The Stock Market Economy

By Peter Schiff – Re-Blogged From Euro Pacific Capital

Currently, some market watchers have begun to openly question whether the bull market in stocks has finally come to an end. They certainly have cause to worry. Valuations are frothy after a record run-up in the last few years. Bond yields across the yield curve are rising sharply, as the Fed Funds Rate breaks into territory not seen since before the market crash of 2008. Much higher costs of capital are already putting pressure on rate-sensitive industries such as housing and autos. The boost to earnings provided by the corporate tax cuts will fade and rising prices resulting from past monetary policy and import tariffs may be expected to slow consumption and take a toll on balance sheets. All this points to possible lackluster performance, with stocks essentially flat so far this year.

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Greenspan Seeing ‘First Signs’ of Inflation

Re-Blogged From Newsmax

Former Federal Reserve Board Chairman Alan Greenspan warned that he is “beginning to see the first signs” of inflation in the U.S. economy.

“We’re seeing it basically in the tightening of the labor markets first, which, as you know, have gotten very tight now. We’re beginning finally to see average wages rise, and clearly there’s no productivity behind it,” Greenspan told Bloomberg TV.

Greenspan said a lack of productivity growth meant “you’re getting into a system now which has no outcome that’s in equilibrium other than inflation and no productivity growth.”

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Dow Jones’ Earnings Are At Record Highs

By Mark J. Lundeen – Re-Blogged From Gold Eagle

The Dow Jones saw some action this week. Wednesday, the day after the mid-term elections it advanced by 2.13% from its previous day’s closing price, our fourth day of extreme volatility since early October. Everyone was happy about the nice daily gain. But I’m only noting that days of extreme market volatility (Dow Jones 2% days) are in the main bear-market phenomenon, be they negative or positive.

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Are US Bonds Overvalued?

By Arkadiusz Sieron – Re-Blogged From Gold Eagle

“We are in a bond market bubble that’s beginning to unwind.” This is the statement of Alan Greenspan. Is he right? We invite you to read today’s article about the US bond market and find out whether it is in bubble or not – and what does it all mean for the precious metals market.

Bond yields are in an upward trend since 2016/2017. And they hit the accelerator again last month. The 10-year Treasury yield topped 3.2 percent, the highest level since May 2011. Other yields have also increased recently: on 30-year Treasuries hit 3.40 in October, while on 5-year US government bonds jumped above 3 percent, as one can see in the chart below.

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The Election’s Finally Over. Now Things Can Go Back To “Normal”

By John Rubino – Re-Blogged From Dollar Collapse

As contentious as the US midterm elections were, there was never a scenario in which they mattered. Any possible configuration of Republicans and Democrats in the House and Senate would have yielded pretty much the same set of economic policies going forward: Ever-higher debt, upward trending interest rates and (through the combination of those two) rising volatility.

So with the sideshow now in the rear view mirror, we can get back to our new normal. From this morning’s media reports:

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Mortgage Applications Hit 4-Year Low as 30-Year Rate at 8-Year High

By Thomson Reuters – Re-Blogged From Newsmax

U.S. borrowers filed the fewest applications to buy a home and to refinance one in nearly four years last week as some 30-year mortgage rates increased to their highest levels in about 8-1/2 years, the Mortgage Bankers Association said on Wednesday.

The Washington-based industry group’s seasonally adjusted gauge on mortgage requests, which is seen as a proxy on future housing activity, fell 4.0 percent to 316.2 in the week ended Nov. 2. This was the weakest reading since December 2014, according to the Mortgage Bankers Association.

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Wholesale Prices Rise Most in 6 Years as Gasoline, Food Jump

By Associated Press – Re-Blogged From Newsmax

U.S. wholesale prices rose by the most in six years last month, led higher by more expensive gas, food, and chemicals.

The Labor Department said Friday that the producer price index — which measures price increases before they reach the consumer — leapt 0.6 percent in October, after a smaller 0.2 percent rise in September. Producer prices increased 2.9 percent from a year earlier.