In a bid to streamline business and tourist transactions, eleven U.S. states are set to adopt the Canadian dollar as their official currency [effective, July 4th, 2011. Read on for more details.] Words: 556

Simple 5 ETF / 10% Retirement Portfolio Drops IVV for OEF in U.S. Equity Hedge

Posted: 26 Apr 2011 07:22 PM PDT

Jeff D. Hamann submits:

Here are the results of a backward looking portfolio of five funds using the Konno and Yamazaki Mean-Absolute Deviation Portfolio for this week. Using a basic set of statistics, we determine which funds should have been included, and determine the allocations that would have generated a 10% return AND minimize the mean absolute deviation (MAD). We restrict the number of assets to 5 so that the results can be written on the back of business card, sent to someone's hand-held device, or broadcast on twitter (which we do regularly). We assume the investor is at or near retirement and include common constraints like "don't include more than 10% commodities."

Given a universe of the following Exchange Traded Funds (ETFs):

Fixed-Income/Bond Assets: TIP, SHY, IEF, TLT, AGG
Commodities: IAU, SLV, GSG, BDC, USO
Global Equities/Emerging Markets: FXI, EFA, EEM, IEV, IOO
US Equities: OEF, IVV, ISI, IYY, JKD, JKG, JKJ
Leveraged

Complete Story »

The Economic Collapse Cycle - Where We Are Now and How to Invest Accordingly

Posted: 26 Apr 2011 06:48 PM PDT

Galt's Gulch submits:

Recently, the hyperinflation-deflation debate has flared up again. What readers need to understand is that this question is really a distracter – the issue is not either/or hyperinflation/deflation – the key issue is where we are in the collapse cycle's chain of events shown below.

click to enlarge

*One key caveat – this cycle is a general theory – war, economic events, and other factors can impact it significantly.

So, where are we today in the cycle? This author believes that we are at the end of the "rising inflation" stage, with the recent announcement that the BRICS are further denominating trade between them in local currencies instead of the USD. Thus, deflationists can be forgiven for believing that we are in the previous stage, as housing prices continue to fall. However, the hyperinflationists remain right - the key point to remember is that deflation LEADS TO hyperinflation.

The reason

Complete Story »

No Sign of the Top in Silver

Posted: 26 Apr 2011 06:23 PM PDT

Chris Mack submits:

Silver is finally getting some attention in the 10th year of its bull market run - mostly top callers who are calling the recent move to nearly $50 an ounce a sign that it has already peaked. Interestingly, these same analysts were nowhere to be found when we made the logical argument that it would reach $50 an ounce this year.

There have been many excuses in the past 10 years why investing in silver was a horrible idea, but the most recent is that it has already gone through its "parabolic" spike phase. Notice that this is always backed up with a well chosen linear chart (click to enlarge), that fits the author's linear thinking.

Of course that looks scary. However, any chart with a linear growth rate will appear geometric when compounded. A true parabolic move must be measured in logarithmic notation to be properly detected.

Using the

Complete Story »

Will governments confiscate gold?

Posted: 26 Apr 2011 05:45 PM PDT

CME Margin Cold Water for Red Hot Silver

Posted: 26 Apr 2011 05:42 PM PDT

Got Gold Report

Why I'm Buying Puts on GLD - And Why You Should Too

Posted: 26 Apr 2011 05:32 PM PDT

Galt's Gulch submits:

A substantial amount of speculation (justified, in this author's opinion) has revolved around the supposed holdings of the GLD and SLV ETFs. The claims are that these vehicles are diversionary tactics by certain bullion banks such as JPM to draw investment dollars flowing to the precious metals sector away from actual metals, and that these ETFs are not fully backed (if backed at all) by actual metals. However, the important point is that it doesn't matter whether they are or not – everyone should buy puts on them. This is a binary solution set: either these ETFs are fully backed or they are not.

Case 1: If the ETFs are fully backed by real gold that would imply that there is actually significant bullion above ground – more than most goldbugs believe exist. In that case, goldbugs are in the wrong, and their hopes are being built on a false

Complete Story »

Gold is trivialized because what it exposes is so scary

Posted: 26 Apr 2011 05:00 PM PDT

Gold Currency: Mandatory Now, For Traders?

Posted: 26 Apr 2011 04:54 PM PDT

Gold Supply/Demand, Gold Derivatives and Gold Loans

Posted: 26 Apr 2011 04:45 PM PDT

Stocks, Dollar, and VIX Not Anticipating Negative Reaction to Fed

Posted: 26 Apr 2011 04:45 PM PDT

Safe Storage for Gold and Precious Metals From an Expert’s point of view

Posted: 26 Apr 2011 04:30 PM PDT

What Is Outsourcing?

Posted: 26 Apr 2011 04:04 PM PDT

Once upon a time in America, virtually anyone with a high school education and the willingness to work hard could get a good job. Fifty years ago a "good job" would enable someone to own a home, buy a car, take a couple of vacations a year and retire with a decent pension. Unfortunately, those days are long gone. Every single year the number of "good jobs" in the United States actually shrinks even as our population continues to grow. Where in the world did all of those good jobs go? Economists toss around terms such as "outsourcing" and "offshoring" to describe what is happening, but most ordinary Americans don't really grasp what those terms mean. So what is outsourcing? Well, it essentially means sending work somewhere else. In the context of this article I will be using those terms to describe the thousands of manufacturing facilities and the millions of jobs that have been sent overseas. Over the past several decades, the U.S. economy has become increasingly merged into the emerging "one world economy". Thanks to the WTO, NAFTA and a whole host of other "free trade" agreements, the internationalist dream of a truly "global marketplace" is closer than ever before.

But for American workers, a "global marketplace" is really bad news. In the United States, businesses are subject to a vast array of very complex laws, rules and regulations that make it very difficult to operate in this country. That makes it very tempting for corporations to simply move out of the U.S. in order to avoid all of the hassle.

In addition, the United States now has the highest corporate tax rate in the entire world. This also provides great motivation for corporations to move operations outside of the country.

The biggest thing affecting American workers, however, is the fact that labor has now become a global commodity. U.S. workers have now been merged into a global labor pool. Americans must now directly compete for jobs with hundreds of millions of desperate people willing to work for slave labor wages on the other side of the globe.

So exactly how is an American worker supposed to compete with a highly motivated person on the other side of the planet that makes $1.50 an hour with essentially no benefits?

Just think about it.

If you were a big global corporation, would you want to hire American workers which would cost you 10 or 20 times more after everything is factored in?

It doesn't take a rocket scientist to figure out why millions of jobs have been leaving the United States.

Corporations love to make more money. Many of them will not hesitate for an instant to pay slave labor wages if they can get away with it. The bottom line for most corporations is to maximize shareholder wealth.

Slowly but surely the number of good jobs in the United States is shrinking and those jobs are being sent to places where labor is cheaper.

According to the U.S. Commerce Department, U.S. multinational corporations added 2.4 million new jobs overseas during the first decade of this century. But during that same time frame U.S. multinational corporations cut a total of 2.9 million jobs inside the United States.

So where are all of our jobs going?

They are going to places like China.

The United States has lost an average of 50,000 manufacturing jobs per month since China joined the World Trade Organization in 2001.

In addition, over 40,000 manufacturing facilities in the United States have been closed permanently during the past decade.

What do you think is eventually going to happen if the U.S. economy continues to bleed jobs and factories so badly?

As the U.S. has faltered, China has become an absolute economic powerhouse.

Ten years ago, the U.S. economy was three times as large as the Chinese economy. At the turn of the century the United States accounted for well over 20 percent of global GDP and China accounted for significantly less than 10 percent of global GDP. But since that time our share of global GDP has been steadily declining and China's share has been steadily rising.

According to the IMF, China will pass the United States and will become the largest economy in the world in 2016.

Should we all celebrate when that happens?

Should we all chant "We're Number 2"?

Our economy is falling to pieces and the competition for the few remaining good jobs has become super intense.

The average American family is having a really tough time right now. Only 45.4% of Americans had a job during 2010. The last time the employment level was that low was back in 1983.

Not only that, only 66.8% of American men had a job last year. That was the lowest level that has ever been recorded in all of U.S. history.

Just think about that.

33.2% of American men do not have jobs.

And that figure is going to continue to rise unless something is done about these economic trends.

Today, there are 10% fewer "middle class jobs" in the United States than there were a decade ago. Tens of millions of Americans have been forced to take "whatever they can get". A lot of very hard working people are basically working for peanuts at this point. In fact, half of all American workers now earn $505 or less per week.

Things have gotten so bad that tens of thousands of people showed up for the National Hiring Day that McDonald's just held. With the economy such a mess, flipping burgers or welcoming people to Wal-Mart are jobs that suddenly don't look so bad.

Right now America is rapidly losing high paying jobs and they are being replaced by low paying jobs. According to a recent report from the National Employment Law Project, higher wage industries accounted for 40 percent of the job losses over the past 12 months but only 14 percent of the job growth. Lower wage industries accounted for just 23 percent of the job losses over the past 12 months and a whopping 49 percent of the job growth.

Thanks to the emerging one world economy, the U.S. is "transitioning" from a manufacturing economy to a service economy.

But it certainly doesn't help that China is using every trick in the book to steal our industries. China openly subsidizes domestic industries, they brazenly steal technology and they manipulate currency rates.

A recent article on Economy In Crisis described how the Chinese paper industry has been able to grow by threefold over the past decade while the U.S. paper industry has fallen apart....

From 2002 to 2009, the Chinese government poured $33.1 billion into what should be an unproductive industry. But, with the help of government subsidies, China was able to ride export-driven growth to become the world's leading producer of paper products.

In the same time frame that China pumped $33 billion into its paper industry, U.S. employment in the industry fell 29 percent, from 557,000 workers to just 398,000.

So why should we be concerned about all of this?

Well, just open up your eyes. As I have written about previously, our formerly great cities are being transformed into post-apocalyptic hellholes.

In a comment to a recent article, Trucker Mark described what he has seen happen to the "rust belt" over the past several decades....

I am a product of Detroit's northwest suburbs and the Cleveland, OH area, where together I lived almost 2/3rds of my 54 years. As a 30-year semi driver, I am intimately familiar with large areas of the industrial Midwest, the Northeast, and even much of central and southern California, and everything in-between. I am also college-educated, in Urban Planning and Economics. What has happened to not just Detroit, but to virtually every city in the southern half of Lower Michigan and northern Ohio is mind-boggling. When I was 18, it was quite common to head over to a car plant and get hired immediately into a middle-class job. At one time I had dozens of friends from school working at car plants, dozens more in other large factories, dozens more in major grocery warehousing and distribution, and me, I was a semi driver delivering to all of those places. Between 1979, when I started driving semis, and now, I must have seen 10s of thousands of factories across just the southern Great Lakes region close their doors. Some of them were small, and some of them employed 10,000 workers or more.

The former Packard plant from your photo closed in 1957, and at one time it employed 12,000 workers, and my roommate in 1982 in Birmingham, MI had been laid-off from the old Dodge Main plant in Hamtramck, which once employed over 20,000 workers, which closed in 1981. In 1970 just Chrysler had over 40 plants in the Detroit-area, and now there are just 11 left open. The Willow Run plant, which at one time turned-out a brand-new B-29 bomber every 40 minutes, and employed 50,000 workers, is long dead too, as is the tank plant north of town too. Even fairly new car plants like Novi Assembly are closed, Pontiac's ultra-modern robotic car assembly plant too. In Cleveland 100 or more huge old plants stand empty, car plants, steel mills, and machine tool builders, in Akron dozens of rubber plants are long gone, Sharon, Warren, and Youngstown have all lost huge numbers of industrial jobs, Canton and Massillon too, where the NFL started, have been reduced to mere shells of their former selves. Along with the plant closings have gone the hopes and dreams of many thousands of retail operators, restaurant owners, and thousands of other small businesses too. Hundreds of entire major shopping malls stand vacant, as seas of potholes consume local roads. The city of Hamtramck, MI a Detroit suburb of 40,000 people, is bankrupt and has had to layoff all but two employees, one of whom works part-time. The traffic lights are shut-off and stop signs now appear at those intersections instead, as the city can't even pay its power bill. I could go on & on & on for days but I don't have the time.

I haven't driven a semi in almost 2 years as my eyesight has begun giving out early. My last 10 years in the industry was spent delivering fresh and frozen meat on a regular multi-stop route through the Chicago-area and throughout southern Michigan. Between 2001 and 2009, my boss lost 14 of 19 major weekly customers in Michigan to bankruptcy, including three major grocery chains, plus numerous less-frequent customers. The Detroit News reported before Christmas of 2007 a 29% unemployment rate within the city limits of Detroit, with an estimated 44% of the total adult population not working, and another news story reported a 1 in 200 chance of selling a house across the entire metropolitan area, which still has 4 million people total. Since 2003, home prices within the city limits of Detroit have fallen by 90%, and today there are thousands of houses in move-in condition on the market there for $5K to $10K. The suburbs are not immune either.

You know what? Detroit and Cleveland used to be two of the greatest cities in the entire world.

Today very few people would call them great. They are just shells of their former glory.

Sadly, this cruel economy is causing "ghost towns" to appear all across the United States. There are quite a few counties across the nation that now have home vacancy rates of over 50%.

Another reader, Flubadub, also remembers how things used to be....

I am also a product of that generation and remember well the opportunities that existed for anyone with even a high school diploma in those days. Just within a reasonable commute to where I grew up we had US Steel, 3M, General Motors Fisher Body, Nabisco, The Budd Co., Strick Trailer and others providing thousands of jobs that enabled you to provide a decent living for your family. There were also plenty of part time jobs to keep high school students busy enough to avoid the pratfalls of idle youth and afford the 28 cent/ gallon gas for their used cars. Most of it is gone now and I don't blame the Mexicans or the Chinese for stealing it. I blame the greed of the globalists and their flunkies, the phony free trade advocates in office, who've spent the last twenty years giving it all away.

Our jobs are being shipped overseas so that greedy corporate executives can pad their bonuses and our politicians are allowing them to get away with it.

According to a new report from the AFL-CIO, the average CEO made 343 times more money than the average American did last year.

Life is great if you are a CEO.

Life is not so great if you are an average American worker trying to raise a family.

Another reader, Itsjustme, says that things are also quite depressing In New Jersey....

I live in northern NJ in a suburb a very short ride from NYC.

Our region was hit very hard — we once had a very prosperous and booming industrial area; mixed use with many warehouses and commercial buildings, hirise and lowrise.

The majority of companies that were in those buildings are gone. Long vacant; the signage is left and nobody is inside them.

One large commercical building with 15 floors now is home to 2 tenants: a law firm and a Korean shipping company.

It's very sad what's happened out here.

The only "companies" moving into these buildings are small change tenants that that are usually Chinese or Middle Eastern; you'll see them subletting out 2 or 3 offices in these buildings and they operate out of those offices. They're mostly importers of apparel or soft goods.

My guess is that they are there on very short term leases.

This will benefit our local and state economy not. These groups usually send the money home.

If this is the shape of things to come, we can hang it up right now. No viable companies are moving into our area; if anything new is being built it is retail and service industry garbage, like crummy fast food chain restaurants. No livable wage jobs are entering our local economy.

As I have written about previously, the standard of living of the middle class is being pushed down to third world levels. We have been merged into a "global labor pool", and what that means is that the standard of living of all workers all over the world is going to be slowly equalized over time.

Our politicians never told us that all of these "free trade" agreements would mean that soon we would be living like the rest of the world.

America used to be the greatest economic machine on the planet. But now we are just another region of the one world economy that has workers that are too expensive to be useful.

In the end, there is not some great mystery as to why we are experiencing economic decline as a nation.

If millions of our jobs are being shipped overseas, it was basically inevitable that we were going to experience a housing crisis. Without good jobs the American people simply cannot afford high mortgage payments.

Today we consume far more wealth as a nation than we produce. We have tried to make up the difference by indulging in the greatest debt binge that the world has ever seen.

We have lived like kings and queens, but our debt-fueled prosperity is not sustainable. In fact, the collapse of our financial system is a lot closer than most people would like to believe.

Things did not have to turn out like this, but we bought into the lies and the propaganda that our leaders were feeding us.

Now our economy lies in tatters and our children have no economic future.

Dollar Weaker Ahead of FOMC Statement

Posted: 26 Apr 2011 03:42 PM PDT

MarketPulse FX submits:

by Scott Boyd

The dollar continued its week-long slide against the euro just one day before the next Federal Open Market Committee statement and investors are strongly of the belief that the FOMC will maintain the current low interest rate policy capping the Federal Funds rate at just 0.25 percent.

A low interest rate tends to devalue a currency; this is because lower interest rates mean weaker yields for investors. As a result, investors will sell lower-yielding currencies for currencies providing higher returns and this is exactly what has been happening with the dollar. Looking ahead, the dollar sell-off will likely increase as the interest rate gap between the U.S. and other countries continues to widen with rate increases in Australia, Canada, and most recently the Eurozone, taking the shine off the greenback.

Geithner Pledges Support for Strong Dollar

Regardless of the high probability that the

Complete Story »

Silver Streak

Posted: 26 Apr 2011 03:29 PM PDT

Mercenary Links Roundup for Tuesday, April 26th (below the jump).

04-26 Tuesday

Day Traders Ride Silver Streak – WSJ.com
Gasoline Futures Highest Since 2008 – ABC News
Gasoline rises a penny to $3.87 per gallon – Yahoo! News
Gas Price Surge Triggers Political Brawl – WSJ.com
Is It 1994 Again? | The Big Picture
Why analysts hate putting out sell ratings | Felix Salmon
Fed Confidence in Transitory Inflation Hinges on Low Wage Gains
As Inflation Surges, Central Banks Run Amok_English_Caixin
Pimco's Observations As The US "Reaches The Keynesian Endpoint"
Bernanke's Code: a Guide to Fed Chairman's First Q&A – WSJ.com
AP Survey: Only Oil Shock Can Stop Economy Now
Coal India to Seek Bids for Imports – WSJ.com
Shale Drilling Faces Crackdown – WSJ.com
California Farms Revive – WSJ.com
Midwest Storms Delay Crucial Planting Season – WSJ.com
Dollar hits 3-year low before Fed, Asia stocks up | Reuters
Swiss franc hits record vs dollar
EM central banks are doing Fed's dirty work
Deficits Higher Than Expected in Greece and Portugal – NYTimes.com
Greece's Budget Deficit Wider Than Expected – WSJ.com
"Gold Glitters Amid Economic Woes" – A Reuters Special Report | zero hedge
U.S. Home Prices Fell Again in February – NYTimes.com
Amazon's Spending Binge Continues – WSJ.com
Amazon.com Forecast Misses Estimates After Spending Growth – Bloomberg
Google, Apple Collect Location From Computers – WSJ.com
Silicon Valley Office Market Booms – WSJ.com
Sony Warns Online Hacker May Have Stolen Credit Card Data – Bloomberg
Financial Crisis-Era Stock Options Reward CEOs – WSJ.com
Another Defendant Pleads Guilty in Galleon Probe – WSJ.com
Safety Becomes Victim in Japan's Nuclear Collusion – NYTimes.com
Firms Seek Supply Route Around Conflict in Congo – WSJ.com
Ron Paul announces presidential run, says Obama can't win youth vote
Obama reissues call to end oil company tax breaks – Yahoo! Finance
Column: Obama breaks vow with jobless blacks – USATODAY.com
At least 400 civilians killed in Syria revolt: group – Yahoo! News
Syrian Army Storms Dara'a, Cracking Down on Rebels – NYTimes.com
NATO Aims to Rattle Qaddafi With Bombs Falling Close to Home – Bloomberg
Poll: Most Egyptians want Kuran as source of laws
With Anorexia, Total Recovery Can Be Elusive – NYTimes.com
~

The End of Abundance

Posted: 26 Apr 2011 03:26 PM PDT

--Welcome back from the long weekend. And oh what a weekend it was. The Aussie dollar continues to power higher, nearing 110 US cents. Silver got on its horse earlier in the week and rode all the way to $49.31-just short of its 1980 high. And then it fell five per cent today. And now we have one of the world's great contrarians telling us that with commodities, this time it's different.

--The task of today's Daily Reckoning is to figure out whether demand growth in commodities is responsible for the recent surge in the commodities complex. Or whether it's just a plain old inflationary increase in global money supply. The answer will have a lot to do with the direction Aussie stocks go in.

--Right now, though, all roads lead to China, which is why it's fitting that Australia's Prime Minister Julia Gillard is there at the moment. Maybe she can advise the Chinese on whether Australia's Foreign Investment Review Board will knock back Barrick Gold's C$7.3 billion bid for the Perth-based Zambian copper play Equinox. Barrick's recent bid trumps the offer made by Chinese-backed metals trader Minmetals Resources.

--You can see why a metals trader would chase a large copper play. But why would a gold company want to become a copper company too? Not being familiar with Barrick's balance sheet, we don't know if the growth in the asset column (at this price) will lower Barrick's return on equity. We'd have to ask Greg Canavan of Sound Money. Sound Investments that question.

--But it's obvious both Barrick and China are bullish on copper. Both Barrick and China are therefore bullish on China. Which brings us to Jeremy Grantham!

--You may have already heard of Grantham. He's the Chief Investment Strategist at GMO Partners. He's also a bit of a contrarian, and ruffled a few Aussie feathers last year when he said the local housing market was a "time bomb" and predicted the failure of at least one major bank.

--Grantham doesn't have a black box. But he does view markets as essentially mean reverting. Things can't stay over- or under-valued forever. He views Aussie house prices as overvalued. But in his April letter, he surprised a lot of people by concluding that commodity prices will go higher. Grantham writes that, "Accelerated demand from developing countries, especially China, has caused an unprecedented shift in the price structure of resources." You can read the whole letter here.

--Grantham is basically saying that "This time it's different with commodities". Why? He's claiming that the growth of the developing world is eclipsing the world's ability to provide the raw materials of civilisation at ever cheaper prices. It's no small claim. It reverses about two hundred years of history, as you can see from the chart below.

STUFF: Getting cheaper for 200 years and counting

Source: The Bank Credit Analyst

--The chart above is one we began showing over seven years ago. It shows that the primary trend in commodity prices is down and has been for the last 200 years. Anyone who is arguing for a long-term bull market in resource prices has to contradict this chart. And the chart makes sense once you look at the grand sweep of economic history.

--As more areas of the world are open to exploration (North America and Australia and New Zealand in the 19th century) commodity producers found more of what they were looking for. There were more places than ever to look for copper, oil, iron ore and places amenable to growing wheat, rice, and corn. What's more, improvements in technology made resource extraction cheaper and more efficient.

-- So why is 200 years of proven pricing history in the commodities markets now changing? Grantham says population growth and GDP growth in the developed world is what is "different" this time. He writes that:

The primary cause of this change [toward structurally higher commodity prices] is not just the accelerated size and growth of China, but also its astonishingly high percentage of capital spending, which is over 50% of GDP, a level never before reached by any economy in history, and by a wide margin

I believe that we are in the midst of one of the giant inflection points in economic history. This is likely the beginning of the end for the heroic growth spurt in population and wealth caused by what I think of as the Hydrocarbon Revolution rather than the Industrial Revolution. The unprecedented broad price rise would seem to confirm this.

--This means you can put Grantham squarely in the "demand growth" camp for explaining rising commodity prices. It is a bit odd that Grantham is citing China's massive, commodity-intensive fixed-asset investment as a source of commodity demand, without connecting China's investment binge to its huge accumulation of U.S. dollars (the whole relationship itself being the major product of the credit bubble). In other words, he doesn't trace China's commodity demand back to its original source: global credit growth.

--But as the kids say these days, watevs. If Grantham is right-and our own Dr. Alex Cowie at Diggers and Drillers has also reached this conclusion-then buying scarce resources (especially world-class proven reserves and resources) is the correct investment strategy for a historical tipping point. One caveat; Grantham's bit about population growth implies that scarcity driven by population growth will limit growth, which would presumably also limit price rises in commodities. But watevs.

--If you're conducting a thought experiment, you might also conclude that after a big global financial crisis AND a sovereign debt crisis, the world economy has kept on keeping on. It's survived the worst that anyone can throw at it. And as the developing nations continue to surpass the growth in the developed world (deindustrialising Welfare States) you get a formula for commodity demand exceeding supply. It's also a relief to believe that the worst is behind us, even if it's just a feeling.

--But we wonder if the structural shift in commodity prices also has anything to do with what Bill points out below, namely money supply growth. The U.S. Federal Reserve has tripled its holdings of public and private debt since the quantitative easing programs began. It's taken $2 trillion in brand new dollars to make that happen. Do you think that-coupled with stimulus in China and Europe-could have anything to do with soaring commodity prices?

--Well, probably. Or...yes!

-- But you could also be watching a version of Gresham's Law playing out, where investors began to hoard commodity-related investments and sell everything else. Gresham's Law is roughly that bad money tends to drive out good money for economic transactions. People hold on to what's valuable (gold) and spend what loses value (paper money). How does that apply to today?

--For the last 30 years, the great credit bubble has resulted in massive asset inflation; stocks, bonds, commodities, real estate, art, pinball machines, and baseball cards. Portfolios the world over have been loaded up with debt-backed securities or companies whose growth depends on the growth in credit; and that is being generous with the "asset" designation.

--Now portfolio managers are eager to unload the debt and own real stuff, or at least stop accumulating the bad stuff. So what is the good stuff today? To be continued...

Dan Denning
Daily Reckoning Australia

Save Your ASSets First

Wednesday, April 27, 2011

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