Monthly Archives: November 2013

Mongolia pushing for rail, pipeline links with China, Russia, official says

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“Mongolia has agreed to establish a working group with China to oversee the construction of new road, rail and pipeline infrastructure connecting the two countries with Russia, a member of a Mongolian government delegation to Beijing said.  The official, speaking to Reuters on condition of anonymity, said landlocked Mongolia aimed to become a ‘transit corridor’ to facilitate trade between its two giant neighbours and reduce the costs of delivering Russian commodities like oil and natural gas to energy-hungry Chinese markets.”

http://www.reuters.com/article/2013/10/29/mongolia-china-investment-idUSL3N0II18Y20131029

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“Mongolia open for business”

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“Mongolia had recently approved a full repeal of the Strategic Entity Foreign Investment Legislation (SEFIL), implemented in May 2012 to protect its minerals, rail infrastructure, telecommunications, media and defence sectors.  This resulted in increased political and legal uncertainty and is linked to a 17% drop in foreign direct investment during 2012 and a further 47% during January – August 2013.  The new legislation was enacted on 4 October 2013 with full bipartisan support. Provided an investor is not 50% or more owned by a foreign government, there are no restrictions on investment.  It also includes provisions to ensure that any future changes must have 66% or more votes in favour by Parliament.”

http://www.proactiveinvestors.com.au/companies/news/49946/aspire-mining-poised-to-benefit-mongolia-open-for-business-49946.html

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Mongolia’s loosening of foreign investment restrictions ‘a positive step’

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“The regulations came into force on 1 November, and removed restrictions placed on foreign investors in the country’s ‘strategic’ sectors, such as mining.  The law also provides investors with tax stability by freezing VAT, corporate income tax, mining royalties and customs duties at the rate applicable when the investment is made for between five and 22 years, depending on the investment amount and location within the country. Investors will also be able to freely transfer profits and assets out of the country.  International investment in Mongolia fell by 43% in the first half of 2013, following more than a year of uncertainty over the investment rules, according to Reuters.”

http://www.out-law.com/en/articles/2013/november/mongolias-loosening-of-foreign-investment-restrictions-will-open-up-natural-resources-sector-says-expert/

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Mongolia Law Signed To Welcome Foreign Investors After Boom Slows

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“Mongolia’s parliament approved a law that ended different rules for domestic and foreign non-state investors after the Mongolian tugrik fell 21% against the dollar this year and foreign direct investment slumped by 47%.  Mongolia’s mineral boom has slowed amid a protracted dispute with key investors, including Rio, and increasing calls for a greater share of revenue to go to its citizens. Building infrastructure will allow the landlocked country to export a greater volume of its abundant natural resources after low commodity prices hurt its $10 billion economy.  Mongolia’s central bank said it was in talks with the People’s Bank of China to double the currency swap agreement between the nations.”

http://www.bloomberg.com/news/2013-10-27/mongolia-premier-welcomes-foreign-investors-as-boom-slows.html

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Crisis Investing in Cyprus

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“In Cyprus, the blood is still in the streets from the crisis there earlier this year. There is essentially nobody who wants to buy anything that is in any way connected to Cyprus right now… which is exactly why it is the right moment to start looking for bargains. Most people aren’t even aware that Cyprus is an independent country, and even fewer know it has a stock market. Most of those who are aware don’t know how to properly invest there or what exactly to buy, and would be too afraid to do so even if they did—especially now, when the index for the Cyprus Stock Exchange is down 98% from its peak. But that’s exactly why Cyprus is now so attractive for a contrarian/crisis investor.”

https://www.internationalman.com/crisis-investing

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Beginning of the End for the Kirchner Era

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“Porsche importers have been forced to sell wine and folks at BMW have had to sell rice. Needless to say, in this kind of climate, the government takeover of YPF, an affiliate of Spanish energy giant Repsol, was inevitable. It was the consequence of the havoc brought on by price controls.  In sum, Argentina has squandered the trillion dollars brought in by the agricultural commodities bonanza since Ms. Kirchner’s late husband, Nestor, came to power in 2003. The end of the Kirchner era in 2015 will not come a moment too soon.  What is not yet clear is what will replace it.”

http://www.independent.org/newsroom/article.asp?id=4772

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Inflation Has Not Cured Iceland’s Economic Woes

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“Both countries still have problems. Iceland’s monetary controls are notably stifling needed investment, while Ireland is left with a large debt from bailing out its banks, and this is stalling growth. One thing is clear though — the effects of monetary policy are stark and the proclaimed benefits of Iceland’s inflationary policy were counteracted by the price inflation that ensued.  Don’t let a good crisis go to waste; learn something from it. As the tale of these two countries demonstrates, inflating one’s currency may give the appearance of recovery, but the truth is somewhat less rosy.”

http://mises.org/daily/6575/Inflation-Has-Not-Cured-Icelands-Economic-Woes

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Marijuana Industry Growing Faster Than Smartphones

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“OK, it’s an apples and oranges comparison, but that doesn’t stop it from grabbing eyeballs. Arcview Market Research is reporting today that $1.43 billion in legal marijuana will be sold this year, and revenues will grow to $2.34 billion in 2014, a growth rate of 64 percent. By comparison the smartphone market grew 46 percent from 2012 to 2013.  ‘Cannabis is one of the fastest-growing industries,’ said Steve Berg, a former managing director of Wells Fargo Bank and editor of the report, the second edition of the State of Legal Marijuana Markets. ‘Domestically, we weren’t able to find any market that is growing as quickly.'”

http://blog.sfgate.com/smellthetruth/2013/11/04/marijuana-industry-growing-faster-than-smartphones/

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New NDAA Costs You $5,700

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“The Defense Authorization bill (NDAA 2014) will cost the average family over a tenth of their income.  But the Senate will spend only a few days to consider it, and then give it a rubber stamp.”

http://www.downsizedc.org/blog/new-ndaa-costs-you-5700

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Here’s Where the S&P 500 Will be in 10 Years

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“The predictor I’m talking about is the Shiller price-to-earnings ratio (P/E), and it’s calculated by dividing the price of the S&P 500 index by the 10-year average of inflation-adjusted earnings.  History shows that expensive markets tend to result in low, and sometimes even negative, long-term returns. And cheap markets tend to result in high, long-term returns.  Sounds like common sense. But most investors ignore it.  And right now the Shiller P/E ratio is telling us that the U.S. stock market is pretty expensive, which means U.S. stocks should produce a relatively low return over the next 10 years.”

http://thesovereigninvestor.com/2013/11/04/heres-sp-500-will-10-years/

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