Peak oil, commodity prices, globalisation, back to the land

An interesting article from Tom Stevenson in Britain's Daily Telegraph, on oil. He reaches two conclusions:

1. it's good news for the commodity investor
2. when supply hits its limit, demand will have to change, and so will our lives

The second is far more interesting. I think we will eventually start listening to the dreamers who are even now formulating new currency systems for localised commerce. And we'll need to unwind our dependence on the car. Think of the implications.

"Real" mortgage rates - a real estate expert writes

A real estate expert, Jonathan J Miller, comments and expands on Barron's recent article on "real" mortgage interest rates, and the state of the housing market generally. I have added Matrix to the bears' link list.

Housing to drag the Dow down?

iTulip is pessimistic about the effect of a housing downturn on the US stockmarket, and skeptical about reported GDP.

Presidency a cyclical influence on the market?

Contrary Investor's July report examines stockmarket cycles in relation to Presidential terms, and draws some tentative but suspicious conclusions.

Marc Faber: "Buy early, exit early"

Marc Faber gave us his approach in the Financial Express on Sunday, and his currently bearish outlook on most classes of asset. Like Sir John Templeton, he believes in buying when the pessimism is at its height. He's also quite dismissive of fund managers' performance.

Peter Schiff: will Japan pull the plug on America?

Peter Schiff, in The Market Oracle yesterday, reports that Japanese monetary inflation is about to show up in their consumer prices. They may be able to cover it by fudging the inflation index (some of us have seen that done elsewhere), but it can't fool everyone forever.

For a long time, Japan has increased its money supply and exported the excess cash by purchasing US Treasury bonds. This keeps the yen steady against the weak dollar, protecting Japan's exports; and it also keeps US interest rates low, so reducing the pressure to raise rates in Japan.

Schiff felicitously terms this a "vendor financing scheme", but regards America's economic collapse as "inevitable". He thinks hyperinflation is too high a price for Japan to pay, and if she retreats from the brink and alters her monetary policy, then the result will be inflation in the US, forcing higher interest rates, and collapsing stock and real property values.

This is what Schiff has predicted in his book, "Crash Proof" (see my review here) and it's interesting to note that the author has been appearing more frequently in the news lately. Either he thinks the turning point is close, or he's marketing the book more actively.

Schiff also comments on the fear of deflation, saying "falling consumer prices are one of the natural rewards that people enjoy in market economies", a point made in Richard Daughty's masterly performance on You Tube. It's so funny and succinct that I re-watch this myself from time to time - have another look:



UPDATE

For a counter-view (in the sense that he doesn't expect the crisis for some years yet), see Puru Saxena as I reported on July 28 here.

Americans should invest abroad - Wasik

Writing in Bloomberg yesterday, John Wasik considers how Americans should invest, since homes, equities and bonds all seem poor value. He recommends high-yielding foreign (i.e. non-US) equities, something Peter Schiff (Crash Proof) has been tipping for quite a while. This, he thinks, will provide yield but also hedge against further falls in the dollar's exchange rate.