Trend
forecaster Gerald Celente lays it on the table, dissecting why the
bounce back in markets the last few days is bunk. After equity markets
worldwide suffered one of the worst starts of a new year in history,
stocks suddenly rebounded. For example, the Nikkei closed out
last week at its lowest level since October 2014. But what economic
fundamentals spiked prices higher this week? Was it the dismal news that
Japan’s economy contracted 1.4 percent in the last quarter? No. What boosted stocks prices was the twisted
rationale that despite the Bank of Japan firing two rounds of blanks
from its “monetary bazooka,” the lousy Gross Domestic Product number was
cause to launch yet another round of stimulus. Before
Chinese markets opened Monday after being closed for a week, the
Shanghai Index had fallen 47 percent since its peak in June. Was it on
the rotten news that China’s exports fell 11.2 percent in January and
imports plunged 18.8 percent that markets rallied? No. As with Japan,
the dismal data was taken as a positive sign that the People’s Bank of
China would take bold measures to boost sluggish growth. “Confidence,”
trust the effectiveness of the rigged market game, not economic
fundamentals, was the rationale for stocks suddenly moving
higher. Tuesday’s New York Times headline summed it up: “Global
Shares Buoyed by Investor Faith.” Yes, faith in more failed
central-bank stimulus and stock and bond buyback sideshows… not faith in
true price discovery and robust Gross Domestic product growth.
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