Can the Great Bull Run Charge Again?


The last thing we expected to write in these pages is that Australia might be on the verge of a historic real estate boom. But that’s the conclusion we saw this week from one controversial analyst, thanks in part to a dead Soviet researcher and twenty years of study. 

It sounds a bit nuts. If you’ve caught the headlines lately, you’ll know the anxiety over the end of the mining boom in Australia is hitting fever pitch. Where will the growth come from? How could real estate soar from here?

The answer, according to Phillip J Anderson, lies in an unlikely place. And don’t bother looking up He says the best clue about where Australian housing is heading next is to check out the US stock market… 

Why a Soviet Economist is Not Forgotten

Phil Anderson argues that the S&P 500 and the Dow Jones Industrials both hitting record highs is the key signal that the property market is turning in America. And if it’s turning there, Australia won’t be far behind. But there’s plenty more to it than that.

Phil is an economic historian and private investor. He’s traced two major cycles that he says have reliably repeated over the last two centuries. The first is US real estate. The second is the major global commodity cycle.

How these are interrelated and how you can identity where we stand right now are a key part of the presentation he gave to a select group of investors back in March.

These cycles give him clues to forming his investment strategy in real estate and stocks.

One of the more intriguing parts of Phil’s theory comes from the Soviet economist Nickolai Kondratiev. Back in the 1920’s, Kondratiev put out a theory that capitalism had 50–60 year supercycles. As part of this, he argued that commodities move in waves that see them rise in price for 30 years and then go down for 30 years.

Kondratiev got that mostly right. Commodities do move in big shifts. In his book Hot Commodities, notable investor Jim Rogers says the 20th century had three big commodity bull markets. They were 1906–1923, 1933–1953 and 1968–1982. That puts the average at about 17 years, which is less than a Kondratiev ‘wave’, but you can see the longest was twenty years. 

But that’s history. What about the current global bull market we’re told is over? Rogers says it began in 1998. That’s when he started his commodity index. Interestingly, Phil Anderson called the commodity rally back before it began in the mid 90’s based on his own analysis. Very few other people did that to our knowledge.

We give Phil credit for that. It reminds us that all the people calling the end of the commodity boom are probably those who didn’t call the start either. Why should we listen to them?

Both Jim Rogers and Phil Anderson say the worldwide commodity bull market still has years to run (although for different reasons). That’s a contrarian position right now. If they’re right, that should mean a continuing bright future for Australia.

This is where real estate enters the picture again. Phil says the wealth brought in from selling our natural resources will show up in property prices because land always captures the gains in the end.   

Before you call up your local agent, even Phil admits there’s a catch to the idea of the property boom, and it’s one he hasn’t nutted out completely. But we won’t steal any more of his thunder.

Check your email at 2pm today for more from Phil Anderson – and his prediction of a coming 18-year real estate cycle…and what it means for Australian commodity prices.

Aussie Dollar on the Nose

For now, we wonder what the Aussie dollar makes of it all. It’s looked crook since the Reserve Bank of Australia (RBA) cut the cash rate to 2.75%.

One reason for the big run it had to beyond parity with the US dollar was the strength of the commodity market in the last decade, which brought in huge foreign investment.

A second phase of the commodity bull could keep the Aussie dollar higher over a longer period of time than many expect. That would be a bummer for all the people who egg on the RBA to bring it down. 

The idea here is to take pressure off the non-mining parts of the economy. Take this from The Age on Thursday.

The Reserve has little choice now but to follow up its May rate-cut with another one in June. As Professor Ross Garnaut has warned, it is urgent that it lower rates to help bring down the dollar rapidly, to give other industries the incentive to invest and expand in mining’s place.’

Devaluing the currency seems to be the bog standard response all over the world these days.

Yeah, it might work for a while. But does anyone seriously think this is a long term solution? Does a cheaper dollar make Australians better educated? Does it make the tax system more rational? Does it incentivise entrepreneurs and small business to add value to Australia’s abundant raw materials?

No. But it will screw over the savings class as interest rates get squeezed, and we’ll all now face higher prices thanks to imported inflation. Great! Oil, for example, is Australia’s third largest import.

Business and consumers will just love those higher fuel costs.

Granted, with Japan and the USA printing like madmen there is an undue pressure on Australia. But trying to devalue your way to prosperity is a losing game.

Germany has been an export powerhouse for 40 years with a hard currency. How? By innovating and building quality products, and investing in research and development. 

This is one reason Money Morning editor Kris Sayce’s new tech newsletter will by necessity look not just in Australia but overseas too as he and his associate editor Sam Volkering hunt for the best Revolutionary stocks around the globe.

Thanks to poor policy here, a lot of the action is elsewhere. But that doesn’t mean Aussie investors are shut out of the action. In fact, it’s never been easier to get at it. Stay tuned. 

Callum Newman.
Editor, Money Morning

Join me on Google+

PS. Don’t forget if you want to keep track of the latest things we’re reading and brief commentary on events that happen through the day, check out our Google+ page and Kris Sayce’s as well.

From the Archives…

The Day Japan and China Shook the Aussie Market
24-05-2013 – Kris Sayce

Why the Only Thing That Matters in the Markets is Japan
23-05-2013 – Murray Dawes

When Soros Buys Gold Stocks, You Better Take Note…

22-05-2013 – Dr Alex Cowie

Look for Small-Cap Resource Stocks with Plenty of Cash
21-05-2013 – Dr Alex Cowie

Why Bank Stocks have Outperformed Resource Stocks…
20-05-2013 – Kris Sayce

Money Weekend’s FutureWatch: 1 June 2013


TECHNOLOGY: Another Glass Hails the New Category of Devices

Google Glass is a real game changer when it comes to interaction with your devices and the digital world. When tech like this comes along it can spark the beginning of a whole new genre of communication. But some of the sceptics believe it’s not going to take off. They believe it’s a niche product that has no mass appeal.

One of the signs that new tech like this is going to have mass appeal is when similar devices are brought to market. A bit of healthy competition. That typically drives innovation and development of technology to higher levels.

And there is some healthy competition now in the wearable tech space. It’s an alternative to Google Glass. Surprisingly, it’s gone unnoticed. We think mainly because Vuzix (the manufacturer) doesn’t have the marketing budget of Google.

The Vuzix Smart Glasses M100 is the device to take on Google. It’s a new type of enhanced ‘hands-free’ smartphone device. It operates on the Android OS and you can text, video, message, email, navigate and listen to audio.

Basically everything you’d expect from your phone, wearable on your head. It looks just as ‘futurey’ as Google Glass, and hopefully it’s as easy to use as it promises. Either way with now more than one type of ‘Glass’ device available, it’s a real signal this will become a new category of devices.

HEALTH: How We Know We Don’t Have Superpowers

A few weeks ago we mentioned that a few of us were getting our DNA analysed. Hopefully this was going to prove the theory that some of us were indeed superpower mutants. In turn we could all design our own superhero outfits, and be justified in wearing them.

This week our DNA results arrived from Sadly it didn’t say we had superhuman powers. But it did give us information and insight into our personal medical crystal ball. It predicted our chance of certain diseases, our reaction to certain drugs, and gave us ancestral information.


For an example of exactly what kind of information we got, here’s some key findings from my DNA results. I have a:

  • 33.9% chance of developing Atrial Fibrillation – average risk is 27.3%
  • 3.5% chance of getting Rheumatoid Arthritis – average risk is 2.4%
  • 3.0% chance of Alzheimer’s disease – average risk is 7.2%
  • 0.09% chance of Type 1 Diabetes – average is 1.02%

Also my BRCA genes show no mutations. The BRCA gene is the gene that’s been getting a lot of coverage over the last few weeks.

The take away from all this is getting DNA results hasn’t resulted in any great change. We’re not about to rush out and get major medical procedures based on these results.

But it has given us a greater insight into our health and genetic makeup. This is invaluable information. There are some things we might be slightly at higher risk of suffering from. But knowing this means we can put measures into place to decrease that risk over time.

As far as we’re concerned that puts the power and control of our health in our hands. It empowers us to make more informed decisions about how we live and manage our health.

ENERGY: Why July Could Be a Significant Moment in History

Elon Musk is a very smart and very rich man. He co-founded PayPal and made a fortune from it. But almost as soon as he sold PayPal and took his cut he looked for another venture.

He was of the belief that he couldn’t really add value to anything more in the ‘digital space’, so looked elsewhere to make a world changing impact.

Elon now is a pioneer of energy and transportation. What we mean by that is the companies he now runs and is involved in are doing more for efficient energy and transportation than any initiative before.


Amongst the companies he now runs are Tesla, which manufactures pure electric premium vehicles; SpaceX, which make rockets and space craft for the exploration of space; and SolarCity, which is now one of the biggest solar energy companies in the US.
But speaking on Thursday at the ‘All Things Digital: D11’ conference Elon alluded to the next major energy and transportation breakthrough.

It’s called the Hyperloop. Elon is somewhat hazy as to the technical details of what this is and how it might work. But he has alluded to it a few times now, with a planned announcement sometime in July.

In short, the Hyperloop is a high speed, self-powering transportation loop that can enable travel between San Francisco and Los Angeles in less than 30 minutes. That’s a speed of more than 1,102kph. It’s a cross between a Concorde, a rail gun and an air hockey table.

This could be a revolution in domestic transportation. We’re going to keep a close watch on this one, as the announcement is coming soon and it could usher in a whole new mode of transport, never seen before.

Sam Volkering
Technology Analyst, Money Weekend

Ed Note: Sam Volkering is assistant editor and analyst for a new breakthrough technology investment service to be launched by Money Morning editor Kris Sayce. The breakthrough technology service will introduce cutting edge investment ideas from the technologies of the future, including medicine, science, energy, mining, and more.

From the Archives…

The Day Japan and China Shook the Aussie Market
24-05-2013 – Kris Sayce

Why the Only Thing That Matters in the Markets is Japan
23-05-2013 – Murray Dawes

When Soros Buys Gold Stocks, You Better Take Note…

22-05-2013 – Dr Alex Cowie

Look for Small-Cap Resource Stocks with Plenty of Cash
21-05-2013 – Dr Alex Cowie

Why Bank Stocks have Outperformed Resource Stocks…
20-05-2013 – Kris Sayce

Colombia holds rate steady, to continue to buy FX

By     Colombia’s central bank held its benchmark interest rate steady at 3.25 percent, as expected, and will continue to buy foreign exchange worth at least $2.5 billion from June to September to keep the peso from rising.
    The Central Bank of Colombia said the peso, like other currencies in Latin America, has depreciated against the U.S. dollar, either due to lower international prices of basic goods or because investors are speculating that the U.S. Federal Reserve will be being to reduce its asset purchase program.
    “The interventions of the Central Bank in the local exchange market, as well as measures taken by the government, have reinforced the trend towards depreciation of the peso,” the central bank said.
    In January Colombia’s central bank said it would spend at least of $3 billion between February and May, with daily purchases of not less than $30 million, to buy foreign exchange to hold down the peso.
    The peso has eased some 7 percent against the U.S. dollar this year and continued to drop after news the central bank would continue to intervene, helping reverse a 10 percent rise in 2012.
    The central bank said second quarter economic growth should improve from the first quarter – estimated at less than 3.0 percent – with consumer confidence improving significantly as previous rate cuts are being transmitted to lower nominal interest rates which has stopped the fall in credit.

    Colombia’s central bank has held rates steady since March after cutting the benchmark rate by 200 basis points since July 2012.
    Economic growth is expected to rise throughout this year as spending continues to react to earlier rate cuts and the government’s $2.7 billion stimulus program from last month.
    Exports, however, are expected to rise slower than previously estimated due to slower growth in emerging markets, the central bank said.
    The central bank’s staff has kept its 2013 growth forecast at 3.0-5.0 percent, with 4.3 percent growth the most likely outcome. In 2012 Colombia’s economy grew by 4.0 percent, down from 2011’s 6.6 percent.
    The latest official data show that Colombia’s Gross Domestic Product expanded by 1.8 percent in fourth quarter, sharply up from the third quarter’s 0.7 percent contraction, for annual growth of 3.1 percent, up from 2.7 percent.
    Inflation in Colombia rose slightly to 2.02 percent in April from 1.91 percent but the central bank said core inflation showed no significant change and both measures were below the central bank’s 3.0 percent target. It is highly likely that inflation will remain around the target range of 2-4 percent.
   The bank said the probability was hight that inflation would remain in the target range.

Zambia raises rate 25 bps on risks to 2013 inflation target

By     Zambia’s central bank raised its policy rate by 25 basis points to 9.5 percent, saying inflationary pressures “would be threat to the achievement of end-year inflation target of 6.0%.”
    The Bank of Zambia, which raised rates by 25 basis points in 2012, said in April that it expected inflationary pressures to continue to moderate in the month of April.
    Inflation rose to 7.0 percent in April from 6.5 percent in March and the central bank said it was anticipating upward risks to inflation in June due to recent increases in the pump price of fuel coupled with the lagged effects of the recent exchange rate depreciation.
    These pressures will be moderated by the relative stable prices of food due to a positive food balance as indicated in recent crop forecast surveys, the bank said.
    Zambia’s average inflation rate in 2012 was 6.6 percent, according to the International Monetary Fund, which forecasts a decline to 6.5 percent this year.

Fiji holds rate steady, growth still on track to hit forecast

By     Fiji’s central bank held its benchmark Overnight Policy Rate (OPR) steady at 0.5 percent as domestic economic activity remained mixed and inflation tumbled to its lowest level since May 2009.
    The Reserve Bank of Fiji, which has maintained an accommodative policy stance and unchanged rates since December 2011, said the economy remains on target to reach a projected 2.7 percent growth in 2013. The International Monetary Fund put Fiji’s 2012 growth at 2.1 percent.
    Fiji’s inflation rate fell to 1.0 percent in April from 3.3 percent in March. Separately, the central bank governor was quoted as saying in local media that inflationary pressures were expected to remain subdued and inflation to settle around 3.0 percent by year-end.
    Consumption continues to trend upward, financed by strong growth in private credit and higher inward remittances, and new bank loans for investment purposes more than doubled to $39.5 million in the year to April, underpinned by loans to the building and construction sector.
    However, gold production and visitor arrivals were weak,  with annual gold production down by 41 percent in the year to March due to the low quality of ore, and in January visitor arrivals fell 7.9 percent due to the impact of Cyclone Evan, the bank said in its latest economic review.
    In Fiji’s financial sector broad money (M3) rose by an annual 7.6 percent in April due to growth in domestic credit, and outstanding loans by commercial banks rose by 12.7 percent on higher lending.
    In the year to April, the Fiji dollar rose 21.3 percent against the Japanese yen and the Fiji dollar’s nominal effective exchange rate (NEER) rose by a monthly 0.2 percent, implying a slight appreciation against major trading partners. However, the real effective exchange rate (REER) fell by 0.2 percent during the month of April due to lower domestic inflation.
    By May 30, Fiji’s foreign exchange reserves stood at $1,603 million, sufficient to cover 4.6 months of imports, up from 4.2 months as of April 26.

Gold Slips from 2-Week High, Chinese “Frenzy Won’t Continue” as Japan Fails to Shake Deflation

London Gold Market Report
from Adrian Ash
Fri 31 May, 08:15 EST

The PRICE of gold slipped from a new 2-week high in London trade Friday morning, nearing the weekend 2.9% above last week’s finish, but losing more than 4.6% from the start of May.

Silver also edged lower, cutting its weekly gain to 0.3% and standing 7.6% lower for the month.

European stock markets meantime extended this week’s drop, but held onto better than 5% gains for May.

“The kind of frenzied gold buying in late April and early May won’t be repeated,” said Zhang Bingnan, secretary-general of the China Gold Association, overnight to Bloomberg.

Zhang’s comments came as market-development group the World Gold Council forecast record quarterly gold demand amongst Asian households for April to July.

Gold prices in India – the world’s heaviest gold-buying nation – this week slipped back to $4 over international benchmarks from $20 per ounce a fortnight ago, Reuters reports.

Gold gifts will be given to some 6.6 million Chinese brides in 2013, the China Gold Association says. But bargain-hunting to acquire that jewelry may have accounted for a large part of April’s surge in demand, sparked by a 15% drop in world gold prices, Zhang believes.

China’s gold imports through Hong Kong had already doubled to record monthly levels in March, however.

Here in London, gold dealing volumes through the largest bullion banks – centre of the world’s wholesale gold trade – rose 10% by weight in April to hit a 20-month high, trade body the London Bullion Market Association said in new data Thursday.

Silver volumes rose 25% to the highest level in 16 months. Trade in both metals rose much less sharply by value, however, growing 3.1% and 9.2% respectively.

“[Gold’s] ability to hold above $1410 on a close basis removes some of the bearish pressure,” says the latest technical analysis from Scotia Mocatta bank.

“Support now seen at $1394 with resistance at $1425.”

“[Thursday’s] renewed price slide on the Nikkei,” says Germany’s Commerzbank, “has made it clear once more that the latest boom on the equity markets is no one-way street.

“This evidently makes gold more attractive in the eyes of some market players, as is also evidenced by lower E.T.F. outflows.”

After rising for the first time in 3 weeks on Wednesday, gold bullion holdings were unchanged Thursday for the world’s largest exchange-traded gold trust fund, the SPDR (ticker: GLD).

Japan’s Nikkei stock index bounced Friday from its second slump in a week, but still ended the month 13% below mid-May’s new 5-year highs.

New data meantime showed Japan’s industrial production beating analyst forecasts with 1.7% annual growth in April.

Despite aggressive new money-creation by the Bank of Japan’s quantitative easing program, however, consumer prices continued to fall, down 0.4% last month from March for the sixth consecutive month of deflation.

“The short-term trend [in gold prices] seems to be higher for the moment,” says the latest note from brokers INTL FC Stone.

“[But] we think gold prices will be lower by year-end…considering that by then, the US Fed should give the markets more clarity as to when it is going to step back [from quantitative easing] if it hasn’t done so already.”

“Based on what the Fed is doing now,” said Anthony Scaramucci, partner at the $7.6 billion SkyBridge Capital asset managers, to CNBC yesterday, “giving us more transparency, I’m not a buyer of gold here.”

“Inflation is going to hit at some point. But it’s pretty far out based on macro econometric estimates.”

Adrian Ash


Gold price chart, no delay | Buy gold online


Adrian Ash is head of research at BullionVault, the secure, low-cost gold and silver market for private investors online, where you can buy gold and silver in Zurich, Switzerland for just 0.5% commission.


(c) BullionVault 2013

Please Note: This article is to inform your thinking, not lead it. Only you can decide the best place for your money, and any decision you make will put your money at risk. Information or data included here may have already been overtaken by events – and must be verified elsewhere – should you choose to act on it.


Restaurant and Bar Sales Up: How to Invest

By The Sizemore Letter

Great Recession?  What Great Recession?

Restaurant and Bar Sales

After flatlining for five years, restaurant and bar sales hit new all-time highs earlier this month (see chart).  It would seem that the scrimping and ramen noodle eating that became so common after the 2008 meltdown is now a distant memory.

Well, sort of.  There are a couple things to keep in mind.  To start, the sales data do not take into account inflation, which, while modest, makes the recent gains a little less spectacular than they look.  And Americans haven’t exactly returned to their free spending ways; according to the National Restaurant Association, 49 percent of American adults do not eat in restaurants as often as they would like.

There is also a demographic angle at work.  20-somethings are splurging more on meals and booze, but nearly half of the 50-64 age bracket—which roughly corresponds to America’s Baby Boomers—are spending less and consider the lower spending to be their “new normal.”

For anyone with an academic interest in demographics (yes, there are some of us who do), this is precisely what you would expect.  The Baby Boomers are saving for a retirement that most are not prepared for.  And even under more normal economic conditions, spending on food and alcohol in restaurants and bars tends to peak in the mid-50s.  I appears that, once the kids leave the nest, Americans like to enjoy one last hurrah of feasting and boozing before they settle down.

Meanwhile, while unemployment is still high among the young, most are employed and earning more than at any time in their lives.  Most 20-somethings are also childless, meaning that a larger percentage of their incomes are disposable.

And importantly, this large generation—alternatively called Gen Y, the Echo Boomers, or the Millennials—has a lot of spending left to do.  The largest cohort is still in their early 20s.

So, with all of this said, how do we profit?

I’ve been a fan of alcoholic beverage stocks for years, and Heineken ($HEINY) and Diageo ($DEO) are both long-time portfolio holdings.  But these are primarily “emerging market lite” plays, as both have better prospects in the developing world than in North America.

What about restaurant stocks?

I’ve had several restaurant and casual dining stocks on my watch list with the Echo Boomers in mind.  The problem is that while I might loves some of the companies, I’m not too fond of the stocks.

Consider Chipotle Mexican Grill ($CMG).  It’s a compelling story backed by strong, secular trends: the move towards healthier and more organic eating and the convergence between fast food and casual dining.  And frankly, I could eat there every day and never get tired of it.

There is one big problem: while Chipotle’s burritos are reasonably priced, its stock isn’t.  It currently trades for nearly 30 times expected earnings and 4 times sales.

Buffalo Wild Wings Inc. ($BWLD), another trendy casual dining stock, is likewise a little too pricey for my liking.  It trades for over 20 times expected earnings.  Panera ($PNRA) isn’t any cheaper.  It trades for 24 times expected earnings.  None of these three pay a dividend.

Moving up the price ladder, we get to Darden Restaurants ($DRI), the owner of the Olive Garden, Red Lobster, and Longhorn Steakhouse among others and Brinker International ($EAT), the owner of Chili’s and Maggiano’ Little Italy.  Brinker has had a decent run, up about 60% over the past two years, compared to around 20% for the S&P 500.  Darden has lagged and is flat for the period.

Brinker and Darden are not sexy.  They epitomize the American suburbs, which is about as anti-sexy as you can get when it comes to a night out.  These restaurants are also the restaurants frequented by the Baby Boomers when they were raising their kids.  Those same Boomers are now past that stage, and their children are not yet in it themselves.

So, we can’t expect a huge surge in revenues tomorrow.  However, with the American housing market recovering and with the Echo Boomers reaching the marriage and family formation stages of their lives, there is a long-term, 10-15-year story here.

Brinker is not particularly overpriced at 14 times expected earnings and pays a 2% dividend.  But Darden would seem to be the more attractive of the two.  It’s slightly more expensive at 16 times earnings, but it pays a nice 3.7% dividend.  Importantly, the company has been growing that dividend aggressively since 2008.

Darden isn’t a homerun stock, but it should be a nice income producer with the potential for decent growth in the years ahead as the Echo Boomers settle down and move to the ‘burbs.

Sizemore Capital is long HEINY and DEO. This article first appeared on InvestorPlace.

Is the Bull Market In REITs and MLPs Over?

By The Sizemore Letter

Over the past 10 days, a period where the S&P 500 has traded sideways, REITs and MLPs are down 8% and 6%, respectively, as measured by the Vanguard REIT ETF ($VNQ) and the JP Morgan Alerian MLP ETN ($AMJ).


Individual REITs and MLPs got hit harder.  The popular Realty Income ($O) and Martin Midstream ($MMLP) were down 15% and 10%, respectively.


All of these securities have one thing in common: they have become extremely popular with yield-starved income investors in recent years.  And the Fed’s recent pronouncements—which indicate that quantitative easing may be ending sooner than expected—slammed them in response.

So is that it?  With rates now destined to rise, is the bull market in income-focused securities over?

Not so fast.  To start, it is not entirely certain that interest rates will materially rise.  Sure, we probably won’t see the 10-year note at 1.5% again (or mortgages at 3.3%).  But as the experience of Japan has proven, rates can stay much lower for much longer than anyone expects during a prolonged period of deleveraging and aging demographics.

The U.S. is not Japan, of course.  But we have a supply/demand mismatch in the fixed income market.  Supply of fixed income from government and private-sector borrowers has not kept up with demand for fixed income by retiring Baby Boomers.  Putting it another way, there is a surplus of investable funds out there, and that surplus means that the price of money—i.e. interest rates—will likely stay low irrespective of what the Fed does.

In other words, don’t expect to see 4-5% Treasury note yields any time soon.

But beyond this, even if yields do rise modestly, a well-bought portfolio of REITs and MLPs can offer something that a standard bond portfolio cannot: an income stream that rises over time.  With demand for pipeline infrastructure charging ahead and with the U.S. commercial real estate markets continuing to improve, the fundamentals of REITs and MLPs as a group are strong and looking to get stronger.

That said, investors had gotten a little carried away this year.  Realty Income and Martin Midstream had been up by as much as 35% and 45%, respectively, since January 1.  They needed a correction…and they got it.

Where do we go from here?

I continue to like both REITs and MLPs as asset classes for the next 5-7 years.  But it’s never good trading advice to try to catch a falling knife.  I would recommend averaging into your favorite REIT and MLP shares on any additional weakness.  You don’t have to buy your entire target allocation in one trade;  buy on dips to enjoy a lower cost basis and plan on holding for a while.

If I’m wrong—very wrong—and inflation goes through the roof in the years ahead, REITs and MLPs will take a hit, at least initially.  But both also have a degree of built-in inflation protection in that real estate and pipeline assets should hold their value in real terms even while the debts used to finance them get inflated away.

Disclosures: Sizemore Capital is long O, MMLP, AMJ and VNQ.  This article first appeared on TraderPlanet.

SUBSCRIBE to Sizemore Insights via e-mail today.

Central Bank News Link List – May 31, 2013: Brazil’s central bank in ‘in a process’ of combating inflation – report


Here’s today’s Central Bank News’ link list, click through if you missed the previous link list. The list comprises news about central banks that is not covered by Central Bank News. The list is updated during the day with the latest developments so readers don’t miss any important news.

U.S GDP First quarter revised slightly lower

By HY Markets Forex Blog

According to the data released from the Commerce Department, the data shown prove that the U.S economy grew an annual rate of 2.4% in the first three months of the year.

On Thursday, The department’s Bureau of Economic Analysis said that the figures were slightly slower than the 2.5% rate predicted for the quarter to 24%. Although the consumer spending were stronger than expected. Some of the other reports released on Thursday were the increased in the jobless claims in the past week and the positive signs of recovery in the housing market.


The reports showed that the economy was getting stronger regardless of its major financial drag according to Ellen Zentner, an analyst from Nomura Securities International. “The GDP data continue to paint the picture of an economy with strengthening fundamentals that is facing significant fiscal drag,” she said.

The Organisation for Economic Co-operation and Development (OECD) lowered its predictions for the global growth to 3.1% this year and 4% in 2014. Major of the U.S. trading partners are predicted to remain in recession for the rest of the year.

The reports show that the consumers might have been encouraged by the decrease of the unemployment rate. Over 200,000 jobs have been added to the jobs market.

The government’s spending fell to a 4.9% annual rate compared to the initial predication of 4.1% .Businesses bought less and growing at a slower pace. Analysts are predicting a slower growth in the next three months.


The post U.S GDP First quarter revised slightly lower appeared first on | HY Markets Official blog.

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