The Calm Before The Inflationary Storm


The economy has been showing great gains, and that positive trend is fueling fears of a surge in inflation. The Consumer Price Index, the key predictor of inflationary trends, rose .05 percent in January, which greatly exceeded the anticipated rise of 0.2 percent. The market reacted as expected as stocks fell, and government bond yield rose.

The Fed is keeping a close eye on these developments, and that could fuel the inflation fears. The fear of rising prices includes most economic sectors, from gasoline, housing, food, healthcare, to clothing.

Predictably, the market reacted immediately to the CPI rise with a 100-point loss after opening, even though the decline was quickly reversed. Investors are anticipating that the Federal Reserve could raise their interest rates three or more times by year-end.

As the economy continues to grow, unemployment has fallen to a record low and the sale of tangible goods is up. Economists are anticipating the economic upswing to continue as the GDP is expected to grow by 3 percent, faster than anticipated. Since 2009, the GDP has only risen by an annual average of 2.2 percent. As a result, prices for consumer goods have risen predictably and steadily. The Federal Reserve is setting policy with a 2 percent inflation in mind. A higher-than-anticipated inflation rate could raise interest rates, making it more difficult for companies to borrow needed funds. Following the passage of a $300 billion spending package, market-watchers are now convinced of a 62 percent chance that the Feds will raise interest rates three times by December. Rate hikes in March and June are almost a certainty, with the third hike a high possibility. A fourth hike is not out of the question and becoming more likely. This is seen by many as the real problem.

On top of the $300 billion spending package, the government has signed off on a $1.5 trillion tax cut over the next ten years. President Trump has also promised more funding for large and long-overdue infrastructure improvements.

All the signs for economic growth are in place, and economists such as Joel Naroff of Naroff Economic Advisors, Inc. are anticipating the consequences of “too much of a good thing” to be rising costs and rapid inflation.

Between 2000 and 2016, food prices have increased by almost 40 percent. This number is within the norm as it comprised a reasonable 13.1 percent of household income in 2016. For a household in a lower-income bracket, however, this amount jumps to 36.6 percent, making it far more significant to poorer consumers. The chart below from zerohedge depicts the rise in food prices since 2007 and the actual impact of inflation for staples at the dinner table.

Chart by Zerohedge

Only a handful of food items fell in price, with meat prices increasing by an average of 50 percent.

Consumers are also subjected to higher prices due to tariffs on imports. As a matter of fact, tariffs can double the cost of certain items. The price of certain fruits and vegetable, leather goods, chocolate and dairy products, to name a few, are inflated due to import taxes, or tariffs. The government imposes these tariffs to protect local industries and jobs from unbridled foreign competition.

The import of steel and aluminum has some major financial and security implications. The US is a major steel buyer from across the world, while we only export 25 percent of the amount of the steel we produce. That makes the US a major global player in the steel market. President Trump is considering a tariff of up to 25 percent for worldwide steel imports and a 53 percent tariff for steel imported from 12 specific countries. Aluminum will face a general worldwide tariff of around 8 percent and a 23.6 percent tariff from specific countries. Both steel and aluminum imports will also face import quotas, thus raising prices even more.

Global steelmaking capacity is up 127 percent from 2000, but the demand for steel has not kept up with capacity. Currently, the worldwide capacity for steel production is at 700 million tons; however, this number is 7 times the amount of steel used in the US.

China is the world’s major steel exporter. Its monthly steel production equals the US’s entire annual production of steel. This situation has lead to the demand for a 53 percent import tariff and quotas on all major steel producing countries, including China, Vietnam, Brazil, Thailand, Costa Rica, Turkey Malaysia, Russia, Egypt, Republic of Korea, India, South Africa and India. The purpose of these strict new measures is to increase US steel production from its current 73 percent capacity to 80 percent.

During 2013 to 2016, aluminum suffered the loss of 6 smelters in the US as demand fell by 58 percent. New plans for an improved infrastructure should raise demand considerably. Currently, the government is recommending a minimum 7 percent tariff on all aluminum imports, with a 23.6 percent for aluminum imported for Vietnam, China, Russia, Hong Kong and Venezuela. Imports from all countries can expect an import quota.

All these anticipated measures are expected to benefit the US steel and aluminum industries and raise consumer prices for commodities using these materials. While prices drop in the US, the quotas will help decrease aluminum prices in China, thus allowing for cheaper exports of items manufactured with steel and aluminum. Our policies focus on manufactured good rather than raw material, so the US needs to consider that the quota of these materials will result in cheaper products. The usual remedy is higher tariffs to allow competition with locally-produced goods.

These signs of impending inflation have investors taking another look at gold as the historically most reliable hedge against inflation.

We could be facing a major gold bull market soon. This one will be quite different from the bull markets in the 1970s or the post-2000 market. An entirely new factor is being introduced into the global gold markets with potentially huge consequences. This time, it includes the Islamic factor in the gold trade. One-quarter of the world’s population is Islamic, and investing in gold has been against Islamic law. This is changing, and one-quarter of the world’s population could be infusing the gold market with $3 trillion of investments.

In addition, China has opened the Shanghai Gold Exchange. China has huge gold reserves and wants prices set in actual gold value instead of paper futures. Currently, for each physical ounce of gold, there are 252 ounces of contracted futures on paper. This could change drastically if China has its way, and it could create a gold bull market of historic proportions.

Our growing economy, along with anticipated changes in tariff regulations and entries into the gold market make inflation in 2018 almost a certainty.

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Conservatives Furious After Twitter Purges Thousands Of Accounts

One month after Project Veritas revealed that Twitter was indeed “shadow banning” and blocking views critical of Hillary Clinton, the social network appears to have done it again, and overnight Twitter appears to have suspended thousands of accounts overnight, infuriating conservatives on the platform.

As Bloomberg reports, prominent conservative pundits and activists said Wednesday that thousands of their followers had been deleted overnight.  Other users said they received messages from Twitter asking them to confirm they were real people before being allowed to keep using the service.

“The twitter purge is real,” conservative podcast host Dan Bongino said on Twitter. “Twitter blocked me from twitter ads last night and purged thousands of followers.”

Conservatives have long accused – and in retrospect, with reason – Twitter of targeting them specifically. EvenAjit Pai, the chair of the Federal Communications Commission, has said the service discriminates against conservatives. On the flip side, progressive users say Twitter doesn’t do enough to stop harassment against women and people of color. Some argue President Donald Trump, Twitter’s most influential users, should be banned for bullying opponents.

While Twitter has yet to make a public statement about the issue, Gizmodo reports that right-wing users believe that they’re being targeted in a mass purge of suspected conservatives under the guise that they are “Russian bot” accounts.

As Bloomberg adds, Twitter has been seeking out and shutting down automated accounts that pretend to be real people as pressure mounts to purge the service of “bots” that artificially inflate follower counts and advertising metrics.

Other fake accounts have been traced to Russian-backed agents that the U.S. government says are working to sow political discord in the country. Researchers say as many as 15 percent of users could be fake, a number Twitter says is much lower.

It’s unclear if the latest loss of followers is related to bots. A Twitter spokesperson didn’t immediately return a request for comment

In response, a hashtag called #TwitterLockOut was launched by conservatives to talk about the purge, with some claiming that real people (as opposed to bots) were locked out of their accounts. On Wednesday morning The hashtag “TwitterLockOut” was trending in the U.S.

Everyone from well known figures of the alt-right, like neo-Nazi Richard Spencer, to people with Twitter handles like @Isa4031AMP, @DonofJustice, and @Patriotsavior seem to have been impacted by the move—at least when it comes to their follower counts.

As has happened on previous occasions, conservatives claim that they’ve lost hundreds and sometimes thousands of followers overnight.

Bill Mitchell, a popular voice within the community known for his tweets defending President Trump, claims that he lost roughly 4,000 followers overnight.

Many people who are angry with Twitter are advocating for a move to Gab, a competing social media platform that has become the preferred alternative to Twitter among conservatives.

Some Trump supporters have even blamed the Twitter account purge on Russia.

Mike Flynn Jr., son of the former Trump national security advisor, also claims that Twitter is targeting conservatives, though he claims he’s given the company the “benefit of doubt.”

Gizmodo said it has reached out to Twitter and will provide an update if @Jack’s company – whose stock in recent days has soared on the back of its first ever profit and a short squeeze – responds.

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Big Bitcoin Bat?

Big Bitcoin Bat?

Bitcoin / Dollar BITFINEX:BTCUSD

Soo let me start this off with the standard comments and disclaimers 🙂 I personally am not trading Bitcoin             at this time and am not advising anyone to enter any trades off the back of this post.All that aside, in going through some analysis on the chart there is an area of interest developing that if we were able to come down to, could provide some good opportunities for long entries.

After the accelerated move up to 20k at the end of last year we have seen a huge correction of late. IMO             , even without doing any chart analysis I think fundamentally BTCUSD             is still headed lower before it starts to really climb again, but when we go through the motions and start taking a closer look at the chart we can see that there might be some other technical hints to that end as well. On the H4 and D1 charts, there appears to be a potential bullish bat pattern currently in formation. The D point for entry is down around the 5k level, which I think in and of itself is an interesting place to be but then we can add in another Fib level, that being the 161.8% extension of the A-B leg, and we find it right down around the same level.

The traditional Bat pattern target 1 IF we get down there, would be around the 10k level which has its own significance already, and then a further T2 level around 14-15k – nice clean numbers which could be of some importance.

Anyways, as mentioned before, I am not a BTCUSD             trader, but just putting out a potential idea for anyone who might be looking to flesh out any of their existing analysis on this instrument. All that being said, watch BTCUSD             now just sky rocket and never come back to touch the 5k level again 😀

Regain Control From Nanny Zuck – How To Make Facebook Show You The News Again

Facebook Time Well Spent by Taking Control of Your Feed

The beginning of 2018 saw a dramatic change in how the world’s most popular social media platform, Facebook, presented its content. Curation has always been a real issue with Facebook, but users who were once empowered to decide their personal feed scroll are now actively being managed. Here’s how to gain back some control.

Also read: Good News for Israeli Bitcoiners

Regaining Facebook Feed Control

It’s really not that complicated. Find a valued source, walk the browser to, click Like, and next to that button click Follow; while on the Follow button be sure to select See First. This way, valued content will continue to flow through your personal Facebook feed. Otherwise, Facebook has decided to curate content for its users, and information and news users relied upon, such as, are quieted in favor of bad vacation photos in front of monuments.

“One of our big focus areas for 2018 is making sure the time we all spend on Facebook is time well spent,” began CEO and Facebook founder Mark Zuckerberg. He went on to contend, “we’ve gotten feedback from our community that public content — posts from businesses, brands and media — is crowding out the personal moments that lead us to connect more with each other.”

Facebook Time Well Spent by Taking Control of Your Feed

This means content some found either objectionable or cumbersome is to be struck in order for a more personalized Facebook experience. As such, “we’re making a major change to how we build Facebook. I’m changing the goal I give our product teams from focusing on helping you find relevant content to helping you have more meaningful social interactions,” Mr. Zuckerberg explained.

It’s a grand, seemingly mature vision from the one animating Mr. Zuckerberg’s early enterprise: wooing college women. Facebook’s value, at least initially, was its personalization. If a user’s attraction to the platform was to “connect” with other people, then that option was beyond available through Friend requests, community forums, groups, and so forth.

Facebook Time Well Spent by Taking Control of Your Feed

Nanny Zuck

However, at some point Facebook became a distribution channel. The company sought outlets from across the spectrum, large conglomerates to niche news. Like a drug dealer, Facebook welcomed all comers, and many a business was built and maintained afloat through Facebook’s ever-growing user base. And then things began to change.

Mr. Zuckerberg and his crew have distinct business interests. To pretend otherwise is to be naive. Anecdotal and university level research suggests Facebook favored slants on the news over others, and often designated opinions out of its favor as “violating community standards.” Fair enough. It’s their company, their rules. But then the advertising revenue idea switched to promoted content, and, again, standards were all over the place.

Facebook Time Well Spent by Taking Control of Your Feed

It’s clear Mr. Zuckerberg has gone full Nanny: “We feel a responsibility to make sure our services aren’t just fun to use, but also good for people’s well-being.” Furthermore, “Some news helps start conversations on important issues. But too often today, watching video, reading news or getting a page update is just a passive experience.”

Facebook is like that super beautiful woman who mistakes her winning of the genetic lottery with profundity, only to find out when her looks fade how little interest there actually is in her ideas. She’s often left shocked, stunned. Something like that is happening with Facebook and its success. Facebook believes its hype, ascribing to itself too much importance and, as a result, too much philosophical doo-goodery.

Facebook Time Well Spent by Taking Control of Your Feed

Take Control

The market will work it out, especially as competitors rise. A decade’s worth of social media experience has humbled the most aspirational of tech executives. Very often adults want shackles lifted and the power to decide what they see to be entirely their own. Businesses that head in the opposite direction, focusing on “well-being” rather than killer content for users, will fade.

For now, alternatives for social media are aplenty, even if Facebook dominates. In a crazy, always changing cryptocurrency ecosystem, having access to timely news from a trusted source only increases in value.

What do you think of Facebook’s changes? Let us know in the comments section.

Images courtesy of Pixabay, Facebook.

Need to calculate your bitcoin holdings? Check our tools section.

The post Regain Control From Nanny Zuck – How To Make Facebook Show You The News Again appeared first on Bitcoin News.

US Home Sales Fell in January

U.S. home sales unexpectedly fell for a second straight month in January, weighed down by a persistent shortage of houses that is pushing up prices and keeping first-time buyers out of the market.

The National Association of Realtors said on Wednesday that existing home sales dropped 3.2 percent to a seasonally adjusted annual rate of 5.38 million units last month. December’s sales pace was revised down to 5.56 million units from the previously reported 5.57 million units.

Economists polled by Reuters had forecast existing home sales rising 0.8 percent to a rate of 5.60 million units in January. Sales fell in all four regions last month. Existing home sales, which account for about 90 percent of U.S. home sales, declined 4.8 percent on a year-on-year basis in January.

via CNBC

The Basics of Technical Analysis

The Basics of Technical Analysis. A few weeks ago, the global stocks market started to fall. Some indices, such as the S&P and Hong Kong’s Hang Seng dropped so much that they entered a correction zone. To many investors and market watchers, this was a surprise to them.

However, to traders who believe in technical analysis, this situation was not a surprise. It was an expected thing. As I had written before the drop, the S&P was trading in an increasingly overbought position as shown below.

In the financial markets, assets move for several reasons which are categorized into technical and fundamental reasons. In the fundamental aspect, assets because of the economic and intrinsic issues. For example, an economic reason for the rise in a currency is the improving employment numbers. For stocks, fundamental reasons could include the quarterly and annual financial results.

On the other hand, technical reasons are those associated with the chart patterns. Every day, traders take time to analyze chart patterns and then decide on when to enter and exit. In the example above, while the fundamentals for US stocks were strong, the technical chart pattern showed a different picture.

There are hundreds of technical indicators today. To be excellent at doing this type of analysis, there are a few things you need to do.

First, select a few indicators and study them. A common mistake I often notice is when traders want to be excellent at all indicators. This is wrong because, using multiple indicators will only present you with confusing details.

For years, I have specialized on a few indicators that have been really good and if you are a new trader, I recommend them. First, there is the Fibonacci Retracement indicator. When plotted well, the Fibonacci Retracement indicator will give you an indication of where the asset is likely to move to. It will not help you predict whether the chart will go up or down, but it will give you a guidance of where to look at.

For example, in the chart below, you can easily predict where the asset will find support and resistance.

The second indicator I regularly use is the Relative Strength Index. This is the one I used to predict the coming correction in the S&P 500. The RSI is an oscillator indicator which can tell you when an asset is overbought and oversold. In this, it is always risky to buy assets that are in the overbought zone and short those in the oversold zone. To make a better decision on this, you can combine this with other oscillators like Stochastics and the Relative Vigor Index.

The third best indicator I recommend is the Moving Average. There are several types of this but, the underlying principle is the same. Moving Averages give you the average pricing of the asset within a certain period. One way to use moving averages is to combine two MAs where one has a shorter timeframe than the other. In most cases, when the longer-term MA crosses the shorter term one in the outside, this is an indication that the asset could move higher. A good example of this is shown below.

Finally, the Elliot Wave is an important method to predict the future movements of financial assets. The idea behind Elliot Wave is that assets tend to move in patterns. These patterns could either be impulse or corrective. After ending an impulse or bullish wave, assets tends to go through a 3-step corrective wave.

The post The Basics of Technical Analysis appeared first on Forex.Info.

USD Higher Ahead of Minutes

The dollar rose to its highest level in a week on Wednesday and world stocks fell for the third day as investors braced for minutes from the Fed’s last policy meeting to see if they would herald more rises in interest rates and global bond yields.

Wall Street looked set for a weaker session, with equity futures down around 0.2 percent and the VIX volatility gauge up for the third day in a row.

The dollar index, which measures the greenback against a basket of peers, rose 0.2 percent. The index has bounced almost 1 percent so far this week, after slumping 1.5 percent the previous week to its lowest level in three years [FRX/].

MSCI’s world index of stocks was down 0.1 percent, set for its third straight decline this week, as a down day in Europe offset earlier gains in Asia.

Investor attention is on the minutes of the Fed’s last policy meeting in late January, due at 1900 GMT. The last readings of U.S. wages and inflation came in higher than expected, with some blaming the numbers for a violent sell-off in stocks earlier this month.

via Reuters

UK Posts Strong Quarterly Productivity Growth in December

The UK has seen the strongest two quarters of productivity growth since the recession of 2008, according to the latest data.

Output per hour rose 0.8% in the three months to December, the Office for National Statistics said. It follows growth of 0.9% in the previous period.

There was also a better than expected rise in wages. Excluding bonuses, earnings rose by 2.5% year-on-year.

However, unemployment edged higher, but still remains low at 4.4%.

The growth in productivity – as measured by the amount of work produced per working hour – will provide encouragement to policy makers who have wrestled with the challenge of low productivity growth since the financial crisis.

via BBC