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Apakah Pasar Emas Akan Mengalami ‘Short Squeeze’?

May 30th, 2013 No comments

“The nice thing about gold is that not only does it hold its value over centuries, but it is also a valuable that you can keep out of the banking system.  Like jewelry or antique cars, you can keep them at home.  Bury them under your own tree.  Keep them in your own safe.  If the banking system freezes up or breaks down… you still have them.  Pass them to your children.  Give them as birthday presents.  Or just lock them up and forget about them. Gold is private money.  Dollars, pounds, and euros are public money.  Dollars, pounds, and euros are given to us by governments and central banks.  Gold is given to us by the gods.”

– Bill Bonner, The Daily Reckoning

Setelah data terbaru CFTC Commitment of Traders (COT), yang menunjukkan bahwa posisi short (jual) emas di bursa Comex meningkat 25% dalam 3 pekan terakhir ini ke rekor tertingginya yakni 79416 kontrak, Tyler Durden dari www.zerohedge.com pun mengomentarinya sebagai berikut:

“Hedge funds have made “the biggest bet ever” against gold by taking Comex gold shorts to all time highs.

To their reflexive benefit, we will admit, they have managed to push the price of gold lower, not much… but it is lower (whether with the BIS’ assistance or not is irrelevant). It is a different question if the price of gold is low enough to reflect such a record bearishness. But the biggest question is what happens if there is a catalyst to launch a covering rally: such as, hypothetically speaking of course, the People’s Bank of China were to announce that it has in the past four years in which it provided no updates on its gold holdings (last is as of 2009), accumulated some 2000-4000 tons of gold.

Surely, that would be most unpleasant to all those record shorts, and the impact on the price would be most parabolic. Why, all those shorts better indeed pray there is no short squeeze now or any time in the future…

If we may be so bold as to we suggest, the time has come to upgrade to the sacrificial slaughtering of at least a lamb on the altar of Saint Ben, because even the tiniest hint of a forced cover will now result in the biggest rip your face off levered short squeeze seen in the history of the yellow metal. Maybe throw in an ink cartridge or two for good measure…”

Selain itu, Bengt Saelensminde dari The Right Side memberikan pandangannya yang cukup menarik dalam laporannya yang berjudul “One important chart about gold”:

“I’m not going to waste time with a long-winded introduction today. Just look at this chart:

Source: www.zerohedge.com

The thought for today will be short and sweet.

What we’ve got here is the gold price (yellow) and the size of short gold positions (red) over the last seven years as traded on the commodities exchange, or COMEX. It’s important to realize that by far the biggest gold market exists not in bullion, but in paper futures contracts – mostly traded on COMEX.

This ‘paper’ trading is mostly speculation. The futures market initially cropped up to allow commodity producers to sell production in advance. That way they knew what they would get for their production, and the buyers knew in advance what they would pay. But that part of the market is pretty insignificant now. What you’ve got today are a load of speculators either trading short or long, as their whims dictate.

The ‘short’ action is significant. And it has a profound effect on the gold price. In fact, to look at the chart, you’d say it has a very predictable effect on the gold price.

The short gold position has never been as large as it is today. And historically, every time the short action has breached the 40,000 contracts level, gold has staged a very decent recovery – the green arrows in the chart. Today’s short action is over 74,000 contracts…

While short positions are growing, the gold price dips. That, of course, stands to reason.

The message for gold bugs today then, is don’t worry about gold’s lackluster performance. The thing to keep your eye on is that red line – the short positions. If and when the shorts unwind, there could be a big reaction in the gold price.

Now that’s obviously good news for gold owners…”

Berikutnya adalah Alasdair Macleod, yang memiliki latar belakang sebagai broker saham, bankir dan ekonom, baru-baru ini menulis laporan untuk pasar emas terkini dalam website-nya (FinanceAndEconomics.org) yang berjudul Bullion banks going net-long:

It has been an interesting week for gold. On Tuesday, open interest on Comex fell sharply by 6,961 contracts. The action was in the June contract which fell 12,072, only 3,000 of which appear to have been rolled into the next active month (August). The bulk of the fall in the June number must have been from bears closing their shorts ahead of Ben Bernanke’s testimony to Congress on Wednesday, but we can see from the numbers that the big bullion banks did not supply the stock (see below).

In the wake of his testimony and the release of the FOMC minutes there was huge volatility in all markets, including a 7% crash in Japanese equities. The trading range for gold was over $60, as first the bears took fright over Bernanke’s reaffirmation of money-printing policies, with gold rising nearly $30 in 10 minutes in a classic bear squeeze with the bullion banks refusing to supply stock. The market was then driven sharply lower, probably assisted by official intervention lest people get the idea that gold is better than dollars.

The net position of the four largest traders, which we can assume are all bullion banks, on 14 May was long for the first time for as long as records are available, shown in the chart below.

Keep in mind the fundamental difference between precious metals and other financial markets: the former are seriously oversold and the latter seriously overbought. Logic strongly suggests that retreats from these extremes would drive gold and silver up, and equity and bond markets down. Therefore, the action in gold and silver was perverse. The evidence is in the chart below, showing how extreme the hedge fund (managed money) short positions in gold have already become.

Factor in the severe shortage of physical bullion and the conditions for an explosive move to the upside become apparent. This is why the market-making bullion banks would be stupid to close their hard-won net long position, and they know it.

The vested interest for lower gold prices lies squarely with the four major central banks, which are most probably going to accelerate quantitative easing. Japan is already doing so; the Fed is backing off earlier suggestions they will slow down; the ECB has a developing euro-area slump; and Mark Carney, Governor-designate for the Bank of England, was this week quoted as applauding Japan’s “bold policy experiment”.”

What Do the Charts Say?

Clive Maund, yang website-nya (www.clivemaund.com) didedikasikan untuk para trader maupun investor yang serius terhadap komoditas logam mulia dan energi, merilis laporan luar biasa dalam Gold Market Update tertanggal 22 Mei 2013, yang di dalamnya terdapat sejumlah grafik menarik dan tentunya merupakan laporan yang masuk dalam kategori WAJIB DIBACA bagi para pelaku komoditas emas:

“For those of you who are short of time and are accustomed to scrolling down to the bottom of an article to read its conclusions I’m going to save you the trouble by putting the conclusions at the start: the broad US stock markets are approaching a parabolic blow off top and should be sold, and gold and silver are bottoming and should be bought. If you have fallen to the floor laughing at this suggestion it is a sign that you have been brainwashed by The Ministry of Disinformation and you are warned to pull yourself together and take the time to calmly consider the hard facts presented below – otherwise you won’t be laughing at all in a few months when YOU will be lying face down in the dirt with tire tracks across your back.

The Barons of Fiat have done an excellent job of discrediting gold and silver and smashing them back down in recent months. They are doubtless crying with laughter at the thought of the distressed “Little Guy” with his modest hoard of coins and featherweight bars, suffering from depression as a result of their actions and turning negative on the sector. The Little Guy’s noble effort to support gold and silver prices by buying a few coins is no match for Big Money’s financial chicanery on the paper market, and when push comes to shove, as happened a month ago, the dumping of a couple of truckloads of gold bars onto the market.

For the Barons of Fiat continually rising gold and silver prices are an embarrassment and may cause people to seriously question the entire fiat system. They don’t want that of course, hence the recent organized takedown, which Big Money even profited from handsomely, by first going short big time, and then getting the media, which they control, to run stories discrediting gold and silver. So it’s nice of Goldman Sachs to tell us that they have now covered their gold short position at a handsome profit.

The underlying drivers for the gold and silver bull market remain in place of course, which are unrestrained global money supply growth and credit growth, which are fuelling big inflation in various countries, even if this is disguised by massaged government statistics. This implies that the recent gold and silver takedown is throwing up a major buying opportunity, even if the basing phase continues for a while longer. So let’s now move on to see what the latest charts for gold, and for its COTs and various sentiment indicators are telling us about the internal dynamics of the sector at this point.

In the last update, posted on 28th April, we stated that gold’s relief rally had peaked and that it would turn back down and retreat back towards it April panic lows. The David vs. Goliath stories about widespread buying of physical gold around the world enabled Big Money to squeeze a little more blood out of the Little Guy, who jumped back in prematurely, just as we expected. On the latest 9-month gold chart we can see that gold has now reacted back towards its April panic lows as predicted, and our challenge now is to determine whether it will continue to drop to substantially lower levels or whether it will turn up here, or soon, and in our quest we will be greatly assisted by pertinent data on the current COT structure and various sentiment indicators.

Before going further it is worth highlighting the fact that gold is now one of the most hated asset classes in the world, and Big Money’s media henchmen are not wasting any opportunity to put the boot into it, oblivious to the irony that such negativity is music to the ears of the true contrarian, which we like to think includes us. The relentless and brutal attacks on gold in the mainstream media are a sure sign that we are at or near to an important bottom.

Returning to consideration of the 9-month chart we see that gold has dropped back quite hard, but in a fairly steady manner, over the past week or so towards its April panic lows. This alone implies that there is a fair chance that the support at these lows will hold, or that if it is breached, it won’t be by much. As we will soon see, COTs and sentiment indicators strongly suggest that gold is now in a basing process, and that if it does drop further, it won’t be by much.  (emphasis mine)

While gold admittedly doesn’t look too good on its 8-year chart, as the high volume breakdown from the top area implies that it could drop further towards strong support approaching $1000, this outcome does not look likely given the COT and sentiment extremes that we are already seeing, and the explosion of negativity towards the metal in the mainstream media, all of which are indicating that we are at or close to a major bottom NOW.

It thus looks likely that gold will turn higher from, or near to, the supporting long-term uptrend line shown on its 20-year chart below.

Having reviewed the gold price charts let’s now consider its latest COT and sentiment charts, starting with the COTs.

The COT chart below shows that Commercial short and Large Spec long positions have dropped to their lowest level by far for the life of this chart. This is bullish. Small Specs are out completely, which is another positive sign.

The COT chart below, which goes back to 2006, reveals that Commercial short and Large Spec long positions are at their lowest levels since the 2008 crash. Small Spec long positions have collapsed to almost nothing. This is all very bullish for gold over a medium and long-term time horizon.


Chart courtesy of www.sentimentrader.com

Hulbert Gold Sentiment is at its lowest reading for years. This is a contrarian indicator that is strongly bullish.

Chart courtesy of www.sentimentrader.com

The Public Opinion chart for gold below shows that bullishness towards gold is at its lowest level for years, which is another contrarian bullish indication.

Chart courtesy of www.sentimentrader.com

Now, we are aware that if the parabolic acceleration in the broad market intensifies short-term, gold could remain depressed and perhaps drop some more, and this fits with gold’s seasonals. The seasonal chart below shows that gold is seasonally weak in May and June, but starts to perk up in July before entering its seasonally strongest time of the year in August and September. So the base building process in gold may continue for a while yet, during which gold and gold ETFs may be accumulated on weakness.” (emphasis mine)

Kesimpulan:

Saran saya: hold your gold!

Jika Anda merasa belum memiliki cukup emas, belilah secara bertahap dalam beberapa bulan ke depan ini.

Saya yakin emas akan naik di akhir tahun nanti dari levelnya hari ini, dan saya juga yakin emas masih akan naik lebih tinggi lagi karena bull market belum berakhir. Bersiaplah karena tentu hal ini tidak semudah yang dibayangkan, dan hasil yang bagus untuk orang-orang yang sabar.

Namun demikian di saat ini, terlalu banyak investor yang yakin emas akan rebound dari areal tekanannya saat ini. Seperti ungkapan dari seorang analis technical besar, Walter Deemer: “When it’s time to buy, you won’t want to …”.

Seperti biasa, berikut adalah gambar-gambar jenaka di akhir tulisan ini:

Terima kasih sudah membaca dan semoga beruntung hari ini!

Dibuat Tanggal 29 Mei 2013

Categories: Emas Tags:

Siprus BUKANLAH Persoalan Unik

May 28th, 2013 No comments

European banks were supposed to be de-leveraging in accordance with the Basel III rules but have grown by 7% according to recent data released by Eurostat. Target2 was supposed to be shrinking but has grown to almost one trillion dollars.  The loans at the ECB have been increasing and whether the credit line to the Spanish banks or the loans to the banks of many countries in Europe to buy their debt at auction keeps on growing.  The risk factor is magnified so far past any margin of safety that I am fearful, more than fearful, that some event, some relatively minor event in fact could throw Europe off a cliff that will make our fiscal cliff look like a gently rolling hill in comparison.”

– Mark J. Grant, author of Out of the Box

Saya mohon maaf telah mengatakan ini sebelumnya karena saya sangat yakin bahwa krisis finansial  global berikutnya akan berasal dari keruntuhan sistem perbankan Eropa.

Sekarang ini persoalan di Siprus mengingatkan semua orang betapa berbahayanya menjadi deposan yang tidak berasuransi pada setiap bank Eropa yang sedang dibebani pinjaman besar. Saya kira sudah waktunya untuk mengedepankan hal ini.

Mengapa demikian? Karena ketika sebuah bank dinyatakan bangkrut, uang Anda mungkin sudah tidak ada.

Mari kita simak lagi yang dikatakan Dijsselbloem: “countries with large banking sectors must look to restructure, reduce overall size”.  Dengan kata lain, mau tidak mau harus melakukan deleveraging.

Sementara itu, argument yang mengatakan bahwa persoalan Siprus tersebut adalah unik, seperti yang senantiasa digembar-gemborkan pihak otoritas, bagi saya tidak masuk akal karena lebih banyak persamaannya daripada perbedaannya dengan persoalan di negara lain.

Alasan utamanya adalah hampir seluruh wilayah Eropa memiliki sistem perbankan yang melampaui standar global, sehingga beresiko untuk menabung/menyimpannya jika mereka memperoleh kesulitan.

Dan bukanlah suatu kebetulan jika salah satu pendukung utama untuk bail-in adalah Inggris.

Jika anda belum mempersiapkan diri untuk kegagalan sistemik, segeralah bersiap saat ini. Kita akan semakin dekat dengan keruntuhan perbankan Eropa yang berpotensi turut menyeret sistem finansial.

Jika Anda ingin tahu mengapa sistem perbankan Eropa sudah sangat rapuh dan bagaimana cara mengatasinya ke depan, maka tulisan-tulisan Tyler Durden dari www.zerohedge.com layak Anda baca dengan seksama, bahkan menurut saya masuk dalam kategori HARUS DIBACA. Jadi bacalah secara seksama dan bertindak yang sesuai:

1) Spot The Odd Continent Out: Total Bank Assets As % Of GDP

There is a reason why in Europe, no matter how much some want to deny it, the Cyprus deposit confiscation “resolution” has become the norm. Quite simply, as BofA summarizes, “Europe’s economy struggles with too many banks, too much debt and too little growth. A long history of empire, trade, war and commerce means a long history of banking. The world’s first state-guaranteed bank was the Bank of Venice, founded in 1157, and the world’s oldest bank today is also Italian, Monte Paschi di Siena (founded 1472). In many European countries, bank assets dwarf the size of the local economy and are far in excess of other regions in the world. This is similarly reflected in the local stock exchanges: even now financials account for 42% of the Spanish stock market and 31% of the Italian stock market versus 16% in the US.”

Visually, this translates as the following dramatic chart, which shows why Europe no longer has a choice in kicking the can, and what we have said from the very beginning, a Mellonesque asset liquidation of bad “assets” is the only option:

It is in Europe that the biggest debt burden lies, and it is Europe that is desperate for the biggest inflation impulse to purge away the debt in the absence of liquidation, or a spike in asset quality. However, as we showed yesterday with Europe’s €500 billion NPL time bomb, the asset quality of Europe’s banking sector is imploding at an unprecedented pace, and is correlated most tightly to the surging unemployment in the periphery, which intuitively makes much sense: without jobs, consumers can’t pay off their debt.

NPLs:

… compared to unemployment:

This means that the only resolution to a massively overlevered banking sector, where inflation just refuses to arrive and assist in the bad-asset “cleansing”, is the start of liability impairment, which will allow the long overdue process of balance sheet restructuring, instead of merely can kicking, to commence. Whether this implies deposit confiscation, well that matters in which country one is, and how many NPLs have been accumulated.

And another problem: the reason why core inflation is gone from Europe is that not only is the hot central bank money not targeting European assets (except for new Japanese Yen chasing after peripheral bonds for as long as there is a carry trade arb, which at this rate won’t last long), but because credit creation in the private sector is dead: as the chart below shows, even credit growth in Germany is now negative:

So what is the only option for a continent in which there are simply too many encumbered assets (recall that unlike the US the bulk of credit in Europe is secured - perhaps the starkest difference between the two credit systems) and in which the private sector credit creation pipeline is clogged: simple – the ECB has to join the Fed and the BOJ in monetizing assets, and creating “credit growth” de novo. Alas, as the past three years have shown, when it comes to outright monetization in Europe, not only does it have to be sterilized to appease the (correctly) inflation-weary Germans (i.e., the SMP; the terms of its replacement, the OMT, still technically don’t exist), but most likely has to come in the form of a structured debt vehicle or an extended loan, like the ESM or the LTRO.

In fact, none other than former ECB member Lorenzo Bini Smaghi told Goldman’s Allison Nathan in a recent interview that QE by the ECB – an outcome most expect once the impact of BOJ QE fizzles – is unlikely. The reason why:

Lorenzo Bini Smaghi: QE in Europe would likely entail the ECB purchasing a representative basket of Euro area government bonds. And so they would probably have to buy large quantities of German and French bonds, rather than the bonds of countries that could use more support; the impact on spreads would not necessarily be in the right direction. So from a technical point of view, the case for QE in Europe is less clear cut.

Needless to say, his outlook on Europe is less than optimistic:

Lorenzo Bini Smaghi: In 15 years I’m a bit more confident because I think the adjustments will have been made. Europe will become more competitive and stronger. So I am a long-term optimist. But I am also a short-term pessimist; the near-term adjustment is maybe a bit too tough and too front-loaded so the next five years are going to be very difficult.

And to think all of this could have been avoided if the Mellon advice of liquidating bad assets, which have accumulated in massive proportions in Europe (and in the shadow banking system in the US, but that is the topic of a different post), had been heeded, as we suggested, from the very beginning. To quote Andrew Mellon:

The government must keep its hands off and let the slump liquidate itself. Liquidate labor, liquidate stocks, liquidate the farmers, liquidate real estate. When the people get an inflation brainstorm, the only way to get it out of their blood is to let it collapse. A panic is not altogether a bad thing. It will purge the rottenness out of the system. High costs of living and high living will come down. People will work harder, live a more moral life. Values will be adjusted, and enterprising people will pick up the wrecks from less competent people.

Of course, the time for liquidation will come sooner or later, only this time the pain and suffering that will accompany it will be order of magnitude greater than had the system been purged in the dark days following the Lehman collapse.

2) At $72.8 Trillion, Presenting The Bank With The Biggest Derivative Exposure In The World (Hint: Not JPMorgan)

Moments ago the market jeered the announcement of DB’s 10% equity dilution, promptly followed by cheering its early earnings announcement which was a “beat” on the topline, despite some weakness in sales and trading and an increase in bad debt provisions (which at €354MM on total loans of €399.9 BN net of a tiny €4.863 BN in loan loss allowance will have to go higher. Much higher). Ironically both events are complete noise in the grand scheme of things. Because something far more interesting can be found on page 87 of the company’s 2012 financial report.

The thing in question is the company’s self-reported total gross notional derivative exposure.

And while the vast majority of readers may be left with the impression that JPMorgan’s mindboggling $69.5 trillion in gross notional derivative exposure as of Q4 2012 may be the largest in the world, they would be surprised to learn that that is not the case. In fact, the bank with the single largest derivative exposure is not located in the US at all, but in the heart of Europe, and its name, as some may have guessed by now, is Deutsche Bank.

The amount in question? €55,605,039,000,000. This, converted into USD at the current EURUSD exchange rate amounts to $72,842,601,090,000…. Or roughly $2 trillion more than JPMorgan’s.

The good news for Deutsche Bank’s accountants and shareholders, and for Germany’s spin masters, is that through the magic of netting, this number collapses into €776.7 billion in positive market value exposure (assets), and €756.4 billion in negative market value exposure (liabilities), both of which are the single largest asset and liability line item in the firm’s €2 trillion balance sheet mind you, and subsequently collapses even further into a “tidy little package” number of just €20.3.

Of course, this works in theory, however in practice the theory falls apart the second there is discontinuity in the collateral chain as we have shown repeatedly in the past, and not only does the €20.3 billion number promptly cease to represent anything real, but the netted derivative exposure even promptlier become the gross number, somewhere north of $70 trillion.

Which, of course, is the primary reason why Germany, theatrically kicking and screaming for the past four years, has done everything in its power, even “yielding” to the ECB, to make sure there is no domino-like collapse of European banks, which would most certainly precipitate just the kind of collateral chain breakage and net-to-gross conversion that is what causes Anshu Jain, and every other bank CEO, to wake up drenched in sweat every night.

Finally, just to keep it all in perspective, below is a chart showing Germany’s GDP compared to Deutsche Bank’s total derivative exposure. If nothing else, it should make clear, once and for all, just who is truly calling the Mutually Assured Destruction shots in Europe.

But don’t worry, this €56 trillion in exposure, should everything go really, really bad is backed by the more than equitable €575.2 billion in deposits, or just 100 times less. Of course, a slightly more aggressive than normal bail-in may be required in case DB itself has to follow in the footsteps of Cyprus…

3) The European Commission Lays Out The True Blueprint For The Future Of Every European Country

Cyprus was the beginning. Next: every other country with a banking system in which non-performing loans are soaring (cough Slovenia cough) as a result of imploding consumer cash flows, and which needs a financial sector “resolution”, which includes, among others, impairment of liabilities courtesy of the new non-template template (and which is now spreading to European interbank deposits). And they all have Cyprus to look to because it will be the benchmark.

Luckily, earlier today as part of its just released Assessment of the public debt sustainability of Cyprus, the European Commission was kind enough to spell out in very clear terms just what the fate of virtually every European country will be going forward.

For the gruesome details we go straight to paragraph 10 where we read…

In accordance with the [insert insolvent European country’s name] authorities policy plans, major financial institution will be downsized combined with extensive bail-in of uninsured depositors, and a set of wide-ranging temporary capital controls and administrative measures. The program is envisaged to build the foundation for sustainable growth over the long run. Nevertheless, in the short run, the economic outlook remains challenging. Real GDP is projected to contract by [insert massive amount] cumulatively in 2013-14. Short-run economic activity will be negatively affected by the immediate restructuring of the banking sector, which will impact on net credit growth and by additional fiscal consolidation measures. Temporary restrictions required to safeguard financial stability will hamper international capital flows and reduce business volumes in both domestic and internationally oriented companies. The bail-in of uninsured depositors will cause a loss of wealth, which will reduce private consumption and business investment. This, compounded by the impact of fiscal consolidation already undertaken and new measures agreed, will result in a sharp fall in domestic demand. Little reprieve can be expected from exports amid uncertain external conditions and a shrinking financial service sector.

And just for once, Europe is actually telling the truth.

Yet such is life, sad as it may be, for a continent that may have “vastly underestimated the amount of political capital that has been invested in the Euro”, and “what the Euro means for the Europeans, for the Euro area.”

For those still confused, it means countless years of pain, suffering and poverty. And it’s all downhill from there.

4) Farage Unleashed: “You Are Common Criminals”

“Years ago, Mrs. Thatcher recognized the truth behind the European Project,” UKIP’s Nigel Farage reminds his European Parliament ‘colleagues’, “she saw that it was about taking away democracy from nation states and handing that power to largely unaccountable people.” In one of his most wonderfully vitriolic remonstrations, the fiery Farage blasts Europe’s leadership, “this European Union is the new communism.” Slamming Olli Rehn and his Troika cohorts for “resorting to the level of common criminals and stealing people’s money”, Farage warns, rather chillingly, that, “it is power without limits. It is creating a tide of human misery and the sooner it is swept away the better.” Simply put, he concludes, the European Parliament is living out a federal fantasy which is no longer sustainable.

Full Transcript:

Years ago, Mrs. Thatcher recognized the truth behind the European Project. She saw that it was about taking away democracy from nation states and handing that power to largely unaccountable people.

Knowing as she did that the euro would not work she saw that this was a very dangerous design. Now we in UKIP take that same view and I tried over the years in this parliament to predict what the next moves would be as the euro disaster unfolded.

But not even me, in my most pessimistic of speeches would have imagined, Mr. Rehn, that you and others in the Troika would resort to the level of common criminals and steal money from peoples’ bank accounts in order to keep propped up this total failure that is the euro.

You even tried to take money away from the small investors in direct breach of the promise you made back in 2008.

Well the precedent has been set, and if we look at countries like Spain where business bankruptcies are up 45% year on year, we can see what your plan is to deal with the other bailouts as they come.

I must say, the message this sends out to investors is very loud and clear: Get your money out of the Euro zone before they come for you.

What you have done in Cyprus is you actually sounded the death knell of the euro. Nobody in the international community will have confidence in leaving their money there.

And how ironic to see the Russian prime minister Dmitry Medvedev compare your actions and say, ‘ I can only compare it to some of the decisions taken by the Soviet authorities.’

And then we have a new German proposal that says that actually what we ought to do is confiscate some of the value of peoples’ properties in the southern Mediterranean euro zone states.

This European Union is the new communism. It is power without limits. It is creating a tide of human misery and the sooner it is swept away the better.

But what of this place, what of the parliament? This parliament has the ability to hold the Commission to account.  I have put down a motion of censure debate on the table. I wonder whether any of you have the courage to recognize it and to support it. I very much doubt that.

And I am minded that there is a new Mrs. Thatcher in Europe and he is called Frits Bolkenstein. And he has said of this parliament – remember he is a former Commissioner: ‘It is not representative anymore for the Dutch or European citizen. The European Parliament is living out a federal fantasy which is no longer sustainable.’

How right he is.

Seperti biasa agar tetap ceria di akhir tulisan ini, saya lampirkan sejumlah hal-hal yang jenaka dari William Banzai:

Cyprus and Greece need a deal

The Spartans have known how you feel

If you want to stay

With honor you pay

The Troika demands that you kneel

The Limerick King

Terima kasih sudah membaca dan semoga memperoleh keuntungan hari ini!

Dibuat Tanggal 28 Mei 2013

Categories: Pasar Internasional Tags:

Apakah Bursa Saham Akan Jatuh?

May 21st, 2013 No comments

“We’ve taken the market to areas that used to be considered extreme.  The S&P is selling at a 25% premium to its 200-week moving average.  That is very rarified air.  You can look at the number of stocks that have reached new 52-week highs, they are at a 35-year high going back into the 1980s.  So you see things that ordinarily people would say, ‘The air is far too rarified here.’  Yet because of the concept that ‘I must buy the dip,’ they really don’t get a chance to dip.”

– Art Cashin, Director of Floor Operations at UBS

Kita sudah berada di paruh kedua bulan Mei dan sekaligus paruh kedua kuartal April-Juni 2013 menjelang liburan musim panas. Bursa masih terus melonjak bahkan sebagian besar sudah mencapai target kenaikan yang seharusnya untuk akhir tahun.

Indeks Dow Jones, S&P 500, saham-saham kecil-menengah, transportasi dan lainnya beramai-ramai berlomba menembus rekor tertingginya. Atau dengan kata lain, sentimen bullish masih dominan di bursa.

Namun kenaikan ini merupakan kondisi melt-up market – dimana para investor melakukan aksi beli karena tidak ingin ketinggalan dalam kenaikan harga – sementara di sisi lain yang melakukan tekanan jual terpaksa melakukan short-covering (short squeeze), yang turut menjadi faktor pendorong harga naik lebih tinggi lagi.

Memang sebaiknya tidak melawan model bursa seperti ini, dan aksi beli nampaknya merupakan satu hal yang ada di benak para investor saat ini karena kenaikan belakangan ini dan sehingga akan memicu kelanjutan kenaikan yang lebih tinggi dari yang diduga.

Pertanyaannya adalah bagaimana kita memanfaatkan atau bertransaksi pada bursa yang sedang diliputi euforia? John C. Burford, editor dari MoneyWeek Trader, mencoba menjawabnya dalam sejumlah paragraf berikut:

“Today I will cover the US equity markets via the S&P 500 index, which has been making new all-time highs of late.
Euphoria is rampant in the stock market – there is no other word for it. Sentiment readings are almost off-the-scale bullish. Here is just one:

Chart: elliottwave.com

The Daily Sentiment Index is a poll of futures traders, and since the start of the year record highs have been continually made.

But note that back at the November low, only 8% of the market was bullish! Now, there are only 8% bears. That is extraordinary.

So, in the space of six months, traders have swung 180 degrees to the bull camp. You may ask… what causes a herd of traders to switch allegiance so suddenly?

A great question! And one that many have answers for – although most are plain wrong! My view is that traders follow the herd, albeit mostly unconsciously. Where the herd is heading, that’s where most follow. Waves of sentiment/mood sweep humanity. When people become more positive, they tend to buy stocks, and vice versa.

And when hedge fund managers see others buying, they are forced to follow suit, despite any reservations they have. Otherwise, they will be accused of not matching or beating their competitors. This fear is the motivation behind herding. Also, the US Fed has been vigorous in their support for the market, of course.

But there is another powerful factor at play in the current market – Tina.

There is no alternative – that is the prime justification for buying stocks in 2013. Let’s look at a few of those alternatives:

Bond yields are puny – even junk bonds are making new all-time highs, despite the risk – that is why they are called junk. Even sovereign bonds of such problem nations as Italy, Greece and Spain are being pushed up, supposedly from the waves of investment from Japan.

Gold does not have the allure it once did, and commodities are well off their highs and appear unattractive.

And once the darling of investors, emerging markets have declined off their highs.

So, US stock markets – and junk bonds, which act very much like equities – are almost the only major area which attracts investors. And since recent company earnings have been good, that has provided the justification for joining the herd.

But Tina is not an investment strategy – it is a frame of mind. If equities are the lesser of several evils, then they are still evil! And frames of mind can change overnight (see above chart).

One other point – some are calling this the start of a massive bull market with some forecasts calling for 25,000 in the Dow.

But one glance at the above chart should convince that we are much closer to a top than a bottom. All bottoms have started from low bullish readings, and all tops have been made on high bullishness. In fact, this has to be the case.

The power to create a bull market has to come first from the majority of traders/investors that have not yet bought into the market, then from the majority who are short, who need to cover as the market rallies.

This means that I am still looking for a top – a search which has been in vain, I admit. Who said that markets can remain irrational for longer than you can remain solvent? But maybe he hadn’t heard of stop losses…”

Saat kebanyakan orang mengejar kenaikan, saya justru lebih memilih untuk mencari aman. Dan inilah yang menjadi tema utama tulisan saya pekan ini, dengan berlandaskan teori dari sebuah organisasi yang memiliki dedikasi mempelajari efek psikologi massa pada peristiwa-peristiwa dunia.

Bagi Anda yang belum tahu Elliott Wave Theory (EWT), yang memiliki dasar dari gagasan bahwa perubahan psikologi massa merupakan pendorong dominan perubahan di pasar – lebih dominan daripada laporan pendapatan perusahaan, margin atau hal-hal fundamental lainnya.

Perubahan-perubahan psikologis biasanya terjadi dalam pola terukur. Jadi, dengan mempelajari psikologi massa tersebut, maka dapat memprediksi kemungkinan arah gerak pasar berikutnya.

Mereka yang mengetahui EWT justru akan lebih tenang di saat euforia di pasar semakin tinggi dan orang-orang berpandangan bullish secara luas. Mengapa demikian? Karena mereka mengetahui bahwa orang-orang yang berpotensi melakukan investasi ternyata sudah melakukannya, artinya sudah tidak ada lagi potensi pembeli yang tersisa – yang ada justru potensi penjual yang sedang mengincar puncak kenaikan.

Pada laporan State of the Global Markets – Edisi untuk 2013, dari Elliott Wave International milik Robert Prechter’s, ada sebuah artikel yang sungguh menarik yang berjudul The Stock Market Is Ripe for a Decline of Historic Magnitude.

Artikel tersebut ditulis oleh Steve Hochberg dan Pete Kendall, yang keduanya adalah editor pada The Elliott Wave Financial Forecast, dan menurut saya ini patut mendapat perhatian Anda.

“Incredibly, the DJIA rallied back to a new all-time high, a move that generated a cornucopia of ever-higher projections.

The wide array of optimistic extremes in sentiment measures includes several readings that exceed the extremes of 2007, when the Dow made its previous high. With a finishing structure that Elliott Wave Principle describes as occurring at “the termination points of larger patterns,” the market is ripe for a decline of historic magnitude.

The sudden, loud chorus of market bulls, which has grown to a full-blown crescendo, fits perfectly with the terminal stages of a major advance. This chart shows the stunning breadth of optimism extending to every class of investor.

The first indicator (second graph) on the chart shows the percentage commitment to equities in the portfolios of members in the National Association of Active Investment Managers (NAAIM). The latest reading reveals an all-time high equity exposure of 104%, which means managers are in a leveraged long position for the first time in the seven-year history of the survey. The reading far surpasses the 83% level, which occurred at the October 2007 all-time high in the Dow.

A separate BofA Merrill Lynch survey of 254 fund managers confirms that money managers’ “appetite for risk in their portfolio” is at its highest in nine years. “An increasing number judge equities as undervalued – particularly in Europe.”

They soon will become even more “undervalued,” as the Euro STOXX 50 Index has traced out five waves down from its January 30 countertrend rally high, indicating that Europe’s bear trend has returned. There’s more: Even though Spain, Portugal, Greece, and Italy are de facto bankrupt, confidence is suddenly so high in that region that Europe’s junk-bond yields relative to investment-grade debt have collapsed to the lowest premium since the start of the global credit crisis. It is an astonishing and historic display of optimism relative to a collapsing economic reality.

The second indicator shows a major upswing in bullishness among options traders via the Credit Suisse Fear Barometer Index (the name is misleading since a rising index means less fear). This index measures trader sentiment by comparing the cost of three-month out-of-the-money calls on the S&P 500 relative to puts of the same duration. The recent extreme of 33.32 on January 25 is the highest in the history of the indicator, which goes all the way back to November 1994. The CBOE Volatility Index (VIX), which tracks the level of fear and complacency using the premium paid for at-the-money S&P options, declined to a low of 12.29 on January 18, its lowest reading – indicating the most complacency – since April 2007, just prior to the major top in the financials.

The third indicator shows a new optimistic extreme among investment advisors. The 15-day average of Market Vane’s Bullish Consensus rose to 68.2% in February, its highest reading since June 2007.

The bottom graph plots the total assets in the government money-market funds at Guggenheim (formerly Rydex), showing that the public is likewise complacent about the potential for a market decline. We’ve inverted the totals to align them with the trend in stocks. When people are highly confident that stock and bond prices will continue to rise, they see little need to hold money aside in money-market funds and instead load up on financial assets. The total holdings in Guggenheim’s money-market funds just dropped to their lowest level ever, reflecting a supreme confidence by investors and a full embrace of stocks and bonds.

At the opposite extreme, corporate insiders – investors who are presumably privy to the future potential of their companies – are dumping shares into the market at a furious pace. According to Vickers Weekly Insider Report, among NYSE stocks there were 9.2 insider shares sold for every share bought over the previous week. The last time the ratio of sales-to-buys was higher was in July 2011, just before the Dow declined 18% over the following four months. As we’ve said previously, there may be many reasons why an insider sells shares, but one of them is not because they think their price is going higher.

Taken together, the breadth of extremes shown on the chart indicates that stocks are not making a short-term top: these measures are all greater than at any time since at least 2007. This is a rare alignment that confirms this is an even more important, and more bearish, juncture than 2007.”

What Do the Charts Say?

Chris Rowe, penulis Technical Analysis Millionaire, memberikan peringatan yang jelas dalam laporannya yang berjudul The Stock Market’s LYING to You:

“My friends, you’re being fattened up for the kill!

I’ll explain…

Major market tops take months to form.  You would think that’s GREAT, considering it gives us time to lock in some hefty profits on our bullish positions.

But the longer it takes, the more euphoric people get… the more leverage they use… the farther away the thought of ever selling gets.

Then, when your position that was up 60% declines sharply, leaving you with only a 40% profit, you say “I’ll just wait until the next bump higher to sell.”  But after more downside you’ve only got 30% left and you’re considering buying more.

6 months later you feel like a fool for ever saying the words “I’ve only got a 40% profit on the table.”

Market tops can take several months to form, and if you understand the market topping process, you can make a killing. But more importantly, you can lock in your profits at great prices!

There are generally two types of stock market tops…

The typical market top, and the Whiskey Tango Foxtrot top (a.k.a. the WTF top).

It appears we are looking at a WTF top.

It’s quite simple really.

So this will be a short article, to explain.  But as simple as the explanation is, the psychology can rip peoples’ financial faces off, so please pay close attention (no matter how simplistic this may seem).

I’ve studied every market move that occurred over the last century+.  I started managing money in 1995 on Wall Street and after moving across the street from my office on Wall & Water st., I befriended many of the trading legends who lived through those times.

Below is a “quick-n-dirty” version of both types of market tops, seen above.

The “Typical” Market Top

1. The first big move off of a bear market bottom. The first move is the sharpest move because not only do you have bullish investors (investors who think prices will advance) plunging new money into stocks, but you have another huge group of buyers — those covering their shorts (exiting short positions by BUYING the stocks back).

Market bottoms are the opposite of market tops.  At market tops, there’s often euphoria where people are overly optimistic.  At market bottoms, people think the market will never go up again.  So short-sellers (those who are taking “bearish positions”) sell-short huge amounts of stock (with the intention of buying the stock back at a lower price).  But those short sellers realize prices are advancing and they have to cut their losses.  To do so, they buy back huge amounts of stock to close out their positions.

Thus, you have bullish buyers and bearish short sellers BOTH buying stock.  It’s a “short-squeeze”.

2. After the boldest investors squeeze the shorts out (causing the STEEPEST advance), we have a short correction followed by another move higher, albeit at a slower pace. The move isn’t as sharp.  Less aggressive buyers come in after they feel “the coast is clear”.

3. You get that final move higher. This upward slope is not as steep as the fist or second.  Here, institutional buyers (who tend to actually move market prices) are not buying.  They are selling into every upside move.  Sure, individual investors are buying like crazy as they watch the financial television talking heads say “markets are breaking highs”.


It’s super hard for the informed institutions to exit their positions without knocking stocks down, but they try for as long as they can without spooking investors, causing a selling panic.  But eventually they need to lock in their profits and WHAM!  Then they sell.

At this point, the short-sellers come in like a pack of hyenas surrounding a lame calf.  And they pounce!

Because the top is so obvious to these sophisticated investors, they go HEAVY on the short side.  They sell and they sell.  And after that, they sell more.

Remember, when they “sell” they are OPENING NEW POSITIONS by selling-short.  They hope to close the trade out later by buying at lower prices, profiting from the difference.  Boy oh boy do they go heavy.

And that brings us to the difference between the typical stock market top and the WTF top…

The “WTF!!??” Market Top

One of the most important and most profitable pieces of advice I ever learned from my mentor, early on, was to never forget “the unwind”!

What’s the “unwind”?

We’ll start simple:  When markets are moving higher and higher, at some point those stock owners must sell.  The more people buy more stock, the bigger position they hold and therefore the more stock they will have to sell to either take profits or to limit losses.

The bigger the position is (bullish or bearish), the bigger the move will be in the other direction when they realize it’s time to EXIT.

If an enormous amount of stock was bought, then when it’s time to sell the price should come crashing down hard.  Now flip that around.  If there’s an enormous amount of short selling then there’s only one way that huge position can be exited — with an enormous amount of BUYING.

Remember, that’s how the stock market BOTTOM was formed.  That’s why the stock market bottom has the steepest advance out of the three discussed above.

The difference between a typical top and a WTF top is that the short sellers pile up on that very obvious market top and then they get SQUEEZED!  Just like the first advance in a new stock market, the short-squeeze causes one final very sharp advance before the destruction of the bull market.

And that’s what is happening currently.  WTF!

So what does that mean to you?

I’ve been through numerous stock market cycles.  I’ve seen people get wiped out time after time and it drives me crazy!  It literally makes me sick to my stomach because it truly ruins lives.

I’m writing this to you today because I don’t want you to be one of those people.  You are about to get hit with a huge amount of stock market euphoria.  This could last weeks or months.

Markets will likely consolidate here for just a little bit (trade sideways with a few ups and downs but ending up around the same place).  But after that consolidation, it appears there will be one final hoorah!

This is awesome for those who recognize it.  It can be a huge money-making opportunity or a gift from the market gods of higher prices to exit at.  But if not played right, it can change a dream into a nightmare.

There are many ways to play it.  And in my coming articles I will reveal the best ways to do so.  But PLEASE be sure to start selling bullish positions into strength or to start hedging those positions.

You don’t want to get bearish too early if you’re not an aggressive trader.  And you can certainly take bullish positions here to capitalize on this short squeeze, but only do so after a short market correction.

We are right up against the upper part of a channel which I discussed last week.”

Terakhir yang tak kalah penting, adalah grafik FRED dari King Report, serta komentar langsung dari Bill King, yakni: “Stocks are in a parabolic rally and a blow-off has commenced.  No one knows the magnitude or duration; but this is the most dangerous condition for any asset.  The S&P 500 Index is in a crystal clear parabolic blow-off.  This used to be called a bubble.”

Seperti biasa di akhir tulisan agar kita tetap ceria di tengah-tengah pekerjaan kita, berikut saya lampirkan kembali sebuah gambar jenaka:

Terima kasih telah membaca dan semoga memperoleh keberuntungan hari ini!

Dibuat Tanggal 21 Mei 2013

Categories: Pasar Internasional Tags:

Apakah Kebijakan The Fed AS Merusak?

May 20th, 2013 No comments

“We don’t need QE, we only need it the way a heroin addict needs heroin. It’s not good.  It’s better to go through withdrawal and get the heroin out of your system. But we’ve got an economy that’s completely dependent on QE. That’s why it’s so screwed up. We need to break that dependency, but the Federal Reserve doesn’t have the stomach for that.  So they are going to keep on ‘fixing’ us with more and more damaging doses of QE.  We’ve built a consumption based economy where everybody borrows money and spends it. The only reason we can do it is because interest rates are at practically zero and we can service the enormity of the debt. But the minute QE goes away and interest rates rise, the party is over, the whole thing collapses. The Fed knows that. So they have to look for more excuses to keep supplying more QE, and keep interest rates at zero. Meanwhile, until we allow interest rates to rise, and allow a healthy restructuring of our economy, we’re never going to get a legitimate recovery, we’re never going to really have economic growth, we’re never going to create jobs. So we know we’re going to have an endless stream of quantitative easing. We’re going to have more QE’s than Rocky movies, until eventually it’s a horror movie and the whole thing implodes, and the economy literally dies of an overdose.”

– Peter Schiff

“The Federal Reserve here in the US recently announced they are willing to print over $1 trillion worth of paper in the next 12 months.  We can print as much money as we want but it’s not going to do any good. Unless the Federal Reserve comes up with a long-term plan for printing food, water, rare earths, silver, we are going to have serious problems because the paper will become worthless. Longer term, no one is going to keep giving you something that is critical and rare in exchange for something you can just press a button and print.”

– Stephen Leeb

Jika lembaga-lembaga pemerintah dapat dipercaya dan memiliki efisiensi, maka program Bernanke – quantitative easing (QE) – sebenarnya bisa berguna.  Namun Bernanke tidak pernah bekerja di lembaga pemerintah dan juga bukan seorang trader berpengalaman.  Sehingga langkahnya tersebut justru hanya menambah parah kondisi-kondisi yang telah berkembang, seperti malinvestment, fraud, mismanagement, korupsi dan lainnya.

Pada akhirnya pasar sendiri yang akan menjelaskan segalanya, dan ini bisa saja akan memalukan bagi Bernanke.  Seluruh stimulus yang dia kucurkan ke pasar akan menguap, dan satu generasi AS pun akan mengalami kehancuran secara finansial.

Terkait dengan hal tersebut, Hinde Capital (www.hindecapital.com) juga menyatakan bahwa sistem ekonomi adalah suatu candu seperti yang dijelaskannya dalam laporan di awal tahun yang berjudul The Central Bank Revolution I – Well ‘Nominally’ So:

Central banks are the devil. They are like drug dealers except they administer regular doses of supposedly legally prescribed barbiturates to their addicts. The ‘easy money’ or ‘credit’ they create is an opiate and like all addictions there is a payback for the addicts, one exacted only in loss of health, misery and death.

The economic system is an addict, but that system is comprised of banks, corporations, non-profit organizations, small businesses all of which are communities. And what comprises communities, us, human beings – individuals. We are the addicts.

Popular economic academia understates human action in the economic equation of money. It is human preferences that determine our desire for goods and services and so in turn really determines the utility of money. Sadly the desire of the State to control money and administer it like a drug has left our economies unproductive and incapable of standing on their own two feet.

Our reliance on ‘easy money’ as facilitated by credit has become terminal. Like drug users we continue to attempt to find a heightened state of Nirvana. We continue to hark for the utopian days prior to the eruption of the post 2008 crisis, even though our well-being was fallacious and based on an illusion of wealth paid for by credit – a creditopia. The abuse of credit is what defined the Great Financial crisis and one that still defines our economic system and one which will define a much worse crisis to come.

Central bankers have begun a concerted effort to fight the global debt problem which has been stifling growth as tax revenues merely serve to finance debt servicing rather than addressing the repayment of principal outstanding. Omnipotent governors, Bernanke, Carney, Draghi, Svensson and Iwata or Kuroda (either are likely to replace Shirakawa) are to take a far more aggressive and activist role in pursuing a new framework for growth and inflation by seeking an alternative way to conduct monetary policy. It’s called Nominal GDP Level targeting and it is in our opinion as significant a moment as Volcker’s appointment to the Federal Reserve governorship in 1978.

Many will recall Volcker’s moment was to engineer a swift monetary contraction and deceleration of the money velocity to try and reign in excessively high inflation and stabilize growth. It worked. Today we are witnessing an ‘Inverse Volcker’ moment, whereby the opposite is likely true.

The question remains are they all still ‘inflation nutters’ as Mervyn King, the BoE Governor glibly referred to those central bankers who focused solely on inflation targets to the potential detriment of stable growth, employment and exchange rates.

Are central bankers merely expanding the boundaries of monetary largesse by focusing on a broader mandate and merely evolving the singular variable approach of inflation targeting or have they finally found a solution to eradicating boom bust business cycles? This is a question we need to answer as we are currently witnessing a Central Bank Revolution which could portend severe consequences for prices in our economies – and all the attendant misery that comes with very high inflation.

Nominal GDP Level targeting advocates believe they have a plausible case for a change of mandate by central banks and one which is being gradually adopted, but we believe that like central banks they have misdiagnosed the cause of the crisis by failing to examine the impact of credit creation in our global economy.

Money matters less credit matters more.

Global economies are still credit driven and Keynesian counterfeiting has merely arrested the collapse. The maintenance of heightened credit levels by financing of deficits with ‘easy’ money is beginning to see prices and output rise in the short term. In the long run only higher prices will remain whilst growth stagnates. A classic monetarist conclusion.

Hinde Capital has provided a long and consistent discourse on the relationship between credit and growth. Policymakers by now may well grasp that sustainable growth is not possible as nations still have an overreliance on credit-based sectors, namely the F.I.R.E. sectors, (Finance, Insurance and Real Estate). This is an understatement as all sectors are now directly or indirectly underpinned by this false mammon called credit.

Once upon a time merely altering the levels of money in the economic system could help an economy expand and contract without creating excessive levels of inflation both in asset, goods and service prices. However as this fiat currency regime has grown older so has the ability of central bank policy to contain large swings in the business cycle.

++++++

It is our contention that central banks feel they need to maintain the balance of credit in the system as it currently stands by adjusting the money supply and monetary velocity (MV) but by doing so they merely circumvent the necessary adjustment in the economic system that comes about by market failure. If they don’t allow this failure then any attempt to influence MV will only lead to higher prices (P) at the expense of output (T) in the famous monetary equation MV=PT.

Lebih lanjut perlu diperhatikan pidato presiden The Fed wilayah Dallas, Richard Fisher, di depan Harvard Club New York pada September 2012 lalu.  Mari kita perhatikan sejumlah paragraf dari pidatonya tersebut yang menjelaskan alasan mengapa dirinya menolak kelanjutan QE saat mayoritas anggota dewan moneter lainnya masih sepakat untuk melanjutkannya:

“It will come as no surprise to those who know me that I did not argue in favor of additional monetary accommodation during our meetings last week. I have repeatedly made it clear, in internal FOMC deliberations and in public speeches, that I believe that with each program we undertake to venture further in that direction, we are sailing deeper into uncharted waters. We are blessed at the Fed with sophisticated econometric models and superb analysts. We can easily conjure up plausible theories as to what we will do when it comes to our next tack or eventually reversing course. The truth, however, is that nobody on the committee, nor on our staffs at the Board of Governors and the 12 Banks, really knows what is holding back the economy.

Nobody really knows what will work to get the economy back on course. And nobody – in fact, no central bank anywhere on the planet – has the experience of successfully navigating a return home from the place in which we now find ourselves. No central bank – not, at least, the Federal Reserve – has ever been on this cruise before.

This much we do know: Our engine room is already flush with $1.6 trillion in excess private bank reserves owned by the banking sector and held by the 12 Federal Reserve Banks. Trillions more are sitting on the sidelines in corporate coffers. On top of all that, a significant amount of underemployed cash – or fuel for investment – is burning a hole in the pockets of money market funds and other nondepository financial operators. This begs the question: Why would the Fed provision to shovel billions in additional liquidity into the economy’s boiler when so much is presently lying fallow?…

One of the most important lessons learned during the economic recovery is that there is a limit to what monetary policy alone can achieve. The responsibility for stimulating economic growth must be shared with fiscal policy. Ironically, and sadly, Congress is doing nothing to incent job creators to use the copious liquidity the Federal Reserve has provided. Indeed, it is doing everything to discourage job creation. Small wonder that the respondents to my own inquires and the NFIB and Duke University surveys are in ‘stall’ or ‘Velcro’ mode.

The FOMC is doing everything it can to encourage the U.S. economy to steam forward. When we meet, we consider views that range from the most cautious perspectives on policy, such as my own, to the more accommodative recommendations of the well-known ‘doves’ on the committee. We debate our different perspectives in the best tradition of civil discourse. Then, having vetted all points of view, we make a decision and act. If only the fiscal authorities could do the same! Instead, they fight, bicker and do nothing but sail about aimlessly, debauching the nation’s income statement and balance sheet with spending programs they never figure out how to finance.

I am tempted to draw upon the hackneyed comparison that likens our dissolute Congress to drunken sailors. But patriots among you might take umbrage, noting that a comparison with Congress in this case might be deemed an insult to drunken sailors.

Just recently, in a hearing before the Senate, your senator and my Harvard classmate, Chuck Schumer, told Chairman Bernanke, “You are the only game in town.” I thought the chairman showed admirable restraint in his response. I would have immediately answered, “No, senator, you and your colleagues are the only game in town. For you and your colleagues, Democrat and Republican alike, have encumbered our nation with debt, sold our children down the river and sorely failed our nation. Sober up. Get your act together. Illegitimum non carborundum; get on with it. Sacrifice your political ambition for the good of our country – for the good of our children and grandchildren. For unless you do so, all the monetary policy accommodation the Federal Reserve can muster will be for naught.”

(If you are interested, you can read the whole speech at:

http://www.dallasfed.org/news/speeches/fisher/2012/fs120919.cfm)

What Do the Charts Say?

Pernahkan Anda bertanya-tanya apa yang dibutuhkan untuk mendorong sedikit pertumbuhan ekonomi? Jika ya, maka 2 laporan Tyler Durden dari www.zerohedge.com berikut dapat menjawabnya:

1) The “Price” Of Record High Markets: $10 Trillion In Seven Years (May 2nd)

By now everyone, even CNBC, admits that the only reason stocks are where they are is due to the G-7 central banks. What many may not know, however, is how we got here, and where we will be at the end of this year. The answer, as provided by JPM Asset Management CIO Michael Cembalest in the chart below, is at the dot in the top right. This will represent the addition of $10 trillion in liquidity, or alternatively the conversion of the “planetary nebula” of central bank balance sheet expansion, in the past seven years. And considering that, as we explained yesterday, there is another $10-11 trillion in scarce “quality collateral” that has to be injected into the financial markets via central banks collateral transformations, the number in yet another 7 years will be at $20 trillion if not exponentially higher, or higher than where US GDP will be.

Cembalest’s take:

The planetary nebula of central bank balance sheet expansion (last chart), which we expect to hit $10 trillion later this year, is still the most important factor underpinning an uneven global recovery. It makes sense to have some patience right now. Global equities are up 8%-9% year to date, which is a pretty good return for a time when the profits expansion is slowing, global growth is closer to 3% than 5%, Chinese growth continues to cool down despite rapid increases in the use of credit, and when it is practically impossible to disentangle how much central banks are affecting asset prices. I read a research report that showed that returns on consumer staples stocks are now correlated 75% with the returns on Treasury bonds, by far the highest level since 1929. Usually, the correlation is close to zero…. Note to Fed: uh, congratulations?

Luckily, nothing bad happened in 1929.

The difference this time, as is now very obvious, is that in the event the central banks fail at preserving the perpetual growth of what may truly be the final bubble (yes, a preposterous assumption), the central banks are already all in, unlike all previous credit, risk-asset, and housing bubbles. So who becomes the “bad bank” to the central banks when confidence in the “lender of last resort” finally gives way? (emphasis mine)

Full note here

2) How Many Central Banks Does It Take To Generate 1% GDP Growth In 5 Years? (January 17th)

By order of their various ‘independent’ masters, the world’s central banks have “got to work” over the past few years. Running the printing presses under the guise of various multi-syllabic programs designed to optically lower interest rates and feed fungible resources to its banking systems – that will inevitably (surely) flow to the real economy and make everything right with the world. Well, perhaps the following chart will explain just how good a “job” they are doing with that real-world, real-economy recovery…

(h/t @Not_Jim_Cramer)

Berikutnya yang tak kalah penting adalah gambar bagan yang nampaknya menjadi pola pikir Bernanke saat ini:

Di akhir tulisan ini – dan juga tulisan terakhir saya pekan ini karena di akhir pekan mengisi seminar di Makasar Sulawesi – seperti biasa ada gambar dan pantun jenaka dari William Banzai:

This wizard of fiat is hip
He’s taken us on a strange trip
His plan for inflation
Is robbing the nation
Our wealth he is trying to strip

The Limerick King

Whenever Ben speaks it is “Big”
The markets he’s trying to rig
The future is set
It’s all about debt
To sheeple he’s shouting out “DIG”

The Limerick King

Dibuat Tanggal 16 Mei 2013

Categories: Pasar Internasional Tags:

Dollar Akan Kembali Menguat?

May 16th, 2013 No comments

“The fact is, currency wars are fought globally in all major financial centers at once, twenty-four hours per day, by bankers, traders, politicians and automated systems – and the fate of economies and their affected citizens hang in the balance.”

– Jim Rickards, Currency Wars

Seperti pernah saya bilang akhir tahun lalu pada sejumlah seminar di beberapa daerah di Indonesia, bahwa nilai tukar dolar AS akan menjadi yang terkuat di antara mata uang utama dunia lainnya pada 2013 dan tahun berikutnya.

Ada banyak faktor yang akan mendukungnya, seperti dijelaskan oleh Charles Hugh-Smith dari Of Two Minds blog, dalam laporan yang berjudul The Tailwinds Pushing The U.S. Dollar Higher

“If we shed our fixation with the Fed and look at global supply and demand, we get a clearer understanding of the tailwinds driving the U.S. dollar higher.

I know this is as welcome in many circles as a flash bang tossed on the table in a swank dinner party, but the U.S. dollar is going a lot higher over the next few years. For a variety of reasons, many observers expect the dollar to decline against other currencies and gold, the one apples-to-apples measure of a currency’s international purchasing power.

The tailwinds pushing the dollar higher are less intuitively appealing than the reasons given for its coming decline:

1. The Federal Reserve printing another trillion dollars (expanding its balance sheet) will devalue the dollar because money supply is expanding faster than the real economy.

2. The Fed is printing money with the intent of devaluing the dollar to make U.S. exports more competitive globally and thereby boost the domestic economy.

Let’s examine each point.

1A. If much of the Fed’s new money ends up as bank reserves, it is “dead money” and not a factor in the real economy. Fact: money velocity is tanking:

1B. Money is being destroyed by deleveraging and write-downs. This is taking money out of the real economy while the Fed’s new money flows to banks.

1C. The purchasing power of the dollar is set by international supply and demand, not the Fed’s balance sheet or the domestic money supply.

As for point 2:

2A. Exports are 13% of the economy. A stronger dollar would reduce the cost of oil, helping 100% of the economy, including exporters. Why would the Fed damage the entire economy to boost exports from 13% to 14% of the domestic economy? It makes no sense.

2B. Most U.S. exports are either must-haves (soybeans, grain, etc.) that buyers will buy at any price because they need to feed their people (and recall that agricultural commodities often fluctuate in a wide price band due to supply-demand issues, so if they rise 50% due to a rising dollar, it’s no different than price increases due to droughts) or they are products that are counted as exports but largely made with non-U.S. parts.

How much of the iPad is actually made in the U.S.? Basically zero. Is it counted as an export? Yes. How much of a Boeing 787 airliner is actually manufactured in the U.S.? Perhaps a third. Sorting out what is actually made in the U.S. within complex corporate supply chains is not easy, and the results are often misleading.

2C. Many exports are made and sold in other countries by U.S. corporations, and so the sales are booked in the local currency. The dollar could rise or fall by 50% and most of the U.S. corporate supply chain and sales would not be affected because many of the goods and services are sourced and sold in other nations’ currencies. The only time the dollar makes an appearance is in the profit-loss statement at home.

Americans tend not to know that up to 75% of U.S. corporations’ revenues are generated overseas, in currencies other than the dollar. This may be part of Americans’ famously domestic-centric perspective.

2D. Most importantly, the American Empire needs to control and issue the global reserve currency. The Fed is a handmaiden to the Empire; the Fed’s claims of independence and its “dual mandate” are useful misdirections.

Some analysts mistakenly believe that Fed policies are aimed at boosting the relatively modest export sector (which we have already seen is a convoluted mess of globally supplied parts, sales in other currencies, etc.) from 13% to 14% of the domestic economy.

This overlooks the fact that the most important export of the U.S. is U.S. dollars for international use. I explained some of the dynamics in Understanding the “Exorbitant Privilege” of the U.S. Dollar (November 19, 2012) and What Will Benefit from Global Recession? The U.S. Dollar (October 9, 2012).

Which is easier to export: manufactured goods that require shipping ore and oil halfway around the world, smelting the ore into steel and turning the oil into plastics, laboriously fabricating real products and then shipping the finished manufactured goods to the U.S. where fierce pricing competition strips away much of the premium/profit?

Or electronically printing money and exchanging it for real products, steel, oil, etc.?

I think we can safely say that creating money out of thin air and “exporting” that is much easier than actually mining, extracting or manufacturing real goods. This astonishing exchange of conjured money for real goods is the heart of the “exorbitant privilege” that accrues to the issuer of the global reserve currency (U.S. dollar).

It’s important to put the Fed’s $3 trillion balance sheet in a foreign-exchange (FX) and global perspective:

- The FX market trades $3 trillion a day in currencies.

- Global financial assets are estimated at around $210 trillion. The Fed’s balance sheet is 1.5% of global assets.

The key to understanding the dollar and Triffin’s Paradox is that as the global reserve currency, the dollar serves both domestic and international markets. Of the two, the more important market is the international one.

To act as the global reserve currency, a currency must be exported in sufficient size to facilitate the gargantuan trade in a $60 trillion global GDP/ $210 trillion global economy. There are only two ways to export enough currency to be remotely useful:

1. Run massive trade deficits, i.e. import goods and export dollars.

2. Loan massive quantities of dollars to nations that will place the dollars in international circulation.

The famous Marshall Plan that helped Western Europe rebuild its economies was just that: a series of large loans of dollars to dollar-starved economies. This was necessary because the U.S. was running trade surpluses in the postwar era and was therefore not exporting dollars.

This leads to a startling but inescapable conclusion: no exporting nation can issue the global reserve currency. That eliminates the European Union, China, Japan, Russia and every other nation running surpluses or modest deficits.

Many commentators are drawing incorrect conclusions from various attempts to bypass the dollar in settling trade accounts. For example, China is setting up direct exchanges where buyers and sellers can exchange their own currencies for renminbi, eliminating the need for intermediary dollars.

This is widely interpreted as the death knell for the dollar. But this misses the entire point of the reserve currency, which is that it must be available in quantity for everyone to use, not just those doing business with the domestic economy of the issuing nation.

Here’s a practical example. The $100 bill is “money” everywhere in the world, recognizable as both a medium of exchange for gold, other currencies, goods and services, and as a store of value that is priced transparently (often on the black market). For the Chinese renminbi/yuan to replace the dollar as the global reserve currency, China would need to “export” enough currency to grease trade large and small worldwide, and enough electronic money to act as reserves that support domestic lending in nations holding the reserve currency.

This is yet another poorly understood function of the reserve currency: it acts as foreign exchange reserves, backing up the holder’s currency, and as reserves in its central bank that act as collateral for its domestic issuance of credit.

In other words, the U.S. has issued and exported trillions of dollars because this is the necessary grease for global trade, currency stability and issuance of credit by nations holding dollars. The U.S. didn’t run massive trade deficits by accident: it needed to “export” more dollars as the volume of global trade expanded.

Issuing credit and loans in dollars wasn’t enough, so the U.S. exported dollars in exchange for commodities and goods.

For China to issue the global reserve currency, it would have to decouple the yuan from the U.S. dollar and start running deficits on the order of $500 billion a year.

Many observers think China is preparing to back its currency with gold, and they mistakenly conclude (yet again) this would be the death knell for the dollar. But they haven’t thought through how currencies work: their value is ultimately set like everything else, by supply and demand.

In an export-dependent country like China, a gold-backed currency would not be exported in quantity–it wouldn’t be “exported” at all, because China “imports” others’ currencies in exchange for goods.

Assuming some of the gold-backed currency was exported, it would quickly end up in savings accounts or bank vaults, being a proxy for gold. There will be none available for facilitating trade in the $210 trillion global economy.

This dual nature of money trips up many analysts. Establishing a currency that is “as good as gold” but not exporting it in quantity means it will be hoarded as a store of value and be unavailable to facilitate trade. Money has to act both as a store of value and as a means of exchange.

This is why U.S. $100 bills are carefully stored in plastic in distant entrepots of the world, safeguarded as real money, available as a store of value and as a means of exchange.

Currencies can be exchanged in a Forex (FX) marketplace, but the reserve currency is the “winner take all” in the real world. If you hold out an equivalent sum in various currencies around the world, the trader in the stall will likely choose the $100 bill because he is not sure of the value of the other funny-money in his home currency and he knows he can easily exchange the $100 everywhere.

The other currencies might trade on the FX market at some percentage of the dollar, but in the real world they are effectively worthless because there aren’t enough of them available to establish a transparent, truly global market. To do that, a nation has to export monumental quantities of their currency and operate their domestic economy in such a fashion that the currency is recognized as being a store of value.

In a very real sense, every currency is a claim not on the issuing central bank’s balance sheet but on the entire economy of the issuing nation.

All this leads to two powerful tailwinds to the value of the dollar. One is simply supply and demand: as the global economy slides into recession, trade volumes decline, and the U.S. deficit shrinks. (It’s already $250 billion less than was “exported” in 2006.) That will leave fewer dollars available on the global market.

In the case of the U.S., which exports large quantities of what the world needs (grain, soy beans, etc.) while buying mostly stuff that is falling in price in recession (oil, surplus manufactured goods, etc.), the trade deficit could decline significantly. (It is currently around $40 billion a month.)

And what does a declining trade deficit mean? It means fewer dollars are being exported. The global GDP is about $60 trillion, of which about 25% is the U.S. economy. Into this vast sea of trade, the U.S. “exports” about $500 billion in U.S. dollars via the trade deficit. Put in perspective, it isn’t that big compared to the machine it is lubricating.

So what happens when there are fewer dollars being exported? Demand for existing dollars goes up, pushing the “price/cost” of dollars up–basic supply and demand.

The second tailwind is the demand for dollars from those exiting the euro and yen. The abandonment of the euro is already visible in these charts, courtesy of Market Daily Briefing: Peak Euros.

We can anticipate this desire to transfer euros and yen into dollars will only increase as those currencies depreciate. Let’s say, just as an example, $5 trillion in euros starts chasing $1 trillion in available U.S. dollars. What will that do to the value of the dollar?

Some ask why those selling euros won’t buy Chinese yuan. Where are you going to find $1 trillion in yuan? It isn’t even convertible on an open market, and since China is an importer of currency, there isn’t 1 trillion yuan floating around the global marketplace to buy even if you wanted to.

Many people scoff when I suggest the dollar could rise 50% (i.e. the DXY dollar index could climb from its current level around 80 to 120) or even 100% (DXY = 160) in the years ahead. I know it’s the highest order of sacrilege to even murmur this, but if global demand for dollars picks up, the Fed isn’t printing nearly enough to dent the rise in the dollar.

As a lagniappe outrage, consider the domestic fallout from a decline in U.S. stocks and the U.S. economy. The Fed’s precious horde of political capital will leak away, and its ability to print more money will be proscribed by political resistance and a loss of faith in the Fed’s claimed omnipotence.

Any reduction in Fed printing would only limit the quantity of dollars available to global buyers, further pushing up its price on the open market.”

What Do the Charts Say?

Meskipun saya pribadi tidak menyukai dolar AS, atau aset-aset yang terdenominasi dengannya, Saya harus mengakui satu hal positif bahwa dolar AS sebagai ‘safe haven’, yakni suatu tempat berlindung (natural hedge) terhadap kondisi ekonomi yang tidak menentu.

Berlanjutnya saham-saham menembus rekor tertingginya, yang seolah memperlihatkan pasang-surutnya fear-and-greed pelakunya, dengan ini saya rasa 3 grafik berikut akan memberikan analogi yang menarik.  Seperti dinyatakan oleh analis dari Citi, Tom Fitzpatrick, grafik-grafik terkini dari emas, indeks dolar AS, USDJPY memiliki persamaan yang menakjubkan dengan grafik masing-masing di tahun 2006/7, 1996/7, and 2000/1.  Jika sejarah berulang, maka saatnya untuk beli dolar AS:

USD Index

  • We continue to believe that the present set up on the USD Index is very similar to early 1997 (16 years ago) and early 1981 (16 years prior to that)
  • This suggests to us that a move towards at least 89.00-89.60 and possibly even as high as 95-97 could be seen this year.
  • The bullish outside month seen last month has added further weight to this view.
  • Interestingly the peaks in 1981 and then in 1997 were both posted in August. In 1981 that was about 27% above the 1980 close while in 1997 (which we favor more as a comparison) it was around 15.5%. A move like 1997 would suggest levels around 92+
  • We continue to follow a similar path which would suggest a move towards 92+ by Aug-Oct this year.
  • It is worth noting that both the 1981 and 1997 periods followed housing/credit/banking crises. In both instances the Fed eased rates and kept them too low for too long….in the 70’s period leading to a stagflationary environment.
  • In addition the 1997 period followed the falling apart of the existing financial architecture in Europe (ERM) to be replaced by the EURO (Fixed exchange rate pretending to be a single currency) which is even more flawed than its predecessor.
  • IF, as we expect, we get a move towards 92 on the USD Index this year we would expect EURUSD to at least equal if not exceed that percentage change. The 92 level is about 11.25% from the present USD-Index level. A drop from here of 11.25% in EURUSD would suggest at least a move towards 1.1500 in EURUSD

Source: Citi

Dan Dontrose, seorang editor The Fundamental View, sebelum Natal lalu memprediksi bahwa dolar AS akan menguat dan ternyata benar.  Berikut adalah penjelasan singkat terkininya mengenai indeks dolar AS dan beberapa grafik menarik untuk dilihat:

“The following charts demonstrate why we are on the precipice of gold’s future direction as well as the dollar’s direction. (HERE AND HERE). Laugh if you will but I am of the view that the dollar is the haven and will remain so for the foreseeable future.  Dollar doomsday prophets will argue the dollar is on its last legs but I would argue that it has taken a few punches but has survived.

Note the bull run it had between 1995 and 2001 when it reached its all time high on the index.  Ever since that time it has been on a decline with the blue line on the chart marking the upper line of the down channel.  Recently, I witnessed the possibility of the dollar putting in a double bottom.  Double tops and bottoms are usually seen at the end of longer term moves.  Based on the action of the dollar, it has now punctured through the top line of the bear market channel and has the potential to start moving up again. Now that the dollar has broken out of its down channel that had been in place since 2000, we may see the dollar start to come back to life, especially if we see, as I anticipate, a major stock market correction on the horizon.”

Apapun yang terjadi dengan dolar AS hendaknya bisa membuat kita terus ceria menjalani hari. Dan untuk itu berikut saya tampilkan gambar jenaka dari William Banzai:

Terima kasih telah membaca dan semoga beruntung saat ini!

Dibuat Tanggal 15 Mei 2013

Categories: Pasar Internasional Tags: