British Inflation Unexpectedly Holds Steady In July

Official figures show that consumer price inflation in Britain held steady in July at an annual rate of 2.6 percent.

The reading from the Office for National Statistics was slightly better than anticipated. The consensus of economists was a modest uptick to 2.7 percent.

Still, Tuesday’s figure keeps inflation above the Bank of England’s target of 2 percent, which has stoked speculation that interest rates may rise in coming months.

Inflation in Britain has risen sharply over the past year since the country voted to leave the European Union, a decision that prompted a big drop in the value of the pound, which raised the price of imported goods.

Inflation also continues to outstrip wage increases, meaning living standards continue to fall.

VanEck calls bitcoin a ‘fad,’ then files for bitcoin ETF

Money management firm VanEck is both skeptical of bitcoin and planning to sell a related investment product, illustrating a rising perception that the surge of interest in the digital currency creates a high-risk opportunity that may be too big to miss.

Last Thursday, Joe Foster, the portfolio manager and strategist for VanEck’s flagship International Investors Gold Fund (INIVX) said in a manager commentary piece for July that bitcoin will likely never “replicate or replace” gold’s place as a safe-haven asset due to fundamental differences between the two.

“Bitcoin and other digital currencies are a fad that has attracted the attention of programmers, speculators, and early adaptors,” Foster said. “It is my opinion that governments will not allow digital currencies to reach the critical mass needed to challenge the utility of fiat currencies” such as the U.S. dollar.

“At best, digital currencies may eventually occupy some middle ground as a niche product,” he said. “At worst, they become a failed experiment that ends in tears.”

One day later, VanEck filed with the U.S. Securities and Exchange Commission for a VanEck Vectors Bitcoin Strategy exchange-traded fund that would initially invest in bitcoin futures contracts and trade on the Nasdaq.

“Performance of the Fund is determined by the price‎ movement of the underlying digital asset (i.e., Bitcoin), the rate of change and the change in volatility,” the filing said.

The fund will be an actively managed ETF that seeks to “provide total return” without tracking the performance of a specific index. Derivatives like futures allow investors to bet on potential gains or losses in bitcoin’s price without buying the digital currency itself.

“Joe Foster makes a great case for gold relative to bitcoin as a currency and store of value,” VanEck told CNBC in an emailed statement. “VanEck believes that the technology underlying digital assets, known as distributed ledger technology, has tremendous potential to revolutionize finance and trade. Digital assets are an investable asset class in their own right and continue to be integrated into the broader economy.”

The SEC declined to comment on the filing.

Many digital currency enthusiasts have called bitcoin “digital gold” and predict that a small percentage of gold’s roughly $7.5 trillion market value will flow into bitcoin, sending the digital currency’s price many multiples higher. Bitcoin has more than quadrupled this year, hitting Monday a record high above $4,300 — triple the price of an ounce of gold.

Despite the many risks of the young digital currency world, analysts like Standpoint Research founder Ronnie Moas said cryptocurrencies’ rapid gains are not something he “could keep [his] hands off of.”

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Greed in the Bitcoin Community

When NIA suggested Bitcoin on May 30, 2016 at $530, the Bitcoin Price (x1MM) to Weekly Bitcoin Transactions Ratio was only 347 – below its long-term average of 449. Today, with Bitcoin up to a new record high of $3,335.48 the ratio is up to 2,284, which is 4 standard deviations above the long-term average.

Shockingly, Bitcoin’s fundamentals have been rapidly deteriorating in recent weeks – but with today’s Federal Reserve fueled hyperinflationary asset price environment – fundamentals no longer play any rolein determining the price of an asset.

Since May 27th, weekly Bitcoin transactions have plunged by -38.53% to 1.46 million, yet the price of Bitcoin has soared 65.61% to $3,335.48. The record high Bitcoin Price (x1MM) to Weekly Bitcoin Transactions Ratio from back on January 5, 2014 is 2,436. If Bitcoin is able to successfully reach the record high ratio from the peak of its last bubble, based on current weekly transactions of 1.46 million it would equal a Bitcoin price of $3,556.56.

You will never find a single post on social media of people talking about how much they love using Bitcoin. All you see are people who love Bitcoin for its price continuing to go up! They explain that Bitcoin is not a bubble because the supply can never rise to more than 21 million.

The Bitcoin block size was always supposed to be limited to 1MB, but last week’s fork will allow Bitcoin’s block size to increase in November to 2MB. If the initial block size limit was so easily increased, even though it was supposed to be permanent, there is no way to guarantee that Bitcoin’s artificial supply limit won’t be increased in the future – along with the elimination of Bitcoin halving.

Today, the artificial supply limit makes it much easier to promote Bitcoin and create the false perceptionthat its a safe/stable store of value. In the future as the Bitcoin inflation rate slowly declinesgreedy Bitcoin miners are likely to decide that it’s not profitable enough to mine Bitcoin for transaction fees alone. They will declare the artificial supply limit and halving to be a threat to Bitcoin’s survivability, just like the U.S. government declared the gold standard a threat to America’s economic stability.

Some people in the Bitcoin community wanted to raise the block size all the way to 8MB, and to appeaseboth sides – last week’s fork created a new ‘Bitcoin Cash’ cryptocurrency that got spun-off to all Bitcoinholders.

Fundamentally, the spin-off of Bitcoin Cash should have caused the price of Bitcoin to decline by an amount equal to the price of Bitcoin Cash. The fact that Bitcoin is in its mania phase and this didn’t happen – has caused Bitcoin enthusiasts to see it as magic and believe that cryptocurrencies offer a special power to create new assets worth billions of dollars out of thin air.

Due to incredibly huge greed in the Bitcoin community, NIA predicts that more “Bitcoin clones” will be unleashed in the months ahead – and there will be massive hype for the next Bitcoin spin-off… with everybody excited to receive more free money, printed out of thin air! Eventually, reality will hit people that even if the artificial supply limit of 21 million Bitcoin stays in effect, there’s nothing to stop greedy Bitcoin miners from spinning off 21 million Bitcoin clones of the same intrinsic value (zero).

If Bitcoin prices soar any higher, the Federal Reserve is going to begin viewing Bitcoin as a major threat to the U.S. banking system and Congress will feel compelled to make all cryptocurrencies illegal. Only the Fed’s primary dealers and their closest friends are supposed to profit from the Fed flooding the financial system with excess liquidity, but millennials are now copying the Federal Reserve and capitalizing on their destructive actionsCrytocurrencies are helping to expose America’s ponzi scheme economy, being kept afloat by the dying petrodollar system.

Stocks Move Higher, Sending Dow Industrials Closer To 22,000

U.S. stocks are rising Tuesday, sending the Dow Jones industrial average closer to 22,000 points. Banks are posting some of the biggest gains, and payment processors and other technology companies are also rising. Under Armour is tumbling after the athletic apparel company lowered its revenue projections and said it will cut jobs and expenses. Oil prices turned lower after a long rally.

KEEPING SCORE: The Standard & Poor’s 500 index rose 6 points, or 0.2 percent, to 2,476 as of 1:50 p.m. Eastern time. The Dow Jones industrial average climbed 86 points, or 0.4 percent, to 21,977. The Nasdaq composite added 12 points, or 0.2 percent, to 6,360. The Russell 2000 index of smaller-company stocks remained at 1,425.

GETTING PAID: Citigroup picked up 92 cents, or 1.3 percent, to $69.37 and Goldman Sachs added $2.11 to $227.44.

Among technology companies, payments processor Visa rose $1.35, or 1.4 percent, to $100.916. Mastercard, which processes debit and credit card payments, rose $1.85, or 1.4 percent, to $129.65.

Intel rose as its deal for Mobileye moved closer to completion following approval from regulators in South Korea. Mobileye makes software that processes information from cameras and other car sensors to decide where an autonomous car should steer, and Intel agreed to buy it for $15 billion in March. Intel gained 78 cents, or 2.2 percent, to $36.25 and Mobileye rose 17 cents to $63.47.

Xerox reported solid quarterly results and jumped $1.38, or 4.5 percent, to $32.05.

SMOOTH SEAS: Cruise line operator Royal Caribbean beat analysts’ forecasts and raised its estimates for the year. It climbed $4.43, or 3.9 percent, to $117.50 and competitor Carnival also advanced 71 cents, or 1.1 percent, to $67.49.

SPRINT SPRINGS: Sprint climbed Tuesday after it said it’s open to combining with another phone company or a cable company. CEO Marcelo Claure said Sprint can survive on its own, but it will be in a better position if it strikes the right deal. The fourth-larger U.S. wireless carrier also reported its first quarterly profit in three years as it cut cost and added wireless subscribers.

Sprint was on pace for its biggest gain of the year as it rose 81 cents, or 10.1 percent, to $8.79. Elsewhere, T-Mobile USA climbed $1.29, or 2.1 percent, to $62.95 and Verizon Communications gained 84 cents, or 1.7 percent, to $49.24.

POWERING DOWN: Utility company Scana continued to rise. On Monday the company said it plans to end construction of two nuclear reactors that customers have already paid billions to build. It will brief regulators Tuesday on its plans. Scana’s South Carolina Electric & Gas unit and state-owned Santee Cooper say they have already spent $10 billion on the project and that it could cost $20 billion to finish. The project has been shrouded in doubt since Westinghouse, the primary contractor, filed for bankruptcy protection earlier this year.

Scana rose $2.71, or 4.2 percent, to $67.08 following a 5 percent gain on Monday.

SLIMMING DOWN: Under Armour cut its annual revenue forecast as sharp discounts continue to affect its business in North America. The Baltimore company said it will eliminate 280 jobs and is aiming to reduce $110 million to $130 million in annual spending through a restructuring plan. Under Armour sank $1.71, or 8.6 percent, to $18.31, and it’s down by more than half over the last 12 months. Rival Nike added 50 cents to $59.55.

STUCK IN NEUTRAL: Engine maker Cummins reported a weaker-than-expected profit due to higher warranty costs, and its stock lost $11.14, or 6.6 percent, to $156.76. Power management company Eaton disclosed a smaller-than-expected profit and fell $5.38, or 6.9 percent, to $72.87.

On Monday Cummins and Eaton started a joint venture that will make automated transmissions for heavy-duty and medium-duty commercial vehicles. They announced that plan in April.

AUTO FAILS: General Motors and Ford declined as auto makers were expected to report their seventh consecutive month of lower sales. GM’s sales fell 15 percent in July and Ford’s decreased 7.5 percent. U.S. new vehicle sales reached a record of 17.55 million in 2016, and Ford’s U.S. sales chief Mark LaNeve said at their current pace, sales will be around 17 million this year.

GM fell $1.30, or 3.6 percent, to $34.67 and Ford declined 27 cents, or 2.4 percent, to $10.95.

ENERGY: Oil prices plunged after a six-day rally. U.S. crude shed $1.40, or 2.8 percent, to $48.77 a barrel in New York. Brent crude, the international standard, dropped $1.37, or 2.6 percent, to $51.3 a barrel in London.

BONDS: Bond prices moved higher. The yield on the 10-year Treasury note dipped to 2.26 percent from 2.30 percent.

METALS: Gold added $6 to $1,279.40 an ounce. Silver lost 2 cents to $16.76 an ounce. Copper dipped 1 cent to $2.88 a pound.

CURRENCIES: The dollar dipped to 110.21 yen from 110.24 yen. The euro slid to $1.1823 from $1.1831.

OVERSEAS: The DAX in Germany DAX rose 1.1 percent. Britain’s FTSE 100 and the French CAC 40 both rose 0.7 percent. Japan’s benchmark Nikkei 225 index added 0.3 percent while South Korea’s Kospi climbed 0.8 percent. In Hong Kong, the Hang Seng gained 0.8 percent.

Why have a trading system if you’re not going to stick to it?

It’s a perfectly reasonable question. And makes perfect sense. Why bother back testing it, learning it and trading it, if in a few days’ time you’ll trade ‘off system’?

Here are 3 common ways many traders trade ‘off system’. There are plenty more, but we’ll stick with 3 today.

  1. They take extra trades they shouldn’t.

There’s a couple of reasons for this. They assume they are missing out on something big and want to trade everything so not to miss it.

Secondly, many traders crave action. They look at their portfolio and want instant results.

  1. They exceed their position sizing

This is often caused by laziness and not being bothered to do the math’s properly, but can also be because the trader has shoe-horned the trade into their portfolio. They’ve exceeded their max risk just this once. Only the odds are 60-80% that it’ll be a losing trade, so all you are doing is allowing your losers to be bigger than they need to be. Guess what the outcome of that is going to be?

  1. They hear something about a stock/market and execute upon it

We’ve all done this before. Reading Twitter, the news and certain traders I respected and followed at the time would tweet about how Gold was destined for a crash. Only I was LONG. My trade was in profit too. Now not only am I having to cope with the normal inclination to want to bank my profits, but that’s just been exacerbated by reading that news. Now I definitely want to bank it. Only I’m trading what I think, not what I see. I’m allowing outside predictions on an unpredictable market influence my decisions. Which is insane. Fear controls everyone. We are so scared of what “MIGHT” happen.

Of course, you don’t need to be a rocket scientist to understand that in order to be a better and more disciplined trader you need to do the opposite to the above.

  • Accept that other markets you are not trading will trend and do well. You can’t trade everything. Be content with missing out. Its part of the game. But it also means that there’s a lot of opportunities. Lots of chances to pick a winning trade on your next pick.
  • Never exceed position sizing. This is paramount. Never put more risk on one trade. The odds are against you if most of your trades are losers. Be smart.
  • Don’t listen to outside opinion. They might be trading 10 min charts for all you know. Or approaching the market in an entirely different way. They also cannot read the future. No one can. Best way to deal with this outside noise is not to see it in the first place. Cut yourself off, and read “How I Made $2 Million on the Stockmarket” by Nick Darvas for inspiration on this.

Alternatively you could opt for a fully automated system which removes all of the above, trades 24×5 – no emotion, risk and opportunity taken care of. Acorn underlines this approach with verified results, month on month. Join us to start increasing your profits with minimal risk.

 

Impact Of The Pound’s Drop Around The World

The drop in the British currency on Friday will have an impact not just on the local economy but also on companies from around the world doing business in the country as well as tourists and shoppers.

The pound fell as much as three cents against the dollar, from $1.2950 to $1.2635, after the British election produced no clear winner. By Friday, it had recovered slightly to $1.2755.

The drop is not as dramatic as the near 17-cent slide — from $1.50 to $1.33 — that the currency endured after Britain voted last year to leave the European Union, but it is likely to be felt broadly if it is sustained.

Here’s a look at the main effects it could have.

TOURISM

A drop in the pound makes it cheaper for people holding other currencies to visit Britain — and shop there. Britain has already seen a surge in tourism since the pound dropped on the Brexit vote last year. A record 37.6 million people visited Britain last year, spending 22.5 billion pounds ($29 billion), with visits from the U.S. up more than 10 percent. It’s not just the stay that’s cheaper. London is one of the biggest destinations for international shopping, particularly luxury goods, and the weaker pound has helped sales. Companies like Burberry have credited tourist shopping for helping to boost sales.

BRITISH EXPORTS

The drop in the pound will help lower the cost of Britain’s exports around the world. Retailers tend to have contracts on imports that span months, if not years, to avoid the uncertainties of fluctuating currencies. So don’t expect the price of a bottle of Scotch whisky to fall overnight. But in the longer-term, as the supply contracts are renegotiated, a weaker pound will, all other things being equal, reduce the cost of British goods sold around the world.

BRITAIN’S COST OF LIVING

The opposite is true for the British: imports for them become more expensive as the pound drops. Some things, like oil and car fuel, which are priced internationally in dollars, will reflect the pound’s drop quickly by edging up. Other things, like foreign cars and food, could take longer as supply contracts get renewed. Since the pound’s big fall on last year’s Brexit vote, inflation has risen faster than wages across Britain, eroding people’s standard of living. Higher inflation also eats away at the benefits exporters will get from the lower pound.

CORPORATE DEALS

British companies become cheaper takeover targets and will find it more expensive to buy foreign companies. Since last year’s sharp fall in the pound, British companies have been approached and been taken over. Software company Arm Holdings was taken over by Japan’s Softbank for $32 billion. More recently, consumer goods giant Unilever has rebuffed a $143 billion approach by Kraft Heinz.

COMPANY EARNINGS

The British currency’s drop will have an automatic impact on company earnings. British multinationals like BP or Shell will see their revenues made in other countries become more valuable when repatriated and translated back into pounds. For non-British companies, their revenues in Britain will take a hit. Some companies have raised their prices or reduced the amount of goods sold in Britain to make up for the decline in local revenue. The issue was highlighted when Mondelez International, based in Deerfield, Illinois, last year reduced the size of some of its Toblerone chocolate bars in Britain.

Jim Rogers: How To Look For Potential Investments

You look out the window, you look at the market, you read the newspapers, you listen to the investor’s podcast, whatever. Wherever you see that people are down on something and it’s depressed and there may be an investment opportunity there.
Agricultural America is pretty depressed right now as you probably know and maybe it is an area where there’s a opportunity but just because something’s depressed that doesn’t mean you should be investing there because it can stay depressed for a long, long time. You have to find a change that’s taking place and change doesn’t happen every day. But if you can find something cheap and if you can find a positive change, maybe you should do more homework and find a potential investment.