+ 6.23 % Also In April! Seventh Good Consecutive Month For Our Galaxy Portfolio Systems!

 

Nella sottostante tabella sono raffigurate le equity line mensili dei trading systems che compongono il nostro portfolio systems Galaxy ed il riassunto MTM dell’operatività dal Novembre 2009. Galaxy chiude con un ottimo risultato anche il mese di Aprile, dopo un equivalente risultato nel mese di Gennaio e Febbraio, portando a 29.59 % la performance del 2011. Quello appena chiuso è il settimo risultato utile consecutivo a livello mensile dopo la breve pausa alla fine dell’estate dello scorso anno. L’equity continua a svilupparsi in maniera armonica mantenendo un’inclinazione positiva e costante grazie all’elevata diversificazione all’interno del portfolio. I risultati storici di Galaxy Portfolio System sono disponibili ai seguenti link: http://www.box.net/shared/static/nz7u0ztnbp.xls, http://box.net/shared/b9cg6kfa6s. I risultati dei singoli trading systems sono a disposizione al seguente link: http://www.box.net/shared/5vajnzc4cp.

Richiedi la demo gratuita di 30 giorni di Galaxy Combined Portfolio Systems 

In the table below you can see the monthly equity line of the trading systems that make our Galaxy portfolio systems and the MTM performance summary since November 2009. Galaxy ends with a good result also the month of April, after a similar result in the month of January and February, bringing the performance to 29.59 % in 2011. One just closed is the seventh consecutive positive months after the brief pause at the end of the summer last year. The equity continues to grow in harmony while maintaining an upward slope and steady thanks to high diversification within the portfolio. Historical results of Galaxy Combined Portfolio System are available at the following links: http://www.box.net/shared/static/nz7u0ztnbp.xls, http://box.net/shared/b9cg6kfa6s. Historical results of single trading systems are available at the following link: http://www.box.net/shared/5vajnzc4cp.

Request a free demo of 30 days of Galaxy Combined Porolio Systems

 

Equity Line Trades, Giornaliera e Mensile di Galaxy / Trades, Daily and Monthly Galaxy Equity Line                                 Free Demo Available

Performance MTM Mensile di Galaxy Portfolio System con un capitale iniziale di $ 200.000
Monthly MTM Performance of Galaxy Combined Portfolio System with $ 200K initial capital

	Jan	Feb	Mar	Apr	May	Jun	Jul	Aug	Sep	Oct	Nov	Dec
2009											1.19 %	2.90 %
2010	(4.28 %)	24.49 %	2.99 %	1.76 %	15.62 %	4.35 %	10.60 %	(0.41 %)	(4.73 %)	1.75 %	12.80 %	1.50 %
2011	7.54 %	7.75 %	8.06 %	6.23 %

 

 

Your diversification strategy is working correctly?

The diversification is a management technique that mixes a wide variety of investments within a portfolio. The main benefit of adding managed futures to a balanced portfolio is the potential to decrease portfolio volatility. Risk reduction is possible because managed futures can trade across a wide range of global markets that have virtually no long-term correlation to most traditional asset classes. Moreover, managed futures funds generally perform well during adverse economic or market conditions for stocks and bonds, thereby providing excellent downside protection in most portfolios.

The diversification between assets

The diversification between assets that have low correlation between them improves the overall performance of our investments for the same risk, thus reducing our exposure to risk decreases as the so-called "specified risk" linked to a single class of financial products. Basically, if you only held the shares, the result of your trading / investment is overly tied to the fortunes of a particular financial instrument for which you are running too high a risk. A well-diversified portfolio asset class is one of the major components that create the optimal portfolio. Read "The Art Of Asset Allocation" and "Top 10 Rules Of Portfolio Diversification".

The diversification within an asset

Concentrating investments in individual products or securities, you are exposed to a type of risk that can not be controlled, and the risk becomes uncertainty, which is something that is incalculable. is possible, even in this case, reduce the specific risks by trading or investing, for example, not a single product but a basket of products that represents a very large share of the market. Read "The Art Of Asset Allocation" and "Top 10 Rules Of Portfolio Diversification".

The diversification of trading methods

It combines the use of different methods of trading not correlated to improve the relationship between profit and maximum loss. The low correlation between different methods tends to reduce overall losses due to the combined performance of two or more trading systems. It is therefore one of the most effective ways to improve the performance of our investments while reducing risk. Read "The Art Of Asset Allocation" and "Top 10 Rules Of Portfolio Diversification".

The diversification of the trading system parameters

Is to use, within the same trading system, of different sets of parameters. Assuming that a trading account manage an adequate capital for diversification, it is better to diversify sets of parameters rather than making multiple contracts with the same set of parameters. The diversification of the set of parameters helps to minimize risk and strengthen our ability to remain disciplined and consistent psychological application of the trading system. Read "The Art Of Asset Allocation" and "Top 10 Rules Of Portfolio Diversification"

TOGETHER TO WIN: GALAXY PORTFOLIO SYSTEMS

Our goal is to generates significant medium term capital growth independent of stock and bond markets with simple and strict risk trading rules with maximum possible diversification. All our Portfolio Systems are designed assembled and managed with this philosophy. Due to the high diversification that characterizes them, our Portfolio Systems enhance the positive synergies of individual Trading Systems which are composed and dramatically reduce the overall risk. Diversification remains the cornerstone of modern portfolio theory.  Yet, during the financial crisis many "diversifying” investments readily followed the direction of the equity markets as they collapsed in 2008 and 2009. By contrast, our Portfolio Systems have just obtained their best resultsin 2008 thanks to the volatility of the period, the high diversification and the construction model that makes them independent of market equity and bond.

 

Material in this post does not constitute investment advice or a recommendation and do not constitute solicitation to public savings. Operate with any financial instrument is safe, even higher if working on derivatives. Be sure to operate only with capital that you can lose. Past performance of the methods described on this blog do not constitute any guarantee for future earnings. The reader should be held responsible for the risks of their investments and for making use of the information contained in the pages of this blog. Trading Weeks should not be considered in any way responsible for any financial losses suffered by the user of the information contained on this blog.

Bank of America quarterly earnings drop

by Reuters

NEW YORK (Reuters) – Bank of America Corp posted a 37.5 percent drop in first quarter earnings, hurt by mortgage-related costs.

The bank also said its chief risk officer, Bruce Thompson, would take on the additional role of chief financial officer at the end of the second quarter. Chuck Noski, the current CFO, will become vice chairman of Bank of America.

COMMENTARY

HEINO RULAND, ANALYST AT RULAND RESEARCH, FRANKFURT

"The figures are clearly disappointing and missed the market expectations. It is clear that a number of factors played a role and influenced the different earnings levels. Pressure on the mortgage business had a significant impact for example. This in itself, however, doesn't really come as a huge surprise to me, but the market seems to have been more optimistic and may be disappointed."

STEFAN DE SCHUTTER, TRADER AT ALPHA TRADING, FRANKFURT

"The EPS is worse than expected and this is really surprising considering the satisfying JP Morgan figures earlier this week. These figures could weigh on the market but many investors may still be waiting to see how others like Goldman and Morgan Stanley do before taking direction and making a solid judgment on the sector. I don't think that this is one of the most indicative groups in the sector."

DAVID MORRISON, MARKET STRATEGIST AT GFT GLOBAL MARKETS, LONDON

"The first thing is of course the earnings per share which is a big miss. I think the reason seems to be Bank of America is struggling with the mortgage mess and cleaning up what is going on there. This is an ongoing situation. We are seeing investors are marking its shares down ... If we are really seeing a slowdown in the U.S. economy, which we certainly seem to be with GDP estimates getting revised down and rising input costs across the board going to affect corporations and consumers already been hit, we might see a dip down in consumer demand. Going forward, I think Bank of America is going to struggle and it can't rely on consumer going forward. It has got a lot to unscramble with the mortgage mess and foreclosures."

OLIVER PURSCHE, PRESIDENT AT GARY GOLDBERG FINANCIAL SERVICES IN SUFFERN, NEW YORK

"When you looked at JPMorgan on Wednesday, as you read between the lines of where they get revenue, you saw some areas of concern and some warnings from them. Now we're seeing a similar breakdown in Bank of America, which reaffirms our position that financials will continue to be under some pressures. Though they're sitting on a lot of cash, they're not earning a lot on that cash. There's still not an overwhelming willingness to lend, so they're handicapping their own revenue streams. We don't see a change in that this year.

"The Street knows Bank of America has troubles; there were never all that high of expectations. Obviously it isn't a positive that it missed expectations, but it isn't 'holy moly this is a huge shock."

MALCOLM POLLEY, CHIEF INVESTMENT OFFICER AT FRONT BARNETT ASSOCIATES

"In the banking world, the chief risk officer or compliance person has been elevated in importance and is really taking on a much larger role in many banking organizations.

"A lot of this really has to do with Dodd-Frank.

"To the extent that banks have had financial issues, whether they should have been caught by financial audits or caused sharp declines in earnings, the chief risk officer has taken on a much greater role within many organizations.

"Boards of directors, whether it has been inferred or put into writing, have seen their personal liability increase dramatically -- to the extent that most financial institution boards put a higher degree of importance on the chief risk officer rather than the chief financial officer."

GARY TOWNSEND, CEO OF HILL-TOWNSEND CAPITAL 

"The explanation from the company is that the CFO could not move from the west coast for personal reasons. It seems plausible. 

"Any time there is an unexpected change in the CFO whether at Wells Fargo or Bank of America, it will generate talk in terms of why. This seems somewhat more straightforward than Atkins' departure." 

On earnings: "The principal weight on the quarter continues to be mortgages."

See the original article >>

Goldman Sachs cuts rating on commodities - again

by Agrimoney.com

Goldman Sachs has cut further its rating on commodities, warning of a "growing conviction" of price declines as over-valued oil falls back to earth, and high prices prompt buyers to run with thinner inventories.

The bank, whose recommendation earlier in the week for profit-taking in commodities was blamed for a sector sell-off, took a step further into bearish territory, urging investors to go "underweight" on raw materials.

The advice reflected "mounting downside risks" to oil prices which should, for New York crude return below $100 a barrel by mid-summer, depressed by a better outlook for Middle East and North African unrest and "nascent signs of demand destruction" in the US.

Commodity price prospects had been further weakened by "tighter inventory management", evident in Chinese consumers running down stocks rather than buy fresh raw material supplies, and "the negative shock to supply chains resulting from the earthquake in Japan".

Agricultural exception

However, while cutting its forecast return from commodities for the next 12 months, Goldman said that many of these factors would prove temporary, and maintained an "overweight" rating for commodities on a 12-month timescale.

And the bank excluded agricultural commodities even from its short-term recommendation for a modest short, saying it was the "only sector where we see near-term upside", reflecting weak inventory levels.

Indeed, Goldman joined the ranks of analysts doubting the US Department of Agriculture's decision a week ago to stick by inventory forecasts for the end of 2010-11, despite evidence of weaker-than-expected stocks as of March 1.

"While the USDA continues to report stabilisation in old-crop inventories at low levels, strong near-term demand, especially for corn from exports, feed and ethanol, points to further declines in inventories," the bank said.

"Tightness" in inventories of 2010-11 crops was "still looming".

'Sustained elevated prices'

And prospects for a rebuild of stocks in 2011-12 were limited, given a forecast for "continued strong feed and fuel demand".

Indeed, crop markets looked set for "sustained elevated prices", the bank said, seeing the "risk to prices as skewed to the upside".

This was true "especially for corn and cotton, as any supply disappointment will require sharply higher prices to achieve sustainable demand destruction in the face of already tight inventories".

However, the bank also acknowledged risks to a forecast for "rangebound" wheat futures, over which it has been more cautious on price prospects.

"We see upside risks to wheat prices and our forecast over the medium term on 2011-12 production risks and potentially higher feed demand," the bank said.

See the original article >>

So Long $2, $4 … $6 Corn

by John Pocock

I first started reporting on agriculture in the late 1980s when corn prices varied little from the $2/bu. range. In addition to writing about agriculture, I also did a fair amount of farm photography. Often, I’d frame up a potential photograph of a corn grower beside his equipment, and decide not take the picture, because the farmer looked far too serious or uncomfortable.

Whenever that happened, I’d typically say something like, “okay, now think $4 corn” – and then take the picture. When doing so, I’d at least get a little upturn in the lips, as the farmer sometimes took on a somewhat dreamy look, which made for a much more appealing, interesting photo.

Nowadays, I wonder what number I’d have to throw out to get a farmer to react positively for a portrait picture. It wouldn’t be $4 or $6 or even $8 corn. Those are either old-market numbers or a soon-to-be-achieved number. (See “Is $8 Corn The Near-term Norm?”)

No, I doubt if even a $10 or $12 number would give me the desired effect for a good, farm-portrait picture. What many corn growers have learned in recent years is that a higher price doesn’t guarantee a profit, although this year might be a welcome exception.

Another sharp spike in oil prices, bad luck with weather, continuing land-price surges, increased insect and disease pressure, a change in tax laws and government safety nets, extreme environmental regulations or any number of things, both likely and unlikely, could cause even $8, $10 or $12 corn to be unprofitable. Yet, some things remain positive: the world’s population keeps increasing and demand for corn keeps rising, both for food and fuel. Plus, there aren’t that many good places in the world for growing corn that aren’t already being used.

Still, as the price for corn increases, so does the call to decrease government safety nets for farmers that have long helped keep “food security” a top priority, both for the U.S. and the world. Famine is a common problem in areas where government unrest and high fuel prices keep plentiful food from reaching hungry people. Stop providing incentives for U.S. farmers to produce a lot of food, or make it economically turbulent or difficult to do so profitably, and there would be much more famine in the world, and not just in third-world countries.

Currently, government subsidies and tax breaks for corn ethanol appear to be endangered when considering the most recent U.S. budget-cutting debates. The critics on one side support ethanol, but not ethanol from corn production, which they incorrectly think unduly degrades the environment. Instead, those critics support ethanol production from other organic matter sources that have yet to prove practical or profitable. Other critics simply want to scrap corn ethanol investments entirely to focus on drilling for oil and other fossil fuels in a way that would establish what might be called national “fuel security.”

Instead, I say let’s have both food and fuel security. Let’s ease restrictions and obstacles to U.S. fossil fuel exploration and production, and any other potential energy source, and support this country’s corn producers as they willingly take on the difficult task to feed the world and provide at least a partial safety valve in sustaining national fuel security via corn ethanol.

Just think “long-term, profitable corn.” Picture that.

Click.

Whether you agree or disagree about the need to maintain or enhance government policies to ensure corn grower efforts to feed and fuel the world are successful, I’d be happy to consider your opinion. When writing, please let me know your name, where you farm or work, what your comment is and whether or not I have permission to use your comment in a future Corn E-Digest newsletter.

See the original article >>

Greece Default Risk Trades to New High; Still No Big Concern About the US

by Bespoke Investment Group

As shown in the first chart below, 5-year credit default swaps for Greece sovereign debt just broke to a new high this week.

This breakout has put default risk for Greece higher than that of Venezuela, which had been the most risky country of the ones we track for some time.

While talk of default here in the US has been escalated recently due to the childish back and forth in Congress about raising the debt limit, US CDS prices remain at low levels.

See the original article >>

Can U.S. Dollar Weakness Mean Stock Market Weakness?

By: Jason_Kaspar

Are there any dollar bulls left? Inflationists across the web are crying ‘victory’ as the dollar sinks and certain asset prices (especially oil prices, food prices, and the gold price) mushroom higher. To the level headed, you should exercise extreme caution against assumed fixed correlations like “weak dollar” means “asset price increases.” Correlations can quickly change.

 A mentor of mine consistently preaches that the market will always do whatever it can to make the most investors look foolish. Contrary to conventional wisdom, there is a case that investors should at least consider: that an accelerating decline in the dollar could turn asset prices negative, at least in the short term. 

The 1987 crash is an appropriate case study. The cause of that October market crash, when the S&P 500 lost 20.5% in a single day, has never been thoroughly explained. No major event could be credited as the catalyst for such a monstrous and rapid decline.

Portfolio insurance, rapidly rising long term US interest rates, a series of preceding market declines during the week leading up to the crash, and a weakening US dollar are all mentioned as possible triggers. In truth, it was likely a confluence of these and other factors that ultimately pushed the market to a tipping point. 

One macro factor stands out among the rest: the rapidly weakening US dollar leading up to Black Monday.

Beginning in late July of 1987, the dollar, after already falling to a seven year low just a few months prior, began a steep decline. A much wider trade deficit than expected was thought to have accelerated the dollar’s descent.

US Dollar: 1987

Over the long term, all things being equal, it is logically sound to conclude that a weakening dollar must cause assets priced in dollars to rise. However, in the short term, markets are not always logical and can anticipate the next move by world bankers. In 1987, the U.S. dollar lost 10% in roughly three months. 

During the same time span, the equity markets lost close to 30%. Such a move contradicts today’s accepted wisdom.

Though the Federal Reserve has approached its dollar policy with the same restraint as Charlie Sheen at Happy Hour, we should avoid approaching every scenario with broad generalizations, regardless of one’s long term view on the dollar. In the financial markets, nothing goes in a straight line, and correlations tend to break down if certain asset classes move too violently.

US Dollar: Last Twelve Months

While the last twelve months have been unfavorable for the dollar, and while assets have benefited from the Federal Reserve’s currency abuse, correlations do seem to be diverging. Over the past year, the dollar is down roughly 8% and the S&P is up about 9%. But the market has begun reacting more coolly towards a weakening dollar as oil prices have accelerated higher. In fact, in the past two months, the dollar is down 4.25%, and the S&P 500 is down 1%. In the last two weeks, the dollar is down 1.45% and the S&P 500 is down about 1.1%. These moves are in stark contrast to the performance of the past year, so the trend is clearly weakening.

I might worry that if the dollar begins a sharp move downward, the Fed may be forced to approach dollar policy with greater restraint, which could instigate a strong market reaction.

I am fairly agnostic on the dollar’s next move, and I am unsure how that next move will correlate with asset prices. Furthermore, I do not intend to predict an imminent market crash. I simply revisit this history lesson to emphasize a few broader points:

1. Long term correlations do not necessarily equate to the same correlation in the short term.
2. In the short term, crashing asset prices can - and often have - occurred alongside a crashing currency. (This occurred in Europe last year.)
3. Investor sentiment against the dollar is heavily skewed, which should make market observers nervous.
4. The Fed may desire a weaker currency, but it is in their best interest to keep the decline orderly. If a dollar decline were to become chaotic, it would force a Fed reaction that could be unfriendly to the market.

Extreme dollar bears (and asset bulls) should be cautious. The markets do not move in straight lines, and the only certainty in volatile markets is uncertainty. A handy life jacket is worthwhile if the boat flips.

See the original article >>

Biofuel Pushes Millions of People Into Poverty

By: Pravda

The growing production of bioethanol increases the shortage of food. Corn, sugar, other types of farm crops are required for the production of the biofuel. In addition, the growth of sowing for the green fuel reduces the square of lands designated for food cultures, which leads to smaller harvest and higher prices on food.

FAO's food prices index gained 2.2 percent in February, which marked the highest point since the analysis of the prices in 1990. The index embraces the fluctuations of prices on 55 sorts of food products.

FAO's crops prices index in March (includes wheat, rice and corn) increased by 3.7 percent. The prices on corn doubled last year, whereas wheat gained 65 percent.

The index of prices on vegetable oil and fats increased insignificantly. It is currently staying at the level of a bit lower than the peak point of June 2008. The index of prices on meat in February increased by two percent. The index of prices on sugar went 16 percent higher than it was a year ago.

A report from the World Bank confirmed that prices on food products continued to grow. WB's index of food prices increased by 15 percent from October 2010 to January 2011.

According to experts' estimates, the number of undernourished people in the world will exceed the level of one billion people already in near future. According to the UN, there were not more than 925 million of such people last year. The growing prices on food push people towards poverty and puts pressure on most vulnerable layers of the population - those who spend over 50 percent of their income on food. As a result, when prices increased by 15 percent from October to January, as many as 44 million more people found themselves below the poverty line, WB specialists said.

FAO's index dropped for the first time in eight months in March - by 2.9 percent. The growing prices on food and fuel push farmers and other agricultural productions towards growing most lucrative "fuel" cultures, which can only add more fuel to the fire.

Neither Europe, nor the USA intend to revise their standards which stipulate the constant increase of the share of natural fuel in their consumption. In the USA, the use of biofuel by 2022 is expected to reach 36 billion gallons a year (more than 160 billion liters). In the EU, ten percent of car fuel is to be produced from plants by 2020. China, India, Indonesia, Thailand and other countries already have their biofuel programs, The New York Times said.

China banned the growth of crops for the production of fuel ten years ago after the country faced a strong increase of prices on corn. The sudden growth of quotations on corn at Chicago Mercantile Exchange occurred due to the development of the bioethanol production in the USA. The latter uses up to 40 percent of its croppage for this purpose.

Nowadays, the Chinese produce ethanol from manioc root crop, which they also import from other countries. The prices on manioc started to grow, and the programs connected with the production of biological fuel in neighboring Asian states began to decline. Manioc is also used as cattle forage, which creates certain problems for the cattle breeding industry. Thus, the production of bioethanol from manioc results in more expensive food products for people.

See the original article >>

The West Dreams About Russia's Collapse

By: Pravda

Why does Finland almost openly support the extremist forces opposed to Russia? This question arises increasingly more often following the latest news from Finland. Last week a criminal case was filed for inciting ethnic hatred against Finnish priest Juha Molari who dared to criticize the website "Kavkaz-Center".

In response, the priest talked about the need to close "Kavkaz-Center" for the Finnish users on the grounds that this publication promotes racism and other forms of extremism. In addition, he called for disclosing the names of those involved in the functioning of the Internet resource, because it is the secrecy that allows its legal status in Finland.

What did the Finnish authorities not like? They were outraged by the fact that he dared to call "Kavkaz-Center" a "mouthpiece of terrorists." The Lutheran Church got involved as well and banned the pastor from conducting service.

Earlier news agencies spread the words of Molari that, in fact, the Finnish government made "Kavkaz-Center" nearly a sacred cow. According to him, it has the real support of the Finnish authorities and it is prohibited to publicly speak out against its activities.

Earlier, Russian Foreign Ministry repeatedly made statements about inadmissibility of "Kavkaz-Center" because it "openly incites violence, inter-ethnic and sectarian strife."

What is going on in Finland? Why does Helsinki so clearly demonstrate the support of the resources supporting separatism in Russia? Johan Backman, Chair of Anti-Fascist Committee of Finland, shared his thoughts in an interview with Pravda.ru:

"A large part of the Finnish political elite openly advocates Russophobia. Take, for example, MEPs from Finland Heidi Hautala who is professionally engaged in Russophobic policy. She is precisely the person who protects the activities of "Kavkaz-Center" and other anti-Russian organizations like Finnish-Russian Civic Forum, lobbying their interests in the European Parliament.

She is in a very comfortable position to do this. She is the chairman of the European Parliament's subcommittee on human rights and uses this platform to defend extremist and terrorist structures.

Hautala is not an isolated example of a politician who does not hide her Russophobia. In fact, she only reflects the tip of the Russophobic iceberg hidden under the guise of the European Parliament. She and her allies in this structure do not hide the fact that they recruit members of Parliament to its ranks.

I personally observed the change in the position of those elected representatives who initially did not have anti-Russian attitude. Yet, after staying with the European Parliament and being exposed to certain brainwashing they surprisingly turned into Russophobes. Nearly all former members of the European Parliament, at least from Finland, are Russophobes. The center of this terrorist activity is in Helsinki."

"Who is behind the activities of "Kavkaz-Center"?

"Of course, the Finnish and other politicians from the countries like Estonia, Latvia, Lithuania and Poland that are trying to use the separatists and terrorists in their own interests. The first name I should call is the name of the financial founder of the "Kavkaz-Center" Mykolas Storsjo. This is the person whose name was recently associated with the illegal immigration into the territory of Finland of at least 100 people from Turkey and Chechnya. In fact, he is the one of the main financiers of Doku Umarov, the leader of the terrorists operating in the North Caucasus. Storsjo with the assistance of mouthpieces like "Kavkaz-Center" openly promotes hatred towards Russia and its leadership."

"It is worth mentioning that some of the Finnish personas simultaneously feed the Belarusian opposition."

"Absolutely, in fact, these are all the links of one chain. The purpose of all this is maximum resistance to rapprochement between Belarus and Russia. What's interesting is that these representatives provide information support to terrorists. To come to this conclusion it is sufficient to follow their response to the terrorist attacks in Domodedovo and Minsk. First, each time after similar explosions corresponding reaction appeared with a speed of lightning. Therefore we cannot rule out their involvement in such terrorist attacks.

If, however, we carefully examine the ideology of these mouthpieces of separatists, then we can conclude that their main focus is Islamism, coming just from many representatives of those communities that have entrenched themselves in Finland.

"Did these politicians fear that one day the Islamists would strike against those who sheltered them? After all, the ideology of Islamism is essentially aimed at establishment of Sharia across the globe."

"This is very true. I do not rule out that at one point those who incite the information war against Russia will themselves become targets for attack by Islamists.

The majority of the Finns do not have Russophobic attitudes. Judging by the reaction of the former Finnish security police, the attitude of its employees strongly differs from the views of the elite. However, the State Security Service of Finland is virtually paralyzed by the actions of the authorities, trying to make it dance to their tune.

The evidence of this is the endless mess in the management of the Security Police. Its directors are being fired and pursued not by accident. This happens because they do not support the current interests of politicians, aware of the dangers of attracting Islamists to Finland who will sooner or later come out against most of the Finnish democracy."

"How can journalists of democratic Finland tolerate the presence of the Islamists? Do they not denounce their activities?"

"In fact, they are fed by the Finnish authorities. There is excellent communication between them, and many media outlets in Finland just follow the orders of the official Helsinki. Judge for yourself: as soon as I or other members of the Anti-Fascist Committee express indignation about another manifestation of Russophobic Finnish authorities or their mouthpieces, like the "Kavkaz-Center, a deliberate harassment starts.

They call us all kinds of different names. They call us "Racists" for fomenting ethnic strife, hirelings of Moscow. The authorities are doing everything to shut my mouth. For example, they ban me from conducting the planned lectures at the University of Helsinki. In turn, they are actively promoting the fact that all Russians are racists, and all the Chechens in Russia are victims of genocide. Russian journalists who try to resist these attacks are called the hirelings of the FSB. As the information source they use the statements of "Kavkaz-Center". This is what democracy looks like.

"What is the situation with the activity of organizations similar to "Kavkaz-Center" in other countries?"

"The same attitude of the authorities is often observed in relation to the diaspora of immigrants from the North Caucasus located in other European countries, particularly Norway. This diaspora is extremely politicized and aggressive. And if I or someone else try to speak out in defense of Russia and to condemn the activities of entities like "Kavkaz-Center", we are threatened with murder. And they influence the decisions of the authorities of such countries. For example, the Estonian authorities are constantly trying to compromise my communication with students of Tartu University.

"What is the ultimate goal of all these personas like Storsjo and Hautala"

"At least to weaken Russia, but in reality the plans of those who are associated with structures such as "Kavkaz-Center" go much further. Their dream is the collapse of the Russian Federation. They almost do not hide that they want to ensure that Russia has the fate of the Soviet Union. Of course, they are trying to present it ideologically correctly, but behind all this is the desire to get additional living space and the enormous raw material resources available to Russia.

"For many inexperienced people this version looks unrealistic. How can anti-Russian forces achieve this?"

"The election in Russia is pretty close, and now Russophobe forces want to make the most of it in their interests. They are trying, by supporting the opposition and the destructive forces, to topple the Russian government. Their plans include organizing a "color revolution". Such leaders openly support the opposition of the current Russian government, meeting with politicians like Nemtsov, they also support the activities of Limonov's group. These people regularly visit Finland where they receive a blessing for their actions. And if the "color revolution" fails, then they are ready to blow up a civil war. This is not confined only to the separatist and oppositional organizations. To support the destructive forces, in fact, there are plans to attack Russia."

"Why is Finland lately can often be seen in Russophobic forefront?"

"For those who are engaged in subversive activities against Russia, this country is of strategic importance. There was a reason why Hitler intensely courted the Finnish leadership in his time for opposing the Soviet Union, since it represents a good springboard for attacks, at the very least its airfield network.

"Are you saying that Finnish politicians are not an independent force?"

"Exactly. A number of Finnish politicians exploiting the structures like "Kavkaz-Center" for the most part are not independent and are being used. Such Russophobe personas exist almost in all Western countries, but in fact they are all controlled from the United States and in many respects act on the order of people like Brzezinski.

See the original article >>

Gold, Silver and Stocks in a Financial Panic

By: Jesse

Gold is resilient, bouncing off its tentative right shoulder support. Silver is just awesome, taking no prisoners.

The commodity commentary on the Bloomberg network was particularly ridiculous today. They drew a parallel between the commodity rise into 2008 and the subsequent sharp decline with the rise into 2011, suggesting that there will be a similar decline, without ever mentioning the cause, using ominous sounding words and innuendo. 

Uh, as I recall there was a stock market crash in 2008 that pulled down everything including commodities. Funny, they keep forgetting to mention that while predicting a waterfall decline in commodities, and endlessly touting equities.

I will repeat as I have done so over and over, that if there is a general liquidation of all financial assets, gold and silver will take a hit as well, along with most other commodities. Silver will decrease further because it has a high beta or variability. Since the miners have a correlation to stocks they will take a hit depending on their beta.

This will most likely represent a buying opportunity if you have the right time horizon and capitalization, and of course depending on your economic outlook, because gold and silver tend to recover more quickly than stocks if there is an economic recovery.

Why? Because money supply and credit expansion lead productive GDP growth, and in some cases as we have now to a much greater degree than normal because the transmission mechanism between credit and the real economy is broken, with a heavy tax being placed on the inflow of new money by the outsized financial sector. 

This is how it also happened in the Crash of 1929 and the decline of US equities and valuations into the trough in 1933. And it will most likely happen like this again even when there is an eventual recovery with legitimate and substantial reform. I expect that reform to also include a significant restructuring of US debt, the international money reserves and arrangements, and of course the US dollar. 

*Could* something else happen? Yes, and in that case I would do something else. That is what is called decision making based on data, not speculating on nonsensical quackery and theories, ignoring the actual data provided by the markets and the economy until you run out of money to play the game.

If there is a waterfall decline in stocks, which is a possibility, I would expect to have my trading account weighted to the short side by the time it gets underway, and make a significant sum of money as I have done the last two times this happened in the past ten years. I would expect not to touch any of my long term gold and silver holdings and take the charges of turning over long term assets such as bullion. I will not touch them until something fundamentally changes in the makeup of the dollar based money system.

Trying to get positioned well ahead of improbable events is generally pretty dumb, the hallmark of an amateur, but especially if you are doing so using financial instruments like triple ETFs with lots of valuation slippage, and take them as long term positions, thereby almost guaranteeing a loss even if you are eventually right.

Yes anything can happen, but as Walter Bagehot so appropriately observed, 'Life is a school of probability.'

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China's inflation rises again; growth still high

By JOE McDONALD

China's inflation jumped to a 32-month high in March and the world's second-largest economy grew rapidly despite official efforts to cool politically sensitive prices, fueling expectations of more interest rate hikes and other controls.

Consumer prices rose 5.4 percent over a year ago, driven by 11.7 percent surge in food costs, data showed Friday. That was up from February's 4.9 percent and a setback for communist leaders who say taming inflation is their priority this year and have raised interest rates four times since October.

"They will have to step up their fight against inflation," said Credit Agricole CIB senior economist Dariusz Kowalczyk.

Inflation, driven in part by Beijing's massive stimulus to ward off the 2008 global crisis, is a political threat to the Communist Party because it erodes the public's gains from economic growth, possibly triggering unrest. Food prices are especially volatile in a society where poor families spend up to half their incomes on food.

Adding to price pressures, the economy grew by 9.7 percent in the first three months of the year, according to the National Bureau of Statistics. That was almost even with the previous quarter's 9.8 percent and defied government efforts to steer China's expansion to a sustainable pace after last year's double-digit growth.

"The government cannot seem to slow the economy down," said IHS Global Insight analyst Alistair Thornton in a report.

China's challenge is a sharp contrast with problems facing the United States and other major economies. While they struggle with lackluster growth and deflation, Beijing is trying to keep growth and prices from spiraling out of control.

China rebounded quickly from the global crisis on the strength of a $586 billion stimulus and a flood of lending by state banks. But that sparked demand that has outstripped supplies of food and other goods. The lending boom pushed up real estate and stock prices, prompting fears of an asset bubble.

Analysts expect at least one more rate hike in coming months and for Beijing to allow a faster rise in China's yuan against the dollar. That would make oil and other imports cheaper in Chinese currency terms. Still, many analysts expect inflation to rise further through at least midyear before easing.

More drastic measures to cool growth and prices could have global repercussions if they cut into demand for iron ore from Australia and Brazil, factory machinery from the United States and Europe and other foreign goods.

March inflation was the highest since July 2008, when prices rose 7.1 percent.

China's top economic official, Premier Wen Jiabao, called Thursday for more efforts to cool inflation. The comments were unusually pointed for such a senior official and reflected mounting official urgency about controlling living costs.

Wen cited surging housing costs despite government controls and rising public expectations of higher inflation, the official Xinhua News Agency reported. Such expectations can propel to higher wage demands and retail price increases.

"We need to skillfully handle the relationship between promoting economic growth and curbing inflation," Wen said at a Cabinet meeting, according to Xinhua.

The sharp jump in food costs came at a time when prices usually fall as spring harvests start to come in, indicating inflation pressures are unusually strong.

"We are seeing continued very strong growth momentum," Kowalczyk said. "The government has not succeeded in containing inflation, despite increases in interest rates. So they will have to do more."

Also in the first quarter, retail sales rose 16.3 percent over a year ago.

Spending on factories, real estate and other fixed assets rose 25 percent in March despite government investment curbs.

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Fed Officials Present Diverging Views on Inflation

By Luca Di Leo

U.S. Federal Reserve officials Thursday gave different views on what should be done about surging commodity prices, underscoring a deepening divide about inflation at the Fed and among major central banks.

Fed Board governors Daniel Tarullo and Elizabeth Duke, two regulatory experts who seldom talk about the economy and monetary policy, went out of their way to talk down inflation worries caused by the higher prices for oil, grains and metals.

By contrast, citing a “remarkable turn of events” where commodity prices have surged, Philadelphia Fed President Charles Plosser said he is growing worried about waiting too long to rein in inflation.

Top decision-makers at the Fed, including Chairman Ben Bernanke, don’t believe the central bank should rush to raise interest rates because the commodity price increase is likely to have a temporary impact on broader inflation. But a vocal minority at the U.S. central bank is growing restless–and policymakers in other parts of the world are also taking a different approach.

Reflecting the dominant view at the Fed, Tarullo and Duke indicated it’s not yet time to tighten credit because the economy remains fragile and the U.S. central bank may regret moving too soon.

Duke suggested inflation may stop rising because the commodity price increases are likely a result of supply and demand factors, which could change. “It would not be helpful if monetary policy reacted to every move in a very volatile price,” Duke said.

Tarullo said looking at so-called core inflation, which strips out volatile food and energy items and remains below the Fed’s informal 2.0% target, is better to set monetary policy, which acts with a lag.

“In the U.S. context…it’s proven a more appropriate metric since there’s a better correlation between core inflation today and inflation tomorrow,” Tarullo said.

A former Georgetown University law professor and the Fed’s point man on bank supervision, Tarullo normally sticks to regulatory issues. He was speaking on the sidelines of a meeting of global financial leaders at the International Monetary Fund.

In an outlook paper that sets the tone for the IMF-World Bank meetings, the IMF this week said the surge in oil prices is one of the biggest threats to the global economy. Opening the meetings Thursday, World Bank President Robert Zoellick warned of rising food inflation.

The European Central Bank, which looks at inflation measures that include food and energy items and show prices rising above its 2.0% target, last week raised rates from rock-bottom levels for the first time since the global financial crisis. The Bank of England is also expected to tighten credit by this summer to keep U.K. inflation in check.

The Fed is in no hurry to follow suit — and that’s a concern for officials like Plosser. In his speech Thursday, he said the Fed may be losing the public’s confidence that it is an effective inflation fighter and needs to take steps to ensure it doesn’t lose any more ground. He added interest rates may need to rise this year.

A similar trans-Atlantic debate about inflation took place in the first half of 2008, when soaring commodity prices led the ECB to raise interest rates in July 2008, before the financial crisis intensified. Europe’s monetary authority was later forced to reverse course, but ECB President Jean-Claude Trichet maintained it helped restrain inflation expectations, keeping inflation-adjusted rates lower than in the U.S.

Most Fed officials are comfortable with keeping rates close to zero as long as inflation expectations don’t rise; that is, if households and businesses begin to expect that higher inflation will take off in the long run.

Fed Vice Chair Janet Yellen Monday vowed the U.S. central bank won’t repeat the mistakes of the 1970s, when high oil prices led to sharp increases in consumer prices. As long as inflation expectations remain stable, the increases seen so far in global commodity prices and headline inflation are unlikely to lead to the wage-price spiral seen in the past, she said.

Plosser said he’s “not panicked” by what’s happening with inflation expectations, but at the same time, it is hard to say where the tipping point for something more ominous will be found. “I think we have to be careful not to get behind the curve here,” he warned.

Economists at Deutsche Bank Thursday put out a note entitled “Memo to Fed: Do not ignore commodities.” They don’t believe that food and energy price gains are transitory.

“In fact, when we look over a several-year period, we find that food and energy prices almost always rise–they only tend to fall in recessions,” they warned.

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20 Signs That A Horrific Global Food Crisis Is Coming

The Economic Collapse

In case you haven't noticed, the world is on the verge of a horrific global food crisis. At some point, this crisis will affect you and your family. It may not be today, and it may not be tomorrow, but it is going to happen. 

Crazy weather and horrifying natural disasters have played havoc with agricultural production in many areas of the globe over the past couple of years. Meanwhile, the price of oil has begun to skyrocket. The entire global economy is predicated on the ability to use massive amounts of inexpensive oil to cheaply produce food and other goods and transport them over vast distances. Without cheap oil the whole game changes. Topsoil is being depleted at a staggering rate and key aquifers all over the world are being drained at an alarming pace.

Global food prices are already at an all-time high and they continue to move up aggressively. So what is going to happen to our world when hundreds of millions more people cannot afford to feed themselves?

Most Americans are so accustomed to supermarkets that are absolutely packed to the gills with massive amounts of really inexpensive food that they cannot even imagine that life could be any other way. 

Unfortunately, that era is ending.

There are all kinds of indications that we are now entering a time when there will not be nearly enough food for everyone in the world. As competition for food supplies increases, food prices are going to go up. In fact, at some point they are going to go way up.

Let's look at some of the key reasons why an increasing number of people believe that a massive food crisis is on the horizon.

The following are 20 signs that a horrific global food crisis is coming....

#1 According to the World Bank, 44 million people around the globe have been pushed into extreme poverty since last June because of rising food prices.

#2 The world is losing topsoil at an astounding rate. In fact, according to Lester Brown, "one third of the world's cropland is losing topsoil faster than new soil is forming through natural processes".

#3 Due to U.S. ethanol subsidies, almost a third of all corn grown in the United States is now used for fuel. This is putting a lot of stress on the price of corn.

#4 Due to a lack of water, some countries in the Middle East find themselves forced to almost totally rely on other nations for basic food staples. For example, it is being projected that there will be no more wheat production in Saudi Arabia by the year 2012.

#5 Water tables all over the globe are being depleted at an alarming rate due to "overpumping". According to the World Bank, there are 130 million people in China and 175 million people in India that are being fed with grain with water that is being pumped out of aquifers faster than it can be replaced. So what happens once all of that water is gone?

#6 In the United States, the systematic depletion of the Ogallala Aquifer could eventually turn "America's Breadbasket" back into the "Dust Bowl".

#7 Diseases such as UG99 wheat rust are wiping out increasingly large segments of the world food supply.

#8 The tsunami and subsequent nuclear crisis in Japan have rendered vast agricultural areas in that nation unusable. In fact, there are many that believe that eventually a significant portion of northern Japan will be considered to be uninhabitable. Not only that, many are now convinced that the Japanese economy, the third largest economy in the world, is likely to totally collapse as a result of all this.

#9 The price of oil may be the biggest factor on this list. The way that we produce our food is very heavily dependent on oil. The way that we transport our food is very heavily dependent on oil. When you have skyrocketing oil prices, our entire food production system becomes much more expensive. If the price of oil continues to stay high, we are going to see much higher food prices and some forms of food production will no longer make economic sense at all.

#10 At some point the world could experience a very serious fertilizer shortage. According to scientists with the Global Phosphorus Research Initiative, the world is not going to have enough phosphorous to meet agricultural demand in just 30 to 40 years.

#11 Food inflation is already devastating many economies around the globe. For example, India is dealing with an annual food inflation rate of 18 percent.

#12 According to the United Nations, the global price of food reached a new all-time high in February.

#13 According to the World Bank, the global price of food has risen 36% over the past 12 months.

#14 The commodity price of wheat has approximately doubled since last summer.

#15 The commodity price of corn has also about doubled since last summer.

#16 The commodity price of soybeans is up about 50% since last June.

#17 The commodity price of orange juice has doubled since 2009.

#18 There are about 3 billion people around the globe that live on the equivalent of 2 dollars a day or less and the world was already on the verge of economic disaster before this year even began.

#19 2011 has already been one of the craziest years since World War 2. Revolutions have swept across the Middle East, the United States has gotten involved in the civil war in Libya, Europe is on the verge of a financial meltdown and the U.S. dollar is dying. None of this is good news for global food production.

#20 There have been persistent rumors of shortages at some of the biggest suppliers of emergency food in the United States. The following is an excerpt from a recent "special alert" posted on Raiders News Network....

Look around you. Read the headlines. See the largest factories of food, potassium iodide, and other emergency product manufacturers literally closing their online stores and putting up signs like those on Mountain House's Official Website and Thyrosafe's Factory Webpage that explain, due to overwhelming demand, they are shutting down sales for the time being and hope to reopen someday.

So what does all of this mean?

It means that time is short.

For years, many "doom and gloomers" have been yelling and screaming that a food crisis is coming.

Well, up to this point there hasn't been much to get alarmed about. Food prices have started to rise, but the truth is that our stores are still packed to the rafters will gigantic amounts of relatively cheap food.

However, you would have to be an idiot not to see the warning signs. Just look at what happened in Japan after March 11th. Store shelves were cleared out almost instantly.

It isn't going to happen today, and it probably isn't going to happen tomorrow, but at some point a major league food crisis is going to strike.

So what are you and your family going to do then?

You might want to start thinking about that.

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THREE THINGS I THINK I THINK

by Cullen Roche

1) How will we know when the QE2 trade is over?

It’s about that time when the smart money is beginning to think 10 moves ahead in the chess game. And in this game, the only piece worth focusing on is QE2. QE2 ends on June 30th and traders are already jockeying for position. How soon will the QE2 trade end? No one can tell. It could be a sell in May or it could be a sell the news. But one thing will be very clear when it occurs – the US dollar will stage a counter-trend rally.

One of the primary fuels during this speculative fervor has been the decline of the dollar. With the exception of a brief period in November no sector has benefited more than commodities. As I’ve previously discussed, this hasn’t generated some great economic benefit for the United States (that wasn’t already occurring), but it most certainly has translated into speculative behavior.

The dollar’s decline was relatively benign until the ECB began forecasting rate hikes earlier this year. And the usual inverse correlation can be seen in a sizable Euro rally. The end of QE2 will be seen as a pseudo form of tightening and a step in the direction towards US rate hikes. This could be an excuse for short covering and a USD rally. And while that doesn’t necessarily mean the commodity bull market is over it is likely to put a dent in the QE2 trade.

When currencies converge?

When will it happen? As I mentioned above, the timing is impossible to know, but if I had to venture a guess I’d say we’re closer to a EUR/USD bend in the trend as opposed to a continuation of the trend. And we all know what they say about the trend and friends….

2) Collapsing lumber prices portend a weaker economy?

Did you completely miss the utter collapse in lumber futures in recent weeks? I certainly did. In just the last 3 weeks lumber futures have fallen 25%. The Wall Street Journal says the decline has been due to a number of factors including fears of slowing Asian demand, weak US housing markets and excess supply:

“The recent decline in lumber futures was blamed on increased first-quarter mill production that met stagnant domestic demand and exports that were strangled by shipping bottlenecks.

China emerged last year as a dominant buyer in western U.S. and Canadian lumber markets. Mills responded by ramping up production to meet export demand and take advantage of an expected seasonal surge in U.S. house construction as spring arrived. Yet shippers couldn’t keep up with export sales to China and the spring housing demand failed to materialize, creating an oversupply problem that fueled the selloff, which started late last month.

…Despite the growth in Chinese demand, the U.S. remains the top market for North American lumber, so when the U.S. housing market is dormant, lumber futures prices soften, said Jamie Greenough, a broker and lumber market analyst at Global Securities Corp., a securities and commodities brokerage in Vancouver, B.C.”

Lumber prices have had a very close correlation with the US economy. While prices appear to have stabilized in recent days you have to wonder if this isn’t a sign of more serious weakness overall. One thing is for certain – the US housing market remains mired in a deep recession.

3) Why does the cost of a house get such a bum rap?

Whenever I talk to someone about inflation in the current environment and I tell them housing costs are near their lows they always reply: “sure, but I don’t buy a house every month”. Well, that might be true, but most Americans pay their mortgage every month – so you kind of do buy a house every minute of every day if you think of it in terms of the duration of the loan. Unless you paid in full upfront (which most homeowners don’t) you’re in a persistent state of buying the home. You could actually argue that you buy your home more often than you buy anything else because you can be damn sure the bank is calculating their loan value by the millisecond. Okay, that’s an exaggeration, but why do people downplay their largest monthly expense?

With interest rates near all-time lows mortgage refinancing is very beneficial – even after the recent rally in rates. In addition, new buyers are swooping in at a 30% discount in the real estate market. In essence, homeowners are able to lock-in deflationary prices in the current environment. That’s a significant price decrease for a vast majority of Americans. While many other prices are rising, housing has rarely been more affordable. Some recent charts from Liz Ann Sonders at Charles Schwab put this into perspective:

It’s no coincidence that the Housing Affordability Index troughed with inflation in the 70′s!

Inflation?

The moral is, the cost of owning a home has plummeted in recent years and this accounts for the majority of one’s monthly non-discretionary spending! Whether you are looking to purchase a home or have an old mortgage you are able to take advantage of significant deflation in your largest monthly expense. This isn’t an attempt to downplay the damaging impact of inflation in other markets, however, when assessing the bigger picture it is very important that we keep things in perspective. According to the BLS, housing related expenditures account for 47% of total consumer expenditures. The price you see on the gas sign every day isn’t nearly as important as the one you see on your monthly mortgage statement. And there is absolutely zero inflation in that payment.

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