Monthly Archives: May 2014

David Galland: Lessons from Economic Crises in Argentina

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“You would think they would want more US dollars to flow into the country, but the government policy is so balled up they have put up some barriers to bringing money into the country. That said, there are simple mechanisms you can use to get around the restrictions that are completely legal. One of which involves buying Argentine bonds on the international market and selling them back in Argentina. Unlike in the US, where everything is straightforward and the rules generally make sense, in Argentina it’s a very fluid situation. I love the fact that I feel like I’m getting a degree in economic crises and how to operate in one.”

http://www.internationalman.com/articles/lessons-from-economic-crises-in-argentina,-with-david-galland

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The Successor to Keynes

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“The words, ‘Brilliant!’ ‘Ground-breaking!’ and ‘Visionary!’  will no doubt be seen in many reviews of Mr. Piketty’s book.  He recommends: Uniform global taxation; Confiscatory tax on inherited wealth; 15% tax on capital; 80% tax on annual incomes over US$500,000; Enforced transparency on all bank transactions; Overt use of inflation to redistribute wealth downwards.  Why didn’t anyone else think of this brilliant plan?  Well actually, they did. In fact, the above is essentially the shopping list of the IMF, the EU, the OECD and, in fact, many of the governments that make up what was formerly described as ‘the free world.'”

http://www.internationalman.com/articles/the-successor-to-keynes

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Bank of Israel’s Fischer, Treasury’s Brainard to push for more activist Fed

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“The arrival of former Bank of Israel Governor Stanley Fischer and former U.S. Treasury official Lael Brainard will add two strong voices to back Chair Janet Yellen’s view that loose monetary policy needs to be extended to turn around a slack labor market.  Fischer intervened directly in Israel’s mortgage market to tackle a real estate bubble, while Brainard pushed EU governments hard for more aggressive action from the European Central Bank during the euro zone crisis.  Interviews with former colleagues and a review of their public statements also suggest both will want the Fed to remain in activist mode long after its current programs wind down and its bloated balance sheet shrinks.”

http://finance.yahoo.com/news/fischer-brainard-push-more-activist-051333390.html

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Yellen tells graduates: Show grit like Ben Bernanke

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“Federal Reserve Chairwoman Janet Yellen on Wednesday delivered what you’d expect from a commencement speech: graduates, she said, should ‘tend the fires of curiosity,’ listen to others, and show grit in the face of failure. Yellen reminded New York University students in Yankee Stadium that even Babe Ruth, Lou Gehrig and Joe DiMaggio failed most of the time they stepped to the plate, according to a text of her remarks.  And what example did Yellen find for such an inspirational beacon of bravery?  Why, her predecessor, Ben Bernanke.”

http://blogs.marketwatch.com/capitolreport/2014/05/21/yellen-tells-graduates-show-grit-like-bernanke/

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Why Are Bond Yields Falling as Stocks Rally?

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“One of the most striking features of 2014 has been falling Treasury yields in the wake of the Fed’s tapering of QE.  The standard theory goes that, as the Fed withdraws support for longer-dated bonds, bond prices will drop (as demand falls) and yields (which move inversely to prices) will rise.  So much for standard theory…  In addition to the divergence between large caps and small caps (which we wrote about here and here), the divergence between falling bond yields and rising large-cap stock prices is another sign that the rally in the S&P 500 and the Dow may not be as strong as some believe.”

http://www.bonnerandpartners.com/oligarchs-and-poligarchs/

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Silver Fixing Company to Stop Running London Benchmark

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“The company that runs the London silver fixing, a benchmark dating back more than a century, will stop running the process after Deutsche Bank AG said two weeks ago that it was dropping out of the price-setting ritual.  The London Silver Market Fixing Ltd. will stop administering the fixing on Aug. 14, it said today in a statement.  Regulators have been stepping up their scrutiny of how gold and silver prices are set in the wake of the London interbank offered rate-manipulation scandal. The FCA is visiting member banks involved in the gold fixing as part of its review of gold benchmarks.  Deutsche Bank has said it is leaving fixings as it scales back its commodities business.”

http://www.bloomberg.com/news/2014-05-14/silver-fixing-company-will-stop-running-benchmark-on-aug-14.html

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Gold Smuggling in India Spikes 446% in Last 12 Months

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“As per the report, Directorate of Revenue Intelligence (DRI) had filed 40 gold smuggling cases in the last year whereas it has increased to 148 cases in the past 12 months. The aggregate value of the seized illegal gold from 464 people in 2013-14 is es at Rs 245 crore.  Most of the gold smugglers are arrested from the nation’s international airports. The customs officials at the Indira Gandhi International Airport said that they have nabbed 353 kg of gold worth at Rs 90 crore in this current financial year whereas it was 20-25 kg of gold in the last year.  India had witnessed a dangerous increase of CAD to $88.2 billion which is about 4.7% of the country’s GDP in the year 2012-2013.”

http://www.scrapmonster.com/news/gold-smuggling-in-india-spikes-446-in-last-12-months/1/12756

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The Birth of a New Bull Market

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“Underneath the headlines lies an irreparable situation with the PGM (Platinum Group Metals) market, one that will last at least several years and probably more like a decade. This market is teetering on the edge of a supply crunch, one more perilous than many investors realize. As the issues outlined below play out, prices will be forced higher—which signals that we should diversify into the ‘other’ precious metals now.  The basic problem is that platinum and palladium supply is in a structural deficit. It won’t be resolved when the strikes end or Russia simmers down. Here are six reasons why.”

http://www.caseyresearch.com/cdd/the-birth-of-a-new-bull-market

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The biggest factor in the platinum and palladium markets

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“The chief reasons platinum and palladium are in a structural supply deficit are:  A: As I mentioned last week, the ore grade of the platinum group metals, that is the amount of the metals found in ore, is declining rapidly, with a plunge of more than 50 percent in ore grades in Russia and South Africa combined since 1998.  B. It takes as long as 10 years to open a new mine. C. Inventories are already being squeezed, with platinum demand expected to exceed available supplies this year by 705,000 ounces, while palladium demand is expected to exceed supplies by a huge 959,000 ounces this year, more than double the official 455,000 ounce deficit in 2013.”

http://www.moneyandmarkets.com/the-biggest-factor-in-the-platinum-and-palladium-markets-61227

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