The International Monetary Fund (IMF) says the global economic outlook is “brightening,” but warns that “protectionism” and geopolitical tensions could hurt economic growth.
The IMF published the report Tuesday, ahead of this week’s gathering of top economic officials from around the world for meetings of the World Bank and the IMF.
The IMF’s Maurice Obstfeld told journalists that global growth will probably accelerate from a 3.1 percent annual rate in 2016 to 3.6 percent in 2018. He says commodity prices have “firmed” since early last year, but at a relatively low level. That leaves commodity exporters in the Middle East, Africa and Latin America with challenges. He also says bad weather and civil unrest mean several low-income nations face mass starvation.
In the report, economists say there are many “downside risks” including political pressure to restrict trade, which they argue will hurt rather than help growth. The report’s authors say slow and unequal income growth, meager growth in productivity, the financial crisis, and other problems have generated political support for “zero-sum” approaches to trade. Obstfeld says nations that pull out of the multilateral trading system could suffer a “self-inflicted wound.”
The IMF says in many cases, wages have not kept up with rising productivity, and labor’s share of national incomes has dropped. These experts urge policymakers to do more to ensure that the gains from growth and trade are shared more widely. Full story
The IMF said on Monday it expects global growth this year of 3.5 per cent, down from 3.7 per cent in 2018 and from the 3.7 per cent it had forecast for 2019 in October.
“After two years of solid expansion, the world economy is growing more slowly than expected and risks are rising,” said Christine Lagarde, the IMF managing director, as she presented the new forecast at the World Economic Forum in Davos, Switzerland.
The fund left its prediction for US growth this year unchanged at 2.5 per cent – although a continuation of the partial 31-day shutdown of its federal government poses a risk. The IMF trimmed the outlook for the 19 countries that use the euro currency to 1.6 per cent from 1.8 per cent.
Growth in emerging-market countries is forecast to slow to 4.5 per cent from 4.6 per cent in 2018. The IMF expects the Chinese economy – the world’s second biggest – to grow 6.2 per cent this year, down from 6.6 per cent in 2018 and slowest since 1990.
The World Bank and the Organisation for Economic Cooperation and Development have also downgraded their world growth forecasts. Full Story
Indoctrination Definition: Are Your Perceptions Really Yours?
To understand this topic, what indoctrination means, let’s start with a question. If two men are arguing and one guy has data to back up his stance, and the other does not have data to back up his stance but irrefutably believes his view is the right one. Who is correct and who is wrong?
The obvious answer would be to state that the guy that has the data to back his point, but if one digs deeper one would have to ask whether this data is indeed valid, has it been independently verified are the sources legit, etc. But even that does not matter, for no matter what data either individual provides to the other, they will both stick to their guns.
The right answer is that they are both right, for nothing anyone can say will move them to change their position. Welcome to the world of indoctrination. Being conservative or liberal or open-minded or closed-minded, or whatever label you want to come up, is in most cases nothing but a form of indoctrination. You think the way you do because of your parents, the school you went to, the friends you have and your religious bent and so on.
Taking things even further, one can state that the liberals are not wrong for the way they see the world because they believe in that line of thinking and the same applies to the conservatives. Alt-right and Alt-left are nothing but forms of indoctrination and the extreme right and left have just received a super dose of brainwashing.
The masses are Indoctrinated Into Believing Experts Know it all
This is the main reason we have stated over and over again, that one should not wear their emotions on their sleeves, for no good can come from it. What has made things worse today is that very few people agree to disagree and move on to a new topic. Today opposing groups want to beat their views into the other group, regardless of whether they agree or not.
This is how the trend of polarisation started. Once you start telling a group that does not agree with you, that they are wrong, that they are stupid and start calling them names, a dangerous sequence of events is triggered and nothing the other camp says or no matter what evidence is provided, the opposing camp will refuse to budge. Look around today for that is where we are and the trend is still in its infancy.
Noam Chomsky Provides A Nice Overview On the Field of Indoctrination
This is a long topic and thankfully, Noam Chomsky provides a nice overview of this subject. We will cover this topic in more detail but if you are interested in understanding more about the inner working of the mindset, then this is a topic one should familiarise themselves with and this video provides a good starting point
Random notes on other topics besides indoctrination
The idea is to incept the seeds of doubt; if you want more clarification on this topic, just watch the movie Inception. The top players have been incepting ideas into the masses for millennia; it works brilliantly and the results are highly rewarding so this process is not going to stop soon. Once the seeds are sown, it is easy to use mass media to provide this seed with a nourishing environment and from seedling, this doubt grows into a massive tree.
In the guise of trying to provide individuals with information, the medias main goal is to brainwash individuals. One of the main ploys is misdirection; this technique revolves around the ploy of creating a mountain out of a molehill to redirect the masses focus. Sadly, this technique works like a charm. The two most effective Brainwashing institutions are public schools and the mass media
Brainwashing Techniques: Using paid experts to support a false narrative
This is another technique that works like a charm and it is blatantly used in the financial sector. Expert after expert spouts an opinion and often the opinions are in direct opposition to each other. The idea is twofold, first to load you with so much information that you don’t quite remember all the details. Secondly, the idea is to cover both ends of the story and when the outcome comes to pass, they make it look like that was the main outcome they were broadcasting all along. In other words, when it comes to the markets, the experts cover both ends of the game, therefore there is no way they can lose.
However, what the masses fail to understand is that they are guessing just like the crowd is, but the only difference is that they control the media, while the people in the crowd are nothing but passive observers, waiting to be taken for a ride. Brainwashing Techniques Institutions & The Media Utilize
How Brainwashing Works
During the Korean War, Korean and Chinese captors reportedly brainwashed American POWs held in prison camps. Several prisoners ultimately confessed to waging germ warfare — which they hadn’t — and pledged allegiance to communism by the end of their captivity. At least 21 soldiers refused to come back to the United States when they were set free. It sounds impressive, but skeptics point out that it was 21 out of more than 20,000 prisoners in communist countries. Does brainwashing really work in any reliable way?
In psychology, the study of brainwashing, often referred to as thought reform, falls into the sphere of “social influence.” Social influence happens every minute of every day. It’s the collection of ways in which people can change other people’s attitudes, beliefs and behaviors. For instance, the compliance method aims to produce a change in a person’s behavior and is not concerned with his attitudes or beliefs. It’s the “Just do it” approach. Persuasion, on the other hand, aims for a change in attitude, or “Do it because it’ll make you feel good/happy/healthy/successful.” The education method (which is called the “propaganda method” when you don’t believe in what’s being taught) goes for the social-influence gold, trying to affect a change in the person’s beliefs, along the lines of “Do it because you know it’s the right thing to do.” Brainwashing is a severe form of social influence that combines all of these approaches to cause changes in someone’s way of thinking. Full Story
The True Story of Brainwashing and How It Shaped America
Journalist Edward Hunter was the first to sound the alarm. “Brain-washing Tactics Force Chinese Into Ranks of Communist Party,” blared his headline in the Miami Daily News in September 1950. In the article, and later in a book, Hunter described how Mao Zedong’s Red Army used terrifying ancient techniques to turn the Chinese people into mindless, Communist automatons. He called this hypnotic process “brainwashing,” a word-for-word translation from xi-nao, the Mandarin words for wash (xi) and brain (nao), and warned about the dangerous applications it could have. The process was meant to “change a mind radically so that its owner becomes a living puppet—a human robot—without the atrocity being visible from the outside.” It wasn’t the first time fears of Communism and mind control had seeped into the American public. In 1946 the U.S. Chamber of Commerce was so worried about the spread of Communism that it proposed removing liberals, socialists and communists from places like schools, libraries, newspapers and entertainment. Hunter’s inflammatory rhetoric didn’t immediately have a huge impact—until three years into the Korean War, when American prisoners of war began confessing to outlandish crimes.
When he was shot down over Korea and captured in 1952, Colonel Frank Schwable was the highest ranking military officer to meet that fate, and by February 1953, he and other prisoners of war had falsely confessed to using germ warfare against the Koreans, dropping everything from anthrax to the plague on unsuspecting civilians. Full Story
United Airlines will not fire employees involved in the recent dragging of a passenger from his seat, an incident CEO Oscar Munoz on Tuesday called “a system failure.”
Executives of the Chicago-based airline sought to assure investors that United is working to learn from the recent uproar over viral videos of Chicago Aviation Department security officers dragging Dr. David Dao from a Louisville-bound flight. Dao was removed from the plane at O’Hare International Airport after he refused to give up his seat to make room for airline employees.
“This is a true learning opportunity and will ultimately prove to be a watershed moment for our company as we work harder than ever to put our customers at the center of everything we do,” Munoz said on a conference call discussing the airline’s quarterly earnings.
There was “never consideration” of firing an employee over the incident, he said.
The airline is reviewing policies around handling oversold flights to prevent similar incidents, including talking to some passengers and employees about how the airline can take a more “commonsense approach,” Munoz said.
[Most read] 1 killed during attempted car theft, 5 others arrested after high-speed police chase from Gurnee to Near West Side of Chicago »
It’s too soon to say whether the April 9 incident has affected customers’ willingness to travel with United, particularly since it happened during the week before Easter, when the airline typically sees fewer passengers, executives said. Full Story
United Continental CEO Oscar Munoz said Tuesday that no one will be fired for the airline’s recent debacle involving a passenger being dragged off an overbooked flight.
“The buck stops here. And I’m sure there was lots of conjecture about me personally,” the apologetic CEO said on the company’s earnings call Tuesday. “Again, it was a system failure across various areas, so no, there was never a consideration for firing an employee.”
The company has been embroiled in controversy ever since a video surfaced of Dr. David Dao being dragged off an overbooked flight in Chicago.
The fiasco has hurt shares of United Continental, which dropped about 4 percent on Tuesday, despite the company reporting better-than-expected earnings late Monday.
Munoz once again apologized for the confrontation, saying, “The incident on Flight 3411 has been a humbling learning experience for all of us here at United and for me in particular. In addition to apologizing to Dr. Dao, as well as all of the passengers aboard, I also want to apologize to all our customers. You can and should expect more from us and as CEO, I take full responsibility for making this right,” he added during Tuesday’s conference call.
Munoz reiterated that United will make policy changes, including not using law enforcement to take passengers off a flight unless there is a security issue and requiring that crews be booked at least an hour before takeoff. Full Story
Mass Hysteria definition: Current Overreaction Is The Perfect Example
According to Wikipedia, the definition of Mass Hysteria is
In sociology and psychology, mass hysteria (also known as mass psychogenic illness, collective hysteria, group hysteria, or collective obsessional behaviour) is a phenomenon that transmits collective illusions of threats, whether real or imaginary, through a population in society as a result of rumours and fear (memory acknowledgement).
In medicine, the term is used to describe the spontaneous manifestation (production of chemicals in the body) of the same or similar hysterical physical symptoms by more than one person. A common type of mass hysteria occurs when a group of people believe they are suffering from a similar disease or ailment, sometimes referred to as mass psychogenic illness or epidemic hysteria.Wikipedia
Consider the following data and decide for yourself
Over 22K people will die today from hunger; this probably one of the most horrible of ways to die
110K have died so far from this year’s flu and roughly 650K die a year from respiratory-related diseases
70K mothers have already died this year giving birth
So the coronavirus epidemic supersedes all this and deserves the attention it is getting? We have not mentioned Cancer, smoking and cardiovascular diseases, all of which kill millions per year. What about the innocent children dying every day? They don’t matter. What’s shocking is that the other viruses that were deadlier did not even receive the same amount of attention. One has to ask the question of what is wrong with the retarded media. Are reporters today nothing but mindless bots?
The disinformation campaign is now in full swing
In the short-term technical analysis cannot identify support levels because we are dealing with madness and that is the reason, we added the new level in the anxiety index. What exacerbates the situation is that there is very little liquidity, look at the bid and ask price on some options they are unreal, for example, a bid of 1.40 and ask of 5.00. This provides a few big players with the opportunity to move the markets in whatever direction they see fit.
The disinformation campaign is so rampant, I felt that this something I needed to investigate directly to offer Tactical Investors a better look at what is really going. So I decided to take the risk and go to solo to Asia without announcing it. I wanted to see for myself if the US and the West, in general, was overreacting and if Asia was doing a better job on the psychological frontier. So far, I have visited Vietnam, Malaysia, Cambodia, Singapore, and Indonesia and I can honestly state that they are doing a much better job of controlling the panic factor then we are doing in the US.
Hysteria overcomes Logic and that’s when things run Amok
People are not emptying shelves left, right and centre, in fact, the only thing seems to be selling like hotcakes are face masks. One of the reasons for this lack of hysteria is possibly due to the fact that most third world/developing nations are used to dealing with hardships that developed nations like the US are not. The contrast in the way the Asians are dealing with from a psychological standpoint of view is humungous.
For example, Jakarta is about to declare a state of emergency and yet people are not running around in panic. Malaysia is closing down its borders and the biggest reaction was that Malaysians working in Singapore raced back home to pack up extra supplies and then headed back to Singapore, where they will stay for an extended period. Many Malaysians commute daily from Singapore to Malaysia. If the border is closed, they won’t be able to go back so they wanted to make sure they had enough clothing etc. for their extended stay in Singapore.
If the leaders of the West but in particular the US could act in the same way to instil calm in the populace the reaction would be different. There are no lockdowns here, at least not yet (other than in China) and the rate of infection is not going ballistic. Fear increases stress and stress actually weakens the immune system.
Videos Illustrating How China & South Korea are Handling Coronavirus outbreak
We have moved deeper into the madness zone, and neutral sentiment has dropped to levels not seen for years. It is trading at 13, but bullish sentiment while below its historical average is still quite high, it would be ideal for it to drop below 24. Bearish sentiment continues to trend higher, and that’s a good sign. As things stand right now, we are close to another “mother of all buy signals” that would match that of 1987 and 2008. Our indicators just need to dip slightly lower into the oversold ranges.
For the “father of all buy signals”, the indicators would need to drop deeply into the oversold ranges, and the gauge on the anxiety index needs to move almost towards the end of the madness zone. Finally, bullish sentiment should drop below 22%. Remember this is a generational type signal so one should not expect it to occur with ease.
Subscribers who were with us back before Dec 2018 will remember how delighted we were when the number of new highs dropped to -10%. While everyone was panicking, we stated this was a fantastic development as the trend was positive. Now=look at the current readings; they are close to hitting minus 20%, something they did not even do in 2008. Given that the trend has not turned negative, this is a monstrous development. When the tide turns, we suspect that the Dow could rally 3600 points in one day with an overshoot to 4200 points. While everyone is focussing on the downward plunge, the melt-up is going to be so spectacular that it will catch all everyone and we mean everyone by surprise.
Courtesy of Tactical Investor
Coronavirus Mass Hysteria: buying toilet paper, canned food…
First it was the masks, then hand sanitisers. Now it seems the novel coronavirus outbreak has people rushing to stock up, among other things, an essential item: toilet paper.
Shelves have been emptied across the world. In Australia, a newspaper helpfully printed out an extra eight pages as a “backup loo roll”. Fights have broken out, trolleys piled high, and across the United States, Canada and the United Kingdom, most supermarkets imposed a cap to limit the number of rolls a person could buy.
Dubbed #ToiletPaperPanic and #ToiletPaperApocalypse online, there is no shortage of videos capturing the mass hysteria that has swept up globally as shelves are cleared. Canned goods, water bottles and pasta shelves have similarly been emptied out.
So, why are we seeing panic buying across the globe?
“Panic buying and hoarding of supplies is obviously not desirable, but it’s understandable, particularly when people see images of cities, regions and even whole countries in lockdown,” Michael Baker, professor of public health at the University of Otago in Wellington, New Zealand, told Al Jazeera.
While panic buying was not seen in response to the most recent influenza pandemic in 2009, Baker said the ongoing crisis is similar to a behavioural response during a natural disaster.
“The difference this time is that people now see COVID-19 as a real threat, one that will last for months, and they may not have confidence in the authorities to contain it.” Full Story
How mass hysteria happens (and how to avoid the COVID-19 panic)?
Mass hysteria, also known as epidemic hysteria, occurs between two or more people who share beliefs related to symptoms suggestive of organic illness.
Research suggests that real pandemics can lead to mass hysteria.
A key factor that creates hysteria around pandemics is that the population’s ability to remain calm and react logically to the situation at hand is blurred and unfocused due to the anxiety and fear felt by large groups of people.
A pandemic, according to the Center for Disease Control (CDC) is defined as a “global outbreak of a new virus”. When dealing with a pandemic such as COVID-19, we need to be extremely cautious in the information we share. Pandemics (such as the Swine Flu pandemic of 2008) can very easily turn into mass hysteria cases, even though the threat is very real.
Mass hysteria, also known as epidemic hysteria, is a constellation of symptoms suggestive of organic illness but without an identifiable cause. It occurs between two or more people who share beliefs related to those symptoms, and has been described as a “social phenomenon involving otherwise healthy people.”
Mass hysteria has been well-documented throughout history, below are two separate cases from the 1900s that better explain what it’s like to be in the midst of mass hysteria. Full Story
What is quantitative easing? We are entering a new paradigm; get used to forever Quantitative Easing – QE, though it will be given other names along the journey to make it appear more palatable. The US and by default worldwide debt is set to soar to preposterous levels; get used to it and embrace this fact for nothing has changed since we got off the Gold standard and nothing will change until the system collapses, though waiting for that day might prove to be fatal as the masses are completely asleep.
If a national debt of almost $22 trillion is shocking to some; imagine how they will feel when the debt soars to $100 trillion. Many might say no way in hell that is going to come to pass. Take a look at the national debt numbers in the early 1900s. Go back to 1900 and then fast forward to the present. Once upon a time, our national debt was less than 1 million USD.
Now if you told people back then it would be at $22 trillion one day; would the reaction not be the same? We will go on record to state that there is a good chance that worldwide debt will surge to $1000 trillion before the masses discover the emperor is naked, fat, bald and ugly; until then they will continue to believe he is a handsome prince. It currently stands at $247 trillion.
Clarida hints at the Forever QE reality
In a Feb. 22 speech, Clarida acknowledged no doubts. He said that radical monetary policy has worked, that it will continue to work, and that it may well become more radical. He contended that low-interest rates are here to stay and that new policy “tools” must be sharpened and kept at the ready. As to potential adverse consequences of administered rates and the mind-control games meant to “anchor” our collective expectations of the future, he mentioned none.
Certainly, rates are astoundingly low—Bank of America Merrill Lynch recently was able to count $11 trillion of bonds worldwide quoted at yields of less than zero. Clarida said that the decline in the so-called neutral rate of interest “is widely expected to persist for years.” Full Story
Stories like this barely receive much media attention, and the masses are too busy dealing with the problems on reality TV or being misdirected by highly politicised B.S. News that only serves to allocate even more time to trivial matters. These developments indicate that developed nations like the US and most of western Europe will become increasingly hostile places to live in. This topic is beyond the scope of this publication, but the trend is in place, the US is no longer the bastion of Freedom and will soon not make it even to the top 10 of the best places to live in.
In The Forever QE Era; strong corrections have to be embraced
In terms of the stock market, until the Fed changes its mind, all sharp corrections have to be viewed as buying opportunities, and backbreaking corrections have to be placed in the category of “once in a lifetime events”, provided of course the trend is positive. That is what we are here for; to inform you if the trend is positive (Up) or negative (down). The world is going to witness a Fed that has decided to make a cocktail of Coke, Heroin, Crack and Meth and take it all in one shot. Imagine what a junkie on this combination of potent drugs is capable of doing, and you will have an idea of where the Fed is heading in the years to come.
Now the Gold bugs will cry “I told you so”. Our response to this statement; not so fast little bugs. While precious metals will do well, we think stocks in key sectors (and we are not referring to Gold stocks) will pulverise the precious metals sector in terms of returns. One such area is robots (particularly Sex-bots) and AI.
Courtesy of Tactical Investor
Random views on QE
What is Quantitative Easing?
Quantitative easing is an unconventional monetary policy in which a central bank purchases government securities or other securities from the market in order to increase the money supply and encourage lending and investment. When short-term interest rates are at or approaching zero, normal open market operations, which target interest rates, are no longer effective, so instead a central bank can target specified amounts of assets to purchase. Quantitative easing increases the money supply by purchasing assets with newly created bank reserves in order to provide banks with more liquidity.
Quantitative easing, or “QE,” is the name for a strategy that a central bank can use to increase the domestic money supply.
QE is usually used when interest rates are already near 0 percent and can be focused on the purchase of government bonds from banks.
QE programs were widely used following the 2008 financial crisis, although some central banks, like the Bank of Japan, had been using QE for several years prior to the financial crisis. Full Story
Quantitative Easing Explained
Quantitative easing is a massive expansion of the open market operations of a central bank. It’s used to stimulate the economy by making it easier for businesses to borrow money. The bank buys securities from its member banks to add liquidity to capital markets. This has the same effect as increasing the money supply. In return, the central bank issues credit to the banks’ reserves to buy the securities.
Where do central banks get the credit to purchase these assets? They simply create it out of thin air. Only central banks have this unique power. This is what people are referring to when they talk about the Federal Reserve “printing money.”
Lower interest rates allow banks to make more loans. Bank loans stimulate demand by giving businesses money to expand. They give shoppers credit to purchase more goods and services.
By increasing the money supply, QE keeps the value of the country’s currency low. This makes the country’s stocks more attractive to foreign investors. It also makes exports cheaper.
Japan was the first to use QE from 2001 to 2006. It restarted in 2012, with the election of Shinzo Abe as Prime Minister. He promised reforms for Japan’s economy with his three-arrow program, “Abenomics.”
The U.S. Federal Reserve undertook the most successful QE effort. It added almost $2 trillion to the money supply. That’s the largest expansion from any economic stimulus program in history. Full Story
Why do we need quantitative easing?
The aim of QE is simple: by creating this ‘new’ money, we aim to boost spending and investment in the economy.
We are tasked with keeping inflation – rises in the prices of goods and services – low and stable.
The normal way we meet our inflation target is by changing Bank Rate, a key interest rate in the economy.
When the global recession took hold in late 2008, we quickly lowered Bank Rate from 5% to 0.5% to support the UK’s economic recovery. Lower interest rates mean it’s cheaper for households and businesses to borrow money – which encourages them to spend and invest, whether that’s a family buying a new car or a company wanting to build a new factory.
But there’s a limit to how low interest rates can go. So when we needed to act to boost the economy, we turned to another method of doing so: we introduced quantitative easing. Full Story
Remember that when the markets eventually correct, this correction will be broadcasted as a crash (that’s the name of the game; scare the hell out of the masses) and it will be blamed on Trump. No, we are not getting sentimental on Trump. In reality, each president has only so much room to do what it is good for the people; most presidents don’t even use this little leeway they are given but focus on themselves. As long as Fiat is around, every president will be bought and paid for. The big players have trillions at their disposal, so the dream of finding a great leader is just that, a “big dream”. Mass psychology covers the aspect of mass manipulation very well and how the top players go out of their way to create situations that will alter the masses angle of observance. Alter the angle and you alter the outcome by altering what the masses deem to be true or false.
Freedom is an Illusion
You are only free to do things that you are allowed to do, and this includes the president. Reflect on that we will expand on it later; we already provided you with a big hint. In case you missed the hint is “fiat money”. At the tactical investor, our focus is on dealing with reality and spotting new trends. Everything else falls into the idle gossip category. It might feel good to rant and rave about stuff like this, but it is a waste of energy. The focus should be on finding a way to play with the hand that you have been dealt.
The markets follow the same path; until Fiat is eliminated this talk about the world coming to an end is nothing but rubbish. All those self-proclaimed masters of wisdom are either dead, dying or becoming highly irrelevant. Focus on the trend for that is all that matters; it is the only way to maintain your health and your wealth.
This market will experience many corrections in the years to come, some will be mild, some will be strong, and some will appear to be devastating. If you follow the trend, you will know when to move into cash and when to jump in. From a “super trend perspective” every back-breaking correction (emphasis on back-breaking) should be viewed as a long-term buying opportunity.
Trump’s presidency has made for some entertaining Moments
Overall the Trump presidency has made for some pretty damn good free entertainment; it is quite amusing to watch the other side react and equally amusing to watch the nonsense the Trump Team can come out with at times to defend their position. As time passes by, it appears that Trump is focussing more on himself than on making the country great. Who knows, he might suddenly change direction; he has a habit of doing the unexpected.
From a psychological perspective, you should hope that some shock announcement is made regarding “Trump”; it will scare the hell out of the masses, and the market will drop like a rock creating a lovely buying opportunity.
The press has always gone out of its way to twist the news and sell the masses rubbish, especially when it comes to the financial markets. However, the veil has fallen completely after Trump won the presidency. The utter garbage they focus on illustrates that IQ is no longer a pre-requisite. We would not be surprised to find out if most of those individuals who pass for reporters have an IQ that is slightly above 70. An IQ of 70 equates to that of a retard. However, on the flip side imagine how difficult it would be if everyone were a genius, so be grateful for these penguins, as their reality is based on what they read. They make trading the markets infinitely easier as their behaviour is predictable.
From an Investment perspective- Trump Administration is bullish for the markets
Trump is bombastic, so he will go out of his way to say things that will shock the markets but as the primary trend is bullish, these pullbacks ranging from mild to wild should be viewed through a bullish lens.
The Fed via fiat money indirectly controls the media; the press through the garbage they print and pass of as news control the masses. You could not ask for a better setup of mind control; the masses think they are free, but they are not; they are free to make decisions in areas that do not matter. Look around slowly and determine for yourself if they are free.
Sit down and watch the show for are things about to get more interesting and nuttier at the same time. We suspect a lot more heads will roll and the cries of rage and frustration will soar to heights never seen before. Market Update May 19, 2017
All massive corrections should be viewed as buying opportunities provided the underlying trend is up (bullish). The stronger the deviation from the norm the better the opportunity
Courtesy of Tactical Investor
Random views on Boom and Bust Cycle
What is Boom And Bust Cycle
A boom and bust cycle is a process of economic expansion and contraction that occurs repeatedly. The boom and bust cycle is a key characteristic of today’s capitalist economies. During the boom the economy grows, jobs are plentiful and the market brings high returns to investors. In the subsequent bust the economy shrinks, people lose their jobs and investors lose money. Boom-bust cycles last for varying lengths of time; they also vary in severity.
BREAKING DOWN Boom And Bust Cycle
Since the mid-1940s, the United States has experienced several boom and bust cycles. Why do we have a boom and bust cycle instead of a long, steady economic growth period? The answer can be found in the way central banks handle the money supply.
During a boom, a central bank makes it easier to obtain credit by lending money at low interest rates. Individuals and businesses can then borrow money easily and cheaply and invest it in, say, technology stocks or houses. Many people earn high returns on their investments, and the economy grows.
The problem is that when credit is too easy to obtain and interest rates are too low, people will overinvest. This excess investment is called “malinvestment.” There won’t be enough demand for, say, all the homes that have been built, and the bust cycle will set in. Things that have been overinvested in will decline in value. Investors lose money, consumers cut spending and companies cut jobs. Full Story
Boom and Bust Cycle, What Causes It, and Its History
The boom and bust cycle is the alternating phases of economic growth and decline. It’s how most people describe the business cycle or economic cycle.
In the boom cycle, growth is positive. If the gross domestic product growth remains in the healthy 2-3 percent range, it can stay in this phase for years. It accompanies a bull market, rising housing prices, wage growth, and low unemployment.
The boom phase doesn’t end unless the economy is allowed to overheat. That’s when there’s too much liquidity in the money supply, leading to inflation. As prices rise, irrational exuberance takes hold of investors. The GDP growth rate grows above 4 percent for two or more quarters in a row. You know you’re at the end of a boom phase when the media says the expansion will never end and when even the grocery clerk is making money from the latest asset bubble.
The bust phase is like life in the Middle Ages. It was brutish, nasty, and mercifully short. It usually lasts only 18 months or less. GDP turns negative, the unemployment rate is 7 percent or higher, and the value of investments falls. If it lasts more than three months, it’s a recession. It can be triggered by a stock market crash, followed by a bear market.
A stock market crash can cause a recession. As stock prices fall, everyone loses confidence in the state of the economy. When investors don’t feel confident about the future outlook, they pull out their investments. Full Story
Causes of Boom and Bust Cycles
Boom and bust economic cycles involve:
Rapid economic growth and inflation (a boom), followed by:
A period of economic contraction / recession (falling GDP, rising unemployment)
Causes of boom and bust cycles
1. Loose Monetary Policy
If monetary policy is too loose, it means real interest rates are too low given the state of the economy, e.g. UK economy in late 1980s. Loose monetary policy reduces the cost of borrowing and mortgage payments (increasing disposable income). This will cause a rise in investment and consumer spending. This rise in aggregate demand can cause excessive growth in the money supply and cause economic growth to be above the long run trend rate.
In the post-war period, the UK has had a long run trend rate of around 2.5%. This means that typically, productive capacity (AS) increases by about 2.5% a year. If interest rates are kept low, aggregate demand (AD) will increase much faster then the rate of productive capacity and economic growth will be too high. If economic growth is substantially above the long run trend rate, we will tend to see:
Rising inflation. Demand grows faster than supply. Therefore firms put up prices.
Wage inflation. Due to high demand for labour, there will be labour shortages leading to wage inflation. Full Story