Posting has been light as I've been busy with non-blogging duties. The big news this week has been the G-20 meeting in Pittsburgh, and the US Fed keeping interest rates at virtually zero.
The view here at Controlled Greed is that the US Government wants inflation. Not hyperinflation, but inflation nonetheless. There is no will in Washington to slash spending to any extent, much less the extent required to reduce the massive debt burden. So that leaves lightening the burden through monetizing the debt.
Anyway, here are five items you might wish to review over the next couple of days.
- David Rosenberg writes in the Financial Times that equities are overvalued, echoing his recent Barron's interview. This appeared on RealClearMarkets.com, so it should be available without a FT.com subscription: The banker J.P. Morgan was fond of saying: “I never buy at lows, I never sell at the highs, I play the middle 60 per cent.” Well, from our lens, we are well past that middle 60 per cent point of this bear market rally.
- The Gannon On Investing blog has been quiet for most of 2009. The Can Turtles Fly? blog caught up with Geoff Gannon by email recently to get his views on Lexmark. Check it out.
- Ambrose Evans-Pritchard writes of HSBC bidding farewell to US dollar supremacy. Specifically, that the dollar looks like sterling did after World War I. A monetary policy of near zero rates – further juiced by quantitative easing – is completely incompatible with circumstances in most of Asia, the Middle East, Latin America, and Africa. Divorce is inevitable. The US is expected to hold rates near zero through 2010 to tackle its own crisis.
- This weekend will see a new issue of Barron's, yet here's an article on gold from last week's. I continue thinking gold makes sense as a form of insurance, especially for US investors. As you know, I own GLD and it is a "double" position in my portfolio. Back to Barron's: Gold could correct 10% to 20% in the near term, but some fans think it could double in coming years as the deficit widens, the dollar falls and inflation arrives.
- Africa Confidential has a new feature article on why the banks remain optimistic about Nigeria. The reason? Well, it has to do with oil, gas and Africa's biggest market. You don't get this kind of reporting in America, unfortunately.
With that, have a great weekend.
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