Croatia To Join European Union

Today, Croatia joined the European Union, time to celebrate! But should we really celebrate?What we took in the European Union is a bunch of problems.First off, the unemployment rate of Croatia is a staggering 20%, rivalling with Spain and Greece.Second, its balance of trade is negative and has always posted a trade deficit.To make matters worse, since 2008, the country was in recession and is still in a recession. Added to this, there is an almost...

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Unemployment Vs. Real GDP

The inverted Unemployment Rate is correlated to Real GDP and is also known as Okun's Law named after Arthur Melvin Okun. Zero Hedge featured Okun's Law in this article.Red curve: inverted yoy% change in unemployment rateBlue curve: yoy% change in real GDPNever in history has the unemployment rate been so artificially low (red graph artificially high) as today. The red curve has never been higher than the blue curve, which implies that the unemployment...

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About Delivery Ratio and Cover Ratio at the COMEX

Interesting article by Jan Skoyles.http://therealasset.co.uk/comex-2-paper-gold/The summary says to us that the amount of gold bullion backing COMEX obligations is at an all time low (Cover Ratio). Meaning, there is very little gold backing at the COMEX.If the delivery ratio (amount of delivered gold against contracts) ever spikes upwards, the COMEX could get under stress. Today, we are still fine, because people aren't really taking delivery as much as they should be.Also notable is that registered stock is declining at a much faster pace than...

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PIIGS Bank Deposits Outflow Accelerating

As I noted a month earlier, Spain's bank deposits posted an outflow and this outflow is accelerating for the month of May 2013. This time, Italy is posting outflows too.Greece, Cyprus are of course still in a decline. I expect bail-ins to come if this trend continues. Europeans should be worried about their deposi...

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Case Study on the Housing Market of Belgium and The Netherlands

With the newly discovered correlation between building permits and housing prices, I wanted to put this correlation into practice more at home. Let's see how The Netherlands is doing. On Chart 1 we see that since 2006, the amount of building permits has dropped and is continuing to drop.Chart 1: Building Permits in The NetherlandsA similar case is found in Belgium, where we see that the amount of building permits dropped since the top of 2006 (Chart...

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Building Permits Vs. Housing Market

The authorization of building permits is a leading indicator for the housing market. As you can see on this chart, the new private housing units authorized by building permits move first, while the house price index moves several months later. This way, you can predict the direction of the real estate market. On June 2013, the direction of the housing market is clearly upwar...

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Correlation: Lumber Vs. Housing

Apparently the lumber price is a leading indicator and a proxy for the housing market. (Zero Hedge)If the lumber price goes up, 2 months later, the housing market goes up. The same happens the other way round.So it's very important to watch the lumber price, which can be found here.http://www.nasdaq.com/markets/lumber.aspx?timeframe=10yAnd even more important, if this correlation is real, then you can just predict the market and earn money by betting...

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What is Open Interest?

BrotherJohnF explains open interest he...

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The Housing Bubble is Deflating

With the recent surge in the mortgage yields, let's see how the housing market is doing. The two key metrics to look at are mortgage rates and household income. Let's analyze the mortgage rates first.Historically, there is a high correlation between 30 year U.S. treasuries and 30 year mortgage rates (Chart 1). The chart shows that the 30 year treasury yield has spiked upwards starting in 2013, so I expect that the 30 year mortgage rates will spike...

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GDP revised lower

As I suspected here, declining PMI will always result in lower GDP forecasts and "unexpected" revisions downward.GDP growth was going to be 2.4% on an annual rate, now it is only 1.8% in Q1 2013.This also means that the Zero Hour Debt chart is on track to go to zero.More weakness is coming ahead of us as interest rates and mortgage rates go up.&nb...

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Follow Up on Eric Sprott's Bullish Call on Gold

As a follow up on Eric Sprott's bullish call on gold here, let's see what has happened ever since.His premise was that hedge funds take possession of their physical gold of the GLD trust, because there isn't any other gold available. As they take possession of this physical gold, they are going to sell it to China who give huge premiums on this physical gold (around 3%).Following chart indeed says to us that hedge funds are still taking possession...

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The Onion Report: The cost of a dollar

There might be some truth behind this. One day the cost to print a dollar bill will be higher than the dollar itself. Or in Gerald Celente's wording: "The U.S. Dollar Isn't Worth The Paper It's Printed o...

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Michael Pento's Outlook

Michael Pento's view on the market and Ben Bernanke's "Taperin...

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Marc Faber's Outlook

Adding this to my Marc Faber Blog Libra...

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Gold/Silver Premiums Going through the Roof Again

Following the smash in gold and silver this week, premiums are soaring all over again.Chart 1: First Majestic Silver PremiumChart 2: APMEX Junk Silver PremiumChart 3: Gold Premium Shanghai to Lon...

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Ben Bernanke: "Our debt is in great demand"

Ben Bernanke (2013): "Our debt is in great demand". (at 06:40)Not anymore...

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LIBOR Vs. SHIBOR

As an analogy on this post, we can do the same analysis in China. The key is that SHIBOR affects Chinese adjustable mortgage rates.Following site gives us the Shanghai LIBOR rates, namely: SHIBOR.http://www.shibor.org/shibor/web/ShiborJPG_e.jsp As you can see, we had a pretty big spike in SHIBOR (Chart 1), which also means a surge in China interest rates/funds rate.Chart 1: SHIBORAs you know a rise in interest rates means a rise in bond yields too,...

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Correlation: LIBOR Vs. Fed Funds Rate

The LIBOR rate at which the banks lend each other money, is an important element in calculating the gold lease rate. Obviously, this LIBOR rate is influenced by the Federal Reserve via the Fed Funds Rate.As you can see on this chart, there is an almost 100% correlation between LIBOR and the Fed Funds Rate.As the Federal Reserve said that they will keep interest rates at zero until 2015, LIBOR rates will keep floating around the 0% level.This also...

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Goldman Sachs Was Right!

Remember I bookmarked this post?http://katchum.blogspot.be/2013/04/whatever-goldman-sachs-says-on-gold-do.htmlI hate to say it, but Goldman Sach's call for gold going below $1300/ounce has become reality. Oh well...

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Initial Jobless Claims starting to rise, S&P in for a correction

This week's initial jobless claims were rising again as reported by Zero Hedge and based on the obvious correlation between the S&P and initial jobless claims here, I expect that the S&P will come down eventually.On top of that, the capacity utilization for the previous month was edging down (blue chart going up), which confirms that the unemployment rate will start going upwards (red chart going up). While deflation sets in with a lower...

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Warning: Deflation is on the horizon

As we know, Ben Bernanke sinked the markets yesterday and this has consequences.As the premium on silver of some silver miners soars to 30%, we are getting to a point where mining companies are actually losing money, especially when they have mining projects in development. At these prices, nobody is going to invest in exploration companies as they would lose money in doing so.On the other front, namely bonds, we see the U.S. treasury market decline...

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Shanghai Gold Market Opens With a Boom

Shanghai Gold Market opens with a boom after the Dragon Boat Festival.The gold premium jumped to 1.2%. For silver, Shanghai premiums shot up to 2.2...

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COMEX gold another huge drop

Interesting article by Zerohedge:http://www.zerohedge.com/news/2013-06-11/jpm-vault-gold-drops-284-overnight-slides-fresh-record-low-withdrawals-accelerateAs I indicated here, COMEX will run out of gold in August 2013.The drop in gold stock is getting worse. Hold on to your belt. Once COMEX has a force majeure, the manipulation is over and the banks know this, as they are now net long in gold for the first time in history (since I monitored it).If...

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Copper Contango Report Shows Weakness to Come

We thought that the contango was going back to backwardation, but lately we see a reversal again.This is a not so positive development for commodities and stoc...

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Silver ETF Vs. Silver Price

As demand is now being dictated for a part by the ETF's, we need to pay attention to what is happening in the trusts.If you see the hedge funds buying (red chart goes up), you should become bullish.You can monitor this chart daily at the iShares Silver trust site:http://us.ishares.com/product_info/fund/downloads/SLV.htmChart 1: Silver Ounces in SLV Vs. SLV Pr...

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Jim Rickards' Currency War

I like this vid...

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U.S. Debt Flattening Out

I don't know if you've noticed, but this is the first time in more than a decade where total public debt has actually dropped...I'm wondering what is happening. (of course, it's the debt ceiling of $16.7 trilli...

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COMEX to run out of gold in August 2013

At this rate, the COMEX will run out of deliverable gold on 14 August 2013.Yes, that's only 2 months from now!You decide what will happen when people can't redeem their physical gold and instead get a paper settlement.David Morgan explains how little physical gold there is in the COMEX (scroll to 12:0...

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China Gold Imports from Hong Kong in April 2013: Disappointing

The China Gold Imports from Hong Kong in April 2013 came in lower than expected, but still very high. I had hoped for a higher number with the decline in gold price...

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COMEX not to be trusted?

While updating my COMEX charts I found something odd."The information in this report is taken from sources believed to be reliable; however, the Commodity Exchange, Inc. disclaims all liability whatsoever with regard to its accuracy or completeness. This report is produced for information purposes only. For questions regarding this report please email Registrar@cmegroup.com or call (312) 341-3370."I wonder why they put that in their reports...

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Correlation: S&P Revenues Vs. PMI

Dr. Ed Yardeni's blog is a pool full of critical information and one of them is a newly discovered correlation which I will add to my collection.Apparently the PMI is a leading indicator for the S&P revenues, which also means the PMI is a leading indicator for the overall direction of the stock market. This is consistent with the correlation between the PMI and the GDP, which is correlated to the total stock market index on itself via the Warren...

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When will inflation in Japan show up?

People are wondering if the money printing experiment in Japan is actually going to be inflationary or not. As we all know, the inflation rate is measured by the CPI (consumer price index). If the CPI goes up, we have inflation.The CPI of Japan consists of the items given in Chart 1. The items with the most weight in it are food, housing, transportation and fuel. Therefore, it is important to watch food and energy costs as well as housing prices...

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