Shorthand for “micro-electromechanical machines,” MEMS are the tiny machines embedded in these products, which provide information regarding position and movement. When your mobile device changes how its screen displays when you rotate it, it is an MEMS device that tells it which way it is oriented. Like most of the electronic innards of a modern computer, MEMS are usually manufactured out of silicon.

With funding from the National Science Foundation, University of Wisconsin-Madison researchers have advanced MEMS technology by integrating new piezoelectric materials on silicon. Piezoelectric materials store an electrical charge when under mechanical force, or expand and contract under the influence of electrical fields. If you’ve used a lighter or propane barbecue that has an electrical igniter, you have seen piezoelectricity at work. Children’s shoes that light up when they step also use piezoelectricity to generate a small electrical current.

The University of Wisconsin-Madison researchers studied a piezoelectric material called lead magnesium niobate-lead titanate, or PMN-PT for short. PMN-PT is a very high-performance piezoelectric crystal that is used, among other things, to deliver waves of ultrasound into the human body to produce 3-D images.

Due to its high level of piezoelectric performance, which includes the ability to work using lower amounts of electrical consumption, PMN-PT would be very useful in MEMS devices. It could be used as part of a machine to act as a tiny switch in optical communications devices, or it could enable a new generation of electronic filters for radio-frequency communications in mobile devices. As a sensor, it could increase sensitivity over currently available MEMS technology.

The problem with PMN-PT is that current commercial manufacturing methods that require the material to be cut, ground and polished from bulk materials. These imprecise “top down” manufacturing techniques mean that it cannot be used for many potential applications. It cannot be handled with enough small-scale precision to make it suitable for use in MEMS devices.

Here is where the new research comes in. The University of Wisconsin-Madison engineers figured out a way to apply fabrication techniques common in the semiconductor industry to PMN-PT. By carefully adding thin layers of a special electrode material on top of a layer of silicon, they were able to add a layer of PMN-PT that performs every bit as well as bulk crystals. The end result of applying atomic-level control to PMN-PT could be more-efficient MEMS circuits, including devices that can convert vibration into electricity for small devices.

Needless to say, we’re on the lookout for the best new technologies that represent investment opportunities. We expect to find exciting candidates in the MEMS field and elsewhere.

Regards,

Ray Blanco,
for The Daily Reckoning

Big Opportunity From Tiny Machines originally appeared in the Daily Reckoning. The Daily Reckoning, published by Agora Financial provides over 400,000 global readers economic news, market analysis, and contrarian investment ideas.

We were also able to talk to executives, scientists and engineers at many cutting-edge technology company. Without a doubt, the hottest topics and most-dazzling presentations at CES this year involved televisions. When I say television, though, I’m talking about an entirely new iteration of the old technology.

“Smart televisions” are finally becoming truly user-friendly. Moreover, the various online sources of content are being knit together by Google and hardware manufacturers. This convergence of all content on the wirelessly connected family screen presents an enormous challenge to traditional broadcast and cable networks. Games, educational materials, entertainment, telephony and home electronics management are coming together. When you can interact with Khan Academy lectures on virtually any subject, the term “boob tube” hardly applies. Here’s one article about this important trend.

In the past, I’ve never gotten particularly excited by HD television. Yes, new HD large-screen televisions have been improvements, but I’ve never found them particularly compelling. I think that’s about to change.

New screen technologies, OLED and active matrix, have crossed some tipping point. I was astonished by the clarity of next-generation screens. The Korean manufacturers, in particular, can make screens with clarity that is getting very close to actual vision. This is particularly true in regard to 3-D screen technology.

I told my subscribers several years ago that entertainment as we knew it would change when 3-D screens reached an acceptable level. That point will not come at once, because individuals have different preferences, but for many, it has already arrived, even though the highest-quality screens still require glasses. That will change within a few years. 3-D televisions are in the works now that will allow a room full of people to each receive, without glasses, both left and right eye signals — even if they move around.

The big events of the CES were all about 3-D, especially the live broadcasts by the ESPN 3-D channel. Fortunately, I know some of the key people at Cameron Pace Group, the company that owns the state-of-the-art technology used to shoot and broadcast most top-level 3-D. Cameron Pace is run by James Cameron of Avatar fame as well as Vince Pace, the inventor of the technology and a well-known cinematographer. As a result, Ray and I were able to go behind the scenes inside the semitrailers outside the convention hall that powered the 3-D broadcast.

I’m not going to go into a lot of detail about this company right now, but I will in the future. A lot of 3-D photography is happening right now, even though the forum doesn’t yet exist for the programming. When 3-D screens are more widely deployed, you’re going to be surprised to find that many of the most-successful shows on television today will then be released, for a second revenue stream, in 3-D.

Regards,

Patrick Cox
for The Daily Reckoning

Coming Soon: Smart Television! originally appeared in the Daily Reckoning. The Daily Reckoning, published by Agora Financial provides over 400,000 global readers economic news, market analysis, and contrarian investment ideas.

We’ll get back to that in a second. First, our regular beat…

Markets went precisely nowhere yesterday. It was as if everyone agreed to stay home…or go fishing…or to become reacquainted with that strange person living in their house and sleeping in their bed. Among other things, investors are waiting to see what happens with Greece. We’ll save them some time. Nothing will happen. Nothing different, anyway. Here’s Bloomberg, with more news on the same old story:

Greek political leaders struck a deal on a package of austerity measures, clearing the way for a swap to cut the nation’s debt and win its second rescue in two years.

Greek Prime Minister Lucas Papademos called European Central Bank President Mario Draghi to tell him “an agreement has been reached,” Draghi said at a press conference today in Frankfurt. An announcement from Papademos’s office is expected shortly, a Greek government official who declined to be identified said today by telephone.

The accord came less than four hours before euro-region finance ministers hold an emergency meeting in Brussels to discuss the 130 billion-euro ($172 billion) lifeline and the swap that will impose a loss of about 70 percent for investors.

Oh, Papademos and Draghi said all’s well. An agreement has been reached. A deal was struck. Phew! We thought that…

…Wait, we’re trusting politicians now? Ex-Goldman Sachs politicians (in Draghi’s case), no less? When did that happen? These are people who couldn’t lie straight in bed. Everybody knows it. Notice, for instance, how these and various other furry-knuckled folk are no longer referred to as “politicians”? That word has been sullied. People have trouble even using it without nailing a “damned” or “thievin’” to the front of it. Now the papers, with embarrassing deference, refer to them as “political leaders.”

Let’s recap what we know about Greece and the euro-situation in general. For brevity’s sake, we’ll stick to its most recent — i.e. current — collapse only.

Back in May of 2010, five short months after receiving its first official credit downgrade, Greece was awarded a €110 billion 3-year “loan.” (We put that word in inverted commas just in case it mistakenly implies repayment.) And what happened? Did the government clean its act up? Did it cut expenses, as promised? Did the economy roar back to life? Of course not. Protesters had barely left their post in Syntagma square when it was time to return for more banner waving and foot stomping. By December that year, the yield on 10-year bonds had spiked to near then record highs over 11%.

Not to worry, said the Feds, who swept in with another €110 billion bailout plan…again negotiated under the strict condition that they rein in spending. But the horse had already bolted. Greece’s outstanding debt is now equal to roughly 160% of GDP. The gears have stalled. Official unemployment has reached over 20%. It’s worse for the youth. Much worse. Half of the nation’s under-24 population is without work. Growth has collapsed. Industrial output in December fell 11.3% from the year-earlier month.

Would you lend these people money? Would you lend these people your money? Only a fool would answer yes to the second question. Only a politician would answer yes to the first.

The Spartans are broke. They have been for a long time. And, as such, they will default. One way or another. All the handshaking, backslapping, hallway dealing, last minute brokering, politicking and brinkmanshipping won’t stop that. It’s just noise, playing like the soundtrack to a movie that’s already been written.

Not that the Greeks area lone sinners. The whole developed world is caught up in a debt funk. The collapse, when it arrives, is going to be truly epic. Which brings us back to our original thought: If you had the choice, would you live your life at any other time?

Take a look back through history. Most of it was a complete bore, save for the workaday melodramas played out in small, social soap operas. In fact, most of history existed before actual soap operas…and before soap…and before operas.

Sure, there were wars and plagues and the miserable collapse of empires. Currencies were debased and their masters beheaded. New lands were found and old cities forgotten. There were events that reshaped the course of history itself, delivering us the present day in which we live.

But mostly these things took many years, centuries even, to fully express themselves. Trends were slow…probably because there was nobody around to drive them. Mankind couldn’t even manage to gather a group of 1 billion people until 1811. How can you expect to get anything done when you’re still counting the global population in “millions?”

These days, contrary to the relative snoozefest of yesteryear, things happen. And when they do, they are fast…and loud…and on a scale that dwarfs any other in history.

Take economic output, for example. According to data compiled by The Economist, more than half (55%) of all the economic output generated over the past 2,000 years was generated in the 20th century. In other words, the last 100 years of the millennium produced more than the preceding 1,900. And this trend — along with the mushrooming population supporting it — is quickening. The first 10 years of this millennium account for roughly one-fifth of the total economic output achieved since BC ticked over to AD.

All this is just a fancy way of saying that big things are happening. Big booms. Big busts. Greece-, Europe-, US- and entire developed-word sized busts. And, lest we fail to mention it, a spectacle like no other in history.

Who would want to miss that?

Joel Bowman
for The Daily Reckoning

Watching the Greek Debt Episode of the Global Soap Opera originally appeared in the Daily Reckoning. The Daily Reckoning, published by Agora Financial provides over 400,000 global readers economic news, market analysis, and contrarian investment ideas.

Yes…we’re going to Japan!

The gist of the Japanese situation is this:

The bubble burst in 1990. But rather than let their big businesses go belly up, the Japanese used every trick in the book. Counter-cyclical deficits up the Shinanho. ZIRP (zero interest rate policy). And QE too.

The economy didn’t grow. It didn’t collapse. It just got stuck…like a moth in amber. No new jobs. No new output. And get this, Japan is expected to lose 40% of its working age population by 2050.

But Japan is a leader, not a follower. Over the next 40 years, Germany will lose more than 30% of its working age population too. Russia and Poland will lose even more.

Growth is expected to be negligible over the next 40 years in Japan. But it will be almost nothing in many other countries too, according to an HSBC report. It estimates that the US will grow at around 1.5% annually. France 1.1%. Denmark, Norway, Sweden — barely anything at all.

What does this sound like to you, dear reader? It sounds like the whole developed world going Japan’s way — with low growth and high debts from here to eternity.

As in Japan, so in Europe and America. The European Central Bank is lending the banks as much as they want — at low rates. The Fed has its own ZIRP…which it says it will keep in place until 2014.

Growth is stalled…debts are mounting up. Hello Tokyo!

But wait…here’s the Congressional Budget Office telling us that Congress will have those deficits under control in no time.

“Deficits to fall sharply, US forecast says,” reports the International Herald Tribune.

What a relief that is! The CBO has crunched the numbers. It has beaten up the 2s. It has punched out the 5s. It has pounded the 6s. And now, finally, like prisoners at Guantanamo, the numbers tell us what we want to hear.

US debt is going down!

Wait a minute…are these the same number crunchers who, at the beginning of the 21st century, forecast federal surpluses as far as the eye could see?

Yes, it is!

But, okay, that didn’t work out exactly as planned. They crunched the numbers but then the numbers got un-crunched on their own. Damned numbers! You just can’t trust them.

So, how can we trust these numbers?

That’s just it, dear reader, we can’t. In order to work out as planned, they require:

1. Congress has to let the Bush tax cuts expire on schedule. Hmmm… Will that happen? Beats us. It probably depends on who wins the elections in November…which probably depends on what the economy does between now and then…which probably depends on more things than we can begin to estimate and compute.

But the central idea of it — that Congress will act responsibly — seems like something you can’t say with a straight face. Will pandas stop eating bamboo? Will teenagers stop slouching? Will liquor stores make free home deliveries? Nope. Everything has a nature of its own. And the nature of Congress is to spend money it doesn’t have on things it doesn’t need. And then to push the bill onto the next Congress…the next administration and the next generation.

2. Not only do taxes have to go up, so does economic growth. There’s a problem right there. According to prevailing theories, if you increase taxes during a de-leveraging spell, you don’t get faster rates of GDP growth. You get slower growth.

The CBO acknowledges this problem, to a degree. It allows as how unemployment may go up, thanks to the tax increases. In fact, they say it will go to 9% in 2013.

How will the President, Congress and the Fed react to rising unemployment? Mightn’t it tempt them to engage in a little more counter-cyclical stimulus…at the expense of the tax cuts?

And what happens to growth rates? The CBO figures that growth can outstrip deficits. Maybe. Maybe not. Now, it’s not even close. There’s a $1.1 trillion deficit this year. Growth? Maybe a fifth of that. In other words, debt is growing 5 times faster than the economy.

During Mr. Obama’s first (and maybe last) term, US debt will grow by more than $5 trillion. Another term like that and we’ll be over $20 trillion.

And already the weight of debt is pressing down growth rates…and it’s getting worse.

And if HSBC is right, US growth will be very slow. Will deficits also be very low? Below 1.5% of GDP? Down from over $1 for the last 4 years to under $225 billion for the next 40?

Heck, we’re as soft-headed as anyone. We’d like to see the whole problem go away too. And maybe it will…

But we wouldn’t bet on it…

Bill Bonner
for The Daily Reckoning

Debt Beats the Economy in a Growth Race originally appeared in the Daily Reckoning. The Daily Reckoning, published by Agora Financial provides over 400,000 global readers economic news, market analysis, and contrarian investment ideas.

I just met this remarkable fellow, full of wisdom on investing, yet hardly known beyond a small group of fans. His name is Thomas Phelps, and he’s had quite a career. He was The Wall Street Journal’s Washington bureau chief, a former editor of Barron’s, a partner at a brokerage firm, the head of the research department at a Fortune 500 company and, finally, a partner at Scudder, Stevens & Clark (since bought out by Deutsche Bank). Phelps retired in Nantucket after a varied 42-year career in markets.

Along the way, Phelps figured out a few things about investing. He conducted a fascinating study on stocks that had returned $100 for every $1 invested. Yes, 100-to-1. Phelps found hundreds of such stocks, bunches available in any single year, that you could have bought and enjoyed a 100-to-1 return on — if you had just held on.

This was the main thrust of our conversation: The key is not only finding them, but keeping them. His basic conclusion can be summed up in the phrase “Buy right and hold on.”

“Let’s face it,” he said, “a great deal of investing is on par with the instinct that makes a fish bite on an edible spinner because it is moving.” Investors, too, bite on what’s moving and can’t sit on a stock that isn’t going anywhere. They also lose patience with one that is moving against them. This causes them to make a lot of trades… and never enjoy truly mammoth returns.

Investors crave activity. Wall Street is built on it. The media feed it all, making it seem as if important things happen every day. Hundreds of millions of shares change hands every session.

But investors need to distinguish between activity and results. “When I was a boy, a carpenter working for my father made this sage observation: ‘A lot of shavings don’t make a good workman.’” As you can see, Phelps is a man of folksy wisdom.

“Investors,” Phelps continued, “have been so thoroughly sold on the nonsensical idea of measuring performance quarter by quarter — or even year by year — that many of them would hit the ceiling if an investment adviser or portfolio manager failed to get rid of a stock that acted badly for more than a year or two.”

What investors should do is focus on the business, not on market prices. Phelps showed me financial histories of a long list of companies — earnings per share, returns on equity and the like. No stock prices. After one example, he asked: “Would a businessman seeing only those figures have been jumping in and out of the stock? I doubt it.” But if they just sat on it, they’d be rich.

And this is the nub of it. Phelps is not a fan of selling good businesses.

He talked about how his friend Karl Pettit — an industrialist, inventor and investor — sold his shares of IBM stock many years ago to start his brokerage business. He sold them for a million bucks. That stake would eventually go on to be worth $2 billion — more than he ever made in his brokerage business.

Phelps told me the story of how he sold his Polaroid stock to pay a steep doctor’s bill of $7,415 back in 1954. “Here is the confirmation of the sale,” he said, which he keeps as a reminder of his folly. Less than 20 years later, his Polaroid stock was worth $843,000. That’s an expensive doctor’s visit.

Phelps also stands against market timing. He told me about how he predicted various bear markets in his career. “Yet I would have been much better off if instead of correctly forecasting a bear market, I had focused my attention through the decline on finding stocks that would turn $10,000 into a million dollars.”

Because of his bearishness, he missed opportunities that went on to deliver 100-to-1. “Bear market smoke gets in one’s eyes,” he said, and it blinds us to buying opportunities if we are too intent on market timing.

“He who lives by the sword shall perish by the sword,” he added. “When experienced investors frown on gambling with price fluctuations in the stock market, it is not because they don’t like money, but because both experience and history have convinced them that enduring fortunes are not built that way.”

Phelps showed me a little schematic that reveals how much a stock must compound its value to multiply a hundredfold:

35 years — 14%
30 years — 16.6%
25 years — 20%
20 years — 26%
15 years — 36%

You’ll note that these are very long holding periods, but that’s the point. The greatest fortunes come from gritting your teeth and holding on. You’ll also see it’s a fairly high hurdle. You need growth.

(Several stocks we own are giving us annualized returns above Phelps’ tough 100-fold hurdles so far: IAG (39%), FLS (28%), MEOH (32%), TIE (25%) and GTLS (70%) — to name those we have held for at least one year. Twenty years is a long time, though…)

Phelps advises looking for new methods, new materials and new products — things that improve life, that solve problems and allow us to do things better, faster and cheaper. There is also an admirable ethical streak to Mr. Phelps’ style. He emphasized investing in companies that do something good for mankind. Finally, focus on cheap stocks, though you have to look beyond past figures.

“There is a Wall Street saying that a situation is better than a statistic,” Phelps said. Relying only on published growth trends, profit margins and price-earnings ratios is not as important as understanding how a company could create value in the years ahead.

Phelps is quick to add that he is not advocating blindly holding onto stocks. “My advice to buy right and hold on is intended to counter unproductive activity,” he says, “not to recommend putting them away and forgetting them.”

And so what if you don’t get a hundredfold return? The point of Phelps’ brilliant teaching method is to focus your attention on the power of compounding, to forget the day-to-day burps and ripples of stock prices. You can see the power of such ideas in the stocks we own: If you had bought Canadian Natural Resources (NYSE:CNQ) 10 years ago, for example, and held on no matter what — through recessions, bubbles, credit crises — you’d have multiplied your money 11-fold. Brookfield Asset Management (NYSE:BAM) went up nearly sevenfold. Buy right and hold on, indeed.

It is an investment tragedy of a sort to think that people have owned these stocks and not reaped those gains because they were trying to time the market or trade in and out. Sometimes stocks take a long time to get going. Phelps had plenty of examples of stocks that went nowhere (or down) for years, but still delivered the big 100-to-1.

“One of the basic rules of investing is never, if you can help it, take an investment action for a noninvestment reason,” Phelps advises. Don’t sell just because the price moved up or down, or because you need to realize a capital gain to offset a loss, etc. You should sell rarely, and only when it is clear you made an error. One can argue that every sale is a confession of error, and the shorter time you’ve held the stock, the greater the error in buying it — according to Phelps.

I love Mr. Phelps’ ideas. They are hard to implement, I know. But some people have. He related the experiences of individuals, former clients and old associates who got rich by buying right and holding on. Only the most-exceptional individuals can do it. Phelps wishes he had learned these insights when he was younger.

Now, I have a little confession to make about Mr. Phelps… I didn’t actually meet him. He’s been dead since 1992, reaching the ripe old age of 90. Every quote above comes not from a conversation, but from his book, 100 to 1 in the Stock Market: A Distinguished Security Analyst Tells How to Make More of Your Investment Opportunities, published in 1972.

I recently picked up a near mint copy for $22. This forgotten book should be a classic. Do not let the implausibility of making 100-to-1 on your stocks distract you. The main idea is to know how such returns have happened and what investors needed to do to get them. Aiming a little closer to that goal is bound to improve your results.

Phelps wrote as much. “Just a slight change in a golfer’s grip and stance may improve his game, so a little more emphasis on buying for keeps, a little more determination not to be tempted to sell… may fatten your portfolio. In Alice in Wonderland, one had to run fast in order to stand still. In the stock market, the evidence suggests, one who buys right must stand still in order to run fast.” I think it is superb advice.

I recommend the book, which is a pleasure to read and has plenty of good ideas, analogies and stories. They are particularly relevant now, given all the trouble in the world. I am inspired by his philosophy of buying right and holding on. I think you should try to do more of that, too.

Regards,

Chris Mayer,
for The Daily Reckoning

The Value of a Thief originally appeared in the Daily Reckoning. The Daily Reckoning, published by Agora Financial provides over 400,000 global readers economic news, market analysis, and contrarian investment ideas.

But are gold buyers making a big mistake? Is history repeating itself? The New York Times suggests it is:

As it was in 1980, could it be again in 2012?

The 1980 presidential election was fought by a Democratic incumbent weakened by a poor economy amid worries that the United States had lost its ability to compete in the world. Gold prices had risen to unprecedented levels as the election approached, and the Republican nominee hinted he might propose a return to a gold standard.

That Republican, Ronald Reagan, won the election and soon appointed a commission to study the role of gold in monetary systems. To gold bugs, it appeared to be the best chance in decades to move the country toward gold and away from what they like to call “fiat money,” a currency anchored by nothing more than government dictates.

Last month, Newt Gingrich, seeking to widen his support in the days leading up to the South Carolina primary, promised that he would appoint a new gold commission. “Part of our approach ought to be to re-establish something Ronald Reagan did in 1981 and that is to have a commission on gold to look at the whole concept of how do we get back to hard money,” he said in a speech.

No, dear reader, history is not repeating itself. The NYT is wrong…about everything. Well, almost everything. It understands that gold is a threat to its big advertisers…and most of its readers (who don’t own any gold). It is also a threat to most economists — who have built their careers on not understanding how a real economy actually works…and whose income and whose professional status now depend on a gold-free, centrally-planned economy.

So, to prove that gold is a ‘barbarous relic’ and that gold bugs walk on four legs, they merely put the question to economists.

The University of Chicago last month asked a panel of 40 economists, including former advisers to both Democratic and Republican presidents, if they agreed that “price-stability and employment outcomes would be better for the average American” if the dollar’s value were tied to gold. Every one of them disagreed, some with more than a little incredulity that such a question was worthy of discussion.

“Why tie to gold?” asked [the very witty] Richard Thaler, a University of Chicago professor. “Why not 1982 Bordeaux?”

“Eesh,” responded Austan Goolsbee, a Chicago colleague and former adviser to President Obama. “Has it come to this?”

The Times goes on to report that “even economists with some sympathy to gold opposed the idea” of a gold-backed dollar. And Mr. Ben Bernanke, former professor of economics at Princeton, says he doesn’t think gold is money.

Oh yeah, replied Congressman Ron Paul, then why do central banks hold gold…and not things such as ’82 Bordeaux or diamonds?

Mr. Bernanke replied that it was just a matter of “tradition.”

Yes, he’s right…it is a matter of tradition, like marriage…like property rights…like government…like murder…like teenagers who moon adults out of car windows…or like drivers who give each other the finger.

Traditions become traditions because people keep doing them. And they keep doing them for reasons that aren’t likely to go away. Times change. Conditions change. Human nature doesn’t.

But let us go back to the New York Times’ silly notion that we are about to relive the period following ’80. What seems to have triggered the idea was Newt Gingrich’s proposal to study the idea of going back on the gold standard. Every right thinking person in the country — the Times implies — knows the idea is foolish. And the price of the yellow metal is sure to fall, as it did after the Reagan election, when people realize how foolish it is.

But gold didn’t fall after ’80 because the Reagan administration didn’t put it back in the monetary system. It fell because Paul Volcker made it unnecessary. Instead of printing money, Volcker tightened up…taking out some of the money that was already there. And he did it under conditions that were not merely unlike those of today…but almost the exact opposite.

Then, the US was still a creditor to the rest of the world, not a debtor.

Then, the US was still running positive trade balances, not losing money every month.

Then, US stocks were at bargain levels…selling for 5 to 8 times earnings; today, they’re twice as expensive.

Then, US bonds were cheap too…with yields for US Treasury debt as high as 18%, or nearly SIX TIMES as high as today’s long bonds.

Then, US households had debt of only 60% or 70% of their disposable income, not 120% like today.

Then, the Fed was determined to stifle inflation; now it is determined to cause it.

Then, the federal government’s debt was less than 40% of GDP. Now, it’s over 100%.

Then, even in today’s inflation adjusted terms, the US government ran a deficit of $197 billion. Today, the deficit is $1.1 trillion.

Then, stocks had been going down for the previous 14 years; bonds had been going down for at least 31 years. Now, stocks and bonds have been going up, generally, for the last 30 years.

This final point is now just a detail. It’s the heart of the matter. With bonds at a 30-year low, Paul Volcker could squeeze inflation…begin a 3-decade period of rising bonds (with falling interest rates)…and an 18-year bust in the gold market.

Will that happen again? Impossible!

What kind of strange history would it be if it could repeat itself…from totally different initial conditions? Could Napoleon march on Moscow…if he had started out in Chicago rather than Paris? Could Liz Taylor have married Richard Burton twice if she’d died in a traffic accident after her first marriage?

Can gold now repeat its path of ’80-’98, even though today’s situation is almost the opposite in every way?

No, dear reader, history doesn’t repeat itself. It just stutters out the same truths, over and over. G..g..g..g..gold is m…m…m…money. It says.

The N..N…New Y…Y…Y…York Times is full of s..s..s..s…

…error!

Who knows what the future will give us? We don’t. Not here at The Daily Reckoning…

…but we see what could be a bad moon rising. No, we’re not talking about a Great Correction…or even a Depression. Who really cares if GDP goes up or down? You can go broke with honor…with a sense of humor…and with grace and dignity. You can happily go broke.

But you can’t go to Hell with grace and dignity.

In the following article, the FBI notes that 18 people a year have been convicted, mostly of ‘white collar crimes.’ You wouldn’t think this would call for comment. But the FBI says these people are “extremists” who believe they have a right to protect themselves from what they see as an overbearing government. The G-men tell us that these extremists can turn violent “at the drop of a hat.”

How long before they’re rounded up? And maybe they’ll round up “potential domestic terrorists” too, even those who have never committed any crime? And what about gold bugs? They may look harmless, but they give aid and comfort to dangerous elements, don’t they?

Here is the FBI preparing the public for a trip to Hell.

(Reuters) — Anti-government extremists opposed to taxes and regulations pose a growing threat to local law enforcement officers in the United States, the FBI warned on Monday.

These extremists, sometimes known as “sovereign citizens,” believe they can live outside any type of government authority, FBI agents said at a news conference.

The extremists may refuse to pay taxes, defy government environmental regulations and believe the United States went bankrupt by going off the gold standard.

Routine encounters with police can turn violent “at the drop of a hat,” said Stuart McArthur, deputy assistant director in the FBI’s counterterrorism division.

“We thought it was important to increase the visibility of the threat with state and local law enforcement,” he said.

In May 2010, two West Memphis, Arkansas, police officers were shot and killed in an argument that developed after they pulled over a “sovereign citizen” in traffic.

Last year, an extremist in Texas opened fire on a police officer during a traffic stop. The officer was not hit.

Legal convictions of such extremists, mostly for white-collar crimes such as fraud, have increased from 10 in 2009 to 18 each in 2010 and 2011, FBI agents said.

“We are being inundated right now with requests for training from state and local law enforcement on sovereign-related matters,” said Casey Carty, an FBI supervisory special agent.

FBI agents said they do not have a tally of people who consider themselves “sovereign citizens.”

J.J. MacNab, a former tax and insurance expert who is an analyst covering the sovereign movement, has estimated that it has about 100,000 members.

Sovereign members often express particular outrage at tax collection, putting Internal Revenue Service employees at risk.

Regards,

Bill Bonner
for The Daily Reckoning

Why Gold is Money Despite Changing Conditions originally appeared in the Daily Reckoning. The Daily Reckoning, published by Agora Financial provides over 400,000 global readers economic news, market analysis, and contrarian investment ideas.

Well, Dear Reader, we’re here to tell you: America is in decline.

We can give it to you straight because we’re not running for public office. And if we were elected, we would immediately demand a recount.

Anyone who tells you America is not in decline is either running for office…or not paying attention.

In 1969, more than one out of every three dollars of income in the entire globe was earned in the US. That’s what the IMF’s World Economic Outlook tells us.

By 2000, that number had fallen…but not by much. The US still took home 31% of global income. But in the last 10 years, the US share has fallen hard — losing more than 7%. Now, only 23% of the world’s income is generated by the US.

Ten years ago, China’s economy measured about 1/8th the size of the US. Now, it is 41%. Another decade and it will be the biggest in the world. It is already bigger by several measures. And even if its growth declines to 7% a year, it will still surpass the US in a dozen years.

Hey, don’t take it personally. The entire developed world is in decline — with America leading them all down.

By 2050, according to a new study from HSBC, today’s emerging economies — as a whole — will be larger than Europe, America and Japan put together.

The New York Times reports:

The American economy’s reported 2.8 percent growth in the fourth quarter, at an annual rate, was seen as mildly encouraging. But it meant that over the previous 10 years, the economy had grown at a compound annual rate of just 1.7 percent. Until the current cycle, there had been no similar prolonged period of slow growth since the Depression.

The International Monetary Fund’s latest forecasts indicate that there is not likely to be a pickup in growth anytime soon, either in the United States or other large industrialized countries.

…if the fund’s forecasts of 1.8 percent real growth in 2012 and 2.2 percent in 2013 prove to be accurate, the 10-year American rate at the end of 2013 will have fallen to 1.5 percent… But it will still be a little above the 0.9 percent compound growth rate in the decade from 1929, the year the Depression began, to 1939.

For Britain, which endured a horrible decade in the 1970s that led to talk of the “British disease,” the previous postwar low, not shown in the charts, was in the 10 years ending in the second quarter of 1983, an annual rate of 0.95 percent. The figure for the 10 years through 2011 is 1.4 percent, but the I.M.F. predictions indicate the 2013 figure will fall to just 0.94 percent. The fund expects the British economy to grow by just 0.6 percent this year and by 2 percent in 2013.

The situation is even worse in Italy, where the fund expects the economy to contract by 2.2 percent this year and 0.6 percent the following year. If that happens, Italy’s economy will be smaller at the end of 2013 than it was 10 years earlier. The French economy is forecast to have grown at a 1 percent annual rate over the same 10-year period.

As the developed economies stagnate, the ‘emerging’ economies grow. Nineteen of the world’s top economies in 2050 will be those we regard as “emerging” today. China and India will hold the number 1 and number 3 spots, with the US sandwiched between them.

So far, we are just talking about numbers. Try to imagine a world in which today’s emerging markets have more economic power, and vastly more people, than today’s leaders. It is not just China and India who will be calling the shots, but Brazil, Turkey, Russia, Mexico and Indonesia too.

New technologies, new fashions, new ideas, new music, new cars, new movies…all are likely to come from countries where, today, Westerners are afraid to drink the water. Now, they are imitating us. Soon, we will be listening to pop Indian sitar music, eating doner kebabs and watching movies made in Jakarta.

Military power, too, is likely to shift to the growing economies. Like a body builder with a protein shake, they will use their increasing resources, human as well as material, to add muscle. But their muscle will be young, built with new technology and new techniques. America’s geriatric, expensive, bureaucracy-ridden, zombified military industry will be unable to match it.

It is one thing to talk nonsense to the voters. They love that kind of stuff. It flatters them. It comforts them.

But only a fool would believe it.

Which is what worries us. The candidates seem to think “declinism” is just a state of mind…and that economic and military success can be had by act of willpower.

“Decline,” writes Charles Krauthammer, “is a choice.”

And it’s a choice the candidates think they can avoid just by giving more money to America’s military industry.

“I will insist on a military so powerful no on would ever think of challenging it,” adds Mitt Romney.

But military spending is not a way to resist decline; it is a sign of it…and a cause of it. Osama bin Laden understood how it worked. By 2000, he had already brought one great empire, the Soviet Union, to its knees, luring it to spend money it didn’t have in a war it couldn’t win. He thought he could do the same to the US. So far, it looks as though he was right.

Lt. Col. Daniel L. Davis has been described as a “whistleblower.” He’s ratting out the military for failing in Afghanistan, just as Osama bin Laden predicted.

He doesn’t seem to understand. The military is not protecting the US in Afghanistan; there’s nothing to protect it against. Nor did it ever intend to “win” a war in Afghanistan. It never even identified what winning would mean or how it would know when it had won. This was always a zombie war, not a real war. Its purpose was only to transfer wealth and power to the military industry. In that sense, the war is a great success.

The Armed Forces Journal has the story:

Truth, lies and Afghanistan
How military leaders have let us down

By LT. COL. DANIEL L. DAVIS

I spent last year in Afghanistan, visiting and talking with US troops and their Afghan partners. My duties with the Army’s Rapid Equipping Force took me into every significant area where our soldiers engage the enemy. Over the course of 12 months, I covered more than 9,000 miles and talked, traveled and patrolled with troops in Kandahar, Kunar, Ghazni, Khost, Paktika, Kunduz, Balkh, Nangarhar and other provinces.

What I saw bore no resemblance to rosy official statements by US military leaders about conditions on the ground.

Entering this deployment, I was sincerely hoping to learn that the claims were true: that conditions in Afghanistan were improving, that the local government and military were progressing toward self-sufficiency. I did not need to witness dramatic improvements to be reassured, but merely hoped to see evidence of positive trends, to see companies or battalions produce even minimal but sustainable progress.

Instead, I witnessed the absence of success on virtually every level.

Regards,

Bill Bonner,
for The Daily Reckoning

When Emerging Markets Shape the Developed World originally appeared in the Daily Reckoning. The Daily Reckoning, published by Agora Financial provides over 400,000 global readers economic news, market analysis, and contrarian investment ideas.

After reading the article, we concluded that Mr. Davidoff is the most creative financial writer around. As such, Mr. Davidoff may be the perfect apologist for today’s dysfunctional monetary “system.” Certainly, he possesses the cerebral alacrity to dodge whatever cold, hard facts may be standing in the way of a good story.

“I call the Fed a hedge fund,” Davidoff cheerily explains, “because it is operating like one, leveraging its balance sheet to earn huge profits.”

We might have been able to embrace Davidoff’s analysis were it not for one nettlesome fact: the Fed is absolutely nothing like a hedge fund. The Fed is, instead, more like a crime syndicate — a racketeer that relies on coercion, deception and outright larceny.

But before explaining The Daily Reckoning’s official metaphor for the Fed, let’s return to Davidoff’s metaphor and “analysis.” Says Davidoff:

Last year, the central bank turned over $76.9 billion in profit to the federal government, slightly down from $79.3 billion it provided in 2010.

The Fed made this money in interest on a nearly $3 trillion portfolio of securities. This enormous holding was built up largely in the wake of the financial crisis as the Fed bought these securities through two rounds of quantitative easing.

I call the Fed a hedge fund because it is operating like one, leveraging its balance sheet to earn huge profits. The main difference between a hedge fund and the Fed is that the Fed effectively creates its own money, so it doesn’t have any borrowing costs, meaning yet more profits.

Remarkably, the Fed’s profits are also an afterthought. The Fed is trying to stabilize and increase the United States economy in the wake of the financial crisis, and its profits are a nice byproduct.

Still, these earnings blow away any other hedge fund profits.

Hmmm… where to begin our autopsy of this fatally flawed analysis?

Let’s begin at the end with those earnings that “blow away any other hedge fund profits.”

If Davidoff is referring only to the Fed’s $79.3 billion “earnings,” without any regard for the denominator that produced those earnings, he is absolutely correct. No other hedge fund in the world came close to earning $79.3 billion in 2011, primarily because no other hedge fund in the world runs a $3 trillion portfolio. But obviously, the absolute number tells us nothing about the genius — or lack thereof — behind the Fed’s investment activities.

To get a feel for that, let’s now insert a denominator and calculate a return. Based on the $3 trillion portfolio that Davidoff cites in his column, the Fed produced a 2.6% return. That kind of number would not pop any year-end champagne corks in any hedge fund office in the land. [Editor’s note: In reality, the Fed’s balance sheet averaged about $2.75 trillion during 2011, not $3 trillion. But since $3 trillion is the number Davidoff uses, we’ll use it also].

But maybe Davidoff had a different return calculation in mind when he dubbed the Fed “the most successful hedge fund around.” Maybe he was thinking the denominator ought to be zero instead of $3 trillion, since, as he observes, the Fed “effectively creates its own money.” In this scenario the Fed’s investment activities would have produced a mind-boggling return of “infinity percent.”

Davidoff is absolutely right; no hedge fund can do that.

Or maybe Davidoff was thinking of a denominator somewhere between zero and $3 trillion. Maybe he had $676 million in mind, which is the actual amount of money the Fed spent last year printing new dollar bills. In this scenario, the Fed’s result would have been a spectacular 117.3%. That’s not quite infinity percent, but it’s not bad.

Unfortunately, there’s another problem with Davidoff’s analysis; the numerator is as much a mystery as the denominator. In other words, the Fed’s theoretical $79.3 billion return is a bogus Beardstown Ladies kind of number since it does not account for marking all the Fed’s securities to market. Without marking its vast $3 trillion portfolio to market, the actual results of the Fed’s investment activities are unknowable.

Perhaps the Fed’s hodgepodge of Treasury bonds, mortgage-backed securities, currency swaps and other financial jetsam increased in value during 2011, in which case the total return would have been higher than 2.6%. Or perhaps these holdings decreased in value, in which case the total return would have been lower than 2.6% — maybe even negative.

No one knows. (Or if they know, they aren’t saying).

Net-net, Davidoff’s analysis, expressed as a mathematical equation, would be greater than or equal to idiotic. That said, as a fellow journalist, we sympathize with Mr. Davidoff. We, too, have written things that should never have survived the copy-editing process. But when we have, we have heard about it from readers…just as Mr. Davidoff heard about it from many of the bloggers on Yahoo! Finance who responded to his column:

Kaos from Plainfield, Connecticut wrote:

Anything done by the NY Times is fire starter material.

Greg from Indianapolis wrote:

“The main difference between a hedge fund and the Fed is that the Fed effectively creates its own money, so it doesn’t have any borrowing costs”

Yeah…that is kind of an advantage…

RJ Wrote:

So the Fed made $76.9 billion from interest on US government debt, then turned that over to the Treasury Department?

Wait, what???

JR wrote:

Maybe this year [the Fed] will print a trillion dollars, turn it over to the Treasury, and this writer can say, “Look, a government operation made a trillion dollars while the idiots in the private sector flounder.” The New York Times is a disgrace.

Mark from Tulsa, Oklahoma wrote:

My 6-year old could make money if he could print dollar bills at will.

While we are sympathetic with these critiques, we can’t really be upset with Mr. Davidoff for producing his obsequious homage to the Federal Reserve, anymore than we can be upset with a puppy for peeing on the side of a brand-new flat-screen TV. To the puppy, the TV looks just like a fire hydrant. And to Davidoff, by his own admission, the Fed looks just like a hedge fund.

But it isn’t. The Fed is a crime syndicate that relies on deception, coercion and grand larceny. It is a racketeer.

“Several forms of racket exist,” Wikipedia explains. “The best-known is the protection racket, in which criminals demand money from businesses in exchange for the service of ‘protection’ against crimes that the racketeers themselves instigate. Traditionally, the word racket is used to describe a business (or syndicate)…that it is engaged in the sale of a solution to a problem that the institution itself creates or perpetuates, with the specific intent to engender continual patronage.”

’Nuff said!

Regards,

Eric J. Fry
for The Daily Reckoning

The Federal Reserve and Other Crimes Against Capitalism originally appeared in the Daily Reckoning. The Daily Reckoning, published by Agora Financial provides over 400,000 global readers economic news, market analysis, and contrarian investment ideas.

We’d prefer to invite you to a quieter place, Fellow Reckoner…somewhere we could talk in private. A speakeasy, perhaps. Somewhere off the radar. Alas, that’s becoming increasingly difficult.

In fact, according to recruitment propaganda handed out by the FBI and the Department of Justice to Internet cafe owners across the country, a person may be considered “suspicious” if they “are overly concerned about privacy” or if he/she “attempts to shield the screen from view of others.”

Other “Potential Indicators of Terrorist Activities Related to Internet Café,” according to this particular flyer, include, “paying with cash,” traveling an “illogical distance to use [the] Internet Café,” acting “nervous” or exhibiting “suspicious behavior inconsistent with activities.”

What constitutes an “illogical distance,” we wonder? Two miles? Five? Twenty? What about visiting a cafe while on vacation? Is that an “illogical distance” from a person’s home? Come to think of it, what does an “illogical distance” even mean? Negative three miles? Minus six miles? Moreover, how would one even know the distance a person traveled to email grandma or fill out online job applications? Should we be spying on them?

Well… Yes, say the Feds.

If a fellow citizen arouses your suspicion — based on what must surely be the vaguest criterion imaginable — the federal agencies encourage you to “be part of the solution.” How? Well, they’d like you to…

“Gather information about individuals without drawing attention to yourself. Identify license plates, vehicle description, names used, languages spoken, ethnicity, etc.”

They’d like to recruit you, in other words. Just imagine, a whole community of spooks, moles, informants, sleuths and…

Wait…who WOULDN’T be nervous in an Internet Café in the USA these days?

And that’s not all. The Fed’s cheerfully-titled “Communities Against Terrorism” flyer series identifies 25 “threat areas” where you might encounter suspicious persons. These include such notorious ne’er-do-well hangouts as:

• Dive/boat shops

• Martial arts centers/Paintball

• Hobby shops

• Farm supply stores

• Financial institutions

• Electronics stores

• Shopping malls

• Hotels/Motels and, just to be on the safe side,

• The General Public

In each of these “threat areas,” the Feds helpfully outline a suggested course of action for those who wish to be part of their “solution.” Again, snitching, spying and behavior generally bordering on paranoia and harassment seem to capture the general gist of it.

For example, if you are out and about in the “General Public” one weekend and you happen to notice “people over dressed for the weather,” the Feds would like you to embark on a snooping mission, maybe even involving following “Mr. Tight-Knit-Cashmere-Cardigan-on-a-Late-Summer-Day” to his car. And don’t be scant on the details. Explains the flyer:

“Providing a detailed description of persons or vehicles is imperative for a successful follow up by law enforcement personnel.”

We’ll come back to exactly what a “successful follow up” means in just a second, but before we get to that…

What to do if your suspected, inappropriate fiber for the season-wearing, possible perp-to-be notices that you are on their tail? And what if, after being stalked through a public place by someone they don’t know, this sketchy individual becomes nervous and departs quickly when you approach them?

Well, they’re only digging themselves deeper. According to the Potential Indicators of Terrorist Activities Related to the General Public flyer, “departing quickly when seen or approached” could be grounds for further suspicion. It says so right there, in the section helpfully titled, “What Should I Consider Suspicious?”

Also in this section: “Questions regarding sensitive information such as security procedures or systems,” “Vehicles that appear to be overloaded,” and, again, just to be safe, “People acting suspiciously.”

But back to the “successful follow up” for a second. What, exactly, would that look like? What sinister plots and stratagems might all this covert invigilation and spying on each other help foil?

We told you about the foiled plot to destroy America involving two British, twenty-something hipsters last week. Well, now there’s the case of telecommunications sales manager Saad Allami, a man who knows a thing or two about living in a…eh…“watchful” community.

Mr. Allami was arrested last month while picking up his 7 year-old son from school in Quebec. During the next 24 hours, while he was being detained, a team of police officers (heroes/patriots/national treasures) stormed Mr. Allami’s home, telling his wife she was “married to a terrorist.” Meanwhile, Mr. Allami’s colleagues, who were on their way to a conference in the Big Apple were also detained at the US border for hours due to their “connection” with Mr. Allami.

And what had Mr. Allami done to deserve this, the swift hand of justice? The Canadian Press provides the shocking details of his master plan:

On Jan. 21, 2011, Allami sent a text message to colleagues urging them to “blow away” the competition at a trade show in New York City.

According to Mr. Allami’s lawsuit, “The treatment of the plaintiff and his wife was cavalier, illegal, aggressive, accusatory, and in violation of their most fundamental rights.”

Exactly as you’d expect, in other words.

Like we said, we’d love to have spoken to you in private, away from the prying eyes and ears of Big Brother…and his thousands of officious little goose-stepping generals on the ground.

But, as you can see, we can’t. He is everywhere. He is everyone and anyone. We know he is listening. And now, so do you.

Act accordingly.

Joel Bowman
for The Daily Reckoning

Why Personal Privacy is Now Public Enemy #1 originally appeared in the Daily Reckoning. The Daily Reckoning, published by Agora Financial provides over 400,000 global readers economic news, market analysis, and contrarian investment ideas.

Kenneth Rogoff, for example, concludes that “improved education alone will not resolve the flaws inherent in today’s capitalism, but it [is an] essential first step down any path to a solution.”

Oh? We never quite figured out the connection. The problem in a nutshell is that developed countries have too much debt and not enough growth. And their debt is growing faster than their output. How then does spending more on non-productive behavior increase GDP output or decrease debt?

Contemporary education is a dead end. The industry has been taken over by zombies. Huge amounts of money — public, private, charitable, debt, savings, earnings — are invested. The output is small, dubious and perhaps even negative.

We know that in some fields, such as economics, the more instruction a person has, the less he knows. Economics — as taught in many universities — is a value-subtracting discipline. As to other fields — politics, sociology, literature, gender studies — we are suspicious.

We have also noted that despite huge increases in per capita, inflation adjusted spending over the last 40 years, test scores have not increased. This suggests that the money was wasted.

But our suspicions run deeper. We suspect that — outside science and engineering — most education, from the first grade to a PhD, is at best a costly luxury…at worst, a big waste of time and money.

Here is evidence, a letter from a former slave to his former master, written only a few years after the War Between the States came to an end. We don’t know, but it is unlikely the former slave had any formal education. But you will notice that today’s typical university graduate could not match his clear thinking or his polite, funny, sarcastic style:

Dayton, Ohio,
August 7, 1865

To My Old Master, Colonel P.H. Anderson, Big Spring, Tennessee

Sir: I got your letter, and was glad to find that you had not forgotten Jourdon, and that you wanted me to come back and live with you again, promising to do better for me than anybody else can. I have often felt uneasy about you. I thought the Yankees would have hung you long before this, for harboring Rebs they found at your house. I suppose they never heard about your going to Colonel Martin’s to kill the Union soldier that was left by his company in their stable. Although you shot at me twice before I left you, I did not want to hear of your being hurt, and am glad you are still living. It would do me good to go back to the dear old home again, and see Miss Mary and Miss Martha and Allen, Esther, Green, and Lee. Give my love to them all, and tell them I hope we will meet in the better world, if not in this. I would have gone back to see you all when I was working in the Nashville Hospital, but one of the neighbors told me that Henry intended to shoot me if he ever got a chance.

I want to know particularly what the good chance is you propose to give me. I am doing tolerably well here. I get twenty-five dollars a month, with victuals and clothing; have a comfortable home for Mandy — the folks call her Mrs. Anderson — and the children — Milly, Jane, and Grundy — go to school and are learning well. The teacher says Grundy has a head for a preacher. They go to Sunday school, and Mandy and me attend church regularly. We are kindly treated. Sometimes we overhear others saying, “Them colored people were slaves” down in Tennessee. The children feel hurt when they hear such remarks; but I tell them it was no disgrace in Tennessee to belong to Colonel Anderson. Many darkeys would have been proud, as I used to be, to call you master. Now if you will write and say what wages you will give me, I will be better able to decide whether it would be to my advantage to move back again.

As to my freedom, which you say I can have, there is nothing to be gained on that score, as I got my free papers in 1864 from the Provost-Marshal-General of the Department of Nashville. Mandy says she would be afraid to go back without some proof that you were disposed to treat us justly and kindly; and we have concluded to test your sincerity by asking you to send us our wages for the time we served you. This will make us forget and forgive old scores, and rely on your justice and friendship in the future. I served you faithfully for thirty-two years, and Mandy twenty years. At twenty-five dollars a month for me, and two dollars a week for Mandy, our earnings would amount to eleven thousand six hundred and eighty dollars. Add to this the interest for the time our wages have been kept back, and deduct what you paid for our clothing, and three doctor’s visits to me, and pulling a tooth for Mandy, and the balance will show what we are in justice entitled to. Please send the money by Adams’s Express, in care of V. Winters, Esq., Dayton, Ohio. If you fail to pay us for faithful labors in the past, we can have little faith in your promises in the future. We trust the good Maker has opened your eyes to the wrongs which you and your fathers have done to me and my fathers, in making us toil for you for generations without recompense. Here I draw my wages every Saturday night; but in Tennessee there was never any pay-day for the negroes any more than for the horses and cows. Surely there will be a day of reckoning for those who defraud the laborer of his hire.

In answering this letter, please state if there would be any safety for my Milly and Jane, who are now grown up, and both good-looking girls. You know how it was with poor Matilda and Catherine. I would rather stay here and starve — and die, if it come to that — than have my girls brought to shame by the violence and wickedness of their young masters. You will also please state if there has been any schools opened for the colored children in your neighborhood. The great desire of my life now is to give my children an education, and have them form virtuous habits.

Say howdy to George Carter, and thank him for taking the pistol from you when you were shooting at me.

From your old servant,

Jourdon Anderson

Regards,

Bill Bonner
for The Daily Reckoning

The Problem with Contemporary Education originally appeared in the Daily Reckoning. The Daily Reckoning, published by Agora Financial provides over 400,000 global readers economic news, market analysis, and contrarian investment ideas.