The PHLX Housing Index (HGX), subject of our Chart Of The Day, closed today at a 9-year high...yet, as the chart shows, while technically a new high...it’s a bit of a reach yet to declare this a “breakout”. That said, the chart has a few things going for it, if you are a bull on housing stocks. [Let me explain.]
Read More »The Phillips Curve – What Must Be Done To Alleviate Persistently Low Inflation? (2K Views)
There was a time when U.S. central bankers worried that inflation was too high, and they tried to bring it down. Now the opposite is true: the Federal Reserve is concerned that inflation has remained stubbornly low, and it’s trying to boost prices. The reason: persistently low inflation raises the risk that prices will actually start to decline. That’s bad news because it makes people less willing to borrow and spend—anticipating lower prices, consumers will put off spending—and could also lead to a fall in wages.
Read More »China’s Economic Slowdown: A Timeline Of How it Has Unfolded
The following timeline of developments in China since last summer’s equity market crash should be a handy tool for businesses around the world trying to figure out what’s next.
Read More »Asset Inflation: We Should Begin To Worry
We are not yet hoarding toilet paper and baked beans, but the prospect that we will be driven to do so has already been signalled to us. This article draws on the evidence of extreme overvaluations in equities and bonds worldwide, and concludes the explanation lies increasingly in a greater perception of risk against holding cash, or bank deposits.
Read More »U.S. Dollar to Strengthen into 2017 – Here’s Why
The chart below shows the US Dollar Index value during the past 44 years (1972-2016). It is imperative to notice the two peak values occurred 16 years apart (1985 and 2001), when the US dollar had soared +101% and +50%, respectively. Consequently, if one assumes the 16 year cycle will indeed repeat, then the greenback may well again rise to a peak in 2017. Moreover, if we assume the US$ could rise the average of the two previous peaks, then we might see it peak next year (2017) to +75%.
Read More »3 Megatrends Shaping the Future of Global Real Estate Investment (+2K Views)
The infographic below captures three megatrends that are the driving forces behind global real estate investment.
Read More »Bonds Are Pricing In Armageddon; Stocks Are Pricing In a New Golden Age For the American Economy – What Gives?
The economy and, more importantly, inflation really need to tank hard to justify current bond prices and economic growth, and earnings really need to soar to truly justify current stock market valuations. It's not hard to imagine a scenario in which both could be very wrong.
Read More »Central Bank Bubble Will Burst and Result In A Recession & Bear Market
The unwinding of the "Central Bank Bubble" will be worse than either the Dot.Com Bubble or the Housing Bubble. It seems like most investors continue to show apathy even with the warnings by us and quite a few others of the "unintended consequences" of the central banks doing things that have never been done before. Those investors are in good company because it appears to us that the leaders of the major central banks of the world do not have any idea of the "unintended consequences" either.
Read More »Gold/Copper Price Ratio Is A Clear Sign of a Slowing, Weakening Global Economy (+2K Views)
The Gold/Copper price ratio is a way to examine the state of the economy through the relative performance of the "pro-growth" copper price and the "anti-growth" gold price. This filters out the distorting effect of currency inflation/deflation, and allows us to focus only on gold and copper themselves. In 2016 we have a historically high Gold/Copper ratio, the likes of which we have only seen before in the Great Depression, the "stagflation" of the 1970s, and the 2008 Great Recession. This is a clear sign of a slowing, weakening global economy. Below are the details.
Read More »Greenspan Warns We’re In the “early days of a crisis” – Here’s Why
Alan Greenspan, the former Chairman of the Federal Reserve has warned that Brexit was a “terrible outcome in all respects” and that we are in the “early days of a crisis.”
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