Financial Sense Newshour Archive
Also, Ryan Puplava With this week’s Market Wrap-Up and Erik Townsend With the Commodity Report
Jim welcomes back technician Bert Dohmen of Dohmen Capital Research Institute and publisher of The Wellington Letter. Bert believes all this talk about “tapering QE” is a ploy by the Fed to cool the speculative fever of the markets. He also notes that overwhelmingly bullish opinion in the early stages of a bull market is not a negative indicator because there is plenty of money still on the sidelines. The big question is, are we in the early stages, or is this bull market already four years old? Bert also sees any major problems likely to surface first in China. Also in this segment, Ryan Puplava has this week’s Market Wrap-Up, and Erik Townsend has the Commodity Report.
Also on the Big Picture: Is the Run In Dividend Stocks Over?
In this week’s first Big Picture topic, “Déjà vu, Revolt of the Money Wealth”, Jim looks at the parallels between the 1970’s and today. He notes that the Fed was able to keep interest rates under control in the early to mid-1970’s even though inflation was building. In 1977 the bond investors started to revolt. Jim sees similarities today, and discusses when the “money wealth” will eventually revolt and start selling their bonds. In the next topic, “Is the Run in Dividend Stocks Over?” Jim notes that a pull-back is not unusual, especially given the overvaluation of sectors such as utilities. Jim believes the run in dividend-paying blue chip stocks is far from over.
Jim Answers a Wide Range of Investment Questions
In this month’s edition of “On the Record” Jim covers a broad array of investment questions, from gold and peak oil, to market corrections, interest rates and dividend stocks. Last but certainly not least, Jim answers your Q-Calls in this segment as well.
Lessons of the great German and American inflations
Jim is pleased to welcome Ronald Marcks, who under the penname Jens O. Parsson wrote “Dying of Money” in 1974, as double-digit inflation was heating up in the US. In his book, Mr. Marcks wrote of the German inflation of 1914-1923, and the rise of the American inflation of the late 1960’s into the 1970’s. Jim and Mr. Marcks discuss the parallels of Weimar Germany to what is happening today. They also discuss the phenomenon that every burst of monetary inflation has been followed by a stock market rise and boom in prosperity and every contraction by a stock market fall and recession. Mr. Marcks sees a “latent inflation” in the US, as the money supply has increased much faster than prices for the last three decades.
Capital is flowing into the US from Europe and Japan
Jim welcomes back Michael Kantrowitz CFA, now teaming with Francois Trahan at Cornerstone Macro in New York City. Michael’s expertise includes business-cycle forecasting the implications for financial markets including global asset allocation, sector positioning, and stock selection. Michael believes we have been back in the “risk-on” trade for over a month, and will likely be in the risk-on mode for the balance of the year. Cyclical sectors are now outperforming, and Michael believes the fuel behind this move is lower inflation. He sees capital flowing into the US from both Europe and Japan. This is helping provide the unusual situation of a stronger dollar and stronger stock market at the same time. The financial world is becoming less correlated than in recent years. Michael prefers the Financial, Technology and Industrial sectors as the best of the cyclical plays.
Currency wars could morph into damaging trade wars, slamming the brakes on global growth
Jim welcomes back John Butler, Chief Investment Officer at Amphora Commodities Alpha Fund in London. John poses the question; might the US may be covertly intervening in the foreign exchange markets to support the US dollar? Because of the Federal Reserve’s QE policy, the pressure is building on the dollar. If foreigners dramatically accelerate their diversification out of dollars and into other currencies, and gold, the US would face a dilemma. The US could allow interest rates to rise to stabilize the dollar, triggering a recession, or it can continue to suppress interest rates but watch the dollar fall sharply, triggering far higher inflation and economic (and perhaps political) instability. John believes the US may take a third path, continuing to suppress interest rates through QE, but covertly intervening on foreign exchange markets to support the dollar. Desperate policymakers sometimes do desperate things.
Spring weather in the US has something for everyone - summer heat-waves ahead
Jim welcomes Evelyn Browning Garriss, Editor of the Browning Newsletter. Evelyn details the wild spring weather of 2013 in the US, with record cold, record heat, floods and drought all hitting different parts of the country. She sees summer heat-waves coming to much of the country heading into a stormy fall in the Atlantic region. Evelyn discusses the ideal conditions likely for a severe hurricane season; favorable winds (lacking last year) and very warm south Atlantic water. In the West, she notes this is the fifth consecutive year of a dropping water table on the Colorado River, and some form of water rationing could be coming.
Special Guest: Dr. T. Colin Campbell, coauthor of the bestselling book on nutrition, “The China Study”
This week Jim and Cathlyn discuss under what circumstances is it okay to touch your principal and how much should you be pulling out. Jim outlines the options for managing your assets, and the options for managing your expenses. They also discuss when it’s not okay to dip into principal, and illustrate the topic using the case study of Melvin and Joanne Keller. The special guest this week is Dr. T. Colin Campbell, coauthor of the bestselling book, “The China Study”, which details the connection between nutrition and heart disease, diabetes, and cancer. Dr. Campbell was also featured in the documentary film, “Forks Over Knives”.
Also, Ryan Puplava with the Market Wrap-up, Erik Townsend on Commodities, and Rob Bernard on Fixed Income
Jim welcomes back noted technician Charles Nenner of the Charles Nenner Research Center. Charles sees many of his short-term cycles topping, with other cycles topping over the summer. He believes most of the gains are already in for the year, and feels that the average investor is too optimistic at this stage of the market. Charles sees strength in the US dollar until mid-2014. He sees higher interest rates coming, and is very cautious on bonds. Also this hour, Ryan Puplava has this week’s Market Wrap-Up, Erik Townsend looks at commodities, and Rob Bernard has the Fixed Income Report.
Political and economic parallels between the 1960’s-1970’s and today
In this week’s first Big Picture topic, Jim takes an in-depth looks at the many economic and political similarities between today and what occurred during the late 1960’s through the 1970’s. Jim looks at interest rates and inflation, the price of gold, Middle East turmoil, political scandals, tax policy, the regulatory environment, and movement in the markets.