Wednesday, February 26, 2014

Tracking Predictions Over Time - A "Yellen Pause" this Summer?

One thing we will do here is try to track some important predictions made by people like Jim Rickards over time. Doing this shows how much confidence to place in their forecasts going forward. Since Jim is predicting "The Death of Money" and a "Collapse of the International Monetary System" we care about his predictions. He has a very good track record so far. If he is right about his big prediction we will certainly have major monetary system change that will impact the status of the US dollar.

Recently Jim predicted that the US economy would slow down and head back into recession mode by this summer. He said this would lead to a "Yellen Pause" as he calls it. In other words, the FED would announce they were not going to continue the QE tapering due to worsening economic conditions. Obviously this is a pretty significant prediction to follow and will let us know if Jim is on the right track.

Here are some headlines today that tend to support his forecast at least right now:

CNBC - JP Morgan to cut 1000's more jobs. - Richmond FED: Manufacturing Activity Withers in February.

Star Tribune -  US Consumer Confidence Dips in February.

CNBC - Morgage Applications at Lowest Level in Two Decades.

ABC News - Walmart Offers Weak Outlook on Sales.

Charlotte Observer - Bank of American lays off more workers.

Telegraph (this one is in the UK) - RBS to slash 20,000 jobs.

Offsetting the above is a report today that January new home sales were up over 9%.

However, with all these banks laying off people in their mortgage divisions it is pretty clear they expect the January numbers not to hold up. Most media accounts are blaming severe winter weather for the slow down.

So right now, things are trending towards Rickard's forecast being correct. He expects a "Yellen Pause" this summer. If that happens, we can expect precious metals to continue to rebound this year.

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