Monday, November 1, 2010
The Rising Cost of Survival
As a general rule, the most successful man in life is the man who has the best information
Socio-economic turmoil - lawlessness, poverty, lack of adequate medical facilities and attention, low to no employment, low wages, disease, no clean drinking water or water for irrigation and shortages of food or unaffordable food can all cause socio-economic pressure to build in many countries that were once stable environments for investment.
In 2007 and 2008 roughly 40 food riots occurred – two of the more publicized examples were when people took to the streets after rising corn prices made tortillas very expensive in Mexico and skyrocketing food prices in Haiti led to the overthrow of that country’s Prime Minister.
The U.N. Food and Agriculture Organization (FAO) reported a five per cent increase in the international price of food over July and August 2010.
"I think everyone is wondering if we are going to have a repeat of 2008 when there were food riots around the world." Johanna Nesseth Tuttle, director, Global Food Security Project
The world’s developing economies mostly rely on food imports to sustain themselves. On average their citizens spend a much larger percentage of their wages on food than do their counterparts in developed nations. Some published estimates are as high as 50 to 60 percent of income going towards food. (more)
Rick Rule: Courage of Conviction
The Energy Report: I attended your speech at the recent Casey Conference, wherein you professed a love of bear markets because everything is cheap. Can you explain further?
Rick Rule: People draw psychological comfort from increasing share prices; but, if trying to increase wealth, they also have to augment their assets. Assets are cheap during bear markets and expensive during bull markets. The virtues of bear markets are fairly obvious—assets are cheap and customers (the consumers of assets and providers of capital, if you will) are afraid. Companies are more willing to offer inducements for you to buy financings, such as long warrants. Another bear-market advantage is that asset markets become more and more constrained, which go to stronger players with established management teams.
TER: Do you think we're in a bear market? Investors have had some pretty nice returns this year.
RR: No. I think we're in a raging bull market in the resource sector. It's arguable that some sectors of the general securities market are in a bear market; but even that market has been very generous relative to what I think the economy would sustain. (more)
Rick Rule: People draw psychological comfort from increasing share prices; but, if trying to increase wealth, they also have to augment their assets. Assets are cheap during bear markets and expensive during bull markets. The virtues of bear markets are fairly obvious—assets are cheap and customers (the consumers of assets and providers of capital, if you will) are afraid. Companies are more willing to offer inducements for you to buy financings, such as long warrants. Another bear-market advantage is that asset markets become more and more constrained, which go to stronger players with established management teams.
TER: Do you think we're in a bear market? Investors have had some pretty nice returns this year.
RR: No. I think we're in a raging bull market in the resource sector. It's arguable that some sectors of the general securities market are in a bear market; but even that market has been very generous relative to what I think the economy would sustain. (more)
The Coming Silver Shortage
What determines Price? According to Adam Smith, it is the "invisible hand" of the marketplace. Price is where Supply meets Demand. So what happens when you manipulate Supply or Demand? You control the Price. It really is that simple. The fact of the matte is, that we will shortly witness the "Great Disappearing Silver" caper of 2010.
This will shortly occur when 100% of the silver that only exists on paper disappears from the marketplace. Yes, the Banksters have once more proven that fractional reserve lending has more than one useful application. It is always in their best interest to suppress metals prices as long as we continue to use their worthless paper as currency.
Gold Will Outlive Dollar Once Slaughter Comes: John Hathaway
The world’s monetary system is in the process of melting down. We have entered the endgame for the dollar as the dominant reserve currency, but most investors and policy makers are unaware of the implications.
The only questions are how long the denouement of the dollar reserve system will last, and how much more damage will be inflicted by new rounds of quantitative easing or more radical monetary measures to prop up the system.
Whether prolonged or sudden, the transition to a stable monetary system will become possible only when the shortcomings of the status quo become unbearable. Such a transition is, by definition, nonlinear. So central-bank soothsaying based on the extrapolation of historical data and the repetition of conventional wisdom offers no guidance on what lies ahead.
It’s amazing that there is no intelligent discourse among policy leaders on the subject of monetary rot and its implications for the future economic and political landscape. Until there is fundamental monetary reform on an international scale, most economic forecasts aren’t worth the paper on which they are written. (more)
US Economic Calendar for the Week
| Date | Time (ET) | Statistic | For | Actual | Briefing Forecast | Market Expects | Prior | Revised From |
| Nov 1 | 8:30 AM | Personal Income | Sep | - | -0.3% | 0.2% | 0.5% | - |
| Nov 1 | 8:30 AM | Personal Spending | Sep | - | 0.5% | 0.4% | 0.4% | - |
| Nov 1 | 8:30 AM | PCE Prices - Core | Sep | - | 0.1% | 0.0% | 0.1% | - |
| Nov 1 | 10:00 AM | ISM Index | Oct | - | 54.6 | 54.0 | 54.4 | - |
| Nov 1 | 10:00 AM | Construction Spending | Sep | - | -0.8% | -0.7% | 0.4% | - |
| Nov 3 | 7:00 AM | MBA Mortgage Applications | 10/29 | - | NA | NA | 3.2% | - |
| Nov 3 | 7:30 AM | Challenger Job Cuts (y/y) | Oct | - | NA | NA | -44.1% | - |
| Nov 3 | 8:15 AM | ADP Employment Change | Oct | - | 20K | 23K | -39K | - |
| Nov 3 | 10:00 AM | ISM Services | Oct | - | 53.5 | 53.4 | 53.2 | - |
| Nov 3 | 10:00 AM | Factory Orders | Sep | - | 2.0% | 1.7% | -0.5% | - |
| Nov 3 | 10:30 AM | Crude Inventories | 10/30 | - | NA | NA | 5.01M | - |
| Nov 3 | 2:00 PM | Auto Sales | Oct | - | NA | NA | 3.75M | - |
| Nov 3 | 2:00 PM | Truck Sales | Oct | - | NA | NA | 5.07M | - |
| Nov 3 | 2:15 PM | FOMC Rate Decision | Nov 3 | - | 0.25% | 0.25% | 0.25% | - |
| Nov 4 | 8:30 AM | Initial Claims | 10/30 | - | 450K | 445K | 434K | - |
| Nov 4 | 8:30 AM | Continuing Claims | 10/23 | - | 4400K | 4383K | 4356K | - |
| Nov 4 | 8:30 AM | Productivity-Prel | Q3 | - | 1.0% | 1.0% | -1.8% | - |
| Nov 4 | 8:30 AM | Unit Labor Costs | Q3 | - | 0.7% | 1.0% | 1.1% | - |
| Nov 5 | 8:30 AM | Nonfarm Payrolls | Oct | - | 25K | 55K | -95K | - |
| Nov 5 | 8:30 AM | Nonfarm Payrolls - Private | Oct | - | 50K | 60K | 64K | - |
| Nov 5 | 8:30 AM | Unemployment Rate | Oct | - | 9.7% | 9.6% | 9.6% | - |
| Nov 5 | 8:30 AM | Hourly Earnings | Oct | - | 0.1% | 0.1% | 0.0% | - |
| Nov 5 | 8:30 AM | Average Workweek | Oct | - | 34.2 | 34.2 | 34.2 | - |
| Nov 5 | 10:00 AM | Pending Home Sales | Sep | - | 2.0% | 2.5% | 4.3% | - |
| Nov 5 | 3:00 PM | Consumer Credit | Sep | - | -$3.0B | -$4.0B | -$3.3B | - |
Subscribe to:
Posts (Atom)