Investing news and commentary through a classical liberal framework
Friday, May 24, 2013
Tuesday, May 21, 2013
The Silver downfall continues....
This is from May 2008 to May 2013
As you can see, we're almost below 2008 levels in silver.
Which doesn't really make any sense since the Fed has printing it's mind off, investment demand is at an all time high, silver production costs are sharply over this period.
As in comparison to Gold, here's the gold/silver ratio:
Historically it looks like Gold is a little high, and the trend here looks like Gold is on the rise as opposed to Silver.
I'm in some silver mining stocks and its just frustrating to see the silver plunge continue. If it continues, these companies are going to post huge losses. They're already way off of their highs despite the rally in the stock market. To me it's a great opportunity to take out of some of your all time high stocks and put more weight in these guys. I don't think the fools in london can hold it down forever and with the sharpness of the downward move, I'm guessing the upward correction will be twice as fast.
Monday, May 20, 2013
Wednesday, May 15, 2013
Abenomics---Japans Doom
Keynesian superstar Prime Minister of Japan--Shinzo Abe has been kicking his plan into full gear lately. The Yen is down 29% since November, stocks are up 45% in 2013, and they're well on their way to the "2% inflation target" they want in the next 2 years.
Exports have rise 1.1% this past quarter, with autos increasing 10% to the US and pushing up the numbers despite political problems with China.
All in all, he's getting what he asked for. But lets talk long run. In 2 years the Yen will be down 50%. This means that all Japanese savings accounts will have been cut in half by the government. Now a lot of people say "but there's no inflation"...but you're just not looking in the right places.
We've broken the trickle down system. The big banks are supposed to get money and then it's supposed get loaned out and eventually (sooner rather later), wages rise and the whole economy has cash (or so Friedmans theory goes)...but now they just invest it.
Inflation will be seen in housing prices, the stock market, gov't debt, and commodities since Banks don't want to loan. Wages (like they have in the US) will remain stagnant, food prices and energy prices will go up as commodity imports shoot up. And then comes the tell all moment that shows if Abenomics works....do the Japanese spend more?
The whole idea of Keynesianism is that you have to have a constantly inflating credit/debt bubble in order to sustain the high levels of growth. When people save or stop borrowing so much, the economy grinds to a stand still. Banks and the government can help fill that credit gap, but the main goal is to get the people to fear saving due to inflation and to go out and buy more. This would be great, except of course if you're a Japanese citizen.
Now here in America....if your rent goes up in price and your grocery bill doubles...do you have more or less money to spend? Do you stop saving for retirement or do you just stop all leisure activities? I really don't see how this is hard to understand. When prices rise (the goal of an inflation target) and wages don't, you don't end up buying more stuff.
Japan's economy will come crashing down in the most amazing display of Keynesian sovereign debt problems. Of course the wicked Japanese man who refuses to spend is the real one to blame....dumbasses.
Exports have rise 1.1% this past quarter, with autos increasing 10% to the US and pushing up the numbers despite political problems with China.
All in all, he's getting what he asked for. But lets talk long run. In 2 years the Yen will be down 50%. This means that all Japanese savings accounts will have been cut in half by the government. Now a lot of people say "but there's no inflation"...but you're just not looking in the right places.
We've broken the trickle down system. The big banks are supposed to get money and then it's supposed get loaned out and eventually (sooner rather later), wages rise and the whole economy has cash (or so Friedmans theory goes)...but now they just invest it.
Inflation will be seen in housing prices, the stock market, gov't debt, and commodities since Banks don't want to loan. Wages (like they have in the US) will remain stagnant, food prices and energy prices will go up as commodity imports shoot up. And then comes the tell all moment that shows if Abenomics works....do the Japanese spend more?
The whole idea of Keynesianism is that you have to have a constantly inflating credit/debt bubble in order to sustain the high levels of growth. When people save or stop borrowing so much, the economy grinds to a stand still. Banks and the government can help fill that credit gap, but the main goal is to get the people to fear saving due to inflation and to go out and buy more. This would be great, except of course if you're a Japanese citizen.
Now here in America....if your rent goes up in price and your grocery bill doubles...do you have more or less money to spend? Do you stop saving for retirement or do you just stop all leisure activities? I really don't see how this is hard to understand. When prices rise (the goal of an inflation target) and wages don't, you don't end up buying more stuff.
Japan's economy will come crashing down in the most amazing display of Keynesian sovereign debt problems. Of course the wicked Japanese man who refuses to spend is the real one to blame....dumbasses.
Tuesday, May 14, 2013
VIDEO-Marc Faber on CNBC
Best wisdom for investors and economists:
"Remember that wealth comes from capital spending and savings. Not consumption."
Monday, May 13, 2013
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