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Gold & Precious Metals

Death Valley Snowballs and Fiat Currencies


Posted by Gary Christenson - The Deviant Investor

on Wednesday, 29 March 2017 07:11

Keep it simple!

- Two Trends That Will Force The Fed To Start Buying StocksSnowballs have a short life expectancy in Death Valley.

- Fiat currencies, backed by credit and debt, survive longer than snowballs in Death Valley, but history shows all fiat currencies are inflated into worthlessness and eventually die.

- “U.S. dollars have value only to the extent that they are strictly limited in supply.” Ben Bernanke on November 21, 2002. But we know the supply of dollars has grown rapidly since 1971, and especially after the 2008 crisis while Bernanke was Chairman of the Fed.

- The U.S. government is officially $20 trillion in debt. Unfunded liabilities are far larger.

- Official national debt has doubled every eight to nine years for decades. Debt in 2017 is $20 trillion and accelerating higher, and in 24 – 27 years it could be eight times higher – at $160 trillion. Can this fiat currency Ponzi scheme survive that long?

- If the Fed “prints” another $140 trillion, will that destroy the purchasing power of the dollar?

- Note to congress: “If you don’t raise the debt limit you will collapse the fiatcurrency bubble. But if you raise the limit and continue with ever-increasing debt you only delay a larger collapse.”

- If something can’t continue, it will stop. What specifically might stop? Economic insanity, exponentially increasing debt creation, FederalReserve credibility, the dollar as the Reserve Currency, purchasing power of the fiat dollar, euro, pound, yen …and others come to mind.

- Federal Reserve Notes are debts of the central bank and have value because they are strictly limited in supply. But the supply of dollars is huge and rising rapidly. That begs the question, “What will preserve the value of the dollar?”

- Gold has been valuable money for thousands of years. Which will retain their value longer?



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Currency

Myriad of Signs


Posted by Przemyslaw Radomski

on Wednesday, 29 March 2017 07:05

In yesterday’s alert we emphasized that the breakdown in the USD Index should not be trusted as it was not confirmed and there were several good reasons to think that it would not be confirmed. The breakdown is already invalidated and – again, as discussed yesterday – this is actually a strong bullish sign. Is the decline in the USD Index over and is the big slide in the precious metals sector just around the corner?

In short, that seems quite likely. Naturally, there’s much more to the precious metals market than just the USD Index and it’s prudent to analyze more factors than just this specific index. In other words, it is of utmost importance especially at this time, but there are many other important signs to keep in mind. Still, let’s start today’s analysis with the U.S. currency (charts courtesy of http://stockcharts.com).

1 fdfTCfC

In yesterday’s alert, we commented on the above chart in the following way:



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Stocks & Equities

What stocks to buy as rates rise


Posted by Money Sense

on Wednesday, 29 March 2017 06:59

aremortgageratesgoingupincanadaWhen interest rates climb, investors should pay closer attention to the sectors they own

Think of investment sectors as neighbourhoods. If you own the best house in the worst neighbourhood, the market will assign a discount on your home’s value. Own the worst house in the best neighbourhood and you’ll enjoy a premium valuation. That’s how Barometer Capital describes its approach to investing, and investors may want to follow suit, especially if your portfolio lives in the financial district.

“The vast majority of your return comes from being in the right sector,” says Diana Avigdor, vice-president head of trading and portfolio manager at Barometer Capital, a Toronto-based wealth management firm. With interest rates climbing in the U.S. this is an important time for investors to make sure they understand which neighbourhoods they’re in.

The current rise in rates in the U.S. Is more about a normalization, after a lot of intervention to boost the economy. It’s not about an expected surge in inflation. Regardless....

...continue reading HERE

 

...relatedL

Two Trends That Will Force The Fed To Start Buying Stocks

 



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Wealth Building Strategies

The Most Important Lesson I Learned in My 30 Years in Business


Posted by Eamonn Percy - The Percy Group

on Wednesday, 29 March 2017 06:55

"Reader, I wish thee Health, Wealth, Happiness, And may kind Heaven thy Year's Industry bless."

                                                                                                                                                 - Ben Franklin

Courage-to-challenge-the-climb-of-the-cliff 1920x1200I originally thought it would be an easy task to write this week's article since I only had to come up with one thing; the single most important lesson I learned in my 30 years in business. However, I soon learned how hard a task that really was, as there are so many important lessons I have learned during my own journey.

I know that persistence, the unwavering dedication to a task, is critical in achieving anything of note. Character development is key to building the traits necessary to persevere.  Education, both formal and informal, is absolutely paramount in building a foundation from which all other skills can be developed. Communications, which is the one most important skill that helped me build a great career in business.  All of those are worthy candidates for the most important lesson learned.

However, none of them can come close to what I believe is the single most important lesson I learned; that is the importance of making COURAGE in making decisions and taking actions. If I am 100% truthful with myself, the only times I really massively excelled in my career was when I ventured far outside my comfort zone. It was the time I was most frightened, anixous and filled with fear about the outcome of a venture, but pressed ahead against the obstacles anyways. For instance, I quit a high paying job as a young manager one time when newly married with a child along the way, only to get recruited within one week to a much, much better position.  I turned down the recruiters first offer, even though I had given up our apartment and was living in my inlaws basement suite, only to get a much better offer. Another time, I took my first executive job with 50% of the salary paid in shares wondering if I would make it, only to have the shares accelerate significantly in value. Most times I pushed the envelope of my personal appetite for fear, I seem to come out ahead. Not always, but more often than not. It was courage that made the difference.

While business has many known and proven rules, it is the bold action-taking the separates the winners from the losers, or from the mere survivors. Taking bold action requires faith in yourself that you will overcome any difficulty, that you are bigger than your problems, that you have powers beyond the natural, and finally, that if you do fail temporarily, you will come back stronger than every. Courage is not being reckless since it still requires planning, risk mitigation and the application of proven business principles. However, there comes a time when all the planning is done, the risks are mitigated and you know the principles are sound, the only thing left to do is act. The bolder the action the bigger the courage required!

Step out of your comfort zone and start taking the action necessary today to make a bigger difference in your life. Seize opportunities around you, don't hold back and wait for circumstances to be just right. Focus on whatever resources you have in front of you now and build the type of life, business and wealth you know you can build and would be proud to accomplish.


By Eamonn Percy http://www.percygroup.ca



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Stocks & Equities

Stock Market Getting Ready for a BIG Move; Risk to the Downside


Posted by Financial Sense

on Tuesday, 28 March 2017 07:46

“Pull” is a term used in shooting sporting clays, which are supposed to represent real birds and sharpen the shooter’s ability to actually hunt live birds. The term is yelled by the shooter to tell the person operating the trap to launch a sporting clay. “Pull” comes from an era long gone by when they actually had real birds in cages and the shooter would say “pull” to have the cage cord pulled and release the bird. The term “pull,” however, took on a whole new meaning last Friday when Speaker Ryan “pulled” the Republican healthcare bill (H.R. 1628) from consideration. I had literally said on CNBC earlier that day (as paraphrased): I lived in Washington D.C., and still have a pretty good network on Capitol Hill and typically what happens, if they don’t think a bill will pass, they pull it (read: withdraw it). But, there is NOTHING typical going on in D.C. these days! I also opined on the same show that – I was hearing that H.R.1628 was a few votes short of the ability to pass. Even if it had passed there would have been major revisions to it in the Senate. I guess it was once again the Russians that influenced the death of H.R. 1628 since they are being blamed for just about everything else. The question now becomes, “How will the various markets view Friday’s Foil?”

Speaking to many media types late Friday afternoon I suggested that a lot of technical damage has been done to the charts during the week. The S&P 500 (SPX/2343.98) broke down from its trading range of 2350 – 2400 that has existed since mid-February. The SPX has also closed decisively below its 20-day moving average (DMA) that has served as a support level since last December (Chart 1). Clearly, the gap in the price chart created by the Fed Fling (March 15, 2017) on the rate ratchet has now been filled raising the question, “Will the upside gap that occurred on February 10, 2017, to February 13, 2017, between 2311.08 and 2311.10 be filled?” Moreover, will the Trump agenda disappointments lead to a 0.328 Fibonacci retracement of the recent rally toward a downside target price of 2278? To be sure, the smart money is “betting” that way given the divergence between the CBOE SKEW Index and the Volatility Index’s (VIX) SKEW (Chart 2). As defined by the CBOE:

The CBOE SKEW Index ("SKEW") is an index derived from the price of S&P 500 tail risk. Similar to VIX®, the price of S&P 500 tail risk is calculated from the prices of S&P 500 out-of-the-money options. SKEW typically ranges from 100 to 150. A SKEW value of 100 means that the perceived distribution of S&P 500 log-returns is normal and the probability of outlier returns is therefore, negligible. As SKEW rises above 100, the left tail of the S&P 500 distribution acquires more weight, and the probabilities of outlier returns become more significant. One can estimate these probabilities from the value of SKEW. Since an increase in perceived tail risk increases the relative demand for low strike puts, increases in SKEW also correspond to an overall steepening of the curve of implied volatilities, familiar to option traders as the "SKEW".

Ladies and gentlemen, the current CBOE SKEW is around 145, and well above what the CBOE website describes as, “As SKEW rises above 100, the left tail of the S&P 500 distribution acquires more weight, and the probabilities of outlier returns become more significant.” Further, the VIX SKEW has diverged with the CBOE SKEW suggesting something BIG is getting ready to happen in the equity markets. Additionally, there is still plenty of “internal energy” to foster such a move, but unfortunately, our internal energy indicator does not tell us if that energy is going to be released on the upside or the downside. Our hunch remains that it will be released on the downside for the aforementioned reasons.

....Continue Reading HERE

...related from Financial Sense:

Dan Wantrobski: Stock Market Breadth, Momentum Weakening



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