1. US Oil Imports Drop Off a Cliff

   by Michael Campbell

This Weeks Shocking Stat – US Oil imports have collapsed from 60% to a just reported 22%. Tough on Canada, that relies so heavily on US Oil Exports! 

…read more HERE

2. The Coming Run on Banks and Pensions

 by Dave Kranzler

“There are folks that are saying you know what, I don’t care, I’m going to lock in my retirement now and get out while I can and fight it as a retiree if they go and change the retiree benefits,” he said.  – Executive Director for the Kentucky Association of State Employees,  Proposed Pension Changes Bring Fears Of State Worker Exodus

….continue HERE

3. Gold: Book Profits Now

 by Stewart Thomson

Gold has staged a fabulous rally from about $1220 to $1245.  Using the December futures price chart, I’ve defined the $1300 – $1350 area as a spectacular profit booking opportunity for investors.

….read it all HERE

Sometimes I like to trot these lumbering monthlies out so we can quiet everything down and see where various markets are slowly heading.

First of all, as I go down with my ‘strengthening US dollar’ ship*, I also mal-projected copper’s upside. I’d felt that $3/lb. would cap Doctor Copper because it is very clear lateral resistance at a handy 38% Fib retrace.**

….continue reading HERE

Mass Sentiment is still Negative so Stock Market likely to Correct only

Combining this data with the action in the Copper markets leads us to believe that the stock market is more likely to experience a correction than an outright crash. Higher copper prices are usually indicative of higher stock market prices.  Therefore, the copper markets are confirming that the long term trend is still intact.

What about the Inflation issue? 

Should we start to worry about inflation, now that copper prices are trending higher?  We would prefer to look at it from a different angle; higher copper prices in the past were associated with an improving economy. For a long time, this indicator like the Baltic dry index diverged, but now it appears copper is dancing to the same tune as the Stock Market

Don’t focus on the inflationary factor, as we are not operating in normal times. The Fed opened Pandora’s box so expect the unexpected.

Greenspan raised rates from 1% in 2004 to 5.25% in 2006 and long term rates hardly budged.  The Fed today is in no position to act as aggressively and on a worldwide basis, central bankers are preparing for deflation as opposed to inflation.

Long term rates are trending upwards, but the Fed has already changed its tune and appears to be taking a more dovish stance. 

“Because the neutral rate is currently quite low by historical standards, the federal fund’s rate would not have to rise all that much further to get to a neutral policy stance,” Yellen will tell Congress.

In a twist, the bond market did not trade to new lows after the last rate hike. In fact, it put in a higher low and has been trending upwards. The bond market has completely shrugged off the effects of the last rate hike.  

Bonds bottomed out in March, and since then they have been trending upwards. A monthly close above 158 should lead to a test of the 164 ranges.

Last but not least, the velocity of M2 money stock continues to trend downwards. Inflation will remain a non-issue until it starts to trend upwards. We also have a plethora of deflationary factors to consider, grocery wars that will escalate now with Amazon’s purchase of Whole Foods, automation and AI, etc.

Irony is the form of paradox. Paradox is what is good and great at the same time.

Friedrich Schlegel

By Sol Pahla

Hurricane Harvey hit Texas hard. Much of Houston, our largest city, will be uninhabitable for months, maybe years.

We had no damage where I live near Austin, but like most Texans, I have friends and relatives in the affected areas. We’re all doing what we can to help them—thanks to everyone pitching in from other states too.

Watching the news coverage, I’ve noticed a common scene.

Many flood victims bring dogs and cats with them on the Cajun Navy’s small boats. I haven’t seen any rescuers object. They seem to think nothing of it and even welcome the animals aboard.

Leave them behind? Inconceivable. Pets are part of the family.

This is another example of an economic trend I wrote about last year. It’s not reversing, and I doubt it ever will.

Photo: AP

True Priorities

As I said, Harvey didn’t hit Austin, but I know what it’s like having to evacuate in a rush.

Our area experienced several huge wildfires back in 2011. One got close enough that we could see the flames. As the wind picked up, firefighters told us to “Get out of there right now!”

Given only minutes to grab what possessions you can—and thinking you will probably lose everything else—you learn your true priorities.

Mine were some essential medicines and our three dogs. My wife, son, and I crammed them into our two vehicles and drove to safety.

Fortunately, the fire went a different way and spared our house. But during that period when we didn’t know, did I regret leaving so much behind? No. Bringing the dogs was the right choice… and the Harvey photos show I’m not the only one who thinks that way.

Photo: AP

Long-Term Trend

Last December, I wrote a Connecting the Dots story called “Investing in Our Furry Friends.” It discussed the way Americans increasingly apply their parental instincts to pets instead of children.

One consequence of this trend is a colossal and growing amount of money spent on our pets. The American Pet Products Association estimates that in 2017, $69.4 billion will be spent on US pet care, up from $66.7 billion in 2016.

The substantial growth in pet care stocks supports these numbers. Check out these one-year returns (as of 8/31/17):

• Phibro Animal Health (PAHC) +58.7%
• Heska Corp. (HSKA) +83.2%
• Freshpet Inc. (FRPT) +52.6%

However, that doesn’t mean you can just throw darts and win. The sector had some losers too, such as…

• Aratana Therapeutics (PETX) -41.4%
• Spectrum Brands (SPB) -18.0%

Normally, an ETF would be the right answer if you’re bullish on a sector but not sure which stocks will perform best. Unfortunately, there is no pet care ETF available to US investors, as far as I can tell.

Worse, private equity firms are snapping up some of the once-public stocks from this segment. The two big pet retailers, Petco and PetSmart, are both private now.

So, that’s aggravating. Here we have a really attractive, long-term theme, but actually investing in it is hard. What can you do?

You can try to build your own ETF with a basket of stocks. You probably need at least 20 stocks to be well-diversified, and that will be tough. Some of the best performers are quite small.

I’m constantly watching for opportunities in this segment, and my Yield Shark and Macro Growth & Income Alert subscribers will be first to know when I find them.

Tiny Motors

Before you enter any investment, you want to consider the risks.

Among other things, the pet care industry faces the same risk we discussed last week for bus drivers. What if robots replace our pets?

That’s not as nutty as it sounds. In fact, it’s already happening.

Photo: Paro Therapeutics

A Japanese company, Paro Therapeutics, makes a robotic baby seal that is apparently very lifelike. It reacts and moves much like a real animal. The company envisions it helping sick children and dementia patients.

Clever Japanese inventions don’t always catch on in the West. Remember Tamagotchi?

But technology improves. Eventually, could robotic dogs or cats take the place of our real ones? Would we even know the difference?

In some ways, maybe not. Sufficiently advanced technology could probably make a robotic dog look, feel, and move like a real one. But that’s not the same as being a real dog.

Dogs are a strange mix of predictability and randomness, and cats even more so. Half the time, I have no idea why my three cats do what they do, or what they’ll do next.

I am sure of one thing, though: whatever a cat does, makes perfect sense to the cat.

How do you duplicate that wonderful mixture in an artificial pet? Never say never, but to me it seems unlikely, at least in our lifetimes.

That means the pet care industry ought to keep doing well for several more decades. We will still have dogs and cats. They will still need food, toys, bedding, healthcare and in the future other luxuries we can’t currently imagine.

Best of all, our dogs, cats and other critters will keep making life better—just by being there. That’s what family does.

See you at the top,

Patrick Watson

P.S. If you’d like to help Harvey’s animal victims, here’s some information on charities working to save them. I’m personally supporting Austin Pets Alive, which is temporarily housing hundreds of animals evacuated from shelters in the disaster area.

1. Martin Armstrong: Is the Stock Market Really Overvalued?

   by Martin Armstrong

All we have been hearing since 2011 is how the stock market is going to crash and then there will be hyperinflation and all sorts of strange relationships that never materialize. They simply focus on the level of the stock market in nominal terms without adjusting it for inflation or showing how it has performed relative to the rest of the economy.

…read more HERE

2. Dollar Update as Loss of Reserve Currency Status Looms

 by Clive Maund

The dollar is on course to lose its reserve currency status. This is not something that will happen overnight, it will be a process, but at some point there is likely to be a “sea change” in perception, as the world grasps that this is what is happening, which will trigger a cascade of selling leading to its collapse, whereupon gold and silver will rocket higher. 

….continue HERE

3. Hot Properties: Michael’s Real Estate Warning

 by Michael Campbell & Ozzie Jurock

Michael shares a costly mistake he himself made in real estate and gets Ozzie’s advice on how everyone can avoid stumbling into the same costly scenario.

….read it all HERE