Previous articles and posts of interest.
First, for all you right minded wording detectives out there, you are absolutely right... inflation is not rising prices and deflation is not dropping prices. Also, deflation is not two…
"History shows again and again how nature points out the folly of man" --Blue Oyster Cult, Godzilla I would have written off the gold sector long ago in its ongoing…
Originally posted at Biiwii.com; thought I’d pop it up here as well.
Below is a summary of some of the aspects we follow in NFTRH to gauge a future investment stance on the gold sector. It is much more complex than simply hearing dogma that seems to make sense and then holding on for dear life…
Here is this morning's pre-market NFTRH subscriber update reproduced publicly, with my compliments for anyone interested. I did not want people to fall for yesterday's bounce in the gold sector. …
Excerpted from this week's Notes From the Rabbit Hole, NFTRH 314: Our view has been that a stronger US dollar would eventually start to eat away at corporate results, especially…
After one of my cynical posts finger pointing at a Fed talking head (in this case Janet Yellen) and answering her absolutely flawed rationalizations for the masses line by line,…
Here is some feedback a republished post of mine (Market Summary; Saturday Morning Cartoons) got at a leading gold website from a reader. "The other support has been the very…
So am I and so are most decent people. So bravo Janet, you are a decent person. You are greatly concerned about inequality in this richest nation on earth.
Yellen says she’s ‘greatly’ concerned by rising inequality
Now let’s work the details…
“It is no secret that the past few decades of widening inequality can be summed up as significant income and wealth gains for those at the very top and stagnant living standards for the majority,” Yellen said in a speech to a conference on inequality sponsored by the Boston Fed.
It is also no secret that manipulating short-term interest rates toward zero kills regular peoples’ ability to save. It creates and furthers a wealthy investor class directly at the expense of the public, who have traditionally been savers.
The title's quote is one of many eminently quotable messages I had the pleasure of receiving over a few years of contact with a late, great and a very interesting…
Excerpted from the September 21 edition of NFTRH, #309, which went on to do extensive technical and macro work across all the key markets…
Last week we noted that Uncle Buck would be front and center in the analysis, not because the strength in the (anti-market) currency was not expected (it was), but because our big picture theme of an ongoing economic contraction had remained intact (ref: gold vs. commodities ratio) over the long-term.
It is important here to remember that NFTRH would only be on its big picture macro themes as long as indictors implied they are still viable. I will be damned if I will let us follow a Pied Piper off an ideological cliff, no matter what readers (including me) might want to hear. We must dedicate to know what is happening, not what our hopes, dreams, egos, etc. think or worse, hope will happen.
No matter the debates over inflation vs. deflation, increasing employment vs. sound monetary policy or systemic health vs. fragility (and whatever else is flying around in Jackson Hole this week), the CPI marches onward and upward. That is the system and it is predicated on creating enough money out of thin air while inflation signals are (somehow) held at bay.
The Straw Man* in this argument lives in the idea that inflation is not always destructive, that inflation can be used for good and honed, massaged and targeted just right to achieve positive ends to defeat the curse of deflation that is surely just around the next corner. Currently, the Straw Man is supported by the reality of the moment, which includes long-term Treasury yields remaining in their long-term secular down trend.
Indeed, right here at this very site was displayed much doubt about the promotion having to do with the “Great Rotation” out of bonds and into stocks (i.e. that the yield would break the red dotted EMA 100 this time). We noted it right at that last red arrow on the Continuum© below. Now, with commodity indexes right at critical support and precious metals not far from their own, the time is now if a match is going to be put to that dry old Straw Man and silver is going to out perform gold, inflation expectations barometers (TIPS vs. unprotected T bonds) are going to turn up and the Continuum is going to find support.
Outside of the sound practice that is physical gold ownership in a time of monetary gamesmanship, the precious metals sector is all about speculation, at least according to 9 out of 10 chart jockeys and momentum junkies micro managing every short-term twist and turn.
Indeed, NFTRH manages gold, silver and the gold stocks on down to the short-term views as well, but that is only because the long-term views have stated that this is a time to be paying attention. Do we pay attention because we have waited so long to promote our orthodoxy and finally be right as gold bugs? No. We pay attention when a chart tells us to pay attention.
While we manage the shorter-term views (both macro fundamental and technical) rigorously in the weekly report and interim updates, here I’d like to dial out to the big monthly picture with 3 large (click to expand as needed) charts of HUI, Gold and Silver to see their stories, which are the reasons we are managing shorter-term views.
HUI Gold Bugs Index
First HUI monthly reviews the warnings to the analysis from 2012 and 2013. They were very clear and should have kept people out of much of harm’s way with respect to gold stock speculation.
Sorry, I could not resist the title. Gary Shilling, an economist whose name I have heard over the years, has quite a body of work often revolving around Fed policy, GDP and deflation. The reason I looked into Mr. Shilling is an email from an NFTRH subscriber linking his thoughts on a coming boom…
The Boom is Coming, and Sooner Than You Think (July 18, 2014)
Okay, an economist and Bloomberg columnist thinks this is a boom (actually it is; we are after all in the age of Inflation onDemand © and a Boom/Bust cycle; currently in a cyclical boom concentrated in stocks). Let’s see what he thinks…
[ed: Excerpted from NFTRH 301’s opening segment. Those looking for paint by numbers directions and casino game instructions (talking to readers at a certain site that may or may not re-publish this article) feel free to just skip the article. You will not get what you are looking for. The balance of NFTRH 301 did the nuts and bolts technical work on the relevant US and global markets, precious metals, currencies, etc.]
[edit 2] Based on reader feedback from another site, it appears I do not understand inflation, nor that gold’s purchasing power is superior to that of the USD over the long term. What I take from this is that if you post anything positive (like USD’s ‘price’ potential) about the buck and/or negative (like gold’s price vulnerabilities) about gold certain handbook carrying people in the gold ‘community’ are going to lash out first, and read/consider second. In other words SSDD.
Take a look around the gold bull landscape and tell me how many of them are featuring a chart like this, showing the US dollar in a bullish short-term stance (to go with the weekly bullish stance we have noted for so long in the ‘Currencies’ segment).
This is not to say that the US dollar has real value. How can it when it is hopelessly dragged down by a national debt-for-growth obsession. But as with gold, value is one thing and price is quite another. It is just that one (USD) receives a price bid due to a ‘nowhere else to hide’ sort of mentality by the majority when asset market liquidity becomes constrained and the other (Gold) receives a more solid value bid, over time.