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Bursting Bond Bubble Greatest Risk To Secular Bull Market

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Posted by Financial Sense

on Friday, 16 December 2016 08:50

market-breadth

Bullish Outlook

Dave Nicoski is optimistically predisposed to the health of the economy as stocks, the US dollar, interest rates, and oil rise together. He correlates this phenomenon to a “post-World War 2” era when “markets reversed and broke out to new highs right around the ’45-46 period.”

On risk, Dave says the US economy is “truly into a bond bubble,” with “1.7 trillion dollars wiped out of the market” since elections. Equities probably have “advanced to a level in many of those areas in terms of when the rubber meets the road on infrastructure spending,” setting up opportunities for pullbacks in those areas.

....read more HERE

...also from Martin Armstrong:

The Cycle of Assassination & War Bottomed in 2014



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Asset protection

The Cycle of Assassination & War Bottomed in 2014

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Posted by Martin Armstrong - Armstrong Economics

on Thursday, 15 December 2016 07:26

War-Cycle-2014

QUESTION: Mr. Armstrong; you previously wrote that if Trump were elected he might be assassinated. Do you still see that as a potential?

ANSWER: Absolutely. There is an 11-year average cycle for attempts to assassinate the president. Here is the list below:

Assassinations

The assassination cycle actually bottomed in 2014 with the Cycle of War. This means we are on an uptrend that may be the strongest uptrend in U.S. history. We have to understand that there will be an uptick in the anarchist philosophy that rose side-by-side with Marxism. There will be a VERY BIG risk that attempts on Trump will take place. It is possible they could even succeed and this would clearly fuel the civil unrest by pitting left against right in violent confrontations. This cycle may not peak until 2022-2024.

...also: 
 


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Asset protection

Why Collapse Isn’t on the Menu

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Posted by Cliff Droke - Financial Sense

on Wednesday, 14 December 2016 06:19

The word “collapse” instantly conjures primal feelings of both fear and excitement whenever we hear it. We fear it because it evokes our collective belief that collapse is fatal and final, yet it excites our imagination to the possibility, however, remote, that perhaps we’ll be among the lucky few to survive and even prosper from it.

Whether in reference to a financial market crash or the collapse of government, the very idea has given birth to a plethora of writings on the subject. Indeed, some of the top selling books in the financial literature category in recent years have had collapse as the subject matter, for writers instinctively know they can always count on a visceral reaction from their readers whenever they write of it.

Interview Clif Droke on Safe-Haven Selloff, Muni Bond Crash

Laying aside the fear it evokes, the study of collapse is a fascinating and rewarding endeavor. Historians have long known what financial writers have only recently discovered, viz. that writing about collapse is a lucrative industry. Consider the hundreds of books dedicated to the decline and fall of the Roman Empire, or to any number of past civilizations (Aztec, Egyptian, Babylonian, etc.). One of the great preoccupations of writers of this genre is the guessing game of what exactly causes a society or an economy, to collapse. There is invariably no consensus among historians as to how, or even when exactly, it happens.

Consider the famous example of ancient Rome. What was it that actually precipitated the decline and fall of this mighty empire? While there have been hundreds of reasons offered by specialists as to the cause(s), the most commonly assigned factors can be generally summarized as follows: 1.) Immigration and assimilation of foreigners (i.e. barbarians), 2.) Failure to continue expanding the frontiers via military conquest, 3.) Loss of personal discipline and liberty; 4.) Corruption on both the administrative and personal levels.

Even if we accept any, or all, of these reasons as being legitimate, it still doesn’t answer the perennial question of what led the Romans to decide on making such a fateful decision. In other words, what was the ultimate reason for the decline and fall?

Financial writers are plagued by the same lack of agreement as to what causes markets to collapse. The reasons they offer range from the prosaic to the profound. Most commonly they assume that a market collapse is the result of asset prices being “too high” or unsustainably expensive relative to valuation. What many don’t realize is that demand for any given asset can extend well beyond the boundaries of normal valuation for years, or even decades, at a time. We need to look no further than the Treasury bond market to see an example of this.

Read Back to Extreme Greed

It has become fashionable among collapse historians to assume that collapse often occurs without warning out of a clear blue sky as it were. Nothing could be further from the truth. Collapses are invariably preceded by long periods of internal weakness, whether it’s the financial market or any other social system. This explains why strong societies, much like strong markets, can withstand any number of external shocks without toppling. It’s only when weakness is entrenched that one can expect external pressure to cause serious damage to a structure.

An example of this is the stock market plunge of late 2015/early 2016. In the months leading up to it there was a sustained period of internal weakness and technical erosion in the NYSE broad market. The number of stocks making new 52-week lows was well over 40, and often in the triple digits, which was a clear sign of distribution taking place in some key industry groups. This weakness was evident in the NYSE Hi-Lo Momentum (HILMO) indicators, which depicted a downward path of least resistance for stocks. The following graph is a snapshot of what the HILMO indicators looked like in the weeks just prior to the January 2016 market plunge.

nyse-internal-momentum-1-dec-13

This is also what stock market internal momentum looked like prior to the 2008 credit crash. In fact, it’s what precedes every major collapse and it’s also a good representation of the internal weakness which takes place before markets, societies and empires collapse. Look below the surface and you’ll always see the internal decay which paves the way for the coming destruction. A healthy and thriving system, by contrast, is simply not conducive for a collapse to occur.

When we view the internal structure of the current NYSE stock market through the lens of the HILMO indicator, what do we see? A market ripe for collapse? Far from it, we see overall signs of technical health – even if the market isn’t firing on all cylinders. Below are all six major components of HILMO. The orange line is the longer-term momentum indicator, which is one of the most important one for discerning whether or not the market has been undergoing major distribution (i.e. internal selling). It has been rising for several months now and is the polar opposite of what it looked like heading into 2016.



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Asset protection

The Yield That Breaks the Trump Rally's Back

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Posted by Michael Pento - Pento Portfolio Strategies

on Tuesday, 13 December 2016 08:23

hqdefaultIn 2012 I wrote a book called "The Coming Bond Market Collapse", in that book I predicted that the bond market would begin to collapse by the end of 2016. Clearly, this prediction has started to come true. However, in all candor, I never dreamed that the Ten-year Treasury yield would plummet to 1.3%. Neither did I ever imagine that over thirteen trillion dollars' worth of global sovereign bonds would have a negative yield, as was the case this past summer.

The Book's assumption was that the bursting of the bond bubble would be caused by a change in global central banks' monetary policy or through the eventual achievement of their inflation targets. At this juncture-at least in the U.S. -- we have both. The Ten-year Treasury note has risen 80% since July based on both the return of inflation and the Fed's desire to raise interest rates.

This begs the question: how high could interest rates climb and what is the interest rate that will break the Trump rally's back?

Back in 2007, before anyone knew what the phrase Quantitative Easing meant, nominal GDP was around 5%, our National Debt was $5.1 trillion (64% of GDP) and the Ten- year was 5% -- there is a strong correlation between nominal GDP and the 10-year note. Therefore, without any central bank-manipulation of long-term interest rates, it would be logical to conclude that the rate would rise back towards the 5% level as long as Mr. Trump can produce real growth of 3% and inflation around 2%. But, given today's $20 trillion of National Debt, which is north of 105% of GDP, and the condition of soaring annual deficits, it would be prudent for bond investors to require an even higher yield than 5%.



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Asset protection

Proactive Planning and Care for Aging Families

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Posted by Janet Bullard

on Friday, 09 December 2016 11:28

proactiveYou might be surprised to learn that up to 45% of caregiving is provided by men! The traditional role associated with women is changing rapidly with caregiving being shared by both men and women, often with different responsibilities and types of care provided.

Shifting trends in longevity, career commitments and health diagnosis have changed the way we age. Instead of the Sandwich generation we now have the Club Sandwich generation where there are 4 generations with those in their 40’s to 70’s being caught in caring for parents and grandchildren.

A major issue with the change in longevity is the increased time spent in advanced age with the likelihood of some health issues that may be short term (knee replacement) or longer term with cardiac, diabetes or other chronic conditions. It used to be that the timeframe after retirement was short and more intense when health issues occurred, but with the development of so many health resources and treatments we have changed the trajectory of aging and dying. Given that most of us will live into our 80’s, how have we planned or prepared for this time?

Financial planning has become the norm for most people with this process often starting in the 20’s and 30’s to ensure control and security over future finances. Did you stop to consider that the most critical aspect in determining how you spend your assets could be your health? What planning have you done for health? Even with lots of financial resources the most important resource is the human resources you have in your personal world.

With increasing geographic distances between family members, the issue of caregiving becomes more costly and complicated. Most women are now in the workforce and no longer available as primary caregivers to family members. Aging parents become a team working together to support one another and the deficits are often not noticeable until an acute event occurs. With aging being the greatest risk factor for dementia and women having a higher rate than men, this means more men are becoming caregivers to their spouses in the later years. Everyone can understand that being a caregiver in the later years has significant impact on the ‘healthy’ spouse and can often cause health issues for the caregiver. Now families have 2 people to care for.

There is a growing trend of younger families asking how they can support their aging parents to have control and be empowered in making decisions in advance of health challenges so that families can honor decisions already expressed, rather than being burdened with decision making. In turn, they realize that they, too, need planning in place for the unexpected and to ensure their children are cared for should the need arise.

We have choice as to how we deal with unexpected health changes:

  1. We can get up the courage to make some proactive plans as a Gift to Our Family
  2. We can wait until some problems to occur and use this as an opportunity to plan
  3. We can wait for the crisis and all that occurs with that

Comprehensive Health Planning is relatively new and engages families in a meaningful and rewarding way. It removes many unknowns and creates guides for ‘what to do’ should they need to step forward.

Where do you stand?

Janet Bullard

Proactive Health Care Advisors

www.proactivehealthadvisor.com



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