China is experiencing the second test this year of their evolution into a free enterprise nation and a true world leader.

China is experiencing the second test this year of their evolution into a free enterprise nation and a true world leader. A village of 20000people in China’s Guangdong Province rebelled after Communist leaders began selling their farms to developers. The villagers are now surrounded by police when tensions escalated between residents and local officials over the death of a protest leader in custody. They failed the first test and due to secrecy it is suspected that they murdered most of the first protestors. But this time they are allowing news coverage which is really the only way to build trust. The villagers only have enough food and water to hold out for 10 days. Chinese shoppers curb spending watching to see if life will get better or if there will be a return to communist insane brutality.

Socialists say the problem is between the rich and the poor. Most Americans now know the problem is really between the:
1. educated and/or competent and/or hard working people vs. the
2. uneducated and/or incompetent and/or lazy.
It is up to people to decide how they would like to live. Normal people can chose either to be any one or more of educated and/or competent and/or hard working people. But if someone chooses all three of the irresponsible behaviors (to be uneducated, and to be incompetent for any job, and to be lazy) they then end up very poor indeed in any society and it is entirely their own doing.

World markets
Indian stocks are ending 2011 with the worst decline among the world’s largest equity markets, and analysts say the worst is just around the corner.

Gold is down about 20% now from its highs and is testing lows getting ready for a downside breakout. Gold broke the closing low of this past September. World recession and depression always makes cash king and gold holders paupers especially when people use charge cards and no one has free cash in their mattresses anymore. Instead gold sellers all have their swimming pools full of gold like Obama wants to have with his $1billion shakedown for his election.
http://www.tfc-charts.w2d.com/chart/ZG/C0

Silver is also testing lows. If silver breaks below $30 or gold breaks 1600 we expect both gold and silver will be in free-fall at that point.
http://www.tfc-charts.w2d.com/chart/SV_/C0

Putin election fraud causes ruble to extend its worst losing streak in three year.

China’s stock market now appears to be breaking down more than 5% below the lows of July 2010. That means the tide that carries all ships is falling and we can expect many new shipwrecks on the China reefs because this could be the first major disruption of China’s credit and their first major stock market panic, world wide. It could also be China’s first venture into personal liberty and a much more prosperous future. Chinese people in villages are demonstrating for liberty against their government driving them off of traditional farmlands.

India’s industrial output shrank for the first time in 28 months, pushing stocks and the rupee lower on concern faltering growth will force the central bank to suspend its fight against India’s highest inflation of the BRIC nations.
Production at factories, utilities and mines fell 5.1 percent from a year earlier in October.

Brazil cut their 2012 economic forecast for the benchmark interest rate for the second straight week on expectations of slower growth in the wake of the EU’s worsening debt crisis.

World markets are failing to break out some on the second and third times at resistance levels.
http://finance.yahoo.com/intlindices?e=asia

China testing recent lows. http://finance.yahoo.com/echarts?s=000001.SS+Interactive#chart1:symbol=000001.ss;range=2y;indicator=ema(200,100)+volume;charttype=line;crosshair=on;ohlcvalues=0;logscale=on;source=undefined

Germany testing resistance level: Choose 2 or 5 years
http://finance.yahoo.com/echarts?s=%5EGDAXI+Interactive#chart2:symbol=^gdaxi;range=2y;indicator=ema(200,100)+volume;charttype=line;crosshair=on;ohlcvalues=0;logscale=on

The Swiss testing resistance level. 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 triple bounce but still testing resistance level.
http://finance.yahoo.com/echarts?s=^BVSP+Interactive#chart1:symbol=^bvsp;range=2y;indicator=volume;charttype=line;crosshair=on;ohlcvalues=0;logscale=on;source=undefine

American Economy
The US economy may not dip as Americans increasingly hope that the Obama Regime will be thrown out of office so Americans can change back to an honest free enterprise system.

So far this week
The good
Treasury Budget Nov -$137 down from -$150.4 last month, -good
Export Prices ex-ag. Nov -0.1% not dropping as much -1.5% still good
Import Prices ex-oil Nov -0.2% stll dropping -0.2% still ok
Crude Inventories 12/10 -1.932M dropped from 1.336M but prices are falling anyway- good
PPI Nov 0.3% 0.1% 0.1% -0.3% -
Empire Manufacturing Dec 9.53 up from 0.61
Core PPI Nov 0.1% 0.0% 0.1% 0.0% -
Capacity Utilization Nov 77.8% still good and no change 77.8%
Philadelphia Fed Dec 10.3 up from 3.60

The bad
Retail Sales Nov 0.2% down from October’s 0.5% -bad
Retail Sales ex-auto Nov 0.2% down from October’s 0.6% -bad
Business Inventories Oct 0.8% surged up from October’s 0.0% -bad
MBA Mortgage Index 12/10 4.1% down from 12.8% seasonal but not good
Initial Claims 12/10 366K still very high but reported down from 381K
Continuing Claims 12/03 3603K up from 3583K
Current Account Balance Q3 -$110.3B still very bad -$118.0B -
Net Long-Term TIC Flows Oct $4.8B a drastic drop in foreign investment from $68.6B
Industrial Production Nov -0.2% a big decline from 0.7%


Today
Dec 16 8:30 AM CPI Nov
Dec 16 8:30 AM Core CPI Nov


Market outlook December 16, 2011

American stocks rose yesterday and still have not broken lows.

Real estate has possibly turned the corner but will not take off until Americans are confident that Obama and his leftist supporters will be thrown out of office in 2012 or even later in 2015 if he is re-elected.
http://www.martincapital.com/index.php?page=graph&view=permits_and_construction

When it comes to jobs, Obama has to manipulate the government statistics just like all communists do to pretend things are better.
http://www.martincapital.com/index.php?page=graph&view=unemployment

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 had advanced once over 60% of the total recent decline and predict we could possibly have as much as 95% recovery. Market Vector agrees with us. But realize that as the upside potential is approached, then the downside risk exceeds the upside potential and it is time to lighten up. View 6 mos. See: http://finance.yahoo.com/echarts?s=^NYA+Interactive#chart1:symbol=^nya;range=6m;indicator=ema(200,100)+volume;charttype=line;crosshair=on;ohlcvalues=0;logscale=on;source=undefined

Growth in bulk shipments in November was down and still at less than 20% of the bulk trade level that existed before Obama declared the USA was in a depression in one of his 2007 campaign speeches. Obama and Dodd caused the fear that triggered the only American bank run of the recent Obama/Dodd depression. http://www.bloomberg.com/apps/quote?ticker=BDIY:IND

Stock market update:
Asian Stock markets were mixed last night. China up 2%, Hong Kong up 1.4%, India down –2.2%, S. Korea up 1.2% and Japan up 0.3%.

European markets are up today in a range +1% to –0.4% half way through their day.

American market futures are up about 0.7% at 7:30 AM EST. It is an unreliable predictor.