Casey Research

For over a quarter of a century, legendary investor and best-selling author Doug Casey and his team at Casey Research have been helping self-directed investors to earn superior returns through innovative investment research designed to take advantage of market dislocations.

Money vs Justice

The More Corrupt the State, the More Numerous the Laws

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In his first inaugural address, Thomas Jefferson said the purpose of government is to “restrain men from injuring one another” and “shall leave them otherwise free to regulate their own pursuits of industry and improvement.” Americans were to live under a presumption of freedom. A recent WSJ article said, “It was our boast that in America, unlike in any other country, you could live your life as you saw fit as long as you accorded the same liberty to everyone else.” But all that has changed now.

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The Fed’s Alice In Wonderland Economy – What’s Next?

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After the president of the United States, the most powerful person on the planet is the chairman of the Federal Reserve. By simply choosing to utter the right words, the chairman of the Fed can create or extinguish trillions of dollars of wealth both in and outside of the U.S. He holds the economic fate of billions of people in his hands. So it’s no shocker that investors carefully parse everything he says.

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Greece Should “Shoot the Dog and Sell the Farm”

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The bell is tolling for Alexis [Tsipras]. European leaders from all sides have abandoned him as he burns through every last bridge that was once in place. His only meeting of importance during this crucial week of negotiation is with Putin – which clearly does not inspire any confidence for a near-term resolution.

It is actually amazing that we have not seen any of the left-leaning party leaders from the rest of Europe running to Tsipras’ side as he truculently engages his paymasters. Where are all these European anti-austarians? Of course they are hiding from the Germans, hoping not to receive the same fate as Alexis. So there he sits, alone and under his last Soviet-held bridge, just like Hemingway’s Robert Jordan. He is waiting to cause just a little more damage before his time is up.

In the end, there is no question that the Germans have executed a near flawless plan to humiliate and vilify Greece. The Greeks now stand as poster children for European profligacy. And they are being paraded through every town square in the EU, in shackles, as the bell tolls near the gallows for their leader.

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Just When You Thought Bonds Were Safe

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In today’s article Jared Dillian compares the 2/10 yield curve to a “Double Black Diamond” ski slope. In other words, it’s wickedly steep! The yield curve he is talking about here is the 10 year treasury yield minus the 2 year treasury yield. This spread measures the steepness of the yield curve. When it is high there is a big difference between the 10 year treasury yield and the 2 year. When it is small investors are not receiving much benefit for taking on longer term risk. Normally the yield curve is positive and longer-term rates are significantly higher than shorter-term rates. In abnormal cases the yield curve becomes “inverted” and short-term rates are actually higher than long-term rates. As Jared tells us, if even a small amount of inflation returns it will create havoc in the long term bond market.

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Governments Around the World Outlawing Cash

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Recently, France decided to crack down on those people who make cash payments and withdrawals and who hold small bank accounts. In 2011 Italy began working to end the right of landlords, tradesmen, and small businesses to perform large transactions in cash. Spain has outlawed cash transactions over €2,500. In Sweden, the use of cash is being steadily eliminated. Denmark’s central bank, Nationalbanken, has another justification for ending its use of banknotes—producing paper money and coinage is not cost effective. Israel also seeks to end the use of cash. A 2012 law in Mexico bans large cash transactions, with a maximum penalty of five years in prison. In 2014, Uruguay passed the Financial Inclusion Law, which limits cash transactions to US$5,000. And In the US, federal law requires banks to file a “suspicious activity report” (SAR) on their customers whenever a customer requests a suspicious transaction. (In 2013, 1.6 million SAR’s were submitted.) As to what may be deemed “suspicious,” it may be any transaction of $5,000 or more, but it may also mean a series of transactions that, together, exceed $5,000.

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Windfall Profits

Should Airlines Be Stopped From Making Windfall Profits?

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There’s this crazy talk about how airlines are some kind of public utility that should only be allowed an “acceptable” profit margin so you and I can continue to fly coast-to-coast for $300 round trip… This is the sort of thinking that gets us in trouble, though. This is what gets entire industries nationalized, which is what happens when some congressman has his flight canceled and starts talking about how the airline industry is in the “national interest.”

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Gold Up Almost Everywhere in 2014

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When looking at prices of anything from cars to oil to gold or stocks… we need to keep in mind our personal frame of reference. We see prices as they are priced in our currency i.e. the currency that we earn in. International companies are especially aware of this as their income can be in one currency while their expenses are in another.

Using a U.S. centric frame of reference we might think that gold didn’t perform very well in 2014 but people from the rest of the world would disagree. Today, Jeff Clark, Senior Precious Metals Analyst for Casey Research looks at the effects of currencies on the price of gold. ~Tim McMahon, editor.

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Russian Oil

Why Russia is Unfazed by Falling Oil Prices

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In recent posts we’ve told you about Russia Eying Crimea’s Oil and Gas Reserves and about the Total War over the Petrodollar and More on the PetroDollar and we’ve considered why the recent OPEC meeting maintained production in spite of declining prices rather than cutting production to keep prices up as they’ve done in the past. There has been some speculation that falling oil prices would hurt Russia (and a variety of other energy producers like U.S. natural producers, wild-catters, small production companies, etc.).

But in today’s article Marin Katusa takes a look at the flip side of falling oil prices and Russia’s resilience. ~Tim McMahon, editor.

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