2016-04-23
Thank you for your continued interest in the billcara.com blog. Please accept my apology for this very belated return to these pages. After passing a certain age, I decided to spend every available free hour enjoying life. I needed to.
One of my concerns in the past about my publishing articles here is that I had been devoting over 20 hours a week free to whomever wanted to read them, but public response had dwindled. Then about 18 to 24 months ago, I decided to invest heavily in a proprietary database/publishing system that would enable me to publish more articles and higher quality ones while requiring just 1 or 2 hours a week of my time. The system is almost finished and so within a month or so I will be returning to the billcara.com blog and to publications like Seeking Alpha. For the blog, I have written 120 daily “Lessons” ready to be published and these will be available in about a dozen free eBooks.
As for the markets and economy today, I am neutral. But the equity market bull phase has lasted over 7 years, and there are problematic aspects to it, so the risks are greater than the potential rewards. While I do see areas of opportunity, particularly in forex and precious metals and with inverse ETFs, I think investors and traders who are perpetually long across the board are over-exposed to significant market risk. Be wary of the usual end of cycle pump and dump schemes associated with dividend increases, share buy-back programs, M&A, and so forth, that tend to over-excite the sheep among you.
Each intermediate cycle market sell-off will likely be serious. The next one I suspect could be substantial. Global economic growth is slowing, corporate earnings are peaking, and the US Dollar needs to weaken considerably to take pressure off the potential for rate hikes as well as give support to what is a slowing corporate earnings picture. Central bank actions are now facilitating higher prices for energy and metals, but these are mostly speculative gains, not ones based on real economic growth, so they will be short-lived.
For years we chided Humongous Bank & Broker (HB&B) for acting in collusion, often in blatant fraud against you and me. Some were asking why I was so bitter. Now you see evidence in that the fines are in the mega billions, and yet still these banking executives are not being prosecuted. Even benchmark indexes have been outright manipulated.
Gold and Silver is an interesting case. For many years, our complaints that precious metal prices were being manipulated fell on deaf ears with the lawmakers and regulators. Now Deutsche Bank is owning up to their complicity in that fraud, and have turned whistleblower against their colleague bankers. At the same time that the London and New York gold market is under investigation, China and the Shanghai Gold Exchange this month has started providing what we always wanted – an honest benchmark price, albeit renminbi denominated.
I find today’s US political scene to be interesting. I believe the public has finally clued in that federal and state leadership has always been bought-and-paid-for by a combination of Wall Street, the Military-Industrial complex and lobbyists from Oil and Pharmaceutical industries. Messrs. Trump and Sanders, I believe, are merely the first of many political outsiders that will rise from the people. Imagine that – government by and for the people – what a concept.
As mainstream media has accurately described me as being a populist, it follows that this cultural change in America – if not these particular candidates — is pleasing to me. Some of you will recall that if change came at the cost of having Donald Trump as President, I could live with it. At the end of the day, however, I think the American public as a whole will seek respectable change in their political system. But change it must be.
Please feel free to keep in touch.
/Bill
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