Byron King: How Australian Resources Can Learn From The US Economy

By MoneyMorning.com.au

You don’t make money when you sell something. You make money when you buy.‘ Keynote speaker Byron King heard those words from a man named Jim Haber many years ago.

Jim Haber gave Byron King his first welding job, straight out of college.

So how did Byron go from being a welder to a keynote speaker at an investment conference? There’s not enough time to go through his history today. But that quote he shared with us on Tuesday just proves that good money advice doesn’t always come from the finance sector.

So how did he kick off his talk? His topic was preserving wealth while Rome burns. And by that, he means the financial system. He started off by focusing on the US economy.

The financial system around us has been showing signs of melting down since the market crashed in 2008. Yet the thing hasn’t fallen over.

Which led King to ask the audience, ‘Can you smell the smoke?

That’s the problem. The financial system isn’t burning yet, but the smoke is starting to fill the air, as Byron explained.

He started with Detroit.

In his words, Things are about as bad as it gets. Detroit is a symbol of lots of things that are wrong with America.‘ Like the high unemployment, or even more frightening, the high youth unemployment.

However, a disproportional number of unemployed are young black Americans and the Hispanic population. Byron says the numbers on this are scary. And he reckons very few in the industry understand the implications of this.

He reckons there is a structural shift in the economic climate in the US. And that’s based on two parts. There’s a shift in attitudes to employment happening in America. He thinks the young kids coming up through the ranks have less engagement with the unions than ever before. And this lower unionised work force are likely to have better employment conditions in the long term.

Also, he noted how the fracking revolution is changing the US economy for the better.

Oil production in the US was on the decline until the mid-2000s. But hydraulic fracking is reviving parts of the American economy. The fracking industry is an example of the free market at work.

The technology to extract the oil this way was financially feasible. And in spite of local governments working against fracking, the industry thrived.

A flow on effect of the fracking industry has been the migration of steel producers shifting to Texas. And why wouldn’t they? Energy is cheap, and labour is available.

And this brings King to a key point as he challenged the audience: What’s wrong with you Australia?

King can’t understand that with all our resources: iron ore, natural gas and coal, why we dig it out, ship it to other countries and let them process the ore into steel, using the coal and gas to power the process.

Australia ought to be a redeveloping country. I’m just saying; it’s your country, you do what you want. But you’ve got the iron ore, you’ve got the gas. Come on, get with it!‘ said King. The crowd laughed and appeared to agree.

He said it doesn’t make sense that Australia exports iron ore and coal to China, when it could be turned into steel here and exported as a ‘value added’ product. Byron said the argument that Aussie labour is too expensive doesn’t stack up to reality.

Why? His point was that there is very little human capital required in modern steel production. Most of it is automated. The theory could be applied to the coal and gas industries. We could set up profitable manufacturing for both commodities. Sure they’d need a large capital injection to get going, but the long term labour costs would be minimal with an investment in robotics.

As King reasons, America’s shift into fracking and refining oil is one of the few things that isn’t wrong with the economy.

As I mentioned earlier, Jim Haber, his first employer, gave him his first piece of investing advice. And on the basis of that, King said he had some ‘humble’ investing ideas to share with the crowd.

Look for companies on a roll. A momentum idea; technology stocks are a good example of this right now.

Also, there’s nothing like picking up something that Wall Street hates. There are plenty of companies in the junior resource sector that the market really hates today. You just have to be prepared to take a risk.

Find out how to catch Byron King’s presentation, some specific recommendations he made, and more here.

More from the final day of World War D tomorrow.

Shae Smith+
Roving Reporter for Money Morning at World War D


By MoneyMorning.com.au

Stephan Bogner and the Rise of a Euro-Chino-Russian Superpower

Source: Brian Sylvester of The Mining Report (4/1/14)

http://www.theaureport.com/pub/na/no-title-15924

Stephan Bogner, mining analyst with Rockstone Research and CEO of Elementum International, views the crisis in Crimea as the beginning of a larger global power shift east of the Atlantic. In this interview with The Mining Report, Bogner details what these shifting power dynamics will mean for the commodities market. And take heed—gold and silver may continue to make gains, but uranium, potash and rare earths are the true wave of the future.

The Mining Report: In his recent interview with The Gold Report, Robert Cohen said that now that Crimea has joined Russia, the crisis in Ukraine has run its course, which is why the price of gold has dropped. As a European mining analyst, do you agree with Cohen’s assertion?

Stephan Bogner: In my view, high-level Wall Street players are orchestrating the gold price drop as a means of making people believe everything is in order again. They’re attempting to convey that the crisis premium has been deducted from the gold price after its rise in the wake of the Crimea crisis, but I wouldn’t bet on that.

Remember when gold rose from $300/ounce ($300/oz) to almost $400/oz in 2002-2003 due to the widely propagated Iraq War premium? When the war was over in early 2003, the price fell back to $320/oz. People used the same argument then: the gold price is dropping because the crisis is over. In a few months, the price rose to $500/oz for no reason the experts could explain.

Don’t bet on TV experts and commentaries. Bet on your gut feeling, especially when it’s getting quiet and experts are going silent.

TMR: What is the general sentiment among the Germans regarding the situation in Ukraine?

SB: According to large polls in Germany, most Germans think that not only Russia, but the Ukrainian government, the EU and the U.S. all have made mistakes and share the blame, and that the crisis is not our business and we shouldn’t get too involved. One out of two Germans thinks that we should only use diplomatic measures and only every fourth German thinks that sanctions against Russia would be appropriate. That said, I doubt most Germans know what the full consequences that sanctions against Russia would bring us.

TMR: It seems the west is unwilling to do much to help Ukraine, apart from sanctions against Russia. Is this emblematic of a power shift from west to east?

SB: According to these polls, 75% of Germans distrust Putin and at the same time think that he is “clever and strong”, but more than 60% of Germans doubt that Obama can solve this conflict. The traditional thinking that sees Russia as mainly negative and the U.S. as mainly positive is breaking apart. The NSA scandal and George W. Bush laid the foundation for the anti-American impulses that are on the sharp rise again. Vladimir Putin’s power and influence have shifted the balance of power from west to east, although we are too proud to fully admit that.

European politicians should know that sanctions against Russia would be useless and counterproductive, to say the least. Germany and especially other European countries are far too dependent on Russian gas supplies and other commodities to threaten Russia with sanctions. We must acknowledge our fault in deciding to abandon all nuclear power plants in Germany, as we are now paying the price for our energy dependence. Putin must be doubling over with laughter about the proposed sanctions, because he’s smart enough to understand that the threat of sanctions is merely chest-beating, as we attempt to convince our own citizens that we still have some influence.

Europe should try to get on the same page with Russia. I believe this can evolve to be a good thing, as Europe and Russia can become a happy new superpower, especially as we partner more with China. I rather want to see Europe team up with Russia and China to replace U.S. dollar-based transactions with what I envision as a gold-backed monetary system.

Russia can benefit immensely being strategically positioned in the heart of both and sitting on vast amounts of natural resources that can be fed to Europe and China. Ultimately, I see Russian, European and Chinese economies flourishing, while the U.S. inflates itself and becomes dependent on this new superpower.

I believe that Russia will successfully merge with Ukraine. I also believe that this crisis was the beginning of currency and commodity wars that may escalate. After years of depreciating commodity and gold prices, during which the smart accumulated as much as possible, the tide is turning and higher prices are on the forefront.

TMR: How will an alliance of this magnitude and the prospect of currency and commodity wars impact the U.S. economy?

SB: Russia may already be quietly backing away from the dollar. In late 2013, Russia held some $138 billion ($138B) in U.S. treasuries—a fair amount, yet dwarfed by the more than $1 trillion in reserves held by both China and Japan.

Russia is not in a position to take down the U.S. bond market on its own, yet it may have a significant impact when it decides to sell. Russia will have good reason to sell U.S. debt and U.S. stocks, and possibly pursue other means of impacting the globalized capital markets, if the U.S. continues to act so aggressively. Sales by Russia also could trigger others into selling. If the U.S. imposes sanctions against Russia, Chinese officials may start to get the notion that they are too dependent on the dollar, which could lead China to sell U.S. treasuries.

On the other hand, it would be good for the U.S. in the long run if foreign countries dumped their U.S. treasuries and turned away from the dollar. The U.S. economy is too dependent on foreigners buying its debt. I am certain that Russia, and maybe China, are already reducing their exposure to U.S. debt and are ready to shoot back aggressively with massive selloffs if the U.S. goes far out on a limb. This would bring about a falling dollar and a rising gold price. I would rather bet on that than anything else.

TMR: And how will that affect the price of gold?

SB: In the short term, the gold price can fall due to manipulation, but in the mid- to long-term, betting on gold is a sure thing because Russia and China are betting on gold as well. They both know that the fiat system hates gold and they know that once the gold market has dried up or if the U.S. threatens them, they can let the gold price explode.

TMR: Iraq bought 36 metric tons of gold recently, valued at $1.6B, the biggest gold purchase by a sovereign power in three years. Is this part of the shift that you are talking about?

SB: Yes, I believe so.

TMR: After a strong start this year, the gold price is seeing diminishing support above $1,300/oz. Is the bull simply resting or has the bear returned? What would you say to an investor who is still uneasy after a three-year bear market in gold equities and to a lesser extent gold itself?

SB: I would say don’t worry. Be happy with gold and silver. Their times will come, as certainly as there is an “amen” at church.

TMR: Where is gold safer, in your mattress or in cash in the bank?

SB: That is the question that high-level players on Wall Street want you to think about. The orchestrated bear market has become a self-fulfilling prophecy, with China and Russia probably also manipulating the gold price to the downside as they are all purchasing from people who are asking themselves this question—people who are selling or are no longer buying.

In the end, only the brave will be among the winners—those who never doubted that such a question is nothing but a trap to steal your gold and silver and attempt to force a bear market.

TMR: Which gold and precious metals equities are you following at Rockstone Research?

SB: I like Klondex Mines Ltd. (KDX:TSX; KLNDF:OTCBB), because it was able to acquire the Midas mine and mill from Newmont Mining Corp. (NEM:NYSE). This gives Klondex a competitive edge in Nevada that the market has not yet fully understood. The company’s management team is among the best in the entire industry and I expect a steady increase in output from now on.

You want to hold high-grade gold in your portfolio in difficult market times. Nevada is the best place in the world to explore and mine for gold. That is also why I like Gold Standard Ventures Corp. (GSV:TSX.V; GSV:NYSE). Dave Mathewson, the former Newmont chief geologist, knows that there are elephant-sized gold deposits—in excess of 20 million ounces (20 Moz)—on the company’s district-sized property. The latest Pinion acquisition adds tremendous size and potential for large gold deposits to be discovered in the next months and years.

Keep NOVAGOLD (NG:TSX; NG:NYSE.MKT) on your radar as well. Once gold prices pick up, this company will be ready to either advance its Donlin property into a mine or be taken out. I also highly recommend Columbus Gold Corp. (CGT:TSX.V) and have no doubt of its success. The management team is determined to bring this highly prospective deposit in production just when I anticipate gold prices will have recovered substantially. It’s all about timing and Columbus is one of the few gold development companies that is right on track.

I’m very bullish on gold and silver in general. However, these markets are among the most manipulated and thus are riskier, especially now, when it is unclear if the market is in recovery mode or if further selloffs may cause the gold price to fall to $1,000/oz. Nonetheless, I follow a few precious metals companies because I like them fundamentally.

TMR: What about silver equities?

SB: I admire IMPACT Silver Corp. (IPT:TSX.V) for having a management team that knows how to overcome the current depressed state of the market. It will prosper above average once markets have recovered.

The same applies to Santacruz Silver Mining Ltd. (SCZ:TSX.V; 1SZ:FSE). The company has brought Rosario into production with low capital expense (capex) and sound profit margins during bad market conditions, hence Santacruz will prosper nicely when silver prices are on the rise.

Golden Arrow Resources Corp. (GRG:TSX.V; GAC:FSE; GARWF:OTCPK) has already identified a silver resource greater than 100 Moz, and I’m positive that will increase.

But really, I’m far more bullish on uranium, potash and rare earths at the moment. To me, they have virtually no downside risk now and are more likely to rise from today’s rock bottom prices than gold and silver. For example, the entire junior- and senior-uranium market is anticipating the beginning of a strong upswing in uranium prices from the current rock-bottom level where it has been holding for quite some time now.

TMR: What is the case for uranium?

SB: I think uranium has one of the best outlooks of all commodity markets right now and my favorite explorer is Lakeland Resources Inc. (LK:TSX.V).

The Lakeland stock has more than doubled since December and other major uranium companies have been on the rise since late 2013 as well. Denison Mines Corp. (DML:TSX; DNN:NYSE.MKT) is up 30%. Cameco Corp. (CCO:TSX; CCJ:NYSE) is up 40%. Fission Uranium Corp. (FCU:TSX.V) is up 60%.

TMR: Isn’t this trend largely based on the Athabasca Basin area play and Fission’s success with a new type of uranium deposit there?

SB: Of course, Fission has more than tripled its stock price because of its discovery of an amazing deposit. The price increases for Denison, which isn’t successfully exploring anything, and for Cameco, a large senior mining company, demonstrates that the entire market is already anticipating a move up in uranium prices, I would argue.

TMR: Do you follow other uranium plays?

SB: I’m pretty much focused only on the Athabasca Basin. I wouldn’t want to look in any other jurisdiction than Canada for political and jurisdiction reasons.

I’m looking more at companies with the potential to become the next Fission. Lakeland, with its large portfolio and strategy of forging joint venture (JV) partnerships, is unparalleled in the Athabasca Basin. It will have one of the largest drilling programs in the entire Athabasca Basin in 2014.

TMR: Any other names you would like to mention?

SB: NovX21 Inc. (NOV:TSX.V) has patented a clean platinum group metals (PGM) recovery technology that can be implemented anywhere. The technology uses little energy and creates no pollution. It has a low capex, offers a quick payback and has a gross margin in excess of 30%.

In the U.S. and Canada alone, more than 12 million (12M) catalytic converters are recycled every year. Worldwide, there are some 50M used cars, but only half of their catalytic converters are recycled. Today, PGMs are usually recovered using capital-intensive smelters. These smelters employ a lot of energy to melt metals between 1,500–3,000 degrees Celsius, generating a lot of pollution.

The NovX21 pilot plant in Québec has been running in an outstanding manner for two years now, making this a great investment opportunity with limited risks. Its process will become the gold standard for PGM recycling.

TMR: Most investors consider rare earth elements (REE) an afterthought at this point. What are you seeing?

SB: The REE exploration and mining space is probably the most difficult commodity market for investors to understand. Yet, I believe that once the market understands how to evaluate an REE deposit, the few really promising REE stocks will appreciate in an outstanding manner. In December 2013, we published two articles on REEs, and named Commerce Resources Corp. (CCE:TSX.V; D7H:FSE; CMRZF:OTCQX) as our favorite in the REE space. That stock has more than doubled since December.

Most REE prices have already hit bottom and are beginning to recover. An upswing in market prices would lift many REE stocks strongly. However, there are few promising development projects and my research explains how to find them.

TMR: Does Commerce have the capital needed to be at the right stage once prices start to rebound?

SB: No, but it doesn’t need to, because it took out most of the risk already. It is in the prefeasibility stage. The company is looking for a partner that is capital-strong before it takes the next risks and brings the Ashram project into production. I have no doubt at all that Commerce will find a partner and that Ashram will be among the next development projects to be put into production.

TMR: Zimtu Capital Corp. (ZC:TSX.V) holds a significant position in Commerce. Will Zimtu be able to help Commerce get the money it needs to advance its projects?

SB: Well, Zimtu has been backing up Commerce with the right people ever since.

TMR: Zimtu is up about 40% year-to-date. Is there much upside left?

SB: Oh yes. Many of its core holdings have more than doubled year-to-date. For example, Commerce Resources has doubled and Western Potash Corp. (WPX:TSX.V) has more than doubled year-to-date.

Zimtu is one of my overall top picks if the mining market recovers. Its share ownership and diversified investment portfolio offer unparalleled upside to a wide variety of commodities, including potash, uranium, REEs, tantalum and niobium, copper, zinc, graphite and gold. The company consistently adds new positions and commodities through property transactions, as well as creating publicly listed companies. And Zimtu is probably the only publicly traded company in which investors can participate in the company-building process as it is a second-to-none prospect generator that is all about people.

Zimtu has been in this business for more than a decade and has established a reputation that is paying off now. Zimtu’s share structure is so tight, with only 11M shares in the market and no warrants outstanding, that its stock is poised to move up in an unparalleled fashion. Management has been very diligent in structuring this company and its shareholder base. I believe that its stock will thrive once the market understands that Zimtu is not only about its core investment holdings but more about future transactions as that is where tremendous value is created and when shareholder value is maximized as no other company in the resource space is capable of doing such on a regular basis.

Zimtu has share holdings in more than 40 publicly traded companies and numerous private companies that are on the verge of going public. Kapuskasing Gold Corp. (OLA:TSX.V) is a good recent example. Zimtu already holds some 2.5M shares and 1M warrants, with an exercise price of $0.10 until 2019. This kind of transaction, made at the earliest-possible moment, is when the most upside can be achieved with little downside risk. Kapuskasing’s stock was halted at $0.07 in late February and resumed a few days ago, trading 1M shares as high as $0.18.

The company acquired the Borden North and Rollo properties near Chapleau in Ontario. The Borden North Property is on the southern flank of the Kapuskasing structural zone, approximately 50 kilometers northeast of Probe Mines Limited’s (PRB:TSX.V) Borden gold deposit, which was discovered in 2010 and hosts a multimillion ounce gold zone. The Probe exploration team, along with prospector Mike Tremblay, was the recipient of the Ontario Prospector Association’s “2013 Ontario Prospector Award” for the Borden gold discovery. Mr. Tremblay joined the advisory board of Kapuskasing Gold after it acquired these two properties. As you see, Zimtu is all about people and creating opportunities.

Zimtu also created Pasinex Resources Ltd. (PSE:CNX) and holds around 10M shares trading at ~$0.05 right now. Imagine the impact on Zimtu if a stock like Pasinex takes off. The outlook for Pasinex turned from bad to fabulous a few weeks ago, as this company holds high-grade zinc properties in Turkey that can be put into production fairly quickly because its joint venture partner is the Turkish mining company, Akmetal AS. As you may know, exploration companies active in Turkey had a really tough time recently, as all exploration projects were forced to be put on hold due to a decree by the Government of Turkey denying any exploration permits. Just a few weeks ago, the Turkish Government issued more than 50,000 exploration permits. Thus, the devalued share prices of exploration companies active in Turkey are likely to recover now, no matter what the gold price or overall commodity market may do. These are the stories to follow as individual market conditions have created opportunities with limited downside risk and rosy outlooks.

TMR: Do you have one final thought on this commodities environment?

SB: Think of commodities prices like a rubber ball floating on water—the deeper you push the ball down into the water, the higher it’s going to jump when it finally surfaces.

TMR: Thanks for your time, Stephan.

Stephan Bogner is mining analyst at Rockstone Research, where he has analyzed capital markets and resource stocks for more than 11 years. He is also CEO at Elementum International AG of Switzerland. Mr. Bogner earned his degree in economics in 2004 at the International School of Management in Dortmund, Germany. He spent five years in Dubai brokering and reselling physical commodities and now resides in Zurich, Switzerland.

Want to read more Mining Report interviews like this? Sign up for our free e-newsletter, and you’ll learn when new articles have been published. To see recent interviews with industry analysts and commentators, visit The Mining Report homepage.

DISCLOSURE:

1) Brian Sylvester conducted this interview for Streetwise Reports LLC, publisher of The Gold Report, The Energy Report, The Life Sciences Report and The Mining Report, and provides services to Streetwise Reports as an independent contractor. He owns, or his family owns, shares of the following companies mentioned in this interview: None.

2) The following companies mentioned in the interview are sponsors of Streetwise Reports: Klondex Mines Ltd., Gold Standard Ventures Corp., NOVAGOLD, Columbus Gold Corp., Fission Uranium Corp., IMPACT Silver Corp., Santacruz Silver Mining Ltd., NovX21 Inc., Pasinex Resources Ltd., Commerce Resources Corp. and Zimtu Capital Corp. Streetwise Reports does not accept stock in exchange for its services.

3) Stephan Bogner: I own, or my family owns, shares of the following companies mentioned in this interview: Zimtu Capital Corp., Commerce Resources Corp., Western Potash Corp., Lakeland Resources Inc., Kapuskasing Gold Corp., Pasinex Resources Ltd., NovX21. I personally am, or my family is, paid by the following companies mentioned in this interview: Zimtu Capital Corp. My company has a financial relationship with the following companies mentioned in this interview: None. I was not paid by Streetwise Reports for participating in this interview. Comments and opinions expressed are my own comments and opinions. I had the opportunity to review the interview for accuracy as of the date of the interview and am responsible for the content of the interview.

4) Interviews are edited for clarity. Streetwise Reports does not make editorial comments or change experts’ statements without their consent.

5) The interview does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports’ terms of use and full legal disclaimer.

6) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their families are prohibited from making purchases and/or sales of those securities in the open market or otherwise during the up-to-four-week interval from the time of the interview until after it publishes.

Streetwise – The Gold Report is Copyright © 2014 by Streetwise Reports LLC. All rights are reserved. Streetwise Reports LLC hereby grants an unrestricted license to use or disseminate this copyrighted material (i) only in whole (and always including this disclaimer), but (ii) never in part.

Streetwise Reports LLC does not guarantee the accuracy or thoroughness of the information reported.

Streetwise Reports LLC receives a fee from companies that are listed on the home page in the In This Issue section. Their sponsor pages may be considered advertising for the purposes of 18 U.S.C. 1734.

Participating companies provide the logos used in The Gold Report. These logos are trademarks and are the property of the individual companies.

101 Second St., Suite 110

Petaluma, CA 94952

Tel.: (707) 981-8999

Fax: (707) 981-8998

Email: [email protected]

 

 

 

 

The Importance of Infrastructure For a Forex Broker

Forex BrokerThe Forex market without question is truly a global market. The Interbank trading sessions start in Tokyo continue on to London and end up in New York. These trading sessions span over many countries and many time zones.

The banks and financial institutions that make up the Interbank market are the heart and soul of the Forex market. It is mission-critical for these institutions to have a state-of-the-art facility in which to host their servers. That is why a majority of these institutions host their servers in the same hosting facility.

The Equinix data center is home to some of the largest financial institutions on the planet. The Equinix LD 4 and NY 4 data centers are where many of the major interbank market participants are hosted. These data centers are also some of the most secure facilities in the world.

Forex brokers with the right infrastructure would be collocated in the same data centers as the liquidity providers and institutions that they are transacting with. This would provide their clients with the low latency for trading as well as a secure and safe training environment. These are some of the most important factors one should consider when trading the Forex market, looking for a forex business partner or choosing the right forex broker.

 

To learn more please visit www.clmforex.com

Disclaimer: Trading of foreign exchange contracts, contracts for difference, derivatives and other investment products which are leveraged, can carry a high level of risk. These products may not be suitable for all investors. It is possible to lose more than your initial investment. All funds committed should be risk capital. Past performance is not necessarily indicative of future results. A Product Disclosure Statement (PDS) is available from the company website. Please read and consider the PDS before making any decision to trade Core Liquidity Markets’ products. The risks must be understood prior to trading. Core Liquidity Markets refers to Core Liquidity Markets Pty Ltd. Core Liquidity Markets is an Australian company which is registered with ASIC, ACN 164 994 049. Core Liquidity Markets is an authorized representative of Direct FX Trading Pty Ltd (AFSL) Number 305539, which is the authorizing Licensee and Principal.

 

 

 

 

Thin Your Waist to Fatten Your Wallet

By Dennis Miller

My doctor told me to lose weight. … I lost 10 lb. … I gained 10 lb. I’ve said those words to my editor Ann all too often over the last two years. Last month when I proudly announced that I’d bought new walking shoes to replace my old Nike Airs and had lost a bit of weight since my annual checkup, she said that was good news, but that I was fighting the wrong battle. Huh?

Ann has been my editor since I joined Casey Research. She and I share an easy rapport, so I had no problem digesting (pun intended) her comments on my dieting misadventures. Monitoring my health might not be Ann’s highest calling. She’s a member of the New York Bar, and we’d already planned to push her out from behind the curtain to write on legal topics near and dear to our readers. After our recent exchange, however, I insisted this letter be her first guest spot.

A Retirement Guru Eats Broccoli… Maybe

By Ann Coxon

Don’t worry. I’m not going to recommend only eating purple foods while standing on your head and singing the “Hokey Pokey.” Maintaining or regaining your health in your golden years is much simpler than that, and it brings an added bonus: more money.

After quietly listening to Dennis speak about his dieting disasters, I finally risked overstepping professional bounds and told him why he wasn’t having any long-term success and what he could do about it. Instead of taking offense like I feared, he thanked me and all but demanded I share my little health rant with you because so many of his friends and peers share the same struggle. If you don’t fall in that category, good for you!

Now, about that money… For Americans age 65 and older, the mean annual expenditure for drugs is $798; for medical services, $935; for medical supplies, $200; and for health insurance, $3,186. That’s a lot of cash, especially when you consider that the mean after-tax income for this age group is $43,969, according to our friends at the Bureau of Labor Statistics (BLS).

Now, here’s the truly astonishing part: This same group spends a mere $452 on fresh fruits and vegetables. Put another way: Seniors are spending $346 more on drugs each year than they are on fresh, green goodness. Talk about a misallocation of resources!

Some of you are likely thinking, “But I need those drugs to control my blood pressure, or arthritis, or type 2 diabetes.” Just name your ailment. Frankly, you’d probably be right—at least, in the here and now. I’m not a doctor, nor do I play one on television. But we all know these lifestyle diseases are largely preventable and sometimes reversible with diet, exercise, and stress reduction.

It’s hard to see the big picture, however, when many or most of your friends and neighbors suffer from similar diseases of civilization. It just seems normal to hand over your hard-earned dollars to Pfizer, Merck, AstraZeneca, etc.

Don’t get me wrong. Pharmaceutical and biotechnology companies do amazing things. We’ve even recommended one in the Miller’s Money Forever portfolio. If I ever need a life-saving drug developed on the back of Lipitor profits, I will quietly thank my lucky stars that Americans stubbornly refused to give up their three cheeseburgers per week habit.

Nevertheless, there is a better place to put that $798: your brokerage account. Of course, you may need to redirect some of it to your green grocer first.

Turning Medical Costs into Profits

Some health costs are unavoidable. You can chalk the $3,186 spent on health insurance up to the cost of living on planet Earth in 2014. But what if you could lessen or even eliminate the other costs? Could that make a real impact on your financial well-being? The short answer is: yes!

For most, medical costs in the decades leading up to retirement are far lower than they’ll be throughout their golden years. From age 25 through 64, the annual mean drug expenditure averages out to $456.75; medical services, $836.75; and medical supplies, $131.75. That’s $1,425.25, year in and year out.

Our chief analyst, Andrey Dashkov whipped up a chart showing the additional funds a hypothetical health nut would have on his 65th birthday if he saved and invested that $1,425.25 each year from age 25, at a modest 5% return (the green line).

It’s an ambitious goal. Even the most diligent among us get bumps, bruises, and the occasional bout of influenza, in addition to any genetically unavoidable ills specific to our individual blueprints. So Andrey ran the numbers a second time assuming our health nut only saved 50% of those costs over the same time period (the yellow line).

The verdict: saving 100% gave our guy $172,170 to play with during retirement; saving 50% gave him an additional $86,085.

OK, you get it. We all agree that more money and better health are good things. So why did I tell Dennis he was fighting the wrong battle?

Finding Lettuce in Texas

In the United States circa 2014, both the type of foods and how they are eaten make it practically impossible for people to not get fat and stay fat; and we all know that diet, exercise, and weight are directly linked to those diseases of civilization mentioned earlier.

The most common reasons I’ve heard for not eating whole, healthy foods, other than “nachos just taste better,” are: they’re too expensive; or, they’re simply unavailable. To the former, I say: Pay now in food costs or pay later in medical bills and a lowered quality of life. To the latter: High-quality food is difficult to find in many parts of the country, but it is not impossible.

Having spent the bulk of my life in northern California, I didn’t have to look far for first-rate fruits and vegetables until moving to a certain state in the Midwest. (I won’t name names. Let’s just say this place is awfully proud of its cheese.)

So, to make sure I didn’t completely stick my foot in my mouth, I looked for supermarket alternatives in Corpus Christi, Texas, commonly billed as “America’s fattest city.” I was curious to know if Corpus Christi had any farm-share programs similar to the one I use.

For $35 per month, Corpus Christi residents can pick up a full basket of seasonal fruits and vegetables biweekly at the Southside Farmers Market, or so I’d read. I called up the farm’s proprietor, Rey, who said he’d had to discontinue the farm-share program this year because of what amounted to a lack of demand. He’d had to give away too much un-purchased produce to local homeless shelters for the program to remain profitable.

Locals can, however, still buy Rey’s produce and that of 15 other farmers at the Wednesday and Saturday markets. In short, there is lettuce to be found in Corpus Christi, but folks down there aren’t buying much of it.

You Can Opt Out

“Franken-food” manufacturers and the ever-growing diet industry make dollar after dollar from a chronically overweight and sick population. Here at Miller’s Money we are as pro free market as they come, and I support us all having the choice to spend life feeling crummy, to buy diet books, powders, and potions to lose weight, and then to spend retirement paying big bucks to treat preventable ailments. But why not keep that money for yourself? You earned it.

To make matters worse, federal agricultural subsidies have helped make cheap-but-empty calories so cheap that “poor” increasingly means “obese-but-malnourished.”

Where does that leave Americans? Overweight, chronically ill, and struggling.

So, here was my prescription for Dennis: Opt out of the modern American diet. These guidelines aren’t always easy to follow. Truth be told, I spent two solid minutes at the market last night pondering the wisdom of buying a pint of banana chocolate ice cream for dinner in lieu of the salmon I actually purchased.

Some of these mantras are borrowed, and some I’ve learned through trial and error. No broccoli is required, since Dennis hates it.

  • Sit down at a table and eat breakfast, lunch, and dinner—nothing more and nothing less. A car is not a table. A couch is not a table. A desk is not a table.Oh! And turn off the television, or your electronic distraction of choice, during every meal. A bit of conversation, or music if you’re dining solo, will slow you down before a casual meal turns into a feast fit for Emperor Caligula.
  • Don’t eat seconds. Another meal will come your way, and you will not starve to death waiting for it.
  • Never eat commercially processed food. Just don’t do it. What does “processed” mean? Look at the back of your milk carton. Does it say “Vitamin A palmitate and/or Vitamin D”? If so, it’s commercially processed in my book.There is simply no way to eat enough commercially manipulated food to feel satiated without consuming excess calories. Too many people are fighting this losing battle; they may have minor successes along the way, but they will likely be short-lived. So put down the Lean Cuisine and master or re-master the art of simple home cooking.
  • Eat vegetables with every meal, even breakfast. Ketchup is not a vegetable.
  • Dessert is like alcohol; have a little with friends, but never alone. The implicit social pressure to not eat a half gallon of ice cream is enough to keep most people in check, but it’s pretty easy to curl up with a dozen cookies when no one is looking. No judgment; we’ve all done it.
  • Never drink soda, including diet soda. Although artificial sweeteners contain no calories, they trick your endocrine system into thinking you’ve consumed real sugar, triggering an uptick in insulin and ghrelin, a key hunger-regulating hormone. So say “goodbye” to Diet Pepsi and “hello” to club soda and unsweetened iced tea.
  • Eat the full-fat version, not the artificially low-fat or non-fat substitute. Less of the real thing is always more satiating than more of the fake stuff. Who wants to live in a world without real butter and bacon? Not I!
  • Break a sweat every day, even on Sundays. You don’t have to join a fancy gym. Your local YMCA likely has classes geared toward seniors so you don’t end up in aerial yoga next to a 25-year-old former New York City Ballet dancer. (Laugh away, but aerial yoga is a real thing and quite the rage among twenty-something urbanites of means. At $20 or so per class, think of how much they could be saving for retirement instead.)Plus, if you’re recently retired and missing office camaraderie, a group class is a no-brainer way to get out of the house every morning. Or just take a brisk walk; it costs nothing.

Eliminating processed foods is a difficult adjustment for many people. You might not know what else to eat. If that’s the case you’re not alone; there’s communal amnesia about how to cook whole foods that taste, umm… tasty. It’s a skill, but it’s an easily learned skill.

Oh, and lest I forget, even if you like hotdogs, fast food, and pre-packaged anything now, our palates are malleable. Start eating whole foods and after awhile you’ll want to eat them. You may feel like you’re in the twilight zone for the first couple of weeks; just give it time. Even Dennis could eventually learn to like broccoli.

By all reports Dennis is following my advice, and his weight and blood pressure are dropping. I practically fainted when he told me he’d eaten beet greens with dinner.

I truly admire Dennis’ willingness to abandon an approach to a problem that wasn’t working. If you feel the same about your approach to retirement investing, or if it simply needs fine-tuning, take a gander at our premium publication, Miller’s Money Forever by signing up here.

 

 

The article Thin Your Waist to Fatten Your Wallet was originally published at millersmoney.com.

Crude oil slumps back to $100 on disappointing economic data

After hitting $102.21 last week, Crude oil futures for delivery in May dipped below the mark, down $1,40 for the day after hitting a low of $99.85.

Crude Oil April 1st

Last week’s rally towards $102.21 stopped precisely on the 61.8% Fibonacci retracement on the bearish swing from $105.20 down to $97.35, raising the possibility that this recent upswing simply completed a retracement and consequently the lower high signals a deeper correction below $100.

As long positions are gradually being reduced, sellers have now reached a very strong support area. Between $99.90 and $100.30 we have a bullish trendline from March, the 50-Day Moving Average and of course the main $100.24 price pivot zone. A daily close below the support area will open the way towards $97.76, where the 100-Day Moving Average is located, with the possibility of a future lower swing low below $97.35.

Further consolidation above the $100 level can become choppy, as price will be squeezed tighter between the rising support and the resistance at $102.20.

*********
Prepared by Alexandru Z., Chief Currency Strategist at Capital Trust Markets

 

 

 

 

 

 

Angola holds rate, cuts standing, raises absorption rate

By CentralBankNews.info
    Angola’s central bank maintained its BNA policy rate at 9.25 percent but continued to adjust its other policy rates “in order to continue to influence the reduction of the costs of financial intermediation, in particular mortgage interest rates.”
    The National Bank of Angola (BNA) cut the rate on its standing lending liquidity facility by 25 basis points to 10.0 percent while it raised the rate on its liquidity absorption facility by 25 basis points to 1.50 percent.
    Last month the BNA also raised the liquidity absorption rate by 50 basis points and cut the reserve requirement on local currency deposits to 12.5 percent from 15.0 percent. The BNA has maintained its policy rate since November 2013 and cut it by 100 basis points last year.
    Angola’s inflation rate eased to 7.48 percent in February from 7.84 percent in January while credit to the economy rose by 12.31 percent over the last 12 months to 2.963 billion kwanza.
    The central bank added that the kwanza’s exchange rate had remained stable, with an average rate of 97.60 to the U.S. dollar. In 2013 the kwanza depreciated by only 1.8 percent against the dollar.
    In 2013 Angola’s economy expanded by 7.4 percent, up from 2012’s 5.2 percent growth.
 
    http://ift.tt/1iP0FNb

Inflation Is Coming, What to Do—NOW

By Jeff Clark, Senior Precious Metals Analyst, Casey Research

We’ve all heard of the inflationary horrors so many countries have lived through in the past. Third-world countries, developing nations, and advanced economies alike—no country in history has escaped the debilitating fallout of unrepentant currency abuse. And we expect the same fallout to impact the US, the EU, Japan, China—all of today’s countries that have turned to the printing press as a solution to their economic woes.

Now, it seems obvious to us that the way to protect one’s self against high inflation is to hold one’s wealth in gold… But did citizens in countries that have experienced high or hyperinflation turn to gold in response? Gold enthusiasts may assume so, but what does the data actually show?

Well, Casey Metals Team researcher Alena Mikhan dug up the data. Here’s a country-by-country analysis…

Brazil

Investment demand for gold grew before Brazil’s debt crisis and economic stagnation of the 1980s. However, it really took off in the late ‘80s, when already-high inflation (100-150% annually) picked up steam and hit unsustainable levels in 1989.

YearInflationInvestment
demand
(tonnes)
1986167.8%20.0
1987218.5%42.8
1988554.2%61.5
19891,972%*86.5
1990116.2%**-74

Source: The International Gold Trade by Tony Warwick-Ching, 1993; inflation.eu
*Measured from December to December
**Year-end rate

During this period, investment demand for bullion skyrocketed 333%, from 20 tonnes in 1976 to 86.5 tonnes in 1989.

And notice what happened to demand when inflation began to reverse. Substantial liquidations, showing demand’s direct link to inflation.

Indonesia

Indonesia was hit by a severe economic crisis in 1998. The average inflation rate spiked to 58% that year.

YearInflationInvestment
demand (t)
19976.2%11.5
199858.0%22.5
199924.0%11.0
20003.7%8.5

Sources: World Gold Council, inflation.eu

Gold demand doubled as inflation surged. It’s worth pointing out that investment demand in 1997 was already at a record high.

Also, total demand in 1999 reached 120.8 tonnes (not just demand directly attributable to investment), 18% more than in pre-crisis 1997. But overall, once inflation cooled, so again did gold demand.

India

While India has a traditional love of gold, its numbers also demonstrate a direct link between demand and rising inflation. The average inflation rate in 1998 climbed to 13%, and you can see how Indians responded with total consumer demand. (Specifically investment demand data, as distinct from broader consumer demand data, is not available for all countries.)

YearInflationConsumer
demand* (t)
19968.9%507
19977.2%688
199813.1%774
19994.8%730

Sources: World Gold Council, inflation.eu
*Includes net retail investment and jewelry

Gold demand hit a record of 774.4 tonnes, 13% above the record set just a year earlier. In fairness, we’ll point out that gold consumption was also growing due to a liberalization of gold import rules at the end of 1997.

When inflation cooled, the same pattern of falling gold demand emerged.

Egypt, Vietnam, United Arab Emirates (UAE)

Here are three countries from the same time frame last decade. Like India, we included jewelry demand since that’s how many consumers in these countries buy their gold.

YearEgyptVietnamUAE
InflationConsumer
demand (t)
InflationConsumer
demand (t)
InflationConsumer
demand (t)
20066.5%60.57.5%86.110%96.0
20079.5%68.58.3%77.514%107.3
200818.3%76.824.4%115.820%109.5
200911.9%58.47.0%73.31.6%73.9

Sources: World Gold Council, indexmundi.com

Egypt saw inflation triple from 2006 to 2008, and you can see consumer demand for bullion grew as well. Even more impressive is what the table doesn’t show: Investment demand grew 247% in 1998 over the year before. Overall tonnage was relatively modest, though, from 0.7 to 2.5 tonnes.

Vietnam and the United Arab Emirates saw similar patterns. Gold consumption increased when inflation peaked in 2008. Again, it was investment demand that saw the biggest increases. It grew 71% in Vietnam, and 27% in the United Arab Emirates.

And when inflation subsided? You guessed it: Demand fell.

Japan

Prime Minister Shinzo Abe’s plan to kill deflation pushed Japan’s consumer price inflation index to 1.2% last year—still low, but it had been flat or falling for almost two decades, including 2012.

YearInflationConsumer
demand (t)
2012-0.1%6.6
20131.2%21.3

 

In response, demand for gold coins, bars, and jewelry jumped threefold in the Land of the Rising Sun.

 

One of the biggest investment sectors that saw increased demand, interestingly, was in pension funds.

Belarus

Unlike many of the nations above, citizens from this country of the former Soviet Union do not have a deep-rooted tradition for gold. However, in 2011, the Belarusian ruble experienced a near threefold depreciation vs. the US dollar. As usual, people bought dollars and euros—but in a new trend, turned to gold as well.

We don’t have access to all the data used in the tables above, but we have firsthand information from people in the country. In the first quarter of 2011, just when it became clear inflation would be severe, gold bar sales increased five times compared to the same period a year earlier. In March alone that year, 471.5 kg of gold (15,158 ounces) were purchased by this small country, which equaled 30% of total gold sales, from just one year earlier. Silver and platinum bullion sales grew noticeably as well.

The “gold rush” didn’t live long, however, as the central bank took measures to curb demand.

Argentina

Argentina’s annual inflation rate topped 26% in March last year, which, according to Bloomberg, made residents “desperate for gold.” Specific data is hard to come by because only one bank in the country trades gold, but everything we read had the same conclusion: Argentines bought more gold last year than ever before.

At one point, one bank, Banco Ciudad, even tried to buy gold directly from mining companies because it couldn’t keep up with demand. Some analysts report that demand has continued this year but that it has shown up in gold stocks.

What to Do—NOW

History clearly shows there is a direct link between inflation and gold demand. When inflation jumps, or even when inflation expectations rise, investors turn to gold in greater numbers. And when gold demand rises, so does its price—you can guess what happens to gold stocks.

With the amount of money the developed countries continue to print, high to hyperinflation is virtually inevitable. We cannot afford to believe in free lunches.

The conclusion is inescapable: One must buy gold (and silver) now, before the masses rush in. The upcoming inflationary storm will encompass most of the globe, so the amount of demand could push prices far higher than many think—and further, make bullion scarce.

Your neighbors will soon be buying. We suggest beating them to the punch.

Remember, gold speaks every language, is highly liquid anywhere in the world, and is a proven store of wealth over thousands of years.

But what to buy? Where? How?

We can help. With a subscription to our monthly newsletter, BIG GOLD, you’ll get the Bullion Buyers Guide, which lists the most trustworthy dealers, thoroughly vetted by the Metals team, as well as the top medium- and large-cap gold and silver producers, royalty companies, and funds.

Normally I’d suggest that you try BIG GOLD risk-free for 3 months, but right now, I can offer you something even better: ALL EIGHT of Casey’s monthly newsletters for one low price, at a huge 55% discount.

It’s called the Casey OnePass and lets you profit from the huge variety of investment opportunities we here at Casey Research are seeing in our respective sectors right now—from precious metals to energy, technology, big-picture trend investing, and income investing.

Click here to find out more. But hurry—the Casey OnePass offer expires this Friday, April 4.

 

The article Inflation Is Coming, What to Do—NOW was originally published at caseyresearch.com.

Crude Prices Drops on China Economy Worries

By HY Markets Forex Blog

Crude prices were seen falling on Tuesday; dragged lower by China’s manufacturing data which came in mixed, as traders raise concerns about the nation’s economy slowdown.

Talks over the crises in Ukraine continue as the tension between Russia and the Western powers over the country continue to weigh on oil prices. Meanwhile, analysts forecast US crude supplies increased for an eleventh week before the release of the data.

Futures for the North American WTI for May delivery declined 0.15% to $101.43 a barrel on the New York Mercantile Exchange at the time of writing, while Brent crude futures for May settlement slipped 0.10% to $107.66 a barrel on the ICE Futures Europe exchange at the same time. The European benchmark crude was at a premium of $6.35 to WTI.

Crude – Chinese Economy

A fresh government reports revealed that China’s manufacturing level grew at a faster rate in March as the Purchasing Managers’ Index (PMI) came in at 50.2 in March, compared to the previous reading of 50.1 seen in February.

In a separate report from HSBC Holdings Plc and Markit Economics revealed that China’s purchasing managers index dropped to 48.0 in March, the lowest since July and compared to the previous reading of 48.5 in February.

Apart from standing as the world’s second largest economy; China is forecasted to account for approximately 11% of the global oil demand this year, while the US is expected to account for 21%, according to forecasts from the International Energy Agency.

Ukraine

Following the talks between Russia and the US over the weekend on how to ease the ongoing tensions in Ukraine, Russia released a list of requirement that could ease the ongoing tension between the nations. As part of the political requirements is a request for military and political neutrality for Ukraine as well as protection of the Russian minority and acceptance of Crimea’s referendum.

Russia has begun to withdraw troops from Ukraine boarder.

The US crude stockpiles probably climbed to 385 million barrels in the week ending March, according to analysts’ forecasts before Wednesday’s report from the Energy Information Administration.

 

Visit www.hymarkets.com   to find out more about our products and start trading today with only $50 using the latest trading technology today

The post Crude Prices Drops on China Economy Worries appeared first on | HY Markets Official blog.

Article provided by HY Markets Forex Blog

Gold Prices Lifted on Mixed China Data

By HY Markets Forex Blog

Gold prices were seen trading higher on Tuesday, clearing losses seen in the previous session after the release of the mixed Chinese manufacturing data.

Gold futures for June delivery climbed 0.05% higher to $1,284.00 an ounce at the time of writing, while futures for the silver metal slipped 0.32% to $19.690 an ounce at the same time.

On Monday, the yellow metal prices dropped close to a six-week low, dragged down by the lower physical demand from Asia. Gold lost approximately $40 an ounce in the month of March after climbing by almost $120 an ounce from the start of the year to the end of February.

The US dollar index, which measures the strength of the greenback against six of its major peers, rose 0.02% higher to 80.1140, while holdings in the world’s largest gold-backed exchanged traded-fund, SPDR Gold Trust; came in at 813.08 tons on Monday.

Gold – China PMI

Reports revealed that China’s manufacturing level grew at a faster rate in March as the Purchasing Managers’ Index (PMI) came in at 50.2 in March, climbing from the previous reading of 50.1 seen in February.

In a separate report from HSBC Holdings Plc and Markit Economics revealed that China’s purchasing managers index dropped to 48.0 in March, the lowest since July and compared to the previous reading of 48.5 in February. A reading below 50 indicates contraction.

Gold – Fed Comments

On Monday, the Federal Reserve Chair Janet Yellen said the US economy will still need monetary stimulus to boost the economy before the release of today’s data which may reveal a gauge of manufacturing rose in March.

On March 19, Yellen said the US central bank might increase the benchmark interest rate in the next six months before the end of the asset-purchasing program, which is expected to end later in the year.

 

Visit www.hymarkets.com   to find out more about our products and start trading today with only $50 using the latest trading technology today

The post Gold Prices Lifted on Mixed China Data appeared first on | HY Markets Official blog.

Article provided by HY Markets Forex Blog

The U.S. Dollar Continued to Sell On a Rise

The EURUSD Retreating from Support Around 1.3720

Another testing the support level of 1.3720 by the EURUSD was finished by a rebound and a rise to 1.3808. After failed attempts to break above, the pair retreated to the support around 1.3763. Its ability to hold bears` onslaught is a positive factor for the bulls, which keeps risks to grow to the 39th figure. On the whole, the picture remains unchanged; the pair is in a consolidation phase. To weaken a bullish impulse, the bears need to break below 1.3720—1.3700.

eur

A Positive Sentiment Towards the GBPUSD Remains

The GBPUSD continues to be bought on dips, so yesterday’s decline to the 1.6611 level has not continued. Instead of this, the pair increased to 1.6683. A positive sentiment remains, though it is not the fact that the bulls could move higher above the 67th figure. Nevertheless, it should not be excluded that it can be tested in the short run. Loss of the support around the 1.6596 level will weaken a bullish impulse and lead to falling to 1.6560—1.6540. Growth and ability to consolidate above the 67th figure will put the resistance around the 68th figure at risk.

gbp

The USDCHF Taking Risk to Resume a Decline

The ascending correction of the USDCHF hauled at the 89th figure, which failed to rise higher. Offers, which are located here, throw the dollar away while every attempt to attack it. Yesterday, after the figure was tested, the dollar decreased to 0.8824. Pressure on it remains and it is running a risk to be below 0.8800. Loss of the support will open the way to the 87th figure, a rise and an ability to consolidate above 0.8800 will return optimism to the dollar bulls.

chf

The USDJPY Can Test 103.76

The USDJPY found support around the 102.79 level, from which it rose to 103.43. Dips continue to attract interest to sales that keeps risks to break resistance at 103.76. In this case the bulls can test the 104.00 level. If it is overcome, it will open the way to 102.00. Falling below 102.79 will weaken a bearish impulse and lead to testing 102.00. Ahead of employment data in the U.S. are published, the pair can move higher, but it is hardly possible to expect strong directed movements.

jpy

provided by IAFT