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Apakah ‘Bull Market’ Emas Sudah Berakhir?

December 23rd, 2013 No comments

“… I had a strange dream last night – a dream that the Averages had collapsed in a vicious bear market and that I was warning people about the depressed economy that lies ahead. I’ve been wondering today about whether the dream was a prediction or merely a warning to be careful. In the meantime, I believe there’s an unspoken undercurrent on the part of seasoned investors to exit this market before any major trouble hits. And, believe me, there will be major trouble, and it will hit. For ultimate safety in coming years, it will not be stocks or bonds or Picasso’s or Bitcoin, but gold. Gold will be the ultimate safe store of value. Gold has two great qualities. It has a long, pristine history, and it is outside the current system. It is notable that China is hedging against its huge hoard of US securities with gold. When I was a young man there was a common expression, “damn clever, these Chinese” (meant in seriousness), and I believe the expression still holds. After all, did you ever see a Chinese restaurant go bankrupt?”

– Richard Russell, December 16, 2013

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Kamis pekan kemarin emas ditutup di harga ‘rata-rata’-nya dalam 7 tahun terakhir dan di level terendahnya sejak Juli 2010. Tidak salah jika Anda menyebutnya hari yang sangat jelek untuk emas, seperti Anda dapat lihat dalam grafik di bawah ini:

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Pertanyaan sekarang adalah “Apakah memang kita sudah harus lupakan emas, atau itu masih merupakan aset yang terbaik di masa yang akan datang?”

Seperti kata Jeff Clark, seorang analis senior untuk logam mulia dari Casey Research, bahwa bull market emas belumlah berakhir!

Dalam laporan terbarunya, Clark mengungkapkan 4 faktor besar yang akan mempengaruhi harga emas mulai tahun 2014.

Berikut laporannya dalam penjelasan yang ringkas namun menarik:

New Trend Guarantees Higher Gold Prices

If you’re like me, you’ve bought gold due to the money printing policies of most developed countries and the effect those policies will have on the future purchasing power of our paper money. Probably also because there’s no viable way for governments to escape the consequences of all the debt they’ve piled up. And maybe because politicians can’t be trusted to formulate a realistic strategy to avoid any number of monetary, fiscal, or economic crises going forward.

These are valid, core reasons to hold gold in a portfolio at this point in time. But a new trend is under way, and someday soon it will be just as much a driving force for gold prices as anything else: a good old-fashioned supply crunch.

A few metals analysts have mentioned it, but it escapes many and certainly is off the radar of the mainstream financial media. But unless several critical factors reverse course, a supply shortage is on the way with clear implications for the price of gold.

The following four factors are combining to diminish gold supply. While we’ve touched on some of them before, put together they’re creating a perfect storm that will, sooner or later, impact the gold market in several powerful ways. As these forces gather steam, you’ll want to make sure you’ve already built a substantial position in physical bullion.

Factor #1: Production Pullbacks, Development Delays, Exploration Cancelations

Gold producers don’t operate in a vacuum. If the price of their product falls by 30% over a two-year period, they’ve got to make some adjustments. And those adjustments, more often than not, result in lower production, delayed mine development plans, and cuts in exploration budgets. The response is industry-wide, and even low-cost producers are not immune.

The drop in metals prices means some mines can’t operate profitably, and if the losses exceed the cost of closure (and possibly, restart in the future), these mines will be shut down. As operations come offline, global output falls.

While lower metals prices are not what any of us want, they’re long-term bullish because, as they say, the cure for low prices is low prices. If prices drop further, a greater number of projects will be unable to maintain production levels. For example, we know of several operating mines that, in spite of large reserves, will be forced offline if the gold price falls to the $1,100 level.

The impact on development and exploration projects is even greater—it’s easy to postpone construction on tomorrow’s new mine when you’re worried about cash flow today. As a result, many companies have cut drilling projects and laid off geologists.

The chart below shows the precipitous decline in the number of drilling projects around the world.

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Through the first nine months of 2013, 52% fewer drills have been turning compared to the same period last year. And it’s not just fewer holes being poked in the ground—ore grades are declining too.

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As of last year, ore grades of the ten largest gold operations are less than a third of what they were just five years ago, and less than a quarter of what they were 14 years ago.

Here’s the troubling aspect: This trend cannot be easily reversed.

It takes about a decade to bring new projects on line, and even shuttered, recently producing mines held on “care and maintenance” take time and money to get going again.

In other words, even when gold prices start rising again, new mine supply will take years to rebuild. Many companies will find themselves with a lack of readily available ore, and the market with fewer ounces.

Lower metals prices obviously have an impact on how much metal gets dug up. This alone is bad enough for supply, but unfortunately it’s not the only factor…

Factor #2: Now You See ‘Em, Now You Don’t

Many mining projects have both low-grade and high-grade zones. When prices fall, a company can mine the richer ore and still make money. It may sound shortsighted, but it can be the right thing to do to stay profitable and be able to survive in a temporarily weak price environment.

But high-grading, as it’s called, can make low-grade ore part of a disappearing act. Here’s how:

When metals prices are low and companies focus on high-grade ore, the low-grade material is temporarily bypassed. It’s still physically there, so one might assume the company will come back at a later time to mine it. But not only is it not economic at lower metals prices, it may never get mined at all.

That’s because some low-grade ore only “works” when it’s mixed with high-grade ore. Even when gold moves back up, it doesn’t matter, because the high-grade ore is gone. So it’s not just gone legally, as per regulatory definitions of mining reserves—it may be economically gone for good.

Miners could return to some of these zones in a very high gold price environment (something well north of $2,000), but that’s a concern for another day. The point for now is that many of today’s low-grade zones would be written off if the high-grade they need to work is gone.

Critical point: You may read reports early next year that global production is rising. However, to the degree that’s due to high-grading, it virtually guarantees lower production is around the corner.

Factor #3: Greed Is Good—Says the Politician

It’s become increasingly difficult for mining companies to navigate the political minefield. Many governments have become so rapacious that supply is already suffering.

We’ve mentioned this issue before, but take a look at how governments and NGOs (nongovernment organizations) put an effective halt to some of the biggest precious metals discoveries seen this cycle…

Pebble Project in Alaska. Anglo American (AAUKY) spent $540 million on one of the biggest copper/gold discoveries ever, but recently announced that it will walk away from it. The company said it wants to focus on lower-risk projects and is undoubtedly tired of putting up with ongoing environmental scares and regulatory delays.

Fruta del Norte in Ecuador. Kinross Gold (KGC) bought Aurelian shortly after what many called the discovery of the decade, but the politicos demanded such a big slice of the pie that Kinross stopped developing the project.

New Prosperity Mine in British Columbia. Taseko Mines (TGB) has been relentlessly challenged by environmental activists at the world’s tenth-largest undeveloped gold/copper deposit and pushed politicians to continually delay permitting.

Pascua-Lama in Argentina & Chile. This giant deposit has been postponed for several years, largely due to environmental issues and unmet regulatory requirements. Some analysts think it may never enter production.

Navidad in Argentina. Pan American Silver (PAAS) was forced to admit that the Navidad silver deposit—one of the world’s biggest silver-primary deposits—was “uneconomic at any reasonable estimate of long-term silver prices” when the local governor announced he wanted “greater state ownership” and increased royalties from 3% to 8%.

Minas Conga in Peru. Newmont’s (NEM) multibillion-dollar project was put on the back burner last year when the government gave the company two years to develop a way to guarantee water supplies for residents of the Cajamarca region.

Certainly bigger projects attract greater attention and scrutiny, but as it stands now, none of the above projects are in operation.

This list is by no means exhaustive; large numbers of smaller projects all around the world face similar challenges.

The bottom line is that finding economic gold deposits in pro-mining jurisdictions is getting increasingly difficult. The result? The metal stays in the ground.

Factor #4: Implosion Explosion

As you’ve likely read, the gold mining industry in South Africa is imploding.

  • Labor strife: Strikes are common, and layoffs have numbered in the thousands this year.
  • Rising costs: Labor and power costs have doubled since 2009. Some projects have been taken off line due to the one-two punch of higher costs and lower metals prices.
  • Maturing assets: Many mines in South Africa are past their heyday and have forced companies to dig deeper. The deepest mine is now 2.4 miles below surface and takes workers a full hour to reach the bottom.
  • Power inefficiencies: Electricity shortages are at their worst in five years. Poor power supply has led to blackouts and mining stoppages, and has made expansion difficult.
  • Political interference: The industry has faced frequent calls for nationalization. Miners were told earlier this year they can stay private, though in exchange they were forced to pay higher taxes. How gracious of the politicians.

The breakdown in South Africa is important because as recently as 2006, it was the world’s top producing country; it’s now #5. Unfortunately, there’s every reason to expect this trend to continue, in many countries around the world.

The result is—you guessed it—fewer ounces come to market.

These four factors are already affecting gold supply. Gold production in the US was already 8% lower in the first half of 2013 vs. the first half of 2012. Through June of each year, output dropped from 655,875 ounces last year to 623,724 in 2013.

The net result of this perfect storm is that we should expect gold supply to decline until prices are much higher. Even when prices do rise, management teams will be reluctant to expand operations, reopen mines, or buy new projects until they feel the new price level is sustainable. As a result, this trend will almost certainly last several years.

Based on the research we’ve done, it is my opinion that after a bump in output early in 2014, the shortfall will become increasingly evident by the end of the year and reach fractious levels by 2015.

If demand remains at current levels, or even if it falls by less than the decrease in supply, gold and silver prices will be forced up. And in an environment of currency depreciation, we should see more demand, not less. We have the makings of a classic supply squeeze.

Higher metals prices are not the only ramification, however: Investors will be required to pay higher premiums on bullion. Further, we can expect a lack of available product, most likely resulting in delivery delays or even rationing.

That’s why it’s so important to buy bullion now, before the storm. Even if you need to sell a little to maintain your standard of living, the effects on you will be all positive. The product you sell will…

  • Fetch much higher prices
  • Return the premium you paid—perhaps more than you paid
  • Have a steady stream of ready customers

All it takes to capitalize on this opportunity is to recognize the supply shortage that’s on the way and act accordingly.

Critical point: Buy the physical gold and silver you think you’ll need for the future NOW.

Sekali lagi, saya ingin menekankan bahwa karena manipulasi harga bank-bank sentral barat (western central bank price manipulation), sektor pertambangan berada dalam kondisi kritis, jalur suplai hampir terhenti, dan suplai di pasar fisik seluruhnya masuk ke Asia.

Akhirnya perusahaan-perusahaan pertambangan besar mulai menutup produksi di tambang-tambang besar.

Meskipun ini akan dianggap sebagai akhir untuk emas, spekulan justru senang karena mengetahui bahwa ini akan menjadi awal bagi induksi gelembung terbesar the Fed dalam sejarah!

Tapi tidak seperti gelembung sebelumnya, di mana mereka mendukung kenaikan harga, gelembung emas akan menjadi hasil dari salah kelola harga emas dari bank-bank sentral barat dalam 3 dekade terakhir dan akhirnya kehilangan kontrol.

Seperti artikel singkat dari Peak Resources explains berikut, bahwa badai besar akan menuju ke aset emas…:

Friday October 11th, gold trading was shut down for 10 seconds according to the CME.

Why, because someone sold 2 million ounces of gold at one time. Who does this? Who sells nearly 2 and half percent of annual gold production in a single minute? The gold valued at over $2.5 billion could not have been sold by a small trader, and certainly not the smart money, institutional investors know that you don’t exit a large trade like this…

So who could it be? Try the dumb money, The Western Central Banks.

As noted by organizations like GATA, TF Metals Report, Zero Hedge, and Shtfplan, gold manipulation is out in the open. Friday October 11th is just one of the daily examples.

With the western central banks suppressing the price, the eastern central banks have been happy buyers.

However, PeakResources.org believes this gold price suppression scheme is nearing its end.

With the Federal Reserve on a fiat currency suicide mission with QE forever, and the U.S. federal government bankrupt, the days of dollar supremacy are in its last days.

For gold though, the central banks have really screwed themselves.

At a price of $1,250, gold mining companies can no longer make a profit. Recent studies show their all in cash cost anywhere from $1,400 to as high as $1,700. Liquid fuels, human energy, and new exploration are costly in the mining process, so it is unlikely these costs can be cut to accommodate the low gold price.

Since gold’s peak in 2011, the TSX Venture exchange, home to the world’s gold exploration companies, is down more than 59%.

The gold juniors index, the GDXJ, is down 83%.

And the large cap gold companies, despite seeing a 400% increase in the price of gold over the past 12 years, are trading at lower valuations then they did even 20 years ago.

As noted in our video Peak Gold, no major gold discoveries have been found in more than 10 years! Gold production as a whole has plateaued.

Remember, all mines have a limited supply of gold, at some point in time they either deplete themselves or become uneconomical. Uneconomical meaning companies can’t mine for profit, which is exactly the case for nearly all gold mines today!

Consider a very famous gold mining region, South Africa.

In 1971 South Africa produced 47.5 million ounces of gold, accounting for 68% of global mine production.

In 2011, South Africa accounted for only 7% of gold production with about 8 million ounces of mine production.

Despite all the technological advances and billions in exploration and development, South African gold production is down 82%.

South Africa isn’t an anomaly either, here in the U.S. production in the past 20 years is down 30%.

Current discoveries are small, in remote areas, and are lower grade deposits.

PeakResources.org recently attended a gold mining event in London, what we learned was that exploration budgets were being slashed! No development, no exploration, and a scaling back of projects.

What this all leads to is a price spike in gold, just as gold rose from $35 to $850 in the 70s, The Dow Jones from 2,000 to 11,000 in the 1990, and Bitcoin from a penny to $1,200 more recently, so to can gold have a parabolic spike.

The perfect storm is coming for gold…

Due to western central bank price manipulation the mining sector is in critical condition, the supply line is all but halted, and the physical supply is being swallowed up by Asia.

The last shoe to drop is for major mining companies to start closing down production at major mines. Though this would be perceived as the end for gold, speculators will be happy to know that this would be the beginning of the biggest Fed induced bubble in history! But unlike previous Fed bubbles where they support the price increase, the gold bubble will be a result of western central planners mis-managing the gold price for the past 3 decades and finally losing control.

With fiat currency being pumped into the system daily and the gold sector in shambles, the central banks are in for a big surprise because sooner or later supply and demand economics will crush the very people who are behind the devastation we have seen in the gold mining and precious metal industry.

What Do the Charts Say?

Dalam tulisannya 24 Deember 2013 lalu, Przemyslaw Radomski, pemegang gelar CFA dan seorang pemilik sekaligus editor utama pada www.SunshineProfits.com, mengetengahkan 2 grafik tentang emas (courtesy of http://stockcharts.com), yang masing-masing memberikan gambaran berbeda mengenai kinerja emas, namun berujung pada arah yang sama – arah penurunan lebih lanjut.

Berikut adalah grafik-grafiknya, disertai dengan komentar dan pesan-pesan penting di akhir tulisannya:

“Let’s start off by taking a look at the chart featuring gold priced in the British pound.

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As far as gold priced in the British pound is concerned, we saw a verification of the breakdown below the previous 2013 low, nothing more. The outlook remains bearish.

Even though we saw rally in USD terms, and it looked quite bullish at the first sight, keeping an eye out on gold priced in other currencies warned that not everything about that rally was so bullish. It was not a true rally, but a verification of a breakdown.

We can say an analogous thing about the Dow to gold ratio. In this case, we had previously seen a breakout and this week we simply saw verification thereof.

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Last week we wrote the following:

That’s one of the most important and useful ratios there are as far as long- and medium-term trends are concerned. In particular, the big price moves can be detected before they happen (note the breakout in the first months of the year that heralded declines in gold).

We saw a breakout above the 12.5 level 2 weeks ago and shortly thereafter we wrote that with the ratio even higher today, we have a good possibility that the breakout will be confirmed and that we will see a big drop in the price of gold in the coming weeks or months.

The ratio moved even higher last week and it’s already at 13.03. However given the sharpness of the most recent move up, we wouldn’t be surprised to see a correction to the previously broken 12.50 level before the upswing continues.

The Dow to gold ratio moved slightly lower earlier this week, which didn’t change anything as it remained above the previously broken 12.50 level. The bearish implications remain in place.

Summing up, the medium-term outlook for gold remains bearish and it seems that we might see another sizable downswing shortly. This week’s initial “strength” was quickly invalidated.

We would like to emphasize that we continue to think that gold is likely to move much higher in the coming years. Gold is a system hedge and with practically all monetary authorities trying to print and inflate their way out of their problems, the systemic risk will continue to increase.

However, markets are logical only in the very long run. In the medium and short term, they are emotional and vulnerable to multiple psychological traits that humans (that ultimately create markets) exhibit. Consequently, every bull market will also have temporary downturns without any good logical reason – and it seems that this is where we are right now. The good news about them is that they allow informed investors to take advantage of these emotional price swings and increase their profits. This means that instead of hating these corrections one might be better off by taking advantage of them.”

Laporan bulanan Elliott Wave International’s Global Market Perspective memproyeksikan bahwa harga emas masih berada dalam penurunan jangka panjang.

Dalam edisi terakhir untuk Desember 2013, laporan tersebut menunjukkan bahwa emas sedang membentuk channel turun baru, yang tentunya memiliki implikasi bearish pada harga emas:

“Gold is down over $200 from its late-August high at $1434, and the bulls are in full retreat. Last week it was reported that one of the world’s best-known hedge-fund bulls was backing away from his bet.

With his gold fund down 63% year-to-date, he privately indicated that he wouldn’t invest any more of his money in the metal.

The Daily Sentiment Index (trade-futures.com) has declined to 10% bulls in gold and 9% bulls in silver.

And in a reversal of silver and gold margin-requirement increases near their respective April and September 2011 all-time highs, the CME two weeks ago cut the margin requirements needed to purchase both metals.

These sentiment indicators allow for a near-term rally, but the larger-degree wave structure remains bearish.

At the least, gold requires a fifth wave down to new lows before we can label a complete five-wave decline from the September 2011 peak at $1921, as the chart below shows.”

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Conclusion

Menurut saya harga emas memang akan turun lagi.

Level penurunan berikut yang perlu diperhatikan adalah level terendah tahun 2013 ini, di sekitar $1180.

Dalam jangka pendek mungkin saja terjadi formasi double bottom di areal tersebut.

Jika ada penurunan menembus level terendah 2013 tersebut, namun kemudian ditutup kembali di atasnya dengan volume yang kuat, maka kemungkinan double bottom tersebut akan semakin kuat.

Namun jika formasi double bottom tidak terjadi, maka harga emas akan turun lebih jauh untuk mencoba support kuat di areal $1000 hingga $1100, yang menjadi target zona koreksi saya sejak September.

Dengan kata lain, kecenderungan di tahun 2014 akan ditentukan dalam 2 pekan terakhir 2013 ini.

Jika membentuk double bottom, maka tahun 2014 akan menjadi tahun gemilang untuk emas, sebaliknya jika tidak mungkin emas bergerak ‘tidak kemana-mana’ dalam beberapa bulan ke depan meskipun dibayangi oleh volatilitas besar dari perubahan kebijakan bank sentral AS (QE-taper).

Setidaknya pergerakan harga emas memasuki libur Natal dan Tahun Baru akan menarik untuk melihat apakah tahun 2014 akan dimulai dengan pergerakan emas dari level rendahnya atau akan mengalami penurunan yang berlanjut.

Di akhir laporan ini, ada kisah tentang emas untuk Anda:

“A most, most wealthy man was told by the Lord that he must get his affairs in order as his life was to end.

The man asked for special dispensation to take his huge hoard of gold with him. He got a YES after a pause.

So when he gets to the pearly gates, St. Peter says, “No luggage allowed.” An Angel says, “There has been special dispensation in this case.” Peter says, “Show me.”

He looks and is aghast and exclaims, “Paving stones?!”

Karena akan menjalani libur akhir tahun untuk 2 pekan mendatang, bersama ini saya juga ucapkan kepada para pembaca dan keluarga selamat berlibur dan selamat Tahun Baru 2014 …

Terima kasih sudah membaca dan semoga beruntung!

Dibuat Tanggal 20 Desember 2013

Categories: Emas Tags:

Prediksi-Prediksi Memukau di 2014

December 20th, 2013 No comments

“What we’ve had in the world is a crisis in 2008 that was caused by excessive leverage and excessive debt brought about by excessively low interest rates. For the last 4 years the Fed Funds rate has been essentially at zero and we have massive money printing – monetary inflation. This creates a huge pool of liquidity. The problem is that this liquidity will not flow evenly. It can flow first into NASDAQ stocks until March 2000, then in the housing market, then in commodities and gold, and then in emerging markets. You have one bubble after the other. The bubble goes up and then is deflated when the capital (liquidity) moves out. That is the problem of money-printing by central banks.

– Marc Faber

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“Avoid the crowd. Do your own thinking independently. Be the chess player, not the chess piece.”

– Ralph Charell

Tidak terasa sebentar lagi akan masuk tahun 2014 dan termasuk Kamis ini hanya 9 hari perdagangan tersisa di tahun 2013, bahkan 2 hari di antaranya (jelang Natal dan jelang Tahun Baru) hanya dibuka setengah hari perdagangan.

Inilah waktunya untuk menyusun portofolio Anda.

Dan jangan tunggu hingga 1 Januari!

Saya sangat ingin menyampaikan hal ini pada Anda bahwa kemungkinan akan terjadi kenaikan ataupun penurunan yang sangat besar pada pasar forex, obligasi, saham dan/atau emas maupun komoditas pada tahun 2014.

Namun ada 5 laporan sangat menarik yang ingin saya berikan dan semoga dapat membantu rencana (jika perlu penyesuaian maupun diversifikasi) investasi Anda di tahun depan.

Yang pertama Bob Stokes dari Elliott Wave International, yang memberikan peringatan keras ke para investor bahwa dalam jangka pendek kita akan dihadapkan pada kemungkinan terjadinya deflasi dan depresi.

Prepare Yourself for the Rest of “Conquer the Crash”
The earlier you position your portfolio, the better

To this day, I wonder why Robert Prechter’s book Conquer the Crash has not been more widely recognized. It described in advance much of what happened in the 2007-09 financial crisis.  

Published in 2002, the book provided detailed descriptions of then-future economic scenarios. They were detailed vs. general descriptions. Prechter was specific in a way that would prove right or wrong; there was no gray.

This is from the book:

There are five major conditions in place at many banks that pose a danger: (1) low liquidity levels, (2) dangerous exposure to leveraged derivatives, (3) the optimistic safety ratings of banks’ debt investments, (4) the inflated values of the property that borrowers have put up as collateral on loans and (5) the substantial size of the mortgages that their clients hold compared both to those property values and to the clients’ potential inability to pay under adverse circumstances. All of these conditions compound the risk to the banking system of deflation and depression.

Conquer the Crash, second edition, (p. 179)

That’s just one excerpt about one topic in a 456-page text. Perhaps you see why I believe the book deserves more credit. Yet even that one paragraph from the book turned out to be a virtual mirror of what came to pass during the 2007-2009 financial crisis.

And we believe that much of what Prechter predicted is yet to unfold.

The broader point is that Conquer the Crash prepared its readers. Around the time the book’s second edition published in 2009, the Chicago Sun-Times remarked:

Reading this book today, it seems as if Prechter had a crystal ball. That’s why his current view of the market is so compelling. … He says the ‘credit implosion’ is not finished.

And the credit implosion is still not over. Please take a look at the chart:

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In the Conquer the Crash quote in the first part of this article, the last three words are “deflation and depression.” The world has yet to completely pass through these economic valleys.

Dalam sebuah wawancara khususnya dengan King World News (www.kingworldnews.com), Marc Faber menjelaskan prediksi utamanya untuk 2014 dan juga saran yang solid untuk mereka (para investor) yang cenderung contrarian.

Berikut yang penjelasannya, disertai sejumlah pernyataan yang mengejutkan dan serta hal lain yang menarik:

“The more I think about it the more I feel that we all don’t know how 2014 will end.  First of all, we have geopolitical tensions that are rising, particularly in Asia.  Who knows what this will lead to?

I don’t think that a war will occur, but the tensions could escalate to a point where they would have some impact on the Asian economies and on the currencies of the Asian economies, notably the yen.

So, whereas I admit that to short the yen is an extremely crowded trade at the present time, everybody is short the yen and long the Nikkei, I still feel there is a good chance that the yen will continue to weaken.  That would be favorable for the US dollar.

Now, against all expectations, this year the euro has rallied against the US dollar.  I think the euro zone economies are probably in the worst shape, and the financial system is in worse shape than the US.  So I would also rather be long the US dollar than short the US dollar.  Also, (I would rather be long the dollar) because of the increased energy self-reliance in the United States.

Concerning the share markets, the big question is this:  Since 2010, we had a massive outperformance of the US vis-a-vis emerging economies.  The US cyclically adjusted earnings P/E ratios are relatively high, which would indicate low returns for the next 7 to 10 years.  In other words, in the opinion of Jeremy Grantham returns of less than 2% are negative in real terms for each of the next 7 years.  

Conversely, in emerging economies we had bear markets.  In some markets, adjusted for the depreciation for currencies like the Brazilian real, the Indian rupee, and so forth, we had declines of 30% to 50% from the highs.  So the question for the investor is, ‘Do I buy the US that is still currently momentum driven but it won’t be driven forever, or do I gradually move into emerging economies?’ 

I think it’s too early to move into emerging economies, and I think it’s too late to buy US stocks.  They (US stocks) may go up another 10%, maybe even 20%, but the risks have increased significantly and I don’t think equity investors in the US, aside from a short-term trading opportunity, will reap very high returns in the future.

Now, compared to equities in emerging economies and equities in the US, what is really incredibly depressed are mining companies.  My preference has always been to own physical gold, but I have to say that at this level the mining companies are relatively good values.

I’m not optimistic about any asset class, whether it’s art, collectibles, bonds, equities, or commodities, but relatively speaking, probably commodity related stocks are very cheap.  And don’t forget in 1999 to March 2000 there were a handful of technology stocks that went ballistic, and these so-called ‘old economy’ stocks were all sleeping.  And when the Nasdaq collapsed, the ‘old economy’ stocks came back (into vogue).

So my sense is that as a contrarian and also given the extremely negative sentiment about gold, silver, platinum, and palladium, going into 2014 I think that the mining sector looks reasonably attractive.”     

Mungkin Greg Guenthner, seorang editor di The Daily Reckoning’s Rude Awakening, adalah orang cenderung agak positif melihat prospek 2014.

Menurutnya para investor saat ini terlalu khawatir sehingga menurutnya harus siap mengawali kenaikan di tahun 2014. Berikut adalah penjelasannya:

How to Profit from the 2014 Taper Trend (December 10, 2013)

The dreaded Fed taper is changing the way investors approach the market.

Well, not the taper itself, of course. That hasn’t happened yet. But the investment community’s fears over the taper, its timing, and impact on the markets have actually slowed the flow of money into long-term investment funds over the past six months.

You can profit from the “taper trend” by staying long equities heading into the New Year. It’s that simple…

What we’re seeing is the potential for a perfect storm of short-covering and reallocation heading into 2014. This “taper trend” could easily become extra fuel for an equity market that is about to register one of its best yearly performances ever…

“Since May, taper fears have caused bond outflows while equity inflows continued,” reads a Deutsche Bank note (via Business Insider). “But the net of the two is zero. With no long-term inflows, $139 billion has piled up in money markets.”

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“Many equity investors are worried given the 27% rally YTD, but we estimate that an incremental $169 billion in pent-up cash and short interest due to taper fears is likely to make its way into equities in the next 3-4 months,” Deutsche Bank continues. “Indeed, the [first-half-of-the-year] pattern since 2009 has seen cash move out of money markets and into bonds and equities.”

Investors are heavily hedged with short positions. And too much money is on the sidelines right now. When the calendar rolls over to January we could see another huge month for stocks (much like we experienced in 2012 and 2013). Don’t over-think it– or you might miss out on another epic rally…

John Hathaway, seorang Portfolio Manager dan Senior Managing Director pada Tocqueville Asset Management L.P., belum lama ini menyebutkan bahwa resiko akan meningkat bagi mereka yang memiliki porsi investasi individu yang signifikan perbankan konvensional dan sekuritas.

Berikut adalah penjelasannya, yang menurut saya pribadi bahwa setiap orang harus mewaspadainya karena dapat memberikan dampak besar bagi tabungan Anda:

“Simon Mikhailovich of Eidesis Capital LLC states in the November 15 issue of Grant’s: “In the old framework, cash was a risk-free asset. In the new paradigm of systemic risks, no asset (even cash) is risk-free so long as it is in custody of a financial institution. Investors and depositors no longer have clear title to their own assets if they are held in financial accounts. There is now a body of law (including Dodd-Frank) that allows custodial assets to be swept into the bankruptcy estate and be subordinated to senior claims.” Hand in hand with the evolution of the banking laws is the subtle but pernicious evolution of the practice of banking: “Various rules and practices have made it almost impossible to use cash and securities. Go try to make large cash withdrawal or cash deposit and see what paperwork you would be forced to complete.”

Should we worry about cash in the bank? Never mind that policy makers and respected private economists are openly campaigning to debase paper currency. “In Fed and Out, Many Now Think Inflation Helps” was the headline for a New York Times article on 10/26/13. “(Fed) critics, including Professor Rogoff, say the Fed is being much too meek. He says that inflation should be pushed as high as 6% a year for a few years.” In addition, there are calls for outright taxes on wealth and movement towards a cashless society in which all money would be electronic. In his recent speech before the IMF, Lawrence Summers stated that electronic money would “make it impossible to hoard money outside the bank, allowing the Fed to cut interest rates to below zero, spurring people to spend more.” Cash and securities within banking and securities institutions are visible forms of wealth. Liquid private wealth captured in electronic form offers endless possibilities for wealth redistribution and other social engineering schemes. Tangible assets that are not securitized or digitized are less visible and therefore less vulnerable to broad edicts targeting private wealth.

The same Mr. Mikhailovich notes that during the financial crisis of 2008, public policy was mostly an ad hoc reaction to a cascade of emergencies. Since then, policy makers have had plenty of time to plan orchestrated responses to circumstances similar or worse. In a series of steps, many small and some large, almost always cloaked in complexity and obscurity, and always in the name of public interest or national security, policy makers have constructed mechanisms that are substantially and substantively unfriendly to private wealth:

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Source: TBR

Terakhir yang tak kalah penting adalah Chris Tell dari http://capitalistexploits.at/ yang memberikan perbandingan sangat menarik antara gelembung hutang pemerintah terbesar sepanjang sejarah dengan kebakaran hutan dalam artikelnya di bawah ini.

Dia juga menjelaskan bagaimana dirinya mengalokasikan modalnya dan bagaimana sebaiknya kita mempersiapkan diri menghadapi badai moneter:

I’ve never been trapped in a fire before and trust me, I have had plenty of opportunity. Yes, I was THAT kid, the one who played with fire. The trick was, and still is to steer clear of the flames, to anticipate what and where. Fire is however notorious for doing what it wants and once it’s out of control even the best firefighters don’t stand a chance.

Each day that passes we come closer to the arrival of a monetary fire that threatens to dwarf anything in our collective living memories. Watching the Australian bush fires in New South Whales recently made me think of our monetary system. Funny that.

The Australian bush has been burning long before the Brits began exporting their best and brightest to the “lucky country.” Right now the fires are raging. It was inevitable. Like the business cycle nature too abhors excess and steps in to correct it, clear the dead wood and prepare for rebirth.

What is often forgotten is that nature has evolved to rely on bush-fires as a means of reproduction and new “birth.” Fires are an integral part of the ecology of the planet’s surface. Humans can try and prevent these inevitable fires by “controlled burnings”, clearing out much of the dead underbrush, but it’s not foolproof.

The fires now raging in New South Whales are in part due to an extensive build up of dry brush which is likely overdue a good burning. The longer the dry bush remains unburned, and the more that accumulates the greater the risk of an inevitable fire. The result will be much greater than that which would have preceded it should a fire have taken place sooner. This is a basic, easy to understand law of nature.

Financial markets are NO different. The dry brush of excessive credit, monetary stimulus, rampant fraud, and government interference, which has caused the largest sovereign bond bubble the world has ever seen, has not been cleared or burned to allow for regeneration. In contrast we’ve actually been ADDING to it, doing the exact opposite of the “controlled burn.”

The market, like nature, has attempted to correct these excesses many times, only to be met with central bankers’ fire hoses spraying liquidity at ever increasing volumes and velocity. As the outbreaks of financial fires increase so too do the tools and technologies used by the central bankers. This postponement of the inevitable leads to massive mis-allocation of capital.

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That’s a lot of dead wood buildup there

The above graph shows all the dead wood build-up. Quite a bonfire awaits us.

It is possible that the fires will continue to be contained, central bankers promise that this is indeed the case. We DO know however that it is not possible to contain it forever. This time is not different…or is it?

Let’s compare what’s different this time around in Australia and the world’s monetary system?

  • The bush fires have invaded the suburbs. So too have the monetary bush fires directly impacted most western “suburbs”.
  • The “tools” available to the firefighters are more advanced than at any time in human history. The tools that are at the disposal of central bankers are more “advanced” than at any time in human history.

What’s happening in New South Wales right now provides us with an instruction manual for how to proceed forward in a world of monetary madness. We need to BURN THE UNDERBRUSH. Simply hoping that the fires will fail to erupt simply defies history and mathematics. “Hope and Change” be damned.

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The likely outcome is that we’re heading deep into asset confiscation mode. Government meddling will fail, it always has and it always will. The playbook from throughout history tells us that governments will steal anything and everything from the most productive before they default.

This happens either overtly (taxation, fines, penalties, asset seizure) or covertly via destruction of currencies (quantitative easing). Everything not nailed down is up for grabs. Don’t say you weren’t warned! If you need an example look at what’s happening in France. Hollande is insane, but he’s not unique.

As such, aside from structuring myself in order to protect what I have, which I hope I’ve done, ensuring that what I invest in going forward is structured properly is just as important. It makes no sense to invest intelligently only to have some thug steal the proceeds because I failed to set myself up to deal with the inevitability just mentioned.

So, how are Mark and I choosing to allocate our capital:

  • Investing in private equity. We like businesses where we can get to know and deal directly with CEO’s and management, and where we are not at the whim of black box trading systems, plunge protection teams and assorted other “firefighters”. This is by far our most overweighted asset class.
  • Continuing to buy and store physical precious metals. This just seems a long-term no-brainer.
  • Investing in agriculture. A guy’s gotta eat, right!
  • Select real estate. Maybe some premium scorched earth in New South Wales, Australia. After all, the risk of a devastating fire is now significantly reduced! But seriously, a nice piece of land where you can escape the madness and “grow your own” if need be.

The above is neither a recommendation nor an endorsement of any particular asset class or strategy. Obviously everyone’s situation is different, and we don’t know yours. Some could probably do just fine with a couple hunting rifles, some ammo and a nice piece of land to grow food and run a few livestock. Albeit that’s not going to work for urban dwellers.

The bottom line is that we are just encouraging you to consider how to prepare for a monetary firestorm. Do it your own way, use common sense, but just don’t be the dupe who ignores the obvious.

- Chris

“So just as I want pilots on the planes that I fly, when it comes to monetary policy, I want to think that there is someone with sound judgment at the controls.” – Martin Feldstein.

What Do the Charts Say?

Seperti dijelaskan oleh Toby Connor, penulis Gold Scents, sebuah blog finansial dengan penekanan khusus untuk secular bull market emas:

“In this business, there is no greater buying opportunity than at a bear market bottom. For those few investors able to control emotions, delay gratification, and go against the crowd, a bear market bottom is where millionaires and billionaires are made.”

Hal tersebut yang coba dijelaskannya dalam artikel berikut yang diberi judul Bear Market Bottoms: Smart Money Buying Opportunity:

“Unfortunately for the vast majority of traders, emotions are much stronger than logic. When most people observe a market that has gone up continuously for five years they automatically assume that this market will continue to rise. And because everyone else is getting rich and they don’t want to be left out, they jump on board too.

In reality a market that has gone up for five years is all that much closer to a top and the upside potential is limited, not exponential. Unfortunately at market tops traders are unable to think logically and all they know is that the money is coming easy. Unfortunately when something is easy, it’s usually about over.

By the same token when a market has gone down dramatically for two years dumb money investors automatically assume that it will continue to fall for the foreseeable future. Let’s face it why would anyone want to buy something that is going down when you can buy stocks that are going up forever, and get rich quick? (This is the same mentality that was prevalent in the real estate market in 2005/06).

Again if one would stop and think logically, a market that has gone down for two years is all that much closer to a bottom. This is how smart money investors think, they think logically instead of emotionally.

In the S&P 500 chart below notice how the volume exploded at the 2009 low. This is a classic example of dumb money emotional selling, and smart money contrarian buying. Now after five years we have the exact opposite. Big money is slowly selling into the rally to the emotional dumb money investors. Volume is contracting.

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So if smart money is selling into the euphoria phase of this bull market, one has to wonder where they are putting their money. One needs to look no further than the closest bear market.

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Smart money understands that all bear markets eventually come to an end. They understand that recent bias is a trap that catches investors at tops and prevents them from buying at bottoms. They control emotions, delay gratification, and understand that bear market bottoms are where the greatest buying opportunities in this business are generated. As you can see big money has been coming into this market since June in preparation for a bear market bottom.

I am cautiously optimistic that gold is in the process of completing a successful test of the June lows. If I’m correct then this will turn out to be one of the greatest buying opportunities of our lifetime.

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Let me stress that this isn’t the time to swing for the fences. Picking a bottom in a bear market isn’t easy. If you’re wrong and get caught in another leg down it’s going to be painful as these can often drop 15 to 20%.

At the moment I’m watching for signs that gold has formed an intermediate degree bottom. If that bottom can hold above the June low it will confirm that June marked a final bear market bottom, and I believe the start of the bubble phase of the secular gold bull market.

In a somewhat related vein I want to finish this article by talking about inflation. The general consensus at the moment is that there is none. That of course is nonsense. We have massive inflation right now. Inflation is an increase in the money supply.

What most people don’t understand, including members of the Federal Reserve, is that inflation doesn’t typically flow evenly into all assets. During the beginning stages of inflation liquidity usually flows into financial assets, as that is where the Fed targets its efforts.

Typically during the first stage of inflation liquidity will flow into stocks, bonds, and in our case over the last decade, real estate. It’s only during the second stage of inflation when these bubbles become overvalued and pop that the inflation that’s being stored in the financial markets begins to leak into the commodity markets. At that point we “label” it as inflation.

Notice in the chart below that from 2002 to 2007 inflation expressed itself as rising stock prices and a bubble in the real estate market. During this time the general consensus was that we had little to no inflation. The reality was that we had massive inflation it’s just that everyone was looking for it in the wrong place. Once the housing bubble and stock bubble began to deflate the inflation that had been stored in these markets began to leak into the commodity markets and the second “recognized” stage of inflation began. This culminated with a spike in the CRB and oil reaching $147 a barrel.

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I would argue that we are now about to begin the second stage inflation again. It appears that rising interest rates have already pricked the echo bubble in the real estate market, and at five years the bubble in the stock market is almost certainly in the final euphoria stage. Once stocks begin to stagnate and rollover we are going to see that same process that we saw in 2007/08 as inflation leaks out of stocks, bonds, and real estate and moves back into the commodity markets.

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If I’m correct about gold forming a final bear market bottom then this second stage inflation is going to be an incredible driver for the next leg of gold’s bull market, which I believe will probably turn into the bubble phase and top some time in 2017/18.”

Seperti biasa di akhir tulisan ini ada beberapa gambar lucu, kali ini mengenai kucing, agar Anda tetap ceria:

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Terima kasih sudah membaca dan semoga beruntung!

Dibuat Tanggal 19 Desember 2013

Categories: Pasar Internasional Tags:

2014: Tahun Penuh Kejutan?

December 18th, 2013 No comments

The fact that we have system-wide liquidity has allowed a complete replay of the circumstances that led up to the 2008 collapse. The system is way too over-leveraged on a global basis. It is also apparent to me that the ability of the financial system to recover from an asymmetric shock, a black swan, is less than it was back in 2008. When I think about the number of things that could create a shock, there are too many to list. But when I think about our ability to withstand the shock, given the bullets we fired at the beast last time – such as oceans of fiat currency or massive liquidity – are bullets that we’ve already fired, one wonders how far we can push on that string the next time around. In this incredibly fragile and, unfortunately, ‘Orwellian’ environment, investors are being bombarded with mainstream media propaganda every day about how things have changed since 2008, but I don’t believe it has changed, with the exception of liquidity in the system. This is why I say I am a terrified observer as I watch the end game drawing to a close. If chaos erupts this time around, there may be no stopping it.”

                                                                                                      -- Rick Rule

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Karena pertemuan menentukan bagi FOMC the Fed AS pada 17-18 Desember pekan ini, apakah akan memutuskan QE-Taper atau tidak, maka di kesempatan ini saya akan membahas terlebih dahulu mengenai hal tersebut. Pertanyaan besarnya adalah apakah bank sentral AS akan melakukan QE-Taper pada Desember ini? Tentunya tidak ada seorang pun yang sepenuhnya yakin untuk menjawabnya saat ini. Oleh karena itu saya memang tidak akan memprediksikan apa keputusan bank sentral AS pekan ini. Namun saya dapat mengatakan bahwa the Fed tentu tak ingin kehilangan kredibilitasnya. Untuk itu mungkin saja mereka melakukan QE-Taper bersifat simbolis saja hanya sekitar $5-$10 milyar dari program stimulus $85 milyar/bulan (atau $1,2 trilyun/tahun). Jika tidak, maka rasa ketidakpercayaan masyarakat global akan semakin meningkat. Sebelum menuju topik utama laporan ini, ada sebuah artikel yang akan sangat menggugah pemikiran  Anda dari W. Bent Hunt dari Epsilon Theory mengenai cara manipulasi bank sentral AS agar Anda meyakini apa yang diinginkannya: Up to the walls of Jericho With sword drawn in his hand Go blow them horns, cried Joshua The battle is in my hands – “Joshua Fit the Battle of Jericho”, traditional African-American spiritual

The Stuka

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At the outset of World War II, the German Luftwaffe attached an ear-splitting siren – the Jericho Trumpet – to the Junker Ju-87 dive-bomber, commonly called the Stuka. Dive-bombers are wonderful tactical aircraft if you have control of the skies, highly effective against tanks, vehicles of all sorts, even smaller ships, but they simply don’t carry enough ordnance to be a strategic weapon. They can certainly help you win a battle, but they’re unlikely to help you win a war. By attaching the Jericho Trumpet, however, the Stuka became a psychological weapon as much as a physical weapon, striking fear in a much wider swath than the actual bombs. During the early Blitzkrieg days of the war, the Stuka had exactly this sort of strategic effect, crushing the morale of the Polish army in particular.

Because it was a propeller-driven siren, the Jericho Trumpet actually made the Stuka a less effective dive-bomber, slowing its air speed and making it an easier target to hit. This was a trade-off that the German High Command was happy to make so long as the Stuka maintained its mystique as a terrifying harbinger of death from above, but that mystique was shattered once the Royal Air Force started shooting them down by the dozens in the Battle of Britain. By the end of 1940 the Stuka was almost entirely redeployed from the Western Front to the East, and those planes that remained had their sirens removed. As Churchill famously said of the RAF, “never was so much owed by so many to so few,” and it’s the psychological dimension of this victory that is so striking to me. I don’t think it’s a coincidence that the military tides of World War II shifted in the West at exactly the same moment that the Luftwaffe took off the Jericho Trumpet and the Stuka lost its mojo.

Today the financial media – and the WSJ’s Jon Hilsenrath in particular – is the Fed’s Jericho Trumpet. Unlike the Luftwaffe, the Fed is not trying to inspire terror, but they are similarly trying to turn a powerful tactical weapon into a strategic weapon through psychological means. The Fed is now embracing the use of communication as a policy tool in a totally separate manner from whatever concrete actions the communication is ostensibly about, and they use Hilsenrath (and a few others) as a modern-day Joshua to blow the horn. The Fed is now playing the Common Knowledge game openly and directly, making public statements through their media intermediaries to tell you how ALL market participants perceive reality, even though in fact NO market participant has a clear view of reality. In the Common Knowledge game – whether it’s the Island of the Green-Eyed Tribe that modern game theorists write about, the Newspaper Beauty Contest that Keynes wrote about in the 1930’s, or the Emperor’s New Clothes that Hans Christian Andersen wrote about in the 1830’s – the strong public statement of what “everyone knows” creates a reality where it is rational behavior for everyone to act as if they, too, see this reality … even if they privately don’t see it at all.

Here’s the money quote from Hilsenrath’s article last Friday after the November jobs report, titled (self-referentially enough) “Hilsenrath’s Five Takeaways on What the Jobs Report Means for the Fed”:

MARKETS BELIEVE TAPERING ISN’T TIGHTENING: Markets are positioned more to the Fed’s liking today than they were in September, when it put off reducing, or “tapering,” the monthly bond purchases. Most notably, the Fed’s message is sinking in that a wind down of the program won’t mean it’s in a hurry to raise short-term interest rates. Futures markets place a very low probability on Fed rate increases before 2015, in contrast to September, when fed funds futures markets indicated rate increases were expected by the end of 2014. The Fed has been trying to drive home the idea that “tapering is not tightening” for months and is likely to feel comforted that investors believe it as a pullback gets serious consideration.

In truth, the shift in the implied futures market expectations of short-term rate hikes from late 2014 into early 2015 says nothing about what “The Market” believes about tapering. It says a lot about the enormous effort that the Fed is putting into its forward guidance on rates, as a communications policy replacement for its prior reliance on forward guidance and linkage of unemployment rates and QE (a mistake that I wrote extensively about at the time and is now universally seen as a policy error). The Fed, through Hilsenrath, is trying to tell you how you should think about tapering. Not by giving you a substantive argument, but simply by announcing to you in a very authoritative voice what everyone else thinks about tapering.

Hey, don’t worry about tapering. No one else is worried about tapering. You are totally out of step with all the smart people if you’re worried about tapering. It’s duration of ZIRP that matters, not QE. Don’t you know that? Everyone else knows that. Maybe you’re just not very smart if you can’t see that, too. Can you see it now? Ah, good.

This is game-playing in an almost pure form. It’s smart and it’s effective. The siren from above is starting to wail: if you react negatively in your investment decisions to tapering, you are Fighting the Fed.

The bombs are going to drop – increased forward guidance on rates and decreased direct bond purchases – but these policies in and of themselves are just tactical. What’s really at stake is the strategic meaning of these policies, the belief system that takes hold (or doesn’t) around the power of the Fed to create market outcomes.

Over the next three or four months we’re going to see quite a battle for the hearts and minds of investors, with both “sides” employing the Narrative of Don’t Fight the Fed. On the one hand you will have the Fed, with their Jericho Trumpet of Hilsenrath et al shrieking at you a new interpretation of the Narrative: ZIRP is the source of the Fed’s power, not QE, so tapering is no big deal. On the other hand you also have the Fed, but the Fed of the past several years and the way it has trained the market to believe that the portfolio rebalancing effect … i.e., the behavioral impact of QE that Bernanke has directly credited with driving up the stock market … is what really matters. And if that’s your reality, then tapering is a big deal, indeed. I’ll be monitoring all this closely at Epsilon Theory in the weeks ahead.

Importantly, this psychological battle is taking place entirely within the larger Narrative of Central Bank Omnipotence. If the QE meme wins the day and tapering ends up hitting the markets hard … well, it’s Fed balance sheet operations that determine market outcomes. If the ZIRP meme wins the day and tapering is a non-event … well, it’s Fed forward guidance on rates that determines market outcomes. Either way, it’s a Fed-centric universe. Forever and ever, amen.

Berikutnya mari kita lihat bagaimana prospek tahun depan, yang bisa saja penuh kejutan terutama untuk investor/trader yang belakangan ini sudah demikian optimisnya.

Pertama adalah laporan dari Michael Snyder dari The Economic Collapse blog, yang menulis 2014 Predictions From The Big Guys…:

Some of the most respected prognosticators in the financial world are warning that what is coming in 2014 and beyond is going to shake America to the core.  Many of the quotes that you are about to read are from individuals that actually predicted the subprime mortgage meltdown and the financial crisis of 2008 ahead of time.  So they have a track record of being right.  Does that guarantee that they will be right about what is coming in 2014?  Of course not.  In fact, as you will see below, not all of them agree about exactly what is coming next.  But without a doubt, all of their forecasts are quite ominous.  The following are quotes from Harry Dent, Marc Faber, Gerald Celente, Mike Maloney, Jim Rogers and nine other respected economic experts about what they believe is coming in 2014 and beyond…

-Harry Dent, author of The Great Depression Ahead: “Our best long-term and intermediate cycles suggest another slowdown and stock crash accelerating between very early 2014 and early 2015, and possibly lasting well into 2015 or even 2016. The worst economic trends due to demographics will hit between 2014 and 2019. The U.S. economy is likely to suffer a minor or major crash by early 2015 and another between late 2017 and late 2019 or early 2020 at the latest.”

-Marc Faber, editor and publisher of the Gloom, Boom & Doom Report: “You have to say that we are again in a massive financial bubble in bonds, in equities, in [other] asset prices that have gone up dramatically.”

-Gerald Celente: “Any self-respecting adult that hears McConnell, Reid, Boehner, Ryan, one after another, and buys this baloney… they deserve what they get.

And as for the international scene… the whole thing is collapsing.

That’s our forecast.

We are saying that by the second quarter of 2014, we expect the bottom to fall out… or something to divert our attention as it falls out.”

-Mike Maloney, host of Hidden Secrets of Money: “I think the crash of 2008 was just a speed bump on the way to the main event… the consequences are going to be horrific… the rest of the decade will bring us the greatest financial calamity in history.”

-Jim Rogers: “You saw what happened in 2008-2009, which was worse than the previous economic setback because the debt was so much higher. Well now the debt is staggeringly much higher, and so the next economic problem, whenever it happens and whatever causes it, is going to be worse than in the past, because we have these unbelievable levels of debt, and unbelievable levels of money printing all over the world. Be worried and get prepared. Now it [a collapse] may not happen until 2016 or something, I have no idea when it’s going to happen, but when it comes, be careful.”

-Lindsey Williams: “There is going to be a global currency reset.”

-CLSA’s Russell Napier: “We are on the eve of a deflationary shock which will likely reduce equity valuations from very high to very low levels.”

-Oaktree Capital’s Howard Marks: “Certainly risk tolerance has been increasing of late; high returns on risky assets have encouraged more of the same; and the markets are becoming more heated. The bottom line varies from sector to sector, but I have no doubt that markets are riskier than at any other time since the depths of the crisis in late 2008 (for credit) or early 2009 (for equities), and they are becoming more so.

-Financial editor Jeff Berwick: “If they allow interest rates to rise, it will effectively make the U.S. government bankrupt and insolvent, and it would make the U.S. government collapse. . . . They are preparing for a major societal collapse.  It is obvious and it will happen, and it will be very scary and very dangerous.”

-Michael Pento, founder of Pento Portfolio Strategies: “Disappointingly, it is much more probable that the government has brought us out of the Great Recession, only to set us up for the Greater Depression, which lies just on the other side of interest rate normalization.”

-Boston University Economics Professor Laurence Kotlikoff: “Eventually somebody recognizes this and starts dumping the bonds, and interest rates go up, and inflation takes off, and we’re off to the races.”

-Mexican Billionaire Hugo Salinas Price: “I think we are going to see a series of bankruptcies.  I think the rise in interest rates is the fatal sign which is going to ignite a derivatives crisis.   This is going to bring down the derivatives system (and the financial system).

There are (over) one quadrillion dollars of derivatives and most of them are related to interest rates.  The spiking of interest rates in the United States may set that off.  What is going to happen in the world is eventually we are going to come to a moment where there is going to be massive bankruptcies around the globe.”

-Robert Shiller, one of the winners of the 2013 Nobel prize for economics: “I’m not sounding the alarm yet.  But in many countries the stock price levels are high, and in many real estate markets prices have risen sharply…that could end badly.”

-David Stockman, former Director of the Office of Management and Budget under President Ronald Reagan: “We have a massive bubble everywhere, from Japan, to China, Europe, to the UK.  As a result of this, I think world financial markets are extremely dangerous, unstable, and subject to serious trouble and dislocation in the future.”

And certainly there are already signs that the U.S. economy is slowing down as we head into the final weeks of 2013.  For example, on Thursday we learned that the number of initial claims for unemployment benefits increased by 68,000 last week to a disturbingly high total of 368,000.  That was the largest increase that we have seen in more than a year.

In addition, as I wrote about the other day, rail traffic is way down right now.  In fact, for the week ending November 30th, U.S. rail traffic was down 16.3 percent from the same week one year earlier.  That is a very important indicator that economic activity is getting slower.

And we continue to get more evidence that the middle class is being steadily eroded and that poverty in America is rapidly growing.  For example, a survey that was just released found that requests for food assistance and the level of homelessness have both risen significantly in major U.S. cities over the past year…

A survey of 25 American cities, including many of the nation’s largest, showed yearly increases in food aid and homelessness.

The cities, located throughout 18 states, saw requests for emergency food aid rise by an average of seven percent compared with the previous period a year earlier, according to the US Conference of Mayors study, published Wednesday.

All but four cities reported an increase in demand for assistance between the period of September 2012 through August 2013.

Unfortunately, if the economic experts quoted above are correct, this is just the beginning of our problems.

The next wave of the economic collapse is rapidly approaching, and things are going to get much worse than this.”

Berikutnya adalah Egon von Greyerz, pendiri Matterhorn Asset Management, yang belum lama ini ke King World News (www.kingworldnews.com) mengirimkan statistic paling menakutkan menjelang tahun 2014.

Egon von Greyerz juga membahas bagaimana korelasinya ke prospek harga emas dan perak di tahun 2014, serta saran investasinya yang sangat praktis dalam tulisan di bawah ini:

“As we approach 2014 this will be a year of major change, and the tide will begin to turn in the world economy.  Since we are talking about the end of a major era, and the tide that will hit us all will be very powerful….

So I’ve thought about some things that investors must not do in 2014, or don’ts as I call them:  Don’t hold major amounts of cash.  Either your bank will not survive, or there will be a bail-in so investors will lose a major part of their funds.  Don’t think that certain banks are superior.  It’s correct that all banks won’t go under simultaneously, but some of the most exposed banks will last longer than others because governments won’t let them fail.

Take the examples of Deutsche Bank, Barclays, and Bank of America:  Even if their balance sheets are very weak, the governments won’t let those go under until the very end — they are just too-big-too-fail.  So there will be bail-ins, but these big banks will be the last to fall.  But the smaller, more marginal banks will not be saved.

Remember that the whole banking system is interconnected and therefore all banks are exposed.  A bank in Singapore or Hong Kong will have dollars in a US bank and in a forex transaction with a US bank, so the whole system is interconnected.

Another don’t is don’t hold bonds, and especially US Treasuries.  Why?  Because the US government is bankrupt.  The last 32 years the US debt has gone up 17 times, and tax revenues have only gone up 2.5 times.  And for these 32 years there has never been a surplus.  Not one time.

So how can anyone believe that the US debt can be repaid with real money?  Let me tell you, it can’t.  There is a hyperinflationary depression scenario in which the dollar is totally destroyed, and the other option is to let the banks collapse.  This means major defaults and the end of the whole financial system as we know it.  The reality is that central banks will print as much money as they can, but in both cases gold will function as the only reliable money or medium of exchange.

The next don’t is don’t hold paper money, and especially not US dollars.  The reign of the US dollar as the world’s reserve currency is coming to an end.  That’s the end of a 100 year experiment of government and central bank interference in the economy, an interference which has been a total failure.

We know the dollar has lost 98% of its purchasing power since 1913.  Since 1971, when Nixon made the desperate move not to back the dollar with gold, the dollar collapse has greatly accelerated.  The dollar has also lost 80% of its value against the Swiss franc since 1971.  The Dow is up 18 times measured in dollars since 1971, but if you measure the Dow in Swiss francs, it’s only up 4 times since 1971.

Another don’t is don’t hold stocks.  The US stock market and most other markets are now at the end of a major long-term bull market, and this will end in a massive bear market.  The debt-induced bubble in stocks is coming to an end.  We might get one final move higher, but after that it’s finished for a very long time.

There are many warning signals regarding stocks.  Right now there are 4 times more bulls than bears in the US stock market.  There are only 14% bears.  The last time we saw this was in 1987, right before the crash.  Also, margin debt in the US is at a record 2.5 times GDP.

If you look at the Schiller P/E Index, that is at the same level it was in 1973, right before the stock market collapsed by 50%.  So stocks will be a very bad investment in 2014 and onwards.  The only exception to that will be precious metals mining stocks, which are massively oversold and likely to have a spectacular run.

Another don’t is don’t have debts or be highly leveraged.  In a hyperinflationary scenario interest rates will soar and debt servicing will be very onerous.  Also, there is a risk that banks will index debts so debtors will not benefit from the inflation.  This has happened in many countries in the past.

Finally, don’t have counterparty risk.  A lot of counterparties will fail.  Therefore, counterparties must be eliminated.  Obviously there are lots of other ‘don’ts,’ but if investors just follow the ones I have just outlined they will save themselves from ruin.

What about do’s?  Well, precious metals are at the top of that list.  What’s happening now is commercials are turning to the long side.  Recently, bullion banks have added 100 tons of gold to their holdings.  The 4 big US banks are now long 180 tons of gold.  Producers are also long 37 tons.  These are incredibly significant amounts.  Just last week 54 tons of gold was delivered to the Shanghai Exchange.  That’s around $2 billion of gold.  If you annualize that it’s 2,800 tons, which of course exceeds the annual production of gold.

So in my view the gold and silver correction is finished as I indicated last week.  The choppy action we have seen this week is typical of a major turn.  I see new highs for both gold and silver in 2014, with gold about $2,000, and silver well above $50.”

What Do the Charts Say?

Meskipun meleset di saham dan emas, analisa teknikal Citi FX yang diketengahkan dalam “12 Charts of Christmas” untuk tahun 2013 bekerja baik di pasar forex, obligasi dan komoditas.

Tahun ini, Tom Fitzpatrick dan timnya merilis 2014′s most important charts – sebuah titik awal bagi prospek mereka untuk tahun depan.

Mulai dari perlambatan pasar perumahan hingga ekspektasi penguatan dolar AS; maupun dari “roll-over” dalam Consumer Confidence menuju ke penguatan emas, mereka melihat kelanjutan “repair process” meskipun dalam langkah yang lamban meskipun ada kekhawatiran bahwa bursa saham semakin mirip dengan pergerakan tahun 2000.

Via CitiFX Technicals,

What do we believe for 2014?

  • The USD bullish trend remains intact and the DXY Index should set new trend highs (90+).
  • EURUSD: We expect a sharp turn lower that could see EURUSD in the 1.18-1.22 range in 2014. A very easy ECB policy will likely be a contributing factor here.
  • USDJPY: Remains in a broad uptrend and we would expect a move towards at least 110-111 this year. This should continue to be supportive of the Nikkei.
  • Consumer Confidence: Looks set to “roll” lower in a fashion similar to 2000 and 2007. This may have implications for the U.S. Equity market which looks stretched at this point in a fashion similar to 2000.
  • Housing looks better than it was at the lows but nowhere near the traditional recovery/escape velocity of prior cycles. In 2014 we may even see a pause in its improvement.
  • US yields: Similar to last year we suspect that an initial move lower may well emerge towards at least 2.40% (10 year) and 3.50% (30 year) and possibly lower. This is within a longer trend dynamic where they will likely move higher again thereafter. We would expect significantly higher yields in the next few years to materialize.
  • Gold finally looks to be forming a base for a move higher. However we need both more convincing price action and likely a struggling equity market to solidify this potential.
  • In Local Markets the USDBRL chart is one of the more convincing pictures and suggests a much weaker BRL is in prospect in 2014.

Overall: We see a backdrop where the “repair process” of recent years continues at a slow pace but where the US continues to look like the “best house on a bad street” when it comes to the major developed nations. This should also benefit the USD and keep the relative picture for yields (monetary policy) in favor of the US.

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The corrective platform could be the “launch pad” for a move to new highs in the trend and a stronger USD all the way to 2016 as per previous post housing collapse cycles.

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EURUSD turning lower like it did in 1998? A move towards 1.20 this year and much further over the next 2+ years looks likely.

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A move similar to 1978-1982 could see USDJPY as high as 118 eventually while a repeat of 1995-1998 would suggest as far as 139. An average of the two could see USDJPY close to 130 by 2015. For 2014 we would expect a move to at least 110-111.

Nico-7 Nico-8

Another 4 year and 4 month trend coming to an end?

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The last 2 peaks in Consumer Confidence led the S&P by 3-4 months. That pretty much takes us to now… big divergence between the Equity market and the real economy.

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Peak in the 1,820-1,830 area? Prior peaks have seen pretty quick falls to the 200 week moving average.

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Is the US 30 year yield double topping as it has done so many times before?

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The potential double bottom will target 3.70 with a break above 2.62. Beyond there the all-time USDBRL high at 4.00 could well be eventually tested.

And summarizing their strong conviction 2014 views:

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Agar tetap ceria, berikut adalah sebuah gambar lucu untuk Anda:

Nico-16Source: IBD via The Burning Platform blog

Terima kasih sudah membaca dan semoga beruntung!

Dibuat Tanggal 17 Desember 2013

Categories: Pasar Internasional Tags:

Apakah “Bernanke Bubble” Akan Pecah?

December 16th, 2013 No comments

“At some point the financial markets will realize that this is just one massive central bank-driven bubble, that it cannot be sustained much longer, and panic will set in. It’s happened every time in recorded history. Who knows what the trigger or catalyst will be – from what direction the black swan will arrive? But it will. The whole thing is a house of cards. There is so much leveraged speculation built into all of the financial markets of the world that when the selling starts, look out below. There won’t be any bids and the central banks won’t have the ability to forestall the collapse. It’s a very dangerous situation and it’s one that is completely uncharted in terms of any historic precedent or benchmark.”

– David Stockman

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The recent trading environment has felt something like walking into a place and having a sense that something is wrong and dangerous but not knowing exactly what will happen or when. “QE Infinity” has so distorted the prices of stocks and bonds that nobody can possibly determine what the investing landscape would look like, or what the condition of the economy and financial system would be, in the absence of Fed bond-buying.”

– Paul Singer, Elliott Management

Memang tidak lumrah untuk memiliki sentimen bearish di tengah kondisi pasar sedemikian ini, namun saya kira tidak ada salahnya untuk menyoroti beberapa indikator yang berpotensi bearish yang belakangan ini mulai muncul.

Meskipun sejumlah indeks saham utama global sedang bertengger di sekitar rekor tertingginya, ada beberapa sinyal peringatan serius dan sejumlah indikator handal yang memberitahu Anda untuk prospek koreksi dalam jangka pendek.

Tyler Durden dari www.zerohedge.com seperti biasa memberikan laporan yang luar biasa yang menunjukkan pada kita bahwa ada potensi jebakan dalam waktu dekat ini.

Silakan baca sejumlah laporan (singkat) berikut ini dengan seksama, dan bertindaklah yang sesuai:

1)    Jeremy Grantham’s GMO: “The S&P Is Approximately 75% Overvalued; Its Fair Value Is 1100” (November 18th)

It has been a while since we heard from the rational folks over at GMO. This is why we are happy that as every possible form of bubble in the capital markets rages, Jeremy Grantham lieutenant Ben Inkster was kind enough to put the raging Fed-induced euphoria in its proper context. To wit “the U.S. stock market is trading at levels that do not seem capable of supporting the type of returns that investors have gotten used to receiving from equities. Our additional work does nothing but confirm our prior beliefs about the current attractiveness – or rather lack of attractiveness – of the U.S. stock market…. On the old model, fair value for the S&P 500 was about 1020 and the expected return for the next seven years was -2.0% after inflation. On the new model, fair value for the S&P 500 is about 1100 and the expected return is -1.3% per year for the next seven years after inflation. Combining the current P/E of over 19 for the S&P 500 and a return on sales about 42% over the historical average, we would get an estimate that the S&P 500 is approximately 75% overvalued.”

      Key highlights:

  • Our recent client conference saw the unveiling of our new forecast methodology for the U.S. stock market, a methodology that we are extending to all of the other equity asset classes that we forecast. It is the result of a three-year research collaboration by our asset allocation and global equity teams, and involved work by a large number of people, although Martin Tarlie of our global equity team did a disproportionate amount of the heavy lifting. In a number of ways it is a “clean sheet of paper” look at forecasting equities, and we have broadened our valuation approach from looking at valuations through the lens of sales to incorporating several other methods. It results in about a 0.7%/year increase in our forecast for the S&P 500 relative to the old model.

On the old model, fair value for the S&P 500 was about 1020 and the expected return for the next seven years was -2.0% after inflation. On the new model, fair value for the S&P 500 is about 1100 and the expected return is -1.3% per year for the next seven years after inflation. For those interested in the broader U.S. stock market, our forecast for the Wilshire 5000 is a bit worse, at -2.0%, due to the fact that small cap valuations are even more elevated than those for large caps.

  • With that assumption, “true” ROE has been 6.5%, against a real return of 5.7% for the S&P 500 since 1970, which is certainly in the ballpark, if not quite spot on. You could simply stop there and declare that the S&P 500, which is currently trading at about 2.5 times book value, must therefore be overvalued by 25%. The problem is, even if book value has been half of economic capital on average over the last 40 years, how do we know it is still half of economic capital today?

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 One way to get around the problem of accounting changes on book value is to look instead at return on sales. Sales have the nice feature that accounting changes have relatively little impact on them. Sales figures from 1970 were calculated on basically the same basis as sales figures today, and probably the same as they will be in 2050. Return on sales has looked fairly stable historically, and as you can see in Exhibit 3, we are significantly further above normal profit margin on sales than we are above normal ROEs.

  • Combining the current P/E of over 19 for the S&P 500 and a return on sales about 42% over the historical average, we would get an estimate that the S&P 500 is approximately 75% overvalued. But the assumption of stable return on sales is problematic for a different reason than ROE. Book value is at least an accounting estimate of equity capital, and as imperfect as it is, return on equity capital is what is supposed to mean revert in a capitalistic system. There is not such a strong argument for reversion when it comes to return on sales. Historically it has been mean reverting, but a high return on sales for a given company does not necessarily mean that competition will follow. Intel has a high return on sales on its microprocessors, but being in a position to sell those microprocessors requires huge amounts of investment and intellectual capital. An economy driven by Intels could easily support higher profit margins than one of supermarkets. So there is a chance that this return on sales framework overstates the degree of overvaluation in the U.S.
  • But enough about the details. The basic point for us remains the same – the U.S. stock market is trading at levels that do not seem capable of supporting the type of returns that investors have gotten used to receiving from equities. Our additional work does nothing but confirm our prior beliefs about the current attractiveness – or rather lack of attractiveness – of the U.S. stock market. To answer the question we get most often about our forecast – “How could you be wrong?” – there are a couple of ways we could be wrong. One of them is pleasant and implausible, the other is more plausible, but far less pleasant.
  • The less pleasant way we could be wrong is if 5.7% real is no longer a reasonable guess at an equilibrium return for U.S. equities. If equity returns for the next hundred years were only going to be 3.5% real or so, today’s prices are about right. We would be wrong about how overvalued the U.S. stock market is, but every pension fund, foundation, and endowment – not to mention every individual saving for retirement – would be in dire straits, as every investors’ portfolio return assumptions build in far more return. Over the standard course of a 40-year working life, a savings rate that is currently assumed to lead to an accumulation of 10 times final salary would wind up 40% short of that goal if today’s valuations are the new equilibrium. Every endowment and foundation will find itself wasting away instead of maintaining itself for future generations. And the plight of public pension funds is probably not even worth calculating, as we would simply find ourselves in a world where retirement as we now know it is fundamentally unaffordable, however we pretend we may have funded it so far. William Bernstein wrote a piece in the September issue of the Financial Analysts Journal, entitled “The Paradox of Wealth,” which explains far too plausibly why generally increasing levels of wealth might drive down the return on capital across the global economy. It’s well worth a read, although perhaps not on a full stomach, as it is one of the most quietly depressing pieces I have ever come across (and this is coming from someone who has spent the last 21 years reading Jeremy Grantham’s letters!).

2)    It’s The Fundamentals, Stupid! (November 21st)

            “All fixed”

Nico-803)    Hugh Hendry Capitulates: “Can’t Look At Himself In The Mirror” As He Throws In The Towel, Turns Bullish (November 22nd)

“I cannot look at myself in the mirror; everything I have believed in I have had to reject. This environment only makes sense through the prism of trends.”

               - Hugh Hendry

First David Rosenberg, then Jeremy Grantham, and now Hugh Hendry: one after another the bears are throwing in the towel.

As Investment Week reports, speaking at Harrington Cooper’s 2013 conference this morning, Hugh Hendry said “he is no longer fighting the two-way feedback loop which is continuing to boost risk assets.”

The reflexive feedback loop envisioned by Hendry is the following and centers on the currency war being played out between the US and China, “in which US QE prompts dollar-denominated investment to head to China, and China fights the resulting upwards pressure on its currency by manufacturing an investment boom. Hendry said this creates a “global supply glut”, leading to falling US inflation expectations (as this supply far outweighs US domestic demand) – which in turn prompts the Federal Reserve to loosen policy once again.” Rinse. Repeat.

Of course, there is a limitation here as we have explained previously, namely the amount of “high-quality collateral” which the Fed and the other central banks can and are rapidly soaking up, in the process destroying bond market liquidity, but that “discovery” will be made by the Fed far too late, despite even the repeated warnings of the Treasury Borrowing Advisory Committee.

And since Hendry is constrained by daily, monthly and annual P&L, he simply does not have luxury of waiting for the “fat tail” event, which incidentally will be quite terminal and thus hardly profitable for anyone exposed to fiat-denominated assets.

      So the end result is that Hugh Hendry is merely the latest bear to throw in the towel:

“I can no longer say I am bearish. When markets become parabolic, the people who exist within them are trend followers, because the guys who are qualitative have got taken out,” Hendry said.

“I have been prepared to underperform for the fun of being proved right when markets crash. But that could be in three-and-a-half-years’ time.”

“I cannot look at myself in the mirror; everything I have believed in I have had to reject. This environment only makes sense through the prism of trends.”

      So what does the newly christened “bull” like?

Though he first began turning more positive on the likes of US and Japanese equities last year, Hendry suggested this morning the current environment created more counter-intuitive opportunities. “This applies to European banks, Greek equities, and Spanish equities. You have got to be in things that are trending,” he said.

The manager’s Eclectica Absolute Macro fund had a 64% value at risk equity allocation in September, up from 45% in August, with December 2013 Japanese TOPIX index futures his biggest single holding on a VaR basis.

Addressing attendees this morning, Hendry said his comments would take on a “confessional” tone, and admitted his performance over the past year had been “at best, mediocre”. Hendry’s CF Eclectica Absolute Macro fund has lost 2.6% in the nine months to 30 September, according to the firm.

In other words the “dash for trash” mentality, which we predicted in September 2012 when we forecast that the most shorted stocks would outperform the market (and they have), has just won another convert. That, and of course, Fed-balance sheet induced momentum chasing, in which the only thing that matters is one’s view how many “assets” the Fed will hold at any point in the future (see from April: “Bernanke & Kuroda Capital LLC: Overweight S&P 500, 2013 Target 1950“).

      Finally, Hendry’s “come to Bernanke” moment does not come easily:

The manager acknowledged his changing stance may be viewed by some investors as a ‘top of the market’ signal, but said he is not concerned by the prospect of a crash.

“I may be providing a public utility here, as the last bear to capitulate. You are well within your rights to say ‘sell’. The S&P 500 is up 30% over the past year: I wish I had thought this last year.”

Crashing is the least of my concerns. I can deal with that, but I cannot risk my reputation because we are in this virtuous loop where the market is trending.”

Sadly, his last statement is just the latest confirmation that in the New Centrally-Planned Normal, FOMO  or Fear of Missing Out (the trend, the media appearance, the herd, the year-end bonus, you name it) is indeed the new POMO as we warned in May.

      And like that, everyone is now on the same side of the boat.

4)    Margin Debt Soars To New Record; Investor Net Worth Hits Record Low (November 26th)

The correlation between stock prices and margin debt continues to rise (to new records of exuberant “Fed’s got our backs” hope) as NYSE member margin balances surge to new record highs. Relative to the NYSE Composite, this is the most “leveraged’ investors have been since the absolute peak in Feb 2000. What is more worrisome, or perhaps not, is the ongoing collapse in investor net worth – defined as total free credit in margin accounts less total margin debt – which has hit what appears to be all-time lows (i.e. there’s less left than ever before) which as we noted previously raised a “red flag” with Deutsche Bank. Relative to the ‘economy’ margin debt has only been higher at the very peak in 2000 and 2007 and was never sustained at this level for more than 2 months. Sounds like a perfect time to BTFATH…

           Record negative investor net worth…

Nico-81      and record high margin relative to stocks… (lower pane)

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and record high margin debt relative to GDP (and rising at a near record pace which has historically signaled a slowing)…

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5)    Albert Edwards: “Investors Demand A Sign Of When To Get Out And That Trigger May Have Just Arrived” (November 27th)

With every other bear throwing in the towel left and right these days, we fully expected that the latest letter by SocGen’s Albert Edwards would have something about “how much he hates looking at himself in the mirror, but…” and then we would be served with some garbage like the following margin expectations chart.

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Luckily none of that happened. Instead we were greeted by the sharp insight and keen intellect that we have grown to expect from AE, and that have disappeared from the repertoire of so many other sellouts and lemming cheerleaders. Ironically, the topic of Edwards’ latest piece is precisely the chart above – the explosion in future margins, or rather the complete lack thereof. In fact, what Edwards is seeing is quite the opposite. To wit:

The margin squeeze that is unfolding as unit labor costs climb above company selling price inflation…

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… leaves the economy extremely vulnerable to a downturn in the investment cycle. Business output inflation is measuring a wider basket of goods and services than the Fed’s favored measure of inflation, the core personal consumption expenditure (PCE) deflator, but it does move in a very similar fashion (see chart below). Low pricing power is leaving the US economy more vulnerable than many suppose. In my view, a full-blown profits and investment downturn is most likely to be triggered by Asian and EM devaluations releasing surplus capacity onto the West and crushing pricing power even further. As Ian Harwood, my former boss used to say, “Watch the profit cycle closely. We ignore it at our peril.”

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This is a useful follow up to our earlier observations on the current status of the leverage cycle, when we noted that while the business cycle may be dead, but if it isn’t we are now on the verge, if not have entered a full-blown recession.

We have, on these pages, long believed that corporate profits should be watched closely, not for their direct impact on equity valuations, but their impact on the economic cycle. Most economic models have profits dropping out as a residual, but they are a key driver of the economic cycle. Growth in profits determines the growth of investment, inventories and employment. (Note I emphasize the growth, and not the level, of profits or the rate of profitability).

Over the years I have tended to focus on US pre-tax domestic non-financial profits as a best lead indicator for US-based company business spending. In the chart below I show this profits measure together with real growth in business investment, including inventories. Profits growth typically leads investment spending.

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If we can get a handle on the profits cycle we can avoid being caught out by the investment cycle and recessions. Typically it was said that “recessions were made in Washington” as the Fed jacked up rates to fight inflation. This not only curbed the credit cycle but squeezed corporate profits to the point that it triggered a downswing in the investment cycle and “caused” a recession.

So in many investors’ minds a recession will not occur unless the Fed triggers one with monetary tightening. That is of course nonsense. A credit bubble can burst without any monetary tightening and similarly the profit cycle can turn down due to a variety of factors.

This is a critical observation, one that everyone ignores, and one which as the first two charts above show, means that unless the Fed proceeds to inject funds directly into corporate revenues (there is a reason why revenues will have declined for 3 quarters in a row), one can kiss not only the idiotic hockey stick forecast margin chart goodbye, but that negative margins, and earnings, are just around the horizon.

Edwards’ conclusion is simple: if the US economy continues on the current track, an economic decline is inevitable, which in turn will crush confidence in the Fed, and make future monetary policy prohibitively costly:

… a recession seems a distant prospect in the minds of most investors. Yet one key precursor for a recession has now fallen into place. Slowing productivity growth means that unit labor costs are now running well ahead of output price inflation. This means a margin and profits downturn is now about to unfold. That typically is a key precursor of recession.

Finally, for those who will be quick to accuse Edwards of crying wolf, he has a few words for you too:

That confidence in a long cycle comes partly with a high level of certainty that the monetary authorities remain in control of the economic cycle. The doomsayers who predicted that this recovery was on the verge of faltering have been proved wrong, and like the boy who cried wolf, can be safely ignored by the market. Yet that is exactly what happened in 2006 with the US consumer and housing boom, where the voices of caution had been so wrong, for so long, that their Cassandra-like utterances were ignored. Cassandra’s forecasts may have been ignored, but they proved to be correct. Investors demand a sign of when to get out and that trigger may have just arrived.

Crying wolf or not, what Bernanke and his central-planning henchmen are now doing, is simply delaying the inevitable day when realty finally catches up with every cycle, and law of nature that the Fed, courtesy of hundreds of billions of de novo liquidity, has – until this point – successfully deferred. The problem is that perhaps the most important law – that of diminishing returns – is now finally breathing down Mr. Chair (wo)man’s neck.

6)    The Last Two Time This Happened, Things Didn’t End Well (December 4th)

With the almost extinction of ‘bears’ we noted last week, the bull-bear index has now crossed the Rubicon into a euphoria mode that marked the turning point before the last 2 major corrections in the US equity market. Of course, we are sure, this time is different; but hasn’t the Fed ‘always’ had our back? Perhaps, as GenRe’s CIO notes, “gravity will win,” after all?

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Shrugging that off… this has happened 15 times in the last 24 years with stocks falling 79% of the time in the following 3 months

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h/t @Not_Jim_Cramer

7)    Just Two Charts (December 6th)

“Earnings” matter… until they don’t. What’s wrong with these two charts?

            EBITDA -7% from previous peak…

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S&P 500 nominal price +15% from previous peak…

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Still think stocks are “cheap” compared to the last cycle?

      Charts: Bloomberg

8)    Seeking Guidance…?! (December 9th)

If you BTFATH today, this is the forward-looking fundamental backdrop that is supporting your decision…

Nico-92(h/t @Not_Jim_Cramer)

9)    WTF Charts Of The Day: Good, Bad, & Ugly (December 12th)

Sometimes you just have to laugh…

      The Good – faith in this chart as being in anyway sustainable seems to beggar belief…

Nico-93The Bad - especially as markets are already well into the ‘Euphoric’ stage of the cycle…

Nico-94

The Ugly – but firms have never (ever ever ever) been so downbeat in their guidance for the future…

Nico-95

So – you BTAFTH? The Shell game continues…

      Source: Tobias Levkovich of Citi

Kesimpulan

Di akhir laporan panjang ini, saya memiliki sejumlah komentar tambahan dari Grant Williams, seorang portfolio manager di Vulpes Precious Metals Fund, yang memperingatkan tentang bahaya di bursa saham global:

“I think people need to be aware of the fact that markets are sleep-walking higher on the promise of free money.  They are really not trading any volume.  So with these thin volumes, and trickling higher, if something bad were to happen, if we were to have another blow-up in Europe, the US, or Asia, this would present incredible danger for the global markets.

When you have smart people like Paul Singer and Spitznagel saying, ‘I don’t like these markets.  I don’t want to play in these markets.’  You better listen to these guys.  They really know what they are talking about.  They have track records that go back decades, and they are worried.  So the man in the street should be a lot more worried because those guys are equipped to handle this, and the man in the street isn’t.

So, I’m concerned that something bad will happen very quickly, and when it does there is not going to be any way out of these markets because the volume is so light.  If we suddenly get a lot of people trying to sell, the bids just aren’t going to be there.

I believe we are going to see a meaningful correction in the global stock markets in the next 6 months.  That’s going to lead to a whole bunch more stimulus.  Meaning, a lot more QE is coming because they don’t have any other options right now, and that will be extremely bullish for gold.”

Terima kasih sudah membaca dan semoga beruntung!

Dibuat Tanggal 16 Desember 2013

Categories: Pasar Internasional Tags:

Sudah Siapkah Anda Menghadapi 2014?

December 10th, 2013 No comments

“I expect many markets to turn during 2014, especially stock and bond markets. They are in a historical bubble and will soon start their secular bear markets leading to massive wealth destruction. Most investors will sadly hang on to their stocks and bonds. But even if you don’t believe that your fortune is in for a nasty turn, investors should realize that you can’t buy fire insurance after the fire. And there is no better insurance than a significant investment in physical gold stored outside the banking system.”

– Egon von Greyerz, founder of Matterhorn Asset Management

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“2008 was so much worse than 2000 because the debt was so much higher, you wait until 2014 or 2015 when the next crisis hits… Debt has gone through the roof, the next one’s gonna be really bad. Be prepared, be worried, and be careful.”

– Jim Rogers

Apakah Anda khawatir menghadapi tahun 2014? Ataukah sebaliknya, Anda sudah sangat siap menghadapinya?

Di awal laporan ini, saya akan mulai dengan kutipan dari Egon von Greyerz, yang memang sudah melihat kejelasannya:

“In history there has never been a situation when most major economies are in the same dire situation.

Japan is a basket case with 200% debt to GDP and a rapidly aging population. China has a major credit bubble.

Most of Europe is badly indebted with high unemployment and a social structure which makes it very uncompetitive. So there is no nation which could save indebted governments worldwide.

Add to that a banking system which is still full of toxic debt and highly leveraged and we have the perfect concoction for the end of a major economic cycle in the world.”

Stephen Leeb, seorang money manager terkemuka, bahkan memberikan peringatan pada King World News (www.kingworldnews.com) bahwa ini merupakan awal dari “New World Order.”

Berikut yang dikatakan Leeb dalam sebuah wawancara, yang di dalamnya dia memproyeksikan munculnya  aliansi global yang bersama-sama akan meruntuhkan kekuasaan Amerika Serikat:

“These are extremely interesting times.  We are at a major point of inflection, and also at the dawn of a ‘New Financial Order,’ a ‘New Monetary Order,’ and a ‘New World Order.’….

“And the kings of this ‘New Financial Order’ are going to be none other than China, Russia, and Germany.  The United States is not going to be there.  They are going to have a role to play, but it’s not going to be a primary role when it comes to the monetary system, the financial system, or the general world economic system.

The first couple of innings of this is going to play out along the following lines:  There is going to be a competing reserve currency for the US dollar, and it will not be the euro.  The euro will go.  Instead it will be the German mark, the Chinese yuan, and to a lesser extent the Russian ruble.

The common denominator is that these currencies, in some way or form, will be convertible into gold.  They will have at least a partial gold backing.  The implications for the US dollar are dreadful.  The implications for inflation in the United States are horrendous.

This will also mean that, despite the recent artificial price action in gold, the price is going to go much higher than anyone can imagine.  This gold bull market will be the ‘Mother’ of all bull markets.  The world will also be in the midst of what will arguably be the greatest commodity-based bull market of all-time.

KWN has covered the massive Chinese accumulation of gold better than anyone in the world.  As you know, China has recently accepted delivery of a vault that will house an additional 2,000 tons of gold.  Keep in mind, that’s just one vault.  That’s a vault that the world happens to know about.  Many more are kept secret by the Chinese I can assure you.

The Chinese are not doing this because they feel sorry for gold and they think it deserves a home.  They are accumulating these historically large volumes of physical gold because they consider it absolutely vital to the ‘New World Order,’ the ‘New Economic Order,’ and the ‘New Financial Order.’”

Baru-baru ini Harry S. Dent Jr., Senior Editor pada Survive & Prosper, juga memberikan peringatan keras, dan mendorong untuk mulai bersiap menghadapi tahun depan:

Americans’ Game-Changing Drug of Choice

In late 2011, the head of the European Central Bank (ECB), President Mario Draghi, single-handedly drove a two-day surge in stock markets around the world with his simple statement: “The ECB will do everything possible to preserve the euro and, believe me, it will be enough.”

Markets were sliding on lower growth forecasts and rising short-term interest rates in southern Europe when Draghi’s statement changed the game.

But this is not a new tale. This story has in fact repeated itself over and over again since late 2008…

The plot line goes like this: The economy slows due to falling demographic trends, excessive debt burdens, and debt deleveraging.

Governments step in with increasingly aggressive monetary and fiscal stimulus.

The stimulus works for up to a year, after which it wears off, and the economy slumps again.

Then governments stimulate again, upping the ante.

With each reiteration of the story, someone throws a different dress on the 800-pound gorilla, changes its wig and bling, and adds more lipstick before pushing it back out in front of the people like it’s the next best thing since sliced bread.

But none of them bother to ask the question: How long can this go on?

That’s why I’ve been asking it… over and over again.

And my answer is always this: Given slowing demographic trends and ever higher debt burdens, governments will have to continue upping stimulus programs for another 10 years!

And that is simply not sustainable.

We’re talking about the government growing its debt to $30 trillion by 2023… a Fed balance sheet of $15 trillion versus $4 trillion today.

The thing is that stimulus is Americans’ drug of choice, and like any drug, the more you use, the less effective it is.

Here’s the proof…

Nico-67

As you can see in this chart, since around 1966 each additional stimulus plan has had less and less effect on our economy. (The red line is the gain in GDP per dollar of debt added and the grey line is total debt.)

Clearly we’ve already reached the near zero point of diminishing returns.

Governments can’t do this forever. There is a point where stimulus just won’t work at all and the economy will die from the side effects and withdrawal, just like any other drug abuser.

Economies and markets have been addicted to quantitative easing since 2008. After first setting short-term rates as close to zero as possible, central banks began injecting new money into the banking system to stop it imploding… bolstering their reserves to cover losses and reserve-ratio deficits. Then they invested the rest of the money, often at high leverage, to replace the profits from past lending. In effect, our financial institutions have become gambling casinos.

The government, and the major banks, like Goldman Sachs, advising it, are simply trying to avoid the consequences of past excesses.

And endless stimulus has kept the bubble from bursting.

But heed my warning: The system will continue to get more stretched as we add more debt and capacity until some major event triggers an out-of-control meltdown.

That’s what happened with the U.S. subprime crisis in late 2008. Now I see something like that happening again in the first half of 2014.

The trigger may be a bank run in Spain or the final exit of Greece or Portugal from the euro.

Or we could see the China real-estate bubble start to burst, torpedoing its most affluent consumers.

Or the U.S. real-estate rebound ends with the combination of rising mortgage rates and speculators backing off.

Regardless of the trigger, things are going to get nasty in 2014.

Start preparing now.

Terakhir yang tak kalah penting adalah Michael Pento, pendiri dari Pento Portfolio Strategies, yang memberikan prediksi luar biasa untuk tahun 2014 dalam sebuah wawancaranya juga dengan King World News, dan mendiskusikan pengaruhnya bagi pasar global:

“Gold is the only asset out there right now that is not in a bubble.  I’m looking at things like art, diamonds, Bitcoins, but most importantly I’m looking at bonds which are near record lows.  The Fed has the overnight rate at 0%….

“Bond yields do not reflect the credit, currency, or inflation risks associated with owning US debt.  The bubble in real estate is getting bigger.  Real estate prices were up 13% year-over-year.  Stocks are up over 150% since March of 2009.

Equities are in a bubble, not because of the P/E ratios being as high as they were in 1999, but because the E (earnings) in that ratio is being artificially derived, and it is unsustainable.  We all know that 70% of GDP is consumption, and that inflation is based on Fed-induced asset bubbles in home prices and stocks.

They have been able to stop the money supply from contracting as it was back in 2009.   So that boosting of asset prices has artificially boosted consumers’ net worth.  It has also given them additional confidence by giving them additional access to credit.  This credit has been created by forcing banks and consumers to speculate on risk assets because interest rates are so low.

The reality is that the economy is being artificially maintained and manipulated by our central bank and government.  Right now it is an overwhelming consensus on Wall Street that in 2014 the Fed will taper, the economy will grow, and interest rates will rise gradually.  They also believe that gold will continue getting crushed as rates rise.

That overwhelming consensus is wrong and it won’t happen because it is an extremely overcrowded trade.  I’m telling you today that the money to be made is to bet against that overwhelming consensus.  Either the Fed will end QE and the economy will fall apart and take down real estate and stocks, or there is no tapering and the gold market will have a major reversal.

Since the spring of 2010, our national debt has increased a staggering 46%, from $8.4 trillion to $12.3 trillion today.  Also, the inflationary increase in the money supply, which is based on the Fed’s balance sheet, has increased from $2.3 trillion to $3.9 trillion today.  That’s a remarkable 70% increase.

So if bond yields are all about the credit and inflation risks associated with owning that debt, then the 4% 10-Year Note will be the absolute bottom because the 4% 10-Year Note existed before we increased our nation’s debt 46%, and the Fed’s balance sheet 70%. 

But the reality is that the interest rate is not going to be 4%, instead it’s going to be much closer to 5%.  And a move on the 10-Year Note from 2.75% today to 5%, in rather quick fashion, is not small and it’s not gradual.  It is going to happen next year if the Fed tapers, and that will crater the entire phony US economy.  This is why there is not going to be any significant tapering in 2014.  This is also why gold will begin a dramatic move the upside starting next year as it marches to new all-time highs.  This is how betting against that overcrowded trade will show big profits for investors.”

What Do the Charts Say?

Ron Rosen, editor dari The Ron Rosen Precious Metals Timing Letter, di awal bulan ini memproyeksikan bahwa sejarah akan berulang dan ini akan mengejutkan dunia.

Berikut adalah tulisannya yang menarik, disertai dengan komentar, sejumlah grafik serta ilustrasi yang luar biasa:

History Is About To Repeat & It Will Shock The World

The 13 year cycle applies to the S & P 500/DJIA and gold. When the S & P 500 tops in the 13th year, gold bottoms in the 13th year. It has been that way since U. S. citizens were granted the right to own gold.

The chart below shows 3 separate 13-year cycles starting in 1973.

Nico-68

If you look at the center portion of the chart below, it shows where the vicious bear market ended in 1974.

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If you look at the center of the gold chart below from 1974, it shows how gold made its top at $204, right as the vicious bear market in stocks ended.

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If you look at the center-right portion of the next two charts, exactly 13 years later they show how stocks found a bottom in the ‘87 stock market collapse, and also how gold hit its high as stocks bottomed in 1987.

Nico-71

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The center of the two charts below shows how exactly 13 years later stocks topped in the year 2000, and gold bottomed during that same time frame.

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Nico-74

If you look below, stocks are simply topping once again 13-years later.

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And guess what?  Yes, that’s right, gold is bottoming in its cyclical bear phase inside of its secular bull market.

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The bottom line here is investors should get ready for some fireworks to the upside in gold as the stock market plunges.  This is just history repeating itself, but it’s going to shock the world.”

Seperti biasa, di akhir laporan saya lampirkan sebuah gambar lucu agar Anda senantiasa ceria serta tetap menjalani kehidupan dengan baik meskipun terjadi guncangan di bursa/pasar finansial:

Nico-77via @FarmLead

Terima kasih sudah membaca dan semoga beruntung!

Dibuat Tanggal 06 Desember 2013

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