Archive - Apr 2011 - Blog entry

The question of centralization versus decentralization might be even more important than fossil fuels versus nuclear versus alternative energy …

If the US were a company, it’d be spending more in salaries than it makes in sales. Aside from being unprofitable, it’s also got a MASSIVE debt load. And it’s current policy of paying out more than it makes only increases this debt load… which begs the question… who’s going to pay the interest payments on the debt? Now, about those payments…More than half of all Americans (59%) receive a Government payout in one form or another. This is not a sliver of the population… it is endemic to the system.

Is rising inflation a serious problem in Canada and how will it impact pension funds' returns?

As competition for food supplies increases, food prices are going to go up. In fact, at some point they are going to go way up.

Headlines will crow of the strength in equities and credit today. However, the lack of high beta participation in credit, the underperformance of financials, and the clear continuation of the somewhat more risk-averse up-in-quality trade in credit and equity markets remains a concern.

Has anything really improved?

Noteworthy and visual news of the day...

Putting aside the S&P threat to downgrade U.S. debt for the moment, consumer and business confidence is weakening, which would be consistent with other data we are seeing about such diverse things as retail sales and industrial production. This is consistent with our forecast for stagflation.

Some extreme sport analogies ...

We are living in a weak-dollar fantasy and partying like it's Germany in early 1921 as the Gold Bug Speculators celebrate their wise investments as gold crosses 1,500 an ounce - unfortunately, the value of every other Mark-denominated asset was down 50% by the end of the year.

What kind of back-assward world do we live in when the FED has to propose a rule like this?

The quarter AT&T loses iPhone exclusivity is the quarter they report record numbers. Why? They started pushing high end Android phones that more than made up for the iPhone loss. You really can't compete with "less than free"!

Not only has this President squandered his opportunity, but his notion of a what a shared sacrifice is very much skewed.

In case you missed it, earlier this week China announced that its foreign currency reserves are excessive and that they need to return to “reasonable” levels. In politician speak, this is a clear, “we are sick of the US Dollar and will be taking steps to lower our holdings.” Remember, the US Dollar is China’s largest single holding. And China has already begun dumping Treasuries (US Debt).