Alan's Finance Blog

Why 2012 looks to be even ROUGHER than 2011!

by Mike Larson

Welcome to 2012! I trust you had an enjoyable holiday season like I did … and that you’re just as ready as I am to make this your most profitable year ever.

So what am I expecting?

In a nutshell, an even MORE tumultuous year than 2011. I say that because many of the problems that hammered markets in 2011 haven’t gone away. They’ve gotten even worse — and the list of NEW problems is getting ever longer.

Why You Still Need to
Worry about Europe!

Last year, I said repeatedly that Europe’s purported debt problem “fixes” would fail. That was clearly on target. I also told you that I believed the global economy would slow broadly. We’ve gotten plenty of evidence that’s the case in Europe, South America, and Asia. Though the U.S. has admittedly fared a bit better than expected.

I also told you that many stocks would struggle …

That was certainly what played out, with the Dow plunging by 2,000 points in late summer. A late rally did save us from an even worse year-end result. But the S&P 500 still only managed to finish 2011 within four one-hundredths of a point from where it closed in 2010. If that’s what the Wall Street pundits consider a good year, I’d hate to see a bad one!

So what will the next 12 months hold?

Well, in Europe, I’m expecting things to get much worse. We’ve seen policymakers over there throw everything but the kitchen sink at this crisis …

They created two large bailout funds — the European Financial Stability Fund (EFSF) and the European Stability Mechanism (ESM). They engineered a second Greek bailout when the first one failed. They poured money into sinking bond markets in Italy and Spain.

And in their grand finale for the year, they launched a massive Longer Term Refinancing Operation (LTRO), propping up 523 European banks with 489 billion euros (about $650 billion) in 3-year loans.

But the underlying problem still remains: European banks and European countries simply owe too much money to too many creditors, and they have neither the capital nor the income to sustain their debts.

Banks are redepositing LTRO cash with the ECB.

That’s why most banks are taking all that LTRO money and parking it right back at the ECB rather than making new loans to European companies or other European banks! Indeed, an all-time record 453 billion euros were parked at the ECB’s deposit facility earlier this week — showing the money is not circulating through the economy as policymakers hoped!

Meanwhile, a key manufacturing index in Europe just registered 46.9 in December. That was the fifth month in a row below the 50 level, the dividing line between economic expansions and contractions. The message? That much of Europe is mired in recession.

At the same time, we just learned that the leaders of Germany and France are set to hold yet another “fix Europe” summit soon. That will come in advance of yet another gathering of all 27 European Union leaders later in January. If things were really “fixed” over there, would we really need meeting after meeting after meeting? Of course not!

It Ain’t Just Europe Folks!

If Europe were the only problem out there, you might be able to shrug it off like Wall Street traders tried to do late last year and in the first day of trading in 2012. But it’s not. I also believe that …

* The emerging markets that led us out of the wilderness after the 2008-2009 downturn will NOT be able to do so again. That’s because their own economies are slowing sharply, and because countries like China are facing serious real estate problems akin to what we faced previously here.

* The dollar could rally in the coming months as the euro continues to sink into the abyss. That would be negative for contra-dollar assets, and asset prices overall. After all, the last time the dollar surged, it forced investors worldwide to close out so-called “carry trades.” All the assets that those highly leveraged trades funded — stocks, high-risk bonds, commodities, and so on — tanked as a result.

Bickering politicians can’t agree on how to fix the nation’s deficits.

* The domestic economy is still hamstrung by an anemic housing market, a relatively lackluster job market, weak income growth, and more. Meanwhile, the risk of yet another downgrade to the U.S.’s sovereign debt rating is rising rapidly thanks to political gridlock in Washington, a continuing surge in the U.S. debt load (to just past $15 trillion), and the $1 trillion-plus annual budget deficits we continue to run.

Until next time,

Mike

The Catfish, Your Savings & Japan’s Gold Coin Giveaway

Don’t be greedy, or a giant catfish might force you to spew out your savings…

UNLIKE us – who are so smart today – ancient folk in ancient times used to believe the oddest things about how the world worked.

The Japanese, for instance, long thought that earthquakes were caused by a giant catfish, shuffling and shifting whenever the great god of Kashima forgot to keep his foot on a heavy stone which held the beast down, deep beneath the coast of Honshu. Honoring the Kashima shrine, some 80 miles north-east of what was then Edo (modern-day Tokyo) was therefore a good idea. Because tectonic upheaval, causing death and destruction, was a sign that the god was neglecting his duty.

November 1855 saw Kashima skip town, or so legend soon had it, leaving the god of fishing in charge of the stone and the catfish. What a mistake! The Great Ansei Earthquake killed 7,000 people at a stroke, and many more in the days and weeks after.

But it wasn’t all bad…

“Don’t be greedy!” one of the laborers urges his mates in this popular print, Mr.Moneybags launches forth his ship of treasure. “You’ll regret it if you save this money and an earthquake comes.

“Better go and spend it at the brothels and keep it circulating.”

The Kashima shrine itself was damaged in March 2011′s catastrophe. But the poor idiots of old-time Japan would still find a silver lining. Although some of the hundreds of namazu-e (catfish pictures) from 19th-century Japan show the beast captured and beaten – or even committing hare-kiri to say sorry – he also became a folk hero to laborers and shopkeepers, because he forced the wealthy to spend money on repairs and rebuilding.

Think of it as a divine take on Bastiat’s “broken windows” parable. Knocking things down is good for society (or so society says), since the glazier is paid and then spends that money in turn. Earthquakes are great for production, because they force cash out of locked chests into the pockets of carpenters, plasterers, bricklayers and masons – just the right type to keep it circulating again.

“For Edo residents,” one scholar explains, “the earthquake of 1855 was an act of yonaoshi, or ‘world rectification’.” In print after print, catfish shake or squeeze wealthy old hoarders who vomit or shit out gold coins, quickly scooped up by dancing laborers eager to spend it on booze, noodles and trips to what’s now known as Soap Land.

“Like typhoon-season floods and dry-season fires,” notes another 2011 look back, “earthquakes and tsunamis were understood as corrections of temporary imbalances in the vital force perpetually flowing through the world (known in Japanese as ki and in Chinese as qi). Periodic eruptions of natural violence released pent-up force and kept both nature and human society healthy by renewing them…Confucian philosophers as well as ordinary people believed that the economy followed the same principles. Just as ki flowed continuously in nature, money should be kept moving in the economy too, not allowed to stagnate and foster greed. For this reason, many people viewed capital accumulation distrustfully. Nature, they believed, censured it.”

Could anyone hold such a medieval view of economics today? Not outside a central bank or university, you might think. But greed is central to our depression’s mythology. From there, the attack on capital accumulation can’t be far off. And it’s ironic that to help keep money moving after the terrible earthquake and tsunami which hit Honshu this spring, Tokyo is now offering gold coins to investors buying its reconstruction financing bonds. On the minimum ¥10 million investment ($150,000) needed to qualify, however, Japan’s reconstruction bonds pay 0.05% per year without the coin, and a barely less miserly 0.3% with it if gold stays at today’s prices by the end of 2014. So the net effect is still to shake down Mr.Moneybags – otherwise known as Japan’s diligent household savers today.

Anyone calling this special half-ounce commemorative gold coin an “incentive” might sound like they need to raise money themselves to buy a calculator. But it’s not the first promotional effort tied to Japanese government bonds. Word reaches us here at BullionVault that special flyers – posted by door-drop in Tokyo – have recently been advertising government debt straight through the mailbox. As for coupons and premia, the Nomura brokerage is already offering its retail clients free shopping vouchers if they buy JGBs and lend to the government, too.

“The wealth of the realm belongs to the realm,” wrote Confucian scholar and advisor Yamaga Soko – who also developed the Samurai code of chivalry, bushido – in the mid-17th century. “It is not the wealth of a single person. Well should it circulate.”

Now compare and contrast French politician and essayist Claude Frédéric Bastiat writing 200 years later. “What would become of the glaziers, if nobody ever broke windows?” he asked in his famous parable of 1850, paraphrasing the “vulgar” mob who applaud the shards of glass on the street. Yet it is the shopkeeper needing to get his window fixed, “the shoemaker (or some other tradesman), whose labour suffers proportionably by the same cause…who is always kept in the shade…who shows us how absurd it is to think we see a profit in an act of destruction.” It is also the tradesman who stands for the capitalist, the diligent drudge minding his business. Shaken down like old Tokyo’s Moneybags, he can only watch in horror as his money – his treasure – is launched forth to common approval.

Here in the early 21st century, Occupy Wall Street think they know just who to choke with a catfish. “Hey, Paulson, you can’t hide, we can see your greedy side!” chanted the self-declared 99% at the hedge-fund manager in October, little caring that his fund has halved in value in 2011-to-date. The echo-chamber of TV news and financial blogs reckons the entire system is run by greedy bastards anyway. No doubt they’re right, but even before the crisis blew up, Fed chairman Ben Bernanke long ago blamed Asia’s savings glut for building imbalances in the global economy.

So how to shake cash from the hoarders? A Tobin tax on financial transactions looks a good start, even though retirement savers will end up paying, of course, as their pension-fund managers pass on the cost. Capping bank dividends only hurts savers again, because their income depends on such yields. Setting interest rates at zero aims to scare (or at least hurt) them for not spending money today. So too does printing more money, as Japan’s modern-day Moneybags know only too well.

“Your key financial asset, your medium of exchange – money – is also a savings vehicle (a store of value) and a safe asset (a unit of account),” explains Berkeley professor Brad DeLong. So “if an excess demand for financial assets is seen to cause a collapse in production and employment” – especially money hoarded in money, rather than being spent on new windows and brothels – “then it would seem immediate and obvious that generating an excess supply of financial assets would cause a revival.”

Immediate and obvious like a giant catfish making the rich puke gold coins, perhaps. Forcing a revival of spending by flooding the market with cash still hasn’t worked in Japan, but it has led to door-drops and vouchers to try and find new loans for the State. And further to DeLong’s proposal, our key financial asset and means of exchange is now something else, too: money is first and foremost a credit, held on deposit rather than hoarded in sock drawers at home. And being a credit, rather than tangible property, the vast bulk of money today is already out of the savers’ control.

Today’s Mr.Moneybags is by definition a lender. Indeed, his money’s already been lent out with gusto. The old miser has no choice; cash on deposit is owed to him, he does not own anything inside the bank’s vaults. On the bank’s balance-sheet, his savings are deemed “liabilities”, while on the other side of the ledger sit the banks’ “assets” – the loans it has made, using Moneybags’ cash. If the old miser (aka retiree or saver) withdraws all his cash, some debtor somewhere must repay their loan. And debt forgiveness is already being talked up – whether for governments in Europe or over-spent US consumers.

So blame greedy hoarders if you like. Just watch for the mob gathered round your broken windows, ready to choke you with a metaphorical catfish.

Adrian Ash

Formerly City correspondent for The Daily Reckoning in London and head of editorial at the UK’s leading financial advisory for private investors, Adrian Ash is head of research at BullionVault – winner of the Queen’s Award for Enterprise Innovation, 2009 and now backed by the World Gold Council market-development and research body – where you can buy gold today vaulted in Zurich on $3 spreads and 0.8% dealing fees.

(c) BullionVault 2011

Please Note: This article is to inform your thinking, not lead it. Only you can decide the best place for your money, and any decision you make will put your money at risk. Information or data included here may have already been overtaken by events – and must be verified elsewhere – should you choose to act on it.

Gift Wrapped Liquidity

Is the ECB about to give Europe’s governments and banks the biggest Christmas present of their lives…?

WITH CHRISTMAS a little over three weeks away, the European Central Bank may be about to hand indebted European governments – not to mention its banking sector – the biggest gift they ever received: an unlimited credit backstop.

It is now being widely reported that there ‘only ten days left to save the Euro’. Even Metro – the free newspaper found discarded by commuters on British trains and buses each morning – made it their front page splash today.

The FT’s Wolfgang Munchau was pushing this meme earlier in the week – but it was European commissioner for economic and monetary affairs Olli Rehn that really got it going with these comments yesterday:

“We are now entering the critical period of ten days to complete and conclude the crisis response of the European Union…There is no one single silver bullet that will get us out of this crisis.”

The ten day dead deadline refers to the European leaders’ summit at the end of next week. Is such a deadline justifiable? Will the Eurozone begin to disintegrate if no convincing solution comes out of that summit?

Quite possibly. Predictions of Eurozone demise within the fortnight could turn out to be self-fulfilling. An ultimatum has been laid down – if politicians appear to have ignored it, it could be fatal for what little confidence investors have left in Europe.

All of which could go some way towards explaining yesterday’s coordinated central bank action. The headline move was the lowering by 50 basis points (half a percentage point) of the cost of borrowing US Dollars. This makes sense given the speed at which international capital is fleeing Europe, as investors head for the perceived safety of the world’s sole reserve currency.

The coordinated central bank statements, though, seem to be preparing the ground for something else too. The following paragraph was common to all six of the central banks involved in the action (The Federal Reserve, the ECB, the Bank of England, the Bank of Japan, the Bank of Canada and the Swiss National Bank):

‘As a contingency measure, these central banks have also agreed to establish temporary bilateral liquidity swap arrangements so that liquidity can be provided in each jurisdiction in any of their currencies should market conditions so warrant. At present, there is no need to offer liquidity in non-domestic currencies other than the US Dollar, but the central banks judge it prudent to make the necessary arrangements so that liquidity support operations could be put into place quickly should the need arise. The swap lines are available until 1 February 2013.’

In other words, central banks are preparing to step up their provision of currencies other than the Dollar. This could be a sign that the ECB is about to take a more active role in the Eurozone crisis.

Indeed, each central bank’s statement had a version of the following, taken from the ECB, dealing with its own particular currency:

‘The Governing Council of the European Central Bank (ECB) decided in co-operation with other central banks the establishment of a temporary network of reciprocal swap lines.  This action will enable the Eurosystem to provide Euro to those central banks when required, as well as enabling the Eurosystem to provide liquidity operations, should they be needed, in Japanese Yen, Sterling, Swiss Francs and Canadian Dollars (in addition to the existing operations in US Dollars).’

Here’s a rough outline of where we stand in this crisis:

• Investors are wary of Eurozone government bonds. This reluctance to lend to governments has pushed borrowing costs to unsustainable levels in Italy and Spain. France may be next.

• It is hoped that the Eurozone’s rescue fund, the European Financial Stability Facility, will be able to solve this problem by ensuring there is sufficient demand at government bond auctions to bring yields back to sustainable levels – for example by offering partial guarantees on losses. However, the EFSF lacks the necessary funds to do this for larger countries, and is having trouble raising cash itself.

• French finance minister Francois Baroin has called repeatedly for the EFSF to be given a banking license so it can borrow from the ECB (Germany is dead against this). And here’s what Bank of France governor and ECB Governing Council member Christian Noyer said yesterday: “In a period of intense market disruption, it is essential to ensure that the monetary policy transmission mechanism actually works. This may involve temporary and exceptional interventions on those market segments where dysfunctions are most apparent.”

• European leaders now have a de facto ultimatum: sort this out by the end of next week, or else.

There is an ongoing push, led by Germany, for a ‘fiscal union’ – involving greater oversight of national budgets and the like. But fiscal integration is preventative measure – not a solution to a crisis that has already erupted.

Markets are looking for a solution this side of Christmas. The only agent in a position to act that quickly is the ECB.

ECB president Mario Draghi spoke to the European Parliament this morning. While he gave his support to what he called “a new fiscal compact”, he did make some comments that may hint at further ECB action over and above its ongoing bond purchase program (which clearly isn’t working, as Italian and Spanish bond yields attest).

“As you know, the ECB’s monetary policy is constantly guided by the goal of maintaining price stability in the Euro area over the medium term,” said Draghi.

“And when I say this, I mean price stability in either direction. This applies to both the setting of official interest rates and the implementation of non-standard measures.” (emphasis ours).

There was also this potential hint:

“I am confident the new surveillance framework will restore confidence over time. I am also quite sure that countries overall are on the right track. But a credible signal is needed to give ultimate assurance over the short term.” (emphasis again ours)

Might that “credible signal” be an offer to provide whatever liquidity is needed to assuage fears in key markets?

There are several mechanisms, for example, by which the ECB might seek to prop up government bond prices (and thus keep yields down). It could find a way, as touched on above, to get more Euros into the hands of the EFSF. It could buy the bonds directly at auction (unlikely, and currently forbidden by several European treaties, but at this stage of the crisis little can be ruled out…). Or perhaps some other method would be found.

The net aim is the same whatever the mechanism: to get Euros to governments who need to roll over their Euro-denominated debt. If there are insufficient investors willing to hand over their Euros, logic suggests that one solution is to turn to the ECB, from whence Euros originate. The ECB, after all, has access to an unlimited number of Euros.

There are also fears over the banking sector, which yesterday suffered a swathe of downgrades from Standard & Poor’s (which in turn may have precipitated the central banks’ announcement). Lower ratings could seriously impair some banks’ ability to borrow in the money markets – which is also a reason we see the world’s lenders of last resort priming their pumps.

In short, get ready for a world of uncapped credit availability, as the authorities step up their fight against deleveraging – like the cavalry in a Western, riding over the hill when all hope seems lost. Saddle up, Draghi!

Long term, a liquidity boost would tend towards a higher gold price, other things equal. However, there could be significant downside risk for gold, with or without a solution being announced at next week’s summit.  If markets are unconvinced, we could see the sort of mass liquidation that has been common in recent weeks – and that has hit gold and silver along with stock markets.

If, on the other hand, the markets buy whatever the Euro leaders are cooking, then we could see some weakening of safe haven demand for gold, at least in the immediate term.

Either way, though, Europe will still be in a mess. Growth is sluggish (today’s Eurozone purchasing manager’s index shows a manufacturing sector shrinking at an accelerating rate).

Outstanding debts, therefore, will either be dealt with via default, or they will have their real value diminished – which means reducing the value of money itself. Default or devalue remain the watchwords for creditors.

So while the ECB may be convinced that it has ‘ten days to save the Euro’, if it ramps up its liquidity provision it could end up doing the exact opposite.

Ben Traynor

Editor of Gold News, the analysis and investment research site from world-leading gold ownership service BullionVault, Ben Traynor was formerly editor of the Fleet Street Letter, the UK’s longest-running investment letter. A Cambridge economics graduate, he is a professional writer and editor with a specialist interest in monetary economics.

(c) BullionVault 2011

Please Note: This article is to inform your thinking, not lead it. Only you can decide the best place for your money, and any decision you make will put your money at risk. Information or data included here may have already been overtaken by events – and must be verified elsewhere – should you choose to act on it.

Where Would We Be Without Rules?

“Where would be if we didn’t have rules?”

“FRANCE!”

“And where would we be if we had too many rules?”

“GERMANY!”

– UK comedian Al Murray, the (very British) Pub Landlord

“The GREAT DEPRESSION was caused by the Gold Standard,” reckons NYU professor and professional media star, Nouriel Roubini.

Like pretty much everyone else, Roubini thinks the Gold Standard’s tiresome rules brought about that cataclysm. Those manacles meant having to swap paper for bullion every time investors and savers got jumpy about the size of your deficit, your debt or your money-printing.

Really, what an idea! So 80 years later, the Gold Standard is deader than punk. Yet here we are in another depression again.

What’s caused this catastrophe if gold was to blame before?

“First, it is Europe itself that is in crisis. Not finance. Not the economy. Europe. Its culture. Its genius. Its unconscious conscience. Its immemorial and its memory. All that makes up its bases and its origins. Its heart, that beats more and more faintly. Its soul. Its common and hidden grammar. The distinction, that it invented, between law and right. Or between man and citizen. The articulation, that is its own, of multiple forms of the Multiple and of the unique name of the One…”

There’s more of this – much, much more – from French “superman and prophet” (© Vanity Fair) Bernard Henri Lévy. A “vain, pontificating dandy” according to the professional pie-thrower who’s been attacking Lévy’s enormous hair since the mid-80s, the nouveau philosophe “[has] no equivalent in the United States,” according to his biog’ on the Huffington Post. Which is lucky for the US. Because in France, Lévy “is accorded the kind of adulation that most countries reserve for their rock stars,” says the UK’s Guardian.

Scarier still, he’s best-friends-forever with French president Nicholas Sarkozy. Most scary of all, Lévy would in fact make a clear and sensible point, if only he swapped the word “Europe” for “money” above. Deflation is a “deterioration of the monetary standard” just as much as inflation, as sometime Reagan advisor and WSJ editor Jude Wanniski noted in 1982. No less disastrous for everything built on the grammar, culture and genius of money than its apparent opposite, deflation is “characterized by falling prices”. And as money rises in value, “it affects more and more debtors in global Dollar contracts” – the Dollar still being money today, and the only cash that counts in a panic.

Research shared with BullionVault today shows that, in 8 out of 10 of the best weeks for equities since 2007, the Dollar fell on the currency market. It rose in each of the worst 10 weeks for stocks. You might have noticed this mechanism gutting your portfolio again this month, as well. But what of the Dollar’s sometime challenger for reserve currency status?

“The Euro represents the mutual confidence at the heart of our community,” declared Wim Duisenberg, then-president of the European Central Bank, when accepting the Charlemagne Prize on behalf of, well, on behalf of the Euro currency itself, in 2002.

“It is the first currency that has not only severed its link to gold, but also its link to the nation-state. It is not backed by the durability of the metal or by the authority of the state.”

Lacking those two legal attributes – attributes held by pretty much all money ever until the mid-20th century – the Euro did have rules, however. “In order for [monetary union] to function smoothly,” as the European Council still says today (just above a warning that “this page is under revision”), “member states must avoid excessive budgetary deficits. Under the provisions of the Stability and Growth Pact, they agree to respect two criteria:

“A deficit-to-GDP ratio of 3% and a debt-to-GDP ratio of 60%.”

Now, if everyone had stuck to those rules, perhaps the Euro would have avoided this crisis. (Not adding the debt of your entire banking sector to the deficit, as Ireland did in 2008, would have helped too.) But nobody kept to 3-and-60, because those rules were just rules, and they were there to be broken.

“If a Member State exceeds the deficit ceiling, the excessive deficit procedure (EDP) is triggered at EU level. This entails several steps – including the possibility of sanctions – to encourage the Member State concerned to take measures to rectify the situation.”

Tough talk! The “possibility” of sanctions would “encourage” miscreants to “take measures”, or so the Growth & Stability Pact pretended. Yet as we wrote a year ago, nearly 12 months to the day, the “ghost of the Mark” (as Nobel-winning economist and ‘father of the Euro’ himself Robert Mundell called it) saw the Euro’s strict rules – learnt and applied during 50 years of Teutonic discipline – over-run at every turn.

• The European Central Bank’s own target for money-supply growth first became merely a “reference value”, and then it was ignored outright. Set at 4.5% per year to start, it hit well over 12% at the height of the banking bubble in 2006-7;
• Luxembourg aside, all member states have long since breached the Eurozone’s government deficit and debt ceilings – Germany included;
• Barred by its founding treaty from financing government deficits directly, the ECB first bailed-out commercial banks by lending to them against government bonds put up as collateral, and then threw the whole thing over by agreeing to buy and hold government bonds outright – the weaker, the better, of course.

There has been resistance, of course. But it was awful late in coming. German ECB member Axel Weber stood down in February 2011, proclaiming discomfort at the majority of his central-bank colleagues voting to buy government bonds to shore up Athens, Dublin and Lisbon. Yet this was over nine months after the first Greek deficit crisis, and a mere eight years after Germany and France breached the 3-and-60 rules themselves. Where were his principles when breaking the rules didn’t matter?

Six months after Weber, the ECB’s chief economist Jürgen Stark also made a principled stand, announcing that he would leave his post, two years early, in December. Why? Because “If the central bank starts to finance governments, it decreases the incentive for governments to address the root causes of the crisis,” as Starck told an interviewer last week.

“It is not so much that bond purchases will lead to inflation at this particular moment. The ECB regularly draws down the liquidity again; it later soaks up the money spent. What is important and problematic is that the interest rate on government bonds is affected by the purchase of bonds and thus has a fiscal effect.”

Buying bonds, in short, means that the independent ECB policy wonks “influence the conditions under which governments can borrow,” says Stark. “This is absolutely not our job.” Given that everyone knows the rules are being broken, of course, “There is an open discussion about extending our mission,” says the ECB man. “This not only affects our independence, it threatens it.

“Principles apply…Rules are there to give direction, especially in times of crisis.”

How brave, insightful and utterly naïve! Tilting at windmills, Stark misses the one true lesson of the Great Depression’s Gold Standard just as badly as Nouriel Roubini does. Hasn’t anyone got a library card these days?

“The advantage of gold, in theory, is that it affords a safeguard against the dishonesty of Governments,” writes British philosopher Bertrand Russell in a dusty tome from 1935. “This would be all very well if there were any way of forcing Governments to adhere to gold in a crisis, but in fact they abandon gold whenever it suits them to do so.”

Replace the word “gold” with the words “Europe’s Growth & Stability Pact”, and you’d think it was the end of November 2011. And just like the Euro’s would-be saviors today – or at least, just like those world-improvers who don’t believe rules should get in the way – Russell thought the only solution to mankind’s economic problems was “an international Government”. That way, tiresome democracy would be made irrelevant as expert technicians did the best for all in all possible ways.

Now voters in Greece, Ireland, Portugal, Spain and most plainly Italy have shown they can’t handle democracy – not in a rules-based currency system. Time and again they have voted for people and policies which now make the rules aimed at defending the State’s independence impossible. Little wonder their sovereignty’s now vanishing, along with the rules.

Adrian Ash

Formerly City correspondent for The Daily Reckoning in London and head of editorial at the UK’s leading financial advisory for private investors, Adrian Ash is head of research at BullionVault – winner of the Queen’s Award for Enterprise Innovation, 2009 and now backed by the World Gold Council market-development and research body – where you can buy gold today vaulted in Zurich on $3 spreads and 0.8% dealing fees.

(c) BullionVault 2011

Please Note: This article is to inform your thinking, not lead it. Only you can decide the best place for your money, and any decision you make will put your money at risk. Information or data included here may have already been overtaken by events – and must be verified elsewhere – should you choose to act on it.

The Quest for Dividends

The Most Important Part of a
Portfolio’s Total Return

Dear Sovereign Investor,

I still remember the day in the spring of ‘97 when I showed up at a NationsBank branch in Irving, Texas, to deposit a dividend check … in New Zealand dollars.

The bank teller laughed.

I had only recently opened my first overseas brokerage account – in Auckland – and the appliance-maker that I owned had sent me my first dividend check denominated in a foreign currency. Given that NationsBank was a super-regional bank, I figured it could handle such a check.

“Not going to happen,” the teller told me. The bank was simply unequipped to accept checks drawn on a foreign account.

Ultimately, I opened a bank account in New Zealand and tied it to my brokerage account, and never again had to worry about giggling tellers here in the U.S.

And now I tell my friends that story, not because of the challenges of dealing with foreign-denominated dividend checks in America, but because of the dividends themselves. For income-oriented investors, there’s a lesson here.

In a Low-Interest-Rate Environment,
Dividends are All the More Important

The thing about dividends is that historically they’ve been a significant part of the stock market’s total return through the years. It’s sometimes difficult to recognize that when you look across U.S. stock markets over the past decade because U.S. companies typically have been more interested in retaining their earnings for other purposes – usually acquisitions – rather than sharing the wealth with shareholders.

Still, over the past century dividends and dividend-growth have accounted for as much as 90% of U.S. equity returns.

And today dividends are all the more important because of the low-interest-rate environment we’re stuck in for at least another 18 months … or so says Ben Bernanke. Right now bank CDs, savings accounts and Treasury paper are all yielding 1% or less.

The S&P 500 yields about 2.4% – more than 20 times what you’d earn holding Treasury notes for the next year.

But you can earn even better than that by going overseas and owning the dividend-paying shares of big, safe blue-chip companies that trade in markets like Sweden, Australia, Singapore and Canada.

That’s what I’ve been doing. For 16 years now, I’ve been operating from a host of overseas brokerage accounts, and I’ve learned firsthand that foreign companies are far-more likely to pay dividends to their shareholders. Equally important, they’re much-more likely to offer larger payouts.

Alongside the fatter dividends, you also gain foreign currency exposure. As the U.S. dollar weakens, the value of the dividends you receive is even greater in dollar terms, boosting your income even more.

Here’s an example of what I’m talking about…

Swiss insurance giant Zurich Financial, back in May 2001, paid its shareholders a dividend of 17.25 francs. A decade later, in April 2011, it paid shareholders a dividend of 17 francs. Not much changed really … until you look at that dividend in currency-adjusted terms.

In 2001, the dividend amounted to $9.72.

In 2011, a slightly smaller dividend amounted to $19.37 – a massive 105% leap, as you can see it in the chart below.

That was all thanks to the ever-weakening U.S. dollar. As the greenback lost value to the far-stronger franc, the dollar value of Zurich Financial’s dividends soared.

Earn 10% in a Safe Danish Stock

Just recently I began compiling a list of the highest-yielding stocks in 22 markets around the world. I’m doing this to get a feel for global yield these days. So far I’ve found nearly 220 stocks yielding more than 5%. Many yield more than 10%.

And remember, these are blue-chips, stocks that are constituents in the local version of a Dow Jones Industrial Average that exists in every country.

One that I’ll tell you about today is TDC A/S …

TDC is a Danish telecom company with operations in landline and wireless phone service, broadband Internet and pay-TV. It’s a market leader in all its segments.

And based on a likely range of expected dividend payments for 2012, the company is yielding between 9% and 10.8% at current prices.

In May it snapped up low-cost rival Onfone, strengthening its leading share of the domestic Danish market. In so doing, it also changed market dynamics to TDC’s advantage.

Prior to the acquisition, Onfone’s traffic had been running across another company’s network. With its purchase, however, TDC has undercut that competitor by moving Onfone’s traffic onto the TDC network, effectively pilfering the competitor’s revenue stream. The upshot is that the Onfone purchase has quieted competitors and will likely force consolidation among smaller telecom companies so they can better match up against TDC in the future.

For TDC shareholders, the Onfone deal will allow it to raise prices a bit, strengthening the earnings and bolstering the company’s hefty dividend payout.

At the moment TDC trades for about 45 Danish krone (US$8.47). The shares are worth closer to 55 krone (US$10.35). So you have a potential gain of 22% in the shares. On top of that, you get the chunky dividend for an all-in return for 2012 in the 30%-plus range.

And you get the ongoing dividend growth of a major telecom player in a safe currency in northern Europe … plus the likely strengthening of that currency against the U.S. dollar over time. Indeed, over the past decade, the krone has gained about 50% on the greenback.

The shares trade on Nasdaq OMX Nordic under the symbol “TDC.” Any brokerage firm that provides access to OMX Nordic will be able to trade the shares.

Until next time, keep a global view … and don’t overlook the dividends.

Jeff D. Opdyke
Editor, The Sovereign Individual

A Way to Profit from Big, Unpredictable Market Moves

In chess, it is said that you need to think three moves ahead.

I’ve played a lot of chess in my day, and I can tell you this is easier said than done. Just when I thought I’d figured out my opponent’s next move, he’d change things up on me.

I baited him once with my bishop. Instead, he took my pawn. It was an unexpected variable that redefined the outcome of the game.

I quickly learned that it’s much more important to develop strategies that can improve your position rather than trying to predict potential moves.

Investing is a lot like chess in that way.

If you think an asset will go up in price you buy it. If you think an asset will go down in price you sell it.

But what happens when you expect the price of an asset to move big… you just don’t know if it’s going to explode or go in the tank?

That’s the situation commodity investors find themselves in today. With all of the volatility in the markets these days, identifying how a commodity’s price will swing is difficult to pinpoint.

But there is an easy and safe strategy savvy investors can use to profit – even if you don’t know where the market is headed.

History Tends to Repeat Itself

Markets tend to react similarly to technical factors over time. Often, these signals give traders and investors clues as to what triggers an asset’s price to move up or down.

Market volume (the number of trades) and open interest (the number of open positions), for example, can influence markets. When markets become too overbought, they tend to correct and go down. When markets become too oversold, they tend to correct and go up.

That’s why watching technical indicators is so important. It keeps you one step ahead of the pack and puts you in a position to profit.

I didn’t realize the importance of technical indicators until I’d been trading for a number of years. That’s mainly because there’s much more information available today than there was three decades ago.

I relied almost exclusively on fundamental analysis. Understanding how markets operate fundamentally is one of the most effective indicators of an asset’s future price movement. A severe drought, for example, could affect this year’s grain harvest. Tighter grain supplies will likely lead to higher grain prices. Or a transportation snafu can affect an entire market because of late delivery.

But if there’s one thing I’ve learned throughout my 30-year career, it’s that…

Fundamentals Are Always Changing

When my opponent took out my pawn instead of my bishop, it completely altered the way I played the rest of the game.

The same is true in investing. A macro event like the debt crisis in Europe or the economic slowdown in China can drastically change underlying market fundamentals.

Even if the long-term fundamentals of a market are bullish, these macro events can create unexpected volatility in the short term that affects the direction of an asset’s price.

These events are inherently unpredictable.

So, as a trader, what can you do to profit from a big move you know is coming… whether it goes up or down?

Options.

With options you can make money if the market moves dramatically up or down. By using a long volatility position, you’re making a simple bet that the market will move with fury in either direction.

It involves simultaneously buying both a call and a put option. If the market moves significantly higher, the call option will make more money than the put option loses. The trade will be a winner.

If the market moves significantly lower, the put option will make more money than the call option loses. The trade will be a winner.

It’s a strategy that works. Here’s how…

Taking a Long Volatility Position in Crude Oil

The whole world watches crude oil prices. This commodity is a key benchmark that reflects the global economic climate. Crude is also produced in some of the most volatile countries in the world.

Fears of a double-dip recession in the U.S., debt problems in Europe and concerns that China is experiencing a slowdown in growth have caused crude oil prices to fall from a high of over $115 to a low of just under $75 a barrel this year.

A further deterioration in the global economic situation could cause prices to plummet further as demand for the commodity plummets. Oil traded as low as $32.50 in 2008 during the housing and banking crisis in the U.S.

On the other hand, heightened tensions between the major oil-producing countries could cause crude oil prices to skyrocket. Oil traded up to $147 in 2008.

Without a crystal ball, we can’t predict where oil prices will head over the coming months.

March crude oil futures traded on the NYMEX are currently priced at $87 a barrel. These futures have traded in a wide range between $100 and $75 over the past three months. Technical indicators are not telling us much at this point. Crude oil is neither overbought nor oversold, and it has very little momentum at current prices. Volatility, however, is high. This indicates that traders are expecting a big move, but they are not sure which way!

In this situation, a commodity options trader could purchase an at-the-money call and put option, called a long straddle. If you were to buy, say, a March 2012 NYMEX Crude Oil $87 straddle, it would cost around $17. Let’s take a look at an illustration of this long straddle on NYMEX crude oil futures:

How to Profit If Crude Oil Moves Up or Down

Long straddles make money if the market moves by more than the premium that is paid. That means this position becomes profitable if NYMEX crude oil is above $104 (87 + 17) or below $70 (87 – 17) by the expiration date.

Every dollar above $104 or below $70 would be a profit to you.

In options trading, using a long straddle when you don’t know where the market is headed, but you know it’s going somewhere, will make you a winner.

Happy Trade Hunting!

Andy Hecht

Failures Projected as Mortgage Insurers Struggle

by guest editor Gavin Magor

Mortgage insurers are in big trouble. Losses account for 154 percent of premiums earned. And they totaled a jaw-dropping $2.4 billion in 2010, thus threatening to destroy the mortgage insurance business, which is dominated by six groups.

The insurers are facing serious threats to their very existence as the financial crisis continues. So is it inevitable that they’ll fail? Certainly their struggle is a factor slowing the housing market’s recovery.

Weiss Ratings recently examined the 34 largest mortgage insurers’ performance through the first quarter of 2011. Subsidiaries of MGIC Investment Corporation (MTG), Radian Group (RDN), Genworth Financial (GNW), PMI Group (PMI), American International Group (AIG) and Old Republic International Corporation (ORI) wrote 80 percent of the $4.4 billion of premiums in 2010.

These same companies also recorded $1.7 billion or 71 percent of the combined $2.4 billion losses. United Guaranty Residential Insurance Co. (an AIG subsidiary) is the only large insurer that had a profit during 2010 and for the first quarter of 2011. And Mortgage Guaranty Insurance Corp (MGIC) recorded a profit in 2010.

With losses of $618 million in the first quarter of 2011 and no sign of significant improvement in the economy for the remainder of the year, it appears that the $2.4 billion in losses mortgage insurers suffered will be matched in 2011.

These losses were not on the back of increasing premiums. In fact, it was exactly the opposite!

With $3.5 billion out of the $4.4 billion of premiums written by the largest insurers, only Radian Guaranty Inc, saw a rise in premiums, increasing 3.5 percent. The remainder of the companies had drops of between 6.4 percent and 21.6 percent.

So why does this matter?

Well, the losses and lower premiums are additional evidence that the housing crisis is nowhere near an end. In fact, without mortgage insurer guarantees, lenders might not extend loans to low down-payment borrowers at prevailing interest rates. And with government guaranteed FHA loans scarcer than ever, there may be nowhere for these borrowers to turn.

The bottom line: If insurance is not available at the lower end of the housing ladder, sales of existing homes face continued weakening.

Of the thirty four mortgage insurers reviewed in the Weiss Ratings’ study, only 6 (18 percent) were rated as having strong financials with 19 (56 percent) rated as weak, including all of the largest.

And from an investing perspective, a look at Weiss Watchdog, shows PMI rated D-, MTG rated D, and GNW rated C-. Not too enticing unless you can find signs that insurers are actively engaged to turn the tide.

Losses Mounting …
Cash Dwindling

With insufficient capital to meet state regulator requirements, PMI Mortgage insurance Co. may be unable to write any new policies. The company recently set up a new insurer specifically to write new business, but his company hasn’t written many policies so far. And according to the Associated Press, PMI’s CFO, Donald Lofe, indicated that the group may consider bankruptcy, although it has no immediate plans to file.

Capital and surplus — the dollars that remain after insurers subtract liabilities from assets — has been dropping for the 34 companies we examined, from $7.7 billion as of December 2010 to $7.2 billion as of March 31, 2011. Losses account for the vast majority of the $494 million (7.4 percent) drop in capital. On an annualized basis this would result in a further $1.5 billion or 21 percent drop in capital to around $5.7 billion.

For some insurers, the key to writing new business is continued waivers from the state regulators over the maximum 25 percent risk-to-capital ratio required. Both PMI and Old Republic exceeded this level during the second quarter of 2011.

The rate of losses is unsustainable. The only question is whether some insurers will stop writing business before they run out of capital. And even then their survival is on a knife edge.

With parent company stock prices dropping an average of 64 percent this year as of Thursday’s close and a price-to-book value of 35 percent or less for each of these stocks — Old Republic being the exception at 62 percent — it appears the markets are wise to be concerned.

Investors beware … speculators may see opportunities.

Best wishes,

Gavin Magor

Source: Money and Markets

Reinventing the American Dream, Abroad!

by Keven Kerr

The late George Carlin, the outspoken and controversial comedian and modern day philosopher, said it best:

“The reason they call it the American Dream is because you have to be asleep to believe it.”

Well these days that’s certainly true.

America’s forefathers and the first colonists risked everything to escape tyranny in Britain, and they fled to the New World to form ‘a more perfect union.’

So what has happened in the last 235 years that has brought the United States to the sorry condition it’s in today?

New American Nightmare

First, it’s important to define what exactly the “American Dream” is anyway? Many people nowadays may not even know.

In fact, for some struggling Americans today the ‘new American Dream’ could be radically different from what it was in the past.  Today it could simply be not being foreclosed on, or a few more weeks of unemployment benefits, or more food stamps. That’s how bad it is.

The definition of the American Dream by writer and historian James Truslow Adams in 1931 stated that “life should be better and richer and fuller for everyone, with opportunity for each according to ability or achievement.” This meant regardless of social class or circumstances of birth.

The idea of the American Dream is the very essence of the U.S. Declaration of Independence, which proclaims: “… that all men are created equal, that they are endowed by their Creator with certain inalienable Rights, that among these are Life, Liberty and the pursuit of Happiness.”

This clearly doesn’t mean more food stamps or longer unemployment lines.

The American dream has turned into more of a nightmare for most people.

Exporting the American Dream

Source: endoftheamericandream.com

The lifeblood of America has always been small business and entrepreneurs, as they provide the much-needed jobs and tax revenues that help support the nation and make it prosperous.

They also provide the innovation that has created some of the world’s most important inventions, such as electric light, computers, space travel, medical advances, entertainment, and on and on.

The achievements and the contributions Americans have made over the short existence of the country are simply miraculous.  But as they say, “the light that burns twice as bright burns half as long,” and America has burned very brightly.

Source: economicnoise.com

Unfortunately, as time passed the country lost many of its core values. Today, we have numerous barriers to the American Dream and all that’s associated with it.

Homeownership, once the cornerstone of the American Dream, is clearly out of reach for the large majority of would-be homebuyers.  Job losses, tight credit, or non-existent credit, have made it next to impossible for potential buyers.

And for those unfortunates who are owners and want to sell, it’s worse.

Homeowners have seen their property values sink, and are often simply throwing the keys in the air and walking away because the properties are so upside down it simply makes no sense to continue to pay for it. Small and medium businesses are impacted too.

The idea of having a vision for a new product or service and developing it and growing it has always made America the land of opportunity. Unfortunately, today there are many major hurdles for anyone seeking to accomplish this goal.

Regulatory agencies, taxes, legal, and credit woes, etc. make the idea of starting and growing a business in the United States a complicated affair.

Many people are opting not to attempt to follow their dream, or, like myself, are picking up and taking their dream elsewhere.

Building Your Own Mayflower

Source: moveoneinc.com

The idea that things may not get better for a long time, or possibly ever, is depressing. After all, most of us have been brought up to believe that if we work hard, save, and contribute to our communities that we too could live the American Dream, it’s simply not the case anymore.

I believe the colonists who first set sail to the New World had the same concerns, and also the same fears about the unknown. Yet they took the risk, boarded boats, and set sail for better or worse.

Today you can too.

Opportunities abound abroad, and as the new global economy grows that will only increase. Asia, Eastern Europe, (where I live), Russia, and elsewhere are all expanding. While every place on earth has challenges, the concept of ‘anything is possible’ is fresh and alive in these places.

But what can investors do if they just can’t take the major step of packing up and shipping out? There are many steps investors can take to protect themselves, but here are four, key action steps everyone can take right now.

Here is my four-point action plan to help you protect yourself and even prosper from the crumbling American Dream:

#1. It’s said a lot, but you must reduce or diversify out of the U.S. dollar as much as possible and into tangible assets. Gold and silver are the most common, but there are many other ways too. The more diverse your holdings, the better.

#2. Pay down your debts as quickly as possible, so your credit cards and other borrowings don’t bury you. Cut the dead weight and turn from a massive consumer to a pragmatic saver and investor.

#3. Become irreplaceable where you work. Take classes outside of work and educate yourself, so you have valuable skills to offer the global marketplace in case you lose your job or want to leave the country. Make your skills portable and desirable. This is key in the new world workplace.

#4. Keep the dream alive, and don’t fill yourself with fear and loathing. Instead, look for what really makes you happy and imagine your glass as half full. You don’t have to bury your head in the sand and ignore reality. Just be sure to see what the reality is and what it’s not.

I love America, and every part of my being wishes and hopes that the dream at home will be resurrected and even improved on. For now, however, I have decided that to protect myself and my family and to give my children a better chance, the opportunities elsewhere are better.

As I said in my first action step, some great ways to take measures to protect and diversify your wealth, are with gold and silver investments.

Using specific gold and silver mining stocks, and ETFs such as GLD and SLV and others. You can also purchase gold bullion coins from reputable dealers such as, American Century, Dillon Gage, FideliTrade, Manfra, Tordella & Brookes, and Rare Coins of New Hampshire.

Remember though, ETF options are what I like best because they offer you leverage on ETFs and you get an added bonus: Limited risk.

They’re the tool I use to help my Master Trader members seek gains in any major asset class in the world — stocks, precious metals, commodities, bonds and even foreign currencies — no matter what event or trend is happening in the world!

The bottom line is America is an amazing country that has simply lost its way. Hopefully, the dream can return. But in the meantime, investors have no choice but to take steps to protect themselves and their families, even if that means taking drastic measures.

Yours for resource profits,

Kevin Kerr

Source: http://www.moneyandmarkets.com

It Ain’t Money If I Can’t Print It!

By: Peter Schiff, CEO of Euro Pacific Capital

I have been forecasting with near certainty that QE2 would not be the end of the Fed’s money-printing program. My suspicions were confirmed in both the Fed minutes on Tuesday and Fed Chairman Ben Bernanke’s semi-annual testimony to Congress yesterday. The former laid out the conditions upon which a new round of inflation would be launched, and the latter re-emphasized – in case anyone still doubted – that Mr. Bernanke has no regard for the principles of a sound currency.

Tuesday’s release of the Fed minutes contained the first indication that a third round of quantitative easing (QE3) is being considered. The notes described unanimous agreement that QE2 should be completed, along with the following comment: “depending on how economic conditions evolve, the Committee might have to consider providing additional monetary policy stimulus, especially if economic growth remained too slow to meaningfully reduce the unemployment rate in the medium run.” Since the unemployment situation is deteriorating, and by all accounts will continue to do so, the Fed is essentially pledging to keep the spigot turned on. The committee also decided to look only at current “overall inflation” in making their judgments, as opposed to “inflation trends.” Since new dollars take awhile to circulate around the economy and raise prices, this means the Fed is sure to be too late in tightening once inflation starts to run away, causing more dislocations in the American economy.

If anyone had lingering faith that Mr. Bernanke actually has a plan to end the US government’s addiction to cheap money, the Chairman’s semi-annual testimony to Congress should have washed it away. In addition to claiming that his money-printing has helped the US economy, Bernanke told Congress that gold is not money, people buying gold are not concerned about inflation, and the external value of the dollar has no influence on its domestic purchasing power. He even took a moment to stump for President Obama’s plan to raise the debt ceiling.

By claiming that gold is not money, the Chairman demonstrates his ignorance of much of monetary history. He told Congressman Ron Paul that he had no idea why central banks hold gold, before speculating that it might have something to do with tradition. Yes, traditionally gold is money, which is precisely why central banks hold it. And gold is money because central bankers like Mr. Bernanke cannot be trusted with a paper substitute.

Bernanke further disputes the facts by claiming that the only reason people are buying gold is to hedge against uncertainty, or “tail risks” as he calls them. My advice to the Chairman is to ask the people who are actually buying it. As someone who has been buying gold myself for a decade, I can assure him that my gold buying has nothing to do with “uncertainty.” In fact, it’s just the opposite. I am buying gold because of what is certain, not what is uncertain. I am certain that Mr. Bernanke’s incompetence will destroy the value of the dollar and unleash runaway inflation.

If it were true that people bought gold to protect themselves from market uncertainty, as the Chairman claims, then the metal should have spiked in the midst of the ’08 credit crunch. Instead, it fell along with most other assets. People instinctively fled into US dollars and Treasuries because of their long record of stability. What Bernanke doesn’t understand is that his irresponsible monetary policy is undermining that faith in US assets, built up over generations. That is what’s driving gold: easy money, negative interest rates, and quantitative easing.

Finally, by claiming that the dollar’s exchange rate has no effect on domestic prices, Mr. Bernanke demonstrates that he probably lacks the competence to be a bank teller, let alone Chairman of the Federal Reserve. A weaker dollar means Americans have to pay more for imported goods. But it also means domestic producers have to pay more for raw materials and imported components, which raises domestic production costs as well. It also means that more domestically produced goods are exported, reducing the supply and raising the price of what is left for Americans to consume. This is Econ 101.

Given the Chairman’s confusion on the basics of economics, perhaps it’s no surprise that he’s put quantitative easing right back on the table, where, despite prior rhetoric, it has been all along. The Fed has always known that QE3 is coming; it’s just looking for an excuse to launch it.

The problem is that fighting a recession with QE is like fighting a fire with gasoline. As the flames of recession reignite, more QE, while dousing it momentarily, will only produce an even larger economic inferno.

At one point, Bernanke said, “The right analogy for not raising the debt ceiling is going out and having a spending spree on your credit card and then refusing to pay the bill.” He’s got the analogy right, but his conclusions are completely wrong. Yes, Congress has gone on a spending spree and it’s time to pay up. But raising the debt ceiling is like taking out a Mastercard to pay the Visa… it just makes the problem worse. If you or I go out one night, get drunk, and run up a huge credit card bill, we know that the way to fix it is to buckle down and pay it back. We might postpone vacation plans or put off buying a new car, we might cancel our cable TV subscription or gym membership. The point is that we would have to reduce current consumption to make up for the overspending in the past.

Obama claims that raising the debt ceiling is about getting a hold of the federal debt. Have you ever heard of anyone getting out of debt by taking on more debt? Has anyone ever reduced their debt without reducing current consumption? How can the Fed Chairman endorse such a preposterous idea?

Bernanke actually went a step further and warned against reducing current federal spending too sharply, claiming that such a move might impede the “recovery.” He apparently believes that it is the role of the Congress to go on spending sprees, and his role to pay the mounting bills with freshly printed dollars. The fact that this formula has produced larger and larger economic crises does not seem to bother him. I guess ignorance is bliss.

Euro Pacific Capital, Inc.
10 Corbin Drive, Suite B
Darien, Ct. 06840
800-727-7922
www.europac.net

Elliott Wave International’s Understanding the Fed eBook is now available

Dear reader,

My friends at Elliott Wave International have just released a free 34-page eBook, Understanding the Fed. It’s the free report the Federal Reserve doesn’t want you to read!

This eye-opening free report, which represents more than 10 years of research by Robert Prechter, goes beyond the Fed’s history and government mandate; it digs into the Fed’s real motivations for being the United States’ “lender of last resort.” In this 34-page report, you’ll discover how the Fed’s actions, combined with public outrage, may ultimately lead to its demise, plus much more about its secret activities and how it affects your money.

Download your free copy of EWI’s Understanding the Fed eBook, here.

Warmest regards,
Alan
———-
About the Publisher, Elliott Wave International
Founded in 1979 by Robert R. Prechter Jr., Elliott Wave International (EWI) is the world’s largest market forecasting firm. Its staff of full-time analysts provides 24-hour-a-day market analysis to institutional and private investors around the world.