central bank

China Lowers Interest Rates for the Third Time in Six Months

By Tuesday, May 12, 2015
China Lowers Interest RatesOn Sunday, May 10, the People’s Bank of China (PBOC) announced that it will lower its one-year benchmark lending rate by 25 basis points to 5.1%. They also cut the one-year deposit rate by the same amount to 2.25%. This is the third interest rate cut by China’s central bank in six months. Markets in Asia welcomed the expansionary monetary policy from the PBOC. In mainland China, the Shanghai Composite .

Central Banks Creating Global Stock Market Bubbles

By Friday, April 17, 2015
Central banksIrrationality prevails in global stock markets and I believe it’s because of the actions of central banks. What’s happening with central banks and their involvement with equity markets not only is unprecedented, but it also will not end well. Japanese Stock Market Topping 20,000 Just look at the chart below of the Tokyo Nikkei Average—a key measure of Japanese stocks. Tokyo Nikkei Average Index ‘Tokyo Nikkei Average Index, 1996-2015,’
Chart courtesy of StockCharts.com The
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Stocks to Push Higher Following First Fed Rate Increase?

By Wednesday, March 25, 2015
Central bank high interest ratesWith the Federal Reserve green-lighting the stock market’s recent advance, it’s a reminder that equities continue to be guided by central bankers and not economic reality. Fed’s Accommodative Actions Guarantee Return for Stock Investors? But this is how it always is in a secondary market (stocks). Share prices reflect the perception of a multitude of forces (the Federal Reserve’s actions included), with earnings growth a secondary issue in recent history, .

How Central Banks Are Pushing Stock Prices Higher

By Friday, November 28, 2014
Central Banks Are Pushing Stock Prices HigherThe “trade” these days is very simple. Just follow what the central banks around the world say and you are pretty much guaranteed to make money. As long as they announce they are printing more paper money or lowering interest rates, then just buy stocks. This requires no thinking whatsoever and the fundamentals, like economic data and corporate earnings, don’t really matter. Look at the chart below of the Dow .

Dow Jones Transportation Stocks Suggesting Bullish Fourth Quarter?

By Friday, November 7, 2014
Where Are Stocks HeadedIn terms of stock market direction, the Dow Jones Transportation Average recently pushed through to another new record-high. The index retrenched along with the broader market in early October, but it fought back hard to just over 8,800. Within the index, countless stocks have been doing well. Alaska Air Group, Inc. (ALK) slumped to $42.00 in the lead-up to its earnings report. Now, it’s almost $55.00 a share after reporting .

About That Referendum in Switzerland…

By Wednesday, October 22, 2014
Demand Shock for Gold Market Coming SoonOn November 30, Switzerland’s citizens will cast a very critical vote. Through a referendum, they will vote for or against the Swiss National Bank increasing its gold bullion reserves to 20%, the central bank halting the selling of gold, and the storing of gold bullion in the country. (Source: Kitco News, September 30, 2014.) If the results are in favor of the referendum, it will mean Switzerland’s central bank will .

About That 500% Jump in Interest Rates…

By Monday, September 22, 2014
Economy and Stock Market Handle a Five-Fold Jump in RatesThe verdict is in… Last week, at the end of its regularly scheduled meeting, the Federal Reserve said: 1)      It would continue to reduce the amount of money it creates each month. The Fed said it will be out of the money printing business by the end of this year. By that time, the Federal Reserve will have created more than $4.0 trillion new American dollars (out of thin air). .

Two Reasons Why Interest Rates Will Rise

By Monday, August 18, 2014
U.S. Dollar Under BRICS PressureThe U.S. dollar is still regarded as the reserve currency of the world. The majority of international transactions are settled in U.S. dollars and most central banks around the word hold it in their foreign exchange reserves. But since the Credit Crisis of 2008, and the multi-trillion-dollar printing program by the Federal Reserve, the supremacy of the U.S. dollar as the “world’s currency” has been challenged. The BRICS countries (Brazil, .

Why a Full-Blown Market Correction Should Be Expected

By Friday, August 8, 2014
Investors Can't Overlook to Succeed in This MarketThe monetary environment is still highly favorable to stocks and should continue to be so well into 2015. However, while this market can handle higher interest rates, stocks can only advance in a higher interest rate environment if gross domestic product (GDP) growth is there to back it up. Because of the capital gains over the last few years and the across-the-board record-highs in many indices, investment risk in stocks .

The Era of Financial Insanity

By Wednesday, July 30, 2014
What Happens Next for the Stock MarketMy colleague Robert Appel (BA, BBL, LLB) issued a research paper to the subscribers of one of his financial advisories earlier this week. I thought it important that all my readers be aware of and understand the crux of what Robert is saying about our current economic situation and where it will eventually lead. Here it is: “The actions of the Federal Reserve (how far they went to ‘stabilize’ the .
Sep. 1, 2015
Trailing 12-month EPS for Dow Jones companies (Most Recent Quarter) $1014.15
Trailing 12-month Price/earnings multiple (Most Recent Quarter)

17.44

Dow Jones Industrial Average Dividend Yield 2.71%
10-year U.S. Treasury Yield 2.14%

Immediate term outlook:
The bear market rally in stocks that started in March 2009, extended because of unprecedented central bank money printing, is coming to an end. Gold bullion is up $1,000 an ounce since we first recommended it in 2002 and we are still bullish on the physical metal.

Short-to-medium term outlook:
World economies are entering their slowest growth period since 2009. The Chinese economy grew last year at its slowest pace in 24 years. Japan is in recession. The eurozone is in depression. With almost half the S&P 500 companies deriving revenue outside the U.S., slower world economic growth will negatively impact revenue and earnings growth of American companies. Domestically, America’s gross domestic product grew by only a meager 2.3% in the second quarter, which will negatively impact an already overpriced equity market.

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From: Michael Lombardi, MBA
Subject: Gold: The Stock Contrarian Investors’ Best Play of the Decade

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