Yen Has Topped Out

Yen Has Topped Out

The excerpt from the Sept 3, 2011 Market update clearly validates that Yen has topped out and is on the cusp of a long and painful downward journey.

The Japanese Yen from a very long-term perspective is in a bubble territory. It’s not a question of if but when this bubble will pop. Thus our advice is to continue accumulating positions in YCS and do not look at them on a weekly basis. Just put it in a draw and look at it maybe once every month. When this market collapses, it is going to fall very strongly. Market Update Sept 3, 2011

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Well the Yen fulfilled expectations and started to break down.  The long term outlook still calls for a significant move lower from current prices.  One day individuals will be stunned at how much the Yen shed, but for now they will assume all is still well.

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Random Musings

Event 1

Braden Janowski has never planted seeds or brought in a harvest. He doesn’t even own overalls.Yet when 430 acres of Michigan cornfields was auctioned last summer, it was Janowski, a brash, 33-year-old software executive, who made the winning bid. It was so high — $4 million, 25 percent above the next-highest — that some farmers stood, shook their heads and walked out. And Janowski figures he got the land cheap.

“Corn back then was around $4,” he says from his office in Tulsa, Okla., stealing a glance at prices per bushel on his computer. Corn rose to almost $8 in June and trades now at about $7. A new breed of gentleman farmer is shaking up the American heartland. Rich investors with no ties to farming, no dirt under their nails, are confident enough to wager big on a patch of earth — betting that it’s a smart investment because food will only get more expensive around the world. They’re buying wheat fields in Kansas, rows of Iowa corn and acres of soybeans in Indiana. And though farmers still fill most of the seats at auctions, the newcomers are growing in number and variety — a Seattle computer executive, a Kansas City lawyer, a publishing executive from Chicago, a Boston money manager. The value of Iowa farmland has almost doubled in six years. In Nebraska and Kansas, it’s up more than 50 percent. Prices have risen so fast that regulators have begun sounding alarms, and farmers are beginning to voice concerns.

“I never thought prices would get this high,” says Robert Huber, 73, who just sold his 500-acre corn and soybean farm in Carmel, Ind., for $3.8 million, or $7,600 an acre, triple what he paid for it a decade ago. “At the price we got, it’s going to take a long time for him to pay it off — and that’s if crop prices stay high.” Buyers say soaring farm values simply reflect fundamentals. Crop prices have risen because demand for food is growing around the world while the supply of arable land is shrinking. Full Story=

 It’s almost 3 years since we first stated that the only high-quality investment to make in the real estate arena was to buy good farmland. Since then we repeatedly made this point. in some cases farmland is up over 300% since we made this statement. Now look at how everyone is running into it, when we started to talk about it no one paid attention, everyone thought it was a joke because the real estate sector was in the toilet.  Congratulations to those of you that followed our advice. Enjoy the profits, there is more to come. we are now at the beginning of the feeding frenzy stage; this should be followed with a hard correction and then one more explosive spike upwards before the market falls apart.

Our goal at TI is to focus on long term trends and in 90% of the instances we have managed to catch these trends.

In 2000= we stated that the best thing to do was to get into bonds; by the end of 2002 we made over 40% by just sitting in cash and putting this money into bonds, In the mean time the markets crumbled.

In 2003 we stated it was time to jump back into equities; shortly after this the market exploded upwards

From 2002-2003 banged the table and stated the Gold and Silver were screaming buys.  Look at where Gold and Silver are now. We opened positions in the 300 and 4 dollar ranges.

From late 2004 to early 2006 we stated that the real estate market was ready to crash.  Not only did this sector crash it basically imploded on its self.

From 2005 to almost 2006 we stated that the best deal in terms real estate market was to become a renter as it was a renters market; this continued for several years later.  We even stated that the best move would be to sell your real estate and rent. Those that followed our advice walked away with huge profits as they sold at the top and were able to rent top properties for next to nothing.

In the 2004 period when oil was trading below 40 dollars we stated that it was ready to explode upwards and would trade at such lofty levels that people would look back and beg for the days when oil was at 40.

From late 2007 to earl 2008 we stated that the bond market was reaching dangerous levels; in fact we stated it was bubble waiting to implode.  Bonds experienced their largest correction in decades and have not been able to test the highs of 2008 ever since.

In 2008 and 2009 we pounded the table on Palladium stating that it was being completely ignored.  In fact we even went so far as to call it a screaming buy; the rest is history Palladium surged almost 400% after that.

When the Swiss franc was trading close to 75 cents to the dollar we stated that a day would come when it would trade well above the dollar.

We made the same claim on the Canadian dollar. When we made this claim it took 65 cents to buy the Canadian dollar.  Look how far the dollar has fallen.

Since 2003 we stated that the long term outlook of the dollar was extremely negative; in fact we produced charts indicating that the dollar was dead.  Look how far the dollar has fallen.

The list goes on and on. Our point is that we focus on the big picture and not on the small short term out look. Can we get everything correct?  The answer is no, we are not Gods. But more than 90% of our long term predictions have come to pass and anything above 75% we consider to be great so we are happy that lady luck has smiled on us so far.

The point of this is not to show you how great we are but to illustrate that long term changes take time. None of the above predictions materialized immediately. Some took 3-4 months to come to fruition, others took 9 months to a few years but the gains were well worth the wait.  Thus be patient in regards to our current outlook that the stock market is headed for a very tough time in the not too distant future.

Event  2

Homeowners in Denial About Value of Properties

Homeowners, especially those who bought their houses after the real-estate bubble burst, are still having trouble accepting just how much the values of their properties may have fallen, says a new report from the real-estate site Zillow. Current sellers, who bought their homes in 2007 or later, an analysis of the site’s home listings shows, are overpricing their properties by an average of 14 percent.Sellers who bought their houses before the bubble, and those who bought during the big run-up in home values, also are overpricing their homes, but not by as much. Those who bought before 2002 are pricing their homes roughly 12 percent over market value, while those who bought from 2002-06 price them about 9 percent over market value. In the analysis, Zillow compared the asking price of one million homes for sale to the homes’ previous purchase price, then factored in the change in the Zillow Home Value Index for the respective ZIP code, to determine an estimate of that home’s current market value.

Stan Humphries, Zillow’s chief economist, says those who bought post-bubble, in 2008, 2009 or later, seem to think they escaped the worse of the housing market debacle and tend to price their homes too high as a result. But 2006 was just the start of the housing recession, which continues today; home values are now down nearly 30 percent from the market’s peak. And, values have fallen about 12 percent from January 2009 through May of this year, he says. That means, he says, that even people who bought after the bubble burst need to take a hard look at what has happened in their local market since they bought their home. Traditionally, people tend to overprice their homes a bit anyway, to allow room for negotiation. But unrealistic overpricing in the current environment, he says, means properties stagnate. Full story

Every single time the experts came out and stated it was a good time to buy, we stated the opposite.  Just this year alone, there have been so many conflicting articles stating that real estate is close to hitting a bottom and it’s a good time to buy it.  Paulson the guy who struck it lucky and walked away with billions because he managed to get into specially created instruments to short the real estate sector boldly stated that it was time to buy not only 1 house but 2 or 3 if you could afford it. He made this claim over a 1 year ago. Dead wrong he was and will be if he continues along this path.

For the real estate sector to go up in value, we need jobs and not just BS jobs but good jobs.  The job market is terrible and is getting worse in almost all the developed nations. It’s only good in the developing world but the salaries there would be considered pathetic by most westerners. For example English teachers get paid 1000 dollars a month.  Top computer programmers also get paid in the 600-1200 a month ranges.  These salaries are great for the individuals living in these countries because they used to get paid next to nothing before and these salaries are like wining the lotto for them.

We made the comment many years ago that money would move from the West to East. The living standard in the East was very low and in the West it was very high. One good Job in the West was enough to pay the salaries of over 150 factory workers in the East per month.  Thus we stated it was just a matter of time before this massive divergence ended and we started moving to some equilibrium point.   This will not end until the salaries for competing professions are more or less on the same scale on a world wide basis.  This means a massive drop in the standard of living in the west and an equally massive gain in the East.  Our words are coming to pass.   This is why several years ago we started to warn all our subscribers to  start living 1-2 It is for this reason we started to push our standards below their means and save the extra money.

Back to the real estate sector; given that the unemployment outlook is going to remain bleak for a long time to come, there is no chance in hell the real estate sector can mount a meaningful recovery.  Companies continue to fire workers even though profits are up. Why are they doing this? This only occurs if they believe the long term outlook is bad and so they try to build up huge cash reserves in order to survive through the tough and lean times that are coming.  US corporations have almost 2 trillion dollars in cash and this continues to grow. If their outlook was positive they would be hiring left right and centre.

Subscribers who are willing to be aggressive and who are either native speakers of English or speak English very well should consider becoming TEFL certified.  This course can be done online. It is not necessary but helps land a English teaching Job faster.   This can then be used to get teaching jobs in Asia and certain parts of South America. While the salary is not high, a couple can make a decent amount of money and in many cases save more of it there then back home as the cost of living is very low. We know of one chap who quit his high paying job, and started to teach English. He wanted to get out of the high stress world. He started with just 700 a month, a pittance compared to his salary back home. Now he makes 5 times more, works less then when he first started because he now offers private lessons instead of working for an institute.  He could make more but would rather relax and enjoy live instead of increasing his stress.

In order for something like this to work, one has to be willing to try something new and be open minded.  Places to consider are Turkey, Malaysia, and certain parts of China; in South America Brazil and Chile are also good options.  We believe that Asia and parts of South America will be in a better position to deal with the huge slump that is going to come. While the west suffers from a massive pneumonia attack; most parts of Asia might just experience a strong cold.

Event 3 

Witnesses to deadly crash focused on basketball star Lamar Odom and not dying teen

 The grave condition of a Queens teenager hit in a chain-reaction wreck was overshadowed by the presence of an NBA celebrity, witnesses said Tuesday. As 15-year-old Awsaf Islam lay dying on a Sunnyside street last Thursday, bystanders focused on Lakers star Lamar Odom, who emerged unscathed from one of the wrecked cars, they said.

 “Everybody was paying attention to him. Nobody cared about the kid,” said Adolfo Ramirez, 13, who witnessed the crash. “It was messed up,” witness Naldo Vasquez, 15, said. “They got excited and were asking to take photos with him.”  Awsaf, who was riding a scooter when he was hit at the intersection of 45th St. and 48th Ave., died at Elmhurst Hospital Center last Friday. He was buried Monday in a service paid for by members of his local Jame Masjid mosque. “He was a real innocent kid – everyone liked him,” said friend Neel Deychoudhury, 15. “He was actually a really talented artist.”

Awsaf’s relatives made the painful decision to have doctors harvest his organs, sources said. His family could not be reached for comment. Full Story

 Clearly indicates the point we have been making for awhile; morality as many knew it is going or has already gone to the dogs.  The trend is only going to get worse.  We believe that a new trend will soon emerge, “the selling of body parts voluntarily”. In the past individuals were forced into this, but this trend will not be restricted just to the 3rd world, it will be a world wide phenomenon. Already if you want blood in Bulgaria, you have to pay someone to give it to you. Fake documents are created to make the person look like he or she is your relative and then they pretend they are doing it for free when in fact they have been paid for it.

Trend 2

We mentioned this a few times several years ago and think we are now closer to this becoming reality.   One can lease almost anything one wants and we believe this lease concept or a form of it will eventually replace the marriage contract.  Instead of getting married individuals will sign a lease with members of the opposite sex, which will entail payments, and the rights one has to the person being leased.  All this sounds far fetched but, believe it or not one day it will just like ordering French fries.  A form of this lease concept is already taking place; the bachelor which is now being imitated all over the world is a perfect example of this.

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