Today we want to introduce the newest member of our team, Don Kaufman. Don has made quite a mark in the last couple months with the introduction of his new TheoTrade program. Truth is, some of our readers have stated they are getting more from his free videos then some of the more expensive programs they have purchased.
Don will be bringing us a free webinar monthly to keep us on the cutting edge of these extremely volatile markets. Just take advantage of any one of his free items. Getting his free eBook or even just watching his most recent free video will guarantee that you will get notified of the free webinars.
So what's in the "How to Protect & Profit in Any Market" eBook?
This 50 page eBook [visit here for free download] will teach you what you need to know to start playing the markets instead of the markets playing you.
Your Portfolio Deserves More Than a 50/50 Chance
It has been shown statistically, over the long run, that fundamental and technical analysis is right about 50% of the time. Flipping a coin will give you the same percentage. As the author of A Random Walk Down Wall Street, Malkiel states, “Technical and Fundamental analysis is a science giving astrology a good name.” Why flip a coin when you can use high probability options strategies?
Diversification is Dead
As a Wall Street saying goes, "When they raid the house they take everyone." Professionals consider diversification as a hedge for people who don’t know how to hedge. Think about it - would you protect the value of your own home against a potential fire by diversifying, that is, buying two houses so if one burns down, the appreciation in the other offsets your loss? Of course not! You insure your home so if it burns down, the insurance covers most of the loss. Welcome to one aspect of using options. Real professionals know how to use options to protect their portfolio from any shock to the markets.
Be The House
Today, investing in the stock market is a big gamble, almost like going to Vegas and playing the slots. And we all know what happens with slot machines. The House always wins. It may take a loss occasionally, but the overall strategy assures that the House will always come out on top. Options let's you turn the tide and be the house. Find out how you can put the odds in your favor.
Get Don's FREE eBook "The Rebel's Guide to Trading Options"....Just Visit Here!
See you in the markets,
Ray C. Parrish
aka the Crude Oil Trader
About Don Kaufman
Don is one of the industry's leading financial strategists and educational authorities with 18 years of financial industry experience. Prior to co-founding TheoTrade, Mr. Kaufman spent 6 years at TD Ameritrade as Director of the Trader Group. At TD Ameritrade Mr. Kaufman handled thinkorswim® content and client education which included the design, build, and execution of what has become the industry standard in financial education. He started his career at thinkorswim® in 2000 (acquired by TD Ameritrade in 2009), where he served as chief derivatives instructor, helping the firm progress into the industry leader in retail options trading and investor education services.
Trade ideas, analysis and low risk set ups for commodities, Bitcoin, gold, silver, coffee, the indexes, options and your retirement. We'll help you keep your emotions out of your trading.
Showing posts with label eBook. Show all posts
Showing posts with label eBook. Show all posts
Wednesday, April 6, 2016
Don Kaufman shows us how to "Protect & Profit" in any Market
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Tuesday, January 12, 2016
Steve Swanson Shows Us How to Trade This Volatile Market
Steve Swanson's 4D technology [which you'll read about in a minute] predicted everything about January's sell off and subsequent rally way back in December. If you want to know the future too, just click on the video link below. An up to date chart of the S&P 500 Price/Time Continuum is posted below the video. See for yourself the precise day the next big rally will begin then use the profit magnifier detailed in this free eBook to earn 3 times more profits.
A revolutionary profit magnifier quietly introduced in November 2008 had the power to essentially change the fate of millions of beleaguered investors. Yet, to this day hardly anybody knows about it. Do you? In his highly acclaimed new book, Steve Swanson [the brilliant trader and inventor who predicted every intermediate market top and bottom for more than two decades] reveals a safe and easy way for you to utilize the powerful Thanksgiving gift of 2008 to earn 3 times more money on every trade.
This is something you really deserve to know about. And you can download his tell all new ebook this week for free. Just for starters, see how you can take that profit and triple it! See how this one simple change can earn you 3 times more money I was shocked. And I think you will be too when you see how ridiculously simple it is to make one minor change. Easy for anybody. And turn a boring 25% a year strategy into an exciting moneymaker that averages 108% a year with no compounding!
And that’s not all. When you download your FREE eBook, you’ll also gain instant access to Steve’s paradigm shifting video
Steve Swanson actually invented a program that plots every intermediate market high and low. Past, present, and future on what’s called the “Price Time Continuum”. That’s how he’s been able to predict and profit from every market turning point for more than 2 decades. Some are calling Swanson’s 4th Dimension breakthrough the “Discovery of the Century”.
See you in the markets,
Ray C. Parrish
aka the Crude Oil Trader
aka the Crude Oil Trader
P.S. As with most free things, Steve Swanson’s generous offer is limited. So, even if you don’t have time to delve into anything new right now, I’d encourage you to grab your free ebook while you can. That way you’ll have it to look through whenever you like. Click Here Now.
Tuesday, November 3, 2015
The Pros Use Them....Why Don't You?
If you have been following our trading partner John Carter of Simpler Options than you have probably heard of one of his in house instructors Bruce Marshall.
Bruce has become an amazing educator in his own right and he has now put together his own free eBook "Greeks 101". And of course he has allowed us to make it available to you today free of charge.
Find it HERE
In this free options trading eBook you will learn:
* The basics on Theta, Delta, Vega and Gamma
* Learn how to quickly tell the probability of your options being "In the Money" by looking at the Greeks
* What options you want and the ones you should stay away from
* How using the Greeks can give you an edge over the average retail trader.
......and much more
Get Bruce's eBook and we'll see you in the markets putting it to use,
Ray C. Parrish
aka the Crude Oil Trader
Get Bruce's FREE eBook "Greeks 101"....Just Click Here!
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Monday, August 24, 2015
Protection Against this Weeks Correction Was Just One Click Away
This market correction is not over so this is a perfect time to download John's latest version of his free eBook. And it's great timing since we have been telling our readers that we are partnering with John on another great event in September and you really need to be familiar with John's trading methods to fully take advantage of what we will be doing in the next few weeks.
In this free options trading eBook you will learn.....
* How to use leverage to grow your account exponentially or free up excess capital
* How to create protection for each one of your positions
* What the options basics are so you’re never confused by an options chain again
* The essentials to managing your position at expiration
* The two different types of settlement
* The key options terms you need to know
* The most important factor to your options trading success
......and much much more
It's crunch time, download the eBook here and get ready to benefit during these volatile times.
See you in the markets!
Ray @ the Crude Oil Trader
Get our latest FREE eBook "Understanding Options"....Just Click Here!
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Tuesday, July 21, 2015
Spotting Reversals Using Simple Patterns in the Markets
With so many commodities trying to scratch out a bottom right now the timing couldn't be better for our trading partner John Carters release of his new eBook "Learn How Human Emotions Produces Patterns in the Markets".
In this eBook, you will learn....
* The 10 chart patterns ALL traders should know
* How to know when a chart pattern is producing an actionable signal
* What chart patterns are the most powerful
* Spot reversals using patterns
* How to call the top using patterns
And a whole lot more!
Take your emotions out of trading positions like.....crude oil, gold, coffee and sugar, just to name a few.
The crude oil, gold, coffee and sugar bulls took another beating this week and it's no surprise traders are dumping positions like crazy. Don't let your emotions get the best of you, put John's simple trading methods to work recognizing those reversals and be ready for them.
Get this free material now....Just Click Here!
See you in the markets putting this to work,
Ray C. Parrish
President/CEO at the Crude Oil Trader
Make sure to subscribe to the Crude Oil Trader so you don't miss a single post from our staff of amazing writers and traders.
In this eBook, you will learn....
* The 10 chart patterns ALL traders should know
* How to know when a chart pattern is producing an actionable signal
* What chart patterns are the most powerful
* Spot reversals using patterns
* How to call the top using patterns
And a whole lot more!
Take your emotions out of trading positions like.....crude oil, gold, coffee and sugar, just to name a few.
The crude oil, gold, coffee and sugar bulls took another beating this week and it's no surprise traders are dumping positions like crazy. Don't let your emotions get the best of you, put John's simple trading methods to work recognizing those reversals and be ready for them.
Get this free material now....Just Click Here!
See you in the markets putting this to work,
Ray C. Parrish
President/CEO at the Crude Oil Trader
Make sure to subscribe to the Crude Oil Trader so you don't miss a single post from our staff of amazing writers and traders.
Tuesday, June 23, 2015
Tomorrow’s Oil from Yesterday’s Wells with Glori Energy’s Michael Pavia
Senior Analyst Phil Flynn discusses resurrecting old oil wells to bring them back to production life using AERO(TM) Technology with Michael Pavia, PhD of Glori Energy (GloriEnergy.com)
Get our latest FREE eBook "Understanding Options"....Just Click Here!
Get our latest FREE eBook "Understanding Options"....Just Click Here!
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Tuesday, May 12, 2015
John Carter's Latest Free eBook "How to Make Money in the Stock Market"
You probably recognize our trading partner John Carter from seeing offers to watch his wildly popular free options trading webinars. John has used these webinars and videos to teach traders some of the most advanced options trading methods imaginable.
Now John has decided to create this new eBook that will help the average home gamer learn how to trade the markets using easy to understand trading techniques that any of us can use starting right away.
In this free stock trading eBook you will learn....
* What are the stock market life cycles that help you predict where the market is headed tomorrow
* Find out who you are trading against and prepare to make the right moves
* How sector rotation can be used to create steady winning trades for your trading account
* How to avoid being impacted by high frequency traders that are manipulating other markets
* How to properly manage your portfolio to generate consistent income within your own personal risk profile
Download the eBook and meet us in the markets putting these methods to work!
See you in the markets!
Ray C. Parrish
aka the CRude Oil Trader
Get John's latest FREE eBooK "How to Make Money in the Stock Market"....Just Click Here
Now John has decided to create this new eBook that will help the average home gamer learn how to trade the markets using easy to understand trading techniques that any of us can use starting right away.
In this free stock trading eBook you will learn....
* What are the stock market life cycles that help you predict where the market is headed tomorrow
* Find out who you are trading against and prepare to make the right moves
* How sector rotation can be used to create steady winning trades for your trading account
* How to avoid being impacted by high frequency traders that are manipulating other markets
* How to properly manage your portfolio to generate consistent income within your own personal risk profile
Download the eBook and meet us in the markets putting these methods to work!
See you in the markets!
Ray C. Parrish
aka the CRude Oil Trader
Get John's latest FREE eBooK "How to Make Money in the Stock Market"....Just Click Here
Saturday, April 25, 2015
Mike Seerys Weekly Natural Gas Futures Recap
Our trading partner Michael Seery is back with his weekly recap of the Futures market. He has been a senior analyst for close to 15 years and has extensive knowledge of all of the commodity and option markets.
Natural gas futures in the June contract settled last Friday at 2.68 while currently trading at 2.56 down around 12 points for the trading week as I have been recommending a short position in the last several weeks as this trade has basically gone sideways to slightly lower and if you took the original recommendation place your stop loss above the 10 day high which currently stands at 2.73 risking around 17 points or $425 per mini contract plus slippage and commission and if you are trading the March contract the risk would be $1,700 plus slippage and commission as the chart structure is outstanding at the current time.
Here's more calls from Mike on Oats. gold, corn, wheat, soybeans and more!
Many of the commodity markets were lower this afternoon, however average temperatures in the Midwestern part of the United States are dragging natural gas prices lower with the next major resistance around 2.50 so continue to play this to the downside and take advantage of any rallies as the chart structure is outstanding allowing you to place a very tight stop therefore lowering monetary risk as prices are still trading below their 20 and 100 day moving average telling you that the trend is to the downside as prices closed at the weekly low.
Trend: Lower
Chart Structure: Excellent
Get our latest FREE eBook "Understanding Options"....Just Click Here!
Natural gas futures in the June contract settled last Friday at 2.68 while currently trading at 2.56 down around 12 points for the trading week as I have been recommending a short position in the last several weeks as this trade has basically gone sideways to slightly lower and if you took the original recommendation place your stop loss above the 10 day high which currently stands at 2.73 risking around 17 points or $425 per mini contract plus slippage and commission and if you are trading the March contract the risk would be $1,700 plus slippage and commission as the chart structure is outstanding at the current time.
Here's more calls from Mike on Oats. gold, corn, wheat, soybeans and more!
Many of the commodity markets were lower this afternoon, however average temperatures in the Midwestern part of the United States are dragging natural gas prices lower with the next major resistance around 2.50 so continue to play this to the downside and take advantage of any rallies as the chart structure is outstanding allowing you to place a very tight stop therefore lowering monetary risk as prices are still trading below their 20 and 100 day moving average telling you that the trend is to the downside as prices closed at the weekly low.
Trend: Lower
Chart Structure: Excellent
Get our latest FREE eBook "Understanding Options"....Just Click Here!
Monday, April 20, 2015
This Weeks Free Webinar...Trading Options the Same Way as the Institutional Traders
Our trading partner Guy Cohen of OVI Flag Traders is finally free from his contract obligations with his large institutional clients and he is back with us for another free training webinar this Thursday April 23rd.
Guy's latest indicator and methods will give us all a unique and valuable insight to what the insiders are up to. The truth is, no one can predict 100% where the markets are going at any given time, but he has developed something that can give us a better clue, especially during certain market setups.
And frankly, that's all we need to become consistently great traders and investors. You can stick with just one inspired method like this and you'll not only be profitable but you will do it safely.
On This Webinar You Will Discover.....
* How one of Guy's students made huge profits in just three short months trading this one specific strategy
* Learn how to master Options regardless of which direction the market is moving
* Learn Guy's simple strategies to consistent income
* How to grow a small account with powerful and safe options strategies to use the right
leverage at the right time
* How to recognize and capitalize on the best patterns right now in the market.
And so much more!
Watch this weeks free video to get even more details about what we will cover in this free webinar....
Just Click Here to Watch the Free Video
In an attempt to make sure everybody gets a seat Guy will be doing two complete live presentations on Thursday at 2 p.m. est and 8 p.m. est.
These two webinars will fill to capacity quickly as Click Here to get Your Reserved Seat asap
See you on Thursday!
Ray C. Parrish
aka the Crude Oil Trader
P.S. While you are waiting for this weeks webinar take a minute to download Guy's free eBook and start learning some of his methods traders have been using for years.....Get Free eBook Here
Guy's latest indicator and methods will give us all a unique and valuable insight to what the insiders are up to. The truth is, no one can predict 100% where the markets are going at any given time, but he has developed something that can give us a better clue, especially during certain market setups.
And frankly, that's all we need to become consistently great traders and investors. You can stick with just one inspired method like this and you'll not only be profitable but you will do it safely.
On This Webinar You Will Discover.....
* How one of Guy's students made huge profits in just three short months trading this one specific strategy
* Learn how to master Options regardless of which direction the market is moving
* Learn Guy's simple strategies to consistent income
* How to grow a small account with powerful and safe options strategies to use the right
leverage at the right time
* How to recognize and capitalize on the best patterns right now in the market.
And so much more!
Watch this weeks free video to get even more details about what we will cover in this free webinar....
Just Click Here to Watch the Free Video
In an attempt to make sure everybody gets a seat Guy will be doing two complete live presentations on Thursday at 2 p.m. est and 8 p.m. est.
These two webinars will fill to capacity quickly as Click Here to get Your Reserved Seat asap
See you on Thursday!
Ray C. Parrish
aka the Crude Oil Trader
P.S. While you are waiting for this weeks webinar take a minute to download Guy's free eBook and start learning some of his methods traders have been using for years.....Get Free eBook Here
Thursday, April 16, 2015
An Insight into What Institutions Get When They Pay Top Dollar
Our trading partner and one of the industry’s most respected traders, Guy Cohen of the OVI Flag Trader, has released a new eBook that you must download and read. Guy is truly the experts’ expert when it comes to options. Over the last 13 years Guy has licensed this proprietary research to institutional clients including the NYSE, the ISE and several brokers.
Fortunately for you his obligations are fulfilled, and he’s now available for the first time in many years to show you his completely unique approach to options.
To celebrate his availability, I asked him to share some of his pearls of wisdom with my valued subscribers. I was just in time because Guy is also contracted to one of his publishers for a new edition of one of his bestsellers. So for starters, he’s written a brand new eBook showing you his uniquely simple approach that you can start implementing immediately. And we have the pleasure of sharing it with you today!
Grab Your Copy Here
In this publication you will learn how to.....
* Trade volatility around news events such as earnings (I love this section)
* Match the right options strategy with the appropriate chart setup (crucial for all options traders)
* Understand the Greeks in seconds (I kid you not...Guy’s approach to this is utterly unique)
* Trade for income with full illustrated examples (and I know there’s more to come) and much more.
If you’re interested in trading options at the highest level, from the industry’s leading expert, you will want to grab your copy NOW!
Guy has an uncanny ability to demystify and simplify options, which is why he’s a four time best selling author, and this is exactly what this new eBook will do for you and more.
See you in the markets putting this to work!
Ray C. Parrish
aka the Crude Oil Trader
Get Guy Cohen's latest FREE eBook....Just Click Here!
Fortunately for you his obligations are fulfilled, and he’s now available for the first time in many years to show you his completely unique approach to options.
To celebrate his availability, I asked him to share some of his pearls of wisdom with my valued subscribers. I was just in time because Guy is also contracted to one of his publishers for a new edition of one of his bestsellers. So for starters, he’s written a brand new eBook showing you his uniquely simple approach that you can start implementing immediately. And we have the pleasure of sharing it with you today!
Grab Your Copy Here
In this publication you will learn how to.....
* Trade volatility around news events such as earnings (I love this section)
* Match the right options strategy with the appropriate chart setup (crucial for all options traders)
* Understand the Greeks in seconds (I kid you not...Guy’s approach to this is utterly unique)
* Trade for income with full illustrated examples (and I know there’s more to come) and much more.
If you’re interested in trading options at the highest level, from the industry’s leading expert, you will want to grab your copy NOW!
Guy has an uncanny ability to demystify and simplify options, which is why he’s a four time best selling author, and this is exactly what this new eBook will do for you and more.
See you in the markets putting this to work!
Ray C. Parrish
aka the Crude Oil Trader
Get Guy Cohen's latest FREE eBook....Just Click Here!
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Friday, April 10, 2015
This Weeks Free Webinar....How to Find High Probability Earnings Trades
Our trading partner John Carter of Simpler Options is back with another one of his wildly popular free webinars. This time around it's "How to Find High Probability Earnings Trades"......Register Now
This free webinar will be held this Tuesday April 14th at 8 p.m. eastern time.
In this webinar John will discuss......
* Why earnings announcements offer a quarterly opportunity you may want to take off from work for
* Why playing big price movement is not the only way to trade around earnings
* How to plan around earnings season each quarter so you’re not caught by surprise
* How to avoid the common mistake traders make around earnings
* The simple way to know which options to trade around earnings so you never pick the wrong one
And much more…..
Don’t worry, if you can’t attend live. We’ll send you a link to the recorded webinar within 24-48 hours. But you must pre-register for the event.
Just Click Here to Complete Registration
See you Tuesday,
Ray C. Parrish
aka the Crude Oil Trader
Get our latest FREE eBook "Understanding Options"while you can....Just Click Here!
This free webinar will be held this Tuesday April 14th at 8 p.m. eastern time.
In this webinar John will discuss......
* Why earnings announcements offer a quarterly opportunity you may want to take off from work for
* Why playing big price movement is not the only way to trade around earnings
* How to plan around earnings season each quarter so you’re not caught by surprise
* How to avoid the common mistake traders make around earnings
* The simple way to know which options to trade around earnings so you never pick the wrong one
And much more…..
Don’t worry, if you can’t attend live. We’ll send you a link to the recorded webinar within 24-48 hours. But you must pre-register for the event.
Just Click Here to Complete Registration
See you Tuesday,
Ray C. Parrish
aka the Crude Oil Trader
Get our latest FREE eBook "Understanding Options"while you can....Just Click Here!
Friday, February 27, 2015
Are you a Brain Dead Trader or Just Lucky?
Were you one of the lucky ones? Were you one of 8,909 traders that registered for this weeks fantastic free webinar from John Carter? If not, not to worry. John has made the webinar available as a replay and of course it's still free to watch. This was another game changer as John found a way to make trading options on premium decay understandable by anyone no matter their trading skill level.
Watch the Free Webinar Replay Here
Why did so many traders fight for a spot at this webinar? I think it has a lot to do with the video primer John send us earlier in the week giving us just a taste of what John would show us in more detail at the webinar.
Watch that Free Video Here
In this video John shows us a simple and effective strategy for using premium decay, but he also shows us his strategy to make money on a stock if it's going up or down.
In this webinar John will discuss....
* Why trading options are perfect for newbies, retirees, part time traders, and full time traders
* Why options are safer than trading stocks, futures or forex while holding on for bigger winners
* One strategy he uses for consistent trading results that you can use the next trading day
* The brain dead rules to follow so you can know exactly how to trade this one set up for consistency
* How traders get sucked into buying the wrong stocks at the wrong price so you never get suckered into a trade again
And much more….
And John doesn't stop there.....
Get his latest FREE eBook "Understanding Options"....Just Click Here!
Nobody did more in 2014 to change the way traders, investors and fund managers looks at trading options than John did with this one eBook. Get yours right now while it's still available.
See you in the markets!
Ray C. Parrish
aka the Crude Oil Trader
Watch the Free Webinar Replay Here
Why did so many traders fight for a spot at this webinar? I think it has a lot to do with the video primer John send us earlier in the week giving us just a taste of what John would show us in more detail at the webinar.
Watch that Free Video Here
In this video John shows us a simple and effective strategy for using premium decay, but he also shows us his strategy to make money on a stock if it's going up or down.
In this webinar John will discuss....
* Why trading options are perfect for newbies, retirees, part time traders, and full time traders
* Why options are safer than trading stocks, futures or forex while holding on for bigger winners
* One strategy he uses for consistent trading results that you can use the next trading day
* The brain dead rules to follow so you can know exactly how to trade this one set up for consistency
* How traders get sucked into buying the wrong stocks at the wrong price so you never get suckered into a trade again
And much more….
And John doesn't stop there.....
Get his latest FREE eBook "Understanding Options"....Just Click Here!
Nobody did more in 2014 to change the way traders, investors and fund managers looks at trading options than John did with this one eBook. Get yours right now while it's still available.
See you in the markets!
Ray C. Parrish
aka the Crude Oil Trader
Wednesday, February 18, 2015
Professional Trader and Author John Carter Shows us How to Trade Options with Oil and Energy ETF's
Curious how to get started trading natural gas, oil, energy stocks and etfs with a small trading account and grow it exponentially with less risk? Then you need to this free eBook - Understanding Options. Professional trader and author John Carter gives the skinny on how HE does it.
Complete Guide To Trading Options Download the complete guide to understanding options...
SIMPLER OPTIONS
Get out latest FREE eBooK "Understanding Options"
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Tuesday, January 27, 2015
How to Find the Best Offshore Banks
By Nick Giambruno
It’s hard to think of a topic where following the conventional wisdom can be more dangerous. And that topic is banking. It’s generally accepted as an absolute truth by the public and most financial experts that putting your money in a domestic bank is a safe and responsible thing to do. After all, if anything were to go wrong, your deposits are insured by the government.
As a result, most people put more thought into which shoes they should purchase than which bank should be entrusted with their life savings.
It’s a classic moral hazard—a situation in which a person is more likely to take risks because the costs won’t be borne by that person. In the case of banking, that’s how a lot of people think, but it isn’t necessarily true that individuals bear no costs of their banking decisions. The prudent thing to do is ignore the conventional wisdom and look at the facts to form your opinions. Choosing the right custodian for your life savings makes a difference—and it deserves some serious thought.
In the US, the Federal Deposit Insurance Corporation (FDIC) insures bank deposits. In the case of a bank failure, the FDIC pays depositors up to $250,000. The FDIC has a reserve of around $30 billion for this purpose.
Now, $30 billion might sound like a lot of money. But considering that the FDIC insures around $9 trillion in deposits, the $30 billion in reserve amounts to just a drop in the bucket. It’s actually less than half a penny for every dollar it supposedly insures.
In fact, there are over 36 banks in the US that have deposits larger than the FDIC’s reserve. It wouldn’t take much for the FDIC itself to go bust. One large bank failure is all it would take. And with many of the big banks leveraged to the hilt, that isn’t as remote a possibility as many would believe.
Oddly, this doesn’t shake the confidence the public and most financial experts place in the US banking system.
Also, it’s already an established precedent that whenever a government deems it necessary, deposit guarantees can be disregarded on whim. We saw this in the early days of the financial crisis in Cyprus. The Cypriot government initially sought (but was ultimately rebuffed) to dip its hands into bank accounts under the guaranteed amount. Similarly, Spain has imposed a blanket taxation on all bank deposits. I’d bet this is only the beginning. We haven’t even made it through the coming attractions.
Taken together, this shows that the confidence in the banking system—merely because of the existence of a bankrupt government promise—is dangerously misplaced.
Follow conventional wisdom at your own peril.
See what our traders are trading everyday, and it's FREE....Just Click Here!
Fortunately, in this day and age the decision on where to bank doesn’t have to be constrained by geography. Banking outside of your home country—where much sounder governments, banking systems, and banks can be found—is in most ways just as easy as banking with Bank of America.
Obtaining a bank account outside of your home country is a key component of any international diversification strategy.
It protects you from capital controls, lightning government seizures, bail ins, other forms of confiscation, and any number of other dirty tricks a bankrupt government might try.
Offshore banks offer another benefit: they are usually much safer and more conservatively run than banks in your home country… at least if you live in the US and many parts of Europe. It’s hard to see how you’d be worse off for placing some of your cash where it’s treated best. In the event that your home government does something desperate or your domestic bank makes a losing bet, it could turn out to be a very prudent move.
When Doug Casey and I were in Cyprus, we met with a number of astute Cypriots who saw the writing on the wall. They got their money outside of the country before the bail in and capital controls, and they were spared. It would be wise to learn from their example.
But you shouldn’t just blindly move your savings to any foreign bank. You want to consider only the best.
For me, being able to find the safest and best offshore banks comes naturally. In the past, I worked as a banking analyst for an investment bank in Beirut, Lebanon. While there, I rigorously assessed countless banks around the world. This experience and the analytical tools I developed have been very helpful in evaluating the best offshore banks worthy of holding deposits.
A basic rundown (but not inclusive) of factors I look for when analyzing an offshore bank include:
For example, assume you are a Chinese citizen and want to diversify. It wouldn’t make much sense to open an account with the New York City branch of the Bank of China. It would be much better from a diversification standpoint for the Chinese citizen to open an account with a sound regional or local bank that doesn’t have a presence or connection to mainland China—and thus cannot have its arm easily twisted by the Chinese government.
Each year, a prominent financial magazine publishes a study on the world’s safest banks. Below are its top 10 safest banks in the world (notice that none of them is in the US).
Naturally, things can change quickly though. New options emerge, while others disappear. This is why it’s so important to have the most up-to-date and accurate information possible. That’s where International Man comes in. Be sure to get the free IM Communiqué to keep up with the latest on the best offshore banking options.
Now, as an American citizen, it’s very unlikely that you could just show up to one of these banks and open an account as a nonresident of that country. That is, unless you plan on making a seven figure or high six figure deposit. Then you might have a chance, but even then it’s not guaranteed.
This dynamic is thanks to FATCA and all the red tape that the US government imposes on foreign banks who have US clients. For foreign banks, the logical business decision is to show Americans the unwelcome mat. The costs simply do not justify the benefits.
This is unfortunately true for many banks the world over. The net effect is to drastically reduce the number of choices that Americans have when banking offshore. It’s a sort of de facto capital control.
There are of course exceptions. Some solid offshore banks still accept Americans, and some even open accounts remotely. This means you could obtain huge diversification benefits without having to leave your living room.
In our comprehensive Going Global publication, we discuss our favorite banks and jurisdictions for offshore banking, crucially including those that still accept Americans as clients. It’s a list that is constantly dwindling, which highlights the need to act sooner rather than later.
As a result, most people put more thought into which shoes they should purchase than which bank should be entrusted with their life savings.
It’s a classic moral hazard—a situation in which a person is more likely to take risks because the costs won’t be borne by that person. In the case of banking, that’s how a lot of people think, but it isn’t necessarily true that individuals bear no costs of their banking decisions. The prudent thing to do is ignore the conventional wisdom and look at the facts to form your opinions. Choosing the right custodian for your life savings makes a difference—and it deserves some serious thought.
A False Sense of Security
Now, $30 billion might sound like a lot of money. But considering that the FDIC insures around $9 trillion in deposits, the $30 billion in reserve amounts to just a drop in the bucket. It’s actually less than half a penny for every dollar it supposedly insures.
In fact, there are over 36 banks in the US that have deposits larger than the FDIC’s reserve. It wouldn’t take much for the FDIC itself to go bust. One large bank failure is all it would take. And with many of the big banks leveraged to the hilt, that isn’t as remote a possibility as many would believe.
Oddly, this doesn’t shake the confidence the public and most financial experts place in the US banking system.
Also, it’s already an established precedent that whenever a government deems it necessary, deposit guarantees can be disregarded on whim. We saw this in the early days of the financial crisis in Cyprus. The Cypriot government initially sought (but was ultimately rebuffed) to dip its hands into bank accounts under the guaranteed amount. Similarly, Spain has imposed a blanket taxation on all bank deposits. I’d bet this is only the beginning. We haven’t even made it through the coming attractions.
Taken together, this shows that the confidence in the banking system—merely because of the existence of a bankrupt government promise—is dangerously misplaced.
Follow conventional wisdom at your own peril.
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Fortunately, in this day and age the decision on where to bank doesn’t have to be constrained by geography. Banking outside of your home country—where much sounder governments, banking systems, and banks can be found—is in most ways just as easy as banking with Bank of America.
The Solution
It protects you from capital controls, lightning government seizures, bail ins, other forms of confiscation, and any number of other dirty tricks a bankrupt government might try.
Offshore banks offer another benefit: they are usually much safer and more conservatively run than banks in your home country… at least if you live in the US and many parts of Europe. It’s hard to see how you’d be worse off for placing some of your cash where it’s treated best. In the event that your home government does something desperate or your domestic bank makes a losing bet, it could turn out to be a very prudent move.
When Doug Casey and I were in Cyprus, we met with a number of astute Cypriots who saw the writing on the wall. They got their money outside of the country before the bail in and capital controls, and they were spared. It would be wise to learn from their example.
But you shouldn’t just blindly move your savings to any foreign bank. You want to consider only the best.
For me, being able to find the safest and best offshore banks comes naturally. In the past, I worked as a banking analyst for an investment bank in Beirut, Lebanon. While there, I rigorously assessed countless banks around the world. This experience and the analytical tools I developed have been very helpful in evaluating the best offshore banks worthy of holding deposits.
A basic rundown (but not inclusive) of factors I look for when analyzing an offshore bank include:
- The economic fundamentals and political risk of the jurisdictions the bank operates in.
- The quality of the bank’s assets—namely its loan book and investments. This helps you determine what the bank is doing with your money. I look for banks that are conservatively run and don’t gamble with your deposits. Banks that make leveraged bets with things like mortgage-backed securities or Greek government bonds are obviously to be avoided. Having a sound loan book with a low nonperforming ratio is crucial.
- Liquidity—a relatively safer bank will keep more cash on hand rather than invest it in risky assets or loan it out, all else equal. That way it can meet customer withdrawals without having to potentially sell off assets for a loss—which could affect its ability to give you back your deposits.
- Capitalization—this is a measure of its financial strength of the bank. It also shows you if the bank is using excessive leverage, which can increase the risk of insolvency. A bank’s capitalization is like its margin of error: the higher the better.
For example, assume you are a Chinese citizen and want to diversify. It wouldn’t make much sense to open an account with the New York City branch of the Bank of China. It would be much better from a diversification standpoint for the Chinese citizen to open an account with a sound regional or local bank that doesn’t have a presence or connection to mainland China—and thus cannot have its arm easily twisted by the Chinese government.
The Best Offshore Banks
Naturally, things can change quickly though. New options emerge, while others disappear. This is why it’s so important to have the most up-to-date and accurate information possible. That’s where International Man comes in. Be sure to get the free IM Communiqué to keep up with the latest on the best offshore banking options.
Now, as an American citizen, it’s very unlikely that you could just show up to one of these banks and open an account as a nonresident of that country. That is, unless you plan on making a seven figure or high six figure deposit. Then you might have a chance, but even then it’s not guaranteed.
This dynamic is thanks to FATCA and all the red tape that the US government imposes on foreign banks who have US clients. For foreign banks, the logical business decision is to show Americans the unwelcome mat. The costs simply do not justify the benefits.
This is unfortunately true for many banks the world over. The net effect is to drastically reduce the number of choices that Americans have when banking offshore. It’s a sort of de facto capital control.
There are of course exceptions. Some solid offshore banks still accept Americans, and some even open accounts remotely. This means you could obtain huge diversification benefits without having to leave your living room.
In our comprehensive Going Global publication, we discuss our favorite banks and jurisdictions for offshore banking, crucially including those that still accept Americans as clients. It’s a list that is constantly dwindling, which highlights the need to act sooner rather than later.
The article was originally published at internationalman.com.
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Tuesday, January 20, 2015
The Single Most Important Economic Statistic that the White House Never Talks About
By Tony Sagami
For the first time in 35 years, American business deaths now outnumber business births. —Jim Clifton, CEO, Gallup Polls
If you’ve ever owned a business, you know exactly what I’m talking about.
Difficult or not, self employment is extremely rewarding, and I wouldn’t have it any other way. Nor would the other 6 million business owners in the United States. Of those 6 million businesses, the vast majority are small “Mom and Pop” businesses. Here are more statistics on businesses in the U.S. :
- 3.8 million have four or fewer employees. That’s me!
- 1 million with 5-9 employees;
- 600,000 with 10-19 employees;
- 500,000 with 20-99 employees;
- 90,000 with 100-499 employees;
- 18,000 with 500 employees or more; and
- 1,000 companies with 10,000 employees or more.
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For those reasons, the health (or lack thereof) of small business is the single most important long term indicator of America’s economic health. Warning: new data suggest that small businesses are in deep trouble.
For the first time in 35 years, the number of business deaths outnumbers the number of business births.
The US Census Bureau reported that the birth and death rates of American businesses crossed for the first time ever! 400,000 new businesses were born last year, but 470,000 died.
Yup, business deaths now outnumber business births.
Pay attention, because this part is important.
The problem isn’t so much that businesses are failing, but that American entrepreneurs are simply not starting as many new businesses as they used to. We like to think of America has the hotbed of capitalism, but the US actually is number 12 among developed nations for new business startups.
Number 12!
You know what countries are ahead of us? Hungary, Denmark, Finland, New Zealand, Sweden, Israel, and even financially troubled Italy are creating new businesses faster than us!
The reasons for the capitalist pessimism are many, but my guess is that the root of the problem comes down to three issues: (1) difficulty of accessing capital (loans); (2) excessive and burdensome government regulations; and (3) an overall malaise about our economic future.
Business owners are permanently smitten with an entrepreneurial bug, and the only thing that prevents them from seeking business success is the expectation that they’ll lose money.
Sadly, the lack of new business start ups is confirmation that American’s free enterprise system is broken.
"There is nobody in this country who got rich on their own. Nobody. You built a factory out there—good for you. But I want to be clear. You moved your goods to market on roads the rest of us paid for. You hired workers the rest of us paid to educate. You were safe in your factory because of police forces and fire forces that the rest of us paid for. You didn't have to worry that marauding bands would come and seize everything at your factory... Now look. You built a factory and it turned into something terrific or a great idea—God bless! Keep a hunk of it. But part of the underlying social contract is you take a hunk of that and pay forward for the next kid who comes along."
―Elizabeth Warren |
“When small and medium-sized businesses are dying faster than they’re being born, so is free enterprise. And when free enterprise dies, America dies with it,” warns Gallup CEO Jim Clifton.
I don’t believe for a second that America’s free-enterprise system is permanently broken. The pendulum will eventually swing the other way, but our economy will not enjoy boom times until the birth/death trends are reversed.
That won’t happen next week or next month. It will take serious, fundamental changes in tax, regulatory, and judicial rules, and I sadly fear that it will take several years for that to happen. Until then, our economy is going to struggle and will pull our high flying stock market down with it. Are you prepared?
If you’re not familiar with inverse ETFs, you’re ignoring one of your best defenses against tough times. An inverse ETF is an exchange traded fund that’s designed to perform as the inverse of whatever index or benchmark it’s designed to track.
By providing performance opposite to their benchmark, inverse ETFs prosper when stock prices are falling. An inverse S&P 500 ETF, for example, seeks a daily percentage movement opposite that of the S&P. If the S&P 500 rises by 1%, the inverse ETF is designed to fall by 1%; and if the S&P falls by 1%, the inverse ETF should rise by 1%.
There are inverse ETFs for most major indices and even sectors and commodities (like oil and gold), as well as specialty ETFs for things like the VIX Volatility Index.
I’m not suggesting that you rush out and buy a bunch of inverse ETFs tomorrow morning. As always, timing is critical, so I recommend that you wait for my buy signals in my Rational Bear service.
But make no mistake, the birth/death ratio is signaling serious trouble ahead. Any investor who doesn’t prepare for it is going to get run over and flattened like a pancake.
Tony Sagami
30 year market expert Tony Sagami leads the Yield Shark and Rational Bear advisories at Mauldin Economics. To learn more about Yield Shark and how it helps you maximize dividend income, click here.
To learn more about Rational Bear and how you can use it to benefit from falling stocks and sectors, click here.
The article Connecting the Dots: The Single Most Important Economic Statistic that the White House Never Talks A was originally published at mauldineconomics.com
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Wednesday, January 14, 2015
A Five Year Forecast: Is this a Tsunami Warning?
By John Mauldin
It is the time of the year for forecasts; but rather than do an annual forecast, which is as much a guessing game as anything else (and I am bad at guessing games), I’m going to do a five year forecast to take us to the end of the decade, which I think may be useful for longer term investors. We will focus on events and trends that I think have a high probability, and I’ll state what I think the probabilities are for my forecasts to actually happen. While I could provide several dozen items, I think there are seven major trends that are going to sweep over the globe and that as an investor you need to have on your radar screen. You will need to approach these trends with caution, but they will also provide significant opportunities.
There is a book in here somewhere, but I do not intend to write one today. In fact, my New Year’s resolution is to write shorter letters in 2015. Over the last decade and a half, the letter has tended to get longer. A little more here, a little more there, and pretty soon it just gets to be a bit too much to read in one sitting. That means I need to either be more concise, break up my topics into two sessions or, if further writing is necessary, post the additional work on the website for those interested.
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So I’m writing today’s letter in that spirit. Each of the major topics we’ll be covering will show up in other letters over the next few months. I would appreciate your feedback and any links to articles and/or data points that you think I should know about regarding these topics.
But first, this is generally the most downloaded letter of the year. I want to invite new readers to become one of my 1 million closest friends by simply entering your email address here. You can follow my work throughout the year, absolutely free (and see how my prognostications are turning out). And if you’re a regular reader, why not send this to a few of your friends and suggest they join you? At the very least, Thoughts from the Frontline should make for some interesting conversations this year. Thanks. Now let’s get on with the forecasting.
Seven Significant Changes for the Next Five Years
Let’s look at what I think are six inexorable trends or waves that will each have a major impact in its own right but that when taken together will amount to a tsunami of change for the global economy.
1. Japan will continue its experiment with the most radical quantitative easing attempted by a major country in the history of the world… and the experiment is getting dangerous. The Bank of Japan is effectively exporting the island nation’s deflation to its trade competitors like Germany, China, and South Korea and inviting a currency war that could shake the world. I’ve been saying this for years now, but the story took a nasty turn on Halloween Day, when the Bank of Japan announced it was greatly expanding and changing the mix of its asset purchases. The results have been downright scary, and a major slide in the JPY/USD exchange rate is almost certain over the next five years. I give it a 90% probability. All this while the population of Japan shrinks before our very eyes.
2. Europe is headed for a crisis at least as severe as the Grexit scare was in 2012 – and for the resulting run-up in interest rates and a sovereign debt scare in the peripheral countries. After all these years of struggle, the structural flaws in the EMU’s design remain; and now major economies like Italy and France are headed for trouble. In the very near future we will finally know the answer to the question, “Is the euro a currency or an experiment?” The changes required to answer that question will be wrenching and horrifically expensive. There are no good answers, only difficult choices about who pays how much and to whom. Again, I see the deepening of the Eurozone crisis as a 90% probability.
3. China is approaching its day of reckoning as it tries to reduce its dependency on debt in its bid for growth, while creating a consumer society. The world is simply not prepared for China to experience an outright “hard landing” or recession, but I think there is a 70% probability that it will do so within the next five years.
And the probability that China will suffer either a hard landing OR a long period of Japanese style stagnation (in the event that the Chinese government is forced to absorb nonperforming loans to prevent a debt crisis) is over 95%. To be sure, it is still quite possible that the Chinese economy will be significantly larger in 2025 (ten years from now) than it is today, but realizing that potential largely depends on President Xi Jinping’s ability to accomplish an extremely difficult task: deleveraging the debt overhang that threatens the country’s MASSIVE financial system while rebalancing the national economy to a more sustainable growth model (either through either a vast expansion of China’s export market or the rapid development of “new economy” sectors like technology, services, and consumption; or both).
This will not be the end of China, which I’m quite bullish on over the very long term, but such transitions are never easy. Even given this rather stark forecast, it is still likely (in my opinion) that the Chinese economy will be 20 to 25% bigger as 2020 opens than it is today; and every other major economy in the world (including the US) would be thrilled to have such growth. At the very least, though, China’s slowdown and rebalancing is going to put pressure on commodity exporters, which are generally emerging markets plus Australia, Canada, and Norway.
4. All of the above will tend to be bullish for the dollar, which will make dollar-denominated debt in emerging market countries more difficult to pay back. And given the amount of debt that has been created in the last few years, it is likely that we’ll see a series of crises in emerging-market countries, along with an uncomfortably high level of risk of setting off an LTCM-style global financial shock.
My colleague Worth Wray spoke about this new era of volatile FX flows and growing risk of capital flight from emerging markets at my Strategic Investor Conference last May, and he has continued to remind us of those risks in recent months (“A Scary Story for Emerging Markets” and “Why the World Needs the US Economy to Struggle”).
Now that Russia has tumbled into a full-fledged currency crisis with serious signs of contagion, Worth’s prediction is already playing out, and I would assign an 80 to 90% probability that it will continue to do so, as a function of (1) the rising US dollar and a reversal in cross border capital flows, (2) falling commodity prices, or (3) both. This massive wave is going to create a lot of opportunities for courageous investors who are ready to surf when countries are cheap.
5. I do not believe that the secular bear market in the United States that I began to describe in 1999 has ended. Secular bull markets simply do not begin from valuations like those we have today. Either we began a secular bull market in 2009, or we have one more major correction in front of us.
Obviously, I think it is the latter. It has been some time since I’ve discussed the difference between secular bull and bear markets and cyclical bull and bear markets, and I will briefly touch on the topic today and go into much more detail in later letters. For US focused investors, this is of major importance. The secular bear is not something to be scared of but simply something to be played. It also offers a great deal of opportunity.
If I am right, then the next major leg down will bring on the end of the secular bear and the beginning of a very long term secular bull. We will all get to be geniuses in the 2020s and perhaps even before the last half of this decade runs out. Won’t that be fun? Let’s call the end of the secular bear a 90% probability in five years and move on.
6. Finally, the voters of the United States are going to have to make a decision about the direction they want to take the country. We can either opt for growth, which will mean a new tax and regulatory regime, or we can double down on the current direction and become Europe and Japan. I’ve traveled to both Europe and Japan, and they’re both pleasant enough places to live, but I wouldn’t want to be a citizen of either Japan or the Eurozone for the rest of this decade. (I particularly love Italy, but it is beginning to resemble a basket case, with last year’s optimistic drive for reforms seemingly stalled.)
However, I would rather live and work and invest in a high-growth country, with opportunities all around me, a country where we reduce income inequality by increasing wealth and opportunities at the lower end of the income scale instead of trying to legislate parity by increasing taxes and imposing government mandated wealth redistribution, which slows growth and squelches opportunity for everyone.
A restructuring of the US tax and regulatory regime does not mean a capitulation to the wealthy, big banks, or big business. Properly conceived and constructed, it will allow the renewal of the middle class and result in higher income for all. Sadly, it is not clear to me that either the Republican or Democratic parties are up to the task of making the difficult political decisions necessary. They each have constituencies that tend to opt for the status quo. But I see hope on both sides of the political spectrum that change is possible. The course they set will give us an idea where we will want to focus our portfolios in the decade of the ’20s. It is a 100% probability that we will have to make a decision. It is less than 50% that we will make the right one – or at least the one that I think is the right one.
7. We have entered the Age of Transformation. We’re going to see the development of new technologies that will simply astound us – from increasingly capable robots and other applications of AI to huge breakthroughs in biotechnology.
The winners are going to be those who identified the truly transformational technologies early on in their development and invested wisely. While riskier (potentially far riskier) than most of your investments should be, a basket of new-technology stocks should be considered for the growth part of your portfolio. I see the Age of Transformation as a 100% probability.
Just for the record, I also see a continuation of the global deflationary environment and a slowing of the velocity of money until we have some type of resolution concerning sovereign debt. Central banks will continue to try to solve the “crises” I mentioned above with monetary policy, but monetary policy will simply not be enough to stem the tide. Central banks can paddle as hard as they like into the waves of change, but they cannot reverse their powerful flow.
Now, let’s look further at each of the waves that are forming into a potential tsunami.
To continue reading this article from Thoughts from the Frontline – a free weekly publication by John Mauldin, renowned financial expert, best-selling author, and Chairman of Mauldin Economics – please click here.
There is a book in here somewhere, but I do not intend to write one today. In fact, my New Year’s resolution is to write shorter letters in 2015. Over the last decade and a half, the letter has tended to get longer. A little more here, a little more there, and pretty soon it just gets to be a bit too much to read in one sitting. That means I need to either be more concise, break up my topics into two sessions or, if further writing is necessary, post the additional work on the website for those interested.
Take a minute to grab our free eBook "Understanding Options" while it's still available.....Just Click Here
So I’m writing today’s letter in that spirit. Each of the major topics we’ll be covering will show up in other letters over the next few months. I would appreciate your feedback and any links to articles and/or data points that you think I should know about regarding these topics.
But first, this is generally the most downloaded letter of the year. I want to invite new readers to become one of my 1 million closest friends by simply entering your email address here. You can follow my work throughout the year, absolutely free (and see how my prognostications are turning out). And if you’re a regular reader, why not send this to a few of your friends and suggest they join you? At the very least, Thoughts from the Frontline should make for some interesting conversations this year. Thanks. Now let’s get on with the forecasting.
Seven Significant Changes for the Next Five Years
Let’s look at what I think are six inexorable trends or waves that will each have a major impact in its own right but that when taken together will amount to a tsunami of change for the global economy.
1. Japan will continue its experiment with the most radical quantitative easing attempted by a major country in the history of the world… and the experiment is getting dangerous. The Bank of Japan is effectively exporting the island nation’s deflation to its trade competitors like Germany, China, and South Korea and inviting a currency war that could shake the world. I’ve been saying this for years now, but the story took a nasty turn on Halloween Day, when the Bank of Japan announced it was greatly expanding and changing the mix of its asset purchases. The results have been downright scary, and a major slide in the JPY/USD exchange rate is almost certain over the next five years. I give it a 90% probability. All this while the population of Japan shrinks before our very eyes.
2. Europe is headed for a crisis at least as severe as the Grexit scare was in 2012 – and for the resulting run-up in interest rates and a sovereign debt scare in the peripheral countries. After all these years of struggle, the structural flaws in the EMU’s design remain; and now major economies like Italy and France are headed for trouble. In the very near future we will finally know the answer to the question, “Is the euro a currency or an experiment?” The changes required to answer that question will be wrenching and horrifically expensive. There are no good answers, only difficult choices about who pays how much and to whom. Again, I see the deepening of the Eurozone crisis as a 90% probability.
3. China is approaching its day of reckoning as it tries to reduce its dependency on debt in its bid for growth, while creating a consumer society. The world is simply not prepared for China to experience an outright “hard landing” or recession, but I think there is a 70% probability that it will do so within the next five years.
And the probability that China will suffer either a hard landing OR a long period of Japanese style stagnation (in the event that the Chinese government is forced to absorb nonperforming loans to prevent a debt crisis) is over 95%. To be sure, it is still quite possible that the Chinese economy will be significantly larger in 2025 (ten years from now) than it is today, but realizing that potential largely depends on President Xi Jinping’s ability to accomplish an extremely difficult task: deleveraging the debt overhang that threatens the country’s MASSIVE financial system while rebalancing the national economy to a more sustainable growth model (either through either a vast expansion of China’s export market or the rapid development of “new economy” sectors like technology, services, and consumption; or both).
This will not be the end of China, which I’m quite bullish on over the very long term, but such transitions are never easy. Even given this rather stark forecast, it is still likely (in my opinion) that the Chinese economy will be 20 to 25% bigger as 2020 opens than it is today; and every other major economy in the world (including the US) would be thrilled to have such growth. At the very least, though, China’s slowdown and rebalancing is going to put pressure on commodity exporters, which are generally emerging markets plus Australia, Canada, and Norway.
4. All of the above will tend to be bullish for the dollar, which will make dollar-denominated debt in emerging market countries more difficult to pay back. And given the amount of debt that has been created in the last few years, it is likely that we’ll see a series of crises in emerging-market countries, along with an uncomfortably high level of risk of setting off an LTCM-style global financial shock.
My colleague Worth Wray spoke about this new era of volatile FX flows and growing risk of capital flight from emerging markets at my Strategic Investor Conference last May, and he has continued to remind us of those risks in recent months (“A Scary Story for Emerging Markets” and “Why the World Needs the US Economy to Struggle”).
Now that Russia has tumbled into a full-fledged currency crisis with serious signs of contagion, Worth’s prediction is already playing out, and I would assign an 80 to 90% probability that it will continue to do so, as a function of (1) the rising US dollar and a reversal in cross border capital flows, (2) falling commodity prices, or (3) both. This massive wave is going to create a lot of opportunities for courageous investors who are ready to surf when countries are cheap.
5. I do not believe that the secular bear market in the United States that I began to describe in 1999 has ended. Secular bull markets simply do not begin from valuations like those we have today. Either we began a secular bull market in 2009, or we have one more major correction in front of us.
Obviously, I think it is the latter. It has been some time since I’ve discussed the difference between secular bull and bear markets and cyclical bull and bear markets, and I will briefly touch on the topic today and go into much more detail in later letters. For US focused investors, this is of major importance. The secular bear is not something to be scared of but simply something to be played. It also offers a great deal of opportunity.
If I am right, then the next major leg down will bring on the end of the secular bear and the beginning of a very long term secular bull. We will all get to be geniuses in the 2020s and perhaps even before the last half of this decade runs out. Won’t that be fun? Let’s call the end of the secular bear a 90% probability in five years and move on.
6. Finally, the voters of the United States are going to have to make a decision about the direction they want to take the country. We can either opt for growth, which will mean a new tax and regulatory regime, or we can double down on the current direction and become Europe and Japan. I’ve traveled to both Europe and Japan, and they’re both pleasant enough places to live, but I wouldn’t want to be a citizen of either Japan or the Eurozone for the rest of this decade. (I particularly love Italy, but it is beginning to resemble a basket case, with last year’s optimistic drive for reforms seemingly stalled.)
However, I would rather live and work and invest in a high-growth country, with opportunities all around me, a country where we reduce income inequality by increasing wealth and opportunities at the lower end of the income scale instead of trying to legislate parity by increasing taxes and imposing government mandated wealth redistribution, which slows growth and squelches opportunity for everyone.
A restructuring of the US tax and regulatory regime does not mean a capitulation to the wealthy, big banks, or big business. Properly conceived and constructed, it will allow the renewal of the middle class and result in higher income for all. Sadly, it is not clear to me that either the Republican or Democratic parties are up to the task of making the difficult political decisions necessary. They each have constituencies that tend to opt for the status quo. But I see hope on both sides of the political spectrum that change is possible. The course they set will give us an idea where we will want to focus our portfolios in the decade of the ’20s. It is a 100% probability that we will have to make a decision. It is less than 50% that we will make the right one – or at least the one that I think is the right one.
7. We have entered the Age of Transformation. We’re going to see the development of new technologies that will simply astound us – from increasingly capable robots and other applications of AI to huge breakthroughs in biotechnology.
The winners are going to be those who identified the truly transformational technologies early on in their development and invested wisely. While riskier (potentially far riskier) than most of your investments should be, a basket of new-technology stocks should be considered for the growth part of your portfolio. I see the Age of Transformation as a 100% probability.
Just for the record, I also see a continuation of the global deflationary environment and a slowing of the velocity of money until we have some type of resolution concerning sovereign debt. Central banks will continue to try to solve the “crises” I mentioned above with monetary policy, but monetary policy will simply not be enough to stem the tide. Central banks can paddle as hard as they like into the waves of change, but they cannot reverse their powerful flow.
Now, let’s look further at each of the waves that are forming into a potential tsunami.
To continue reading this article from Thoughts from the Frontline – a free weekly publication by John Mauldin, renowned financial expert, best-selling author, and Chairman of Mauldin Economics – please click here.
The article Thoughts from the Frontline: A Five-Year Global Financial Forecast: Tsunami Warning was originally published at mauldineconomics.com.
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Wednesday, December 10, 2014
Seven Questions Gold Bears Must Answer
By Jeff Clark, Senior Precious Metals Analyst
A glance at any gold price chart reveals the severity of the bear mauling it has endured over the last three years. More alarming, even for die hard gold investors, is that some of the fundamental drivers that would normally push gold higher, like a weak U.S. dollar, have reversed.Throw in a correction defying Wall Street stock market and the never ending rain of disdain for gold from the mainstream and it may seem that there’s no reason to buy gold; the bear is here to stay.
If so, then I have a question. Actually, a whole bunch of questions.
If we’re in a bear market, then…..
Why Is China Accumulating Record Amounts of Gold?
But total gold imports are up. Most journalists continue to overlook the fact that China imports gold directly into Beijing and Shanghai now. And there are at least 12 importing banks—that we know of.
Counting these “unreported” sources, imports have risen sharply. How do we know? From other countries’ export data. Take Switzerland, for example:
So far in 2014, Switzerland has shipped 153 tonnes (4.9 million ounces) to China directly. This represents over 50% of what they sent through Hong Kong (299 tonnes).
The UK has also exported £15 billion in gold so far in 2014, according to customs data. In fact, London has shipped so much gold to China (and other parts of Asia) that their domestic market has “tightened significantly” according to bullion analysts there.
Why Is China Working to Accelerate Its Accumulation?
As evidence of burgeoning demand, gold trading on China’s largest physical exchange has already exceeded last year’s record volume. YTD volume on the Shanghai Gold Exchange, including the city’s free trade zone, was 12,077 tonnes through October vs. 11,614 tonnes in all of 2013.
The Chinese wave has reached tidal proportions—and it’s still growing.
Why Are Other Countries Hoarding Gold?
India and China currently account for approximately 3,100 tonnes of gold demand, and the WGC says new mine production was 3,115 tonnes during the same period.
And in spite of all the government attempts to limit gold imports, India just recorded the highest level of imports in 41 months; the country imported over 39 tonnes in November alone, the most since May 2011.
Let’s not forget Russia. Not only does the Russian central bank continue to buy aggressively on the international market, Moscow now buys directly from Russian miners. This is largely because banks and brokers are blocked from using international markets by US sanctions. Despite this, and the fact that Russia doesn’t have to buy gold but keeps doing so anyway.
Global gold demand now eats up more than miners around the world can produce. Do all these countries see something we don’t?
Why Are Retail Investors NOT Selling SLV?
While the silver price has fallen 16.5% so far this year, SLV holdings have risen 9.5%.
Why are so many silver investors not only holding on to their ETF shares but buying more?
Why Are Bullion Sales Setting New Records?
And yet 2014 is on track to exceed last year’s record-setting pace, particularly with silver…
- November silver Eagle sales from the US Mint totaled 3,426,000 ounces, 49% more than the previous year. If December sales surpass 1.1 million coins—a near certainty at this point—2014 will be another record-breaking year.
- Silver sales at the Perth Mint last month also hit their highest level since January. Silver coin sales jumped to 851,836 ounces in November. That was also substantially higher than the 655,881 ounces in October.
- And India’s silver imports rose 14% for the first 10 months of the year and set a record for that period. Silver imports totaled a massive 169 million ounces, draining many vaults in the UK, similar to the drain for gold I mentioned above.
Why Are Some Mainstream Investors Buying Gold?
Ray Dalio runs the world’s largest hedge fund, with approximately $150 billion in assets under management. As my colleague Marin Katusa puts it, “When Ray talks, you listen.”
And Ray currently allocates 7.5% of his portfolio to gold.
He’s not alone. Joe Wickwire, portfolio manager of Fidelity Investments, said last week, “I believe now is a good time to take advantage of negative short-term trading sentiment in gold.”
Then there are Japanese pension funds, which as recently as 2011 did not invest in gold at all. Today, several hundred Japanese pension funds actively invest in the metal. Consider that Japan is the second-largest pension market in the world. Demand is also reportedly growing from defined benefit and defined contribution plans.
And just last Friday, Credit Suisse sold $24 million of US notes tied to an index of gold stocks, the largest offering in 14 months, a bet that producers will rebound from near six-year lows.
These (and other) mainstream investors are clearly not expecting gold and gold stocks to keep declining.
Why Are Countries Repatriating Gold?
- Netherlands repatriated 122 tonnes (3.9 million ounces) last month.
- France’s National Front leader urged the Bank of France last month to repatriate all its gold from overseas vaults, and to increase its bullion assets by 20%.
- The Swiss Gold Initiative, which did not pass a popular vote, would’ve required all overseas gold be repatriated, as well as gold to comprise 20% of Swiss assets.
- Germany announced a repatriation program last year, though the plan has since fizzled.
- And this just in: there are reports that the Belgian central bank is investigating repatriation of its gold reserves.
These strong signs of demand don’t normally correlate with an asset in a bear market. Do you know of any bear market, in any asset, that’s seen this kind of demand?
Neither do I.
My friends, there’s only one explanation: all these parties see the bear soon yielding to the bull. You and I obviously aren’t the only ones that see it on the horizon.
Christmas Wishes Come True…..
I say we back up the truck for the bargain of the century. Just like all the others above are doing.
With gold on sale for the holidays, I arranged for premium discounts on SEVEN different bullion products in the new issue of BIG GOLD. With gold and silver prices at four-year lows and fundamental forces that will someday propel them a lot higher, we have a truly unique buying opportunity. I want to capitalize on today’s “most mispriced asset” before sentiment reverses and the next uptrend in precious metals kicks into gear. It’s our first ever Bullion Buyers Blowout—and I hope you’ll take advantage of the can’t-beat offers.
Someday soon you will pay a lot more for your insurance. Save now with these discounts.
The article 7 Questions Gold Bears Must Answer was originally published at casey research.
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Thursday, December 4, 2014
The Healthy Bull Market: Bah, Humbug!
By Tony Sagami
Are you a long term investor? Convinced that all you have to do is wait long enough to be guaranteed huge stock market profits? Take a look at the chart below of rolling 30 year returns of the S&P 500 and tell me if it affects your enthusiasm.
The reality is that stock market results vary widely depending on what your starting point is. For example, any investor who put $100,000 into the stock market 1954 was rewarded with roughly the same $100,000 30 years later in 1984.
Yup… 30 years in, and not a penny of profits.
With the stock market at all-time highs, you may find it hard to be pessimistic, but the stock market is doing as well as it’s ever done, with a rolling 30-year return of better than 400%.
How would you feel about earning 0% on your money for 30 years?
Could the stock market go even higher? Yes, it could—but the odds aren’t favorable after the QE fueled rally has pushed stocks to historically high valuations. High valuations? Despite what the mass media and the Wall Street crowd try to tell you, valuations are quite high.
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The most popular myth spouted on financial TV these days is the notion that the S&P 500 is trading at 19 times earnings. Baloney!
First, that 19 P/E is based on “forward” earnings, not trailing earnings. As unreliable as economists and self-serving analysts are, I’m surprised that anyone—especially you—believes anything they say.
Second, that forward looking earnings forecast is based on those 500 companies increasing their earnings by an average of 23% over the next 12 months. Yup… a 23% increase!
That’s extremely optimistic, but I think especially misplaced now that the steroid of quantitative easing is behind us. Consider this: everybody agrees that stocks responded extremely positively to quantitative easing, so doesn’t it make sense to be concerned now that the monetary punch bowl has been yanked away?
The first place to look for signs of waning enthusiasm are small-cap stocks. While the Dow Jones Industrial Average and the S&P 500 were setting all-time highs, the Russell 2000 wasn’t able to punch through its March, July, and September peaks.
This quadruple top looks like a formidable resistance level for small stocks and clear evidence that investors are reducing risk by rotating out of small-cap stocks and into big cap stocks.
Additionally, financial stocks are showing signs of exhaustion too. Healthy bull markets are often led by financial stocks, but the financials are lagging the major indexes now. That’s why I think last week’s 3.9% GDP print smelled fishy; some weak economic numbers are spelling trouble.
Durable Goods Orders Not So Good: The headline number for October durable goods orders was strong with a +0.4% increase, but if you back out the volatile transportation sales, the picture is a lot uglier. If you exclude transportation—because just a few $100 million jet orders can skew the numbers—the 0.4% gain turns into a 0.9% decrease.
By the way, orders for defense aircraft were up 45.3%, but orders for non defense aircraft orders were down 0.1% in October. If not for some big government orders, the results would be absolutely horrible!
Unemployment Claims Rise Despite Holiday Hiring: The job picture, which had been improving, showed some deterioration last week despite going into the busy holiday hiring season. Initial jobless claims jumped to 313,000, a 7.2% increase from last week as well as much higher than the 286,000 forecast. It also broke a 10-week streak of claims below 300,000.
Before You Cheer Cheap Oil: After OPEC agreed to keep production levels unchanged, the price of oil plunged by 7% on Friday to less than $68 a barrel. That’s good news for drivers, but oil’s falling prices (as well as those of other commodities) are a very bad sign for economic growth. Moreover, the energy industry has been one of the few industries producing good, high-paying jobs. Thus, low oil prices could turn that smile into a frown in no time.
The Bond Conundrum: The yield on 10 year Treasury bonds was as high as 3% earlier this year but dropped to 2.31 last Friday. If our economy were rocking as well as the 3.9% GDP rate suggests, interest rates should be rising… not falling like a rock.
The stock market may not fall out of bed tomorrow morning, but the holiday season for stock market investors looks like it may be more Scrooge than Santa Claus.
30 year market expert Tony Sagami leads the Yield Shark and Rational Bear advisories at Mauldin Economics. To learn more about Yield Shark and how it helps you maximize dividend income, click here.
To learn more about Rational Bear and how you can use it to benefit from falling stocks and sectors, click here.
The article Connecting the Dots: The Healthy Bull Market: Bah, Humbug! was originally published at mauldin economics
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Monday, December 1, 2014
Investors That Do Not Understand The Power Of Seven Will Lose Money in 2015
Investors and traders around the world continually search to find or increase their edge in the financial markets to boost profits. The next few months are going to be critical for investors because the number seven is now in play for the stock market.
In magical lore seven is a magical number., While all numbers are ascribed certain properties and energies, seven is a number of power, a lucky number, a number of psychic and mystical powers, of secrecy and the search for truth. Seven is used 735 times in the bible and if you total up all words including “sevenfold” and “seventh” there is a total of 860 references.
The origin of seven’s power lies in the lunar cycle. The moon has four phases lasts about seven days. The Sumerians gave the week seven days. Life cycles on earth also have phases demarcated by seven, and there are seven years to each stage of human growth, seven colors to the rainbow, seven notes in the musical scale, seven petitions in the Lord’s Prayer, and seven deadly sins.
More importantly for investors the number seven and multiples of seven have a powerful influence on money. The U.S. stock market is now trading in the seventh year window and it should not be taken lightly. While I could go into a lot more detail about how I use seven in my algorithmic trading strategy to swing trade the S&P 500 index. This article focuses on the investing outlook.
I am fortunate enough that I have been trading since 1997 and have seen the how the stock market cycles affect human behavior and businesses specifically the financial newsletter industry which I have been involved in since the first day my trading career. The stock market appears to be nearing a critical turning point that will change the lives and behaviors of investors for years to come.
The good news is that I have experienced four of these turning points and human behavior shifts in my career before and we currently entering the fifth turning point. I feel obligated to share this valuable insight with those of you who read my work. The next major market move could have a dramatic impact on your wealth and retirement years.
Insight on Investor Behavior and Business
Being heavily involved in the financial newsletter industry I have not only seen but survived several of these major cycles which forced many newsletters to go out of business. The cycles at play here are the market trend and the behavior of traders and investors.
The combined forces of these two cycles are what cleanse the newsletter industry of poor quality services. It becomes almost impossible to obtain new clients without word of mouth/referrals from happy users and if the quality of the newsletter is poor, eventually they lack enough users to make it feasible to operate. Unfortunately it’s the brutal truth, and over the last couple years I am seeing newsletters and even to top trading magazines that have been around for decades closing their doors.
The business cycle can easily be explained by observing the chart below of the SP500 index. In short, when the stock market has been rising for six or more months investors start to become confident in that they can make money on their own. And in fact they can if they buy and hold during a bull market.
But what happens as the market continues to rise for many years is that more and more investors and traders realize they can make money on their own. The longer the uptrend remains intact the less will need the help of a trading and investing newsletter making it difficult to get new customers in this highly competitive industry.
Currently investors are behaving almost identical to what I saw during 1999 – 2001, from 2006 – 2007, and now 2014 – 2015 market tops.
Did you notice anything with those market tops? They are 7 years apart…
Let’s now take a look at the best times in the business cycle where traders and investors are in desperate need of help and start subscribing to multiple paid financial newsletter services. The strongest times for business took place during 2002 – 2003, and again in 2008 – 2010. This is when investor not only lost most of their wealth, but their faith in how they invest, who they invest with, and the stock market as a whole.
Did you notice any these also? They are 7 years apart also…
Investors 7 Year Financial Outlook
Those of you who follow me know that I do not pick market tops or bottoms. Rather I focus on identifying trends and cycles in the market and only trade and invest with the active confirmed trend.
You also know that trying to pick market tops and bottoms is a suckers game and a sure fire way to lose a lot of money and build a serious complex that the market is manipulated, not tradable, and that it may be time for you to give up on trading all together.
Well, I am here to say that the market is tradeable, and can generate traders and investors a boat load of money once you understand how and why it moves. Most importantly you need to understand money/position management and be patient for consistent long term gains.
Take a look at the chart below for a clear visual of 7 year cycle highs and lows at play.
While I do not invest based on this major seven year cycle I do actively trade a smaller market cycle which provides roughly 35 – 65 trades per year. This strategy allows me to profit during these major bull markets and also during the multi-year bear markets when the majority of investors are losing boat loads of their hard earned money.
The reason I do not invest in the seven year cycle is because the market can still have 30+% price swings within bull and bear markets and that type of volatility is beyond what I am comfortable with. Also because I can actively invest with my automated trading system so I don’t need to lift a finger or watch the stock market each day, week or month.
I hope you found this report useful in some way, and I ask that you share it with others.
Chris Vermeulen
www.The Gold & Oil Guy.com
www.The Gold & Oil Guy.com
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