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The Signals Are Clear
Submitted by Alasdair Macleod via GoldMoney.com,
As recently as 9th January I wrote an article suggesting that 2015 would turn out to be the year of the slump. The title ended with a question mark, but today we are closer to removing it in favour of a definite statement.
In recent weeks, it has become clear that key economic blocs are indeed heading for a slump, including but not limited to China, the Eurozone and Japan (allowing for the distortions of her aggressive money-printing). Between them they account for nearly 40% of global GDP. We know this because of the collapse in commodity prices, which is reflected in a global shift of preference in favour of the US dollar.
For the avoidance of doubt, money should be regarded as a good, and each currency as a different good. When this point is grasped, the context of the dollar’s rise against both commodities and other currencies becomes clear. Both commodities and currencies are priced in dollars, so markets are showing that banks, consumers and businesses have been changing their preferences in favour of increasing their dollar balances.
Modern macroeconomics fails to adequately explain the importance of these developments. A quick look at the index in Keynes’s General Theory makes no mention of changes in preference for money versus other goods. It lists and defines liquidity preference which is a different topic. Once you accept money is a good, supply and demand will always balance as predicated in Say’s Law, otherwise known as the Law of the Markets.
Something has spooked consumers in markets around the world into spending less on other goods and to increase their holdings of dollars. The explanation can only be that prices for all other goods have been too high relative to dollars, so they have had to fall. There can be no clearer signal that there is a slump in global economic activity.
The largest source of exported physical goods is China. Demand from other countries for China’s goods is declining, confirmed by the Baltic Dry Index which is plumbing new lows.
This slow-down in economic activity could easily burst the bubble of bank credit, which is in danger of collapsing under the massive burden of bad debts. December’s slow-down in new loan demand coupled with declining trade flows can only be temporarily resolved by China devaluing the renminbi, thereby lowering her export prices. The breathing space this gives China is only as long as it takes for her manufacturing costs to rise to reflect the devaluation. If it occurs, a renminbi devaluation would quickly put more downward pressure on prices for local manufacturers in her export markets.
Turning to China’s trade partners, we see the Eurozone’s economy ex-Germany beginning to contract which is panicking the ECB into money-printing in a desperate attempt to maintain too-high prices. Japan has been doing this for some time, and is labouring under a mountain of debt that makes even Greece look responsible.
The signals are clear: the world has already entered a downturn in economic activity. Therefore we can expect accelerated money-printing and the imposition of more negative interest rates in a forlorn attempt to avert economic reality.
Which might explain this divergence...
* * *
It appears Goldman's GLI is right...
The contraction is here.
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Europe is a total mess. I can only imagine war will spread. The Southern countries like Spain and Greece are only going to become more chaotic as they go against the Troika.
Be well my friends. Love your family and lives. Ignore the politics.
More likely that the sheep are stirring and realizing that not all is well in the land of OZ.
I've said this before. What possessed the Fed to plainly prop up this market. Just let it trade. It'll be OK in the end Mr Yellin.
What are you so fucking afraid of?!
A gallows.
Host just now figuring out that the parasites have all their wealth?
I've got some rope!
Keep buying the dips until the trend chages - Fuck the bad news and Kudos to Hugh Hendry for a) having the balls to turn his back on the fundamentals and b) for going public about it
depends how much leverage you have.
What does?
this too, is bullish
BTFD, bitchez!
The Swirl-O-Gram says to me that numbers have been faked since Aug14 through Jan 14 for the convenience of big fish so that they can get positioned to take advantage of the situation when the 99% are allowed to know the truth. Just sayin'.
The contraction in global GDP will continue for another 15~40 years depending on when the birth rate in developed countries picks up.
Not enough families being started for every person dying.
The economy sucks, young people cant get good jobs because economic demand has contracted / is contracting as the baby boomers start to hit the dirt. . . the largest portions of our population are about to retire/hit the dirt..... if you have x amount of people that equals x amount of demand for economic activity, it stands to reason that when x amount of people stop being alive that economic demand and growth will slow / contract.
The only way back to a road of recovery is to let the monetary system reset/let banks fail so that the numbers (mainly prices relative to wages) go down to what the current level of actual economic demand (not speculative demand by banks fueled with FIAT) would be.
If a 20~30 year old cant afford a house/car/ to start a family, than you are looking at basically every sector of the global economy shrinking until THEY CAN AFFORD TO.
Speculative bubbles fueled by counterfeit bailout money/bank credit etc... in things young people need to start a family is artificially keeping these things necessary for future generations to grow out of reach....
The great irony is, all these speculators keeping prices high are going to eat their own shirt when the shit hits the fan and the proverbial economic rubber band finally snaps back to reality.
Until the warped numbers that were created from fraudulant economics and monetary policy are corrected, nothing will improve and things will get progressively worse for the majority of Americans.
"The great irony is, all these speculators keeping prices high are going to eat their own shirt when the shit hits the fan"
Not true my friend - we can always close our long positions or even reverse them and go short, don't you know
Spoken like a true 'Moron'. Knows when to enter and when to exit. Seems I know a lot of fools like yourself saying the same things in 1999 and 2007 never to be heard from again. You need to see about getting a guest appearance on CNBC. Your arrogance and lack of intelligence makes you uniquely qualified. Good luck Brutus, you're gonna need it!
Some people are traders, others like your good self spend their day's trolling forums, because they are either a) too frightened to pull the trigger or b) lost all their money..
Cheers, for the down vote Loose Louise - I don't give a shit and voted you up in return as I've had a really good week buying dips
<< Speculative bubbles fueled by counterfeit bailout money/bank credit etc >>
Some bubbles - like residential housing, raw land and stawks -- are still seriously in Bubble Terriotry. My old house is still 320% higher then it was in 2004 while salaries have barely budged.
When these Bubbles Blow, it's going to be pretty Fugly, but inevitable. It's the fed's fault and politicians let it happen.
"It's the fed's fault and politicians let it happen."
Bankster & politiions GREED
in extreme situation i really doubt that's possible :
* it'd be too fast & possibly even for an (amateur) algo on a remote server; so a human brain + reaction time + clicking 2/3 times on an app on a slow windows or mac (use linux btw) that connect to a remote server that connect to the markets = a lot of, if not all, your equity is already gone in front of your panicking eyes
* who is going to long your short ? your broker ?
* spreads will be so ridiculouss you'll have no room for volatility to save what's left of your equity; be prepared to pee your pants
* so even if by miracle you're in front of your trader app & your brain is faster than a computer & you're on the fed server & some crazy guy has decided it was time to go bankrupt & took your short & you end up with insanely huge profit in this 30 seconds window that will open; even so you'll still need your broker to survive the hit and to agree to pay you... but then how is he going to pay you if the top currencies have crashed as they are supposed to in a massive hit (like germany post ww1 when people go with suitcases filled with notes to get a piece of bread bread at the bakery) ?
1 000 000 000 * 0.0 =0
I don't know if it's the same for you where you trade, but over here we have "guaranteed stop" losses Hope that helps
lol you're so naive,
promises commit only those that receive them
guaranteed stop on a free fall ? you really believe in that ?
how many brokers went bankrupt on that small SNB annoucement ? how many of them had "guaranteed" stop loss ?
I don't think so sir - All traders here are backed by the Financial Compensation scheme (Check it out)
your broker is a shark that want to eat you, if you trade believing your broker is your friend... the fall will be painful
You really ought to do some research before you type
yeah like who is taking most of the counterpart of the positions retail traders open ?
you do belive all the bullshit you're being fed with everyday by all those liers ?
i can't wait to know who is your broker (for the next laugh)
who is your broker ???
The laugh is on you sucker - I'm telling you the truth and you're too ignorant to hear it.
I told you before, Check out the Financial Compensation Scheme - Here you go, educate yourself you fucking moron and don't forget the apology when you've been proven wrong http://www.fscs.org.uk/
truth is you live in teletubbies world
let me check out your broker instead
[i won't look up your bs insurance because their compensation is in fiat currency & the whole point of the discussion -but you didn't read my first post although you replied, i guess you did the same with your broker & didn't read the small mentions in the terms- is that if markets fall , fiat currency will fall with them & they won't compensate you in physical gold or are they ?]
truth is you live in teletubbies world - Why is it the truth, just because you say so?
let me check out your broker instead - No need, it's the same for all brokers here
[i won't look up your bs insurance - Why, because you're frightened of being wrong because their compensation is in fiat currency & the whole point of the discussion -No it isn't, you're making that up but you didn't read my first post although you replied,No, shit for brains, you go and check, you'll see you replied to my post first i guess you did the same I can see you do a lot of guessing with your broker & didn't read the small mentions in the terms- is that if markets fall , fiat currency will fall with them & they won't compensate you in physical gold or are they ?] Educate yourself "shit for brains" and quit trying to dig yourself out of a hole http://www.fscs.org.uk/
i'm not the one getting angry, nor the one becoming vulgar & making it personal through poor insults (that tells much more about you as a matter of fact)...
i do have compassion for you however
you know the stages of the acceptance of truth ? (research shopenhauer or gandhi... but eh you have no clue about history so you probably don't even know who they are)
your first post was how you're so smart you cut your long & take a short at the time of the shtf;
then you change your stance to "but my broker has guaranteed stop loss, i don't risk nothing" which is admitting your first post was bs and completely unrealistic.
last but not least you insist on proving you don't have a clue, as all your self-confidence in the markets & your power to create proft entirely relies on the hypotheises that the broker & the insurance are your friend.
the fall will be tougher as you, i tell you again, have not planned that it could happen.
you win until you lose is your motto
any experienced trader will confirm that only the opposite has long term viability :
you lose until you win
good luck man (& i sincerely hope you're not playing enough to put your family at risk)
You know nothing about me yet you claim to have me all figured out - That makes you plain arrogant, so I name you arsehole affectionately for my own amusement
i'm not the one getting angry, Who's angry - 1) poor assumption arsehole nor the one becoming vulgar & making it personal Arsehole, allo of your comments are nothing but personal through poor insults (that tells much more about you as a matter of fact)...
i do have compassion for you however You're all heart (as well as Arse)
you know the stages of the acceptance of truth ? (research shopenhauer or gandhi... but eh you have no clue about history so you probably don't even know who they are)2nd poor assumption
your first post was how you're so smart 3rd Poor assumption you cut your long & take a short at the time of the shtf;What, so you aren't able to pul it off, which makes it impossible for others? (4th poorassumption)
then you change your stance to "but my broker has guaranteed stop loss,(I answered your question, no change of stance at all (5th poor assumption, i don't risk nothing" which is admitting your first post was bs and completely unrealistic.(Your logic can only be understood by you)
last but not least you insist on proving you don't have a clue, (WTF) as all your self-confidence in the markets & your power to create proft entirely relies on the hypotheises that the broker & the insurance are your friend. (NO, those are your words - guess what, 6th poor assumption
the fall will be tougher as you, i tell you again, have not planned that it could happen.(Who TF are you to tell me or anybody anything)
you win until you lose is your motto(You guessed it 7th poor assumption)
any experienced trader will confirm that only the opposite has long term viability :(I've been trading since 1986, I know a bit about the markets and a lot more about twats like you come to think of it)
you lose until you win
good luck man (& i sincerely hope you're not playing enough to put your family at risk) I play professionally Dick Head
Now read through your message again and you'll see you've made all these assumptions without knowing anything about me. Not only that, you're convinced you are 100% correct, which is worrying for you if you're playing with money in the markets. If you can't admit you're wrong, I suspect you're having a tough time coming to terms with your losses, but then I'm just making assumptions here as I also have no idea who I'm talking to
Allowing for the fact that you write a lot of bullshit, you might just be a fantastic trader, but I sincerely doubt it
dbl
nb : i do the trading, writing algos, found some edge, have a target, praying i'll reach it before it happens, if i reach, then i'll get out & i'll never look back to this insanity to do meaningful thing withat meaningless money.
Because you always buy at the bottom and sell at the top
Mr. Wolf,
A rising birth rate in 40 years isn't going to do jack squat for the GDP.
Agreed, Hohum, by all accounts the world is already over populated (not enought decent jobs to go around) and a rising birth rate is likely to finish us off...
A decent war would fix everything and is the most likely re-set that will be coming our way
Not sure exactly how much war would fix. It would just accelerate the rate of how fucked up things get from 10-30 years into a space of 5-8 years.
So if, by "fix", you mean accelerate the levels of human tragedy into a tighter time frame, then yes, I agree.
Thats's your opinion - I don't know what you're basing it on and I doubt I'll change it for you, but if you would just consider the global expansion after, World War II and don't forget the mess Germany was in right before it started - Cheers
The economic growth following WWII did not rise out of the destruction.
The healing process WAS the economic growth (more proof that rising populations increase wealth creation).
During the wars and just right after, all the nations that were involved in the war (had action on the ground) were in constant economic decline.
So war is bad for the economy, unless your country is not actively taking hits during the war.
The United States during WWII did not profit from being involved in the war because it was losing people, it profited because it acted as a nuetral third party creditor, no real infrastructure in the USA took any damage. . . if the USA was in an active war . . . say with Russia and Thermonuclear bombs were going off . . . we would of still not recovered from the damage . . . and we would all still probably be in economic decline due to the negative health effects.
Birthing creates wealth.... not murder.
Your ignorance shows. WWI & II were the decline of the British, German and French empires. Germany is nowhere near as wealthy and powerful as pre-WWI. Loss of millions of young people does not create a wealthier nation.
No need for rudeness, Sun and you're also incorrect about Germany being more wealthy before WWI...
But don't just take my word for it, it's all here on Wiki for you http://en.wikipedia.org/wiki/Economy_of_Nazi_Germany...
Lets see what sort of a climbdown if any you perform afterwards eh?
No need for rudeness
seriously ? you is saying that ?
it was a joke i hope (otherwise that just reveal a little more the lost soul you are)
The only joke around here sunshine, is you
Yes, clearly the solution to all of humanities problems is to blow ourselves up while the most corrupt and disgusting of us hide in bunkers.
Do you people listen to yourselves?
You really ought to read through some of the posts you've come out with this evening... I'm not a psycho analyst, but I'd wager that you've got more than your fair share of personality issues
Population expands, demand goes up, spending goes up, amount of jobs goes up.
Population growth rate slows,demand growth slows, spending slows, job growth slows.
Population goes down, demand goes down,spending goes down, jobs disapear.
Its pretty simple, increasing population is the fast track brute force method of increasing demand for goods and services, increased demand for goods and services creates jobs, new jobs equals new spending and more confidence, more confidence increases investing in productive assets (plant and equipment) more plant equipment and jobs = more wealth, more wealth = more people that are richer... more rich people = more investing and more people having babies = the world keeps turning.
Everyone not having babies, getting old and dying pretty much destroys economic growth.
People have lost sight of the fact that all these numbers and charts represent the actions and decisions of the collective.... all the charts will represent our collective intentions and actions.
If the charts look bad, its because our collective intentions as a civilization, our values and actions . . . are bad.
Sex is the primary driver of the economy.
Its all about sex-drugs and rock and roll.
The world I live in is already over populated and with too few resources to go around - Your logic might work in an under populated world, not this one
60% of the food in the United States gets thrown away.
Oil is heading to 10$ a barrel.
Housing is plummeting due to lack of demand.
There are millions of acres that no one lives in, with homes in disrepair.
The planet is mostly water...
The sun provides abundant energy even if energy was a problem . . . which it isn't.
There are other planets out there to populate.
The problem is not the environment.
The problem is fear, a lack of values and ambition.
The entire idea that the world is over-populated is a fallacy that has been propagated by foolish megalomaniacs with to many billions of dollars with which they know not to do with . . . so they spend all their time pushing idiotic agendas like . . . global warming, abortion, climate change, carbon emissions . . .
All this bullshit is preventing humanity from reaching our true destination . . . the stars.
If there are to-many people outside of your house, and you can't stand bumping into them everyday, the logical thing to do . . . would be to move to a less populated area and pump out some babies and when this planet is full . . . we will find another.
The goal is to get as many brains being born as possible, more brains = more computing power to brute force a solution , to get us off this rock and onto the next one.
If land was ever a problem, humanity could simply build floating cities....
Don't you ever get tired of pumping out so much shit
Not when there exists an endless supply of trolls like you to eat it.
Supply and Demand.
You want to eat the shit, ill serve it up for you.
I'm a professional trader. I'm in the markets purely to make money and I like to read some of the more intelligent posts here when I can. Forgive me if you think I'm a troll, (I'm not) but your views are bordering on the ridiculous
It doesn't help that you write in such a manner that you seem to believe your opinions are hard facts - Guess what? - They are not
Dre4dwolf = wanker
Accelerating right into the mountain! Cap'n Yellin sez if we can build up enough speed we can just fly right thru it!
LOL....buckle up the rest of your life is nothing but turbulence and air pockets.
When are we going to get the deadliest of the deadly death cross? Just wake me up when there is actually a reset. Otherwise, carry on with more of the same...
The medium term"hedge fund" euro shorts are going to get toasted. The euro is not going anywhere close to "parity" with the $usd.
I wouldn't be surprised to see the euro trading close to the 1.20 handle by June.
That massive move up in UST-10's yields, and lack of $usd buying, just solidifies my reasoning.
Feedback is welcome.
So I keep stacking. Just bought a roll of silver Eagles today. Funny, the price keeps going lower than the last time.
When will I not be a sucker? I keep stacking....can't lift the box anymore.
What am I missing?
Good for you! Be right and sit tight!
Yeah, he is just like you, except you've been wrong for a couple of decades now
(Excerpt from your post just a few comments lower) Those of us who have been waiting for decades for justice to be done will finally be vindicated.
A broken clock is right more often than you are
The signals are clear, BTFATH bitchez!
ECB to the rescue with purchases starting March 1st. Have any grade AAA sacks of stinking shit you want to pass off? Just call it "high yield" muni bonds or automobile recievables. Done deal! Fraud? Who cares as not much is audited. NO ONE wants the truth so why bother?
Bush/Clinton for dictator/stooge in charge of isheeple.
One has to wonder just how further the DAX is going to rise when the Draghi QE begins as it's already piled on 33% since last October and without a pullback of any sort.....
The DAX will rise, like the Japanese market, like the US market and all who print will have their market rise. With Zirp and Nirp there is nothing but air under them and below them only hard earth.
Does the Name Darius ring a bell. Thus endith the lesson
Thanks for that Mental, but I already figured out the DAX will rise (even stated it myself) and didn't ask for a lesseon My question was "how much further will it go"
You mean Deadalus and Icarus?
The signals are all clear, the contraction is here.
Topping...the last two times it took 7 months for it to turn over...the higher it gets, the sooner the reversal
So basically this means stocks higher bonds higher and commodities precipitously lower in the future I guess.
One of my all time favorite quotes is by the 17th Century Scottish poet, Thomas Campbell who said:
"Coming events cast their shadow before"
And so they do.
The CB's around the world are having their 'swan song'. When reality hits (and it ALWAYS does), the backlash will be so severe that there will be people calling for executions. Make note. These unelected bureaucrats and the clowns that profit from their misdeeds will be front and center all across the globe. Those of us who have been waiting for decades for justice to be done will finally be vindicated. Sadly, the punishment meted will seem severe but will be fitting...
Spoken like another bitter short seller who lost all his money -
But but but the Baltic Dry Index is up 2 points!
Yellen already let the cat (signals) out of the bag several days ago.
http://michaelekelley.com/2015/02/20/fed-warns-of-two-bubbles/
Here is how to prepare for the worst.
http://michaelekelley.com/2014/10/16/8-things-to-do-when-recession-happens/
Thanks
The global economy going into a slump and a simple question ... how would you regenerate the economic activity?
Global economy is a single trader with no other trader.
It has to be either and there are only 2 ways CTRL-P or the LEVERAGE ON LOANS where we have implied debt creation.
So it will be the latter point, no way to avoid it but with it comes growing unrest from ordinary people with no skin in the game being devalued away as central banks push to generate inflation.
The unrest will be along these lines and wether it takes 1 year, 5 years oe 50 years the outcome is already decided.
So think of Greece as in every 5 years ... this is the second go round now...
it will still in the same position as today with a new party the population will eventually be clamouring for an EZ / EU exit or if not then they have not suffered enough yet but give it time it will happen.
yellen douches with drano