Tuesday, December 23, 2014

Singapore's inflation

Singapore's inflation. Is cost of living going up 5-10% yearly?
Singapore money supply (S$ million)
Sep 2008
M1: 75,633.7
M2: 324,687.2
M3: 333,807.8
Sep 2014
M1: 156,503.7 (106.9% increase, 12.9% annualised)
M2: 505,032.8 (55.5% increase, 7.6% annualised)
M3: 516,912.6 (54.9% increase, 7.6% annualised)
Source: MAS

The forgotten depression — 1921: The crash that cured itself

Academics should study this. Seriously. Why it's left out of econs classes confounds me. I wrote a summary of it before at http://silvernjin.blogspot.sg/…/1920-depression-that-no-one… but this video contains more details.

Hayek on Keynes

Here are links to 2 videos of Economics Nobel Prize Winner Hayek on Keynes, the guy whose ideas form the basis of the world economic model today.

Hayek on Keynes' ignorance of economics:

2nd Video:

4:00 onwards in the 2nd video. Keynes is against the inflationary policies that we have in the world today, as I've always suspected so. Nevertheless, politicians used his ideas and make them highly destructive. The world is fixated on inflation, spending and consumption as a means to cure the ills of the economy, when in fact inflation, over-spending and over-consumption were the causes of those ills in the first place. The next 1-3 years will be very interesting for the financial community. We should probably see the full-blown problems caused by Keynesianism, especially in the West. Big symptoms have emerged in the past decade but politicians and central banks managed to cover it up. When Keynesianism will be banished forever is a question mark. But it won't be in the foreseeable future. I'll be really happy if I'm wrong in the preceding statement.

Wednesday, December 17, 2014

Russian Fear

-Low debt. Huge reserves. Debt to GDP of 9.2%. Oil revenue denominated in USD.
-Natural-resource-based economy + commodity boom for forsee-able future.
-Great balance sheets in energy companies. Tremendous assets.
-The p/e ratio of the largest oil company is lower than 3!
-Apple alone is valued more than the entire Russian stock exchange.
-Why own 1 company rather than an entire country?
-The Russian Central Bank just raised interest rates to 17%.
-A number of major economies cannot even afford 1% !
-Why do people short Russian rubles and stocks so much?
-Anyway, bought myself a significant bunch of RSX yesterday at $13.18.
-As global economy slows, it may drop back down to its 2009 lows.
-Who knows. I'm in for the long haul. The fundamentals are good.
-And also, Putin has opened up the economy more in the past few years.
-But if Russia invades Europe, then I may have to panic sell.
-Also, I wish to buy rubles but have not done so yet.

Update 18/12/14. The mainstream media has been talking about Russia selling its gold. I think this is unlikely. From the russian point of view, they have a huge foreign reserve that they can tap into. I think they are more likely to sell their USD and US treasuries than to sell the gold that they have worked hard to stockpile over the last few years. In fact, this year, they bought the most gold on record - almost twice of last year's amount. I was telling my friends yesterday about this, and soon enough, it was reported that Russia sold some of its foreign reserves to buy up the rubles. But what if Russia really sells its gold? Then gold is likely to go down, and we may finally see a bottom in the gold market as some staunch gold-supporters give up their holdings. I am still thinking of getting more North Korean gold coins in March. So if gold goes down, it will help! In the meantime, my RSX is up a whopping 20% in 2 days. I won't be surprised if it goes to its 2009 lows though, when a financial crisis hits the world in the next few years. I took the chance to buy up these RSX for the long term, seeing that traders are mass-selling it without any regard for fundamentals. But again, if Putin invades Europe or make some other major mistakes, I would have to sell my holdings.

Friday, October 3, 2014

Where is US stocks going next?

It seems like there's some sort of correction going on. I've been watching the small caps and their junk bonds. The Russell 2000 has fallen 10% since March this year. DJIA and S&P500 fell today too.

Since 2009, I have been maintaining the position that stocks may well rise due to the Fed's money printing. But I am more than willing to sit out the potential gains because there is no economic fundamentals behind them. Stocks are simply going up because of the cheap money sloshing around the world. That is also the reason why I did not short any stocks at all. Going forward, my thesis remains the same. As the economic weakness becomes more apparent to the Fed and the market, the Fed will come in with a new round of QE, or whatever they call it. Stocks may then rise again and have their final hurrah. Till then, it's entertainment for me as I watch the events unfolding.

Monday, September 22, 2014

Greenspan Says Construction Dead in the Water


greenspan: U.S. economic rebound has been hindered by a slump in the construction industry.

reality: The construction rebound has been hindered by a slump in the economy. 

And greenspan was the one who started it all, back in the 1990s and 2000s.

Alan Greenspan's Nine Reasons "Why The Economy Stinks"


Hey Greenspan, why aren't you on that list?

Here's one sentence from him that is right though:

“The whole structure of the industry is the mechanism by which you’re converting consumption into savings, and the only way the economy can grow is to SAVE (emphasis mine).”

Wars help the economy??

Didn't economists say that wars help grow the economy? Jokers! 

C.Bank chief says Ukraine 2014 GDP may shrink by up to 10 pct - agency

Failure of Japanese keynesian experiment

Why are the failures of keynesian-style spending programs in Japan ignored? No idea.

Imf sources:

“Between 1992 and 1995, Japan tried six spending programs totaling 65.5 trillion yen. In April 1998, the government unveiled a fiscal stimulus package worth more than 16.7 trillion yen, almost half of which was for public works. Again, in November 1998, another fiscal stimulus package worth 23.9 trillion yen was announced. A year later (November 1999), yet another fiscal stimulus package of 18 trillion yen was tried. Finally, in October 2000, Japan announced yet another fiscal stimulus package of 11 trillion yen. Overall during the 1990s, Japan tried 10 fiscal stimulus packages totaling more than 100 trillion yen, and each failed to cure the recession. What the spending programs have done, however, is put Japan’s government in poor fiscal shape.”

Yellen caught lying


"Federal Reserve Chair Janet Yellen says “it could take until the end of the decade” to shrink the Fed’s record investment portfolio to more normal levels."

Aww come on... somebody ought to have asked her during the conference... to shrink the balance sheet to normal levels within 5 years means that the Fed has to sell $700b worth of bonds per year. Who is going to buy? 

Global Finance Chiefs Said to Warn of Growing Economic Risks


Right diagnosis, but wrong prescription as usual.This senseless focus on boosting 'demand'.

cheapening the currency doesn't work


There you go. Who still buy into the idea that a cheap currency is good for trade?
As I've explained numerous times, a cheap currency ultimately transfers purchasing power from your importers and the general population to your exporters. A few exporters benefit at the expense of the rest of the population.

Trade is about trying to export less and import more. You want to work less in exchange for more stuff from other nations. To cheapen your currency just to be able to export more does not make any sense, except to the mainstream analysts and economists. It means you have to work more in exchange for less, because now your imports become more expensive!

That's the idea. Some people will dismiss it as a mere 'theory'. Well fine. Show me an example in history when cheapening your currency has been good for the economy overall.

Inflation and rates

Krugman wants 4% inflation (well, it's already beyond 4% if the calculations have been honest), Some want 5-6%. But they forget that this will push treasury yields way up and put the govt in huge trouble. There is no free lunch.... The market now believes inflation to be only 1.7%, and 10 year yield is 2.64%, 30 year yield is at 3.36%. Where will yields be if the market believes that inflation is 4%?

On another note, it is likely that the Fed will not voluntarily raise rates because they have to know that this will crash the bubble economy, and put the government in a very uncomfortable position with their debts. So, expect the Fed to come up with more excuses to keep rates low and even come up with a new QE in the months to come.

Greenspan brought rates down to 1% and left them there for 2 years. He had to raise them slowly over the next 4-5 years to try not to collapse the artificial boom in housing. He thought this will give the market enough time to adjust. BAD bet. He should have raised rates much sooner to prick the bubble. Better yet, he should never have lowered rates in the first place. There's no free lunch. Look at the damage it did.

Bernanke/Yellen had kept rates down at 0% for SIX years now. Again, they never learn. Again, they hope the market will adjust without incident. Yellen is most likely not going to raise rates voluntarily because she will prick the bubble economy. It is more likely that the market will eventually force them to raise the rates. But expect the carnage that will follow.

Tuesday, September 16, 2014

Warren Buffet's wealth in terms of gold/commodities Update till 2013

Would have been better if invested in commodities.

Sunday, June 15, 2014

The big 3 are screwing the rest over

Some info and thoughts as I read James Rickards' Death of Money:

The USD, JPY and EURO make up 65% of allocated world reserve currencies (half this number if you include unallocated reserves). With the 3 central banks printing these currencies like crazy, they are screwing up the other nations, transferring wealth from creditors to themselves.

The rest of the world don't like it. The BRICS, SCO, and GCC want to set up alternative monetary systems. They have been accumulating gold furiously.

If the IMF's SDR becomes the new reserve currency, it will be an inflationary currency par excellence. The source of inflation will be so obscure. The smart ones will start to blame inflation on sovereign central banks, but these central banks will simply point their fingers to the IMF. Owned by no nation, untouchable.

The BRICS, SCO and GCC are not too keen on tagging along with the IMF system unless they get more say. This could result in a Bretton-Woods style monetary system, where gold is once again reestablished as an anchor.

In any case, the end of the USD standard is drawing near. The 20th century witnessed 3 changes in the world monetary system. Each time, gold is revalued upwards massively to account for devalued currencies. The new change in the world monetary system will be the first one for the 21st century. Lots of investors will lose money . Lots of investors will gain money too.

Paul Volcker, Bretton Woods, Gold standard

Former Federal Reserve chairman Paul Volcker has hinted at a new Bretton Woods to prevent "destructive financial crisis."

Volcker said in his Bretton Woods speech this past May:

"Was the exorbitant privilege of the dollar as a reserve currency also a dangerous temptation to procrastinate - an impediment to timely policy adjustments, risking eventual breakdown?"
A new Bretton Woods conference? We are long ways from that. But surely events have raised, whether we want to admit it or not, some fundamental questions that have been ignored for decades.

New York Times on Latvia in 2013

New York Times on Latvia in 2013: 

When a credit-fueled economic boom turned to bust in this tiny Baltic nation in 2008, Didzis Krumins, who ran a small architectural company, fired his staff... and then shut down the business. He watched in dismay as Latvia's misery deepened under a harsh austerity drive that scythed wages, jobs and state financing for schools and hospitals. 

But instead of taking to the streets to protest the cuts, Mr. Krumins... bought a tractor and begun hauling wood to heating plants that needed fuel. Then, as Latvia's economy began to pull out of its nose-dive, he returned to architecture and today employs 15 people - five more than he had before.

Real austerity vs fake austerity

Real austerity vs fake austerity.
Economic prudence vs Keynesian-style stimulus.


After the economic collapses in both groups in 2008, GIIPS raised taxes and hardly cut spending (many people were led to believe they have austerity just because the news headlines said so). BELL took drastic austerity measures with govt layoffs and real spending cuts (such as 35% salary cuts for ministers. Now that's austerity!).

Results: GIIPS are still muddling along and more trouble lies ahead. BELL had a longer recession but also a dramatic turnaround and their growths are now the highest in the EU.

Moral of the story: Economic prudence works. Keynesian-style stimulus fails. Keynesianism has a dismal track record over the decades and lack empirical support for its claims, yet it is being taught in schools and followed blindly in the financial world. Let a real recession happen. Cut govt spending with a chainsaw. Take the pain and let the free market work. The economy will restructure and become stronger.

Inflation myth: foreigners cause it

Every notable nation in the world has inflation. Every nation blames it on foreigners. Does kicking foreigners out solve the problem? No! Merely shuffling people around between nations do not kill inflation. 

Inflation is the result of the current world monetary system, which is about 43 years old. Inflation is not caused by people. It is caused by money printing. You shuffle people around the world, but the paper money is still around to bid up prices.

On a side note, expect a change in the world monetary system soon. It has changed 3 times in the 20th century. The first change in the 21st century is not far off into the future.

1400 gold coins VS $30,000

Uncovering 1400 gold coins VS uncovering $30,000 (the values of these coins back then). 
What's the difference?

Couple who found gold in back yard are millions of dollars better off


Thursday, May 29, 2014

3% interest rate 'to be the norm'

3% interest rate 'to be the norm'


That's assuming the market shares the same sentiment when the time comes, sir.
Market > central bank.

Roubini vs Schiff

Schiff vs mainstream economist Roubini.
This must go into the next "Peter Schiff was right" compilation.


Roubini vs. Schiff: Who's "Doomier" on US Economy?


Russia dumps US bonds

Russia dumps a record amount of US treasuries and buys more gold.


Sneaky tactics or inflation?

No worries bond traders. There's no inflation.

Analysts see it as 'sneaky tactics', I see it as inflation.

Supermarket Shrinkage? It's Not Your Imagination, Experts Say


Soros bought gold

Soros Fund Management LLC increased its stake in Barrick Gold Corp, the largest producer, in the first quarter and also bought more shares in the Market Vectors Gold Miners ETP.

Hasn't the "ultimate bubble" burst already?

US Interest Debt

The national debt tripled in the past 20 years, to almost $18 trillion now. Yet, interest payments stayed roughly the same. As alluded to before, this is the real reason why the Fed prints tons of money: to keep the government afloat. Government bonds has had its 30-odd-year bull run. What happens when interest rates double or triple?

Friday, May 9, 2014

Russian Stocks

Finally got myself some Russian stocks today, through an ETF.

EDIT 20 Mar 2015:
Wow, some guy from youtube actually looked through my blog and told me that I bought RSX on May 8th,2014. So I presume he saw this particular post. I argued against him in the past. I thought I was done with him. But today he emerged again to insult me. It seems like he has been trying to find faults with me. I do have many faults, but he is pointing out this particular "fault" in this particular post. Should I be honoured that he is putting in the effort to discredit me? He said that I bought RSX on May 8, 2014 and that it was "down 32% in less than a year".

Ok, I should have put in more effort to write my blog. But since I did not expect people to read it, nor am I promoting it like other bloggers, I did not put in the effort. He assumed that I lost big. But in reality, I bought only 2 lots, because I was testing my new broker. And I told him that my main purchase was updated here: http://silvernjin.blogspot.sg/2015/02/portfolio-update-2.html

And oh, about those 2 lots, Check it out. It is a good thing I took a screenshot of it back then, because right now I cannot access my transactions online which are more than a month old:
It sure hurts to lose those couple of bucks! :)

Iranian stocks.

Iranian stocks have rallied 150% since last year, about the same time I started looking at it (posted in FB but forgot to post it here). Situation is still uncertain. Only a very tiny amount of Iranian stocks are currently owned by foreigners. Continue to monitor!

What inflation?

According to the CPI, inflation is just around 1% a year. 

Here're some figures that support the claim:


College costs up 40%
Gold up 37%
Silver up 44%
Pork chops up 25%
Chicken up 10%
Hot dogs up 18%
Ground beef up 43%
Gas up 70%
Milk up 130%
Coffee up 43%
Cotton up 54%

Spin it positively!

I get amused by market commentators sometimes.

Journalist on bloomberg:
"US unemployment rate falls to 6.3%, the lowest SINCE september 2008."
"288k, the best number we've see SINCE jan 2012."
"But the participation rate drop to 62.8%, the civilian labour force dropping by almost 800k"

Participation rate is the lowest SINCE when? Since 1978. Of course it isn't mentioned. Gotta keep a positive spin to it. (Absent the convenient kicking of people out of the labour force statistic, the unemployment rate is well above 10%)


There has been so much news against Russia in the mainstream media. Here I would like to add some other perspectives:

The US wanted regime change in the democratically-elected government of Ukraine (among other countries) since 2004. 

Known US funding of foreign political parties in:
italy, phillipines, lebanon, indonesia, vietnam, guyana, japan, nepal, laos, brazil, dominican republic, guatemala, bolivia, chile, portugal, australia, jamaica, nicaragua, haiti, bulgaria, mongolia, russia, bosnia, yugoslavia, bolivia, slovakia, georgia, el salvador, afghanistan, iraq, ukraine

Known US covert regime change in:
hawaii, russia, italy, cuba, syria, guatemala, tibet, iran, indonesia, lebanon, nepal, congo, bolivia, jamaica, iraq, dominican republic, south vietnam, brazil, ghana, greece, cambodia, chile, argentina, afghanistan, turkey, nicaragua, poland, bulgaria, mongolia, venezuela, georgia, libya, ukraine.

~source: Rogue State

And yet,
US Code Amended, Article 2, Section 441 E(A):
"It shall be unlawful for a foreign national to make any contribution of money in connection with political office"

Don't worry folks, the economy is improving

The market loves to feel optimistic and ignore all bad data.


Record corporate cash... record-er corporate debt.

We hear so much about record corporate cash. How about corporate debt?


Am looking to make some shorts on stocks/corporate bonds soon.

Japan trade deficit quadruples


Isn't cheapening the currency supposed to help exports?

Print faster, Kuroda!


"For a day and a half this week, the Japanese government’s benchmark 10-year bonds attracted not a single successful private sector bid...The rest of the world now refuses to lend money for ten years at 0.6% to a government whose debt is 200% of GDP and rising" 

Come on Kuroda. Print faster!!

Saturday, March 29, 2014

Singapore Coin Fair 2014

North korean gold coins. A bet on the eventual demise of the regime:

Photo with legendary billionaire investor Jim Rogers:

Last but not least, a gift for my special person:

Saturday, March 22, 2014

Fed removes goal post

Of course, as mentioned before, they need new excuses to continue printing.

They've changed policies over 10 times in the past few years. Watch out for a reversal of QE-tapering or a new QE program in the later part of this year.

The Federal Reserve gave itself room to keep borrowing costs low at least until next year by dropping a linkage between the benchmark interest rate and a specific level of unemployment:

Buffett Rule! Not!

So much for the buffett rule. 

Berkshire May Avoid $400 Million Tax Bill In Graham Holdings Swap:


Abenomics fail

Blow for Abenomics as Japan's economy grows less than expected:
Misery Index Rise to 33-Year High on Abenomics:
Japan Trade Deficit Exceeds Forecasts as Tax Rise Looms

I've been a critic of Abenomics ever since it started. Keynesians make mistakes after mistakes and never learn from history.The worse part is that it adversely affects so many ordinary people.

Tuesday, March 11, 2014

World money-printing championship

And a new world record was set too!

Spend our way to prosperity!


This will end badly

Sunday, March 9, 2014


I don't condone Russia's behaviour but look who's talking:

“You just don’t invade another country on phony pretext in order to assert your interests. This is an Act of Aggression that is completely trumped up in terms of its pretext. It’s really 19th Century behavior in the 21st Century.” – US Secretary of State, John Kerry on Meet the Press, March 2, 2014.

Purchasing power of british pounds.


Purchasing power of british pounds.

Wages and dollar measured in terms of coca cola.


Wages and dollar measured in terms of coca cola.

Real unemployment rate

Donald Trump: “We’re Becoming A Third-World Country”

Trump validated what I've always said!

[Real unemployment, the famed entrepreneur and former Republican presidential candidate estimated, is as high as 22 percent. Dishonest calculations, however, suppress the real results of Barrack Obama’s disastrous economic policies. “When you give up looking for a job,” he explained, “it’s like they consider you employed.”]

Note: I am not anti-US. Far from it. I just like to bash mainstream economists who don't do their homework and who misinform.

Russia and China rush into North Korea

Russia is writing off $11b of North Korean debt and is investing $1b into the North Korean economy. The Russians and Chinese are rushing in

The Fed needs an Austrian economist in their team

Fed Staff Suddenly Saw U.S. Economy in 2008 Needing Low Rate Era

The Fed needs an Austrian economist in their team.

China allows default

The last time i checked, China had been printing $250billion worth of yuan a year. This fuelled lots of artificial growth. Now is payback time. Hope the chinese dont make the mistake of bailing people out... 

China allows first corporate bond default


Good. Refreshing! Let the market choose winners and losers.

Saturday, March 8, 2014

Savers fight back!

Funeral to 'mourn the passing of the UK saver'


Bring on the r3VOJution good people! But protect urself and those around you first. 

So much truth in what Simon Rose has to say in this article about savers.

US 'growth' not the same as before

No Signs US Catching Up With Growth Trend, Stiglitz Says

Of course, this has got nothing to do with our econs nobel prize winner stiglitz's inflationary policy recommendations. (note the sarcasm)

Mistake wasn't deflation. It was bailing people out.

ECB May Repeat Japan Mistake That Triggered Lost Decade

The mistake was bailing out everyone in sight and not letting the competent people gain market shares.

Ben cashes in


which is more ridiculous... the person who spouts bs or the people who paid him $250k to spout bs?
P.S. you can buy a perfect book that explains economics by Peter Schiff, for a fraction of this cost.


"many environmental problems are not caused by "market failure" but by government’s failure to enforce property rights."

Socialism and pollution:

Recovery!!... not

2012: GDP +2.8%
2013: GDP +1.9%

Late 2013: 
Obama: "This is the year that the recovery becomes real."

(Of course, if inflation is measured properly, the GDP numbers will be much lower.)



Crude oil needs to go higher for shale to be competitive.

It's non-interventionism, not isolationism.

Kerry decries 'new isolationism', says U.S. acts like poor nation

it's not isolationism Kerry. Heard this word too often... It's non-interventionism! Besides, you don't have money!

N.Korea tidbits

N.Korea tidbits

-Looks like Internet services have been set up within the Kaesong Industrial Complex in N.Korea.

-People are getting their hands on lots of foreign currencies (USD and more recently, RMB) ever since the revaluation of the N.Korean Won in 2009, which had wiped out the savings of millions of people.

-The won has lost 99% of its value against USD in the black market (USD has lost 99% of its value against real goods in the past century).

-It appears that the 'underground' economy is now larger than the 'official' economy, fuelled by foreign currencies.

-Hope I beat Jim Rogers into buying N.Korean gold coins in a month's time.

Monday, February 24, 2014

Portfolio update

Mid-to-Long-term portfolio:

Long gold from $950
Long silver from $14
Short US 30-year bond futures from $150
Long sugar from 16.50 cents
Long north korean gold coins -- coming soon
Long chinese yuan against sgd from SGD:RMB of 1:5

Short S&P500 from $1840

Friday, February 21, 2014

Song for helicopter Ben


A song dedicated to helicopter Ben.




yellen yellen.... walking into a minefield created by bernanke and greenspan and which she helped to create... those 2 managed to escape in time and breathe a sigh of relief, but I'm afraid yellen won't be so lucky.

In the future when scholars study this era of gross monetary mismanagement, these 3 people will certainly go down in history as the Fed's worst chairmen.

The definition of insanity


If it fails (as it has for ages throughout history), repeat the same tactic again with renewed vigour. Last i remember, Einstein had a nice quote for this kind of behaviour.

Multiplier effect?

Economists often say that creating inflation (printing money) has a "multiplier effect" in the economy and therefore it is good.

It is akin to saying that alcohol has a "multiplier effect" on my happiness and is therefore good for my happiness.

You see, it is unsustainable. Once the alcohol (and money printing) stops, the big hangover/ crash is inevitable.

Preparing for civil unrest?


Interesting. The US Government has been purchasing firearms and ammunition off of the market at an alarming rate. Preparing for civil unrest? 

Tax the rich...not!


What the rich do with their money:
1. keep in banks as savings, which are loaned out to businesses or other people
2. do investments, which grows the economy and provide jobs
3. donate to help the less fortunate

But people love to tax the rich disproportionately and give money to the bureaucrats. Hmmm

Minimum wage


Good intentions, unintended consequences.

Fun fact: The minimum wage law in the US does not apply to the mentally challenged. Why? Because the bureaucrats understood (hopefully) that employers will be less likely to hire them. This shows that the lawmakers understood (hopefully) that the minimum wage law discriminates against the less-skilled workers. This is also one major reason why youth unemployment is so high. It is also the reason why there are more and more unpaid interns, because the company will run afoul of the law if they pay you some money.

"Unions top that list. A higher minimum wage increases the demand for union workers by reducing competition from lower-skilled workers. For instance, if the minimum wage was $8 and the union wage was $40, employers give up 5 hours of low-skilled work for every union worker-hour utilized. But increasing the minimum to $10 means employers give up 4 hours of low-skilled work for every union worker hour."
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