If cash becomes king it will be because the world today runs on credit not cash. If the credit system goes bust there will not be enough cash

World markets

China's average home prices ticked lower in October for the first time this year, official data showed today, a victory in Beijing's fight against inflation but also a challenge if prices fall too sharply and pop the real estate bubble.

An Indian airline was hijacked by its crew, which collected about $16000 from the passengers claiming they ran out of gas half way to India. They face possible bankruptcy as unions demand more money and while they lose money. If they hike airline prices people will switch to better run airlines.

European banks are swapping worthless assets at full value to keep the illusion that they have real cash. The USA banks did the same thing before the implosion by swapping worthless defaulting mortgage based paper. By trading worthless paper that way, they do not have to recognize the true loss.

Spain and Italy got some relief from the ECB buying debt. Most European markets are new support levels. Germany declined for 5 sessions.

China bounced. http://finance.yahoo.com/echarts?s=000001.SS+Interactive#chart1:symbol=000001.ss;range=5y;indicator=volume;charttype=line;crosshair=on;ohlcvalues=0;logscale=on;source=undefined

Germany rises: Choose 2 or 5 years
http://finance.yahoo.com/echarts?s=%5EGDAXI+Interactive#chart1:symbol=^gdaxi;range=2y;indicator=volume;charttype=line;crosshair=on;ohlcvalues=0;logscale=on;source=undefined

The Swiss government and central bank has a target for the Swiss franc to halt its rise. Choose 2 or 5 years http://finance.yahoo.com/echarts?s=%5ESSMI+Interactive#chart1:symbol=^ssmi;range=2y;indicator=volume;charttype=line;crosshair=on;ohlcvalues=0;logscale=on;source=undefined

Emerging markets show resiliency.
http://finance.yahoo.com/echarts?s=^BVSP+Interactive#chart1:symbol=^bvsp;range=2y;indicator=volume;charttype=line;crosshair=on;ohlcvalues=0;logscale=on;source=undefined


American Economy
If cash becomes king it will be because the world today runs on credit not cash. If the credit system goes bust there will not be enough cash to buy things and prices will fall. Nobody will want gold… they will want cash. That is why all the credit Bernanke has put into the system does not have the same effect as printing money. It is only credit that could dry up in a week. Gold traders and doomsday survivalists selling gold are scamming many conservative investors. Some gold owners are getting scammed when they sell gold that they inherited. They are told the weight and copper content knocks the value down. That is a lie if you are buying USA minted coins. Those dealers are bald-faced liars who prey on people who inherit gold and do not understand how it is valued.

Past Week
PPI Oct -0.3% down sharply from 0.8% deflationary
Core PPI Oct 0.0% down from 0.2% deflationary
Retail Sales Oct 0.5% down from 1.1% not good
Retail Sales ex-auto Oct 0.6% flat from 0.6% not great
Empire Manufacturing Nov 0.61 up significantly from -8.48 very good
Business Inventories Sep 0.0% dropped from 0.5% very good
MBA Mortgage Index 11/12 -10.0% down from 10.3% very bad
CPI Oct -0.1% down from 0.3% deflation
Core CPI Oct 0.1% constant at 0.1% no inflation
Net long-term TIC Flows Sep $68.6B up from $57.9B good foreign investment in US
Industrial Production Oct 0.7% up from 0.2% very positive
Capacity Utilization Oct 77.8% up 77.4% good sign
NAHB Housing Market Index Nov 20 18 flat 18 flat lined again
Crude Inventories 11/12 -1.056M drop again -1.370M good when inventories are lower

Yesterday
Initial Claims 11/12 388K dropped from 390K very good
Continuing Claims 11/05 3608K dropped from 3615K good
Housing Starts Oct 628K down from 658K meaningless since it is not seasonally corrected and expected to decline in winter.
Building Permits Oct 653K up from 594K seasonal correction expected drop number but instead it went up. Very good
Philadelphia Fed Nov 3.6 declined from 8.7 indicating a slow down…not good

Today
Nov 18 10:00 AM Leading Indicators Oct

Market Outlook November 18 2011

The US and the world economy will not likely slip back into a recession until early next year under current trends in Obama incompetence.

We should see downside resistance soon before the advance resumes. The resistance level is about 2% lower than yesterday but it could happen intra day within the week. But complacency has not set in. We are now climbing the well-known bull market wall of fear. There is still just not much short seller fear at this point. We have not had the shorts squeezed out of the market yet. Look how low the VIX has to go before the market top is hit! A level as low as 20 would indicate complacency and the end of the bull market.
http://finance.yahoo.com/q/bc?s=%5EVIX&t=6m&l=on&z=m&q=l&c=

We advanced over 60% of the total recent decline and predict we could possibly have as much as 90% recovery. But realize that as the upside potential is approached, then the downside risk exceeds the upside potential.
See:
http://finance.yahoo.com/echarts?s=^NYA+Interactive#chart3:symbol=^nya;range=5y;indicator=ema(200,100)+volume;charttype=line;crosshair=on;ohlcvalues=0;logscale=on;source=undefined

Demand from Asia should be sufficient for increased volumes even if the Euro crisis leads to a collapse in European sales, per Bremerhaven BLG analysis:
http://www.bloomberg.com/apps/quote?ticker=BDIY:IND

Stock market update:
Asian Stocks were down again last night. China down –1.9%, Hong Kong down –1.7%, India down –0.6%, and Japan up 1.2%.

European markets are down again today in a range –0.1% to –2 % half way through their day.

American market futures are up about 0.4% at 7:00 AM EST. They are an unreliable predictor.