The whole idea of a consensus in the scientific realm is to prevent anyone from asking uncomfortable questions. Oddly, there are other critical areas today where a considerable consensus carries no weight whatsoever

also Michael’s Mid-Week Comment – Vancouver’s Real Estate Market is Finally Cooling

Houston we’ve got a problem. Oil continues to hover around $40, with most analysts calling for a further significant drop. That’s not good news for the Canadian economy. Worse still is that our politicians only ever offer more of the same.

Don’t miss Michael’s Comment: 

It’s such a filthy little four letter word – but it’s the big dog in the financial world

Investors want my head again. Gold, silver, and mining companies are refusing to fall per the forecast of my artificial intelligence, neural net models.

So what gives? In this column, I’ll lay out what I think is happening and also give you my line in the sand.

Fundamentally, what I believe is happening is that the rise in geopolitical troubles here in the U.S. and abroad, the rise of the war cycles that I’ve written about before, is stronger than I had expected. This is causing the precious metals and mining sector to be stronger than expected as well.

However, the line in the sand remains a weekly close above $1,363.50 in gold. If that were to occur, it would indicate an extended rally to somewhere between $1,450 and $1,500 by October. Mining companies of course would follow suit as would platinum and palladium.

 Let’s hope we don’t see that. The reason is because when a market undergoes two cycle inversions in a row, without a pullback — that market is actually more bearish than bullish intermediate-term.

If we were to get a second cycle inversion and a move up to the $1,450 to $1,500 region in gold by October, then we would likely see the precious metals crash and burn, along with mining companies into early 2017 — and to new record lows.

The far more constructive, bullish pattern would be for gold and silver to follow the current forecast and decline into early October. So if you’re a long-term bull, you want to be rooting for a decline into October.

I’m telling you like it is. I’m not talking out of both sides of my mouth. I’m giving you the two scenarios for the precious metals and miners. And I’m giving you the line in the sand that separates the two scenarios.

As testament to how accurate my numbers can be, just consider the Dow Jones Industrials. For over a year and a half, I told you that major resistance for the Dow Industrials was at 18,500. I also told you that the next leg up in the Dow Industrials would not begin until we got a monthly close above 18,500.

For well over a year now, the Dow has flirted with the 18,500 level. And this past Friday, July 29, the last trading day of the month, the Dow closed at 18,432.24, once again failing to close the month above 18,500.

In truth, the Dow Industrials and the S&P 500 have reached record highs but only due to a handful of stocks, namely in the tech sector. The majority of publicly traded stocks remain lower for the year, down as much as 71.6 percent.

Looking at the big picture, the U.S. stock markets have gone nowhere for well over a year. And they will not begin to break out until we get a monthly close above 18,500, which still does not preclude a correction from occurring.

There is no question that geopolitical tensions domestically and internationally are rising at a very fast pace. This has been the cornerstone theme of my forecasts ever since I gave my presentation on the war cycles in late 2012.

This is what will dominate the future, heading into the year 2020/21. The Federal Reserve is essentially meaningless and has lost control of the economy. Ditto for the European Central Bank and other central banks. Ditto for governments. 

Brexit is very much a part of this rise in geopolitical tensions and the opening act of the end of the European Union and the euro currency. Italy’s banks are now failing, putting extreme stress on Germany’s leadership, in addition to the refugee crisis which may well topple Angela Merkel.

Here in the U.S., like it or not, my models are pointing to a Donald Trump win come November. He is the worst possible candidate, but the timing fits perfectly with what my models are forecasting for the U.S., which is a sovereign debt crisis, rising civil unrest, and increased troubles with countries around the world, namely Russia and China — including the very real potential for an international war of epic, historic proportions.

Stay tuned and stay safe! 

Best wishes, 

Larry

Our real-world experience tells us the official inflation rate doesn’t reflect the actual cost increases of everything from burritos to healthcare.

In our household, we measure inflation with the Burrito Index: How much has the cost of a regular burrito at our favorite taco truck gone up?

Since we keep detailed records of expenses (a necessity if you’re a self-employed free-lance writer), I can track the real-world inflation of the Burrito Index with great accuracy: the cost of a regular burrito from our local taco truck has gone up from $2.50 in 2001 to $5 in 2010 to $6.50 in 2016.

That’s a $160% increase since 2001; 15 years in which the official inflation rate reports that what $1 bought in 2001 can supposedly be bought with $1.35 today.

….continue reading HERE

related:

Revealing the Real Rate of Inflation Would Crash the System

The Gallup Poll has released an Economic Confidence Index which reflects the sentiment of Americans, as it pertains to the economy.

As the stock market makes new record highs and the housing “bubble” market soars, one would expect that the “average” American would be smiling from ear to ear.   However, the chart below appears to present nothing but gloom and doom.  The Gallup Polls results are dumbfounding the American public as to why this divergence has occurred.  I feel we have touched upon a few points as to why this is occurring.

First off, half of all Americans do not even own one stock.  Secondly, there are many U.S. companies making large profits overseas. That may be positive for the company but that does not necessarily translate into a better financial position for mainstream Americans.

A survey was recently released showing that 62 percent of Americans do not even have $1000.00 in their savings accounts. Most Americans are only one small emergency expense away from being on the streets.  What this means is that many will simply rely on credit cards, friends and/or family for their funding should a financial emergency arise.  Is this meant to be our economic recovery? 

How much do Americans save?

Housing values, which are being “artificially” inflated, only prevent Americans from purchasing their ‘dream homes’, as is reflected in low homeownership rates.

The housing market is once again too expensive for most American families to afford. During the last housing “bubble”, many Americans were able to partake in the mania and enjoy equity gains although they were fleeting.

This time around, most of the gains are going to investors and large institutional buyers that have crowded out mainstream America. This is a first in history to occur, at least on this large of a scale.  The homeownership rate is the lowest in a generation as many young Americans are saddled with unsurmountable student loans and consequently forced to return to living at home.

Inflated home prices coupled with decreasing incomes, provide a recipe for disaster! Total wealth, in the U.S., is at a record high level, once again.  Consequently, most of the gains are in the hands of a very few.

Americans are angry with the “establishment” and are frustrated with their economic ‘uncertainty’

Americans no longer trust mainstream media.  This is being reflected in the political climate: i.e., non-establishment candidates, Brexit, etc. and even new asset classes like digital currencies like bitcoin.

The stock market is fully “decoupled” as to how good Americans are doing, overall.

The SPX is up a stunning 220% since the lows that were reached in 2009 and US economic confidence index shows more people simply do not trust the economic numbers and media.

Concluding Thoughts:

In short, I continue to warn about a down turn in both the economy and stock market. The markets continue to mature and the leading indicators point to a sharp correction in the financial systems I the coming months.

Safe haven investments have rocketed higher like bonds, gold, silver, mining stocks as smart money positioned its self in preparation for a crisis. As I have mentioned many times already, is just going to take one bad event or piece of data to cause the tipping point for the market. The question is when and what will it be?

Just like the 2008 bear market in stocks and financial down turn, this will be no different in terms of what will happen, just like every previous bear market/financial down turn before that. Stock prices will fall, people will lose their jobs, companies go bankrupt, housing defaults increase, personal spending comes to a grinding halt.

When it comes to our investment and trading capital, you can either ride the financial rollercoaster and do nothing, move to cash with some safe haven investments like bonds/precious metals, or bet against the US economy and watch your net worth reach new highs during a time when everyone you know is losing money, jobs and confidence.

Follow my weekly articles, swing trades, and long-term ETF investing positions.

Chris Vermeulen – www.TheGoldAndOilGuy.com

also:

Is It The Season For Investing In Gold? or Oil? or Stocks?