About right now, I imagine 90% of our subscribers and most of the analysts in my building think I'm nuts. Truthfully... I feel a little bit like Chicken Little. I've been saying the risk of hyperinflation is a more serious threat to our wealth (and way of life) than a massive deflation. Meanwhile, just about every month it looks more and more like Europe's banking crisis will cause another round of serious deflation in the world's asset prices. I'm starting to look pretty foolish... I thought economic growth would be stronger than expected, not weaker. I thought job growth would be stronger than expected, not weaker. I thought yields on long-term Treasury bonds would move higher, not … [Read more...]
Global Inflation and Double-Dip Recession Prospects
By Martin Hutchinson, Contributing Editor, Money Morning Last week's stock-market meltdown was a worldwide affair, and was touched off by trader fears of a global "double-dip" recession. However, the truth is that the odds of a recessionary reprise are high in just a few countries - primarily those that have experienced excessive fiscal and monetary "stimulus," or that have real inflation problems. The rest of the world is recovering just fine. … [Read more...]
Gold – The Optimal Investment for Inflation and Deflation
History shows that gold is an excellent performer in both inflationary and deflationary economic scenarios. Author: Ronald Stoeferle Posted: Thursday , 24 Jun 2010 VIENNA (Erste Bank) - The central question of whether the next few years will be dominated by inflation or deflation still remains unanswered. In periods of inflation, tangible assets are the preferred asset class, whereas in times of deflation, cash is king. Gold is liquid, divisible, indestructible, and can be easily transported. It has a worldwide market and there is no default risk associated with it, which means it is cash of the highest quality. Therefore gold is the optimal investment both in deflation and … [Read more...]
There’s No Quick and Easy Fix for This Economy
By Adam Hewison, President INO.com Regardless of what others might say, there is no quick fix for the economy. To illustrate this point, a friend of mine recently sent me a chart which I would like to share with you. This charts shows that we may be going into a prolonged period of no growth overall in the stock market. The NASDAQ peaked at 5,132.52 on March 10th, 2000. The NASDAQ market is in many ways more important than the DOW, and should be considered more of a leading indicator. If that is truly the case, then we have been in a bear market for the last eight years. … [Read more...]
Men Staring at Goats
What Hollywood can teach us about the Washington, DC establishment … and Obamanomics By Rob Carlson On November 3, 2009, a new movie opened in theatres, starring one of America’s favorite sons -- George Clooney. In the film, Men Who Stare At Goats, the government gathers and trains a group of people with “special” mental capabilities. These men of rare ability are to be trained as Top Secret… Psychic Soldiers. The film was, ostensibly, “based in a top-secret true story.” Employing their special “abilities,” these “Jedi” warrior monks would pass through walls, and see into the future. They would fight – not with guns, but with their minds. Directing their gaze at the enemy, they … [Read more...]
Gold Investing
Gold Is Going Nowhere…But Up By Joshua Burnett My father-in-law recently sent me an article from the Money section of CNN under the title: “Beware The 4 New Asset Bubbles,” written by Shawn Tully, senior editor at large at Fortune. Mr. Tully contends that there are four new balloons in the economy: Treasuries, Oil, Gold, and Stocks. My father-in-law was primarily concerned with gold so let’s look at that. The “Historic Average” of Gold Mr. Tully makes several claims concerning gold. His first indirect statement address all four items: “They’ve already seen huge run-ups that put their prices far above their historic averages, and far above the levels justified by fundamentals.” Au … [Read more...]
Stock Market vs. Gold
Editor's Note: Often people are skeptical about the Government's Inflation numbers and I frequently get questions like "Are they fudging the data?" And to some extent they might be. Since Gold is the original money and it is freely converted to cash, it is still a reasonable scale to gauge other prices against. If gold was a true inflation indicator, the gold price in dollars would progress steadily upward with very few downward periods and the inflation adjusted price of gold would be constant. Although this is not the case, never-the-less gold is a good scale to use for comparison purposes. So the following article on Gold vs. the Dow Jones Industrial Average is a good place to … [Read more...]
Deflation: Micro vs. Macro
Deflation By Joshua Burnett If you’re anything like me, one of the problems you run into when trying to convince someone that the hyperinflation scenario will occur is an argument that revolves around us currently being in a deflationary period. People (and those involved with the economy and stock market especially) have a hard time seeing looming hyperinflation (that might occur as soon as a year and a half away) when what they’re currently seeing is… deflation. But wait a second; how in the wide world of sports are we seeing deflation when we’ve been printing money like our lives depend on it? Let’s return to market fundamentals, and the ever-present difference between macro and … [Read more...]
Inflation is Not Coming…It Has Arrived!
By Jon Herring Don’t be deluded into thinking that inflation “might be coming” in the future and that once you see the signs you can protect yourself. Inflation is already here. And if you wait too long to take precautions, this silent thief will most certainly steal your wealth and savings. You must act NOW if you wish to protect what you have worked so hard for. Take the right actions today, and you can not only insure your wealth against erosion by inflation… you can generate life-changing profits as well. First, it is important to have a proper understanding of inflation. Most people believe that the definition of inflation is rising prices. This is not true. The definition of … [Read more...]
Zimbabwe Hyperinflation and the U.S. Dollar
The (Zimbabwean) Dollar - The Point of No Return By John Lee, CFA Last week, Zimbabwe slashed 12 zeros from its currency as hyperinflation continued to erode its value, the country's central bank announced in late January. The government instituted price cuts to arrest inflation. As time went by, it became apparent the forced price cuts cause bare shelves in shops and many businesses to close. "Even in the face of current economic and political challenges confronting the economy, the Zimbabwe dollar ought to and must remain the nation's currency, so as to safeguard our national identity and sovereignty... Our national currency is a fundamental economic pillar of our sovereignty," … [Read more...]
