....also from Safehaven: Fantasyland Reality Check: Fed's Beige Book Makes Absurd Claims in at Least 3 Places
Posted by Richard Shaw via Safehaven
on Thursday, 20 April 2017 06:28
....also from Safehaven: Fantasyland Reality Check: Fed's Beige Book Makes Absurd Claims in at Least 3 Places
Posted by Rory Hall - The Daily Coin
on Thursday, 20 April 2017 06:23
The global capacity for debt has reached it’s zenith. So-called developed markets and emerging markets have all reached maximum debt load. Of the all the major countries that impact the global GDP name one that’s not fully levered with debt. I’ll wait here while you look for that needle in a haystack.
We came into the bail outs. The G7 had levered up. Then we had the emerging markets lever up and they’re finished levering up and now everybody’s levered up.
There is no place to go. We can go to an equity model and we can optimize bottom-up but that requires a legitimate pricing function. And when you’re trying to run the whole thing with fake intel, fake science, fake news…The harvesting machine needs a new way to dig and digital currency and digital cash is that way. But you need all those countries in the tent and you need the ability to force everybody into a digital system. Source
The world (tent) must get inline with the idea of global governance and global currency, otherwise, it will not work.
Cryptocurrencies and all the people who believe this digital illusion is going to somehow save us from the evil banksters are overlooking what I have been saying since bitcoin first came onto the scene – it plays into the hands of the banksters and their desire to move us all to a digital currency. If someone believes for a second that Amazon or any other large multinational corporation that conducts retail business is going to accept bitcoin when they have been instructed not to, they are simply living in a fantasy.
That’s why the guys from bitcoin drive me nuts. Because they think “Oh this is how we’re going to be free“. No, you’re prototyping Mr. Globals digital currency.Source
If a person thinks the central banks and their digital currency will COMPETE with bitcoin you are not seeing the entire picture. That is not going to happen – EVER. The reason gold was outlawed in the U.S. in the 1930’s was to keep gold from competing with the Federal Reserve Note. Why would anyone believe the Federal Reserve is going to allow a digital form of currency to compete with their wealth transferring mechanism on a large scale?
Posted by Rambus Chartology
on Thursday, 20 April 2017 06:12
Before we look at tonight’s charts I would like to thank Sir Plunger for putting on the short oil trade this week while I was recovering from surgery. You won’t find a more through and in depth look at oil than what Sir Plunger offered. And wouldn’t you know it his timing as usual was impeccable. Oil dropped almost 4% today.
Now lets turn our attention to the sector which many members have a love hate relationship with.
There is a potential new pattern forming on some of the precious metals stock indexes which is only coming to light today. Before today’s price action there was only a guess of what may be forming with no confirmation. After today’s big gap breakout another piece of the puzzle is falling into place. Nothing is ever guaranteed when it comes to the markets, so all we can do is get the odds in our favor and try to recognize a potential pattern as soon as possible. Once you think you may have something figured out you then put together a game plan and work it until it either plays out or fails.
Lets start with the 60 minute chart for the GDX which shows the now completed bearish rising wedge. We got the H&S top which formed at the top of the rising wedge as the 4th reversal point making the rising wedge a consolidation pattern to the downside. It’s still possible we could see a backtest to the 24 area before the impulse leg down begins in earnest, but there are no guarantees. Note the inverse H&S bottom that formed in March which reversed the decline from the August 2016 high, a H&S at the bottom and a H&S at the top, both of which are reversal patterns.
This next chart is a one year look we were watching during the big impulse leg up out of the January 2016 low to the August 2016 high. Here you can see another H&S top which reversed the 2016 rally. After forming several smaller consolidation patterns the GDX bottomed out in December of 2016. That 2 month rally produced the first blue bearish rising wedge with the 200 day ma offering resistance. If you recall we went short on the backtest to the underside of the rising wedge until the Fed announcement, which spiked GDX higher at the beginning of our current and smaller blue rising wedge. Today we shorted the PM stock indexes again, as the price action is in a similar spot to the bigger blue bearish rising wedge.
Posted by Frank De Baere
on Wednesday, 19 April 2017 11:55
From Tulips to South Seas, from Dot Coms to Houses, all manias have something in common. Assets rise gently, largely unnoticed by the great unwashed, as the easy money is made and price rises above historical norms they become more popular by mainstream, then they become overvalued as their price rises way above "intrinsic value" and when the mania finally matures overvalued grows to extremely overvalued. And then at some point in time at some price level on the chart the market exhausts itself and collapses back to and often below it's starting point. These collapses tend to be sudden, out of the blue and violent and usually happen without any obvious cause or reason. What was made during the boom gets lost in the bust. Only the smart money has greater odds of surviving ending manias but only if it does not get outsmarted.
What we as Danielcode members are interested in is markets turns. As we said above manias end at some point in time and at some price. Think about that for a minute. A mania pushes up price to a certain level and at one specific point on the chart it all collapses under its own weight for no obvious reason. Whatever reason is pinpointed to the start of the crash by financial journalists is merely linking an event or piece of news that happened after the top was made. The real question on our mind is "Why is a specific price THE top and why did that top happen in that specific week or even on that specific day?" And God help us, what if we could foresee these points on the chart and have a good idea where and when they should happen. Is that even possible? The truth is that God does help us, the sad truth is that no one listens and even less are interested.
The Danielcode is a mathematical matrix of numbers straight from the book of Daniel discovered by our mentor John Needham. How these numbers are calculated is beyond my time schedule to write here but you can discover all of that in the "Live at the Springs" audio under the articles tabs at the Danielcode website. The Danielcode ratios are 29.7 , 37.5 , 44.5 , 50 , 62.5 , 59.3 , 74.2 and the powerful 89 number. And these numbers are important folks. Very important. They rule all markets in both time and price, they even rule all life and death in the universe. Or do you think it is a coincidence that the synodial month, the average length of a month, is 29.7 days or that the orbit of Saturn (referred to by the ancients as Cronus or Kronos the Roman Deity of Time) is 29.7 earth years or that the orbital velocity of Mercury is 29.7 miles per second?
Maybe. But our mentor has shown us so many charts where price has recognized so many Danielcode numbers always with precision down to a few ticks that I have completely sworn off Random Walk theory a long time ago. Nothing is random in a chart my friends. Markets are not random, they are perfectly mathematically organized, and sometimes even perfectly predictable. Let me show you what I mean.
Posted by Goldtent TA Paradise
on Wednesday, 19 April 2017 07:06
The big trade of this year positions oneself for the upcoming US recession. In speculating and investing if one can get the main concept right everything else falls into place. Various trades will branch off from this theme. The trade is not priced into the market at all since we are betting against the accepted narrative. We can use various proxies to play the trade, as just about anything economically sensitive may qualify. Base metal producers, car companies, sub prime financiers, retail establishments, the list goes on. The main vehicle I have chosen to execute the trade is the oil price. I have chosen this because both fundamentals and technicals indicate to me it is over priced and due for a fall. It trades deep and has a record of falling under distressed economic conditions.
“All that we see or seem is but a dream within a dream”- Edger Allan Poe
That’s what we have lived over the past 8 years, an economic mirage. A historic FED fueled reflation rally, that was just a dream. Central banks led by Phd academics applied their unproven pet theories of substituting credit conjured from thin air in place of accumulated savings to stimulate demand. We are now going to see if their theories worked. Von Mises explained in “Human Action” that a credit-fueled boom ends in one of two ways:
“Either the banks continue the credit expansion without restriction and thus cause constantly mounting price increases and an ever growing orgy of speculation, which, as in all other cases of unlimited inflation ends in a “crack-up boom” and in a collapse of the money and credit system. Or the banks stop before this point is reached, voluntarily renounce further credit expansion and thus bring about the crisis.”
That is where we are right now, at the beginning of the credit restriction, the crisis will then follow. Its time to take the trade before its begins to be priced into the market. The oil market is rife with false understandings that should soon be exposed. Chief among them is that OPEC is in control. A belief in an OPEC put reminds me of the belief in the central bank put which existed in 2008. That dream was soon blown away. The false idea that producers will simply shut down production once they reach their all in costs is simply wrong. Sovereigns and independents have bills to pay, the costs of infrastructure can be written off.
Diego Parrilla has written a wonderful book “The energy world is flat”where he describes forces converging on the energy markets which ultimately work towards lower prices. These forces have converged to put crude oil on the defensive. Substitution, regional convergence, lower transportation costs have essentially made Oil into strictly a transportation fuel. Oil once the source of power generation is no more. Oil now competes at a disadvantage with virtually most other energy sources.
Consumers have defended themselves in various ways and geopolitics no longer add much of a premium into price with ample storage capacity and diverse supplies. Peak oil turns out was a very linear static view of the world. It ignored the dynamism of the market. These are forces that will exert a downward pressure on prices for years to come and when a faltering economy runs headlong into the largest spec long position of any commodity in history prices will drop.
Distressed producers and investors.
Reversion to the mean is a statistical certainty. The only question is what duration do we use to determine it? If one is to look at the oil price spanning the entire modern era (post WWII) the mean price, in today’s dollars, would be around $35. So its not hard to imagine a dip below the mean during a mean reversion cycle.
Capturing that move below $35 is what this trade is all about. As I said earlier what makes this the Big Trade is not the percentage move, but in getting the theme right and using that theme in your other investments.
Subscribe to Mike’s twice weekly email service and get Mike’s editorials, feature interviews, investment ideas, Trades of the Week and much more. All for FREE!
His top research pick
Weekly astonishing statistics
Wisdom from the World
Most Popular postings
It was in the summer of 2016, with the 10-year Government of Canada Note yielding 0.96%, that a new narrative was born, under the pretext of...
Exclusive content sent directly to your Inbox.