With continued chaos around the world and uncertainty in global markets, today KWN is publishing an incredibly powerful piece that was written by a 60-year market veteran. The Godfather of newsletter writers, Richard Russell, discusses gold, major markets, and warns that the average person is terrified and depressed as the US collapses.
Timing & trends
Michigan Sentiment Index Decreased to 80.4 in January
Consumer confidence in the U.S. unexpectedly declined in January, a sign spending may take time to accelerate early this year.
The Thomson Reuters/University of Michigan preliminary index of sentiment fell to 80.4 from 82.5 in December. Economists in a Bloomberg survey called for a reading of 83.5, according to the median estimate.
The report follows figures last week showing employment rose in December at the slowest pace in almost three years. While more job opportunities would help lift spirits, higher property values and rising equity prices are boosting household wealth and will keep consumers spending.
“There probably are some people who could have lost confidence based on what they read but I think the bigger driver is what people see day to day,” Jim O’Sullivan, chief U.S. economist at High Frequency Economics Ltd. in Valhalla, New York, said before the report.
Estimates of the 67 economists in the Bloomberg survey ranged from 78 to 88. The index averaged 89 in the five years before December 2007, when the last recession began, and 64.2 in the 18-month contraction that ensued.
The Michigan sentiment survey’s current conditions index, which measures Americans’ view of their personal finances, fell to 95.2 in January from 98.6 a month earlier.
The index of expectations six months from now decreased to 70.9 from 72.1 last month.
….you can read more on Bloomberg Sentiment HERE (scroll down)
Global FOOD PRICES to RISE, GOLD MANIPULATION, CHINA & more
A brief summary of Rogers on Gold from the interview :
Gold has had a nice runup for over a decade now, but it has taken a beating this year. The yellow metal is currently trading at three-year lows. We reached out to commodities expert Jim Rogers for his take on what will happen next in the gold markets.
Jim Rogers: I am useless as a market timer/trader. Having said that, a 50% correction is normal in markets so why not in gold? The 12-year rise was an anomaly in markets so the correction may continue to be an anomaly. There will be rallies after big drops, but I expect another opportunity to buy gold.
JR: [1] The anomaly of the 12-year rise, for one thing. [2] India as we have discussed before. Indian politicians are blaming their problems on gold, so [they] have added special taxes, tariffs, controls, and regulations. Pakistan and Bangladesh even totally banned imports of gold at one time.
The politicians are now trying to figure out ways to force Indians to sell gold. There are staggering amounts of gold there. The politicians are now trying to hit the temples which have accumulated an unimaginable amount of gold over the centuries. I have no idea if they will succeed at either, but the effort is having an effect. If they are successful to any degree, it will have an even bigger effect. India has been the largest buyer of gold for decades. Cutting back the purchases has already had an effect. IF they can force the largest buyer to become a seller [much less a larger seller], who knows how low gold could go? [3] A lot of people leveraged themselves too which hurts on the downside. Etc., etc.
BI. Are you buying gold? If not when would you buy gold?
JR: No. Most of them are still denying reality saying it cannot happen, etc. They are also blaming it on manipulation still. They did not blame anything on manipulation on the way up, but are now finding all sorts of excuses. [I also find it interesting that I have not seen a single comment from them or anyone else about changes in India — the largest buyer in the world. The whole thing is “manipulation”.]
“World economic freedom has reached record levels. But after seven years of straight decline,
the U.S. has dropped out of the top 10 most economically free countries.”
– Wall Street Journal, January 13, 2014
BOB HOYE
PUBLISHED BY INSTITUTIONAL ADVISORS
JANUARY 15, 2014
Key lines in the cartoon are:
“Depleting The Resources Of The Soundest Government In The World”
“Young Pinkies From Columbia And Harvard”
What appears to be Trotsky is outlining a radical agenda.
Since the early 1970s, the bitter academic Saul Alinsky has inspired legions of the politically
ambitious. Including many in today’s White House.
The opening paragraph of his Rules For Radicals says it all:
“What follows is for those who want to change the world from what it is to what they believe it should be. The Prince was written by Machiavelli for the Haves on how to hold power. Rules for Radicals is written for the Have-Nots on how to take it away.”
– Rules for Radicals: A Pragmatic Primer for Realistic Radicals
Considering that political disaster has been the inevitable consequence of every great experiment in authoritarian government, what are today’s American authoritarians really winning?
Power, but not yet unlimited.
The full article follows:
Wall Street Journal, January 13, 2014
America’s Dwindling Economic Freedom
Regulation, taxes and debt knock the U.S. out of the world’s
top 10.
By Terry Miller
World economic freedom has reached record levels, according to the 2014 Index of Economic Freedom, released Tuesday by the Heritage Foundation and The Wall Street Journal. But after seven straight years of decline, the U.S. has dropped out of the top 10 most economically free countries.
For 20 years, the index has measured a nation’s commitment to free enterprise on a scale of 0 to 100 by evaluating 10 categories, including fiscal soundness, government size and property rights. These commitments have powerful effects: Countries achieving higher levels of economic freedom consistently and measurably outperform others in economic growth, long-term prosperity and social progress. Botswana, for example, has made gains through low tax rates and political stability.
Those losing freedom, on the other hand, risk economic stagnation, high unemployment and deteriorating social conditions. For instance, heavy-handed government intervention in Brazil’s economy continues to limit mobility and fuel a sense of injustice.
It’s not hard to see why the U.S. is losing ground. Even marginal tax rates exceeding 43% cannot finance runaway government spending, which has caused the national debt to skyrocket. The Obama administration continues to shackle entire sectors of the economy with regulation, including health care, finance and energy. The intervention impedes both personal freedom and national prosperity.
But as the U.S. economy languishes, many countries are leaping ahead, thanks to policies that enhance economic freedom—the same ones that made the U.S. economy the most powerful in the world. Governments in 114 countries have taken steps in the past year to increase the economic freedom of their citizens. Forty-three countries, from every part of the world, have now reached their highest economic freedom ranking in the index’s history.
Hong Kong continues to dominate the list, followed by Singapore, Australia, Switzerland, New Zealand and Canada. These are the only countries to earn the index’s “economically free” designation. Mauritius earned top honors among African countries and Chile excelled in Latin America. Despite the turmoil in the Middle East, several Gulf states, led by Bahrain, earned designation as “mostly free.”
A realignment is under way in Europe, according to the index’s findings. Eighteen European nations, including Germany, Sweden, Georgia and Poland, have reached new highs in economic freedom. By contrast, five others—Greece, Italy, France, Cyprus and the United Kingdom—registered scores lower than they received when the index started two decades ago.
The most improved players are in Eastern Europe, including Estonia, Lithuania and the Czech Republic. These countries have gained the most economic freedom over the past two decades. And it’s no surprise: Those who have lived under communism have no trouble recognizing the benefits of a free-market system. But countries that have experimented with milder forms of socialism, such as Sweden, Denmark and Canada, also have made impressive moves toward greater economic freedom, with gains near 10 points or higher on the index scale. Sweden, for instance, is now ranked 20th out of 178 countries, up from 34th out of 140 countries in 1996.
The U.S. and the U.K, historically champions of free enterprise, have suffered the most pronounced declines. Both countries now fall in the “mostly free” category. Some of the worst performers are in Latin America, particularly Venezuela, Argentina, Ecuador and Bolivia. All are governed by crony populist regimes pushing policies that have made property rights less secure, spending unsustainable and inflation evermore threatening.
Despite financial crises and recessions, the global economy has expanded by nearly 70% in 20 years, to $54 trillion in 2012 from $32 trillion in 1993. Hundreds of millions of people have left grinding poverty behind as their economies have become freer. But it is an appalling, avoidable human tragedy how many of the world’s peoples remain unfree—and poor.
The record of increasing economic freedom elsewhere makes it inexcusable that a country like the U.S. continues to pursue policies antithetical to its own growth, while wielding its influence to encourage other countries to chart the same disastrous course. The 2014 Index of Economic Freedom documents a world-wide race to enhance economic opportunity through greater freedom—and this year’s index demonstrates that the U.S. needs a drastic change in direction.
BOB HOYE, INSTITUTIONAL ADVISORS – WEBSITE: www.institutionaladvisors.com
Russell: “As the year 2013 came to a close, the weekly Investor’s Intelligence survey of investment newsletters recorded the most lopsided ratio of bulls to bears — more than four to one in favor of bulls — since 1987. At the same time, the National Association of Investment Managers showed one of the most bullish readings since the survey began in 2006. Of course, these are both fodder for contrary opinion.
Growth in the third quarter reached an annual rate of 4.1%, but much of that growth came from inventory building. Analysts are anxiously awaiting the end of January, since what happens in January often signals what may happen the rest of the year.
Remember that years ending in 4 tend to be poor years for the market. Meanwhile, the Fed has lopped off ten billion per month of its generous stimulation efforts. Every down January since 1950 has been followed by a bear market, a 10% correction or a flat market. So any way you look at it, January is an important month, and we can all hope that it ends up as a month that closes higher (although, as it stands, it has many hurdles to overcome, since its first week has been discouraging).
….continue reading this powerful piece HERE
McIver Wealth Management Consulting Group / Richardson GMP Limited
US car sales since 1994
With the Detroit Auto Show going on (also known as the North American International Auto Show), there has been much attention on the U.S. auto industry and the comeback in the level of sales. In fact, there has been a lot of hype regarding this over the past year.
However, when looking at a longer-term chart of auto sales (see chart above), we can see that although car sales have crawled back, they are not back to the level of the heydays before the Global Credit Crisis and Great Recession.
The opinions expressed in this report are the opinions of the author and readers should not assume they reflect the opinions or recommendations of Richardson GMP Limited or its affiliates. Assumptions, opinions and estimates constitute the author’s judgment as of the date of this material and are subject to change without notice. We do not warrant the completeness or accuracy of this material, and it should not be relied upon as such. Before acting on any recommendation, you should consider whether it is suitable for your particular circumstances and, if necessary, seek professional advice. Past performance is not indicative of future results.
Richardson GMP Limited, Member Canadian Investor Protection Fund.
Richardson is a trade-mark of James Richardson & Sons, Limited. GMP is a registered trade-mark of GMP Securities L.P. Both used under license by Richardson GMP Limited.
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