The current stock market boom is a result of a reckless zero interest rate policy. Driven by loose credit, the Dow Jones Index reached new record highs earlier this year. Margin debt — the total amount of credit which is used to buy securities ‘on margin’ at a stock brokerage — also made record highs. It’s not the first time that both — margin debt and stock ... »
Leading Indicator Says Stock Market Crash Imminent
June 26 2014
Olav Dirkmaat
Gold Bugs and Equity Cockroaches
June 20 2014
Investors in gold are commonly called gold bugs. Yet, gold bug is a derogatory term. As Marc Faber has put it nicely, a bug is an insect. The word “bug” or “insect” has a negative connotation to it. Calling gold investors gold bugs makes just as much sense as calling equity investors "equity cockroaches". It’s a way to prematurely end a, for many, much neede... »
Olav Dirkmaat
The Longer It Takes, the More Dramatic the Reversal
June 13 2014
A lot of gold investors are disgruntled. The emotional pain involved in seeing ones gold holdings decline in value while stock and bond markets are reaching a phase of full-fledged exuberance proves to be too much for many. At such extremes, however, a reversal will be hefty. As markets become... »
Olav Dirkmaat
Negative Deposit Rates in Europe: Unintended Consequences?
June 6 2014
Thursday was the most interesting day of the week as ECB president Draghi announced the central bank’s interest rate decision. Not only was the main refinancing rate cut with ten basis points to 0.15%, but, more interesting, the ECB decided that it will charge banks for depositing funds at the ECB. Deflation fears led to this historic policy change: the ECB is the first major central bank to... »
Olav Dirkmaat
