Friday, February 5, 2016

2016 Gold and Silver Impact Outlook

James Turk, Alasdair Macleod and John Butler form a precious metals and global outlook roundtable. They give us their opinions on what they envision happening in 2016 for precious metals, the world and beyond.

Saturday, January 9, 2016

Hyperinflation and the Destruction of the US Dollar

In short, higher interest rates are the path to hyperinflation and the destruction of the dollar. Fed officials undoubtedly understand this. So do not be surprised if the Fed leaves interest rates unchanged. But if the Fed does hike rates, expect its announcement to be extremely dovish.

The Fed might leave the lower range of the federal funds rate unchanged at 0, increasing only the top range to half a percent. In addition, there will be a lot of post-announcement dovish speak to try to talk the stock market higher.

- Source James Turk via KWN

Monday, January 4, 2016

Why The FED Should Not Raise Rates Further

When it comes to credit, they are called “junk bonds” for a reason. These are bonds of companies that rest on a knife-edge between solvency and bankruptcy. The slightest hiccup can create a disaster for these companies, so oil companies that borrowed excessively thinking that crude oil prices would never fall below $60 a barrel are suffering the consequences.

What is worse is that credit deterioration is seeping into the banking system. Today Wells Fargo Bank said that “stresses” are building in its portfolio of loans to energy companies because of the drop in the price of oil, which is another reason the Fed may choose to avoid hiking rates.

The best reason for the Fed not to raise rates is the U.S. government’s own debt load. This is why I have been saying for years that rates will never go up. The U.S. government has so much debt it cannot afford to pay a fair rate of interest.

- Source, James Turk via King World News

Wednesday, December 30, 2015

Credit Market Carnage And The Big Surprise For This Week

“We have finally reached that moment, Eric, when the Fed will announce whether it is going to raise U.S. dollar interest rates, which have remained unchanged for seven years. The announcement will be made Wednesday afternoon at the conclusion of the Fed’s two-day meeting…

Through the release of the minutes from the Fed’s previous meetings as well as its numerous public pronouncements over the past several weeks, Fed officials have indicated that rates will rise by 25 basis points (0.25 percent). But there are still good reasons to believe that the Fed will again choose to keep interest rates unchanged with its target Fed funds range remaining at 0-0.25 percent."

- Source, James Turk via King World News

Monday, November 30, 2015

Is The Global House Of Cards Finally Going To Collapse?

After the panic low in the stock market on Monday, August 24, traders were hoping for a “V” bottom, and stocks did bounce back quickly for a couple of days, But since then stocks have not made any progress and are again turning over. This action suggests that August low is going to re-tested. If that low does not hold, there could be a bloodbath.

Sometimes stocks become overpriced relative to their true underlying value, and sometimes we see the reverse. When stock prices are undervalued, the equity ownership conveyed by the stock is worth more than the price. The important point is that most investors do not factor into their economic calculations when evaluating stocks whether the dollar — the measuring stick — is itself overvalued or undervalued.

- James Turk via a recent King World News interview

Wednesday, November 25, 2015

Trouble For The U.S. Dollar

So will the dollar tank and remove some of the selling pressure on stocks? Or will a dollar rally make stocks look even more overvalued and increase the selling pressure?

If history is any guide, I expect the former. For decades the Fed has trashed the dollar in an attempt to paper over declining living standards to keep the U.S. welfare state afloat. Expect more of the same.

For this reason I do not think the air pocket the precious metals yesterday is a reason for concern. Gold in dollar terms is down 4 percent this year, but I expect gold to post a gain this year when the counting is done in three months.

- Source, James Turk via King World News

Friday, November 20, 2015

The Tide is Rolling Out

This downtrend in the dollar has been underway for months. The dollar has been moving lower since the U.S. Dollar Index hit 100 early this year. It also topped out last month around 98 and has been unable to rally back to those previous highs. The tide is rolling out.

The stock market has also been giving us sell signals. For example, the Dow Jones Industrial Average broke below key moving averages last month and has not produced any meaningful rally. These are negative signals.

Since the 2008 collapse, we have seen this action in stocks and the dollar before. In those instances the Federal Reserve saved the day for the dollar and stocks with QE programs and other schemes that pumped newly printed dollars into the system. But this time is shaping up differently.

The Fed has not done anything of substance — at least not yet anyway. The rising selling pressure in the stock market is the result.

- James Turk via King World News

Sunday, November 15, 2015

Is The Global House Of Cards Finally Going To Collapse?

“These two markets are of course inextricably interrelated. We price the Dow Jones, S&P 500, and, for that matter, every individual stock in terms of the dollar. The dollar is the measuring stick by which market participants state their individual subjective view of the value of every stock. But valuations are less important now than the need for liquidity.

Because of all the leveraged bets, investors have had to sell stocks to keep their heads above water. But with prices in Asia heading lower to begin this week, a global slide in prices is the result.

It is noteworthy that the dollar fell yesterday along with the stock market. We are seeing a rush for liquidity as stocks head lower, but yesterday’s weakness shows that the dollar is losing its position as the currency of choice."

- James Turk via King World News

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