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An Opportunity To Own Farmland

Tuesday, November 29, 2011, 2:45 PM

Today we are trying something new. We are bringing an investment opportunity to CM.com readers, one that many of you have been quite vocal about finding for years. As an enrolled member, you are learning about this in advance of the general public. Please note that this opportunity is not for everyone, so read carefully. If the CM.com community appreciates being made privy to similar opportunities like this in the future, we'll continue to keep looking for them.

Gaining exposure to farmland as an investment asset class is highly desired by many of our readers, but very challenging to obtain in practice. Chris and I have been seeking a good solution to which we can refer interested individuals, and we believe we've finally found one. » Read more

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The Skills Most Likely To Be In Demand

Monday, November 28, 2011, 2:55 PM

The Skills Most Likely To Be In Demand

by Charles Hugh Smith, contributing editor
Monday, November 28, 2011

Executive Summary

  • The New Paradigm For Job Security
  • Unlocking Value By Removing Systemic 'Friction'
  • Examples of Promising Business Models
  • The Skills That Will Be In High Demand
  • Why Changing Your Behavior Will Be as Important as Re-Skilling

Part I: The Future Of Jobs

If you have not yet read Part I, available free to all readers, please click here to read it first.

Part II: The Skills Most Likely To Be In Demand

The New Paradigm for Job Security

The coming decade will turn many long-standing ideas about work and employment on their heads.

For example, in the current Status Quo, inflexibility and resistance to change are the hallmarks of secure employment. Institutional employment is “guaranteed” by contracts, and institutional resistance to change is viewed as a guarantee of secure employment.

In the near future, these brittle forms of security will prove chimerical, as the very rigidity and resistance to change that characterizes institutions renders them increasingly prone to disruption and collapse. The very traits which are currently viewed as protectors of security will be revealed as the causes of insecurity. Flexibility and adaptability—what are now viewed as hallmarks of insecurity—will slowly be recognized as the sources of real security. These include flex-time, free-lance labor, small, local enterprises and self-organizing networks.

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Off The Cuff: Give Thanks You Don't Live In Greece

Thursday, November 24, 2011, 3:01 PM

In this week's Off the Cuff with Mish & Chris podcast, Chris and Mish pontificate on:

  • The Options for Greece

    • Which path should Greece choose at this point? Whichever one it is, it's not going to feel good.
  • Weakness in the Banks
    • 2008-style red flags are increasing. What risk is the banking system facing at this point?
  • The promise of China and the Emerging Markets

    • More signs of Asian slowdown continue to appear.  

With the US Thanksgiving holiday upon us, Chris and Mish discuss the latest concerning data on the European credit crisis, and give particular thanks that they are not the one's faced with the choices confronting Greece. There are a limited number of options left on the table this time (austerity; high/hyperinflation; outright default); none of them have pleasant repercussions to live through. » Read more

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Understanding Where Gold and Silver Go from Here

Monday, November 21, 2011, 10:15 AM

Understanding Where Gold and Silver Go from Here

by Gregor Macdonald, contributing editor
Monday, November 21, 2011

Executive Summary

  • The outlook for precious metals will be heavily influenced by the steps the European Central Bank (ECB) takes in the near future.
  • Understanding the likely price trajectories of the precious metals whether or not central banks resume quantitative easing (QE, a.k.a. money printing)
  • The specific price targets for both gold and silver under the most likely scenarios
  • Underscoring the gravity of our current situation

Part I - The New Price Era of Oil and Gold

If you have not yet read Part I, available free to all readers, please click here to read it first.

Part II - Understanding Where Gold and Silver Go from Here

As readers now understand, I am not currently a supporter of higher gold prices as a function of inflation risk. Instead, my view is that we must first move through the various iterations of crisis, collapse, debt default, instability, and policy panic before gold attaches itself to inflation. Yes, I agree with the Paul Brodsky thesis (and the FOFOA thesis) that the foundations of future inflation have already been laid. But it’s also my view that for a severe inflation to unfold, there has to be a collapse in currency demand itself. It would also be necessary for global industrial production to have collapsed down to much lower levels to provide sufficient scarcity of goods. Mind you, I see both of these conditions -- rejection of currencies and industrial collapse -- as high risk. The two maps I offer here include them.

Mapping the Price Future of Gold and Silver

The first price path I want to share with you is called The Grand QE Cycle. It begins with the resolution to the most pressing question facing markets right here, right now, today: Will the ECB federalize all Eurozone debt?

Based on my own analysis and in consultation with contacts, I concluded for myself weeks ago that the crisis in the EU was becoming increasingly binary. Indeed, it is now fully binary. Either the ECB guides to a new charter or mandate, allowing it to buy unlimited quantities of EU debt, or it follows through on its hard-money threats -- and the sovereign debt, which forms the core asset of pension funds, banks, institutions across the EU, will become distressed debt, forcing a cataclysmic purge.

Because this urgent question has not been definitively answered as yet, gold is making its way in volatile fashion towards a price of...

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Off The Cuff: Europe's Destiny Hangs In the Balance

Friday, November 18, 2011, 9:11 PM

In this week's Off the Cuff with Mish & Chris podcast, Chris and Mish investigate:

  • Europe's precarious plight

    • It's all in the hands of the ECB at this point. Will it print? And if so, will it print enough to matter?
  • Corporations and The Stock Market
    • Are malinvestments on the rise?
  • The Congressional Supercommittee
    • Will it deliver a plan of any meaning by the approaching deadline? 

Chris has just returned from Spain and is amazed at how serene the scene remains there despite the severe deterioration of the European economy over the past several weeks. Mish concurs that a major 'wake up call' to the status quo is coming in the near term. » Read more

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The Future of Work

Wednesday, November 16, 2011, 1:04 PM

The Future of Work

by Charles Hugh Smith, contributing editor
Wednesday, November 16, 2011

Executive Summary

  • Many of today's current job positions will vanish as the debt that has made them possible retraces
  • Future demand for work will come from non-financial sectors
  • Cost management will re-assert it's importance on par with income growth
  • Non-market and hybrid work models will grow to employ many more people than they do now
  • Participation in social and capital networks (both physical and virtual) will become increasingly valuable

Part I

If you have not yet read Part I, available free to all readers, please click here to read it first.

Part II

The Vulnerability of Our Debt-Dependent Workforce

In Part I of The Future of Work, we examined the future trend of the US economy and found that ever-expanding debt has been the “engine” that has powered growth (as measured by GDP, gross domestic product) over the past 30 years. The productivity of debt has now fallen to zero, or perhaps even less than zero, which means that increasing debt no longer adds to GDP.

The structural weakness of this model is reflected by the diminishing number of jobs, and the declining ratio of payroll and employment to population and per capita measures of the economy.

Simply put, an economy that has become increasingly dependent on debt for its growth no longer creates jobs. Rather, the cost of servicing all that debt acts as unproductive friction.

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Fighting the Last Battle

Tuesday, November 15, 2011, 1:04 PM

I happen to be in Madrid, Spain at the moment, and I have a few observations. I wandered extensively this morning and noted that Madrid is just the same as any other big city – no surprise there – with crowded streets, a lack of parking, and cars everywhere. While I was envious of all the small cars, especially those with diesel engines (not available in the US, for some strange reason) that probably get close to 60 mpg without involving the massive technology of a hybrid, I only noted a single bicyclist braving the traffic flows.

Like any other major city, the role of energy in supporting its every breath and movement here is obvious. If there’s a Plan “B” here that involves a lot more public transit or reconfiguring the city to operate on less fuel, it isn’t obvious. Perhaps those plans exist somewhere, but if they do, they are not yet in plain sight.

Tonight and tomorrow I get to interact with a variety of notables, including James Turk and G. Edward Griffin (neither of whom I have yet met in person), and present to an audience of approximately 300 precious metals experts.

If ever there was a ripe time to deliver a message that includes both a resource-oriented and monetary perspective on why now is a good time to own gold, I cannot imagine one better than the current climate. 

» Read more

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How To Position For the Next Great Oil Squeeze

Monday, November 14, 2011, 12:13 PM

How To Position For the Next Great Oil Squeeze

by Gregor Macdonald, contributing editor
Monday, November 14, 2011

Executive Summary

  • Why smaller, independent oil companies should thrive as America struggles to increase domestic supply
  • A breakdown of often-touted 'new sources of domestic supply' (shale oil, kerogen, offshore fields, other Western Hemisphere finds) and why they won't come close to meeting US demand needs
  • How to hedge against the next great oil price spike
  • The wisdom of adopting a slower-based oil consumption lifestyle now

Part I - Selling the Oil Illusion, American Style

If you have not yet read Part I, available free to all readers, please click here to read it first.

Part II - How To Position For the Next Great Oil Squeeze

Using the latest data from EIA Washington, I made the following chart of actual imports of crude oil against production. This is a simple and direct accounting of what can become a rather complex topic filled with obfuscation and bad math. For example, by counting biofuels, ethanol, natural gas liquids, and the use of our own natural gas inputs to refine crude oil into gasoline, you can produce rather misleading accounts of net imports, such as this piece from EIA Washington titled How Dependent Are We on Foreign Oil?

Just so that we are very clear on the facts, natural gas liquids (NGLs) contain only 65% of the btu of oil, and, of course, they are not oil. As Jeff Rubin likes to say, "NGLs can go straight to your butane cigarette lighter, not your automobile." But by adding NGLs and ethanol to "oil supply," we can delude ourselves into thinking that the US produces not 5.596 mbpd of crude oil, but rather 10.037 mbpd of liquids.

Despite any legitimate conversation we could have about the usefulness of various energy resources, it would be silly to say (for example) that "we need not worry about expensive oil and its effect on the economy, because we can just switch to ethanol." The vastly smaller btu content of biofuel feedstock makes its inclusion in the accounting unhelpful, to say the least. As one Oil Drum commenter said to my previously cited post:

If the goal is to highlight the decline of crude oil production over time then including all other fuel sources is improper. You can't project a future production trend of one commodity by including other commodities in the analysis.

(Source)

Yes, precisely. To that point, let's now look at the chart.

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Off The Cuff: Markets In Revolt

Thursday, November 10, 2011, 10:31 AM

In this week's Off the Cuff with Mish & Chris podcast, Chris and Mish cover:

  • Yesterday's Market Carnage

    • Are we seeing an important shift in investor sentiment?
  • The Future of Europe
    • Can the Eurozone remain intact? If not, what does that mean?
  • How This Will End
    • Deflation or currency collapse? (or both?)
    • Where should investors looking to preserve purchasing power put their capital?

Chris and Mish have been amazed at how the equity markets have continued to levitate of late, given the absolutely horrible news over the past few weeks. Well, wonder no more. Blow-out spreads in European bond markets and today's equity market carnage are a wake-up call that -- finally -- investors are starting to appreciate the unsustainability of the system. » Read more

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Warning: Italian Debt Breaking Down

Wednesday, November 9, 2011, 7:44 AM

Okay folks, the alert I sent out is close to being validated this morning. I am watching Italian debt yields spiking in real time. Just a few weeks ago, the world was wringing its hands over Italian debt breaching the 6% mark. By late yesterday there was growing concern that Italian debt had climbed past 6.5%, and there was speculation that it might even -- gasp! -- be headed towards 7%.

Well, this morning Italian debt roared right through the 7% mark, and as of 5:37 a.m. (the time of this writing) we are seeing these shocking yields: Italy 10-year 7.37%; 5-year 7.64%; 2-year 8.03%.

What can I tell you? Simply that the game is entering a new phase, one that includes the risk of a massive, systemic banking failure as a possible feature.

» Read more