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China started today with a another huge decline, this time a 7.63% drop. That's a massive 16% decline in just 2 days!!

Shanghai market

China joins the "great race to the bottom currency game"

In our very first publication of the TREND Letter in 2002, we warned that the US was going to enter the "great race to the bottom currency game", & start to devalue the $US. As we can see, that is exactly what happened from 2002 to 2008 (shaded area), where $US declined over 40% in value over that stretch.

US dollar

It's a global economy

Last week, we saw the Chinese government make yet another move to boost its economy & stock market. The Chinese government cut the pegged value of the Yuan three times last week. By the end of the week, the Yuan fell by 4.5% against the US dollar.

Being pegged to the US Dollar meant that as the dollar strengthened over the last couple of years, so too did the Yuan. This hurt Chinese exporters, so now the Chinese government has joined in on what we call the "great race to the bottom currency game."

The Day of Reckoning is fast approaching - are you prepared?

Everyone has heard of the Great Depression, but few are aware that after the stock market crash in 1929, global capital poured out of Europe, & into the US stock markets. Why?...because in Europe, every major country defaulted on their debt.

A question on gold

We received the following question from a Musings reader. Since we have received different forms of the same question for the past 4 years, we thought it would make sense to share our answer with everyone.

Q. I read a number of newsletters, & yours is the only one that seems to be anti-gold. Why do you not recommend gold at these incredibly low prices? You guys are missing the buying opportunity of a lifetime.

A ticking time bomb!

A ticking time bomb!

July 26 Update - TTT Subscriber Content

 

We have a bearish turn in the Weekly Indicator along with a new, much higher, Weekly pivot now at 18140.  

Since the start of the year, against popular opinion, we've forecasted lower equities.  Friday the DJIA closed at the 2nd-lowest point of the past 6 months.  It should continue lower.

What the oil data is telling us

While the mainstream media focuses on how US oil producers have significantly decreased their drilling activities for future oil reserves, we see very little discussion on how much more productive these fracking techniques have become, especially in the past 18 months.

Currencies can help you profit in the coming Sovereign Debt Crisis

We have stated many times that if we were to only trade in one sector, it would be currencies. The currency market, or Forex, trades over $5.5 trillion per day, & is the largest investment market in the world. By comparison, the daily trading volume on the New York Stock Exchange is only about $30 billion. The key to being a successful investor is understanding where the global flow of capital is headed, & one of the best & easiest ways to profit from that flow of capital is by investing in the right currencies.

It's not just gold

We received a lot of email yesterday, asking why gold is getting hammered. To answer that question, all we need to do is look at other commodities. They are also getting whacked...have a look:

Gold - down 18% since last July

Gold

Silver - down 29.4% in the last year

Gold has entered panic mode

Gold has entered panic mode

Right on target with our models' forecast, gold closed today below 1100 @ 1096, just above our original target of 1070-1090. Gold is now in panic mode, so we should see some high volatility for the next while. 

Corruption, debt, & poor administration put Rome on verge of collapse.

From The Telegraph...

Rome collapse

It may boast the Trevi Fountain, the Spanish Steps and the glories that were ancient Rome, but the city is now in chronic decline, its business leaders and inhabitants have warned.

Why is Gold declining?

Gold

The problem with many gold investors is that they fail to acknowledge that gold is a market, just like every other sector. Gold moves on a pendulum, going from bearish -> bullish, & then swings back the other way. This is how ALL markets work. To make money in any market, you want to buy in when everyone else wants out, & you want to sell when everyone else wants to buy.

The coming crash will NOT be a one-off event

Greece crisis to escalate soon

The Greece crisis issue has NOT been solved. The International Monetary Fund (IMF) made a stunning statement on Wednesday...it said that before it participates in another bailout, the IMF will require other EU nations to "forgive" significant portions of Greek debt, & "donate" €billions to Greece.

An eye opening view of the Greece negotiations with the EU

Varoufakis

We have said for years now that we need to get rid of lawyers running countries, & get people who understand the economy. The link below is the full transcript of an interview with former Greek Finance Minister Yanis Varoufakis.  In the interview he speaks openly & frankly about the difficulties in negotiating with EU people who really do not understand economics.

Our current investment themes

We are getting a ton of emails, with many questions. This alone tells us we are getting closer to the Directional Change & Key Turning Point that our models have forecasted. Here are our high level current themes.

First Official Projection Says at Least 61% of Greeks Voted ‘No’ in Referendum

Greece voted NO

From Wall St Journal...

A first official projection of Greece’s referendum outcome, based on early counting, said that at least 61% of Greeks voted “no” to creditors’ demands on Sunday, an outcome that—if confirmed—would set the country on a collision course with the rest of the eurozone.

The projection, announced by the company Singular Logic, the official partner of Greece’s interior ministry in carrying out the referendum, was announced after some 20% of the vote had been counted.

China markets crashing

China markets crashing

China's Shanghai market closed down almost 6% today. Over the past three weeks, the decline in Shanghai shares is valued at roughly $2.9 trillion, roughly the size of the UK economy.

Shanghai Market

Is the European Union trying to end democracy?

Varoufakis

With his frustration with the EU efforts to thwart any vote on whether or not Greece stays in the Euro, Greek Finance Minister, Yanis Varoufakis, posted the following blog detailing exactly what he says transpired in those recent meetings. If he is telling the truth, we as the public need to understand the arrogance of these bureaucrats and politicians.

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