Heads up to the community, please do not accept solicitation from a magazine called The Global Commodities Report(http://theglobalcommoditiesreport.com/), they might even be at the PDAC pushing their wares.
They are a group of hucksters pretending to run a legitimate business, they have caused considerable problems for myself and several others after they left behind a trail of unpaid bills and false statements about the nature of their business.
Aaron Weafer who runs the site is an example of exactly what is wrong with finance in today's climate. The fact that they still publish a magazine is equally disappointing.
always a great take on macro trends with a commodity focus, i have always seen a fairly strong correlation with Bill's thoughts as well, his weekly call is a key target for me leading into the weekend reviews of data.
I wholeheartedly agree with your take on the matter.
What I am wondering is, if the M&A activity in the mining sector that was supposed to take place between majors taking out jr's at elevated values will in fact be majors taking out mid-weights (like Kinross or Yamana) after their share prices have been utterly smashed below fair market value for even a portion of their cash on hand and a low-end estimate of metal in the ground.
Stranger things have happened.
I suspect in this market climate for miners of precious metals, mid-weight outfits like a Kinross are the mining equivalent of Czechoslovakia in 1939: strong, with a large standing army, good industrial base and on paper a formidable opponent- but in reality German tanks rolled through it's borders unopposed due to meddling and diplomatic fancy. Can the mid-weight miners with great mineral resume's beat the rough and tumble world of mining and fickle investors with fingers on the "sell" trigger?
Too many polarizing opinions from both sides of the drugs. vs. natural medicine camps neglect some basic facts:
1. natural medicine advocates easily implicate corruption and fraud towards phrama but neglect those same human tendencies in pushers of natural remedies that are also a multi-million dollar business.
2. if large corporations are willing to push meds that dont really work, then its no leap of faith to believe that large natural medicine producers will push natural meds that dont really work.
3. research is key: does such and such substance do what is claims it can. thats the simple quesiton, and very often prescription and natural medicines fail to clearly show benefit. Very often the benefit is minor, inconsistent or insufficient to actually cure a given condition.
4. natural medicine advocates ignore the scores of research that show a lack of efficacy for some of their products, exactly the same behavior that big-phrama has displayed towards many of their drugs. not surprising.
5. natural does not mean harmless, many natural substances are toxic if processed or taken incorrectly, just as many prescriptions are toxic.
6. doctors continually preach prevention and lifestyle/diet changes to patients but how often does it fall on deaf ears, thus they opt for the easy pill alternative that doesn't always work, but what would the alternative be: exercise and stop eating donoughts and if you refuse, we will refuse to give you meds that may at least help? nonsense.
7. these are all industries playing off people's emotions, and the natural medicine industry has its share of hucksters and snake oil salesmen as well. The ideal is a doctor who prescribes the right substance natural or phrama according to sound evidence-based practices that have been rigorously tested and considered, free of non-objective interests. a pipe dream? perhaps.
8. we have to accept that there is nothing on the market that can solve many common conditions be they pharmaceuticals or natural substances. Ive tried everything under the sun for chronic back pain including every natural substance out there and nothing works, period. mild pain relief can be had by some but so can Tylenol. no evidence supports any substance curing back pain, but there is no shortage of snake-oil salesmen pushing cures for this and that based on anecdotal stories of someone's friend or uncle who was cured by it.
You know who also offers a cure for everything? religion. why don't doctors tell patients to hit up church when they are in pain?
barf!!
9. part of the paradigm change that will take place in health care is the realization that good evidence is hard to find and that much of what is out there doesn't simply cure diseases without side effects or high costs.
lifestyle changes will help, as will collective stop smoking programs, increased air/water quality, coupled with reduction of toxic load via common household and industrial material like lead-based paint and asbestos. but convincing people to drop bad habits is less a medical issue and more a human behavioral issue.
Interesting story, Gartman declared gold in bear mode as of December prior to big plunge. He looked smart but has since declared he failed to re-enter the market at lower prices and believes a bull for gold is back on.
Re: of mice and men new
Submitted by westcoaster (696 comments) on Mon, 12/19/2011 - 13:03 #102364 (in reply to #102360)
Can you see re-unification as the result of the loss of iron grip by young millenial successor who may not be anything like his father? Educated in the west for starters.
____________________
This is the million dollar question.
My answer: Warmer relations eventually, economic ties and some growth in real wages/living standards but people fail to realize the massive state bureaucracy that underpin's North Korea's regime.
Even with a very-liberal minded leader, it would be a slow thaw to unlock the existing system because so many people are complicit in perpetrating totalitarian rule.
This is happening in Cuba, but it is smaller and less dictatorial than North Korea. In addition, China has a very strong say in NK's policies, including the purse strings to most of their foreign aid allotment.
Western Educations might actually provoke a stronger anti-western (but not anti-capitalist) stance. Think of the multitude of western educated liberal arts majors who take very strong stances against western imperialism, expansionism and capitalism. That kind of array of opinion is a positive and healthy thing, perhaps the new NK leader will posses a rare trait in NK right now: critical and objective thinking.
No one knows how it will turn out, but the next 60 days or so will no doubt give us some key signals.
Vaclav Havel, the Czech Republic's first president and Kim Jong Il, North Korea's Leader passed away this weekend.
Two very polarized and revered figures that led 2 very different nations that were forced to split from their other half.
Kim Jong Il was famous for his quasi-religious status as the worshiped leader of what many call the largest national cult in the world that is North Korea. With millions starving, and many billions in foreign aid keeping their population afloat, North Korea stood in stark contrast to its ethnically identical but economically progressive South Korean counter-part.
What drove one man to exalt himself so high that he could allow his own people to starve while insisting they worship him is beyond me. A quote from Kim Jong Ii is telling:
"I am the object of criticism around the world. But I think that since I am being discussed, then I am on the right track."
In stark contrast to such shallow and megalomaniacal thought was Havel.
Havel was an artist and dissident before entering politics. He was famous for his essays, most prominent of them was "Post-Totalitarianism" (Power of the Powerless), a term that describes the social and political order that enabled people to "live within a lie" of regimes such as Nazi and Communist dictatorships.
My favorite Havel quote is equally telling:
"Hope is a state of mind, not of the world. Hope, in this deep and powerful sense, is not the same as joy that things are going well, or willingness to invest in enterprises that are obviously heading for success, but rather an ability to work for something because it is good."
Both men leave behind stunning legacies, one of hope and leadership in the face of adversary, the other a long and slow road to restore basic human needs to some 25 million people.
It never ceases to amaze me what kind of life the world will allow us to lead.
The salient question to anyone unsure of their gold position must be:
why does it matter if one country is buying gold?
does china purchasing gold mean that gold should rise? why?
has anyone to date ever given a clear reason why China buying gold is bullish for the price of gold?
I am bullish on gold because of its fundamental opposition to monetary debasement. Not because this or that nation is purchasing it.
To make matters worse, how much gold is china turning around and selling?
Can we trust the data emerging from China?
And does any of this matter at all? I find it somewhat stereotypic when people side with bullish chinese views on gold as if a nation of 1.6 billion people are a monolith, that they "know" something the rest of the world doesnt. They dont.
China buying means nothing.
If anyone can explain in reasonable terms with historical proof that China buying gold is naturally bullish for gold I welcome it.
The Panopticon was the idea of an 18th century thinker Jeremy Bentham. It was a prison like structure intended to allow custodians to view all inmates at all times without them knowing when or if they were being observed.
The idea proved to be more substantial as a metaphor than as an actual structure, as it was famously invoked by the social theorist Michel Foucault as metaphor for modern "disciplinary" societies and their pervasive inclination to observe and normalize.
Foucault viewed structures such as schools, the army and other large institutions as hierarchical in nature and subject to Panoptic-like organization.
Modern surveillance technology has breathed new life into Foucault's ideas as the advent of CCTV, drones and internet tracking tools provide an observatory matrix over our daily activity- whether we want it or not.
I have often said that the emergence of a totalitarian state will not be signaled by the sounds of jack-booted storm troopers in our streets, or other familiar signs of dictatorial rule. Instead of a BANG it will be a series of whimpers; small and seemingly insignificant losses of general freedoms in the name of safety. Over time, like the frog who stays in a pot only if it gradually comes to a boil, we will find ourselves at the mercy of an authority we have created and elected to inestimable power.
Those who bemoan the loss of freedoms were at once fringe candidates or radicals. Now they have been made caricatures or have splintered off into the usual hate-mongers and conspiracy theorists. It has cleverly disguised those who actually speak to the truth.
How is a presidential candidate like Ron Paul so routinely ignored and marginalized in spite of saying what has been on the lips of so many thinkers for so long? I may not agree with everything he says, but I agree with far more than what any other candidate has ever said in an election. Why the liberal media, who must remain the custodian of free thinking, aren't more astute in their analysis of his ideas is beyond me. Instead it's celebrity, fashion and people taking video's of them slipping and falling.
There's nothing wrong with shows like "Jackass", as banal the topic might be, many young men do truly enjoy watching other young men slip, fall and hurt themselves. The problem is when this is the most serious form of public commentary dominating the discourse in the demographic who will mostly likely be tasked to fight our future wars.
Im starting to ramble on, so I will end with this quote from Kenan Malik:
"The power to censor is in the hands of the few. But the capacity for free speech is in all our mouths. The real value of free speech is not to those who possess power, but to those who want to challenge them.
The real value of censorship is to those who do not wish their authority to be challenged."
"gold mining stocks are trading at their cheapest level in at least 8 years"
and in 2007 it read:
"gold mining stocks are trading at their cheapest level in at least 7 years"
and in 2006 it read:
"gold mining stocks are trading at their cheapest level in at least 6 years"
and in 2005 it read:
"gold mining stocks are trading at their cheapest level in at least 5 years"
each new year brought fresh excitement that gold stocks would finally rebound off of higher gold prices and new metrics that magically would change course. Instead you see gold stocks rise on a relative basis to gold only when the broad market can rise. With the TSX at about the same place it was 6 years ago, gold stocks are up about %30 or so vs. a tripling of gold.
I see nothing new in gold stocks as a sector, only good stocks that will rise above the rest. Selection is the key, not broad-based assumptions about a sector moving higher off the back of gold that only fails to materialize year after year.
Kaimu made some great points in yesterday's discourse that generated some interesting debate. Id like to throw my hat in the ring.
Remember, Im canadian and its a pastime up here to slag Americans, and to a lesser extent Quebecers if you are not yourself French.
The only thing on the decline in America is the number of people who see the nation as a great place to live. That may or may not mean it is actually in decline. During the post war boom there were millions living a meagre existence that we could call poverty today yet we are too often told this was the golden age.
People have been claiming the decline of America for over 120 years. Eventually they may be right, but broken clocks are right twice a day as well. Rome fell but Italy remains a nation, albeit a much poorer one as of late. It is still one of the worlds largest economies and one of the biggest tourist and fashion destinations in the world. Italians may be many things but members of a collapsed failed Roman republic whose embers remain glowing it is not.
Afghanistan is a failed state. Let's stop throwing these words around before they lose all meaning. The S&P is not the pulse of a nation, even amidst %15 unemployment, %85 of working age people have some sort of job. That is not a failed state until those numbers reverse.
The biggest problem is one of perception: America is a massive nation. over 300 million people. Kaimu's assertion that Canada's entire population is equal to those getting Food Stamps in the US is correct.
But what does that mean? In Canada we could say to the people of Luxembourg that their entire population is equal to those Canadians living in horrific poverty. Aghast, the Luxembourgians will say "How could this be? Canada is a wonderful place that is wealthy, G7, respected, a place where human rights are respected and the pastoral scenes we get on TV or nature, mountains and hockey.. how could this happen? We would say that most people aren't desparately poor, and most folks do just fine here. But there are problem areas, in both cities, small towns and on Native reservations where conditions are at times deplorable.
Virtually every nation has this problem and the larger the nation the larger the actual number there will be of vulnerable and poor people. The difficulty with America is that its about the same size as Europe but in a single nation making it prone to generalizations that arent applied in the same way to Europe.
Comparing the US to France is unfair, the later is a wealthy nation in general. Comparing the US to say France, Russia, Yugoslavia, Germany, Italy, Spain and the UK and what do you have: A strikingly similar scenario of weathy areas surrounded by farms, poorer towns and some chronically poor, unstable and dangerous regions.
The biggest difference between the two is the absence of a potential genocide requiring NATO intervention in the US for the past 20 years or so. Think about that for a moment: Ever time we say "Europe" we really mean the richest 7 or 8 nations, not the less developed backwaters where wars, regional strife and horrific violence can still plague the populace. How ever bad the worst parts of the US may be, Alabama will never be Bosnia.
Lets get real here, The UK may have declined as an empire but the UK is still a viable and wealthy nation compared to most. Hundreds of thousands still immigrate each year there. They have a host of industry and sport and the British travel around the world. They may not be as rich as they once were, and the sun may now in fact set on the British Empire, but it is by no means a failed state, a collapsed nation or a steaming mass of impoverished people falling apart at the seams. Same with America. The streets may no longer be paved in gold, and an immigrant may not have as easy as a time making it big in the Big Apple but America is a more mature nation that it once was, and there is always a price to pay when you're late to the party.
Real estate is more expensive in New York City than it was 100 year ago, why? Prices so high that it makes life miserable for those living there that arent rich, they spend much of their incomes on rent. But they choose to live there, they choose to participate in the grand experiment called NYC. That is their decision, and their struggles shouldnt be an indication of impoverishment as much as an indication of maturity, and that after a while social network has grown to support people who very often would have zero help in other nations or in previous times.
A typical lower middle class New Yorker in 1890 lived in squalor compared to the same one today. Our standards have risen much faster than those of much of the developing world who still go by our 1890 expectations.
Food stamps and poverty are no doubt real and sad. But they are not singular to the US, and what would be considered borderline poverty in the US might be lower middle class in much of the rest of the world.
Consider this: crime is falling and at multi decade lows in the US (and Canada):
America is heavily scrutinized while many nations, especially European ones escape similar detailed examination, they receive simplistic stereotypic generalizations. Americans aren't anything. They are 300 million individuals in one of the most diverse nations on the planet. They are far from perfect and far from innocent in world affairs. But they are not unique, nor are they collapsing, they are suffering from much the same malaise that other G20 nations are.
Multiple degree holding youth complaining about not having jobs are actually complaining about not having good jobs they feel they should be getting. This is a very different situation. All the while doctors, accountants and scientists from pooerer states are clamouring to immigrate there. Has anyone told them there are apparently no jobs for them because according to the masses of liberal arts graduates things are bleak, there are no jobs and no means of providing for themselves? Barf!!
Its not ideal that college graduates should be forced to take lower paying jobs that dont even require an advanced degree to perform, but there is no real way to "fix" this via government action and Im surprised people blame the government in the first place. I think every university student should sign a contract before they start agreeing to the basic reality "This degree will not guarantee me a good paying, stable pensionable salary, it might help but that's up to me, not the letters after my name". For real, lets stop acting like students still actually believe going to college will be the easy ticket to the stars.
If bailing out Wall Street was a bad idea, would bailing out school loans and college grads be a good one? Europeans are very familiar with the situation in which college grads fail to fine commensurate work, making the need for higher educate less urgent in these places. Europe has faced a maliase for much longer and perhaps its masked when Americans complain about it. They have been there and done that, while America is just got dumped for the firm time....
To people who claim America has become a police state or a haven for the insane I ask a simple few questions:
1. If you were to be suddenly arrested and thrown in jail, where would you want it to be: America, Brasil, Mexico, Russia, China or India? And why? Arent the BRIC nations up and coming and such fantastic places? Or is there in a reality a lack of stability that we take for granted in places like the US compared to these states?
2. If you had 1 million dollars and there was a massive global crisis taking place, where would you put your money: America, Brasil, Russia, China, or India? I wont even include Europe because who would be that stupid? No matter what you answer Id ask why the US Dollar still jumps as people panic when something happens to spook markets? Good or bad, something sill seems to be drawing people to the same nation many claim is collapsing and perpetually in decline.
The population of the US is growing, crime is declining, and other nations are growing too, so it may no longer remain the economic juggernaut, and not as much gold paved on the roads, but it's not too bad a place (other than Canada and Luxembourg!) to get locked up, get a fair trail, open a bank account or buy a bacon double cheeseburger.
I always enjoy Steve Saville's sober analysis, his take on deflation vs.
money printing is succinct. I find these types of concepts confusing at times, the debate between inflation and deflation seems endless. At the core of most arguments at a macro level is the question of solvency. Is a given government capable of addressing it's financial obligations via its issued bonds.
If we choose to purchase bonds from distressed nation-states tied to a ghastly web of other nation-states with dramatically different economies, we are making a risk-adjusted decision over other assets. Is taking a big risk for an extra 3 or 4 percentage points return worthwhile? I'm not sure, as everyone's risk profile is different. The key issue is if risks for greater returns above boring US T-bills is better allocated to frisky yields in Europe or stocks and commodities? Its never an easy call.
A government with a captive central bank could always CHOOSE to directly default on its debt, but it will never be FORCED to do so because it will always have the option of selling more debt to the central bank in exchange for newly-created money. In other words, it will always have the option of going down the inflation path. The US federal government, for example, will never run short of dollars as long as the Fed exists.
The US government's debt situation is only marginally better than that of Italy's government. Furthermore, Italy's government has a much healthier balance sheet than Japan's government. And yet, the 10-year bonds issued by Italy's government currently yield more than 6%, while the 10-year bonds issued by the governments of the US and Japan yield 2.0% and 1.0%, respectively. The critical difference is that the governments of the US and Japan have their own central banks whereas the government of Italy shares a central bank with 16 other European governments. Of greatest relevance, Italy shares a central bank with inflation-shy Germany.
Italy's government could not attempt to inflate its way out of trouble without imposing a cost on German savers, and German savers, strangely enough, aren't keen on donating some of their purchasing power to a bailout of Italy.
So, the buyers of Italian government bonds have to account for the risk that the Italian government will soon have to directly renege on its obligations. The buyers of US and Japanese government bonds do not face such a risk. To put it another way, Italian government bond yields are relatively high due to the realistic possibility of genuine deflation in that country, while US and Japanese government bond yields are relatively low because these governments, via their central banks, have unlimited ability to inflate.
This is contrary to the conventional wisdom that government bond yields in the US and Japan are currently low due to the threat of deflation. If the power to use the 'printing press' were taken away from these governments then deflation really would become probable and bond yields would move much higher as the market discounted the risk of direct default."
Hussman's latest is as always a great and sober take on the market. His comments on gold vis a vis USD appreciation are spot on imho.
I find no material support for his comments that gold miners are now attractive because of their historic low valuations to gold. But I believe at some point the situation will change, just not while the USD remains strong, I suspect that between hedging programs, options and other exotic share agreements in the miners, they will continue to disappoint relative to gold .
As always, our hedging reflects the overall return/risk profile that we observe at any particular time. Presently, we do expect some potential for additional "flight to safety" movements toward the U.S. dollar, but not enough to hedge off all of our currency risk.
As for precious metals, gold prices tend to be inversely correlated with the dollar provided that gold prices are relatively stable in foreign currency terms. At present, we observe continued upward pressure on gold prices in foreign currency terms, so even the prospect of a stronger dollar doesn't necessarily imply weakness in the dollar price of gold. Moreover, gold equities are near record lows relative to the metal, and combined with other factors, we continue to gauge the Market Climate in precious metals shares as very positive. Strategic Total Return continues to carry a duration of about 3 years in Treasury securities, with a few percent of assets in utility shares, and about 20% of assets in precious metals shares, which account for most of the day-to-day fluctuations in the Fund at present.
FD: I own TRX, and have been buying the past week.
I have been disappointed in this outfit for some time but at the prices
its been going for the past month, I see value. Its essentially a bet on Jim Sinclair. He was my guiding light 6 years ago when I was starting out on the gold side of the market and really helped me understand the forces at play.
What I see happening to TRX (TNX on the TSX) is similar to the takedowns in his company Royal Gold. It took several hits on bad media and liquidations in spite of no material changes in the company's balance sheet.
I dont see it a risk-free trade but at these levels for me its attractive if gold continues in this environment. I would be curious to find out what the technical guys on this board think of this stock.
scam alert:
Heads up to the community, please do not accept solicitation from a magazine called The Global Commodities Report(http://theglobalcommoditiesreport.com/), they might even be at the PDAC pushing their wares.
They are a group of hucksters pretending to run a legitimate business, they have caused considerable problems for myself and several others after they left behind a trail of unpaid bills and false statements about the nature of their business.
Aaron Weafer who runs the site is an example of exactly what is wrong with finance in today's climate. The fact that they still publish a magazine is equally disappointing.
Jan 20, 2012 CC with Don Coxe webcast posted here:
http://www.bellwebcasting.ca/audience/lobby/index....
always a great take on macro trends with a commodity focus, i have always seen a fairly strong correlation with Bill's thoughts as well, his weekly call is a key target for me leading into the weekend reviews of data.
enjoy
New post in my corner of the blogsphere:
free speech, burka bans and Chinese gold buying...
Billy,
I wholeheartedly agree with your take on the matter.
What I am wondering is, if the M&A activity in the mining sector that was supposed to take place between majors taking out jr's at elevated values will in fact be majors taking out mid-weights (like Kinross or Yamana) after their share prices have been utterly smashed below fair market value for even a portion of their cash on hand and a low-end estimate of metal in the ground.
Stranger things have happened.
I suspect in this market climate for miners of precious metals, mid-weight outfits like a Kinross are the mining equivalent of Czechoslovakia in 1939: strong, with a large standing army, good industrial base and on paper a formidable opponent- but in reality German tanks rolled through it's borders unopposed due to meddling and diplomatic fancy. Can the mid-weight miners with great mineral resume's beat the rough and tumble world of mining and fickle investors with fingers on the "sell" trigger?
The not so hidden truth about Kinross Gold,
new post in my corner of the blog gang, feedback is as always welcome and encouraged.
Jeff
Ron and Bill make cogent points.
I look at the issue from a holistic perspective:
Too many polarizing opinions from both sides of the drugs. vs. natural medicine camps neglect some basic facts:
1. natural medicine advocates easily implicate corruption and fraud towards phrama but neglect those same human tendencies in pushers of natural remedies that are also a multi-million dollar business.
2. if large corporations are willing to push meds that dont really work, then its no leap of faith to believe that large natural medicine producers will push natural meds that dont really work.
3. research is key: does such and such substance do what is claims it can. thats the simple quesiton, and very often prescription and natural medicines fail to clearly show benefit. Very often the benefit is minor, inconsistent or insufficient to actually cure a given condition.
4. natural medicine advocates ignore the scores of research that show a lack of efficacy for some of their products, exactly the same behavior that big-phrama has displayed towards many of their drugs. not surprising.
5. natural does not mean harmless, many natural substances are toxic if processed or taken incorrectly, just as many prescriptions are toxic.
6. doctors continually preach prevention and lifestyle/diet changes to patients but how often does it fall on deaf ears, thus they opt for the easy pill alternative that doesn't always work, but what would the alternative be: exercise and stop eating donoughts and if you refuse, we will refuse to give you meds that may at least help? nonsense.
7. these are all industries playing off people's emotions, and the natural medicine industry has its share of hucksters and snake oil salesmen as well. The ideal is a doctor who prescribes the right substance natural or phrama according to sound evidence-based practices that have been rigorously tested and considered, free of non-objective interests. a pipe dream? perhaps.
8. we have to accept that there is nothing on the market that can solve many common conditions be they pharmaceuticals or natural substances. Ive tried everything under the sun for chronic back pain including every natural substance out there and nothing works, period. mild pain relief can be had by some but so can Tylenol. no evidence supports any substance curing back pain, but there is no shortage of snake-oil salesmen pushing cures for this and that based on anecdotal stories of someone's friend or uncle who was cured by it.
You know who also offers a cure for everything? religion. why don't doctors tell patients to hit up church when they are in pain?
barf!!
9. part of the paradigm change that will take place in health care is the realization that good evidence is hard to find and that much of what is out there doesn't simply cure diseases without side effects or high costs.
lifestyle changes will help, as will collective stop smoking programs, increased air/water quality, coupled with reduction of toxic load via common household and industrial material like lead-based paint and asbestos. but convincing people to drop bad habits is less a medical issue and more a human behavioral issue.
thx JB, this is a good link.
funny how some choose to make their money...
Interesting story, Gartman declared gold in bear mode as of December prior to big plunge. He looked smart but has since declared he failed to re-enter the market at lower prices and believes a bull for gold is back on.
http://business.financialpost.com/2012/01/05/gartm...
gold bulls will say this vindicates them, i say this only proves the worthlessness of guru's trying to predict anything with any sort of regularity.
gold moves no matter what any one in nice suits says.
just updated the Hidden Truth Section with a cautionary Christmas note to all the tricksters: you are on watch.
lets get back to capital markets!!
Re: of mice and men new
Submitted by westcoaster (696 comments) on Mon, 12/19/2011 - 13:03 #102364 (in reply to #102360)
Can you see re-unification as the result of the loss of iron grip by young millenial successor who may not be anything like his father? Educated in the west for starters.
____________________
This is the million dollar question.
My answer: Warmer relations eventually, economic ties and some growth in real wages/living standards but people fail to realize the massive state bureaucracy that underpin's North Korea's regime.
Even with a very-liberal minded leader, it would be a slow thaw to unlock the existing system because so many people are complicit in perpetrating totalitarian rule.
This is happening in Cuba, but it is smaller and less dictatorial than North Korea. In addition, China has a very strong say in NK's policies, including the purse strings to most of their foreign aid allotment.
Western Educations might actually provoke a stronger anti-western (but not anti-capitalist) stance. Think of the multitude of western educated liberal arts majors who take very strong stances against western imperialism, expansionism and capitalism. That kind of array of opinion is a positive and healthy thing, perhaps the new NK leader will posses a rare trait in NK right now: critical and objective thinking.
No one knows how it will turn out, but the next 60 days or so will no doubt give us some key signals.
Vaclav Havel, the Czech Republic's first president and Kim Jong Il, North Korea's Leader passed away this weekend.
Two very polarized and revered figures that led 2 very different nations that were forced to split from their other half.
Kim Jong Il was famous for his quasi-religious status as the worshiped leader of what many call the largest national cult in the world that is North Korea. With millions starving, and many billions in foreign aid keeping their population afloat, North Korea stood in stark contrast to its ethnically identical but economically progressive South Korean counter-part.
What drove one man to exalt himself so high that he could allow his own people to starve while insisting they worship him is beyond me. A quote from Kim Jong Ii is telling:
"I am the object of criticism around the world. But I think that since I am being discussed, then I am on the right track."
In stark contrast to such shallow and megalomaniacal thought was Havel.
Havel was an artist and dissident before entering politics. He was famous for his essays, most prominent of them was "Post-Totalitarianism" (Power of the Powerless), a term that describes the social and political order that enabled people to "live within a lie" of regimes such as Nazi and Communist dictatorships.
My favorite Havel quote is equally telling:
"Hope is a state of mind, not of the world. Hope, in this deep and powerful sense, is not the same as joy that things are going well, or willingness to invest in enterprises that are obviously heading for success, but rather an ability to work for something because it is good."
Both men leave behind stunning legacies, one of hope and leadership in the face of adversary, the other a long and slow road to restore basic human needs to some 25 million people.
It never ceases to amaze me what kind of life the world will allow us to lead.
agreed davefairtex,
but gdx:gld are down for several years now.
its a stock pickers market in the miners, but as a sector the GDX
will be a bad place to be compared to gold.
China is the largest purchaser of gold.
Who is the largest seller of gold?
The salient question to anyone unsure of their gold position must be:
why does it matter if one country is buying gold?
does china purchasing gold mean that gold should rise? why?
has anyone to date ever given a clear reason why China buying gold is bullish for the price of gold?
I am bullish on gold because of its fundamental opposition to monetary debasement. Not because this or that nation is purchasing it.
To make matters worse, how much gold is china turning around and selling?
Can we trust the data emerging from China?
And does any of this matter at all? I find it somewhat stereotypic when people side with bullish chinese views on gold as if a nation of 1.6 billion people are a monolith, that they "know" something the rest of the world doesnt. They dont.
China buying means nothing.
If anyone can explain in reasonable terms with historical proof that China buying gold is naturally bullish for gold I welcome it.
The Panopticon and the Road to Serfdom
The Panopticon was the idea of an 18th century thinker Jeremy Bentham. It was a prison like structure intended to allow custodians to view all inmates at all times without them knowing when or if they were being observed.
The idea proved to be more substantial as a metaphor than as an actual structure, as it was famously invoked by the social theorist Michel Foucault as metaphor for modern "disciplinary" societies and their pervasive inclination to observe and normalize.
Foucault viewed structures such as schools, the army and other large institutions as hierarchical in nature and subject to Panoptic-like organization.
Modern surveillance technology has breathed new life into Foucault's ideas as the advent of CCTV, drones and internet tracking tools provide an observatory matrix over our daily activity- whether we want it or not.
I have often said that the emergence of a totalitarian state will not be signaled by the sounds of jack-booted storm troopers in our streets, or other familiar signs of dictatorial rule. Instead of a BANG it will be a series of whimpers; small and seemingly insignificant losses of general freedoms in the name of safety. Over time, like the frog who stays in a pot only if it gradually comes to a boil, we will find ourselves at the mercy of an authority we have created and elected to inestimable power.
Those who bemoan the loss of freedoms were at once fringe candidates or radicals. Now they have been made caricatures or have splintered off into the usual hate-mongers and conspiracy theorists. It has cleverly disguised those who actually speak to the truth.
How is a presidential candidate like Ron Paul so routinely ignored and marginalized in spite of saying what has been on the lips of so many thinkers for so long? I may not agree with everything he says, but I agree with far more than what any other candidate has ever said in an election. Why the liberal media, who must remain the custodian of free thinking, aren't more astute in their analysis of his ideas is beyond me. Instead it's celebrity, fashion and people taking video's of them slipping and falling.
There's nothing wrong with shows like "Jackass", as banal the topic might be, many young men do truly enjoy watching other young men slip, fall and hurt themselves. The problem is when this is the most serious form of public commentary dominating the discourse in the demographic who will mostly likely be tasked to fight our future wars.
Im starting to ramble on, so I will end with this quote from Kenan Malik:
"The power to censor is in the hands of the few. But the capacity for free speech is in all our mouths. The real value of free speech is not to those who possess power, but to those who want to challenge them.
The real value of censorship is to those who do not wish their authority to be challenged."
Same article as last year but read:
"gold mining stocks are trading at their cheapest level in at least 8 years"
and in 2007 it read:
"gold mining stocks are trading at their cheapest level in at least 7 years"
and in 2006 it read:
"gold mining stocks are trading at their cheapest level in at least 6 years"
and in 2005 it read:
"gold mining stocks are trading at their cheapest level in at least 5 years"
each new year brought fresh excitement that gold stocks would finally rebound off of higher gold prices and new metrics that magically would change course. Instead you see gold stocks rise on a relative basis to gold only when the broad market can rise. With the TSX at about the same place it was 6 years ago, gold stocks are up about %30 or so vs. a tripling of gold.
I see nothing new in gold stocks as a sector, only good stocks that will rise above the rest. Selection is the key, not broad-based assumptions about a sector moving higher off the back of gold that only fails to materialize year after year.
Declining Expectations
Kaimu made some great points in yesterday's discourse that generated some interesting debate. Id like to throw my hat in the ring.
Remember, Im canadian and its a pastime up here to slag Americans, and to a lesser extent Quebecers if you are not yourself French.
The only thing on the decline in America is the number of people who see the nation as a great place to live. That may or may not mean it is actually in decline. During the post war boom there were millions living a meagre existence that we could call poverty today yet we are too often told this was the golden age.
People have been claiming the decline of America for over 120 years. Eventually they may be right, but broken clocks are right twice a day as well. Rome fell but Italy remains a nation, albeit a much poorer one as of late. It is still one of the worlds largest economies and one of the biggest tourist and fashion destinations in the world. Italians may be many things but members of a collapsed failed Roman republic whose embers remain glowing it is not.
Afghanistan is a failed state. Let's stop throwing these words around before they lose all meaning. The S&P is not the pulse of a nation, even amidst %15 unemployment, %85 of working age people have some sort of job. That is not a failed state until those numbers reverse.
The biggest problem is one of perception: America is a massive nation. over 300 million people. Kaimu's assertion that Canada's entire population is equal to those getting Food Stamps in the US is correct.
But what does that mean? In Canada we could say to the people of Luxembourg that their entire population is equal to those Canadians living in horrific poverty. Aghast, the Luxembourgians will say "How could this be? Canada is a wonderful place that is wealthy, G7, respected, a place where human rights are respected and the pastoral scenes we get on TV or nature, mountains and hockey.. how could this happen? We would say that most people aren't desparately poor, and most folks do just fine here. But there are problem areas, in both cities, small towns and on Native reservations where conditions are at times deplorable.
Virtually every nation has this problem and the larger the nation the larger the actual number there will be of vulnerable and poor people. The difficulty with America is that its about the same size as Europe but in a single nation making it prone to generalizations that arent applied in the same way to Europe.
Comparing the US to France is unfair, the later is a wealthy nation in general. Comparing the US to say France, Russia, Yugoslavia, Germany, Italy, Spain and the UK and what do you have: A strikingly similar scenario of weathy areas surrounded by farms, poorer towns and some chronically poor, unstable and dangerous regions.
The biggest difference between the two is the absence of a potential genocide requiring NATO intervention in the US for the past 20 years or so. Think about that for a moment: Ever time we say "Europe" we really mean the richest 7 or 8 nations, not the less developed backwaters where wars, regional strife and horrific violence can still plague the populace. How ever bad the worst parts of the US may be, Alabama will never be Bosnia.
Lets get real here, The UK may have declined as an empire but the UK is still a viable and wealthy nation compared to most. Hundreds of thousands still immigrate each year there. They have a host of industry and sport and the British travel around the world. They may not be as rich as they once were, and the sun may now in fact set on the British Empire, but it is by no means a failed state, a collapsed nation or a steaming mass of impoverished people falling apart at the seams. Same with America. The streets may no longer be paved in gold, and an immigrant may not have as easy as a time making it big in the Big Apple but America is a more mature nation that it once was, and there is always a price to pay when you're late to the party.
Real estate is more expensive in New York City than it was 100 year ago, why? Prices so high that it makes life miserable for those living there that arent rich, they spend much of their incomes on rent. But they choose to live there, they choose to participate in the grand experiment called NYC. That is their decision, and their struggles shouldnt be an indication of impoverishment as much as an indication of maturity, and that after a while social network has grown to support people who very often would have zero help in other nations or in previous times.
A typical lower middle class New Yorker in 1890 lived in squalor compared to the same one today. Our standards have risen much faster than those of much of the developing world who still go by our 1890 expectations.
Food stamps and poverty are no doubt real and sad. But they are not singular to the US, and what would be considered borderline poverty in the US might be lower middle class in much of the rest of the world.
Consider this: crime is falling and at multi decade lows in the US (and Canada):
http://www.guardian.co.uk/world/2011/aug/21/americ...
America is heavily scrutinized while many nations, especially European ones escape similar detailed examination, they receive simplistic stereotypic generalizations. Americans aren't anything. They are 300 million individuals in one of the most diverse nations on the planet. They are far from perfect and far from innocent in world affairs. But they are not unique, nor are they collapsing, they are suffering from much the same malaise that other G20 nations are.
Multiple degree holding youth complaining about not having jobs are actually complaining about not having good jobs they feel they should be getting. This is a very different situation. All the while doctors, accountants and scientists from pooerer states are clamouring to immigrate there. Has anyone told them there are apparently no jobs for them because according to the masses of liberal arts graduates things are bleak, there are no jobs and no means of providing for themselves? Barf!!
Its not ideal that college graduates should be forced to take lower paying jobs that dont even require an advanced degree to perform, but there is no real way to "fix" this via government action and Im surprised people blame the government in the first place. I think every university student should sign a contract before they start agreeing to the basic reality "This degree will not guarantee me a good paying, stable pensionable salary, it might help but that's up to me, not the letters after my name". For real, lets stop acting like students still actually believe going to college will be the easy ticket to the stars.
If bailing out Wall Street was a bad idea, would bailing out school loans and college grads be a good one? Europeans are very familiar with the situation in which college grads fail to fine commensurate work, making the need for higher educate less urgent in these places. Europe has faced a maliase for much longer and perhaps its masked when Americans complain about it. They have been there and done that, while America is just got dumped for the firm time....
To people who claim America has become a police state or a haven for the insane I ask a simple few questions:
1. If you were to be suddenly arrested and thrown in jail, where would you want it to be: America, Brasil, Mexico, Russia, China or India? And why? Arent the BRIC nations up and coming and such fantastic places? Or is there in a reality a lack of stability that we take for granted in places like the US compared to these states?
2. If you had 1 million dollars and there was a massive global crisis taking place, where would you put your money: America, Brasil, Russia, China, or India? I wont even include Europe because who would be that stupid? No matter what you answer Id ask why the US Dollar still jumps as people panic when something happens to spook markets? Good or bad, something sill seems to be drawing people to the same nation many claim is collapsing and perpetually in decline.
The population of the US is growing, crime is declining, and other nations are growing too, so it may no longer remain the economic juggernaut, and not as much gold paved on the roads, but it's not too bad a place (other than Canada and Luxembourg!) to get locked up, get a fair trail, open a bank account or buy a bacon double cheeseburger.
November edition of Don Coxe's Basic points. Always a good read:
http://www.slideshare.net/ram2099/don-coxe-basic-p...
I always enjoy Steve Saville's sober analysis, his take on deflation vs.
money printing is succinct. I find these types of concepts confusing at times, the debate between inflation and deflation seems endless. At the core of most arguments at a macro level is the question of solvency. Is a given government capable of addressing it's financial obligations via its issued bonds.
If we choose to purchase bonds from distressed nation-states tied to a ghastly web of other nation-states with dramatically different economies, we are making a risk-adjusted decision over other assets. Is taking a big risk for an extra 3 or 4 percentage points return worthwhile? I'm not sure, as everyone's risk profile is different. The key issue is if risks for greater returns above boring US T-bills is better allocated to frisky yields in Europe or stocks and commodities? Its never an easy call.
Enjoy the article,
http://www.321gold.com/editorials/saville/saville1...
Why the sovereign debt crisis began in Europe
Steve Saville
email: sas888_hk@yahoo.com
Posted Nov 15, 2011
[excerpts]
A government with a captive central bank could always CHOOSE to directly default on its debt, but it will never be FORCED to do so because it will always have the option of selling more debt to the central bank in exchange for newly-created money. In other words, it will always have the option of going down the inflation path. The US federal government, for example, will never run short of dollars as long as the Fed exists.
The US government's debt situation is only marginally better than that of Italy's government. Furthermore, Italy's government has a much healthier balance sheet than Japan's government. And yet, the 10-year bonds issued by Italy's government currently yield more than 6%, while the 10-year bonds issued by the governments of the US and Japan yield 2.0% and 1.0%, respectively. The critical difference is that the governments of the US and Japan have their own central banks whereas the government of Italy shares a central bank with 16 other European governments. Of greatest relevance, Italy shares a central bank with inflation-shy Germany.
Italy's government could not attempt to inflate its way out of trouble without imposing a cost on German savers, and German savers, strangely enough, aren't keen on donating some of their purchasing power to a bailout of Italy.
So, the buyers of Italian government bonds have to account for the risk that the Italian government will soon have to directly renege on its obligations. The buyers of US and Japanese government bonds do not face such a risk. To put it another way, Italian government bond yields are relatively high due to the realistic possibility of genuine deflation in that country, while US and Japanese government bond yields are relatively low because these governments, via their central banks, have unlimited ability to inflate.
This is contrary to the conventional wisdom that government bond yields in the US and Japan are currently low due to the threat of deflation. If the power to use the 'printing press' were taken away from these governments then deflation really would become probable and bond yields would move much higher as the market discounted the risk of direct default."
Hussman's latest is as always a great and sober take on the market. His comments on gold vis a vis USD appreciation are spot on imho.
I find no material support for his comments that gold miners are now attractive because of their historic low valuations to gold. But I believe at some point the situation will change, just not while the USD remains strong, I suspect that between hedging programs, options and other exotic share agreements in the miners, they will continue to disappoint relative to gold .
http://www.hussmanfunds.com/wmc/wmc111114.htm
As always, our hedging reflects the overall return/risk profile that we observe at any particular time. Presently, we do expect some potential for additional "flight to safety" movements toward the U.S. dollar, but not enough to hedge off all of our currency risk.
As for precious metals, gold prices tend to be inversely correlated with the dollar provided that gold prices are relatively stable in foreign currency terms. At present, we observe continued upward pressure on gold prices in foreign currency terms, so even the prospect of a stronger dollar doesn't necessarily imply weakness in the dollar price of gold. Moreover, gold equities are near record lows relative to the metal, and combined with other factors, we continue to gauge the Market Climate in precious metals shares as very positive. Strategic Total Return continues to carry a duration of about 3 years in Treasury securities, with a few percent of assets in utility shares, and about 20% of assets in precious metals shares, which account for most of the day-to-day fluctuations in the Fund at present.
FD: I own TRX, and have been buying the past week.
I have been disappointed in this outfit for some time but at the prices
its been going for the past month, I see value. Its essentially a bet on Jim Sinclair. He was my guiding light 6 years ago when I was starting out on the gold side of the market and really helped me understand the forces at play.
What I see happening to TRX (TNX on the TSX) is similar to the takedowns in his company Royal Gold. It took several hits on bad media and liquidations in spite of no material changes in the company's balance sheet.
I dont see it a risk-free trade but at these levels for me its attractive if gold continues in this environment. I would be curious to find out what the technical guys on this board think of this stock.