Personal Finance
Jim Rogers started on Wall Street back in the 60s and went on to co-found the Quantum Fund with George Soros.
Then he packed up and moved to Singapore, essentially shorting the west.
Now he’s heavily invested in agriculture, gold, and silver, and he is training his children to speak Mandarin because he thinks the balance of power is shifting to Asia.
Rogers never minces his words when he talks about investments, politics, and life in general.
We’ve put together 12 brilliant quotes from Rogers that every investor will find helpful.
$2 trillion Pimco money managers Bill Gross and Mohamed El-Erian, the co-CEOs, are warning investors to prepare for the coming lean years of slow, low growth and austerity. Specifically no recovery until 2022.
Warren Buffett and Jack Bogle first mentioned a “new normal” with slow, low growth back in 2002. It fell on deaf ears. Since the 2008 meltdown the same warnings are coming from gurus like Grantham, Gross, El-Erian and others. Ignore their warnings at your peril.
Here is a summary of 10 points picked up from meetings with El-Erian and Gross:
1. America fell in love with a Goldilocks economy
As early as 2005 Pimco warned that investors, voters and politicians had fallen in love with “a Goldilocks economy, the notion that markets were in a long period of growth and stability, neither too hot nor too cold.” El-Erian “never believed the bull” about wise “world’s central bankers and the seemingly endless growth of emerging markets.”
2. Economists predicting 3% to 4% growth are misleading America
Pimco was “quick to see, post-2008, the passing of an era,” says Foroohar. The unthinkable was happening: “The U.S. flirting with default, unlimited central-bank money dumps were suddenly happening.” Worse, today “while most experts (including those within the Obama administration) were plotting how to move from recession back to the trend growth rate of 3% or 4%,” Pimco concluded that a low 2% growth will probably be the New Normal “not for a couple of years but for decades.”
3. Warning: Too many investors, banks, politicians still in denial
Many investors are still disappointed with their nest eggs, in denial, ignoring Pimco’s message, trapped in wishful thinking, hoping for a return of the short-term bull-bear cycles common in recent decades, unwilling to face the harsh reality of the New Normal with slow growth everywhere: consumer spending, jobs, government revenues, corporate earnings, stocks, bonds, commodities, even America’s role in the world.
….read 4 to 10 HERE
After a 3.5 Million Ounce Selloff, Gold recovered somewhat overnight in Asia and again today in Europe despite the sharp selling seen on the COMEX yesterday.
As ever, it is very difficult to pinpoint exactly why gold and all precious metals fell in price. Interestingly, oil fell by even more – NYMEX crude was down by 1% and was down by more than 1.7% at one stage.
The CME Group, which operates the U.S. COMEX gold futures market, said Wednesday’s plunge in gold was not the consequence of a “fat finger” or a human error. The trading wasn’t even fast enough to trigger a pause on Globex, said CME.
One thing that we can say for certain was that there was massive, concentrated selling as the New York stock markets opened with some 35,000 lots sold which is equivalent to 3.5 million ounces and saw the price fall from $1,735/oz to $1,711/oz between 0825 and 0830 EST.
One sell order alone was believed to be 24 tonnes or 770,000 troy ounces. Incredibly there was 35% daily volume in just 60 seconds.
The selling, like all peculiar, counter intuitive, sharp sell offs in recent months, was COMEX driven with COMEX contracts slammed leading to further stop loss selling.
The selling may have been by speculative players on the COMEX. It may have been algo or computer trading driven or tech selling – although this is less likely.
It would be naive to completely discount the possibility that a bullion bank, short the gold and silver markets, may have been trying to protect their large concentrated short positions. The CFTC data shows some bullion banks continue to have massive concentrated short positions – which are still being investigated.
Informed commentators questioned the nature of the selling as a large institutional COMEX trading entity would normally gradually sell a position of this size in order to maximise profit.
Other speculation was that because of the wholesale liquidation of all precious metals and some other commodities, the selling may have come from a fund forced to sell a range of speculative positions after the SAC Wells notice.
Futures and options expiration may have also played a role, according to some analysts.
The robustness of gold overnight and recovery this morning is encouraging as normally one would expect to see follow through selling after such a sharp move lower.
The gold mining stocks indices were also higher yesterday which suggests that some precious metal market participants see the move as another mere blip in the precious metal bull markets.
The fundamentals driving the gold market remain very sound with broad based demand – store of wealth, investor, institutional and central bank – continuing to be seen globally.
There have not been very significant increases in open interest on the COMEX and there is no mania on trading floors and universal bullishness.
Indeed, this is far from the case today. There continues to be little or no positive coverage of the precious metals in the non specialist financial media.
While ETF holdings are at record highs – the increase in holdings has been tentative and gradual with no huge jump in demand which would be associated by a market top.
The shoeshine girls and boys have been selling large amounts of gold jewellery in the international phenomenon that is ‘cash for gold.’
Meanwhile figures for mints, refiners and bullion dealers in last quarter show retail investor interest is tepid at best.
*Post courtesy of Mark O’Byrne at GoldCore. His daily ‘Market Updates’ are quoted and reported on in the international financial press on a daily basis. Read more at Gold Core.
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In today’s economic environment, we often complain about volatility and uncertainty, but there is one thing I think we can be fairly certain of: taxes are going up. I constantly try to impress upon my kids, most of whom are now adults, that ideas and actions have consequences. In today’s letter we will look at some of the consequences of an increase in taxes. Please note that this is different from arguing whether taxes should rise or fall. For all intents and purposes that debate is over. As investors, our job is to deal with reality. We must play the hand we are dealt. Taxation is a complex issue, but let’s see if a few word pictures can help us understand what we face.
….read the Full Newsletter HERE which includes:
- Capital Formation & The Fiscal Cliff
- Your Perception Is Your Reality
- Growth = Population Growth + Productivity Increases
- Reduced Capital Spending
“When Interest Rates Tick Up, The U.S. Will Be In A Mess”.
One day when interest rates go up for whatever reason, maybe next year, or in 3 years time, interest payments on the government debt will balloon, and in say, 7 years time, the interest payments on the US government debt will be between 35 and 50 percent of tax revenues. Then you are in a huge mess.
I believe to get out of that mess they will monetize, they will have all kinds of stimulus packages that will lead to high inflation and the standards of living of the typical household, the average household, will go down. It will enrich a few people, the elite, essentially on Wall Street.
But then to distract the attention, the US will escalate its war efforts and then we will go into war in the world and then the whole thing will collapse.
Marc Faber’s 2013 Market Outlook
Click HERE for Faber’s 2013 Forecast if any problem with player below)
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