Despite a barrage of negative and cynical articles, there is at least one thing that I know to be good and true. No they do not include Nicholas Bolton and his Vulture Fund but you can hardly blame him for wanting to profit from the mistakes of others. Brisconnections is/was a scam, a fraud and a rip off and anyone who bought equity in that was badly ripped off. We all know it is going to zero, the only difference between us and N.Bolton is that he decided to do something about it. If you are able to short Brisconnections at any price >$0.01, do it.
The thing that I know to be true is....drumroll, Australian inflation will rise, rise rise. St George bank is offering 8.00% term deposits for anyone who wants to put their cash away for 60 Months. What does that tell you? It tells you that the stimulus spending is having its desired effect, assuming the desired affect was to get inflation on the rise. If you spend lots of money and lend lots of money for cheap, that seems to grease the wheels. The big difference is that unlike the last time inflation rose (driven by some organic growth in the economy and a market with nearly full employment), this growth will be in an environment with rising unemployement and declining real wages...scary.
Monday, January 18, 2010
Friday, January 15, 2010
Tuesday, January 12, 2010
This can't be true...can it?
From the Daily Reckoning.
01/11/10 Stockholm, Sweden – Congo’s new economic stimulus package of distributing one AK-47 to each citizen certainly sounds — in a humanitarian sense — morally inferior to the various good-natured but ill-conceived measures applied by the US government.
01/11/10 Stockholm, Sweden – Congo’s new economic stimulus package of distributing one AK-47 to each citizen certainly sounds — in a humanitarian sense — morally inferior to the various good-natured but ill-conceived measures applied by the US government.
Let us go then you and I
What are the brave and bold predictions for 2010? It's fairly straightforward really.
1: China will start slowing down. They have been growing like crazy (If you believe the official propaganda) for decades and it appears that they are building in some over capacity. The Global media is starting to pick up on this. Al Jazeera report on Ghost Cities
Does this remind anyone else of the Japanese government paving rivers in an effort to stimulate the economy.
2: Chinese slowdown will start to freak out the commodity bulls. This will cascade through all markets. The next big leg down in equity markets will be led by China.
3: Selling US debt will be the best trade you could make this year. There is basically no yield on T-Bonds. Inflation will rise. Yields will rise. The credit worthiness of the Fed is not in question, but their propensity for printing money will count against them.
4: USD to devalue further against the EUR, but to potentially to gain some ground against the commodity currencies (AUD, NOK, CAD, BRL)
5: Trading carbon credits or any sort of global alliance to fight climate change will become less important as governments in western countries concern themselves with fighting against rising unemployment and deteriorating economies
Finally some predictions for 2010:
“The problem is not solved. They're only making it worse. Countries that take the pain [let bankruptcies correct mistakes] move on. The U.S. is following the Japan model.” Jim Rogers, legendary investor
“The moment this fear of deflation turns into a fear of inflation … interest rates rise will in the long end … we are heading … into stagflation.” George Soros, chairman, Soros Fund Management LLC
1: China will start slowing down. They have been growing like crazy (If you believe the official propaganda) for decades and it appears that they are building in some over capacity. The Global media is starting to pick up on this. Al Jazeera report on Ghost Cities
Does this remind anyone else of the Japanese government paving rivers in an effort to stimulate the economy.
2: Chinese slowdown will start to freak out the commodity bulls. This will cascade through all markets. The next big leg down in equity markets will be led by China.
3: Selling US debt will be the best trade you could make this year. There is basically no yield on T-Bonds. Inflation will rise. Yields will rise. The credit worthiness of the Fed is not in question, but their propensity for printing money will count against them.
4: USD to devalue further against the EUR, but to potentially to gain some ground against the commodity currencies (AUD, NOK, CAD, BRL)
5: Trading carbon credits or any sort of global alliance to fight climate change will become less important as governments in western countries concern themselves with fighting against rising unemployment and deteriorating economies
Finally some predictions for 2010:
“The problem is not solved. They're only making it worse. Countries that take the pain [let bankruptcies correct mistakes] move on. The U.S. is following the Japan model.” Jim Rogers, legendary investor
“The moment this fear of deflation turns into a fear of inflation … interest rates rise will in the long end … we are heading … into stagflation.” George Soros, chairman, Soros Fund Management LLC
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