The Emerging Markets Rally is Here

So says Mark Mobius.

http://bloomberg.com/apps/news?pid=20601087&sid=aykWeSWzvFsA&refer=home

IS this for real or not, we don't know.

We see strong base building in, but not limited to Japanese small caps, Korean shares, Taiwanese shares, Hong Kong shares, and Russian shares. We don't see these markets dipping to new lows.

Many of these markets crashed in October and early November. Unlike the US, they did not pierce those lows and appear to have successfully retested the bottom.

Our call on Russian equities, was spot on and the RTS has rallied 40% in less than 2 months.

The technicals, simple ones at that, help us line up the probabilities so that they are in our favor. The best advice we can give is to never attempt to catch a falling knife.

Gold and Hard Assets to Gain with Fed Money Destruction

The Fed is buying treausuries, which is in fact money printing, or monetization of debt, in order to hold the yield curve down.

This will be excellent for gold and hard assets. It is why we were positioned well ahead of the crowd and used the November - February months to acquire the gold miners of our choice at rock bottom prices!

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aOsvwdYztl7Q

Paulson Joins the Gold Rush

John Paulson, one of the greatest hedge fund investors ever has acquired an 11% stake in Anglogold Ashanti from Anglo American.

Paulson joins Einhorn from Greenlight and Loeb from Third Point in the great gold hunt.

http://www.marketwatch.com/news/story/paulson-acquires-stake-south-african/story.aspx?guid=%7B2CD83706%2DF504%2D487D%2D8665%2DFE2DBD724352%7D&siteid=yhoof

Swiss Money Printing ! The Race to the Bottom

Global banks around the world are engaged in both quantitative and qualitative easing.

Qualitatively they are lowering the standards for the collateral that they are willing to buy or lend for.

The race to the bottom is here. No one wants a strong currency. This should be apparent to everyone. This money printing will be positive for hard assets, especially precious metals.

http://www.iht.com/articles/ap/2009/03/12/business/EU-Swiss-Franc.php

JP Morgan Says Buy Goldmines

To which we say, we are already there, and they clearly missed the bottom call as most gold miners have doubled and tripled.

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aNHAoeICrVlE

Lets make this easy for everyone. The two largest inputs into mining are labor and energy.

Oil has collapsed from $147 into the 40s. Check.

Gold is sold for US dollars, the SA rand, Mexican peso, and Australian dollar have all collapsed. Check. This means that local lobor costs, denominated in those currencies have all fallen by at least a third.

Gold in USD and other currencies is stronfg, therefore the outlook for miners is excellent.

Everyone should well be aware by now, but even with a more than tripling of price of gold, gold supply is lower than in 2001.

There you go.

The Coming Gold Bubble

http://econompicdata.blogspot.com/2009/03/ready-to-ride-golden-bubble.html

The excellent post is listed above.

To which we say yes, that is why we own gold!

Actually gold performed quite well during the Great Depression and has held up very well during times of deflation vis a vis shares and real estate which collapse. Ditto 2008.

For those that remember Homestake Mining went from a peak of $90 in 1929 and fell to only $70 a share. And then rose to over $500 by the end of the Depression!

It has not performed well during disinflation which is a different matter.

The whole point about investing is to buy early in the trend and wait for the mania, remembering that at some price, every asset should be sold! I want the parabolic blow off, as should everyone that owns gold.



Silver also offers better upside than gold as a current speculation.

http://thecreativedestructionist.blogspot.com/2009/03/silver-from-heaven...

Russian Stocks Rally Over 10%

The Russian RTS which had been in the 500 to 550 range was a bargain.

http://www.bloomberg.com/apps/quote?ticker=RTSI$:IND

Again please see our prior post on Russian equities. We find the RTS under 600 tio be an excellent speculation.

http://thecreativedestructionist.blogspot.com/2009/02/speculative-long-russia.html

Stocks Stage Massive Global Rally

Selling pressure had gotten to multi-generational highs.

Citigroup with better news than expected.

http://www.bloomberg.com/apps/news?pid=20601087&sid=a0Ii37swxioo&refer=home

While the exact timing has been unknowable, we are not surprised by this.

Refer to our post from exactly one week ago. The post is below.

http://thecreativedestructionist.blogspot.com/2009/03/massive-selling-pressure-on-s-500.html

Silver from Heaven . . . !

http://www.kitco.com/scripts/hist_charts/yearly_graphs.plx

The gold to silver ratio has blown out to over 70. In times of distress we have seen the ratio historically approach 15.

Given that it fell from over $20 an ounce last year, we like silver under $13 an ounce. If we did not own it already, we would be very happy to grab some at $10- $12 an ounce.

The Coinage Act of 1792 set gold equal to silver in a 15 to 1 ratio. This is why there is often a historical reference to the price.

http://en.wikipedia.org/wiki/Coinage_Act_of_1792

Gold has eclipsed its prior all-time high from 1980, though in inflation adjusted terms it has a ways to go.

Silver on the other hand is well below the $50 price set in the infamous Hunt Brothers squeeze of 1980. We firmly believe that due to massive amounts of monetary stimulus, in time, silver will reach all time highs, not only in nominal, but inflation adjusted terms!

A low risk speculation is to accumulate old Mercury dimes and Washington quarters with the silver content. The coins have historical signifcance and can still be had for a low price over melt.

Even the Cricket Players Are Not Safe - The Next Front on the War on Terror

Sad news from Pakistan as the Sri Lankan Cricket team was attacked in a commando style assault.

Six policemen died.

We firmly believe that this is the next major front on the War on Terror.

Given the situation in Afghanistan and Pakistan, any troops pulled from Iraq are very likely to be redeployed.

Keep watching, the geopolitical situation is getting worse.

http://www.iht.com/articles/2009/03/03/asia/03pakistan2.php

Massive Selling Pressure on the S&P 500

http://finance.yahoo.com/q/ta?s=%5EDJI&t=my

Please use Max.

A scary chart is a long-term one of the S&P 500 with volume. The brutal bear market has seen record volume on the downside, which we feel may represent, even if temporary, a selling climax.

Sometime soon a rally should not be unexpected, as it appears that everyone who wants to get out is now selling.

There are no absolutes or guarantees in investing. One can only determine greater or lesser probabilities based upon the information one has at the time.