Econ Base

The Truth Behind China's Currency Peg

"........De-pegging will force the hand of U.S. politicians toward pursuing realistic policies"

Good enough of a reason why depegging is needed. Then long term America will become a producer economy.

Bill Gross: Anything But 0.01%

"......the New Normal is likely to be a significantly lower-returning world"

Agree. Impossible to find safe yields of 4% for a reasonable investment duration. Best 10 year CD I found is yielding only 3.8%.

The Oil Casino: SEC Heading for Monte Carlo, Part I

This article is exposing another industry playing games with accounting numbers. Financial firms have no "mark to market" handcuffs, and oil industry has found comfort by overstating "proven oil reserves". I will not be surprised if the list is lot longer. Another reason why another major stock market crash is inevitable.

On Inflation, Precious Metals and the Mayan Calendar

"......For at least the next year, the simple, fire-and-forget strategy is 50-50 gold and cash – gold for what looks to be inevitable but on its own schedule, cash to be ready for the bargains that may show up while we're waiting for the inevitable to arrive..."

Overall agree. I published an article today on seekingalpha on a similar topic. Good luck!

portfolioforlife.blogs...

Jim Rogers on the Next 10 Years

Jim Rogers' fundamental theme is correct, but he is going a little bit overboard, perhaps too extreme.

Long term interest rates are not controlled by Ben Bernanke or the fed, only short term rates are. The long term rates are set by the bond market and it should have priced in all what Jim Rogers has been saying for the last several years.

Stay balanced and focus for the long term: Both cash (i.e. bonds, CD's etc.) and precious metals (i.e. Gold, Platinum, gold ETF's, mining stocks etc.) have a place in the portfolio.

portfolioforlife.blogs...

Marc Faber: Equities Safer than Dollars

If the dollar collapse is so obvious, why is the news not factored in the markets? Today the 30yr. bond closed at 3.96%. That is up more than 2% when compared to yesterday.

I think most of the dollar news for now is factored in: 1) Helicoptor Ben 2) Printing presses 3) Gold 4) US debt 5) Lack of US exports 5) Govt. bailout etc. etc.

The problem is that every other currency is worse than the dollar. Precious metals are the only alternative to dollar.
portfolioforlife.blogs...

So Much for the 'Recovery'

Rise is stock market is not recovery. Unfortunately Ben Bernanke and all the bulls have been assuming that is the case.

Real recovery is when meaningful jobs are created. That is very far away. In fact brace yourself for a bigger downturn, once money has been wasted on bailouts and tax payers cannot do any more bailouts.

There Are No Good Choices for the Fed

>>>Most investments behave quite differently depending on whether we are in a deflationary or inflationary environment. Get this answer wrong and it could rise up to bite you.<<<<<

yes, but only if you are trying to time entry/exit points. Best is to stay the course once a portfolio is built with your comfort level.

portfolioforlife.blogs...

Construct a Fixed Income Portfolio with 5%+ Dividends Using ETFs

The key question is what portion of your assett allocation should pursue such ETF's? Sorry, but I wouldn't park my "safe" money in this. As you mentioned the least voltalie of your picks is BND which has a 52 wk High/low price ratio of 1.18. 18% price decline too much risk to chase 5% dividend. You are better off with buying CD's for the safe portion of your portfolio. For the risky portion of your portfolio, maybe yes.

portfolioforlife.blogs...

Gold Is Still the Opportunity of a Lifetime

We cannot ignore the fact that we live in a paper currency world. The Fed can manipulate on a short term basis by pumping or withdrawing liquidity. As I wrote earlier, better have an assett allocation for precious metals in your "portfolio for life".

portfolioforlife.blogs...


On Sep 07 10:12 AM anarchist wrote:

> The DJI is down 19% from the 52 week high but up 47% from the 52
> week low. Gold, by my calculation of GLD is up 47% from it's 52 week
> low. Looks to me like they both have done well. When I see scales
> appear in Safeway to accommodate those who wish to pay for groceries
> with gold I will believe that gold is money, until then I see it
> as a trading vehicle.

Why Economists Messed Up

Although the stock market is still the best indicator of future, the 1999 internet bubble, and the 2008 crash are two examples how the stock market also gets it so wrong. Governments by manipulating the currency and bond markets prop up the stock market. So market corrections are postponed. Sooner or later this "manipulation" will get factored in by the stock market.
portfolioforlife.blogs...

Job Growth Is Key to a Turnaround

Dear Readers, I noticed that this article does not display the second graph and some lines of texty in Internet Explorer 6.0 for some reason. The article pulls up correctly in Fire Fox. Until the error is corrected kindly read the instablog version at: seekingalpha.com/insta...

Canadian Dollar Rattled by Shanghai Meltdown, Interventionist Talk

The Canadian stock market (and Australian) and their currencies for that matter are tied to commodity prices. You can plot historical charts to get to this conclusion. China has been on a buying spree of commodities, trying to diversify out of the US dollar. When that Chinese appetite is fulfiled and markets return to normal supply and demand, then watch out for a commodity AND Canadian/Australian stock market and currency correction.
Stay balanced. Good luck!
portfolioforlife.blogs...

The Federal Reserve Is Immoral

Try laddering long term CD's. I have been writing about keeping significant portion in cash for a while now. Back those CD's with precious metals gold/platinum. Good luck!
portfolioforlife.blogs...

What Really Backs the U.S. Dollar?

Agree with the reader above. The American taxpayer is the primary backer of USD.
Read portfolioforlife.blogs...