Friday April 19 2019

The Recurring Case of April 19, 19

We suggested caution regarding the markets in this column two weeks ago.   Some ETF stock indexes have made new highs. While there are many optimistic expectations given the low unemployment numbers, stock market action looks a lot like September 2018. That led to the October 3 top and a 4,000 DJIA drop. That is not a prediction but again a caution. The charts suggest this as a real possibility.

Crude oil has yet to break above $66 measured by West Texas Intermediate. Gold should be making a 13.5 month low now. Several technicians are forecasting lower prices for gold, next week will tell the story.

The date of April 19 has a remarkable coincidence marking aggressive human acts.   Consider these events which occurred on that date.

• Start of American Revolutionary War
• Start of American Civil War
• Start of Spanish-American War
• Bay of Pigs Failure in Cuba
• End of Viet Nam War

And the date is living up to its reputation again. Consider these events this week.

• Release of Mueller Report, rather than accept it, Democrats now say it is up to Congress to ‘continue the investigation.
• Notre Dam Cathedral burns
• Tucson, AZ declares state of emergency unable to handle influx of illegals
• North Korea fires short range missile

America abandoned the gold standard April 19, 1933. So it was no coincidence that China picked April 19, 2016 to announce its own Shanghai Gold Fix.   China is now the largest producer and consumer of gold.

This is part of a much larger pattern of aggressive Chinese behavior. This of course is being ignored while our Congress works on the important things like demanding Trump’s tax returns.

China has adopted an aggressive Made in China 2025 plan for economic expansion. And there are at least three other initiatives at work.

First is the New Silk Road construction Project. This is a revival of the original 207 BCE Silk Road during the Han Dynasty. It will link China to East Africa, West Asia, and already Europe.   China already controls 10% of European water ports.

Next is the Asia Infrastructure Investment Bank. This is clearly a challenge to the World Bank and the International Bank for Reconstruction and Development begun at Bretton Woods in 1944. Significantly the US is not a member but most Asian nations are members with much of Europe on board.

Finally there is the construction on the Spratly Islands in the South China sea.

While American politicians cannot see beyond the 2020 elections, China has a long range plan which is clear to see, if only the USA would take a look.

Tuesday March 19, 2019