuclear deal is to have a conflict with them and draw them out into the open.
There's no way the US and the 5 other countries would support or sign a deal with Iran if open conflict was underway.
I never thought the nuclear talks were meant to actually pass and they were just going through the motions.
If you're Netanyahu and you believe/know Obama and the Dem.'s started talks with Iran that strayed from previous US policy (regarding any tolerance for any Iranian nuclear capability) there's nothing you'd love to do more then to interfere with Obama's ability to consumate a major foreign policy initiative (aka normalizing US/Iran relations).
The one way they can accomplish that is by goading and engaging Iran. Saudi Arabia will join right in. The death of King Abdullah has removed the handcuffs of hesitancy within SA.
In an openly hostile environment a nuclear deal is undoable and instead they'll collectively neuter Iran through war.
With Netanyahu scheduled to soon talk in front of the US Congress about Iran and Israeli security and with the recent incident of the dead Iranian general you can almost see how this Lebanon shelling might lead to something larger.
It seems to me a noticeable negative Iranian slant has been going on in the US media within the last 3 weeks that's painting the nuclear talks and Iran in a different light.
If Iran and Israel or SA etc start fighting the nuclear deal is dead in the water.
I'm sure none of that is lost on Netanyahu.
~☆~☆~☆~☆~☆~☆~☆~☆~☆~
▪Two Israeli soldiers, U.N. peacekeeper killed in Israel-Hezbollah violence▪
Wed Jan 28, 2015 3:54pm EST
By Jeffrey Heller and Sylvia Westall
JERUSALEM/BEIRUT (Reuters) - Two Israeli soldiers and a Spanish peacekeeper were killed on Wednesday in an exchange of fire between Hezbollah and Israel, one of the most violent clashes between the two sides since a 2006 war.
The soldiers were killed when Hezbollah fired five missiles at a convoy of Israeli military vehicles on the frontier with Lebanon.
The peacekeeper, serving with a U.N. monitoring force in southern Lebanon, was killed as Israel responded with air strikes and artillery fire, a U.N. spokesman and Spanish officials said.
Hezbollah said one of its brigades in the area had carried out the attack, which appeared to be in retaliation for a Jan. 18 Israeli air strike in southern Syria that killed several Hezbollah members and an Iranian general.
"Those behind the attack today will pay the full price," Israeli Prime Minister Benjamin Netanyahu warned later on Wednesday, in televised remarks...(cont.)
http://mobile.reuters.com/article/idUSKBN0L10XD20150128?irpc=932
This seems a little too tidy/neat and quick.
DeleteI'm pretty sure Hezbollah and Iran aren't done just yet. Same goes for Israel.
~☆~☆~☆~☆~☆~☆~☆~☆~☆~
▪Israel, Hezbollah signal their flare-up is over▪
JERUSALEM/BEIRUT - Israel and Hezbollah signaled on Thursday their rare flare-up in fighting across the Israel-Lebanon border was over, after the Lebanese guerrillas killed two Israeli troops in retaliation for a deadly air strike in Syria last week.
Israel said it had received a message from UNIFIL, the U.N. peacekeeping force in Lebanon, that Hezbollah was not interested in further escalation.
In Beirut, a Lebanese source briefed on the situation told Reuters that Israel informed Hezbollah via UNIFIL "that it will make do with what happened yesterday and it does not want the battle to expand".
Asked on Israel's Army Radio whether Hezbollah had sought to de-escalate, Defence Minister Moshe Yaalon said: "There are lines of coordination between us and Lebanon via UNIFIL and such a message was indeed received from Lebanon."
A salvo of Hezbollah guided missiles killed an Israeli infantry major and a conscript soldier as they rode in unmarked civilian vehicles along the Lebanese border on Wednesday.
Israel then launched an artillery and air barrage, and a Spanish peacekeeper was killed...(cont.)
http://mobile.reuters.com/article/idUSKBN0L10XD20150129?irpc=932
Bye-bye, Silver...
ReplyDeleteDo you mean the metal or Sheldon Silver...or both? :-)
DeleteSpot gold at $1,150 or $1,000 is not that far away.
ReplyDeleteYep, so far the trend towards lower highs and lower lows is still in place.
DeleteOne look at a 5 year chart tells the tale
When the U.S. eventually starts to raise rates, even if minute (.25), it'll seal golds destiny to closely approach $1,000 if not breach it.
Capital that's looking for positive return (in an increasing NIRP world) will move some money out of gold into something with an actual yield.
All the pundits who said QE was forever and the taper and eventual end of QE couldn't happen are now saying the same thing about interest rate hikes being impossible even while the Fed is clearly telegraphing what they'll eventually do.
How the US raises rates without painting themselves into a corner is another conversation for another time.
The Fed risk collapsing the stock markets if they raise interest rates.
DeleteJust look at how the stock markets cratered yesterday after the markets interpreted the Fed statement as more hawkish.
And Yellen quickly tried to reverse it today when she made a speech today about not raising interest rates and the stock markets rocketed higher on her words. The markets are addicted to 0% rates and QE
If the stock markets don't cooperate, there will be no rate hike.
The Fed only wants to raise interest rates off zero so they have something to fight a future recession with as right now there is only QE left.
Think about it, if they don't raise interest rates off 0% what do they fight the next recession with?
They are not trying to raise interest rates because they think the economy is strong and recovered. They just want something to fight the recessions they see starting around the world.
http://research.stlouisfed.org/fred2/data/WMTSECL1.txt
ReplyDeleteThe Federal Reserve only follows and reacts. As long as bonds sell, they will not panic. Only after money begins pouring into the the stock market will they have to compete and raise bond interest rates.
ReplyDeleteThe days of the Feds smoothing out business cycles ended decades ago as it is no longer their function. 0 rates have not jumped started the housing industry. No one really is asking for loans so money is not circulating. It is more of a wait and see attitude.
With record US tax receipts and the sticker shock of O'bummercare in the years to come, the economy here is going nowhere. See all the latest layoffs? Oil industry has to slow down too in order to adjust to the new pricing. Too much debt to cover.
Around spot $1,000, capitulation will set in and mark a bottom measured in months then I bet silver will lead and outperform.
No real talk of a new reserve currency replacement yet. US$ will probably have to head way above 100 to really upset the basket of currencies and force a new standard. That new world standard could still be a revamped US$ or electronic denominations or any other wild assemblage destined to fail years from now but that's how it goes.
No, they have to keep rates low to keep the buyback game rolling. Raising rates now after 6 years of zirp is not like going from 4% to 5% in a normal business cycle. Raising rates will lead to capital losses on leveraged bond positions that were taken b/c there is no yield out there. Raising rates will viciously unwind the corporate financial engineering game of using debt to buy back shares. Raising rates will snuff out subprime auto and student loans that have accounted for what weak consumer activity we've seen.
DeleteIf they are going to raise rates, then a devaluation is also in the cards.
Thank you Martin Armstrong for scratching the surface about what I've been saying the last several years.
ReplyDeleteIf they own "it" then it's no longer a debt obligation but instead becomes an asset given enough TIME.
http://armstrongeconomics.com/2015/01/30/what-if-central-banks-buy-90-of-govt-paper/
is that the right link DPH? the problem with Martin Armstrong is that he can't even write a short snippet coherently. how does he logically get from the buyer of last resort bidding for all guv debt offered to rising interest rates privately. a bidder with infinitely deep pockets raises price - lowers yield, and all private rates are based on guv bond benchmarks. not saying he is wrong, just that on his way from A to D, he left out B and C. why does this guy not have an editor? well personally i think he is just as full of crap as the rest of them, but as they all do, does sometimes roll a few 6's in a row.
Deletebtw - when confidence is lost in the Central Bank/paper money, gold shines, if not we go even further back in time, back to seashells, beaver pelts, even all the way to barter. whatever happens to interest rates during the collapse is anyone's guess. what are "real" interest rates during such events? that is my story, and i am sticking with it. hope i am at least as confused as MA.
Hmm, I read it Darkpurple, Armstrong does not seem to be saying it works out great from his comments in quotes below from the article.
Deletetheir debt fails he says,
he does not mention what happens to the value of the dollar in the markets when the debt fails? That would seem to be the key question?
Do people still want the dollar if there are no private investors that want the debt anymore? Would you buy the dollar if their debt failed?
"Government debts ALWAYS collapse without exception. Why people even call this “quality” is amazing when it is UNSECURED backed only by the delusion of CONFIDENCE. Capital will simply wake up and move to the private sector. This is starting and it is why Germany could not sell all its debt privately."
I think he uses a dictate program and that's why he misspells or a phrase sounds odd because how he speaks.
ReplyDeleteHeck he might just be making it up as he goes along but he "seems" to have a pretty good handle on the big picture and some of the smaller one's.
He scratched the surface in his title and didn't follow through and instead got off track.
I'm pretty sure at some point he'll expand his thoughts on it.
My basic premise is that the US has no real intention of EVER paying off their debt. That could apply to the EU or any other nation IF they decided to do the same thing except.
The US has a currency advantage (and UST's also) and no one else (so far) can rival how entrenched or vital the USD (and UST) still is in the capital markets.
Most countries (and people) wish they had more dollars and bonds on hand at this point as it surges against all others.
In my view the Fed/Treasury only needs to keep rolling over the debt every 5 years and keep making interest payments on that portion of the debt that needs to be satisfied and not all of the debt.
If they we're satisfy China's and Japan's portion of the debt it would "only" amount to a little over $3.5 TRILLION and the US wouldn't gave to even worry about the rest of the debt.
The majority of the other US debt is owned by large retirement funds and other mutual funds etc and by the US itself as it's soaked up so much new issuance plus older/medium/shorter dated maturies
that they don't really need to worry about repaying the entire debt obligation...that they have no intention of EVER paying back.
I believe this is the main reason they lifted the debt ceiling. They kept running up against something that was a constant political football and if they have no intention of ever paying ofg the entire debt then why saddle yourself with a ceiling?
In the end, after lots of TIME, the US will own so much of their own debt obligations that the remaining amout will be satisfied or negligible compared to the overall debt amount.
My guess has been 85%. MA tosses out 90%
With a surging dollar and with UST's that are going to get a small bump in rates other currencies are weakening and other CB's are scurrying to lower their rates as they approach NIRP.
Because the US did QE first and in a HUGE way before anyone else did (or could) they will be the first to reap the "benefits" of taking on more debt at the right moment in time.
They ran of of debt rope and simply created more rope and room and TIME.
The important part to understand is that they removed the ceiling and have no intention of ever paying it back.
As time marches on their debt obligations are going to be mostly to themselves or other domestic financial entities. That's when pension funds will need to be bailed out....yep, more QE down the road but not during this current credit/debt cycle when rates are about to go back up.
They'll create the very space they'll eventually need to drop rates by raising rates going forward soon enough.
I didn't even mention the creative accounting methods they'll employ over time that will further reduce the debt shadow many of us feel like we live under.
Citizens have anxiety over debt, politicians don't.
Politicians removed the debt ceiling and I don't see any pol's stressing out over it. Heck, they don't even talk about it anymore.
That's because they have no intention of paying it off and they know at some point (85%?) they'll be the primary debt holder of themselves.
It's twisted thinking but creative accounting methods can erase many things that once seemed indelible...like the US debt.
Rates WILL go up.
"...IF they decided to do the same thing except (edit) ...that they can't."
ReplyDeletei.e. it is a giant ponzi scheme. the problem is that eventually every such scheme runs out of suckers. or you could say confidence. you are right - there is no intention to pay back the debt - it is not possible anyway. is that not why interest rates are even going below zero now? when i was in college 30 years ago that was only theoretical! the debt can't even be serviced now at positive real rates!
ReplyDeleteand the best way to clear the fog is just to simplify down all the economic hocus pocus. when a government or bank creates money out of nothing, someone is not getting paid fully for their efforts,call it labor in the most basic example. in another way of thinking, all that accumulated debt is someones labor spent, before the work got done. we are stealing from the future - our kids.
i agree in general with what you are saying above, but just am saying that something as logically flawed as the system of banking is right now, must at some point collapse. the difficult part is guessing when.
i see a new post. thanks Dan, and see ya over there.
https://www.fms.treas.gov/fmsweb/viewDTSFiles?dir=w&fname=15012900.pdf
ReplyDeleteGo to Table IIIC- Debt Subject to Limit
"Statutory debt limit temporarily suspended thru March 15, 2015."
Is this just a phase in a bankruptcy proceeding. First the collateral (cheap gold/oil/commodities). Second use Treasuries for Silk Road buildout via AIIB and muscle in on IMF turf ( Latin America, Africa, Oz). Third???