Marc Faber, one of the few analysts, to have predicted the current crisis correctly and to have protected his clients in the process, remains very bullish on gold. In another excellent Bloomberg interview, Faber said that “the trend for gold prices will be steady but the trend for the dollar and other currencies will be down. So in other words gold in dollar terms will trend higher.” “How high it will go, you will have to call Mr Bernanke and at the Fed there are other people who actually make Mr Bernanke look like a hawk and so they are going to print money.” Faber is on record as to the importance of owning physical gold and he again warned about the importance of owning gold but not storing it in the U.S. “You ought to own some gold but don’t store it in the U.S., the Fed will take it away from you one day,” Faber astutely noted. He said that Bernanke is a money printer and this could lead to massive inflation and the Dow Jones at 20,000, 50,000 or 10 million. Faber cheerily predicted that the “the Federal Reserve’s monetary policy will destroy the world” and “eventually we will have a systemic crisis and everything will collapse.”
Full Summary Of The Latest In Anti-American Sentiment
Having
trouble keeping track of how many countries have now officially
rebelled against Pax Americana in the past week? Here is your handy
one-stop resource to keep you abreast of all the latest in the embassy
storming fad.Mortgage Spread Collapses... More
Since
QEternity was announced, the spread between the 30Y mortgage and 10Y
Treasury has collapsed from an already very tight (in anticipation of
QE3) level to simply incredible levels. Following our comments on
Friday about the relative 'safety' of mortgages over Treasuries, the compression from over 60bps pre-Ben to a mere 22bps
now is incredible and just highlights how entirely distorted any
signaling from any rate market has become. The point remains that lower
absolute mortgage rates (which are notably not as exuberant as this
relative risk spread would suggest) have not in the recent past provided
notable pick-up in the new home sales (which is where real growth in
the economy comes from) and furthermore, the benefits to the consumer of
further mortgage rate cuts (based on recent JPMorgan work) is around $5bn
per annum for every 25bps improvement in the mortgage rate (a drop in
the ocean for a consumer who spends $11 trillion per year).Meanwhile In Pakistan
First Afghanistan a few hours ago, and now...- PROTESTORS TRY TO STORM U.S. CONSULATE IN LAHORE: EXPRESS TV
Japanese Businesses Shuttering Chinese Facilities As Mainland Anger Spreads
When you have central planners printing inverse-wealth (because money printing dilution by definition means less wealth for everyone), who needs that cornerstone of old school economics: trade. Certainly not Japan (which has been diluting its futures to prosperity for the past 30 years and somehow failing each and every time) and China, both of which are now starting to feel the consequences of the collapse in political relations as a result of the senseless spat of the Senkaku Islands (recorded in its full visual glory here). As the NYT reports, "major Japanese companies closed factories in China and urged expatriate workers to stay indoors Monday, after angry protests flared over a territorial dispute, which threatened to hurt trade ties between the two biggest Asian economies." What does the idiotic escalation in unprovoked Japanese tensions over a rock in the East China Sea (note: not West Japan Sea) for the bottom line of Japan? In a word: Lots.Postcards From A Furious China
Over
the past 48 hours we have written much, describing the perfectly
expected surge in nationalist fervor and anti-Japanese sentiment, as the
Senkaku Islands Snafu hits its boiling point (a Japan whose GDP is now
declining in real terms, whose economy has been crippled by years of
deflation, whose infrastructure is impaired due to anti-nuclear power
sentiment, and one which generally can not afford an all out diplomatic, political and economic conflict with China, and may thus ask itself: why escalate and just who prompted it do so now?). Instead we'll let the pictures do the talking.What's More Important - Growth Or Policy?
Following
this morning's dismal Empire manufacturing 'growth' data (which
generated zero impact in equity futures thanks to QEternity 'policy'
having dampened the market's beta to any and every macro data points)
we note Morgan Stanley's findings that while monetary policy can provide a temporary boost to valuations
(driving investors quickly into higher beta and into value over
growth), in fact over medium-term horizons (i.e. more than a week or
two), it is in fact growth that dominates the drivers of equity performance.
Since growth in our advanced 'new normal' economy means debt (and
realistically has meant more debt for over 30 years), and with even the
most exuberant of Fed heads seeing only modest growth over the next few
years, perhaps the hubris of the last few days in the equity markets
will dissolve into reality sooner than everyone hopes (i.e. before
November) as the realization of Koo's impotent Fed comes to pass and the
fiscal cliff remains unresolved.Empire Manufacturing Index Prints At Lowest Since April 2009
Today's
horrible piece of news, which at least on the surface was supposed to
send the market soaring, comes courtesy of the Empire Fed Manufacturing
Index, which printed at -10.41, the lowest print since April 2009,
down from -5.85, and well below expectations of -2.0. The Index print
confirmed the biggest 6 month drop since records began. The components
painted a dire picture for jobs, with the employment index sliding from
16.47 to 4.26, New Orders tumbling from -5.50 to -14.03, while, wait
for it, prices rose, from 16.47 to 19.15. Re-stagflation here we come.
Market for now seems confused - since QE is priced into infinity, it is
unclear if this latest datapoint confirming a recessionary economy, QE
can't be more-er infiniter. Best to not respond to this, or any other
macro news at all, which is precisely what the market has done. For
those who missed it, not only has Bernanke doomed the global economy to
stagflation and imminent food riots, while making the richest 0.001%
richer than ever, he has completely broken any linkage between the
economy and the market.Donations will help maintain this goal and defray the operational costs. Paypal, a leading provider of secure online money transfers, will handle the donations. Thank you for your contribution.
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Daily US Opening News And Market Re-Cap: September 17
Stocks in Europe traded lower throughout the session, as market participants were seen booking profits following last weeks gains after the Fed announce a radical open ended QE program. Equity indices were led lower by the telecommunications, as well as utility related stocks. It is also worth noting that peripheral stock indices underperformed their core-EU counterparts, with some noting fast money and system accounts selling equities and instead turning to fixed income. As a result, Bunds have edged higher, with yields touching on highest level since April. Also, this week’s supply from France and Spain, as well as Germany, lead to modest spread widening. In the FX space, flows were light so far this session, as such both EUR/USD and GBP/USD are seen little changed as we enter the EU session. Going forward, there are no major economic releases scheduled for the second half of the session and volumes are expected to be thin given the Rosh Hashanah holiday.Meanwhile In Afghanistan
Yesterday it was US embassies in Egypt, Libya, Tunisia, Morocco, Sudan, Lebanon, India, Balgadesh, Indonesia,
and others that were besieged and/or attacked. Today, we finally add
Afghanistan to the "and others" list. From the LA Times: "Rioters
infuriated by an anti-Islam video clashed with police in the Afghan
capital on Monday, setting cars and tires ablaze and chanting
anti-American slogans. Police blocked off the traffic circle closest to
the U.S. Embassy and other diplomatic missions, and most Westerners
working in Kabul were ordered by their organizations to try to stay out
of public view. Monday’s unrest broke out when about 1,000 people
gathered near an American base on the capital’s eastern edge and began
marching toward the city. Police fired shots into the air to try to disperse the crowd, but the protesters continued to surge forward." In other words, just another American appreciation day.Frontrunning: September 17
- Anti-Japan demonstrators protest in New York City (China Daily) ...and the propaganda: Younger generation feels wave of emotions (CD)
- And the retaliation: Obama to launch auto trade case against China (Reuters)
- Spanish Banks Bleeding Cash Cloud Bailout Debate (Bloomberg)
- Chicago teachers extend strike (Reuters); Emanuel Promises He’ll Sue to End Chicago Teacher Strike (Bloomberg)
- China hurts own credibility with Xi's vanishing act (Reuters)
- European Squabbling on Euro Crisis Solution May Test Rally (Bloomberg)
- Two South Africa mines reopen, most don't (Reuters)
- Finance Industry Warns of ‘Cliff Effect’ in ECB’s Bond Plan (Bloomberg)
- China struggles to cure the violent ills of health system (Reuters)
- QE3 is for Main Street, except... it isn't: QE3 hit by mortgage processing delays (FT)
- Probe focuses on JPMorgan's monitoring of suspect transactions (Reuters)
- As explained here before: Spanish Bonds Decline as EU Policy Makers Clash on Bank Plan (Bloomberg)
Overnight Sentiment: Leave It All To The Fed
News may come, and news may go, but the fiscal policy implementation vehicle known as the market, and now controlled by the Political Reserve don't care. For those who do, here is what has happened in the past few hours and what is on deck for the remainder of the week.If Romney Wins, The Next Fed Chairman Will Be A Money Printer Too
Admin at Marc Faber Blog - 23 minutes ago
If Mr. Romney wins the election, the next Federal Reserve Chairman will
also be a money printer. - *in Bloomberg* *Marc Faber is an international
investor known for his uncanny predictions of the stock market and futures
markets around the world.*
Gold Will Trend Higher In Dollar Terms
Admin at Marc Faber Blog - 1 hour ago
The trend for gold prices will be steady but the trend for the dollar and
other currencies will be down. So in other words gold in dollar terms will
trend higher. - *in Resource Investor*
Related ETF: SPDR Gold Trust EYF (GLD)
*Marc Faber is an international investor known for his uncanny predictions
of the stock market and futures markets around the world.*
Wait Until the Fish Are Biting
Eric De Groot at Eric De Groot - 1 hour ago
Gunslinger traders reduce their exposure into fishing poles from a high
dock (big drops) and buy the hooks when the fish (retail money) are biting
at headline fear. Position traders after buying the D-wave decline are
patiently waiting for the "big green hook." I wear both trading hats.
Chart: Silver London P.M Fixed and the Silver Diffusion Index...
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content, and more! ]]
Oil Is Rallying, Don't Let The Headlines Convince Otherwise
Eric De Groot at Eric De Groot - 2 hours ago
http://simpsons.wikia.com/wiki/Bart_vs._Australia The same 'guys' that
couldn't see the oil rally coming are now telling us not to expect the
boost to last. Experienced traders see this setup as the blind leading the
blind. That's how the game works and why most traders seeking advice
outside the message of the market often end up with a big boot wedged
between their butt cheeks. Oil's rally...
[[ This is a content summary only. Visit my website for full links, other
content, and more! ]]
Video: Has Capitalism Lost Its Compass?
Admin at Jim Rogers Blog - 3 hours ago
Video Summary: Has capitalism lost its compass? How should capitalism be
defined? How flawed is the system and could it still be revived? And is
there any real alternative to capitalism? Peter Lavelle is discussing these
issues with his distinguished panelists at the APEC 2012 summit hold in
Vladivostok. Jim Rogers and Artyom Volynets are there to defend capitalism
in its modern form, while Chandran Nair and Frank-Jurgen Richter are
arguing that capitalism has indeed lost its compass.
*Jim Rogers is an author, financial commentator and successful
international investor. He has bee... more »
Bloomberg Video: Fed Policy Will Destroy The World
Admin at Marc Faber Blog - 3 hours ago
Sept. 14 (Bloomberg) -- Marc Faber, publisher of the Gloom, Boom & Doom
report, talks about Federal Reserve policy and his investment strategy.
Faber, speaking with Betty Liu on Bloomberg Television's "In the Loop,"
also discusses gold prices and the property market. (Source: Bloomberg)
*Marc Faber is an international investor known for his uncanny predictions
of the stock market and futures markets around the world.*Today’s Items:
German diplomats are skeptical about
allowing the European Central Bank to have authority to supervise all
6,000 banks in the euro zone. The French, being the recipients of any
such move to help their struggling economy, are all for it. This
reform requires the approval of the 27 member states. Guess the French
could tell the Germans, in for a penny, in for a pound. That will
calm things down… Not!
In 2011, Obama stated that “freedom
lovers” in Egypt and Libya needed our help to establish democracy in
their lands. Well, it turns out that those “freedom lovers” were bat
crap crazy. Of course, we should have thought something was not
right right back then when they were burning were burning the American
Flag, looting the pyramids, and raping female correspondents. But we
must remember folks. He didn’t build this situation by himself. He
had help, and it was the complicit, non-questioning, mainstream media.
Not to mention the central bankers that profited nicely off the mayhem.
Last month, the Bank of England issued a
report describing its policies of quantitative easing – similar to the
Fed’s – as benefiting mainly the wealthy. QE drives up the prices of
financial assets. Most Americans have about 50% of their wealth tied
up in their houses. The top 5 percent have only 10 percent of the
wealth tied up in homes with one-third to 40 percent in financial
assets. So, the wealthy will get the lions share of the benefits.
What a surprise.
Here are a few…
1. From Ron Paul… “It means we are weakening the dollar.”
2. From Donald Trump… “People like me will benefit from this.”
3. John Williams of Shadowstats… “That’s absolutely nonsense. The Fed is just propping up the banks.”
4. From me… “After preparing, keep stacking physical.”
Okay, I was saying that long before the QE3 announcement.
1. From Ron Paul… “It means we are weakening the dollar.”
2. From Donald Trump… “People like me will benefit from this.”
3. John Williams of Shadowstats… “That’s absolutely nonsense. The Fed is just propping up the banks.”
4. From me… “After preparing, keep stacking physical.”
Okay, I was saying that long before the QE3 announcement.
Eastern countries and non-G-6 Central
Banks have been accumulating tons of gold. In addition, China could be
considering to back its currency up by gold. With that said, John
Embry believes that most people tend to overestimate the physical gold
and silver market; in that, the market is already tight. As central
planners keep on flooding the markets with easy money, they stimulate at
the same time the demand for precious metals and this will cause their
value to skyrocket.
This video shows some very possible
headlines from Zerohedge to the LA Times, that we may see in the
not-so-distant future. I thought the ad saying “Gold: You are too
late” was interesting; however, the one stating President Romney
declaring Martial Law was pretty scary.
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