Anno Domini 2016 is behind us. It is the high time to see which Independent Trader predictions were on point and which ones were off and why. As always, you can find my prediction from a year ago in italics. Below every single one there is a follow-up comment.

 

Media's focus is now on the losing spree of gold which coincided with Donald Trump's victory. Meanwhile no attention is paid to an elephant in the room – bond market crash. An elephant because the value of the global bond market is higher than the capitalisation of all equity markets. If we talk about the value, here we can find plenty of it.

Last weeks showed there is no doubt what priorities financial elite has. One country recently made a move which resulted in terrible consequences. Indian government decided to revoke high-value notes as a legal tender.

When you look at the price of gold in 2016 you see that the level we have today 1130 USD/oz is only a little bit higher than January’s 1050 USD/oz. Jumping to conclusions we may say that this year was very calm but the reality is far from it.

 An analysis based primarily on the price of metal is misleading. Last 12 months were chaotic and official price of gold seems to obscure the shift this market is experiencing.

Ten years of silver market manipulation. Deutsche Bank shows evidence.

The investigation of silver market manipulation is underway and Deutsche Bank shared their insider knowledge of an artificial undercutting of the price of silver. This is why DB will be hit with a penalty of only 38 million USD. If DB was not so cooperative this fine could have additional zeroes at the end.

Recently while watching Mike Maloney I saw him picking up on Ben Bernanke’s talk from 2002. Fourteen years in the world of finance is an era but Bernanke’s words are still actual and important. With hindsight, it was an announcement of what governments and central banks were about to do.

On paper, central banks are responsible for two things. They decide about the supply of currency and set interest rates. If the economy is healthy the velocity of money circulation grows higher creating inflation. Raising interest rates help to cool off the overheating economy. On the other hand, if the economy is heading for a recession central banks lower interest rates to make available to society credit cheaper and stimulate spending. This helps the economy get up from its knees. This is the theory.

The key role of four companies from the title of this article (Facebook, Apple, Netflix, Google) starts to resemble situation from the end of the '60s and beginning of the ‘70s. This is when American market was stormed by fashionable firms like Nifty Fifty. Investors were convinced about the limitless potential of several companies and it led to very painful crashes. How will the history end this time?