Financial Sense Newshour on the Markets

Jim welcomes back Brian Pretti CFA, Managing Editor at ContraryInvestor.com. Brian sees a likely political compromise on the “Fiscal Cliff” tax increases and spending cuts due to start in January. They will cut a deal, or at the least, postpone any decision until later in the year. Brian also discusses the sorry state of the economy in California, and how recent significant tax increases won’t help matters. Brian and Jim also discuss the state of the markets post-election.

Jim is pleased to welcome Dave Lauer, a market structure and high-frequency trading consultant to IEX Group. Dave recently testified before the Senate Committee on Banking, Housing and Urban Affairs as to the dangers of high-frequency trading and also suggested potential solutions. Dave’s key points to combat the growing threats to market stability are to level the data-access playing field, reinstate the uptick rule, eliminate the maker-taker business model, and implement a market-wide surveillance system.

Jim welcomes back energy expert Joe Dancy to discuss how record food prices will likely disrupt energy markets next year, as well as potentially set the stage for more turmoil in the Middle East. Joe also discusses the myth of energy independence in the US and why the energy stocks are the cheapest they’ve been in a decade.

In this segment of the Big Picture, the first topic is: "Gold Stocks−time to reap the rewards." Jim looks at how the gold stocks have underperformed the price of gold, and how this may be about to change for the well-run gold mining companies.

The next Big Picture topic on the advantages of dividend reinvesting and compounding is a take-off on the famous book by Napoleon Hill: "Think and Grow Rich." Jim looks at how dividend investing can save you during long periods of a flat-to-down market. The compounding of dividends over time can make a tremendous difference for those saving for retirement.

Jim welcomes Jon Matonis, an e-Money researcher and Crypto Economist focused on expanding the circulation of nonpolitical digital currencies. Jon explains the definition of "crypto-currency" and discusses Bitcoin, the first true crypto-currency, which he describes as ''digital gold." Jon and Jim discuss the potential of Bitcoin, if it will eventually compete against government monopoly currencies, and if crypto-currencies could in fact become the future of money itself.

Jim welcomes back Dave Nicoski CMT, Director of Research at Vermilion Technical Research, LLC. Dave sees the market continuing to consolidate until the elections, but longer term sees the general uptrend continuing. He sees a break-out in the blue chip stocks, which he believes is very bullish for the market going forward. Dave also notes that Fed intervention has resulted in breakouts in the financial and health care sectors. Also in this segment, Ryan Puplava has his weekly Market Wrap-up, and Rob Bernard the Fixed Income Report. This week, Erik Townsend joins the first hour of the program as a regular contributor, focusing on the commodities markets.

Jim welcomes Martin Armstrong of Armstrong Economics and founder of Princeton Economics. Martin sees a strong trend of financial and economic power moving to Asia. In the US, he notes that stability is vital to economic growth, but that is lacking in Washington. As to the stock market and gold, he sees the next up-cycle for both beginning by summer 2013, with the Dow reaching 20,000 later next year. He sees the "smart money" moving out of bonds and into stocks. Martin believes the strongest up-cycle for gold will be in 2016-2020, when he sees gold prices going parabolic. He sees the civil unrest cycle accelerating in 2014 in the US, driven by layoffs in the public sector.

Technician Frank Barbera joins the Financial Sense Newshour for a special visit this week. Frank informs Jim (tongue firmly in cheek) that he is building a new bunker, an "off-shore" island bunker, and equipping it with supplies and fishing nets. On a more serious note, he believes that QE may have reached its effective limit, and advises "ringing the cash register" (taking profits) while you can. He also discussed the possibility that the markets could be facing a deflationary outcome. Also on the program, Ryan Puplava gives his weekly Market Wrap-up and Rob Bernard has the Fixed Income Report.

Jim welcomes Don Coxe of Coxe Advisors LLP to discuss the Commodity Super-Cycle. Don believes that because most commodities are no longer priced primarily by Europe and North America, they are less risky than conventional Wall Street economists understand. Don strongly feels that investors need to invest where the demand is, and will be, for coming decades. That means economies whose consumption of commodities per unit of GDP is still far higher than ours. Since 1998, Don has advised clients to "invest in companies which produce what China needs to buy."