With the drought in the U.S. Midwest expected to keep food prices rising. Obama has become Jimmy Carter on steroids. Here comes the 15% inflation rate. Ryan’s budget plan on the other hand would shrink the Federal government 20% by 2014 and therefore balance the budget. Since federal workers do not produce any gross national product their cut can only help because they will finally have private sector jobs that contribute to the economy of the USA.

The supporters of Obama are everyone dependent on the government, the unions, government workers, the welfare and fraud constituency, and finally all the air-head liberals who we grew up with who married or inherited wealth or got jobs in Hollywood. The problem is that the airhead liberals come across as attractive well meaning compassionate people and they are the ones who are like the goats that lead the cattle into the slaughterhouse.

A Ponzi scheme is a system to defraud investors. A "mark" is any individual being defrauded. Once an investor becomes a "mark" they are enticed to stay invested in a number of ways with fictitious paper profits, parties where they mingle with other "marks."

When interest rates are artificially kept low by governments buying debt (with no collateral) to increase demand for the treasuries it is to enable the government to borrow continuously and afford ever-higher unsustainable debt. The way it is done is the government to competes with private bidders and therefore artificially increases demand for treasuries (government bonds) to keep rates low. This is a Ponzi scheme that is both unsustainable and at the same time makes the economy more volatile until it becomes unstable. That is what the Weimar republic did and what caused German hyperinflation when it went unstable.    Japan has a debt that is approximately twice their GDP. That is why they have been in a recession since 1990 when they gave up free enterprise and chose socialism. The whole world is starting to use the Obama-Bernanke Ponzi scheme. One side effect is that 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). That is where the Obama Ponzi scheme is headed. Look at bulk trade and it is clear trade is drying up which initially it has a depressing effect on prices. But then shortages explode with higher prices and that causes hoarding to also explode.   We are on the edge of the Obama Crash right now.

The dollar advanced as the global slump spurs  demand for safety.

Obama says, "From each according to their ability, to each according to their wants and disabilities." Many 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

Hedge funds are reducing investments after longest-ever rally in commodities.

Japan’s atomic power industry lost a record $46 billion since the Fukushima tsunami and meltdown last year, wiping out seven years of profit. Then came the bad news that they will be broken up and reduce dividends.

Facebook Inc. (FB)’s stock plunge has cost Goldman Sachs Group Inc. and Microsoft Corp. (MSFT) much of the potential gain they could unlock when the ban on insiders’ sales begins to lift.

The end of the insiders’ sales ban only puts additional pressure on the stock price. Goldman Sachs (GS), which now has a stake worth about $900 million risks further losses.

Google Plans to cut 4,000 jobs or 20 percent of the staff at Motorola which it bought for about $12.5 billion.

The racist Muslim Brotherhood grows in influence across North Africa with the assistance of the Obama administration undermining former moderates.

The Rasmussen Reports daily Presidential Tracking Poll shows Mitt Romney stuck in a 46%dead heat with Obama stuck in a 44%. Confidence in the U.S. job market has fallen again, with the highest number of Americans in 10 months describing the employment situation as worse than it was a year ago.
http://www.rasmussenreports.com/public_content/politics/obama_administration/daily_presidential_tracking_poll

World market this week
China’s stock investors are wondering how China’s stock market (which touts exceptionally outstanding economic growth rates and claiming companies continuing to generate handsome profits), has tumbled more than 38% in the span of three years.
Hong Kong’s government cut its estimate for the city’s expansion this year after the economy grew 1.1 percent. The trade dependent economy risks further deterioration this quarter after China reported July export growth slumped to a grinding to a halt, leading to inventory surpluses over 2.5 times the standard amount, according to China’s Automobile Dealers Association.
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 it is breaking down through the 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 well below 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
The recent market rally was due to hedge funds unwinding bets against European stocks at the fastest pace in three years, speculating that socialist policy makers will join the Obama debt Ponzi scheme to increase debt. That means the hedge funds have stopped buying stocks to cover their shorts and are ready to short again.

Last Week
Consumer Credit spending in Jun fell 66% to $6.5B from $17.1B last month.
MBA Mortgage Index 08/04 -1.8% far below last 0.2%. The housing crisis worsens
Productivity-Prel Q2 1.6% up from -0.9% A probable data scatter.
Unit Labor Costs -Prel Q2 rose 1.7% a 6.7% annual rate
Crude Inventories 08/04 -3.729M prices will continue to rise for gasoline -6.522M
Yesterday
Initial Claims 08/04 363K steady but again manipulated data from Obama.
Continuing Claims 07/28 3332K up from 3272K
Trade Balance Jun -$42.9B down from -$48.7B as international trade continues to collapse.
Wholesale Inventories Jun –0.2% shrunk from 0.3% as factories shut down
Friday
Export Prices ex-ag. Jul -0.3% was -1.4%
Import Prices ex-oil Jul -0.4% was -0.3% -
Treasury Budget Jul -69.6B was -$129.4B

This week
MSNBC/PRAVDA is low balling predictions for this week to claim things are not as bad as they are.
Aug 14 8:30 AM Retail Sales Jul
Aug 14 8:30 AM Retail Sales ex-auto Jul -
Aug 14 8:30 AM PPI Jul
Aug 14 8:30 AM Core PPI Jul
Aug 14 10:00 AM Business Inventories Jun
Aug 15 7:00 AM MBA Mortgage Index 08/11
Aug 15 8:30 AM CPI Jul
Aug 15 8:30 AM Core CPI Jul
Aug 15 8:30 AM Empire Manufacturing Aug
Aug 15 9:00 AM Net Long-Term TIC Flows Jun
Aug 15 9:15 AM Industrial Production Jul
Aug 15 9:15 AM Capacity Utilization Jul
Aug 15 10:00 AM NAHB Housing Market Index Aug
Aug 15 10:30 AM Crude Inventories 08/11
Aug 16 8:30 AM Initial Claims 08/11
Aug 16 8:30 AM Continuing Claims 08/04
Aug 16 8:30 AM Housing Starts Jul
Aug 16 8:30 AM Building Permits Jul
Aug 16 10:00 AM Philadelphia Fed Aug
Aug 17 9:55 AM Mich Sentiment Aug
Aug 17 10:00 AM Leading Indicators Jul

Market outlook August 13, 2012
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" then move it start in January of 2011and 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. 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;

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 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 down last night. China down –1.5%, Hong Kong down –0.3%, S. Korea down –0.7%, India up 0.4%, Japan down –0.1%.
European markets today are down half way through their day in a range of –0.3% to +0.4%.
American market futures are flat at about 0% in after-hour trading at 7:30 AM EST. This indicator does not statistically correlate with anything.