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Edward Moseley  

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  • Stay Away From Barrick Gold [View article]
    I've been scooping up shares of ABX hand over fist-- they may be selling non-core assets, but I am seeing a company (the largest gold miner in the world) that is strengthening its balance sheet for the long term rather effectively (at least over that past 3 quarters).

    I can't rule out downside potential in the next few months, but I am of the opinion that once the central bankers get even a tick of the commodity inflation that they want we will see a rekindled interest in the precious metals.
    Sep 9, 2015. 10:36 AM | 4 Likes Like |Link to Comment
  • Nokia Lumia 1020 Edges The Company Back Into Conversation [View article]
    This is a very speculative play-- I would not throw my hat into the ring on this one.
    Jul 12, 2013. 03:37 PM | 3 Likes Like |Link to Comment
  • Gold Likely Entering A Deflationary Spiral [View article]

    Deflation does lower tax receipts, and it does indeed raise the price of floating new debt. I don't believe an increase in tax receipts or an increase in the issuance of government bonds is a good thing.

    It is not in the people's best interest for wealth to be absorbed by taxes, and its furthermore worse if the government needs to float bonds in order to pay off those owners of bonds reaching maturity.

    Maybe a little bit of deflation is exactly what the U.S. needs.
    Jul 3, 2013. 04:46 PM | Likes Like |Link to Comment
  • Gold Likely Entering A Deflationary Spiral [View article]

    I've read "The Debt-Deflation Theory of Great Depressions."

    Empirically what Fisher said is untrue, even Friedman and Schwartz, in their "Monetary History of the United States, 1867-1960," admit that there was a decade of sustained deflation between 1869-1879 during which time productivity per monetary unit increased drastically (during which time highly leveraged firms were failing after the post-war greenback contraction). This period has led economists to abandon the idea that deflation is sufficient to indicate depression.

    Deflation is not the cause of economic downturns-- indeed it is the inflation prior that is the cause. During the inflationary period credit becomes cheap and businesses begin to leverage themselves up, during the period of credit contraction those firms that are overleveraged must liquidate. Further inflationary money market manipulation always exacerbates the problem and leads to further leveraging.

    From a praxeological perspective, I know that the USD is appreciating relative to gasoline, but I still need to fuel my vehicle. Cell phones and laptops are flooding the market, and the market is absorbing them at lower prices.

    The idea that sustained monetary inflation is a necessary component of a prosperous economy is overplayed and its malicious effects on the capital structure are seriously underestimated.
    Jul 2, 2013. 10:47 AM | 2 Likes Like |Link to Comment
  • Gold Likely Entering A Deflationary Spiral [View article]
    It's easy to bash gold as the global economy embarks on an inflationary boom period in capital prices-- as GLD is ~-25% YTD, and SPY is up ~13% YTD-- but one economic fallacy I am tired of hearing is: "mild, stable and predictable inflation is the ideal environment for economic growth."

    Entrepreneurs succeed, not because the value of their product is increasing, but because they notice disparities in the prices of productive inputs and embark upon more efficient productive endeavors than their peers. The foundation of successful economies is efficiency, not inflationism.
    Jul 1, 2013. 07:48 PM | 3 Likes Like |Link to Comment
  • Where The Market Is Headed: An Austrian Perspective [View article]

    If a corporate entity is engaged in the issuance of bonds for the purpose of share buy-backs it is still engaged in low interest rate-induced behavior. We know from the past few months that corporate bond yields are artificially low due to the low yields on bonds across the board which, as a result, are forcing investors into riskier assets. All of these investments would not have been embarked upon had it not been for the Fed reducing rates to 0-0.25%.
    Jun 21, 2013. 11:58 AM | Likes Like |Link to Comment
  • The Myth Of Liquidity And Bubbles In Financial Markets [View article]
    You say:
    "This is a bubble. When asset prices are not consistent with fundamentals."

    There is only one market construct capable of creating asset prices that are inconsistent with market fundamentals-- that would be the medium of exchange. As the Fed's balance sheet has more than tripled since 2008 (while it keeps the overnight rate at ~0%), is it perhaps feasible that the Fed's tinkering on the medium of exchange in the credit market could create a short-term, boom-like overvaluation of the capital markets?
    May 17, 2013. 04:08 PM | Likes Like |Link to Comment
  • The Newly Renovated Housing Bubble [View article]
    I agree, but I think it would be wise to understand exactly why real estate agents are enthusiastic. Mortgage money is cheap right now-- I would be enthusiastic too if I were in the business. It's important to know that this upturn in demand cannot last indefinitely, it will reach a peak and then fall again.
    Jan 23, 2013. 05:53 PM | Likes Like |Link to Comment
  • The Newly Renovated Housing Bubble [View article]
    Thiazole, the point of the article is to say that the reason the housing market is doing so well is due in a very large part to the actions of the Federal Reserve. How would the housing market be doing without the $40 billion a month injection? No one knows. But it is important to consider what would occur if Federal Reserve demand were to be taken out of the market, and my article addresses that.
    Jan 23, 2013. 11:49 AM | Likes Like |Link to Comment
  • The Newly Renovated Housing Bubble [View article]
    I agree that in the short term, especially with respect to the relatively high rent prices, home purchases are a logical alternative. It is the long term that this article was meant to address. Note that when I mention the temporal relation of mortgages originated, I am referring to the short term and its profitability. It is when interest rates rise and demand shifts inward that profitability ceases and the bubble bursts. $40 billion/month is a massive amount of capital, there is no arguing that.
    Jan 22, 2013. 01:16 PM | 1 Like Like |Link to Comment
  • The Gold Bubble: Why It Just Won't Burst [View article]

    I was talking to kvatchik who said, "the most important and often overlooked fundamental fact of all - you can't eat gold!"

    I understand and empathize with your position, I just don't feel that it's a particularly profitable one.
    Dec 15, 2012. 11:28 AM | Likes Like |Link to Comment
  • The Gold Bubble: Why It Just Won't Burst [View article]
    I've heard that a lot, that "you can't eat gold."

    I've always been interested in seeing the person who makes that claim prepare a delicious Federal Reserve Note sandwich.
    Dec 14, 2012. 05:56 PM | 8 Likes Like |Link to Comment
  • The Gold Bubble: Why It Just Won't Burst [View article]
    Since February of 2012, due to US and UN sanctions on Iran, Iran has only been able to sell its oil to China and India for gold. Iran has the world's 3rd largest oil reserves. It is oil that is primarily a dollar based asset, but we cannot count on that forever if trends like these continue.
    Dec 14, 2012. 02:29 PM | 2 Likes Like |Link to Comment
  • The Gold Bubble: Why It Just Won't Burst [View article]
    An asset bubble, in my opinion, is one which arises out of credit expansion. I am familiar with the Tulip Bubble, I do not believe there is significant evidence to suggest that it was organic speculation without the aid of either credit expansion in some form or interference with the enforcement of futures contracts.
    Dec 13, 2012. 05:49 PM | 3 Likes Like |Link to Comment
  • Stocks: The Danger Lurking After A Fiscal Cliff Deal Is Reached [View article]
    Excellent article, and a trend that I've noticed as well-- though only relative to the prior 2011 debt crisis and the 2012 U.S. election.

    I think an important consideration that many people are avoiding is S&P and their U.S. credit downgrade Aug 5th 2011 (after the debt ceiling was raised). In the report they issued, they said they would keep a close eye on the U.S. over the next two years and would downgrade the credit further to AA if something isn't done. I think there may be very real cause for concern if Washington does not get its fiscal house in order by January 1st.

    I remain bearish for the reasons outlined above.
    Dec 6, 2012. 12:14 PM | 7 Likes Like |Link to Comment