De Graaf

ETFs for 2010

Too bad you forget to mention that diversification is not the key to outperforming the S&P500. Or underperforming in a bear market scenario, for that matter...

You can be well diversified but if you fail to asset allocate properly...then you have a point there.

Asset allocation is the most important thing of your overal return. Second comes diversification.

regards

Falling Dollar Erodes Non-U.S. Investors’ Returns

Much 'savier'...I meant to say ;)

Falling Dollar Erodes Non-U.S. Investors’ Returns

I as a European investor have sold all of my dollar holdings in 2008 except for a few equities that are earning their revenue in foreign countries. So in nominal terms I get bang for my buck, but revalued against my Euro currency those assets will perform well.

Its just that their isn't any other way to invest in China etc. without the US markets. Think OTC pink sheets and ADR's to get an idea of what I mean.

The rest of my holdings are mostly held in Canadian Dollars. Much saver if you ask me.

The End of Safe Havens

Felix,

Unbelievable, just unbelievable you still don't seem to get that our capitalistic system is infected by debt. There is so much leveraged debt that this is not a one time event.

Because of the linear (high) growth prospects of CB's in developed economies and their misaligned regulatory framework by non-enforcement, the next crisis' will be closer to the next one if we continue on this path.

Humans are obviously unable to comprehend the exponential function related with e.g. steady 5% growth. For a developing economy like China there is way more room for high growth then developed economies. Industrialization is different than advanced societal development that should be based on low growth and sustainability. Think about it.

Inflation isn't the solution. Debt-deflation is a result of monetary mismanagement. Its the remedy consequence of a sick economic development from government involvement.

Stop looking at CPI, and take a look at the total money supply.

Fm = Fb + MV(Fc)

Fiat money = Fm
Fiat base = Fb
Fiat credit = Fc (always at market value!)

Austrian economics Felix. Austrian economics should be your next research topic.

Richard Koo Discusses Japan's Lost Decade and the U.S.

1) Your bad is apologized and accepted (lol)

2) Yes I noticed, but that doesn't change its significance. To the contrary, they should fire Summers, Bernanke and Geithner and replace the Paul Volcker instantly...I said: INSTANTLY g@ddammit.

3) Exactly, but don't forget that China's record stimulus is sustainable as aggregate demand as long as the savings rate in China remains high.
Remember what Richard Koo said: deficit neutral spending by government fiscal policy aligned with savings rate to keep GDP at par.

Thats only applicable to avoid depression. If this isn't enough evidence that Keynesians monetary thinking is a fallacy, I don't know what is.

I think the Austrian school of economics is the prudent way to AVOID future crisis. But even the Austrians will now need to adhere to greater consensus on fiscal stimulus in times of crisis with less focus on the fiscal deficit.

The Obama team should consider to NOT create growth by additional fiscal stimulus measurements with a huge deficit in place. Savings rate is near 5%, so no room for a spending frenzy. Prudence is key...(no pun intended)

Cheers, great article btw.


On Nov 09 09:49 AM Ricard wrote:

> 1) My bad, apparently he is Taiwanese.
>
> 2) I don't think anyone has noticed that this video is already one
> year old (10/29/08, not 2009). He's still talking about Bernanke
> pondering lowering rates and the administration debating the stimulus
> package. Regardless, thanks for posting it.
>
> 3) His theories would also explain why China's economy is humming
> along, given the enormous size of their stimulus relative to their
> GDP. I suppose the question would then be whether or not they collapse
> in the future, or further their own stimulus.

PIMCO's Gross: 'The Dollar Is Over-Owned"

If Bill Gross tells you that the dollar is overowned. He's simply telling you to get out of his fund.

He's not going to tell you directly to drop your investments with his fund. But this is a clear warning message.

Get out while you still can. The bubble is bursting sooner or later. Forget smaller returns. Dollar is toast.

M3 Is Contracting Now

Thank you for your contribution. Very enlightening.

Its early to say, but logic implies that the US is heading towards depression like phenomena.

Private sector deleveraging, M3 declining, U6 unemployment close to historic highs and no jobs available.

The public side: money creation by the FED, GDP based on spending, stimulus for job creation equals temp. job savings with no productivity improvements, simply a GDP boost by increased spending. And last but not least, a gigantic accounting fraud at WallStreet and the government...

This can't go on much longer. Dollar confidence is at its end. Reality will sink in soon with most Americans for a revolution and when that happens, the foreign creditors have long left the dollar playing field.

So, Where's the GDP Disaster?

I honesly don't buy any of the GDP numbers coming out.

I mean c'mon, if unemployment is at 10 percent, U6 (1930 like measure) at 17 percent, you can't expect me to believe that the GDP is an accurate measure of economic growth!?

The more we spend, the bigger GDP gets...thats inherently phony.
Also, if companies are downsizing their payroll size and implementing other efficiencies that improve productivity, then GDP is suppose to decline! not grow!

The US is stepping in their own excrement soon but they won't see it as the roads are covered with a giant pile of leaves. Soon the man on the street will slip... and the cascade begins..

Europe Is Breaking Up Its 'Too Big to Fail' Banks

Neelie's agenda is very simple. That is to avoid monopoly market shares and to allow free market capitalism to benefit the European markets and therefore its people.

America could actually learn something from its forefathers...
End the phony economy in the US. Start reasoning for the taxpayer or continue to destroy the dollar, increase moral hazard and top the peak for a bigger economic collapse,...a currency crisis.


On Oct 29 08:36 AM the gerald wrote:

> what about DB, barclays, bnp,credit agicole, ubs, soc. gen, stb,
> unicredit, credit suisse, hbos? the idiot EU is transfering all the
> rbs ing, lloyds stuff over to the local(?)above mentioned banks.
>
>
> no other banks can afford to buy the big chunks. the list of the
> top 25 will shuffle a bit. all above mentioned are too big to fail.
>
>
> neelie has an adjenda, i don't understand what it is.

Nouriel Roubini, One on One: More Doom and Gloom

Roubini is a smart guy. Having said that: He's schooled as a Keynesian and so you can't blame his ignorance for gold aswell as the fact that he concludes that the current spending policy has saved us from depression....

Look outside, look at the Hoovervilles poppin' all over America, look at the U6 unemployment... no depression like phenomenons?

I think he should make a move towards Austrian economics. Never too late to learn some more in my opinion. Roubini is still young compared to Summers. He should retire instantly...

Dow Breaks 10,000 for 26th Time While Gold Shines

Well Jeff, I couldn't agree more with your writing. In fact, since I follow you, you make more than simple sense. Its valued.

Sound advice and keep it up!

Marc Faber: Dollar Weakness a Symptom of Inflation in the System

"Edward here. This might make for good headlines on Bloomberg, but it is patently false. The United States is not now or ever going bust. A sovereign government which borrows in its own currency in a fiat currency system can never go bust. An entity which borrows and prints its own money does not have the same constraints that, say, California or Ireland have. How prices are affected is another issue altogether."

Rob here. Never say never. Given, the US is able to print money till the dollar is at par with the manufacturing costs of its dollar paper mache project at the FED, but when confidence is lost in a currency (whether its a fiat currency would take a little longer than Zimbabwe) the dollar will continue to lose value and eventually go bust.

Another thing: Greenspan did one thing good, he kept policy inline with the borrowing capacity of your nation. Bernanke however, is testing the limits of debt to GDP in a time when GDP is shrinking due to deflationary pressures in the private sector. Remember, GDP in the US is based on spending. Contracting credit lines and efficiency (shedding jobs) will deflate GDP as you will see when the final statistics arrive.

I'm glad you acknowledge we are in a deflationary cycle. But I would want to add one thing to your knowledge. Mr. Faber is merely an inflationista (in your words) because of current US policy. The US will print its way out of debt if it needs to as confirmed by speech of Mr. Bernanke in 2002, if I recall correctly. Therefore, US policy is inflationary.

All credits to Marc Faber, who knows what he's talking about.

regards

American Austerity Is About to Begin

The political problem (for creditor nations and Central Banks that fund the US deficit) when they stop subsidizing America's exponential growth dream is too disturbing for them.

Remember what happened to France when they didn't suppor the war? There you go.

Those creditor nations just think by themselves...let us just get a low return (or perhaps a moderate loss) on our US dollar investments and keep the friendship going, or we could face a complete isolation in international matters by veto...

1. You fund the deficit and have good international relationship although the US will lose hegemony and power over time, or

2. Stop funding the US deficit and risk protectionist measures against your nation, plus the added effect of serious fiscal reform in America, once again revamping the US as a global power and lose respect for the coming century...for example.

Choice is clear for them, but I understand Shiff's ideology and principle which I fully support by the way, from America's perspective.

A Fed Official That Actually Makes Sense

Good article. Love the sarcasm.

Keep it up.

The Benefits of Too Big to Fail

Sean Ryan is spot on.

Explicit or implicit, either way the costs of implicit backing of risk by governments are obvious now.

If TBTF banks are allowed to exist in the future, which I expect they will, then improved regulation and higher risk insurance should be implemented on a global basis to offset the systemic failure. I believe Strauss Kahn of the IMF talked about that latter issue recently, to form one global pool of insurance covering all major markets.

You can allow greedy bankers to continue, or you socialize some of their profits in insurance pools on a pro rato basis. The bigger the bank, the more it contributes.

Hard work should always be rewarded without limits. But not on the back of society by means of Keynesian leverage.

Time for Austrian economics. The common individual centralized. Not MBA bonuses.