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Long a buy and hold investor, I now believe that buy and hold has to be re-evaluated in a world of ever increasing, instant information and huge gyrations in markets all over the world. A value investor at heart, I anchor my portfolio with conservative funds and blue chip dividend stocks, but... More
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  • Stratfor believes Chinese growth is unsustainable!
    Chinese economy is unsustainable according to Stratfor Global Intelligence.
     
    IN "China, Power and Perils" the latest report from Stratfor Global Intelligence, a case is laid out for  unsustainable growth in the CommuCapitalist country. Stratfor builds a case for the unsustainability of an 8% growth minumum, which China says it needs to placate the growing millions who have entered and are entering the job market at a staggering 16 million this year alone.

    Stratfor says there are "structural elements that render 8% annual growth impossible" and compares the current Chinese economy to a giant ponzi scheme!

    So, how are ponzi schemès maintained? Well, if Bernie Madoff and his ilk are an indication, it is done with lies, lies and more lies! The lies have to convince some smart people of their legimacy, after which those lies are then spread by otherwise legitimate people and businesses.It is only after the lies have been uncovered that the typical ponzi scheme begins to unravel. As I have pointed out in prior posts, if you cannot believe some of the economic reports coming out of some Wallstreet firms, then how can you count on the word of a cloistered, communist elite, that has absolutely no interest in your (or your moneys) wellbeing. Their only interest is how they will hold on to power in the coming years.

    Stratfor brings up some familiar old ghosts, from our own recent past as they point out:

    " China's economy (according to China) needs 8% annual growth, just to keep the roughly 16 million new people entering the work force from rising in jobless protest—and to keep up with climbing wages and to sustain a growing retired population. A combination of exports, loose lending practices, super low margins, and government spending help keep up the growth. Sound healthy to you? "


    For several years now I have enjoyed reading the informative, and sometimes contraversal reports from Stratfor Global Intelligence.  For the purposes of disclosure, I have no interest or investment, nor do I benefit from Stratfor, except for sometimes using their valuable intelligence.


    This week, if you join Stratfor, at a cost of $129 for one year, they will send you this extensive report as well as the book, "The next 10 years" written by Stratfor founder, George Friedman.

    If you do not wish to join at this time, you can sample some of their in depth reports for free simply by giving them your email address.

    Stratfor is one more valuable resource, in the world of investing, politics and world events.

    Visit them at Stratfor.com  for more information.

    Happy investing.
    HP
    May 25 6:42 PM | Link | Comment!
  • Job market in Canada vs USA bodes well for the Canadian dollar!
    Economies of U..S.A. and Canada on divergent paths!
     
    According to the U.S. National Bureau of Economic Research, U.S. and Canadian job markets have struck a divergent path since December of 2007 when the recession in the USA began.  This chart explains how divergent those paths have been in graphic terms.

    At this writing, Canada has reproduced all of it's recession job losses and, in fact, has increased that number by 2%.

    When the Canadian dollar was trading at .77 cents I wrote an article that basically told you to "hold on to your loonies".  I reiteratted that sentiment over a year later when the loonie was trading at .97 cents to the usd again telling you to hold on to your loonies.  Now, even with the Canuck buck trading at over $1.04 usd I am reiterrating that same sentiment. Hold on to your loonies!

    In the 1950's the Canuck buck traded around $1.08 to $1.10 to the usd.  I believe those levels will be reached again and will hold true for the forseeable future. There are many reasons for this opinion, not the least of which is the massive debt load of the U.S. and a number of it's states.  The U.S. bond market is in for a financial tsunami at some point beyond when quantitative easing ends, and maybe before that time.

    The U.S. has been, for the past year, buying up to two thirds (2/3) of all of it's own debt on the bond market. As that giant Kenseyian experiment ends, listen carefully for the underwater earthquake that could eventually spawn a Tsunami called hyper inflation.

    Markets usually like inflation. Commodities like inflation. Even housing likes inflation and remember, the U.S. Federal Reserve always errs on the side of inflation. The problem is, once this Genie is out of the bottle, no one really knows where it will go, but it does not bode well for the usd.

    Since commodities love inflation, and Canada is a country rich in almost every single commoditiy from water, to wheat, grains, cattle, oil, gas, gold, silver, lithium, diamonds, gypsum, lumber, seafood, coal, etc. etc  look for the cad to strengthen, even from these levels.  As two billion more people from China to India, Brazil, Russia and Indonesia join the middle class, the demand for all commodities will climb, and climb and climb.

    Anyone who thinks the commodities bull market is over will miss out on huge upside. This lull is a buying opportunity and when everyone gets extremely negative over the next month or so, it will be even a better buying opportunity.

    Look for Canadian interest rates to remain above U.S. rates, to rise slowly and strengthen the Cannuck buck.

    Now remember, "hold on to your loonies"!

    Happy investing.

    HP



    May 12 2:24 PM | Link | 1 Comment
  • Are your Canadian Investments in jeopardy this week?
    Oh Canada! Jack is back but his beanstock of goodies for voters could be devastating for your Retirefund.
     
    Jack Layton on the 5th anniversary of his lead...Image via Wikipedia
    A storm is brewing north of the 49th parallel.

    Right now it is just a squal, but it could whip itself into a powerful hurricane, strong enough to blow away much of your investments. The name of that storm is Jack Layton.

    Smilin Jack is the leader of Canada's New Ðemocratic Party (NDP). It is far and away, the most leftest political party North America has ever seen.

    Jack has been covering the country with huge spending promises, especially in the Province of Quebec, and it is that province (often the bane of Canadian investors) who may once again, send your retirefund into a tailspin.

    As Jack entices Canadians with over $80 Billion in election promises, (and no hope of paying for them) there is a well spring of support from students, former Bloc Quebecois supporters, and red Liberals who are beginning to fall for a nice guy with a nice smile and pie in the sky promises. This former University professor has never run a business, been responsible for payroll and benefits for employees, invested on behalf of others or even run a Government Dept, but he could actually become the Prime Minister of Canada. That possibility now has about a 50-50 chance of coming true.  Herès why!

    The opposition Liberal Party under Michael Ignatief with the help of leftist Jack and the Bloc Quebecois, were successful in voting down the recent Conservative budget, and forcing this election. The Conservatives, under Prime Minister Steve Harper are looking for the first majority government in years, as they know that, if they only get another minority government, This coalition of opposition parties will vote down the budget again and then present themselves to the Governor General as a (coalition) majority of Parliament, able to govern. If history is any indication, their request will be granted.

    Now when this coalition first hatched this plan, the Liberals had a commanding lead over the other two coalition parties and that would make Michael Ignatief the Prime Minister. The Liberal party is known basically as a party of the centre (most of the time).

    However if the polls are correct, it is possible that the NDP, and smilin Jack, have a good chance of stealing seats from both the Liberals and the Bloc Quebecois, thereby giving them more seats than either of their coalition partners, and subequently making Left Wing Jack the Prime Minister under the above scenario.

    Of course, if the Conservatives get their majority, this scenario melts away. Also, if Jack does come out on top of his coalition partners, it may well be that the Liberals will turn the tide and side with the Conservatives.

    Only time will tell, however, be forwarned should the NDP hold such sway in Canada, the stock market, big business and subesequently, your Retirefund could be in for a thorough, socialist thrashing.

    HP

    Quote:

    "The problem with a socialist government is, they always run out of other people's money"


    Margaret Thatcher
    former Prime Minister of England


    Apr 29 6:53 PM | Link | 4 Comments
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