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karanjakinuthia
#181 Posted : Wednesday, January 27, 2010 12:43:20 PM
Rank: Member


Joined: 11/13/2006
Posts: 551
Location: Nairobi
Today's Financial Times carries an article on Greece's attempt to woo China into buying $25 bn worth of bonds. The market is watching for implementation of Portugal's deficit cutting measures announced in its budget on Tuesday. Both underscore the fact that we are in a Debt Crisis that is far from over.

"The world has issued so much debt in the past two years fighting the Great Recession that paying it all back is going to be hell--for Americans, along with everybody else. Taxes will have to rise around the globe, hobbling job growth and economic recovery. Traders like Bass could make a lot of money betting against sovereign debt the way they shorted subprime loans at the peak of the housing bubble.

National governments will issue an estimated $4.5 trillion in debt this year, almost triple the average for mature economies over the preceding five years. The U.S. has allowed the total federal debt (including debt held by government agencies, like the Social Security fund) to balloon by 50% since 2006 to $12.3 trillion. The pain of repayment is not yet being felt, because interest rates are so low--close to 0% on short-term Treasury bills. Someday those rates are going to rise. Then the taxpayer will have the devil to pay..."

Read more:

http://www.forbes.com/fo...bal-debt-bomb_print.html
karanjakinuthia
#182 Posted : Thursday, January 28, 2010 11:34:16 AM
Rank: Member


Joined: 11/13/2006
Posts: 551
Location: Nairobi
Whilst the West dishoards of gold via the increasingly popular gold parties, the East is steadily accumulating. Despite the 400% gain in the value of the precious metal, citizens of the Anglo Saxon regions seem uninterested. The inviting conclusion is that those that the East is largely debt free and is able to utilise its savings in speculation and investment.

"The assistant pushed the red velvet sacks across the counter discreetly. The customer quickly slipped them into her bag. With a brief, nervous look around, she walked briskly from the shop, already clutching her car keys.

Few people feel comfortable lugging around a kilo of pure gold bars. But that doesn't stop Chinese shoppers from thronging to Caibai, the number one place for buying the precious metal. The Beijing store's 5,000 daily customers are at the forefront of a new gold rush.

Since 2007, when South Africa fell behind, China has been the world's biggest gold producer. Now the World Gold Council and industry analysts believe it may have overtaken India – for centuries the dominant buyer – to become the biggest consumer too. The China Gold Association estimated demand would exceed 450 tonnes last year, up from 395.6 tonnes in 2008 (the actual figures are not yet available)."

Read more:

http://www.guardian.co.u...chinese-gold-rush-demand
karanjakinuthia
#183 Posted : Thursday, January 28, 2010 2:18:35 PM
Rank: Member


Joined: 11/13/2006
Posts: 551
Location: Nairobi
The following articles are in resonance. CIC's push into commodity companies will inadvertently place Africa in its cross hairs. Inorder for efficient extration of resources, supporting infrastructure must be in place. The Chinese have entrenched themselves as top quality contractors. Good infrastructure is bound to attract additional investment in primary or extractive industries as well as manufacturing (secondary) and services (tertiary). A virtous cycle it is.

" Jan. 27 (Bloomberg) -- China’s $300 billion sovereign wealth fund is considering new investments in resource-related companies after bets on commodities producers from the U.S. to Kazakhstan paid off in 2009.

China Investment Corp. increased spending on energy and minerals assets last year to profit as the global economy recovers. The Beijing-based fund avoided the worst of the credit crunch in its first full year in 2008 and may have had a return of more than 10 percent in 2009, said London-based Jan Randolph, director of sovereign risk, analysis and forecasting at IHS Global Insight.

“They have timed the upside well both in market terms, but also to fit in with the longer-term diversification strategy,” Randolph said...."

Read more:

http://www.bloomberg.com...0&sid=aeyawIJ8FKoQ#


"For some African countries, particularly those helped by Chinese investment and its thirst for energy and minerals, another boom may be approaching.

Investors with cheap cash needing to spice up returns in more obscure parts of the globe are asking whether Africa can shift from final investment frontier into the emerging market mainstream. Reflecting this interest, Africa gets top billing at the annual meeting of the rich and powerful in Davos this week..."

http://www.businessdaily.../-/9fnt5kz/-/index.html

karanjakinuthia
#184 Posted : Friday, January 29, 2010 2:25:02 PM
Rank: Member


Joined: 11/13/2006
Posts: 551
Location: Nairobi
An eye catching pictorial aptly named the "Ring of Fire" accompanies an articulate assessment of current economic events by Bill Gross, Managing Director of the world's largest bond fund, Pimco.

"Investment management is a privileged profession – not just for being paid by X-times what you’re really worth to society, but from the standpoint of longevity. If you’re good, and you at least give the impression that you still have most of your faculties, you can literally hang around forever. James Carville, the well-meaning but evil-lookin’ guy from the Clinton Administration once remarked that in his next life he’d like to come back as a bond manager. He had part of it right – the influence, the wealth, and even fame – but there was no need to imagine himself as some cryogenically preserved Wall Street version of Ted Williams – he was young enough at the time to make the leap and still have a 20-year career ahead of him. Other professions do not afford such opportunities – the gold watch at 65 is not only symbolic, but a statement in most professions that says you are more or less washed up. Athletes have at most 20 years and musicians seem to have that brief window of creation as well. The Beatles, for instance, were done after a decade’s time. Paul is still writing songs, but the magic clearly disappeared in the 70s and now his concerts are “garden parties” of remembrances as opposed to creation...."

Read more:

http://europe.pimco.com/...oss+The+Ring+of+Fire.htm
karanjakinuthia
#185 Posted : Friday, January 29, 2010 2:31:43 PM
Rank: Member


Joined: 11/13/2006
Posts: 551
Location: Nairobi
Follow the Money in the pictorial that potrays the flow of money from a central bank to the equity markets. It is one system through which money is created, the other being through leverage in the banking sector. The equity markets thus perform as hedges against domestic inflation.

"The steps are as follows:

* The Federal Reserve creates monetary policy and based on that policy provides increased liquidity to the markets or restricts fund flows.
* The banking system is the preferred mechanism for sending the newly created funds into the economy and financial system. Some would argue that in recent years the financial markets themselves have been able to take newly created funds directly from the Federal Reserve and leverage the new money.
* The funds created are then allocated by a pricing mechanism to either the economy or the financial system.
* Those funds that reach the financial system are then allocated among five generic forms of financial instruments: cash, fixed income, equities, commodities, and currencies.
* The money received in the equity markets is then allocated between multiple industry sectors...."

Read more:

http://ftalphaville.ft.c...kers-bove-the-blueprint/
karanjakinuthia
#186 Posted : Sunday, January 31, 2010 7:46:04 AM
Rank: Member


Joined: 11/13/2006
Posts: 551
Location: Nairobi
As per my previous analysis (http://tinyurl.com/ybs5wbp), sugar continues to generate sweet returns for producers and investors. Consequently, there is marked interest in setting up sugar factories in Kenya. It comes as no surprise that the leader in the industry, Mumias Sugar, would enjoy bumper profits.

"High sugar prices and cost cutting measures sweetened Mumias Sugar Co Ltd’s pre-tax profit by 561 per cent in the first six months to December 31, 2009.

The listed miller’s pre-tax profit increased from Sh231 million in the previous financial year to Sh1.5 billion.

A loss and profit statement issued on Friday, indicated that the company returned net revenues of Sh7.7 billion, which is 49 per cent higher than the Sh5.2 billion achieved over the same period last year.

“The world’s sugar prices are at an all time high, ranging at $750 per tonne (about Sh57,000). This has resulted in improved sugar selling prices within the period. Currently, sugarcane prices have been increased from Sh2,850 to Sh3,148 per tonne,” read the statement from Ms Emily Otieno, the company’s secretary...."

Read more:

http://www.nation.co.ke/.../-/hdd83lz/-/index.html

Long-term price chart:

http://www.mrci.com/pdf/sb.pdf
Scubidu
#187 Posted : Monday, February 01, 2010 6:41:42 AM
Rank: Veteran


Joined: 9/4/2009
Posts: 700
Location: Nairobi
Enlightening post (185) on money flows into equity markets as well as the Mumias one.

Wanted you to check out the article in the blog below:

http://www.zerohedge.com...new-bretton-woods-system
“We are the middle children of history man, no purpose or place. We have no great war, no great depression. Our great war is a spiritual war, our great depression is our lives!" – Tyler Durden
karanjakinuthia
#188 Posted : Tuesday, February 02, 2010 5:35:54 AM
Rank: Member


Joined: 11/13/2006
Posts: 551
Location: Nairobi
"Fear the Boom and Bust" a Hayek vs. Keynes Rap Anthem:

http://www.youtube.com/w...feature=player_embedded


karanjakinuthia
#189 Posted : Wednesday, February 03, 2010 6:59:43 AM
Rank: Member


Joined: 11/13/2006
Posts: 551
Location: Nairobi
Dear Friends,

I hope this day finds you and those near and dear in good health and high spirits.

There’s never a dull moment in the markets with several themes playing to our favour. Going into 2015, commodity related investments are providing leadership on an international level. The past decade has already witnessed technology, real estate and debt markets having their day in the sun. Using history as our guide the early 1900 saw the booms in railway stocks (1907), commodities (1919) and industrials led by autos and airlines (1929).

Kenyan sugar miller Mumias Sugar Company is good example of a commodity play that has benefited from a surge in international sugar prices. Its pre-tax profits were up by 561% in the first six months to December 31, 2009.

The yellow metal, gold is at the helm of the commodity bull market.

On the local scene, the Nairobi Stock Exchange bottomed on March 10th, 2009 (along with major global stock markets) at 2361 points. On that day, the Nation Newspaper ran a cover story titled “Four Big Losers in NSE Meltdown”. The index has witnessed a 48% appreciation reinforcing the adage by Warren Buffet “Be fearful when others are greedy. Be greedy when others are fearful.”

The NSE bull market on a cyclical perspective may well run for 11 years topping in 2013 or 14 years to coincide with the topping of the commodity cycle in 2016.

If you require assistance in investing your savings, are part of a group that requires investment advice or would like coaching on the workings of the markets, please inbox me at karanjakinuthia@hotmail.com.

Thank you for listening.

Kind regards,

K.K.

karanjakinuthia
#190 Posted : Thursday, February 04, 2010 6:05:50 AM
Rank: Member


Joined: 11/13/2006
Posts: 551
Location: Nairobi
Raise your mugs and toast the commodity bull market!

"The top price for Kenya's benchmark grade AA coffee edged up to $453 per 50-kg bag from $450 at the previous auction, the Nairobi Coffee Exchange (NCE) said on Wednesday.

AA coffee sold at between $453 and $191 per bag, while the top price for AB grade beans fell to $383 from $400 at the last sale, the NCE said in a market report.

It said 22,540 bags were offered this week and 18,525 were sold. Last week, 21,714 bags were offered and 18,093 sold.

The NCE said the average price for all grades rose 18 percent to $294.08 per bag compared with the previous auction...."

Read more:

http://www.nation.co.ke/.../-/hdbqb7z/-/index.html

Long term chart:

http://www.mrci.com/pdf/kc.pdf
karanjakinuthia
#191 Posted : Thursday, February 04, 2010 6:15:45 AM
Rank: Member


Joined: 11/13/2006
Posts: 551
Location: Nairobi
Lawrence H. Summers, used to ask before he entered government a year ago, “How long can the world’s biggest borrower remain the world’s biggest power?”

http://www.nytimes.com/i...-porcupine-graphic.html

karanjakinuthia
#192 Posted : Friday, February 05, 2010 12:41:36 PM
Rank: Member


Joined: 11/13/2006
Posts: 551
Location: Nairobi
Nothing is more vexing to the sugar farmer that has been languishing in a 28 year bear market than not being part of the bonanza. It is my hope that prices will stay profitable for an extended period to allow them to offset fertilizer and other input costs.

"Farmers supplying sugarcane to government-owned millers could miss out on the high sugar prices in the international market, due to production inefficiencies.

Because they depend on millers for farm inputs among them fertiliser and transport services, industry players said, the final payout is squeezed by these deductions.

But those who supply to private mills have independent arrangements that ensures they enjoy maximum benefits of upward price revisions.

“While such prices are welcome to the farmers and the factories, the farmers may not end up enjoying the full benefits. Once the companies have taken their dues the farmers remain with very little to take home,” said Mr Saulo Busolo, a farmer’s representative at the Kenya Sugar Board...."

Read more:

http://www.nation.co.ke/...0/-/8g2lx1z/-/index.html
karanjakinuthia
#193 Posted : Friday, February 05, 2010 4:20:47 PM
Rank: Member


Joined: 11/13/2006
Posts: 551
Location: Nairobi
A word of caution as regards Forex trading. The year 2008 was the beginning of volatility. Recall the Debacle in Dubai at the tail-end of 2009 that kicked off concerns over sovereign debt. This year has began with an upsurge in volatility due to market players casting a nervous eye on the financial conditions of nation states. Herbert Hoover, during the Currency Crisis of 1931, wrote in his memoirs:

"During this new stage of the depression, the refugee gold and the foreign government reserve deposits were constantly driven by fear hither and yon over the world. We were to see currencies demoralized and go governments embarassed as fear drove the gold from one country to another. In fact, there was a mass of gold and short-term credit which behaved like a loose cannon on the deck of the world in a tempest-tossed era." (hat tip to Martin Armstrong)

What an apt description of present day currency movements. Trade with caution.

"Global markets were trading sharply lower on Thursday following further signs of contagion across the eurozone, as investors sold government bonds of many peripheral eurozone countries, sending yields higher.

Fears of default by companies in the eurozone periphery also rose sharply, indicating that contagion was spreading to the corporate sector..."

Read more:

http://www.theglobeandma...vestors/article1456123/
karanjakinuthia
#194 Posted : Sunday, February 07, 2010 8:13:25 AM
Rank: Member


Joined: 11/13/2006
Posts: 551
Location: Nairobi
Were the American authorities to look across the Atlantic at the afflictions of Iceland, Greece, Portugal, Italy, Ireland and Spain, they would halt this debt madness. They would realise that not only are they mortaging their citizens' future, but also exporting their domestic policies to all international holders of U.S. Dollars.

"The budget should be balanced, the Treasury should be refilled, public debt should be reduced, the arrogance of officialdom should be tempered and controlled, and the assistance to foreign lands should be curtailed lest Rome become bankrupt. People must again learn to work, instead of living on public assistance." - Cicero's address to the Roman Senate in 55BC

One does not treat alcoholism with more vodka. A Debt Crisis is not tempered by more debt.

"WASHINGTON — The US Congress on Thursday sent President Barack Obama legislation allowing the United States to borrow another 1.9 trillion dollars, hiking the national debt ceiling to a historic 14.3 trillion.

An angry election-year debate over soaring government deficits was on full display as the US House of Representatives signed off on the increase in a 217-212 procedural vote before a final ballot on the underlying bill.

All of President Barack Obama's Republican critics and 37 of his Democratic allies opposed the move, which came one week after the similarly divided US Senate approved the increase..."

Read more:

http://www.google.com/ho...er8MS43aXoIYCrbm3ykr6SEg
karanjakinuthia
#195 Posted : Sunday, February 07, 2010 8:51:23 AM
Rank: Member


Joined: 11/13/2006
Posts: 551
Location: Nairobi
Please refer to the quote from Herbert Hoover's memoirs during the Currency Crisis of 1931 posted on Friday. The 2007 - 2009 period was the First Wave that impacted the private sector (stocks, corporate debt, commodities and real estate). 2010 onwards feels like the onset of the Second Wave, a crisis in the public sector (government debt and currencies).

Central bankers lay awake at night, hoping against one condition: CONTAGION.

"THE world's top central bankers began arriving in Australia yesterday as renewed fears about the strength of the global economic recovery gripped world share markets.

Representatives from 24 central banks and monetary authorities including the US Federal Reserve and European Central Bank landed in Sydney to meet tomorrow at a secret location, the Herald Sun reports.

Organised by the Bank for International Settlements last year, the two-day talks are shrouded in secrecy with high-level security believed to have been invoked by law enforcement agencies..."

Read more:

http://www.news.com.au/b...-e6frfm1i-1225827289543

Scubidu
#196 Posted : Sunday, February 07, 2010 3:38:48 PM
Rank: Veteran


Joined: 9/4/2009
Posts: 700
Location: Nairobi
People that have secret meetings with secret agenda's must be up to no good, non?

Interesting part of the article "...The gathering also comes at an important time for the BIS as it initiates an overhaul of the global banking system which will include new capital rules applying to banks and more stringent standards regulating executive pay..."

What role would the BIS have on regulating executive pay? Strange! As for the capital requirements, the one's we know 8% core capital ratio and 12% capital adequacy ratio. Are those the ones they will review? What would changing these mean on the ability to 'create money from thin air'?

Congressman Ron Paul will not give up on sound money and a return to a Gold-based Standard. He's also an advocate of free banking (I believe) and introducing a piece of legislature known as the Free Competition in Currency Act.

Read more:

http://www.jbs.org/infla...-taxes-economy-blog/5919
“We are the middle children of history man, no purpose or place. We have no great war, no great depression. Our great war is a spiritual war, our great depression is our lives!" – Tyler Durden
karanjakinuthia
#197 Posted : Monday, February 08, 2010 4:17:29 PM
Rank: Member


Joined: 11/13/2006
Posts: 551
Location: Nairobi
Cast your eyes Eastward, my friends.

"The level of Chinese investment in the African mining industry is nothing compared to China's involvement in the years to come, The Beijing Axis founder and group managing director Kobus van der Warth said on Tuesday.

Speaking at the Mining Indaba, Van der Warth said the sector could expect more China-Africa deals in the next 24 months.

There are concerted efforts by China, which is now poised to become the world's second-biggest economy, to invest abroad and the bulk of those investments are in the resources and infrastructure sectors.

"The Chinese are bold and they have the capacity and balance sheets to support that," said Van der Warth.... "

Read more:

http://www.busrep.co.za/...&fArticleId=5336208

karanjakinuthia
#198 Posted : Tuesday, February 09, 2010 5:47:34 AM
Rank: Member


Joined: 11/13/2006
Posts: 551
Location: Nairobi
Over the weekend, two high level meetings were held. One in the southern tip of the globe while the other, at the northern edge. The secret meeting of the world's central bankers in Australia and the G7 meeting in Iqaluit, Nunavut were as a result of the market jitters over Anglo-Saxon government debt structures that are spilling into currencies and the debt markets.

A short position is one that intends to profit from the fall or descent of a tradeable asset. Hedge funds, smelling blood in the waters of Europe have placed huge bets on the decline of the Euro. In addition, they have placed the silmilar bets on the decline of the debts of Portugal, Greece, Spain and Italy.

The Dollar's strength is largely due to weakness of the Euro as capital seeks a safe haven. Trade with caution.

" Traders and hedge funds have bet nearly $8bn against the euro, amassing the biggest short position in the single currency since its launch on fears of a eurozone debt crisis.

Investors increased their bets against the euro to record levels in the week to February 2, according to the latest figures from the Chicago Mercantile Exchange, which are often used as a proxy of hedge fund activity.

The build-up in net short positions represents more than 40,000 contracts traded against the single currency, equivalent to bets worth $7.6bn. It suggests that investors are losing confidence in the euro's ability to withstand any contagion from Greece's fiscal problems to other European countries..."

Read more:

http://business.theatlan...he_euros_going_down.php

karanjakinuthia
#199 Posted : Wednesday, February 10, 2010 4:29:27 AM
Rank: Member


Joined: 11/13/2006
Posts: 551
Location: Nairobi
Lifetime Economic, Financial and Investment Map

http://1.bp.blogspot.com...600-h/The+Long+Wave.jpg

karanjakinuthia
#200 Posted : Wednesday, February 10, 2010 4:36:41 PM
Rank: Member


Joined: 11/13/2006
Posts: 551
Location: Nairobi
Diversification out of the U.S. Dollar continues in earnest, taking advantage of the currency's recent upsurge due to debt jitters in Europe. Please review the video that follow the article.

"China Investment Corp., the Asian economic superpower's hulking $200-billion (U.S.) sovereign wealth fund, has been quietly accumulating stakes in resource firms including Canada's Kinross Gold Corp. (K-T18.800.935.20%) and Potash Corp. of Saskatchewan, (POT-T113.103.763.44%) according to a filing with securities regulators.

CIC, whose chairman is former Communist Party of China insider Lou Jiwei, has spent billions of dollars on mining and energy related investments, the filing with the U.S. Securities and Exchange Commission reveals. China is the world's largest commodity buyer and part of the fund's mandate is to invest directly in materials producers to offset China's costs...."

Read more:

http://www.theglobeandma...mpanies/article1460614/


Chinese govt advise gold buying - why? What is their plan?:

http://www.youtube.com/w...feature=player_embedded

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