Few more weeks passed since our last publication and there are more signs that USA policies in part Keynesian polices in general do no work. One wonders, how would the Keynesian policies work for masses when Keynes himself admitted that to inflate (to print money, FEDs job ) is to steal, "in a way that not one in million people understand". Yes, Keynesians paid Courtyard Economists ( which includes all NOBLE Price winners in this field and some more) spew in your face all kinds of theories, all of which come down to allow such theft, confiscation by the part of SOPITALISTS( Currently Democrats and Unions, other part, of course is Bankers, Republicans Courtyard Media, Multinationals, Foreign Powers etc.) to take place.
In the end ordinary citizens are left defrauded and enslaved, as their power to affect the distribution of national wealth is near ZERO. One wonders, how did person manage to be liable for 200000 when he had never borrowed penny and never taken penny from Government. Of course, The Government tells them, "we have borrowed for you". Ok, and I have few bridges to sell in NY City for cheap (:- This positive feedback loop of Democrats confiscating to transfer to Unions and Unions Spending to keep the Dems ( party for them) going is getting louder and louder and will one day explode as all unchecked positive feedback loops do ( please, remember we never liked Reps doing same either).
Meanwhile, as YBR-Yellow Brick Predictor depicts in the chart below the good times seem to have come to an end. The second chart shows the YBR performance over last 4 years. Portions of it have been published at this site of http://www.safehaven.com many times in the past. YBR is not a curve fitting system. On the contrary, it is forward looking graph, that predicts what the stock market is going do in the future( we can produce YBR prediction for years and decades ahead). Now, the nice by product of stock market predictive abilities coming from YBR, is the ability to predict other markets. YBR/WBR were able to predict the OIL decline and EURO currencies( EUR,GBP,CHF etc.) decline due to the tight (anti) correlations between the markets, lately. Within last few weeks larger YBR picture has also followed the predictions flawlessly.
Definitions AHAP (Annual High Attraction Point), ALAP (Annual Low Attraction Point)
OIL THEN: Last time we said.
We believe OIL markets have not too much upside left. If the markets are going to roll down soon then the OIL will follow. Being a tax collection tool though, Manipulations may last to keep the prices high and more taxes collected as Government is hungry for money. The AHAP1 and AHAP2 resistance (reserved for subscribers)
Not much to add this time as the OIL stocks got decimated and Oil itself lost close to 20% from the highs. Will rebound some as YBR/Market does.
GOLD THEN: Last time we said.
It has entered another surge recently, but we do not believe it will run up too fast too far this time. It will do so in the months and years to come, but this current rally, is probably within the context of a wide-ranging trading market for few months to come. AHAP1, AHAP2 resistance (reserved for subscribers)
GOLD NOW: Again, Little to Add, except the high was, repeated, even exceeded by a dollar or so, which leave everything as outlined before, but perhaps makes gold vulnerable, especially next few days before the end of this month.
BONDS THEN: We said last time.
While the stock market are likely to turn down, the FED will keep fighting the decline at all costs and that means more and more money printed, which will undermine the confidence in government bonds here and everywhere. We think 4.3(AHAP1) is likely on 10 year notes by JUNE, Most likely, because "the powers" will turn "EURO death" promotion into "USA death" promotion by then.
BONDS NOW. It was obvious that had the POWERS succeeded in their nonsense that Dollar is a strong currency and EURO must go down. I was contradicting my own CURRENT correlations in the market (stocks down bonds up and currencies down). I expected and still expect, working on timing, for the paradigm change, whereby this current correlation will change to one where Stocks, Bonds and Dollar (US) will all go down, devastating an US investor (nowhere to hide). But paradigms take time to change and we are patient and monitoring our APs for signals that it happened. For now USA stocks have declined in EURO terms, so we do see the initial faint signs of that paradigm change to come. Our subscribers know what to monitor and how to execute the tactical transition when it comes. I still believe that Anti EURO promotion was all made up by Wall Street Hedgies. Still, fundamentally, EURO had to go down due to the overvaluation and need for EURO exports to restart. Unfortunately, in the process, USA big multinationals are getting killed. You can chose your poisons, but they are still that (poison).
DOLLAR THEN:we said
Dollar index is 54% tied to EURO, so we may as well talk about EURO when addressing the DOLLAR. The Wall Street and their helpers made big efforts to try and bring the EURO down. EURO governments did not mind either, as the cheaper euro is likely to restart the EXPORT machine of GERMANY/FRANCE and improve trade for other EURO countries. So, we take contrary view and think that EURO may have bottomed at 1.3150=AHAP1 as we have long projected for possible low. There are projections lower, but went long at the ALAP1 and are profitable with stops break even or better.
DOLLAR NOW: Dollar is now close to fairly valued against EURO, but take out EURO and Dollar has, actually not rallied much at all since late April( where we had initial top for Dollar at AHAP1 (82.50 +). Since then Dollar has moved strongly to AHAP3 and higher (87.50 +). This just shows the power of Wall Street Establishment, when they want something to happen. Nevertheless, we patiently give the markets test at all/every AHAP and see where they prove that turnaround. We think we are close, but again, it is not what we think, but what we do. We know how/where to test the markets. So, while Dollar over all rise is a mirage, its rise against EURO is not. It served us well to be invested in SGD and KRW along CHF even when Dollar was in the rally (:- ! Always check out the trees when going to the forest, that would be our advice.
All in the spirit of the greatest 12 century GEORGIAN poet and philosopher Shota Rustavely who said:
"You find what you give, all else is lost"