Economy Turning Down
While Wal-Mart turned down, all retail sales are off significantly and we will see this on a wide scale basis and this will be the “fundamental” behind the decline and fall of the US share market into the weeks ahead. Ever since the ECM turned, the share market is slipping. With the crash in retail sales taking place, the domestic analysts will see only a bear market and economic recession. Indeed, it may “feel” like 2007 to many. This is similar to the “feel” that the British had in 1985 as foreign capital started pouring in when the pound fell to $1.03. The Brits thought the real estate market was over priced whereas the foreigners saw it like a sale at Harrods.
We should see the Dow drop into next week. The ideal target will be Monday. Support is 148250 and 14805. The next area will be 14450. We should start to see volatility rise the last wee of August into the first week of September.
Money had NEVER been Tangible! Period! If you do not understand what money is you will lose your shirt & more
COMMENT: “Money will no longer be tangible? Declaring that the tangibility of money is dead will not make it so. Goods will always be tangible and must be traded, bought, sold in with some kind of accepted tangible commodity — be it seashells, beads, or gold and silver. As you mentioned, paper money, when accepted, was always backed by such tangibility. Granted that governments have debased such currencies, but at least a feedback system was in place to counter that. You frequently quote history — but never in history has anyone knowingly traded something real for something that is not. It just hasn’t happened and will not happen.”
ANSWER: Money is simply the medium of exchange and a unit of account. It is not a tangible asset that always retains value and never has been. It fluctuates in value rising in depression and falling in purchasing power. When gold was “money” it rose with economic declines and declined in value with inflation. It acted no different! Anyone who keeps saying this nonsense that money must be “tangible” and never lose its value is trying to eliminate the business cycle as did Karl Marx and that is communism. Get over it. Understand you cannot have your house rise in value yet “money” still retain some mythical tangible wealth. Perhaps in the land of OZ, but there in no such historical period that anyone can point to.
While you have waited for this TANGIBLE rectification, in 1980 gold was $875 and the Dow was 1,000. The Dow rallied to almost 16,000 and gold could not exceed $2,000. It would seem to a reasonable person that 33 years is a long time to keep saying you will be right while refraining from investing. If you bought Detroit bonds in 1930 because “government debt” was safe compared to the risky stock market, when they suspended all payments, yes they eventually made good in current dollars only in 1963. If you were 60, that was 33 years to waiting and you still lost due to inflation.
China had intangible money for thousands of years. In Europe, they may have used tangible objects for money but that means nothing. WEALTH is measured in money. It is NOT money. Nobody in their right mind would hold cash as an investment earning no interest. It depreciates in purchasing power over time regardless what it is. Explain how China used paper money from the 13th century and even when the Mongols seized the Chinese Empire, they accepted the paper money that already was circulating without devaluation.
Explain how Egypt had warehouse deposit receipts for grain that circulated as money for thousands of years until Alexander the Great conquered Egypt and introduced coins?
REAL money defined as the productive capacity of a person is simply that. You work and your productive labor is the real VALUE you exchange for the medium of exchange and accept whatever it might be ONLY because someone else will accept that.
We have intangible money right now. The actual paper currency is less than 10% of the money supply. You have bank statements that are simply electronic entries. REAL wealth is purely assets that can be real estate, stocks, or gold (since it is not money). You say Donald Trump is rich because you see all the buildings with his name. You do not see MONEY for that is simply the unit of account by which we measure things like a yard-stick.
Do not confuse assets with money. MONEY has always been intangible. The wealth of a nation is not its gold reserves, but its people and their total combined capacity to produce something of value be it agricultural, manufacturing, or services. That is whatever someone else is willing to pay for.
The root monetary system is barter and that will always be the case. I will do this, if you do that. MONEY emerged like a language. If I wanted a cow you had and I had corn, we strike a deal as long as we both have what the other wants. When that does not happen, we now need a third party to enter the transaction and hopefully he has something you will take for the cow and he need my corn.
MONEY became simply a medium of exchange. Something one person would accept ONLY because he knew others would accept it from him. That facilitated trade. Whatever that object might be as long as the majority accept it. Regardless what you think that money has to be gold, tell that to a kid buying coffee at Starbucks with his cell phone they scan. The world has changed. What use to be is no more.
To say money has always been tangible is absurd – not true, and a great distortion of fact. What is the problem? If you keep this nonsense up spun by gold promoters, it is like saying this used car is better than that one because a little old lady drove it. Where’s the proof?
Gold will rise in value because it is an INVESTMENT – not because it is money. Keep believing this propaganda and you will lose everything. It is like the guy stand on the roof of his house in a flood. The water keeps rising and he is praying for God to save him. A large log comes floating buy and bumps into the house, but the man ignores it waiting for God to save him. Then two people come by in a row boat and say jump in. He says no, he is waiting for God to save him. Then a helicopter comes and throws a harness down but the man refuses and says he is waiting for God to save him. The water rises and man drowns. He then sees God and complains, I prayed and prayed for you to save me. Why did you ignore me.God says, I sent you a long, then a boat, then a helicopter. How stupid are you?
Market Recap Week of 08-12-2013
U.S. stocks had the biggest one-day percentage drop since late June yesterday in a higher-than-average trading volume after poor results and outlooks from Dow components Wal-Mart and Cisco. Wal-Mart earnings were $1.24 compared to $1.25 expected. So we are not looking at a dramatic impact. Nevertheless, when the cycle points down, even good news is never good enough.
Consumer and technology stocks were among the biggest decliners and Cisco Systems shares fell one day after the network equipment maker announced it was cutting 4,000 jobs. The CBOE Volatility Index <.vix> spiked for the day, but was still below 15 rising nearly 12%t to 14.55.
Inflation ticked up with consumer prices rising broadly in July as new claims for jobless benefits last week fell near a six-year low, These are factors that would traditionally lead the Federal Reserve closer toward trimming its $85 billion monthly bond-buying program to stimulate economic growth.
The Dow Jones industrial average was down 225.47 points, or 1.47 percent, at 15,112.19. The Standard & Poor’s 500 Index was down 24.07 points, or 1.43 percent, at 1,661.32. The Nasdaq Composite Index was down 63.16 points, or 1.72 percent, at 3,606.12.
We still see this week as a possible temporary low. The first Weekly Bearish lies at 14805 so there is no danger right now of a serious sell signal. A Weekly buy signal would unfold if we saw a closing above 1537600 today. The next minor turning point will be week of 08/26 followed by 09/09. We should see high volatility after Labor Day.
In gold, we need a closing above 1388.50 to keep the upward momentum. Some closing support lies at 1353.60 while the resistance is building at 1398 level. Support next week begins at 1336-1339 so we need to maintain a closing above that today. Next week is the turning point whereas this week may be the highest weekly closing.
This was the target week in silver the computer has been projecting as illustrated above. The closing resistance stands at 2345 for today. A closing below 2295 will most likely warn we have a high in place. The major weekly resistance stands at 2882.A high this week may be followed by a low the week of 09/09. September is still a target followed by the Dec/Jan target.
The Euro still has the major resistance at 13432 area whereas we have reached the 13399 level on 8/8 in line with the ECM. A daily closing back below 13232 will shift the euro back to a negative position, but there has been merely sideways churning for weeks buying time. A closing below 13309 today will warn that the upward momentum is starting to be lost. The turning points will be the weeks of 08/26-09/02 followed by 09/23. We still see September as the main turning point with a minor in November and the next major turning point will be January.