Gold has shown some resiliency in 2024. Recently, John Authers at Bloomberg published the following comparison of gold vs. the S&P 500. With all the hype around the magnificent gains in the stock market you might think that it has massively outperformed gold. But currently, one ounce of gold buy the same number of shares of the S&P 500 as in 1971 when Nixon severed the link between gold and the dollar.
The Barbarous Relic Rides Again Read More »
As the new President of Argentina mulls the idea of dollarization to reduce Argentinian inflation we look at “What is Dollarization? ” and “Will it help Argentina?”.
According to Reuters, “Argentina’s annual inflation rate hit 161% in November… the monthly inflation was rate 12.8% in November alone”. Argentina’s new President Javier Milei campaigned on the promise of fixing Argentina’s economic crisis, and on Tuesday his government announced a more than 50% devaluation of the local peso currency plus sharp spending cuts. One of Milei’s ideas for reducing inflation is “Dollarization”. So, what is Dollarization? And how does it work?
Argentina Mulls Dollarization- What is it? Read More »
According to a recent article by Bloomberg entitled, Wider War in Middle East Could Tip the World Economy Into Recession, it is a distinct possibility. The article presents 3 possible scenarios, i.e., Confined War, Proxy War, and Direct War. Confined War Scenario In the confined war scenario conflict is limited to Gaza, Israel, and the Palestinian
Could a Hamas vs. Israel War Trigger a Worldwide Recession? Read More »
China is risking more than a real estate collapse. China has turned its back on what created the Chinese Economic Miracle in the first place. Everyone is pontificating about China’s real estate bubble and whether Chairman Xi will do enough to stimulate the economy. Even though the media admits that so far a loose monetary policy hasn’t helped, they still believe that more of the magic cure-all monetary elixir will somehow eventually work.
The Crux of China’s Problems Read More »
The stock market appears to be approaching an “inflection point.” Mr. Market is going to have to make up his mind… whether this is going to turn into a bullish or bearish market. At this point, it could still go either way, but the big caveat is that when it moves, the move will probably be dramatic. Looking at the following chart, we can see the two blue short-term support and resistance lines are forming a “pennant” formation. Generally, when that happens, it is like a spring being coiled up as the index gets compressed into the two lines. When it finally breaks free in one direction or the other, it is often explosive.
Big Move Coming in Stocks Read More »
Today Chris Ciovacco of Ciovacco Capital Management looks at the market situation in light of the bank failures. First up is the Inverted Yield Curve. We can see that it originally inverted in July of last year, when short-term interest rates moved higher than long-term rates. From there it moved steadily lower before rebounding earlier this month. So although it is still inverted it is not anywhere near as bad as it was just a few weeks ago.
Stock Market Outlook – March 24, 2023 Read More »
Back in 1933, Roosevelt forced Americans to sell their gold to the government for $20.67 an ounce and then promptly raised the price to $35/oz. Thus he presided over a 69.33% gain in the value of gold which was equivalent to a 69% tax on the ownership of gold. Then at the tail end of WWII, Roosevelt pulled off the Bretton Woods agreement that made the U.S. the dominant world currency. When that began to fail Nixon cut a deal with Saudi Arabia instituting the “Petrodollar” which once again put the dollar at the top of the heap. But now some cracks are once again emerging.
More Cracks in U.S. Dollar Dominance Read More »
It has been a long time since there has been any positive news for the stock market. In our January 12th, 2023, NYSE ROC report, we changed from a “Sell Signal” to a “Hold Signal” because of some positive indications in the market. Although the ROC has not yet switched to a “Buy”, we noticed a few positive indicators that could indicate either a bottom has been set or that we are in for a short-term rally. Some may call this “green shoots” in the market.
Has the Stock Market Turned Positive? Read More »
There’s a new Recession Alarm! Money Supply Growth can have a significant influence on the state of the economy. When the FED is pumping, and the money supply is growing, Woo Hoo, it’s happy days, but when the flow dries up, the economy goes into a tailspin. As we have repeatedly implied, via the FED’s massive Quantitative Easing, the money supply has grown exponentially over the last decade.
But today, let’s look at the M3 money supply itself. The M3 money supply is a broad measure of money, including M2 plus much more. It is an indirectly derived measure of the supply of money which includes currency in circulation, checking and savings deposits, certificates of deposit, term deposits, call/term borrowings from ‘non-depository’ corporations by the banking system, and ‘Other’ deposits with the central bank.
Latest Recession Alarm Read More »
Housing prices are at record highs, having more than doubled over the last decade, creating the potential for another housing crash. In the wake of the 2008 crash, there was a tremendous housing glut. People simply couldn’t afford housing after record-setting job losses. Many ended up moving in with relatives. This reduced the demand for
Are Housing Prices Set to Crash? Read More »
