Wednesday, January 25, 2006

 

A 'Difficult Time' Ahead: Mellon

A British finance mogul had a warning for the west. "Jim Mellon says 2006 is the year to hunker down and consolidate. The high-flying financier says the party is over and it's time to prepare for the great depression of the 21st century. 'My suggestion is that the next two or three years are going to be a dangerous and difficult time for us,' says Mellon."

"The global entrepreneur and economic pundit is picking a rough sailing for western economies like New Zealand's. And he says much of the problem is stemming from America. 'Every man, woman and child in America imports approximately $16 worth of foreign product and they only export $9 so there's a gap of several dollars a day for every man, woman and child, multiplied by 282 million people, multiplied by 365 days a year, equals $US 650 billion a year which is bigger than most countries GDP by a mile...that's how deficit is financed...by the Chinese and Japanese banks buying American government debt,' says Mellon."

"'Ultimately how does America pay for that...there's only one way out and that's a lower standard of living for the Americans and hence for the rest of us in Anglo-Saxon economies.' Mellon says the West can't compete with China on a manufacturing basis because the average wage rate is between 20 and 30 US cents per hour while in Germany and the UK it's $US30 per hour. And he says the skills gap is not that great. 'We have approximately 15 years before China overtakes the US - it's already overtaken the UK, France and Germany.'"

"And Mellon says New Zealand has experienced the same 'frenzied boom' as in the UK, America and Australia. 'Property prices have gone up 10 times in the space of 20 years...that's a ludicrous rise and incomes haven't risen 10 times.' Mellon's own 'rough forecast' is that over the next five years or so properties could fall 50 percent."

"He is concerned that many people are loaded with debt rather than savings. 'There's no stigma attached to being in debt any more so your grandparents would have been mortified if they'd owed more than 5 shillings on something but now it's acceptable.'"

Comments:
it's here, probably.

Shine On – Part II: SEC Proposes Rules for Silver ETF Trading

by Charles Mackay, Tuesday January 24 2006

It’s coming. Despite roadblocks put up by the Silver Users Association, the Securities and Exchange Commission (SEC) in conjunction with the American Stock Exchange, has proposed new rules that will guide the trading of the upcoming silver exchange traded fund (ETF).

Let’s be clear – the proposed rule from the SEC governing trading of the silver ETF (Rule Change Relating to the Listing and Trading of Shares of the iShares® Silver Trust) should not be confused with the pending registration of iShares Silver Trust (SLV) shares with the SEC. These are separate matters. However the SEC action indicates the very clear intention of the SEC and AMEX to prepare for the eventual trading of the silver ETF. The proposed rule will take at least until February 7, 2006 to be approved, and possibly, it could be subject to further delays and/or changes.

Shine On – Part II: SEC Proposes Rules for Silver ETF Trading
 
AustinYankee,

What was the amount (or %) that you paid over spot, if you don't mind me asking?
 
jeffolie,

Personally, I lean more to the deflationist camp, too. But as Robert Prechter once said, gold is good to have around with inflation or deflation. Both are destabilizing events, and it is hard to know what our government or the Fed may do.

If gold falls significantly, I will probably move more cash that way.
 
AustinYankee,
Blue pill? BTW, the 18 year high brings back memories, because I was buying and selling silver back then. The best price I ever got was over $11. Those silver eagles are nice and they have a slight value over the physical metal. Take good care of them!
 
John, thanks for the related SLV link! No wonder SLW reached new highs. ;)

thejdog, I'm really concerned about hyperinflation (money press frenzy + Fed rate drops). How would one protect against this? Have investments outside of US and commodities? (If so, I'm in good shape.)
 
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