Sunday, September 30, 2007
But there's something about the name of this one - similar to other charities somehow. So I google it. Page after page on Google, each leading you directly to their site.
But now for blogpower! I look to see what my fellow bloggers say. Here's one, and it's most interesting. I say no more, since I have no money to fight in court.
I shall now add Elmer to my links, and the US charity evaluation site, Charity Navigator.
Another case where bloggers have proved to be useful, I would say.
Saturday, September 29, 2007
Contrary to Mr Gordon Brown's claim to be prudent, many believe that the British Government (as well as that of the USA) wastes public money. One such critic is "Wat Tyler" in the British blog, Burning Our Money.
What if the people we criticise said, put up or shut up?
So, if you want better value for money in public finance, how would you get it? How would you achieve the same results for less money, or how would you improve quality without increasing expenditure?
If you wish to submit a longer piece, please submit your email in the comments - I shall then add you as an author to this blog pro tem (but will keep your email address off the blog unless you wish it to be published).
Annualised equivalent: gold increasing by c. 82% p.a., "gold-priced Dow" falling 40% over a year. Will these trends continue?
Thursday, September 27, 2007
Very simply, it will end in a catastrophe. We never had, in the history of capitalism, a global, synchronised, boom. If you travel around the world, everywhere you go, there are booming conditions.
Now if you look at the last 200 years of financial history, you had investment booms and mania in relatively small sectors in the economy: in the US in canals and railroad in the 19th century, some regional real estate markets. And then in the 1920s you had the stockmarket boom, and in the late 80s you have a silver, gold and energy share boom, and in the year 2000 we had a boom in tech stocks and in Japan in the 80s in Japanese shares. And each time these bubbles burst, they had an impact but the impact was largely sectorial or regional and not affecting the whole world.
Now, we have a bubble everywhere. We have a bubble in real estate prices, we have a bubble in stock, we have a bubble in art prices, we have a bubble in commodities.bigger the bubble, the bigger the bang will be. If someone argues we're in a global synchronised boom, I agree entirely. The consequence will be that the next boss will be a global synchronised boss.
By the way, I like that mistranscription, it conveys his Europeanness.
The southern Germans are comfortable with the themes of pain and loss, as you'll know if you've looked at the Meglinger painting on Dr Faber's GloomBoomDoom site. D.H. Lawrence wrote of the sensual agony in the little roadside shrines in interwar Bavaria. This is not simple morbidity - unlike modern crime/action films - but a sign that you can rise above suffering, instead of avoiding it.
A Viennese taxi driver explained to us the difference between Austrians and northern Germans: "They say, it's bad, but it's not hopeless; we say, it's hopeless, but it's not so bad."
Back to our muttons. Here he is again, quoted from various sources via Resourcexinvestor:
"Investors have to look for assets which cannot multiply as fast as the pace at which the Fed prints money."
... He advised buying gold to defend against monetary inflation... he recommends holding physical gold bullion investments in gold-friendly countries such as Hong Kong, India and Switzerland. He counsels against holding gold in the US for fear that it might be nationalized by the government.
Wednesday, September 26, 2007
Bully for the fund managers. But I say again, consider the implications for the West, which is losing control of its debt and now looks set to start losing control of its assets.
Tuesday, September 25, 2007
1. Are you still of that opinion?
2. What do you think is the present situation regarding gold holdings by central banks?
3. What evidence do we now have?
I believe that we are near the end of a commodity bubble that is the largest in all history. The greatest extreme is in metals. Hedge funds have accumulated futures, forwards and physical on a scale that simply has no precedent. The greatest excesses are in base metals but these same funds all hold large gold positions. I believe that individual funds may hold positions in copper or gold that are as large in value as the ETF. I know that sounds unbelievable. But I have a great deal of evidence.
If this is so, the price of gold should be much higher. My only explanation for why it is not is that central bank holdings must be very large for this to happen.
I should add, I believe there will be a coming crash in the metals sector that will surface. There will be an unprecedented investor revulsion toward this sector.
Gold’s fundamentals are totally different from those of base metals and silver. However, because the same funds also hold gold, I cannot see how gold can escape forced liquidations from these portfolios.
Frank Veneroso — Perhaps the most highly regarded market economist of our time, Frank Veneroso has advised countless governments, as well as the World Bank, on economic policy, served as a senior partner in one of the world's largest hedge funds, and is a confidant and private advisor to many of today's most influential investors and economic leaders.
He was among only a handful of analysts who clearly predicted the Tech Wreck, and followed it up with a deadly-accurate forecast of today's gold bull market.
Now, Mr. Veneroso is stunning the world with predictions of a major train wreck in no less than two high-flying sectors of the global economy. Virtually no one is expecting these dramatic events...
"US companies aren't going to make much money by selling more product to Americans. Americans don't have any money... A company with a good product - especially a good brand - can make a lot of money now by doing two things. One is lowering its costs by outsourcing labour to Asia...not just manufacturing, but even high-level things like design, research, marketing, legal work. The other thing it has to do is to sell its products to this huge rising market of the Asian middle class.
Monday, September 24, 2007
When it comes to metals, we see hedge fund speculation, hoarding and squeezing everywhere. Not only have some metals markets been driven far, far higher in this cycle compared to all past cycles; we see the same phenomenon across all metals. It is the combination of both the amplitude and breadth of the metals bubble that probably makes it the biggest speculation to the point of manipulation in the history of commodities. (Page 50)
... it is likely that the net nominal return to portfolios from investing in physical “stuff” has not been more than 1% per annum. By contrast, in a 3% inflation environment, bonds have yielded somewhere between 5% and 9% and equities have yielded somewhere between 8% and 11%. In effect, you gave up an immense amount of yield if you diversified out of bonds and stocks into commodities. You did gain by reducing overall portfolio volatility, but that gain was not large enough to offset the loss in yield. Diversifying with “stuff” did not enhance risk-adjusted returns. (Page 57)
Sunday, September 23, 2007
I went to a very interesting investment seminar yesterday, at which it was said that the American stockmarket could be as much as 50% too high, and a correction is overdue. It has already slid 20% off its highest point, by degrees, but a bigger drop could happen. If and when it does, this would have consequences for other markets around the world, since the US is the biggest stockmarket of all.
As you know, the XXX Fund is designed specifically as a safe haven for your investment in uncertain times, and I enclose a form for you to sign and forward to XXX Life, if you agree with my suggestion.
Saturday, September 22, 2007
As the dollar goes down, Americans become poorer…and their assets become cheaper...The foreigners have huge piles of dollars which are losing value... Doesn’t it make sense for them to use the dollars to buy American assets?
The Arabs must think so... They [are] making offers on the Nasdaq…the London Stock Exchange…and the Carlyle Group, a US buyout firm.
China , meanwhile, recently took a big stake in Blackstone, another big corporate chop shop. Buying up the buyout firms is a particularly important omen, we think. It allows the foreigners to take up more and more US (and UK) assets without getting their name in the paper. And it allows Anglo-Saxons the soothing flattery of thinking that their assets are becoming more and more sought after…it takes their minds off the sour news, that foreigners are using their mountains of trashy dollars to get control over genuinely valuable assets…and that Americans will increasingly be working for foreigners…
A potentially dangerous form of debt restructuring is in progress. As small businesses yield to huge corporations, increasingly foreign-owned, could Big CEO become the new Big Brother? Will the excesses of consumerism end in our descendants serving in a modern version of bonded labour?
Unlike all the Wall Street strategists who compare the current credit crisis to the credit crisis of 1998 (Long Term Capital Management), I believe that the ongoing credit problems will be far worse and of a longer-term nature. This will make it difficult for the market to reach new highs in the near future. Moreover, even if the 1998 comparison were to hold, we would still be looking at a much deeper stock market correction than the 22% sell-off we saw in 1998....
...even if the Fed were to cut rates massively now, it is unlikely that it would stimulate credit growth, which, as I have explained repeatedly in the past, must continuously expand at an accelerating rate in a credit- and asset-driven economy in order to keep the economic plane from losing altitude. Accelerating credit growth is most unlikely now, because I cannot see how financial intermediaries will ease lending standards any time soon after the losses they have recently endured and following their dismal stock performance...
The crises that build up in international financial structures always ricochet from country to country….
...For the last several years, investors have enjoyed a massive global boom. But they should not rule out a massive global panic.
Friday, September 21, 2007
Dow currently 13,839.54, gold (10.03 am NY time) $736.30. Adjusted for the change in the gold price, the Dow would be worth 12,175.15, or down 10.55% since July 6.
Putting it another way, gold has risen 13.67% against the dollar in 77 days; that's getting on for 90% annualised. Is this lift-off for Doug Casey's trip to the moon?
Tuesday, September 18, 2007
According to Bloomberg today, "Rogers said he is buying agricultural commodities and recommended investors purchase Asian currencies including the Chinese renminbi and the Japanese yen.
Faber, publisher of the Gloom, Boom & Doom Report, said he is buying gold."
DOW 9,000 update
At the time of writing, the Dow stands at 13,493 and gold at $713.70/oz. Adjusted for the change in the price of gold, the Dow has fallen by just over 10% since July 6.
Sunday, September 16, 2007
But, says Jim, the next recovery will be shorter, and the next fall back much worse. He sees this as happening around 2009/2010, which coincides with the time of Peak Oil, in which he is a big believer. That's when he feels the energy and credit crunches may come together. He sees gold and silver soaring to levels that currently seem fantastic.
For us ordinary people, that may be less interesting than the effects of energy shortage on our daily transportation and domestic heating.
Thursday, September 13, 2007
But such is the complexity of modern industrial society, and the horrific potential of modern military technology, that we may invert the relationship: economic ownership and infrastructure may be the new weapons with which to wage war.
It is not hard to see the power potential in China's increasing stake in the US economy - not only US government bonds, but increasingly, other assets such as equities. Already, the bond market feels the jerk of the chain, and within the last couple of years Britain has stepped in to provide some much-needed slack to America. But the growth of "sovereign wealth funds" could see future governments using their investments to interfere in the equity markets, too. What price free trade then?
And there are other gaps in the armour. For example, America's recent allegations against China of cyber-warfare have highlighted our daily dependence on electronic technology.
Two Chinese colonels, Qiao Liang and Wang Xiangsui, have produced a book examining such possibilities: "Unrestricted Warfare" (1999). Some translated extracts are available here, and the Wikipedia article is here.
This is not to say that China is actually hostile; only that, like the rest of us, she has her own agenda, and her own contingency plans. Much of warfare is not outright battle, but the use of threats and potential threats to gain strategic advantage. Pushing your opponent into desperation can backfire disastrously. As Sun Tzu said, "To a surrounded enemy, you must leave a way of escape."
But we must recover our economic balance, or risk having the imbalance used against us.
Monday, September 10, 2007
A day later, gold is up another 1%, (or would that be, the dollar is down 1% against it?), the pound is marginally nearer $2.03, and the Dow is rising.
Saturday, September 08, 2007
We're in a rare moment in history where cash is king... My prediction is that the Standard & Poor's 500 could fall at least another 10% from here. I think the economy is weakening and the crisis in the credit markets will worsen from here... this is not the time for a buy-and-hold strategy. But if you must stay in stocks, look at more defensive sectors like food, beverage and healthcare... Gold...
Read the whole item - and see the video - here.
Thursday, September 06, 2007
Wednesday, September 05, 2007
"Beijing sees a “veto proof” protectionist bill sailing thru the US Congress later this year, and has been a net seller of US T-bonds for three straight months by a record amount of $14.7 billion, the longest period of sales by China since November 2000."
More on this from the Daily Telegraph here.
This would be interesting information for gold bugs. Unfortunately, the World Gold Council has not updated its list of gold holdings since June. Any information, anybody?
Physical gold has enjoyed record purchases in some regions, according to The Market Oracle yesterday.
Monday, September 03, 2007
Sunday, September 02, 2007
inflation, deflation, gold, cash...
Jim Puplava: ...I've had Bob Prechter on this program and Bob is a deflationist and Bob believes that we get deflation first and then hyperinflation where I guess my views are we get hyperinflation and then what follows will be deflation. And that's the way it has unfolded with great debtor nations. And I think history will repeat itself here with the US. There is too much debt here and it has to be inflated away...
...I really believe that the full force of these storms aren't going to hit until somewhere between 2009 and 2010 when this really comes home to roost. And all of these debt problems, the problems that we have with energy today, availability, peak oil, the geopolitical problems in the Middle East – I do not expect the next decade to be a pleasant one, John. I wish I could say otherwise because as a father with three children, one to get married shortly and looking forward to grandchildren, you know, this is something that you don't like to think about...
credit bubble, credit crunch, commodities, East delinking from West...
Doug Noland: ...the economy is much more vulnerable than many believe because of the credit that was going to the upper end; and I think the upper end mortgage area is where we had the greatest excesses.
So I think when all is said and done, subprime losses are going to be small compared to the losses we see in jumbo and Alt-A, and especially, unfortunately out in California...
...there’s desperation out there to find buyers for mortgages... Washington generally doesn’t understand the risk of Fannie and Freddie [US government-sponsored entities - "GSEs" - that offer mortgages], so of course they would think it’s their role to step in and provide the liquidity.
But... their total exposure is over 4 trillion dollars now. And this is a huge problem, and I fully expect down the road these institutions to be nationalized. And I think the US taxpayer is going to pay a huge bill for this... To be honest, I don’t mind the GSEs if they want to play a role in affordable housing; if they wanted to try to rectify some of the problems at the lower end because of the lack of the availability of credit in subprime. But to think that the GSEs should start doing jumbo mortgages, to try to be the buyer of last resort for California mortgages, my God, it’s hard to believe that makes sense to anyone because that’s just a potential disaster. It’s also reminiscent of the S&L – the Savings and Loan problem that, you know, was a several billion dollar problem during the 80s that they allowed to grow to several hundred billion by the early 90s. And definitely, the tab of the GSEs is growing rapidly right now...
...even if the central banks add a trillion dollars of liquidity to help out this deleveraging we still have this issue of how are we going to generate the trillions of additional credit going forward to keep incomes levitated, to keep corporation earnings levitated, to keep asset prices levitated, to keep the global economy chugging along...
...The global economy may be something of a different story because we have credit bubbles all over the world. Like the Chinese bubble right now is pretty much oblivious to what’s going on in the US and in Europe. You can see a scenario where, you know, you have serious credit breakdown but let’s say Chinese demand keeps energy and resource prices higher than one would expect. So I’m going to be watching this very carefully because we’re going to see some very unusual dynamics as far as liquidity and inflation effects between different asset classes and different types of price levels throughout the economy.