Saturday, February 4, 2012

Euro Currency Recovery Is Temporary

By Alan Bush, Archer Financial Services

The euro registered a 16-month low against the U.S. dollar on January 13 at 1.2627. Much of the selling was linked to increasing worries that the euro zone economy will continue to weaken. The news was overwhelmingly bearish, as these lows were made, such as the report from Germany's Federal Statistics Office when they said Germany's economy probably contracted in the fourth quarter by .25% from the third quarter. In addition, the European Union reduced their euro zone growth estimate to .1% in the third quarter from the .2% growth they had previously estimated. A Bloomberg survey at the time showed the euro zone economy could shrink by .2% this year.
Unemployment in the euro zone hit a record high at the end of 2011. The jobless rate in the 17 countries that use the single currency was 10.4% in December. This was unchanged from November's figure, which was revised up from 10.3%. There were 16.5 million people out of work in the euro zone in December, which is up 751,000 from the prior year. The highest unemployment rate remains in Spain at 22.9%, while the lowest is in Austria, at 4.1%. The unemployment rate has been rising throughout 2011, as the debt crisis in the area has continued. In December 2010, the unemployment rate in the euro zone was 10%.
Eurozone Unemployment
Illustrating the lack of confidence in the euro zone were reports that some in the Greek business community are pushing for a return to the drachma, which possibly would enable businesses with tax arrears to pay their debt in devalued "new" drachmas rather than in euros.

The euro was also hurt by talk that the European Central Bank may have to write down its holdings of Greek sovereign debt. In addition, Fitch Ratings downgraded several euro zone countries, including Italy and Spain.

More recently, the fundamentals appeared to have gotten better, causing prices to partially recover. For example, Greek Prime Minister Papademos said progress had been made in debt swap negotiations with the private holders of Greek sovereign debt. There were recent reports that the holders of Greek debt may get a sweetener, as part of the deal to accept a lower yield on new debt, in the event that there was an improvement in the Greek economy.

Chart provided by APEX

There was additional support for the euro when European Union leaders, at their January 30 summit in Brussels, agreed on a fiscal discipline plan that would impose sanctions on high budget deficit member nations. Only the Czech Republic and the U.K. refused to sign the agreement on grounds that too much of their sovereignty would be given up.


Although some of the recent news from the euro zone has suggested financial conditions may have gotten a little better, the longer-term underlying fundamentals remain bearish for the currency of the euro zone. While there is no shortage of economic and political problems in the U.S., it appears that the strains on the financial system in the euro area are much more severe by comparison. Our analysis suggests the euro zone economy will enter into a recession this year. As a result, we anticipate there will be increased motivation for market participants to seek the relative safety of the U.S. dollar, by moving out of the euro currency and into greenback.

The main trend for the euro currency is lower, with the next downside psychological chart objective coming in at 1.2500 to be followed by a test of the 1.2000 area. In the long term, the series of lows at the 1.1661 to the 1.2326 area may offer only temporary support.

James Turk: Corrective Action in Gold is Prelude to Bullish Explosion

from King World News:

With gold trading roughly $35 lower, silver down nearly $1, today King World News interviewed James Turk out of Spain. Turk told King World News that this corrective action in gold and silver is healthy and a prelude to a major bullish move to the upside. Here is what Turk had to say about money on the sidelines and where gold and silver are headed: “Sooner or later that money is going to realize the train is pulling away from the station. Whether this money comes in next week or the week after, I do very much like this trading action. I’m very bullish here short-term on gold and silver, it looks very, very good.”

James Turk continues: Read More @

AT&T Sounding Loud-and-Clear Buy Signal

AT&T (NYSE:T) — One of the most recognized brand names in the world, AT&T is expected to see gains in consumer wireless and broadband services. Its strong balance sheet, long-term customer relationships, and expanding profit margins should result in an increase in the P/E multiple of the stock along with an increase in earnings. Analysts estimate AT&T will earn $2.27 in 2011 and $2.53 in 2012.

The stock has a dividend yield of over 6%, and fundamental analysts have a price target of $34, which, if reached, would result in a total annual return of 18%.

Technically the stock has reversed from its 50-day moving average and flashed a buy signal from our internal indicator, the Collins-Bollinger Reversal (CBR), resulting in a six-month target of $36.

Trade of the Day – AT&T (NYSE:T)

The 5 Stages of Collapse: Where Are We Currently?

In light of the unfolding global sovereign debt fiasco that has turned out to be less of a waterfall and more of an avalanche [than anticipated I present below a description of the 5 stages of collapse and discuss our preparedness. If you haven't read it yet, perhaps you should.] It has been read by 70,000+ people so far – and is still being read by an average of 1,500 people each month – on my site alone.

So says Dmitry Orlov ( in edited excerpts from his original article*.

Orlov goes on to say, in part:

Elizabeth Kübler-Ross defined the five stages of coming to terms with grief and tragedy as:
  1. denial,
  2. anger,
  3. bargaining,
  4. depression and
  5. acceptance,

and applied it quite successfully to various forms of catastrophic personal loss, such as death of a loved one, sudden end to one’s career, and so forth.

Applying the Kübler-Ross Model to Economic Collapse

Several thinkers, notably James Howard Kunstler and, more recently John Michael Greer, have pointed out that the Kübler-Ross model is also quite terrifyingly accurate in reflecting the process by which society as a whole (or at least the informed and thinking parts of it) is reconciling itself to the inevitability of a discontinuous future, with our institutions and life support systems undermined by a combination of:

  • resource depletion,
  • catastrophic climate change and
  • political impotence.

So far, [however,] little has been said specifically about the finer structure of these discontinuities. Instead, there is to be found a continuum of subjective judgments, ranging from “a severe and prolonged recession” (the prediction we most often read in the financial press), to Kunstler’s “Long Emergency,” to the ever-popular “Collapse of Western Civilization,” painted with an ever-wider brush-stroke.

For those of us who have already gone through all of the emotional stages of reconciling ourselves to the prospect of social and economic upheaval, it might be helpful to have a more precise terminology that goes beyond such emotionally charged phrases.

Defining a taxonomy of collapses might prove to be more than just an intellectual exercise: based on our abilities and circumstances, some of us may be able to specifically plan for a certain stage of collapse as a temporary, or even permanent, stopping point. Even if society at the current stage of socioeconomic complexity will no longer be possible, and even if, as Tainter points in his “Collapse of Complex Societies,” there are circumstances in which collapse happens to be the correct adaptive response, it need not automatically cause a population crash, with the survivors disbanding into solitary, feral humans dispersed in the wilderness and subsisting miserably. Collapse can be conceived of as an orderly, organized retreat rather than a rout.

The collapse of the Soviet Union, for example, [did not deprive the population of] food, housing, medicine, or any of the other survival necessities. Many institutions, including the military, public utilities, and public transportation, continued to function throughout [the decline. Even though] there was much social dislocation and suffering, society as a whole did not collapse [and this] allowed the Soviet population to inadvertently achieve a greater level of collapse-preparedness than is currently possible in the United States… (more)

SPECIAL REPORT: $500 SILVER & Hyperinflation

Life and Debt [HQ Full Movie]

Life and Debt . The elite want to keep their populace ignorant, fat, immobile, and depoliticized so a select class can profit, profit, profit , it's referred to as breeding "sheeple". we the people need to look inward and fine the solution in us....we need to set our own standards and stop follow policies design to benefit them... example we always want what is from foreign and what we don't produce replace our Breadfruit for Irish potato.The reality of power/self interest is far more corrupt/insidious than what we can even dream of .The new World Order was put into plan after Hitler,USA as well as England and the Other G20 countries are the cause of chaos,create war an dependence an own,slavery is always,look deep because it is well hidden in poverty, Know thyself and choose wisely whom you serve. Do you serve the will of the usurer (usury is backed by evil/lucifer) or do you serve the Creator. .

Jamaica — land of sea, sand and sun. And a prime example of the impact economic globalization can have on a developing country. Using conventional and unconventional documentary techniques, this searing film dissects the "mechanism of debt" that is destroying local agriculture and industry while substituting sweatshops and cheap imports. With a voice-over narration written by Jamaica Kincaid, adapted from her book A SMALL PLACE, LIFE AND DEBT is an unapologetic look at the "new world order," from the point of view of Jamaican workers, farmers, government and policy officials who see the reality of globalization from the ground up .Unbelievable! I cannot Understand Why the USA Behaves Like the Roman Empire But as you Know HISTORY ALWAYS REPEATS ITSELF! 

TFMR Podcast #12 – John Williams of


Click Here to Listen to the Podcast

Boy oh boy, do I ever have a timely treat for you today. Back on Thursday, I was able to visit with John Williams of Shadow Government Statistics. In light of today’s heavily-manipulated BLSBS report, I’d say this podcast is rather timely.

As most of you know, my college degree is in Econ so getting a chance to visit with John was a real pleasure. I mention at the end of the podcast that I could have gone on speaking with him for another hour or two but, in respect of his time, I had to cut us off after just 30 minutes. Please take the time to listen to the entire thirty minutes, though. The information that John provides, particularly near the end of the podcast as he discusses the CPI and the coming “hyperinlationary depression”, is extremely important.

Read More @

Corn Market Is Entering a Key Marketing Window

The corn market has shrugged off the negative January USDA Report. Traders were surprised earlier this month when December 1 corn stocks were reported to be nearly 250 million bushels above the analysts' expectations. This combined with a less surprising rise in the final production estimate caused corn prices to break nearly $.60 in four days. The implication derived from the increase in December 1 stocks was that first quarter feed usage may be the lowest since 1995. The increase of wheat into rations and the higher production of DDGs may help to explain this decline, but the third consecutive negative stocks report, based on lower feed and residual usage, left many traders and producers questioning the data. The recent $.50 recovery of old crop corn values may lend credence to some of the disbelief. Although declining production estimates for the Argentina corn crop aided the recovery, the main catalyst was a surprising surge in cash prices across the country due to tight pipeline inventories.

According to the December 1, USDA Stocks Report, producers held just under 50% of last year's crop in "on-farm" storage. It appears that much of last year's corn crop was keenly sold on last summer's rally or moved off the combine due to historically high harvest prices. Producer sales tend to pick up after the first of the year. However, three important factors have seemed to mute that farmer movement. As stated earlier, half of last year's crop has already been likely moved into the market place leaving producers to be more cautious of future sales. Second, a bullish January production report may very well have been met with increased farmer sales, but the $.60 break sealed the bin doors tight. Finally, today's producers simply do not have the same cash flow needs of 10-20 years ago. They can afford to be patient and move their inventory on a more opportune schedule. This leaves ethanol producers, as well as exporters, scrambling to shake that cash corn loose. This is a feature that will be an important factor throughout the remainder of the marketing year.

The corn market is entering a very important marketing window for producers. Old crop corn values should continue to be supported on breaks toward $6.00 by solid demand and a potentially declining carryout estimate. It is possible that the recent close in March corn above its 100-day moving average for the first time since last September will open up an additional $.30 of upside to prices. With fewer concerns for the corn crop in the bin, most producers are shifting their focus to marketing the 2012 crop. Many analysts have already been flooding the market with much higher new crop carryover estimates and projecting sharply lower prices for this fall. When using a planted acreage figure near 95 million acres combined with trend line yields, it is easy to see where these projections are derived. The jump in corn acres may seem somewhat easy to explain. However, as evidenced over the past two years, a trend line projection near 162 bushels per acre will prove to be a much bigger challenge. The tight cash market and the potential for lower carryout estimates in upcoming USDA Supply and Demand Reports, provide the possibility for an acute rally to old crop corn values. Although such a rally to March futures will likely result in the spread widening, it still may drag new crop corn values to the $5.85-$6.00 level. This would provide an excellent opportunity for producers to advance 2012 crop sales. In addition, producers could take that opportunity to aggressively lock in a price floor using well out of the money options.

The corn market will likely remain quite volatile throughout at least the first half of this year until it becomes more comfortable that a yield around 160 bushels per acre can be achieved. Producers can use this volatility to aggressively market 2012 crop corn production on rallies, yet transferring that risk back to the cash market on breaks. By setting a price floor using options, it will provide the comfort to step aside on hedges at the bottom end of the expected trading range without entirely exiting the corn coverage. A marketing plan that includes both a longer-term option strategy and a shorter-term pricing strategy can help to reduce some of the emotional decisions that will undoubtedly face corn producers throughout the spring and summer.