Thursday, June 25, 2015

Ghost Cities, Ghost Malls and the Silk Road: Why China Needs Entrepreneurs

Even though the official numbers from China's National Bureau of Statistics suggest consumption is moving steadily along, accounting for 51.2 percent of GDP, and following on the heels of the 12 percent boost in retail sales in 2014, there are questions these numbers may not reflect the reality on the ground.

It has been pointed out that "private surveys and results from consumer product companies" paint a different picture; one that draws the conclusion that consumer spending has been level or contracting.

Other data contributing to this as being the likely scenario are the PPI in April dropped for the 37th month in a row, and manufacturing in China, with a 49.2 reading in May (-4.6%, missing analysts expectations of -4.4%), confirms it is contracting faster than believed.

The point is the decisions and proposed spending actions and focus of Chinese economic leadership reinforces the strong probability China is struggling to not only grow its economy, but to keep it from contracting.

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Thursday, June 18, 2015

Manufacturing Sales in Canada Continue to Plunge

No matter how it is spun, Canada is edging close to a recession, as the latest manufacturing numbers from Statistics Canada confirm.

Sales in the latest quarter plummeted 2.1 percent to $49.8 billion during April, resulting in overall manufacturing sales down 7.3 percent from the same period in 2014.


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Monday, June 15, 2015

The Catalysts Driving Asian Forex Down and Boosting Outflows

There are a number of reason Asian currencies have been falling recently, with the most obvious being expectations the Federal Reserve will raise interest rates in the latter part of 2015.

Other factors attributed to weaker Asian currencies include pressure from local businesses, demand for electronics gadgets fell, MERS, funds pulling money from emerging markets, Japanese yen, and a potential Greek default. I'll break down how these are having an effect country-by-country in a moment.

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Thursday, June 4, 2015

Free Market Against Central Banking - And the winner is?

One of the consequences or side effects of central banking monetary inflation (creating money out of thin air) is it masks over the benefit of the free market in lowering costs. That means the average person and investor doesn't understand how the battle between the free market and central banking is going, who is winning, and what is coming our way over the long term as a result.

As the size of the money supply continues to rise - which is what allows the faulty fractional reserve banking system to operate even while it's failing - it results in inflation. That is the reason the free market can be thriving, but the economy can have the appearance of struggling, because of the hidden costs associated with the monetary policies of central banks.

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Friday, May 29, 2015

Why Gold is Going to Soar

Gold is now trading at close to where it had been five years ago, as investors overall remain on the sidelines because of uncertainty surrounding the usual catalysts associated with a cyclical uptrend in the yellow metal; elements such as hints of a recession, market correction, proof of inflation, and a weak U.S. dollar, among other things.

Since the Federal Reserve has been the primary impetus behind the bull stock market, and it has resulted in interfering with the price mechanism of the market, it's difficult to ascertain its condition because of artificially low interest rates, which has encouraged some companies to take risks they may not have taken in a market that had more of an honest and measurable performance metric.

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Monday, May 25, 2015

Why Yuan Isn't Ready for Prime Time

There has been a lot of speculation concerning the goal and strategy of China concerning the place of the yuan or renminbi on the world economic stage.

I have no doubt the Chinese have a goal of becoming the leading reserve currency in the world, but if that ends up being a reality, it's going to be many years from now.

The idea that China is attempting to bypass the existing currency market and working to build an alternative to it is actually the exact opposite of what it really wants to do, which is to become a larger player in the current global economy.

For now, the yuan isn't close to being ready to be a currency leader, as China needs to take a number of steps before it's going to be considered a means of paying for major transactions on a global basis.

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Friday, May 22, 2015

Why I Like Turquoise Hill Now

It's been a long time coming for Turquoise Hill (NYSE:TRQ) and Rio Tinto (NYSE:RIO) concerning their stake in the massive Oyu Tolgoi, as they have finally come to an agreement with the Mongolian government to move ahead with its development of the next phase of the mine, which is to expand the major underground portion of the resource, which at this time, is estimated to account for approximately 80 percent of the mineral value of the mine.

Major sticking points which led to the differences have been resolved, including cost overruns and taxes.

With that behind them, the next areas to approve and make transparent will be an underground feasibility study and project financing. There is little to suggest there will be a problem in those areas, so it appears Turquoise Hill should fairly quickly be able to move operations forward.

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Monday, May 11, 2015

How to Play the War on Cash

I've been somewhat surprised at the relatively low level of resistance to the proclivity of governments and the banking system to move rapidly toward a cashless society.

When looking through comment sections of blogs and news sites, one of the major responses to the concerns is people from the U.S. will allude to the words on our currency that says it's a "legal tender," as if that will stop the forward motion of what has become a global initiative in many nations.

Immediately below is a list of the reasons I have been able to find as to why we should move towards a cashless society. They are from a variety of nations, and not all are given as reasons from any one country.
Stated reasons:

    Fight terrorism

    Tax evasion

    Black market

    Costs of currency production

    Improve credit rating of country (Uruguay)

    Encourages underground economy

    Money laundering

    Reductions in armed robbery

    Counterfeiting


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Friday, April 10, 2015

Time to Take a Position in Turquoise Hill?

Financial news outlets were blaring out headlines and lead stories about an alleged agreement between the government of Mongolia and Rio Tinto (RIO) and Turquoise Hill (TRQ) concerning Oyu Tolgoi, the rich mineral resource in the country.


While it would be welcome news to investors if this is in fact the case, I will wait until I hear very clearly from Rio CEO Sam Walsh on his take in the deal.


Just recently Walsh stated very clearly that the final offer was on the table, and it's a check to me that he has been very quiet after the supposed blockbuster announcement from Mongolia’s Prime Minister Saikhanbileg, that past hindrances to the project have been resolved and the project is cleared to move ahead.


If that was really the case, it's very puzzling that there are no confirmations of this outside of a small story and line from Sky News in Australia, which asserted Walsh confirmed the story.
To me, this is too big of a story and impetus for it to be ignored by Rio and Turquoise Hill, if indeed a deal has been made.

This is especially true after Walsh said just a little over a week ago thatnegotiations had reached the critical stage, with the major issues left to be faced. It's puzzling to believe it took that long to fix a number of smaller issues, and in a short week the major issues have quickly been resolved. It's possible, but highly unlikely.


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