Posts Tagged ‘inflationary spiral’

A DEFLATIONARY RED FLAG IN THE $U.S. DOLLAR

A DEFLATIONARY RED FLAG IN THE $U.S. DOLLAR

Courtesy of The Pragmatic Capitalist 

Red Flag against Blue Sky

If the chart below doesn’t grab your attention then few things will. In my opinion, the performance of the dollar is the surest evidence of the kind of environment we’re currently in. The surging dollar is a clear sign that inflation is not the concern of global investors. This is almost a sure sign that deflation is once again gripping the global economy and should be setting off red flags for equity investors around the world.

The recent action in the dollar is eerily reminiscent of the peak worries in the credit crisis when deflation appeared to be taking a death grip on the global economy and demand for dollars was extremely high. The recent 16% rally in the dollar is a sign that investors are once again worried about the continuing problem of debt around the world and they’re reaching for the safety of the world’s reserve currency – the dollar. As asset prices decline and bond yields collapse this is a clear sign that inflation is not the near-term concern, but rather that the debt based deflationary trends continue to dominate global economic trends.

This is exactly the kind of market action we saw leading up to Lehman Brothers. In 2008 the dollar rallied as signs of deflation began to sprout up. This was an instant red flag for anyone who understood the deflationary forces at work (and a total surprise for the inflationistas). The dollar ultimately rallied 26% from peak to trough. Coincidentally, the dollar had rallied 16% from trough to peak just prior to the Lehman collapse when the dollar surge accelerated.

USD2 A DEFLATIONARY RED FLAG IN THE $U.S. DOLLAR

 

Of course, the inflationistas will argue that gold is rising in anticipation of inflation. In my opinion, this is incorrect. First of all, if inflation were a major global concern the Goldman Sachs Commodity Index wouldn’t be almost 65% off its all-time high and just 33% above its 2009 low. Second, and perhaps most importantly, bond yields around the globe wouldn’t be plummeting if there were rampant inflationary fears. For a much more detailed analysis on the reasons why inflation is not a near-term concern please see here.

Oriental dragon mask

As for the gold rally, I think it’s clear gold is rallying in anticipation of its potential to become a future reserve currency. The…
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Zero Hedge

Is Zoltan's Market Doomsday Imminent? Here Are The Two Things To Watch

Courtesy of ZeroHedge View original post here.

In the aftermath of Zoltan Pozsar's stunning "doomsday" report about an upcoming crisis in the repo market, which we discussed extensively yesterday, and which predicted that the Fed may "lose control of overnight rates" leading to a vicious dislocation in repos coupled with a paralysis in the FX swap market, many traders who (pretend to) understand the implications of what the former Fed strategist said, have quietly hun...



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Phil's Favorites

The British election explained in five key phrases

 

The British election explained in five key phrases

Courtesy of Veronika Koller, Lancaster University

The UK government’s decision to hold its third general election since 2015 is a baffling one to many – including the weary voters who have to take part.

Tensions have been high as the country attempts to resolve the identity crisis first sparked by the Brexit vote in 2016. It’s a complicated moment for the nation and, at times like these, it can help to observe the big issues through the lens of language. The slogans and terms that get thrown around again and again during a campaign can often tell us a lot about the bigger picture. Here are five such slogans that can help explain what’s happening in the UK right now.

‘Get Br...

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Digital Currencies

Three Men Arrested In NJ For Running Alleged $722 Million Crypto Ponzi Scheme

Courtesy of ZeroHedge View original post here.

Authored by Kollen Post via CoinTelegraph.com,

United States authorities in New Jersey have announced the arrest of three men who are accused of defrauding investors of over $722 million as part of alleged crypto ponzie scheme BitClub Network, per a Dec. 10 announcement from the Dep...



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Kimble Charting Solutions

Is Freeport McMoRan (FCX) Making A Run For the "Gold"?

Courtesy of Chris Kimble

Mining company Freeport McMoRan NYSE: FCX is enjoying the tailwind from a strong year for gold and silver prices. And although Copper prices are down, Copper has been turning up lately.

This has helped Freeport’s stock price recover in 2019 and has FCX testing a key breakout level.

Below is a “weekly” chart of Freeport McMoRan (FCX). The shaded channel outlined by each (1) highlights the longer-term downtrend that FCX has been stuck in.

But this could change on a dime, especially if FCX can breakout above (2). This area represents its re...



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Insider Scoop

Economic Data Scheduled For Wednesday

Courtesy of Benzinga

  • The MBA's index of mortgage application activity for the latest week is schedule for release at 7:00 a.m. ET.
  • The Consumer Price Index for November will be released at 8:30 a.m. ET.
  • The Census Bureau quarterly services survey report for the third quarter is schedule for release at 10:00 a.m. ET.
  • The Atlanta Fed's Business Inflation Expectations survey report for December will be released at 10:00 a.m. ET.
  • The Energy Information Administration’s weekly report on petroleum inventories in the U.S. is schedule for release at 10:30 a.m. ET.
  • The Federal Open Market Committee will announce its policy decision at 2:00 p.m. ET.
  • The U.S. Treasury budget report for November will be released at 2:00 p.m. ET.
  • ...


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Lee's Free Thinking

Chart Shows the Fed Ramping Up Not QE - Funding Almost All Treasury Issuance

 

Chart Shows the Fed Ramping Up Not QE – Funding Almost All Treasury Issuance

Courtesy of Lee Adler, Wall Street Examiner 

The Fed is ramping up “Not QE” .

The Fed bought $2.2 billion in notes today in its POMO, “not QE,” operations. Actually $2.15 billion because they sold back a whole $50 million. Must have been a little glitch in the force.

This brings the Fed’s total outright purchases of Treasuries to $170 billion since it started Not QE, on September 17.

It also did $107 billion in gross new repo loans to Primary Dealers to buy Tre...



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Chart School

Silver stock taking the sector higher

Courtesy of Read the Ticker

As the US economy begins to show late cycle characteristics like: GDP slowing, higher inflation, higher wage costs, CEO confidence slump. 
Previous Post: Gold Stocks Review

The big players in the market are looking for the next swing off good value lows. This means more money is finding it way into the gold and silver sector, and it is said gold and silver stocks actually lead the metal prices. The cycle below shows prices are ready to move in the months ahead (older chart re posted).




 

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Members' Corner

Sacha Baron Cohen Uses ADL Speech to Tear Apart Mark Zuckerberg and Facebook

 

Sacha Baron Cohen Uses ADL Speech to Tear Apart Mark Zuckerberg and Facebook

By Matt Wilstein

Excerpt:

Sacha Baron Cohen accepted the International Leadership Award at the Anti-Defamation League’s Never is Now summit on anti-Semitism and hate Thursday. And the comedian and actor used his keynote speech to single out the one Jewish-American who he believes is doing the most to facilitate “hate and violence” in America: Facebook founder and CEO Mark Zuckerberg.

He began with a joke at the Trump administration’s expense. “Thank you, ADL, for this recognition and your work in fighting racism, hate and bigotry,” Baron Cohen said, according to his prepared...



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The Technical Traders

VIX Warns Of Imminent Market Correction

Courtesy of Technical Traders

The VIX is warning that a market peak may be setting up in the global markets and that investors should be cautious of the extremely low price in the VIX. These extremely low prices in the VIX are typically followed by some type of increased volatility in the markets.

The US Federal Reserve continues to push an easy money policy and has recently begun acquiring more dept allowing a deeper move towards a Quantitative Easing stance. This move, along with investor confidence in the US markets, has prompted early warning signs that the market has reached near extreme levels/peaks. 

Vix Value Drops Before Monthly Expiration

When the VIX falls to levels below 12~13, this typically v...



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Biotech

Why telling people with diabetes to use Walmart insulin can be dangerous advice

Reminder: We are available to chat with Members, comments are found below each post.

 

Why telling people with diabetes to use Walmart insulin can be dangerous advice

A vial of insulin. Prices for the drug, crucial for those with diabetes, have soared in recent years. Oleksandr Nagaiets/Shutterstock.com

Courtesy of Jeffrey Bennett, Vanderbilt University

About 7.4 million people ...



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Mapping The Market

How IPOs Are Priced

Via Jean Luc 

Funny but probably true:

...

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Promotions

Free eBook - "My Top Strategies for 2017"

 

 

Here's a free ebook for you to check out! 

Phil has a chapter in a newly-released eBook that we think you’ll enjoy.

In My Top Strategies for 2017, Phil's chapter is Secret Santa’s Inflation Hedges for 2017.

This chapter isn’t about risk or leverage. Phil present a few smart, practical ideas you can use as a hedge against inflation as well as hedging strategies designed to assist you in staying ahead of the markets.

Some other great content in this free eBook includes:

 

·       How 2017 Will Affect Oil, the US Dollar and the European Union

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