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Interview with Jim Rogers: Why Inflation is Raging Worldwide And He's Shorting US Treasury Bonds

Saturday, January 22, 2011, 1:14 PM

"I see more inflation and more currency turmoil as we go forward. There are huge debt imbalances in the world. U.S. is the largest debtor nation in the world and all the assets are in Asia. The largest creditors in the world are China, Korea, Japan, Taiwan, Hong Kong, Singapore – this is where the assets are and the debts are in the West. Those imbalances have to be resolved. They frequently lead to more currency turmoil. We’ll see more inflation, we’ll see more governments fall. We just saw Tunisia fall – more are coming because the world is going to continue to have these problems, and especially inflation that is going to cause more social unrest."

So said investing legend Jim Rogers when he spoke recently with about the inflationary pressures rising dramatically around the globe, despite some governments' best efforts to downplay them. Jim shares his "outside in" perspective on US monetary and fiscal policy, and how international players find themselves forced to react. He sees a lot of fundamental imbalances that need to be corrected for, as well as shortages of almost everything developing. In his words, "It's going to be a real mess before it's over."

We're making this important interview available first to our enrolled members.

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Missing the Big Picture - Economists Risk Everything

Thursday, January 20, 2011, 6:04 PM

In a different time we could happily go about our lives, ignoring economists as largely irrelevant to our daily lives. That is no longer the case.

In helping to shape central bank policies, economists are performing one of the largest social and monetary experiments in all of history, and its outcome, good or bad, will shape all of our lives enormously over the coming years. In fact, this experiment is already well underway and yielding results. Perhaps not the desired results, but results nonetheless.

The biggest problem with most, but not all, economists is that their theories are founded on incorrect assumptions.

This biggest of them all is assuming that the economy has some sort of an 'equilibrium point,' a magic place where just the right number of monetary actions and policies will create high jobs, price stability, and economic growth.

Unfortunately, this is just completely the wrong way to look at things.

Niall Ferguson recently pointed this out and made a critically important point:

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Interview with Bill Fleckenstein (Part 2): Outlook for 2011

Tuesday, January 18, 2011, 10:07 PM

The second part of Chris' interview with Bill Fleckenstein is reserved below for you, our enrolled members.

If you've not yet listened to Part 1, click here to do so.

Part 2 of this interview delves into Bill's vision on where the Fed's money printing is leading: notably, to a currency and/or bond market crisis. 

He and Chris discuss the timing of how quickly such an event could play out, what advance signals to look for, and where investors can position themselves in advance. » Read more


Interview with Marc Faber (Part 2): Prognosis for 2011

Sunday, January 16, 2011, 6:53 PM

The second part of Chris' interview with Marc Faber is reserved below for you, our enrolled members.

If you've not yet listened to Part 1, click here to do so.

Part 2 of the interview takes a critical look at longstanding and widely-held assumptions that are dangerous to maintain in today's reality. America is due for a rude awakening as it increasingly realizes the rest of the world is less dependent upon it (and less respectful of it) than it thinks. Or that there's not enough global energy supply to keep historic growth trajectories continuing ad infinitum.

Marc discusses his vision for the most likely way in which the current economic situation will play out, plus his specific outlook for 2011 - including the investments he believes are best-suited to the future he sees. » Read more


How This Will All End

Wednesday, January 12, 2011, 10:52 PM

How This Will All End

Wednesday, January 12, 2011

Executive Summary

  • The inevitable market correction will be triggered by a forcing event, and which one is most likely
  • The US has too much debt
  • State bailouts signaled by Fed's denials?
  • "Not enough oil to repay the debt"
  • Why the cost of debt service will drown us, even if interest rates remain low
  • Bond market will lead the way
  • The key signs to watch for that will signal the endgame is playing out
  • Recommended investment classes for preserving wealth 

Part I

If you have not yet read Part I of this report, please click here to read it first.

Part II - How This Will All End

In Part I of this report, I laid out my reasoning for why the game has managed to continue on as long as it has. Where a massive financial dislocation should have happened by now, in practice the impacts have been relatively minor compared to what many people had expected to happen. 

But we cannot escape the fact that entirely too many debts and liabilities exist to pay off in current dollars. Either those debts will have to be defaulted upon, or they will have to be inflated away.

Even more important than the question of which one it will be is the question of when. That's what we will explore here.


Can You Trust the Market?

Monday, January 10, 2011, 11:14 PM

This is the title of a recent editorial in the New York Times. It asks an extremely important question, one the gets right to the heart of our economic future.

For 'the system' to operate well, the game must go on, and a big part of that game requires individual investors, either directly or indirectly via their pensions, to continue to contribute their hard-earned savings into the stock market casino.

For a very long time, stocks have been viewed by many as the path to building wealth. Recently it has become clear to many that stocks are little more than a way for well-connected Wall Street and corporate insiders to enrich themselves at everybody else's expense. Stocks are a confidence game and all but a privileged few are the suckers, is how one prominent line of thinking goes.

The New York Times editorial addresses a very important topic, and even gets close to the core issues, but misses the mark by failing to go far enough and connect all the dots.

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Why I Don't Trust the Official Inflation Numbers (and Neither Should You)

Friday, January 7, 2011, 5:43 PM

In justifying the massive money printing operations of the Fed, Bernanke used inflation data to bolster his case that the Fed's actions are both prudent and worth continuing.

Here's what he said:

Recent data show consumer price inflation continuing to trend downward. For the 12 months ending in November, prices for personal consumption expenditures rose 1.0 percent, and inflation excluding the relatively volatile food and energy components--which tends to be a better gauge of underlying inflation trends--was only 0.8 percent, down from 1.7 percent a year earlier and from about 2-1/2 percent in 2007, the year before the recession began.


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The Liquidity Flood Continues

Monday, January 3, 2011, 7:58 PM

Happy new year, everyone!

I am slowly recovering from the intensive "weekend" that actually spanned Tue-Sat and never saw me in bed before 1:30 a.m. or after 7:00 a.m.

I am very much looking forward to a new year of seeing what the world shall bring.

As always, our commitment here is to let the data do the talking. Of course we develop theories, and even act on them, but keeping a flexible outlook is the most important attribute one can develop. Nobody knows what the future will bring, but knowing which trends are in play can offer a lot of illumination to the alert participant.

To refresh our minds, the key trends we have been following are these:

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Dispatch #2 from the field

Friday, December 31, 2010, 5:02 AM

Here are Chris’ and Adam’s takeaways from their second day at the conference.

Chris’s Observations

Today was a quite interesting day, but also, in many ways, simply reconfirmed yesterday. I would have to say that the most powerful money and policy people are all in agreement; they believe more stimulus money is both necessary and proper here. None seem to think that there’s any real risk to the US dollar. The usual litany of perfectly reasonable rationalizations applied. “China needs the US more than the US needs China.”  “The Euro is a weak substitute with plenty of risks all its own.”

These are reasonable propositions, but that’s the problem. By accepting these ideas, exploration of other risks seems to have been short-circuited, as no other discussion could follow them. That places them into the bucket of “rationalizations” as opposed to reasoned ideas. That is, they are beliefs, not facts. 

The good news, such as it is, is that plenty of work remains for us to do in this world. 

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Dispatch #1 from the field

Thursday, December 30, 2010, 2:05 AM

Chris and I are spending the week at a non-partisan conference where players from diverse industries explore ideas & trends they find most relevant to the world today. As we can steal time to do so, we'll send out field dispatches with our notable observations from the event. 

First, a little about the company here. It's a medley of politicians, financiers, corporate executives, entrepreneurs, activists, scientists, religious leaders, actors, media personalities, and educators - of all generations. Some of those here are household names; all are engaged in endeavors that impact society in some noteworthy shape or form. It's both a fascinating and intimidating crew to mix with.

Chris and I are here to get first-hand visibility into the issues these decision-makers are focused on, as well as to engage their attention on our mission. Can they introduce new perspective or support that will help us better serve our readers?

This morning we attended panel discussions on politics, energy supply, investing, the economy, and social media. Here are our takeaways so far.

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