No6's Financial Markets Thread

[littledavesab]

Don't really know much about this project as such, but when it comes to security issues you could say that the fundamentalists can find all manner of targets in that part of the world, just as they can in Saudi Arabia, Iraq, etc, so unless the region has a specific known problem and you are considering an investment I wouldn't say that you should dismiss it because those fears are never likely to go away. As we know, much of our energy comes from regions with security issues that never seem to end, yet the supply gets through. I suppose the risk/reward is high, but probably worth it for those brave enough because the fundamentalists never really stop anything permanently. Most of their fear is the threat they pose, most of the time they are never strong enough to carry it through.

 

Thanks for that No6. Is of interest re my Dragon Oil shares - operations based in Turkmenistan. So there is a fair bit of political risk anyway. I have been in this for a while anyway. If pipeline it comes off would be a bonus as they seem to be flaring a lot of gas - not good enviromentally (nor is flogging oil via Iran...). Russia has objected in past to running a pipeline under the Caspian.

 

I guess also the fundamentalists dont want to bite the hands that might possibly feed them! If the pipleline goes ahead then maybe some "security" jobs would be on offer to locals!!

 

Of course with recent events (OBL) the geo politicals might change soon, hopefully for the better... one can but hope.

[littledavesab]

Good article here I thought on the possible future path for the oil price. Upside downside argument. Mentions Thorium !

 

http://www.stockopedia.co.uk/content/the-case-for-human-ingenuity-the-absolute-return-letter-may-2011-56186/?submitted=1#1

 

+ link to the Grantham piece mentioned (registration is free)

 

https://www.gmo.com/Europe/CMSAttachmentDownload.aspx?target=JUBRxi51IICi3XDk3kgSh6vLtzbPwJWv9j9b13l0dYjF9rvqA%2bOemQJnKCUtBlLDDT%2fh8Vj%2fLziezC4nF7YfHbgtGQ%2bonQI1B9fB4K%2fEAsE%3d

bullish on commodities.

[No6]

Good article here I thought on the possible future path for the oil price. Upside downside argument. Mentions Thorium !

 

http://www.stockopedia.co.uk/content/the-case-for-human-ingenuity-the-absolute-return-letter-may-2011-56186/?submitted=1#1

 

+ link to the Grantham piece mentioned (registration is free)

 

https://www.gmo.com/Europe/CMSAttachmentDownload.aspx?target=JUBRxi51IICi3XDk3kgSh6vLtzbPwJWv9j9b13l0dYjF9rvqA%2bOemQJnKCUtBlLDDT%2fh8Vj%2fLziezC4nF7YfHbgtGQ%2bonQI1B9fB4K%2fEAsE%3d

bullish on commodities.

 

Commodity, resource and energy companies look like they are selling off in the UK at the moment. They can be very volatile, but watch for when they turn back up.

 

FTSE 100 - Fallers

 

Schroders (SDR) 1,698.50p -9.27%

Schroders (Non-Voting) (SDRC) 1,390.00p -8.61%

Lloyds Banking Group (LLOY) 53.58p -7.66%

Essar Energy (ESSR) 427.90p -5.14%

Fresnillo (FRES) 1,438.00p -5.08%

Lonmin (LMI) 1,530.00p -4.43%

Vedanta Resources (VED) 2,130.50p -4.03%

Kazakhmys (KAZ) 1,258.50p -3.56%

BG Group (BG.) 1,408.25p -3.35%

Hargreaves Lansdown (HL.) 620.75p -3.16%

 

FTSE 250 - Fallers

 

Lamprell (LAM) 341.40p -5.95%

Talvivaara Mining Company (TALV) 502.75p -4.24%

Ferrexpo (FXPO) 460.40p -4.02%

Stobart Group Ltd. (STOB) 129.80p -3.85%

Aquarius Platinum Ltd. (AQP) 347.00p -3.61%

Premier Oil (PMO) 1,826.00p -3.39%

Kofax (KFX) 451.95p -3.39%

Redrow (RDW) 125.65p -3.27%

International Personal Finance (IPF) 352.80p -3.08%

Hochschild Mining (HOC) 562.50p -3.02%

[jerpy]

Thankyou for the explanation, myself I think we are just seeing more muddling along and taking the bullishness out of the market in some sectors.

 

It was the point and figure chart with all those markings I didn't get at all.

[No6]

So are we finally seeing that big sell off in commodities and what does it mean for the markets in general, especially in the UK where international commodity related companies form a significant part of the index? It may well have some way to go from here and the charts of some are not looking too rosy right now. I will post some when I get a chance later.

 

NEW YORK (MarketWatch) -- The broad sell-off in commodities sent investors scurrying for defensive positions in popular exchange-traded funds that track crude and silver.

 

Volume in bearish "puts" to sell the United States Oil Fund /quotes/comstock/13*!uso/quotes/nls/uso USO -9.11% soared to an all-time record as crude prices collapsed below $100 a barrel in afternoon trading.

 

To hedge against losses tied to falling crude, traders poured into bearish $40 put contracts that expire at the end of the week, as well as puts with strike prices like $40, $39 and $38 expiring later in the month. The USO oil ETF traded down 9.4% to $39.20 recently. The ETF has shed 12% so far this week.

 

About 235,000 bearish oil ETF puts changed hands compared with 145,000 bullish calls in overall volume nearly four times the daily average, according to Trade Alert.

 

As precious metals sold off from recent record highs, options on a popular ETF tracking silver continued to show investors were throwing in the towel. For the fourth straight session, put volume in the silver ETF hit a record high.

 

Traders piled into puts to sell the silver ETF at $35. The iShares Silver Trust /quotes/comstock/13*!slv/quotes/nls/slv SLV -11.89% fell 9.6% to $34.58 recently, down 26% this week.

 

http://www.marketwatch.com/story/commodities-sell-off-drives-hedging-2011-05-05

 

Oil prices, which have been rising for months and stoking inflation in Canada and around the world, have abruptly reversed course, plunging to just below $100 (U.S.) a barrel on Thursday amid signs that the global economy is slowing.

 

The sharp drop in one of Western Canada’s most important export products is being attributed to a number of factors. Since last fall, oil has marched swiftly from $80 a barrel to more than $110 because fast-growing Asian and South American countries were hungry for fuel, while civil war in Libya has raised concerns about supply.

 

But recent moves by policy makers in China, India and elsewhere to crack down on inflation by raising interest rates – even at the expense of economic growth – have thrown a wrench into the economic and geopolitical forecasts that oil traders were betting on. Now they are swiftly backtracking. Thursday’s decline of $9.44 a barrel in New York trading was the largest one-day drop since the recession two years ago.

 

http://www.theglobeandmail.com/report-on-business/industry-news/energy-and-resources/oil-prices-plunge-other-commodities-caught-in-broader-selloff/article2011354/

 

SINGAPORE, May 6 (Reuters) - Silver rebounded on Friday from

its biggest one-day dollar fall since 1980, and gold also

recovered as cheaper prices lured in Asian investors keeping a

wary eye on U.S. employment data due later in the day.

 

Buyers are taking advantage of a fall in spot gold of more

than $100 from a record high in just four days and spot silver

that has shed 30 percent from a record of $49.51 hit on April

28.

 

Spot silver slumped by 12 percent on Thursday after another

margin hike by the CME Group on its COMEX silver futures

increased the cost of the trading the metal, dragging gold down

3 percent and triggering a brutal sell-off that sent commodities

from oil to copper sharply lower.

 

"Prices have dropped so much over the past few days and

bargain hunters are in," said Ong Yi Ling, an analyst at Phillip

Futures, adding that the weak outlook for U.S. employment data

helped add to the lure of gold.

 

http://www.reuters.com/article/2011/05/06/markets-precious-idUSL3E7G610G20110506

 

 

 

[No6]

Could be too early to be buying a commodities rebound.

 

The CRB Commodities Index broke out of its trend channel, warning that the trend has lost momentum and is close to an end. The Australian Dollar reacted accordingly.

 

========================

 

The Shanghai Composite Index reversed below 3000 and its rising trendline, warning of a correction. Failure of support at 2850 would test support at 2650, threatening a primary trend reversal. Bearish divergence on 21-day Twiggs Money Flow indicates selling pressure.

 

========================

 

Gold has been shaken by the fall in commodities, especially silver and crude. Penetration of the rising trendline would warn of a correction to test the long-term trendline around $1400.

 

========================

 

The Gold Miners Index often leads the physical metal and has penetrated its long-term trendline, warning of a reversal. Breach of support at 53.00 would confirm. Bearish divergence on 21-day Twiggs Money Flow indicates selling pressure.

 

========================

 

http://www.incrediblecharts.com/tradingdiary/2011-05-05_markets_gold_forex.php

[No6]

Glencore have picked a fine time to float.

 

Glencore's record London float is headed for the top end of its price range despite investor concerns about governance, providing a major fillip to its plans for a tie-up with miner Xstrata.

 

The £6.7bn tranche of shares available in the float has attracted more investors than the offer can satisfy, according to sources close to one of the investment banks managing the process.

 

So-called ‘cornerstone’ investors, including sovereign wealth funds and banks, have already subscribed for 31 per cent of the issue at a minimum of £5.80, the top of a range that begins at £4.80.

 

http://www.dailymail.co.uk/money/article-1384032/Investors-queue-buy-Glencores-record-London-float.html?ito=feeds-newsxml

 

The price of oil, gold and silver has tumbled with traders questioning whether the commodities boom has been overegged.

 

The price of oil tumbled by nearly $10 a barrel today, the Guardian reported, dragging silver, gold copper, lead and tin with it.

 

The tumble comes as speculation mounts that the commodities boom may be ending.

 

Traders were reported as questioneing whether the £36bn flotation of commodity trading giant Glencore marked the top of the market.

 

The price of silver fared the worst, falling 6% to $37.84, its worst week in nearly three decades.

 

http://www.mindfulmoney.co.uk/4178/investing-strategy/commodities-is-the-boom-over-glencore-s-ipo-price-questioned.html

[littledavesab]

Commodity, resource and energy companies look like they are selling off in the UK at the moment. They can be very volatile, but watch for when they turn back up.

 

So I see - ouch! Realised a little while after my last post. Have a great sense of timing dont I what with my other reply to how one would read the charts a couple of pages back...

[No6]

So I see - ouch! Realised a little while after my last post. Have a great sense of timing dont I what with my other reply to how one would read the charts a couple of pages back...

 

The falls should remind people that most markets are ruled by speculation not commitment. What I mean by that is that most of the traders that determine day to day price are speculators, who are really only interested in whether something is going up or down and whether they can jump on board. There are very few people who are totally committed to something. I suppose in the end the committed are the ones that get burnt the most if they find they can never let go when the bull ends. Still probably plenty of bull to come in the commodities boom though.

[No6]

Sell in May not so obvious anymore it would seem.

 

"Sell in May come back St Ledger day" (10 September) is an old proverb used in the City of London and reflects a popular view that share investments tend to underperform in the summer.

 

However, research from F&C investments tracking moves in the FTSE 100 shows that there have been four "up" summers and six "down" summers. The average rise in the "up" summers has been 9.67 per cent, while the average fall in the "down" summers has been 9.15 per cent. In other words, recent history has shown that the FTSE 100 is pretty much as likely to rise as it is to fall over the summer.

 

http://www.independent.co.uk/money/spend-save/seasons-have-little-effect-on-stock-market-2277289.html

[jerpy]

The falls should remind people that most markets are ruled by speculation not commitment. What I mean by that is that most of the traders that determine day to day price are speculators, who are really only interested in whether something is going up or down and whether they can jump on board. There are very few people who are totally committed to something. I suppose in the end the committed are the ones that get burnt the most if they find they can never let go when the bull ends. Still probably plenty of bull to come in the commodities boom though.

 

Thats a fair point. This fall is affecting, the real traders, those with longer term belief, be in individual stocks or commodities should always expect pullbacks. As they say nothing rarely goes up in straight lines.

 

As for the bull, nice pun slipped in there, you can bet on that

[No6]

Thats a fair point. This fall is affecting, the real traders, those with longer term belief, be in individual stocks or commodities should always expect pullbacks. As they say nothing rarely goes up in straight lines.

 

As for the bull, nice pun slipped in there, you can bet on that

 

 

And the things that do go up in straight lines, moonshots, have a nasty tendency to come back to earth even faster.

[No6]

A while back there was a thread on here about shorting Rightmove which I questioned the logic of at the time. RM still seems to be going strong despite the weak UK housing market, Estate Agents still have to advertise, but it is beginning to look a little overcooked. Wonder if it will finally pullback a little over the summer?

 

Shorting Rightmove - now is the time thread

 

http://www.greenenergyinvestors.com/index.php?showtopic=11737&st=0&p=190514&hl=rightmove&fromsearch=1entry190514

 

Share price: 1,039p (-27p)

 

Further evidence that the housing market remains lodged in the doldrums came from the Nationwide report on house prices yesterday. After rising by half a percentage point in March, Nationwide's house-price index slipped by 0.2 per cent in April.

 

In annual terms, prices were down by 1.3 per cent. And although recent mortgage-approval figures suggest housing-market activity may be edging off lows, the picture remains uncertain. Besides, in historical terms, the flow of credit remains fairly thin.

 

All this argues against investing in house builders and though there will always be exceptions, we remain cautious on the whole. That said, there are ways to play the housing market – and the property website Rightmove is one of them.

 

The company, which charges estate agents for listings on its ever-more popular web pages, boasts an enviable position in the online property sector. For many, it is the first port of call when it comes to searching for rentals or for places to buy. This trend will accelerate as would-be buyers seek to make the most of their limited ability to borrow by bargain-hunting.

 

Yesterday's interim management statement showed that the site continues to attract more and more visitors, with page impressions up by 15 per cent in annual terms over the first three months of the year. Searches on mobile devices were "over 200 per cent higher" in the same period.

 

Still, like a nervous home buyer, the valuation gives us pause for thought. Rightmove trades on multiples of nearly 25 times forward earnings, says Altium, which last night lowered the stock to sell for that reason.

 

However, though we agree that the shares aren't exactly cheap, we do not think the multiples are so prohibitive as to warrant such a bearish stance, particularly in light of the strength of the business. Don't move out yet.

 

http://www.independent.co.uk/news/business/sharewatch/investment-column-stay-put-at-rightmove-despite-the-slump-2279100.html

[No6]

There are a couple of threads around here on Free Capital by Guy Thomas. There is an interview on Stockpedia.

 

As it happens, help is now at hand with the arrival of Guy Thomas’ excellent new book, Free Capital. Thomas is an investor and former academic actuary who has painstakingly chronicled how 12 UK private investors accumulated sufficient "free capital" to dedicate themselves full-time to their portfolios. Each has made £1m or more - in most cases considerably more – from investing.

 

With some similarities to Money Makers or Jack Schwager’s Market Wizards series, the book covers these investors’ backgrounds, how they made their fortunes, and how they spend their days now. For those interested in the UK investing space, it is highly recommended reading for a wide range of insights on successful strategies and approaches.

 

Most of the investors interviewed by the author are only identified using pseudonyms but some profiles will be familiar to users of this site (wink, wink); they apparently also include some of the most prolific posters on bulletinboards like TMF & ADVFN. The divergence in background is striking. Some have several academic degrees or strong City backgrounds; others left school with few qualifications and are entirely self-taught as investors. They also have very different styles. Some invest most of their money in a small number of shares and hold them for years at a time; others make dozens of trades every day, and hold them for at most a few hours. Some are inveterate networkers, who spend their day talking to managers at companies in which they invest; for others a share is just a symbol on a screen.

 

http://www.stockopedia.co.uk/content/guy-thomas-free-capital-at-last-a-true-to-life-account-of-uk-investing-56265/?utm_source=sendgrid.com&utm_medium=email&utm_campaign=Site%20Features

[No6]

I quite like this weekly analysis of the market.

 

http://www.youtube.com/watch?v=CbmHi7sKlzE

[No6]

Another Motley Fool interview with Naked Trader, Robbie Burns on spreadbetting this time.

 

http://www.fool.co.uk/money-talk/the-dos-donts-of-spread-betting-8122.aspx?source=ufwflwlnk0000001

[jerpy]

A while back there was a thread on here about shorting Rightmove which I questioned the logic of at the time. RM still seems to be going strong despite the weak UK housing market, Estate Agents still have to advertise, but it is beginning to look a little overcooked. Wonder if it will finally pullback a little over the summer?

 

Shorting Rightmove - now is the time thread

 

 

Have to say Rightmove really surprises me. No position, but it might pay to watch out with Robbie for RM summer blues. He had at least two really good short plays back in 2008, I can remember reading the N.T thread and noting it.

[No6]

Have to say Rightmove really surprises me. No position, but it might pay to watch out with Robbie for RM summer blues. He had at least two really good short plays back in 2008, I can remember reading the N.T thread and noting it.

 

Actually, I'm not that surprised as I wondered why others who were suggesting a short seemed to just lump it in with the rest of the struggling housing market. Just seemed to me that it could win regardless of whether prices were going up or down because estate agents need to advertise and Rightmove has the brand recognition and name to benefit. Having said that, the price does now seem to be generous to say the least, but people shouldn't think that bad news on house prices is necessarily bad news for Rightmove. Worth looking out for any Robbie short though! He doesn't get it wrong that often.

[No6]

More interesting takes on the bull market.

 

Why Stocks Will Rally When the Fed Stops Printing Money

 

By Dr. Steve Sjuggerud

 

The big fear in the market is this: What happens when the Fed stops printing money and starts raising interest rates? Won't stocks fall?

 

You'll be surprised...

 

I crunched the numbers and found, in recent times, stocks do surprisingly well when the Fed starts to hike interest rates.

 

Here's the best way I can explain it: When the Fed starts to hike interest rates, it's signaling to the rest of the world the danger has passed. When stock market investors believe the danger has passed, they push prices up.

 

You can see it in the chart below...

 

You'll notice the Fed hiked interest rates during the bull market of the mid-1990s. Over the next five years, stocks went on to rally to incredible new highs... and then crashed. The Fed also increased rates starting in 2004. Stocks continued to rally for years after.

 

In both instances, the Fed hiked rates for years before stocks felt the pinch of the increased rates. Stocks only start to fall, buckling the economy, after the Fed has hiked interest rates too high and held them there too long.

 

Importantly, we may have a long wait until the Fed starts to hike rates...

 

http://www.dailywealth.com/1726/Why-Stocks-Will-Rally-When-the-Fed-Stops-Printing-Money'>http://www.dailywealth.com/1726/Why-Stocks-Will-Rally-When-the-Fed-Stops-Printing-Money

 

A BULLISH SIGN FROM THE TRANSPORTS

 

If you're looking for confirmation of a "bullish on stocks" stance right now, make sure to check out the Dow Jones Transportation Average...

 

More than 100 years ago, Wall Street Journal founder Charles Dow set the foundation of modern technical analysis – the "art" of watching stock price trends.

 

One of Dow's major tenets holds that the stock market is healthy when both the manufacturers of goods and the transporters of goods are doing brisk business and enjoying rising stock prices. Dow called it a "confirmation" when his Industrial Average and Transportation Average reached new highs together.

 

Below is a chart of the price action in the Dow Jones Transportation Average over the past year. This index measures the stock price performance of America's most important railroad, trucking, and shipping firms. As you can see, this index is enjoying a bullish series of "higher highs and higher lows" and is sitting near its yearly high.

 

http://www.dailywealth.com/

 

[littledavesab]

Another Motley Fool interview with Naked Trader, Robbie Burns on spreadbetting this time.

 

http://www.fool.co.u...fwflwlnk0000001

 

You beat me to it! + Not sure if is of interest but financial sense had the "Noted technician John Bollinger, inventor of the Bollinger Bands," on at the weekend

 

http://www.financialsense.com/contributors/john-bollinger-cfa-cmt

[jerpy]

Actually, I'm not that surprised as I wondered why others who were suggesting a short seemed to just lump it in with the rest of the struggling housing market. Just seemed to me that it could win regardless of whether prices were going up or down because estate agents need to advertise and Rightmove has the brand recognition and name to benefit. Having said that, the price does now seem to be generous to say the least, but people shouldn't think that bad news on house prices is necessarily bad news for Rightmove. Worth looking out for any Robbie short though! He doesn't get it wrong that often.

 

That would be me then, since it's pretty well what I expected to be honest. Useful lesson and pleased I never felt tempted to trade against that rising chart!

 

Remember thinking Carnival would go down with rising fuel and the rich Americans having less to spend. That one seemed to defy obvious market logic too; though I seem to remember fuel hedges at some point played some part.

[No6]

Bearish on commodities and stocks? Perhaps we will have a summer bear after all?

 

Global investors have tempered their optimism about the U.S. and world economies and plan to put more of their money in cash and less in commodities over the next six months, a Bloomberg survey found.

 

Almost 1 in 3 of those questioned say they will hold more cash, while 30 percent intend to reduce investments in commodities, according to a quarterly Bloomberg Global Poll of 1,263 investors, analysts and traders who are Bloomberg subscribers. Both results were the highest since the survey began asking the question last June.

 

A plurality -- 40 percent -- expects oil prices to fall in the next six months, the first time respondents felt that way since the inception of this poll in July 2009.

 

The “big stimulus game is over,” said Bill O’Connor, a poll participant and founder of Sagg Main Capital hedge fund in New York, in explaining why he’s moving money into cash as the Federal Reserve winds up its bond-buying program and U.S. lawmakers look to cut the budget.

 

============================

 

Bearish on Stocks

 

The poll, conducted May 9-10, also found that investors’ ardor for stocks is cooling. Two in 5 intend to increase their exposure to equity markets over the next six months, down from almost 3 in 5 in the last poll in January. U.S. investors in particular have become less keen on stocks: Just 37 percent say they are increasing their exposure, down from 57 percent in the previous poll.

 

The survey was taken after a turbulent week in the markets that saw commodity prices suffer their biggest decline in more than two years. The Standard & Poor’s GSCI Total Return Index of 24 commodities dropped 11 percent last week, led by a 27 percent collapse in silver prices. The gauge fell 3.9 percent yesterday and another 0.9 percent by 9:29 a.m. in London today. Crude oil fell below $100 a barrel in New York trading yesterday.

 

More than half of those surveyed expect silver prices to fall further in the next six months. Sixteen percent identified commodities as one of the markets that will suffer the worst returns over the next year, more than double the proportion that said that in January.

 

http://www.bloomberg.com/news/2011-05-12/investors-shifting-to-cash-from-commodities-as-outlook-dims-in-global-poll.html

[No6]

I read recently that some in the LibDems would prefer this option for when the time comes to privatise the state owned banks.

 

CPS calls for RBS and Lloyds shares to be given to taxpayers

 

The state should hand the shares its owns in Lloyds Banking Group and Royal Bank of Scotland to taxpayers giving windfalls of between £500 and £1,000.

 

Think tank the Centre for Policy Studies (CPS) said the best way to ensure taxpayer value for money from the re-privatisation of the holdings would be to distribute the shares among taxpayers.".

 

The CPS says what it calls a "universal privatisation" would be the best way to ensure the Treasury get the best value from the sale of the shares and would help "restore popular support" for the banks.

 

"We gave the Government our money to invest in the banks. If there is a profit on our investment, that is our profit. Like any investor, we want it paid to us promptly and directly. We do not want it lost in the maze of other Government schemes and projects," said Lord Saatchi, chairman of the CPS.

 

Every taxpayer could receive about £350 for the RBS shares the state owns and £150 for the Lloyds shares after deducting capital gains tax and taking into account the likely issue price of the shares.

 

http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/8517131/CPS-calls-for-RBS-and-Lloyds-shares-to-be-given-to-taxpayers.html

[No6]

We could be in for a rocky summer.

 

US raids civil service pension fund as it hits $14.3 trillion debt limit

 

The US has suspended payments into a civil service pension fund to free up almost $150bn (£92bn) as the major debtor nation approaches its legal borrowing limit.

 

Timothy Geithner, the US Treasury Secretary, announced the move in a letter on Monday to Congressional leaders as he explained that the move extends the government's breathing space to August 2 to avoid an unprecedented default on its borrowings.

 

The US Treasury expected to reach the $14.3 trillion limit on on Monday. Congress needs to raise the legal debt ceiling beyond its current limit, which will require Republicans and Democrats reaching agreement over an issue that bitterly divides them. President Barack Obama warned over the weekend that failure to raise the ceiling risks unravelling the world's financial system.

 

http://www.telegraph.co.uk/finance/economics/8517266/US-raids-civil-service-pension-fund-as-it-hits-14.3-trillion-debt-limit.html

 

[No6]

The Bank of England's big lie. Some of us have been saying for a while that the BoE always use the excuse of lower inflation ahead in order to keep IR's low today. Trouble is, when the time comes and they are proved wrong with their inflation forecast they simply say, in two years time, etc, etc. Question is, how long can they keep this lie going? So far they have done well to get away with it for several years, the latest being that as the inflation is imported, raising rates will not stop it. If true, the BoE has no role as an inflation fighter anyway. The BoE has always been in the business of helping to create inflation alongside it's other central banker friends. Like the story of the three bears, they prefer their inflation porridge neither too hot or too cold, but no one should kid themselves that it is not wanted.

 

The Inflation Mega-trend

 

The bottom line is that the central banks CREAT inflation by means of PRINTING MONEY (in its various forms from fractional reserve banking to Quantitative Easing), if they did not print money then there WOULD BE DEFLATION, as that is NORMAL for a stable monetary environment as technologically development would result in FALLING PRICES, but the central banks cannot STOP printing money as that is the primary means of TAXING 99% of the population.

 

We are living in a decade of high inflation that was covered at length in the January 2010 100 page Inflation Mega-Trend ebook (FREE DOWNLOAD), that contains 50 pages of analysis and 50 pages of wealth protection strategies.

 

Western governments such as the UK and USA are printing their way out of their fiscal crisis whilst emerging markets have soaring demand for commodities, goods and services and are exporting their inflation abroad so as to prevent their populations from revolting over ever higher food prices.

 

The Bank of England remains paralysed by the fear of another banking sector financial armageddon, and is continually pressured by the UK government that seeks high inflation as a means of making stealth deep real terms cuts in public spending, the deficit and total accumulated debt, thus the British economy is being sleep walked towards a wage price inflation spiral, as people will increasingly refuse to be lied to anymore and start to demand wage rises in line with real inflation.

 

Look the facts are as illustrated in the UK Sunday Times Rich List which saw the wealth of the 1000 richest people in Britain increase by 18% over the past year whilst ordinary people have seen the purchasing power of their earnings shrink by an average of 3%, a lot of smoke and mirrors have to be utilised by these 1000 ruling Oligarch's to ensure that the masses do not revolt but instead are forced to pay higher taxes and have their savings inflated away as the super rich Oligarchs DO NOT pay the same rate of tax and evade the consequences of inflation stealth tax by means of central banks funneling cash through various means into their back pockets such as the inflating of stock prices by 100% in 2 years, and the situation is even worse in the United States.

 

Bank of England's Worthless Inflation Reports Propaganda

 

High UK Inflation that has apparently surprised everyone to the upside for virtually the whole of 2010, by spiking and remaining above 3% from early 2010 illustrates the tendency of the mainstream press to basically regurgitate the views of vested interests that have beaten the drum of always imminent DEFLATION for the whole of 2010 as High inflation was always just temporary and should be ignored by the general population.

 

To look at the reason why high inflation has been ignored during 2010 we have to look beyond journalists, we have to look beyond academic economists that are paid to follow a school of thought that their pay masters want to push in the media. The place to look for the reason why high Inflation is being ignored is to the very top of the financial pyramid, to the Bank of England.

 

The connection that the mainstream press has never been able to make is that the Bank of England does NOT make Forecasts. Instead the Bank of England quarterly inflation forecast reports are nothing more than ECONOMIC PROPAGANDA, that virtually always converge towards the Bank of England achieving its 2% Inflation target in 2 years time, despite the fact that historical analysis shows that the Bank of England FAILS in achieving its 2% target 96% of the time.

 

The following are the last 6 quarterly Inflation forecast reports by the Bank of England issued from February 2010 to May 2011 that were instrumental in academic economists and journalists in the mainstream press regurgitating the always temporarily high inflation mantra during 2010 and into 2011, despite current CPI of 4%.

 

http://www.marketoracle.co.uk/Article28153.html