Best of the Week
Most Popular
1.Stocks Bear Market Apocalypse Imminent Crash Gets Nuked Again - Nadeem_Walayat
2.Gold And Silver – A Reality Check - Michael_Noonan
3.The Killer Ape, Human Evolution, Artificial Intelligence and Extinction End Game - Nadeem_Walayat
4.Stock Market S&P 500 Volatility-Based Price Probability Range - Richard_Shaw
5.A Stocks Bear Market Is Now More Likely Than Not - Richard_Shaw
6.Money Supply and the Fed’s Serious Inflation Risks - Zeal_LLC
7.More Selling for Stock Market, Gold? - Brad_Gudgeon
8.Gold, Silver Precious Metals: a Critical Week Ahead - Rambus_Chartology
9.Gold Price Change in Character - Gary_Savage
10.Advice for Biotech Investors: 'Hold Your Powder' 'til Winter - TLSReport
Last 5 days
Why Millennials Are So Different - 13th Oct 15
Unhealthy, Not Wealthy, and Far from Wise, The Changing Healthcare World - 13th Oct 15
Which Is The Better Investment - Gold Or The Dow? - 13th Oct 15
Stock Market Initial Projection Reached (Short-Term Top Expected) - 13th Oct 15
Gold Signals The End Of This Monetary Era - 13th Oct 15
Gold for Stocks Bear Market? - 13th Oct 15
The Mindless Stupidity of Negative Interest Rates - 13th Oct 15
China, The Great Depressions 1 & 2, and Gold - 13th Oct 15
Top 3 Technical Tools Part 3: MACD - Video Lesson - 13th Oct 15
An Introduction to Technofeudalism Ascending - 13th Oct 15
Stock Market S&P 500: Is it This Simple? - 12th Oct 15
Chanos: I'm a Potential Purchases or Glencore Stock - 12th Oct 15
IMF Fears $3 Trillion Credit Crunch; Lagarde Warns 'IMF Credibility at Stake' - 12th Oct 15
Structural Reasons For A Long-Term Financial Markets Decline - 12th Oct 15
New Hedge Fund Buying Enters Crude Oil Market - 12th Oct 15
Stock Market / GDX New Lows Coming: Panic Ahead? - 12th Oct 15
Stock Market Gains, but the “Super Crash” Is Accelerating - 11th Oct 15
October Stocks Bear Market and Crash Killer - 11th Oct 15
A Bifurcated U.S. Housing Market, How Much Longer Can Unaffordable Housing Prices Last? - 10th Oct 15
Stock Market Primary V to New Highs Underway - 10th Oct 15
Putin’s “Endgame” in Syria - 10th Oct 15
Gold And Silver Trapped In A Low-End Trading Range - 10th Oct 15
Free Traders Educational Week - 10th Oct 15
Stock Market Rally May be Broken - 9th Oct 15
Gold Stocks Major Breakout - 9th Oct 15
Contrarian Investing - Being the 10th Man - 9th Oct 15
U.S. Can Expect Recession in 1-3 Years - 9th Oct 15
The Greater Economic Depression Deep State - 9th Oct 15
Financial Markets Calm Before the Storm? - 9th Oct 15
Stock Market History Calling, Says Performance will be Crappy for Another ~10 years! - 9th Oct 15
Why This Feels Like an Economic Depression for Most People - 9th Oct 15
Dr Copper Back from the Dead - Time to Buy or Blink - 8th Oct 15
Glencore Rout Blamed on Short Sellers Playing With CDS - 8th Oct 15
The Real Reason for the Refugee Crisis You Won’t Hear About in the Media - 8th Oct 15
US Stocks: The [Trend]Line Between Bull and Bear Market - 8th Oct 15
Bundesbank “Reassures” Re. Gold Bullion Reserves as Deutsche Bank Shocks With €6 Billion Loss Warning - 8th Oct 15
How Our Aversion To Change Leads Us Into Danger - 8th Oct 15
Moving Stem Cell Research Forward: Bernie Siegel of the Genetics Policy Institute - 8th Oct 15
Stock Market VERY IMPORTANT Turn Date - 7th Oct 15
The 5th Convergence…An Economic & Financial Superstorm That Will Devastate America - 7th Oct 15
Summers Grades Janet Yellen's Fed Performance 'Incomplete' - 7th Oct 15
Gold Versus Central Banks Paper Ponzi - 7th Oct 15
QE3 is Over Get Ready for QE4 - 7th Oct 15
How to Profit from Government Mandates in Biofuels - 7th Oct 15
A Key Oil Price Trend That Everyone Is Missing - 6th Oct 15
Stock Market Turn Appears to Have Been Made - 6th Oct 15
Designing a Dividend Growth Portfolio for a Specific Retirement Yield Objective - 6th Oct 15
Peter Schiff Predicts Gold Price Breakout - Video - 6th Oct 15
Theresa May Declares War on Immigration - Conference Speech Full Transcript - 6th Oct 15
Is Russia Plotting To Bring Down OPEC? - 6th Oct 15
Target Date Funds As Aid In Retirement Investment Portfolio Design - 6th Oct 15
Stocks Bear Market Apocalypse Imminent Crash Gets Nuked Again - 6th Oct 15

Free Instant Analysis

Free Instant Technical Analysis

Market Oracle FREE Newsletter

Stock Market Crash - Smart Money Is Leaving the Building

Stock-Markets / Financial Crash Aug 13, 2013 - 04:29 PM GMT

By: Graham_Summers


Japan continues to dominate the economic news. The latest move concerns Prime Minister Abe’s new economic policies to cut corporate taxes. He also announced plans to run a shakeup at Japan’s political ministries.

This is “Plan B” for Abe who has found that his policy of “Abenomics” or pushing the Bank of Japan to print even more money has failed to stimulate Japan’s economy.

Abe won in a landslide last September on his platform of urging the Bank of Japan to do more. This platform ignored the failure of QE to stimulate growth in Japan in the previous 20 years (Japan had already engaged in QE programs equal to 25% of the country’s GDP). It also ignored the risks of unfettered money printing, namely higher inflation.

Sadly, Abe has discovered that ignoring both of these key issues, while good politically, has been disastrous economically. Abe won the election and the Bank of Japan announced a record $1.4 trillion QE effort in April 2013. To put this number into perspective, this would be the equivalent of Ben Bernanke announcing a $3.75 trillion QE plan in the US. Suffice to say it was a “shock and awe” move.

Unfortunately, it hasn’t worked. Japan’s industrial production fell 3.3% month over month in June. At the same time, Japan’s consumer price index registered its first increase in 14 months in June. The pace of increase was the fastest since 2008 when commodity prices were at record highs.

In plain terms, the Japanese economy is failing to respond to Abenomics. This is the single most important issue for the global financial system today.

The economy and financial markets have been moving in a zig-zag pattern ever since 2008 with drops in asset prices and GDP being met by intervention and stimulus by the world’s Central Banks.

However, thus far no Central Bank has gone “all in” with QE. The larger efforts have been focused on specific timelines (six months to a year) and the ongoing efforts have been tied to economic developments (the Fed claims it will taper QE when US employment falls to an acceptable level).

Never before has a Central Bank stated point blank that it’s firing a bazooka at the economy. Japan has done this. It has failed. And this failure has effectively been the “Emperor has no clothes” moment for Central Bank interventions.

And the markets are taking note.

Traders and investors do not respond to sea changes instantly. The smart ones take note and begin adjusting their portfolios and hedging their bets. This doesn’t result in massive market moves as these investors are sophisticated enough to move out of old positions and into new ones without drawing too much attention

It’s only when the investment herd en masse realizes that something has changed that you begin to see market Crashes.

This process has begun in the world. The smart money is leaving the market. And the market rally is being driven by fewer and fewer companies. This is classic Bubble Topping signals.

This is not to say that the market will crash tomorrow. But the sea change has hit and it’s now a matter of time. The likelihood of a full-scale market Crash similar to 1987 occurring in the coming months has increased dramatically.

So if you are not taking steps to prepare your portfolio for some major price movements, you need to start now. Pinpointing the exact date of a market Crash is darn near impossible. But one thing is clear: once it begins it’s far too late to save your hard earned capital.

Clicking Here Now!!!

Graham Summers

Chief Market Strategist

Good Investing!

PS. If you’re getting worried about the future of the stock market and have yet to take steps to prepare for the Second Round of the Financial Crisis… I highly suggest you download my FREE Special Report specifying exactly how to prepare for what’s to come.

I call it The Financial Crisis “Round Two” Survival Kit. And its 17 pages contain a wealth of information about portfolio protection, which investments to own and how to take out Catastrophe Insurance on the stock market (this “insurance” paid out triple digit gains in the Autumn of 2008).

Again, this is all 100% FREE. To pick up your copy today, got to and click on FREE REPORTS.

Graham also writes Private Wealth Advisory, a monthly investment advisory focusing on the most lucrative investment opportunities the financial markets have to offer. Graham understands the big picture from both a macro-economic and capital in/outflow perspective. He translates his understanding into finding trends and undervalued investment opportunities months before the markets catch on: the Private Wealth Advisory portfolio has outperformed the S&P 500 three of the last five years, including a 7% return in 2008 vs. a 37% loss for the S&P 500.

Previously, Graham worked as a Senior Financial Analyst covering global markets for several investment firms in the Mid-Atlantic region. He’s lived and performed research in Europe, Asia, the Middle East, and the United States.

© 2013 Copyright Graham Summers - All Rights Reserved
Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

Graham Summers Archive

© 2005-2015 - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.

Post Comment

Only logged in users are allowed to post comments. Register/ Log in

Biggest Debt Bomb in History