a5fung

Investors Interested in Farmland Again

I agree with the above posters, farmland is a good idea but it''s hard to invest in for the (small) individual investors.

I'm also thinking of Sprott Resources, but dislike the 2/20 commission model they use (similar to hedge funds). I guess you can't have it both ways.

Gold Rises, the Dollar Falls: Is This Really a Good Thing?

You might want to review your history of the Great Depression, here's a good start - www.amazon.com/America....

It's not so much about 'strengthening' the currency per se, it's more about letting the economy work its way out without the constant bailouts, stimulus, and everything else in between that promotes inflation of the currency. If you want a historical example that worked, take a look at America in 1920-21, there was a 'depression' that in the first year was as great as the Great Depression, but there were no bailouts, no price fixing, etc. Hoover was the Secretary of Commerce back then, he fought hard to implement the policies he later implemented as President (i.e. bailouts, etc). The result? The depression of 1920-21 lasted a year or so, the Great Depression lasted for over a decade. The difference? Government's policies to bailout, to stimulate and to inflate away the problem vs 'do nothing'. What FDR did was only to double down on Hoover's policies. The major difference for us today is that there is no gold link in the currency, so we can inflate without restraint.

It's funny how most people like to study the historical example of "failure" (a.k.a. the 30s), but disregards the many examples of "success" in history, where the depressions didn't last over a decade but mere a year or two (or three). The 30s was a failure because of the wrong policies, not because of right policies that just wasn't right enough (i.e. bailouts are good, but more is necessary, stimulus is good, but more is necessary, blah blah blah). People should stop studying the 30s and come the the conclusion that we should double down on those policies!

On Oct 07 07:21 AM chap08 wrote:

> You say that "deflation (in the real economy) is more the near term
> risk since the U.S. economy is so poor" and yet you, like so many
> others, are scared s**tless by a devaluation in the dollar. That's
> a dollar, by the way, which is still trading higher than it was before
> the crisis began.
>
> When are you going to stop talking about the "destruction of the
> dollar" and see sense? What other economies have got themselves out
> of a situation like ours by strengthening their currency? Answer:
> none. If you're going to say that there haven't been other economies
> with conditions like ours then you'd be wrong. Nothing is ever exactly
> the same but there are strong similarities. Ourselves in the 30s
> is one example. Hoover tried protecting the dollar then and that
> led to a deep depression. Conditions only started to improve when
> the dollar was devalued and inflationary policies implemented. What
> was true then, is still true today.
>
> We need to get the dollar down to something like fair value - a level
> at which we have balanced trade. That will give us exports, jobs
> and a chance to work our way out of these problems. You ask at what
> point the "destruction" of the dollar turns in to a bad thing. We
> are nowhere near it yet.

Why Another Stock Market Collapse Could Be Imminent

You missed something. In 1921, there were no bailouts, no stimilus, no government intervention; Hoover (then secretary of commerce) lobbied to have industries/banks/etc saved but Harding wouldn't have any of it. The economy was allowed to reset and work its way out of the bottom. Contrary to now (and 1929), we have everything that Hoover/FDR implemented during the Great Depression and then some.

On Aug 05 03:07 PM Angel Martin wrote:

> I think the most relevant historical example is the stock market
> rally of 1921, not 1929.
>
> (1918-1921)
> War - inflation - real estate/farmland bubble - disinflation - real
> estate crash - stock market crash - financial failures - severe recession
> - stock market rally - economic recovery

China's Growth: Far Less than Meets the Eye

The problem I see here is that most people are arguing with different time frames in mind. Those that are negative on china seems to see an immediate bubble forming (and eventually popping). I don't necessary disagree with this, certain parts of the economy can and will overheat, certain industries will stumble and we will likely see several crisis come and go. In the short to medium term, China will have some troubles, no doubt. However, those are are pro the China story, seems to be looking at the long term and over a long period of time, say the 21st century. To see China continue her growth and become an economic power house (more so than now) during the next few decades is not exactly a pipe dream, to say the least. This is the China story; what she will do over the decades, not what will happen over the short term. Of course, this is not to say there will be no problems over the long term either, quite the contrary. But over a long stretch, I am bullish on China.

Some Important Notes on Potash (And Ways to Profit)

I have been checking out Migao myself for the past little while, but if I'm not mistaken, Migao is a specialty potash company and their business is to sell value-added potash products and not actually mining potash themselves. They don't own or operate any potash mines, but instead purchase potash and process/package it and deliver to the end users or distributors. I also recall that much of their potash products are used in tobacco crops.

Anyways, thanks for the analysis, I'll check out your spreadsheets. Thanks.

Back in the U.S.S.A.

I am merely stating a piece of fact I have come across that suggests average prosperity have not increased; however, if you feel richer than more power to you.

You're correct, debt is not bad, nor is it good. It depends on what you do with the debt that matters. If you use to to consume, you are merely using up your future consumption, technically borrowing from your future. On the other hand, if you use it to increase your productivity and invest it wisely, than you can say debt is good.

Take a look at something like education. Can the average student afford his/her own education without a government subsidy these days? Most likely not. Working part-time or a summer job is just not enough to cover the costs college today. But of course, nothing some debt cannot solve right?

No doubt we have had a lot of technological advancements, but this does not necessarily translate to being richer (well, depends on how you want to define "rich"). We will most likely continue to have new technologies despite our economic conditions.

On Jun 21 02:51 PM milkchaser wrote:

> Debt is not bad. It does not always crush. When someone loans me
> money for 30 years, I hope to be better off (depending on what I
> do with it, of course).
>
> I cannot believe that the average American is worse off now than
> in the 1970s. I have lived through both as a fairly average American.
> We are richer today by a long shot. Everything we use (including,
> of course, the computers we are using to communicate now) are immensely
> better and cheaper and more accessible.
>
> Who had microwaves in the 1970s? It was an era of toasters and Mr.
> Coffee. It was the era of the Gremlin, the Pacer and the Thing.
> Digital recording meant counting on your fingers.
>
> On Jun 21 01:59 PM a5fung wrote:

Back in the U.S.S.A.

Thats not wat I read. I read that US weekly income peaked in the 70s even when using the government provided CPI. If you use real inflation (one that has not been altered over the years since), average income has been dropping dramatically since the 80s (using CPI shows more of a levelling off after a initial drop in the early 70s). Of course, with the flood of cheap credit in the past 30 years, it may be hard to tell between poverty and prosperity. Unlike parents of generations past, we now live in nice big houses with remodelled kitchens and drive two cars (at least pre-crisis) but with that also came the load of debt our parents never had. On top of the debt, this generation have also burned through the real savings of past generations, making this crisis that much harder to bear.

On Jun 21 10:02 AM Ferdinand E. Banks wrote:

> Interesting. I read someplace that the average American is - on the
> average - 50 percent richer than his or her parents. If that is true,
> then I wonder why anyone with any intelligence at all would want
> to label the US the USSOA.
>
> As for the problem with Obama, the great fear of course is that he
> will clean up this mess before the next election. Clean it up before
> the next election and polish it up before the one after that. Then
> we might get the 12 or 16 years of honest government that the US
> needs- You know, governments that don't tell lies about weapons of
> mass destruction, and who will not remain passive when 'swift boat
> captains' tell lies about Americans who served in combat zones.

5 Reasons to Avoid the Gold Rush

If people really understand what money is, they will know that gold is money, honest money.

If people really understand intrinsic value, they will see the value attached to gold.

China's Statements About U.S. Debt Are Overblown

I hears lots of
"China "needs" the American consumer, because ..."

I know CNBC loves using this point, but did anyone bother to double check this "fact" before they spin it?

China's export as a % of GDP is smaller than some data suggests, and exports to USA is probably much less than most thinks. For one, GDP is usually calculated on a value-added basis, while exports on a gross basis. Last I heard, exports to USA constitutes 5% of China's GDP or there abouts.

Faber Peddling Gloom, Doom, Inflation, and Gold

Wow, what a poor article indeed.

First you misquote, then you go on to make the assumption that he's trying to "scare a few more dollars into gold", when in fact he's been saying for the past little while (few months) that there are better investments than gold at the moment. In fact, in the same interview a question from the viewer pointed out that Faber said gold was dead money for the next few months (when it was hovering around 850-900) and saying it may go down, yet it went up to 950.

One of the indispensable ingredient of hyperinflation is the loss of confidence in the currency, and economic recovery/growth is NOT a necessary condition for hyperinflation. In fact, many episodes of hyperinflation is during periods of depressed economic conditions. I'm not saying hyperinflation will or will not occur, is just that this article doesn't seem to explain how hyperinflation actually come about.