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Posts Tagged ‘language’

If U.S. Troops Fight WWIII, Who Fights The Coming American Civil War?

September 27th, 2012

U.S. troops available for deployment to fight a full-blown war is 1.4 million, with an additional 2.1 million, if all of NATO were to oblige. Read more…

Currency, Government, Markets, World News

WWIII Within Days; Food-For-Guns Program Next, Says Informant

September 20th, 2012

Dominique de Kevelioc de Bailleul: War drums beat in the Middle East and, now, the drums suddenly beat strongly between two Asian mights.  That, on top of a global financial system on the brink of entering the slide to hyperinflation has many thoughtful analysts suggesting Read more…

China, Economy, Government, World News

Former State Dept. Veteran Drops Bombshell: WWIII Starts Sept. 25, 2012

September 18th, 2012

Dominique de Kevelioc de Bailleul: Speaking with Infowars’ Alex Jones, former Assistant Deputy Secretary of State Dr. Steve Pieczenik says Israel plans to attack Iran before the U.S. elections of Nov. 6., and, that an attack on Iran will assuredly kickoff WWIII, according to him. Read more…

Economy, Government, World News

New Sessions Added and Current Schedule for June Dallas Traders Expo

April 20th, 2011

It really is coming up faster than it seems and will be here before you know it!

I wanted to post a reminder to go ahead and register for the upcoming Dallas Traders Expo in June (15th to 18th) this year in Dallas.

Here’s just a small list of some of the free presentations/classroom sessions you’ll be able to attend:

Two presentations from “Gap-Guy” Scott Andrews:

“Trading the Gap Using Historical Probabilities”
“Stop Guessing!  Focusing on the Top Gap Trading Stocks”

S&B Capital’s Mike Bellafiore:  “From Good to Great: Using the Principles of Elite Performance to Grow Your P&L”

Four from DTI’s Tom Busby (including a Live Trading Challenge):

“Tape Reading and Technical Analysis – A Marriage Made in Heaven”

Well-respected Technician Tom DeMark:  “New and Exciting Market Timing Indicators

Trading for a Living author Alexander Elder: “My Favorite Trading Tools”

Pattern Trader Leslie Jouflas:  “Learn to Profit Using Harmonic Numbers and Repetitive Swings”

Options Guru/Expert Larry McMillian:  “Using Option Data as a Forecasting Tool”

Three presentations from Market Geometry master Tim Morge:

“Understanding Market Structure with Median Lines”
“How Millionaire Wall Street Traders Learned to Trade”
“The Language of Price–Learn the Importance of Tape Reading”

Two from CyberTrading University Founder Fausto Pugliese:

“Be a Practical Trader, Not an Emotional One”
“Take Your Trading to the Next Level…Literally”

AlphaTrends founder (and StockTwitter) Brian Shannon:  “Finding the Right Stocks at the Right Time”

LBR Group’s very energetic Chris Terry: “Success in the Markets–Technically and Mentally

Two from respected trader and best-selling author Toni Turner:

“Three Moving Average Combinations: How to Trade Them for Profits”
“Be Sector Savvy! Sector ETFs to Trade in Bull and Bear Markets”

And MANY many others … and that’s just the live presentations!

At the Expos, there are plenty of networking events to meet fellow traders – both presenters/bloggers/authors and fellow attendees – where you can make new friends and catch up with existing ones (people often plan meet-ups at the Expo).

Plus, the Exhibit Hall is a great place to catch up on some of the latest software and tools out there.

I’ll also be presenting a free session entitled:

“The Momentum Kickoff: A Simple Yet Powerful Signal to Trade Trend Reversals”

Along with a half-day, premium/intensive session entitled:

“Simplify Your Trading Decisions with Early Recognition – from Entry to Exit”

With the exception of the nine intensive, half-day premium sessions (which require a ticket), all other events and activities/presentations are free – you just pay for hotel and travel to and from Dallas.

As you can probably guess, I’m a huge fan of the Traders Expos and greatly enjoy attending each one and look forward to the interaction and idea-sharing that always takes place throughout the entire conference.

If you’ve never been to an Expo, this is a chance to attend and learn from a wide variety of speakers in a short amount of time.

For more details, check out the Expo homepage for the full roster and schedule (much more than I was able to list above) and I hope to see you in Dallas!

Corey Rosenbloom, CMT

Read more here:
New Sessions Added and Current Schedule for June Dallas Traders Expo

ETF, OPTIONS, Uncategorized

Patriotic Expatriates

March 8th, 2011

I’ve written many times about the importance of internationalizing your assets, your mode of living, and your way of thinking. I suspect most readers have treated those articles as they might a travelogue to some distant and exotic land: interesting fodder for cocktail party chatter, but basically academic and of little immediate personal relevance.

All very well, you may say. But there are practical issues, you also say. A person can’t just pick up and leave and go where he wants and do what he wants…can he? Get real, Casey. There are reasons a person has to stay where he is, aren’t there?

Let’s look at some of those reasons.

“America is the best country in the world. I’d be a fool to leave.” That was absolutely true, not so very long ago. America certainly was the best – and it was unique. But it no longer exists, except as an ideal. The geography it occupied has been co-opted by the United States, which today is just another nation-state. And, most unfortunately, one that’s become especially predatory toward its citizens.

“My parents and grandparents were born here; I have roots in this country.” An understandable emotion; everyone has an atavistic affinity for his place of birth, including your most distant relatives born long, long ago, and far, far away. I suppose if Lucy, apparently the first more-or-less human we know of, had been able to speak, she might have pled roots if you’d asked her to leave her valley in East Africa. If you buy this argument, then it’s clear your forefathers, who came from Europe, Asia, or Africa, were made of sterner stuff than you are.

“I’m not going to be unpatriotic.” Patriotism is one of those things very few even question and even fewer examine closely. I’m a patriot, you’re a nationalist, he’s a jingoist. But let’s put such a tendentious and emotion-laden subject aside. Today a true patriot – an effective patriot – would be accumulating capital elsewhere, to have assets he can repatriate and use for rebuilding when the time is right. And a real patriot understands that America is not a place; it’s an idea. It deserves to be spread.

“I can’t leave my aging mother behind.” Not to sound callous, but your aging parent will soon leave you behind. Why not offer her the chance to come along, though? She might enjoy a good live-in maid in your own house (which I challenge you to get in the US) more than a sterile, dismal and overpriced old people’s home, where she’s likely to wind up.

“I might not be able to earn a living.” Spoken like a person with little imagination and even less self-confidence. And likely little experience or knowledge of economics. Everyone, everywhere, has to produce at least as much as he consumes – that won’t change whether you stay in your living room or go to Timbuktu. In point of fact, though, it tends to be easier to earn big money in a foreign country, because you will have knowledge, experience, skills, and connections the locals don’t.

“I don’t have enough capital to make a move.” Well, that was one thing that kept serfs down on the farm. Capital gives you freedom. On the other hand, a certain amount of poverty can underwrite your freedom, since possessions act as chains for many.

“I’m afraid I won’t fit in.” As I explained a little earlier, the real danger that’s headed your way is not fitting in at home. This objection is often proffered by people who’ve never traveled abroad. Here’s a suggestion. If you don’t have a valid passport, apply for one tomorrow morning. Then, at the next opportunity, book a trip to somewhere that seems interesting. Make an effort to meet people. Find out if you’re really as abject a wallflower as you fear.

“I don’t speak the language.” It’s said that Sir Richard Burton, the 19th-century explorer, spoke 10 languages fluently and 15 more “reasonably well.” I’ve always liked that distinction although, personally, I’m not a good linguist. And it gets harder to learn a language as you get older – although it’s also true that learning a new language actually keeps your brain limber. In point of fact, though, English is the world’s language. Almost anyone who is anyone, and the typical school kid, has some grasp of it.

“I’m too old to make such a big change.” Yes, I guess it makes more sense to just take a seat and await the arrival of the Grim Reaper. Or, perhaps, is your life already so exciting and wonderful that you can’t handle a little change? Better, I think, that you might adopt the attitude of the 85-year-old woman who has just transplanted herself to Argentina from the frozen north. Even after many years of adventure, she simply feels ready for a change and was getting tired of the same old people with the same old stories and habits.

“I’ve got to wait until the kids are out of school. It would disrupt their lives.” This is actually one of the lamest excuses in the book. I’m sympathetic to the view that kids ought to live with wolves for a couple of years to get a proper grounding in life – although I’m not advocating anything that radical. It’s one of the greatest gifts you can give your kids: to live in another culture, learn a new language, and associate with a better class of people (as an expat, you’ll almost automatically move to the upper rungs – arguably a big plus). After a little whining, the kids will love it. When they’re grown, if they discover you passed up the opportunity, they won’t forgive you.

“I don’t want to give up my US citizenship.” There’s no need to. Anyway, if you have a lot of deferred income and untaxed gains, it can be punitive to do so; the US government wants to keep you as a milk cow. But then, you may cotton to the idea of living free of any taxing government, while having the travel documents offered by several. And you may want to save your children from becoming cannon fodder or indentured servants, should the US reinstitute the draft or start a program of “national service” – which is not unlikely.

But these arguments are unimportant. The real problem is one of psychology. In that regard, I like to point to my old friend Paul Terhorst, who 30 years ago was the youngest partner at a national accounting firm. He and his wife, Vicki, decided that “keeping up with the Joneses” for the rest of their lives just wasn’t for them. They sold everything – cars, house, clothes, artwork, the works – and decided to live around the world. Paul then had the time to read books, play chess, and generally enjoy himself. He wrote about it in Cashing In on the American Dream: How to Retire at 35. As a bonus, the advantages of not being a tax resident anywhere and having time to scope out proper investments has put Paul way ahead in the money game. He typically spends about half his year in Argentina; we usually have lunch every week when in residence.

I could go on. But perhaps it’s pointless to offer rational counters to irrational fears and preconceptions. As Gibbon noted with his signature brand of irony, “The power of instruction is seldom of much efficacy, except in those happy dispositions where it is almost superfluous.”

Let me say again, time is getting short. And the reasons for looking abroad are changing.

In the past, the best argument for expatriation was an automatic increase in one’s standard of living. In the ’50s and ’60s, a book called Europe on $5 a Day accurately reflected all-in costs for a tourist. In those days a middle-class American could live like a king in Europe; but those days are long gone. Now it’s the rare American who can afford to visit Europe except on a cheesy package tour. That situation may actually improve soon, if only because the standard of living in Europe is likely to fall even faster than in the US. But the improvement will be temporary. One thing you can plan your life around is that, for the average American, foreign travel is going to become much more expensive in the next few years as the dollar loses value at an accelerating rate.

Affordability is going to be a real problem for Americans, who’ve long been used to being the world’s “rich guys.” But an even bigger problem will be presented by foreign exchange controls of some nature, which the government will impose in its efforts to “do something.” FX controls – perhaps in the form of taxes on money that goes abroad, perhaps restrictions on amounts and reasons, perhaps the requirement of official approval, perhaps all of these things – are a natural progression during the next stage of the crisis. After all, only rich people can afford to send money abroad, and only the unpatriotic would think of doing so.

I would like to reemphasize that it’s pure foolishness to have your loyalties dictated by the lines on a map or the dictates of some ruler. The nation-state itself is on its way out. The world will increasingly be aligned with what we call phyles, groups of people who consider themselves countrymen based on their interests and values, not on which government’s ID they share. I believe the sooner you start thinking that way, the freer, the richer, and the more secure you will become.

The most important first step is to get out of the danger zone. Let’s list the steps, in order of importance.

  • Establish a financial account in a second country and transfer assets to it, immediately.
  • Purchase a crib in a suitable third country, somewhere you might enjoy whether in good times or bad.
  • Get moving toward an alternative citizenship in a fourth country; you don’t want to be stuck geographically, and you don’t want to live like a refugee.
  • Keep your eyes open for business and investment opportunities in those four countries, plus the other 225; you’ll greatly increase your perspective and your chances of success.

Where to go? The personal conclusion I came to was Argentina (followed by Uruguay), where I spend a good part of my year, and even more when my house at La Estancia de Cafayate is completed.

In general, I would suggest you look most seriously at countries whose governments aren’t overly cozy with the US and whose people maintain an inbred suspicion of the police, the military, and the fiscal authorities. These criteria tilt the scales against past favorites like Australia, New Zealand, Canada, and the UK.

And one more piece of sage advice: stop thinking like your neighbors, which is to say stop thinking and acting like a serf. Most people – although they can be perfectly affable and even seem sensible – have the attitudes of medieval peasants that objected to going further than a day’s round-trip from their hut, for fear the stories of dragons that live over the hill might be true. We covered the modern versions of that objection a bit earlier.

I’m not saying that you’ll make your fortune and find happiness by venturing out. But you’ll greatly increase your odds of doing so, greatly increase your security, and, I suspect, have a much more interesting time.

Let me end by reminding you what Rick Blaine, Bogart’s character in Casablanca, had to say in only a slightly different context. Appropriately, Rick was an early but also an archetypical international man. Let’s just imagine he’s talking about what will happen if you don’t effectively internationalize yourself, now. He said: “You may not regret it now, but you’ll regret it soon. And for the rest of your life.”

Regards,

Doug Casey
for The Daily Reckoning

Patriotic Expatriates originally appeared in the Daily Reckoning. The Daily Reckoning has published articles on the impact of quantitative easing, bakken oil, and hyperinflation.

Read more here:
Patriotic Expatriates




The Daily Reckoning is a contrarian e-letter, brought to you by New York Times best-selling authors Bill Bonner and Addison Wiggin since 1999. The DR looks at the economic world-at-large and offers its major players – investors, politicians, economists and the average consumer – some much-needed constructive criticism.

OPTIONS, Uncategorized

The Role of US Debt in the Current Revolution

February 22nd, 2011

Cereal Wars…and Zombie Wars…

Hey, how ’bout that Ben Bernanke… He’s a freedom fighter! Look what he’s done to North Africa!

Seems like every time we pick up the paper another dictator is toppling over. Where does it lead, we wonder? What would a world be like without dictators? Without them, who will the CIA and the State Department give our money to?

On the run this morning (but not quite given up) is Muammar Gaddafi of Libya.

Wait… Is this guy a friend or an enemy? We can’t remember. Wasn’t he a bad guy a few years ago? But recently we’ve heard that he is a good guy. He’s helped with the War on Terror. And he sells oil.

Friend or foe, we don’t know…but whatever he is, he’s beginning to look past tense. As of this morning, reports say he’s lost control of Libya’s second largest city. His troops are firing on protesters in the capital, where he and his loyal guards are holed up in a few government buildings.

His son vows to fight back. He says there will be “rivers of blood” before he gives up.

That “rivers of blood” image was used by Enoch Powell in Britain fifty years ago. It came from Virgil’s Aeneid, in which a character foresees “wars, terrible wars, and the Tiber foaming with much blood.”

Powell was referring to the effects of immigration into Britain from Africa and elsewhere. He thought he saw race wars and power struggles coming as a result.

But the younger Gaddafi uses the language as a threat, not a prophecy.

Still, it didn’t do Powell much good. Maybe Gaddafi will have better luck with it. Most likely, he’ll high tail it out of the country before the blood is his own. That will bring to three the number of regime changes in the last few weeks. Which leads us to ask: what’s up?

The answer comes from our old friend, Jim Davidson. He pins the revolutions on Ben Bernanke. Behind the popular discontent is neither the desire for liberty nor the appeal of elections. It’s food. And behind soaring food prices is Ben Bernanke.

The Arab world is a model Malthusian disaster, says Davidson. Populations have ballooned. Food production has not. Which makes Arab countries the biggest importers of cereals in the world. And when the price of food goes up, the masses rise up too.

From Jim’s latest newsletter, Strategic Investment:

Food prices hit an all-time high in January. According to the UN’s Food and Agricultural Organization (FAO) “the FAO Food Price Index (FFPI) rose for the seventh consecutive month, averaging 231 points in January 2011, up 3.4 percent from December 2010 and the highest in both real and nominal terms” since records began. Note that prices have now exceeded the previously record levels of 2008 that sparked food riots in more than 30 countries. “Famine-style” prices for food and energy that prevailed early in 2008 may also have helped precipitate the credit crisis that Federal Reserve Chairman Ben Bernanke described in closed-door testimony “as the worst in financial history, even exceeding the Great Depression.”

This time around, the turmoil surrounding commodity inflation has taken center stage with more serious riots and even revolutions across the globe. Popular discontent is not just confined to “basket case” countries like Haiti and Bangladesh as in 2008. High food prices have roiled Arab kleptocracies with young populations and US backed dictators such as Tunisia, Egypt, Bahrain and Yemen. Even dynamic economies have been affected. Indeed, all of the BRIC countries, except Brazil, have witnessed food rioting.

Well, how do you like that, Dear Reader? All those billions of dollars spent propping up dictators – $70 billion was the cost of supporting Hosni Mubarak in Egypt alone – and then the Fed comes along and knocks them down.

The Fed lowers the cost of money so speculators can borrow below the rate of inflation. And then it prints up trillions more – just to top up the worlds’ money supply.

Is it any wonder food prices rise? Imagine you’re a farmer…or a speculator. You can sell food. Or you can hold it in storage. You know the food is valuable. You know the world has more and more mouths to feed everyday. You know food production is limited. And you know Ben Bernanke can print up an unlimited number of dollars. What do you do?

Do you sell immediately? Or drag your feet…holding onto your valuable grain as the price hits new highs?

Davidson continues:

While Mr. Bernanke modestly declines the credit for de-stabilizing much of the world, close analysis confirms that he played an informing role. His QE2 program of counterfeiting trillions out of thin air has helped ignite a raging bull market in raw materials with food and commodities – up 28% in the past six months. The fact that the US dollar has heretofore been the world’s reserve currency means that almost all commodity prices are denominated in dollars. As a matter of simple math, when the dollar goes down, the prices of commodities tend to go up.

Today, Libya. Tomorrow…Yemen? Or Saudi Arabia.

In North Africa, Cereal Revolutions…

In North America, Zombie Wars…

Yes, the battle rages in the Dairy State. And yes, Nobel Prize winner Paul Krugman (Economics!) has no idea what is going on:

It’s “not about the budget. It’s about power.”

He thinks it is a battle between the rich and powerful, whom he calls the “oligarchy,” and the decent lumpenproletariat on the other. Wisconsin’s governor is trying to bust the union, says Krugman, so that the elite can ride roughshod over poor government workers, cut their pay, and reduce their benefits (thereby downsizing the state’s budget deficit).

It’s not about money, says the New York Times columnist. He’s wrong, as usual. The Zombie Wars are always about money. There is less money available and more zombies who want it.

In the present case, rather than hire honest people to work at market rates…Krugman wants the state to be forced to deal with a privileged union. Union zombies should bargain with government zombies, he says. Together, in cooperation, not in conflict, they should figure out how to rip off the taxpayer.

Stay tuned…the Zombie Wars are just beginning.

Regards,

Bill Bonner
for The Daily Reckoning

The Role of US Debt in the Current Revolution originally appeared in the Daily Reckoning. The Daily Reckoning has published articles on the impact of quantitative easing, bakken oil, and hyperinflation.

Read more here:
The Role of US Debt in the Current Revolution




The Daily Reckoning is a contrarian e-letter, brought to you by New York Times best-selling authors Bill Bonner and Addison Wiggin since 1999. The DR looks at the economic world-at-large and offers its major players – investors, politicians, economists and the average consumer – some much-needed constructive criticism.

Commodities, OPTIONS, Uncategorized

The End Game for the Euro

December 11th, 2010

Bryan Rich

The euro is doomed, and the consequences of its demise are far-reaching — both in terms of the dangers for anyone who is unprepared and the opportunities for those who are.

This is so important I have created a special presentation, entitled “Currency Wars Helping Savvy Investors Make Fortunes.” It shows you not only how the currency wars are escalating but how to profit from them.

And right now, the biggest global war is against the euro, driving it to its demise.

To readers who have been following me, this should come as no surprise. I’ve made the case for some time that the euro’s days were numbered — even while most others were hailing it as “the next world reserve currency.”

But for investors and politicians who have staked their financial future on the euro — both in Europe and the U.S. — the shock could be traumatic. They’ve simply refused to recognize the flaws in the entire European Union — flaws that have been, and still are, abundantly clear.

Here’s the key: Monetary unity can only be possible with fiscal unity.

The whole idea of creating a single monetary unit — the euro — on the shaky foundation of 16 different governments, each taxing and spending at their own whim, was insane from Day One.

It created incentives to cheat the system. It encouraged certain countries to spend beyond their means and take shelter under the credit of their stronger neighbors. And it has led to precisely the kind of anomalies and disasters we should expect:

  • Wildly varying financial positions for the countries within the monetary union — some on the brink of bankruptcy, others still solvent.
  • No freedom for individual countries to determine the value of their currencies independently. For them, instead of serving as a benefit, the euro has become a curse.
  • Extreme vulnerability to any economic downturn — the ever-present danger that the union could collapse under economic or financial stress.
  • Grave political turmoil and public unrest.

As long as Europe’s economy was growing, prosperity camouflaged these fundamental failings. All that was needed to expose these flaws and set the euro’s demise into motion was a severe economic downturn.

And in 2008, that’s precisely what we got, along with a massive housing bust.

The bust, in turn, blatantly exposed everything that was wrong with the euro from the start — the fiscal irresponsibility of Portugal, Ireland, Italy, Greece, and Spain … the extreme vulnerability of stronger euro members as they are pulled down by the weak … and the invalid rulebook upon which the euro concept was built.

That’s why this crisis is far more than just an ordinary economic recession. What we have been witnessing is the progressive downward spiral of Europe itself.

Europe’s High-Risk Game of Poker

In response, Europe’s high officials have undertaken Herculean measures to stay afloat and prevent a breakup.

But despite all the rescue packages, bold promises, backstops and politicking, the sovereign debt crisis has continued to fester, spread, and accelerate.

This can mean only one thing: The outlook for the euro is bleak.

The fact is Europe’s strategy for handling the spreading sovereign debt crisis is nothing more than a grand bluff with a weak hand. Here’s how they’re playing it:

Earlier this year, the European Union and the IMF, using mostly German money, bet huge sums on insolvent countries. They put $1 trillion on the table, thinking they’d impress global investors. They didn’t.

Now, they’re talking about doubling the ante without any better cards to play. They’re hoping that this bluff will push back global investors and speculators who have staked their bets against the euro and the bond markets of the weak euro-zone members.

But all the while, they’ve known they’re holding a losing hand. They won’t admit it in public. But they’re also deathly afraid that the longer the game lasts, the more money Europe will be forced to pour into the black hole called “rescue aid.”

Games Like These Always Have an
Inevitable and Predictable End

Investors see through the bluff. Speculators can virtually smell the fear. And they attack with one simple weapon: Their ability to SELL the currency and the country’s government bonds at any time and in any amount of their choosing.

With few exceptions, no matter what the central bank says, the attacks continue relentlessly. And they typically, in the case of a currency attack, do not end until the central bank has depleted large sums of foreign exchange reserves. This, in turn, forces the central bank to fold its hand, abandon its defense of the currency, and enact a major devaluation.

But for the European Union, the bet is so large and the cards so weak, the end game could be even more Draconian: A breakup of the euro altogether.

Already the language and rhetoric is beginning to change in Europe. It’s gone from denial and political-unity speak … to admission and nationalist speak. Indeed, in just the last few days …

Talk of a Euro Breakup Has Suddenly
Begun Spilling out of the Continent!

Look at the swelling uproar …

  • The Irish Times has just run a headline “Ireland likely to leave the euro.”
  • German Chancellor Angela Merkel was said to have threatened to take Germany out of the euro. She denied it. But the swelling political pressures for a German exit are not deniable.
  • A UK official and former Bank of England member openly admitted the collapse of the euro was possible.
  • An Austrian Central Bank Governor and ECB policymaker said no country in the euro zone was safe from the collateral damage of a euro breakup.

Breakup or no breakup, anyone holding euros should be looking for the exit door. You wouldn’t own a company that’s loaded with sinking junk bonds. Likewise, you shouldn’t own the currency of the European Central Bank, which continues to buy up the junk bonds of Greece, Ireland and a growing list of weak countries — each digging itself deeper into debt despite ever harsher austerity measures.

My main point: This is far more serious than just one currency or even one continent. European banks are loaded with the seedy debt from the weakest euro- zone member countries.

If a major country like Ireland or Spain defaults or restructures its debts, it could send European banks into the tank. And those bank failures, in turn, could threaten the entire global financial system much as they did in 2008.

So the euro problem isn’t just a Europe problem. It’s a problem for everyone. World economies are highly interconnected. Those investors who aren’t closely monitoring the situation in Europe and the impact on the euro, could be caught on the wrong side of another Lehman-type event.

This is very dangerous for those who are unprepared. But it also has tremendous profit potential for those who are — with instruments any investor can buy. To see how, check out my presentation, “Currency Wars Helping Savvy Investors Make Fortunes,” which I’ve just posted online.

Click here, and it will begin playing right away.

Regards,

Bryan

P.S. This week on Money and Markets TV, we checked in on the health of the U.S. economy, and offered our prognosis for the pace of recovery in 2011. Plus viewers received some concrete investment ideas based on the economic outlook of all the Weiss Research editors.

If you missed Thursday night’s episode of Money and Markets TV — or would like to see it again at your convenience — it’s now available at www.weissmoneynetwork.com.

Read more here:
The End Game for the Euro

Commodities, ETF, Mutual Fund, Uncategorized

Currency War: “The Worst of Wars”

October 30th, 2010

Bryan Rich

Last week, here in Money and Markets, I suggested that the recent G-20 finance minister meetings could have a meaningful influence on the next trend in global currencies and other key markets. Therefore, we should pay very close attention to market activity.

I also suggested that this “influence” could be in the form of a coordinated intervention by G-4 economies (U.S., U.K., euro zone and Japan) to weaken the yen, a viable antidote to the bubbling and divisive currency tensions.

And given the context of the statement from the G-20 last weekend, that scenario looks quite plausible.

G-20: What They Said

The United States is the lead negotiator in trying to convince China to revalue its undervalued yuan. But U.S. officials are simultaneously operating under the growing perception that it may be seeking a weaker currency of its own — by planning for another round of quantitative easing — thereby threatening its credibility.

That’s why U.S. Treasury Secretary Tim Geithner made a strategic move to influence the G-20 agenda. He preceded the formal meetings last weekend with a letter to his G-20 counterparts, recommending a unified position and the language for G-20 opposition to the growing currency tensions in the world.

Geithner pushed for unity at the G-20 meeting.
Geithner pushed for unity at the G-20 meeting.

And for the most part, it worked.

Here’s the key take-away from the final G-20 communiqu

Commodities, ETF, Mutual Fund, Uncategorized

Two Game-Changing Decisions

October 18th, 2010

Martin D. Weiss, Ph.D.

If you think all the game-changing decisions to be made on November 2 will be by voters at the ballot boxes, think again!

In his latest online presentation, Monty Agarwal reminds us that, on that very same Tuesday, Fed Chairman Ben Bernanke will …

corral together the other voting members of the Federal Open Market Committee …

send any dissenters off to the shearing shed, and …

before the following day, close the deal on QE2 — the next major round of mass money printing.

How ironic the twists and turns of history can be!

While millions of voters will likely vote to transform Capitol Hill into a new stable of fiscal conservatives …

Just 12 men — meeting two and a half miles away — will be voting to transform America into a field of money trees.

Strangely …

The vote at the polls will put the padlock on America’s fiscal stimulus. But …

The vote at the Fed will unleash a whole new round of monetary stimulus, potentially driving more liquidity into gold, commodities, foreign currencies, and emerging markets.

End result: One of the greatest disconnects of all time between …

A sinking economy on the one side, and …

The real possibility of roaring bull markets in certain asset classes on the other side.

In fact, with investors rushing to adjust their portfolios in anticipation of these game-changing decisions, we already see this disconnect right now:

  • We see unemployment at deep-recession levels, housing in a depression, and home mortgages in chaos. But, at the same time …
  • We see gold near $1,400 per ounce, agricultural commodities through the roof, emerging markets booming, and key foreign currencies exploding higher.

What will happen once we see these game-changing decisions in black and white — the election results on November 2 and the Fed announcement on November 3?

Could markets reverse sharply, as they often do when widely anticipated news is finally announced? Or will we see even bigger investor stampedes into the same assets that have been soaring so consistently in recent weeks?

The Big-Picture Answers

Just 24 hours ago, I had the great privilege of reviewing the galley proofs for a new book on precisely this topic — the Global Debt Trap, by Claus Vogt and Roland Leuschel.

The book goes to press in a few days. So although you can already pre-order online, it’s not yet available in bookstores.

No matter what — with Fed Chairman Bernanke declaring last week that a new round of mass money printing is now in the making — right now is the ideal time for a sneak preview of the authors’ most relevant conclusions.

So let me give you a few key passages from one chapter (updated slightly to reflect recent events) …

image Two Game Changing Decisions

Quantitative Easing or
“Look Mom, No Hands!
We’re Printing Money!”

by Global Debt Trap authors
Claus Vogt and Roland Leuschel

Three of the most powerful central banks in the world — the U.S. Federal Reserve, the Bank of Japan, and the Bank of England — have publicly espoused a policy of quantitative easing.

The European Central Bank (ECB) is following a similar path, but differs in that it has still not publicly professed this creed. Nevertheless, it is probably only a matter of time before ECB bureaucrats cross the same monetary frontier.

Most people, unfortunately, don’t have the faintest idea of what quantitative easing really means. They do not understand the phrase. They are certainly unaware of its true implications. They probably presume a complex concept that justifies the comparatively high salaries of the central bankers who pursue it.

The term was obviously chosen as an unmitigated euphemism with the exclusive purpose of concealing a simple reality — a truth that would be far easier for people to understand, but far more difficult to accept. This is why the term is rarely ever translated into an English that the average American would understand.

Regardless of the language, what central bankers really mean by quantitative easing is nothing more and nothing less than running the printing presses to create paper money.

And beyond the use of fancy language, what the monetary policymakers in Japan, the United Kingdom, and the United States are really doing is openly and blatantly singing the praises of the printing press. This is not new. A gifted soloist — U.S. Fed Chairman Ben Bernanke — was the first to raise his voice above the throng, with the now-infamous phrase …

“The U.S. government has a technology, called a printing press … that allows it to produce as many U.S. dollars as it wishes at essentially no cost.”

Bernanke left us no doubt that inflation is always feasible in countries with fiat currencies. And he made it abundantly clear to everyone that he’s the man to turn that feasibility into actuality.

In principle, a central bank can purchase any security or any commodity. There are, admittedly, a few legal limitations, but they are hardly worth the paper they’re printed on.

This unbridled money printing parallels out-of-control federal budget deficits in two ways: First, the urgent goal of financing the federal deficits is a key reason politicians are so quick to run the printing presses. And second, like federal deficits, all forms of principles and promises fall by the wayside just as soon as the need arises.

Consider, for example, the European Stability Pact, which forbade and forswore annual budget deficits higher than 3 percent of GDP. And consider how quickly — and universally — those limits have been shattered, how easily those rules became paper tigers, and how conveniently they were overridden precisely when they were needed the most.

The average national deficit of all 27 EU members was 6 percent in 2009, rising to 7.3 percent in 2010 — more than double the caps. And that was after averaging in the supposedly more disciplined countries and before new weakness in the European economy!

What did the Commission do about this blatant breach of its own hard and fast rules? Did it insist that the agreement be adhered to? No chance! Rather, it moved to reassure its colleagues in member states with this pronouncement: “The countries concerned need not fear any imminent enforcement proceedings.”

Shocking!

Even more shocking, however, has been the rush by the U.S. central bank to buy $1.7 trillion in mortgage-backed securities and U.S. government bonds, with other central banks following its lead.

What Happens When a Central Bank
Buys up Bonds or Other Securities?

It pays for them, of course. It transfers the money straight into the seller’s account.

Where does the central bank get the money? Does it have the money in its coffers or borrow it? Neither! It merely creates the money out of thin air.

Science fiction? If it weren’t happening before your very eyes, you might certainly think so. But it’s fact.

Wouldn’t you love to pay for things without having the money and without ever having to borrow it or pay it back? Wouldn’t you like to play with money that did not previously exist? In other words, wouldn’t you love to operate your own personal, legally sanctioned counterfeit money machine? Sounds both fantastic and impossible, doesn’t it? Yet that’s precisely what our central banks do.

The Mafia is undoubtedly green with envy.

Why are average citizens like us never allowed to run our own money printing presses? The reason is both obvious and rational: Anyone in any economy who takes or seizes ownership of goods without providing something in return is doing nothing less, nothing more than stealing.

But alas, that privilege is reserved for the government … and the handy mechanism by which this is done is provided by the central banks — quantitative easing.

As George Bernard Shaw said, “If the governments devalue the currency in order to betray all creditors, you politely call this procedure ‘inflation.’”

What Can a Government Do If
It Wants to Spend More Than It Has?

Answer: It must get the money by following any of several possible well-trodden paths known around the world and throughout the ages.

  • Tax increases. Government leaders recognize that this path is less popular and brings with it the danger of invoking the resistance, wrath, and rebellion of the population … or, in democracies, elections that kick them out of power.
  • Wars of conquest. Unfortunately, this path has been taken far too often in history; fortunately, this barbaric form of money creation is no longer readily available to Western democracies.
  • Borrowing the money. In earlier times, kings who lived beyond their means went into hock with their banks. Their modern-day successors raise the money in the financial markets. The obvious disadvantage: The loans must be repaid, with interest. The not-so- obvious limitation: Ultimately, if debts get out of hand, credit ratings will fall, interest costs will surge, bond vigilantes will attack, and further borrowing could become impossible.
  • Running the money printing presses. In earlier times, they sometimes tried to skimp on the gold content of coins. Then, with the advent of paper currency, printing up excess quantities emerged as the new, far more powerful mechanism. And today, the state-sponsored creation of money has been elevated to an even higher high-tech plane — electronic transfers from the bank accounts of central banks to the bank accounts of private-sector institutions.

This fourth pathway is the one the Federal Reserve pursued with a vengeance though March … and will announce AGAIN on November 3.

The U.S. Treasury issues bonds — IOUs which it hands off to the Federal Reserve Bank.

The Federal Reserve, in turn, transfers money to the government’s bank account — money that previously did not exist, money that the central bank simply creates in the form of an electronic book entry.

Then, the Federal Reserve does the same — in even larger quantities — for government-sponsored (now government-owned) agencies such as Fannie Mae and Freddie Mac, buying their mortgage-backed securities and other agency bonds.

This newly created money does not represent real wealth. No new goods are created. No new services are rendered. This lack of substance behind the money, however, does not stop the government from using it to pay its bills, meet payroll, or subsidize moribund banks.

So mark November 3 on your calendar. It represents another decisive break with previous monetary policy. It’s a day that will probably go down in financial history.

Importantly, the U.S. Federal Reserve is no trailblazer in taking this step. Japan’s central bank took a similar path in the early 1990s. And in the present economic cycle, it was the father of all central banks, the much venerated Bank of England, that made these methods seem respectable. But because the U.S. Fed has been entrusted with the responsibility for the U.S. dollar — the world’s premier reserve currency since World War II — it’s the Fed’s transgressions that are, of course, the most decisive.

And if you’re expecting the European Central Bank (ECB) to stem the flow of paper money, don’t hold your breath. ECB bureaucrats have, up to now, always found ways of staying more or less in step with American inflationary targets. No wonder. They are almost all unabashed fans of Alan Greenspan and his successor, Ben Bernanke.

Indeed, the best inflation-fearing Europeans can hope for is that the ECB will be deadlocked, unable to achieve a consensus among its member governments, all of which want to have their say. However, as we’ve seen, the ECB is no more a bastion of stability than the Fed. And as we’ve further seen, virtually no central bankers are monetary guardians, but the precise opposite. They are the foxes guarding the chicken coop.

Even the once-honorable Swiss National Bank has joined their ranks with increasing zeal. How? First, it sold the majority of Switzerland’s gold reserves. Then it began to sell its own currency, with the declared aim of weakening it.

Two conclusions:

1. We repeat a fact that you must not forget in the coming years: Inflation doesn’t just happen. It doesn’t fall from the skies. Inflation is man-made. It is the result of conscious political decisions.

2. Buy gold!

Editor’s note: In our presentation now online, Monty Agarwal shows you how he’s investing $1,000,000 of my own money — so you can transform these game-changing decisions into a game-changing, wealth-building opportunity.

The approach he’s using could have turned a similar sum into more than $25,000,000 — with either inflation or deflation … in both bull markets and bear markets.

So first make sure your computer speakers are on. Then click here to see Monty’s presentation before markets go truly haywire in response to these sweeping decisions now being made.

Related posts:

  1. Two Game-Changing Decisions
  2. Glimpses of the End Game
  3. The Dangerous Game of Confidence

Read more here:
Two Game-Changing Decisions

Commodities, ETF, Mutual Fund, Uncategorized

Japan Agrees With US on Chinese Monetary Policy

September 23rd, 2010

The euphoria in the currencies and metals carried through yesterday morning, with the euro (EUR) bumping up to 1.3425, and the Aussie dollar (AUD) bumping up to 0.9568… But the profit taking began to step in, and soon all the lofty levels that the currencies and metals had gained for the previous 24 hours were seeing slippage, and that slippage soon became hard selling.

I had told the boys and girls on the trading desk here, yesterday, when the euro traded above 1.34, that the euro had “gapped” through 1.32, and 1.33, and I wouldn’t be surprised to see the currency go back and fill in those gaps, which is another way of saying that 1.3435 wasn’t going to last… And it didn’t!

The one currency that is kicking tail and taking names later this morning is the Swiss franc (CHF), which is trading above parity to the dollar once again. And versus the euro, the franc is really strong!

Besides the profit taking, we’ve had some soft data reports around the world that have put a damper on things. For instance, Yesterday in Canada, their July retail sales unexpectedly fell, causing selling in the loonie (CAD).

In addition, overnight, New Zealand’s kiwi (NZD) had a rough go of it, after the government printed a very weak second quarter GDP of just 0.2%… The thing that has scared kiwi holders is the fall off of GDP in the second quarter was before the earthquake that occurred earlier this month. With the fall off of GDP since the earthquake, there are fears that New Zealand’s third quarter GDP could dip negative… And that would be the telling blow to any thoughts that the Reserve Bank of New Zealand (RBNZ) would hike rates this year… Instead, I see the rebuilding after the earthquake pushing fourth quarter GDP to strong levels, and the RBNZ coming back to the rate hike table in 2011…

And in the Eurozone this morning, the Eurozone PMI (manufacturing Index) was disappointing, as it remained at 53.8, when it was expected to rise to 55.7! And the really disappointing data was in Germany, where manufacturing is king… The German numbers were weaker than previously… So… The euro has seen a 1-cent fall off its price overnight… OUCH!

The euro IS still trading above its 200-day moving average though, and that’s a good thing…

Yesterday, in the US… We had home prices data that really should have shook the markets to the core, but there’s too much periphery stuff going on these days… But for those of you keeping score at home… US house prices fell 0.5% in July to the lowest level in nearly six years, according to data released from the Federal Housing Finance Agency.

Recall… I’ve contended for some time now that we would see another 10% drop in home prices before reaching the bottom that the US government told us we reached a year ago!

There’s not much in the data cupboard for us to see here in the US today, but we will see the Initial Weekly Jobless Claims.

So, that leaves us to the BIG TALK overnight… And that is the saber rattling going on between the US and China… The US is now demanding that China allow a 20% appreciation in the renminbi (CNY) versus the dollar… China barked back saying that a 20% appreciation of the renminbi would be devastating to them and cause many bankruptcies…

Here’s the wild card in this whole thing… Now Japan is siding with the US and suggesting that China needs to allow appreciation of the renminbi… That’s all they need in Asia right now, is for these two giant economies to get into a hot debate…

Well, the President will be meeting with China today, and also Japan… Let’s hope he beats on Japan, as much as he beats on China… But in the end, isn’t this really a bunch of theater? This administration, like the administration before it, doesn’t have the answers, so they “deflect” and blame China for our problems… When in reality they should be thanking China for taking on so much of our debt the past decade! If China’s economy hadn’t woken up a decade ago, the problems for the US deficit spending would be even greater than they are right now!

There are reports this morning that The Bank of England (BOE) might roll out another round of stimulus to boost the struggling recovery, according to minutes of a Monetary Policy Committee meeting. Some committee members expressed concern that headwinds to private-sector demand are “somewhat stronger than previously thought.” The financial market has taken the language as a signal that the central bank is warming to more quantitative easing.

All I’ll say to that is, that’s another reason to believe the FOMC will be rolling out their own quantitative easing (QE) because… For over two years now, the stuff that happens in the UK is a precursor to what will happen here in the US.

Before I head to the Big Finish, I want to point out a story I was reading on the Bloomie this morning, about the Aussie dollar… Commonwealth Bank of Australia made a bold comment last night, saying that the Aussie dollar will reach 97-cents by the end of this year, and $1.02 by next March 2011… WOW! They also said they thought at the same time in March 2011 kiwi would be 76-cents…

Of course, you have to be careful about reading too much into reports like this, as you never know, what their motives are for writing this… Most of the time, I take these with a grain of salt… But Shoot Rudy, this one is so bold!

And speaking of bold… Gold went up, then it went down, then it went back up yesterday, and this morning, while the currencies have sold off their lofty levels, (except Swiss francs), gold is trading at the same level it was yesterday morning!

Then there was this… I saw this in The Washington Post yesterday… In order for the United States to recoup all of its $50 billion investment in General Motors, it must sell its ownership stake at $134 a share, according to the special inspector general of the government’s bailout programs. The estimate comes as the automaker readies itself for a public stock offering, setting the stage for the government to withdraw from its majority stake in the company.

The price needed for a full recovery of the US investment is far higher than shares of the automaker have ever reached, and some analysts and government officials have expressed doubts that the United States will be able to recover the money.

To recap… The currency euphoria hit a roadblock yesterday afternoon, and overnight, as profit taking has turned to hard selling. Soft economic data is adding to the currencies’ problems this morning. Home prices fell 0.5% here in the US, and there’s a ton of saber rattling going on between the US, China, and now Japan has been added to the mix!

Chuck Butler
for The Daily Reckoning

Japan Agrees With US on Chinese Monetary Policy originally appeared in the Daily Reckoning. The Daily Reckoning, offers a uniquely refreshing, perspective on the global economy, investing, gold, stocks and today’s markets. Its been called “the most entertaining read of the day.”

Read more here:
Japan Agrees With US on Chinese Monetary Policy




The Daily Reckoning is a contrarian e-letter, brought to you by New York Times best-selling authors Bill Bonner and Addison Wiggin since 1999. The DR looks at the economic world-at-large and offers its major players – investors, politicians, economists and the average consumer – some much-needed constructive criticism.

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