Wednesday, February 27, 2013

Inflation in Singapore

ever wondered why living expenses keep rising?


Societies have flourished and perished with and without water. The sector is an exciting place to be in.

Is Soros really selling gold?

Interesting. Soros could be selling GLD to push prices down, and then buying the physical itself. He doesn't report his physical investments.

Secretary of the Debt

Nowadays the job of the Secretary of Debt, i mean Treasury, is to convince the world to lend the country more money. Quite a tough job

Eurozone crisis

The Eurozone debt crisis is far from over. They've only papered over it like Japan did in the 1990s, and US in the 2000s. The crisis will resurface again. The construction of the euro was fundamentally flawed. Member countries are allowed to have deficits of up to 3% of their GDP. Which politicians wouldn't take advantage of that? Each year the debt still goes higher. A top economist in the Greek govt privately told people that they're never gonna pay the money back. Bailouts = throwing money down the rathole

Analysts laud Singapore govt’s ‘Robin Hood’ budget

Democracy leads to socialism. Singapore, one of the best managed country in the world, is falling victim to this too.

How much does food cost?

This is how much paper money it takes to buy some food over a few decades.
And this is how much gold it takes to buy some food over a few decades.

Oil Palm

Chart 6.
Oil palm is historically cheap in terms of gold, even as inventory has fallen lower than in the preceding decades.

The British Pounds

The value of British pound has dropped by two thirds in 30 years. What backs paper money today is just pure faith on politicians' empty promises to keep it scarce. No currency has ever retained or regained its initial value, unlike precious metals.

Just over a 100 yrs ago, the pound was the international reserve currency and they were the world superpower.

Within 2-3 generations, they were bankrupt, and had to be bailed out in 1976. Today they still have staggering debts.

Who will the market punish first? The GBP, JPY or the USD (the worst among the lot?)

Tuesday, February 26, 2013

Singapore housing prices in terms of gold.

Did a fast, casual research:

1985: A 4-rm flat costs 90oz of gold, and SGD 61,000
2011: A 4-rm flat costs 165oz of gold, and SGD 400,000

Price rose 83% in terms of gold
Price rose 556% in terms of SGD
Prices rose 670% faster in terms of SGD than in terms of Gold!

Rising demand and limited land space does put a premium on housing price over the years, but the main source is INFLATION! Money creation out of thin air. 

I made the assumption that gold is fairly priced and follows inflation closely. Didn't take into account tax effects that push down current gold prices. Else a 4-rm flat would have cost less gold :)


5th chart!

Historical high: 65.2 Cents/lb in November of 1974
Inflation-adjusted high using govt-manipulated inflation figures: $2.91/lb
Inflation-adjusted high using private sources of inflation figures: > $6/lb


4th chart. We see that prices of agricultural commodities are generally stable in terms of gold, but unstable in fiat currency. This chart shows again that after 1970, when gold was no longer artificially undervalued by the government, it went on to its 'true' value against other commodities.

Monday, February 25, 2013

Friday, February 22, 2013


Current global cotton inventory is at a multi-decade high.

North Korea, open up!

A fascinating look inside North Korea. The situation there does not seem as bad as the brutal civil wars that had plagued Burma in the past few decades. When North Korea opens up and re-unifies with South Korea, the resulting economic boom should be a sight to behold, and investment opportunities await!

Thursday, February 21, 2013

The Fed has no exit

There is no exit without crashing the bubble economy. One can say the Fed is THE market in the long-term bond market right now. How can they exit?? Who will buy from them when they try to sell?? It's impossible, unless aliens visit earth and get convinced to buy government bonds. And look at those bonds maturing in the next 1-2 yrs. Yikes!

Wednesday, February 20, 2013

The Big Rip

Bill Gross knows astronomy/physics: 

"[Our] current monetary system seems to require perpetual expansion to maintain its existence. And too, the advancing entropy in the physical universe may in fact portend a similar decline of 'energy' and 'heat' within the credit markets," writes Gross.

Bill Gross said this will result in a Big Freeze of credits. I'll add that it will also result in a Big Rip of the economy.

Devalue to drive exports?

The damaging effects of money devaluation (headlines from bloomberg):

-Japan Trade Deficit Hits Record as Yen Inflates Imports

-Louis Vuitton Japan Prices Raised to Most Ever to Fight Weak Yen

It doesn't help exports. It only helps big export companies. Meanwhile the rest of the population pays for higher imports and inflation at home.

And what about other nations? Do you think they can't devalue as well? There is NO historical evidence that devaluation helps exports. It's just ludicrous. A theory dreamt up by mainstream economists.

Tuesday, February 19, 2013

1920: The Depression that no one talked about

This was a great example of what government did correctly during a downturn. But of course, it isn't discussed nowadays, and therefore economic commentators are none the wiser. Modern commentators think they are smarter and have better economics theories than their counterparts 100 years ago. This is a timeline of what happened back then:

1913 - Creation of Fed. Fed was NOT allowed to own government bonds because of fear of monetization of debt (i.e. QE in today's colourful but deceptive term).

1917 - US finally entered WW1. Government needed to spend. The Federal Reserve Act was amended to allow monetization of debt. This was also when the DEBT CEILING came into existence. People feared that  government will take on too much debt (of course, the ceiling is meaningless, because Congress keeps increasing it every time they approach it).

1918 - End of WW1. Fed stops printing money. But by then, inflation was rampant. All the magic money created previously had also gone into the GDP and stock markets -- making people feel rich.

1920 - Because there is no more cheap money, US GDP crashed by 17%. US unemployment sky-rocketed to 12%. Stock market crashed by 40% . Wholesale prices dropped by 37%. 

NOTE: Still think the Fed can stop printing money without crashing the economy? No way. There's no exit, like they would have you believe (I''ve discussed this mathematically before).
Update 2013: The Fed said that they need not exit (i.e. sell bonds). There you go. They just admitted they have no exit.

1920 - The then Secretary of Commerce, Herbert Hoover said: "Oh no! This is terrible. The government gotta intervene! We need to STIMULATE!" (he probably didn't use this term. But yeah it's the same thing that he was referring to).

Instead of following what many now call the "Keynesian-style stimulus", these happened:

-President Warren Harding: SLASHED government spending by ALMOST 50%.
-Federal Reserve: Did absolutely NOTHING. No stimulus. No easing.
-FREE MARKET CAPITALISM was allowed a chance to prove itself.

-Within 1 year, unemployment was cut in half, from 12% to 6.7%.
-In 2 years, it fell to only 2.4% !!
-Stock market fully recovered everything it lost!


-1927 - Small contraction in economy. Fed tries to prevent it by printing money. Fed also printed to help the UK, because there was a run on the sterling pounds (same story, UK overspent and intervened in their economy). Stock market took off.

-1928 - Fed started to raise rates, realising its mistake.

-1929 - Stock bubble burst in Oct 29 (known as Black Tuesday). But now Herbert Hoover had become president. Now he finally had his chance. He intervened and stimulated. (George Bush is the modern equivalent of Herbert Hoover, who intervened when the bubble burst in 2000-2001).

- 1933 - President Franklin D. Roosevelt came into office. He had won his elections campaigning against the RECKLESS spending and interventions of Herbert Hoover. He promised CHANGE. But what did he do once in office? He took Hoover's exact same policies and expanded on it, calling it the New Deal. (Barrack Obama is the modern equivalent of Roosevelt. Obama railed against the reckless spending of Bush, and promised change. But once in office, he took Bush's policies to unprecedented levels).

The small recession that started in 1929 turned into the Great Depression, because of all these interventionist policies. US unemployment rate rose to 25%. International trade fell 50%. Modern commentators claimed that the Great Depression started because the politicians did nothing, which is so FALSE.

Saturday, February 16, 2013


Corn inventory has dropped significantly in the past 3 decades, leading to higher prices per bushel. But a lot of the price increase is due to money-printing, as evidenced by the steady gold : corn ratio. Since gold cannot be printed out of thin air, the ratio is relatively stable. Gold : corn ratio was out of whack before 1970 because gold was artificially undervalued by governments back then, under the Bretton Woods agreement.

Wednesday, February 13, 2013

North Korea

The media has always been reporting negative stuff on North Korea. I won't be surprised if reality is not what is purported to be. As usual, I've learnt to do my own independent research. I've been wanting to buy some books on the country through online stores, but haven't got about doing it.

From what I know so far, the new generation of North Korean leaders have travelled places, and studied overseas. They must have seen the changes and rapid growth everywhere around the world. They would want to replicate some of these success in their own country. According to Jim Rogers, the N. Koreans have banners everywhere, in favour of reunification with South Korea. They are also opening up their economy slowly, at least to their northern neighbour China.

I trust accounts like Jim Rogers' more than the propaganda from the mainstream media, the US and the Japanese. He has been there and seen the country with his own eyes. I take with a pinch of salt, articles about N. Korea being a nuclear threat and have millions of people starving in the country. People buy into these stories and get agitated easily. Yet they overlook the atrocities - worse atrocities - of other supposedly 'good' countries.

Of course, I'm not trying to absolve N. Korea of some of the reported atrocities on its citizens. I do not know how true those accusations are, but I won't be surprised if it's bad. A lot of governments do that - most notably Myanmar, taking an example close to home, in recent decades. But in any case, North Korea may be undergoing a fundamental change right now. It would be a good place to visit and invest in.

Tuesday, February 5, 2013

Singapore aims to be the gold and silver hub in SEA

Singapore took one more step towards becoming “the new Switzerland,” as Mike Maloney often calls it, when Swiss precious metals refiner Metalor decided to build a new refinery on the Pacific Rim, as reported by Metalor Group CEO Scott Morrison:

The construction of a gold refinery in Singapore comes at a time of rising demand for precious metals and is therefore perfectly in line with our development strategy in the Asia-Pacific region.

Unemployment figures in the US

This article sums up what i've been trying to tell people in the past few years:
Web Statistics