A Look At Futures Contracts

Mark J Lundeen – Re-Blogged From Gold Eagle

Every bull market advance eventually sees its last all-time high. No one rings a bell when it happens, but from that point on things begin to change for the worse for the bulls.

The Dow Jones’ BEV chart below begins at the -54% bear-market bottom of the 2007-09 credit crisis. We don’t see a -54% BEV value as I began this series on the March 09, 2009 bear-market bottom. So instead we see a 0.00%, as the first data point of all BEV series begins at zero percent.

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Fed Encourages Runaway Debt as “Minsky Moment” Approaches

By Clint Siegner – Re-Blogged From Gold Eagle

Federal Reserve officials like to pretend they can use interest rates like a motorcycle throttle on the U.S. economy. They can either rev things up by dropping interest rates or slow things down by moving rates higher.

The public has been led to believe the central planners can do whatever is needed with rates to keep things purring along.

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US Dollar Testing Long-Term Support

By Mike Golembesky – Re-Blogged From http://www.Gold-Eagle.com

The US Dollar has continued to fall hitting a low of 92.72 on Monday, July 31st. The US Dollar also broke through shorter term support levels and is now closing in on long term support that could very well define the longer term trend over the next several years.

When most financial writers (to which I include myself) refer to the US Dollar they are typically referencing the DXY index. The DXY index is composed of 6 currency pairs that are based mostly in Europe. The Euro vs. the US Dollar makes up 58% of the DXY index with the Great British Pound, Swedish Krona and Swiss Franc making up an additional 19.7% of the index combined.

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Economic Stagnation

By Gerald Peters – Re-Blogged From http://www.Silver-Phoenix500.com

So we have once again seen official reports about sub-par economic growth. Some are constantly perplexed as to why growth is so weak. I believe it will eventually become more obvious to everyone that debt is one of the major problems causing our current stagnation.

Looking at the above chart, we see GDP growth rates have been getting weaker each decade. The economy used to grow at 7 or 8 %…then 5 or 6%…then 4%…then 3%. Currently. There is only 2% growth. Moreover, after the next recession we will be lucky to see 1% growth as the norm. Follow the trend and we see that the US economy will probably be at 0% economic growth after 2030. To be sure after 2040 we will probably see negative growth as the norm. By the way, the chart of retail sales growth looks the same. This trend has continued regardless of which political party controls the White House or Congress.

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Gold – A Reasonable Correction?

By Alasdair Macleod  ReBlogged From Gold Money

Gold weakened during May by about $100…from a high point of $1300 to a low of $1200. For technical analysts this is entirely within the normal correction zone of a third to two-thirds of the previous rise, which would be 84 to 167 dollars.

So the price decline is technically reasonable…and therefore doesn’t in itself signify any underlying challenge to the merits of a long position in gold. However, when looking at short-term considerations, we should look at motivations as well. And those clearly are the profit to be made by banks dealing in the paper bullion market, which they can simply overwhelm by issuing short contracts out of thin air. This card has been played successfully yet again, with the bullion banks first creating and then destroying nearly 100,000 contracts, lifting the profits from hapless bulls in the COMEX market.

The banks get the money, the punters get the experience…and the evidence disappears. The futures market is demonstrably little more than a financial casino, where the house, comprising the establishment banks, always wins. Financial markets are not about free markets and purposeful pricing, which is why the vast majority of outsiders, including hedge funds, those Masters of the Universe of yore, usually lose. This leads us to an important conclusion: the fall in prices has less to do with a change in outlook for the gold price, and more with the way a casino-like exchange stays in business.

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What’s Different About Monetary Policy?

By Keith Weiner – Re-Blogged From http://www.Gold-Eagle.com

Many people agree that it’s important to move to a free market in money (i.e. the gold standard). They also say that it’s just as important to fight bad taxes and regulation. In their view, government interference in the economy is like friction in a car. The more friction you add, the slower the car goes. One source of friction is much the same as any other.

Let me explain why it doesn’t quite work that way, using a few examples.

Suppose the government imposes an expensive tax on employers based on the number of full-time employees. Full time is defined as working at least 30 hours per week. Employers respond to this tax by reducing the hours of as many employees as possible below the threshold. The law still harms employers, but less than intended. If the law were a bullet aimed at the chest of the employer, it ends up causing a flesh wound.

Another example is a law that makes it illegal for startup companies to pitch their deals to non-accredited investors. Accredited investors form organized groups that entrepreneurs can safely go to and raise capital. It’s cumbersome, and it leaves some entrepreneurs out in the cold, but as with the employer tax, everyone works to minimize the damage.

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December FED Rate Hike?

cropped-bob-shapiro.jpg   By Bob Shapiro

It looked as if the FED had decided to go all in with money printing. And, it looked like the FED officials were lying through their teeth with all the jawboning since Janet Yellen became FED Chief. Not only was the FED continuing with ZIRP and QE money expansion, but also Negative Interest Rates. But something may have changed the last couple of weeks.

Since a month ago, interest rates have gone up. It’s not enough to call it a spike, but up nonetheless.

US Treasury Yields 110815

Short rates – on 3 month T-Bills – went from a low of -0.04% to a recent high of 0.06%, although they have settled back a little to 0.04%. However, over the rest of the yield curve, from 6 mo and 2 year up to the 10 and 30 year maturities, yields are up by a quarter percent or more.

The odds of the FED actually raising rates “officially” at their December meeting, are starting to look good.

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