Two Legends Just Issued Major Alerts (Kevin J.)
Oil, Contagion Concerns, And Even The Election Weigh On Markets – Once again weakness in crude helped send equity prices lower. Energy stocks took a sound pounding.
The oil price has fallen below $30 now: lower than it has been since 2013. The International Energy Agency warns that the oil market may “drown in oversupply” in 2016. The Saudis keep pumping, the warm weather is depressing demand, Iran is re-entering the global market now that nuclear sanctions are over, and so on.
In Switzerland, punishment interest already causes “perverse unpredictable effects,” as mortgage rates have started to soar. It’s wreaking havoc in Denmark and Sweden. Bank of Canada Governor Stephen Poloz let the idea float that he’d unleash punishment interest to destroy the Canadian dollar. The Bank of Japan announced Friday morning – timed for maximum market effect – that it too would inflict negative interest rates on its subjects.
In the financial realm, fragility builds as the system relies ever more heavily on marginal lenders, borrowers, buyers and investments for its “growth.” The current “recovery” (smirk) is completely dependent on marginal lenders (China’s shadow banking), borrowers (auto buyers taking subprime 7-year loans), buyers (corrupt Chinese officials buying $3 million homes in Vancouver B.C. with their ill-gotten gains) and investments (empty malls, empty factories, stock buy-backs, etc.).
But Clinton didn’t simply pretend to do something she didn’t. She abjectly falsified her history. In the debate, she said she went to Wall Street in December 2007. That much she did do. But rather that get tough with financial firms as she claimed, she went with the “everyone’s to blame” line, which of course means no one is to blame…except for those greedy borrowers.
Stockman warns the next crash will be bigger than any other in history. Stockman, the best-selling author of “The Great Deformation,” says, “I think we have been building a bubble year by year since the early 1990’s. The earlier crashes that we are so familiar with, Dot Com and the Housing Crash, were only interim corrections that were not allowed to work their way clear. The rot was not effectively purged from the system because central banks jumped back in within months of the corrections and doubled down in terms of the stimulus and liquidity that they pumped into the market.”
Gold to Beat Stocks? (Aaron M., Axel M.)
The chart shows the dollar started to underperform after the Fed was introduced in the early part of last century, then in earnest during the Great Depression. We also read into this chart that the credit driven super cycle that started at the end of the Great Depression was at the expense of the dollar.
As the price of gold is surging, gold miners are going higher as well. We are not including the charts of the gold mining indexes like GDX or HUI, as they only show a recovery from a major bottom. For this article, we have chosen to focus on one particular gold miner with an extremely constructive chart setup. It is a mid-sized miner, with a market cap of $3B, production from one important gold mining, several exploration activities, production of 505k ounces of gold in 2015, and a cash position of $160M at the end of 2015.
Ambitious TPP trade deal signed (Mark C.)
The ambitious Trans Pacific Partnership (TPP) has been formally signed in Auckland even as the US struggles to get the pact ratified in Congress. The trade deal looks to facilitate investment between 12 countries across the Pacific Rim, which together account for about 40% of the global economy.
This includes Singapore, Australia, Canada, Japan, Malaysia and Mexico. The TPP was agreed in October after years of negotiations and multiple missed deadlines.
The bonds will pay a fixed yield of five percent until they mature in January 2022. The money raised in the bond issue will help the company improve its facilities and promote the thick-rind cheese it makes, said the cooperative’s chairman.
December brought wild weather events in other places too, as the UK saw its single wettest month ever recorded, with nearly double the average rainfall. That month in the UK also shattered temperature records, with an average temperature that was 4.1 degrees Celsius higher than the long-term average.
A head was going for $1.99 a head at a number of supermarkets in Toronto this week, and CBC reports similar prices are now being advertised in Vancouver. A spokesperson for Metro Foods confirmed prices have come down in recent weeks at the chain.
Gold & Silver
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