Investment/Trends

Why South Africa’s Currency Has Been Getting Destroyed

"The South African rand (ZAR) is getting absolutely brutalized lately. The currency has fallen from levels around 9.00 against the U.S. dollar just three weeks ago to levels around 10.00 today. 'The key negative risk from headlines out of the mining sector wage negotiations is playing out in a text book fashion – alongside plummeting gold prices and rising [U.S. Treasury] rates – creating a perfect storm for ZAR,' write Bank of America Merrill Lynch currency strategists. The ongoing unrest in South Africa's mining sector – which relies heavily on exports of gold and other metals – is dragging down the country's economy." Continue reading →

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Krugman thinks low interest rates are behind the boom in paper currency. Not so fast!

"Yes, as Krugman says, interest rates are probably an important factor. But I’m not so sure they’re the most important factor — for a few reasons. For starters, a lot of the demand for U.S. currency is coming from abroad. If you’re in another country with high inflation or severe instability, one of your main concerns is going to be preserving your purchasing power. About 70 percent of U.S. currency today – in the form of $100 bills – is abroad, compared to about 50 percent two decades ago. And while the total level of $100 bills outstanding in the United States has a little more than doubled over 20 years, the growth in $100 bills abroad has increased by far more." Continue reading →

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Timing the Bottom

"We think the safest portfolio allocation under present circumstances would be 50% gold, 50% cash. But preserving wealth is not our only goal here at Casey Research. For many of us, readers and colleagues alike, it's not even our top priority: we want to make money—lots of money. And it is our view that the recent market volatility is evidence that our projections of more economic trouble ahead were and are correct. That means our overall strategy is correct and remains intact, which in turn implies that the current selloff is a buying opportunity. Hence, we still recommend our basic allocation model of 33% cash, 33% gold, and 33% equities that should do well in times of crisis." Continue reading →

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For Bitcoin VCs, There’s No Sexier Word Than “Compliance”

"'There are few things scarier than the threat of the government turning off your [portfolio] business and that possibility 100 percent exists with bitcoin,' said Matthew Witheiler, principal at Flybridge Capital Partners, and one of the four investor panelists at the pitch event. 'The bitcoin companies that win will be the ones that play by the rules.' Andrew Chang, a partner at Liberty City Ventures, a VC firm that has created a dedicated bitcoin startup fund, said he is looking for startups that approach their business 'not necessarily as tech startups would approach it, but as financial institutions would.'" Continue reading →

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Indian jewellers join government’s gold bar and coin ban

"In a bid to support the Indian government’s efforts, jewellery retailers have decided to join in and curb investment into the precious metal. Several prominent retailers like Gitanjali Gems, TBZ and Tanishq, are to voluntarily stop sales. All India Gems and Jewellery Trade Federation, which has more than 40,000 members, has said that over 85% of its members have agreed to the ban. The rest are slated to join over the weekend. 'The jewellery community has come together in supporting the country in times of crisis. We are happy to help with this voluntary action,' said Haresh Soni, chairman of the Federation." Continue reading →

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The Gold Roller Coaster

"About a year ago, we began to advise readers that we are in for the economic roller coaster ride of the century and that gold will be on that roller coaster. Those who are on the ride will need to keep their nerve – to remember that, as wild as the fluctuations may become, gold is not in the same category as stocks and bonds. It retains value when other more conventional forms of wealth disappear. Its true value to the investor is as an insurance policy – to make sure that if economies collapse, it might still be possible to buy some freedom and put food on the table – to ride out the economic storm." Continue reading →

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Gold! $250K in centuries-old coins found

"The coins, called escudos, were part of the treasure aboard a fleet of 11 Spanish galleons wrecked by a hurricane off the Florida coast on July 31, 1715. It was this famous shipwreck that gave this part of Florida its nickname, The Treasure Coast. The coins appear to be in good condition, and still have some legible dates and markings. The oldest bears the date 1697; the youngest is dated 1714. The 48 coins have an estimated value of $200,000 to $250,000, said Brisben. Perhaps the most surprising thing about the expedition is that the coins were found just 100 feet from the shoreline, in only six feet of water." Continue reading →

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Realty Mogul Review: Fractional Investment Property Ownership, Hard Money Lending

"Realty Mogul is a new 'crowdfunding' start-up that lets you invest in residential investment property for as little as $5,000. You either take a partial ownership position in a property, or you become a lender to (experienced) house flippers. The new thing here is that you can do it completely online with a few mouse clicks (no mortgage brokers, real estate agents, or tenants) and again that low minimum $5,000 investment. Taking an equity ownership position means that you own a little slice of a single-family home or multi-unit complex while a professional does the buying, fixing up, renting out, and eventual selling." Continue reading →

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Marc Faber: Even QE99 won’t help US; India best in Asia

"Despite quantitative easing (QE) not really bearing any fruit for the common man, the Federal Reserve is likely to continue with it and go 'up to QE99,' says investment guru Marc Faber. He strongly feels easy money has not boosted employment for the ordinary people; instead it has given a philip to asset prices owned by very small portion of the population. Property prices over the last 12 months are up 35 percent, but all this has not helped the man on the street, he says." Continue reading →

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The “Zero Hour” Scenario

"The 'emperor' here consists of central banks, commercial and investment banks and the commodities exchanges. The day everyone recognizes them as being buck naked — or in this case, stripped of the gold they claim to hold — will be 'zero hour.' It’s the day you’ll be happy you held on, even as gold sank from $1,900 in September 2011 to less than $1,500 as we go to press. Caution: What we are projecting here is nearly the ultimate in fat-tail events. But make no mistake: Zero hour — in the form of a precious metals default on the Comex, or maybe the London Bullion Market Association (LBMA) — is coming sooner or later." Continue reading →

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