News Commentary

The Secret to Picking Winners in ‘Submerging Markets’

"With investors already on edge as global markets came unglued last week, China picked a fine time to engineer a credit crunch. Drowned out in the noise about Federal Reserve Chairman Ben Bernanke’s tapering talk last week was the fact that half a world away, China’s banking system was caught up in a cash squeeze. Short-term lending rates tripled as the financial system essentially froze. It was frighteningly reminiscent of the 2008 financial crisis in the U.S. Hedge fund managers and economists have long warned of a potential bursting of China’s debt-fueled real estate bubble, a replay of our own subprime crisis. Could this be the beginning?" Continue reading →

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Euro Pacific Capital Global Investor Newsletter – June 2013

"The central premise of Abenomics seems to be that the Bank of Japan could succeed in pushing inflation up to 2% without raising the rates on long-term debt. To do this, one would have to assume that bond investors would accept negative interest rates, even while a falling yen was eating away at principle. Such an outcome is not consistent with demonstrable human behavior. If the investors didn't play ball, it was assumed that the Bank of Japan could step up their quantitative easing and buy the bonds that investors were rationally selling. But the BoJ is already buying 70% of the new government debt." Continue reading →

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Sitka Pacific Capital Management Client Letter, May 2013

"In many respects, the market action over the past 2 years — in stocks and gold — seems to reflect a misunderstanding of how periods of monetary expansion affect consumer prices and asset prices. In the pages that follow we’ll highlight a few of these monetary expansion/inflation misunderstandings, and we’ll explain why equity investors should be growing more pessimistic — not optimistic — in light of current market valuations and the Fed’s continued quantitative easing." Continue reading →

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Don’t Fall Victim to Hoarding

"Thanks to the courageous Edward Snowden, America now knows the NSA has, for seven years, collected data on many millions of our phone calls, emails and other communications, even when its top officials have testified that it had not. And things look like they are going to get even worse. Hot on the heels of the NSA revelations, now the habitually anti-tax haven and pro-tax Organization for Economic and Community Development (OECD) wants in on the action, by forcing all countries into useless data-hoarding of private information in a very big way." Continue reading →

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Bill Bonner: The Bear Market in Bonds

"Get out now. You can ask all the questions you want later. Everyone saw (or still sees) a turn in the bond market coming. Bonds have been going up for 33 years. They can't go up forever. What can't last forever has to stop sometime. This seems like as good a time as any. But everyone cannot get out of their bond investments at the same time in a calm, orderly way. Some will hesitate... wait too long... and then, every bounce will encourage them to wait longer, hoping to recover their losses. Others will stumble and be crushed underfoot, selling their bonds at panic prices. Is the panic happening already? No. We've only smelled the first faint whiffs of fear." Continue reading →

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Crisis and Opportunity in the Junior Miners

"While it's true that junior miners routinely rise and fall like a roller coaster, the opportunity that today's dirt-cheap prices present is far from normal.To put it in perspective, remember when Lehman Brothers, Merrill Lynch, and Bear Stearns all succumbed to the subprime crisis? When the financial system itself seemed to be crumbling, and panicked investors were selling everything they could catch a bid on? Well, junior mining companies are as cheap now as they were then. Even if you go all the way back to 2002 – before the gold bull really got running, and gold was going for just $315 an ounce – junior miners still weren't as cheap as they are today." Continue reading →

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Pardon Me? It isn’t Snowden Who Needs Clemency

"It isn’t Snowden who needs clemency. It’s Barack Obama, his co-conspirators and his accessories before and after the fact. Nor is it Snowden alone before whom the crooks should be made to grovel for mercy. The fate of the Obama Spy Ring rightfully belongs in the hands of ALL its victims. Will these telecom voyeurs, these data burglars — and their bosses — be made to truly pay for their crimes? It seems unlikely, as they are made members of the world’s most powerful organized crime syndicate, the government of the United States." Continue reading →

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Edward Snowden versus Jay Carney

"There is no doubt that Edward Snowden has created a huge public relations crisis for the Obama administration. The government appears to be not only stupid, but utterly impotent. Here we have this gigantic spying system, and it looks like the Keystone Kops. It cannot locate him. It cannot stop him. It revoked his passport. Nobody cares. Obama has remained silent on all of this. In his place is Jay Carney. Who in the world is Jay Carney? The implications of what Snowden has revealed are monumental. We have moved formally and legally into a police state. The only thing protecting us is the utter incompetence of the police state to enforce its will on people." Continue reading →

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The Real New Hope for the Global Middle Class

"The idea is that if people protest loudly enough, monopoly government – Leviathan – shall oblige protestors by revealing its inner workings. We know this is possible because a worldwide transparency organization led by a former World Bank executive tells us it will be so. But we have another idea. Much that is going on in the world today is attributable to what we call the Internet Reformation. Around the world, the powers-that-be are struggling to contain its evolution and impacts. In our view, they probably will not be entirely successful. One can orchestrate protests and violence. But one cannot outrun the sociological impact of digital enlightenment." Continue reading →

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