A worrying endorsement from Ben Bernanke

  • Where else this October?
  • I learnt two things last Tuesday

Now that a book has been written on the subject, there can be no doubt that it will happen.

By it, we mean the end of physical cash in the economy.

Economist Kenneth S Rogoff has written a book titled: The Curse of Cash. The publisher of the book, Princeton University Press, provides this blurb on its website:

From the New York Times bestselling author of This Time Is Different, “a fascinating and important book” (Ben Bernanke) about phasing out most paper money to fight crime and tax evasion — and to battle financial crises by tapping the power of negative interest rates.

As our Jewish friends would say, ‘Oy vey’!

Not only has someone written a book about it, but they’ve gotten former US Federal Reserve chairman Dr Ben S Bernanke to endorse its contents.

Philosophically, we don’t have a problem with abolishing paper money. Providing it’s in the context of abolishing fiat money. That is, money that has nothing supporting it, except the promise of a government to ensure the stability of the money.

Of course, you already know that the promises of a government are meaningless — especially when it comes to the matter of maintaining the value of money.

The following chart shows that perfectly.



chart image

Source: Bloomberg
Click to enlarge


The white line shows you how many ounces of gold you could get for each US dollar. In 1971, you could get 0.025 ounces of gold for each US dollar bill.

Today, you can only buy 0.00076 ounces of gold for every dollar bill you have. That tells you the US government and Federal Reserve have devalued their currency by 97.05% in just 45 years.

But, it seems, they’re not happy with that. Having tried to stimulate the economy through printing more and more money, it frustrates them that it hasn’t worked.

So, rather than stopping to think that maybe it’s just a bad idea…they’re determined to do more. And that involves making cash the enemy, abolishing it, and then replacing it with a fully government-controlled electronic currency.

Why? The Economist explains:

In “The Curse of Cash”…Kenneth Rogoff makes the case for gradually getting rid of most paper currency. It certainly has benefits, he admits, but these are outweighed by the costs associated with its murky side. Take anonymity. The same virtue that provides the ability to pay for a self-indulgent treat or a naughty service without its appearing on bank records or credit-card statements also allows criminals to fund their activities and tax-dodgers to avoid levies.

Don’t fall for it. The ‘criminal element’ argument is just a ruse. It’s really all about control. Busybody bureaucrats and economists (Ed note: By the way, who suddenly made economists the experts on everything?) don’t like the idea that people can spend or save their money as they see fit.

It annoys them. They want to control everything you do. They want to tell you when to spend, and when not to spend. When physical money exists, it’s hard for them to do that.

But in a digital money world, one controlled by government, it’s much easier to impose capital controls. The next step beyond that is to impose negative interest rates — penalising savings when the government wants you to spend.

So, how can you avoid what appears to be an inevitable chain of events? We thought you’d never ask. First…

Markets

Over the weekend, the Dow Jones Industrial Average fell 53.01 points, or 0.29%.

The S&P 500 index fell 3.43 points, for a 0.16% fall.

In Europe, the Euro Stoxx 50 index gained 22.67 points, or 0.76%. Meanwhile, the FTSE 100 added 0.31%, and Germany’s DAX index closed up 0.55%.

In Asian markets, Japan’s Nikkei 225 index is up 396.88 points, or 2.43%. China’s CSI 300 index is up 0.13%.

In Australia, the S&P/ASX 200 is down 58.57 points, or 1.06%.

On the commodities markets, West Texas Intermediate crude oil is US$47.04 per barrel. Brent crude is US$49.34 per barrel.

Gold is trading for US$1,317 (AU$1,744) per troy ounce. Silver is US$18.47 (AU$24.47) per troy ounce.

The Aussie dollar is worth 75.51 US cents.

Where else this October?

I don’t mind admitting that I was stunned with the response to this year’s Port Phillip Publishing investment conference.

We had hoped to sell around 400 tickets. That would have made it bigger than our last conference in 2014.

Plus, I expected it to take around four to six months to sell all those tickets.

There were a couple of reasons for that. First, this is our first ‘destination’ conference. In 2012 we hosted our conference at the InterContinental hotel in Sydney.

In 2014, it was at the Grand Hyatt in Melbourne.

Both conferences were at venues in the heart of Australia’s two biggest cities.

Second, we didn’t know what the appetite would be for an investment conference that would have (and I’m being honest here) a somewhat negative sounding theme.

Would our subscribers really make the effort to get up and travel to a far-flung destination, to attend a conference titled ‘The Great Repression’?

But, I needn’t have worried. We sold out our initial target of 400 within a few days of announcing the conference. After getting in touch with the hotel, we managed to arrange an increase in capacity.

Within days of that, numbers hit over 600. We were sold out again.

It seems that people are interested in hearing about key investment ideas, even if the content may have a negative feel. But let me be clear, while I have no doubt that our guest speakers (including Jim Rogers, Jim Rickards, Dan Denning, Satyajit Das, Phil Anderson, and others) will address some of the ongoing problems with the world’s economy, it won’t be a ‘grump-fest’.

We know that investors want solutions to problems, not just people carping on about things.

Our aim with this year’s conference is to give you solutions — in spades.

In saying that, some of our speakers may not even focus on the negatives at all. I’m sure Phil Anderson will have his take on where we really are in the ‘Grand Cycle’.

Last time I saw Phil here in our office a couple of weeks ago, he told me not to worry about a major market crash for several more years!

And if you subscribe to Australian Small-Cap Investigator, Revolutionary Tech Investor, or Microcap Trader, you’ll know that it’s rare for a negative word to ever leave the mouth of Sam Volkering.

And why should it when he’s knee deep in one of the most amazing and spectacular industries there is — technology.

I’m convinced that the 2016 Port Phillip Publishing investment conference will achieve two things. It will be the best conference we’ve ever held, and it will be the best investment conference anywhere in Australia this year.

(It could even be the best investment conference of the past decade, but to say so would be boastful, and that wouldn’t do.)

Oh, and did I mention where we’re holding it? I said above that it’s a ‘destination’ conference. Well, this year we’re heading to Port Douglas, Queensland, and the Sheraton Mirage Resort.

If you’ve ever been there, you’ll know it’s a stunning location. Right on the beach, the venue offers the perfect opportunity for an investment getaway.

Take a few days off work, and enjoy the long weekend. If you’re from Melbourne, the conference is the week before the Melbourne Cup. What better excuse to take a few days off the week before, tack on the Monday, and spend a week in an Australian paradise.

I can picture you there now. You’ll arrive at the resort on the afternoon of 26 October. Take the time to settle in to your spacious room.

Then, it’s time for a walk. Remember, it will be hot. Gentlemen, put on those shorts and a t-shirt. Ladies, something light and breezy should do the trick.

As you wander the grounds, you’ll appreciate the slow-strobing effect as you move from direct sunlight to the shade of the palm trees, and back again.

But don’t walk too fast…because you don’t need to. There’s no reason to rush. Take your time and enjoy the ambiance. Because up here in Port Douglas, just a gentle walk can be a thrill.

You’ll feel the waft of a gentle breeze kissing your features. A breeze that was just for you. It has travelled thousands of kilometres across the Pacific Ocean, eventually flitting up the beach, and finally gliding over the picturesque saltwater lagoon pools…meeting you — as if by appointment — as you stroll through the elegant grounds.

When you’re done walking, why not sit (or lay down if you prefer) near one of the lagoons in a private cabana? Just you and your partner, looking out at the luscious foliage, sandwiched between the crystal clear ‘twin blues’ of the lagoon and sky.

Only in Queensland…and only in Port Douglas…does the water and sky look this good all day long. It’s almost as though they’re putting on a show. But they’re not. That’s how it is.

But you’re not just here to lounge around. There’s an investment conference to attend. That same evening, you’ll join us for a welcoming cocktail party. Dress how you please (within reason and respectability!).

Wear your beach and lagoon attire from earlier in the day, or slip into something a little more formal. Something you’ll be happy to be seen wearing in a photograph.

After all, how many other opportunities will you have to shake hands and share a story or two with Jim Rogers and Jim Rickards…or dare I say it, the rest of the Port Phillip Publishing crew.

It will still be warm at this time of night. Gathered in a secluded area of the resort, you’ll get to mix with a number of our star guests, in addition to rubbing shoulders with our in-house editors and analysts. The food and drink will be flowing, and you’ll have the chance to ask and find out all about the following two days of investment presentations.

But don’t drink too much. The first day is an early start. You’ll want to be there early to register and prepare yourself for the big show.

You won’t want to miss two of our first presenters who are due to speak early on the Thursday — Dan Denning and Vern Gowdie.

You won’t want to miss Satyajit Das, or the incomparable Jim Rogers. And at the end of the day, you’ll want to relax and recharge your batteries.

Because after a full day of presentations, you’ll do it all over again for a second full day on the Friday — Phil Anderson, Sam Volkering, Jim Rickards, and more.

After that, the rest of the time is yours. You can spend the time relaxing by the lagoons, or maybe you’ll stroll over to the Ocean beach and take in the wonder of the Pacific Ocean.

Perhaps going on a tour is your thing. You are, after all, on the doorstep of the Great Barrier Reef. Not to mention the Daintree and Kuranda national parks, which are within easy driving distance.

All I can say is: Why wouldn’t you want to be in Port Douglas with us this October?

It’s hard to put it any plainer than that.

We’ve opened up just 70 more spots for attendees. These spots will not be there come Thursday morning — that’s regardless of whether we sell out of tickets or not.

We have to confirm final numbers with the hotel and various other vendors this week. Once we’ve finalised the numbers, that’s it. There won’t be any other chance to attend.

So, if you’re interested in understanding exactly what’s going on with the world’s economy, and the investment strategies you may be able to put in place to deal with it, attending this year’s Port Phillip Publishing investment conference should be a no-brainer.

Tickets are still available. But not for long. For details, go here.

I learnt two things last Tuesday

Last week we held our second ever live event. And yes, it really was live.

By the time it finished, we didn’t get out of here until after 9.30pm.

But it was worth it.

For the most part, I left host James ‘Woody’ Woodburn, and his special guests, Jason McIntosh and Greg Canavan, to it.

They did a great job explaining algorithmic trading and how Jason’s Quant Trader system can help investors make automated trades on the market.

But there were two things that really stood out for me. And to be honest, I’m not sure they were things I’d appreciated until I heard them talk about it last week.

The first is the concept of ‘taking the emotion out of trading’. I first got into the markets in 1995. Over that time I’ve heard plenty of traders talk about how they ‘take the emotion out of trading’.

It’s a catchy, if somewhat overused, phrase.

But, regardless, it’s also something that most traders never actually achieve. In my experience, most traders only ever succeed in actually putting the emotion into their trading.

They look at the charts, which tell them one thing, but they then decide they know better and (sometimes) end up doing the opposite.

Or they’ll see one of their positions move quickly into profit and, rather than looking at the trade systematically, they decide to get out and bag the profit. Even though their technical analysis system may have told them that further gains could be on the way.

That’s the beauty of Quant Trader. It’s automated. It takes around 30 seconds for Jason’s powerful computer to run its ‘eye’ over the market every evening. It then takes about a minute to churn out the results into a readable format.

From that point, Jason does little more than copy the data into an email, and arrange for that email to be sent to his Quant Trader subscribers.

There’s no emotion…no checking what the companies’ earnings are…no double-guessing about the next US Federal Reserve interest rate decision. If Jason’s computer tells him that a stock is a buy, he’ll tell you to buy it.

That, my friend, is taking the emotion out of trading.

But it’s not the only thing that caught my attention. Let me show you this chart. It’s of Fisher & Paykel Healthcare Ltd [ASX:FPH]:



chart image

Source: Bloomberg
Click to enlarge


I’ve marked on the chart with an arrow where Jason’s powerful computer spat out a buy recommendation. What do you notice about the timing of that signal?

It’s probably the same thing that had me hit myself in the forehead with the palm of my hand.

That’s right, not only had the stock more than tripled since the 2012 low, but it was also trading at a record high.

Not many investors would have bought at that price. They would have preferred waiting for it to fall — for a pullback. But Jason’s computer doesn’t worry about such emotional frailties as buying a stock that’s already high.

If the algorithms compute that the stock has a high probability of continuing to rise, it will churn out a buy recommendation. So it did. And Jason’s subscribers are no doubt happy that it did. Since then, the stock is up around 95%. What’s more, his computer churned out two more buy signals after the first signal!

Oh, and if you’re wondering why it didn’t pick up the stock before that, it may very well have done so had we published the Quant Trader system before that date.

Anyway, the point is, Quant Trader is genuine emotion-free trading. Of course, there is still some human element involved — you. That’s why Jason also provides what I consider to be top-notch mentoring to his subscribers on a weekly basis.

Each weekly email from Jason gives his subscribers an insight into trading, revealing how traders can maximise their successes and limit their losses.

In my view, it’s an invaluable service. To find out more about Quant Trader, I recommend that you go here to check it out.

Cheers,
Kris