Red China engages in practices that are illegal in the Free World where trade must be fair.

Red China engages in practices that are illegal in the Free World where trade must be fair. China is creating monopolies and cornering the market in Rare Earth's the way criminal organizations did a century ago. China thus is causing shortages and driving up prices all around the world and they causing unemployment in manufacturing nations in the Asian ring. Remember they illegally imprisoned two Americans for doing diligent economic research for fear the Americans would expose Red China's economic corruption. Their Nobel Peace Prizewinner was thrown in jail because he accepted the peace prize. China should free the two Americans and let their Nobel Prize winner leave China.

The dollar strengthens and gold falls in price as the world discovers the best inflation adjusted returns are found in the USA. The Net long-term TIC Flows for November show a sharp trend reversal as the world buys US dollars and treasuries for a safe higher rate of return like the USA banks have enjoyed at 0.25% cost for the last two years.
Treasury 10-year notes pay 1.88 percent after subtracting consumer price increases, compared with 1.41 percent for German bunds and 1.13 percent for Japanese government bonds. Gilts yield four basis points less than the U.K.’s inflation rate. America's QE2 is NOT INFLATIONARY! It is designed to prevent the deflation that has been destroying the Japanese economy for twenty Years. 2.5% inflation is historically a very low money supply expansion rate needed to allow for population increase and for the East to catch up with the West.

With a 0.25% cost and a guaranteed 1.88% return banks make money. While investors are forcing European governments from Greece to Ireland to cut spending as governments prepare to sell $1.1 trillion of bonds this year, demand at Treasury auctions has been the highest on record.
The precious metals trend line is now down

World Markets:
China is in America to accelerate the rate at with American technology is pirated via joint ventures. GE has already sold out the aviation industry giving China everything they need to build a Dreamliner.

There was a saying in America one hundred years ago, "Would you like to buy the Brooklyn Bridge? Hutchison Whampoa said it was listing the new Red Chinese port company in Singapore because Red China's Hong Kong Exchange regulations don’t allow such trusts. Hutchison's executives may eventually be hunted down, tried and executed by the Red Chinese and all the Chinese assets they are trying to illegally sell could be confiscated from the investors. Does Hutchison Whampoa think it owns Red China? Are we to believe the Red Chinese government is not behind this swindle of Western investors? You would be better off buying the Brooklyn Bridge. This shows the extent to which the Asian bubble has grown and the brazen criminal activities caused by the communists' complete lack of understanding that honesty and trust are the underpinnings of free enterprise. Such a brazen degree of Red Chinese corruption is a sign of impending economic collapse of their bubble. Disclosing criminal Red Chinese activities is the reason they imprison innocent Americans and Nobel Prize winners in Red China.

Asian markets show caution. China's markets declined -3% Monday and -2.9% Wednesday in a sharp selloff. European stimulation puts cash into the stock markets to try to improve asset values and make reserves appear larger than they otherwise would be. The USA has avoided that. World liquidity is shrinking because the USA is seen now as such a safe investment compared with massive illegalities and sucker sales like Hutchison Whampoa Ltd.’s sale. The Asian criminals are essentially selling their Brooklyn Bridge.


Business trends
Empire Manufacturing Jan rose to 11.9 from 10.6 reported last month. Small improvement
Net long-term TIC Flows Nov: US Treasury reported that in November Net Long-term TIC Flows increased to $85.1B from 27.6B. This indicates that the dollar will likely strengthen significantly. See:
http://nowandfutures.com/key_stats.html#tic
NAHB Housing Market Index Jan remained unchanged. No improvement.
MBA Mortgage Purchase Index 01/14 +5% improved from +2.2% last month.
Housing Starts Dec 529K down from 555K. Which is good because there is a glut of unoccupied housing.
Jan 19 8:30 AM Building Permits Dec 635K up from 555K. Which is bad because there is a glut of unoccupied housing.

Yesterday
Initial Claims 01/15 - the number of new people seeking benefits fell by 37,000 to a seasonally adjusted 404,000 for the week ended Jan. 15. That's not much higher than the 391,000 level reached last month, the lowest in more than two years. The decline suggested that an unexpected rise in applications a week earlier was the result of seasonal factors. Applications often rise in early January after retailers lay off temporary holiday workers.

Continuing Claims 01/08 the number of people continuing to receive unemployment benefits fell to 3.9 million in the week ending Jan. 8, its lowest level since October 2008. But that means many people have exhausted state benefits and doesn't include millions of long-term unemployed who are receiving extended benefits from the federal government under the emergency program set up during the recession.

Existing Home Sales Dec resales increased by 12.3% from a month earlier to a seasonally adjusted annual rate of 5.28 million. Despite the monthly jump, the housing market remains a weak spot for the economy, which is slowly coming out of a severe recession. For all of 2010, about 4.9 million homes were sold, the worst year since 1997 and down 4.8% from 2009. But last month was back to the 2009 level and it is expected to improve during all of 2011.

Jan 20 10:00 AM Leading Indicators Dec were up 1% which is low than the 1.1% before Christmas. The current stock market bubble is the only thing keeping the Leading indicators up. This is the opposite of the GE/MSNBC/Proved hype that Americans understood to be just socialist propaganda last November. The declining American unemployment rate by Communist standards is now quoted at half of what the real rate is, but is not yet up to where the FDR socialists put it (25%) during the FDR socialists Great Depression.
Jan 20 10:00 AM Philadelphia Fed Jan was 19.3 significantly poorer that the 24.3 last month. Again it was all GE/MSNBC/Pravada lies to help socialist retain power.
Jan 20 11:00 AM Crude Inventories 01/15 Jumped over 2M after declining by similar amounts in past weeks. Red China is behind the higher commodity prices around the world, not because they are doing well but because they bought up much of the world's natural resources in every continent and are raising prices to squeeze the free world.

Market Outlook Jan 20, 2011

Cracks are beginning to appear in the American stock market bubble in commodities, gold, energy, and other financial instruments depending on Asia's bubble which is beginning to show incredible amounts of ignorant speculation and corruption getting ready to be exploded. Honesty and trust, not Karl Mark, is what is lacking in Asian expansion.

Currently American investors remain at historic levels of optimism, although there were very few to be found actually investing in recent weeks. Most are already fully invested. Short Selling Against S&P 500 Companies is at a one-year low, lower than before the May Flash Crash. We are seeing evidence that Americans question that Apple and Google could really be worth more than Japan in market cap. American technology stocks are overpriced because General Electric socialists/ MSNBC/Pravda are selling out other American companies by giving away American technology to curry favor with the communists of China.

By mid year we expect state and federal worker layoffs because the socialists have not put their government houses in order and the Tea Party wants smaller government. Raising taxes would allow states go even deeper in the hole with union contracts and tip into default. Many predict a major sell off at mid year when several individual states also are in budget crisis. But typically the stock market is six months ahead of economy. QE2 ends mid year but that is likely to be extended.
Foreclosures to push American home prices down another 5% in 2011according to RealtyTrac

World Markets
Asian markets were down last night. China's market was up 1.4%, Hong Kong down -0.5%, India down -0.2%, and Japan down -1.6%,

European markets are up this morning in a range of about 0.3% to 1.4% half way through their day.

US pre-market futures are up about 0.3 % at 9:00 AM EST.