When monetary policy keeps prices low for a long period of time it dries up supply until shortages start to occur everywhere. Then the monetary policy collapses and commodity prices rise rapidly and inflation grows out of control… and finally the Ponzi Quantitative Easing scheme collapses (as it did with the Weimar Republic) and the US dollar collapses (as the German currency collapsed). That is where the Obama Ponzi scheme is headed. Look at bulk trade and it is clear trade is drying up and initially it has a depressing effect on prices. But then shortages explode and hoarding explodes. We are on the edge of the Obama Crash right now.

Obama’s campaign hits all-time lows. Now they say America’s free enterprise system failed and is the “e coli Republican disease.” “Mitt wants to take you back the way it was before Obama saved us.” Obama says the e coli system of the “Founding Slave Masters” must be replaced by his compassionate (Hitler-Stalin) style socialism that gives everyone in need a cell phone, an apartment, food stamps, welfare, and child support. Obama says, "From each according to their ability, to each according to their wants and disabilities." Fake disability claims against Social Security in the USA are now estimated to outnumber valid claims by six to one. Food stamps under Obama marketing has doubled since he took office, housing subsidies in America have tripled. Obama Ghettos are growing and the ghetto children who already have attention deficit disorders have free Obama cell phones they can use with free Obama minutes so they can text each other during what Obama says are their “boring” classes. 60% of Obama’s student supporters dropped out of school and went on welfare. Most Americans no longer wonder if Obama is an American. Now Americans wonder if he grew up on our planet.

http://www.huffingtonpost.com/2012/08/03/chick-fil-a-kiss-ins-gay-lgbt_n_1739365.html
http://www.freegovernmentcellphones.net/free-cell-phone-providers/assurance-wireless

http://theeconomiccollapseblog.com/archives/outrageous-the-federal-government-is-giving-out-free-cell-phones-and-free-cell-phone-minutes-to-welfare-recipients

Long term unemployment has doubled under Obama.
http://video.foxbusiness.com/v/1733671659001/study-youre-paying-for-government-until-july-15/
http://poorrichardsnews.com/post/27146302552/long-term-unemployment-has-doubled-under-obama


Apple Inc. said Google Inc.’s highly popular YouTube won’t be included in the next version of the software used in the iPhone and iPad.the latest sign that Apple would cut off its nose to spite its face.

Morgan Stanley & Co was accused in a lawsuit by Hong Leong Finance Ltd. of Singapore of deceptively selling investments while rigging them to fail for Morgan Stanley’s own benefit.

Fertilizer producer CF Industries Holdings Inc posted a lower-than-expected second-quarter profit on Monday due to falling demand.

The Rasmussen Reports daily Presidential Tracking Poll shows Mitt Romney stuck in a 47% to 45%dead heat with Obama. http://www.rasmussenreports.com/public_content/politics/obama_administration/daily_presidential_tracking_poll

World market this week
A Chinese company that assembles devices for Samsung Electronics Co. hired children at its production facilities and forced them to work excessive hours, violating labor laws, China Labor Watch said in a report.

South Korea let the won weaken to keep pace with policy makers seeking to shore up economic growth.

German factory orders, adjusted for seasonal swings and inflation, dropped 1.7 percent from May, the Economy Ministry in Berlin said today. From a year earlier, German factory orders fell 7.8 percent when adjusted for workdays. The decline is more than twice as much as economists forecast.

The Tokyo Stock Exchange Group Inc.’s second major system error in seven months halted derivatives trading for about 95 minutes, cutting equity volumes, driving government bonds lower

Yields on Spanish and Italian two- year notes rose for the first time in five days as hope in the quantitative Ponzi easing scheme faded, and Standard Chartered Plc tumbled the most since at least 1988. Spain’s 10-year bond rose nine basis points to 6.83 percent.

Elan Corp, the Irish drugmaker, sank 11 percent to its lowest price this year as it wrote down to zero the value of its venture with Johnson & Johnson.

Italy’s economy contracted for a fourth straight quarter amid an intensifying euro-area debt crisis.

China’s volatility indexes are increasing and that is a sign that the bull trap is beginning to close on all world stock markets and that the bears know Obama-Bernanke-Draghi are running the Japanese Ponzi scheme that has keep Japan’s economy stagnant since 1990. Obama can’t figure out why the Ponzi scheme does not work.

German bonds rose, with yields on 10- year bunds falling from a one-month high, and the euro weakened.

Italy said the EU is at risk.

U.K. house prices fall in stagnant market.

Spanish and Italian two-year notes climbed for a fourth day amid ignorant speculation the European Central Bank will execute the Japanese/Obama Ponzi scheme and buy the securities. It increases the prospects of a perpetual recession with virtually unlimited national debt.

Italian industrial production declined 1.4 percent from May, a –17% annual rate of decline if it continues.

In spite of miss reporting by MSNBC that Emerging markets recovered then faltered at recent highs which are well below the March level which is well also below the high of 2012. All world 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

Germany faltering below the recent high which is well blow the March level which is well below the high of 2012: Choose 2 or 5 years. The DAX can’t even keep up with the DJI!

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 well 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
Consumer Credit spending in Jun fell 66% to $6.5B from $17.1B last month.

Today

Aug 8 7:00 AM MBA Mortgage Index 08/04

Aug 8 8:30 AM Productivity-Prel Q2

Aug 8 8:30 AM Unit Labor Costs -Prel Q2

Aug 8 10:30 AM Crude Inventories 08/04

This Week

Aug 9 8:30 AM Initial Claims 08/04

Aug 9 8:30 AM Continuing Claims 07/28

Aug 9 8:30 AM Trade Balance Jun

Aug 9 10:00 AM Wholesale Inventories Jun

Aug 10 8:30 AM Export Prices ex-ag. Jul

Aug 10 8:30 AM Import Prices ex-oil Jul

Aug 10 2:00 PM Treasury Budget Jul

Market outlook August 8, 2012
When monetary policy keeps prices low for a long period of time it dries up supply until shortages start to occur everywhere. Then the monetary policy collapses and commodity prices rise rapidly and inflation grows out of control… and finally the Ponzi Quantitative Easing scheme collapses (as it did with the Weimar Republic) and the US dollar collapses (as the German currency collapsed). That is where the Obama Ponzi scheme is headed. Look at bulk trade and it is clear trade is drying up and initially it has a depressing effect on prices. But then shortages explode and hoarding explodes. We are on the edge of the Obama Crash right now.

The exchange volume is at new lows indicating the situation is even more precariously unstable and could swing widely again. The Knight trading platform went unstable Monday and instead of squeezing small investors it attacked fund clients as well and had to be stopped. The markets and the economy are becoming unstable as the Quantitative Easing Ponzi scheme grows internationally. The 1922 Great Depression type German death spiral followed by hyperinflation is beginning to loom now on the Obama horizon. That scenario catapulted National Socialism and international socialism in the 1920s and 1930s and destroyed several democracies.

Remember that Obama’s key advisor advised Obama to treat the 2008 banking crisis as an opportunity. This time with an international Ponzi scheme Obama can destroy American free enterprise and America will not be there to stop the slaughter of innocent people who do not carry and wave the dominant leftist party flag. Even the communist Trotsky got an axe in his head courtesy of Stalin because his flag was not the correct red shade.

Compare what GLD did when stocks dropped last August. To do that, right click and change the date range from “200 days” to “Past Year” and see what gold did. This is a good way to plot your stocks together.
http://stockcharts.com/freecharts/perf.html?DTD,EXT,EPS,EES,EZY,ROI,GLD

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.
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;

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 breakout.
http://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 VIX is showing that the bear market has barely started and the VIX indicates the market has a long way to go fall until the VIX rises above 30 where bear markets normally end.
http://finance.yahoo.com/q/bc?s=%5EVIX&t=5y&l=on&z=l&q=l&c=

The Baltic Dry Index is already anemic and now is falling again. World trade has now almost completely collapsed with just having Obama around, without tariffs that were the blame for the collapse during FDR’s socialist experimentation that resulted in the last Great Depression. Clearly it is the corruption of gangster socialism and its crony capitalism, not rigorous free enterprise, that always ends in collapse of production and then economic depression.
http://www.bloomberg.com/quote/BDIY:IND/chart

Stock market update:
Asian markets were up last night. China up 0.1%, Hong Kong down -0.1%, India down -0.1%, Singapore down –0.5%, Japan up 0.9%.

European markets today are down half way through their day in a range of –0.1% to –1.1%.

American market futures are down about 0.2% in after-hour trading at 7 AM EST. This indicator does not statistically correlate with anything.