Personal Finance

J. Rogers: Bernanke to Leave Fed to Avoid ‘Hangover”

Posted by Jim Rogers via Money News

on Monday, 20 May 2013 17:10

Jim Rogers“It seems that Mr. Bernanke may be leaving in a few months.”

The Federal Reserve is pumping up the economy and financial markets with its massive easing tactics, and central bank Chairman Ben Bernanke might not seek another term because he doesn’t want to deal with the “hangover” aftermath of his policies, says legendary investor Jim Rogers, chairman of Rogers Holdings. 

“Right now we have a very artificial situation. You have the central bank in America printing staggering amounts of money,” he tells Newsmax TV in an exclusive interview. 

“There’s this gigantic artificial flow of money floating into our economy, and this is going to end badly because it is artificial.”

….read more & or view video HERE

Since I feel surrounded by gold bears everywhere I look and the onslaught of articles recommending I and others holders of gold should “surrender” or face death holding gold, I chosen to respond with a one-word reply made famous during World War II –NUTS!

After 30 years in and around Wall Street, you develop a sixth sense that doesn’t require charts or some long list of fundamental reasons to justify a position. It’s like the movie is only halfway through but you already know where they’re going with it.

I’m not going to write some long dissertation to justify my position to buy gold and silver right now but I will make a few key points:

…..read those points HERE

China Bubble or Breakout?

Posted by Martin Armstrong: Armstrong Economics

on Monday, 20 May 2013 7:00

QUESTION:    I’m a reader from China and one of the big fans of you in our country. I want to ask you a question and would be very happy to get your reply. If my memories are correct, you have been a bull of China and praised Chinese leaders for their competence. But in reality, Chinese people are very disapproval of the government, to be more exactly, hate and curse! As you know, aside from problems of severe pollution and food safety,China has a very big housing bubble and the price is well beyond people’s purchasing power. Many young people had to use their parent’s  retirement savings or even borrow the rest from relatives as down payment to buy an apartment so they can get married. On the other hand, most Chinese public servants have many many suites of apartment——to hide their bribery money in many cases. Corruption is widespread in China, everywhere. People are yearning for democracy and election, and not trust one-party politics anymore. Also, many people are expecting a crash of china’s housing market. Sadly enough, they have been expecting for many years but the price just won’t stop rising.

So, what’s your opinion, about china’s politics and housing market? I will be very eager to wait for your answer. Thank you very much.

Yours,

——-

Beijing,China

TankMan-060589ANSWER: Politicians in the USA like to point their collective finger at China for corruption problems while they sanction a legalized system of corruption that ensured the NY bankers will NEVER be prosecuted. Furthermore, in the USA, politicians receive untold millions legally funneled to them by political action committees. The PACs assure that Congress votes the way that those who provide the money want it to. Why is Goldman Sachs above the law? They bought both parties equally. Rubin took charge of the Treasury under Clinton and did away with Glass-Steagall. Paulson took over the Treasury from him and eliminated Lehman and Bear Stearns, but as soon as Goldman’s was getting shorted he outlawed short selling. Nobody in Congress will even investigate Goldman Sachs because they have their hand out under the pretense it is LEGAL.

China should just LEGALIZE the corruption like it is done in all GOOD upstanding Democracies and it will not be an issue regardless what goes on.

….read it all HERE

Busting The Bullish Arguments

Posted by Lance Roberts: The X-factor Report

on Sunday, 19 May 2013 23:48

  • This market is nothing like 2000!”
     
  • “You have to realize just how amazing the markets are right now.”
     
  • “The ‘Walls of Worry’ have all been knocked down.”
     
  • “The next stop for the markets is simply higher.”
     
  • “This market is unstoppable.”
     
  • “I haven’t seen a market like this in 30 years.”

 

These were all things that I either read, or heard, in just the past week. I even read an article as to why that “This time is different – really!”

Here is an interesting statistic to think about for a moment. 

The current rise in the stock market has gone uninterrupted for 181 days which is the longest period in the history of the stock market.

Think about that for a moment.

Over the last 113 years of stock market history we are now witnessing the longest rise – ever. Every single time in history, when the markets have gone on extended runs, they have NEVER, not once, lasted as long as the current artificially fueled advance. What do you think is likely to happen next?

There is no doubt that the current advance is quite amazing. However, it is not unstoppable. It will stop. It will correct. Of course, when it does, these same “book talking jacklegs” that made the statements above will have a litany of excuses has to why such a correction was unexpected. Of course, those excuses won’t replace your lost capital.

Busting The “Bullish” Arguments

Take a look at the first chart below. First, notice the recent run-up in the market at the far right of the chart. This price action is very abnormal; it is called a parabolic spike, but is similar to what was witnessed at the peak of every previous bull market advance.

Secondly, one the primary “bullish” arguments has been valuations. The argument is that stocks are “fairly valued” because valuations reverted to their long term average during the financial crisis.

Take a look at the chart below. Never in history have valuations ONLY returned their long term average before setting off into the next secular bull market rise.

Screen shot 2013-05-19 at 4.44.54 PM

….read the entire 16 page report HERE

Art Cashin: This Could Send Markets ‘Parabolic’

Posted by Art Cashin - UBS

on Sunday, 19 May 2013 23:32

UBS’s Cashin explains why the stocks with the heaviest short are likely to “crumble if they keep moving up.”

 

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