Legendary Swiss investor Felix Zulauf wrote this note to Itau Global Connections newsletter. An excerpt below including his views on: Economies, Stocks, Interest Rates, Commodites, Currencies & more

A short while ago the VIPs and aspiring VIPs of world politics and business met at the World Economic Forum in Davos, a resort in the Swiss Alps famous for great ski slopes, and discussed the state of the world economy and what lies ahead. In contrast to the meetings of the last few years, doubters have disappeared and the general mood was upbeat. Leading politicians pointed to their great achievements in overcoming the great financial crisis and the positive results, although in my view the “improvements” are primarily a result of more money printing by leading central banks due to a disturbing inability to make progress via politics.

However, economic indicators seem to confirm the general mood of an improving world economy, and according to my analysis this may remain so in the first half of the year. Recent numbers released in China, the US, Germany, and even the euro zone as a whole are welcomed good news. The question is whether this improvement will continue for the whole year or not. I will address this question in another report in coming months, as I think it is not relevant now, because coming months should see at the very least acceptable economic numbers. The main exception is Europe, where I see total credit growth now falling into deep negative territory, which makes a sustainable improvement virtually impossible. Spanish retail sales down more than 10% year over year are a shocking reminder that problems in the real economy remain unresolved.

Nonetheless, the investment industry is getting euphoric.

…..read more HERE

With Gold & Silver up sharply this morning, it might pay to look at what the GodFather of Financial writers the 89 year old Richard Russell had to say 5 days ago – Ed

Richard Russell: “The chart below almost speaks for itself.  Spot gold is in a rising trend and is touching its 50-day MA.  The nearby target is to climb above 1700.  There has been terrific resistance to gold’s rise — it’s as if every penny higher has been fought against by the anti-gold group (and who could that be but the Fed?).  RSI and MACD are both bullish:.

“GDX has been a lagger, both in the general market and a laggard vs. gold.  I think this ETF (holding the larger gold mining shares) would be a good item to put in your portfolio and forget about.  The gold mining stocks have big leverage to gold — if or when gold finally takes off”.

“GDXJ is the ETF containing the speculative smaller gold mining stocks.  My advice, take a small position in GDXJ and forget about it for a while.  MACD is bullish.  I think it could be a surprisingly good long-term holding.  But for GDX and GDXJ you are going to need patience”

Getting back to the general market, the Transports are surging into record high territory.  All that’s needed now is a confirmation by the Industrials.  The Dow closed yesterday at 13,712.13 just 452 points below their record high of 14,164.53 established in 2007.  Below we see the Dow, climbing up a steep trendline.  

“The public is bullish.  The retail investors are the most bullish they’ve been in four years.  Volume implications and MACD are bullish.  RSI is about to enter overbought area.  So shouldn’t the Dow climb to new record highs?  Sure, so what’s stopping it?  Just that old axiom, “The best laid plans of mice and men” — Then we have Russell’s axiom — There’s only two sure things in the market — surprise and uncertainty!”

To subscribe to Richard Russell’s Dow Theory Letters CLICK HERE.

About Richard Russell

Russell began publishing Dow Theory Letters in 1958, and he has been writing the Letters ever since (never once having skipped a Letter). Dow Theory Letters is the oldest service continuously written by one person in the business.

Russell gained wide recognition via a series of over 30 Dow Theory and technical articles that he wrote for Barron’s during the late-’50s through the ’90s. Through Barron’s and via word of mouth, he gained a wide following. Russell was the first (in 1960) to recommend gold stocks. He called the top of the 1949-’66 bull market. And almost to the day he called the bottom of the great 1972-’74 bear market, and the beginning of the great bull market which started in December 1974.

The Letters, published every three weeks, cover the US stock market, foreign markets, bonds, precious metals, commodities, economics –plus Russell’s widely-followed comments and observations and stock market philosophy.

Bob takes on the STOCK MARKET, CURRENCIES, COMMODITIES, PRECIOUS METALS, and the FED

PERSPECTIVE

Well, the debt ceiling number has always been there, but it is often changed, when it is expedient. Never down and always up, and lately, with some drama. However, it does provide a chance for a voice of sobriety. The attached chart by Ron Griess shows that the debt level already exceeds the “limit”.

The political drama could more specifically be called “Theatre of the Absurd”. Only popular with the participants; the public and the markets could soon say “Enough!”.

While we can hardly restrain our anticipation of such a revulsion, it would be prudent to watch the charts.

…..go HERE for the entire article including:

STOCK MARKET

CURRENCIES

COMMODITIES

PRECIOUS METALS

CHARTS

SIGNS OF THE TIMES

After spending more than 50 years in foreign hands, Germany’s gold is finally going home.

In a recent watershed decision the Bundesbank, Germany’s central bank, has decided at least half of its gold should be held in its own vaults.

Since the Bundesbank is the second-largest gold holder in the world, that’s going to mean moving 54,000 bars of the shiny metal.

According to Der Spiegel:

“Finally, in 2007, “following numerous enquiries,” Bundesbank staff members were allowed to see the facility, but they reportedly only made it to the anteroom of the German reserves.

So why would the Federal Reserve deny the Bundesbank a full inspection and audit?

That question has been rich feed for the rumor mills ever since the news broke.

It shouldn’t take until 2020 for it to make its way back home. Seven months — maybe. Seven years means something else is up.

So let’s have a closer look at the surrounding facts…

….whole article HERE

“Gold is on the verge of another failure, dangerously close to another leg Down not UP” – Larry Edelson

Unlimited money-printing from the Federal Reserve. Unlimited euro-printing from the European Central Bank. Unlimited yen-printing from the Bank of Japan …

North Korea about to stage a rocket test directed at striking the U.S. North Korea now threatening war with South Korea. Terrorist actions in Algiers. In Mali.

Bankrupt Spain. Greece. Italy. France going down the tubes. Britain on the edge of its third recession since 2008, with its fourth-quarter 2012 GDP contracting more than expected.

Unemployment in Spain’s 16-to-24 age group just hit 55% and overall unemployment, 26.6%, the worst in Spain’s history.

Washington in debt past its eyeballs, and desperate. So much so, it’s acting as though the debt doesn’t exist at all — once again kicking the issue down the road, this time to May 18. And more.

And gold is now nearly $257 below its all-time record high. It can barely rally.

Every time it does, the rally fades away and now, the price of gold is dangerously near an important weekly sell signal on my systems, which stands at $1,657.

I would love nothing more than to tell you that gold has finally embarked on its next leg up to $5,000-plus.

But the fact of the matter is that there is no evidence that it has. Period.

In fact, gold is telling you exactly the opposite: That there isn’t even record demand for gold right now. That instead, demand is actually slumping.

That more debts are about to be liquidated than the central banks can offset with money-printing.

And that inflation has not yet broken out to the upside.

That’s why I’m sticking to what my models say: The next phase of gold’s bull market (and all commodities for that matter) — is not yet here.

Which is precisely why I’m still not ready to stick my head out and load up on more gold. Nor should you.

My forecast — despite all the hate mail and pressure I get to change it — has also not changed: Based on my systems and models, I will not turn bullish again on gold until either …

A. Spot gold has closed above $1,823 an ounce on a weekly and monthly basis. Or …

B. Gold cracks the $1,527 level and plunges to the $1,400 level, and even a tad lower.

I know that’s not what you want to hear. I know that you are as eager as I am to see the next leg of gold’s bull market begin.

I know that you want to buy more gold, load up on it and ride it to glory over the next few years. So do I.

But when a market as sensitive as gold is to geopolitical events … as sensitive as gold is to money-printing and bankrupt governments … doesn’t do what logic says it should be doing, then something else must be going on. Markets are never wrong.

So what is gold really telling us? With all the money-printing going on, why hasn’t gold broken out yet?

With busted governments in Europe, why isn’t gold rallying?

With new war threats coming in from North Korea and from terrorists, why isn’t gold flying to the upside?

Why, in the face of all that, is gold instead dangerously close to issuing another weekly sell signal on my systems, and threatening to plunge anew?

To those of you looking for a fundamental explanation, the reasons are simple:

I see two major forces at work right now that are overpowering all the others …

First, money-printing — even when virtually all major central banks are doing it — means nothing when most of the money being printed is merely ending up sitting in the banks. I’ve said that before and it’s still largely the case.

It means consumers aren’t interested in adding to debt by increasing their borrowings and credit lines … and the velocity of money, or its turnover, is virtually non-existent.

Ditto for corporations that are conserving cash and largely paying down or refinancing debt rather than taking on new debt. Or choosing to buy back their own shares.

Second, fears of North Korea’s recent threats or renewed terrorist uprisings are — at this time — also actually suppressing gold. It’s causing just enough geopolitical uncertainty to put savvy investors in a “cash mode” of thinking … and not quite enough uncertainty to drive them directly into gold.

Both of the above forces will — down the road — become bullish forces for gold. But as those who recently attended the Weiss Wealth Summit in Florida already know from my presentation at the event, none of the above forces will become bullish until it’s time for them to do so.

And based on my work, that’s not likely until later this year. And from much lower prices in gold.

I know that’s difficult to understand. But do listen to the markets and what they are telling you. The markets, I repeat, are never wrong. Only the interpretations and expectations are.

So stay the course. Build up your stash of cash ammo so that when it does come time to pull the trigger on gold again and back up the truck, you will be able to.

Ditto for silver and other natural-resource and tangible-asset investments. While their time to shine is not here yet, it will come again, I assure you that.

You want to be fully ready and able to capitalize on these forces. If you listen to the pundits who proclaim the next bull market is here every time gold rallies $5 or $10 … or even $25, you won’t be ready. You’ll be far more likely to suffer massive losses. Ditto for silver.

Stay the course, build up your ammo, and be ready to pull the trigger when I issue a headline like “Back Up the Truck, NOW!”

Best wishes,

Larry