The economic benefits of a Trump administration could spill over into global markets, including Japan.
- How Italy’s Vote on Sunday Could Affect Our Markets
- Emerging Markets Just Got Red Hot Again
- Time for More Double-Digit Gains from "the Country of the Future"
- A Market Circus Made by Policy Clowns
- The Next Wave of Stimulus Brings Us This Multitrillion-Dollar Opportunity
- How I Predicted the Global Market Sell-Off
- The World Can No Longer Ignore These Threats
- Global Markets in Self-Perpetuating Denial
- The "Unnatural Disaster" Ravaging Global Markets
- What the Greek Debt Crisis Means for Markets and Your Money
- These Companies May Decide the Fate of Ukraine
- Our Man in Japan Shares a Soros-Beating Move
- Godzilla Will Come Out of Tokyo Bay Before Japan Rebounds
- United Nations Warns of Food Price Hikes, Painting a Picture Similar to 2008's "Silent Tsunami"
- How to Profit From Europe's Stealthy Resurgence
- Author Chat: Money Morning's Martin Hutchinson Talks About "Alchemists of Loss"
Italy's vote outcome could come as a shock to the world, and it could definitely impact U.S. markets. Just look at what happened last June when Brexit wiped out $3 trillion of wealth in just two days.
Brazil managed to pull off the 2016 Summer Games, South America's first ever, free of major problems or disruptions.
The same can't be said of the country's politics or its economy, though. Massive budget deficits, rocketing interest rates, and a plunging currency are linked with a widening corruption scandal that's brought down the president of Brazil and spurred violent civic unrest.
That doesn't seem like a likely source of market-beating 44% and 24% gains, but that's exactly what our Brazilian plays have returned over the past 10 months - a time that's seen plenty of global investors run away from the country's 200 million consumers.
Clearly, not every investor is running out on Brazil. In fact, a few of the world's smartest, richest investors are making a beeline for Brazil... along with other, similar markets that offer better diversification, higher yields, and bigger gains.
"Boom and Bust" Brazil's long political drama is reaching a fever pitch. Yesterday morning, the Brazilian Federal Senate voted to impeach President Dilma Rousseff. While the Senate still has to convict her, she'll be suspended from office until her trial ends.
Rousseff stands accused of being at the very heart of a vast web of corruption that's brought South America's biggest, most diverse economy into a biting recession.
Rousseff and her many supporters call the impeachment proceedings "a coup," while her opponents call it "justice." Brazil's divided society has taken to the streets with near-daily demonstrations and violence between the two sides.
What's more, all of this is taking place against a backdrop of plunging commodities, double-digit inflation and interest rates, a collapsing real, and, yes, even the dreaded Zika virus.
In other words, conditions are perfect for what could be the contrarian play of the year.
Remember, the United States has seen low growth, political gridlock, and social upheaval, all while its stock market went stratospheric. The effect in Brazil is likely to be stronger and more lucrative; GDP shrank 3.95% last year, but Brazilian stocks have surged 35% in the past three months alone, and they've historically shot up by more than 1,000% at times like these.
Stocks resumed their rally last week after Janet Yellen reassured investors that things are so bad she won't raise interest rates any time soon. The Dow Jones Industrial Average jumped 277 points, or 1.6%, to 17,792.75 while the S&P 500 added 37 points, or 1.8%, on this idiotic "bad news is good news" scenario.
Eight long years of excruciatingly accommodative monetary policy have done a lot to inflate asset prices and concentrate some $112 trillion in wealth in the hands of just 34 million people... but it hasn't come anywhere close to the goal of stimulating broader economic growth.
Now instead of admitting the mistake and trying structural reforms, politicians and bureaucrats have come up with yet another crackpot idea to spend their way to growth.
That means there's likely some serious "helicopter money" headed our way.
Making millions in the stock market is simple - all you have to do is predict its direction. Easier said than done, right? Not necessarily.
While most of Wall Street and the world didn't see this global market sell-off coming, I did.
As the world reels from the barbarous, but all too predictable, terrorist attacks in Paris on Friday evening, markets will also be trying to regain their balance after a difficult week. What the Paris attacks have in common with last week's market losses is that they both disabused observers of the illusions that they can continue ignoring the consequences of political and policy weakness.
The central bank circus was on full display this week as the Federal Reserve's Open Market Committee held a two-day meeting only to emerge with another mind-numbing series of excuses for keeping interest rates at zero when the economy is not in crisis.
One such claim was that inflation (as measured by economists) is insufficiently high, despite the fact that the price of real-world goods and services (including gasoline again) are steadily rising. The Fed stated that it's afraid raising interest rates - for the first time in nine years by all of 25 basis points - could send the economy into a tailspin. That isn't only bad policy, it is pathetic.
The tide is turning for crude oil prices. Following some nice recent gains and despite a dip on Tuesday, the market currently remains at just below $60 a barrel for West Texas Intermediate (WTI) crude oil futures in New York. The recent rise in prices would seem to be just what the smaller operators in the U.S. need to avoid a sector meltdown. A few months back, when prices were pushing lows of $40 a barrel, there was widespread talk of a wave of bankruptcies coming in the oil patch. The picture is now better, given a recovery in crude prices.
The tide is turning for crude oil prices.
Following some nice recent gains and despite a dip on Tuesday, the market currently remains at just below $60 a barrel for West Texas Intermediate (WTI) crude oil futures in New York.
The recent rise in prices would seem to be just what the smaller operators in the U.S. need to avoid a sector meltdown.
A few months back, when prices were pushing lows of $40 a barrel, there was widespread talk of a wave of bankruptcies coming in the oil patch. The picture is now better, given a recovery in crude prices.
All eyes are on Greek debt crisis this week, and rightfully so.
The country lied to get into the European Union, managed its finances terribly during its membership, and now wants to renege on its obligations. I'm not surprised and chances are you aren't either. We've been talking about the fallacy of central banking and the dangers associated with derivatives trading for years.
Editor's Note: Bill Patalon's readers enjoy regular access to his high-profit research and best money-making, market-beating ideas. Today Bill looks behind a global crisis that's playing loudly out on the front pages everywhere, yet the most important factor is almost entirely being missed. Since Bill's been watching this trend for years, he sees, and shares, for us his one-of-a-kind insights...
If you've been watching the developments between Russia and Ukraine in recent days, then I'm sure you've seen reports of the sobering military buildups taking place on both sides of the border.
Today I want to spend a little time updating you on these escalations.
But then I plan to tell you about the real skirmish there - one that's not being reported on by the mainstream media. In fact, it may have already ended the battle in Moscow's favor.
Kiev just doesn't realize it yet.
The deciding factor in this skirmish is something we've been telling you about for more than two years.
And it just keeps gaining in importance - so much so, in fact, that we Main Street Americans need to watch it carefully just to protect ourselves.
This "X-Factor" goes by a lot of names.
But today we're going to refer to it as the "Invisible Front" of modern warfare.
Every year some analyst comes out with a variation of the story that Japan is about to rebound.
Usually the argument goes something like this: Japanese markets are impossibly cheap and the central bank will be there to prevent a catastrophe.
Or sometimes there is another variation of the Cinderella story.
Either way, don't hold your breath. Japan posted its first trade deficit since 1980 last year and the big trade surpluses needed to drive the Nikkei back to its glory days are over.
At best, Japan is going to see balanced trade figures or a small surplus in the years ahead. It won't be enough.
If you're not familiar with what a trade deficit is, here's what you need to know: Japan imported $32 billion worth of stuff more than it exported for the first time in 31 years.
Fighting the Demographic TideCritics say there are mitigating factors behind the figures and they're right.
Against the backdrop of one of the world's fastest aging populations, one of the lowest birth rates on the planet, a renewed reliance on foreign energy, and a yen that is so expensive that Japanese corporations are offshoring production, it won't be long before the country eventually plows through its savings.
So $32 billion is just the beginning...
In fact, we are more likely to see Godzilla walk out of Tokyo Bay than we are to witness a return to Japan's halcyon days.
Worse, I believe that within the next five years, Japan will long for the good old days when the trade deficit was merely $32 billion, instead of $100 billion, $200 billion or worse.
Not one of the things I've just mentioned - that the critics cite as short-term influences - are anything but continuations of much longer-term trends. Nearly all of them are being driven by Japan's declining population.
You may not know this, but Japan's population is projected to shrink by 30% by 2060. That means the total population will go from 128 million people today to only 87 million people in less than 50 years.
That's hard to imagine since Japan is one of the most densely populated countries on the planet. But the effects are already visible.
In my neighborhood in Kyoto, for example, we see abandoned houses that fall in on themselves after people die and there are no longer any other family members to live there. We see schools that are shut down in the region because there are no kids to attend them.
We're also seeing companies shuttered because there are no markets for their products, including my wife's family kimono business, which closed after 300 years in existence.
Simply put, you just can't grow a population or its stock markets without people.
Japan also has no immigration policy to speak of, so there is no means of replacing the "silvers," or senior workers, who are leaving their productive years behind them.
By 2060 the number of people who are 65 or older is going to double. At the same time, the number of people in the workforce between 15 and 65 is going to shrink to less than 50% of the total population.
By 2050, there will be 75 retirees for every 100 workers. By comparison, in the United States in 2050 there will be about 32 retirees per 100 workers.
You'd think Japan could get "busy" and produce more children but even that's problematic. The country has one of the lowest birthrates on the planet. Many young Japanese simply don't want romance -- let alone children.
In fact, many Japanese don't even want sex.
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The FAO announced in its twice-yearly Food Outlook report that global food import costs will jump 15% in 2010 to $1.026 trillion – dangerously close to the 2008 crisis level of $1.031 trillion. The world food import outlook was revised up from a June estimate of $921 billion.
Increasing global demand is boosting the food bill, and price climbs in grain and sugar – which recently passed its 30-year peak – have signaled even higher prices ahead.