Wall Street is Chasing Ghosts

By Michael Pento – Re-Blogged From Pento Portfolio Strategies

Wall Street’s absolute obsession with the soon to be announced most wonderful trade deal with China is mind-boggling. The cheerleaders that haunt main stream financial media don’t even care what kind of deal gets done. They don’t care if it hurts the already faltering condition of China’s economy or even if it does little to improve the chronically massive US trade deficits—just as long as both sides can spin it as a victory and return to the status quo all will be fine.

But let’s look at some facts that contradict this assumption. The problems with China are structural and have very little if anything to do with a trade war. To prove this let’s first look at the main stock market in China called the Shanghai Composite Index. This index peaked at over 5,100 in the summer of 2015. It began last year at 3,550. But today is trading at just 2,720. From its peak in 2015 to the day the trade war began on July 6th of 2018, the index fell by 47%. Therefore, it is silly to blame China’s issues on trade alone. The real issue with China is debt. In 2007 its debt was $7 trillion, and it has skyrocketed to $40 trillion today. It is the most unbalanced and unproductive pile of debt dung the world has ever seen, and it was built in record time by an edict from the communist state.

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Fed Chair Powell’s Rate Pause Won’t Save Stocks

By Michael Pento – Re-Blogged From Pento Portfolio Strategies

Jerome Powell threw Wall Street a lifeline recently when he decided to temporarily take a pause with the Fed’s rate hiking campaign. The Fed Head also indicated that the process of credit destruction, known as Quantitative Tightening, may soon be brought to an end.  This move towards donning a dovish plume caused the total value of equities to soar back to a level that is now 137% of GDP. For some context, that valuation is over 30 percentage points higher than it was at the start of Great Recession and over 90 percentage points greater than 1985. So, the salient question for investors is: will a slightly dovish FOMC be enough to support the massively overvalued market?

The S&P 500 is now trading at over 16x forward earnings. But the growth rate of that earnings will plunge from over 20% last year to a minus 0.8% in Q1 of this year, according to FACTSET. It might have made sense to pay 19x earnings back in 2018 because it was justified by a commensurate rate of earnings growth. But only a fool would pay 16x or 17x earnings if growth is actually negative?

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40 Years Of Reforms And Gold

By Arkadiusz Sieroń – Re-Blogged From Gold Eagle

The economic development of China is one of the most important events in the history of the world. In an unprecedentedly short time, millions of people have been taken out from poverty. But, as no country has ever developed so fast, that great story raises important worries.

We invite you to read our today’s article about the great progress China made in the last forty years and find out whether it’s too good to be true and it must end with some catastrophe, triggering rally in the gold prices.

One of the biggest risks for the global economy which can materialize this year is the slowdown of China’s economic growth. So, it is wise to analyze the current state of the Chinese economy – its implications for the gold market and what will happen next. As December 2018 marked the forty years of market reforms in China, we will adopt a long-term perspective, explaining how China transformed itself from a poor, backward and isolated country to the world’s economic power. We will examine what the global economy and the precious metals market can expect in China’s fifth decade of reform and development.

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US-China War May Be “Just A Shot Away”

By Mark O’Byrne -Re-Blogged From Gold Eagle

– “World’s most dangerous hotspot” is in the South China Sea
– Currency and trade wars can lead to shooting wars warns Rickards
– Chinese buildup in South China Sea like ‘preparing for World War III’ says US senator (see news)
– U.S.-China shooting war could be, as Mick Jagger put it, “just a shot away…”


Chinese President Xi Jinping speaks after reviewing the Chinese People’s Liberation Army Navy fleet in the South China Sea on April 12. Xi has urged the PLAN to better prepare for combat, according to state media reports. (Li Gang/Xinhua via AP)

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Goodbye to a Misguided War on Coal

– Re-Blogged From Washington Times

ANALYSIS/OPINION:

The unexpected departure of Dr. Jim Yong Kim as president of the World Bank gives President Donald J. Trump the perfect opportunity to reverse the anti-fossil fuel, energy poverty agenda the bank has pursued since Dr. Kim’s appointment by President Barack Obama in 2012.

The World Bank is the world’s premier development bank. Its knowledge of developing countries means that its participation is often essential to leverage private sector investment into some of the world’s poorest countries.

Rather than development, Dr. Kim saw the bank’s principal job as waging President Obama’s war on coal across the developing world. One of his first acts was instituting a ban on World Bank participation in any funding of new electrical generation projects using coal, other than in the most exceptional circumstances.

The Approaching Storm

By Gary Christenson -Re-Blogged From Gold Eagle

Peter Schiff explained “What Happens Next.” This article takes his “likely sequence of events” and expands the discussion.

His sequence:

  1. Bear Market
  2. Recession
  3. Deficits explode
  4. Return of ZIRP and QE
  5. Dollar tanks
  6. Gold [and silver] soars
  7. CPI spikes
  8. Long-term rates rise
  9. Federal Reserve is forced to hike rates during a recession
  10. A financial crisis without stimulus or bailouts.

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End Of The World (Part 2)

By Gary Christenson – Re-Blogged From Gold Eagle

Part one discussed the “what” and “why” of unpayable debt, an inevitable “reset” or the end of the current financial world. Part two addresses when.

REVIEW FROM PART ONE

  • A risk/reward analysis for 2018—202? points toward gold and silver, not stocks, bonds, corporate debt, student loans or most asset classes.
  • The “everything bubble” will burst. Consequences will be dire for many individuals, businesses and governments.
  • Debt and spending are “out of control.” Central banks will “paper over” massive defaults, and fiat currencies will devalue.
  • Hyperinflation, defaults and resets occurred in many countries and could (will) happen in developed countries such as the U.S.
  • Rig for stormy weather! Gold and silver bullion and coins are “insurance” against the inevitable currency devaluations that must occur in our debt based fiat currency systems.

Part Two—When?

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