Monday, May 23, 2011

Morning Update/ Market Thread 5/23

Good Morning,

Equity futures are tumbling again this morning, with the dollar higher, euro lower, bonds higher, oil down sharply, gold & silver down only slightly, and most food commodities slightly lower as well.

The ongoing (never ending) debt crisis in Europe is garnering attention over the weekend. The debate about who’s worse off in the world still mindlessly rages while the vast majority fail to understand the root problems of debt saturation, how we got that way, and WHO is behind the monetary madness. No real progress can or will be made until we exit the central banker paradigm, stop arguing about “stimulus” versus austerity (false left vs. right argument), and get on with the job of creating a money system that works at the benefit of the entire population, not just a few self-anointed narcissists.

The stimulus/ austerity waves go back and forth and right now the market appears to be pricing in the possibility that austerity is next… again. At least that’s a mainstream take on things. My take is that the markets are 100% captured and none of it has meaning except in how we’re being manipulated context. Keep that in mind especially when you see a chart of the dollar – talk about squishy, there are more manipulations there than in Obama’s long form birth certificate! Still, the dollar is getting close to a down slopping area of overhead resistance just as the major indices are nearing the bottom of a downtrend line of the recent decline.

Below is a daily dollar chart showing this overhead. A break above that trendline may mean that equities and commodities are about to have a harder time, but a turn back down in the dollar may mean another rally leg higher:

Below you can see that this morning the DOW has slid to recent down slopping support on the 30 minute chart of the DOW futures:

Meanwhile the manipulated economic data can’t even be manipulated into positive territory anymore. The Chicago “Fed” National Activity Index fell from +.26 to -.45 in April with the three month moving average also falling negative. Here’s Econonotaclue:
The Chicago Fed national activity index fell to minus 0.45 in April for the lowest reading since August and down from March's revised plus 0.32. April shows a month-to-month decline in manufacturing-related indicators which the report attributes in part to Japanese-related shortages in the auto sector. The three-month moving average is minus 0.12 for the first negative reading since December. The average indicates that economic activity was below trend in the month though it also indicates that inflationary pressures were subdued.

Oh yeah, another wave of austerity and the pulling of liquidity will subdue inflationary pressures all right… oh, for about a month maybe until the “Fed” can’t stand the heat and then the justification for QEinfinity rolls out. Waves of deflation and inflation, but the overall trend will be inflation until we create a system that is not built around the need for inflation. The only way to do that is to end the process of financing national debts with the private banks via the bond and treasury market and to create a system like Freedom’s Vision that ensures that overall price inflation targets ZERO (the ONLY inflation target that makes any sense).

This week we’ll get several housing market data points, and we’ll get version 2 of Q1 GDP. The consensus is that it will be revised higher to 2.1% - I say only in the “Fed’s” money printing dollar debauched fantasy world is that true.

In the real world, attempts at never-ending growth always hit limits. Drill and spill in the Gulf, build nuclear reactors right on the shoreline in an earthquake/ tsunami zone. Those are the types of things done when we are pushing the boundaries of our knowledge – I happen to think boundaries need to be pushed, but when we’re talking about such important things we need to push with care and oversight. When special interests rule politics, oversight is out the window.

In Arnie Gunderson’s latest update he discusses the implications of the Fukushima disaster on our existing reactors and has clear thoughts on weak areas that need to be addressed. My take is that they won’t truly be addressed and new disasters will continue to happen until we get our money system and our politics back into the hands of the people. Here’s Arnie:

The Implications of the Fukushima Accident on the World's Operating Reactors