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2017 is Looking More Optimistic Than Ever

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Posted by Martin Armstrong - Armstrong Economics

on Tuesday, 03 January 2017 08:12

2017-Countdown-600x450The only thing about international trade is that someone cannot have a trade surplus without another experiencing a trade deficit. We all cannot have trade surpluses simultaneously and we have to begin understanding this reality. The net capital movements around the world are showing clear signs that things will be intensifying and the net capital movement is headed for the dollar – but that does not mean day one. Sure, many will point the finger at Trump and blame him for a trade war etc., but in reality, the net capital movements are intensifying for reasons that have nothing to do with trade. Ushering in Trump will also have a profound impact upon Europe and now Merkel’s greatest challenge will be to hold the EU together for its core design was to enhance German trade by eliminating currency risk.

The insane policies of Angela Merkel combined with....continue reading HERE

....also from Martin:

Hyperinflation - Coming to an Indebted Democracy Near You



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Currency

Surging US Dollar in 2017 a Catalyst for Gold Bottom

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Posted by Jordan Roy-Byrne - The Daily Gold

on Thursday, 29 December 2016 07:40

Gold has suffered recently in the wake of higher real interest rates while the US Dollar, thanks to higher yields has reached a 14-year high. Stronger real rates hurt Gold but so does a stronger US Dollar, which remains the dominant global currency. In addition to falling real interest rates Gold likely needs the US Dollar to approach a major peak. It may sound perverse to gold bugs but the sooner the US Dollar climbs and the stronger it gets, the closer Gold could be to the start of a new bull market.

Gold is now officially in its longest bear market ever. If we define a bull market as a multi-year advance then Gold has endured five bear markets over the past 45 years. Four of the five are plotted in the chart below. The current bear market has followed the trajectory of the 1987-1993 and 1996-2001 bears but with more downside. 

Dec272016Goldbearanalog

Gold Bear Analog



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Currency

The Dollar Bull Overstays Its Welcome

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Posted by Roland Watson

on Thursday, 22 December 2016 08:14

Back in March 2008, as the Credit Crunch was biting, the US Dollar, as measured by the US Dollar Index (USDX), was bottoming after a drop of over six years fuelled by the War on Terror. Silver had previous topped out at about $21 and was later to visit $50 as the dollar faced the abyss again just above the 70 level. To date, that level has been the all time low for the USDX.

USD INDEX

Looking at the 45 year chart for the USDX, it is clear the dollar has been on a downward trajectory interspersed with some rallies since 1985. As of 2008, the dollar has been in an 8 year rally. It is no coincidence that gold and silver have struggled during this time and precious metal investors will be wondering when the dollar will resume its 31 year bear?

While writing for subscribers on the US Dollar, another look at the USDX chart suggested that the dollar bull was beginning to outstay its welcome. Lines have been drawn between each high and low to highlight each dollar bull and bear.



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Currency

US Dollar & Gold

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Posted by Ross Clark - Institutional Advisors

on Wednesday, 21 December 2016 08:12

We continue to monitor the seventeen-year cycle in the US Dollar Index and its relationship with gold. Looking at gold since the Dollar bottomed in May, the patterns of 1999, 1982 and 1983-85 are a close match. The Fibonacci levels come into play in each instance. 

The October 7th low at $1242 (labelled level 50 on the chart) was the last support before gold broke the May 31st low of $1199. It is deemed to become the midpoint of the eventual decline. The resistance level at 76% was a test of the previous support around $1310 during the summer. April and May become the 38% level in the pattern. The measured range for the downside move is $1105 +/- $5. 

Screen Shot 2016-12-21 at 6.45.35 AM

...view entire analysis & large charts HERE



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Currency

Yuan's Day of Reckoning

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Posted by Michael Pento - Pento Portfolio Strategies Strategies

on Tuesday, 20 December 2016 07:53

China's economy and markets have been defying the laws of economics since 2009. Amid a worldwide financial crisis during that year, they managed to grow their economy by 8.7%. But that growth was fueled by a $586 billion dollar government stimulus package, which was followed by an additional $20 trillion dollars in new construction spending over the next seven years.

China's economy became the envy of the world as the economy expanded through the edict of government to build massive cities that were mostly vacant. In fact, estimates are that 52 million homes in China are currently vacant and 90% of those empty units were purchased for investment purposes.

As investors sat on empty real estate, debt levels in the shadow banking system rose to troubling levels. A real estate bubble of this magnitude would bring most economies to the brink of destruction. But fear not; the megalomaniacs in Beijing had a solution: in 2015 they created a new bubble in the stock market to offset the fragile real estate bubble.

And to accomplish this, 40 online brokerage lenders helped arrange more than 7 billion yuan worth of loans for stock purchases.

As you can imagine, China's leverage problem quickly reached epic proportions. Fueled by margin debt the Shanghai Composite (SSE) started 2015 at 3,234 and hit 5,023 by June 4th; a 150% surge from the preceding 12 months, before plunging.

Shanghai Index:

43305 a



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