global economy

Global Economy: Why It Will Get Worse Before It Gets Better

By Friday, August 28, 2015
Global EconomyChina is in deep trouble. Economic activity in the second-biggest economy is plunging and it looks like the situation is only going to get worse. The Caixin Flash China General Manufacturing Purchasing Mangers’ Index (PMI), an indicator of manufacturing activity, now stands at 47.8—the lowest level in more than six years. (Source: Markit Economics, August 21, 2015.) A PMI below 50 means contraction in the manufacturing sector. This year, the .

Gold Prices to Skyrocket as Global Uncertainty Rises?

By Thursday, August 27, 2015
Gold Prices to SkyrocketGold prices go up when uncertainty rises. As it stands, there’s an abundance of it in the global economy. There are at least three major issues that are haunting investors globally; economic slowdown in China, threat or outright currency devaluation in the emerging markets, and the U.S. dollar rising as the Federal Reserve contemplates hiking its benchmark interest rates. Rising Uncertainty Great for Gold Prices To provide some perspective, please .

U.S. Economic Collapse: Growth in Share Buybacks Killing Job Numbers

By Friday, August 21, 2015
America Economic CollapseExecutives are spending billions buying back their own stock, but their efforts are slowing, destroying the American economy. A new report from Aranca Investment Research concludes that almost $2.3 trillion has been spent on buybacks since 2009, as corporate cash reserves have grown and borrowing costs have declined. More incredibly, over $1.0 trillion will be spent on corporate buybacks by S&P 500 companies in 2015, marking the fifth straight year .

Stock Market Crash: China Could Spark an Economic Collapse in 2016

By Friday, August 21, 2015
China Stock Market CrashAfter a colossal stock market crash in June, many analysts are worrying that China is on the brink of an economic collapse. Panic is setting in as the country experiences a dramatic slowdown in exports and growth. A recession in China would precipitate crises across the world, drawing an eerie parallel to the U.S.-led contraction during the last decade. After markets collapsed in 2008, we often heard the phrase, “the .

Global Economy: Here Cometh Deflation

By Friday, August 14, 2015
global economyEarly this year, I started writing about how falling copper prices were a leading indicator of trouble in the global economy. Since then, we’ve all come to know about the economic slowdown in China. But the further collapse in copper prices over the past three months could be warning of something much bigger than just a slowdown ahead. Commodities Price Plunge Suggests There’s No Growth Below is a chart of .

Bill Gross: Economy is Dangerously Close to Deflation

By Thursday, August 13, 2015
Economy is Dangerously Close to DeflationImage by Simon Cunningham
Billionaire hedge fund manager, Bill Gross, says the Federal Reserve needs to raise interest rates to prevent deflation in the global economy. Gross is famous for steering Pacific Investment Management Corp. through the financial crisis, so much so that Wall Street calls him as the “Bond King.” He thinks we’re at risk of an economic collapse. (Source: Bloomberg, August 7, 2015.) Gross, who now works
.

Economic Crisis Killing the Commodity Supercycle?

By Wednesday, July 29, 2015
Economic CrisisWith the recent break of oil back below $50.00 a barrel, the commodity supercycle driven by the superlative rise of the emerging markets looks like it’s dissipated…and we could be facing an economic crisis. The Thomson Reuters/CoreCommodity CRB Index fell to a 52-week and six-year low, adding to the reality that demand for commodities is fading. This index covers 17 commodities, including the highly watched gold, silver, oil, copper, and .

Goldman Sachs: Gold Prices Could Fall Below $1,000

By Wednesday, July 22, 2015
Gold PriceGold prices could plunge below $1,000 an ounce. At least, that’s the latest gold price forecast from Goldman Sachs commodity research headJeffrey Currie. “The risks are clearly skewed to the downside in this environment,” he told Bloomberg in a telephone interview on Tuesday. “There is a probability that the market trades below US$1,000 this year given our broader commodity view.” (Source: Goldman Sachs: This Could Send Gold Prices Below $1,000, .

Gerald Celente: Gold Prices are “Rigged”

By Wednesday, July 22, 2015
Gold PriceGold prices are rigged and the world could be on the verge of an economic collapse. At least, that’s according to trend forecaster Gerald Celente. In an interview with King World News, the global economy is entering into a recession and the global economic collapse is imminent. (Source: The Panic That’s Happening Right Now Is Much Bigger Than Just The Gold Market, July 22, 2015.) In June of 2013, .

Global Economy in Sharp Slowdown; U.S. Companies’ Earnings at Risk

By Wednesday, July 22, 2015
Global EconomyNo matter where you look, major economic hubs in the global economy are struggling to show growth. According to the German finance ministry, Germany’s economy grew at only 0.3% in the second quarter of this year after growing a similar amount in the first quarter. (Source: Reuters, July 19, 2015.) Germany is the fourth biggest economy in the world. China, the second biggest economy, saw its gross domestic product (GDP) .
Sep. 2, 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
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