Newshour on Global/International Issues
Michelle Caruso-Cabrera: Cyprus Was Treated Unfairly by the Euro Powers
Jim is pleased to welcome back Michelle Caruso-Cabrera, an award-winning financial television journalist working for CNBC. Michelle and Jim discuss her on-the-ground reporting from Cyprus during its financial crisis. She believes Cyprus was treated unfairly by the European powers, and didn’t receive the same treatment as Greece, which was kept afloat with massive bailouts. Michelle notes that Cyprus runs on its banking system, and Cyprus was treated as an off-shore tax haven, not a sovereign country. She also points out that Cyprus did not cut government spending, but raised taxes instead. Michelle also discusses the European economy and the chances of the Euro surviving longer term.
Joseph Dancy: Global Demand For Oil Is Growing Relentlessly
Jim welcomes Joseph Dancy, Manager LSGI Venture Fund, and Professor at SMU Cox School of Business in Texas. Joe sees a discrepancy between energy company performance and share prices, as most major oil producers have underperformed the S&P 500 Index. Joe notes that the global demand for oil is rising relentlessly through industrialization and growth in China, India and other developing nations. With record oil company revenues and growing global demand likely to continue, Joe sees a much more positive performance for the energy sector looking ahead.
Martin Armstrong: Washington Is Broke and Looking at More Ways to Tax Americans
Jim welcomes back Martin Armstrong of Armstrong Economics. Martin and Jim cover many important topics, including Washington’s need for more revenue, the future of the European Union, the current outlook for gold, the Cyprus banking situation, the pension system in the US, and how Congress is working hard to exempt itself from Obamacare. Martin also touches on economic trouble brewing in Europe, Japan and Argentina. As to the banking system, Martin advises to avoid large banks involved in proprietary trading and stay with the regional banks.
Neil Irwin – The Alchemists: Three Central Bankers and a World on Fire
Jim welcomes author and Washington Post columnist Neil Irwin to discuss his new book, “The Alchemists: Three Central Bankers and a World on Fire”. The book focuses on the world’s most powerful men never elected to public office; Ben Bernanke of the Federal Reserve, Mervyn King of the Bank of England, and Jean-Claude Trichet of the European Central Bank. Mr. Irwin initially looks at the origins of central banking and then takes the reader into the Great Financial Crisis and its aftermath with the story of these three men and the extraordinary power they have over our collective fate, and that of the global economy.
Dr. Robert Hirsch: Middle East Waking Up To Peak Oil Reality
Jim is pleased to welcome back Dr. Robert Hirsch, Senior Energy Advisor at Management Information Services Inc. and an authority on Peak Oil. Dr. Hirsch has just returned from an historic peak oil conference in Doha, Qatar, the first ever initiated by Gulf State oil producers. Dr. Hirsch believes there will be a “sea change” coming to the Middle East, once peak oil is reached. The timing of its arrival is difficult to predict, but it will likely be sooner than the global economy is prepared for. He makes the point that most people don’t understand that peak oil is a “liquid fuel problem”, and thus wind and solar technology will never solve the problem. Dr. Hirsch also sees the current projections of future US energy independence as “pure fiction”.
Brian Pretti: Global Capital Flight To The US Will Drive Next Melt-up In The Stock Market
Jim is pleased to welcome back Brian Pretti CFA, Managing Editor at ContraryInvestor.com. Brian says to brace yourself for the flight of global capital coming into the US later this year. For now, all roads lead to the dollar. Brian believes the first wave will come from capital fleeing both Europe and Asia. Brian and Jim also discuss the new Japanese monetary policy and how this will unleash a flood of cheap money on the globe. This will encourage sophisticated investors to borrow in Japan, invest in the US, and pay back the loan in cheaper Yen, increasing the return substantially.
Jim Puplava’s Big Picture: Drop, Pop, And A Melt-Up In The Stock Market
In this segment of the Big Picture, Jim looks at two stock related topics. In “Drop, Pop and a Melt-up in the Stock Market”, Jim discusses the idea that the next stock market melt-up will be caused by the flight of global capital coming into the US from both Asia and Europe. In the next topic, “The Dividend Story keeps getting Better, Better and Better”, Jim looks at the reasons why to own dividend-paying equities, and the trend of growing dividend pay-outs in the first quarter of 2013. Jim will also answer your Q-Calls in this segment of the program.
Simon Mikhailovich: It’s 12 O’clock, Do You Know Where Your Gold Is?
Jim welcomes Simon Mikhailovich, Co-Founder of Eidesis Capital LLC in New York City. Jim and Simon cover a number of topics, including gold, why people should own it, and the difference between paper and physical gold. Simon also discusses the safety of your bank accounts in the future as governments look at the “Cyprus Model”, including the US. Simon talks about the coming “wealth taxes” in Europe, as governments desperately search for revenue amidst weakening economies. Simon calls gold “the most under-owned asset class in the world” and believes the real bull market in gold has not yet begun.
Grant Williams: Currency Wars Now Entering Their End Game
Jim is pleased to welcome back Grant Williams, Portfolio & Strategy Advisor at Vulpes Investment Management in Singapore, and author of the popular investment letter, “Things That Make You Go Hmmm…”. Grant discusses the recent policy change in Japan, which is now printing massive amounts of Yen to raise inflation and weaken the currency. Grant notes that it didn’t work in the 1930’s for Japan, and it won’t work this time. He does see a coming Asian currency war in response however. Grant also speaks in some detail about gold and gold equities. He believes the world is struggling with accepting gold as a currency. But Grant notes that at some point deficits matter and excessive money printing will eventually drive the price of gold significantly higher.
Ramesh Ponnuru On How To Make America a Global Tax Haven
Jim welcomes Ramesh Ponnuru, Bloomberg columnist and visiting fellow at the American Enterprise Institute. Ramesh discusses an article he wrote about a proposal from US Congressman Devin Nunes to incentivize American and foreign business to invest in the US through a new approach Nunes calls a “business consumption tax”. It would treat all businesses the same, and instead of taxing their income, it would tax their cash flow.
Axel Merk: The Downside of Currency Wars
Jim welcomes back Axel Merk, founder and portfolio manager at Merk Investments LLC. This week Axel discusses some of the downside of currency wars, including a loss of competitiveness in domestic economies, growing social unrest, and in extreme cases, war. Axel also sees the Eurozone as less capable of debasing its currency than other countries, which will ultimately strengthen the Euro. He sees gold in a transition phase, but believes that the US, Japan and the UK will drive gold prices higher eventually.
Jeffrey Saut: This Is the Most Hated Stock Market Rally in Half a Century
Jim is pleased to welcome back Jeffrey Saut, Managing Director of Research at Raymond James Financial. Jeff believes we have started a new secular bull market, but calls the stock market advance the “most hated rally in half a century”. Jeff notes that the support for the rally comes from a number of factors including central bank stimulus, low interest rates, strength in housing and autos, and improvement in the employment picture. He also mentions that the world is currently underinvested in US equities. Jeff makes an interesting observation about Mexico, both in terms of its labor situation and railroad transportation to the US, calling it the “New China” for US markets.
Puru Saxena: China's Real Estate Bubble on the Verge of a Bust
Jim welcomes Puru Saxena, Editor and Founder of Money Matters and Puru Saxena Limited in Hong Kong. Puru believes that the Chinese real estate bubble is on the verge of a major bust, which will not bode well for China, or Asia. He believes the thirteen year bear market in stocks is over, and a multiple year bull market in equities has begun, especially in the US. Puru sees the dollar as the most liquid and secure currency in the world and does not foresee a dollar crisis. Due to supply and demand factors, he does not favor commodities, as prices will be under pressure in the near to medium term.
The Big Picture: The Significance of Cyprus – Is the US Dollar on the Cusp of a Surprise?
In this week’s edition of the Big Picture, Erik Townsend and Ryan Puplava sit in for Jim and discuss three different topics. The first, “The Significance of Cyprus- US Dollar on the cusp of a surprise?” deals with the events in Cyprus in the context of helping to stregthen the US dollar. Combining this banking fiasco with central banking printing around the globe, the US dollar looks primed to stregthen, which most do not expect. They discuss the implications for stocks, gold and commodities if this were to happen. In the next Big Picture topic, “Triple Top or New Secular Bull Market?”, Erik and Ryan discuss the issue, and make distinctions between economic recovery and stock market strength. In the last topic, “Still Waiting for Armageddon?” Erik and Ryan look at those still waiting for a disaster in their “bunker”, and stress that no matter when, or if, the calamity arrives, investors need to have a financial plan in place and not be paralyzed by fear. They also discuss the possibility that there could be a bond market melt-down, but that stocks might benefit.
Doug Noland on the Granddaddy of All Super Bubbles, the Global Sovereign Bond Market
Jim welcomes back Douglas Noland, Senior Portfolio Manager at Federated Investors Inc. Doug sees the global government finance bubble as the next crisis epicenter. He believes the US has exported the finance bubble and today QE by central banks around the world make the dollar more attractive by comparison. Doug also sees the German people taking a harder line against bailouts in Europe, leaving their government in a bind. He believes that US bank depositors are also at risk of confiscation, by inflation.
William Black: World Markets Governed By Crony Capitalism
Jim welcomes William Black PhD, Professor of Economics and Law at University of Missouri-Kansas City School of Law. Professor Black sees an increasing trend of crony capitalism in world markets. He sees two primary reasons for the mess; regulatory neglect and competition from overseas exchanges with less stringent regulations. In terms of corruption, Black believes the current credit crisis is 70 times larger than the Savings & Loan Crisis. In the S&L crisis, Black notes that there were 30,000 criminal referrals, and 2,000 white collar criminals went to prison. In the current credit crisis, stemming from 2008, there have been zero criminal referrals and zero prosecutions. He sees the FBI as the only agency with any effectiveness in white collar crime, but they are woefully understaffed.
Jim Puplava’s Big Picture: Dying of Money- This Time It’s Global
In this week’s first Big Picture topic, Jim discusses the implications from the book “Dying of Money: Lessons of the Great German and American Inflations” by Gens O. Parsson. Jim looks at the lessons from prior inflationary episodes in Germany and America, and sees similarities to today, only now it’s on a global basis. Jim also answers your Q-Calls in this segment.
Gail Tverberg: Our Energy Investment Sinkhole Problem
Jim welcomes back Gail Tverberg to speak on energy, and they discuss her views on limits to oil supply limiting long-term economic growth. Gail believes the key issue is that global oil supply is not rising very quickly, no matter how much investment is made. Because of this “sinkhole” phenomenon, we are getting less and less back for every dollar invested; or declining energy return on energy invested. Gail argues that the ultimate impact for developed (OECD) countries will be a long-term contraction of their economies. The problem is that our current global financial system depends on long-term growth.
Michael Kantrowitz of Wolfe Trahan: Rising Inflation In Second Half of 2013
Jim welcomes back Michael Kantrowitz CFA, Director, Portfolio Strategy & Quantitative Research at Wolfe Trahan in New York. Michael sees the inflationary set-up as the big difference between 2012 and 2013. He expects record high gas prices by May, and sees Chinese economic growth leading to more inflation for US consumers. He mentions a steady stream of early signs of inflation. Michael discusses investing in areas that will benefit from massive central bank stimulation: energy, materials, industrials and technology.
Jim Rickards: Currency War 3 Has Just Begun
Jim Rickards, Pentagon advisor, investment banker and author of the famous book, Currency Wars, speaks with Jim Puplava on the Financial Sense Newshour to discuss the new age of global financial warfare and its potential outcome on savers and investors around the world.