Monday, August 29, 2011

Soros and Rogers Agree: Greater Returns from Farmland Than Gold! Here’s Why: MOO, BARN

Question: What asset has appreciated more than any asset since the year 2000? Answer: Farmland – by 1,200%! [George Soros and Jim Rogers have recognized that fact and invested accordingly. Here is what you need to know to do likewise.] Words: 974

So asked George Maniere ( in an article* which Lorimer Wilson, editor of (It’s all about Money!), has further edited ([ ]), abridged (…) and reformatted below for the sake of clarity and brevity to ensure a fast and easy read. Please note that this paragraph must be included in any article re-posting to avoid copyright infringement. Maniere goes on to explain:

Food Prices Skyrocketing

Food prices are skyrocketing all across the globe, and there’s no end in sight. The United Nations says food inflation is currently at 30% a year, and the fast-eroding value of the [U.S.] dollar is causing food prices to appear even higher in contrast to a weakening currency. As the dollar drops in value due to runaway money printing at the Federal Reserve, the cost to import foods from other nations looks to double in just the next two years — and possibly every two years thereafter.

That’s probably why investors around the globe are flocking to farmland as the new growth industry. Investors are pouring into farmland in the U.S. and parts of Europe, Latin America and Africa as global food prices soar. A fund controlled by George Soros, the billionaire hedge-fund manager, owns 23.4 percent of a South American farmland venture Adecoagro.

Commodities are still the best play for the long term and legendary investor guru Jim Rogers confessed that he has been buying farmland himself [see article 1 below].

People are still going to eat. Mother Nature has taken her wrath out on the world as of late to such an extent that farmers cannot get loans for fertilizers right now without putting their land up as collateral and with too little rain or too much rain the farmland that has been in a family for generations could be wiped away in a trick of fate. Therefore the supplies of food are going to continue to be under pressure. This leads me to conclude that agriculture is going to be one of the greatest industries in the next 20 years, 30 years.

That’s because demand for food is accelerating even as radical climate changes, a loss of fossil water supplies, and the failure of genetically engineered crops is actually reducing food yields around the globe.

South America: Agricultural Commodity Exports Growing Rapidly

Ceres Partners, which invests in farmland, has produced astonishing 16% annual returns since its launch in 2008 – and this is during a depressed economy when most other industries are showing losses – with investments in dairy, green house vegetable, beef cattle and rice plantation operations. Ceres reported that most commodity exporting countries of South America are facing highly favorable conditions, particularly those with stronger fundamentals that have easiest access to external financing and stand to benefit the most from low global interest rates. Foreign direct investment in the economies of the region increased almost 20% during 2010 compared with the same period a year ago.

The region’s economy expanded 6% in 2010 and according to ECLAC´s latest report, South America will grow 5.1% in 2011. In terms of countries, the fastest growing this year will be Argentina (8.3%), Peru (7.1%). Uruguay (6.8%), Ecuador (6.4%), Chile (6.3%), Paraguay (5.7%) followed by Colombia (5.3%), Venezuela (4.5%) and Brazil (4%).

For its soils and weather conditions, abundance of natural resources, good infrastructure and the unique possibility of acquiring large extension of productive farmland, South America is considered a top place to buy, lease and manage agricultural lands for profit. The region accounts for 59% of global exports of oil seeds, 11% of grains and 37% of meat, with Argentina, Brazil, Chile and Uruguay being among the top 10 food exporters.

How to Invest in Farmland

While it does not invest in farmland directly, the Market Vectors Agribusiness ETF (MOO) is the closest thing to a farmland ETF. MOO seeks to replicate the price and yield performance of global agricultural business. It is a modified market capitalization-weighted index consisting of publicly traded companies engaged in the agriculture business that are traded on global exchanges. It provides exposure to companies worldwide that derive at least 50% of their revenue from agriculture business. Another interesting agribusiness ETF is BARN. Barn offers global exposure to the farmland industry, focusing exclusively on companies involved in agricultural products, livestock operations and the manufacturing of farming equiptment.

Market crash 'could hit within weeks', warn bankers

A more severe crash than the one triggered by the collapse of Lehman Brothers could be on the way, according to alarm signals in the credit markets.

Insurance on the debt of several major European banks has now hit historic levels, higher even than those recorded during financial crisis caused by the US financial group's implosion nearly three years ago.

Credit default swaps on the bonds of Royal Bank of Scotland, BNP Paribas, Deutsche Bank and Intesa Sanpaolo, among others, flashed warning signals on Wednesday. Credit default swaps (CDS) on RBS were trading at 343.54 basis points, meaning the annual cost to insure £10m of the state-backed lender's bonds against default is now £343,540.

The cost of insuring RBS bonds is now higher than before the taxpayer was forced to step in and rescue the bank in October 2008, and shows the recent dramatic downturn in sentiment among credit investors towards banks.

"The problem is a shortage of liquidity – that is what is causing the problems with the banks. It feels exactly as it felt in 2008," said one senior London-based bank executive.

"I think we are heading for a market shock in September or October that will match anything we have ever seen before," said a senior credit banker at a major European bank.

Despite this, bank shares rebounded on Wednesday, showing the growing disconnect between equity and credit investors. RBS closed up 9pc at 21.87p, while Barclays put on 3pc to 149.6p despite credit default swaps on the bank hitting a 12-month high. This mirrored the US trend, with Bank of America shares up 10pc in late Wall Street trade after a hitting a 12-month low on Tuesday over fears that it might have to raise as much as $200bn (£121bn). As with the European banks, the rebound in the share price was not reflected in the credit markets, where its CDS reached a 12-month high of 384.42 basis points.

European stock markets joined in the rally. The FTSE closed up 1.5pc at 5,206 on hopes the chance of a global recession had diminished. European shares hit a one-week high, with Germany's DAX closing up 2.7pc and France's CAC 1.8pc higher. The Dow Jones index edged higher on strong durable goods orders data as markets began to accept that the US Federal Reserve is unlikely to signal fresh stimulus at Jackson Hole this Friday.

Even Moody's decision to downgrade Japan's sovereign credit rating by one notch to Aa3 did little to damage global sentiment, although Tokyo's Nikkei closed down just over 1pc.

As stock market nerves settled, gold - which has recorded steady gains recently as investors seek a safe haven - fell 5.3pc to $1,777 in London.

9 Steps to Take If You Fear a Job Layoff

If you notice warning signs at your company that clearly say, "Somebody's going to be leaving here on short notice," don't wait until you're handed a pink slip to start thinking about your next career move.

Here are nine tips that can help make a layoff less traumatic, and put you on track to quickly land a new job.

Assess Your Next Move

It can be unnerving to show up for work every day knowing that a layoff is looming. Help relieve some of that tension by taking stock of your professional situation. Ask yourself:

1) If you had to change jobs quickly, would you pursue the same type of assignment you have now?

2) Where would you focus your job search and how would brand yourself for the next project?

3) What have you learned on your current job that could be beneficial in your next venture?

4) Would you consider independent consulting — perhaps even for your soon-to-be former employer?

Revive Your Resume

An effective resume nowadays draws a smooth line between your background (highlighting your entire career, not just your current role) and the positions you're targeting in your job search. If a layoff is, indeed, in the works at your company, you'll want to rewrite your resume to focus on the relevance of your previous jobs in relation to the positions you're pursuing now.

For example, if you've spent several years in human resources, but prefer accounting and want to highlight that aspect of your skill set, under your current job functions, showcase the accounting-related work you've done.

Update (or Create) Your LinkedIn Profile

New users should get comfortable with, which is a social networking site targeted towards professionals, by joining a group, answering a question on LinkedIn Answers, adding a blog or other content to your profile, and using the search capabilities of the site's massive database.

Before you change anything on your profile, however, go to the settings and turn off outgoing notifications to your network. Doing this allows you to work on your profile without alerting the whole world. Update your profile with details on your current job, update your picture if it needs freshening and cultivate some new connections while you're at it.

Expand Your Network

Most employed people (sans entrepreneurs) don't network nearly as much as they should. If your senses are telling you that a job change is likely -- whether you want it or not -- it's time to reconnect with former colleagues and make new professional acquaintances.

That means at least one breakfast or lunch per week with someone you know. Remember to talk about what's new in both of your lives, and if you're comfortable, gently request an introduction to second-degree friends who should be a part of your professional network.

Get to Know a Respected Headhunter

Every white-collar job-seeker needs a headhunter in their corner. If you're not already on the short list of at least one search pro in your industry, make a new friend who fits that description. You can meet them through friends or find one online and initiate contact.

Headhunters will be able to provide you with feedback about your resume, let you know what your background is likely to fetch in the marketplace and tell you about local firms with open positions in your field. As long as you respect their time and remember that job-seekers don't pay their salary -- employers do -- you'll find a search partner that's a valuable ally.

Determine Your Value

Most people who've been employed at one company for many years have no clue how much they're worth in the current job market. Use sites such as, and to help determine an appropriate salary amount for your experience level. You'll need that information when an employer asks what you're looking to earn. Many industry-specific publications, such as InfoWorld (for IT pros) and Adweek (advertising folks), publish an annual salary survey that can help provide a better idea of what your asking price should be.

Mobilize Your References

Even if a layoff is in the very near future, your current employer can still give you something incredibly valuable in the form of references from fellow colleagues. Start cultivating your reference list now, and include at least one co-worker, a customer or vendor you've done business with over the years and a subordinate. If you can make contact with a former boss, that's even better. If there are colleagues you'd hope to stay close with assuming the worst, get their personal e-mail addresses and phone numbers, too.

Start Your Job Search

Take a look at and, two major job aggregation sites, to see what employers in your area are looking for. Research specific employers by trolling LinkedIn to see who's working where, how certain employers fare in their competitive arenas and what companies are looking for as they grow their teams.

Once you've figured out what direction you want your job search to take, test the waters by applying to positions online. Remember, employers prefer job candidates who are already employed.

Don't Be Afraid to Ask

If you do learn that your position has been eliminated, immediately discuss critical details, such as severance pay and health benefits coverage, with your manager. Determine whether terms are negotiable. Keep your cool during this conversation, but insist on complete answers. If your manager can't give them, then ask who can. While getting laid off can be an emotional and confusing time, it can be made even worse if you fail to ask questions and take the necessary steps to prepare.

Storm Pennants Are Flying In Stocks And The Dollar

Storm Pennants Are Flying In Stocks and the Dollar

If we look only at charts and ignore the "news," we see storm pennants are flying in both the stock market and the U.S. dollar.

The stock market is wearing a T-shirt that reads, "I broke a downtrend and all I got was this lousy pennant." Having just returned from nine glorious days camping in Washington State, I have no idea what "news" has effected the markets ("news" in quotes because the news is managed for its PR effect--the real news is what has been suppressed lest it undermine the Status Quo's carefully cultivated propaganda campaign), and so I have marked up the chart of the Dow Jones Industrial Average (DJIA) and the U.S. dollar without the "benefit" of the news flow.

What pops out is a big fat pennant in both charts. Pennants can be continuation patterns--mere way points in a continuing up or down trend--or they can indicate points of trend reversals.

The key feature of a pennant is the compression of price into a narrowing channel, as the relative indecision of buyers and sellers alike causes price to fluctuate less and less.

At the apex of the pennant (note the triangle shape), the irresolution is resolved, usually in a big way up or down.

If we look at the indicators in the chart of the Dow Industrials (Indoos), we note that the oversold conditions have been worked off, and a very bullish divergence in the MACD indicator (and a positive cross in MACD) has yielded up a meager pennant rather than a clear breakout or trend reversal.

Even if you discount the "death cross" of the 50-day moving average (MA) dropping below the 200-day MA, a declining 50-day MA does not suggest a Bullish resolution to the pennant.

That intersection of the 50-day and 200-day MAs offers up a tempting target for market Bulls. What should worry Bulls is that these positive moves in the indicators have yielded up such modest results--a pennant that is a week or two away from a potentially major break up or down.

As for the dollar, the pennant may well be a sign of strength, as the Federal Reserve has been trying mightily to push the USD to a new low while propping up the euro at 1.44.

The basic reason is that a weakening dollar is the primary engine of U.S. corporate profits, as I explained in About Those Permanently Rising Corporate Profits... (August 12, 2011). If the Fed is unable to suppress the dollar via propping up the euro, then the entire stock market rally built on a falling dollar will collapse is a heap, shattering Wall Street's PR of permanently rising corporate profits.

As noted in that entry, the euro and the dollar (as measured by the DXY index of weighted currencies) are on a see-saw; if the euro breaks down as a result of the eurozone's irreversable structural dilemmas, then the dollar will strengthen and the Fed's master plan of pushing stocks up via a weakening dollar will have failed.

We have no idea how much treasure is being thrown into the fire to maintain the euro at 1.44 to the dollar, and that is the "news" which we must not be allowed to know, lest the extreme vulnerability of the eurozone financial Status Quo and the global rally were reflected in the foreign exchange and stock markets.

Being completely out of the news cycle is a blessing, in more ways than one: not only is one's mind untwisted by propaganda passing as "news," one is free to look at charts without the carefully designed biases implicit in the "news."

Canadian Dollar To Retreat Versus the USD?

For the past year or so, the Canadian dollar or the Loonie as some traders call it has overtaken the USD. However, it appears that the USDCAD pair could already be bottoming.

As you can see from the chart above, the pair has already moved out of its year-long downtrend. Now, this could be taken as a good sign for the US dollar. Also, notice that from March of this year onwards, the pair seems to have been forming a double bottom pattern, which technical analysts consider as a bullish reversal formation. Moreover, a presence of another bullish pattern in the form of a pennant could catapult the USD back above par. However, it should considerably move above and break the 1.000 marker for it to have a chance of reaching its 1.0500 target (assuming it breaks out from the pennant). In case the 1.0000 price level holds and does not break then the USDCAD could continue to just drift sideways. Worse for the US dollar, the pair could even revisit its former lows at 0.9500 or even at 0.9400.

Technically Precious With Merv Burack

Gold Blow Off May Have Arrived

Best Financial Markets Analysis ArticleBoy, some of these moves are getting kind of scary. To keep your balance about things it might be very beneficial to watch the long term chart. It does not roller coaster like a short term one. On the other hand there may be just too much action missed between a short term and a long term trend.


Way behind time so once again it’s just the facts. Maximum information with minimum time spent.


Trend: Although it looks like the blow-off suggested here last week has arrived. Still, the long term trend has not changed. Gold remains above its long term positive sloping moving average line and above its long term up trend line (that lower channel support line shown here a couple of weeks back).

Strength: The long term momentum indicator remains in its positive zone but the action of early this past week has knocked some steam out of it. It is now below its negative sloping trigger line for the first early warning of possible trend change sometime ahead.

Volume: The volume indicator remains one strong long term indicator and remains above its positive sloping long term trigger line.

Despite a minor early warning from the momentum indicator the long term rating remains BULLISH at the Friday close.


Trend: If I can easily draw three Accelerating FAN trend lines then I have the criteria for my blow-off period. The breaking of that third FAN trend line is the end of the blow-off trend and the end of the present bullish trend, intermediate term wise. Watch for the price to move within those last two FAN lines for a while but inevitably drop into the area between the first and second FAN trend lines. So much for “predicting”. On the Friday close gold remains above its intermediate term positive sloping moving average line so from the indicators the intermediate term trend is still on-going. The FAN line (blow-off) break is a very early reversal indicator.

Strength: The intermediate term momentum indicator entered its overbought zone and quickly backed off. It remains in its positive zone but below its negative sloping trigger line. This reversal of the momentum indicator back below its overbought line is another indicator of an end of trend for a while. Friday’s price reversal had very little effect on the momentum indicator, at least at this time.

Volume: Still one of the strong indicators, the volume indicator has been consistently making new highs and remains above its positive sloping trigger line.

Despite the early reversal signal from the FAN lines and the momentum indicator the overall intermediate term indicators still give us a BULLISH rating at the Friday close. This bull is confirmed by the short term moving average line remaining above the intermediate term line.


Trend: The third FAN trend line may be assumed as a short term trend line. This trend line was broken on Wednesday and the price of gold remains below the line. On Wednesday the price of gold also closed below its short term moving average line turning the moving average line towards the down side. By Friday gold looked like it was back on the up move but closed on Friday just below its moving average line. The line itself has turned back to the up side on Friday.

Strength: On Wednesday the short term momentum indicator broke below its overbought line (it was basically in the overbought zone for a few weeks) and below support going back to early July. It remained in its positive zone, however, and is turning back to the up side but still below its negative trigger line.

Volume: The daily volume action is telling us a somewhat different story than the intermediate and long term volume indicators are telling us. With the price advance starting two weeks ago the volume has been pretty low. It started to improver at the top of the move peaking on the two down days. The advance on Thursday and Friday was once more on decreasing volume. Not the volume action one likes to see.

Putting it all together I cannot give the short term rating a bull or a bear rating. It is close to a bear but comes in as a – NEUTRAL rating, one level above a full bear. The very short term moving average line is confirming this neutrality. It is heading lower fast and is very, very close to moving below the short term line, but not quite yet. Possibly another day will do it.


Briefly, the P&F chart almost says it all. The long term bull remains in force but getting close to reversing. That would come on a move to the $37 level. However, a more important support would be at the $33 level.

Time limitations once more have caused me to cut the silver commentary short but suffice it to say that all three time periods are rated as BULLISH as of the Friday close.


Looking over the various major North American and Merv’s gold Indices they are still all (except for the Merv’s Qual-Gold Index) below their previous highs. It would take another good week for some of the major Indices to get back to new highs while it would require more than a week for the Merv’s Indices to do so.

What we have here is a clear indication, using the various Merv’s Indices that any upward movement in gold stocks lately has been in the largest company stocks and not the speculative or gambling variety. As mentioned previously, this is more of an indication that the majority of market players are not yet convinced that we are into a new major bull move. Once they are confident that we are in a new major bull move you will see them gravitate towards the more speculative stocks. These will then move and far out perform any gains that the quality stocks may have made to that point.

At this time it just might be more advantageous to sit back and wait for the speculatives to take flight. Of course, if you must be in the market the quality stocks just might be your investment hoping for gains with lower risk.

Merv’s Precious Metals Indices Table

Well, that’s it for this week. Comments are always welcome and should be addressed to

By Merv Burak, CMT

Homelessness and Poverty on the Rise in Britain and America

Homelessness and Poverty on the Rise in Britain nobody is immune not even talented businessmen , Homeless people are just those unable to pay to occupy land, if you remove that concept then things are much easier instead of helping other countries with foreign aid why don't we help the homeless in this country. the trillion dollars spent on useless wars abroad , that are taxes go to pay for like, congressmen pay raise could ultimate homelessness in America. It's a bad two way street can't get a home without a job can't get a job without a home!!!!!!!!!!!!!!!!

"If you had any idea of how people really lived in Western Europe, Australia, New Zealand, Canada and many parts of Asia, you’d be rioting in the streets calling for a better life. In fact, the average Australian or Singaporean taxi driver has a much better standard of living than the typical American white-collar worker. I know this because I am an American, and I escaped from the prison you call home." (exerpt from “America: The Grim Truth” by Lance Freeman)

Gold Stocks At Historically Cheap Levels! Here’s Why

One market trend that seems to be attracting more and more attention is the large performance gap between gold bullion and gold stocks. The price of gold bullion has increased roughly 28 percent in 2011, while the S&P/TSX Gold Index is down [about] 1 percent. [Let me convey why that is the case.]

So says Frank Holmes ( in an article* which Lorimer Wilson, editor of (It’s all about Money!), has further edited ([ ]), abridged (…) and reformatted below for the sake of clarity and brevity to ensure a fast and easy read. Please note that this paragraph must be included in any article re-posting to avoid copyright infringement. Holmes goes on to explain:

BMO Capital Markets have offered one reason behind the performance gap, saying:

“The rate of change in the gold price has been high over the past decade, perhaps too high for investors to gain confidence in that price as sustainable for an equity investment decision” 9and while it was hard to imagine gold prices could sustain a $1,000 an ounce levels five years ago,) “now it’s hard to see the gold price falling to that level.”

Using the implied value of a defined group of global gold stocks, BMO calculated the internal rate of return to measure how gold stocks have underperformed compared to the yellow metal. Over a period of nearly 20 years, BMO’s group of global gold stocks has never been this inexpensive. Only twice—during the Tech bubble in 2000 and the financial crisis of 2008—has the internal rate of return compared so closely with the price of gold bullion.

BMO's Universe of Global Gold Stocks Historically Cheap

RBC Capital Markets also sees potential in unpopular, undervalued gold equities and urges readers to take “a fresh look” at gold companies. RBC says gold companies currently have margins that are at record highs and it believes margins could be approximately $1,200 an ounce for the next 12 to 24 months. This is substantially higher than the 10-year average of $320 an ounce. Comparatively, many current projects were economically sound at $700-$1,000 per ounce gold prices, creating $300-500 an ounce margins.

Right now, BMO calculates the total cost to produce an ounce of gold at roughly $900 an ounce, while the company can turn around and sell that ounce for upwards of $1,400. This puts margins near 40 percent, roughly twice what they were in 2007 and four times higher than in 2000.

Increased profit margins put more money in gold company coffers and this is reflected in the unprecedented amount of free cash flow (FCF), RBC says. The firm says the industry has reached an inflection point with a “substantial wave of free cash flow” coming over the next 1 to 2 years.

You can see this incredible increase in Tier 1 producers, such as Barrick, Goldcorp, Kinross and Newmont Mining. Looking at their trailing 12 months of free cash flow over 10 years, FCF never rose above $2 billion. However, following the trend in gold prices, FCF among these Tier 1 companies stair-stepped up to $4 billion.

Record High Free Cash Flows for Tier I Producers

Looking forward over the next few years, RBC estimates that if the price of gold remains at $1,850, FCF should stair-step even further, reaching nearly $12,000 by the end of December 2013. BMO estimates the global gold companies will accumulate net cash of $120 billion by 2015 if gold prices remain elevated.

Rising FCF is especially relevant to shareholders, as it allows the gold company to use that money to invest in projects that should enhance shareholder value. This could include pursuing new projects, making acquisitions, reducing debt or paying dividends. Many gold companies are opting for the latter and increasing dividends but these increases haven’t kept up with the pace of rising earnings. The average payout ratio was roughly 20 percent in 2008 but currently sits around 10 percent in 2011.

BMO says, “A dividend policy linked to the financial performance of the company offers investors additional leverage to the gold price. The provision of a meaningful and sustained dividend has the potential to broaden investor appeal and to instill fiscal responsibility for management.”

BMO says gold stocks are currently trading at historically cheap levels, which the company sees as an opportunity investors can take advantage of.

RBC attempts to quantify that opportunity by saying:

“if gold prices remain elevated and/or investors accept a higher long-term gold price, we could see 25-50 percent upside in equities.”

US Weekly Economic Calendar

DateTime (ET)StatisticForActualBriefing ForecastMarket ExpectsPriorRevised From
Aug 298:30 AMPersonal IncomeJul-0.4%0.4%0.1%-
Aug 298:30 AMPersonal SpendingJul-0.5%0.5%-0.2%-
Aug 298:30 AMPCE Prices - CoreJul-0.2%0.2%0.1%-
Aug 2910:00 AMPending Home SalesJun--1.0%-1.4%2.4%-
Aug 309:00 AMCase-Shiller 20-city IndexJun--5.0%-4.7%-4.51%-
Aug 3010:00 AMConsumer ConfidenceAug-
Aug 317:00 AMMBA Mortgage Index08/27-NANA-2.4%-
Aug 317:30 AMChallenger Job CutsAug-NANA59.4%-
Aug 318:15 AMADP Employment ChangeAug-100K100K114K-
Aug 319:45 AMChicago PMIAug-51.052.558.8-
Aug 3110:00 AMFactory OrdersJul-2.0%1.8%-0.8%-
Aug 3110:30 AMCrude Inventories08/27-NANA-2.213M-
Sep 18:30 AMInitial Claims08/27-405K408K417K-
Sep 18:30 AMContinuing Claims08/20-3700K3660K3641K-
Sep 18:30 AMProductivity-Rev.Q2--0.4%-0.5%-0.3%-
Sep 18:30 AMUnit Labor Costs - Rev.Q2-2.3%2.4%2.2%-
Sep 110:00 AMISM IndexAug-47.048.550.9-
Sep 110:00 AMConstruction SpendingJul--0.3%0.1%0.2%-
Sep 13:00 PMAuto SalesSep-NANA3.93M-
Sep 13:00 PMTruck SalesSep-NANA5.56M-
Sep 28:30 AMNonfarm PayrollsAug-75K75K117K-
Sep 28:30 AMNonfarm Private PayrollsAug-100K111K154K-
Sep 28:30 AMUnemployment RateAug-9.2%9.1%9.1%-
Sep 28:30 AMHourly EarningsAug-0.2%0.2%0.4%-
Sep 28:30 AMAverage WorkweekAug-34.334.334.3-