We were at 8% GDP spent by government in 1910, we are at 25% before Obama, and Obama has set his deficit spending to take us to 40% of GDP for his government welfare society. A recent survey of traders and analysts at a conference in South India this weekend concluded gold bullion would climb the most since a 30 percent surge in 2010. That is in line with the high deficits being run by Obama and the socialists of Athens, and Portugal and all the banana republics run by incompetent administrations.

Mitt Romney would drop government to 20% of the GDP as it was under Reagan.  Mitt Romney slipped 2% in the polls prior to the convention. Americans need to give the Democrat Socialists the boot out of all federal offices if the Obama Greatest Depression Ever on Earth is going to be stopped. There has to be a limit on the maximum permissible Federal/State/Local Government’s spending percentage of the GDP.

Two years ago, Bernanke said in his speech that the FOMC "is prepared to provide additional monetary accommodation through unconventional measures if it proves necessary, especially if the outlook were to deteriorate significantly." But everyone knows QE has already lost any simulative benefit and is a destabilizing effect on the bond market. It the bond payout goes from 0.5% to 1% the small 0.5% gain now makes yesterday’s bonds lose half their value bring yesterday’s bonds have the same payout of 1%. So now the threat of QE 4 is ever-greater bong market instability and threat of collapse as well as the admission that stimulation is needed.

According to the Washington Times, Obama is getting the moron vote.
http://www.washingtontimes.com/news/2012/aug/22/obamas-looking-for-the-moron-vote/

R. Emmett Tyrrell Jr. is founder and editor-in-chief of the American Spectator
Gold advanced to the highest level in 16 weeks after breaking above the 200-day moving average as Bernanke signaled that it may expand the Obama Ponzi scheme and the phony unsupported investment holdings rose to a record.


Once a Moslem always a Moslem… because the Moslem religion places a death sentence (fatwa) on anyone who recants his Moslem beliefs. A movie "2016" reviews Obama’s life in his own words and has opened at many theaters this week. It shows the reasons for Obama wanting to "downsize America" and why he has no respect for America’s founding fathers.

Tiffany reduced its global net sales growth forecast by 1 percentage point. It lowered its full-year profit outlook to $3.55 to $3.70 a share from $3.70 to $3.80. Global sales at stores open at least a year fell 1 percent, excluding the impact of currency fluctuations.

Rasmussen reports daily Presidential Tracking Poll for Wednesday shows Mitt Romney attracting support from 42% of voters nationwide, while President Obama earns the vote from 47%.
http://www.rasmussenreports.com/public_content/politics/obama_administration/daily_presidential_tracking_poll

　

World market this week

German Chancellor Angela Merkel told officials in her coalition calling for a Greek exit from the Euro to "weigh their words" as she signaled a renewed determination to keep the single currency intact. No progress was made on deficit spending in Greece but the current leader is the first to say he is at least trying. The Ifo institute of Munich said German business confidence dropped to 102.3 from 103.2 in July. That’s the lowest reading since March 2010. Economists predicted a lesser decline to 102.7 so perhaps it has over spiked and is ready to advance next month.

Portuguese government bond trading in the secondary market dropped to an average 3 million euros a day in July, the lowest since at least 2000, from 15 million euros in June. This is the reaction artificial lowering of rates when the governments bid on their own bonds. Liquidity dries up as the situations approach instability. The lower the rates the higher the risk of investors loosing more than 80% of their investments.

A Bloomberg survey of traders and analysts at a conference in Hyderabad in South India on Aug. 25 concluded gold bullion may reach $1,800 an ounce before the year-end. That would be the most since a 30 percent surge in 2010.

Germany’s economic growth slowed to 0.3 percent from 0.5 percent in the first three months of the year, the Federal Statistics Office said today.

Emerging-market stocks dropped to a three-week low as a U.S. jury ruled Samsung Electronics Co. had infringed Apple Inc.’s patents and concern mounted corporate earnings growth in developing nations is slowing.

Emerging markets will continue to suffer unless Obama is given the heave-ho. 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

Emerging market composite indicates continued breaking down through the recent lows.
http://finance.yahoo.com/echarts?s=%5EGSPTSE+Interactive#symbol=^gsptse;range=5y;compare=;indicator=ema(200,100)+volume;charttype=line;crosshair=on;ohlcvalues=0;logscale=on;source=undefined;



German stocks are faltering below the recent high that is now close to the March level which is still below the high of 2011 and 2012: 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 Market is testing moving averages. It gave a sell signal last year. It is at a new high for 2012 but below the 2011 high.
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


American Economy
Last week The VIX is showing that a bear market is highly probable now and the VIX will have a long way to go up until the VIX is above 30 where bear markets normally end.

Aug 21 2:00 PM FOMC Minutes 7/31 Indicate expanding the Obama CE Ponzi scheme

MBA Mortgage Index 08/18 fell to –7.4% from –4.5%

Existing Home Sales Jul were 4.47M rate up slightly from 4.37M

Crude Inventories 08/18 rose to 5.4M from 3.7M. 

Initial Claims 08/18 375K up from 366K

Continuing Claims 08/11 3325K up from 3305K

New Home Sales Jul 372K up from 350K seasonal

FHFA Housing Price Index Jun 0.7% down from 0.8%

Friday
Durable Orders Jul 4.2% up from 1.3% due to aircraft sales

Durable Orders -ex Transportation Jul -0.4% declined again after declining -1.4% last month

This Week
Aug 28 9:00 AM Case-Shiller 20-city Index Jun

Aug 28 10:00 AM Consumer Confidence Aug

Aug 29 7:00 AM MBA Mortgage Index 08/25

Aug 29 8:30 AM GDP - Second Estimate Q2

Aug 29 8:30 AM GDP Deflator - Second Estimate Q2

Aug 29 10:00 AM Pending Home Sales Jul

Aug 29 10:30 AM Crude Inventories 08/25 -

Aug 29 2:00 PM Fed's Beige Book Aug

Aug 30 8:30 AM Initial Claims 08/25

Aug 30 8:30 AM Continuing Claims 08/18

Aug 30 8:30 AM Personal Income Jul

Aug 30 8:30 AM Personal Spending Jul

Aug 30 8:30 AM PCE Prices - Core Jul

Aug 31 9:45 AM Chicago PMI Aug

Aug 31 9:55 AM Michigan Sentiment

Aug 31 10:00 AM Factory Orders Jul

Market outlook August 27, 2012
This is the quiet before the storm with the VIX under 14 and extreme complacency. Most of Europe takes all of August as a vacation so it is a lost month every year.

People forget that the DJI is not by itself the famous stock market indicator. The DJR must confirm the DJI for there to be a buy signal or sell signal. The DJI and DJR confirmed a sell signal together in August 2011and the DJR remains confirming that sell signal today. The DJI is the last "safe" place bulls go to reduce risk before the entire stock market collapses. Therefore the DJI is biased bullish and needs the DJR for balance. The DJ Rails continues to say sell even as people seek the false security of the DJ Industrials. The Divergence you see is the classic symptom of the Dow theory bull’s trap.
http://finance.yahoo.com/echarts?s=%5EDJT+Interactive#symbol=^djt;range=6m;compare=^dji;indicator=;charttype=line;crosshair=on;ohlcvalues=0;logscale=on;source=undefined;

12,000 Federal workers are reported getting government pensions exceeding $100,000/yr for life.

The NYSE is much more representative of the US economy than are the DOW indices. Examine the last 5 years of the NYSE. It shows that Obama may be taking America into a profoundly deeper depression breaking 2009 lows if he is re-elected.

http://finance.yahoo.com/echarts?s=%5ENYA+Interactive#symbol=^nya;range=5y;compare=;indicator=ema(200,100)+volume;charttype=line;crosshair=on;ohlcvalues=0;logscale=off;source=undefined;

The Dow Theory Industrials and Rails sell signal of August 2, 2011 still holds. The Rails failed again to meet even the last shoulder of the head and shoulder sell signal.

http://finance.yahoo.com/echarts?s=%5EDJT+Interactive#symbol=^djt;range=5y;compare=^dji;indicator=;charttype=line;crosshair=on;ohlcvalues=0;logscale=on;source=undefined;

The market sell signal is also seen in 3-month market cyclic data. Notice that yesterday wasn’t even a breakouthttp://finance.yahoo.com/echarts?s=%5ENYA+Interactive#symbol=^nya;range=2y;compare=;indicator=ema(200,100)+volume;charttype=line;crosshair=on;ohlcvalues=0;logscale=off;source=undefined

The NASDAQ is near its march level now.
http://finance.yahoo.com/echarts?s=QQQ+Interactive#symbol=qqq;range=my;compare=;indicator=;charttype=line;crosshair=on;ohlcvalues=0;logscale=on;source=undefined;

Has the VIX bottomed? The low VIX precedes a sell-off. Once that starts the VIX needs to go up above 30 until bear markets normally end.
http://finance.yahoo.com/q/bc?s=%5EVIX&t=1m&l=on&z=l&q=l&c=

The Baltic Dry Index says world trade is plunging toward a depression low. Clearly Obama Solyndra corruption, gangster fast and furious socialism, and Obama’s Goldman Sachs crony capitalism will only end in further collapse of production, collapse of small businesses and then the round up of the hated 2%. http://www.bloomberg.com/quote/BDIY:IND/chart

Stock market update:
Asian markets were down sharply last night. China down – 1.7%, Hong Kong down -0.4%, India down - 0.6%, S. Korea down – 0.1%, Japan up 0.2%.

European markets are down sharply half way through their day in a range of +0.8% to –0.2%.

American market futures are up at about 0.3% in after-hour trading at 8 AM EST. This indicator does not statistically correlate with anything.