Econ Base

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.

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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.
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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!
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What Really Backs the U.S. Dollar?

Agree with the reader above. The American taxpayer is the primary backer of USD.
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What Does ETF Money Flow Tell Us About Gold?

since central bankers are not backing their currencies with precious metals, we need to do it ourselves. Read this:
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The Importance of the Dow-Gold Ratio

The Fed in the pursuit of "price stability" and fear of deflation, are desparately trying to inject inflation. They won't be able to turn the "deflation" control knob as easily as they have turned the "inflation" knob. This means precious metals will keep rising. I bought Platinum at $995 earlier this year. Gold due to its wider acceptance and due to the various instruments available to trade (such as ETF's) tends to be preferred vehicle. There is a place for Platinum and Gold in everyone's portfolio. Dollar may get stronger in next few days and is that a buying opportunity for Gold and Platinum? Good luck. I will do a posting if I buy or sell again at:
portfolioforlife.blogs...

PIMCO's Bill Gross Sees a Bleak Future

The emerging market economies and or that matter rest of the world store dollars as "foreign exchange reserves". Until they switch to another form of reserve, I am not buying into this argument of dollar fading away. Dollar's troubles are well known. Problem of other currencies like Indian rupee is that you don't even know what is going on behind the scenes. What kind of manipulation is taking place. These are countries where corruption is institutionalized. Even Indian banks are known to issue fake currency bills. Yuan's manipulation is acknowledged by Geithner. Yen and Swiss Frank cannot replace dollar. The Japanese and Swiss economies are not that big. Euro cannot, because it is really a political creation and not based on financial principles. What is let is commodities like oil and gold. So fundamentally they will keep going up in price, as dollar weakens. So what can individual investors do? Just to be safe, everyone needs to become their own central banker by backing their cash reserves by some form of precious metals like physical gold, platinum and precious metal mining stocks. At least 10% of the net worth should be in such precious metals.

Current Recession Is Tracking the 1930s Bear Market

The 2 graphs by Plan B Economics graphs show similarities. Contrarian market psychology tells us a new bottom is yet to be reached.......just like in the 30's. All the bulls, the doubters and the "this time is different" campers (see reply of D Lesh, Steven Hansen above) are exactly the reason why a new low is yet to come. It won't happen until the last bull gives up. Perhaps such doubters existing in the 30's as well as the bottom was being formed.

Can Central Bankers Prevent a Great Depression?

This article although long winded and not seeming to have a conclusion, is a a treasure chest of data! The "Adam Smith" capitalistic markets may seem to be at serious risk due to Central Bank manipulation (such as QE). But the invisible hand will over ride this manipulation. The market told us that people had no business buying houses they couldn't afford to begin with, but banks kept lending. So if lending to the same people (or even Detroit auto makers as another example of reckless lending) continued with govt. bailout money, the problem gets worse. But guess what......the banks are not lending now......this is the market's free hand correction. This is good!......for the long run. People are saving more, frugal and eventually this will be good for America........but before that there will be a recession that feels like a depression. As aresult All assets including Gold are at risk of being under valued.

Time to Liquidate?

However, one should not be fully invested in stocks all the time.


Agree. There is a place for CD's in every portfolio

Stagflation Haunts Global Stock Markets, Buoys Gold

Gary, Outstanding article. One reason why the situation now is not same as late stagflation of 70's and early 80's, is because long term interest rates (market controlled) are very low. Never the less, it could change if buyers of US treasuries become scarcer and the longer term interest rates start rising. Agree?