IMF Cuts Growth Forecast. Rates To Remain Low

While most market pundits expect the US Economy to accelerate growth due to “anticipated” increase in CAPEX, hiring or whatever other nonsense they believe in, even the IMF is not buying it. IMF Cuts U.S. Growth Forecast, Sees Greater Scope for Zero Rates

The International Monetary Fund cut its growth forecast for the U.S. economy this year and said theFederal Reserve may have scope to keep interest rates at zero for longer than investors expect

This has been my view for quite some time now. As our stock market mathematical and timing work clearly shows, the US Economy will be in a server recession by this time next year. That means that any and all tightening proposed by the FED will go out of the window. Instead, the FED will be looking re-inflate the economy/market through all means necessary. That means putting all interest rate increases on hold and possibly re-accelerating QE.

In short, expect interest rates to stay low for at least a few more years. This is further confirmed by our technical 10-Year Note view and it’s likely retest of the 1.5-1.6% range(double bottom in yields).

IMF Cuts Growth Forecast. Rates To Remain Low Google

February 24, 2014February 24, 2014

Warning: The US Economy Is Flying Blind…About To Crash

Over the last couple of years I have argued, sometimes passionately, that the Federal Reserve doesn’t really know what is going on within our own economy and our financial markets. Not only that, but I have also argued that they are a bunch of idiots and fools who believe that they can somehow control our financial markets.

If recently released transcripts, generated during the 2008 meltdown don’t prove my point of view without a shadow of a doubt, I don’t know what will. Here are just a few quick points from the said transcripts.

They didn’t even realize recession was happening until the 4th quarter of 2008. By that point the stock market has completed 80% of its down move. In fact, for most of 2008 they thought the recession “could be avoided”.

—-Hello???? Was anyone home??? Recession started in Q4 of 2007.

Bernanke talked about pent-up demand for housing as late as January 2008.
Bernanke was worried about inflation as late as January 2008.
Throughout Q1 of 2008 they have held a generally rosy view of the world and the US Economy

Here are the links to two great articles about the transcripts if you would like to learn more. Click Here and/or Click Here

The lesson here is twofold.

First, anyone who believes that the FED can either control, anticipate or predict financial markets and/or the economy is even a bigger fool. Neither Bernanke nor Yellen can predict the economy even if it hit them in the face with a brick. All they can do is look at past data and say “Oh, look, according to this data recession started in Q4 of 2007”. What a waste of time and money.

Second, they will always be behind the ball. They will always be a reactionary force as opposed to market makers. Take today’s environment for example. They are cutting QE and talking about raising the interest rates at exactly the wrong time. The damage from their crazy liquidity party has already been done. The worst thing they can do now is cut it. The faster they do it the faster the markets will collapse.

Why is any of this important?

Well, if you rely on FED to make money in the stock market and/or run your own business it becomes incredibly important. As such, no one should rely on any action by the FED as an investment indicator. It is as simple as that.

This brings us to financial markets and my premise that financial markets behave exactly as they should. Many people would argue that it was the FED’s actions that put the bottom in at the March of 2009 juncture, ensuring a subsequent and massive stock market rally.

WRONG.

Don’t confuse cause and effect. It was the market that made the FED’s look good and not the other way around. The market was structured to bottom on March 6th, 2009 at 6,469 and then have a subsequent 5-year market rally. It was the mid-cycle bottom (half point of bear market) and I predicted it as early as January of that year. I was 1 day and 100 points away. Close enough. I know I have shown this chart before, but let’s take another look.

If you perform the type of 3-dimensional analysis that I do you would know that the move between 2003 bottom and 2009 bottom would be IDENTICAL to the move between 1994 bottom and 2002 bottom. And so it was, exhibiting a variance of 22 3-dimensional units (equivalent to a few trading days or 100 points).

Any analyst working with this information would know that as soon as 2007 top was confirmed that the next move down would be exactly 8,130 3-dimensional units. Once the market developed further, the same analyst would be able to pin point the exact bottom with amazing precision and that is what I want you to understand without a shadow of a doubt. The stock market is not volatile or random, it is exact and precise.

Same thing applies to today’s market. In last week’s forecast I identified a turning point in February. While I am not yet at liberty to discuss this turning point (available to premium subscribers only), it clearly explains the market action we have witnessed over the last couple of days. By concentrating on mathematics and 3-dimensional analysis one can pick out turning points with a precision of a surgeon.

It is just my hope that the points above will force you to re-examine your reliance on the FED while eliminating your sense of false security.

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Warning: The US Economy Is Flying Blind…About To Crash Google

September 10, 2013September 10, 2013

Americas Hidden Depression

Bloomberg Writes: Recession? Depression? One in Three Thinks So

A third of Americans think the U.S. economy is in a recession or a depression and only one in six think it’s growing, says a new survey that also finds “deep-seated pessimism about the medium term.”

Americans are highly critical of policymakers, unwilling to take risks with their savings, planning to reduce their indebtedness over the next year, suspicious of the stock market, and more worried about inflation than unemployment, according to the survey released today.

The National Bureau of Economic Research has declared that the U.S. pulled out of recession more than four years ago—in June 2009—but a lot of people apparently didn’t get the memo.

The survey found that 85 percent of the 1,000-plus adults worry to some degree about their financial situation, compared with 90 percent three years ago. People who say they’re worse off than they were a year ago outnumber those who say they’re better off, 28 percent to 22 percent.

Read The Rest Of The Article Here

This is fairly easy to explain. The survey above shows the true state of the US Economy. Even though the numbers shows that the US Economy has recovered significantly from the March of 2009 bottom, nothing could be further from the truth.

The recovery was fueled and financed by Credit Bubble Finance. Meaning that the US Government basically wasted about a Trillion Dollars (some claim a lot more) to prevent a complete collapse in the US Economic System. However, the original “SIN” of massive credit expansion, cheap finance and speculation hasn’t been fixed yet. On the contrary, it has been made a lot worse.

Now the US Economy has massive imbalances that cannot be dismissed or fixed in any favorable fashion. It could only be done either through massive inflation or massive defaults. Even war is no longer a tool.

I am sorry to say, but my timing work clearly shows that both of those things are about to happen. First, deflationary credit defaults from now till 2016 final bear market bottom (and 2018 secondary bottom), followed by accelerated inflation thereafter.

Unfortunately, in such a scenario no one wins, but it does pay to be prepared.

If you can, please share our blog with your friends as we try to get traction. Gratitude!!!