Barron's interview to Marc Faber Part 1

About his negative view on money printing

"The Fed is flooding the system, it doesn't increase economic activity and asset prices in concert.
Instead it creates excessess in countries and asset classes.
Money-printing fueled the colossal stock-market bubble of 1999-2000, when the Nasdaq more than doubled, becoming disconnected from economic reality. It fueled the housing bubble, which burst in 2008, and the commodities bubble. Now money is flowing into the high-end asset market—things like stocks, bonds, art, wine, jewelry, and luxury real estate. The art-auction houses are seeing record sales. Property prices in the Hamptons rose 35% last year. Sandy Weill [the former head of Citigroup] bought a Manhattan condominium in 2007 for $43.7 million. He sold it last year for $88 million"

It wouldn't have been worse without Quantative Easing after the economic crisis of 2008?

"Why start with 2008? The government bailed out savings-and-loan depositors during the thrift crisis in the late 1980s. The U.S. Treasury and Federal Reserve bailed out Mexico in the mid-1990s. The biggest policy mistake occurred with the Fed-supervised bailout of the hedge fund Long-Term Capital Management in 1998, because it gave a green light to Wall Street to keep leveraging up.

Another policy mistake was made in 2000, right after the Nasdaq collapsed. The system probably could have handled a recession then, but instead, the Fed engineered a drop in interest rates, eventually to 1%, that encouraged a huge housing bubble. After it burst in September 2008, Bernanke slashed short-term rates to near-zero, where they are still. Meanwhile, the stock market is up 150% from its 2009 lows''.

   Is the US stock market in a bubble?

  '' I am suggesting that in the fourth year of an economic expansion, near-zero interest rates will lead to a further misallocation of capital. I thought the U.S. market would have a 20% correction last fall, but it didn't happen. I also said the market might explode to the upside before the correction occurred. We might be in the final acceleration phase now. The Standard & Poor's 500 is at 1650. It could rally to 1750 or even 2000 in the next month or two before collapsing. People with assets are all doomed, because prices are grossly inflated globally for stocks, bonds, and collectibles''.

Buffett's investing in Nevada's NV Energy,fits his strategy,to own businessess with large predictable cash flows.

Buffett utility deal may signal big push to invest cash

"MidAmerican Energy Holdings Co, a core part of Warren Buffett's sprawling business empire, is becoming a favourite way for the "Oracle of Omaha" to invest the billions of dollars of cash on Berkshire Hathaway Inc's  balance sheet"

"The unit's $5.6 billion US acquisition of Nevada's NV Energy , announced last week, vaulted MidAmerican to ninth place in terms of U.S. electric utility customers from fourteenth, according to data compiled by Reuters, and fits right into Buffett's strategy of owning businesses with large, predictable cash flows.

Berkshire Vice Chairman Charles Munger last year said MidAmerican could deploy as much as $100 billion over the next 10 to 15 years".

"The energy sector looks to be a pathway for (Buffett) to invest a lot of money," said David Rolfe, chief investment officer of St. Louis-based Wedgewood Partners, which has about $300 million invested in Berkshire Hathaway stock. "There is a very good chance that 10 years from now it's the largest part of Berkshire, easily."

Including the NV Energy deal, which is the largest in the global energy and power sector so far this year, MidAmerican makes up only about 10 percent of Berkshire's pre-tax earnings, dwarfed by the company's vast insurance holdings. But that is expected to change.

"What (MidAmerican and railroad Burlington Northern Santa Fe) have done is guaranteed the cash flows get reinvested back into those businesses," said Morningstar analyst Greggory Warren. "It eliminates some of the risk to whoever succeeds him of having too much cash on the balance sheet and not enough good ideas."

BNSF has been investing in the expansion of rail infrastructure in the United States and in new technologies such as powering locomotives with natural gas in a bid to increase profitability.

In his most recent letter to shareholders, Buffett called MidAmerican's earnings "recession-resistant" because the company offers "an essential service."

"Buffett has also figured out how to generate stable returns in renewable energy by investing in projects that come with long-term contracts to sell their output to utilities.

The regulated utilities are MidAmerican's primary focus, however, and include Oregon-based PacifiCorp, Iowa's MidAmerican Energy Co and Northern Powergrid in England. Together, those utilities will serve 8.4 million customers once NV Energy is folded into the mix".

Nichola Groom, Reuters
3:32 PM, E.T. | June 5, 2013
Investing

Interview to Pierre Lassonde, Chaiman of Franco Nevada.

Pierre Lassonde
      -was President of Newmont Mining Corp. from 2002 to 2006.
      -Co-founder and Chairman of the original Franco Nevada Corp.
        The first gold royalty company.
      -Past Chairman of the World Gold Conuncil.
    
  For the past 18 months we had a typical midsize correction of the
price of gold,his thoughts are that we are still in a long run bull market for
gold.

 Gold is the anti-dollar,if central banks of Japan, US, the ECB,UK, etc, keep their policy of
printing money. At the end of the day what you are going to see is the debasing of their currencies
and then gold will shine again.

  In 2013 55% of all gold sold in the world came from China an India.
  If the chinese economy had a sharp decrease in its rate of growth,then the price of gold could have an
 important correction.

   In the past decade as the price of gold went up,major gold miners went into a race of increasing
their reserves by lowering their grade cut-off. And mining engineers decided to design pits to
produce gold from these much lower grades too.

   The result was that their cash costs went to the roof,  5 years ago they had a cash cost of US$700,
now it is 1000 or 1100 us dollars.

Interview by Howard Green in bnn.ca 07.06.2013

Impact of Oil and Gas industry on the US

"PwC's preliminary estimates show that the US oil and natural gas industry's total
employment impact to the national economy in 2011, combining the operational and
capital investment impacts, amounted to 9.6 million full-time and part-time jobs,
accounting for 5.5 percent of the total employment in the country . At
the national level, each direct job in the oil and natural gas industry supported
approximately 2.7 jobs elsewhere in the US economy in 2011. Total estimated labor
income, including proprietors' income, was $580 billion, or 6.1 percent of national labor

As shown in the previous section, the US oil and natural gas industry's direct labor
income in 2011 is estimated to be $224.4 billion and capital expenditures are
preliminarily estimated to be $156.3 billion in 2011.
 One measure of the industry's
total "spend" is the sum of the industry labor income, capital expenditures and dividend
payments.
Total dividends paid by the industry were obtained from S&P's Compustat North
America® database for US-headquartered companies in the oil and natural gas
industry.7 Excluding distributions from Master Limited Partnerships and other passthrough entities,
8 PwC estimates that the industry paid out a total of $28.7 billion in
dividends in 2011, including dividends paid to individuals, retirement plans, foreign
shareholders, and other businesses.
Using this measure of total "spend" (consisting of the estimated direct labor income,
capital expenditures, and dividend payments), the industry's total "spend" amounted to
$409.4 billion in 2011.
Another source for the industry's annual capital expenditures is a survey published
annually by the Oil & Gas Journal, which puts the industry's 2011 US capital
expenditures at $292.0 billion.
 If this estimate of the industry's capital expenditures is
used for the purpose of computing the industry's total "spend" as defined above, the
industry's total "spend" was $545.0 billion in 2011"

PwC
Economic Impacts of the
Oil and Natural Gas
Industry
December 19, 2012

Emerging Market Stocks Turn From Best to Worst‏

Emerging Market Stocks Turn From Best to Worst
In today's "Global Outlook," Bloomberg's David Ingles takes a look at emerging market stocks.

Watch this video at http://bloomberg.com/share/video/MAT6Ed2TSw2ZFLgzLN4~ug

Worries about the end of easy money.

FT attributes  the fall of the dollar index today, to the worries of the ending of bond purchases by the Federal Reserve.

 In an article published today by the WSJ, they also explain the jitters of the market.

"The big question worrying investors today is how markets will react when the Federal Reserve starts trimming its stimulus program, something that could happen as soon as this year.
The first time the Fed pared stimulus, in March 2010, the Dow Jones Industrial Average responded with a 14% drop between April and July. The second time the Fed pulled stimulus back, in June 2011, the Dow moved in anticipation, slumping 17% from April into October.
Some analysts think the softness means the Fed will give up on withdrawing stimulus for the foreseeable future. But so far, the Fed is still signaling a desire to start cutting stimulus at some point.

Part of the problem the Fed faces is that it never before has tried to carry out this massive a stimulus program for such a long period. The Fed’s role in markets is, in that sense, greater than ever before, meaning markets are more dependent on the Fed than ever before. Because of that, and because the economy is so fragile, the current period truly is an exceptional one, in some ways more like the 1930s than the 1990s.

Many analysts now are trying to predict the market’s future based on what happened after Fed actions in the past 30 years. A better reference point might be the Depression, or Japan’s two recent lost decades.

Mr. Bernanke’s challenge is to move the Fed back to a more normal role in financial markets and the economy, while avoiding the disastrous errors of 1936 and 1937. One problem he will face is that markets aren’t likely to applaud cutbacks in Fed assistance".

Wilbur Ross : We are now or beyond low and negative real interest rates in the U.S.

Ten-Year Treasury Runs Risk of 25% Decline: Wilbur Ross
June 6 (Bloomberg) -- Wilbur Ross, Chairman and CEO at WL Ross & Co., talks with Betty Liu about what is driving the current employment market, the big risk to the treasury market and his overall economic outlook for the United States. He speaks on Bloomberg Television's "In The Loop."

Watch this video at http://bloomberg.com/share/video/C5DDIK5hR6W3yP~aXOcPwg

Goldman Sachs Higher Mortgage rates won't derail housing recovery

From the WSJ article, excerpts.

“Housing can remain affordable by historical standards even if interest rates rise,” wrote Goldman Sachs economists Hui Shan and Marty Young in a research note this week. They say interest rates, given the recent half-percentage point rise, don’t change their expectation for home prices to rise by 4% to 5% annually over the next few years.

Getty Images

Goldman runs an exercise that shows just how affordable housing is, even if rates rise. They assume the typical homebuyer has an annual household income of $50,000, pays a 20% down payment, and obtains a 30-year fixed-rate mortgage. At an interest rate of 3.8%, the average homebuyer can afford a house worth $279,000, which is 45% above the current median sales price of previously owned homes. Even if interest rates rise to 6%, homes would still be affordable to this median borrower because prices are still so low.

Rising rates “will likely slow the strong house price appreciation observed over the past year, but the impact will likely be modest given the cushion provided by the high level of housing affordability at present,” the Goldman economists write.

Jim Rogers on the correction of the price of gold

Excerpt from Félix Moreno Interview to Jim Rogers

''FM: You always say in your interviews that you are not a very good market timer, but I beg to differ. I’d like to turn to gold: you are one of the few gold bulls who had actually been calling for a correction in the past few months, or at least saying that we were in a correction and that, even though you were very optimistic in the long term, we should expect lower prices now. You must feel vindicated now.

JR: Every once in a while I get it right. Even I get it right sometimes. Vindicated? I don’t take any great pleasure in it. I just talk about the way the world works. It’s reality. Unfortunately some people don’t like to see how the world works, but yes, I did happen to get it right this time.

FM: So what is your opinion on the current state of the gold bull market. You’ve said repeatedly that you expect it to go much higher this decade. How do you see it right now?

JR: Unfortunately from my point of view, and I own gold and haven’t sold any, we are in a long overdue and much needed correction. The anomaly was that gold had been up 12 years in a row. That’s not normal, typical action. It’s abnormal, which worries me and should worry all the gold bulls. It has now corrected for some 18 to 20 months now. I find that encouraging. I mean, I don’t know, because I’m not a very good market timer, but I do know that most corrections go on long enough to scare a lot of people and scare them out of their positions, and that’s what I would expect to happen.

I’ve had people write to me and say: “gold cannot go down 30%”, and I say: “turn on your computer. It’s there.” There are a lot of mystics that are still true believers. Until it scares a lot of people the correction is not over. I would certainly like the correction to be over this afternoon and see gold go to $2,000 or to $3,000, but that’s not reality''.

Interview published in GoldMoney 30 May 2013

High Grade(AU,AG) Pretium´s Valley of Kings latest drilling results

Pretium Resources  initial underground drilling has been succesful  as part of the Valley of the Kings bulk sample program intersected visible gold, and continues to confirm the projection of high-grade gold mineralized domains. 

Table 1: Valley of the Kings Bulk Sample Drill Results, June 2013 (VU-01 to VU-07)(1,2,3)
Hole No.	Collar Coords.	Dip/ Azimuth		From (meters)	To (meters)	Interval (meters)	Gold (g/t)	Silver (g/t)	Capping
VU-01(4)	6258007N 426599E	-0.3/ 180		32.00	44.00	12.00	21.57	17.50
			incl	42.75	43.25	0.50	388.00	279.00
			incl	43.50	44.00	0.50	99.70	50.00
				64.00	66.00	2.00	8.38	58.92
			incl	65.60	66.00	0.40	31.10	22.10
VU-02	6258007N 426599E	-10.6/ 180		27.00	44.50	17.50	17.25	25.07	1 Au sample cut
			or	27.00	44.50	17.50	33.20	25.07	Uncut
			incl	27.55	28.05	0.50	988.00	493.00	Uncut
			incl	41.15	41.65	0.50	117.50	66.10
VU-03	6258007N 426599E	-22.7/ 180		30.00	40.00	10.00	3.85	8.75
			incl	30.00	30.50	0.50	42.30	65.50
VU-04	6258007N 426599E	13.9/ 180		29.50	38.50	9.00	1.44	6.27
VU-05	6258007N 426599E	25.7/ 180		29.00	42.00	13.00	1.65	6.76
VU-06	6258007N 426599E	35.0/ 180		37.00	44.00	7.00	3.24	5.02
			incl	40.00	41.57	1.57	10.64	9.32
VU-07	6258007N 426599E	-32.2/ 179.5		30.00	45.50	15.50	10.07	18.22
			incl	35.89	36.39	0.50	271.00	257.00
				51.00	59.00	8.00	10.85	14.44
			incl	53.95	54.45	0.50	140.00	57.60

	(1)	True thickness to be determined.
	(2)	Unless otherwise indicated as uncut, all gold assays over 421 g/t were cut to 421 g/t.
	(3)	All samples were submitted for preparation and analysis by ALS Chemex at its facilities in Terrace, B.C. All samples were analyzed using multi-digestion with ICP finish and fire assay with AA finish for gold. Samples over 100 ppm silver were reanalyzed using four acid digestion with an ore grade AA finish. Samples over 1,500 ppm silver were fire assayed with a gravimetric finish. Samples with over 10 ppm gold were fire assayed with a gravimetric finish. One in 20 samples was blank, one in 20 was a standard sample, and differing one in 20 samples was a field duplicate one-quarter split core assayed at ALS Chemex in Vancouver, B.C.
	(4)	Previously reported.

Kenneth C. McNaughton, M.A.Sc., P.Eng., Chief Exploration Officer, Pretium Resources Inc. is the Qualified Person (QP) responsible for the Brucejack Proje

The mining sector has been crashed in the stockmarket,gold producers have dropped even worse.Wonder Why?

Mine: A confidence crisis

 PricewaterhouseCoopers Report

Download

The mining industry faces a confidence crisis. Confidence over whether costs can be controlled, return on capital will improve and commodity prices will not collapse, among others. Over the past decade, the mining industry has outperformed the broader equity markets, but this trend has recently changed. While 2012 saw mining stocks fall slightly, they fell nearly 20% in the first four months of 2013.

Regaining confidence depends on how the mining industry responds to its rising costs, increasingly volatile commodity prices and other challenges such as resource nationalism. Despite this drop in confidence, it’s not all bad news. Production volumes and dividend yields are up and while prices have fallen, they have not crashed. China continues to be the industry’s most important customer. While Chinese growth rates are slowing down, they are coming from a bigger base, so future demand for commodities still looks healthy.

Miners are trying to rebuild the market’s confidence - capital expenditures have been scaled back, hurdle rates are being increased and non-core assets are being disposed of. Across the board, there is a shift from maximising value by increasing production volumes, to a renewed focus on maximising returns from existing operations through managing productivity and improving efficiencies. 

Go to link of PricewaterhouseCooper

Jim Rogers thoughts: are your bank accounts safe enough?

"It’s been condoned [now] by the IMF, the European union, and everybody else in sight; that a government in need, can take assets. We all knew they could tax us…but this is the first time that I’m aware of, that they’ve gone in and taken bank accounts. They took gold from people in the U.S. in the 1930′s…but I’ve never heard of them taking bank accounts. [Now] they’re doing it. So be careful [because], now they can take your bank account under this precedent.“

"Who knows if I’m right or not, but I’d rather be safe than sorry as all of those people who had money in Cyprus have learned. They thought they had a normal bank account…but now it’s been [taken] with the sanctions of many governments and institutions.”

“If people have money in any account, anywhere in the world…cut it down to under the guaranteed amount. They might take that too someday when things get desperate, because the precedent has been set, but that’s where I would start if I had money in the bank anywhere in the world.”

Excerpts from Tekoa Da Silva's interview to Jim Rogers in The Bull Market Thinking

American Energy Boom long term solution for present economic woes?

Energy Boom Ripples Through US Economy

 CNBC

Published: Monday, 25 Mar 2013 | 10:15 AM ET

By: John W. Schoen, NBC News

Excerpts

The boom in new oil and natural gas flowing through U.S. pipelines is beginning to ripple through the wider American economy.

Booms, Busts and Booms

Since the first gusher of oil spewed from of the ground above the Spindletop salt dome outside Beaumont, Texas, more than a century ago, the U.S. energy industry has enjoyed its share of booms and busts. After peaking in the early 1970s, U.S. oil and gas production began to decline as thousands of depleted wells were shut down. The U.S. rapidly became dependent on foreign suppliers to fuel its economy.

About a decade ago, advanced oilfield production technologies like hydraulic fracturing, or "fracking," and horizontal drilling began to reverse that trend. Many of the now-bountiful fields being brought back on line were mothballed long ago when the remaining "tight" oil and gas deposits were considered too costly or technically difficult to produce.

"It is a sizeable opportunity," said John Larson, an economist with IHS Global Insight. "It's a game changer."

America's growing energy independence also has been fueled by gains in efficiency: U.S. vehicles are squeezing more mileage from every gallon of fuel, and high-tech heating and cooling units and green building techniques and materials have cut energy bills for commercial and residential buildings by 10 percent since 2005.

Challenges remain

To be sure, there are forces that could delay – or even derail – the ongoing energy boom. The drop in natural gas prices has already slowed production of some projects that become too costly when gas prices are too low.

Lower oil prices could have the same impact, but it's not clear that added U.S. supplies will be sufficient to make a dent in global oil prices, especially if OPECproducers like Saudi Arabia throttle back on supplies to maintain current prices.

The original article was published by NBC

Massive losses for small investors as they where forced to swap preferred shares and hybrid debt in Bankia for ordinary shares.

MADRID | Thu May 23, 2013 6:49pm EDT

(Reuters) - Small investors in shares of in Spain's nationalized lender Bankia suffered new massive losses on Thursday as the stock plunged by more than 50 percent amid an abnormally high volume of trading which the stock market regulator said would be looked at closely.

Tens of thousands of small savers, who were often missold preferred shares and hybrid debt in Bankia, swapped their investment for ordinary shares on Thursday at a an average discount of around 40 percent.

But while they had hoped the move would help them recoup part of their money, they instead saw how the new shares, initially valued at 1.35 euro each and which they cannot exchange until next Tuesday, lost 51.4 percent on the day to close at 0.68 euro.

While analysts had widely expected the share price to drop and adjust to 1.35 euro before the bank received 15.5 billion euros ($20 billion) of fresh funds, the abnormally high trading volume registered on Thursday raised eyebrows at the stock market regulator.

A source with knowledge of the matter said some institutional investors who were also forced to swap their hybrid debt and preference shares at a discount may have engaged in naked short-selling to compensate for their losses.

Naked short-selling, where traders sell a stock they don't own in order to make a profit by buying it at a later date at a lower price, is not allowed under Spanish market rules.

Bankia said in a statement that after the new cash injection its parent group BFA owned 68.4 percent of its capital while former holders of hybrid debt and preference shares owned 31 percent and current shareholders hold the remaining 0.5 percent. ($1 = 0.7751 euros)

(Reporting by Julien Toyer, additional reporting by Sarah White; editing by Andrew Hay and David Gregorio)