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Each morning Ian R. Campbell (CFPA, FCA, FCBV) personally filters an average of over 750
economic and resource articles [including on gold and silver] published in the previous 24 hours selecting those thought to be particularly important. He then comments on their subject matter via his new Economic Straight Talk Newsletter (see a sample below) to give you balanced views and contextual comments that save you time. The subscription newsletter’s objective is to help you keep up to date, gain new ideas, better trade and invest, better communicate with your investment advisor if you have one, and importantly make your own ‘penny drop’. Take a look below.
So says an overview by Ian R. Campbell regarding his recently introduced Economic Straight Talk Newsletter. The newsletter is available by subscription only but the latest edition is posted below in its entirety with Campbell’s permission and with the compliments of www.munKNEE.com (Your Key to Making Money) and www.FinancialArticleSummariesToday.com (A site for sore eyes and inquisitive minds). For the record, this post is in recognition of a quality product and neither site has, nor will receive, any financial compensation for having done so.
Commentaries
Financial Markets: Rogers and Roubini
If you participate in the financial markets I suggest you watch and think about two short recent CNN videos:
- the first being a three minute interview with Jim Rogers titled Jim Rogers: Soaring Dow a poor indicator and sub-titled ‘Famed investor Jim Rogers says recent gains in international markets is a poor indicator of global economic health’; and,
- the second being a two minute interview with Nouriel Roubini titled Roubini: ECB will do ‘too little,too late’ and sub-titled ‘American economist Nouriel Roubini discusses why international markets are making huge gains despite a weak global economy’.
What appears to me, and to many others I have spoken with, is that there is a seemingly ever increasing disconnect between the equity markets that appear to rise based on the DJIA, the S&P 500, and other market indexes, and the world economy as growth slows in many developed countries.
Both Messrs. Rogers and Roubini seem to share that view, and their interview comments are well worth listening to and thinking about.
Topical References: Jim Rogers: Soaring Dow a poor indicator, from CNN Money, March 15 – viewing time 3 minutes. Roubini: ECB will do ‘too little,too late’, from CNN Money, March 15 – viewing time 2 minutes.
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Gold Stocks: The hidden assumption
There is continuing discussion by many commentators with respect to the current market pricing of junior, developer, and producer gold stocks. But one example is an article titled Spring Rally Directly Ahead for Gold Stocks. The author of that artlcle does, quite appropriately, state his ‘gold price assumption’. What is unsaid in that (and most other similar) commentaries that I read, is any reference to the overall financial markets and their near or long-term prospective direction as seen through the eyes of the commentator.
One has only to consider what happened in the financial markets in the fall of 2008 through early March 2009 to conclude that ‘it won’t be different this time’ if the financial markets drop from here. In that 2008 – 2009 period gold stocks dropped as did everything else as margin calls were made and traders and investors sought liquidity so the author of Spring Rally Directly Ahead for Gold Stocks may prove to be right if the financial markets hold to their current levels or go up. I believe that has to be his unstated assumption. It is, of course, possible that his general financial markets assumption is that this is so obvious that it doesn’t need to be stated. If so, I think that to be a serious stretch given the various levels of financial, trading and investment sophistication of people likely to read any article once published. That said, it is virtually certain that if the financial markets pull back significantly in the near term all gold stocks will retreat from their current prices, not advance from them.
The message: Read what you read carefully, and ‘think between the lines’.
Topical Reference: Spring Rally Directly Ahead for Gold Stocks, from The Market Oracle, Jordan Roy Byrne, March 15, 2013 – reading time 2 minutes.
Greenland: Worth watching?
Greenland is about one-quarter the size of the Continental United States, is home to under 60,000 people, is a territory of Denmark, and is home to what could be vast resources that can increasingly be accessed as its glaciers melt.
Last week Greenland elected its first female prime minister based on a her platform of greater control and heavier taxation of foreign mining but that may not be the whole story the way I read Mining-critical party wins Greenland election. It seems to me that Greenland, while wanting more control of, and monetary inputs from, foreign miners may also react to those foreign miners with a degree of enthusiasm perhaps is missed.
Topical Reference: Mining-critical party wins Greenland election, from Mineweb, Alistair Scrutton, March 13, 2013 – reading time 3 minutes.
United States: Bubbles – and not gold?
Dr. Paul Roberts is an American Economist, Assistant Secretary of the Treasury in the Reagan Administration, and the author of the just published book The Failure of Laissez Faire Capitalism (available on Amazon for under $10). On Saturday I listened carefully to interview comments Dr. Roberts made on King World News. I suggest you listen to it, being patient through the introduction. As an overview, Dr. Roberts postulates that:
- the U.S. Federal Reserve has created a bond bubble through quantitative easing policies;
- ‘too big to fail’ banks have created an equities markets bubble (at least in part) as a result of the Federal Reserve’s policies;
- the U.S.$, currently the world’s reserve currency, is itself in a bubble because of the pace at which it is being printed;
- the bond and equities markets will collapse, and there will rising price inflation;
- U.S. price inflation may prove to be significant;
- there is potential for widespread U.S. unemployment;
- confidence in the U.S. dollar and use of it as the world reserve currency will be shaken;
- the gold price is controlled, and has been since at least September 2011 when it hit a price in excess of $1,900. This is because if gold, denominated in U.S. dollars, goes up, bonds (read fiat currency) will go down;
- he sees derivatives as a potential major issue; and,
- he believes unregulated financial markets to be dangerous.
In the end Dr. Roberts believes there will be a significant financial crisis, but says he is unable to predict the timing of when that will occur, or what specific event or events ultimately will drive that event.
I strongly suggest you take 20 minutes and listen to Dr. Roberts. I also recommend you read his latest book The Failure of Laissez Faire Capitalism, where he sets out his views in a reader-friendly way.
Topical Reference: Interview with Dr. Paul Craig Roberts, from King World News, March 16, 2013 – viewing time 15 minutes.
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Other “Economic Straight Talk” Commentaries:
Without economic growth, and real economic growth at that, there can be no meaningful long-term economic recovery in the developed countries. Growth or lack thereof will have to be reflected in the financial markets over time. Currently, I continue to see a disconnect between where the financial markets are pricing things, and where I think they ought to be pricing things. Words: 784
2. “Ponzi Finance”: What Must Happen To Bring It To An End?
The Boston Consulting Group has issued a paper that recommends 10 steps that developed countries must take to end what they refer to as ‘Ponzi finance’ and to return to a sustainable growth path but I believe their recommendations to be but theoretical and impractical constructs. While I believe we face – and will experience – interesting, speculative, fragile, and very challenging and very likely life-changing times going forward, I believe that the only thing that will force developed country politicians to work for common purposes is a further global financial crisis. This article provides an overview and assessment of said paper and the rationale for my position. Words: 600
3. Don’t Blithely Accept the Views of Stock & Commodity Commentators – Here’s Why
Many…commentaries by people referred to as ‘gurus’ or ‘experts’…often don’t state the assumptions that underlie the opinions they express leaving the reader…to take at face value what is said based on ‘assumed expertise’. I suggest you exercise caution and not blithely accept the views of ‘experts’ without first understanding their underlying assumptions and then satisfying yourself that those assumptions both make sense and are internally consistent with the views and opinions the ‘experts’ express, and the advice they give. Let me explain more fully below.
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Every day now there is Media and Internet commentary on the current prices at which gold mining stocks are trading. Some of this commentary is excellent, some seems to be written from a “vested interest’ perspective and some is very simplistic. [This article discusses unstated underlying assumptions that some commentators base their views on, endeavours to provide a greater understanding of the gold ‘mining’ sector and influences on pricing of sector stocks and what investors need to do before investing in said sector.] Words: 2030
5. Campbell’s Challenge: Stop Being a Lemming! Contradictory Points of View are Imperative – Here’s Why
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< noscript>It is all too easy to look for like-minded persons who continuously reinforce one’s own views – a clear form of ‘lemmingism’, to coin a new word. Instead, one should make an effort to recognize both reader and writer biases when reading and thinking about things found on the Internet in social media websites and blogs. [Let me explain my views on that further.] Words: 720
6. Campbell: Balanced Opinions Regarding Gold & Silver are Paramount – Here’s Why
If you hold, or are considering holding, physical gold or silver or both, [it is imperative that you] read as many ‘balanced opinions’ as you possibly can with respect to ownership of each. [Here’s why]. Words: 337