I Don't Want Speculation, I Want Clear Investment

Lars Schall of chaostheorien.de was kind enough to provide yours truly and SmartKnowledgeU with the English translation of the German interview.  Though I agree with many of Mr. Hellmeyer's views, I don't agree with all he has to say. For example, I disagree with Mr. Hellmeyer in that I expect dramatic rises in food prices in the Western world in the next several years whereas he does not. I do, however, agree  with Mr. Hellmeyer in his assessment that gold and silver have a long way to run before talk of a bubble can even become realistic. The English translation below may not be perfect as English is not Mr.
Schall's first language. In any event, the below still provides fascinating
insight into a very knowledgeable German banker's views of our current global monetary
meltdown as well as some well-formulated opinions of what lies ahead for our global economy.

Folker Hellmeyer, the chief analyst with the Bremer
Landesbank, gives in an exclusive interview for chaostheorien.de his take on
the so-called “Currency War” and China’s role as a stabilizing factor in the
world economy. Moreover, he talks about the problem of high frequency trading,
the development of oil prices and the ongoing rally in the precious metals
markets: “Gold is not in a bubble, silver is not in a bubble, precious metals
are in general terms not in a bubble.”

By Lars Schall

I Don't Want Speculation, I Want Clear Investment

Folker Hellmeyer, born 1961 in Hamburg, is a banking professional who started
his career as foreign exchange trader with Deutsche Bank in Hamburg (1984 -
1987) and London (1988 - 1989). From 1990 to 1995 he worked as an OTC broker in
the interbank foreign exchange market at Bierbaum & Co. GmbH & Co. OHG.
In 1995 he went as a senior analyst to Landesbank Hessen-Thüringen GZ (Helaba)
in Frankfurt. Since April 2002 he has been chief analyst with Bremer
Landesbank, where he is responsible for the Foreign Exchange and Money Market
Sales department.

In his book “Endlich Klartext” ("At last, clear
text"), that was published in 2008 at the Finanzbuch Verlag in Munich,
Hellmeyer takes a look behind the scenes of our financial system. His critical
analysis provides the reader with an equally entertaining and informative
insight into the U.S. financial system and its political background. The
functions of the free market, the policy of the central and commercial banks
and the role of rating agencies are critically examined and reviewed.

To what extent one can therefore still believe economic data
from the United States? How can one look behind the veil of political
correctness? What is the aim of the Plunge Protection Team? These are some of
his questions. Hellmeyer is one of very few senior bankers in Germany who
doesn't grow tired of reminding the public: “First the free market dies, then
dies democracy."

A comprehensive interview in German, that Folker Hellmeyer
gave chaostheorien.de in August 2009, can be found under the headline „Das
Plunge Protection Team in Aktion“ (“The Plunge Protection Team in Action“)
here:

http://www.chaostheorien.de/interviews/-/asset_publisher/rAD9/content/plunge-protection-team-in-aktion?redirect=%2Finterviews

Mr. Hellmeyer, for quite some time there is a “Currency War“
going on – and by now it is reaching the mainstream press. Can you explain to
us this development and how gold fits into the picture?

Yes, of course. First of all, we have to say that this
"Currency War" topic has been chosen by the Western press and it
comes out of the Western financial hemisphere. In that respect we have to check
whether the currency war is in fact the "Currency War" which is
presented in the media outlets. From my point of view the currency war is not
led by China or other emerging market countries and I want to point this out in
a very outspoken manner.

China has started revaluing the Renminbi in 2005, the revaluation of the
Renminbi stands currently at 20 percent. Throughout the crisis this revaluation
of the Renminbi was halted for very good reasons because the insecurity about
the further development was very high and from June 2010 onwards we've seen
again an appreciation of the Renminbi by 3.3 percent so far. If you extrapolate
the latest pace since June 2010 on a yearly basis we get somewhere close to 6
percent per year. This is a substantial result in the first place.

Secondly, we have to bear in mind that China took over responsibility on a
global frame in stabilizing the global economy and the world financial system.
In relation to the GDP, China took on the biggest burden for reviving its
economy and thus supporting the global economy. Then they were helping out
Russia, Eastern Europe and also the euro-zone in the beginning of 2009 after
the financial centers London and New York attacked Eastern Europe and in
particular Russia. They were sending a front-up payment of roughly 100 billion dollars
to Russia for future energy contracts.

Thirdly, in the year 2010 they were again on the side of the
euro zone supporting the euro zone in the question of the budget deficit
crisis. They were lending support to Greece, they were buying the euro down in
the 1,20's. Again they were supportive regarding the functioning of the global
financial system. So arguing that China is not taking responsibility for the
world recovery is simply nonsense.

If we look at Japan we clearly have to state that the JPY value does not comply
with the status of its economy. So the interventions we are seeing from Japan
are very much in line with fundamentals. Also here I can't see a currency war.

If we talk about a currency war the initiator stands on the other side: the
United States are starting QE2, which means swamping the market with dollar
liquidity and this dollar liquidity indeed leads to revaluations of foreign
currencies, in particular in the emerging markets, where you have comparatively
small markets being unable to neutralize this extra liquidity without
consequences, pushing up the value of their currencies to levels that don't
comply with their real economies. In that respect, if there is any currency war
going on, then it is a liquidity currency war led by the United States,
endangering the recovery of the global economy, because it is able to blow
bubbles on one hand and destabilizing emerging markets countries in their
economic recovery on the other. If we talk about currency wars as I said the
United States are at the center of starting this currency war rather than
anybody else.

And what is the relation to gold? Gold with the increased liquidity of course
is getting more friends, simply because the world financial system or the
center of this system is demolished by these politics of the United States. The
United States as a country setting or delivering the world leading currency at
the moment are not living up to the needs of the role of leading world currency
in a serious manner and are rather following very selfish policies in order to
gain the day and to lose the future - and I really want to point that out:
America is doing cosmetic jobs and intends no structural reforms to refurbish
their business model. Cosmetics do not deliver the intended results resolving
the problems on a longer time frame. They simply increase problems over time.

Nevertheless some people are arguing that the gold price is
in a bubble, like for example recently James Altucher in a piece for “Business
Insider. “Is gold in a bubble, yes or no? And what do you think about Mr.
Altucher's “11 reasons“ to state it is?

First of all, gold is not in a bubble, silver is not in a
bubble, precious metals are in general terms not in a bubble. That's the first
statement. If there is a bubble, it's in Triple A rated Treasury papers,
whether from Germany or United States. Precious metals are in demand for very
simple reasons: We have an inflexible supply due to a lack of exploration and
we have an increasing demand due to various factors.

One factor is definitely the debasement of the U.S. dollar. The second aspect is
that the global wealth is increasing quickly, in particular in the emerging
market countries. 5 billion of the world population are having higher living
standards and thus are consuming more precious metals. Thirdly, and that is
very important: smart central banks start to accumulate gold rather than
accumulate printed paper from the United States. That means we have a strong
demand growth with an inflexible supply. Those are the drivers of the gold
price.

If Mr. Altucher is giving some 11 arguments why gold might be in a bubble then
this might sound at first sight reasonable, but at second sight it's simply
nonsense. It is as much nonsense as we've seen in the past nine years by
protagonists being negative on a "professional" basis. Very often
throughout the rally of gold we have heard these arguments and they proved to
be wrong. The same will apply here.

Would you say that Mr. Altucher and his ilk should give it
also a more thorough thought that gold and silver is the preferred currency of
the so called elite – and what this might mean for their prices?

Indeed. The elite today are human beings that care about the
state of our financial system. The elite are also central banks that do know
the game that is being played, and we're talking here about emerging market
central banks like the Russian one, the People's Bank of China, the Brazilian
central bank and the Indian central bank. All these players in this market have
a very clear and outspoken view on investments in precious metals, and they
figured out that the quality of this asset is basically based on the fact that
it can not be increased in volume by political will but rather only by lots of
work, and that is why precious metals are precious.

Louise Yamada, probably the best technical analyst in the
world (http://www.lyadvisors.com/), says that gold will not be in a bubble
before it will cost $5,200 per ounce. If one would add real inflation we get a
price of roughly $7,700 per ounce. Do you assess this as realistic?

Well, that depends where the dollar is when we hit 5.200
U.S. dollars in the parity to gold, whether against the Euro or the Swiss
franc. Frankly speaking, I do not like these clear cut targets for the rise of
gold and silver What I'm saying is: for another 5 to 7 years we will see a further
rally in precious metals due to the fact that there has been a lack of
exploration. This lack of exploration means that we see an inflexible supply
picture. At the same time there is a rising demand picture, and that is what
drives prices higher.

My minimum call for gold is that we will see again the prices of 1980 on an
inflation adjusted basis, and that means something like 2500 dollars - but that
is a very, very conservative call because in 1980 the status of the world
financial system was in a much better shape than it is today. And the
situation, for example the development of population, has shifted dramatically.
In that respect, there is room for much higher prices than the 2.500. The 2.500
U.S. dollar forecast is a very conservative approach.

In case Ms. Yamada is right: what will those people cry then
when they are already now crying “Wolf!“ (a.k.a. “Bubble!“)?

Well, "Crying Wolf" is a funny game: the more
often you cry wolf the less people will listen to you - and this what will
happen eventually to these people. If you look at Mr. Nadler from Kitco, who
has stated many times throughout the last five years why gold should come down,
nobody really listens to him any longer, at least no one, who takes this topic
seriously. And the same applies for banks, for example Barclays. They missed
out the whole rally of precious metals during the last nine years. In that
respect I do not care about those people or institutions, rather I think it is
enchanting to listen to them in order to have a good laugh.

And to do the opposite...

Exactly.

...of their calls. Yes. - Do you think silver has a fair
chance to outperform gold?

Indeed, yes. Silver is more volatile, but on the upside
there are higher chances. First of all, there is no reasonable amount of silver
located with central banks. The industrial use is increasing significantly.
With world growth around 4 to 5 percent, again that will increase the demand
picture. Also it is the precious metal of small man. In that respect,
percentage wise, it has a chance on the upside for a sustained outperformance
in comparison to gold. But we have also to bear in mind to look in the rear
mirror that corrections in silver are more aggressive than those in gold. Any
player who is heavily invested in silver has to bear in mind that correction
risks are markedly higher than those in gold.

Mr. Hellmeyer, it seems to me what Mr. Altucher and people
like him tend to forget all the time is the problem of huge short positions in
the gold and silver future markets. Especially JPM Chase seems to face major
difficulties in that respect. What are your thoughts on this, particular since
a representative of the CFTC admitted that the silver market is subject to
“fraudulent“ influences?

I'm a friend of free markets and I'm a friend of perfect
markets, and perfect markets require the structure of a polypoly. In particular
the situation at the precious metal market is a situation where two players,
which is on the one hand JPMorgan Chase and on the other hand HSBC, have a very
dominant role and a dominant role does not fit into the setup of a perfect
market or a free market. In that respect, yes I have really difficulties
accepting this situation. And given the latest arguments by Bart Chilton by the
CFTC, indeed the risk that these markets are corrupted is extremely high.

To put it bluntly: We have a misallocation of market share that is a prime
driver of the risk of a manipulated market. And if there is a one thing that
has to be altered then it is here the situation that the so called
"banking aristocracy" or global financial players has to be split up
again into players that comply with the needs of the perfect market and thus of
the free market. That is what I do expect by those persons and those
organisations that are in charge of the setup of the financial system. The
fact, that nothing has been seen of reordering the system, is in my eyes proof
that the banking lobby of the banking aristocracy is still in hold of those
positions that are important in our free system and that is a shame!

Before we continue to talk about precious metals: what are
your thoughts with regard to “fraudulent“ influences in the markets for example
via high frequency trading? Here's a graph related to an estimate of the
percentage of HFT trades by the financial markets'  research and strategic advisory firm TABB Group:

Well, first of all, the same what I spoke about in the
previous question applies also here: if you have a market place you need for
all participants the same entrance barrier or entrance level. And high
frequency trading is one of those measures that gives a very limited number of
players certain advantages in comparison to all other players. In this regard
high frequency trading needs to be abandoned as soon as possible simply because
it breaches rules of a fair market.

What else can be said on that? We have created a situation where the global
banking aristocracy, the big players, tend to get advantages in comparison to
smaller players of the market. And if we want to keep up our free market and
ultimately our democratic system then these policies have to be altered.

I also want to put forward another question, and the question is: Why stock
exchanges and other exchanges have to be privatized? Given the backdrop of the
latest experience in history it shows that they don't comply with the demands
of a level playing field. Thus the privatization of these exchanges in my eyes
has led partly also to the crisis we have seen, and it has to be thought upon
whether these structures need to be managed rather by governmental instances
rather than private entities.

Let's return to gold. You are familiar with a story by Max
Keiser and me: “Currency War: Germany about to lose 66% of its gold reserves. “Should
Germany worry about its gold holdings at the New York Fed now that for example
some major central banks – as you've already mentioned - in the world buying
gold big time compared to the past?

Well, in the first place, central banks should and do trust each
other. Under that aspect shifting the gold reserves from the United States back
to Frankfurt does not seem to be really necessary. Given the fact that we have
problems with the balance sheet positions of gold in the United States, whether
it's bullion reserve, custodial gold or deep storage gold, of course some
doubts have to be taken into account.

I know from the Bundesbank that the gold from the Bank of England has been
reallocated into Frankfurt. That was back in my time when I was at the Helaba
and running the central bank desk there. In that respect parts of these
reserves have definitely been shifted into Frankfurt.

 
I strongly recommend, as there is a rift on the central bank side which
policies are adequate - if we look at the policies between the ECB and the
Federal Reserve the rift is rather increasing - to remove the German gold from
the USA back into Germany, into Frankfurt.

Another aspect regards the way the bullion reserve of the Bundesbank has been
verified by the Bundesbank in the past. If it is clear cut accounted for
reserve held in New York or at Fort Knox and it is verified on a regular basis,
then you can, of course, keep this policy on. At the end it's a question of
trust.

I prefer the direct control by the Bundesbank rather than trusting somebody. At
this very stage I can neither state that Max Keiser's call on the situation is
correct nor the position of the Bundesbank. Generally I trust the Bundesbank,
that the whole reserve of roughly 3.400 tonnes is still available to the
Bundesbank.

Yes, but shouldn't there be a public discussion here in this
country about this question?

There should be a public discussion about all central bank
gold reserves, and the transparency the central banks require from all players
in the financial field should be fulfilled by central banks regarding bullion
reserve. In that respect, yes, a discussion is meaningful, but obviously
central banks do not wish an intense communication.

Like a former official of the Federal Reserve said: “The
last duty of a Central Banker is to tell the pubic the truth.”

Well, that is the American way to view it. From my
experiences with the Bundesbank and also with the ECB I know that this view is
definitely not shared in the first place. Regarding bullion reserve there are
many question marks, whether with the BIS, with the Bundesbank reserve or with
the U.S. reserve - whether they are still there or they have been swapped and
they're simply financial receivables against mines or other financial players.
We need transparency in order to avoid too much speculation. I don't want
speculation, I want clear investment.

How do you think about the initiative of the Gold Anti-Trust
Action Committee, GATA (www.gata.org), to have an audit in the U.S. of their
gold reserves – which would be the first since the days of President
Eisenhower?

It is more than due. I am very happy that we have a group
like GATA that insists on this audit. And I am also very happy that we have
GATA because GATA has been the best provider of news regarding bullion in
general for the past ten years. I am a reader of "Le Metropole Cafe"
(www.LeMetropoleCafe.com) since, I think, 2002 and the best information that we
have received within the bullion market has not been the information granted by
banks and bullion banks in particular, but rather the information given by GATA
and "Le Metropole Cafe" - and this stands for itself.

So you appreciate the work of GATA in general – and it
shouldn't be dismissed as “conspiracy theories“ per se?

Well, I think that conspiracies are much more common than
most people seem to believe. If you look at your office and there's a nice,
smart girl who wants to have the post of chief secretary and there is another
one who is very intelligent but less attractive, very often you will see a kind
of mobbing going on and mobbing is a conspiracy. If you take a look at chemical
industries and just google the word cartel in combination, you clearly see that
also here the conspiracies are comparatively common, as a cartel always
includes conspiracy. In that respect, conspiracies do deliver very good reasons
to be discussed, and I would not put GATA and "Le Metropole Cafe" in
the corner of conspiracy theories only, but rather they delve into matters
very, very deeply and create a very satisfying setup of information which
implicitly shows that most of their claims are correct.

To say “this a conspiracy theory“ is a psychological tactic
– well, it's a conspiracy theory, don't pay attention to it.

Indeed. Normally those people talking about conspiracy
theories want to finish off this discussion at first sight in order not to
delve into this problem. Thus those people acting in this manner have to be
seen with lots of caution.

One last topic for our conversation: the development of the
oil price. Mike Norman, the chief economist at John Thomas Financial
(www.johnthomasbd.com), wrote to me last month this opinion of his:

"Current oil market fundamentals do not justify the
price. Stocks of crude in the U.S. are just off record levels, yet the price is
more than double a year ago. Same with gasoline. All speculation. Total NYMEX
open interest in crude is 1.4 m contracts or about 1.4 billion barrels of
crude. Daily volume of crude traded on NYMEX is over 1 billion barrels per day.
Total daily global demand is only 83 million barrels per day. The amount traded
on one single exchange is more than 10 times total daily consumption. It's a
giant casino with prices being driven up by speculators and consumers having to
pay more and more."

Is Mr. Norman on the right track with this opinion?

At first sight, again, this sounds very smart but it is
definitely not. We trade foreign exchange for example and the main volumes are
speculative. Only roughly 1 percent of the trade volume of foreign exchange on
a daily basis is backed by real trade. We could also say that the foreign
exchange is a casino. No, it's a market place where you have lots of interests,
which comes close to the status of a polypoly. That also applies for the
commodity market of oil. In that respect, the amounts that have been traded are
not that important.

Secondly, yes, the stocks of crude and gasoline may be at record levels in the
United States, but the question is not whether they are at record levels in the
United States - we trade oil and gasoline as a global commodity. When we look
into other countries this picture is different. We have a global growth
meanwhile of 4.8 percent given the latest call by the IMF and next year by 4.2
percent. So what we are seeing here is that the market anticipates an increase
of demand. To me these prices at $ 80 - 85 are very much in line with the
global growth picture.

Another argument that has to be taken into account: all these commodities are
valued in U.S. dollars. The supply of dollars is increasing with the next quantitative
easing measures. In that respect, the price increase of commodities priced in
U.S. dollars is also a function of the liquidity provided by the Federal
Reserve System. Thus the debasement of the U.S. dollar also plays out in the commodity
market. So I strongly oppose the point of view of Mr. Mike Norman.

And you know that the OPEC members are already calling for
an oil price of 100 U.S. dollars just to outbalance the loss of the value of
the US dollar.

Indeed, and this is very much in line with our call for the
next year. We are forecasting that the bottom of the range in the next year
will be somewhere around 80 U.S. dollars and that the upside potential for the
next 12 to 14 months stands at roughly 110 U.S. dollars.

Are we heading towards a new oil price spike like the one of
2007/08?

I'm not seeing this really. This oil price spike was very
much related to a free market approach. As we have figured out earlier on, we
have two mayor players, in particular JPM. What applies to the precious metal
markets partly applies to the energy markets. JPM plays a very important role.
If we see the surprise for many related to the upswing of the global economy
throughout 2010, it is quite remarkable that the oil price is comparatively
stable, though the market is surprised about the strength of the economy. My
gut feeling is, that energy markets have a kind of a political taste to it. In
this respect I am not expecting a repeat of 2008.

What will be the outcome of a rising oil price for a) the
economy, b) precious metals, c) commodities in general, and d) food prices?

Let me put it this way: when you look at the stance of China
throughout the last few years, it is getting very obvious that we do have a
"war" in the world of commerce on commodities. It is essential for
the future development of countries that they find enough resources to feed
their economies. In that respect, all these topics: oil price, precious metals,
and commodities in general, food, do basically mirror the same topic. The oil
price will have a price impact for example on food production, it will have a
impact on commodities in general - and this is an upward price momentum. With
this upward price momentum, as I said early on, precious metal prices will also
move up.

For the next decade I clearly see a further bull market in all commodities. If
you look at the food markets, we can claim 5 billion people have higher living
standards and they require more. That gives a very solid footing to the
agricultural markets. Commodities in general, whether we talk about rare earths
or whatever, are in demand - also here we have an  upward price momentum.
And energy is basically the means how to move all these things around in a
mobile world. So these prices will also surge up. We will have inflation on an
exogenous commodity related basis.

With regard to food prices: do you foresee dramatic
developments for the ordinary common people?

No, not really. We have to bear in mind that only 50 years
ago people were earning their money in order to pay the rent and pay the food.
What we have seen for the last 30, probably 40 years is a situation where this
cluster has changed. We will have to adopt to a new situation where people have
to stand ready to pay up for food and agricultural products.

Do you think the peak oil scenario is something we all
should pay more attention to?

Well, I think there is peak oil in a way, but not in the way
it is being described. There is enough oil on the earth in my eyes, but the reserves
we can get hold on are limited currently due to the price scenario. In that
respect, yes, peak oil plays a role in pushing prices higher for the
foreseeable future. Eventually we will exploit new resources and use these new
resources. There are plentiful resources on a longer time frame, but at higher
prices.

What's your overall outlook for 2011?

There are two sides to it. If we look at the crisis, in
summer 2011 the fifth year of the crisis will begin and the United States will
again be in the center of this crisis. Fact is, that the United States and
Japan are the only countries that are still focused on cosmetics in order to
manage their economies and systems. There are no structural reforms to be seen
so far. They stand in for 23 percent of world GDP. That is a risk factor. But
this risk factor looks manageable under the aspect that 70 percent of the world
economy is performing strongly.

50 percent of the world economy are the emerging market countries. They are
free of any major dependence on Western finance. They are rather those
countries that provide stability into the system. They have a growth pattern of
6 to 8 percent. Their indebtedness, whether it's governmental or private, is at
very low levels. Take China: 22 percent debt-to-GDP ratio and with hardly no
consumption related indebtedness by the private subjects. So this growth
pattern within the emerging market countries in my eyes is stable. Next year
the growth pattern will come off from roughly 7.3 percent this year towards 6.5
percent, but it is still going strong.

20 percent of world GDP is defined by strong industrialized nations like
Australia, Canada, Germany, Scandinavia and the Northern European hemisphere.
They are doing well with growth patterns in between 1.5 and 3.5 percent.

These 70 percent are the two main catalysts for a very positive outcome next
year. I expect world growth to be at minimum at 4 percent and I don't rule out
5 percent, so it's a very high level growth in 2011 to be expected. In that
respect I am seeing stronger equity markets.

Also I want to put a focus on the cyclical approach. We have on the one hand
the inventory cycle. The inventory cycle is by far from being finished.
Normally it is a short cycle. This time it is prolonged, because many
participants in the real economy have been frightened by the sheer size of the
global crisis. The inventory cycle will at least last until summer of 2011 and
will have a positive impact on global growth in 80 percent of the world
economy.

The capital investment cycle has only just started in the first quarter of
2010, after having halted for 18 months within industrialized nations, which is
a total anomaly under historic proportions. In that respect I expect the
capital investment cycle within 80 percent of the world economy to last for
another two to three years and basically this capital investment cycle will
have an effect also on the inventory cycle, because, as I've said, the
inventory has not been build up.

As a result of these two impacts, the consumption cycle starts to pick up in 70
percent of the world economy due to higher employment. And this setup of 80
percent inventory cycle and capital investment cycle plus 70 percent
consumption cycle is something that we have not seen in the world economy since
the early 1950's. That will have a more pronounced effect on the global growth
picture than most of my colleagues do anticipate.

I have been an optimist for 2010 and we were calling correctly the turn around
of the world economy in 2009 and said that this will be a very strong upswing.
We stick to this view. In particular the analysis of these cycles - inventory,
capital investment and consumption cycle - gives us very good arguments to
expect in 2011, and probably into 2012, a growth pattern that is higher than
the mainstream expects. That leads us to the conclusion that commodities, in
particular precious metals, will gain throughout this development of the world
economy.

One final question: if we would assume a more worst case
scenario - what can and what should the common people do in order to survive
the survival of the fittest competition?

Well, as I've said, the biggest risk related to this
positive outlook of mine is that the U. S. fails. I can't see that in 2011 or
2012, but it is a risk. Given the fact, that the financial system is not in an
equilibrium, but rather distorted, in particular by the policies of the United
States, I strongly recommend investment in real assets - and real assets are
commodities, are precious metals, is land, is real estate at reasonable prices
and are equities, are shares.

As I've said to you, we have 70 percent of the world economy that is doing
nicely. And if you look at the current reporting season of the companies, the
companies are doing extremely well and are surprising positively by the ratio
4:1. That is something to bear in mind. And giving the evaluation of equity
markets - if you look at the price-earning ratios of the DAX for example,
you're standing below 11 at 2011 expected profits - you are standing at 140
percent of book value, which is historically cheap, and a dividend yield of 3.2
percent outperforming outstanding 10 year bonds, which stands 2.3 percent. So
if you look at equity markets, these markets are very, very attractive given
the pricing.

Thank you very much for taking your time, Mr. Hellmeyer!

You're welcome.

Comments

[Raging Debate]

Good analysis, thank you for publishing.

[Bicycle Repairman]

No mention of expanded (non-currency) war.  I wonder what his thoughts are regarding that?

[skippy9]

Wow! Finally, some valuable insight from a real professional. Thank you for sharing.

[Pegasus Muse]

It's good to get an outside view of the destructive/destabilizing policies of the Federal Reserve.  Agree with Hellmeyer's views on PMs and commodities.  Hope he is correct about corporations serving the developing countries and the 70% of the world whose economies are doing OK.   

[Tense INDIAN]

sorry ...we are all speculators now....