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Created on: 10/25/2011 6:53:20 PM Last Update: 10/25/2011 7:09:48 PM Posted by: RTT
WARNING: This entry is 4714 days old. It may contain broken links, out-dated or misleading content. Please read on with caution.
1 POST
Felix Zulauf, USD least ugly currency
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 The site is a fan of Felix Zulauf of Zulauf Asset Management, and we thank him for his public statements, here is another via the BigPictureBlog.
Source: Felix Zulauf: The Die is Cast
The highlights:
• We are on a spiral caused by mass credit creation, excessive borrowing, reckless spending, and a enormous credit crisis. The end result is inevitable, and most likely unavoidable.
• The Europeans have created their own credit crisis, and it is attributable, in part, to the creation of the EU. They EU is following a path similar to what the US went through n 2008-09.
• There will be yet another bailout in the US and QE3 (or more) — but not until the situation gets much worse; That refers to both the market and the economy.
• There was a window for an Austrian economics solution, but that opportunity has passed. Worse still, imposing Austrian economics on weak countries here and now will only make the situation worse, causing a recession or making any contraction worse.
• Equities remain in a long term secular bear market dating back to 2000, one that is unlikely to end before 2017.
• Multiples will compress over this time period. Look at more than P/E — consider Price to Sales as well.
• Of all the currencies in thew world, the US Dollar is the least ugly. That says less about the Greenback than it does about the Euro and Yen.
• The Eurozone was problematic since its inception. You cannot have a monetary union but not simultaneous fiscal union.
• Policy makers inevitably punish savers.
• Germany is the creditor to the rest of Europe. Given their history, their biggest concern is hyper inflation, while nations like Greece, Italy and Ireland are facing deflation
• Watch for rising populism in response to economic turmoil. It is already happening in Europe, and will eventually come to the US.
• The political situation in Europe is unlikely to improve until the crisis is much worse. The same is likely true in the US.
• There will be an eventual repricing of all currencies.
• Greece may very well will leave the Euro, but Italy is probably to big to do so.
• Countries that can print & devalue their own currencies get to invite tourists, stimulate economy, and climb out of their morass. Tied to the Euro, they simply cannot.
• There is no currency that will retain its value over the next decade except Gold. Every other currency is in a race to print and devalue, inflating away the debt.
• There is no price target on Gold, but he expects higher prices, and perhaps significantly higher prices over the next decade.
COMMENTS:
- Felix is bullish in both gold and USD, this means one will be 'buy and hold' and the other will be for 'traders' (swinging market, no new highs each month).
- If USD is strong then the EURO is weak and so will be stocks.
- The USD could be very strong subject to: China slow down, US recession, Euro mess.
- Investing in gold stocks could be a tad tricky if gold is a traders market.
- Our bias is:
(i) Gold has gone exponential and is due to lose trend momentum as gold in portfolios is in profit and can be used to meet margin calls (so buy on big dips) (ii) the USD has been sold down very hard and could revalue higher (maybe USD and EURO 1:1), (iii) which may see USD up and stock down hard, what else do you expect for 2012 presidential election year. (iv) Curve balls: China slow down gets serious, QE3+, USA recession is not mild. (v) In a very difficult market watch out for those large investors that get the information juice before the rest of us: PIMCO, Buffet, etc. No body plays fair when the game gets rough.
More for you on USD:
Euro up, stocks up, Euro down, stocks down
US Dollar Gann Angle Trend Study
US Dollar cycle review
NOTE: Posts here are the lite version, more depth on each subject can be found via our RTT Plus membership.
Changes in the world is the source of all market moves, to catch and ride the change we believe a combination
of Gann Angles,
Cycles,
Wyckoff and
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is the best way to ride the change, after all these methods have been used successfully for 70+ years.
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Investing Quote...
.."Frequent requests are made for the name of someone who will teach the Art of Tape Reading. I do not know of anyone able to read the tape with profit who is willing to become an instructor. The reason is very simple. Profits from the tape far exceed anything that might be earned by charging tuition fees to his students. Its simple economics"…
Richard D Wyckoff
..“If it’s obvious, it’s obviously wrong.”..
Joe Granville
My experience has been that in successful businesses and fund management companies, which performed well over the long-term, some courageous decisions were taken. Courageous fund managers reduce their positions when markets become frothy and accumulate equities when economic and social conditions are dire. They avoid the most popular sectors, which are therefore over-valued, and invest in neglected sectors because being neglected by investors they are by definition inexpensive. The point is that it is very hard and that it takes a lot of courage for a fund manager to avoid the most popular sectors and stocks and to invest in unloved assets. Finally, every investor understands the principle ‘buy low and sell high’, but when prices are low nobody wants to buy.
Marc Faber
..“I buy on the assumption they could close the market the next day and not reopen it for five years” and “Much success can be attributed to inactivity. Most investors cannot resist the temptation to constantly buy and sell.”..
Warren Buffet
.."It's easier to fool people than convince them that they have been fooled"..
Mark Twain
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