On the topic of investing in gold, billionaire investor Ray Dalio said something very interesting:
“If you don’t own gold, there is no sensible reason other than you don’t know history or you don’t know the economics of it.”
What he meant was that gold is an alternative to cash. Under today’s fiat money system, a lot of central banks are printing massive amounts of money. With paper money flooding .
Greece, one the most troubled nations in the eurozone, has elected a radical left-wing political party named the Syriza that’s against the austerity measures placed on Greece by the “troika”—that’s the European Central Bank (ECB), the European Union (EU), and the International Monetary Fund (IMF).
Syriza wants to renegotiate the terms of the country’s bailout and imposed austerity measures with the ECB, the EU, and the IMF. The leader of .
Three weeks into 2015 and gold prices are already up 10% for the year. Gold stocks we have been recommending in our paid-for newsletters had a spectacular start to the year, having rebounded nicely from their oversold levels. Going forward, I expect the gold prices to move higher and with this, gold mining companies should continue to perform well.
The chart below clearly shows the breakout by gold prices from .
So the S&P 500 has touched the 2,000 mark.
Will the S&P 500 continue to march to new highs?
Well, my opinion towards the stock market hasn’t changed. I remain skeptical for a variety of reasons, many of which I have shared with my readers over the past few months.
But I have a new concern about the stock market, something that hasn’t been touched on by analysts: trading volume .
This morning came the news that Italy, a country very close to my heart (just look at my last name) and the third-biggest economy in the eurozone, is back in recession.
And Germany, the biggest economy in Europe, saw factory orders in June drop by the most since 2011.
While the financial media has taken the focus off the eurozone over the past couple of years, I have continued to .
We are hearing more and more about interest rates getting ready to rise. The Federal Reserve itself has said it expects the federal funds rate to increase to 1.5% by the end of next year and to 2.25% by the end of 2016.
Before the Fed came out with its forecast, I was writing about how the Fed will have no choice but to raise interest rates because inflation is .
While the Federal Reserve has cut back on its money printing program, the fact of the matter is that the “official” U.S. national debt is closing in on $18.0 trillion. The unofficial national debt (when obligations like Social Security, Medicare, Medicaid, welfare, and now Obamacare are taken into consideration) is closer to $200 trillion.
The Japanese national debt just hit one quadrillion yuan.
Many countries in the eurozone are drowning .
Many central banks within the global economy are involved in printing more of their paper money (often referred to as “fiat” currencies). There’s a race to devalue currencies in hopes to revive economies and maintain a competitive stance. Countries believe that by printing more of their fiat currency, they can improve their exports to the global economy, because the goods will be cheaper for those countries that have a stronger .
Export-oriented provinces in the Chinese economy have turned pessimistic and anticipate exports will only grow at the rate of five percent this year. In 2012, they targeted an export growth rate of eight percent to 10%.
What’s troublesome about this is that exports from the Chinese economy account for 20% of the country’s gross domestic product (GDP). This means that, if exports from China to other countries decline, the Chinese .
The eurozone credit crisis is taking center stage once again. As I have been saying in these pages, it is far from over, even though the European Central Bank (ECB) has announced that it will do “whatever it takes” to save the eurozone. Economic conditions in the region are still deteriorating.
The debt-infested countries in the eurozone are reaching their lows with widespread economic slowdown, but I am more concerned .
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.
Estimates Aug. 28, 2015
Trailing 12-month EPS for Dow Jones companies (Most Recent Quarter)