All Articles

Gold is still likely to go to $1,000 before it goes to $2,000

With the Fed continuing to ramp down its QE programme, a bearish technical set up, and a lack of CPI inflation, the outlook for gold is bearish, and therefore gold is still likely to go to $1,000 before it goes to $2,000.

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US large-cap blue-chip stocks are still the place to be

In December last year I outlined a number of factors that were bullish for US stocks, and said that they would continue to be the primary beneficiary of Fed policy and other favourable macro forces. My bullish outlook has not changed, and this article explores more reasons to be bullish on large-cap US equities.

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The Big Picture: From banking crisis to sovereign debt crisis to currency crisis

This article attempts to outline all the macro forces and trends that are currently impacting the global economy and financial markets. It is only by understanding all of these forces (and the interplay between them) that investors can begin to see the inevitable path from banking crisis to sovereign debt crisis to currency crisis.

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Examining the global crack-up boom: Part I

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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What is Quantitative Easing & why has it failed to stimulate growth?

This article explores the subject of Quantitative Easing (QE) and tries to answer the following questions: What is QE? How does QE work?, What is QE supposed to do?, and Why has QE failed to stimulate growth?

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DOATFT: In this market the only thing that makes sense is Trend Following

In a world where government deficits are rising, interest rates are at record lows, central banks are printing money, unemployment remains stubbornly high, and bank deposits are being raided to rescue insolvent banks, it is hard to believe that gold and silver have fallen so sharply. In this environment the only thing that makes sense is Trend Following.

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Chart of the week: Money velocity plunges to lowest level in more than 50 years

Since the financial crisis hit the US Federal Reserve has created more than $2.2 trillion. However, all this new money has not found its way into the economy. Instead, it is just sitting idle in the banking system, and as a result money velocity has plunged to the lowest level in more than 50 years.

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Keynesianism, inflation & euthanasia of the rentier: A survival guide

The Keynesian economic policies being pursued by finance ministers, central bankers and politicians around the world are designed to create inflation and destroy the wealth of investors. This article outlines the dangers and explores ways in which investors can protect themselves.

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The flawed logic of Keynesian economics: Part I

The economic policies being pursued in the majority of G8 countries are flawed. That’s because they are based on the flawed thinking of John Maynard Keynes. This article aims to give some insight into the flawed logic that lies that the heart of what is known as Keynesian economics.

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How To Solve The Global Financial Crisis: A 20 Point Plan

Having analysed both the factors that led to the boom and the actions of governments since the bust, it’s clear that to solve this crisis we need a much more radical plan. What follows is a 20-point plan that we believe would help Britain return to sustainable prosperity.

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Why today’s system of fiat money is doomed to fail & what it means for investors

There is a clear link between fiat money, the supply of money in an economy, and the 30-year boom that came to an end in 2008. By understanding this link investors can see how fragile the system is, and what to do to protect themselves from its inevitable collapse.

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The Forgotten Depression Of The 1920’s & What It Teaches Us

Very few people have heard of the Forgotten Depression of the 1920’s that affected the US from 1920 to 1921. Despite its severity economic growth was quickly restored thanks to a President who chose not to intervene in the markets and rather let free-market forces cleanse and reset the system.

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Six options for resolving the global debt crisis

The global debt crisis is perhaps the single biggest threat to our economic future and therefore understanding how it might be resolved is vital. This article examines six options for resolving the global debt crisis. It also suggests which of these we are most likely to see, and what that will mean for investors.

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The science & success of trend following: Part II

Part I of The science & success of trend following covered what trend following is, and where it came from. Part II reveals how trend following works. It also tries to answer the question: If trend following is so profitable, why aren’t more traders trend followers?

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The science & success of trend following: Part I

Trend followers are not concerned with balance sheets, income statements, supply and demand, the outcome of Fed meetings, or even the news. That’s because they don’t try to predict the direction of markets, they simply react to market movements and follow along.

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Why we still don’t have a true economic recovery five years after the global financial crisis began

It is five years since the global financial crisis began but we still don’t have a true economic recovery. This article explains why that is.

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An introduction to Value Investing

If you had given $10,000 to Warren Buffet in 1956 that investment would now be worth over $400 million, and that’s after fees and taxes. Much of Buffet’s success is owed to his chosen investment philosophy, that of value investing. This article provides an introduction to the value investing philosophy and outlines its core principles. Background [...]

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Financial repression poses a serious threat to your wealth

Financial repression poses a serious threat to the wealth of millions of savers and investors, and it is likely to be a dominant feature within the financial landscape for at least the remainder of the decade. This article examines what financial repression is, and how savers and investors can protect themselves from it.

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Market outlook: Stocks, gold & UK property

Recent research continues to support the thesis that US large-cap blue-chip stocks will continue to be the primary beneficiary of the Fed’s policy of QE-to-infinity and other favourable macro forces.

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China & India’s Gold vs. Silver Imports Diverge as Analysts Warn on QE Taper

The price of gold held just shy of last week’s 2-month closing high in London trade on Friday, retreating $10 from an overnight high of $1380 per ounce as world stock markets also held flat.

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Gold & Silver Recover Fed Drop, S.African Mining “In Crisis”

The price of gold recovered overnight losses after the release of US Federal Reserve meeting notes in London trade Thursday morning, rising back to $1375 as major stock markets also rose with commodities.

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Taper Talk, Act 2

While the Fed’s taper talk has been tapered and then un-tapered, the market may now be tapering the Fed rather than vice versa. Let’s assess Act 2 of the taper talk and the implications for the markets, including the dollar and gold.

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Bonds (TLT) Break Important Support

This week let’s take a look at bonds because rising rates are capturing broad attention.

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Silver’s 13% Jump “Confirms” Recovery in Gold Even as T-Bond Yields Rise

Wholesale gold edged back from last week’s two-month closing high on Monday morning, recording its best London Gold Fix since 18th June above $1375 per ounce. World stock markets slipped, with Indonesia dropping 5.5%, as major government bond prices also fell, driving interest rates higher.

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Tapering And The Potential Impact On Credit Spreads

According to our U.S. Bond Strategy service, there could be some modest disruption in the performance of risk assets as the Fed pares back its asset purchases.

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Buy U.S. Bank Stocks, Short Canadian Banks

Our Global Investment Strategy service recommends going long U.S. financials while shorting their Canadian peers: housing dynamics are completely out of sync between the two markets.

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Warning from Broad Range of Indicators

While the S&P 500 Index has recently made new, all-time highs, a trio of indicators says we should be alert for market weakness.

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Are Banks Finally Ready To Start Lending?

In normal times, today’s combination of record low interest rates and massive infusions of capital into the banking system would ignite the mother of all expansions. That it hasn’t has confused the economists whose textbooks clearly state that it should. And it has convinced the Fed to just keep upping the ante with QE after QE.

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Price inflation approaching

There is some evidence in the UK of a pick-up in consumer spending. There are two likely factors behind this, the first perhaps being seasonal, aided by the fine weather. The second is less obvious, but combines with the first to encourage purchases of big ticket items; and this is cheap consumer finance coupled with growing expectations of higher interest rates in the future.

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What’s next for the Dollar and Currencies? Updated Merk Outlook August 2013

In the short to medium term, the U.S. dollar and currencies are heavily influenced by the actions of the Fed. As the Fed may be reading tealeaves as much as anyone else, we may be facing particularly high policy uncertainty that, in turn, reflects on elevated volatility in the bond and currency markets. The good news is that this may yield opportunities for the prudent investor.

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