Friday, October 31, 2014

"The Most Important Chart For Investors" Flashback, And Why USDJPY 120 Is Now Coming Fast

Back in late September, we posted what Albert Edwards thought at the time was "The Most Important Chart For Investors" which was quite simply, a chart of the USDJPY.  Considering the BOJ's overnight move, he was absolutely correct. So for all those who missed it, here it is again, because it explains not only where the Yen is headed next, but why, sadly, this could well be the end of Japan and the mirage of a recovery that has had everybody hypnotized for the past 6 years.

The Story Changes: Ebola Is Now "Aerostable" And Can Remain On Surfaces For 50 Days

When it comes to Ebola, the story that the government is telling us just keeps on changing.At first, government officials were claiming that it was very difficult to spread the Ebola virus. Some of them were even comparing it to HIV. We were given the impression that we had to have “direct contact” with someone else’s body fluids in order to have any chance of catching the virus. But of course that is not true at all. Now authorities are admitting that Ebola is “aerostable”, that it can be “spread through droplets”, and that it can remain on surfaces for up to 50 days. That is far different information than we have been getting up until this point.

FEMA Pandemic Exercise Series



Paul Craig Roberts: Dysfunctional America

If you require more evidence that the United States is a dysfunctional society, observe American elections. Election season is slander season. Each party’s attack teams focus on misrepresenting, defaming, and ridiculing the opposing party’s candidates. Attack ads have replaced debates and any discussion of what the issues are, or should be, and how candidates perceive the public’s interest. Each attack team tells lies designed to enrage various voters about the other team’s candidate.


Forty-Two Plutocrats Have Funded More Than a Third of All Super PAC Spending

Here’s one more reason not to use your iPhone’s fingerprint scanner

How Americans fare on the ignorance index

Do you think you’re better informed than your fellow countrypeople? Take the perils of perception quiz and find out how you stack up across a range of issues.


Dow Jones – OMG – A Possible Sling-Shot Move?

DJIND-D 10-31-2014

We closed right on our 17195 target and then the Dow closed above 17143 providing another buy signal yesterday and that warned of a move further to the upside. Especially when we fell right to the Bearish Reversal at 15960 and held. Exceeding Thursday’s high is a serious issue. We now must realize that exceeding the September high intraday will signal we just may be in store for an awesomeSling-Shot Move to the upside – that’s a run-away that takes out the lows and then runs through the highs.
On top of that, we may be making at least a Channel Move and possibly preparing for a Plateau Move. This is all find and dandy to make money in stocks, but it is a devastating signal for a collapse in government and the monetary system that may be an under statement. I am not selling hype so I tend to downplay rather than exaggerate potentials to sell newsletters. The truth is bad enough – I do not need to spin it to sell stuff.
I realize every government watches this blog. PAY ATTENTION for once!!!! This is going to be bigger than you! Think about your family and the future – not just holding on to power today. Tomorrow always comes.
DJIND-M 10-31-2014

Today is the end of the month. At the time of this writing the Dow has reached 17395. Exceeding 17414 - T O D A Y  – will be awesome and closing above that will be VERTIGO-land. Even a closing today higher than September (which was 17042.90) will be a warning in itself we better pay attention here . This makes the minimum target at the 20k level but more likely the minimum becomes 24-26k.
boehner-gavelThe full World Share Market Report will be moved forward. We will try to issue just an interim report on the Dow based upon the seriousness of these events. Next week remains the critical target and it appears that the Republicans may win the Senate and that could be very bullish for sentiment (although in reality nothing will really change). The key would then be the leadership battle in January and getting rid of John Boehner will be the real critical issue. He likes it as is and will NEVER consider change until it is forced upon him.

Burkina Faso In Revolution – Rising Distrust of Politicians

Politicians are all the same no matter what country, color or religion. Once someone tastes power, it simply kills them to hand it back. In the little know West African country of Burkina Faso, protests were sparked by the government’s attempt to push a constitutional change through parliament to allow the 63-year-old President Blaise Compaore to seek reelection next year after holding office for 27 years. Large protests also erupted in Bobo Dioulasso, Burkina’s second biggest town, and Ouahigouya, in the north. The protests turned violent on Thursday and the people stormed Parliament and set it on fire.
Compaore Blaise
President Blaise Compaore first tried to declare a state of Emergency and order the military to defend the government. However, the military dissolved parliament and announced a transitional government would be put in place and did not slaughter the people so President Compaore could hold on to power.
Army chief General Honore Traore said: “Given the need preserve the country from chaos and preserve national unity … the National Assembly is dissolved, the government is dissolved.” The new government would be installed after consultation with all political parties and would lead the country to an election within 12 months. He also announced a curfew from 1900 to 0600 GMT (1500 to 0200 ET).
However, Traore declined to say whether Compaore remained the head of state. Regional West African bloc ECOWAS had said earlier on Thursday that it would not accept any party seizing power through non-constitutional means – suggesting diplomatic pressure to leave Compaore in place. That seems a bit strange for the people have had enough of him and someone else should be appointed temporarily.
This is all part of the Cycle of War. Civil Unrest is rising everywhere because the way government have been run an fiefdoms is coming to an end. Politicians are distrusted even more than Muslims in the West with all the paranoia and that is really saying something. People are not afraid of Muslims in general because of ISIS or terrorists, but they do not trust politicians across the board. WOW – that is a real statement!

Are Americans Ignorant or victims of Yellow Journalism?

Reuters has published the result of what is being touted as theIgnorance Index. The one question as an example: “Guess how many U.S. girls aged 15-19 give birth each year. Go ahead, guess. If you calculated the number at 3 percent you’re correct; if you guessed 24 percent, you’re American.”
I rarely watch TV. If I do, it tends to be national news – never local news who seem to think a burning house is news or some guy shot his wife in a domestic dispute. I was at dinner and the TV was on. I could not believe the TV advertisements for the elections. They are all NEGATIVE calling the other a liar or misrepresenting the facts on everything. One said the candidate cut the number of police, made the streets more dangerous and then shows a picture of ISIS and then said she raise taxes. Then the very next advertisement flips and calls the other a liar for something or another. There was ZEROadvertisement about anything other than vote for me because I lie less that the other liar.
It seems that the Ignorant Index may be more tied to the bias and lack of integrity of the media. They focus on sensationalism to gain readership and in the process focus of one thing and create false images in the minds of the average person.
A classic issue is immigration and Muslims. Americans, according to the Ignorant Index, “significantly miss the mark on the proportion of the population that is comprised of immigrants, guessing 32 percent against the true number of 13 percent. Americans also overestimate the number of Muslims in the population, 15 percent versus only 1 percent in reality, and underestimate the number of Christians, 56 percent to 78 percent. ”
Pulitzer Joseph
It seems as if the problem is not that Americans are ignorant, they are being fed nonsense by the media to sell newspaper and TV advertising. We have fallen into a cycle of Yellow Journalism that was begun by Pulitzer. It was Pulitzer who created the Spanish-American War by making up shit to sell newspapers. The famous Pulitzer Prize given by Columbia University is named after the father of Yellow Journalism – go figure!
One good place to start is OUTLAW negative advertising. COMPELpolitical candidates to state what they stand for rather than calling their opponent a liar. Then if they do not vote for what they profess and knuckle under to party rule, that should be FRAUD and time for a vacation in the “Big House” (Penitentiary named after a place you were supposed to be silent and do penance). We seem to elect people for no reason and then wonder why nothing changes. Obama’s vote for me for real change has been a joke – he kept the same people Bush had in place. This is why polls place politicians at 7% trust factors. The days of Jimmy Carter, Ronald Reagan, and Maggie Thatcher who at least stood for what they believed in regardless of what people thought, are over. They were at least ethical regardless of if you agreed or disagreed with what they stood for in those days.
At what point does revolution take place? It does not appear to be a percentage in our review of history, but the economic trend. In other words, turn the economy down and the percent of discontent rises exponentially. So beware – not ghosts and goblins, but politicians 2015.75-2020. So perhaps Americans will wise up only when the economy turns down and the Internet provides a greater proportion of real news compared to mainstream media. Indeed, the younger generation under 40 rely on the internet and those who subscribe to newspapers or watch the TV news are diminishing rapidly. This in itself will be a dynamic shift that restores freedom of the press and only then perhaps we will see Americans rise in the Ignorance Index.

Deflation – What is the Cause? PUBLIC or PRIVATE?

QUESTION: Hi Martin,

You talk quite a bit about deflation in your comments, especially in Europe.  Can I assume you’re referring to monetary deflation arising from a slowdown in the velocity of money?  Which I’m guessing stems from banks using the plentiful money that’s available to them to purchase government bonds, using 30-1 leverage (as instructed by the central banks) and trading with most of the rest.  

I ask about the type of deflation to which you refer because surely you’re not talking about their cost of living going down, as it’s rising in Europe, the UK and the US.  

If you agree, why the disconnect?  Why does monetary deflation still result in a higher cost of living?

Appreciate all your great work over the years.

All the best, CB
3FACESn of Deflation
ANSWER: There are always different flavors of inflation and deflation. There can be currency inflation where the price of everything rises because the currency declines in international purchasing value, which has nothing to do with supply and demand per se other than a sharp decline in currency valye corresponds to a rise in price that will impact demand eventually.
Here the type of deflation that exists to some extent is in prices, but this is really a side effect. Some prices are declining marginally as people cut profits to try to do some business. This accounts for the decline in cost of living in some areas that are marginal like 0.4% for a quarter that is unnoticeable as a whole. It is the decline in theVELOCITY of money as banks lend less to the private sector without 110% security and but more bonds.
The disconnect has to do with the source of the cause – PUBLIC v PRIVATE. You also get DEFLATION when the rise in the cost of living is not from the private sector but from the public sector. Government consumes more and more of the disposable income and therefore people have less to spend and that will also cause prices to decline to try to stimulate business – albeit marginally. This also results in higher unemployment, decline in job creation, and a rise in business closures as well as bankruptcies.
When the cause emerges from government with rising taxes, people experience a DECLINE in their standard of living. So even if prices rise because costs are rising, it is still DEFLATIONARY for the growth is absent and the VELOCITY declines. Inflation results when there is a rise in DEMAND because people are buying rather than just surviving.
DEFLATION that comes from a cut back in spending that results in hoarding of cash unfolds when CONFIDENCE in the future crashes. The money is there – people just do not spend. This is the presumption that is the single-minded cause in central banks. They constantly fight ONLY this type of DEFLATION and never consider that the cause is something other than a mere collapse inCONFIDENCE – it is a rise in the cost of living coming from taxes that causing a drop in disposable income as distinguished from hoarding. Central Banks never look at the other-side of theDEFLATIONARY coin.