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Some analysts seem to think there’s an inflation scare in the air. That Europe’s economy is looking a tad better and so is Japan’s.
Therefore, they claim, the dollar is going to continue to fall while the euro and yen rally, hence, setting off inflation in the U.S. as a result of a falling dollar.
But the fact of the matter is that nothing could be further from the truth! Let’s take a closer look at their argument to see how ridiculous it is. It’s also a good lesson on how pointless it is to use fundamentals to make forecasts.
I ask you, where is the improvement in Europe’s economy?
Fact: The region’s economy grew by 0.3% in the last quarter of 2015. Meager at best.
Fact: Stock market losses in the euro region have left the Stoxx Europe 600 Index down 9.9% this year, its worst start since 2008.
Fact: Dismal bank earnings have pushed the cost of insuring the financial credit risk of European banks and insurers to the highest levels in more than two years.
Fact: Europe is stuck in a nightmarish depression of no economic growth in the strongest European economies and sinking growth in the weakest.
Fact: Prices are falling throughout the euro region. Unemployment is hovering at record highs. Debt-to-GDP levels are going virtually straight up.
Then there’s the Syrian refugee crisis that is wreaking havoc on government budgets everywhere in Europe and causing even further unrest among citizens who are already having a tough economic time.
Furthermore, Europe’s leaders are still committed to even more austerity, sacrificing the jobs and livelihoods of tens of millions of people!
Anyone with a clue of what’s going on in Europe would recognize that Europe is still headed down the tubes, and with it the euro. Its recent rally being nothing more than a bounce, with a still huge letdown coming, and soon.
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| The yen has nowhere to go but down. |
Now, let’s look at Japan.
Fact: For the third quarter of 2015, Japan’s economy shrank by 0.4% versus expectations of a quarterly contraction of 0.3%.
Fact: On an annualized basis, the economy contracted 1.4% in 2015!
Fact: Weaker domestic demand, together with slower investment in housing, contributed to the disappointing numbers. Private consumption plunged 0.8%, a huge drop.
Japan’s economy is picking up? Based on what? I don’t see it. Wrongly, pundits are taking the recent strength in Japan’s currency as a sign investors are willing to own the Japanese economy and hence even Japanese stocks.
But that’s a recipe for financial disaster. Savvy money will soon realize that the yen has nowhere to go but down as the Bank of Japan puts the pedal to the metal with more yen printing.
Contrast Europe and Japan with the United States …
A. The U.S. economy, growing modestly as it is, is still the strongest of the developed nations, much stronger than Europe’s or Japan’s economy.
B. The U.S. economy has the deepest, most liquid capital markets on the planet, making them the easiest place to invest and with the most opportunities.
C. U.S. markets remain the last bastion of capitalism in the world, and certainly in the Western world.
Bottom line: Arguments that Europe and Japan are recovering are complete nonsense and based on fundamentals that are full of holes. Anyone with half a brain can see through such arguments.
In addition, …
FIRST, the euro’s bounce is near ending, and a renewed downtrend is about to take root.
SECOND, conversely, the dollar’s recent pullback is near ending, and a new leg up is about to begin.
THIRD, inflation is nowhere to be seen in Europe, Asia, Latin America, or even in the U.S.
So then, you ask, why the huge rally in gold? I warned you it was coming. I have also warned you all along that gold’s next rally would coincide more with the breakdown and collapse of Western economies than anything else, especially inflation.
And so it is. Gold is rallying with no inflation in sight. And instead, with collapsing economies all around it.
Gold has now taken out a weekly buy signal at $1,187.50 — the first step in confirming a new bull market in precious metals.
Best wishes, as always …
Larry
P.S. As the Dow doubles, some stocks will see explosive gains of 300%, 400%, 500% and more. To help you get ready to take full advantage of the bull market of a lifetime, I want to send you a complete Dow 31,000 Preparedness Kit — five distinct free reports! The first free report spells out step-by-step what you must do now to position yourself for amazing profits (and protection) over the next two years. Click here to download now!
pnjab khahkmeed February 29, 2016
Greetings from the great and terrifying allah! Please come join us for a delicious meal of raw camel dongs and roasted goat testicles!
pnjab khahkmeed February 29, 2016
Greetings from the great and terrifying allah! Please come join us for a delicious meal of raw camel dongs and roasted goat testicles!
cal February 20, 2016
Too bad we cannot buy futures on food prices….have you followed the trend for HIGHER prices for SMALLER packages…like good ole potato chips..the bags are so small, they look like the size sold at the deli counter for 1 serving, yet, have the “Family Size” on the label, and cost $3.99!!! Peanut butter containers have been shrunk(they use a concave shape now), by 25%, and, the price is higher, not lowered 25%! Hamburger here(N. California) is at $4.29/pound. On and on it goes. Rent is up, due to millions losing homes in 2008-09, now renting. People spend 90% of their income on just rent and food. Many are on food stamps and live in section 8 housing.
NOBODY ever wants to talk about the TRILLIONS of dollars wasted on WAR, and “Donations” to over 165 world Countries, which SHOULD BE KEPT at HOME to help our own people.
A smart Presidential candidate would HOLD up this list of contributions to all these countries, and tell in public the total…people would riot in the streets if they knew the truth.
I’m not against a little money for humanitarian aid and medical help to these places, but, we have put POLITICS above helping our own. More people die in Oakland and Richmond over here daily than do in IRAQ now, it’s worse than a 3rd world country with the bullets flying.
Everything comes in cycles…another 1968 revolution is near, as economic inequality and injustice to all invades the streets. The so-called “Millenials” won’t put up with this crap, and, will evoke change.
Trump may be right..When you shop at OSH, or Pier 1, or any large store now, IT’S ALL CRAP MADE IN CHINA. How this came to be just comes down to pure greed, as USA companies sold out here, and went overseas. The madness has to end. Make imports-exports sane, and fair. I hope China crumbles hard, and implodes.
As far as gold, when the fiat printed paper money debt collapse is over, the ONLY way to salvage any hope of return will be central banks using gold-silver standards…the price will already be over $1,700/Oz when this happens, then, it’s a parabolic rise well over 3k/Oz….by this time next year, Europe and China and emerging markets will be in the final death spiral of collapse…the following year it will come to our shores, as our markets collapse. Fine with me, as my gold-silver-platinum and mining stocks will create great wealth for me.
cal February 20, 2016
Too bad we cannot buy futures on food prices….have you followed the trend for HIGHER prices for SMALLER packages…like good ole potato chips..the bags are so small, they look like the size sold at the deli counter for 1 serving, yet, have the “Family Size” on the label, and cost $3.99!!! Peanut butter containers have been shrunk(they use a concave shape now), by 25%, and, the price is higher, not lowered 25%! Hamburger here(N. California) is at $4.29/pound. On and on it goes. Rent is up, due to millions losing homes in 2008-09, now renting. People spend 90% of their income on just rent and food. Many are on food stamps and live in section 8 housing.
NOBODY ever wants to talk about the TRILLIONS of dollars wasted on WAR, and “Donations” to over 165 world Countries, which SHOULD BE KEPT at HOME to help our own people.
A smart Presidential candidate would HOLD up this list of contributions to all these countries, and tell in public the total…people would riot in the streets if they knew the truth.
I’m not against a little money for humanitarian aid and medical help to these places, but, we have put POLITICS above helping our own. More people die in Oakland and Richmond over here daily than do in IRAQ now, it’s worse than a 3rd world country with the bullets flying.
Everything comes in cycles…another 1968 revolution is near, as economic inequality and injustice to all invades the streets. The so-called “Millenials” won’t put up with this crap, and, will evoke change.
Trump may be right..When you shop at OSH, or Pier 1, or any large store now, IT’S ALL CRAP MADE IN CHINA. How this came to be just comes down to pure greed, as USA companies sold out here, and went overseas. The madness has to end. Make imports-exports sane, and fair. I hope China crumbles hard, and implodes.
As far as gold, when the fiat printed paper money debt collapse is over, the ONLY way to salvage any hope of return will be central banks using gold-silver standards…the price will already be over $1,700/Oz when this happens, then, it’s a parabolic rise well over 3k/Oz….by this time next year, Europe and China and emerging markets will be in the final death spiral of collapse…the following year it will come to our shores, as our markets collapse. Fine with me, as my gold-silver-platinum and mining stocks will create great wealth for me.
hillaréé February 19, 2016
so now you know the difference between blond and blonde. are you sure you’re smart enough to be investing?
hillaréé February 19, 2016
so now you know the difference between blond and blonde. are you sure you’re smart enough to be investing?
Peter February 18, 2016
Hello,
I read a lot and I get conflicting recommendations…. You should listen to technical indicators! They are more reliable than talk …
What I do is simple, I just listen to my own trading system which has 5 components.
Volume, MACD, RSI, Chaikins money flow, Accumulation / distribution with customized settings for each indicator. If 3 out of 5 are in the right direction I go in. If less than 3 are in the right direction or momentum changes I go out. By doing this I made with NUGT and JNUG 40 % from January until mid february. Now I wait until gold reaches another “bottom” and then I’ll do the same thing again.
UDO February 21, 2016
Peter
that is terrific . I do the same with TVIX but I only watch the RSI – top-bottom – and I also have an average in % when it comes down. And it works like a charm and it replaces my Income Fund already – yes I love .
Good trading , Peter
UDO February 21, 2016
Peter ,
I’ll be back next week – DUST might get ready soon ?
fred February 18, 2016
why do you think Europe is welcoming all the immigrants? wait a while and watch the recovery,. gold is moving because inflation is happening now,.
UDO February 21, 2016
fred
You have so much to learn – so , so much . Gold has nothing to do with inflation ?
How old are you ? There was huge inflation from 1980 to 2001 what did gold do for 21 years ? NOTHING ! Now go back to Larry and learn again about gold or invest in oil .
fred February 18, 2016
why do you think Europe is welcoming all the immigrants? wait a while and watch the recovery,. gold is moving because inflation is happening now,.
UDO February 21, 2016
fred
You have so much to learn – so , so much . Gold has nothing to do with inflation ?
How old are you ? There was huge inflation from 1980 to 2001 what did gold do for 21 years ? NOTHING ! Now go back to Larry and learn again about gold or invest in oil .
roger February 18, 2016
Great Larry……………..but what about your LIFE members like me………………do we have to join AGAIN?
roger
roger February 18, 2016
Great Larry……………..but what about your LIFE members like me………………do we have to join AGAIN?
roger
Kevin Beck February 17, 2016
I am always perplexed by some of these predictions based upon ratios that say that X is at a never-before-seen extreme relative to Y. Sort of like the saying, “It’s always darkest before the dawn.”
But there’s another version of that: “It’s always darkest before pitch-black.”
Just because a ratio is at a historical extreme doesn’t mean it can’t become even more extreme in the future. If the European Union were to fundamentally collapse, how extreme would the value of the Dollar to the Euro be?
Answer: We don’t know. But I think that when that point is reached, people will look back and say, “I wish my Euros were still worth what I paid for them in 2015.” Yeah…because then they still had some value.
Kevin Beck February 17, 2016
I am always perplexed by some of these predictions based upon ratios that say that X is at a never-before-seen extreme relative to Y. Sort of like the saying, “It’s always darkest before the dawn.”
But there’s another version of that: “It’s always darkest before pitch-black.”
Just because a ratio is at a historical extreme doesn’t mean it can’t become even more extreme in the future. If the European Union were to fundamentally collapse, how extreme would the value of the Dollar to the Euro be?
Answer: We don’t know. But I think that when that point is reached, people will look back and say, “I wish my Euros were still worth what I paid for them in 2015.” Yeah…because then they still had some value.
RICHARD BOSSHARDT February 17, 2016
Larry, I like your logic and steady good advice or I wouldn’t be in Super Cycle trader. BUT, beware of currency forecasts from Kathy & Boris. At this point I wouldn’t invest a cent after their ludicrous analysis of the Swiss Franc collapsing. i am a dual Swiss/American, and lived there 42 years. I just checked with several reliable business sources over there. Sure, the Swiss are having keeping the Franc DOWN to `help exports; production is down a few percent. But they are NOT part of the EU, have voted to stop immigratiom, have a balanced budget & small debt., and have world wide markets. You yourself recommended ABB, and just consider Nestle, or Novartis, etc. etc.
Your own reputation might suffer if you swallow everything Kathy & Boris (German ?) spew out to justify joining Weiss. Richard, Nevada City, CA
RICHARD BOSSHARDT February 17, 2016
Larry, I like your logic and steady good advice or I wouldn’t be in Super Cycle trader. BUT, beware of currency forecasts from Kathy & Boris. At this point I wouldn’t invest a cent after their ludicrous analysis of the Swiss Franc collapsing. i am a dual Swiss/American, and lived there 42 years. I just checked with several reliable business sources over there. Sure, the Swiss are having keeping the Franc DOWN to `help exports; production is down a few percent. But they are NOT part of the EU, have voted to stop immigratiom, have a balanced budget & small debt., and have world wide markets. You yourself recommended ABB, and just consider Nestle, or Novartis, etc. etc.
Your own reputation might suffer if you swallow everything Kathy & Boris (German ?) spew out to justify joining Weiss. Richard, Nevada City, CA
barry February 17, 2016
hilaree — you mean an inverse relationship
$1,000 gold February 17, 2016
you got it, dude. inverse. now think about gold and not grammer.
barry February 17, 2016
hilaree — you mean an inverse relationship
Christine Dudley February 17, 2016
Nobody knows what will happen tomorrow with any amount of accuracy. Now there is always something ripping down somewhere, it feels very scary out here.
Use your own common sense too.
Christine Dudley February 17, 2016
Nobody knows what will happen tomorrow with any amount of accuracy. Now there is always something ripping down somewhere, it feels very scary out here.
Use your own common sense too.
Mr. Wonderful February 17, 2016
Larry,
What ever happened to the idea that all the money from Japan and Europe was going to flood into the U.S. Stock Market.
When the markets in Japan and Europe go down…..the U.S. Market goes down also.
Looks like all of the money is going into the toilet!
hillaree, If stocks go up and gold goes down, that is not a mirror image. If stocks go up and gold goes up, that is a mirror image. (Unless I have a bad mirror)
franklin February 21, 2016
mirror image? it all depends. Say you’re doing pushups on a mirror – what happens to the image?
Mr. Wonderful February 17, 2016
Larry,
What ever happened to the idea that all the money from Japan and Europe was going to flood into the U.S. Stock Market.
When the markets in Japan and Europe go down…..the U.S. Market goes down also.
Looks like all of the money is going into the toilet!
hillaree, If stocks go up and gold goes down, that is not a mirror image. If stocks go up and gold goes up, that is a mirror image. (Unless I have a bad mirror)
franklin February 21, 2016
mirror image? it all depends. Say you’re doing pushups on a mirror – what happens to the image?
Wyatt February 17, 2016
I agree and a great over view of the worlds economic affairs (what about China) however, I think your wrong of the US stock market lift off.
While there was a surge in the 1930,s depression, it seems as though the DOW will drop 70% due to a number of reasons (including a global recession which began in early 2015) including all of the factors that you allude to, inaddition to demographics and lack of demand for goods and services – not to mention 160+T in combined US debt.
The US will never be capable of repaying this debt to various creditors (including Asia) therefore the US will not be viewed as a safe haven. And given the world debt to GDP’s , the Dow and it subsidies will simply trade downwards for quite a number of years.
Money is scared to death and the new norm will be to keep it under your mattress or pay negative rates on it!
kENNETH SCHAN February 17, 2016
Buy the dip when the dip starts going up again and crosses up through the Critical Threshold Point (CTP) in that dip (in up trend) and sell the rally when the rally crosses down through the Critical Threhold Point (CTP) in that rally (in a down trend). How do you know what the CTP is ? 40 years of studying charts.
kENNETH SCHAN February 17, 2016
Buy the dip when the dip starts going up again and crosses up through the Critical Threshold Point (CTP) in that dip (in up trend) and sell the rally when the rally crosses down through the Critical Threhold Point (CTP) in that rally (in a down trend). How do you know what the CTP is ? 40 years of studying charts.
Beverly February 17, 2016
I don’t want to read any more mean comments!
hillaréé February 17, 2016
i’m with beverly. why are you people so mean?
Beverly February 17, 2016
I don’t want to read any more mean comments!
hillaréé February 17, 2016
i’m with beverly. why are you people so mean?
steve christie February 17, 2016
HI Larry – Its interesting to get this from you today because I work in the hedge fund industry and just yesterday I received this industry newsletter. When I looked at its upbeat take on Japan and esp. it touting the success of Abenomics, it made me wonder:
http://www.opalesque.com/RT181/Newsletter_RT_02162016.html
steve christie February 17, 2016
HI Larry – Its interesting to get this from you today because I work in the hedge fund industry and just yesterday I received this industry newsletter. When I looked at its upbeat take on Japan and esp. it touting the success of Abenomics, it made me wonder:
http://www.opalesque.com/RT181/Newsletter_RT_02162016.html
Dan February 17, 2016
I wish the recommendations are better worded. Just like stock market drop was expected 6 months ago, a big rally is expected 6 months from now.
A stock with good fundamentals will bounce like a tennis ball and these stocks would be above the buy limit by the time buy recommendations are made here.
A lot of inverse ETF recommendations are NOT investments. All the inverse ETF are probably very low today. They have to sold quickly when a percentage increase occurs with sudden drop in stock markets otherwise no money is made.
Edwards Lifesciences, Vail resorts, TAL education , restaurant stocks never showed any signs of relative weakness during the stock market drops. So what is the real benefit of subscription. Gold is not correlated with inflation alone, may be in US. Gold is also correlated to currency fluctuations and right now gold is up because of currency devaluation in other countries.
Dan February 17, 2016
I wish the recommendations are better worded. Just like stock market drop was expected 6 months ago, a big rally is expected 6 months from now.
A stock with good fundamentals will bounce like a tennis ball and these stocks would be above the buy limit by the time buy recommendations are made here.
A lot of inverse ETF recommendations are NOT investments. All the inverse ETF are probably very low today. They have to sold quickly when a percentage increase occurs with sudden drop in stock markets otherwise no money is made.
Edwards Lifesciences, Vail resorts, TAL education , restaurant stocks never showed any signs of relative weakness during the stock market drops. So what is the real benefit of subscription. Gold is not correlated with inflation alone, may be in US. Gold is also correlated to currency fluctuations and right now gold is up because of currency devaluation in other countries.
ELISSA JUNG February 17, 2016
In my humble opinion…
Larry has sold his soul to the company store.
The financial world is waving one leg in the air while standing on a banana peel.
Gold is glittery but silver is in business.
The elephant is backing up to the fan.
If Trump gets in I’m investing in body bags.
from your favorite right brained gurgu.
ELISSA JUNG February 17, 2016
In my humble opinion…
Larry has sold his soul to the company store.
The financial world is waving one leg in the air while standing on a banana peel.
Gold is glittery but silver is in business.
The elephant is backing up to the fan.
If Trump gets in I’m investing in body bags.
from your favorite right brained gurgu.
LarryB. February 17, 2016
Hello $1000 gold,
How are your gold shorts working out now ?? Inquiring minds want to know!!
You seem to be missing 🙁
$1,000 gold February 17, 2016
things are so fine. how are things smelling with you
caféé February 17, 2016
great!
$1,000 gold February 17, 2016
i’ve been shorting with leveraged gold miner funds JDUST and DUST for about a year. go look at them and see how poorly they’ve done. gold and miners have gone down the entire time i’ve shorted. beware of leveraged funds. these funds appear to be flawed instruments. in addition to that, the fees are high at 1%. you can make the right call, select the right tool, and still lose money. i’m hoping gold goes up, since these instruments seem to working in reverse of the intended design.
$1,000 gold February 17, 2016
btw, i’m not awol. the trolls now own my $1,000 gold identity. you’re probably one of them.
LarryBéé February 17, 2016
it’s a little child’s game of musical chairs. i’m assuming there’s a large millennial population on this site.
$1,000 gold February 17, 2016
so did you ask to gloat over how poorly i did with gold shorts? or do you want to learn? i doubt it’s the latter.
$1,000 gold February 17, 2016
it’s amazing how immature these pretenders are. everything should be about me and i hate when it isn’t
hillaréé February 18, 2016
just do the opposite of what you read and everything will be so fine
LarryB. February 17, 2016
Hello $1000 gold,
How are your gold shorts working out now ?? Inquiring minds want to know!!
You seem to be missing 🙁
$1,000 gold February 17, 2016
things are so fine. how are things smelling with you
caféé February 17, 2016
great!
$1,000 gold February 17, 2016
i’ve been shorting with leveraged gold miner funds JDUST and DUST for about a year. go look at them and see how poorly they’ve done. gold and miners have gone down the entire time i’ve shorted. beware of leveraged funds. these funds appear to be flawed instruments. in addition to that, the fees are high at 1%. you can make the right call, select the right tool, and still lose money. i’m hoping gold goes up, since these instruments seem to working in reverse of the intended design.
matt February 17, 2016
Europe is a mess; Japan is a mess-therefore the USA is better. Okay Larry, agreed. USA is less bad then those two. But you still have to take a serious look at parts of China…
matt February 17, 2016
Europe is a mess; Japan is a mess-therefore the USA is better. Okay Larry, agreed. USA is less bad then those two. But you still have to take a serious look at parts of China…
Paul Sorenson February 17, 2016
I am confused!!! In Issue 142 you stated get ready for the great economic down turn, now you are telling us to getting ready for a 31,000 Dow by 2017. What is the truth???
UDO February 21, 2016
Paul
Larry is just a bit confused on THAT issue for now . What he is waiting for is for the DOW to hit 12,000 – 14,000 and then get that slingshot move – the unexpected up move .
cofféé February 17, 2016
gold is pretty easy. stocks go up, gold goes down – one is the mirror image of the other.
cofféé February 17, 2016
i mean really, it doesn’t get any simpler than this.
cofféé February 17, 2016
come on, larry. you’re a gold expert. look at the damn charts.
hillaréé February 17, 2016
gold is the mirror image of stocks. stocks go up, gold goes down – stocks go down, gold goes up. even an amateur like me can see that.
Mr. Wonderful February 17, 2016
Hillaree,
Are you a blond?
hillaréé February 17, 2016
no, i’m blonde. b-l-o-n-d-e, not blond. are you dum? or dumb?
Mr. Wonderful February 18, 2016
hillaree,
My dictionary shows blond and blonde.
hillaréé February 19, 2016
blond is male. blonde is female. my name is hillaréé, not bill.
hillaréé February 19, 2016
did you look up dum?
hillaréé February 19, 2016
don’t answer that. i’m not coming back.
Motty Perel February 17, 2016
Along human history, since humans were gathering nature’s fruits and killing wild animals for food to these days, when most people in the street carry i-phones, places and countries with high human productivity were richer than places and countries with low human productivity.
So, are humans these days, helped with technology comparable with former miracles, less able to produce than they were at the times when today’s technological level was perceived as impossible miracles?
I suspect, your answer will be NO.
And yet, the average person in the Western World is getting poorer.
Did you ever contemplate why?
I did.
The reason for stagnant or declining human productivity in the Western World is the incompatibility of Employment, which is our Mode of Labor Utilization (MLU) for the recent four centuries, with Capitalism, which is our socioeconomic system for the same period.
Capitalism stipulates that every successful investor of money and/or labor is entitled to a profit his investment generates in the market; while Employment stipulates that any profit generated by an employee’s labor is property of his employer. This incompatibility is cause of exploitation of the employee by his employer.
No one likes to be exploited. Every employee at a production floor or among his peers in service enterprises meets with resistance of his peers, if he exhibits outstandingly high productivity. He must stop “showing off and must work the way we all work around here” or he must quit. This peer pressure keeps general employee productivity at a level of mere corporate survival, regardless of technology advances. This phenomenon leads to stagnant or falling general wealth level, private and national debts, stagnant market demand, scarcity of new productive jobs and recessions.
The solution is to make the MLU compatible with Capitalism. That means, an employer should offer each of his employees to take financial responsibility for corporate losses with a proportional fraction of his wages and, consequently, receive the market profit this former employee’s investment of labor generates. This change stops human exploitation.
The employer’s expenses consist of outlays for means of production and outlays for labor. The rate of profit (or loss) on each of the two outlays is the same. When the worker will receive the profit his investment of labor generates, he will maximize his productivity and will be under peer pressure and encouragement to maximize it. Productivity of labor will multiply and so will profit on both the workers’ labor and the employer’s means of production. The employer’s forfeiture of profit on labor will be a small price to pay for the increased profit on the employer’s means of production.
This is the way to increase the total productivity of Western World. This abandonment of Employment and embracing the new, compatible with Capitalism Entrepreneurial Mode of Labor Utilization will change the direction of Western economy from heading toward a deadly depression to millennia of uninterrupted prosperity.
onlymo February 17, 2016
many (perhaps even most) employees would not understand your argument and certainly lack the commitment necessary to participate in the investment risk
JohnLamb February 17, 2016
I have personal experience in 2 companies where I instituted this type of operations.
Workers are not stupid. The results were astounding.
Here are some of the results experienced:
Unbelievably low absenteeism. (In cases we had to send people home because they came to work too sick.)
Refusal to join Unions.
Continuous improvements due to workers innovations
Extreme loyalty to the organization.
Peer pressure to work faster and better. (The opposite of “slowing down to average” described above)
Workers advising on new recruits to be fired “as they were not good enough to work here”!
Both companies were sold. 25% of price was distributed to the workers.
In the 2nd start up, eventually 50% of the workers came from the 1st company.
Even today, ~10 years later I get calls when will I start something again for them to join me.
It is not illusory, people usually respond with the same attitude that management displays to them. One cannot motivate people, one can only demotivate them. (Peter Drucker)
What you propose is workable, it has to be simplified in it’s explanation and most importantly it must be applied consistently. Yes there are bad apples, but believe me no worker will carry another if it hurts his pocket, you’ll be advised “this one is not for us”.
Motty Perel February 17, 2016
Along human history, since humans were gathering nature’s fruits and killing wild animals for food to these days, when most people in the street carry i-phones, places and countries with high human productivity were richer than places and countries with low human productivity.
So, are humans these days, helped with technology comparable with former miracles, less able to produce than they were at the times when today’s technological level was perceived as impossible miracles?
I suspect, your answer will be NO.
And yet, the average person in the Western World is getting poorer.
Did you ever contemplate why?
I did.
The reason for stagnant or declining human productivity in the Western World is the incompatibility of Employment, which is our Mode of Labor Utilization (MLU) for the recent four centuries, with Capitalism, which is our socioeconomic system for the same period.
Capitalism stipulates that every successful investor of money and/or labor is entitled to a profit his investment generates in the market; while Employment stipulates that any profit generated by an employee’s labor is property of his employer. This incompatibility is cause of exploitation of the employee by his employer.
No one likes to be exploited. Every employee at a production floor or among his peers in service enterprises meets with resistance of his peers, if he exhibits outstandingly high productivity. He must stop “showing off and must work the way we all work around here” or he must quit. This peer pressure keeps general employee productivity at a level of mere corporate survival, regardless of technology advances. This phenomenon leads to stagnant or falling general wealth level, private and national debts, stagnant market demand, scarcity of new productive jobs and recessions.
The solution is to make the MLU compatible with Capitalism. That means, an employer should offer each of his employees to take financial responsibility for corporate losses with a proportional fraction of his wages and, consequently, receive the market profit this former employee’s investment of labor generates. This change stops human exploitation.
The employer’s expenses consist of outlays for means of production and outlays for labor. The rate of profit (or loss) on each of the two outlays is the same. When the worker will receive the profit his investment of labor generates, he will maximize his productivity and will be under peer pressure and encouragement to maximize it. Productivity of labor will multiply and so will profit on both the workers’ labor and the employer’s means of production. The employer’s forfeiture of profit on labor will be a small price to pay for the increased profit on the employer’s means of production.
This is the way to increase the total productivity of Western World. This abandonment of Employment and embracing the new, compatible with Capitalism Entrepreneurial Mode of Labor Utilization will change the direction of Western economy from heading toward a deadly depression to millennia of uninterrupted prosperity.
onlymo February 17, 2016
many (perhaps even most) employees would not understand your argument and certainly lack the commitment necessary to participate in the investment risk
JohnLamb February 17, 2016
I have personal experience in 2 companies where I instituted this type of operations.
Workers are not stupid. The results were astounding.
Here are some of the results experienced:
Unbelievably low absenteeism. (In cases we had to send people home because they came to work too sick.)
Refusal to join Unions.
Continuous improvements due to workers innovations
Extreme loyalty to the organization.
Peer pressure to work faster and better. (The opposite of “slowing down to average” described above)
Workers advising on new recruits to be fired “as they were not good enough to work here”!
Both companies were sold. 25% of price was distributed to the workers.
In the 2nd start up, eventually 50% of the workers came from the 1st company.
Even today, ~10 years later I get calls when will I start something again for them to join me.
It is not illusory, people usually respond with the same attitude that management displays to them. One cannot motivate people, one can only demotivate them. (Peter Drucker)
What you propose is workable, it has to be simplified in it’s explanation and most importantly it must be applied consistently. Yes there are bad apples, but believe me no worker will carry another if it hurts his pocket, you’ll be advised “this one is not for us”.
Al February 17, 2016
Larry simply jumps from one sensationalist theory to another. Come to think of it, so does the market. I would say however, the debt burden on the “civilized world” is a burden we all will pay for eventually, either through increased taxes or cuts in spending. ‘Till someone or better yet, ’till we all pressure our politicians to start off by decreasing spending, we will continue to spiral. Indeed, inflation may occur if the Fed would allow the markets to determine their own fate without manipulation. … Government economic intervention is never positive and “theories” regarding the fate/future of the economy are just that. Ronald Reagan once said that the nine words you never want to hear are I’m from the government and I am here to help” applies to most of what you hear from government and “financial experts”.
Al February 17, 2016
Larry simply jumps from one sensationalist theory to another. Come to think of it, so does the market. I would say however, the debt burden on the “civilized world” is a burden we all will pay for eventually, either through increased taxes or cuts in spending. ‘Till someone or better yet, ’till we all pressure our politicians to start off by decreasing spending, we will continue to spiral. Indeed, inflation may occur if the Fed would allow the markets to determine their own fate without manipulation. … Government economic intervention is never positive and “theories” regarding the fate/future of the economy are just that. Ronald Reagan once said that the nine words you never want to hear are I’m from the government and I am here to help” applies to most of what you hear from government and “financial experts”.
Jeff February 17, 2016
Have you not been to the grocery store?
Everything, practically every week is sliding up and up.
Jeff February 17, 2016
Have you not been to the grocery store?
Everything, practically every week is sliding up and up.
john February 17, 2016
Larry
Your analysis too high level. Many variables in each of the subsets and you dont have the evidence to support your conclusions.
If you want readers to take you seriously you need a bit more evidence rather than opinions .
Europe collapsing is so ridiculous . Theres no evidence backing your opinion>
Your analyses is like a novel; great read but a fantasy !
John
Jim February 17, 2016
Larry has missed or is very late on some of his guesses!
Geo February 17, 2016
The longs have been suckered in and the trap door in gold is loaded and ready to spring open. Martin Armstrong is not buying this rally, neither is Doug Eberhardt (another excellent gold analyst).
JTMarlin February 17, 2016
Doug Eberhardt is the furthest thing from an excellent gold analyst.
UDO February 21, 2016
JTMartin
So happy to hear about Doug and I fully agree . I met him on Seeking Alpha boards – pretty arrogant .
Geo February 17, 2016
The longs have been suckered in and the trap door in gold is loaded and ready to spring open. Martin Armstrong is not buying this rally, neither is Doug Eberhardt (another excellent gold analyst).
JTMarlin February 17, 2016
Doug Eberhardt is the furthest thing from an excellent gold analyst.
UDO February 21, 2016
JTMartin
So happy to hear about Doug and I fully agree . I met him on Seeking Alpha boards – pretty arrogant .
Chuck Burton February 17, 2016
I’m surprised, Larry, with your cycles of war studies, that you don’t mention the events in Syria, et/al, which have a possibility of starting WWIII. Nearly all of the Sunni nations vs Iraq, Iran, Syria, and Russia, with the possibility of nuclear war underlying. And are we also backing the Sunnis?
F151 February 17, 2016
Syria is a total mess and Obama is clueless. The Turks are killing the Kurds and they are the only effective fighting force against ISIS.
hillaréé February 17, 2016
it’s a real cluster f*ck over there.
UDO February 21, 2016
F151
Don’t they always fight / kill down there ? Nothing new to us or them – that’s their life.
John February 17, 2016
Larry you have taught me a lot about markets. Keep up the good work. These are treacherous times.
UDO February 21, 2016
John
They – the analysts – have been saying this ” treacherous times ” for years and years . If they don’t say that what is their to sell ? HYPE the markets, gold , oil, housing and you can make a buck
Ted F February 17, 2016
No inflation? Obviously you do not do the grocery shipping. Safeway in Northern California two months ago green onions, two bundles for a dollar, this week $2.00 a bundle. Lettuce has doubled in price. Canned Progresso Soup on sale went from 4 for $5.00 to 3 for $5.00. Ground beef is up almost two dollars a pound in a year. That is part of Obama’s sick joke on seniors claim there is no rise in prices because the price of gas has dropped, but most seniors don’t drive or drive very little. And remember the egg scare a few months ago, prices have dropped by about half the increase during the scare. Even the price of Spam is up. For the last couple of years things from China have cost about twenty percent more in some consumer goods, especially toys and hobby items.
John February 17, 2016
Ted how can you possibly use real world examples to talk about a government distorted concept like inflation. You must be aware that the lies out of DC do not include food. At least for a moment gasoline is cheap. Still you do have a point on the rise in food prices.
F151 February 17, 2016
You need to look at the bigger picture. Commodities have been thrashed across the board. Interest rates on bonds are negative in some countries. Oil is sinking like a rock. Real estate was hit, has recovered…..I expect another hit as the IYR is showing. Now the stock market is joining in after a long holdout. Yes, groceries are holding out….but give them time. Everything does not decline at once.
John T February 18, 2016
Jojn – What are you drinking, Cool Aide. Inflation is and always has been a monetary issue. The only real money that cannot be created out of thin air is gold. The numbers the crooks at the FED use are pure bogus.
George E February 17, 2016
Gentlemen and Lady,
I agree with your analyses for the near future. However, as Lord Keynes said, “in the long run we are all dead”, I strongly suspect that we all will be bankrupt while most of us still aren’t! Go into any big chain pharmacy or low price dry goods store and you will see that as much as a third of the floor space is now dedicated to stocking mostly non-perishable food items as the means of maintaining a base level of sales to pay salaries and overhead. The real problem is that the customers who patronize those stores have decreasing discretionary income and their central banks counterfeited cash is not going into their pockets. Ultimately, investors need adepuate sales from customers to get their ROI’s and the central bankers are just pushing on strings. More “dollops of debt” and its servicing costs just exacberate the problem. The taboo R-word solution is never mentioned because it requires recognition of the fact that “too much money going into too few hands” is the real problem. The collective body Economic is going into shock from the lack of adequate circulation of liquidity, the same as the circulatory blood loss of human victims in car crashes. Greed is NOT good because it does not work: lack of sales is the earthly here and now punishment! As Moses told Pharoh in “The Ten Commandments”, the strong (well paid workers) make many bricks (and sales), the weak (poorly paid) make few, and the dead (unemplolyed) make none. Even my peasant immigrant grandmother knew that!
JayT February 17, 2016
Nice one George E, and I concur.
books February 17, 2016
Anyone who says there’s no inflation in the U.S. hasn’t grocery shopped here lately.
AlcoholTelevisionFaithInTheSystem February 17, 2016
Silly rabbit. YOU are falsely associating higher prices with inflation. Just because everything COSTS more doesn’t mean that prices are going up, or that there is “inflation” by the Fed’s measure. It just means food costs more.
[In my own home, I take the Fed’s Expert Advice by simply eliminating expeditures in “volatile” “non-core” sectors such as food and energy. This has really gotten inflation under control in my budget, but the kids do cry for milk a lot.]
Now let’s take another look. Try this for practice. Grab a crayon out of the box. Any colour will do and you can use either end of the crayon. Take a clean white piece of paper and draw a square circle. When you are done with that, draw a round square. See how easy that was?
NOW the Fed’s Financial “Theory” of ZIRP or NIRP to “get inflation rates up” makes perfect sense!! You just have to BELIEVE there is no inflation and then POOF it’s gone!
[If you seat enough monkeys at enough keyboards for long enough, one of them is sure to crank out Fed Financial Policy.]
Planet Hobo February 17, 2016
I find Larry to be a bit off the mark here. Uneployment, measured by 1983 criteria is at 23% in the US, the 5% pedalled by the government is pure propaganda. That would put us on a par with Europe. Food stamps at 45 million, hmmmm, that is not a recovery or talking point either. Debt, the US is at 20 trillion and the banks are just as weak, and the US has 20+ million illegals feeding off the system versus 2 million refugees in all of Europe. I do not think the US is even the cleanest dirty shirt in the laundry, just the most promoted and lied about. East or West we have all been screwed by our various liars oh, make that leaders. It is only a question of who hits the wall first, the rest will quickly join in any case.
Bob February 17, 2016
Enough advertising, we need advice, buy above $1187?
UDO February 21, 2016
Bob
No – buy under $ 1000 that’s what Larry said before
joe February 17, 2016
Sandra…He missed the boat on the buy signal. He said it was going below 1000 and it never did. When it dipped to 1052 he said not to buy yet. By the time he gives the signal miners will be way up which they already are.
John T February 18, 2016
Larry doesn’t know what the market will do until it does it. Then he says I told you so.
Amceey February 17, 2016
As always well done Larry and thanks.
You anticipated the equity market falling since a long time ago. Indeed it is since last summer. It appears the move is still in the middle of the down fall and I believe a sudden sharp fall is coming soon. My question is, will the miners stocks fall along with it then rebounds or will they move by their own merits?
Sandra Powell February 17, 2016
I am confused. Are you saying with the $1187.50 price hit now is the time to buy gold$
David in Williamsburg February 17, 2016
Sandra, don’t know if this helps but Larry raised his buy below price to $1,080 in the RWR. He did say that he expected Gold to pull back after it hit the $1,187.50 level on a weekly close as it did. The pullback on Friday and yesterday has given me the opportunity to sell Puts on RGLD and SLW which is my way to invest for income in Gold and Silver Streamers.
Chris February 17, 2016
I agree. Larry issued a buy target of 970 and than 1080 after Gold was well past. He also indicates a pullback may come.
John T February 18, 2016
In Dec gold hit a low of about $1050, I think the train left the the station. Still waiting for the signal to back up the truck on mining shares. lol
UDO February 21, 2016
Didn’t Larry always say :
Gold will go under $ 1000 and Larry is always as right as rain .
Dave Smeltz February 17, 2016
This review of the global economic situation is interesting and helpful. Where is the guidance that was promised about the gold & silver market though? The charts we have seen up to now only go up to March 18th, nothing beyond that. Can we please get a forecast that looks further into the future?…………Thanks, Dave
joe February 17, 2016
“So then, you ask, why the huge rally in gold? I warned you it was coming.” And you also told us not to buy yet. Train has left the station.
Richard February 17, 2016
Oh no Joe. We will see the dollar and gold go up together. Unheard of! When the Europe and Japan fall,you can make money on either the dollar or gold.
Howard February 17, 2016
Hi Larry
We are indeed in interesting times. With the $US, we have the least dirty shirt in the laundry, my cash levels are up and as every day passes, I feel less confident about currencies. Even the $US. Gold is looking better now, even to me but I still sense there are too many bulls, in gold stocks and we haven’t seen a complete shake out yet. Then my timing has never been perfect.
John Milton February 17, 2016
GREAT Analysis!
AlcoholTelevisionFaithInTheSystem February 17, 2016
Hey Larry! What about China? IF it were possible to dig through your archives from, say, one year ago, I believe we would read about how China is SOARING, ROARING, SIZZLING, BLASTING OFF INTO THE STRATOSPHERE. You had logs from trips to China’s “interior” that waxed endlessly about how great the future was to be for China.
And today? Silence on China.
gypsy gene February 18, 2016
FXI is not part of RWR.
Mike February 17, 2016
There is inflation not the way they calculate inflation . Just like in America. We have a lot of inflation health care costs . Cost of autos and repairs just to mention a few
Pedro February 20, 2016
Want a shock to your pocket book? Try buying some tractor parts…or any machinery related to farming. In the last twenty years the price of a John Deere tractor, horsepower wise, has more than tripled. A starter can cost you over 700 bucks. To overhaul a transmission…25,000. No, we have no inflation. And 95 million that could be working are not…that is nearly thirty percent of the population.
UDO February 21, 2016
OMG OMG OMG
Larry has declared a new bull market in gold and he is ALWAYS right as rain .
OMG OMG OMG