A Shout-Out to Myanmar!

Congratulations to Myanmar (or Burma, as many of us still call it)! The country held elections last week for 45 of the 664 seats in its Parliament. Aung San Suu Kyi’s National League for Democracy won 43 of the 45 contested seats. The decision to gradually democratize Burma’s political process was made by Burma’s ruling generals.

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Hitler’s Blackberry

Poor old Ben Bernanke has a deflation phobia. He sees it everywhere the way the kid in The Sixth Sense saw dead people. And Bernanke is equally terrified of falling stock prices (and their effect on consumer confidence).

Falling stock prices are what some people call deflation, or asset price deflation. Bernanke, the governor of the US Federal Reserve, believes the Fed made the Depression a Great Depression by raising interest rates too soon during the US recovery. He won’t make that mistake again! He will simply not allow stocks to fall.

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What the Greek Rescue is Really About

In today’s Daily Reckoning, we’ll do something we can barely stand to do: we’re going to write one more time about Greece. If you can stand to read it, you may come to the same conclusion we reached.

That conclusion is simple: what’s going on Europe has nothing to do with solving a debt crisis and everything to do with preserving a corrupt system based on limitless debt and growing government power. The sooner you understand that fact, the sooner you’ll be able to prepare for what happens next. There are two options for what happens next, and we’ll get to those shortly.

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Germans Ban Getting Naked

Austria is not Australia. Sorry about that.

Late last week we reported that the Australian Mint sold more gold coins in the first two weeks of April than it had in all of the first quarter combined. That was a mistake. It was the Austrian Mint, which makes a lot more sense, given that nearly all of the sales were to Europeans who are in a mild state of panic about the stability of their currency and their banking sector.

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The Great Money Shift

It will be a thoughtful reckoning today. Put on your thinking cap. There is a lot to think about. What exactly is going on in the world and what, if anything, can you do about it?

Lets start with China, where Shanghai stocks fell 5.1% yesterday and are 26% off the indexs 52-week high. If Chinese stocks are leading the economy, one crash is in and another could be just beginning.

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Europhoria

Monday was the day the worlds capital markets turned into a giant fiat money casino. Consider yourself forewarned. You might be able to trade your way to profits in this market on the tide of easy money being printed now by the Federal Reserve and the European Central Bank (ECB). But the financial markets are setting up for the mother of all collapses.

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The New Phase of Chinese Growth

Recently we claimed that borrowing your way to national prosperity is a sure-fire way to servitude and political instability. Today, we aim to prove it. To do so, we cite this article from Reuters. It suggests that China is using or should use its large holdings of US Treasury bonds as a cudgel with which to bludgeon the United States, its strategic adversary/indispensable economic partner.

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The Second Round of Pain

If youve been thinking about reducing exposure to stocks, now might be a good time. And if youve been thinking about increasing your exposure to precious metals, now might be a good time.

According to Morgan Stanley economist Gerard Minack, the stock market is in for a correction after its 9-month relief rally. In a note to clients Minack wrote, We see the rise from March 2009 as a typical relief rally that follows major bear markets. Those relief rallies can occur regardless of underlying macro conditions, regardless of liquidity conditions and most importantly regardless of what happens next… We think risk assets have swung to pricing a better outlook than is likely.

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