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By Monty Guild and Tony Danaher, on October 27th, 2010
Where inflation is higher than interest rates, liquidity will flow
In the world of stock, commodities, and real estate investing, it is common knowledge that capital flows to where inflation exceeds the cost of borrowing. Clearly, if you can borrow at 4% and inflation is 6% it pays to borrow money and speculate in the appreciating stocks, commodities, and real estate. This is the situation in many developing nations today, especially in China, India, and some other countries in Southeast Asia and Latin America; borrowing costs are less than the commonly accepted “true” rate of inflation. Additionally, companies and . . .
Continue Reading: LIQUIDITY WILL CREATE BULL MARKETS IN COMMODITIES AND SOME STOCKS
By Monty Guild and Tony Danaher, on October 21st, 2010
Please notice the chart reflecting the trends in the holdings of U.S. treasury debt by Japan, China, and the U.S. This chart tells the story of what is happening to the U.S. dollar and the U.S. economy.
You will notice that Japan is increasing their holdings of U.S. debt. This means they are buying U.S. debt, selling yen to keep the value of the yen from rising too much. It seems clear to us that the Japanese exporters are suffering greatly as the yen has risen to high after high and they are pressuring the Japanese government . . .
Continue Reading: CONTINUING TO BELIEVE IN COMMODITIES (GOLD, FOOD, OIL) AND FOREIGN MARKETS
By Monty Guild and Tony Danaher, on October 13th, 2010
The U.S. has been sucessful in devaluing its currency.
The U.S. dollar is down by 13% in the last months.
In our opinion, the U.S. intends to devalue the dollar by at least another 10% in the coming months. Many countries are trying to competitively devalue their currencies and are using easy monetary policy to accomplish the goal. This is creating a liquidity boom in many countries. Liquidity is flowing into the area where growth and profitability are the greatest: the developing world, and more specifically those industries and companies who work with or produce commodities.
Will the . . .
Continue Reading: WILL THE RALLY IN DEVELOPING MARKETS AND SOME DEVELOPED MARKETS CONTINUE?
By Monty Guild and Tony Danaher, on October 8th, 2010
Over the last several years, we have pointed out in our commentaries many times that the U.S. dollar is due for long-term decline in price. Please visit our archive of our commentaries to review the reasons that we have held, and continue to hold, this opinion.
The following summarizes our opinions about some of the attractive opportunities U.S. dollar based investors have.
1. PROFIT FROM A DECLINING U.S. DOLLAR
U.S. currency holders may diversify into commodities that are priced in dollars. As the U.S. dollar falls, the value of such commodities will rise.
U.S. currency holders can shift their . . .
Continue Reading: THOSE WHO HOLD U.S. DOLLARS AS THEIR HOME CURRENCY HAVE MANY ATTRACTIVE INVESTMENT OPTIONS
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