I was off air for most of June, and early July, pc's and I do not mix well.
US stock markets are presently in the 4th range up on the daily chart.
Markets move in sections, mostly three, sometimes there is a 4th, before
a then retracement back to a weekly chart mid point. The 4th section is
the most difficult to trade, usually it is trend-less, one day up, one
day down. You could watch the US for a double top next week as a
possibility; that would be my forecast at least anyway. See how to make
profits in commodities, page 50. You could do well to continue reading
on from here, to page 51. When Mr G talks about space, or space
movements, to understand him I substitute the word range, do that and
see how you go.
I assume you noted some cotton data early June, but I will point it out
anyway; June 4 low, 5/8ths retr on the weekly, 3/8ths on the monthly,
2*1 angle on the weekly off October 01 low, 180 degrees Dec 4th, 144
weeks off 67.31 top. Me - I waited for a higher low, like the
other lows December, October and May of last year - and we didn't get
one anyhere near it, check the lows on a daily chart and you will see
what I mean. Did anyone get long ?
Property market in Oz must be going well:
-developer stocks like FKP and VWD going gang busters (may I claim that
I did point this out earlier in the year)
-opposition pollies starting to make noise about govt actions to control
or 'help smooth' the housing cycle; the usual statements come out, land
banking, ending negative gearing etc etc
-crazy ideas floated, involving banks, to help new home buyers get into
the market, which usually serve only to push land prices even higher
A govt inquiry into land price and why young people are being priced out
of the market is not far away now, 2O06? The beginning of the end after
I have continued research into my book - several pc's in for repairs at
the same time gave me some enforced reading, having started to read up
on all past 18 year cycles, and trying to track down and buy some now
really old and out of print books. I can tell you the clear repetition
of history has startled even me, and I can't wait to share it with you
all, let me tell you. In every past cycle, the biggest land value gains
came right at the end, though it is not evenly spread across all sectors.
I noted the AFR p 78 4th July, the world's newest obl target is due for
completion in Taipei late next year, 508 metres, 101 stories. This is
expected to be taller than the Mori building still being built in
Shanghai. Could one ask for a better repeat setting? The Taiwan mayor
says "this building will lead Taiwan to the top of the world, giving
Taiwan the drive to fulfill its dreams..." Mmmm, anyone smell a
property cycle bubble coming on here... Remember if the speculation ends
up big, it will bust badly.
Assuming the speculation in real estate continues, the time will
approach when you want to keep an eye on the bank shares, with a view to
shorting. Around the peak, (still a way to go yet - 3 to 4 years would
be my best guess at this stage, but we will let the indicators tell the
story) a knowledge of how to read bank annual reports could be handy -
if anyone of you know someone who can do that let me know. You would be
looking for the bank (or listed building society or listed property
developers, land financiers or home mortgage companies), that is the
most over-exposed to property lending, a la like pyramid or Westpac in
the late eighties.
Set yourself up to do this, I can tell you; the real estate speculation
looks to me like it will boil over...same as it's been doing the last
200 years, roughly every 18 years.
As it happens, there is a reasonable write up in this month's
Intelligent Investor magazine about banks and banking, page 11 issue
130, with one to come next issue apparently; the write up I say is
'reasonable', it would have been great except they - like absolutely
every one else - fall into the same trap of explaining that banks "take
your money, paying you a rate of interest for the privilege, and lend it
out at a higher rate". This is completely false. Banks do not lend money
- for they have none to lend. Banks create credit, out of absolutely
nothing, thin air in fact, backed mostly by the value of govt granted
privileges, the largest of which is land value (though last cycle
spectrum came a close 2nd). Banks DO NOT lend money. Never forget this.
These days the credit is created as a debt, (called a bank loan) rather
than actual notes and coins, as in the 18th and 19th centuries. Another
good book on the subject apart from Galbraith's 'money whence it came',
is 'the grip of death; a study of modern money, debt slavery and
destructive economics' by Michael Rowbotham.
Credit creation, based on land value, is why all capitalist economies
have a business and property cycle. This WILL continue until the
underlying structure of the capitalization of govt granted licenses into
tradable commodities is stopped by community consent.
I just love a good conspiracy; the UN weapons inspector, thought to be
the source for a BBC report suggesting UK officials doctored
intelligence hyping Iraqi weapons ability, is found dead. A heart
attack? Poor soul, one shouldn't take a leisurely stroll in the woods at
such a pace...
Hong Kong'ers protest over the new law to limit civil liberties. (Does
any government really want to stop its people from simply associating
with one another ??, who knows what they might talk about together) The
Civil Humans Right Front organized the gatherings, a loose coalition of
45 non profit groups. You can bet the Chinese are busy organizing spies
to infiltrate each one with a view to creating chaos amongst each,
rendering them ineffective. Tis a safe bet each group will be out of
business withing five years, never to be heard of again.
Watch the US. This years govt budget deficit is the largest on record,
next years will be worse. This is a vast creation of credit, coming into
the economy as a debt. The effect will be to increase land price...oh
how history is repeating, just the numbers get bigger.