By MoneyMorning.com.au
Spending time in high altitudes is bound to affect your brain.
That was the conclusion of your reporter as we watched the flight attendant perform the pre-flight safety routine. The assorted editors and crew of Port Phillip Publishing were on our way to Sydney for ‘After America’. The flight attendant seemed to have forgotten he was in customer service and not showbiz…
Instead of showing you how to put on the oxygen mask, he struck a funny pose with it. Instead of showing you where the exits were, he gave you a knowing wink and flapped his arms about. You can’t blame him for trying to get a laugh. It was an instructive presentation – just we all became experts in bad acting, not surviving a crash!
But we made it to Sydney…
It was a near run thing. There was one person conspicuous by his absence outside the office this morning as the bus was ready to leave: Money Morning editor, Kris Sayce.
Normally he is conspicuous by his presence. He’s tall. He was also late. Or so we presumed. We couldn’t ring his mobile. He doesn’t have one. Being a contrarian, lone-wolf personality type is perfect for a career in investing. It’s just not great for the person stuck organising the group.
Finally, ‘After America’ is Ready to Begin
The official start isn’t until this evening. Although there will be plenty to talk about over cocktails and wine. I know Greg Canavan, editor of Sound Money. Sound Investments has plenty to say. At 10 am tomorrow morning he will explore whether China has a credit bubble – and the implications for Aussie investors.
The supply of credit is no doubt going to be a theme. Dylan Grice, the first keynote guest speaker at the conference, wrote the following some time ago:
Financial historians have shown that every single financial crisis since the 1870s has been preceded by rampant credit growth…the fact is all bubbles end in tears. The innocent bystanders who go to work not realising that their jobs derive from unsustainable demand suddenly find they’re out of work, through no fault of their own. The investors who believe the hype – generally but not exclusively naïve retail investors – get completely wiped out, or worse find themselves in debt after leveraging into the story.
Aftermath of the Credit Boom
In a normal world, central banks would not be part of the conversation. Now they dominate the conversation, because there is no discussion worth having that can risk not factoring them in. They have come between you – as an investor – and the price mechanism… the only signal you can trust. False signals lead to bad investments, as Dylan Grice makes clear.
I must confess to quoting the same Grice comment in a previous article. Probably later at the bar I’ll quote it all night. But it’s a good example of why Dylan Grice is going to be talking about inflation – central bankers being the villains.
Surprisingly, having seen a preview of Dylan Grice’s presentation, the US Federal Reserve Chairman looks like a hero. That’s because there is a slide where Bernanke is dressed as Superman. Wearing his underpants on the outside of his trousers suits his act – getting things mostly backwards. I’m sure Dylan Grice will conclude something like that, but we won’t know for sure until tomorrow. We’ll keep you posted.
Dylan Grice is the only keynote presenter that is not speaking about China or the USA specifically. The other keynote speakers, analyst and author Satyajit Das, Dr. Paul Monk and futurist David Thomas, will reveal their insights tomorrow too. From the conference notes, it’s possible to infer there’ll be a diversity of viewpoints and angles. No doubt it will lead to a dozen or more investing ideas.
The Port Phillip Publishing editors already have plenty of ideas lined up. Both Kris Sayce, editor of Australian Small Cap Investigator and Dr. Alex Cowie, editor of Diggers & Drillers, will examine how different demand trends in China will benefit certain stocks. And, of course, Murray Dawes, Slipstream Trader, is going to examine the price action of the key commodities in the crossfire of the US-China rivalry.
There is certainly plenty to get through. Don’t forget you’re more than welcome to take part and have your say by sending in any questions or comments to [email protected]. We’ll pass on what we can to the presenters and editors – who knows, maybe you’ll end up in the DVD!
But first – its cocktails at seven as conference attendees settle themselves in. The best part, talk is free. The second best bit is the cocktails are on us.
Callum Newman
Roving Reporter, ‘After America’
Cocktails and Central Banks
Tradervox (Dublin) – Euro got sold off last night after the FOMC minutes. As expected the interest rate was kept unchanged as expected. But what shook the market was the observations made by Fed. Fed saw moderate improvements in US economy and labor markets. The US dollar gained across the board and Euro was hammered badly losing the 1.3100 levels and formeing the low of 1.3050.
Tradervox (Dublin) – FOMC decision yesterday gave no indication that the Federal Reserve will make another round quantitative easing. In a statement to the press, FOMC indicated that the economy will recover moderately and that unemployment is expected to decline gradually. According to Robert Rennie, a Chief Currency Strategist in Sydney, the signs of recovery in the US economy will start to offer support for the dollar and this is expected to continue for some time.
