Commodity Trade Mantra

Posts Tagged ‘Financial Markets’

The Fed Can’t Raise Interest Rates, But Must Pretend It Will

The Fed must succeed in continuing to postpone rate hikes into the future without breaking peoples’ expectation that rates will rise at some point. It has to send out the message that rates will be increased at, say, the forthcoming FOMC meeting. But, as the meeting approaches, the Fed would have to repeat its trickery, pushing the possible date for a rate hike still further out.

Why Gold is Good and Sovereign Debt is Bad

It is easy to create debt – central banks “print” currencies by BORROWING those currencies into existence. Debt increases, currency in circulation increases, and until it crashes, life is good for the financial and political elite. But debt increasing 60 times more rapidly than gold indicates that debt is growing too rapidly and due for a reset.

The Bull Market in Stocks May Have Ended Already

With the Fed now running out of ammo, we MAY no longer be in a bull market. Instead, we MAY be entering a bear market. If so, you can forget about a recovery in four months. Instead, it may take four years… or 40 years… to reclaim the bull market high set this past May. Corrections in a bull market are one thing. Bear markets are something very different.

The Fed Is Spooking the Markets, and Not China

The Fed has always known that the fragile economy created through stimulus might prove unable to survive even the most marginal of rate increases. The markets have now panicked that the rate hikes are about to occur in the face of a weakening economy. How much further will markets have to fall before the Fed comes to the rescue by calling off any threatened rate increase?

The Worst Time In History To Be Invested In Stock Markets

While the Fed has been successful at intentionally promoting yield-seeking speculation since 2009, a century of evidence demonstrates that current valuation extremes also imply a stock market collapse that is now baked in the cake, and that Federal Reserve policy has much less ability to prevent than investors seem to believe.

If There Ever Was A Need For Gold - Now is the Time

If investors ever needed physical gold in their portfolios, now is the time. Now is the time to protect even a well-diversified portfolio against the risks inherent in financial assets (equities, debt) and tangible assets (real estate, fine art, etc.) alike. Here are some reasons why.

What Is The Federal Reserve System?

Spending time to understand the ins and outs of the Federal Reserve will give you a significant financial edge. Paying attention to and understanding the Federal Reserve System is more critical to your investments now than in the past decade. Well, everything you need to understand the Federal Reserve is right here at your fingertips.

If Anyone Doubts That U.S. Is In A Stock Market Bubble, Show Them This

It would be one thing if stocks were soaring because the U.S. economy as a whole was doing extremely well. But we all know that isn’t true. Instead, what we have been experiencing is a clearly artificial stock market behavior that has nothing to do with economic reality. The warning signs are there – if you are willing to look at them.

When A Soaring Dollar "Reflects Loss Of Investor Confidence And Is Potentially Devastating"

A strong dollar has a Jekyll and Hyde personality – a ‘good dollar’ that reflects economic & monetary policy divergence & whose rally is orderly and limited. A ‘bad dollar’ which de-couples from monetary policy & reflects instead a loss of investor in the face of higher volatility. That dollar rises faster, much further & is potentially devastating.

The Line Between Rational Speculation and Market Collapse

At present, the fact that we are highly concerned about market risk is a reflection of a market environment that joins extremely overvalued, overbought, overbullish conditions with still-troubling dispersion in market internals and a widening of credit spreads. Our concerns about market risk remain extreme at present.

Ponzi Finance and $50 Oil - James Rickards

Oil below $50 is more than low enough to do an enormous amount of damage in financial markets. There are about $5.4 trillion dollars of costs incurred in the last five years for exploration drilling and infrastructure in the alternative (fracking) energy sector. It’s been largely financed with corporate and bank debt.

Surprise...Everyone Was Wrong About The End Of QE

With the Fed now extracting the QE support, it is very likely that economic weakness will resurface since the “engine of growth” was never repaired. Furthermore, interest rates can remain low for a very long time when there is a lack of sufficient economic catalysts to sustain the drag imposed by higher borrowing costs.

Gold, Financial Markets & International Monetary System

How often have we seen $100 moves in gold, much less $400? It has been only one time that gold moved over $100 in a day. We have seen $3 moves in silver but these were almost exclusively during evening trade sessions. Does CME really see $12 moves in silver coming? Again, “are they expecting something?” we don’t know about …

Why The Stock Market Is Detached From The Economy

While statistical economic data suggests that the economy is rapidly healing, it has only been so for a very small percentage of the players. For most American’s they have only watched the “rich” prosper as the Federal Reserve put Wall Street before Main Street. Moreover; global deflationary pressures have only begun to wash back on the domestic economy.

American Financial Markets Have No Relationship To Reality

The price of gold is determined in a speculative futures market in which bets are placed on the direction of the gold price & not the physical market. The divergence of markets from economic reality disturbs neither public policymakers nor economists, who promote the interests of the government and its allied interest groups.

End Of Quantitative Easing - How Will The Stock Market React?

Since 2008 stocks have risen dramatically throughout every stage of quantitative easing. But when the various phases of quantitative easing have ended, stocks have always responded by declining substantially. The only thing that caused stocks to eventually start rising again was a new round of quantitative easing. So what will happen this time?

Believe It Or Not - We Are Right On Schedule For The Next Financial Crash

The financial markets have become completely divorced from economic reality & such a state of affairs never lasts forever. It is just a matter of time before a correction comes. Just because something has not happened yet does not mean that it is not going to happen. We are right on schedule for the next great financial crash.

Why We Should Fear the REPO

The REPO market is the transmission mechanism that drives liquidity. REPO, also related to “shadow finance” is the core catalyst – the perpetual financial motion generator, the way constant leverage is conjured out of nothing on a daily basis. It drives worldwide liquidity and/or credit. It has enabled the funneling of credit into equities.

It Can't Be A Bubble! Does One Actually Exist Or Not?

Ultimately the question is whether brisk money supply growth will be maintained and whether the economy’s real pool of funding is still large enough to allow for additional diversions of scarce resources into bubble activities. Most of the time, it’s the eventual slowdown of money supply growth that brings a bubble to its knees.

5 Reasons Why The Market Won't Crash Or Will

Can this bull market last, given the current economic & fundamental variables? While we can eventually recover from a market crash, we can not regain the time lost to save & grow our investments to fund our retirement. Its critical to understand what the ramifications to your long term investment & financial planning goals will be if you are wrong.

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