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June 27, 2013

June 27, 2013

This week’s Premium Global Market Summary goes into great detail on what the markets have told us, discusses interest rates, and we provide an  analysis of gold. 

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Europe: Lagarde Delivers a Scolding to the “Laggards”

At the annual meeting of the International Monetary Fund, director Christine Lagarde divided the world’s economies into three groups.  First are the developing economies — those still growing fast enough to be the “engines” of world growth.  Second are those whose recoveries from the Great Recession are getting stronger, such as the U.S. (and we might add, hopefully, Japan).  And third are those who are making everything worse for everybody by not being in groups one or two.

The blame there fell on Europe’s large economies — the U.K., France, Germany, and Italy.  And the chief cause suggested for their status as global “laggards” is intemperate and overly stringent fiscal consolidation: i.e., austerity.  Lagarde called for policies that would do “anything that works” to create jobs…

Wolfgang Schäuble and Christine Lagarde — Matter and Antimatter?

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Source: New York Times

To read the full analysis on Europe, upgrade your subscription to a Gold Subscription. To learn more about Gold Subscription, please click the following link: Gold Subscription


Germany’s Miracle: Thank Gerhard Schröder

The figure below shows the solution to European malaise that Angela Merkel would like to convey to Europe’s other leaders.  She loves to talk about competitiveness, and in a way, this is a graph showing it: the change in unit labor costs for major European economies and the United States over the past decade.  “Unit labor costs” represent the cost of labor for a given unit of economic output.

Miracle Workers.jpg
Source: The Economist

In 2003, faced by the economic shock of reunification and the exodus of small- and medium-sized German middlesized firms to find cheaper labor in Eastern Europe, the German government enacted a painful package of labor reforms — the Hartz reforms.  They were unpopular enough to get Chancellor Gerhard Schröder booted out of office in 2005.  Thanks largely to these reforms, Germany’s unit labor costs have grown more slowly than those of the U.S., and much more slowly than those of other European economies — although Spain has shown real improvement since the crisis hit in 2009…

To read the full analysis on Germany, upgrade your subscription to a Gold Subscription. To learn more about Gold Subscription, please click the following link: Gold Subscription


More Oil to be Available Worldwide: New Report Updates World Shale Reserve Estimates

This month the Energy Information Agency (EIA) published an update to its 2011 assessment of shale oil and gas resources in 41 countries outside the United States.  After just two years, there was enough new data to warrant a new report; this is a field where information is scarce and subject to sometimes radical revision on the basis of new discoveries.

Location of World Shale Reserves

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Source: Energy Information Agency

The current report adds about 11 percent to global technically recoverable shale oil reserves, and about 47 percent to global technically recoverable shale gas reserves.

Find out the top ten countries by shale oil reserves

Find out the top ten countries by shale gas reserves

Is this bullish for the U.S.?

To read the full analysis on Oil, upgrade your subscription to a Gold Subscription. To learn more about Gold Subscription, please click the following link: Gold Subscription

 


Guild Basic Needs IndexTM

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In this week’s Premium Global Market Commentary available to Gold Subscribers, we feature:

  • Mexico’s President Pushes Closer to Oil Reform

    What does this mean for Mexico?

  • We Believe that U.S. Immigration Will Fuel Economic Growth: CBO Says 16 Million More Consumers and Savers Means More Demand and More Growth

    What does this mean for the U.S.? 

  • Guild’s Premium Global Market Summary

    We provide commentary on some global markets. What happened in 2010?  What happened in 2011?  What happened in 2012?  What is happening today? 

    What about interest rates?

    Gold?  We discuss the positives, the background, and the negatives.     

Gold Subscribers have full access to all premium content.  In addition, Gold Subscribers can participate on Guild’s periodic conference calls where participants can ask direct questions to Guild’s portfolio managers and research team.  We will be announcing our conference call date and time in the coming weeks.

Please click the button below to learn about the benefits of Gold Subscription, or contact our office at (310) 826-8600.

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