Month: November 2013

By MoneyMorning.com.au

The market is hotting up.

But not here, not in Australia. Not yet anyway.

That will come. You can bank on it.

But for now things are really hotting up in the US market. Two of the main indices are at record highs, and still the money keeps pouring into the market.

What can stop it?

Bloomberg News reports:

‘Investors are pouring more money into stock mutual funds in the U.S. than they have in 13 years, attracted by a market near record highs and stung by bond losses that would deepen if interest rates keep rising.‘

This is an argument few have looked at. Most of the talk about rising interest rates centres on why it would be bad news for stocks.

Rising interest rates can be bad news for stocks because they create competition for dividend stocks. If an investor can get – say – a 4% yield on a savings account they’re less likely to accept – say – a 4% yield on stocks, which have more risk.

That typically means stock prices will fall unless companies can increase dividends at the same time that finance costs are rising.

But what about the flipside? If interest rates go up, that means bond prices fall. That means big investors may cut back their bond exposure…and that could cause a surge into stocks.

Enjoy No-Nonsense Trading

That reasoning is partly why stocks have been so volatile. Big investors don’t know whether interest rates are good for stocks or bad for stocks.

Incidentally, the constant rising and falling market is a big reason our publisher, Port Phillip Publishing, has invested in a ‘black box’ directional trading system developed by former Telstra engineer Brian Jagger.

Unlike most trading systems, you don’t need to be ‘on call’ for the latest trade alert. You just check your email at the same time every morning, enter the trade and that’s it, you get to enjoy the rest of your day without checking in on the market.

You can find out more about this no-nonsense, purely technical trading system here.

But back to the news about record inflows into stock mutual funds (the US equivalent of managed funds). The knee-jerk reaction is to say, ‘Well, here comes the top of the market.’

And it could be. But that view ignores one point. Who’s to say fund inflows won’t hit another record next month, and the month after that?

The same goes for a stock index. Whenever an index hits a new high some folks are quick to say that’s the top of the market. They forget that when the market hit the previous high that was a record too, but it didn’t stop stocks going even higher.

The Return of Excess

We will agree with one thing. When stocks keep taking out a new high, it makes sense to be cautious. But it’s still not time to rush for the exit.

For instance, in the past few weeks, three of our Revolutionary Tech Investor stock tips have registered 100% gains, and one has got close to the mark. They’ve slipped back from those highs in recent days, but we see that slip as little more than a short-term bump on the road to higher stock prices.

And it’s all thanks to cheap money. It’s flowing through the economy, pushing up asset prices and pushing up consumer prices.

Another report from Bloomberg highlights the impact of cheap money:

‘A year ago, New Jersey contractor Michael Mroz’s customers were focused on saving money when renovating kitchens and baths, he said. Now, with a resurgence of home equity lending, they’re ready to pay for the best.

‘“People don’t want granite countertops – they want marble costing at least 25 percent more,” said Mroz, owner of Michael Robert Construction in Westfield, an affluent town less than an hour’s commute to Manhattan. “Money is so cheap today, people can splurge on $1,000 faucets.”‘

Make no mistake, not everyone benefits from cheap money, rising asset prices and rising consumer prices.

It’s not a coincidence that folks in the Manhattan commuter belt – most likely financial services professionals – are those getting the benefit of the US Federal Reserve’s cheap money policies.

It’s hard to imagine the average working class New Jersey resident splashing out on thousand dollar taps.

Don’t Get Angry With the Stock Market

But it’s not so hard to imagine a Wall Street banker, fund manager or trader splashing out on marble bench tops, $1,000 taps, and perhaps even gold plated toilets.

This is just one more real example of where the money flows when central banks print it.

And this is exactly why we say you need to be a part of it. Sure, you can get angry, say it’s crazy and refuse to play along as this asset bubble grows. Or you can follow the money flow. As the old saying goes, ‘Don’t get angry, get even.’

Right now that means putting your money where Wall Street is putting its money – in stocks.

US stock prices are surging. It’s time to get set, because it’s only a matter of time before this flows through to the Aussie stock market.

Cheers,
Kris+

Special Report: The ‘Wonder Weld’ That Could Triple Your Money

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By MoneyMorning.com.au

By MoneyMorning.com.au

Australia is blessed with abundant energy resources. Coal, natural gas, uranium and even quite a bit of oil can be found on our continent. But did you know that you pay for the most expensive electricity in the world?

Sure enough, our state governments found a way to mismanage our abundant resources and electricity industry so badly that we turned an advantageous position into a disadvantageous one.

You’ve probably heard about the coming gas shortage in Australia. And the changes to renewable energy incentives, like solar panel rebates. Here’s the thing. When it comes to your power bill, things are about to get a whole lot worse. And it has the potential to wreak havoc on your cost of living in retirement, and on Australia’s entire economy.

But there’s some good news too.

There is a surprisingly easy, simple and cheap to implement solution to deal with the coming shocks to the electricity system. One that could see you escape the surging costs of power altogether. You’d be completely independent.

I want you to realise just how important this is. And not just to your retirement and cost of living.

Australia’s Economic Future is at Stake

As you’ve probably noticed, Australia’s electricity infrastructure is failing to deliver electricity at a reasonable price. What you might not realise is how disastrous this will prove to be for the country. To get an idea of where we are heading, take a look at Europe.

‘We face a systemic industrial massacre,‘ Antonio Tajani, the European industry commissioner, told The Daily Telegraph at a recent meeting of policy makers from around the world in Lake Como. ‘The loss of competitiveness is frightening. When people choose whether to invest in Europe or the US, what they think about most is the cost of energy’ explained Paulo Savona, head of Italy’s de­posit insurance fund.

European President Herman Van Rompuy connected the dots: ‘Compared to US competitors, European industry pays today twice as much for electricity, and four times as much for gas.‘ With Europe going on a very expensive green energy crusade to save the world from global warming while America’s scientists point to the 60% growth in polar ice caps as a sign of global cooling, Europe’s industry looks doomed. Power will simply be too expensive.

But what do European electricity prices have to do with you? Well, if Europe faces an industrial massacre from high power costs, Australia faces an industrial Armageddon. And it has nothing to do with green energy, the carbon tax or environmentalism.

These charts from CME, ad energy consultancy, show Australia’s power prices are already outrageous:

Click to enlarge

And they’re projected to surge even more:

Click to enlarge

Four of Australia’s states are in the top 6 when it comes to the cost of electricity around the world.  But all this is just the beginning. It’s the appetiser you’ve already had to swallow when you looked at your power bills as they surged – up 70% in four years according to government figures.

How to Opt Out of the Coming Crises

If you want your retirement to be robust against these changes, you need a way to opt out.  Politicians have been promising you so called ‘Direct Action’ on climate change. The last person I would rely on for any kind of direct action is a politician. And the first person is you. So that’s what I’m proposing today – for you to take direct action on power prices before they rise. And, with the help that Australian power companies fear most, I’m can show you how.

But is going off the grid really plausible? Yes, it is. And you’re going to discover exactly how to
do it.

I asked my friend Len McKelvey to tell the story of how he went off the grid. He even managed to turn a $10,000 utility fee into a $10,000 cheque from the same utility company. Now Len’s case was unique. But as you’ll see you can go off the grid in an affordable way today, even before electricity costs surge even further.

Your Biggest Ally in the War for Affordable Power

Len is Australia’s leading guru when it comes to power. He’s the go to man for some of
Australia’s biggest power users, and utility companies despise him. Recently, he saved a Gold Coast theme park so much money on their power bills that the utility company sent out 4 engineers to check their equipment. They even asked the park engineer whether he had ‘turned the power off’. In other words, he’s just the man to explain what’s going on, and what you should do
about it.

But rather than writing about what’s in store for your power bill, and how to give your utility
company a rude shock before they give you one, I decided to record an interview with Len in person. I wanted his passion and experience to get through to you first hand. As you’ll see, he’s quite a character. You can access the interview by clicking here.

Nick Hubble+
Editor, The Money for Life Letter

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By MoneyMorning.com.au

Article by Investazor.com

It is very important for you to know if you have time to invest in you learning process. Even though it will appear to you as a fast profit taking, it is not. You will have to understand the domain, understand the risk, invest money and time in your education and after that everything will be paid off 10, 20 100 times more.

In nowadays and with the current systems it is possible for you to invest a little sum of money and end up with a fortune overnight. But it will never be enough, for a human being! If you will not have the knowledge, you will not know how to manage your money and your time, you will end up losing everything. Try to understand, if you are a novice in this domain that it is very important to understand the domain and the risk. Invest some money and mostly time in your trading education. This way you will get to know the markets and create a trading strategy that you will use to earn money from the market.

I would like you to keep in mind what I have written earlier, but read the next story with an open mind:

A young painter met an older and famous painter.

Young Painter:  – Sir, I am a very big fan of yours and I respect your work. I have, though, a question! I am working a day for a painting and try my ass off to sell it for one year, what is your secret?

Old Painter: Son, if you will spend a year in creating your painting, you will then sell it in one day!

This is a story from which we can learn a lot of things, but I would like to compare it with trading. It is very important for you to administrate your time when you are trading. A good trade comes after a very thorough analysis and when all your trading strategy’s conditions are met.

–          What are you, a full time trader, or a part time trader?

–          How much time can you invest in the full process in trading, keeping in sight also your private life and your family?

–          Which part of the day is best for you to trade?

–          How much time do your trading strategies need for analysis?

–          How much time do you need to get in touch with the latest news?

–          What are the best hours for trading?

Ask yourself these questions and you will end up with a pretty interesting answer. That will be the time you have for trading. Try to split it so you will end up with the best time management, for that you will find a solution in the story I have told you earlier.

The quality of the trade it is given by the time invested in its analysis!

The post Rethink your Trading Time Management appeared first on investazor.com.

Source: Brian Sylvester of The Gold Report (11/25/13)

http://www.theaureport.com/pub/na/jay-taylor-cashing-in-on-deflationary-forces

It’s been a pretty rotten year for gold equities, and most investors can’t wait for a fresh start in 2014. There’s plenty to look forward to, according to Jay Taylor, publisher and editor of Gold, Energy & Tech Stocks and host of the radio show “Turning Hard Times into Good Times.” Taylor, who is speaking at the Metals & Mining Conference in San Francisco, is forecasting a staggering rise in the real gold price, and profits for small-cap gold companies in the new year. In this interview with The Gold Report, Taylor identifies the best and brightest in his portfolio as he positions for a gold run.

The Gold Report: Jay, you’re presenting “Deflationary Forces in the Midst of an Inflationary Monetary Regime,” at the San Francisco Metals & Minerals Conference Nov. 25 and 26. How can that concept affect gold investors?

Jay Taylor: We’re in a deflationary environment that policy makers are trying to overcome with inflation. That won’t work as long as people remain confident in the currency—but if there’s a loss of confidence in the currency, deflationary forces will give way to inflation. It might even lead to a hyperinflationary situation down the road. That’s the worst outcome, but I fear it could happen.

TGR: The government is pumping money into the system. We have a window before the dollar crashes. How long is that deflationary window going to stay open?

JT: It’s very difficult to say because what we’re talking about is a con job. You can’t predict when people are going to lose confidence in the currency or the establishment. We probably have six months to a year, if not longer. Keep in mind, you don’t have to create more money to cause the value of it to go down. In Iceland, for example, the currency lost 50% of its value in 24 hours without increasing the supply just because people said, “Oh gosh, we’re in trouble. I don’t want to own this. I want to own something that is tangible.” And they dumped it.

It’s impossible to say when that day will come for the dollar, but people need to be ready for it because when it occurs, it could happen with frightening rapidity.

TGR: What do you believe is going to happen next for gold?

JT: The chances are better than 50/50 that we’ve seen the bottom and we’re just meandering around and building a base for the next major leg up. It’s not hard for me to imagine gold exploding off the launch pad to hit new highs. The question is: How much higher than $1,900/ounce ($1,900/oz) will it go? I don’t have a strong opinion on that. It depends on how the economy goes and the psychology of the masses.

TGR: Will silver follow suit or chart its own course?

JT: It will follow suit, to a great extent, because it will take on more of a monetary component; currently much of its demand is still from industry. Silver and gold nearly always move in the same direction, but because silver is more undervalued than gold, it could have a much bigger move in percentage terms.

TGR: Do you see the market’s blindness to gold as one of the few bright spots in gold space in 2013?

JT: It is for investors who have money. A lot of the people I know in Vancouver in the junior sector are just flat-out broke. There are companies out there that have great projects that are not being recognized. In that regard, it’s very bullish. I’m having a hard time keeping myself from jumping into things sooner than I should because stocks are so cheap—and yet they get cheaper. Gold shares have been punished unmercifully. When this thing turns, there are going to be some major profits made in the gold sector.

TGR: In June you told us that you were seeking cash-flow positive, small-cap gold producers with strong exploration potential. Are those still the tenets of your investment thesis for companies that size?

JT: Yes, very much so. I still look for companies that have cash flow, that have lots of exploration potential, that can grow earnings over time, combined with higher real gold prices and larger production.

TGR: Which companies fit that mold?

JT: Agnico-Eagle Mines Ltd. (AEM:TSX; AEM:NYSE) has done extremely well and is earning good profits.Allied Nevada Gold Corp. (ANV:TSX; ANV:NYSE.MKT) was selling at $40/share and is now below $4. The company will be able to make money with the sulfide portion of its deposit, which is gigantic. It’s low grade, but I remain confident. It’s been making money with its oxides.

TGR: What’s the next catalyst for Allied Nevada Gold after a share price drop like that?

JT: Allied Nevada is developing its project. The company is fairly well cashed up and continues to improve its oxide production. It scaled back a bit from earlier targets, but it’s still on track to move forward on its sulfides. The major driver would be an increase in the gold price, but at less than $4/share, this is a good speculation.

I also like Dynacor Gold Mines Inc. (DNG:TSX), which has a different model. The company processes ore from licensed, small mines in Peru; there’s a huge market for that. There are a lot of very small, high-grade miners. It’s been turning out nice profits and growing nicely.

Dynacor also has its own deposit, Tumipampa in Peru, which has a high-grade underground vein system over the top of a copper-gold skarn target that has the potential to be massive.

The company has solid cash flows. It hasn’t had to issue shares, so dilution has been held down to less than 40 million shares.

OceanaGold Corp. (OGC:TSX; OGC:ASX) just reported nice profits and opened up a major gold-copper project in the Philippines, Didipio, that has reduced its overall cost of gold production very dramatically.

I still like Sandstorm Gold Ltd. (SSL:TSX), a gold streaming company, that reported a loss in the last quarter related to accounting issues not central to its business. It still had strong operating profits.

I also like Mandalay Resources Corp. (MND:TSX).

TGR: Mandalay’s Costerfield and Cerro Bayo deposits have gold and silver. Oceana has gold and copper. Do you like the multimetal producers?

JT: As a goldbug, I’m concerned about a major collapse in the economy sending the prices of copper and other base metals down. I look at it case by case and project by project.

TGR: In the November edition of Hotlines, you wrote, “When the real price of gold explodes as it historically does with credit implosions, the stocks that may seem like the riskiest in the lot, and as such sell at very low prices, have much greater potential in percentage terms.” Do small-cap gold equities have greater leverage to the gold price?

JT: I wouldn’t limit it to nonproducers. There are producers that I didn’t name earlier, like San Gold Corp. (SGR:TSX.V), Osisko Mining Corp. (OSK:TSX) and Petaquilla Minerals Ltd. (PTQ:TSX; PTQMF:OTCBB; P7Z:FSE), that could benefit very dramatically. They provide a better leverage play on gold, but exploration companies that have the goods also will be leveraged to the price of gold.

When the real price of gold rises, you get a huge rise in the profitability of gold mining projects. The opportunity for a $4 stock like Allied Nevada to give you a big percentage gain is better than a $30 stock like Agnico-Eagle. The opportunity for San Gold to give you a bigger gain than any of those companies is better because it’s a bigger leverage play on the price of gold, and on the real price of gold. It’s the real price of gold that matters in mining. It’s not the nominal price.

TGR: Do those big companies, like Agnico-Eagle, act as the anchor in your portfolio?

JT: I build my personal portfolio around the producers and a couple of project generators that, even though their share prices have gotten clocked like everybody else’s, haven’t had to go out and issue huge numbers of shares to keep the lights on. I prefer project generators as a category. A fair number of companies out there are promising. When this market turns around and when the real price of gold rises, the big guys are going to earn big profits and then they’ll start looking down the food chain at the companies they might pick up to increase and continue production. There will be a big percentage gain for the more marginal companies that are in production.

TGR: Let’s talk about the other end of your portfolio. What are the exploration plays that you’re following?

JT: Columbus Gold Corp. (CGT:TSX.V) is one that I really love. I like it even more since it recently did a deal with Nord Gold N.V. (NORD:LSE), a Russian company owned largely by a billionaire Russian who made his fortune in the iron ore business.

Nord Gold has been aggressively growing its production. It’s getting close to being among the top 20 gold producers in the world. It acquired 50.01% of Columbus’ Paul Isnard project in French Guiana. The project has about 5.37 million ounces (5.37 Moz) of gold, with lots of exploration potential beyond that. Nord Gold can really get the job done, move this project along and put it into production.

The other thing I like about the deal with Nord Gold is that the least Columbus can own in the project if it doesn’t put any more money in after feasibility is 25%. The deal is that Nord Gold has to spend everything to take it into bankable feasibility. From that point on, Columbus can spend its 49.9% to stay at that level or it can get taken down to 25%, but not below that.

This could be a real big winner. No one is paying any attention to it now because no one is paying any attention to any of these companies, but Columbus has great upside potential when this market wakes up.

TGR: What other companies have upside potential?

JT: Paramount Gold and Silver Corp. (PZG:NYSE.MKT; PZG:TSX) is worth looking at. The company has about 10 Moz gold equivalent—although that number will probably increase soon because of drilling on its silver-gold San Miguel project in Mexico and the Sleeper mine in Nevada. Those two projects are substantial in size and will likely attract a major.

In addition to having two outstanding projects, Paramount has some real deep pockets behind it—billionaire goldbug Alfred D. Friedberg, who is committed to seeing this thing through.

TGR: Are Sleeper and San Miguel company-maker assets?

JT: Either of them could be. However, it’s more likely both multimillion-ounce deposits will be taken over by a household name.

Let me also tell you about Golden Arrow Resources Corp. (GRG:TSX.V; GAC:FSE; GARWF:OTCPK), which is more of a silver producer. The company is in Argentina, which is not a favored place to do business these days, but it has a project with a silver equivalent of just less than 100 billion ounces, with enormous exploration potential. It could be much bigger. The stock is selling for pennies, and it’s just a speculation, but I think it has the goods. Argentina isn’t the worst place to do business, and if people warm up to that market, Golden Arrow could be a real big winner as well.

And I should mention a real favorite of mine—GoldQuest Mining Corp. (GQC:TSX.V). It just announced a 3.2 Moz resource in the Dominican Republic. I like that the executive chairman, Bill Fisher, and Felix Mercedes, the general manager in the Dominican Republic, previously got a copper-gold deposit in that country into production. They have a good chance of moving this into production, and there’s still a lot of upside exploration potential as well.

TGR: They also seem to be doing things the right way with the environment and best practices.

JT: Absolutely. Bill Fisher is an above-board guy if ever there was one. He’s an honest guy, he works hard and he treats stakeholders very fairly. He’s a model citizen in this industry.

TGR: The end of 2013 is around the corner—not soon enough for some. What are you looking forward to in 2014?

JT: Well, I can sum up 2013 in one word—horrible. But if you’ve been able to squirrel away some cash, this year has provided great opportunities.

We’ve had 10 years of rising gold prices, so 2013 will be the first year with a pullback in a cyclical bear market within a secular bull. It’s very natural. If you compare this to the last great bull market, when gold went from $200 to $100 to $850/oz, the same kind of a percentage move could very well be in place in 2014. We could see a similar explosion in the gold price.

Deflationary implosion doesn’t bother me because I’m more favorably disposed toward gold in credit deflation such as what we had in the 1930s. It was very bullish for the gold mining sector. Catalysts for triggering an explosion in the gold price could be a loss of confidence in the mainstream assets: the dollar, Wall Street, a collapse of the London Bullion Market Association (LBMA) or the COMEX.

The speculative games that are played by the bullion banks are leading to some big problems. A default on either of those exchanges could shake the confidence of the other markets and play into the hands of China and other BRIC countries that are squirreling away as much gold as they can get at these cheap prices from the West. Those countries have made no bones about wanting to see the dollar replaced as the world’s reserve currency.

That fall could take place fairly soon in 2014. People that have cash now should look for these gold mining shares at bargain basement prices that we talked about today. I also still believe that people should have physical gold and silver as their core asset. That’s the best advice I could give: own gold and silver coins and then the gold and silver shares.

TGR: I’ve enjoyed speaking with you. Thanks for your time.

As he followed the demolition of the U.S. gold standard and the rapid rise in the national debt, Jay Taylor’s interest in U.S. monetary and fiscal policy grew, particularly as it related to gold. He began publishing North American Gold Mining Stocks in 1981. In 1997, he decided to pursue his avocation as a new full-time career—including publication of his weekly Gold, Energy & Tech Stocks newsletter. He also has a radio program, “Turning Hard Times into Good Times.”

Want to read more Gold Report interviews like this? Sign up for our free e-newsletter, and you’ll learn when new articles have been published. To see a list of recent interviews with industry analysts and commentators, visit our Streetwise Interviews page.

DISCLOSURE:

1) Brian Sylvester conducted this interview for The Gold Report and provides services to The Gold Report as an independent contractor. He or his family own shares of the following companies mentioned in this interview: None.

2) The following companies mentioned in the interview are sponsors of The Gold Report: Allied Nevada Gold Corp. and Mandalay Resources Corp. Streetwise Reports does not accept stock in exchange for its services or as sponsorship payment.

3) Jay Taylor: I or my family own shares of the following companies mentioned in this interview: Allied Nevada Gold Corp., Dynacor Gold Mines Inc., Sandstorm Gold Ltd., San Gold Corp., Petaquilla Minerals Ltd., Columbus Gold Corp., Paramount Gold and Silver Corp., Golden Arrow Resources Corp. and GoldQuest Mining Corp. I personally am or my family is paid by the following companies mentioned in this interview: None. My company has a financial relationship (sponsors to my radio show) with the following companies mentioned in this interview: Columbus Gold Corp., Paramount Gold and Silver Corp. and Golden Arrow Resources Corp. All of the companies mentioned with the exception of Nord Gold are recommendations in my newsletter, J Taylor’s Gold, Energy & Tech Stocks. I was not paid by Streetwise Reports for participating in this interview. Comments and opinions expressed are my own comments and opinions. I had the opportunity to review the interview for accuracy as of the date of the interview and am responsible for the content of the interview.

4) Interviews are edited for clarity. Streetwise Reports does not make editorial comments or change experts’ statements without their consent.

5) The interview does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports’ terms of use and full legal disclaimer.

6) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned and may make purchases and/or sales of those securities in the open market or otherwise.

Streetwise – The Gold Report is Copyright © 2013 by Streetwise Reports LLC. All rights are reserved. Streetwise Reports LLC hereby grants an unrestricted license to use or disseminate this copyrighted material (i) only in whole (and always including this disclaimer), but (ii) never in part.

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By CentralBankNews.info
    Israel’s central bank held its benchmark interest rate steady at 1.0 percent, as expected, repeating that future moves in the rate depend on inflation, domestic and global economic growth, the monetary policies of major central banks and the shekel’s exchange rate.
     The Bank of Israel (BOI), which has cut rates by a total of 75 basis points this year, most recently in September, said the main considerations behind its decision was the low inflation environment, a decline in economic growth in the third quarter, a very slight weakening of the shekel in the last month, very accommodative monetary policy in most major economies, weaker forecasts for global growth and a continued rise in house prices.
    “The Bank of Israel will continue to monitor developments in the Israeli and global economies and in financial markets, particularly in light of the continuing uncertainty in the global economy,” BOI said.
    Israel’s inflation rate jumped to a higher-than-expected annual rate of 1.8 percent in October from 1.3 percent in both September and August due to higher fruit and vegetable prices, clothing and footwear.
    Despite this rise, the BOI said the “inflation environment remains low” and there has been a decline in inflation expectations for the coming year. The BOI targets annual inflation of 1-3 percent.

    Israel’s economy slowed in the third quarter due to weak manufacturing and exports, but the BOI said “initial indicators for the fourth quarter point to some recovery.”
    Israel’s Gross Domestic Product expanded by only 0.5 percent in the third quarter from the second for annual growth of 3.2 percent, down from 3.8 percent. The BOI has forecast growth of 3.6 percent this year and 3.4 percent next year.
    Since the BOI’s previous policy meeting on Oct. 27, the shekel has weakened by some 0.9 percent against the U.S. dollar, a more moderate decline that most currencies against the dollar. Since the beginning of the year, the shekel’s effective exchange rate is up by has 5.7 percent. It was quoted around 3.55 to the dollar today.

    www.CentralBankNews.info

By Sasha Cekerevac for Investment Contrarians

As my regular readers know, over the past couple of months, I’ve repeatedly raised my concerns that the stock market is increasingly becoming out of touch with the underlying reality of our economy. Now, the latest batch of reports from companies is showing just how inflated the stock market really is.

One market segment that I have warned readers about is the retail sector. In my opinion, the retail sector has become far overvalued in terms of potential corporate earnings growth.

Now that we’re coming into the holiday season, I believe this year is going to be one of the worst for the retail sector in generating any corporate earnings at all.

It really boils down to two things: the consumer and the companies within the retail sector.

The average American, as we all know, is still getting the same wages, getting hit with a higher payroll tax this year, and is still uncertain about their future due to high unemployment levels.

Considering the situation of the average American, companies within the retail sector are literally doing everything possible to convince consumers to spend in order to increase revenues and, hopefully, generate some corporate earnings.

Unfortunately, this heavy amount of competition for fewer dollars means disappointing corporate earnings.

Target Corporation (NYSE/TGT) just recently reported its third-quarter results, with corporate earnings falling 46% year-over-year. While part of the decrease was due to a disappointing launch in Canada, much of the decline in corporate earnings was due to consumers’ unwillingness to spend. (Source: “Target Reports Third Quarter 2013 Earnings,” Target Corporation, November 21, 2013.)

You don’t have to believe me when I say that the average American does not have excess cash on hand. In the financial release, the chairman, president and CEO of Target, Gregg Steinhafel, stated that its U.S. division is “…an environment where consumer spending remains constrained.” (Source: Ibid.)

This is only the beginning for the retail sector.

As the holiday season approaches, companies are becoming even more aggressive with respect to offering deals to chase the very same consumers, which will ultimately just hurt corporate earnings.

Wal-Mart Stores, Inc. (NYSE/WMT) is advertising $98.00 32-inch flatscreen TVs for the Thanksgiving holiday. In addition, the company, along with many other stores in the retail sector, is offering price-matching guarantees. This is going to erode corporate earnings across the retail sector.

Best Buy Co., Inc. (NYSE/BBY) just warned that there would be a significant amount of holiday pressure on profit margins due to heavy competition.

Chart courtesy of www.StockCharts.com

Looking at the above chart, one would think that the retail sector is healthy and corporate earnings are accelerating—nothing could be further from the truth. We are now entering what will be, in my opinion, the most difficult holiday season in years.

With consumers strapped for cash, all of these companies in the retail sector will be chasing the same dollars through essentially one method: price competition.

To get people in the door, it seems the only effective method is by discounting prices to a ridiculously low level. As a consumer, I think this is great. As a potential investor, I would stay far away from the retail sector, as corporate earnings will be severely impacted from the competition.

Are there any positives? I would look to companies that cater to the wealthy, as they’ve made a lot of money in the market. With their target consumers worrying less about cash, these stocks don’t have to chase the same dollars. With price competition being less fierce, these stocks’ corporate earnings are likely to remain unaffected by the holiday season.

One company that has benefited is Sotheby’s (NYSE/BID). With record after record being broken in the high-end art retail market, Sotheby’s is the best way to gain exposure to the extremely wealthy. Plus, with the company’s expansion plans of adding more clients from China, I think the next few years will see substantial growth in both revenues and earnings for Sotheby’s.

http://www.investmentcontrarians.com/stock-market/even-with-discounts-flooding-retail-sector-these-stocks-prospering/3334/

London Gold Market Report

from Adrian Ash

BullionVault

Mon 25 Nov 08:25 EST

LAST WEEK’s losses of 3.6% in gold were extended Monday morning, with silver also falling again as world stock markets rose yet again.

 Priced in Dollars, gold dropped below $1230 per ounce for the first time since the first week of July.

 Silver added to last week’s 4.5% drop against the Dollar to hit 3-month lows at $19.61.

Gold in British Pounds fell to new 39-month lows beneath £760 per ounce.

“With the Fed perhaps stepping back” from QE money-printing stimulus, says Jeffrey Sherman, a manager at the $53 billion DoubleLine Capital in Los Angeles, quoted by Bloomberg, “it’s hard to make a case for inflationary behavior out there.

 “People aren’t as worried about inflation, thus you’re not seeing people buying gold.”

 “Downside risks predominate in the short term,” says a note from German investment bank and bullion retailer Commerzbank, saying that in Dollar terms gold “may well test the $1180 mark – its three-year low from the end of June.”

 Having called $1240 the “next support” late Friday, bulllion bank and market maker Scotia Mocatta’s technical analysis also points to $1180, “the 100% retracement” of this summer’s rally.

 “The big issue is still the monetary tightening in the US,” says analyst Michael Widmer at Bank of America Merrill Lynch.

 “As soon as [tapering] comes back, you will get further downward pressure.”

 “Absenting any change in the direction of the Dollar,” agrees Jonathan Butler at Japanese conglomerate Mitsubishi, “gold could continue to retrace its late June low of $1180, at which point physical demand [from Asia] may re-emerge.”

 Despite holding at an $11 premium per ounce above the price of London settlement, Chinese gold prices also fell Monday in subdued trade.

 Compared to China’s GDP, private spending on gold has risen twice as fast in 2013 to date according to analysis by BullionVault.

 Speculators trading US derivatives last week raised their net betting that the US Dollar will rise against other currencies by almost one-fifth to more than $15 billion.

 Gold futures and options trading meantime saw speculative players cut their net betting on higher gold by 14%, down to the lowest level since early August.

 Equal last week to fewer than 240 tonnes (including small as well as larger, hedge fund traders) the speculative net long position on gold averaged 722 tonnes in the five years to end-2012.

 It’s so far averaged 332 tonnes equivalent in 2013.

 “Gold still looks like a good short in our view,” the Wall Street Journal quoted technical strategist Chris Verrone at brokerage and money-managers Strategas Research Partners in New York on Friday, also targeting a fall to $1180.

 But now, warns a technical analysis from French investment bank and London bullion market makers Societe Generale today, “The daily indicators are testing supports and [are] overstretched.

 “This suggests caution” says SocGen, with $1222 acting as “a key support”.

 On the equity markets, meantime, the FTSE100 index here in London briefly poked its head above 6,700 for the fourth time in a week, but held 2% below June’s near 6-year high.

 Futures trading in New York’s S&P500 index today put it ready to open above 1800 for the first time ever.

 “External markets continue to create an unfavourable backdrop for gold,” notes Barclays Captial.

 “The physical market [meantime] lends little support during the seasonally strong period for consumption.”

 Adrian Ash

BullionVault

Gold price chart, no delay | Buy gold online

Adrian Ash is head of research at BullionVault, the secure, low-cost gold and silver market for private investors online, where you can fully allocated bullion already vaulted in your choice of London, New York, Singapore, Toronto or Zurich for just 0.5% commission.

(c) BullionVault 2013

Please Note: This article is to inform your thinking, not lead it. Only you can decide the best place for your money, and any decision you make will put your money at risk. Information or data included here may have already been overtaken by events – and must be verified elsewhere – should you choose to act on it.

By George Leong for Investment Contrarians

The more I view this stock market, the more nervous I get. While Wall Street gets set for some terrific year-end bonuses and investors take some amazing gains off the table, I’m sensing some euphoric buying in numerous areas of the stock market.

We saw what happened to hydrogen-cell car maker Tesla Motors, Inc. (NASDAQ/TSLA), as the high-momentum stock rocketed to $194.50 on September 30. The euphoric buying was clearly overdone and set for a nasty decline as short-sellers jumped in. Fast-forward nearly two months, and the stock has plummeted 38%, sitting at the $120.00 level as of Friday. And while some are blaming multiple engine fires in several Tesla cars, the reality was the stock simply accelerated much too fast on the chart to levels that were clearly unsustainable. Even now, trading at 80 times (X) its estimated 2014 earnings and with a price-to-earnings growth (PEG) of 11, the valuation is obscene.

Areas that I view as having some excessive run-ups and valuation in the stock market include the Internet services and social media sectors, which include such stocks as Facebook, Inc. (NASDAQ/FB), Twitter, Inc. (NYSE/TWTR), and Netflix, Inc. (NASDAQ/NFLX). These high-momentum stocks are excessively priced by the stock market, so investors should be wary of chasing them higher. As an alternative investment strategy, wait for the stock to come to you; in other words, wait for weakness in the stock market and for prices to decline before jumping into these investment areas.

The cloud services area in the tech sector has also seen some massive advances to the point where there is so much hype built into the price. Small-cap Intercloud Systems, Inc. (NASDAQ/ICLD) emerged on my radar when the stock was trading below $3.00 on November 14. Trading prior to this was light and was in the hundreds or thousands, and then all of a sudden, the stock popped on November 15 to above $10.00 on 12.83 million shares traded. Intercloud Systems subsequently traded above $16.00 the following day on 14.12 million shares. Volume has since declined to below two million on November 21. At this point, the party for Intercloud Systems may be over and what I suspect is the share price will likely continue to fall as speculators jump off.

The cases of Intercloud Systems, Tesla, and the social media stocks suggest there is clearly euphoria in this stock market that needs to be monitored. As well, investors should use these stock market stories as an example of what to beware of in an overly optimistic market that doesn’t seem to follow fundamentals.

Despite what you are reading out there about the S&P 500 jumping to 2,000 by the year’s end and the Dow Jones reaching 20,000 by 2014, this is exactly the kind of hype that surfaces when a stock market shows some bubble-like characteristics.

As an investor in the stock market, you need to be aware of this over-exuberance. When considering a stock in this market, focus on whether the rapid gains are justified given the muted economic growth and weak corporate revenues that continue to plague the U.S. economy.

http://www.investmentcontrarians.com/stock-market/why-patience-really-is-a-virtue-in-this-stock-market/3338/

By HY Markets Forex Blog

Gold futures dropped after an agreement with Iran was reached to ease sanctions in return for concessions over the country’s nuclear program.

Gold Futures for December delivery dropped 1.10% to $1,230.50 an ounce on New York’s Comex at the time of writing, while Silver futures declined 1.17% to $19.630 at the same time,

Five permanent Security Council members, Britain, France, US, China, Russia and Germany concluded an agreement with Iran over the weekend to ease the extensive nuclear program in the country in return of an estimated $7 billion-worth of sanctions.

However, the deal doesn’t imply a direct removal of sanctions. Iran will get access to $4.2 billion in foreign exchange as part of the deal, a western diplomat confirmed to the press.

Market participants continue to remain hopeful that the Western powers can finalize a broader agreement on the nuclear-programs talks in the future.

Gold

The yellow metal recorded its worst weekly performance since September over the last week, following the release of the Federal Open Market Committee (FOMC) minutes which revealed that the Federal Reserve could begin to taper its monthly asset purchases as early as December. The Federal Open Market Committee minutes from the October meeting weighed on the precious metal prices.

Gold prices dropped   26% lower this year on fears that the Federal Reserve would begin to taper soon and is likely to record its first annual drop in 12 years.

Last week, Hedge-fund Manager John Paulson, said he personally wouldn’t invest more money into his gold fund due to the inflation possibly accelerating.

Holdings in the world’s largest gold-backed exchange-traded fund, SPDR Gold Trust, came in at 852.21 tones on Friday, dropping to its lowest level since February 2009.

Visit www.hymarkets.com   to find out more about our products and start trading today with only $50 using the latest trading technology today.

The post Gold Futures Drops after Iran Deal appeared first on | HY Markets Official blog.

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By HY Markets Forex Blog

The Japanese yen declined to a six-month low against the greenback, dropping to its weakest level since May 29 after Bank of Japan (BoJ) Governor Haruhiko Kuroda said the nation’s economy is recovering at a moderate rate towards the  2% inflation target.

The yen edged 0.55% lower to ¥101.87 against the US dollar at the time of writing, dropping to a six-month low of ¥101.91.

At the same time the Japanese yen dropped 0.49% at ¥137.93 against the 17-nation euro, while it declined 0.46% to ¥165.17 against the UK pound, marking its weakest level since October 2008. Bank of Japan’s (BoJ) Governor Haruhiko Kuroda made a speech at a financial seminar in Tokyo and commented on the economy picking up and would add more stimulus if it’s needed to reach the inflation target.

The latest reports from Japan shows the inflation at 0.7% in the year ended September, which is still below the target; however according to the BoJ chief, the year-on-year rate of change in the CPI would likely follow a rising trend.

On Sunday, the Japanese yen dropped against the greenback, following the agreement that was reached between Iran and the Western powers (Britain, US, France, China, Russia and Germany, to ease an extensive nuclear program in the Persian gulf nation in return for the removal of an estimated $7 billion-worth of sanctions.

Yen – BoJ Maintains Monetary Policy

Following the Banks of Japan’s two-day meeting, the bank’s policymakers decided to maintain the current level of stimulus in order to achieve its 2% inflation target.

“The BoJ will conduct money market operations so that the monetary base will increase at an annual pace of about 60-70 trillion yen,” according to bank’s the statement.

“In terms of monetary policy, the BOJ has the most loose policy,” Koji Fukaya, chief executive officer and currency strategist at FPG Securities Co. in Tokyo said. “The yen is also being sold as risk sentiment improves,” he added.

Visit www.hymarkets.com   to find out more about our products and start trading today with only $50 using the latest trading technology today.

The post Yen Falls to Six-Month Low appeared first on | HY Markets Official blog.

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