Saturday, November 16, 2013

The United States Is Now In A Catastrophic Default

On the heels of a global stock markets remaining on a tear, today the 42-year market veteran who correctly predicted that the Fed would not taper warned King World News that the United States is already in a “catastrophic default” situation.  Below is what Egon von Greyerz, who is founder of Matterhorn Asset Management out of Switzerland, had to say in this extraordinary interview.
Greyerz:  “Eric, since 2008 the major central banks, the Fed, the ECB, Bank of Japan, Bank of England, and the Swiss National Bank, have increased their balance sheets by a staggering 50%….
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Gold Trader: Gold Signaling “Manufactured” Crash Over Next 30-40 Trading Days

by Tekoa Da Silva, Bull Market Thinking:
I had the chance yesterday to reconnect with technical gold trader Gary Savage, publisher of the Smart Money Tracker daily gold market commentary and trading service, which has outperformed most of the world’s hedge funds in 2011 and 2012.
It was a powerful conversation as Gary indicated that gold is now signaling the increasing likelihood of another overnight sell-off event, similar to what was seen in late June, in which the price collapsed from $1400 oz. to just under $1200 oz.
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Former Federal Reserve Official Apologizes Calling Quantitative Easing (QE) "Greatest Backdoor Wall Street Bailout Of All Time"

I can only say: I'm sorry, America. As a former Federal Reserve official, I was responsible for executing the centerpiece program of the Fed's first plunge into the bond-buying experiment known as quantitative easing. The central bank continues to spin QE as a tool for helping Main Street. But I've come to recognize the program for what it really is: the greatest backdoor Wall Street bailout of all time.

Five years ago this month, on Black Friday, the Fed launched an unprecedented shopping spree. By that point in the financial crisis, Congress had already passed legislation, the Troubled Asset Relief Program, to halt the U.S. banking system's free fall. Beyond Wall Street, though, the economic pain was still soaring. In the last three months of 2008 alone, almost two million Americans would lose their jobs. (more)

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Profit Potential with Spread Trading

The futures markets are attractive to investors due to the wide range of products offered; from grain futures, to metals, to energies and financials, there are numerous products that offer opportunity.  The wide spectrum of products listed and their time-specific nature also allow traders to structure trades that capitalize on the difference between two or more commodities, or their different price expectations over time.   These types of trades, called spreads, add a layer of complexity, but expand investors' opportunities and can be quite profitable.  In this article, we will explore some basic types of spreads and other factors to consider when executing these trades.
At its basic level, a spread trade involves the buying of one or more contracts of one future, and selling one or more contracts of another. Traders hope to profit by a change in the relative difference between the two futures contracts.  If the difference becomes larger, the spread is said to be widening, and if the difference becomes smaller, the spread is said to be tightening.  Spread trades are often traded from a fundamental basis or belief, although they can be traded through technical analysis as well.  There are many types of spread trades, which include seasonal spreads, financial spreads, inter-commodity spreads, and crack/crush spreads. (more)

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Rick Rule: Buying Stocks in the Uranium and Silver Sectors

This week, Rick Rule, president and CEO of Sprott Global Resource Investments and resources expert, joins our show and breaks down the markets. Rick tells us why he’s an aggressive buyer of resource stocks right now. In fact, he hasn’t been this bullish in more than a decade. He also shares why investors will be rewarded for buying stocks in the uranium and silver sectors… and reveals why he’s predicting a temporary pullback in oil prices.
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Let’s Talk About Corn For A Minute

This has been something that I’ve been somewhat obsessing over in the last week. Thursday night during and after my presentation at Duke University, one of the things the students were most interested in was my Corn trade. One of the kids was fascinated that I was buying Corn and not talking about Tesla or Twitter or any of these other “hot topics” that have been in the news lately. Phil Pearlman and I first went over this trade during our weekend video last weekend. But I wanted to go over some of the details in a separate post and follow up on some of the things we discussed.
What first caught my attention was the hate that Corn has been getting lately. We haven’t seen this much pessimism in the Corn market since back in 2009. This detestation of Corn by the investing public came just before a 150% rally in Corn prices. Here is the current public opinion chart of the corn market that consists of a basket of our favorite polls: Bloomberg, Market Vane, Consensus Inc, Ned Davis, etc. The colored lines represent 1.5 standard deviations above and below a 1-year moving average:
11-15-13 corn public opinion
The next thing that got my attention was what the “smart money” and “dumb money” have been doing. The commercial hedgers have been loading the boat as corn prices have fallen, while the speculators are selling the heck out of it. I like to be on the side of the commercials: (more)
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Deflated: Prices in Greece at a 50-year low

Prices of goods in Greece, from milk and bread to medicine have fallen by 2.0 percent in October, and are now at their lowest since 1962. Only the price of alcohol and tobacco increased in the last year.

Consumer prices in Greece plummeted 2.0 percent year-on-year in October 2013, according to a report by Greece’s Hellenic Statistical Authority on Friday.

In its sixth year of deep recession, unemployment and wage cuts have eroded demand and pushed prices to fifty year lows. Greeks are nearly 40 percent poorer than 5 years ago, with disposable incomes down by a third since the country fell into recession. (more)

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