Why the Yuan Is a Big Problem for Everyone

“No man is an island entire of itself; every man

is a piece of the continent, a part of the main…”

John Donne’s words apply to money as well as to mankind. No currency is an island unto itself – even though the “experts” would often like you to think so.

Mainstream economists and media pundits are telling people that problems in China are unlikely to cause serious problems in the United States. They point to the fact that China only accounts for a small percentage of U.S. trade, for example, and that the falling Chinese stock market has very little to do with our stock market.  Unfortunately, they are missing the point.

China is now to the rest of the world what the U.S. housing market was before the 2008 financial crisis – it is the epicenter of global instability. You can read more about China’s problems here.

And at the very heart of that instability lies the yuan.

Western investors may not realize that the yuan has appreciated by nearly 70% against the yen over the last five years, delivering a blow to China’s export position vis-à-vis Japan. And that creates a ripple effect that will be felt in multiple markets.

Here’s where the yuan is headed – and how you can protect yourself….

To continue reading click here.

What The Energy Crash Really Tells You About This Market

There’s no bear on Wall Street – only a giant brass bull.

That pretty well encapsulates the attitude of all the “experts” who are now hastening to assure investors that the current sell-off is not a reprise of 2008. (Here’s how my own 2016 forecast stacks up against the status quo.) Take Justin Lahart of The Wall Street Journal, who wrote on January 16 that, “there are crucial differences between now and those dark days. While losses could continue, the U.S. appears, at the moment, to be in a better position to weather them.”

Don’t be fooled.

If I had a dollar for every person who told me I was wrong when I wrote a year ago that low oil prices would be bad for the U.S. economy, I’d have a lot of dollars.

I’d also still be right.

Oil last week traded below $28/bbl (WTI) – a 14-year low and close to 40% down since I predicted oil would fall by 50% again on September 28, 2015. And I think it still has further to fall.

In reality, the energy crash serves as a disturbing litmus test for how bad this market really is.

Here are the signals you should be watching…

To continue reading click here.