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Pater Tenebrarum

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  • Investors Don't Understand Apple's Math - A Mistake [View article]
    'Apple's complicated math' - try analyzing an earnings report of a big bank then :) By the time you have arrived at footnote 637, you have a beard longer than Methusela's.
    Nov 15 02:54 PM | Likes Like |Link to Comment
  • Stocks And Euro-Dollar Futures Positioning [View article]
    Please note,McClellan's article is already over a year old. I have only linked to it to introduce readers to the concept. The chart that is relevant TODAY is the one in this article. And that implies a high in late November (i.e., there should be one more move higher) and a tumble lasting into October 2013.
    Nov 8 02:16 PM | Likes Like |Link to Comment
  • 2 Gold Stocks Receiving Initial Coverage Investors Should Consider [View article]
    "Its principal property includes the Ocampo mine covering approximately 15,000 hectares located in Chihuahua State"

    Well, actually this is not so. AUQ has sold this mine. Its 'principal property' is now Young-Davidson.
    Nov 8 02:07 PM | 1 Like Like |Link to Comment
  • Apple Vs. Microsoft: The Tide Is Turning [View article]
    Windoze-using musician here. Also no problem w. productivity. I think w.r.t. that PC's and Macs are on the same level these days. Of course, if you use Logic you'll want to have a Mac.
    Nov 5 06:25 AM | Likes Like |Link to Comment
  • The Opportune Buying Time For Barrick Is Now [View article]
    However, this is like saying: 'mining is a risky business' - as Barrick's earnings release this morning has shown the company is by no means exceptional in this regard. In fact, investors have had to live with the considerable escalation of development costs in Barrick's major projects such as Pascua-Lama, which is ongoing (they just bumped up the cost estimate again and announced another start-up delay). When considering the investment opportunities in gold mining shares, one must always weigh risk and reward, but one thing is clear: the less risky well diversified senior producers won't produce outstanding reward. For that you have to move out on the risk curve (and you can always mitigate your risk by means of diversification). In the long run, the shares of senior producers are likely to underperform the price of gold, just as they did in the 1970's bull market. If you really want to make a profit in excess of what an investment in the metal itself is likely to produce, you have to look at the junior and exploration sectors - this implies taking more risk, but even if you end up finding only one or two big winners it will be worth it.
    Let us also not forget: sell-side analysis is always colored by recency bias. Over the past two years, gold stocks have woefully lagged the metal. Only after this became obvious have people begun to look for reasons. Now many assume that the problems have become immutable. This is however not the case - gold mining margins are generally anti-cyclical. They tend to be compressed when economic confidence increases and tend to expand when it decreases, which is why the gold mining sector is the only sector in the market that is demonstrably negatively correlated with the broader stock market in the long term.
    Nov 1 10:45 AM | Likes Like |Link to Comment
  • Armchair Planners Plotting Monetary Conflagration [View article]
    I fully agree with your assessment. I have written about the problem that modern-day macro-economists have become part of the class of 'planners' before. In an unhampered free market economy, there would be little demand for macro-economists. Their pay scale would be accordingly adjusted. It is only because they are employed as planners for various central planning institutions of the State that they can command the salaries they get. Their intellectual output is largely mediocre, barren and as a rule viciously statist.
    And you are of course quite right that money printing can not possibly overcome the scarcity of resources and capital. It can and does however misdirect resources into uneconomic, and ultimately wealth destroying activities (like e.g. giant housing bubbles, to name a glaring recent example). Today central bankers are proposing that they must do all over again what they already tried after the tech bubble burst - only on an even grander scale. It is simply put insanity.
    Oct 25 09:47 PM | 2 Likes Like |Link to Comment
  • Armchair Planners Plotting Monetary Conflagration [View article]
    Imo the only way to have sound money is to return money to the market. We currently have a centrally planned, fully socialistic money system. That is however not a 'normal' state of affairs. The State has usurped money due to the obvious advantages this monopoly gives it. But money has not originated as a creature of the state - it has originated in the marketplace. Ron Paul had exactly the right idea when he demanded that competing, privately issued currencies be made legal. Whether the free market would choose gold is a separate question, but it probably would.
    Oct 25 09:39 PM | 2 Likes Like |Link to Comment
  • Why Apple Doesn't Care About Its Competition [View article]
    The theory makes no sense to me either. I'm also considering buying a small tablet, and I am definitely comparing the various different ones that are on offer. It could be that the min-ipad ends up convincing me, but this is not a certainty.
    Oct 25 05:21 PM | Likes Like |Link to Comment
  • Lessons From 5 Years Of Economic Crisis [View article]
    "There is simply no other choice than this: either to abstain from interference in the free play of the market, or to delegate the entire management of production and distribution to the government. Either capitalism or socialism: there exists no middle way."

    Ludwig von Mises, in 'Liberalism'
    Oct 11 10:58 PM | 3 Likes Like |Link to Comment
  • Lessons From 5 Years Of Economic Crisis [View article]
    It calls itself 'MMT' these days, but it is the same hoary inflationism countless monetary cranks have preached since the 1920's. In fact, it is better called chartalism, taken from Georg Friedrich Knapp's 'The State Theory of Money' (the title speaks for itself...).
    Never mind that these inflationist theories have all been refuted a thousand times already - they seem to have more lives than a cat. If one could really create wealth by printing money, we'd already be in the Land of Cockaigne and the roasted chickens would fly into our mouths. Somehow it hasn't happened yet.
    Oct 11 10:54 PM | 4 Likes Like |Link to Comment
  • Lessons From 5 Years Of Economic Crisis [View article]
    In fact, Hoover was a major interventionist. FDR merely continued what he started.
    Oct 11 10:49 PM | 3 Likes Like |Link to Comment
  • The Scourge Of Central Banking [View article]
    Please note, the Fed did NOT 'take money out' of the economy during the Great Depression. The Fed expanded free bank reserves by more than 400% between September 1929 and March 1933.
    What happened was that so many banks went under that all the deposit money that had been created during the 1920's boom and was deposited with these banks went to money heaven. Since there was no FDIC, this part of the money supply - essentially money substitutes created by fractional reserve banking for which no standard money backing existed - disappeared. This is why the money supply shrank in the first three years of the depression. This was by the way the very last time the US money supply has declined, apart from a tiny year-on-year decline in 1981 as a result of Paul Volcker's money supply targeting policy in the early 80's.
    Oct 5 01:32 PM | 2 Likes Like |Link to Comment
  • The Scourge Of Central Banking [View article]
    I can answer that question. We still have a market economy, even if it is a severely hampered market economy - and a market economy tends to create wealth. If you had seen a few earlier articles of mine, I have quite often made the point that while the inflationary boom-bust sequence 'impoverishes' us, one must be very careful in interpreting this term in this context. It does not necessarily mean that we are poorer at the end of the bust than we were on the eve of the boom. It only means that we would have attained an even greater degree of wealth and want-satisfaction had there been no inflationary boom in the first place.
    Oct 5 01:26 PM | 1 Like Like |Link to Comment
  • The Scourge Of Central Banking [View article]
    Thanks for the kind words- and quite right - the point that all economic activity is ultimately actually funded by real goods is something that escapes most observers and is rarely discussed.
    An excellent and extensive discussion of this point can by the way be found in Richard von Strigl's 'Capital and Production'.
    Oct 5 01:21 PM | 1 Like Like |Link to Comment
  • The Scourge Of Central Banking [View article]
    Please note that I make no claim anywhere that there is an imminent threat of hyper-inflation. The extreme case is only considered in the context of the hubris of policymakers who maintain that such outcomes are impossible.
    There need not be a 'loss of productive capacity' to produce hyperinflation. In historical cases of hyperinflation there were of course always extraneous factors contributing to the desperate decisions that ultimately led to a loss of faith in the currency's purchasing power. No policymaker ever embarked on such a policy with the explicit aim to destroy the currency. But these circumstances were different in every case. The revolutionary assembly of France did not face a 'loss of production capacity' for instance. Neither did John Law and the Duc d'Orleans. Nevertheless, they managed to inflate their respective currencies to oblivion.
    Oct 5 01:18 PM | 2 Likes Like |Link to Comment
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