The following is the text of an e-mail I sent today to Subscribers of StockResearchPortal.com. StockResearchPortal.com is a research website that provides coverage on the approximate 1,600 Mining and Oil & Gas stocks listed on the Toronto and Toronto Venture Stock Exchanges.

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According to an article today titled ‘Chicken Little Nouriel Roubini Says Gold Apparently Has No Intrinsic Value?‘, and that Roubini says just that.  Roubini is the New York University economist who is acclaimed for ‘calling’ the current economic malaise, and who writes and edits Roubini Global Economics.  I read Roubini’s commentaries regularly and with interest, as I find his views very thought-provoking.

The referenced article, which to me drips unnecessary and unwarranted sarcasm, in essence says ‘the quietly broadening move towards gold rolls on’ while at the same time ‘gold only rises on the back of runaway inflation in consumer prices…or a wipe-out Armageddon in stocks and bonds’ - and that in the author’s view ‘Those two eventualities would likely push gold sharply higher from here. We might just get them all at once if current trends persist for much longer. Better to take a position ahead of time, you might guess. But no. Not if you’re smart like Roubini’.

The author then says Roubini asks the rhetorical question ‘With no near-term risk of inflation or depression, why have gold prices started to rise sharply again in the last few months?’, and answering it by saying:  ‘Without those extreme events, this fall’s (i.e. last few months) rise in the gold price must be a bubble’.  The article goes on to quote Roubini as saying “When inflation is high and rising, gold becomes a hedge against inflation; and when there is a risk of a near depression and investors fear for the security of their bank deposits, gold becomes a safe haven”.  The author agrees that to be ‘fair commentary’, and then attributes 6 reasons for gold’s continued price rise to Roubini, being:  money printing; bank leverage, the U.S. Dollar, falling mine output, Asian gold hoarding; and the ultimate “too big to save” of government itself.  The article than says Roubini ultimately concludes gold has ‘no intrinsic value’ because at the end of the day the U.S.$ will prevail, and ends with what I think is likely misplaced sarcasm with respect to that view.

I think anyone reading this e-mail ought to click here and read the referenced article in its entirety and in context.  It also is available today to visitors to the ‘Today’s Focused News’ feature on StockResearchPortal.com.

In my view it is all to easy to be a critic.  I suspect Roubini’s view (assuming the author of the referenced article got Roubini’s commentary right) is that for the foreseeable future:

·    the U.S.$ will continue to be the world’s reserve currency;

·    that the U.S.$ as a fiat currency will continue to be ‘best of breed’ in the context of all other world fiat currencies; and,

·    the world will not revert to a ‘gold standard’.

If indeed that is Roubini’s view I am inclined to agree with him - all of which leads me back to physical gold being a good thing to ‘have some of’ in either an inflationary or deflationary environment.
I recommend you carefully read everything Roubini writes that you can get your hands on, and reflect on what he says (not necessarily agreeing with all he says) for the same ‘think for yourself’ reasons I do.

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The following is the text of an e-mail I sent today to Subscribers of StockResearchPortal.com. StockResearchPortal.com is a research website that provides coverage on the approximate 1,600 Mining and Oil & Gas stocks listed on the Toronto and Toronto Venture Stock Exchanges.

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I have commented in previous e-mails I believe % increases in economic statistics as a barometer of an ‘economy’s recovery and well-being’ need to be carefully considered in the context of ‘what do those % increases really mean’.  From my perspective, a % increase is more likely to be a meaningful measure in a period of continual growth, as contrasted with today’s circumstances where % growth frequently is reported from a base that has significantly deteriorated in a short time span.  The following simple numeric examples better show what I mean:

·    continual growth scenerio:  assume the following Quarter/Quarter absolute $ results - 6, 7, 9, 11, 12, 14 and that the next quarter is reported as enjoying further growth of 7% (to an imputed ‘15′).  I would see such a result as being a potential meaningful indicator of ‘further good times ahead’ for two reasons, the result would be a continuation of a trend and would be a new ‘high water mark’; and,

·    growth reported after significant decline:  assume different Quarter/Quarter absolute $ results - 6, 7, 9, 11, 8, 5 and a ‘next quarter report of 7% growth (to an imputed ‘5.4′).  How big a deal is that?  It obviously depends, but on the basis that ‘one swallow does not a summer make’ such a result would not give me the same ‘warm & fuzzy’ feelings the previous example would give me.  Questions that obviously arise for me in such a scenerio are:  how certain is it this trend will continue, can we ever get back to, and beyond ‘11′ - and if we can, how long will it take, and so on.

From my perspective reports on % increases ought not to be taken at face value as certain harbingers of long-term prospective good tidings.  Rather, the absolute $ numbers need to be analyzed carefully to determine what the reported % increases really mean.  You can get a pretty good idea of what I am talking about by clicking on either of the following articles, which you can also access in ‘Today’s Filtered News’ on the left side of the Home Page of StockResearchPortal.com:

·    Stronger retail sales and sentiment boost stocks; and,

·    U.S. Consumers Driving Heady Q4 GDP.

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The following is the text of an e-mail I sent yesterday to Subscribers of StockResearchPortal.com. StockResearchPortal.com is a research website that provides coverage on the approximate 1,600 Mining and Oil & Gas stocks listed on the Toronto and Toronto Venture Stock Exchanges.

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My wife and I are Canadians who spend 3 months each year in North Carolina, have many good friends there, respect the ‘American Entrepreneurship’ that is a foundation of the American culture, and periodically amuse ourselves by watching when in North Carolina watching the news on television.  I comment here briefly on two reported events, one from the last few days, and one from about 2 years ago, and compare how they would have been dealt with by our Canadian television news reports.

First, the ‘Tiger Woods’ incident that occurred in the early hours of November 28.  Everyone in the free world must have heard how Tiger backed out of this driveway at 2:30 a.m., hit a tree and a fire hydrant, and was rescued by his wife who used a golf club to break one of the car’s windows to help him out of the car.  This story was incessantly covered by the U.S. news channels.  Please!!  Tiger Woods without doubt is one of the world’s premier athletes.  He is also 33 years old, pulls his pants on one leg at a time (or at least I assume he does), and presumably like the rest of us doesn’t ‘walk on water’.  The reports say no one, other than Tiger who is reported to have suffered minor injuries, was involved in the incident or harmed in any way by it.  So, big deal.  If Wayne Gretsky (a good Canadian comparator to Woods) had been involved in a similar incident it might have gotten 60 seconds of coverage on the Canadian television networks who would simply have reported the matter factually and moved on to the important world, national and local news of the day.

Second, you will remember the ‘Duke University Lacrosse Team’ incident where it was alleged (subsequently found not to be true by the U.S. Courts) that members of that team raped a girl.  My wife and I were in North Carolina when that event was first reported.  In Canada if similar allegations were made against members of a University of Toronto (Canada’s largest University) Men’s Sports Team the story would have made the National News on the day it was first reported for about 5 minutes maximum - likely never to be heard about again on that News Service until the matter was in the Courts or brought to resolution.  In North Carolina the Duke Lacrosse Team dominated local television news each day for weeks, and was prominently and repeatedly featured on the U.S. national programming.

In my experience Americans have deep ties to their sports icons and sports teams that for many of them are almost as important as their families and their jobs.  This explains part of the Networks and Press facination with these two stories.  That said, from my perspective the U.S. as a country and, importantly its residents, would be far better served going forward if U.S. Television Networks focused to an even greater degree than they do on the ongoing world events - political and economic - that are influencing and will influence and shape the U.S. going forward.

To use a sports analogy, ‘the ball game and its rules have and are rapidly changing on the world political and economic front’.  I think that many Americans are like the baseball catcher who, focused entirely on the field in front of him (read the U.S.), gets hit in the back of the head by an irate fan who throws a baseball at him from the stands behind home plate.  Television can be a great educator, and in my view the networks and reporters have a responsibility to ‘get it right’ and ‘place emphasis where it makes the most sense’.  I strongly believe this because I believe it likely a large majority of any television (or newspaper) audience believes what it hears without really questioning what is being reported.  In my view America needs ever more television reporting that focuses on reporting newsworthy items as a means of educating the American population on what is going on beyond America’s borders - and give the ‘Tiger Woods’ type stories the minimal 60 second, one time coverage they merit from the prospective of ‘newsworthiness’.

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