Behavioral Finance: Inside the Client’s Brain

"I admit to a prurient interest in behavioral finance. Perhaps this is due to my background in psychology—or just from having dealt with a broad range of clients for many years. Investor behavior is sometimes amazing, and behavioral finance, the academic specialty that has grown up to examine it, is equally interesting. One of the most practical discussions of behavioral finance I have seen appeared recently on AdvisorOne. It was written by Michael Finke, the coordinator for the financial planning program at Texas Tech.
It is my strong recommendation that you read the entire article, but here are a few of the behavioral finance highlights that jumped out at me:

• Breaking habits requires deliberate intention to change routines by using our rider to change the direction of the elephant. How do we motivate people to change behavior to meet long-term goals? Neuroscience suggests that the worst way to motivate people is to focus on numbers. Telling someone they need to save a certain amount to achieve an adequate retirement accumulation goal may be convincing to the rational brain, but not so convincing to the elephant.
• Explaining a concept in a visual or emotional sense uses much more of our brain functions than is used by numbers. If you think of people as being emotional and visual, you’ve essentially tapped into 70% of the brain real estate. There is that rational side, but that rational side might be more like 20% of the real estate. The rational side used to solve math problems might be 8% of the real estate.
• It can be useful to frame desired actions as the status quo in order to take advantage of this preference. For example, setting defaults that are beneficial can have an unexpectedly large impact on improving behavior.
• The most powerful emotional response related to financial choice is fear. Fear leads to a number of observed decision anomalies identified in behavioral finance such as the excessive attention paid to a loss. Framing decisions so that they do not necessarily involve a loss is an important tool advisors can use to avoid bringing the amygdala to the table.
• “Dollar cost averaging is an illusion,” notes James. “Unless we have mean reversion in the market (and if we do we can make lots of market timing bets and make ourselves rich), dollar cost averaging does not work. But if people believe that they are buying shares cheaper in a recession, the story makes people stay in the market at the times when their fear-driven emotional side wants them to get out of the market. We have a story that, even if it’s completely false, is generating the behavior that is going to be portfolio maximizing in the end. So maybe the answer to the usefulness of dollar cost averaging isn’t ‘well we’ve figured it out and it doesn’t work, so don’t use it,’ the answer is ‘actually it’s not true but it gets your clients to behave the right way so keep telling them that.’”

The biggest impediment to good returns is typically investor psychology. If behavioral finance ideas can help clients control their behavior better—and thus lead to better investment outcomes—some of these ideas may prove useful."

Source: Lean Frog (click on image to enlarge)

at http://systematicrelativestrength.com/2012/11/27/behavioral-finance-inside-clients-brain/

Turk - The LBMA Is Moving To Cover Up Silver Manipulation

"Today James Turk spoke with King World News about steps which are being taken by the LBMA and Western central planners to cover up the corruption and manipulation in the gold and silver markets. This is the first in a series of interviews with James Turk that will be released today which reveals what is going on behind the scenes of the increasingly desperate Western central bank gold and silver price suppression scheme.

Here is what Turk had to say about what is now taking place: “They (the LBMA) are making it more and more opaque. Less and less information is being made available. Specifically, what’s happened here is that the LBMA had been reporting the silver lending rate and comparing it to the LIBOR rate.”

 

“For the past couple of years I have contended that this was a fictitious rate because, in reality, I believe silver is in backwardation. In other words, the future months are below the spot months, and so you should have a negative silver forward rate. But it’s not reported that way on the LBMA site.

They (the LBMA) consistently show a positive silver forward rate. Now, what the LBMA said is they are no longer going to report silver interest rates and silver forward rates.....

“The reason they (the LBMA) gave is they said it is just an indication and you can’t really trade at that price anyway. 

So what that does is prove the point that I’ve been making, that these are artificial rates which are just there to paint the tape and to mislead people into thinking the silver market is actually in a normal contango. But in reality it (silver) is actually in backwardation.”

Eric King: “These are the types of things you see James as you are running a price fixing scheme, and it’s a Ponzi scheme, and you begin to run into trouble.”

at http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2012/11/27_Turk_-_The_LBMA_Is_Moving_To_Cover_Up_Silver_Manipulation.html

Leeb - Gold, Silver & Natural Gas Are Going To Soar

"...When I watch what is happening I keep wondering, how much money is the Fed going to print? And when does inflation really start to take hold? It’s just a matter of time, Eric. The endgame here is just more money printing to keep the economy going.

As the world really begins to look seriously at the energy problems we face going forward, governments will start to realize the strategic importance of silver. Silver is a better buy than gold. Silver is going to play a vital role in producing energy around the globe. Japan is turning to solar. Saudi Arabia is turning to solar. Virtually every major country in the world is turning to solar. There is not going to be enough silver to satisfy the demand for solar energy.

Silver has not broken $50 yet, but when I say silver is going to be a 3-digit commodity, it will be. These small silver stocks, they are the ones that are really going to be a big hit. What really worries me about silver, Milton Friedman said silver was the first monetary metal. Silver will benefit from the monetary catastrophe that is in front of us because it is a monetary metal. But silver is also needed for cell phones, energy, computers, automobiles and so on.

A Stanford professor, Mark Jacobson, wrote a cover story in Scientific American in late 2009. He said that in order for the world to ween itself from hydrocarbons, we are going to need four or five terawatts of electricity. The amount of silver that would be needed for that is more than exists in the ground.

 

So in the future when silver is well above $100 an ounce, you are likely to see governments saying to people, ‘You can’t buy silver anymore.’ The price of silver will be going ballistic, but the mines will continue to produce because the governments will continue to need every ounce of silver they can get.

The bottom line is we are looking at the beginning of what’s likely to be a massive boom in these monetary metals, but silver, in particular, is really going to soar.”

at http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2012/11/27_Leeb_-_Gold,_Silver_%26_Natural_Gas_Are_Going_To_Soar.html

Welcome to the Currency War, Part 5: The Dollar Gets Serious Competition

"Not so long ago the dollar was the world’s only reserve currency. Everything else was one (or several) steps down in terms of safety and liquidity, and major financial institutions acted accordingly, accumulating dollars for the risk-free parts of their portfolios. Global demand for dollars was, as a result, effectively infinite, which meant the US could borrow whatever it wanted, secure in the knowledge that the Treasury bonds it created would find willing buyers.

But quietly, over the past couple of decades, the dollar has been joined at the top by the euro, yen, pound sterling and Swiss franc. And now the list of legitimate reserve currencies has expanded to include Canadian and Australian dollars:...

Note that the Chinese renminbi (aka the yuan) and Singapore dollar aren’t on the list. But they will be soon, with China now the second biggest economy (and an aggressive importer of gold) and Singapore becoming the preferred destination of global savings (especially gold storage) now that Switzerland has been cracked by the IRS and other tax authorities. See China’s next step in yuan overhaul is convertibility.

Gold, meanwhile, is once again being accumulated rather than dumped by central banks, and has already, arguably, replaced the dollar as the most coveted reserve asset. This, by the way, is simply a return after a 40-year absence to the place gold has occupied since the beginning of recorded history.

What does this mean for the dollar? First, a lot of central banks and trading firms will sell dollars to buy those other currencies and gold in order to make their portfolios reflect evolving financial realities. That selling pressure will, other things being equal, lower the dollar’s relative value, which is another way of saying that the US might not be able to borrow infinite amounts of money going forward, forcing us to either cut annual deficits far faster than is currently planned or pay a higher interest rate on future borrowings, which would increase future deficits.

The US, in short, will finally be subject to the same economic laws as lesser countries, with the same result: excessive debt and money printing lead to currency crisis which leads to depression."

at http://dollarcollapse.com/currency-war-2/welcome-to-the-currency-war-part-5-the-dollar-is-now-one-of-many/

Close To The Tipping Point For The Chaotic Phase To Begin

"Today 40-year veteran, Robert Fitzwilson, wrote the following piece exclusively for King World News. Fitzwilson, who is founder of The Portola Group, warns that “Cracks are developing in the fabric of societies around the world ... It feels like we are getting very close to the tipping point for the chaotic phase to begin.” 

 

Below is Fitzwilson’s exclusive piece for KWN:

“Gravity is a mysterious force. We can measure it, and we can experience it. Our very existence would not be possible without it. There are many theories as to the origin of gravity, but none that have been proven conclusively.

If we then turn to look at the global experience with fiat money, we know it is coming to an end. The arithmetic is inescapable. History is very clear about that. We have concluded that the “when” conundrum cannot be answered with any certainty. The end is unlikely to be linear, most likely chaotic and will accelerate rapidly to the final conclusion...."

at http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2012/11/25_Close_To_The_Tipping_Point_For_The_Chaotic_Phase_To_Begin.html

GRANTHAM: Here Are The Basic Forces That Will Send Growth To Near-Zero For Decades

"Jeremy Grantham recently released his quarterly letter to GMO clients.

Titled On The Road To Zero Growth, the note was pretty depressing.

Grantham sees real US GDP growth trending at 0.9 percent through 2030, then falling to 0.4 percent from 2030 to 2050.

"Someday, when the debt is repaid and housing is normal and Europe has settled down, most business people seem to expect a recovery back to America’s old 3.4% a year growth trend, or at least something close," he wrote. "They should not hold their breath.
"A declining growth trend is inevitable and permanent and is caused by some pretty basic forces."
Those basic forces include unfavorable demographic trends, decelerating productivity growth, tightening resource constraints, and rising environmental costs.
These are trends that have been developing for years. However, they have gone unnoticed thanks to the tech, housing, and financial booms and busts of the last ten or so years..."

at  http://www.businessinsider.com/grantham-on-the-road-to-zero-growth-2012-11?op=1#ixzz2DGeZgp9X

More Filings From Large & Influential Investors Buying Gold

"Today one of the wealthiest men in the resource space said that in the very near future we should expect more filings from large and influential investors buying gold. Here is what Rule had to say: “We just had reports that both Paulson and Soros have been adding to their gold positions, which now total roughly $4 billion. It doesn’t surprise me that they are adding to positions. My suspicion is that in the coming months we are going to see more reports of large and influential investors doing the same thing.”

 

Today one of the wealthiest men in the resource space said that in the very near future we should expect more filings from large and influential investors buying gold. Here is what Rule had to say: “We just had reports that both Paulson and Soros have been adding to their gold positions, which now total roughly $4 billion. It doesn’t surprise me that they are adding to positions. My suspicion is that in the coming months we are going to see more reports of large and influential investors doing the same thing.”

 

“Certainly Mr. Paulson and Mr. Soros have to deal with large amounts of money. The fact that they are very prescient investors, both of them, in terms of futures markets and currency markets, probably adds to the reasons why they feel comfortable betting on gold.

Their traditional areas are so volatile and risky, so I understand the move. What I find interesting is the timing of the increase and what it says about the likely direction of the price of gold going forward.

 

I have told you that quantitative easing is simply counterfeiting and it is happening around the world. One of the reasons why we have seen so little volatility in the global markets is there is so much cash around because of the printing.

The central bank officials know this, and they are very leery about cutting off that source of cash to the market because they want the markets to stay quiet. This is coordinated action to some degree, but governments around the world are engaged in currency wars and competitive devaluations. 

These governments want their currencies lower. They want to maintain whatever competitiveness is left in their economies. They also want to reduce growing unemployment. They are also using the newly counterfeited money to buy newly issued bonds in order to keep up with their spending programs.

 

So the reality is these countries can’t stop quantitative easing. Their failure to stop quantitative easing is naturally leading to more gold buying. This environment could not be more friendly to gold bulls and I fully expect higher prices going forward.”

at http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2012/11/23_More_Filings_From_Large_%26_Influential_Investors_Buying_Gold.html

Mark Faber Presents: The 44 Devastating Charts That Show Why The World Is Doomed

at http://www.businessinsider.com/marc-faber-lbma-presentation-2012-11

The Black Market For Gold Is Booming

"According to Assistant Central Bank Governor Manuel Torres, who heads the bank’s refinery operations, as much as 95% of all the gold mined in the Philippines is now being sold to smugglers and moved out of the country illegally.
And the trend has been accelerating. In 2011, central bank gold purchases dropped at an annualized rate of 4%, then 76%, then 88% during the second, third, and fourth quarters. In the first quarter of 2012, gold purchases were down 92%. It’s staggering.
Most of this smuggled gold finds its way here to Hong Kong, and then onward to China, where there is a voracious demand for gold despite rising prices.
Of course, it’s perfectly legal to bring gold, tax-free, into Hong Kong. This is why when Hong Kong reports its official trade statistics, ‘gold imports’ from the Philippines are 30 times higher than what the Philippines government reports as ‘gold exports’ to Hong Kong!
It’s an enormous discrepancy, and it gives a huge indication of how much gold smuggling is really going on.
And it’s not just the Philippines either; small-scale mining activity is being pushed to the black market in many countries around the world..."

at  http://www.sovereignman.com/expat/the-thriving-black-market-for-gold-10021/#ixzz2D57Ov2VG

World Gold Council's Grubb: Gold To Continue Higher In 2013 Amid China Recovery, Record Central Bank Buying

"Hard Assets Investor: Central bank gold demand looked strong again last quarter and seems on pace to exceed last year’s five-decade high. Which central banks are buying? And what influences their purchase decision?

Marcus Grubb: Yes, absolutely. On the face of it, central bank net purchases of gold fell 31 percent when compared with Q3 2011. But actually, 97.6 tons is a great number. And it means that through the end of September, this year is an even better year than last year; and last year was a record year. To the end of September, central banks have now bought 373.9 tons. Last year through September, they bought 343.9. So we’re looking at another 450-500-ton year for central banks, which is a record since the ’60s.

The most recent name that’s popped in, after many years of not buying gold, is Brazil. Brazil’s buying confirms a trend we’ve seen. If you look back over this year and in this quarter, the buyers are Latin American countries — Mexico, Bolivia, now Brazil; they are Central Asian countries — Russia, Kazakhstan, Ukraine; and Far Eastern countries such as Thailand, Philippines and South Korea. The developing country central banks are the ones doing the purchasing.

The interesting thing about them is, on average, their weightings to gold are much lower than the U.S. and European central banks — usually under 10 percent of foreign exchange reserves in gold. And, in many cases, less than 5.

The other conundrum to always keep in mind is that China has made no public statements about its gold reserves in three to four years. Ostensibly, they're still at 1064 tons, about 1.8 percent of foreign exchange reserves, which is extremely low by international standards. But we don’t have any new data on China currently.

The bottom line is that these central banks are diversifying away from the dollar. And they are diversifying away from the euro because of the sovereign problems and the currency issues in Europe.

Moreover, they are diversifying away from sovereign debt. We’ve seen the sovereign debt issue raise its head last year in the U.S and, of course in Europe, we’ve got countries that are effectively insolvent, being propped up by bailouts..."

at http://seekingalpha.com/article/1025821-world-gold-council-s-grubb-gold-to-continue-higher-in-2013-amid-china-recovery-record-central-bank-buying?source=feed

Bill Black: Financial Craziness on Three Continents

at http://jessescrossroadscafe.blogspot.com/2012/11/bill-black-financial-craziness-on-three.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+JessesCafeAmericain+%28Jesse%27s+Caf%C3%A9+Am%C3%A9ricain%29

Richard Russell - Attempts To Defeat Deflation As Money Dies

"With gold and silver surging, the Godfather of newsletter writers, Richard Russell, warns about attempts to defeat deflation as money dies. Here are Russell’s thoughts, along with some charts, in a note to subscribers: “Help, I'm alone. Where are my fellow newsletter writers: Stan Weinstein, Garfield Drew, Sir Harry Schultz, Marty Zweig, Chuck Almon, Bob Farrell? They all flew the coop while poor old Richard Russell is still carrying on. Maybe it's because the stock market has become impossible or irrational. I think at any given time, the stock market seems increasingly difficult to figure out.”

 

Richard Russell continues:

“I think what's needed is a lot of patience. Sooner or later the stock market will show its hand. At this juncture, we have the pressure of world deflation weighing on ALL the markets. Against that, we have the various central banks trying to print us into prosperity and at the same time trying to defeat deflation.

How do you battle deflation? Easy, you print fiat money until deflation backs off and until signs of inflation appear. But what happens when you print to kingdom come, and inflation refuses to appear? Well, in that case your junk currency sinks to near-nothingness, and you leave the whole deflation problem to the next generation of devaluing geniuses.

I ask myself, why hold any dollars at all? What's the danger of holding everything in dollars? And my answer is -- when it comes to investing, nothing is certain. Sure, it looks as though Fed printing (now that Obama is in for another four years) will continue for the next four years or, at least, until Bernanke is convinced that he has defeated deflation.

Wait, what could cause Bernanke to halt flooding the system with his fiat notes? I think runaway inflation in tangible goods and political pressure could halt the Fed's wholesale manufacturing of Fed notes. Scandalous bubbles might appear. Bubbles in college costs, bubbles in medical, bubbles in collectibles, bubbles, in insurance costs, bubbles in food prices, bubbles in energy costs, bubbles in consumer optimism. Of course, none of this would appear in the Labor Department's phony CPI statistics. As we all know, figures don't lie, but liars can figure..."

 

at  http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2012/11/23_Richard_Russell_-_Attempts_To_Defeat_Deflation_As_Money_Dies.html

A Brutal German Takedown Of The French Economy

"It’s certainly bizarre. For a while now, experts and researchers have been giving us the bad news, each bit worse than the last, about the crisis countries of southern Europe. And, throughout, the talk has been of “core Europe,” held by the “Franco-German motor” that must under no circumstances be allowed to stammer.

But now, in the face of France’s increasing lack of competitiveness and horrendous public debt (currently at 90% of GDP), a question arises: are we dealing with a communication disaster here, naive blindness all around – or is this perhaps one last Pyrrhic victory for that supremely French art of smoke and mirrors?
How much taxpayer money has been wasted – also in Germany – with ridiculous conferences and research projects geared to furthering post-World War II “Franco-German reconciliation!”
The reconciliation became a reality long ago, and the fact is that neither country gives much of a damn about the other. No need for conferences to establish that, and well enough could be left alone if it weren’t for the fact that France, Germany’s neighbor, is on a course to becoming the next crisis country.
So, once again: why wasn’t anybody paying closer attention? An unintentional and indirect explanation was delivered two weeks ago by the former CEO of aerospace group EADS, Louis Gallois, in his damning diagnosis of the French economy and call for incisive reforms. A "competitiveness shock" was needed, said Gallois who forged his own business career on the back of lucrative government contracts..."

at  http://www.worldcrunch.com/business-finance/rotten-at-europe-039-s-quot-core-quot-a-pitiless-german-takedown-of-modern-france/france-germany-economy-die-welt/c2s10211/#.UKz2COOe_DN#ixzz2CtNNWzHX

Is there an Asian RMB bloc?

"...The first interesting commentary is a paper by Arvind Subramanian and Martin Kessler, both from the Peterson Institute, arguing that a RMB currency bloc is rising in Asia and is displacing the US dollar. According to the abstract:

A country’s rise to economic dominance tends to be accompanied by its currency becoming a reference point, with other currencies tracking it implicitly or explicitly. For a sample comprising emerging market economies, we show that in the last two years, the renminbi has increasingly become a reference currency which we define as one which exhibits a high degree of co-movement (CMC) with other currencies.
In East Asia, there is already a renminbi bloc, because the renminbi has become the dominant reference currency, eclipsing the dollar, which is a historic development. In this region, 7 currencies out of 10 co-move more closely with the renminbi than with the dollar, with the average value of the CMC relative to the renminbi being 40 percent greater than that for the dollar.
We find that co-movements with a reference currency, especially for the renminbi, are associated with trade integration. We draw some lessons for the prospects for the renminbi bloc to move beyond Asia based on a comparison of the renminbi’s situation today and that of the Japanese yen in the early 1990s. If trade were the sole driver, a more global renminbi bloc could emerge by the mid-2030s but complementary reforms of the financial and external sector could considerably expedite the process.

The RMB, the authors claim, is well on its way to eclipsing the US dollar as the dominant reserve currency. In an OpEd piece in the Financial Times the authors explain their reasoning a little more, going on to say:

In new research, we find that since the global financial crisis, as the US and Europe have struggled economically, the renminbi has increasingly become a reference currency (meaning emerging market exchange rates move closely with it). In fact, since June 2010 when the renminbi resumed floating, the number of currencies tracking it has increased compared with the earlier period of flexibility between July 2005 and 2008. Over the same period, the number tracking the euro and the dollar declined.
East Asia is now a renminbi bloc because the currencies of seven out of 10 countries in the region – including South Korea, Indonesia, Taiwan, Malaysia, Singapore and Thailand – track the renminbi more closely than the US dollar. For example, since the middle of 2010, the Korean won and the renminbi have appreciated by similar amounts against the dollar. Only three economies in the group – Hong Kong, Vietnam and Mongolia – still have currencies following the dollar more closely than the renminbi."
 

at  http://www.creditwritedowns.com/2012/11/is-there-an-asian-rmb-bloc.html?utm_source=rss&utm_medium=rss&utm_campaign=is-there-an-asian-rmb-bloc

The Age of Financial Repression

"Following his re-election, US President Barack Obama almost immediately turned his attention to reining in America’s rising national debt. In fact, almost all Western countries are implementing policies aimed at reducing – or at least arresting the growth of – the volume of public debt.

In their widely cited paper “Growth in a Time of Debt,” Kenneth Rogoff and Carmen Reinhart argue that, when government debt exceeds 90% of GDP, countries suffer slower economic growth. Many Western countries’ national debt is now dangerously near, and in some cases above, this critical threshold.

Indeed, according to the OECD, by the end of this year, America’s national debt/GDP ratio will climb to 108.6%. Public debt in the eurozone stands at 99.1% of GDP, led by France, where the ratio is expected to reach 105.5%, and the United Kingdom, where it will reach 104.2%. Even well disciplined Germany is expected to close in on the 90% threshold, at 88.5%.

Countries can reduce their national debt by narrowing the budget deficit or achieving a primary surplus (the fiscal balance minus interest payments on outstanding debt). This can be accomplished through tax increases, government-spending cuts, faster economic growth, or some combination of these components.

When the economy is growing, automatic stabilizers work their magic. As more people work and earn more money, tax liabilities rise and eligibility for government benefits like unemployment insurance falls. With higher revenues and lower payouts, the budget deficit diminishes.

But in times of slow economic growth, policymakers’ options are grim. Increasing taxes is not only unpopular; it can be counter-productive, given already-high taxation in many countries. Public support for spending cuts is also difficult to win. As a result, many Western policymakers are seeking alternative solutions – many of which can be classified as financial repression.

Financial repression occurs when governments take measures to channel to themselves funds that, in a deregulated market, would go elsewhere. For example, many governments have implemented regulations for banks and insurance companies that increase the amount of government debt that they own..."

at http://www.project-syndicate.org/commentary/western-governments--increasing-use-of-financial-repression-by-sylvester-eijffinger-and-edin-mujagic#ZJOkowuJ8eRwm0KG.99

Doorsteps of a Currency Crisis; Economic Illiterates Debate Monetary Policy; Monetarist Mush

"Japan's grand experiment of decades-long QE coupled with Keynesian foolishness is about to take one last gigantic leap forward before it plunges straight off the cliff into a massive currency crisis.

Please consider the New York Times article A Call for Japan to Take Bolder Monetary Action

For years, proponents of aggressive monetary policy have offered this unusual piece of advice as a way to end Japan’s deflationary slump and invigorate the economy. Print lots of money, they said. Keep interest rates at zero. Convince the market that Japan will allow inflation for a while.

Japan’s central bankers long scoffed at such recklessness, which they feared would ignite runaway inflation. But now, the bank’s hand could be forced by an unlikely alliance of economists and lawmakers who have argued for Japan to take more monetary action after more than a decade of weak growth and depressed prices..."

 at http://globaleconomicanalysis.blogspot.com/2012/11/doorsteps-of-currency-crisis-economic.html#XUbcdOdDcFBzIGfE.99

Hyperinflation and Complete Collapse – Nick Barisheff

"Asset manager Nick Barisheff says, “There’s never been a fiat currency in history that didn’t end in hyperinflation and complete collapse.” Barisheff thinks that Treasury Secretary Tim Geithner’s most recent call to have an “unlimited debt ceiling” for the U.S. was “just telling the truth.” That’s essentially what we have now with “open-ended” money printing by the Fed. Barisheff adds, “All it’s doing is postponing a problem . . . it makes it bigger and eventually it blows up.” Forget about remedies for the economy, it’s too late. Barisheff says, “We’ve passed the point of this getting fixed.” Barisheff thinks if the Fed’s gold holdings are ever audited, there will be a “gigantic short-covering rally . . . multiple bankruptcies . . . and a massive loss of confidence” in the dollar because much of the gold is gone or leased out. Barisheff thinks the gold price could be “easily double” right now. That’s because Barisheff believes, “What’s kept the price down is the artificial leased gold going onto the markets.” Join Greg Hunter as he goes One-on-One with Nick Barisheff, CEO of the $650 million Bullion Management Group..."

at    http://usawatchdog.com/hyperinflation-and-complete-collapse-nick-barisheff/ 

Jim Rogers~US Headed For A Financial Crisis

"Jim Rogers~US Headed For A Financial Crisis , legendary investor talking to Judge Andrew Napolitano about a wide range of subjects touching on economy politics and finance..."

at http://jimrogers1.blogspot.com/2012/11/jim-rogersus-headed-for-financial-crisis.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+blogspot%2FWOHK+%28Jim+Rogers+Blog%29

Turk - This Is The Chart That Every Investor Needs To See

"...The following chart illustrates the close correlation between the S&P 500 and the securities the Federal Reserve is monetizing. The amount last week is not that big, but even small amounts can impact stock market prices. Note the small recent uptick in the red line in the chart.

The important message from this chart, Eric, is that the stock market is not rising because of good economic activity, which is understandable. The economy will not be improving until employment starts growing again. After all, that is what economic activity is all about - people working and saving or spending the money they earn. And here's the horrific part..."

 

at http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2012/11/19_Turk_-_This_Is_The_Chart_That_Every_Investor_Needs_To_See.html

President Xi’s Singapore Lessons

"China is at a crucial point today, as it was in 1978, when the market reforms launched by Deng Xiaoping opened its economy to the world – and as it was again in the early 1990’s, when Deng’s famous “southern tour” reaffirmed the country’s development path.

 

Throughout this time, examples and lessons from other countries have been important. Deng was reportedly substantially influenced by an early visit to Singapore, where accelerated growth and prosperity had come decades earlier. Understanding other developing countries’ successes and shortcomings has been – and remains – an important part of China’s approach to formulating its growth strategy.

 

Like Singapore, Japan, South Korea, and Taiwan in their first few decades of modern growth, China has been ruled by a single party. Singapore’s People’s Action Party (PAP) remains dominant, though that appears to be changing. The others evolved into multi-party democracies during the middle-income transition. China, too, has now reached this critical last leg of the long march to advanced-country status in terms of economic structure and income levels.

 

Singapore should continue to be a role model for China, despite its smaller size. The success of both countries reflects many contributing factors, including a skilled and educated group of policymakers supplied by a meritocratic selection system, and a pragmatic, disciplined, experimental, and forward-looking approach to policy.

 

The other key lesson from Singapore is that single-party rule has retained popular legitimacy by delivering inclusive growth and equality of opportunity in a multi-ethnic society, and by eliminating corruption of all kinds, including cronyism and excessive influence for vested interests. What Singapore’s founder, Lee Kwan Yew, and his colleagues and successors understood is that the combination of single-party rule and corruption is toxic. If you want the benefits of the former, you cannot allow the latter.

 

Coherence, long time horizons, appropriate incentives, strong “navigational” skills, and decisiveness are desirable aspects of continuity in governance, especially in a meritocratic system managing complex structural shifts. To protect that and maintain public support for the investments and policies that sustain growth, Singapore needed to prevent corruption from gaining a foothold, and to establish consistency in the application of rules. Lee did that, with the PAP supplying what a full formal system of public accountability would have provided..."

at http://www.project-syndicate.org/commentary/reforming-one-party-rule-in-china-by-michael-spence#uHaavWr8RITt3OVx.99