Friday, June 12, 2009

Western Government Doing Their Best to Impoverish Their Countries

I seldom become depressed, but when I consider that prosperity is created by "peace, easy taxes and a tolerable administration of justice" I really think that the U.S. and other Western governments are doing their very best to impoverish their countries.

A friend of mine, Michael Berry, whose missives I always read, could not have phrased this better than in "Importance of the Individual", a recent report in which he quotes Milton Friedman (whose views I fully share in this particular instance) in an interview with Phil Donohue. (more)

Business Week, June 22, 2009

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Get Ready for a Natural Gas Rally

Natural gas has been the worst-performing commodity this year, falling more than 30 percent since the end of December and sliding to a six-year low in April. Weakness in the U.S. dollar, which has buoyed many commodities, including crude oil, has failed to create a spark in natural gas. While investors have not been enthusiastic about the market at this state, I think the fundamentals going forward look great for a rebound, and recommend a call spread to take advantage of higher prices come fall.

Natural gas futures rallied after the latest inventory report from the Energy Information Administration (EIA) showed U.S. natural gas inventories rose 106 billion cubic feet in the week ended June 5, 2009, lower than the consensus analyst forecast. NYMEX July natural gas futures hit $4 per million British thermal units (Btu) after the report. (more)

Is Eastern Europe On The Brink Of An Asia-Style Crisis?

The collapse of the Thai baht in July 1997 helped spark the Asian financial crisis. Could events in Latvia spawn a similar contagion? Eyes are focused on this small Baltic economy--amid growing talk of a devaluation--because of the potential for spillover effects into its fellow Baltic states, Sweden and the broader Eastern European region.

Strong trade and financial linkages, not to mention similar macroeconomic vulnerabilities, mean a Latvian crisis would almost surely have knock-on effects on neighboring Estonia and Lithuania. A Latvian crisis would also have negative spillover effects into Sweden via Swedish banks' heavy exposure to the Baltic trio. The wild card is how a Latvian crisis would affect the greater Central and Eastern European (CEE) region. Direct trade and financial linkages between Latvia and the CEE economies, excluding the Baltics, are limited. Nevertheless, many of these countries--particularly Bulgaria and Romania--share similar macroeconomic vulnerabilities with Latvia, meaning a crisis there could awaken investors to the potential for crises in the rest of the region.


Time For Delivery by Jim Sinclair

Dear Friends,

You know that information that comes to me has been reliable. You also know that the entire purpose of all of working here at JSMineset has been to get you through this safely. You also know that if we had not been here hundreds of thousands of people now holding gold would not be.

So please pay attention to the following.

I have heard rumors for some time, but today it was confirmed to me, that the Canadian mint’s present problems are not unique and that other depositories (vaults) have had an army of auditors descend on them in the last two weeks. Some of these depositories have names so famous that it would scare the hell out of you. The repercussions would be drastic if they turn out to be troubled. (more)

McAlvany Weekly Commentary

Dohmen Capital Research Institute Inc. was founded in 1977 by Bert Dohmen as an economic and investment research firm. Over the past two decades, the firm’s services have achieved the highest acclaim. They are the most highly respected and sought-after advisory services for investors world-wide.The firm currently offers 10 services. These include a long-term advisory service for the mutual fund investor, which helps investors avoid the need for a money manager or financial planner. There are also fax and e-mail services for short term traders in stocks, options and short sales.

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China’s Commodity Buying Spree

HONG KONG — Strong buying by China has helped lift commodity prices around the world this spring, but growing evidence suggests that a sizable portion of this buying has been to build stockpiles in China, and may not be sustainable.
At least 90 large freighters full of iron ore are idling off Chinese ports, where they face waits of up to two weeks to unload because port storage operations are overflowing, chief executives of shipping companies said in interviews this week. Yet actual steel production from that iron ore is recovering much more slowly in China, and Chinese steel exports remain weak. (more)