When will we win? Chinese trade victory is a mirage.

By David Haggith – Re-Blogged From The Great Recession Blog

The following is my recent argument with yet one more market analyst who can’t see straight, even when his article overall was admitting it was time to bail out of stocks. Correcting the market mantras that dominate the bullheaded is partly why I am here.

I’m not going to call this one out of the herd by name because sometimes his writing is sensible. It is the group-think herd mentality of the bulls, which he expresses, that I am challenging. His writing is in quotes and my responses to his way of thinking follow each quote.

I lay it out here because somehow it still surprises me to see how vapid the wasteland of popular thought can be even when analysts finally reach the point of giving up on stocks. I actually sometimes enjoy reading this author, but this article demonstrates the typical delirious thinking that pervades market commentary everywhere all the time in what is a virtual desert of economic analysis. So, I’m going to dissect it for you as an example of just how full of denial so much market commentary is:

Continue reading

Advertisements

Reading the Next Recession

Here is a journey in photos and facts to compare the present Great Recession with the past Great Depression to gain perspective on where we might be headed.

Just as we had two great world wars, we might have two great depressions, the last of which we started out calling “The Great Recession” because, at the time, we didn’t know where it would end up or how long it would continue. Remember that World War I did not start off being called WWI. It was originally called “The Great War.”

US City With Highest Min Wage Signals a ‘Tipping Point,’ Businesses Uncertain on How They’ll ‘Survive It’

The continued hike in the minimum wage in one California city — which has the highest in the U.S. — has local business owners worried.

The city of Emeryville, California, garnered the title of being the highest minimum wage city in the United States when the city saw a minimum wage hike in July from $15 to $16.30, according to The Wall Street Journal. Due to the city’s high cost of living in the Bay Area region, supporters of the wage hike saw it necessary.

Thomas White/Reuters

Continue reading

Goldfinger, Silver and Gold

Breaking News: On July 5, 2019 prices for contracts of paper gold and silver closed at $1,400 and $15.00, a multi-decade gold/silver ratio high. The great financial game continues. What game?

  1. Low gold prices inspire confidence in central bankers and governments. The-Powers-That-Be (TPTB) often devalue their currencies too rapidly, do something more stupid than usual, pound the middle class with excessive digital printing of fiat currency units, and expand wars. When people recognize fiscal and monetary disaster ahead, prices for gold and silver rise. Hence TPTB “manage” gold and silver prices on the paper exchanges to support their “everything is great” story.
  2. The financial game has worked for decades, with minor exceptions.
  3. Silver and gold prices peaked in 2011 and fell thereafter. But metals prices will adjust to our disastrous fiscal and monetary policies, ongoing Continue reading

What The World Doesn’t Need Now Is Lower Rates

The Q2 earnings season is upon us and the risks to the rally that started after the worst December on record at the close of last year is in serious jeopardy. We received a glimpse of this with some of the current companies that have reported. For example, to understand how dangerous this earnings reporting season can be, take a look at what one of the largest US multinational firms had to say recently after it reported earnings. The Minnesota-based Fastenal, which is the largest fastener distributor in North America, reported worse-than-expected second-quarter earnings and revenue. Shares of Fastenal promptly tanked more than 4%. But what the management said about the quarter was very interesting. The company said in its press release that its strategy to raise prices to offset tariffs placed to date on products sourced from China were not sufficient to also counter general inflation in the marketplace.

Continue reading

Stalling Markets

By Alasdair Macleod – Re-Blogged From Gold Eagle

The combination of American trade protectionism and the end of a failing credit expansion is leading into a global economic downturn, and potentially a systemic crisis. Meanwhile, investors still believe more extreme monetary policies will stabilise economies and that the ultra-low interest rate environment will persist without renewed price inflation. As Samuel Johnson reputedly said of a second marriage, it represents the triumph of hope over experience.

Introduction

There is a moment just after the top of every credit cycle where positive momentum stalls before a new reality emerges. When the stall begins, as appears to be the case today, everything is still read positively. Perennial bulls say “Don’t worry, the central bank will reduce interest rates and inject enough money into the banking system to ensure any recession will be minor and growth will resume”. With interest rates falling, confidence in the final outcome means stocks continue to rise. With this mindset, bad news for the economy is always good news for stocks.

Continue reading

Federal Debt Ceiling Reached As Federal Spending Rages

By Clint Siegner – Re-Blogged From Gold Eagle

The federal government will soon run up against its self-imposed borrowing cap once again.

Current estimates are for the government to max out its credit limit at a little over $22 trillion in early September. Congress goes on recess in August, so there is some pressure to address the cap right now.

Treasury Secretary Steve Mnuchin has been fulfilling what seems to be the most sacred responsibility of his position: borrowing money. It’s one that each of his predecessors has also undertaken, without fail and without regard to party affiliation, in recent decades.

He is solemnly arguing why it would be wholly irresponsible for Congress not to approve another massive increase in what the Treasury can borrow.

Continue reading