Since the 2008 financial crisis central banks around the world have created in excess of $12 trillion. Not only has their policy of ultra-lose money created another unsustainable boom in asset prices, it is looking increasingly likely that it will end in what Austrian economist Ludwig von Mises called a “crack-up boom”, i.e. a complete breakdown of the monetary system.
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Since 1 November 2011 the Dow Jones Industrial Average has risen by 31.19%. Over the same period however, Alcoa, the world’s leading producer of aluminium, has fallen by 15.98%. With the Dow making new all-time highs, the question is, why is one of its oldest components still trading at the same level it was in 1989?
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Today’s chart of the Gold Miners Bullish Percentage Index reveals that right now not one of the 30 gold mining stocks in the NYSE Arca Gold Miners Index (GDM) is in an uptrend. This reflects extreme bearishness on the part of gold investors, something which typically marks a major market bottom.
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The gold price fell $10 per ounce after reaching almost $1400 for the 5th time this week in London trade Friday morning. Silver held tight around $22.50 per ounce, managing only one-third of gold’s 2.0% gain for the week.
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Rolling Stone’s Matt Taibbi has once again put the world’s major news organizations to shame by describing, in comprehensible terms, the pervasive corruption at the heart of the financial system. Below are his concluding paragraphs from a much larger article that everyone with money at risk in a bank, brokerage account or business should read.
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Since the 2008 financial crisis central banks around the world have created in excess of $12 trillion. Not only has their policy of ultra-lose money created another unsustainable boom in asset prices, it is looking increasingly likely that it will end in what Austrian economist Ludwig von Mises called a “crack-up boom”, i.e. a complete breakdown of the monetary system.
Read more...
Both gold and silver rose in Asian and London trade Thursday morning, defying a sharp slide in global stock markets to gain 3.0% rally from yesterday’s sharp sell-off. Commodity prices fell as major government bonds rose but weaker Eurozone debt slipped, pushing interest rates higher.
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With the stock market seemingly reaching new highs every day, should we worry about a crash that puts an end to the party? If so, how should investors prepare? Let us explain.
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The price of both silver and gold slipped back in London on Tuesday morning, cutting into yesterday’s rapid gains from 4-year and 1-month lows respectively. World stock markets stalled after hitting a series of near and new all-time highs so far this month.
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The 2003-07 credit cycle provides an instructive template on how the current cycle may eventually play out.
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Having essentially traded sideways for 13 years, the FTSE 100 has finally reached the same level it did during the height of the credit bubble in the summer of 2007. In nominal terms the FTSE is now just 2.8% below its 30 December 1999 all-time high of 6,950.60. In real terms however, it is still 28% below it.
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On Friday, Treasury Secretary Jacob Lew sent a letter to House Speaker John Boehner, informing him that the Treasury will begin taking “extraordinary measures” in order to keep the Federal debt below the legal limit. Such measures could include redeeming current investments in the retirement accounts of civil service workers and would keep things running up through Labor Day.
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This article illustrates how a news organization can shape the tone of a story. Bloomberg chooses to focus on the bear market in precious metals, framing the record level of bearish hedge fund bets as, well, bearish. But the data could just as easily be the basis of a bullish story, since whenever hedge funds get massively short the price of gold and silver soar.
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The article ‘Energy sector provides decent trading opportunity’, published last week, outlined a potential trading opportunity in the energy sector ETF XLE. The fund had broken out above a key resistance level and established a well defined uptrend. Now however, the fund has begun to advance strongly and it’s time to safe-guard our profit.
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