E.D.Hart

Three Solid Investment Themes

Regarding our current maelstrom, I hear a lot of comparisons to the 30s, and also to Wiemar Germany, as well as to Japan in the 90's.

Less often stated until very recently is the comparison of our malady to the US in the 70's and its stagflation--lower growth, and higher inflation. Is it just me, or does it seem more likely than not that we will have some level of lower growth and higher inflation going forward, although we know not the extent to which.

Therefore, it might be prudent to position ones portfolio toward those plays that worked in the 70's---energy, gold, and oil service stocks.

I agree with Dr. Leeb and his three themes--inflation protection (gold/silver), energy, and international diversification. This seems to be just common sense. But not necessarily commonly believed.

7 Signs of an Economic Bottom

A couple of points: there is no country in the world with lazzi-faire capitalism. Neither did Adam Smith advocate for it, as the concept of lazzi-fare was after S
Smith, not part of his theories.

As for evolution: there is little logical connection between what happens in the natural world, and ethical theories of right and wrong. The fact that chimps wage war on other tribes of chimps, or that some bears eat the cubs of sows to re impregnate the mother, or that some animals engage in homosexual sex has no bearing on what SHOULD be the case for humans. (Slavery makes sense under evolutionary ethics).

Finally, if socialism means redistribution of wealth then we have a socialized military, socialized education, and a socialized police force. Also, if socialism means the redistribution of wealth then some of the richest people on the planet are the largest socialists: Gates, Buffet, Soros for example advocate for paying taxes to pay for programs like education that help build our nation. THe uberr rich are the biggest socialists by the aforementioned definition.

A country that lived by evolutionary rules--this would be called anarchy.

Cramer's Lightning Round - Johnson & Johnson 'Is' America

Why does Cramer even have a job? Are we so shallow as a nation that investing requires an entertainment channel? Wait, never mind, I know the answer to that one.

Bearish on SLW--because gold is the metal of choice? This isnt logical--gold and silver are highly correlated (although silver is clearly more of an industrial metal) . Both benefit from investment demand.

The total gold market is around 3 trillion, and the total silver market is around 14 billion. Guess which one moves the farthest to incremental investment demand?

SLW is also very undervalued, with little debt, and low operational risk.
Long: SLW

Waiting for Inflation? It May Take Awhile

There is much truth in your article, but I think that a previous response has a good point--its not just money supply but money supply plus velocity. When velocity picks up, inflation should pick up

Also, because Japanese debt bubble popped during a time of booming markets elsewhere...Japans experience may not be the best analogy. Todays debt crisis is global ---and global liquidity is being ramped up simultaneously.

Finally, I think you may have the causal relationship reversed between slack and liquidity:
"Looking further into the relationship we find that output gaps lead to disinflation and when the economy is producing more than potential estimates, inflation follows."
It seems more likely that falling money supply leads to output gaps, and that aggregate money supply growth plus velocity acceleration (inflation) leads to a pickup in economic activity.

Correlation is not causation.

Why Citi's Failure Costs More than Saving It Does

An analogy is that it costs less put out the fire of a burning building than it does to let it burn to the ground.

GM we might let fail because failure of GM wont start a global bonfire.

Letting Citi fail is akin to letting a citiblock burn to the ground and then spread to other blocks, throughout the cirty...except in this case the city is global banking and credit institutions.

The government is not communist...they are trying to prevent this fire from spreading further than it already has. Let them fail sounds great, and makes great sound bites...and is ideologically consistent with free market capitalism...but it is utterly pragmatic.

If my neighbors kid is playing with matches under his porch and the kid sets the house on fire...by golly I want to help put that fire out even though this might be a moral hazard issue (darn that kid..lets teach that family a lesson!!!)

Enlightened self interest if nothing else compels me to do whatever it takes to put out that fire...if I think my house could catch fire too.

Gold: How Long Will the Bull Market Last?

The media constantly cite the $2200 or so that gold may return to on an inflation adjusted basis...but this is using a bogus government supplied cpi index that vastly under reports inflation. Realistically, using constant methodology in inflation calculation, gold will return to 4200 and beyond. I believe that the author may be on to something since prices often over shoot on the down side and the upside.
Long physical gold, and long UXG.

Silver Trust Adds 420 Tonnes to Its Stash

Silver dropped today because it was a hedge against market uncertainty--as confidence and buying returned to the markets, some of that money drained out of silver. For me, Im long silver and silver stocks and wait until DOW 6000 until I begin to put money back to work in traditional blue chips.
Long silver, Long SLW.

Does Friday's CPI Report Mark an Inflection Point?

In the future there is a real risk that the price of crude will be priced in gold, as well as dollars. There will be those cocuntries that find it too volatile and risky to hold dollars to pay for imports of critical materails, and begin to funnel more of there reserves and trade balances into gold for the sake of trade. This can be done with gold backed derivitives and need not entail direct deleivery of gold.

As a consequence, the dollar runs the risk of plummeting anew. Yes folks, no one knows what the future holds, but surely this is a risk to consider. Then we will be staring at higher rates and higher inflation--stagflation is indeed a real threat.

Producer Price Inflation Is Not Dead

TIPS for inflation protection relies on official government inflation numbers which are not accurate indicators of true inflation. I wouldn't trust the government to issue a bond to protect me from inflation that gov. has created...would you?

A better bet would be some of the MLP's that raise rates at % higher than inflation. Yes, more volatility, but higher returns are baked in. Nothing is risk free, not even TIPS, but I like my chance better with GDX, and MLPs for long term inflation protection.

Richard Russell: Bear Market Remains in Force

Jimbo,
Thanks for responding--as a proud teacher, libertarian, and history/literature buff, I can tell you with absolute confidence gained from experience that sarcasm is a very offensive weapon (both senses of the word intended) .

Mark Twain, Shakespeare, et. al. Sarcasm is great stuff. I fully expect to get way more negative hits than positive, but so what? It actually puts the other person on the defensive---and every so often stimulated more thinking than a straight argument.

So, there you go, I couldn't disagree more. I abhor hypocrisy, and sarcasm seems one way to get people to think about it where they wouldn't otherwise.

Rick Santelli's Rant: A Response

How many of you want higher taxes in the future to pay for Iraq Fiasco? its the same argument...we pay for war through higher taxes down the road...where were the howls of protest from the right about helping the iraqis have a better lifem and freedom at the cost of 2-3 trillion dollars. Where was Ricks protest? Its the same thing...big conservative government and big liberal government leads down the same road. Id like the conservatives to come clean and admit that some of them have been a big part of the problem---and look honestly at how to handle thee problems we have. About Iraq, people say, well were there, we shouldnt look back-we need to move forward. Doesnt the same thinking apply with the fiancial crisis? We are here, lets move forward, it does no good to point fingers (except to learn from our mistakes). Im a small government libertarian, but if you ask me, Rick is a Hypocrit with a capital H.

No Gold Bubble

I agree with most of what you say, except the part about silver. I expect slver to rally more than gold as economic activity picks up minimally. Silver does indeed have monetary characteristics.

Gold: The Investment Bedrock of Monetary Systems

Well done, I agreed with 99% of what you said, and it was convincing and well researched. Nice article proving the benefits of owning gold and shares of companies that mine it.

Richard Russell: Bear Market Remains in Force

It is best to keep most political discussion out of economic discussion...but because the current crisis is partly the result of politicians...lets go hunting for people to blame. (also because of some previous posts)

1) Obama the Socialist---this is a good one. Wasnt it the bailout of Wallstreet banks (socialsm) proposed by the other guy that was in that big house for 8 years?

2) Taxes = bad = confiscation= socialism. This is some good critical thinking. So when we fight two wars, one of them unnessary, triple the nations balance sheet debt, and cut taxes, this is smart money management right? Taxes are bad, but debt that drives up taxes in the future is good? Taxes are bad, but massive war spending, medicare spending, and wall street bailout spending is good?

I dont know, but it almost seems like taxes and spending are, like somehow, ahhh, related.....

3) The best course of action would be no taxes--then we could default on our debts, and go back to bartering, hunter gathering, and anarchy---the only real freedom. Ill be happy then because their wont be evil taxes and evil government.

4) Clearly the answers are keep lowering taxes, until you run out of ideas (oops, aready there) keep talking about the F word ()"Freedom" as a patriotic slogan rather than a real idea--so its citizens cant see the wizard behind the curtain reducing our real freedoms--such as the GREAT PAtriotic act, FISA reform, and the necessary and oh so useful wiretapping against our citizens. Clearly there should only be one political party--the Republicans who are the nations vanguards of freedom and democracy.

5) Please do no critical thinking when reading or listening to political ideas, just go with whatever is consistent with the winning ideology and the current zeitgeist. Then we can get back to blaming and self righteousness, instead of all this problem solving that is currently going on, messy though it may be.

Yamana Gold: Finding Value

AUY carries a lot of future value for its copper in the ground.