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Apakah Waktunya Ambil Untung?

March 18th, 2014 No comments

“Fired up by QE, the stock market pushes ahead. Meanwhile, the Fed comforts itself by excusing the lousy economic data on the basis of the lousy weather. But beneath the latest statistics, a recession continues. As the old song goes, “It’s easy to blame the weather.” I continue to believe that institutional distribution is going on. … The stock market continues to be levitated by the Fed’s quantitative easing. The risk to reward ratio for being in the stock market is negative. Meanwhile, the US economy remains in recession. And once the truth breaks out, the stock market will slip into crash mode. The stock market is up on Fed manipulations, and the economy is up on lies and propaganda. It’s a poisonous combination.”

– Richard Russell

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“Here we are again, mired in a euphoric environment in which some securities have risen in price beyond all reason, where leverage is returning to rainy markets and asset classes, and where caution seems radical and risk-taking the prudent course. Not surprisingly, lessons learned in 2008 were only learned temporarily. These are the inevitable cycles of greed and fear, of peaks and troughs. Can we say when it will end? No. Can we say that it will end? Yes. And when it ends and the trend reverses, here is what we can say for sure. Few will be ready. Few will be prepared.”

– excerpted from Baupost Group’s Seth Klarman letter

Sejak tahun 2009, bursa saham Wall Street seperti mengalami tren kenaikan yang tak terbendung.

Namun di akhir pekan lalu, indeks Dow Jones terkoreksi dalam 5 hari berturut-turut untuk pertama kalinya sejak Mei 2012, Nasdaq mengalami tekanan mingguan terbesarnya dalam 9 bulan, sementara indeks S&P kembali masuk ke zona merah (negatif) untuk 2014 berjalan ini.

Jadi pertanyaan kunci yang ada di benak para investor adalah apakah ini akan menjadi akhir dari bull cycle yang dimulai sejak Maret 2009 (berusia 5 tahun saat ini).

Terutama belakangan ini yang menarik diperhatikan adalah kenaikan Nasdaq 100 hingga 83% (31 Desember) dan 82% (26 Februari), yang adalah rekor terbesar kenaikannya, namun ini berarti bahwa ke depannya akan dibayangi kepanikan dan penurunan tajam.

Berikut adalah grafik sentimen dari Investors Intelligence Report yang menggambarkan hal-hal ekstrim yang menekan sentimen pasar:

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Grafik di atas menunjukkan bahwa sentimen bearish bursa saham anjlok ke level terendah sejak 1987 (yang tidak terlihat di grafik tersebut).

Oleh karena itu, penurunan Dow Jones pekan lalu dapat dikhawatirkan sebagai awal dari tekanan jual.

Bisa saja bursa akan naik lagi, namun sudah muncul indikasi penurunan lebih dalam dan selloff berkelanjutan.

Robert R. Prechter, Jr. dari Elliott Wave International’s juga memberikan perspektifnya mengenai seberapa jauh kenaikan pasar akan terjadi dalam sentimen investor sejak krisis AS 5 tahun lalu.

Rasionalisasi media finansial menutup pandangan kita terhadap luapan investasi tak masuk akal, dan berikut ini Mr. Prechter coba menjernihkannya untuk kita:

Capitulation of the Bears

In the back-to-back weeks of December 4 and 11, Investors Intelligence reported that only 14.3% of stock market advisory services are bearish. This is the lowest percentage in over a quarter-century. It is lower than at the highs of 2000 and 2007. The last time numbers were lower was before the 1987 crash.

The flood of revisions of formerly bearish advisors’ market opinions started around November 15. It has been strong enough to prompt journalists to write articles about the shift. In half the cases, former bears said they were tired of being bearish and were turning 180 degrees to become outright bulls. In the other half of the cases, the few remaining super-bears say they still think the stock market is in a bubble, but it isn’t peaking now. It will first undergo a “melt-up,” “blow-off,” or “parabolic rise.”

 

A “Melt-Up”?

The idea that the stock market will end its rally with a near-vertical advance is appearing in articles, interviews, newsletters, web posts, and even emails to EWI. It is especially popular among super-bears who have long recognized that the market is in a bubble.

The problem with this idea is that the Dow and S&P have never blown off. The stock market as a whole has never accelerated upward at a market top. It often accelerates off bottoms, and it always accelerates in the center of a third wave; but it has always lost momentum in a fifth wave relative to the third wave. Predictions for a blow-off defy history.

Commodities are the exception, as Frost and I pointed out in 1978 in Elliott Wave Principle (see text, p.173). In fifth waves of Primary and higher degree, commodities often accelerate upward before reversing. Recent examples include oil in 2008 and silver in 2011. The reason for the difference is that commodities peak on fear, whereas stocks peak on complacency.

Some people are arguing that the stock market has become “commoditized,” and that’s why it’s about to go into a parabolic rise. While we cannot say such an event is outright impossible, it’s never happened. One thing that does happen repeatedly in the stock market is for investors to raise their upside forecasts dramatically at a top. In 1999-2000, at the market’s true peak, books came out calling for Dow 36,000, Dow 40,000 and Dow 100,000. Today’s calls for a melt-up, then, are probably just capitulation to the bullish imperative, a rationalization of optimism. By this means, bears have switched from predicting a collapse to predicting soaring prices. In other words, “Sure, it’s a bubble; but it’s not topping now. In fact, it’s going to start going up faster!” These melt-up predictions are yet another indication that the market is close to a peak in the biggest B wave in recorded history.

This type of capitulation to the trend is different from panic, because it occurs at the opposite end of the psychological spectrum. There is no single word for it. Some people say things such as, “Investors are going to panic into stocks.” But the only people who can buy in panic are those who are short, and they typically constitute a very small percentage of investors. The stock market as a whole does not panic up. But it does occasionally experience a sudden crystallization of optimism. Usually it happens without much near-term price movement; it is the result of a long period of past price movement. We might call this event a cynap, the opposite of panic. When investors’ synapses snap, their opinions become aligned like particles in a magnet. That’s what we have today.

Meanwhile, the stock market has been losing upside momentum for seven months. This is how market tops have always formed, not with a rocket blast but with a subtly slowing ascent. Even in 1929 the market did not blow off; the rise that year was slower than the market’s rise in the second half of 1928. Is this time different? Well, so far it’s exactly the same in that people are saying it will be different.

One or two bears agree with us in being more vocal than ever about the risk in today’s market. Jean-Pierre Louvet of the SafeWealth Group reports on US insolvency, bank woes, deflation, and what “cash” means: David Stockman knows it’s a bubble and pulls no punches in saying how it will end.

Conviction Among the Bulls

The Daily Sentiment Index (trade-futures.com) reported 93% bulls twice, on November 15 and 22. Two readings this high are a rarity. The weekly Investors Intelligence poll on December 11 and 18 showed over 80% bulls among committed advisors (i.e., bulls/(bulls+bears), omitting those expecting a correction), the highest reading since 1987. Such extreme readings in conjunction are even rarer.

The Rydex family-of-funds data afford good sentiment indicators. Recent figures show a record low investment in conservative money-market funds, meaning nearly everyone is invested in stocks and bonds. At the same time, the ratio of money in bullish stock funds vs. bearish stock funds is over 5:1, and per SentimenTrader.com the ratio of money in leveraged bull vs. bear funds (see below) is 10:1! This reading leaves past extremes in the dust. If you study the chart, you will notice that the biggest rush has come in the past six months, which is precisely the time that stocks’ ascent has been slowing! In other words, optimism is soaring while upside momentum is waning. Once this epic complacency melts, I doubt we will see such a ratio again in our lifetimes.

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Interviews with money managers and Wall Street strategists reveal extremely lopsided optimism. Journalists seem unable to find subjects who will make a bearish case. On December 16, a major national newspaper reported on the opinions of its roundtable of five forecasters. All five of them are bullish. Their major themes are:

  1. Investors must display wild-eyed euphoria before the market can turn down.
  2. The weak recovery is keeping investors from being bullish enough for a top.
  3. The possibility of a “short and shallow … 5% correction” is not “outlandish.”
  4. If the market corrects, it will be a blessing.
  5. But don’t wait for a correction, because you’ll just miss the boat.
  6. If the Fed tapers, it won’t hurt the market…
  7. because the economy is getting healthier and will soon be in a stronger expansion.
  8. Interest rates probably won’t rise very much…
  9. …but if they do, it won’t hurt the market.
  10. We have lots of sector picks and stock picks.

Can you imagine advisors showing this much confidence and unanimity at a truly good buying opportunity? In March 2009, the Daily Sentiment Index (trade-futures.com) recorded an all-time low of 2% bulls, meaning that 98% of S&P traders thought the market would go lower. Money managers who are bullish today will tell you that March 2009 was an “obvious” buying opportunity. But most of them never got out at the previous top so they could put cash to work, and when the time arrived they were cautious, if not scared stiff. Now they are devoid of fear. They won’t raise cash at this top, either.

We don’t know if the S&P will go up another 100 points before it reverses. But one thing we can count on is that all of the sentiment extremes we have observed will lead to their opposite.

What Do the Charts Say?

Tyler Durden dari www.zerohedge.com baru-baru ini melaporkan hal-hal berikut:

“While central bankers, asset-gatherers, and TV ‘personalities’ remain nonchalant of stocks being in a bubble, some are positively vociferous over the manipulated mania US investors are currently re-experiencing.

Until the last few months, the new dot-com bubble had been quietly hidden behind the walls of the private equity world, but as the following chart shows, the bankers have found a willing audience for ‘stories’ and ‘spin’ as the percentage of firms IPOing with negative earnings soars to its highest since Feb 2000… that didn’t end well and we suspect “peak-greater-fool” won’t this time either.”

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h/t Bloomberg and Sentiment Trader

After highlighting the dot-com-esque surge in earnings-less IPOs in the last few months, please allow me to point out four more Yellen-ignoring bubble-implying charts that must surely be ignored by the cognoscenti of all-knowing stock market gurus:

Submitted by Pater Tenebrarum of Acting Man blog,

Leveraged Loans, Penny Stocks and Profitless IPOs

Sentimentrader has posted a few updates recently that show that financial froth is quite out of bounds by now. For instance, the share of IPOs of money losing companies over the past six months has soared back to the highs last seen at the top of the technology mania in 2000. A full 74% of all IPOs issued over the past half year were in companies that are making losses. The securities of such companies bereft of income of course all tend to soar right after they hit the market.

In another update, it was pointed out that the value of trading in penny stocks has soared to a multi-year high:

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Penny stock trading soars

Admittedly, a similar spike in 2013 subsided quickly and didn’t turn out to mean anything, but since then there have been several intermittent spikes, and their frequency has clearly increased. At some point it will mean something (just because something has not had meant much so far does not mean it never will).

However, the soaring issuance of leveraged loans really takes the cake. This is a chart to make even hardened bubble-heads dizzy. It is especially noteworthy how the current surge compares to the surge in 2007, shortly before the last bubble peaked. Nothing remotely comparable has ever been seen before. It is a mirror image of record junk bond issuance and the mania for high yielding debt in general (whereby ‘high yielding’ these days actually means ‘not yielding very much’).

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Leveraged loan issuance goes bananas

 

So we ask again: Is it a bubble yet? Perhaps Ms. Yellen knows. 

Another indicator that is worth examining is the amount of cash held by mutual funds relative to their assets. As a ‘signal’ it has not been very useful for quite some time now, but it nevertheless tells us something about the sentiment of fund managers. As a long term chart reveals, the previous  secular bull market was undergirded by a great deal of skepticism on the part of this group, and it ended when its skepticism vanished into thin air in late 1999/early 2000. What do these luminaries currently think? They are at their most bullish in all of history, and as fully invested as they can possibly be.

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Mutual fund cash – fund managers were deeply pessimistic in the first decade of the last secular bull market, and when their pessimism gradually unwound in the 1990s, the bull market went into overdrive and became the biggest bubble in terms of valuations ever seen. Right now this group harbors exactly zero skepticism and is invested up to its eyebrows.

Finally, one can also examine margin debt, which shows us the extent to which investors are prepared to speculate with borrowed money. It is well known that margin debt currently stands at a record high, but below we show a chart from Doug Short that gives us a close-up of the investor net credit situation at the NYSE, which is at its most deeply negative level in history.

Apart from the fact that the entire ‘cash on the sidelines’ argument is extremely flawed on a fundamental level, it is in our opinion quite dubious for a market expert to invoke this myth in view of such data points. This is not the picture of ‘fuel for a bull market in its middle innings’, it is rather a warning sign with an exclamation point.

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NYSE credit balances are deeply negative and investor ‘net worth’ is thus at its lowest level ever. Fuel for a bull market certainly existed in late 2002/early 2003 and again in late 2008/early 2009, but by now margin debt has expanded to truly vertiginous heights. Not even the tech mania of 2000 can any longer hold a candle to this.

Kenaikan tahun 2014 nampaknya mulai goyah setelah belakangan terjadi peningkatan volatilitas dan juga gerak whipsaw.

Jadi Apakah indeks Dow Jones sudah di puncak kenaikannya? Inilah yang coba dijawab oleh John C. Burford, editor di MoneyWeek Trader, dalam laporan terbarunya:

“Should we beware the Ides of March? So warned the soothsayer to Julius Caesar in 44 BC. He should have taken note because, according to Shakespeare, he was assassinated on that very date (which falls tomorrow this year).

That soothsayer could make a lot of money if he were around today and appeared on CNBC. All the other stock market pundits would quickly be out of a job.

As a soothsayer of the markets, I don’t have that 100% track record. But before I left for my break, I did make a case that stocks would very likely make highs in the month of March.

This is the weekly chart of the Dow that I made on 24 February:

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My basic premise was this: From the 2007 highs, I can count a clear five-wave impulsive wave pattern down to the March 2009 low at the 6,500 level. That date is highly significant.

I can make two projections from this low. First, the next major move would be an upward corrective move. Second, this move would likely be in an A-B-C form.

It has taken five years – almost to the day – to produce this picture of a textbook A-B-C relief rally pattern.

My question is: Why has it taken so very long to stretch out this relief rally? For bears such as myself, it was been an agonizing time, although there have been some terrific shorting opportunities along the way.

 

Blame it all on QE

The decline off the 2007 top took around eighteen months. The relief rally has taken sixty months (so far) – over three times as long as the decline.

To me, the reason is encapsulated in only one factor – QE. This mammoth increase in funds available for stock speculation started from the depths of the credit crunch. And it has encouraged financial institutions to jump on the stock market bandwagon in an effort to repair the damage done to their firms by the credit implosion.

And as markets recovered, sentiment has followed to the point now where we are seeing bubble-like behaviour in many sectors.

But what is fascinating to me in the above chart is that the major low of the relief rally (my B wave low) occurred precisely thirty months from the March 2009 low.

The best cycles are the ones that fly under the radar

Project forward thirty months from March 2009 and we come to March 2014 – this month.

This is an example of the use of cycles. The study of cycles is a well-researched area in the past. If you analyze historic charts, you will quickly find many examples of patterns being repeated in a cyclic manner. At one time, the four-year stock market cycle was a popular topic. This pattern coincided with major tops and bottoms four years apart.

Lately, virtually no-one is talking about cycles – and that’s because the consensus believes stocks are on an ever-upward path. To me, that is a clear warning sign that cycles are quietly operating under the radar – and my new discovery may indeed be one in operation right now.

The key point about cycles is that they only work when very few analysts notice them. When a particular cycle is splashed around in the media, it is best to reject it as a basis for forecasting.

One way to keep track of the popularity of cycles is to scan the new book releases. If there are a few on cycles, then your time is well spent in searching for them!

How to find that major monthly top

So if I am looking for a major stock market top this month, is there more evidence that another index can tell me?

Here is the monthly FTSE chart. Often, the monthly chart can reveal clues that shorter-term charts miss.

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Just as in the Dow, there is a well-defined five-wave impulsive pattern off the 2007 highs to the March 2009 low, and the relief rally is in a clear A-B-C.

The 2007 highs were in the 6,800 area, and in the last few months the market has rallied to this region. But note that every time it has poked above the 6,800 parapet, it has been shot back down into the trenches. The pigtails of the past few months give the game away.

This means the market considers the 6,800 level as very strong resistance.

Also, the lower line represents support because I have drawn it across two major tops. The market is currently trading inside the zone between the support and resistance levels. Once it breaks free, the moves should be dramatic.

What QE and tapering mean for the markets

Note the important momentum readings – the maximum for the rally occurred in early 2010 – over four years ago! And since then, the rally has been sustained on a steadily weakening buying power. That is one powerful demonstration of the declining effect of QE. As the added QE liquidity since inception has had a gradually declining supportive effect on the GDP of the USA, so it has on the stock market. Also in the mix is the Fed’s current tapering policy, thereby reducing even further the stimulus effect.

Are there any shorter-term clues as to immediate direction?

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Here is a tramline trio that I am working on the daily Dow. The upper line has a terrific PPP (prior pivot points) from October 2011 and clips the important highs in late 2012.

Also, there was an important high on 22 May 2012. If you were reading my emails at the time, you will recall that I identified that top and an excellent short trade resulted.

But in the past few days, the market has made a kiss on the underside of my centre tramline and is backing off it very sharply in textbook scalded cat fashion. This action supports my contention that we have indeed seen a major top already this month and the path of least resistance is now down.

Although the Ides of March fall tomorrow, is the Dow high on 7 March just one week early from that fateful day?”

 

Conclusion

Sebelum ke akhir tulisan, berikut adalah komentar menarik dari John P. Hussman, Ph.D., yang dalam tulisan terbarunya di Hussman Funds Market Comment mengingatkan bahwa overvaluation indeks S&P 500 kini sudah melampaui sektor perumahan AS tahun 2006:

It is incorrect to believe that the 2008-2009 market plunge and financial crisis were caused by the housing bubble. The housing bubble was merely the expression of a very specific underlying dynamic. The true cause of that episode can be found earlier, in Federal Reserve policies that suppressed short-term interest rates following the 2000-2002 recession, and provoked a multi-year speculative “reach for yield” into mortgage securities. Wall Street was quite happy to supply the desired “product” to investors who – observing that the housing market had never experienced major losses – misinvested trillions of dollars of savings, chasing mortgage securities and financing a speculative bubble. Of course, the only way to generate enough “product” was to make mortgage loans of progressively lower quality to anyone with a pulse. To believe that the housing bubble caused the crash was is to ignore its origin in Federal Reserve policies that forced investors to reach for yield.

Tragically, the Federal Reserve has done the same thing again – starving investors of safe returns, and promoting a reach for yield into increasingly elevated and speculative assets. Thinking about the crisis only from the perspective of housing, investors and policy-makers have allowed the same process to play out more broadly in the equity market.

On a quantitative basis, the overvaluation of the equity market is greater percentage-wise, and greater dollar-wise, than the overvaluation of housing in 2006-2007. We fully expect that from present valuations, U.S. stocks will produce zero or negative returns on every horizon shorter than 7 years.

There is no antidote or alchemy that will allow a buy-and-hold approach to squeeze water from this stone.

There is no painless monetary fix that will shift the allocation of capital toward productive investment and away from distortive speculation.

Instead, one must wait for the rain. Impatient, crowd-following investors are all too willing to wastefully scatter seeds onto this parched desert, thinking that this is their only chance to sow. To wait patiently in the expectation of fertile soil and rain is not an act of pessimism, but an act of optimism and informed experience.

 

Dan terakhir, namun tak kalah penting, berikut adalah the CNBS talking head survival guide langsung untuk Anda:

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h/t @Not_Jim_Cramer

Terima kasih sudah membaca dan semoga beruntung!

Dibuat Tanggal 18 Maret 2014

Categories: Pasar Internasional Tags:

Fokus Tertuju Ke Ukraina

March 18th, 2014 No comments

“It may well be that we will end up in a confrontation with Russia. The Americans could not win on the ground there – they can’t possibly that distant from their (military) bases take on the Russian Army in its own backyard. So the conflict would likely go nuclear…. I would be worried about whether we can survive the incompetence and the stupidity of the arrogant and ignorant Obama regime. That’s what the world has to worry about at this moment. Look, whenever you are stupid enough to take a direct strategic threat to a powerful military armed with nuclear weapons, which is what Russia is, you don’t have any sense. And so we have the world being driven by a government that hasn’t got any sense – the United States government. You just don’t do that.”

– former US Treasury official Dr. Paul Craig Roberts

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“If anybody is stupid enough to consider fighting Russia, they should just rememberwhat happened to both Napoleon and Hitler. The Russians are not going to be defeated.This isn’t Iraq. This isn’t Colonel Gaddafi in Libya. These are the Russians. They are armed to the teeth, they are technically savvy, and they are not going to give an inch. I don’t believe the politicians or the military would dare threaten to go into any kind of an armed conflict with Russia because if they did, it would be the beginning of World War III.”

– Gerald Celente, founder of Trends Research

 

Dengan persentase voting (suara) 79.09%, di atas suara pemilu presiden AS sejak 1990, maka jajak pendapat mendukung penuh Crimea untuk bergabung dengan Rusia:

  • Jajak pendapat oleh Republican Institute for Political and Sociological Studies yang berbasis di Crimea, dirilis oleh Kryminform
  • 93% dari total pemilih mendukung penggabungan dengan Rusia

Dan Crimea akan segera resmi bergabung ke Rusia:

Crimea’s regional government will make a formal application today to join the Russian Federation, the local pro-Moscow leader said on Twitter after a disputed referendum to break away from Ukraine.

“The Supreme Soviet of Crimea will make an official application for the republic to join the Russian Federation at a meeting on March 17,” Sergiy Aksyonov said in a tweet.

Masyarakat Crimea pun merayakan hal ini, seperti terlihat di gambar berikut:

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Namun sayangnya AS sudah mengatakan bahwa dunia tidak akan mengakui referendum dan hasilnya, yang dikatakan penuh “ancaman kekerasan dan intimidasi dari Rusia (melalui intervensi militer) sehingga melanggar hukum internasional.”

Sebuah pernyataan tertulis dari Gedung Putih menyebutkan bahwa aksi Rusia di Ukraina “berbahaya dan mengacaukan.”

Dan AS mendesak negara-negara lain untuk “mengambil langkah dan memberikan sanksi” pada Rusia.

Jadi, begitu Crimea resmi berpisah dari Ukraina dan bergabung ke Rusia yang merupakan kehendak dari parlemen dan masyarakatnya sendiri, hal-hal kasar pun dapat terjadi, karena ini dianggap ekspansi formal Rusia ke wilayah Ukraina yang oleh Barat disebut sebagai proses yang inkonstitusional, sementara Rusia di sisi lain menilai langkah menjatuhkan Yanukovich (dari kursi presiden Ukraina) adalah hal yang inkonstitusional.

Sebelum kita melihat dampaknya ke pasar finansial, Saya ingin menyampaikan salah analisa terbaik yang pernah saya baca belakangan ini mengenai kejadian di Timur dan yang dilakukan Barat terhadapnya.

Ini adalah tulisan dari Byron King, editor dari media the Outstanding Investments and Energy & Scarcity Investor, yang patut Anda simak:

 

Russia Has “Won” in Ukraine

Nico-189“I spent much of last week in Houston at a major energy conference. I spent most of this week up in Toronto at the annual convention of the Prospectors & Developers Association of Canada (PDAC), the world’s largest mining conference.

Along the way, I followed news and spoke with knowledgeable people about Russia and its political-military moves toward Ukraine. I won’t drop names, but the other night I had dinner with a former Canadian ambassador to Russia; and that was after spending an entire afternoon talking with members of the Canadian diplomatic corps who deal extensively with NATO, Russia and nations of the former Soviet Union (FSU).

What does the Russia-Ukraine situation mean to you as an investor? More bluntly, can you make any money here?

First, let’s be candid. Let’s acknowledge something, and it’s critical. That is, with President Putin setting strategy, Russia is rapidly succeeding in its immediate goal of hobbling Ukraine and taking back Crimea.

That is, there is a situation on the ground in Ukraine-Crimea that favors Russia. This situation will not be reversed by any actions from the U.S., NATO or any other power (well, not for a generation or two, if then).

I won’t go deep into discourse, except to say that Russia sometimes produces more history than it can consume. Since the 1700s, Russia has regarded Crimea as critical to its national security. In the days of the Soviet Union, Crimea was a key region for building and projecting naval power.

Nico-190Geographically, nothing has changed over time. From Russia’s perspective, the past 22 years — with Crimea as part of an economically moribund post-Soviet Ukraine — are an historical anomaly. This situation is rapidly ending.

From the Western perspective, the unfolding Russia-Ukraine-Crimea episode is a battle, so to speak, that the U.S. and NATO have already lost. All the political chest-thumping, sanctions, visa restrictions, etc., in the world won’t make any difference to the correlation of forces. Russia’s troops are where they are, and they aren’t leaving.

Sadly — because I really shouldn’t have to explain this — I’ll note an obvious point, but one that’s apparently lost on many senior politicians in the U.S. and elsewhere. In short, Ukraine-Crimea is not a battle that the U.S. or NATO ever should have pretended to join. We’re dealing with geography that’s at the heart of Russia’s “near abroad” and vital to Russia’s national defense. So it’s accurate to say that Ukraine-Crimea is a point of supreme national interest to Russia. Get it? Hey, some people don’t.

Putin and his generals now have “boots on the ground,” with or without Russian insignia on the uniforms. (It’s most likely that soldiers you see on television are Russian special forces — spetsnaz. Plus, Russia has likely organized local militias, under Russian military control. It’s characteristic.)

Here’s the rub. There’s nothing that anyone in Ukraine, the EU, NATO and/or the U.S. can do about Crimea, and probably eastern Ukraine, as this unfolds. Not unless Western political players want to send in tanks and troops, which would doubtless escalate into something very bad, and certainly much worse than what we see. Really, the Russians don’t fool around, let alone back down, on issues like this. They’ll fight.

The quick, determinative lesson in all of this is that hard power trumps soft power every time. Or as a wise old admiral once told me, “Gunboat diplomacy without the gunboats is just small talk.”

Another lesson in all of this is that unfavorable geopolitical events do not just happen out of the blue. This current standoff — and this Western “loss,” if you’re keeping score — has been many years in the making. Russia is responding to two decades of strategic insult and political fecklessness by the West, going back to ridiculous U.S./NATO missteps immediately following the demise of the Soviet Union.

For example, NATO was a post-World War II military alliance created to contain the then-expansionist, aggressive Soviet Union. Yet when the USSR imploded in 1991, NATO remained intact; kept its name; perpetuated its bureaucracy; and, organizationally, expanded eastward to the borders of Russia (think of Latvia, Estonia and Lithuania). From the Russian perspective, it was as if Napoleon were assembling another Grande Armee.

Later, during the first decade of the 2000s, NATO even worked to add Georgia and Ukraine to the ranks. This was utterly intolerable from Russia’s strategic perspective and led to the Russia-Georgia war of August 2008. That short conflict should have been instructive, but apparently, some people just don’t learn.

More recently, the idea of Ukraine as part of NATO has proven to be, basically, the equivalent of Soviet missiles in Cuba in 1962. It’s a casus belli to Russia, clearly, because Russia has moved troops to quell the problem.

Finally, consider that Russia is doing what it’s doing because the West (and certainly the U.S.) has failed to remain militarily pre-eminent in the world. Hold this last thought, because I’ll address it in a moment.

The West — as embodied by its blustering, incompetent, impotent politicians — cannot undo what’s happening in Ukraine-Crimea. Events will unfold in their own way. Russia controls the course of things; it’s “running the table,” so to speak.

Meanwhile, there’s NO vital U.S. national interest in the region. Zero! And certainly, there’s nothing worth going to war over with Russia. And just so you know, Russian war-fighting doctrine has a low threshold for using nuclear weapons. So is the West willing to risk losing London or New York over which apparatchik is the mayor of Sevastopol?

Nico-191In one way or another, the Ukraine situation will resolve. Crimea will likely revert to Russia. Part of eastern Ukraine might also affiliate with Russia.

When the territorial transfers are completed, perhaps Russia will come to a meeting somewhere. The Russian diplomats will allow Western politicians to save a bit of face, perhaps by offering back a few scraps of borderlands here and there. Through it all, Russia will do what’s in its broad interests.

The West has been humiliated. NATO is looking more and more like a paper tiger. The U.S. level of gravitas in the world is in free fall. Our U.S. national leadership — and I mean members of both political parties — look like a ship of fools.
What can the West do for now? Many of the silliest, most big-mouthed politicians ought to collectively resign and make room for a new crop of leadership that’s smarter (we can only hope).

With or without the departure of many current names from the roster, however, there are larger lessons to be drawn from the situation in Ukraine. In other words, the key issue for the future is how nations across the world will in the future resolve territorial-demographic disputes and redraw old maps.

How will the West work things out with Russia? To be sure, it will set a global precedent. Indeed, Ukraine-Crimea will affect how, for example, China goes about expanding its territory at sea, or with India, or how it deals with Japan. In other words, the Ukraine situation is going to echo around the globe for many years to come.

So to sum up, Crimea isn’t really all about Crimea any more. It’s about what protocols the West establishes for other nations with territorial and demographic disputes. This is what’s crucial. Can the West pull something useful out of this pol-mil-dip thrashing?

Looking ahead, it’s time for the U.S./NATO to get serious about the next advances in military technology. For all the money that the U.S. spends on “defense,” much of it goes for salaries, health care and supporting legacy systems. Yet U.S./NATO budgets go down, while, say, China is on a continual investment spree.”

 

What Are The Financial Repercussions?

Para pejabat pemerintahan dan pelaku bisnis Rusia bakal menghadapi sanksi yang menurut Bloomberg akan sama seperti sanksi di Iran.

Jika cadangan devisa asing dan aset-aset perbankan Rusia dibekukan seperti yang diperkirakan, maka Rusia dapat meresponnya dengan melakukan likuidasi besar-besaran obligasi dan cadangan devisanya (dalam denominasi) dolar AS.

Sebagai pembalasan, Rusia dapat mengambil opsi hanya menerima emas untuk pembayaran gas, minyak dan ekspor komoditas mereka lainnya. Inilah yang akan mendorong pelemahan besar dolar AS dan lonjakan harga emas.

Sehingga, perang mata uang pun akan semakin buruk seperti yang saya peringatkan sebelumnya.

Sudah seberapa siapkah Barat, terutama Eropa, melanjutkan hidup mereka jika sepertiga dari gas di Jerman hilang…?

Jika langkah kooperatif sudah tidak bisa dilanjutkan, hal pertama yang menjadi kekhawatiran adalah ekspor gas Rusia ke Eropa.

 

Dan di bawah ini adalah following map from the WSJ, yang menunjukkan seberapa besar mayoritas wilayah Eropa yang bergantung pada ekspor gas dari Rusia:

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Selanjutnya pada 14 Maret 2014, James G. Rickards, seorang portfolio manager di West Shore Real Asset Income Fund dan penulis The New York Times untuk buku laris yang berjudul Currency Wars, merilis artikel yang masuk dalam kategori WAJIB DIBACA di The Darien Times mengenai the new balance of financial terror:

“Americans have been galvanized lately at the sight of Russian troops, directed by Vladimir Putin, blatantly occupying the Crimean Peninsula in Ukraine and annexing it as part of Russia.

For those who thought that such brutal tactics were a thing of the past, the Russian invasion of Crimea serves as a reminder that the impulse among autocrats to build empires is alive and well.

For better or worse, there is little the United States can do militarily to change the outcome in Ukraine. As was seen in Hungary in 1956, Czechoslovakia in 1968, and Afghanistan in 1979, when Russia decides to exert brute force in its sphere of influence, the United States can voice support for the victims, but is otherwise unable to intervene except at costs that are too high relative to the national interests involved.

But this does not mean the United States is helpless. No sooner had the Russian invasion become clear than the White House announced the possibility of economic sanctions against Russia. The sanctions have yet to be spelled out completely, but could include freezing personal assets of certain Russian officials and oligarchs and prohibiting certain transactions by United States companies and government agencies with Russian counterparts. By implementing such sanctions, the United States has moved in the direction of a new kind of warfare — not kinetic war involving ships, planes and missiles — but financial war involving cash, stocks, bonds and derivatives. The policy question, and an important question for investors, is how far can this type of financial warfare go and how effective can it be? What will the impact of financial war be on markets in general and investors in particular?

The answer is that such financial warfare tactics will not go very far and will not be very effective. The reasons for this go back to the Cold War doctrine of Mutual Assured Destruction or “MAD.” During the Cold War, the United States had enough nuclear missiles to destroy Russia and its economy and Russia had enough missiles to do the same to the United States. Neither adversary used those missiles and the leaders were quite careful to avoid escalations that might lead in that direction. Proxy wars were fought in places like Vietnam, the Congo and Afghanistan, but direct confrontation between the United States and Russia was never allowed to come to a head. The reason was that no matter how devastating a nuclear “first strike” might be, the country under attack would have enough surviving missiles to launch a massive “second strike” that would destroy the attacker. This is what was meant by “mutual assured destruction” or the balance of terror. Neither side could win and both sides would be destroyed, therefore they went to great lengths to avoid confrontation and escalation in the first place.

In financial warfare between the United States and Russia, a similar balance of terror exists. It is true that the United States has powerful financial weapons it can use against Russia. The United States can freeze the assets of Russian leaders and oligarchs that can be found both in United States banks and foreign banks that do business in dollars. The United States can deny Russian access to the dollar payments system and work with allies to deny Russian access to the SWIFT system in Belgium that processes payments in all currencies, not just dollars. Many of these tactics have, in fact, been used against Iran and Syria in the financial war that has been going on in the Middle East and Persian Gulf since 2012.

But, Russia is not without financial weapons of its own. Russians could refuse to pay dollar-denominated debts to United States and multilateral lenders. Russia could dump the billions of dollars of United States Treasury notes they own thus driving up United States interest rates and hurting the United States stock and bond markets. Most ominously, Russia could unleash its hackers, among the best in the world, to crash United States stock exchanges. On August 22, 2013 the NASDAQ stock market crashed for half a trading day and no credible explanation has yet been offered for the crash. Hacking by Syrian, Iranian or Russian cyber warriors cannot be ruled out. This may have been a warning to the United States about enemy capabilities.

In short, the United States has no interest in intervening in Ukraine militarily and even its economic response will be muted because of new fears of mutual assured financial destruction emanating from Russia and elsewhere. Putin has thought all of this through and has taken Crimea as his prize.

Merely because financial warfare between the United States and Russia will not be allowed to go too far, does not mean that the situation in Ukraine will not impact markets. Stock markets dislike uncertainty of any kind and Russia’s intentions with regard to the rest of the Ukraine outside of Crimea certainly add to uncertainty. Russia’s victory in Crimea may embolden China to assert territorial claims to certain islands in the South China Sea, which will increase tensions with Japan, Korea, Taiwan and the United States.

There is always the possibility of a financial attack being launched by mistake or miscalculation, which could cause events to spin out of control in unintended ways.

Investors may not be able to change this dangerous state of the world, but they are not helpless when it comes to preserving wealth. A modest allocation of investable assets to physical gold will help to preserve wealth in the face of financial war or unexpected catastrophic outcomes.

Gold is not digital, cannot be wiped out by hackers, and is immune to crashing stock markets and bank failures. Russia has increased its gold reserves 70% in the past five years. China has increased its gold reserves over 200% in the same time period. Do they know something you don’t?”

 

Sementara itu, dalam sebuah wawancara dengan King World News (www.kingworldnews.com), Dr. Stephen Leeb menjelaskan pentingnya memiliki emas di tengah kekhawatiran pecahnya perang di Ukraina saat ini:

“I’m focused on geopolitical factors and how desperate the West seems to be to keep this world running.  Every day that goes by there are more signs of desperation.  Putin is giving no sign whatsoever of backing down in Ukraine.  It’s very clear that he is going to annex the Crimea….

He will also make a run at other eastern Ukrainian enclaves where there are a lot of Russians.  I think the United States and Europe are going to be left holding the bag. 

Part of the desperation on the part of the West is because of the fact that Putin has tremendous access to energy resources, whereas the West does and it doesn’t.  The costs of fracking are incredibly high, and the public has no idea about the chemicals that really go into fracking.  Almost every single one of the chemicals that goes into fracking has a negative health effect.

The reason I am suspicious of the government’s motives with fracking is because this is really our only card left to play.  We don’t have any real viable energy resources in the Western world, aside from fracking.  We cannot satisfy demand for energy unless we go to extremes.

We don’t have that much clean groundwater, and without question fracking damages the clean underground water supply.  All of these chemicals are seeping into the ground and every single one of them is a poisonous carcinogen.  So this kind of desperation is not going to work in the long run.  

We are looking at a geopolitical crisis right now where there is no answer — where the West is powerless.  There is a tremendous alliance between Russia and China over natural resources.  What is not making the headlines is the fact that the president of China just had a long conversation with Merkel, Cameron, and Obama.  Did you see that anywhere in the headlines?

I can tell you the nature of that conversation:  The president of China warned the West not to start any trouble.  He also told them not to slap any sanctions on Russia.  Meanwhile, the United States is supporting a Ukrainian regime without legitimacy, which also has extreme Nazi-style support.  One of the biggest concentration camps in World War II was right outside of Kiev.  How does it make any sense for the West to support these thugs, Eric?  The answer is, it doesn’t.

But every day the West is becoming less and less powerful.  So how can we rely on the U.S. dollar to remain as the world’s reserve currency?  How can we rely on the euro to be the second most desirable currency in the world?  It makes no sense, and people are starting to get this message.  This is why gold has bottomed.

The real run in gold, the one that takes us to $10,000, which comes when people realize that ‘the emperor has no clothes.’  Yes, China has problems but they are many steps ahead of us.  Russia also has the right idea.  Today Russians live much freer than they ever did in the past 400 years.

I have a friend who travels to Russia each year.  He is one of the best chess coaches in Russia.  He owns property in Russia, and he knows people all over the country who verify that the country is freer today than it has ever been.  Putin’s popularity within Russia is also higher than it’s ever been.

So this is why the West is acting out of such desperation.  They know the clock is ticking against them and their dominance of the world.  But all of the propaganda in the West is to convince the people that the West is still number one.  This is not true.  The emperor’s clothes are coming off, and the gold market is going to reveal this at some point.

We may have a few more chapters to complete before we see $10,000 gold, but this book will be completed.  And when the book is completed, this world will not be recognizable.  What we are seeing right now is the last gasp effort on the West’s part to show its dominance.

We are literally witnessing history before our eyes.  We are living through a point of inflection and the West is desperate to hold on to what it has but we won’t be able to do it.  The bottom line is the move to $10,000 gold will mark a dramatic shift of power from West to East.  It will also mark the end of Western dominance altogether.”

Terakhir yang tak kalah penting adalah Michael Snyder dari The Economic Collapse Blog yang belum lama ini memberikan peringatan keras implikasi economic war akan cukup jauh, dalam artikelnya yang berjudul Russia + China = Bad News For The U.S.:

“So much for “isolating” Russia.  The Chinese government is publicly siding with Russia on the crisis in Ukraine, and that is very bad news for the United States.  Not only does it mean that the U.S. is essentially powerless to do anything about the situation in Ukraine, it also means that Russia and China are starting to understand how much economic leverage that they really have.  Yes, the Obama administration can threaten to slap “sanctions” on Russia or threaten to kick Russia “out of the G8“, but those actions would not actually hurt too much.  On the other hand, Russia and China hold approximately 25 percent of all foreign-owned U.S. debt, and if they started massively dumping U.S. debt it could rapidly create a nightmare scenario.  In addition, it is important to remember that Russia is the largest exporter of natural gas and the second largest exporter of oil in the world.  And China now imports more oil than anyone else on the planet does, including the United States.  If Russia and China got together and decided to kill the petrodollar, they could do it almost overnight.  So when it comes to Ukraine, it is definitely not the United States that has the leverage.

If China and the rest of the world abandoned Russia over Ukraine, that would be one thing.  But that is not happening at all.  In fact, China has chosen to publicly stand with Russia on this issue.  The following is from a Sky News article entitled “Russia And China ‘In Agreement’ Over Ukraine“…

Russian foreign minister Sergei Lavrov discussed Ukraine by telephone with his Chinese counterpart, Wang Yi, on Monday, and claimed they had “broadly coinciding points of view” on the situation there, according to a ministry statement.

And Chinese state news agency Xinhua is publicly rebuking the West for their handling of the Ukrainian crisis…

China’s state news agency Xinhua accused western powers of adopting a Cold War- like mindset towards Russia, trying to isolate Moscow at a time when much needed mediation is need to reach a diplomatic solution to the crisis in Crimea.

“Based on the fact that Russia and Ukraine have deep cultural, historical and economic connections, it is time for Western powers to abandon their Cold War thinking. Stop trying to exclude Russia from the political crisis they failed to mediate, and respect Russia’s unique role in mapping out the future of Ukraine,” Xinhua wrote in an opinion piece.

Apparently clueless as to how the geopolitical chips are falling, the Obama administration is busy planning all sorts of ways that it can punish Russia

Behind the scenes, Obama administration officials are preparing a series of possible battle plans for a potential economic assault on Russia in response to its invasion of Ukraine, an administration source close to the issue told The Daily Beast. Among the possible targets for these financial attacks: everyone from high-ranking Russian military officials to government leaders to top businessmen to Russian-speaking separatists in Ukraine. It’s all part of the work to prepare an executive order now under consideration at the Obama administration’s highest levels.

Does the Obama administration really want to start an “economic war” with Russia and potentially against China as well?

Considering how much money we owe them, and considering the fact that we desperately need them to continue to use the petrodollar, we stand to lose far more than they do.

This is one of the reasons why I have always insisted that the national debt was a national security issue.  By going into so much debt, we have given other nations such as Russia and China a tremendous amount of leverage over us.

Unfortunately, the debt mongers in Washington D.C. never have listened to common sense.

When it comes to Ukraine, there are other economic considerations as well.

For example, about 25 percent of the natural gas that Europe uses comes from Russia, and Ukraine only has about four months of natural gas supplies stockpiled.

If Russia cut off the natural gas, that would create some huge problems.  Fortunately, winter is just about over or the Russians would have even more leverage.

In addition, Ukraine is one of the leading exporters of wheat and corn on the planet, and a disruption in the growing of those crops could make the emerging global food crisis even worse.

But of course the biggest concern is that the Ukraine crisis could ultimately spark a global war.

Unfortunately, there is a treaty that requires the United States to defend Ukraine if it is attacked…

President Bill Clinton, along with the British, signed in 1994 a nearly forgotten agreement to protect Ukraine’s borders. Ukraine now is appealing to the countries that signed the agreement.

As the British Daily Mail points out, it means that, technically, if Russia were to invade Ukraine, it would be difficult for the U.S. and Britain to avoid going to war.

Given that the late Russian president, Boris Yeltsin also signed it, it was apparent that it wasn’t expected that the Russians would take the action that Putin now is undertaking.

And top Ukrainian politicians are now asking western nations to come to the aid of Ukraine militarily

Ukraine’s former prime minister Yulia Tymoshenko has appealed for the West to adopt ‘strongest means’ to intervene in Russia’s occupation of Crimea if diplomacy fails.

In an interview with CNN’s Christiane Amanpour, Tymoshenko, freed last week after the riots throughout the nation, said if Russia is allowed to ‘take away’ Crimea, life will change ‘practically everywhere in the world.’

She added: ‘Then we have to accept… an aggressor, can violate all the international agreements, take away territories, whenever she likes.’

On the other side, deposed Ukrainian President Viktor Yanukovych has formally requested that Russia militarily intervene in his nation…

Russia’s U.N. envoy said Monday that ousted Ukrainian President Viktor Yanukovych asked Russia to send troops to “establish legitimacy, peace, law and order, stability, and defending the people of Ukraine.” Russian Ambassador Vitaly Churkin read a letter from Yanukovych at the U.N. Security Council meeting.

“Ukraine is on the brink of civil war. In the country, there is chaos and anarchy. The life, the security and the rights of people, particularly in the southeast part in Crimea are being threatened. So under the influence of Western countries, there are open acts of terrorism and violence. People are being persecuted for language and political reasons,” the letter said. “So in this regard, I would call on the President of Russia, Mr. Putin, asking him to use the armed forces of the Russian Federation to establish legitimacy, peace, law and order, stability, and defending the people of Ukraine.”

And it is very important to note that Yanukovych would have never issued this letter if the Russian government has not asked him to.

So the stage is set.

Russia has already grabbed Crimea, and it is eyeing other territories in eastern Ukraine.

China is publicly backing Russia, and collectively they have a tremendous amount of economic leverage.

The Obama administration is barking loudly about what Russia has done, but the reality is that the U.S. has very little economic leverage at this point.

What the U.S. does have is the strongest military on the entire planet, but let us hope and pray that Obama does not decide to get the U.S. military involved in Ukraine.  That would be absolutely disastrous.

In the end, the U.S. has no good options in Ukraine.  The Obama administration helped aid and organize the violent revolution that overthrew the Ukrainian government, and now we have a giant mess.

Nobody is quite sure what comes next, but one thing is certain…

The relationship between the United States and Russia will never, ever be the same again.”

Di akhir tulisan ini, agar tetap ceria, berikut saya persembahkan gambar mengenai diskusi Obama-Putin via telepon, yang mungkin saja dialognya sama seperti ini:

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h/t @SooperMexican and @LibertyBlitz

Terima kasih sudah membaca dan semoga beruntung!

Dibuat Tanggal 17 Maret 2014

Categories: Pasar Internasional Tags:

Apakah Eropa Akan Terperangkap dalam Deflasi?

March 17th, 2014 No comments

Make no mistake about it: Though it may not seem that Europe is the problem, I can assure you it is. Europe is sinking deeper and deeper into a depression. Unemployment continues to rise, banks in Europe are getting weaker and weaker, and the strength in the euro is not a sign of health. Rather, it’s a sign of severe deflation taking root in Europe, a force that will eventually cause Europe to meltdown. I urge all investors to stay out of European equity and bond markets. That’s where the real crisis is.”

– Larry Edelson

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“A new risk to activity stems from very low inflation in advanced economies, especially the euro area, which, if below target for an extended period, could de-anchor longer-term inflation expectations. Low inflation raises the likelihood of a deflation in case of a serious adverse shock to activity. In the euro area, low inflation also complicates the task in the periphery where the real burden of both public and private debt would rise as real interest rates increased.”

– International Monetary Fund

 

Kekhawatiran zona euro mudah terbakar, yang setiap menitnya dapat beresiko pada kehancuran finansial, seolah sudah hilang.

Namun kini seperti bom waktu yang siap meledak, dapat menyebabkan pasar global seperti krisis Rusia 1998 ataupun krisis AS 2007/08 (pailitnya Lehman Brothers). Apakah ini mampu diatasi?

Menurut saya tidak.

Belakangan ini, Zona Eropa mengalami tingkat inflasi yang sangat rendah, sebagai salah satu akibat karena memiliki hutang besar.

Ketika hutang mencapai level tertentu yang membebani ekonomi, maka akan menekan potensi pertumbuhannya.

Sumber daya yang seharusnya lebih baik dimanfaatkan di suatu hal, kini terpaksa digunakan untuk kepentingan hutang tersebut. Dengan kata lain yang lebih sederhana, segala energi (kekuatan) tertuju hanya untuk menopang hutang dan masalah-masalah yang muncul karenanya.

Bagi debitur, inflasi akan menjadi pengikis beban hutang.

Namun ketika deflasi menyerang, nilai ‘real’ dari hutang akan meningkat sehingga beban akan semakin berat. Dengan kondisi sedemikian, maka energi lebih besar dibutuhkan dan ini akan membuat debitur semakin terpuruk.

Ini bukanlah situasi yang kondusif bagi pemulihan yang nampaknya mulai terjadi di Yunani, Italia, Irlandia, Portugal ataupun Spanyol.

Dan semakin banyak investor yang khawatir terhadapnya, semakin mereka menyadari bahwa kondisi Eropa yang sebelumnya banyak dikatakan pulih bukanlah sebuah akhir dari krisis.

Mike Amey dari perusahaan bond fund, Pimco, mengatakan bahwa Zona Eropa sedang “sleepwalking into a decades-long deflation trap” seperti Jepang tahun 1990an yang salah langkah menurunkan suku bunga mendekati 0%.

Sementara, sekalipun deflasi stabil diinginkan oleh negara yang hutangnya rendah, tetap saja akan menjadi malapetaka karena dinamisme hutang terhadap leveraged economy, inilah yang dijelaskan oleh ekonomi AS Irving Fisher dalam tulisannya yang terkenal di tahun 1933 berjudul “Debt-deflation Theory of Great Depressions”.

Sebuah lembaga riset Belgia, Bruegel, misalnya mengatakan resiko deflasi membuat Italia dan Spanyol masuk dalam “runaway debt trajectory” karena debt stock naik terhadap  akibat turun/statisnya nominal base.

Setiap poin persentase penurunan inflasi membuat Italia harus menaikkan primary budget surplus-nya sebesar 1,3% dari GDP untuk menstabilkan hutang stabilize debt – sebuah hal yang sulit.

Untuk melihat bagaimana tekanan inflasi atau ancaman deflasi Eropa berikut laporan Tyler Durden dari www.zerohedge.com:

 

European Inflation Has Biggest Monthly Drop On Record

February 24, 2014

For those who have been following the abysmal loan creation in Europe, which recently dropped to an all time low…

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… today’s inflation, or rather make that deflation; data out of Europe should not come as much of a surprise. Then again, with January inflation posting the biggest drop in history, when it tumbled by a record 1.1% from December levels, even the skeptics may be stunned by how rapidly deflation is gripping the continent.

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On an annual basis, Euro area inflation rose by 0.8% for the second month in a row and the 4th month of sub 1% annual inflation in a row. At this rate, Europe will enter outright deflation in a few short months.

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Broken down by country:

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Reuters explains:

         Euro zone consumer prices fell in January at their fastest ever pace on a monthly basis, dragged down by a slump in the cost of non-energy industrial goods, keeping annual inflation   well below the European Central Bank’s target.

         Inflation rate in the 18 countries sharing the euro dropped by 1.1 percent in January when compared with December, keeping the annual inflation rate at 0.8 percent for a second month in   a row, the EU’s statistics office Eurostat said.

         The annual inflation rate was revised from 0.7 percent, which Eurostat released in a flash estimate on January 31.

         Economists polled by Reuters expected consumer price inflation to accelerate slightly to 0.9 percent in January, a level that is still well below the ECB’s target of close to but below 2 percent.

         The annual rate was influenced by a 1.2 percent decline in the highly volatile prices of energy, while the monthly decline was hit by a 3.9 percent fall in prices of non-energy industrial goods and a 0.4 percent drop in the price of services.

         The ECB, which cut its key interest rate to a record low of 0.25 percent in November, is expected to stay put until mid-2015 unless money market rates rise and the euro strengthens.

         …

         Italy, the euro zone’s third largest economy, showed a 2.1 percent month-on-month decline, the biggest drop from among all euro zone members.

         In Germany, Europe’s largest economy, consumer prices fell by 0.7 percent on the month, keeping the annual inflation rate steady at 1.2 percent, with both figures coming below expectations.

And now back to Mario Draghi who which struggles to find new and improved ways of making sure European purchasing power continues to decline in light with the canons of Keynesian fundamentalism.

Source: Eurostat

 

Laporan Global Market Perspective dari Elliott Wave International’s juga meyakini bahwa Eropa dibayangi deflasi.

Berikut laporan singkat namun luar biasa mengenai EUROPEAN ECONOMY & DEFLATION:

 

“Even as authorities loosen regulations for over-extended banks, the deflationary forces that will ultimately destroy them are growing stronger.

This chart of Swiss, EU and British consumer prices shows that disinflation (declining rates of inflation) has persisted for decades, with the downtrend recently gaining momentum in Britain and the EU 27.

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In fact, for the first time since 2009, the Bank of England actually met its 2% inflation target last month.

The UK has therefore joined Europe, Japan and the United States, with all four countries showing official inflation rates that are at or below 2%.

Switzerland actually shows the weakest price appreciation on the chart, as year-over-year CPI rose at just one-tenth of 1% in January.

Disinflation will finally surrender to deflation when these charts cross the zero line and stay there. Yet, despite the trends, disbelief about Europe’s deflationary future prevails.

A January Bloomberg poll, for instance, finds record improvements in economic optimism. At 49%, the percentage of Bloomberg subscribers who say the euro zone economy is improving tripled its reading from one year ago.

The percentage also reached its highest level since Bloomberg first asked the question in September 2011.

Likewise, 72% of respondents said the U.S. economy is improving, which is up from 53% a year ago. And 59% say the overall economic outlook is getting better – also up from last year.

In contrast, just 14% said that stocks were in a bubble, which was down from 20% last November.

Financial experts also see blue skies ahead. “The lower inflation is part of the economic recovery and the restructuring and it’s inevitable,” argues Eurogroup President Jeroen Dijsselbloem. He adds that he’s not particularly worried that inflation will fall further.

It’s exactly this kind of widespread nonchalance, however, that more or less guarantees Europe’s deflationary future.

In October 2013, when a Marketwatch columnist called deflation in Britain “about as likely as sunbathing in October,” we countered that economic trends tend to reverse much like stocks trends do: when people least expect them.

To illustrate the point, we depicted the tight correlation between commodity prices and public attitudes about future inflation, showing that the previous two big spikes in UK inflation expectations – 4.4% in August 2008 and 4.2% in August 2011 – foreshadowed major peaks in the Thomson/Reuters Jefferies CRB Commodity Index.

Our accompanying discussion concluded:

         Just as widespread bullishness contrarily signals and impending peak in stocks, elevated public    perceptions about inflation tend to coincide with peaks in the price of raw materials. As stocks fall and social mood waxes negative, the reality of deflation should send both of these indexes well below their 2009 lows.

         –European Financial Forecast,

         November 2013

The CRB index remains locked in a relentless downtrend, yet with inflation expectations still stuck at 3.6% (way too high in our opinion), commodity prices and inflation rates are destined for much lower levels.

As with stocks, the crowd will catch on only after it’s too late to take action.”

 

What Do the Charts Say?

Jadi apa artinya bagi langkah ECB mendatang?

The Wall Street Journal, mengutip chief economist di IHS Global Insight London yang mengatakan “he expects the ECB to take more action early in 2014, “most likely” as another longer-term loan. It is “highly possible” that a future loan would be “tailored specifically toward bank lending.”

Atau, jika melihat penurunan EUR Kamis kemarin, ECB bisa mengejutkan lagi dengan melakukan langkah lebih besar dari sebelumnya, yang secara konvensional sudah diterima, dan tidak hanya berupa penurunan suku bunga namun berpotensi menambah QE.

Bahkan, setelah sejumlah kegagalan sterilisasi SMP, ternyata ECB tidak sungguh melakukan sterilisasi pada episode QE-nya sebelumnya.

Terkait dengan ini, saya punya 2 laporan bagus dilengkapi dengan grafik-grafik menarik. Yang pertama dari Tyler Durden di www.zerohedge.com, yang memperkirakan Draghi sudah siap untuk mebali menembakkan ‘bazooka’-nya:

“It would appear that 1.39 EURUSD is the line in the sand for Mario Draghi. As pressures build on European competitiveness, Draghi appears to have finally got sick of China buying EURs to diversify its FX reserves away from USDs. This time “whatever it takes” is to drag the EUR lower – on the back of suggestions that OMT 2.0 (new measures – double the effectiveness and just as non-existent) and guarding against deflation (not worried about inflation). The jawbone is working for now as EUR breaks down through 1.39.

China has been diversifying aggressively away from the US Dollar:

Via Bloomberg

Add China pushing the yuan lower and diversifying reserves away from dollar assets to the drivers behind the euro defying forecasts and rallying to a two-year high versus the U.S. currency, according to BNP Paribas SA.

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The upper panel shows the 18-nation euro reaching the strongest level since October 2011 and the six-month average of changes in China’s foreign reserves touching the highest since June 2011, according to data compiled by Bloomberg. The lower panel shows the yuan, after strengthening the past four years to an all-time high, slumped by the most on record last month amid speculation the People’s Bank of China will allow greater volatility.

China’s central bank is widely believed to have intervened heavily in February and this means markets will anticipate a period of the dollar selling versus the euro and other reserve currencies as these reserves are diversified,”

And so Draghi finally reached “Whatever it takes 2.0″…

  • *DRAGHI: EURO GAINS ‘INCREASINGLY RELEVANT’ TO PRICE STABILITY
  • ECB’S DRAGHI SAYS REAL INTEREST RATE SPREAD BETWEEN EURO ZONE AND REST OF WORLD WILL PROBABLY FALL, PUTTING DOWNWARD PRESSURE ON EXCHANGE RATE
  • DRAGHI – ECB HAS BEEN PREPARING ADDITIONAL NON-STANDARD MEASURES TO GUARD AGAINST DEFLATION, STANDS READY TO TAKE FURTHER DECISIVE ACTION IF NEEDED

*DRAGHI: TOO-LOW INFLATION NOW ‘MORE RELEVANT’ THAN TOO-HIGH

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It would seem, given previous levels and actions, that Draghi has given the market a bogey of around 1.45 for the next round of QE

This comes as the “Deflation Club” in Europe doubles to 4 members:

Signs of deflation strengthened on the Euro zone periphery Wednesday, with four countries now registering annual declines in consumer prices.

Data around the edges of the single currency area showed that consumer prices fell by 0.1% in February in both Portugal and Slovakia compared with a year ago. The two countries join Greece and Cyprus, where price declines are already running at an annual pace of more than 1.0%.”

Charts: Bloomberg

Mr. Gordon Long, mantan senior group executive di IBM & Motorola, pendiri dana modal ventura swasta, memiliki pandangan menarik dan potensi langkah kebijakan ECB ke depan.

Berikut sejumlah kutipan laporannya yang menjelaskan mengapa ECB melakukan QE:

“In the short term there is only one easy way out and politicians always take the easiest most expedient way.

The answer is for the EU through the ECB to ‘stand to the plate’ and take their turn at central bank money pumping. They have been the positive recipients over the last few years and now it is their turn.

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The just concluded G-20 Summit Conference in Sydney, Australia produced a document saying that another $2 Trillion needed to be added to the Global Economy, but blatantly avoided saying how this would happen.

Mario Draghi however was front and center in a staged press conference saying that the March 7th ECB meeting was pivotal on what the ECB’s plans would be going forward. Based on the German Bundesbank recently capitulating on the requirement for the ECB to “sterilize” monetary operations, it appears Draghi with the G-20 breathing down his neck has a green light to step up to the plate.

None of this should be a surprise. It is all playing out in a fully choreographed almost preordained play.”

Agar tetap ceria, berikut saya ketengahkan lelucon dan kartun jenaka untuk Anda yang berjudul The New Normal:

Four Worms in Church

A minister decided that a visual demonstration would add emphasis to his Sunday sermon. Four worms were placed into four separate jars. The first worm was put into a container of alcohol. The second worm was put into a container of cigarette smoke. The third worm was put into a container of chocolate syrup. The fourth worm was put into a container of good, clean soil.

At the conclusion of the sermon, the minister reported the following results: The first worm in alcohol: dead. The second worm in cigarette smoke: dead. Third worm in chocolate syrup: dead. The fourth worm in good, clean soil: alive.

So the minister asked the congregation, “What did you learn from this demonstration?”

Maxine was sitting in the back and quickly raised her hand. “If you drink, smoke, and eat chocolate, you won’t have worms!”

That pretty much ended the service.

Nico-186Terima kasih sudah membaca dan semoga beruntung!

Dibuat Tanggal 14 Maret 2014

Categories: Pasar Internasional Tags:

Apakah Emerging Markets Rentan Terhadap Fed Tightening?

March 13th, 2014 No comments

“Emerging-market assets are at risk as the tapering of the Federal Reserve’s stimulus program will probably trigger a reversal of $2 trillion in carry trades, according to strategists at Bank of America Merrill Lynch. Carry trades, where investors borrow in a country with low interest rates to fund purchases of higher-yielding assets elsewhere, helped developing nations raise foreign-exchange reserves by $2.7 trillion since the end of the third quarter of 2008, Hong Kong-based Ajay Singh Kapur and Ritesh Samadhiya at BofA wrote… The capital inflows spurred economic growth and inflated prices, particularly those of bonds and property, they said… The U.S. central bank has kept its benchmark interest rate in a range of near zero to 0.25% since 2008 and boosted the supply of dollars via its stimulus policy. That compares with borrowing costs of more than 13% in Argentina, 7.5% in Indonesia and 2.5% in Poland. ‘As the Fed continues to taper its heterodox policy, we believe these large carry trades are likely to diminish, or be unwound… We believe carry-trade driven emerging-market asset prices remain at risk, are a global deflationary threat, could drive defensive asset bids, and competitive devaluations.”

            — Bloomberg (Fion Li)

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Mantra yang selalu diucapkan para anggota dewan moneter bank sentral AS (FOMC) terhadap isu taper adalah: “Tapering isn’t tightening.”

Mungkin memang belum di AS, namun konsekwensi tidak langsung dari tindakan the Fed tersebut sudah terjadi di negara-negara lain.

Aksi sell off di emerging markets (pasar negara-negara berkembang) menjadi isu besar tahun 2014 ini, dan meskipun sentimen mulai membaik, hal yang terburuk belumlah datang.

Untuk menahan pelemahan mata uangnya atas dolar AS, banyak negara-negara berkembang yang harus menopang nilai tukar mereka masing-masing.

Bahkan, mereka juga terpaksa menaikkan suku bunga untuk menahan outflow maupun inflasi, meskipun GDP kuartalan turun.

Nothing matters to anybody until it matters to everybody, namun jika demikian maka bukankah itu terlambat?

Di saat bank sentral dunia perlu menyajikan sebuah front bersatu, justru terpaksa ‘pecah’ karena tapering oleh bank sentral AS menyedot arus modal dari negara-negara berkembang yang kondisinya jelek.

Dan mereka adalah “the Fragile Five”, yang terdiri dari Turki, Brasil, India, Afrika Selatan dan Indonesia.

Negara-negara itu teridentifikasi yang paling rentan terhadap dampak negatif dari penurunan investasi asing.

Jadi yang kita hadapi adalah pertanyaan krusial: “Is tapering tightening, or not?”

Menurut saya tapering tidak hanya tightening, tapi juga kita hampir pasti melihat dari awal tema yang akan berkembang di tahun ini.

Dan, Albert Edwards dari Société Générale memberikan klarifikasi dalam laporannya awal Februari lalu yang berjudul The “Freddie Kruger-Like Nightmare” For Stocks Is Coming:

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Tapering is tightening, which inevitably ends in recession, bailout and tears

 Our warnings throughout last year that an unraveling of emerging markets (EM) was the final tweet of the canary in the coal mine have still not been taken on board. The ongoing EM debacle will be less contained than sub-prime ultimately proved to be.

The simple fact is that US and global profits growth has now reached a tipping point and the unfolding EM crisis will push global profits and thereafter the global economy back into deep recession. Our thesis on how EM would be pushed to crisis was simple, especially as we saw close parallels with the 1997 Emerging Asia currency crisis.

We saw yen weakness further undermining an already weak balance of payments situation in the emerging world as a direct replay of 1997. A strong dollar/weak yen environment is typically an incendiary combination for EM, and so it has proved once again. Having reached tipping point the yen will often rally strongly as it has now and as it did in May 1997. This may or may not delay the impending EM implosion for a few weeks. Indeed the Thai Baht, the first domino to fall in the Asian crisis, briefly rallied strongly (vs the US$) in early June 1997, reassuring investors just ahead of its ultimate collapse.

There has never been any shadow of doubt in my mind that tapering = tightening, and I marvel that the Fed convinced anyone otherwise. A Fed tightening cycle inevitably plays a key role in triggering the next crisis (see below). Plus ca change, hey?

  • 1970 Recession/Penn Central Railroad
  • 1974 Recession/Franklin National Bank
  • 1980 Recession/First Penn/Latin America
  • 1984 Continental Illinois Bank
  • 1987 Black Monday
  • 1990 Recession/S&L and banking crisis
  • 1997 Asian currency collapse/Russian default/LTCM
  • 2007 The Great Recession/Collapse of almost the entire global financial system
  • 2014 Emerging Market collapse/deflation/recession/another banking collapse etc., etc.?

Additionally, we have now made it all too clear that there is no such thing as a market anymore – there is a carry trade, manifested typically by the level of the USDJPY – which is the ultimate driver of all risk. It is this trade that Edwards warns will no longer work as it results directly in EM collapse, as can be seen most recently as the source of the EM crisis of 1997.

Nico-168But the inevitable has occurred and fundamentals have caught up with the markets as they always eventually do. The recent slide in US equity prices has been entirely consistent with the profits outlook Andrew has been flagging for some months (see chart below).

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The market has at last awoken from the dream it hoped would last forever – you must have had one of those dreams which you hope you can get back to if you fall asleep again quickly. The pungent smell of coffee has now overwhelmed the hallucinatory vapors contained in QE. Commodities snapped out of their trance some two years ago and could not find their way back into that same dream-like state. Now it is equities turn.

The dire profits situation will only get worse as EM implodes and waves of deflation flow from Asia to overwhelm the fragile situation in the US and Europe.

… the slump in the recent ISM data may be the “straw in the wind” of what is to come. Certainly the three-month change of the leading indicator has now turned down sharply – even before the recent ISM data has been incorporated. We watch the unfolding EM crisis with increasing trepidation because we know how this story ends. We have been here before.

And even if the Fed resumes massive QE at some point as the world melts down, and markets desperately attempt their return to the dream trance, they will instead find themselves locked into a Freddie Kruger-like nightmare in which phase 3 of this secular bear market takes equity valuations down to levels not seen for a generation.

 

Pada 01 Maret 2014, James Gruber, penulis di media investasi mingguan “Asia Confidential,” membuat artikel yang masuk kategori WAJIB DIBACA mengenai cerita terkini drama yang terjadi di negara-negara berkembang.

Dan juga ada alasan-alasan mengapa dirinya yakin tekanan di pasar finansial belum berakhir:

 

Emerging Market Banking Crises Are Next

Financial headlines have rightly been dominated by the largest 7-day sell-off of the Chinese yuan on record. Everyone’s speculating whether it’s been a deliberate move by the People’s Bank of China (PBOC) or not. The consensus is that it’s been PBOC initiated to shake out carry trade speculators who’ve used low US interest rates to borrow low-yielding US dollars and buy the higher-yielding yuan and yuan-denominated assets. This before a move to increase the daily trading band for the yuan. A minority believe the yuan has unraveled of its own accord driven by a shortage of US dollars leading to the liquidation of yuan instruments. Either way, carry trades are being quickly unwound.

Asia Confidential thinks the vast majority of commentary has missed the underlying reasons for emerging market currency volatility, with the yuan being the latest example. What we’re really witnessing is a major rebalancing of global economic trade.

Prior to 2008, the US had a massive consumption bubble, financed by its current account deficit which exported U.S. dollars and fueled global trade. Since the crisis, US consumption has slowed but QE has stepped in to provide the U.S. dollar liquidity needed for world trade. With the tapering of QE, that dollar liquidity is diminishing. And emerging market currencies such as the yuan have to adjust to reflect real US demand. With or without PBOC intervention, that was bound to happen.

The concern for emerging markets is that this isn’t just a currency issue. The carry trades and subsequent inflows of capital have created substantial credit and real estate bubbles in many of these markets. The unwinding of these bubbles is likely to lead to banking crises in several countries, including China and China proxies such as Hong Kong, Australia and perhaps Singapore. 

The hit to global economic activity will hurt inflated stock markets. As well as commodities, particularly the likes of iron ore and copper which have been widely used as collateral to finance trade/purchases in China. The winners out of all this are expected to include the US dollar, given less dollar liquidity means reduced supply vis-a-vis demand. And US Treasuries too due to the deflationary consequences of the economic re-balancing.

Chinese whispers  

For years, the yuan has been a one-way bet. Even during the emerging market currency turmoil of last year, the yuan escaped unscathed and outperformed. Moreover, it’s done so with minimal volatility given a tightly-controlled trading band. That band involves the PBOC setting a daily fixing rate against the dollar around which the onshore yuan is permitted to rise or fall 1% a day.

Over the past week, things have changed rather dramatically. The PBOC guided the onshore currency weaker through higher fixes. The move caused consternation in some quarters. The one-way bet became two-way and many got burned.

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The PBOC hasn’t adequately explained the move and it’s left everyone to speculate about the ultimate reasons. Most are in little doubt that it’s been orchestrated by the central bank. 

The most common reason ascribed is that it’s a tactical move by the PBOC to introduce more yuan volatility before widening the trading band, a long-held aim of theirs. This could be right though it’s a clumsy way to go about it.

Another explanation is that it could be a move to bring onshore and offshore rates together before the trading band increase. By way of background, the onshore rate is obviously that within China itself. The offshore rate is via Hong Kong, where the yuan is better known as the CNH and trades without restrictions imposed onshore by Chinese authorities.

Two weeks ago, the spread between the CNH rate and onshore rate reached its widest since 2010. Some suggest this prodded the central bank into action.

A third explanation has been put forward also. That the Chinese want a weaker currency to help its exporters and support the economy. This could well have validity and the authorities wouldn’t exactly advertise if this were the case. It’s dangerous though as it could lead to capital outflows and tighter credit, thereby accelerating the country’s economic slowdown.

There’s an altogether different explanation though involving the yuan devaluation having nothing to do with Chinese authorities. The theory is that the yuan carry trade is unraveling of its own accord. Reduced US dollar liquidity triggered by QE tapering has resulted in reduced flows for the carry trade and the liquidation of yuan-related instruments. And that’s caused a surge in offshore CNH liquidity. 

It’s difficult to pinpoint where the truth lays. But we are more certain that this isn’t the end of yuan volatility as it isn’t just a China issue. And it isn’t just a carry trade issue. And it certainly isn’t just a QE tapering issue. It’s deeper than that and the threads go back to the global trade imbalances of pre-2008 and the policies since which have covered them up … until now.

 

The great economic rebalancing  

To better understand this, let’s step back for a moment. As everyone knows, the US dollar is the world’s reserve currency. Given this, the US has to run large trade deficits (where imports exceed exports) in order to export US dollars and lubricate global trade. Other nations need US dollars to conduct trade and build foreign exchange reserves which bolster their own currency and provide the asset base for the expansion of credit within their own country. 

The US had a massive consumption bubble prior to 2008. This was financed by its trade and current account deficit (trade is a large part of the current account). US consumption collapsed during the crisis and the current account deficit started to narrow. 

Then Bernanke stepped in with QE, which in effect financed US consumption and global trade. It prevented the pre-2008 economic imbalances from correcting.

US deficits have continued to sharply decline due to the domestic energy boom (reducing the reliance on oil imports), cheap and more competitive labor given the more than decade declines in the US dollar and the end of the consumption boom. But QE1, 2 and 3 have filled the gap to finance global trade.

Now that the Fed is tapering QE, that’s reducing the supply of US dollars into the global marketplace. Global macro strategists, Gavekal, in a report called US Current Account and Vanishing Global Liquidity, describe the impact on emerging markets:

“…if the amounts generating by the US current account are insufficient to meet overseas nations’ needs, then these economies will…be forced to either borrow dollars (not a long term solution), flog domestic assets or run down foreign exchange reserves. Hence, when I see central bank reserves deposited at the Fed falling, I know we are getting close to a “black swan” event, as dumping these precious “savings” is, for any country, always a desperate last resort.”

And a reduction in foreign exchange reserves at the Fed is exactly what’s happening now.

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It’s important to note, as strategist Vince Foster points out, reductions of foreign exchange reserves held at the Fed have usually preceded financial crises. And it should also be noted that the largest foreign exchange reserves belong to China and its reserves dropped sharply both before the 2000 downturn and the 2008 financial crisis. The expectation here is that China’s foreign exchange reserves may well start falling soon. This would shock many investors. [Emphasis mine]

More EM drama to come  

The good times were very good for emerging markets prior to mid-last year. Capital inflows led to currency appreciation which provided the liquidity for domestic investment and consumption booms. 

Since the 2008 financial crisis, emerging market foreign exchange reserves have increased by US$2.7 trillion, their monetary bases are up US$3.2 trillion and money supply (M2) has risen by US$14.9 trillion.

Unsurprisingly, that’s fueled mammoth property booms. Hong Kong and Chinese residential real estate prices have doubled over the past five years, while Singapore’s are up 70%.

Carry trades have partly financed the asset booms. Bank of America Merrill Lynch estimates that emerging market external loan and bond issuance has increased by US$1.9 trillion since the third quarter of 2008.

And the banks are at the heart of this and other financing. Thus, Hong Kong banks have been the go-to for the China carry trade. And their net lending to China itself has increased from 18% of Hong Kong GDP in 2007 to 148% now.

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QE is the trigger for an unwinding of all this. The weakest links, those countries with chronic current account deficits such as Turkey, have been hit first. Asia Confidential believes the next in line will be the countries where the largest credit bubbles have occurred.

And that’s where China comes into play. Those who insist that China doesn’t have a debt problem don’t get it. History shows that it isn’t the amount of debt, but the pace it’s gathered which matters when it comes to potential financial crises.

With this, China is in a league of its own. Since 2008, Chinese total outstanding credit has more than doubled. Its banking assets having grown by US$14 trillion, or the equivalent of the entire US commercial banking sector.

Credit growth in the years leading to the bursting of previous credit bubbles – such as the US pre-2008, Japan pre-1990 and South Korea pre-1997 – has been 40-50%. China’s credit growth has dwarfed this and it’s easy to see the dangers that represents.

We believe the next phase of this crisis will be felt in the banking systems of several countries. China is the obvious one and that’s already begun (with defaults in trust funds).

Hong Kong banks are among the most vulnerable outside of China. That’s not only because of the exposure to lending to the mainland. But overall bank assets now total around 800% of GDP. It doesn’t take a genius to work out the disproportionate impact that even a small percentage of those assets going bad would have on the city’s GDP.

Australia and Singapore don’t have the same direct China lending exposure but the risks to their respective banking systems are high also. The Australian economy is highly dependent on Chinese commodity imports and the country’s big four banks have financed a monstrous property bubble off the back of the decade-long mining boom. Moreover, the Australian banks rely on short-term external financing as loan-to-deposit ratios are close to 120%.

The Singapore banking sector is also at risk given its domestic credit boom which has seen bank assets increase to total 650% of the country’s GDP. Yes, Singaporean banks have large capital buffers but significant risk remains.

 

Winners and losers  

There are a number of commentators, particularly out of the US, who suggest that the emerging market crisis won’t have any impact on developed market economies. They’re deluded.

Emerging markets account for more than 50% of global GDP. Moreover, emerging markets ex-China represent a third of global imports. Including China, they account for 43% of imports. A slowdown in emerging markets will hurt their imports and therefore exporters in the developed world.

In addition, the profits of many US and European companies depend on overseas markets, particularly in the developing world. For instance, more than 50% of S&P 500 profits are generated outside of the US. 

So the emerging market crisis will substantially impact global economic growth. And stock markets, particularly elevated ones such as the US, are most vulnerable.

Commodities are likely to be hit too. China is the largest consumer of most commodities and a downturn there will reduce their previously insatiable consumption. Even precious metals may be impacted given the deflationary consequences of a China slowdown. Though bullish on gold, we suspect it may break key US$1,180/ounce levels and have a further lurch down before climbing again.

As for the likely winners as the emerging market crisis deepens, Asia Confidential would put the US dollar at the top. The reason is that a reduction in the exporting of US dollars will result in less supply amid growing demand. This could well result in a sharp spike in the dollar.

The fate of US treasury bonds is an interesting one. Declining foreign exchange reserves of emerging markets should mean reduced demand for treasuries. In theory, this should put pressure of bond prices. However, given accelerating deflationary forces, we’d suggest Europe and the US central bank will step in to plug the demand gap. 

 

What Do the Charts Say?

Meskipun emerging markets cenderung pulih dari tekannnya Januari lalu, pasar EM FX masih dalam tekanan signifikan, seperti dapat dilihat di grafik di bawah ini:

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Dan Michael Pettis memberikan catatannya sebagai berikut:

Any rebound will face the same ugly arithmetic. Ordinary households in too many countries have seen their share of total GDP plunge.

Until it rebounds, the global imbalances will only remain in place, and without a global New Deal, the only alternative to weak demand will be soaring debt.

Add to this continued political uncertainty, not just in the developing world but also in peripheral Europe, and it is clear that we should expect developing country woes only to get worse over the next two to three years.

Terakhir yang tak kalah penting adalah bahwa waktu dunia terakhir mengalami goncangan di emerging markets, posisi AS masih menjadi konsumen terbesar di dunia.

Namun, seperti ditunjukkan dalam grafik JPMorgan di bawah ini, kondisi saat ini sangat berbeda:

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Oleh karena itu perlambatan pertumbuhan di negara-negara berkembang (tidak hanya Asia, tapi juga Amerika Latin), meskipun diabaikan oleh mayoritas orang, mungkin akan lebih penting bagi kelanjutan pemulihan global daripada yang disebut-sebut media mainstream.

Agar Anda terus ceria, di akhir tulisan ini saya ingin mempersembahkan sebuah lelucon dan gambar lucu mengenai kebijakan luar negeri AS:

 

Everything’s Bigger in Texas

There once was a blind man who decided to visit Texas. When he arrived on the plane, he felt the seats and said, “Wow, these seats are big!” The person next to him answered, “Everything is big in Texas.”

When he finally arrived in Texas, he decided to visit the hotel bar. Upon arriving to the bar, he ordered a beer and got a mug placed between his hands. He exclaimed, “Wow, these mugs are big!” The bartender replied, “Everything is big in Texas.”

A little later, the blind man asked the bartender where the bathroom was. The bartender replied, “Second door to the right.” The blind man headed for the bathroom, but accidentally tripped and entered the third door. This door led to the swimming pool and he fell in by accident.

Scared to death, he started shouting, “Don’t flush, don’t flush!”

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Source: Sunday Funnies

 

Terima kasih sudah membaca dan semoga beruntung!

Dibuat Tanggal 11 Maret 2014

Categories: Pasar Internasional Tags:

Emas: Sudah Saatnya Beli Atau… Waspada?

March 11th, 2014 No comments

“There is a total supply of gold in the world. But to corner a market or squeeze a market, you don’t need to buy all the gold; you just need to buy the floating supply. Think of all the gold in the world, it’s about 170,000 tons. Think of a little sliver on top of it that is the floating supply available for trading. Gold that’s in the Comex or JPMorgan or GLD vaults is available for trading. Gold purchased by the Chinese will not see the light of day again for the next 300 years, and is not available for trading. So with the gold going from West to East, and from GLD to China, the total amount of gold is unchanged, but the floating supply is declining rapidly. This means that the paper gold that sits on top of the floating supply is becoming more and more unstable and vulnerable to a short squeeze, because there is not enough physical gold to  support it. So that’s likely to collapse at one point and lead to a short squeeze and heavy buying.”

– James Rickards, the author of the national bestseller “Currency Wars”

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Belakangan ini mungkin sebagian besar para pecinta emas berharap-harap cemas, seiring dengan naiknya harga logam mulia menembus $1300/troy ounce untuk pertama kalinya sejak November 2013, waktu menjelang the Fed mulai melakukan QE-taper.

Selain itu kenaikan harga emas juga menembus MA-200 hari untuk pertama kalinya dalam kurun waktu sekitar setahun, seperti Anda dapat lihat di grafik di bawah ini:

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Sementara di awal pekan lalu, kenaikan harga emas mencapai level tertinggi dalam 4 bulan di $1354,80.

Dampak dari keputusan the Fed untuk mengurangi stimulus berupa program pembelian obligasi, yang adalah katalisator kenaikan harga emas sebelumnya, menyebabkan para trader cenderung menahan diri berbulan-bulan lamanya.

Emas pun merespon negatif terhadap awal QE-taper (17-18/Des) tahun lalu dan mengalami tekanan besar. Sehingga mengakumulasi penurunan emas di tahun 2013 sebesar 28%, dan merupakan penurunan tahunan pertamanya dalam 13 tahun.

Kemudian, hingga saat ini, harga emas cenderung naik sejak penurunan tersebut.

Namun di beberapa pekan ke depan perlu mewaspadai tantangan yang akan dihadapi kenaikan harga emas tersebut.

Jika kenaikan mampu bertahan kembali di areal kuncinya, yang adalah resistance di $1350, maka kenaikan dapat berlanjut.

Level tersebut menarik untuk diperhatikan dalam beberapa hari ke depan.

Dan pada Maret ini, kenaikan harga emas telah dua kali mencoba areal $1350 tersebut, kemudian masing-masing diikuti kejatuhan ke areal $1330an. Dan (laporan ini dbuat, di sesi Asia Senin 10/Mar/2014), harga emas bergerak di kisaran $1330 hingga $1340).

Bahkan, untuk mengingatkan, bahwa constructive price action emas tahun ini menunjukkan bahwa emas masih dalam bear market-nya saat ini.

Saya akan lanjutkan pandangan emas saya, yang masih melihat bahwa kenaikannya belakangan ini hanya sebuah bear market rally sampai ada konfirmasi yang menunjukkannya.

What Do the Charts Say?

Larry Edelson, seorang ahli emas dan logam mulia terkemuka dunia dan editor pada Real Wealth Report, Power Portfolio serta Gold and Silver Trader, memberikan peringatan keras di tulisan terbarunya yang berjudul: Don’t Be Fooled by Gold’s Glitter.

Berikut tulisannya:

“Almost everyone thinks gold has bottomed. And almost everyone also thinks I’ve been dead wrong on gold.

I wish I were wrong. I wish gold has bottomed. But there is nothing, and I mean nothing, that convinces me that my models on gold are wrong. Only in the very short-term.

Keep in mind my models on gold have never missed one single major turning point since 1978. Not one.

There’s always a first time for everything, so with that in mind, I have been studiously watching the gold market this year — more than ever before — fully open to the idea that I could be wrong.

But as I just said, I have yet to be convinced that my models are wrong.

First, and foremost, the January low that did not happen merely means the gold market is undergoing a “cycle inversion” — one that pushes the final low off to the next important cyclic period for a major low, which is May.

Second, no major buy signals have yet been hit in gold during this cyclic rally inversion.

The most important of those buy signals are a weekly close above $1,320.40 followed by a weekly close above $1,449.50.

We are approaching the $1,320 level now. If gold closes above it on a Friday basis, you can expect a further rally. But I doubt very much gold can close above $1,449.50.

Third, the trading pattern of gold’s recent rally is not that bullish. In Elliott Wave terms, which I often use as an additional tool, gold is in a fourth wave upward correction, one that is accompanied by declining trading volume.

You can see it in this chart. Notice the sloppy upward slopes of the recent rally. It’s choppy, characteristic of a correction.

Nico-155

At the bottom of the chart, notice how the volume of trade has been declining. That, too, is characteristic of a bounce and not the start of something much bigger.

Also note the Fibonacci extensions I have drawn on the chart for you. If gold’s rally ends near its current level — an “e” wave of a fourth wave upward correction — then the next leg down, the fifth wave, would find gold falling to at least $1,062.50, and more likely, even lower, to about the $967 level.

I find it fascinating that on my system models I have major support and sell signals at the $1,059 and $962 levels.

Derived from an entirely different model that has nothing to do with Elliott Wave Theory — when the two point to the same conclusions and support, I consider it a kind of double confirmation that my models are going to end up being right.

Fourth, the double bottom that’s been made in gold, at $1,180.81 last June and $1,184.50 on Dec. 31, are way too close together in terms of price, to hold.

Double-bottoms are a misnomer. They almost always give birth to a temporary rally, but then the market turns south again and demolishes the double-bottom, spiking to substantial new lows.

I believe the same thing is going to happen to the June/December 2013 double-bottom in gold (and silver as well).

There are many more reasons I believe the current rally is nothing more than a correction and that new lows are likely ahead, for both gold and silver.

But right now, I want to outline the two main scenarios for gold going forward.

Scenario A: Gold’s rally stalls at current levels or slightly higher, and then it resumes its downtrend. That’s the scenario right now according to my models. New lows will then be seen by May, and the bear market will finally be over.

Scenario B: I am dead wrong and gold continues higher, taking out the $1,320 level and then moves even higher, taking out $1,449.

In this scenario, gold would still retrace a very large part of its first wave up and decline back to the mid or low $1,200 area before resuming its new bull market.

In other words, even if I am dead wrong, we would have a chance to get on board at much lower levels.

What about any further rally from current levels? Should you get in now? That’s up to you. I can only tell you what I am personally doing and recommending. The answer is no.

I prefer to buy gold, or any market for that matter, when my models give me a 90 percent probability that the bottom is in. Right now, those models are saying that there is less than a 25 percent chance we have seen the bottom.

What about mining shares? Or silver, platinum and palladium?

Same applies. I do not believe any of them have bottomed.

I know it’s tough to watch gold go up and not participate. It’s tough for me too. But discipline and patience is key. And in the rare event that I’m wrong, keep in mind that …

One, you will still get a chance to get on board during a major pullback. And …

Two, gold is going much higher over the next few years, to over $5,000 an ounce. So if you miss a $100 or $150 move, it’s no big deal. It’s always far better to buy when the odds are on your side.”

Selain itu John C. Burford, editor di MoneyWeek Trader, yang yakin bahwa kini posisi emas sedang di persimpangan dan perlu waspada di posisi tersebut:

“Gold received a boost from Mr. Putin on Monday over the Ukraine affair. I spent the weekend trying to remember my school history lessons and recalled that in the Crimean War of the 1850s, Russia was defeated. But I believe the result would be a little different this time. That said, any shooting war seems like a very distant prospect, simply because nations today are so intertwined economically. Damage to one means damage to all.

Either way, gold is getting closer to my target at the $1400 area that I set last year.

I’ve also noticed that I’m no longer the only one with this figure as a target. I’m reading many such forecasts lately. This is inevitable when gold has been in a solid two-month rally, lifting prices by about $180. Remember, markets make opinions.

And contrarians use this knowledge to get on board a new trend early.

 

Why I’m cautious about the gold bull market

Two months ago, gold had few friends – bullish sentiment readings were around 5%, which is about as low as it could possibly reach. And that was the ideal time to start looking for reasons to go against the majority opinion. This bearish opinion was set in place by the relentless decline off the $1800 high in October 2012.

But I do not use sentiment readings alone to justify a trade! I only use them to confirm a trade which I have researched by my usual methods. Taken together, this is a powerful package.

In December, the bear market was over a year old and was fully entrenched in people’s minds. There was even a solid story behind the decline (stocks good, gold bad). So, just when the dog had herded all of the sheep into the bear’s pen, the bull appeared!

But two months later, bullish sentiment has rocketed to around the 80% area – a level where previous tops have been made. It is unusual to read a short-term bearish opinion today.

This is making me very cautious for the very same reason that I became bullish two months ago.


The market has hit an important resistance level

Another reason I’m proceeding with caution is that at this week’s high of $1350, the market has hit an important resistance level – the closing of the October gap, which I have pointed out before:

Nico-156

But that’s not all. The $1350 level is also chart resistance. I have placed arrows where major market turns have occurred. The market believes the $1350 level is significant. My conclusion: it would take a big effort to push well above this level in the near-term.

Gazing at the daily chart above, I am having great difficulty placing any major Elliott waves on the rally!  In a two-month span of trading, this is very unusual, especially in the gold chart. The rally has been without even a minor setback. My conclusion: this rally could be the first large wave of an unfolding pattern – say an A wave of an A-B-C, or perhaps a wave within a very large triangle.

Nico-157

Here are two possibilities (there are more!). My purple A and B waves are as I had them earlier this year. We are currently in purple wave C. This C wave could terminate here, or it could extend above my downtrend line.

If my excellent downtrend line is operative, and it reinforces the resistance mentioned above, then the market could bounce down from here. That seems to be the path of least resistance.

After that, the market could find support from late–to–the–party bulls who were waiting for a dip to get long. This would push the market back up to my downtrend line. And another big test of the bull market’s strength would ensue.

The other valid possibility is for the resistance at $1350 to be overcome within the next few days and produce this picture:

Nico-158

Here, the market would move above my downtrend line to complete the C wave, which would also complete wave 4. My guess is that there are many buy-stops placed above $1350 by old bears who have retained their positions throughout the rally.

If this occurs, the market will then decline to new lows in wave 5, which should approach the $1000 area.

All of my analysis suggests that the market is at critical juncture as it closes in on my $1400 target. If the market does break above $1350 convincingly, then my best guess is that the market will fall short of the precise and now widely-touted $1400 target.

History lessons for traders

You may recall that in 2011 when the market was in a steep ascent, a very common target was $2000. The actual top fell $80 short. Anyone expecting a $2000 print is still waiting.

Likewise, in October 2012, when the market was also in full rally mode, a common target was $1800. The actual top fell $4 short before peeling away.

The lesson here? When a round-number target is widely anticipated, it is rarely hit on the nose. If you have a trade, it is usually best to look to exit as common targets are approached.

Finally, I will leave you with this thought. If, like me, you can remember the huge gold bull market in the 1970s that produced a spike high above $850 in late 1979, then today’s Russian invasion of a neighboring country should ring a few bells.

Back then, Russia invaded Afghanistan because of the problems created by insurgents in that country. Plus ça change. The concern in the West was that the Cold War could rapidly turn into a hot one. Tensions ran very high.

And the very date of the massive invasion across the border marked the exact top in gold. The knee-jerk reaction of the market to this event was to push gold higher. But buying quickly became exhausted and it was downhill from then on for many years. It was a classic ‘buy the rumor, sell the news’ event.

But that was a grinding shooting war which resulted in Russia withdrawing with its tail between its legs. Today, conditions are vastly different. But all the same, could today’s events in the Ukraine herald at least a minor top in gold?”

Why should you keep on buying gold?

Beberapa paragraph berikut akan berisi mengenai komentar dari Grant Williams, portfolio manager di Vulpes Precious Metals Fund dan sekaligus strategy advisor untuk Vulpes Investment Management Singapura, bahwa tidak banyak orang yang sungguh mengetahui prinsip fundamental untuk investasi di emas (dan perak) – meskipun tak terhitung pembahasan mengenai emas dari para pengamat:

“So these anti-gold idiots are just that, idiots, or else they have the memory of a goldfish, because currencies come and currencies go, as sure as night follows day. It is the natural order of things. And as you can see, it’s not about trading gold to get rich or getting long gold or buying one by two call spreads or getting fancy, it literally is about protecting yourself in the end. It’s not like Williams got rich. He just stayed rich. Everyone else got poor.

It’s not like Williams got rich. He just stayed rich. Everyone else got poor.

That’s it. Right there.

If you talk to most people in the West about gold, they have no idea about the price or its recent direction. Narrow your sample audience down to those with a passing interest in finance, and they will likely know that gold is an awful investment whose price only goes down. (Had we conducted this little survey in 2011, the results would have been different, but that only illustrates the point.)

Ask a random group of people in the East about gold, however, and the conversation is completely different.

In this part of the world, people talk about how much gold they (or their parents or their grandparents) own. They will tell you stories of the first time they handled a gold coin (usually as a child), and they will know the price but not have much of an opinion on how good or bad gold’s performance has been — it will be far less relevant to them. They just know that you don’t trade gold; you own it.

To further illustrate this point, let’s talk about our old friends the world’s central banks.

The chart showing the 25 largest central bank holders of the world’s gold looks like this:

Nico-159If we take a look at the changes in those holdings between 2008 and 2013, an interesting phenomenon emerges: central banks in the East, as their reserves have grown, have been accumulating gold:

Nico-160

Since 2008, the central banks of China, Russia, India, Turkey, Saudi Arabia, Thailand, and the Philippines have increased their gold holdings on average by 119.67%.

Central banks continually rubbish gold as a worthless asset class because it constricts their ability to produce money at the push of a button. Not only that, but it offers their citizens the means to reduce their reliance upon a nation’s fiat currency — one has only to look at the goings-on in India last year to see what THAT looks like.

Deep down, though, central bankers know what gold is for and why you hold it. They know.

In 1999, a group of central banks came together through the Washington Agreement on Gold to jointly manage sales of the precious metal.

The Washington Agreement worked when central banks were selling their gold because there were always buyers, at lower and lower prices — those were the investors soaking up the bullion.

NOW we have a bunch of central banks aggressively trying to BUY gold; and what they’re finding (unsurprisingly) is that the investors aren’t sellers, so the only people left from whom to acquire gold are the traders — and they have a very limited supply of actual metal.

Nico-161

When Western central bankers rubbish gold as a “barbarous relic” or, as in the case of Ben Bernanke shortly before he started his job at The Brookings Institution left office in January, admit to a complete lack of understanding of it, does it not strike you as strange that, having accumulated significant stockpiles of gold over the years, they aren’t in a hurry to swap any of it for paper money (well, with the notable exception perhaps of the United Kingdom, thanks to the antics of Gordon Brown, King of the Idiot Chancellors)?

It shouldn’t.

Gold is held by Western central banks for exactly the same reason individuals ought to hold it: protection.

Central banks are accumulating gold because it cannot go BANG! like fiat currencies do.

Individuals should be doing the same — not being sidetracked by the distractions.

It’s not about price. The story Jared shared with us demonstrates that beyond any doubt.

If you own gold, it will do all the heavy lifting for you when the time comes.

And that’s where Grant Williams gets really deep in his latest excellent letter…

TTMYGH_17_Feb_2014

 

Di akhir laporan ini, saya akan menyertakan 2 gambar lucu terkait krisis Ukraina saat ini:

Nico-162

Nico-163Terima kasih sudah membaca dan semoga beruntung!

Dibuat Tanggal 10 Maret 2014

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