Showing posts with label Inflation. Show all posts
Showing posts with label Inflation. Show all posts

Sunday, November 10, 2024

The Illusion of Control: The Fed's Quiet Coup d'État | Gerry Nolan

As Mike Lee states, the Executive Branch was meant to be under the President’s executive branch and direction. And yet, the Fed remains the ultimate untouchable, a fortress of financial power immune to democratic oversight or any real accountability. Let’s face it: The Fed is not about serving the people; it’s the nerve center of a Ponzi scheme so vast that it makes Wall Street look like pocket change.

 » The Federal Reserve isn’t a public service, it’s the vault where the
sovereignty of the American people was locked away a century ago. «

For over a century, the Fed has held the American economy in a chokehold, dictating monetary policy in ways that serve the banking elites and global financiers, while keeping citizens in perpetual debt-enslavement. It’s not a “politically independent institution” as they like to spin it - it’s a profit machine, designed to siphon wealth upwards and keep the masses at bay with breadcrumbs of credit and endless inflation.

 » The Fed is a profit machine, designed to siphon wealth upwards and keep
 the masses at bay with breadcrumbs of credit and endless inflation. «

The Fed controls interest rates, injects trillions into the economy at will, and manipulates the currency supply, all without a single vote from the American people. True sovereignty would mean a government with control over its own currency, accountable to its citizens, not be held to private bankers. But ending the Fed? That would mean dismantling the very backbone of U.S. financial imperialism, a move that would bring about sovereign economic control, yet will never happen under the current system of oligarchic “democracy.”

The real question isn’t whether Trump (or any president) could rein in the Fed; it’s whether the American people will ever realize that the Federal Reserve isn’t a public service, it’s the vault where their own sovereignty was locked away a century ago.

The Fed's Ponzi machine may be untouchable, but the illusion of freedom is slipping. How long until the curtain falls?

Quoted from:

Wednesday, October 30, 2024

Global MAGA-nomics | Francisco José Fernández-Cruz Sequera

The re-election of Donald Trump will lead to significant shifts in US economic and foreign policy, emphasizing unilateral protectionism and high tariffs aimed at boosting domestic production and safeguarding American interests. This 'MAGA-nomics' approach may impose tariffs of 10% to 20% on all imports and up to 60% on Chinese products, intending to reverse US deindustrialization and create jobs in key sectors.

MAGA-nomics: The war Trump will wage in 2025.

Trump's trade rhetoric portrays free trade as detrimental to the US economy, claiming trade deficits indicate weakness and job losses. His strategy seeks not only to protect the domestic market but also to pressure other nations to enhance market access for US goods. However, such mercantilism poses risks, including potential retaliatory tariffs from other countries, which could escalate costs and inflation both in the US and globally.

 Chronicles of Western Collapse.

A drastic tariff increase could harm American consumers by raising prices and potentially increasing inflation. The confrontation with China is particularly complex, as high tariffs may prompt China to devalue its currency, exacerbating internal economic issues while potentially triggering further trade conflicts.

The European Union, a major US trading partner, would likely suffer from these tariffs, which could significantly impact its economy amidst already existing challenges. Projections indicate that a 10% tariff on EU imports could reduce the Eurozone's annual GDP growth, further straining economic recovery.

 High tariffs, radical unilateralism, and the end of globalization as we know it.

Emerging markets like Vietnam, India, and Mexico may benefit as companies relocate production away from China, realigning global supply chains and potentially harming economies in Africa. The International Monetary Fund estimates that escalating trade disputes could reduce global economic growth, affecting millions worldwide.

Trump's approach extends beyond economics to form a coalition against China's influence, integrating defense strategies within economic policies (“Free and Open Indo-Pacific”). This could deepen geopolitical tensions and potentially lead to a new pro-China bloc. The historical precedent of protectionism, such as the Smoot-Hawley Tariff Act of 1930, illustrates the risks of such policies, emphasizing the interconnectedness of global economies and the potential for widespread negative repercussions.

Tuesday, October 29, 2024

Fed Policy-Driven Super Rallies and Corrections in US Stocks | Sven Henrich

The US market is at a critical juncture with a contentious election, a Fed meeting, and numerous earnings reports on the horizon. A significant liquidity rally is underway, raising hopes for a year-end rally, yet concerns about a potential corrective move linger, especially after an 11-month rise. Despite strong bullish sentiment, skepticism remains due to insufficient changes in underlying conditions and earnings not meeting expectations. The S&P 500 is now at approximately 5,800, with some analysts projecting levels as high as 6,600, but these optimistic forecasts prompt concerns about sustainability.

Super rallies and corrections in the S&P, driven by interest rate cuts and hikes (2016–2024).
 
Liquidity-driven super rallies, influenced by Fed policy on interest rates, are characterized by prolonged market increases with minimal price discovery. The first major super rally in the above chart followed the earnings recession of 2015-2016, fueled by tax cuts and global quantitative easing. Subsequent rallies occurred despite rate hikes, indicating a strong influence from central banks and government policies. These rallies often persist until liquidity conditions shift, such as through rate increases or unexpected events. 
 
Currently, global central banks are signaling easing policies, contributing to the ongoing liquidity rally. Fiscal dominance, marked by significant deficits, plays a crucial role in this environment. The unprecedented $1.6 trillion deficit in 2023 raises questions about recession potential amid fiscal stimulus. Past experiences show that downside movements typically arise when liquidity changes. The current market situation highlights a disconnect between strong policy support and underlying economic conditions. Overall, these factors suggest that the rally extend through the end of the year or into 2025, but risks remain.
 
Reference:

Markets expect the Federal Open Market Committee to 
cut interest rates again by 0.25% on Thursday, November 7.
 
The median Nasdaq 100 (NDX) return from October 27th to December 31st is +11.74% since 1985.  
The median S&P 500 return from October 27th to December 31st in election years is +6.25% since 1928. 
 

Friday, October 25, 2024

Hidden Signs and Obvious Clues | Janet Yellen


The moment United States Secretary of the Treasury Janet Yellen uttered the phrase "the dollar is the world's reserve currency", the coat of arms of the US Treasury Department fell off her lectern and crashed to the ground.


S&P Cycle Analysis - Time and Price Projections Update | Steve Miller

The upcoming week marks the pre-election period, where heightened election anxiety and a significant earnings schedule are expected to drive high volatility. This trend is likely to continue through election day. Historical analysis shows that the September to November timeframe has often been associated with increased risk, frequently leading to substantial market corrections.

SPY (weekly bars), the MACD, and the extreme stretch between the 13-week and 89-week 
moving averages, which historically always leads to extended corrections.
 
Stocks have demonstrated remarkable resilience, displaying behavior that can be characterized as extreme. The above weekly chart of the SPY highlights this dynamic, tracking the moving average convergence divergence (MACD) alongside the distance between the 13-week and 89-week moving averages. Currently, the MACD indicates an unusually wide gap between these averages, suggesting a potential correction on the horizon.

 SPY (weekly bars), six-month cycles, three-month cycles.

When such corrections occur, they can be quite severe. Although the market has remained strong, November and December are anticipated to experience downturns due to the current extremes, which could lead to several challenging weeks ahead. Nevertheless, broader analysis suggests that the bull market may extend into 2025 before facing a significant downturn, potentially resulting in years of low or negative returns in the stock market.

 SPY (daily bars) and 21-trading day cycles with projected ideal troughs around 
November 6 (Wed) and December 4 (Wed), with a margin of ±3 trading days.

An examination of the SPY across various timeframes, including weekly and two-hour metrics, reveals a deterioration in the two-hour indicators, often the first sign of an impending correction. Historical examples, such as the market's reaction following the 2016 Trump election, highlight the potential for volatility. On that occasion, the Dow fell nearly 800 points before rebounding. Similar large movements are anticipated in the days leading up to and following this forthcoming election. While signs of a downturn have been expected for weeks, the market continues to set the course, underscoring its ultimate authority.

 

Thursday, October 17, 2024

Strong NYSE Breadth Indicates Liquidity is Abundant | Tom McClellan

Strong NYSE breadth says liquidity is plentiful.

A higher number of advancing stocks suggests bullish sentiment, 
more declining stocks bearish sentiment.


"No need to fear S&P 500 new all-time highs … until they cease."

Wednesday, October 9, 2024

Budget Deficit Bullish for S&P 500 and Gold | Tom McClellan

The final stats are in for fiscal year 2024, and the federal debt in the U.S. grew by $2.297 trillion versus a year earlier, and as of September 30, 2024, the total debt stood at $35.465 trillion. 

 
[...] A rising debt load is a horrible thing, but it is a bullish thing. And trying to pay down the debt is a bearish thing. [...] And deficits are also really bullish for gold too.
 

Sunday, September 29, 2024

S&P 500 Seasonal Pattern for the Presidential Election Cycle 2024 - 2027

 S&P 500 Seasonal Pattern for the Presidential Election Cycle 2024 - 2027.
4 Year Presidential Cycle in line with the Decennial Cycle.

The chart above is an attempt to merge the Decennial Cycle with the Four-Year Presidential Election Cycle by creating a composite of all US presidential elections that took place since 1900 in the fourth year of a decade (1904, 1924, 1944, 1964, 1984, 2004). 

 S&P 500 Seasonal Pattern for the Election Year 2024.
 
S&P 500 Seasonal Pattern for Q4 of the Election Year 2024.
 
 S&P 500 Seasonal Pattern for October of the Election Year 2024.
 
 S&P 500 Seasonal Pattern for November of the Election Year 2024.
 
 S&P 500 Seasonal Pattern for December of the Election Year 2024.

 S&P 500 Seasonal Pattern for the Post-Election Year 2025.
 
S&P 500 Seasonal Pattern for Q1 of the Post-Election Year 2025.


Cross check dates with historical trends, price probabilities, news calendar, Hurst cycles, etc.

The four-year presidential election cycle has a profound impact on the economy and the stock market, with a distinct pattern emerging over time. Notably, the four-year cycle has become a more significant driver of market behavior than the decennial cycle, except in extraordinary years such as those ending in five and eight. In recent decades, the US has experienced a period of unprecedented prosperity, with returns distributed relatively evenly across the decade. Fourth years, in particular, have tended to perform better than average. Looking back, the last six election years ending in four (2004, 1984, 1964, 1944, 1924, and 1904) the S&P 500 averaged a full-year gain of 14%.

 Decennial Cycle: Average annual change in the DJIA (1881-2024).

The 5th year is by far the best year of the decennial cycle. In the Dow Jones Industrial Average out of the last 14 "5th years", 12 were up averaging a return of 26
% per year. The only two 5th years that have ever been negative in the history of the DJIA were 2005 (-0.61%) and 2015 (-2.2%).

See also:

Friday, September 27, 2024

1986-2024 S&P 500 Index Analog Projection into Early December


On a day to day basis the analog between S&P 500 closing prices of 1986 and 2024 had a 95% positive correlation over the past 180 trading days, which is the period since the beginning of 2024. Of course, only time will tell whether this correlation continues. With that in mind, the analog projects the upcoming swing highs and lows for the month of October to be more or less in line with Jeff Hirsch's average seasonal chart for October in election yearsFrom the latest all-time high of September 26, the next swing low is projected to occur on October 9 (Wed), followed by a high on October 18 (Fri), and a potentially lower low around October 23-25 (Wed-Fri). Then a rally is expected to occur into November 29 (Fri). Note that in this context, direction is more important than price levels. The average S&P 500 return during October was slightly positive between 1950 and 2023, with 45 up years and 29 down years, and an average return of 0.75%.

Seth Golden is extremely optimistic about 2025: "From September 2023 to September 2024, the S&P 500 has been up greater than 30%. Historically, when the S&P 500 >25% over the trailing 12 months or more into a rate cut, stocks have NEVER been lower a year later and up close to +20% on average. There is no soft landing if there is no landing at all in 2025, and by all accounts the setup is clear! 
 
A potential fly in the ointment for all of the above bullish outlook is Sergey Tarassov's long-term cycle analysis. He suggested that the 41-month Kitchin Cycle in US stocks would peak between June and October 2024, and be followed by a decline into December 2025-January 2026.  
 
That said, from a narrower medium-term Hurst cycle perspective, August 5 marked the low of a 40-week cycle. The market is now trending upward toward the next 40 week cycle's peak, and the last quarter of 2024 may very well conclude with new all-time highs.

Thursday, September 19, 2024

S&P 500 Projection Chart from 2009 to 2025 | Jeff Hirsch

We are revising our 15-Year Projection chart. This was first drawn in 2011 when our book Super Boom: Why the Dow Jones Will Hit 38,820 and How You Can Profit From It (Wiley) hit the stores. The projection was based upon, drawn from, years of historical patterns and data. In the years to follow numerous unprecedented events occurred, the Fed held its key lending rate in a range of 0 to 0.25% for an incredible seven years, under took multiple rounds of quantitative easing (QE) and essentially pledged unwavering support for the market. Many other nations and central banks around the world were taking similar or even more aggressive steps to support their own economies and markets. Negative interest rates and negative yields on 10-year bonds are not what we consider normal.
 
 
 
Our current updated projection is illustrated in the red line in the chart. In keeping with the history of market performance in pre-election years and the current trajectory of the indices, it would not surprise us for the market to continue rising through April make new high here in Q2, then pause over the weaker summer months before hitting higher highs toward yearend. Next year promises to be an embattled election year and the likelihood of another significant correction or even a bear market are higher.
 
 
 
 
 
   

Tuesday, May 21, 2024

US Debt is now rising by $1 Trillion every 100 Days | Paul Craig Roberts

The US debt has never mattered, because the US dollar is the world reserve currency. That means US debt is the reserves of the world’s central banks. If US debt rises, so does the reserves of the world banking system. All central banks were delighted to accumulate more US Treasury debt as it meant the reserves of their banking system went up.

» The morons who comprise the Biden regime are scaring central banks away from the dollar. «
 
The Federal Reserve can always redeem US Treasury debt by creating money with which to buy it. The debt is always redeemable because it is denominated in dollars. The problem arrives when the dollar is deserted as world reserve currency. The morons who comprise the Biden regime are scaring central banks away from the dollar as their reserves because of sanctions against Russia, Iran, China, Venezuela, and others. The slow mental processes of central banks are beginning to understand that having your reserves in US Treasury dollar debt means they can be frozen, seized, denied to your use if you cross Washington.

Fun Fact : The current Chair of the Federal Reserve Jerome Hayden 'Jay' Powell is NOT Jewish.

The threat to Washington is, whereas the Fed can print dollars to redeem the debt, the Fed cannot print foreign currencies to redeem the US dollar. So, if central banks shift their reserves out of dollars into gold, as Russia and China are doing, or into other currencies, the supply of dollars in foreign exchange markets have fewer and fewer takers. Consequently the dollar loses its value relative to gold, silver, and rising currencies, and the dollar’s value falls in foreign exchange markets. As America’s manufacturing is offshored and as America relies on imports of food, US inflation rises. Historically, the Fed’s response to inflation has been unemployment.

 
♫ Nowhere to hide nowhere to go meet Saint Jerome the Wrecking Ball
 
The Federal Reserve and the institutions used to suppress gold and silver prices use naked shorts to control the price by dumping shorts into the futures market. In other words, contracts unsupported by actual gold holdings can be used to increase the paper supply of gold in futures markets. As the futures market settles in cash, not in gold deliveries, a flood of paper contracts unsupported by actual physical gold can be used to suppress the price. In other words, the supply of paper gold can be printed just like the Fed can print paper money. [...] This price control process fails when the demand for gold exceeds the physical supply at the suppressed price. We have recently witnessed a new outbreak in the gold price. Is this a sign that the controlled price can no longer hold against the demand for physical gold, or is there some other explanation?

» America is likely living her last years. Perhaps this is why Putin and Xi don’t bother to dispose of us. «

As the fools ruling the US continue their destruction of the country, the dollar and living standards will die with the country. America is likely living her last years. Perhaps this is why Putin and Xi don’t bother to dispose of us.
 
 
See also:
 
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