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Precious metals expert Michael Ballanger discusses market reactions post-Brexit vote.
To truly appreciate market crashes, you must have an ample serving of grey hair.
Over the weekend, I must have received three dozen "Emergency Email Alert" notifications by newsletter services and financial intermediaries that got absolutely obliterated Friday morning and were expecting more of the same on Monday, which they got in spades. This new generation of "wealth advisors" has, unfortunately, been living off the largess of Central Bank guarantees and the winks and nudges of the "Finance Ministers" and "Treasury Secretaries" and "Chancellors of the Exchequer," where they make investment decisions based not upon analyses of balance sheets or income statements but upon the collective wisdom of Champagne Socialists. I have been writing about this for about thirty-five years and while it has not yet manifested itself in the advance of the prices of precious metals to levels that would correspond to the level of coinciding currency debasement, especially in the United States and Europe, it is going to be the "Talk of the Town" here in 2016. Continue reading "Following Brexit, Central Bank Desperation Never More Evident"
Yes, it’s another inflation post going up even as inflation expectations are in the dumper and casino patrons just cannot get enough of Treasury and Government bonds yielding 0%, near 0% and below 0%.
Feel free to tune out the lunatic inflation theories you’ve found at nftrh.com over the last few weeks. But if by chance you do want to look, here’s a visual path we have taken to arrive at the barn door, behind which are all those inflated chickens, roosting and waiting. All sorts of animals will get out of the barn if macro signals activate.
Gold led silver ever since the last inflationary blow off and blow out in early 2011. The gold-silver ratio rose through global deflation, US Goldilocks, good times and bad. There was no inflation problem, anywhere. Then early this year silver jerked leadership away from gold and now for the second time the ratio of gold to silver has broken below the moving average that has defined its trend (it did so in 2012 as well).
Why is this significant? Well, try on 2010 for size (see chart below). I for one happily managed the gold-silver ratio up spike in 2008, buying gold miners as they crashed. As gold (monetary, risk ‘off’) topped vs. silver (commodity/monetary, relatively risk ‘on’) we expanded the bullish view to commodities as well. But then came the bottoming pattern that was not a bottoming pattern. To this day I believe that the macro was preparing for a next leg up and some serious new destruction before Ben Bernanke, the “Hero”, sprung into action and ruined the beautiful Inverted H&S pattern that long-time NFTRH subscribers will remember me making a big deal about at the time. Continue reading "A Path Toward Inflation"
Hello MarketClub members everywhere. It has been quite a week so far, but before I get to that, let's take a look at what happened in the markets in June and how the markets closed out the month.
The big winner for the month was gold (FOREX:XAUUSDO). This precious metal was indeed precious to investors last month as it closed out June with a 9.39% gain, far exceeding any other major market.
Crude oil (NYMEX:CL.Q16.E), on the other hand, lost almost 2% in fairly choppy trading conditions. Continue reading "Welcome To The Second Half Of The Trading Year"
Not too long ago, July was marked as THE month that the Fed would raise its benchmark rate for the second time in a year. The last time the Fed hiked rates twice in the same calendar year was a decade ago. Now, in the wake of the Brexit shocker, Bloomberg reports markets are pushing the probability of the next rate hike towards the end of 2018. Are investors overly pessimistic? Here are some factors to consider.
“Kicking the can” has been a common analogy for the EU’s handling of the Greek debt crisis. In fact, until this day, from way back in 2010 when the crisis over Greece’s debt first erupted, the Greek crisis has not been resolved. Now, with EU leaders and the UK deeply divided on the timing and execution of Brexit, the UK could delay the activation of Article 50 of the Lisbon Treaty – at least until it gets an easy way out of the EU. A slow and drawn out Brexit, while negative for the UK economy in the immediate term due to uncertainty, may have only minimal impact on the US economy in the same time horizon. A slow, drawn out Brexit does not create shocks, and without the threat of an immediate shock, the US economy should weather the transition well. Continue reading "Fed Might Still Raise Rates"
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