As we kickoff trading, today major economic warnings are taking place from China to Europe!
Global Economic Slowdown Picks Up Speed
January 22 (King World News) – Here is a portion of what Peter Boockvar wrote today as the world awaits the next round of monetary madness: If there is a chart I can show John Williams and the rest of the Fed who look at financial conditions as an input to where they believe monetary policy should be calibrated, here is a chart over the past 5 years between the Goldman Sachs Financial Conditions Index and the S&P 500.
INVERSE RELATIONSHIP: Goldman Sachs Financial Conditions Index (Orange) vs S&P 500 (White)
Notice they tend to just move opposite each other in the chart (higher GS Fin’l index means tighter) but means that they are pretty tightly correlated…
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Peter Boockvar continues: To this point, as the stock market has risen over the past few weeks, we are now back to pricing in the possibility of another rate hike by year end, albeit modest, instead of the very slight odds of a cut priced in at the end of December. Chasing ones tail.
BIG TROUBLE: Chinese Economy Continues To Slow
The mixed Chinese economic data seen yesterday has the Shanghai comp down 1.2% after the .6% drop on Monday. The yuan is at a 2 week low, copper is down by 1.7% and the Aussie $ is at a 2 1/2 week low vs the dollar in response. It is clear that the Chinese economy continues to slow and Chinese authorities are not trying to speed it up but instead are trying to control/cushion the moderation. Considering the debt excess they are choking on, bankruptcy headlines sound scary but it’s what they need to experience in order to speed up the cleansing process. I don’t want the Chinese economy to turn into Japan where the bank aid was never ripped off.
Below Zero For 10 Straight Months!
…Moving on. The January German ZEW economic expectations index (measuring what investors think as opposed to actual business) remained negative at -15 but that is up 2.5 pts and 3.5 pts above the estimate. It’s below zero for 10 straight months. The real disappointment was seen in the Current Situation component which fell sharply to 27.6 from 45.3. That is well below the forecast of 43 and the lowest level in 4 years.
MAJOR EUROPEAN ECONOMIC WARNING: Current (Economic) Conditions In Germany Plunge To Lowest Since Q1 Of 2015!
Gold Update
King World News note: Within hours KWN will be releasing a very important update on the gold market from Michael Oliver. In the meantime, it is becoming quite clear that the global economic slowdown is picking up steam. This present a huge problem for the trapped Fed, but it will be extremely bullish for gold.
Also of importance…
3 Drill Rigs Now Turning!
Jonathan Awde, CEO and Director of Gold Standard: “We are excited to get back to work on our lead Dark Star deposit which we expect to continue growing in 2019. We are also evaluating the results of our 2018 program prior to setting drill priorities for the rest of this year. Our preliminary assessment is that we have discovered several new high potential targets that will make for another exciting year of exploration on our Railroad-Pinion Project.” To read today’s important news release CLICK HERE.
***KWN has now released the remarkable audio interview with Egon von Greyerz and you can listen to it by CLICKING HERE OR ON THE IMAGE BELOW.
ALSO RELEASED: Egon von Greyerz – On The Cusp Of The Biggest Financial And Economic Collapse In History CLICK HERE TO READ.
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