October 1, 2011 – January 1st to September 30th Price Changes for Stocks, Bonds, Metals, Food, Oil, Currencies and Interest Rates: The chart above and table below, tell the tale for the investment world for the first nine months of calendar year 2011. I charted 22 high volume Commodities (Futures) or Stock Indices for the first nine months of the year. The graphic results are above and tabular results below: (Left Click on the Images Below to Enlarge Them)
The group results are above and the footnotes are below:
If you purchased gold at the start of the year, you did very well at +14%, although gold hit a high of $1,923.70/oz. on September 6th. Metals were the 2nd highest group at +5%, pulled down by the poor performance of Silver.
The star performers were the interest rate contracts. The 10 Year T-Note saw the 2nd best price change at +11.6%. However, the Euro Dollar, which is a short term interest rate contract, pulled the group down to an average +5.84% (see group table above). As the U.S. Government pushed interest rates down, prices of Treasury Debt securities rose significantly.
Currencies were the only other group to finish up for the period at +0.26%. Four out of seven of the group finished in positive territory, with the Japanese Yen the winner at +5.02%.
All five of the Stock Indices finished in the red, with the Dow Jones the best of the bunch at -3.74%. This group was considerably higher in late July, 2011. For example, the S&P 500 was at 1,342.00 on July 22nd and plunged to a low of 1,071.25 on August 9th; an astounding -20.2% drop in 13 trading days.
All five components of the Food Group were down, except for Live Cattle; which eked out a gain of +1.4%. As the economic contraction gathers steam, demand is expected to decline.
Crude Oil got hammered with a drop of almost -20%. Crude reached an intra-day high of $116.36/barrel on May 2nd; and has also suffered from an expected severe economic slowdown.
Cash is king in a de-leveraging, dis- inflationary, depressing slump. The excess debt needs to be squeezed out of the world economy. This will take five to 10 years, if we’re lucky.
Most global investors predict Chinese growth will slow to less than half the pace sustained since the government began dismantling Mao Zedong’s communist economy three decades ago. If we’re not buying things, they’re not making them. That leaves both of us feeling a little poorer. This correction is bigger, meaner and longer lasting than most imagined. The social welfare governments of the modern world are not equipped to deal with this challenge. They were designed for growing economies, not stagnant ones.
Neither the Europeans’ social welfare states, nor the Americans’ welfare/warfare state are likely to survive in their present forms. A Great Depression II is coming and no one can stop it! World governments are only making it worse by intervening. You can’t solve a debt problem with more debt!
The Master of Disaster