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該来來的總是會來的 July 14, 2016

Posted by hslu in Economics, Energy, Food, Global Affair, Gold, Military, Oil.
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Former Fed chair Greenspan: Inflation is Starting to Rise.

http://www.foxbusiness.com/markets/2016/07/14/fmr-fed-chair-greenspan-inflation-is-starting-to-rise.html

Source: Fox News website

Greenspan’s prediction of a pending slow but persist inflation over a long period of time will come in due time. Average long term interest rate cycle is 37 years.

The bottom of the current “up” cycle was formed about 7 years ago.

There is still a long way to go.

What is problem, you say?

Well, consider these:

Higher crude oil price down the road.

Higher food prices due to food shortage worldwide.

The rise of the Chinese middle income class.

The unstoppable rise of global money supply due to QEs, negative interest rates and stimulus programs by governments in the world.

The gradual improvement of the U.S. economy.

The buildup of debts by the private and public sectors everywhere in the world.

The wealth effects coming from the rise of the stock and real estate  markets in many parts of the world.

The arm race due to the threat of military confrontation in Middle East, Europe and Asia.

So what could the end of this rising interest rate cycle look like?

Another devastating crush of the world economy and the stocks and real estate market. And the return of gold price to new record high.

Crazy me, you might say.

Although we still have a long way to go but, look around, the worse of the deflation threats are behind us.

Greenspan may be right this time.

This simple chart illustrates the frightening force driving the economy July 10, 2016

Posted by hslu in Economics, Global Affair, Gold.
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http://finance.yahoo.com/news/grant-williams-crazy-presentation-debt-000000190.html
Grant Williams, the author of the widely-read financial publication “Things That Make You Go Hmmm” and co-founder of Real Vision Television, says we’re experiencing something “truly historic” in the global economy. In a new 40-minute video presentation called “Crazy,” Williams highlights the extraordinary levels of global debt and unprecedented monetary policy we’ve seen since the 2008 financial crisis. Following the 2008 financial crisis, central bankers unleashed ultra easy monetary policy.

朱立倫:Loser April 20, 2015

Posted by hslu in Cooking, Economics, Global Affair, Gold, Politics, Taipei, Taiwan.
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你聽聽他的口氣,完全是一副’無可奈何’,啞巴吃黃蓮的可憐相。

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‘我2016不競選總統’ 這樣可以嗎?

你看朱立倫的口氣多可憐啊!好一副委屈求饒的樣子。

朱立倫的意思是:放過我吧!別再找我的麻煩。

Loser!

我早就說過,朱立倫跟馬英九一樣是一個鞠躬的料子。他這麽說就證明我先前說的沒錯。

這是嘴巴上鞠躬。

其實他2016不選是對的。被國民黨9% 的馬英九拱出來的正藍候選人幾乎是沒有希望被選上的。等個四年,好好的做國民黨黨主席和市長。做的好2020說不定還有機會。2016朱立倫要是選不上,那國民黨裏面一定有人要朱立倫下台。到時他必須辭國民黨主席的地位。新北市市長的寶座也坐不穩。朱立倫打個算盤就知道了。

在此之時,好好的做你的市長。養精蓄銳,市長做的好,2020還有希望。

Will stock markets drop soon? August 13, 2014

Posted by hslu in Cold War, Economics, Energy, Global Affair, Gold, Military, Obama, Oil, Politics, Putin, stocks.
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Are stock markets in denial? Will conflicts between Russia and Ukraine, or more fittingly Russia and the US or Putin and Obama, bring the five-year old bull market down?

The reason for the bear case is simple: Russia may engage Ukraine army or Kiev hard-right defenders militarily UNEXPECTEDLY.

Donetsk is an important city in Ukraine and the state where Donetsk is the capital is an industrial center of Ukraine. It is historically connected to Russia not Europe. Donetsk is an important industrial city with a million people. 750,000 have fled to Russia (an hour or so away from Russian border) and 150,000 have fled to somewhere else. The city is heavily damaged from Ukraine’s continuous bombing and it is essentially a ghost town now. Yet we don’t see any picture on American TV but the situation is widely reported in Europe and Russia.

I am sure you know why the killing and shelling are not front and center in Americans’ living room.

But that is not what the stock market cares about and we need to find out what’s going happen to the stock market if something does go wrong. We need to know what is going to happen when Russian’s 280 humanitarian trucks carrying relief material to Donetsk where pro-Russian fighters are still holding up against the hard right fighters (not Ukraine army.) There is no water. There is no electricity. There is no food. There is no essential supply. There are killings and dead people but Kiev doesn’t want the west to find out.

Russia wanted to send in supplies for people who are still in the city and those 1,500 pro-Russia fighters. Government in Kiev don’t want them in Ukraine territory.

Now, we have a problem in a day or two especially when Putin goes to Crimea tomorrow (Thursday.)

These are what the stock market is worrying about:

What does Petro of Ukraine want to do? What message he gets from the US/Obama? Is Obama using Ukraine as a pawn to send a message to Putin? Is Obama’s recent insults to Russia/Russian male/Putin a prelude of war? Does Obama believe Putin will eventually back down in the face of all powerful American military might? Is Biden, who is said to have been given the job to handle the Ukraine crisis by Obama, mad? What is the exit plan for Obama/America? What outcome will America accept in the end? How far Obama will support Kiev?

We don’t know.

What will Putin do? Why is Putin going to Crimea? What if the trucks are stopped by Kiev/Ukraine at the boarder manned by the Red Cross? What if the pro-Ukraine force (not Ukraine army) starts shooting at the trucks? Why doesn’t Kiev want the trucks in? Are they afraid that the real picture of great destruction of Donetsk is revealed by the west? Will Putin send in fighter jets? Will Putin engage Russian military with Kiev? Will Putin shut in gas to Ukraine and Europe? Will Russia shut in oil supply to Ukraine and Europe? What if Kiev blocks the transportation of nat gas and oil to some European ciuntries some of which have to go through Ukraine?

The key question is: Will Putin announce this Thursday that Russia will send in Russian army if Kiev and Obama do not back down?

What’s important for us low life investors do?

Do we wait for the announcement from Putin? Do we believe that Obama has had enough of Putin’s humiliation in the past and he has drawn a red line on Ukraine. As such, will Obama not back down this time even risking a fight with Putin’s Russian army?

No wonder the stock market is in a holding pattern this last couple of days. EU will sink into recession if this conflict escalates. Russia’s economy will shrink. Oil will soar. Stock will tank.

So, what is the end game llike?

Cold war between Russia and US has now officially entered into a new chapter.

Put on your ‘GOLD’ shirt August 8, 2014

Posted by hslu in Gold.
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$213,000.

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Source: CNBC mobile site.

That’s how much this ~8.8 pound, 18-22 carat ‘gold’ shirt is worth.

His name is Pankaj Parakh and he is an Indian. He is a textile magnate with a lot of money. He got the shirt for his 45th birthday.

We the gold bugs need many rich people like Pankaj who has more money than he needs.

May be Pankaj can make a ‘gold’ wedding gown for his daughter or something.

Let do some math here:

The article says the following:

1. the shirt weighs more than 4 kilograms.
2. the shirt is made out of 18-22 carat gold.

Let’s assume it weighs 9 pounds and it is made out of 20 carat gold since we don’t know the exact gold content.

9 lbsx16 oz/lb = 144 ozs
20/24=0.8333% gold
144 oz x 0.8333 = 120 ozs of gold.

That’s how much pure gold the shirt has in it.

$213,000/120 oz = $1,775/oz

Let’s assume labor cost is minimum in India and let’s assume the othe metal in the shirt isn’t worth a lot, Pankaj bought the gold when it was eorth $1,775 per oz.

Gold closed at $1,311 per oz today for Dec. 2014 delivery.

How does Pankaj take off his gold shirt?

Very carefully, for sure.

I wonder how many more times Pankaj plans to wear his gold shirt?

Up, Up and Away! March 21, 2014

Posted by hslu in Economics, Global Affair, Gold, stocks.
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Something is happening at a breakneck speed since 2003 and, yes, you’ve guessed it: the rich get richer, and that’s exactly what Bernanke wanted with his now infamous QEs: trickle down economy.

For trickle down mechanism to work, two things have to happen: First, the rich has to get richer and, secondly, the rich has to spend their riches.

Worldwide 2014 there are:

  • 1,682 billionaires:up 82% since 2003;
  • 37,104 $100-millionaires:up 62% since 2003;
  • 167,000 $30-millionaires:up 59% since 2003.

There is no doubt that the first part of the trickle down puzzle is in place but the riches haven’t spent their money as much as it is needed to move the US economy to break free speed.

That’s why QE3 is still in progress now.

In the mean time, wages for the middle-income population have mostly been stagnant and many of them haven’t benefited by the rising stock and real estate markets because they don’t own that much stock to begin with. The values of their homes have barely moved back to the pre- great recession levels.  Few of them own any gold.

US median Household Income Dec 2007 - June 2013

The US economy has been limping along at 2% for the last 5 years.

Can we call this progress?

Yes, it is for the riches and it is the natural progression of capitalism. It is wealth distribution from the middle class to the top. That’s what is supposed to happen when capitalism is the rules of the game of the society. This has been the rules laid by the United States for other nations to follow for many decades in the past.

Way back in my JH days, I learned in my 公民 classes that, according to 国父孫中山; Dr. Sun Yat-sen, that one of the ill effects of capitalism is inequality of personal wealth between the haves and have-nots. Sure enough, inequality is at its utmost extreme in the United States because the single most important objective of capitalism is the accumulation of profits. With unlimited hot money provided by Bernanke, the riches on Wall Street and other places in the world, sure had a good friend in the most important position in the world.

I kept wondering that when will the inflation time bomb explode?

台北街头和桃园机场 October 13, 2013

Posted by hslu in China, Chinese Food, Do you know?, Food, Gold, Taipei, Taiwan, Travel.
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Just a few pictures of what I saw in Taipei about a month ago。

 

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Six year old 高粱酒 -Made from Sorghum。

Six year old 高粱酒 -Made from Sorghum。

二锅头也是一种由高粱做的白酒;about 90 proof。

二锅头也是一种由高粱做的白酒;about 90 proof。

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One of my most favorite fruits; longan,桂圆也。

One of my most favorite fruits; longan,桂圆也。

成双成对。

成双成对。

中国人喜欢买金子。台湾银行的广告非常吸引人。Accumulate wealth starts by buying gold。

中国人喜欢买金子。台湾银行的广告非常吸引人。Accumulate wealth starts by buying gold。

大肚能容  了却多少人间事; 满腔欢喜  笑开多少古今愁。 That‘s what I like 弥勒佛 for。

大肚能容 了却多少人间事;
满腔欢喜 笑开多少古今愁。
That‘s what I like 弥勒佛 for。

乌鱼子 is a delicacy Favorited by many Taiwanese. Very expensive. That' why it is called 台湾乌金。

乌鱼子 is a delicacy Favorited by many Taiwanese. Very expensive. That’ why it is called 台湾乌金。

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What is the age of your skin is more important than your real age。

What is the age of your skin is more important than your real age。

My name is Taiwan。

My name is Taiwan。

稀饭和小菜。

稀饭和小菜。

担担面

担担面

 

Summary of the Economy and Financial Markets October 5, 2013

Posted by hslu in China, Economics, Energy, Euro, Global Affair, Gold, jobs, Oil, stocks.
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I wrote this short report for my friends in Dallas yesterday; October 4, 2013. It helps me to get a grip of what’s going on in the financial market. It is a very simple and brief summary of what’s important over the last month on Bonds, stocks, crude oil and gold. I am learning to spot investment opportunities and I thought understanding the macro economics is essential.

  • The Fed delayed tapering due to deteriorating economy and pending gov. shutdown.

    • Unemployment rate @ 7.3%; Labor participation rate @ 63.2%; lowest since 1970.
    • U6 remains at ~14%; 90,473,000 not in Labor Force – BLS data.
    • Stock market popped due to QE but gave back gains 3 days after- A concern!
    • Treasuries rallied: 10-year Bond yield to decline from ~3% (record low: ~1.40%.) Watch TBT.
    • Government shut down and pending debt ceiling fight (2 weeks) will impede rally
    • Emerging markets had relief rallies.
    • Countries with current account deficits continue to see market/currency decline.
    • India and Indonesia in trouble.
  • Crude oil and metals continue to trade lower;
    • China slow down weighs and Inflation absent.
    • Bull market in gold ran out of steam.
    • Economy needs to pick up steam to see crude oil and gold moving higher.
  • European economic conditions improved but recoveries slow to come.
    • Merkel stayed on for 3rd term. Steady as she goes. No major policy change.
    • Recession may be over.
    • Sovereign debt yields declining: Spain and Italy 10-year Treasury yield. LT buy?
  • Japan
    • Business confidence improves: capital investment up 5.1%
    • GDP up 3.8% in Q2 2013; revised up from 2.6%. 4.1% in Q1 2013.
    • Sales tax increased to 8% (4/2014) from 5%. Up to 10% in 2015.
    • Government: ¥10 trillion (~$100 B) stimulus: lower than expected. GDP = $5.96 trillion.
    • BOJ on target to increase currency float. Deflation may be over.
    • Debt: ¥1,000+ trillion. Deficit: 40+% spending borrowed. Structural reform from Abe not enough.
    • DXJ and YCS are still in play. US government shutdown affected Nikkei’s decline and yen’s strength.
  • Chin Economy expanded at ~7.5%
    • 12-5 is in progress (2011 – 2015): sustainable growth of 7%, industrial upgrading and the promotion of domestic consumption. 11-5 expected 7.5%. Actual 11%.
    • 10 new cities to accommodate 250 million people from farms: urbanization
    • 户口制度to relax?
    • Shanghai Free-Trade Zone: testing for 2-3 years. To expand to other areas.
    • Preparation for a floating 人民币?
    • More countries signed up for direct exchange with人民币: by-pass US dollar.
    • China ADRs could be good investments.

 

Gold, Renminbi and the Gold Standard September 28, 2013

Posted by hslu in China, Economics, Global Affair, Gold.
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It is rumored that the Chinese government has accumulated more than 7,000 tons of gold since 2009. the central government also encourages Chinese citizens buy gold on the open market. Panda gold coins has been a popular collectors’ item since 1982. Ads like this one are very common at gold and jewelry stores in Shanghai.

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Wouldn’t you like some of those gold pieces on you?

Why the rapid pace of gold purchase on the open market? 

The Bank of China probably doesn’t like what Bernanke has been doing since 2008, I guess.

But, this is the obvious answer.  I wonder that is there a hidden agenda from the Chinese government?

Some reports speculated that the pace of gold purchase will continue and some even linked Renminbi with the gold standard as a way to fight inflation and teach America a lesson.

It is hard to know what the real game is.

Well, just so happens that Chinese has a saying for this situation:

“不知道中国的葫芦里到底卖的是什么药!”

Bernanke is at it again, but July 13, 2011

Posted by hslu in Economics, Energy, Global Affair, Gold, jobs, Oil, Politics, stocks.
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Will QE2.5 and QE3 generate jobs?

The answer is “NO.”

It will pop up stock market which Bernanke is intended to do. The rational behind that is people will feel richer and will spend more, hence, stimulate the sagging economy.

But the next run of printing will inevitably increase the commodity prices which will negate any wealth effect bought on by higher stock prices.

Here is the $64 million question:

Will you go out buy a car or a house if your stock portfolio is up by 15% but you food and transportation cost is up by $250 a month?

No way. Not when your neighbors are out of work since March and your wife’s job is on the line.

That’s why QE2 didn’t work and that’s why QE2.5 and QE3 will not work either.

But inflation will be worse all over the world and we will all suffer because of Bernanke’s reckless action.

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