APPLE COMPUTER UPDATE!
Apple Computer is still a shortsell. I have been telling my readers I will keep them up-to-date.
HOV - Hovnanian Housing -- seems to be breaking down.
British Pound - So it is time for the Brits to try to outflank the Japanese?
FIRST BUSINESS: APPLE COMPUTER UPDATE.
Not much to report. Apple is still negative and going lower. Look how the trend line (red, third pane down) is now flattening and trying to turn down. If it does turn down, this would be decidedly negative. Also note that the moving averages in the price pane (red, blue and orange), tried to make a bottom and now are trying to make a top.
Of course the big news of the day is that the Fed is getting scared, and might scale back Bernanke Operations this year, sooner rather than later. Markets all over the world tanked. Inflation is rising, even during a hearty deflation season, because of irresponsible leadership from the central banks. Now it is all starting to break down. Chaos is coming. Civil war is probably coming to the world, many nations, America, UK, European nations. Probably not to Japan, although that is because the Japanese respond to disappointment and fear differently than Westerners do. But it will lead to another fascist anti-Western nationalism in Japan.
We know that Bernanke's Debt Bubble Inflation Theory was not his own theory. He is following a Japanese Finance Minister from the 1930's who did everything that Bernanke did in 2009. His name is Korekiyo Takahashi, and this is Bernanke's hero. The problem is, Bernanke only read the first three years of Mr. Takahashi's success stories. Then Bernanke must have closed the book -- it is a tragic story.
Minister Takahashi did QE, ZIRP, yen devaluation and saved Japan from the Great Depression. That is, he saved Japan for a while; by crushing the Yen, Japan's exports grew and swamped Asia. Japanese manufacturing rebelled against the Great Depression. But then the UK responded to the currency war with a currency war of their own; and with tariffs against Japanese products, in China and India, which stopped Minister Takahashi in his tracks. Then interest rates started to rise; and Minister Takashashi tried to cut spending, which proved to be a disaster to the economy, and to himself personally. Then came hyper-inflation, which reborn Keynesian's claim is a phantom thing.
Her is the whole story:
The finance minister at the time (the 1930's in Japan) was Korekiyo Takahashi, a man who it seems is something of a hero to Ben Bernanke - in 2003, Bernanke referred to him as having "brilliantly rescued Japan from the Great Depression through reflationary policies in the early 1930s".
You'll be wondering how he did this - given how tricky rescuing economies from deflationary pressures appears to be these days. Simple really... He took Japan off the gold standard (allowing the yen to float freely), outlawed the conversion of paper currency to gold, slashed interest rates to the bone, enacted massive government spending and made it legally possible for the Bank of Japan to buy and hang on to government bonds (hello QE). It worked.
Equities boomed, the yen collapsed, exports soared and growth hit 6%. Then Takahashi started trying to get out. And it stopped working - his attempt to reverse some of the QE in 1935 resulted in a failed auction, something that told him the deficit spending had to come to an end. Unfortunately for him, most of the spending was going on warfare and the military didn't much fancy any spending cuts.
The result? An irritable group of young officers, keen not to see the flow of public cash to their cause diminished in any way, hacked the 82-year-old finance minister to death....
Am I wishing for a similar fate for Ben Bernanke? Well, I just wish he's resign, admit his failure, and write his memoirs; and wait for an audit of the Fed to show how many laws he has broken, and how much American money he has given to foreign bankers.
SECOND BUSINESS: HOV, HOVNANIAN HOUSING.
Anyone who has read my blogs knows that I consider the so-called 'Housing Recovery' in America to be a fraud, a secondary bubble designed by Ben Bernanke, with his friends in the bank, to trick Americans into rushing back in to a deflating Housing Bubble and get burned a second time. The Housing Bubble will not bottom until interest rates are high; and until no one gives a damn about flipping houses for a living. The Fed stomping on interest rates and keeping them at zero is a picture of the opposite of a housing bottom. The Fed is shameful. They do not care about Americans being caught in a debt collapse. Their only interest is in saving the banks that hold toxic debt on America's overpriced housing, which still needs to come down 30-50%.
Hovnanian is the first house-building stock I follow that is beginning to buckle. It could go down to as low as $3/share from here -- this is my opinion, of course. I've been wrong many times before.
THIRD BUSINESS: WELCOME TO THE CURRENCY WAR. GREAT BRITAIN FIRES MORE EXOCET MISSILES.
We read above that it was mainly Great Britain who responded to Japan's currency war in the 1930's, sinking Japan's effort to save itself through devaluation of their currency. Of course, this currency war, the 2009 Currency War, has really been run by America and Great Britain, through QE and other strangulation of interest rates. It suddenly 'became a currency war' in the public mind, when a non-Anglo Saxon country got involved (Switzerland joined the fray years ago also). The Euro is in a strange place because a weaker Euro drives up the cost of Second Tier State's cost of debt-funding; a higher Euro destroys the EU state's ability to compete with exports of other countries. It's not really the Euro that has been strong, but other nation's have been rushing to devalue their currencies, and the Euro has bobbed up.
Pictures of the recent UK currency selling:
GBP vs Indian Rupee: The Pound is breaking down, which will put more inflation pressure on India, and more pressure to raise interest rates in response, which will shrink the economy.
Japan has won the first round of devaluation against the Pound. But England is getting ready to fight back. It will be an interesting battle.
In Vietnam, where I live, land values have collapsed as interest rates have risen. Inflation is running 2-3% higher than reported GDP. Prices for gasoline, cooking gas, food have jumped through the roof. This is a picture of what happens to the losers of the currency war, those without the resources to fight back. It is a fixed game. The rich nations own the table and the casino. And they are bringing another war to the Earth through their greed, and their unwillingness to make credit MORE EXPENSIVE and make business take a loss for bad planning and bad management.
A weaker dollar forces up prices for everything priced in Dollars. The Dollar has lost 20% since 2000; and the government is still telling us that inflation is insignificant. When they finally wake up to reality (and let their denial go), it will be too late.
We are heading into another Time of Hardship. We need to let the Giants fall; and we need to take care of each other.
God bless all of you.
Michael J. Clark