Posts Tagged ‘Fiat Currency’

Welcome to the top of the ride … all downhill from here.

There is an adage in the market that says,

“Sell in May and walk away.”

Well, there are many leading indicators that are now pointing DOWN, way down.

From the Treasury Market Inflation Forecast to the Economic Cycle Research Institute’s (ECRI) Long Leading Index of global industrial growth, these indicators are showing that the “W” of recovery is more likely.

Given that the US housing market has not rebounded as was once hoped, that the QE and QEII have only resulted in a short term bull rally in the stock market and a temporary easing of short term bond rates and not the much touted employment that the bankers and others from Wall Street and DC were promising was ‘on the way’.  Indeed employment numbers are stalled, much like the sense one has in a roller coaster car just as you reach the top of the first ‘hill’ after being released from the lift chains.  We have had a drop and a ‘scare’ now the real ride begins.

Richard Russell, 86-year old author of the Dow Theory Letters commented as follows on the deteriorating market breadth: “This is a bearish picture. The ‘soldiers’ are deserting even while the ‘generals’ continue to march forward. In a war, this would be a prelude to disaster. In the stock market, it may be the same.”

I agree with that sentiment and add in argument that the broader market place is going to go into a panic situation, this summer will be pleasant enough, like the roller coaster car moving gently along the top of the rail in a near flat grade.  By this autumn?  Well Kondratieff Winter will blow in for real with a storm to remember …

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Correction only in Silver, this is not over at all

The recent pull-back in Silver has prompted some to begin speaking about the ‘end’ of the run in silver and gold.

While a risk of a prolonged pull-back (and by this I mean a few months) is a potential in the market the long-term fundamentals remain the same.

In the attached video Gold& Silver operator speaks about these fundamentals.

If you are still not convinced, try calling up anyone in Argentina that survived (or thrived) in that marketplace after the total default on sovereign debt…

Then ask yourself,

“What are the options for the way out of the situation for the US Federal government in the debt ceiling situation?”

Get ready for a wild summer.

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