Tag Archives: National Health care

May 19 2017

Gold & Euro & Dollar


Armstrong Economics Blog/Euro €

Re-Posted May 19, 2017 by Martin Armstrong

QUESTION: Marty; You said gold was still vulnerable in dollars but that the low was probably in place in Euros. I have been trying to reconcile that statement in my mind. The only way that happens is a real crisis in Europe and a strong dollar. Correct? It seems really naive that people get bullish on a few weeks of price movement and predict the next 10 years. The dollar first is week with Trump and bullish euro for Macron? Right?

Thank you for a lone voice in the wilderness of analysis.

OT

ANSWER: Yes. Just compare the two chart patterns. Notice that gold in euros bottomed back in December 2013 compared to December 2015 in dollars. The numbers will not come down unless gold makes a new low in dollars. Then the breakout will drop from the 1362 level. Just looking at gold in euros exposes the real trend.

The fools keep saying see the euro rallies and the dollar declines so I have to be wrong. The European Central Bank is the one at risk of collapsing. Draghi bought 40% of all Eurozone debt. He raises interest rates at his own balance sheet takes the hit. This fool is really in trouble and then you have Germany turning against the Draghi. Neither the Fed nor the Bank of Japan are in such a dangerous position.

The perpetual dollar bears cannot see the light. Just how is the world economy going to crack with a lower dollar? They look at the dollar as if it is a SHARE PRICE up is bullish and down is bearish for America. Currency is the opposite of share prices. The higher the currency, the greater the deflation and the lower the economic growth. They never heard of “competitive devaluations” or currency wars. Every crisis has come with a rising dollar. The solution was a dollar devaluation as Roosevelt did in 1934. They look at everything backwards and that’s why the lose a fortune consistently buying highs.

Here is the CAC40 of France. The high in the French stock market is 1999. Yet everyone is cheering as if the US is down and Europe is the new wonderland?

Compare the German stock market in euros and in dollars. It has finally made new international highs only in 2015. We have to look at everything from a global perspective. The new highs in the Dax in international terms is ONLY because of the decline in the euro. With the bounce in the euro, the Dax will rally in euros, but only to a point.

A spike up in the dollar can be achieved from political chaos, but also geopolitical. Only a rise in the dollar will break the system and end the dollar as the reserve currency. The debt crisis we face is building and with higher interest rates, then there will be the risk for major loses overseas and capital will contract once again. It was the US capital outflows that rebuilt the world. A lower dollar encourages overseas investment. A higher dollar causes a contraction.

Only a total idiot forecasts the long-term by one month worth of price action. We need these fools to make the trends. Somebody has to buy the high and sell the low. This entire political-geopolitical mess us starting to bubble up. Why are two Republicans, McCain and Graham, acting as Trump’s worst enemy trying to destroy the Republican Agenda? They are being paid by their lobbyists to protect the corrupt establishment. They are against their own Party and should just join Hillary on vacation. Oh that’s right. They have the same backers. Graham’s number one contributors are law firms really on behalf of their clients to hide the source of the money I believe.

Categories: Euro €, Gold, USD $
May 19 2017

Gold & the False Move


Armstrong Economics Blog/Gold

Re-Posted May 19, 2017 by Martin Armstrong

QUESTION: Dear Marty, could the current ongoing deleveraging in China cause Gold and Silver to fall beneath 1000$ (Silver under ?) or is this currently no big deal what`s going on in China? Keep up the good work!

Best regards,

B

ANSWER: There are so many fundamentals out there is hard to predict which one causes what. Combined, they are all a nightmare. What is essential, is if we are going to really rocket up in a major phase transition, you MUST always have the false move first. These are just minor swings creating the false move which is always counter to the ultimate trend. To swing down under the December 2015 low will cause people to capitulate and then you will make a run and swing out to new highs.

With the stock market crash into 2009, this was the PERFECT storm, which was a FALSE MOVE. Even Barrons as last of 2011 ran a story saying tongue in cheek how I was forecasting new highs. They thought it was a joke. That’s because these people have never been traders or students of the market. The chart patterns are always the same regardless of the instrument because you are plotting human emotion – not really that instrument.

The most powerful move up for gold requires a false move of a slingshot proportion.

May 18 2017

Mutual Funds versus ETF’S


Armstrong Economics Blog/Basic Concepts

Re-Posted May 18, 2017 by Martin Armstrong

 

People are waking-up to the fact that they can substitute the expensive Asset Manager fees by doing it themselves. There are many ways but here we distinguish between Mutual Funds (MT) and ETF’s (Exchange Traded Funds). When buying into a MF it is via a company such as Blackrock, Vanguard, State Street etc. and they either execute the trade themselves or via a brokerage company. You are then part of a pool of money that tracks the underlying performance of the asset class. You are priced at the net asset value of the fund at the close of business that day. There is a bid/offer spread to the fund and typically a holding period with penalty for early redemption. ETF’s on the other hand are similar to a single name stock/Index/Municipal Bond etc. are traded directly on the exchange but bears no holding period. ETF’s attempt to track the net asset value of the underlying and are typically following an index; such at the S+P. One key difference is the cost – ETF’s are usually a lot cheaper to trade but on the other hand can be considerably riskier.

The growth of this type of self-investing has been huge. At the end of 2016 it is estimated the global ETF market was around $2,775bn (ICI data) with over 1,700 ETF listed. There are also rumoured to be around 79,000 Mutual Funds in the world, with just 7,900 in the Sates. However, much of the market size is dominated with in the US accounting for over 60% of the entire market value.

Growth rate into MF and ETF’s has only just stalled (in the US) but that could be because the US has such a dominant role and if considering the level of the overall stock market. Assets roughly stand around $16trn having been rising by over 12% pa since 1965 (according to Investment Company Institute). Although we are seeing a levelling-off in the US market we continue to see growth for less developed market and especially in Asia. The growth in India, for example, it is reported that Asset Management Companies grew AUM by 30% (reported by Value Research) over the past 18 months.

There could be several factors influencing recent trends. The mainstream players are facing a contracting market. This could be due to the absolute level (contract highs) and competition on fees. Clients are also becoming more financially aware, millennials are more socially astute with technology playing a huge role but also local emerging market players have started to reclaim their markets. This could be one of the reasons why GIC (Singapore sovereign wealth fund) is offering 2.4% stake in UBS; because of the increased competition from local funds in their own domestic market. UBS currently plays a dominant role within Asia for wealth management so it should not be a surprise that local companies are making a play to regain lost territory.

Categories: Basic Concepts
May 17 2017

Stock Market Crash?


Armstrong Economics Blog/Dow Jones

Re-Posted May 17, 2017 by Martin Armstrong

The correction has begun with the uneasiness of the two political scandals surrounding Trump – Russian meeting and now a Comey memo saying Trump asked him to kill the investigation into Flyn. The first is not really an issue legally, but the second could fuel the quest to impeach Trump which is really led by McCain and Graham behind the curtain in league with Schumer. McCain is already calling this a Watergate demonstrating he is out to get rid of Trump and protect the establishment.

The impeachment of Trump is being talked about behind the curtain as a positive move for then Pence would take up the Presidency and then the tax reforms would become possible. That is an interesting twist on things.

We are showing choppiness for three months and big volatility its in August. The likelihood of getting any tax reform now before the August Congress holiday is fading very fast. This is taking the icing off of the Trump rally. Forget the infrastructure expenditures for that is matching funds and states will just raise taxes for that one which is detrimental not bullish other than from the companies who will overcharge government fix stuff.

The Daily Bearish Reversals in the Cash S&P500 lie at 237900 and 234450. A Weekly closing below 233500 will tend to warn a serious correction becomes possible.

The fact that the Dow has been unable to make new highs and the Global Market Watched on the monthly level labeled April when it closed for the month as IMPORTANT HIGH. Our Capital Flow Models models are showing that there has been some European selling of equities, which is the reason the Dow has not followed the S&P500 or the NASDAQ. There has been a flight to quality moving into the US Treasuries, but also the hot money has been selling the dollar after the French election. Here we still see a Weekly closing below 20000 will confirm a more serious correction. The Daily number remains at 20204.

The NASDAQ shows a daily closing below 610750 will signal that a temporary correction is possible.A Weekly closing below 580500 will confirm a serious correction is possible.

The Global Market Watch classified the April high in the Dow as a Possible Important High. That should not be ignored. If May closes lower than April at month-end on these three indexes, that will confirm the correction. We do see the possibility for the correction to extend into 2018 from which a slingshot to the upside remains probably.