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

Can Money Printing Cause Deflation?

Marc Faber

"There has been an issue that has preoccupied my mind for a long time," writes Dr. Marc Faber. "In economics, it is generally accepted that if the quantity of money and credit is increased, prices will rise… However, since economics is so complex… I question whether the expansion of central banks' balance sheets and policies of zero interest rates could have a deflationary impact…" The good doctor wrestles with the question, in today's essay...


Forget the Oil Crash – Crush the Market With Biotech Stocks

Greg Guenthner

The Biotech iShares ETF is up 23% since the Oct. 15th bottom. No, that is not a typo. Biotechs have torched the S&P over the past two months--more than doubling the returns of the big index. And biotechs as a group are up more than 38% year-to-date. In fact, since we first highlighted the June comeback, the Biotech iShares have gone nowhere but up.


How Low Will Oil Go – And What Can You Do?

Matt Insley

The oil market has been under siege for six months. From service providers to producers this downturn has been painful. Of course, we’ve known all along that oil prices were a little toppy over the summer. In fact, when asked just how low oil prices could go I usually answered with a simple “lower than you’d expect…”


Cuba’s Berlin Wall Moment

Peter Coyne

Our forecast that Cuba would be open and integrated within 5-10 years is on track after yesterday's big announcement. Ahead of schedule, even. Click here to see how some investors have profited and what the island's likely future is...


The $4 LED Trend You Don’t Want to Miss

Chris Mayer

The opportunity to sell and install LEDs is enormous. We’re talking about over a billion lighting fixtures. And the areas with the largest potential -- like parking lots -- have barely begun to change. Banker to the presidents Chris Mayer says you could triple your money in this new tech trend. Here's what you need to know.


How to Make the Casinos Pay You for a Change

Greg Guenthner

It's a theme we've shared with you since April. And it's only gotten worse. The gaming industry has come under all sorts of pressure--a situation I first noticed in the charts. The powerful, multi-year uptrends started showing cracks. And it wasn't long before those cracks turned into gaping holes you could drive a friggin' truck through. That's where things stand today.