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Frank Holmes is CEO and chief investment officer of U.S. Global Investors, Inc., a boutique investment advisory firm based in San Antonio that manages domestic and offshore funds specializing in the natural resources and emerging markets sectors. The company’s no-load mutual funds include the... More
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U.S. Global Investors
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Frank Talk: Insights for Investors
My book:
Goldwatcher: Demystifying Gold Investing
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  • Collecting Relics from a Recession
    Everyone has his own story to tell about the impact of the Great Recession, and the Museum of American Finance wants to use the power of social media to catalog them all.

    The museum has set up Recessipedia, a Wikipedia-like site that allows users to write about how the financial crisis and global recession has affected them.

    The idea is to gather stories and piece together a comprehensive view of the recession, much in the same way that a natural history museum would collect bones and pottery shards to flesh out the history of a bygone civilization.

    One of the first Recessipedia contributors, NINJA Dad (the acronym means No Income, No Job or Assets), wrote about his daughter, an unemployed recent college grad who in 2006 bought a $250,000 house with a no-money-down subprime mortgage.

    “She hasn't defaulted ... yet ... but periodically she calls crying her eyes out,” wrote NINJA Dad, who identified himself as a finance executive. “If she defaults, I wonder if she will ever be able to obtain a mortgage again, although her only mistake was to believe the hype about housing prices always going up.”

    It’s hard not to feel bad for an individual caught in this situation, but this testimonial sheds some light on irresponsible borrowing decisions that helped inflate the real-estate bubble. Not all of the blame can be heaped onto the lenders. NINJA Dad himself wondered why his jobless daughter didn’t rent instead.

    There was also excessive borrowing against home equity that saddled homeowners with crushing amounts of debt when home prices dropped. A University of Chicago study estimates that homeowners borrowed up to 30 cents for every dollar increase in home values during the peak bubble years.

    Recessipedia provides an outlet for people to write about their personal experiences, and more stories like NINJA Dad’s may lead to a more inclusive view of what led up to the recession and why it has been so severe.

    Check Out Recessipedia

    By clicking the links in this article, you will be redirected to a third-party website. U.S. Global Investors does not endorse all information supplied by this website and is not responsible for its content. All opinions expressed and data provided are subject to change without notice. Some of these opinions may not be appropriate to every investor. #09-706

    Oct 08 11:21 AM | Link | Comment!
  • For China and Elsewhere, Democracy is a Good Thing
    As China marks the 60th anniversary of Communist rule, it’s a good time to think about the prospects for democracy in the world’s most populous nation.

    China’s rulers have at times inflicted unimaginable suffering on their people. The “Great Leap Forward” of the 1960s was anything but – tens of millions of Chinese starved to death during a government-created famine. Then came the equally ill-named “Cultural Revolution” in which millions more were killed. Along the way there have been various other purges, crackdowns and persecutions.

    On the other side of the ledger, over the past six decades, many millions in China have enjoyed a dramatic improvement in living conditions, education and economic opportunities. The country has transformed itself from a political and business backwater into a dynamic global power, yet its people do not have many of the freedoms that we enjoy.

    Three years ago this month, a leading Chinese intellectual named Yu Keping wrote a succinct article titled “Democracy Is a Good Thing” that was published with at least the implicit consent of the Beijing government.

    While he is certainly pro-democracy, Yu does a remarkably clear-eyed job in assessing the limitations of our political system as well. Here’s an excerpt:

    Democracy is a good thing, but that does not mean that everything about democracy is good. Democracy is definitely not 100% perfect; it has many internal inadequacies. … Democracy often affords opportunities for certain sweet-talking political fraudsters to mislead the people, and so on. But among all the political systems that have been invented and implemented, democracy is the one with the least number of flaws. That is to say, relatively speaking, democracy is the best political system for humankind.

    Many of us take the benefits of democracy for granted, for it’s all we’ve ever known. We’re the lucky ones, and as China’s regime begins its seventh decade in power, I encourage you to read Yu’s article to remind yourself why democracy, for all of its imperfections, remains a good thing.

    Click Here to View Images of the 60th Anniversary Celebration

    By clicking the links in this article, you will be redirected to third-party websites. U.S. Global Investors does not endorse all information supplied by these websites and is not responsible for their content.
    All opinions expressed and data provided are subject to change without notice. Some of these opinions may not be appropriate to every investor.

    Oct 02 9:42 AM | Link | Comment!
  • History's Greatest Money Printer
    This analysis from Dr. Marc Faber is adapted from our exclusive webcast Global Investing Outlook, which originally aired in early September. Dr. Faber, based in Hong Kong, is a prominent international investor and a member of the influential Barron’s Roundtable.

    I would argue that the weaker the economy is, the more fiscal stimulus will be applied and the more money printing will take place under Fed Chairman Mr. Bernanke, who is history’s greatest money printer.

    As a government, you can print money, increase your debt and put everything on the government’s balance sheet, but it is unlikely to help the typical household in the United States. It may help Wall Street and it may help some asset markets, but not the American standard of living.

    If money printing would make countries rich, Zimbabwe would be the richest country in the world.

    If you pursue a monetary policy aimed at driving down and keeping interest rates at zero and pushing people into assets, then you can essentially have a weak dollar but have stocks catch up and compensate for that weak dollar.

    Going forward, I think there’s a chance that equity prices around the world continue to rally and could rally quite substantially if the dollar is weak. In addition, the more money Mr. Bernanke prints, the more oil and other commodities like precious metals will go up.

    All opinions expressed and data provided are subject to change without notice. Some of these opinions may not be appropriate to every investor.

    Oct 01 9:10 AM | Link | Comment!
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