Financial Sense Blog

Perhaps it is a sign of the times we live in that we feel the need to ask ourselves this question. The answer might appear simple, in that textbook definitions normally list the following three properties of money:

Consider two cases of mass manipulation through a big lie: the first is directed against children, and has to do with Santa Claus; the second is directed against adults, and has to do with government programs and goodies. In the first case adults engage in a conspiracy to inculcate in children a belief in Saint Nicholas; in the second case, a certain party of propagandists engage in a conspiracy to inculcate a general belief in government entitlements...

This is a long term analysis covering bonds and interest rates and their relationship using The 54 Year Interest Rate Cycle and the related Kondratieff Cycle as well as Elliott Wave Theory. The Elliott Wave Principle is based on the psychology of the masses which forms patterns. I use these patterns as well as the general sentiment in my forecasting. In addition, I take into consideration the behavior of commercial traders.

News today that Greece will seriously work on cutting their budget deficit sent the global markets rallying today. Details from Greece’s proposed measures are provided below from a Bloomberg article:

Currently, the outlook for retirees looking for income is dim. Money market funds are paying close to 0% interest. Short-term treasury bills are yielding less than 0.3% for a one-year maturity. Tax-free municipal bonds have recovered from the credit crisis but the California, Indiana, Nevada, and New York (CINN) credit default swaps are climbing; California's debt has been downgraded.

The complex market system that allows more than six billion earthlings to feed and clothe themselves is called capitalism. It is a system that produces unequal results. But if you take away capitalism the number of human beings on the planet will go into decline. In other words, people will starve to death. Without economic inequality there is no economic vitality, and no six billion people...

As an Account Manager and Trading Instructor, there is a theme I see that keeps recurring. I hear this from my clients and students over and over, "things are so bad how can I be safe buying". I hear "we are going to have hyper inflation" or "it is all going to collapse into a deflationary abyss. In other words, they lose their bearings in a sea of information. My answer is always the same, we must trust our algorithmic models. Markets will fluctuate, what you read or listen to is illusion. When one group has all the money, the rules of the game have changed.

Joseph Schumpeter once explained that many Marxists and Keynesians never read a line of Marx or Keynes. According to Thomas Sowell, "They have gotten their ideas second- or third-hand from the intelligentsia." One might say that Marxism and Keynesianism bear a resemblance to disease. If Bubonic plague is carried by flea-infested rats, Marxism and Keynesianism are carried by intellectuals. In the first instance, we are dealing with dangerous bacteria; in the second instance, we are dealing with dangerous ideas.

Palladium had the most tumultuous decade of all the precious metals.

Today’s commentary lacks a central theme and instead really is a “Market Observation.” Often at times it is useful to remove one’s opinions from the investment equation and instead listen to what the market is saying, gleaning useful information in the process, rather than having a preconceived notion of how the markets should be acting. Below are of few items that should be of interest on a range of topics. Let’s dive in.