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Matthew Cowie  

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  • It's Still Fool's Gold For A While Yet [View article]
    I'm expecting a significant U.S. dollar rally to be the catalyst.
    May 12, 2013. 11:46 AM | 3 Likes Like |Link to Comment
  • Forget Yen, Yuan Making Big Move [View article]
    Read the article yourself: 可怕的人民币升值:外贸企业老板一句话道出幕后推手

    They interviewed exporters who admit they are faking invoices. The reporting is all from Mainland sources.

    It may well be the trend is not huge, but it explains the trade discrepencies with HK last month and it is large enough to distort the currency, which is a big deal.
    May 11, 2013. 10:56 PM | 1 Like Like |Link to Comment
  • Forget Yen, Yuan Making Big Move [View article]
    The trade numbers are fake. The export businesses are going broke and their only means of profit is to conduct currency arbitrage, exploiting the lower offshore value of the yuan. Thanks to cross-border currency settlement, dollars are piling up in the Chinese banking system, sending the yuan higher and reinforcing the cycle.

    This is not a natural move in the market and it risks a deflationary collapse of the Chinese economy. The last time we saw this activity taking place was 2011 when factory owners were running away and there were riots at home developers because prices were falling. The government stepped back and let the yuan fall and eased monetary policy, but came out with all types of regulations on home prices to prevent the bubble from growing. Now, the same thing is happening with currency as SAFE is regulating banks FX loan-to-deposit ratios and investigating if companies are using fake invoices to hide currency arbitrage.

    With inflation picking up and their export sector getting crushed, they are in a real pickle. Let the yuan rise and curtail inflation, but risk deflation. Ease monetary policy and join the devaluation against the U.S. dollar, and risk high inflation.
    May 11, 2013. 03:06 AM | Likes Like |Link to Comment
  • Uranium's Dirty Little Secret - Investors Take Note [View article]
    The negative perception about nuclear power is also shifting. Nuclear probably bottomed at Fukushima and Germany's decision will be seen like the Bank of England's decision to sell gold. Here's a new documentary that signals the changing winds: Pandora's Promise.

    Nuclear has several political positives: it replaces foreign energy, it has low carbon emissions, with electric vehicles it can fully replace foreign oil, it creates domestic jobs.
    May 6, 2013. 03:14 AM | Likes Like |Link to Comment
  • Uranium's Dirty Little Secret - Investors Take Note [View article]
    Another speculative stock is Lightbridge LTBR.
    May 5, 2013. 12:00 PM | Likes Like |Link to Comment
  • Uranium's Dirty Little Secret - Investors Take Note [View article]
    There's a physical company: U.TO Uranium Participation Corp, at the bottom of the author's list.

    From their website:

    Uranium Participation Corporation is an investment holding company which invests substantially all of its assets in uranium, either in the form of uranium oxide in concentrates ("U3O8") or uranium hexafluoride ("UF6"), with the primary investment objective of achieving appreciation in the value of its uranium holdings. The mission of the Corporation is to provide an investment alternative for investors interested in holding uranium. Denison Mines Inc., a wholly owned subsidiary of Denison Mines Corp., is the manager of Uranium Participation Corporation.
    May 5, 2013. 11:36 AM | 2 Likes Like |Link to Comment
  • Eric Sprott's Gold Analysis Deconstructed: What The Gold Bulls Still Don't Get [View article]
    Mises published Socialism in 1922, explaining how and why socialism was going to fail. He died in 1973, just as socialism was beginning to fall apart.

    When gold peaked over $800 in 1980, people were worried the USA would lose the Cold War. Five years later, they needed the Plaza Accord to weaken the U.S. dollar. Four years later the Soviet Union collapsed.
    May 2, 2013. 12:46 PM | 1 Like Like |Link to Comment
  • Gold Vs. Coca-Cola [View article]
    It was telling you that people thought the U.S. dollar was about to collapse because the Soviet Union was going to win the Cold War.
    Apr 30, 2013. 04:30 AM | 1 Like Like |Link to Comment
  • Gold Vs. Coca-Cola [View article]
    Stocks are exactly like gold in one way: their price (not value) is driven by people's desire to own stocks. A rising P/E ratio is the corollary to a rising gold price; both move in long-term cycles.

    The Federal Reserve Bank of S.F. published research ( that estimates P/E ratios will bottom around 2023 based on demographics. If the P/E ratio is about 10 in 2023 for KO and earnings double over the next 10 years, it will be dead money (not counting dividends). If the P/E fell to 8, KO would lose about 25%, wiping out most dividend gains, assuming you took cash and didn't reinvest. If that scenario plays out, it's likely the Fed hasn't stopped QE and the U.S. is in the Japan scenario. KO may see sub-optimal earnings growth during the decade, in which case it is possible that at some point during the next 10 years KO shares, along with most of the stock market, will be heavily discounted.

    I don't know if that will happen. I don't even put odds on it. I'm happy to say I don't know, and for that reason I diversify.
    Apr 28, 2013. 10:39 AM | 3 Likes Like |Link to Comment
  • Newmont Mining Is Now Too Cheap To Ignore With A 5% Yield [View article]
    If gold stayed at current levels they would cut the dividend to $1 based on the policy, which is about a 3% yield on today's stock price.
    Apr 24, 2013. 10:06 AM | 2 Likes Like |Link to Comment
  • Why Does Anyone Listen To Conservative Economists Anymore? [View article]
    There's no spin. The "liberal" and "conservative" economists all have failed policies, a pox on both their houses. Look at this take on this whole debate about the Rogoff study: it's just more politics.
    Apr 22, 2013. 08:33 PM | 1 Like Like |Link to Comment
  • Why Does Anyone Listen To Conservative Economists Anymore? [View article]
    There is always left/right, conservative/liberal in any system. It is like a Soviet asking why do we listen to the conservative Marxist economists? We should listen to the liberal Marxist economists.

    The Rogoff paper never changed anyone's mind. Even if it were tomorrow proved correct, the liberal economists would deny it.

    The real dividing line is between those who are inside the system and those outside of the system. Steve Keen has been a relentless critic of Krugman, even though they are both on the left politically, yet Mish agrees with much of what Keen writes.

    Hong Kong provides the best example to follow: they didn't collect much of any economic data before 1985.

    This way they didn't get bogged down in who predicted what, but rather focused on long-term positive economic policies.
    Apr 22, 2013. 07:43 PM | Likes Like |Link to Comment
  • The Fed Didn't Cause The Gold Bubble - Or Any Other Bubble [View article]
    While I do believe some small bubbles are possible due to the human herding impulse, every major bubble in history was based on credit. During the Tulip Bubble, speculators were able to use leverage. John Law's Mississippi Bubble involved him getting to open a bank and circulate bank notes......The South Sea Bubble was fueled by people converting government debt into shares and then using the stock as collateral to borrow money, often buying more stock.....

    Almost every massive bubble is the result of unbacked credit because fads don't last long enough. There needs to be a way for the bubble to feed on itself and the fuel is credit. The story today is that credit peaked in 2008/9 in the private economy. The thing that makes bubbles is itself a bubble in the process of collapse.
    Apr 22, 2013. 11:08 AM | 2 Likes Like |Link to Comment
  • Gold Lied, Inflation Died [View article]
    I think it is a result of the government and central bank actions. During a major war, the arms manufacturers profit; today the government and central banks of the world are waging a global financial war. But it is a good counterpoint: if the deflation scenario is correct, luxury goods will fall in price.
    Apr 19, 2013. 03:26 AM | Likes Like |Link to Comment
  • Gold Lied, Inflation Died [View article]
    Mish Shedlock had a good post on this yesterday called: Is the Fed Printing Money?
    Apr 19, 2013. 03:12 AM | Likes Like |Link to Comment