Financial Sense Newshour for Storm Watch
Puru Saxena: China’s Real Estate Bubble Is a Disaster Waiting to Happen
US real estate is cheap compared to the rest of the world
Jim welcomes back Puru Saxena, Editor and Founder at Money Matters and Puru Saxena Limited in Hong Kong. Puru is very concerned about the real estate bubble still building in China. He notes there are “ghost cities” all over China and it will end very badly. Even prices in Hong Kong are out of control. Puru sees the most value currently in US real estate and stocks, and is his moving his investment assets to the US. He sees Europe as a mess, Japan as a mess, and China as the next major bubble to burst. Given those assessments, Puru believes the US is by far the best, and safest, place to invest in the current environment.
Felix Zulauf: Japan Will Be the Root Cause of the Next Global Crisis
Interest rates could rise because of defaults, not inflation
Jim is pleased to welcome back Felix Zulauf, president of Zulauf Asset Management AG and Co-CIO of Vicenda Asset Management AG in Zug, Switzerland. Felix and Jim cover a wide range of global macro issues, including today’s deflationary environment versus the inflationary 1970’s, Japan as the likely catalyst of the next global crisis, why the bond market is in trouble, and that gold could decline before another buying opportunity. Felix also does not believe that the Fed will ease off its QE program in 2013.
Harry Markopolos: No One Would Listen
The man who exposed Bernie Madoff and history’s greatest Ponzi scheme
Jim is pleased to welcome Harry Markopolos CFA, the man who blew the whistle on Bernie Madoff and the largest Ponzi scheme in history. His book is titled “No One Would Listen: A True Financial Thriller”. Harry discusses how both the SEC and the financial industry ignored his warnings of obvious fraud for years before it all came tumbling down in 2008. Harry tells a fascinating story of money, corruption and power, and how a massive financial fraud such as the Bernie Madoff case could happen again.
Jens O. Parsson: Author of “Dying of Money”
Lessons of the great German and American inflations
Jim is pleased to welcome Ronald Marcks, who under the penname Jens O. Parsson wrote “Dying of Money” in 1974, as double-digit inflation was heating up in the US. In his book, Mr. Marcks wrote of the German inflation of 1914-1923, and the rise of the American inflation of the late 1960’s into the 1970’s. Jim and Mr. Marcks discuss the parallels of Weimar Germany to what is happening today. They also discuss the phenomenon that every burst of monetary inflation has been followed by a stock market rise and boom in prosperity and every contraction by a stock market fall and recession. Mr. Marcks sees a “latent inflation” in the US, as the money supply has increased much faster than prices for the last three decades.
John Butler: Currency Wars - Is the US Covertly Intervening to Support the Dollar?
Currency wars could morph into damaging trade wars, slamming the brakes on global growth
Jim welcomes back John Butler, Chief Investment Officer at Amphora Commodities Alpha Fund in London. John poses the question; might the US may be covertly intervening in the foreign exchange markets to support the US dollar? Because of the Federal Reserve’s QE policy, the pressure is building on the dollar. If foreigners dramatically accelerate their diversification out of dollars and into other currencies, and gold, the US would face a dilemma. The US could allow interest rates to rise to stabilize the dollar, triggering a recession, or it can continue to suppress interest rates but watch the dollar fall sharply, triggering far higher inflation and economic (and perhaps political) instability. John believes the US may take a third path, continuing to suppress interest rates through QE, but covertly intervening on foreign exchange markets to support the dollar. Desperate policymakers sometimes do desperate things.
Evelyn Browning Garriss: Weather Whiplash
Spring weather in the US has something for everyone - summer heat-waves ahead
Jim welcomes Evelyn Browning Garriss, Editor of the Browning Newsletter. Evelyn details the wild spring weather of 2013 in the US, with record cold, record heat, floods and drought all hitting different parts of the country. She sees summer heat-waves coming to much of the country heading into a stormy fall in the Atlantic region. Evelyn discusses the ideal conditions likely for a severe hurricane season; favorable winds (lacking last year) and very warm south Atlantic water. In the West, she notes this is the fifth consecutive year of a dropping water table on the Colorado River, and some form of water rationing could be coming.
Adam Fergusson - When Money Dies: A Comparison Between 1920’s Weimar Germany and Today
Today’s globalized markets make a big difference
Jim is pleased to welcome back Adam Fergusson, author of When Money Dies, written in 1975. Mr. Fergusson is also a former Member of the European Parliament, and has been a Special Adviser at the Foreign Office, and a consultant on European affairs for international industry and commerce. When Money Dies had been out of print for 30 years until recently; yet had never ceased to be quoted on both sides of the Atlantic. The book is well-known to financial commentators and has become something of a classic. Jim and Mr. Fergusson discuss the parallels and differnces between 1920’s Weimar Germany and today’s global financial system. He sees the potential for more inflation today, but not hyperinflation.
Nicholas Eberstadt, Author of “A Nation of Takers: America's Entitlement Epidemic”
Entitlements and the long-lasting, negative impact on the character of our citizens
Jim welcomes Nicholas Eberstadt, a political economist and a demographer by training, who holds the Henry Wendt Chair in Political Economy at American Enterprise Institute. In his book, Nicholas details the exponential growth in entitlement spending over the past fifty years. As he notes, in 1960 entitlement payments accounted for well under a third of the federal government’s total outlays. Today, entitlement spending accounts for a full two-thirds of the federal budget. He makes the case that while this spending certainly drains our federal coffers, it also has a very real, long-lasting, negative impact on the character of our citizens.
Rick Santelli: Hold Onto Your Wallet - The Entitlement Society Now Being Adopted as US Economic Policy
Austerity is the worst word in the English language for politicians
Jim welcomes back Rick Santelli, On-Air Editor at CNBC and veteran trader and financial executive. Rick refers to current central bank policies as a world-wide “money fest”, given by the Central Banking Country Club. Rick sees the US adopting the “entitlement society” as current economic policy, which he asserts has never worked globally. He advises taxpayers to hold onto their wallets. Taxes will be going higher to pay for ever increasing government spending.
Martin Armstrong: Washington Is Broke and Looking at More Ways to Tax Americans
The European Union is a basket-case and can’t survive long-term
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
The extraordinary power of central bankers and how they used it during the great financial crisis
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.
Simon Mikhailovich: It’s 12 O’clock, Do You Know Where Your Gold Is?
How Safe Is Your Bank Account?
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.
Barry Ritholtz: Most Economic Crises Are Overblown- Driven by the Media and Washington
Long-term secular trend signals higher corporate productivity but less jobs in the future
Jim welcomes back Barry Ritholtz, CEO and Director of Equity Research at Fusion IQ, an online quantitative research firm. Barry discusses how the many economic “crises” today are overblown and essentially driven by the media and Washington. Barry sees the vast majority of “news” today as simply gossip. As to stocks, Barry believes they are not as cheap as 3 years ago, but still reasonably priced. He much prefers the dividend theme to stock buy-backs by corporations. Barry also discussed a long term secular trend in demographic changes that will be a negative for employment longer term, as increasingly more productive companies need fewer workers to stay profitable.
Jim Puplava’s Big Picture: Wash, Rinse and Repeat- That Was Then, This Is Now
Also, “Has The Glitter Faded? Why Gold Prices Can Still Go Higher”
In this week’s first Big Picture topic “Wash, Rinse and Repeat – that was then, this is now” Jim looks at a repeat of the Petro Business Cycle pattern for the fourth year in a row. The familiar economic scenario features a strong start to the year, then the LEI’s roll over and the economy starts to slow, which is followed by more Federal Reserve stimulus, which leads to a strong finish to the year. Wash, rinse and repeat. The next topic, “Has the glitter faded? Why gold prices can go higher” is in response to the weak precious metals market. Jim continues his thesis that you don’t need a Doomsday scenario to see rising gold prices in the future. This topic also leads into Jim’s in-depth conversation with John Kaiser on gold in the next segment of the program. Jim also answers some of your Q-calls in this segment.
Jim's Big Picture: Mad Max Beyond Thunderdome: Why We Do't Need Armageddon for Gold Prices to Head Higher
Also on the Big Picture: On the Record with Jim Puplava and John Loeffler
In this segment Jim gives his reasoning why gold prices can head higher without a crisis situation, or economic Armageddon. Jim sees many fundamental economic factors that could push gold and commodities higher, without the need for an “end of the world” scenario. The next topic is “On The Record”, as Jim is interviewed by John on a wide range of topics, including his macro views, investment topics and the content of the program. Jim also answers more of your Q-Calls in this segment of the program.
Puru Saxena: China's Real Estate Bubble on the Verge of a Bust
As Long As Central Banks Are Printing Money, You Have to Be in Stocks
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.
Jeffrey Brown on Global Net Oil Exports: Is It Midnight on the Titanic?
Available Global Net Oil Exports Continue to Decline, Outpacing Gains in US Oil Production
Jim welcomes Jeffrey Brown, Independent Petroleum Geologist, creator of the Export Land Model, and ASPO-USA Board Member. Jeffrey explains his Export Land Model, and reviews the major trends regarding availability of oil exports on the world market. Jeffrey also looks at the growing tension between oil production and the rising internal demand of oil-producing nations as well as China, India, and other emerging economies. His overall thesis is that the US oil industry continues to make a serious mistake by providing, in his opinion, wildly unrealistic scenarios for future US and global crude oil production.
The Big Picture: The Significance of Cyprus – Is the US Dollar on the Cusp of a Surprise?
Also on the Big Picture: “Triple Top or New Secular Bull Market?” and “Still Waiting For Armageddon?”
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
Global QE Makes the Dollar Look Relatively More Attractive
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.
Jim Puplava’s Big Picture: Dying of Money- This Time It’s Global
Good inflation vs. Bad Inflation
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.
Market volatility and the breakdown of fundamental and technical indicators are only a few signs. There are others which are more subtle and not visible to the human eye—below the surface. They show up in bear-o-metric readings of the nation's money supply, credit expansion and the breakdown of corporate earnings. With all of these readings, we know that a storm is coming. The question is: "What kind will it be?"
—Jim Puplava, The Perfect Financial Storm Part 3