* What a week for global stock markets, but in particular, the U.S. stock market, which had its worst week in 4 years * The Dow Jones down better than 1,000 points - over 10% from its peak puts it in official correction territory * One-third of the stocks in the S&P 500 are already down 20% from their highs * The Dow lost more than half of the 1,000 points today - 530 points, which is the 9th biggest point decline ever * This is on top of the 350 points dropped on Thursday * Thursday we broke below some key technical levels so Friday's drop was inevitable * There could be a bigger one looming for Monday * This is reminiscent of the weekend before Black Monday back in 1987 * We are only about 300 points above the lows from October last year when St. Louis Fed President James Bullard saved the market and sent the Dow up 2,000 points * This time he is throwing the market an anchor * He still indicates the Fed is undecided * What data over the next couple of weeks could be that significant? * The Fed does not want to admit that they can't raise rates * When is the Fed going to blink? * Valuations are extremely high, and the Fed is about to go from supporting the market to leaning against it * The economy is decelerating * I think the market is going to surrender all the gains it has made since March of 2009 * None of those gains have been real - they did not come from increased production or a genuine increase in corporate earnings, it was all Fed engineering * The market has gained no ground since QE was suspended * If the market goes down on Monday, what is the Fed going to do? * The Fed needs an excuse not to raise rates * The drop is not because of China * The problem in China and in the emerging markets is caused by the perception that U.S. Fed is going to raise rates * The markets want to blame the market correction on China but that is not why our market had a correction * Emerging market currencies are taking the brunt of the selling by those who are expecting a Fed rate hike * The euro is very strong today, and the dollar index is declining * The euro is going to go on a big move, especially if the Fed caves * Gold is up $80 in the last 2 weeks * What happened to the theory that gold will collapse below 1000? * Two weeks ago hedge funds were for the first time net short gold * How is that trade working out for them now? * A lot of people are trapped short the euro and short gold * Now pro-dollar bets are pressing smaller currencies * This is the last throes of the dollar bull, based on the rate hikes that aren't going to happen * At the end of the 6 or 7 year journey, there can't be a rate hike * If the Fed actually raises rates, they lose credibility because they will have to immediately reverse course * If they do not raise rates, they can say caution is needed because of another dip in the recession * This way they don't have to admit that the policy was a failure * The only economic data that came out today was the August Manufacturing PMI number - expected to improve over last month * It dropped again to 52.9 - the lowest level since October 2013, and the biggest miss in 2 years * If the Fed is truly data dependent it would have already admitted that it can't raise rates * At the end of 2014, I predicted that 2015 would be a much weaker economy than forecasted * I was right about that * I thought by now the Fed would have admitted that the economy is too weak for a rate hike * But the Fed just keeps talking about a potential rate hike as though it were a real possibility * This is a very dangerous game Our Sponsors:* Check out Infinite Epigenetics: https://infiniteepigenetics.com/GOLD* Check out Justin Wine and use my code SCHIFF20 for a great deal: https://www.justinwine.comPrivacy & Opt-Out: https://redcircle.com/privacy

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“What did the council decide on item 42?” — answered with the speaker and the moment.

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