Addison Wiggin

“I don’t think markets are going down because of Greece,” our old friend Marc Faber offered as an alternative explanation for the market’s recent malaise to CNBC’s Squawk Box yesterday.

“I don’t think the markets are going down because of the ‘fiscal cliff,’” he added, “because there won’t be a ‘fiscal cliff.

“The market is going down because corporate profits will begin to disappoint,” Mr. Faber dolefully explains, “the global economy will hardly grow next year or even contract, and that is the reason why stocks, from the highs of September of 1,470 on the S&P, will drop at least 20%, in my view.”

“Dr. Doom’s” gloominess stands in stark contrast our resident tech traders Jonas Elmerraji and Greg Guenthner.

“Stocks are flailing again,” Jonas Elmerraji reports, “threatening to plunge lower in this morning’s early action after moving sideways since the end of last week.

“It’s not just us,” Jonas goes on, “all markets are off today. But that shouldn’t come as a huge surprise. The media will probably blame selling on the latest news from Greece (even though they were giving a Greek debt deal credit for moving futures higher much earlier this morning).

“Greece, the fiscal cliff, doomsday on Dec. 21, 2012… Whatever news is getting the blame for the most recent rally or the latest drop, it all comes down to buyers and sellers. Right now, with the S&P pushing just below 1,400, the weak hands are getting squeezed out and fear is the biggest factor affecting stocks.

“Relying on the news cycle won’t make you rich — but identifying those pockets of buyers and sellers can.”

[Ed. Note: Jonas and Gunner want a chance to prove that assertion to you in what they call the “Trading Experiment.” Their mission is to show at least 75 of our readers the ropes on how to be better traders in a mere five days…

They claim they can teach anyone how to turn $1,000 into $5,240 in any market. We’re skeptical. Hence the wager. We’re eager to see what takes shape during the experiment. If you want to take part…

It’s free. Won’t cost you a nickel. But be mindful… today is your last day to sign up.]

“Why do we not switch, then, to a monetary unit such as gold,” Turkish Prime Minister Recep Tayyip Erdogan asked openly to the International Monetary Fund (IMF) and the U.N. yesterday, “which is at the very least an international constant and indicator that has maintained its honor throughout history?

“This is something to think about.”

Indeed. Why don’t they…

Erdogan’s questions and criticisms were the highlight of the fifth Bali Democracy Forum in Indonesia last week. (Iranian president Ahmadinejad’s mockery of the U.S. elections took second place, dubbing them a “battleground for capitalists and an excuse for hasty spending.”)

“It is thought-provoking,” Erdogan goes on, “that the IMF is not using gold as a global currency rather than any currency, and it only gives aid on a where and what basis.”

His tartness most likely stems from a raw deal with the IMF sticking Turkey with over $23.5 billion of debt. But the challenge remains… if the rest of the world’s financial community can, as they have been trying to do for years, agree on a viable alternative to the dollar as a “reserve currency,” holders of dollar assets will get crushed.

Turkey’s Erdogan has been a busy man… He has systematically ended Turkey’s half-century “Era of Coups,” sliced the country’s IMF debt down to $1.3 billion (with plans to wipe it out next April), and has stealthily crept Turkey away from dependence on the U.S. dollar.

Cheers,
Addison Wiggin

The preceding article was excerpted from Agora Finacial’s 5 Min. Forecast. To read the entire episode, please feel free to do so here.

Addison Wiggin

Addison Wiggin is the executive publisher of Agora Financial, LLC, a fiercely independent economic forecasting and financial research firm. He's the creator and editorial director of Agora Financial's daily 5 Min. Forecast and editorial director of The Daily Reckoning. Wiggin is the founder of Agora Entertainment, executive producer and co-writer of I.O.U.S.A., which was nominated for the Grand Jury Prize at the 2008 Sundance Film Festival, the 2009 Critics Choice Award for Best Documentary Feature, and was also shortlisted for a 2009 Academy Award. He is the author of the companion book of the film I.O.U.S.A.and his second edition of The Demise of the Dollar, and Why it's Even Better for Your Investments was just fully revised and updated. Wiggin is a three-time New York Times best-selling author whose work has been recognized by The New York Times Magazine, The Economist, Worth, The New York Times, The Washington Post as well as major network news programs. He also co-authored international bestsellers Financial Reckoning Day and Empire of Debt with Bill Bonner.

Recent Articles

The Irony of a Debt-Fueled Oil Boom

Wolf Richter

A report out of research firm Wood Mackenzie today estimated that U.S. oil and gas producers would have to cut spending by $170 billion to maintain net debt at 2014 levels. That won’t stop them from drilling for more and more oil, however. Wolf Richter explains the irony of the situation, below...


Here’s How to Get Out of a Horrible Trade

Greg Guenthner

An asteroid strike, terrorist attack, extreme weather, riots, the Patriots following NFL rules-- or earnings estimates that completely miss the goalposts-- are all events that can “shock” the price of stocks. Dems is the breaks, as they say.


Peter Thiel Explains What Backs the U.S. Dollar

Chris Mayer

In a recent interview, Peter Thiel gave a simple and clear explanation of what gives the U.S. dollar its power. “It surprised me,” writes Chris Mayer, “because I had not heard anyone but fringe economists give it. And yet it is the key to understanding modern money.” Chris revisits the idea… including some radical ideas “that will change the way you think of money and the economy forever.”


The Currency Wars’ “Pearl Harbor”

James Rickards

The most dramatic battle yet in the currency wars took place last Thursday. It was the financial equivalent of a Pearl Harbor sneak attack. Jim Rickards has the full story... what it means moving forward... and a lesson for all gold investors...


Could Steak Really Cause Arthritis?

Stephen Petranek

Can you really eat more salt? Is arthritis caused by steak? Are artificial sweeteners really Satan’s sugar? Stephen Petranek comes clean about 2014’s wackiest health recommendations in his new series on “The Truth About MD Warnings.”