Market Trends – Mon 7 May, 2012

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Roger Wiegand

  1. On May 7, 2012 at 3:17 pm,
    Larry says:

    Thanks Rog. It looks more like the three stooges movie “Who’s on first” every day.
    Their can be no resolution without acceptance.

  2. On May 7, 2012 at 3:25 pm,
    Big Al says:

    HI Larry,

    You, my friend, took the words right out of my mouth!

    Big Al

  3. On May 7, 2012 at 4:42 pm,
    Jody D says:

    Thank You for your descriptive opinions. As always, I enjoy your reports.
    Jody D

  4. On May 7, 2012 at 5:26 pm,
    Bob Veitch says:

    Before this is all over i believe we will see blood in the streets. When the average working man comes to understand that the Government, the Banks and of course Wall Street have executed the greatest ever redistribution of wealth things will change quickly. The three groups will eventually have to flee for their lives. As Bob Dylan once sung ” the times they are a changing”

  5. On May 7, 2012 at 8:15 pm,
    hal says:

    Look–last week we had jobs numbers that even the liberal news outlets pointed out the numbers games. And many saw this coming.

    Pretty soon we should see some wave of action because our government is lying to us on several fronts. Ok–so the problems are extreme and difficult if not impossible to fix without a reset of sorts.

    But I do not think it is just an election year that is causing the lies.

    This is going to be a mess.

  6. On May 8, 2012 at 12:58 am,
    Martin (UK) says:
    • On May 8, 2012 at 4:38 pm,
      Jody D says:

      Martin (UK),
      Thanks for the link.
      Jody D

  7. On May 8, 2012 at 5:45 am,
    Tex says:

    China is buying crude oil from Iran using its currency the yuan, an Iranian diplomat has said.

  8. On May 8, 2012 at 8:44 am,
    Reo says:

    Gold and Silver continue to Drop Rog….your continual prediction of a parabolic highs etc etc are really getting OLD.

  9. On May 8, 2012 at 9:23 am,
    Past-Expiry-Dot-Com says:

    If the US bond market unravels as Trader Rog predicts, what would that mean to the bond market in Canada? Would they simply go down in value as people flee bonds in general (regardless of country)?

    • On May 8, 2012 at 5:31 pm,
      John W. Robertson says:

      I have pondered that myself, Past-Ex. I’d have to say yes, it would affect most countries’ bonds. Unless a currency has the following attributes, it cannot survive on it’s own:

      1. Liquidity – there aren’t enough Canadian dollars (or Australian, the other ‘good’ fiat) in existence to satisfy the demand. In theory, one might think the dearth of something relatively valuable is good, but with currencies, if there aren’t enough in volume, then the big players just don’t seem to want to buy and hold them. They may like trading them, or speculating with derivatives, but not necessarily hold them long-term.

      2. Inherent Value – the CDN $ is arguably stronger than the US and Euro, and should be, but it’s still fiat. As much as it’s nice to see the CDN reach par with the USD for a sustained period of time, look at how bad it’s had to get in the US just for that to happen. One might think the CDN should be worth 1.5x the US, rather than just par, given the relative debts going forward. Unless, of course, Canada’s own baby-boom and retirement demographics are just about as bad. Whether the value is real or perceived, the investing world only values the Loonie about equal to 1 US dollar at the moment.

      3. Interest Rates – Canadian interests are still low. Australia’s dollar is considered to be quite strong now as they raised interest rates in 2010 and haven’t looked back (they can afford to, with their booming economy). When bonds crash, Canada and Australia will be able to demand better spreads on their bonds, but to what end? The US will just pay an extra 2% and people will buy US instead. Canada and Australia will have to raise rates so high to remain attractive, that they’ll kill growth. Of course, things may be so bad, it won’t matter, but that will be the argument.

      4. Trade – most countries (sarcasm) cannot exist in a vacuum, though a few in North Korea and Venezuela might disagree. As such, will bonds burn, Canada’s terrific exports will soften. As they soften, and the Federal deficit grows, it’s own bonds become riskier.

      I’ll leave it there. This is a hard subject to be brief on. It gets into the question of what values a currency in the first place, supply and demand, trade, and trust. There comes a point that, if everyone is going to be flushed down the toilet, would you just rather go first or last?

      • On May 9, 2012 at 5:23 am,
        Past-Expiry-Dot-Com says:

        Thanks John W. Robertson! That was quite educational. I also love toilet anologies!

        If I recall right, Canada’s demographics (baby boom) lags the US by 4 years. i.e. not much.