News Commentary

Destroying the Switzerland of Central America

"Leave it to the U.S. national-security state to destroy another country, this one being Costa Rica, known as the 'Switzerland of Central America' and whose national slogan is 'pura vida'—'pure life.' How is the U.S. government now destroying Costa Rica? No, not with bombs or missiles—at least not yet—but with its much-vaunted drug war, which the Pentagon and the CIA are expanding in Latin America since that their adventures in Afghanistan and the Middle East might be winding down. Does anyone in Costa Rica really believe that the militarization of Costa Rican society is going to have any significant effect on the 40-year-old war on drugs?" Continue reading →

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The Financial Situation in Cyprus and the End of the Euro

"There are several lessons to be learned here: 1. Politicians lie. Only a few weeks ago, politicians in Cyprus promised that deposits in local banks would be backed 100% and that euro-zone taxpayers would finance any bailout. Obviously, that turned out not to be true. 2. The swift win the race. Those depositors who got their funds out of Cyprus banks before the bailout get to keep 100% of their capital. Those who delayed face losses up to 60%. 3. Cash is king. While the value of the euro has slumped in recent weeks, anyone with euros in cash form, rather than in an account, is far better off than with euros in a bank account. [..]" Continue reading →

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Risks Across All Markets Necessitate Careful Asset Allocation

"It’s obvious to everyone by now that the global rally has been primarily driven by central bank money printing, creating an artificial financial environment. The world’s biggest central banks have added an astounding $8.7 trillion of liquidity since 2008, while slashing interest rates well below the rate of inflation. This massive amount of liquidity has found its way into the markets. At some point, all this quantitative easing will end. The resulting worldwide deleveraging will create massive problems for the equity markets. There’s no telling when this sea change will happen, so it’s imperative that you develop an exit strategy now." Continue reading →

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Marc Faber: What Happened In Cyprus Will Happen Everywhere

"'It will happen everywhere in the world, in Western democracies,' Faber said. 'I think you have to be prepared to lose 20 to 30%. I think you're lucky if you don't lose your life.' 'If you look at what happened in Cyprus, basically people with money will lose part of their wealth, either through expropriation or higher taxation. The problem is that 92% of financial wealth is owned by 5% of the population. The majority of people don't benefit from a rise in the stock market. They are being hurt by a rising cost of living and we all know that the real incomes of median households has been going down for the last few years,' he said." Continue reading →

Continue ReadingMarc Faber: What Happened In Cyprus Will Happen Everywhere

Jim Rogers: ‘Run for the Hills’ Now, I’m Doing It

"The EU/IMF raiding bank accounts in Cyprus to bail out the country's financial system sets a dangerous precedent and investors should 'run for the hills' said investor Jim Rogers, chairman of Rogers Holdings. Rogers said that with Cyprus, politicians are saying that this is a special case and urging people not to worry, but that is exactly why investors should be concerned. 'If you're going to listen to government, you're going to go bankrupt very quickly,' he added. 'I, for one, am making sure I don't have too much money in any one specific bank account anywhere in the world, because now there is a precedent,' he said." Continue reading →

Continue ReadingJim Rogers: ‘Run for the Hills’ Now, I’m Doing It

Is it Time to Give Up on Gold?

"There’s no question everyone hates gold right now. But this is actually a good thing for the metal. This extremely negative sentiment could set up the stage for the next move higher. When nearly everyone hates an asset, it means most investors have already sold it. So the downside may be limited. In March 2009, the survey of futures traders I mentioned above also registered the same low reading of 3% for stocks. In other words, when U.S. stocks bottomed after the crash, only 3% of future traders were bullish. Since then, the S&P 500 Index has rallied 130%. If sentiment towards gold changes, we could see an explosive move in the metal." Continue reading →

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Fusion center director: We don’t spy on Americans, just anti-government Americans

"Law enforcement intelligence-processing fusion centers have long come under attack for spying on Americans. The Arkansas director wanted to clarify the truth: centers only spies on some Americans – those who appear to be a threat to the government. In trying to clear up the ‘misconceptions’ about the conduct of fusion centers, Arkansas State Fusion Center Director Richard Davis simply confirmed Americans’ fears: the center does in fact spy on Americans – but only on those who are suspected to be ‘anti-government’." Continue reading →

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To protect restaurants, D.C. may curb food trucks

"Should D.C.'s food laws try to protect consumers and public safety? Or should they try to protect brick-and-mortar restaurants from competition? D.C.'s restaurant lobbyists, along with many local politicians and bureaucrats, seem to thi nk the government's job is to save the delis and diners, bistros and brasseries from the scourge of falafel trucks, barbecue buses and weenie wagons. Most of downtown D.C., according to the Food Truck Association of Metropolitan Washington, would be off-limits to food trucks under new regulations proposed by the Department of Consumer and Regulatory Affairs." Continue reading →

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A bitter lesson from ‘the best and the brightest’

"The Boston School Committee announced last week that it will finally end almost 40 years of forced busing — long after the policy effectively wrecked local schools. In May 1974, Boston residents voted 15 to 1 against busing schoolchildren to achieve racial integration. A month later, U.S. District Judge Arthur Garrity ignored the popular vote and made himself czar of Boston schools. Even though there are only 13 percent white students remaining in local schools, almost two-thirds of students last year were bused away from their neighborhoods. Students were dragged out of bed before 6:05 a.m. for the glory of a long-dead judge’s vision." Continue reading →

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Post-Cyprus Blues: Confusion and an Erosion of Faith

"It may be misleading to project the crisis and resolution in Cyprus onto other quite different financial crises in other quite different economies. The common ground may be a rising fear of capital controls and the search for safe havens that won't implode or change the rules overnight. The sudden emergence of risk in what was perceived to be a safe haven will likely spark interest in non-banking safe havens, for example, precious metals, and what correspondent Mark G. calls the Glass Jar Bank, which he observes is still a popular alternative in Eastern Europe to entrusting one's cash to banks." Continue reading →

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