This is a dig at those who think my articles may seem a little “off” because I report what I see and not what I make things up to be. Case in point: All we heard throughout the holiday season is that it was record-setting. That was based upon credit card debt being added. Back then, I was writing (right here!) that the holiday shopping season would be a bust. Today Fox Business confirmed that I was correct and that “US Sales post biggest drop in 9 years in December”. Who was a “little off” the financial game shows or me?
The stock market continues to rally even though, according to Bank of America $515 billion has been withdrawn from US stocks by individual investors in the last 2 months. How could that be? Supply and demand says when demand is up (money going IN) prices rise. When demand is low (money being withdrawn) the price goes down. Obviously, something else is at work here. It was reported on Zerohedge that corporate share buybacks are running 78% ahead of last years record pace of over a trillion dollars so that may be part of it but that would NOT make up for $515 billion being removed. My guess is that central banks, and their owners, the largest private banks are buying and propping up a market that appears to be dying to discover true value. Can’t let that happen!
Some other sobering news in the headlines:
According to Bloomberg:
- Industrial production across the 19-nation Eurozone is “falling at the fastest pace since the financial crisis, and deteriorating demand is evident as the region finds itself squeezed between international and domestic drags” (December -0.9 from November and the steepest annual decline since 2009) This while there are still extremely low and in some case negative interest rates, purchasing of all sorts of government and corporate bonds and even stocks to keep the economy humming. Uh-oh!
- S&P forward earnings expectations are collapsing
- The Baltic Dry Index (Cost of shipping goods in large container ships) has collapsed from over 1200 in December to under 600 today. This shows a lot of excess capacity and NOT enough freight moving to support higher prices.
- Treasury receipts move LOWER for the first time since Trump’s election. WOW! With all of those new “jobs” and the economy hitting on all cylinders isn’t it a bit odd that tax receipts are turning lower? You can make up a lot of numbers but this one is telling. You can’t fake what is coming in. Not only are corporate taxes lower but individual receipts are down 3% year over year.
- NFIB (National Federation of Independent Business) confidence has DROPPED 5 months in a row- the largest back to back losses since 1998.
- More cash is being held by investors than at any time in this century other than the 2008-09 collapse. (BOA Merrill Lynch)
- US hotel occupancy rates have stopped growing for the first time since 2014. (STR forecasts)
- The probability of a Fed rate hike in 2019 went from 90% likely in December of 2018 to 0% today (Bloomberg)
The economy is SO strong that a .25% rate increase may send it reeling.
With all of this information so readily available I can’t imagine why so many tune in to find out from “experts” whether “is now the time to buy?” It always is on the financial game shows!
I do have to give some credit to Jim Cramer however- he has mentioned that gold would be a good thing to have going forward. Many billionaires, central banks, large commercial banks and countries are agreeing with him.
Just like $515 billion being taken OUT OF US stock markets and they are rising, MORE perplexing is that gold and silver are being purchased at record levels by Central Banks, Countries, and commercial banks and yet has not risen meaningfully yet.
Countries may have bought thousands of tons last year, central banks bought 615 tons last year, production is flat and yet the price goes nowhere. As Dr. Paul Craig Roberts (Former Assistant Treasury Secretary under Ronald Reagan) said “The only way you can have increasing demand and supply stays the same yet the price goes down is fraud”. I agree.
Those same people propping up paper assets with more paper debt are keeping gold and silver from rising using the same futures scheme that they have used to knock bitcoin from near $20,000 to a little over $3000.00. This is why I was able to, with some certainty, predict bitcoin’s fall a few weeks prior to it happening. There was a futures market established. I am only guessing here but I believe they sell “bitcoin” that is actually a paper facsimile of bitcoin into the market to keep the price suppressed. Since I don’t follow bitcoin I can only guess that they sell naked short positions when trading is at its thinnest with a market order to ensure that the price falls. I DO watch the gold market and see this game on most days.
My point here is that you are being programmed with propaganda in my opinion to make sure that you don’t know the real status of our economy, our debts, our unemployment rates- anything that might clue you in that things aren’t that great and are disintegrating at an accelerating pace across the globe.
Don’t worry about the wars in the Middle East, don’t worry about riots and killings everywhere- worry about someone who pulled a stunt and wore blackface 30 years ago or about who was offended by an off-color joke. Which can change your life- a hurt feeling or a sudden change in what you may have to do to maintain your lifestyle. FAKE NEWS?- You bet!
Look beyond the headlines and … Be Prepared!
Mike Savage, Financial Advisor
2642 Route 940 Pocono Summit, Pa. 18346
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