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The Great Market Tide Has Now Shifted To Risk-Off Assets

A global sea-change in risk appetite & sentiment
Friday, July 8, 2016, 3:03 PM

In the conventional investment perspective, risk-on assets (i.e. investments with higher risks and higher potential returns) such as stocks are on a see-saw with risk-off assets (investments with lower returns and lower risk, such as Treasury bonds). When risk appetites are high, institutional managers and speculators move money into stocks and high-yield junk bonds, and move money out of safe-haven assets such as gold and U.S. Treasuries.

But recently, markets are no longer following this convention. Safe haven assets such as precious metals and Treasuries are soaring at the same time that stock markets bounced strongly off the post-Brexit lows.

Risk-on assets (stocks) rising at the same time as safe-haven assets is akin to dogs marrying cats and living happily ever after. 

What the heck is going on? » Read more

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Observations From The Heart Of Silicon Valley

The calm before the storm?
Thursday, May 19, 2016, 8:11 PM

Yesterday I made the 2-hour drive back to Silicon Valley, where I lived for 15 years before moving out to the country.

I rarely go back, as I miss very little about the hyper-elite scene there. When I do, though, I feel I have a useful 'insider-now-outsider' perspective that allows me to see things there more accurately than those who live in that fishbowl 24/7.

What hit me most strongly upon arriving back in the Menlo Park/Palo Alto area, is how little of the craziness has changed since I left 4 years ago. I don't mean 'unchanged' though; rather that the same craziness is there, just more extreme than ever. » Read more

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And The Winner Is...

Which nations to keep your investments in
Friday, May 13, 2016, 8:20 PM

Executive Summary

  • The Sole Superpower
  • The Importance of factoring in External Costs
  • The Biggest Loser
  • Which nations to keep your investments in

If you have not yet read Which Countries Will Be Tomorrow's Winners & Losers?, available free to all readers, please click here to read it first.

In Part 1, we examined the thesis that geography and demographics largely define a nation’s destiny.

In Part 2 here, we add other potentially game-changing factors that don’t necessarily fit neatly into either category.

Oh, No: America, The Sole Superpower?

Many of those who disagree with America’s military-interventionist foreign policy of the past 15 years will naturally be appalled by any analysis that suggests America’s preeminence is only going to become even more dominant as the rest of the world is destabilized by the inter-connected dynamics driving global disorder.

The good news is Zeihan sees America becoming much less interventionist as it withdraws into greater self-sufficiency—a topic I’ve discussed in previous essays on autarky. (What If Nations Were Less Dependent on One Another? The Case for Autarky (January 2014))

In Zeihan’s view, America’s preeminence is based on its unparalleled assets of geography and more favorable demographics than its competitors. Zeihan sees the U.S.A’s energy resources, dual-ocean buffers, lack of contiguous-border competitors/enemies, culture of innovation and impressive pool of domestic and foreign capital as an unbeatable combination that no other aspirant to superpower status can match.

In his analysis, the intrinsic weaknesses of other nations and alliances such as the Eurozone have been papered over by the flood of capital that has saturated the global economy for the past 20 years.  The source of this ocean of capital is.... » Read more

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Off The Cuff: Elusive Earnings

Profits vanish as as the next recession encroaches
Wednesday, May 4, 2016, 10:55 AM

In this week's Off The Cuff podcast, Chris and John Rubino discuss:

  • Elusive Earnings
    • Corporate profits are vaporizing across all sectors
  • Non-GAAP Crap
    • Companies are increasingly contorting their books to look more solvent than they are
  • The Ramifications Of Distorting Price Signals
    • Malinvestment the world 'round
  • Inflate Or Die
    • Why helicopter money is coming
Podcast

Jim Rickards: The New Case For Gold

A powerful set of arguments for owning the yellow metal
Monday, April 4, 2016, 12:32 AM

Monetary expert Jim Rickards returns this week to share the insights from his latest work The New Case For Gold, a detailed and highly-researched study of the fundamentals likely to drive the price of gold bullion in the years to come.

Rickards is quite confident that the price is going higher -- much higher in fact -- as the current world fit currency regimes falter, to be replaced by ones backed (at least in part) by bullion.

On the way to that outcome, expect the price to be subject to the geopolitical interests and aims of the largest players on the chessboard. » Read more

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Off The Cuff: Are We Entering A New Bull Market For Gold?

Likely, though risk of a short term pull-back is high
Friday, March 11, 2016, 12:30 AM

In this week's Off The Cuff podcast, Chris and John Rubino discuss:

  •  Has A New Bull Market In Gold Begun?
    • Maybe, though a short term pull-back is likely
  • Has Oil Bottomed?
    • Much harder to tell
  • Electric Cars
    • How long may it really take for them to reach mainstream penetration?
  • How Bad Will The Next Market Crash Be?
    • Very bad. This next one's for all the marbles.
Insider

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Why This Next Crisis Will Be Worse Than 2008

And what you can do to prepare
Friday, January 15, 2016, 8:53 PM

Executive Summary

  • There are too many signs of deflation to deny it's winning the day
  • Why China's weakening will accelerate the global economy's decent
  • Why this next crisis will be worse than 2008
  • What will it look like if things really get out of control (how bad could things get?)
  • The best investments to be making now, before the rout

If you have not yet read The Deflation Monster Has Arrived, available free to all readers, please click here to read it first.

Too Many Warning Signs To Talk About

The deflationary monster is here and there are almost too many warning signs to list, let alone fully describe.

So I’ll just list and link them…you can follow up on the details if you want, it’s the ‘general vibe’ I want to get across.

Here are the signs of a weak economy that we are dealing with:

The pattern here is one of rapidly slowing economic activity and mounting pain starting “from the outside in” as emerging markets and the poor people within the core countries bear the brunt at first. Things always get rolling to the downside starting with the weakest, peripheral elements first.

Copper and oil are providing very clear signs that economic activity is not just slow, but in rapid retreat. Wal-Mart tells us that its shoppers are having trouble. The fresh all-time lows in a variety of currencies, plus massive weakness in others, is telling us that the virtuous portion of the liquidity cycle that the Fed, et al., unleashed on the world has entered the vicious part of the cycle.

The pain will spread to the center with increasing speed. The main question is if the authorities can stop that before the momentum becomes too great to halt? And what will happen if they cannot?

The answer to that is... » Read more

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Markets Are Correcting Hard

An assessment of the risks of things getting worse from here
Friday, January 8, 2016, 1:41 AM

The long-awaited global financial market correction has arrived. We are seeing collapses in all major markets and across all major categories.

As usual, the pain has started at the edges, in the weaker elements (emerging markets, junk bonds, weak companies, etc.) and is rapidly spreading towards the center. » Read more

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2015 Year In Review (Part 2)

A bonfire of the sanities
Friday, December 18, 2015, 9:35 PM
As regards the banks, we have come down from the trees but are not out of the woods yet.
 
The six biggest banks are ginormous—50% larger than they were at the previous high at the start of the crisis—but the sector was relatively quiet this year. Hundreds of billions in fines have been levied by various governmental Rainbow Coalitions.
 
As statutes of limitations began to run out, Eric Holder and authorities declared there would be no prosecutions of individuals responsible for the crisis.
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The Screaming Fundamentals For Owning Gold

We're at a moment of historic opportunity
Tuesday, December 8, 2015, 12:53 PM

Every year or two we update this report, which lays out the investment thesis for gold. Here is this year's version.

Silver is touched upon only as necessary; as a separate report of equal scope is required for that precious metal.

Gold is one of the few investments that every investor should have in their portfolio. We are now at the dangerous end-game period of a very bold but very reckless & disappointing experiment with the world's fiat (unbacked) currencies. If this experiment fails -- and we observe it's in the process of failing -- gold will provide one of the best forms of wealth insurance. But like all insurance products, it only works if you buy it before you need to rely on it. » Read more