InvestMacro Forex News

Scalping is an alluring draw for many new traders. It promises action, suspense, immediate gratification, and, if done well, bragging rights. In fact, scalping is the most often suggested trading method in Forex forums, and new traders, unaware of its dangers, frequently take their peers’ assurances at face value.

Scalping is a trading method in which the chart technician opens several very short-term trades with the aim of coming away with small gains each time. Scalpers, if they use a stop loss, typically set it to at least twice the amount of that they want to make in profit. A scalper utilizes indicators that lag the price less than others, such as the Relative Strength Index and the Fast Stochastic. They often also make use of non-lagging indicators that interpret volume, such as the Market Facilitation Index. With these indicators, they typically seek to identify retractions in established trends, or else make back-to-back trades within a range.

Additionally, the scalper may view several different charts at once, one for each major time frame: 1 minute, 5 minute, 15 minute, 1 hour and 4 hour. With these, they can identify areas of support and resistance and trend correlation.

However, as sophisticated as these methods are, there are significant dangers to scalping. Primary among these is the nature of scalping itself, which encourages the gambler’s mindset of “all or nothing.” Scalpers may ascribe too much importance to the result of a signal trade, becoming emotionally attached. The premise of scalping is that with a sound trading system, proper money management and sufficient volume, the scalper should end the day, week or month with a profit. If the scalper reacts badly to a single bad trade, however, they could begin making emotional decisions that can magnify that initial loss into the total loss of their account in a frighteningly brief amount of time.

Furthermore, while scalping is pushed on to new traders by more experienced ones and even some unscrupulous brokers, most novices do not have the account size required to truly benefit from scalping. For instance, most brokers that cater to new traders require a deposit of at least $300 and offer spreads of, at minimum, three pips. Three pips, however, is far too wide for the purposes of scalping. A professional scalper will trade with a spread of .5 pip, with one pip being the absolute maximum. Access to an account that provides such a spread typically requires an initial deposit of $10,000.

The difference between one pip and three pips may seem trivial at first glance—and it is for long term traders—but keep in mind that scalpers need to be in and out of the market in mere minutes. When dealing with tick charts, two pips can be a significant barrier to overcome, especially if it occurs in an area of resistance or support.

Another hidden danger of scalping lies in the fact that the countries that Forex currency pairs are based upon frequently release economic news. The market becomes incredibly volatile during these times and the price of the more active pairs can easily fluctuate over 100 pips. In such a tempest, the scalper has no hope of setting stop losses and is at the mercy of the market.

In addition to cluing in to economic data releases, steeling yourself against emotional trades and having adequate account size, you can minimize your risks when scalping by studying the major currency pairs. Each currency pair has a “personality” of sorts. It has a habitual daily and hourly range. If you can ingrain the way the currency pairs move in your subconscious by watching them move over a long period of time, your trading decisions will be better informed.

Additionally, it is of paramount importance that you have a tested trading system in place before you begin scalping and that you stick to it at all times. If you deviate even a bit, you will be in danger of making emotional, knee-jerk decisions, and you may lose your account.

Scalping is not, as it is often touted, the holy grail of Forex trading. It is a take-no-prisoners, cut-throat affair that exposes its practitioners to extreme risk and leaves no room for the weak. Arm yourself with knowledge and save the gambling for the poker table, and you may have a chance of joining the elite few who scalp profitably over the long term.

To learn more please visit www.clmforex.com

By www.CentralBankNews.info     Singapore’s central bank maintained its policy stance, saying it expects the economy to continue to expand this year and into 2014 though “some volatility in growth rates is likely” in light of the uncertainties that currently characterize the international environment.
    The Monetary Authority of Singapore (MAS), which targets the Singapore dollar against a basket of foreign currencies as a way to control inflation, said it would “maintain its policy of a modest and gradual appreciation of the S$NEER policy band. There will be no change to the slope of the policy band and the level at which it is centred.”
    MAS added that the current width of its trading band for the Singapore dollar was considered sufficient to accommodate temporary fluctuations and would thus be maintained.
    “Barring a significant deterioration in global demand conditions, the labour market will remain tight, and exert further upward pressures on MAS core inflation as firms pass on accumulated costs to consumer prices,” MAS added.
    Singapore’s Gross Domestic Product contracted by 1.0 percent in the third quarter from the second quarter on an seasonally adjusted annualised basis, MAS said, referring to advance estimates by Singapore’s trade and industry ministry.

    But incoming data suggests that the recovery in the global economy is continuing and Singapore’s external-oriented sectors are expected to see a modest uplift while domestic-driven sectors, such as construction, healthcare and education remain resilient.
    “Overall GDP growth is projected at 2.5-3.5 percent in 2013, and is unlikely to be significantly different in 2014,” MAS said, adding that the labour market should remain at full employment.
    Singapore’s headline inflation rate inched up to 2.0 percent in August from 1.9 percent in July while the authority’s gauge for core inflation rose to 1.8 percent from 1.6 percent.
    “While global demand conditions will strengthen, spare production capacity in the advanced economies and ample supply buffers in commodity markets should keep a lid on imported inflation,” MAS said, adding that core inflation is expected to rise to 2-3 percent next year from 1.5-2.0 percent this year and the unemployment rate remains below its historical average and the pass-through of domestic costs to prices of consumer services could intensity.
    In July MAS revised down its forecast for 2013 CPI-All items inflation to 2-3 percent from its previous forecast of 3-4 percent in light of a sharp fall in car prices following the announcement of financing restrictions on motor vehicle loans.
    It said that it is currently expecting all-items inflation to come in a the upper range of its 2-3 percent forecast and for 2014 it is also forecasting all-items inflation at 2-3 percent.

    www.CentralBankNews.info

By www.CentralBankNews.info
    Last week four central banks, including Indonesia’s, kept their policy rates steady as Brazil continued its tightening cycle and Tajikistan cut its rate as global financial markets gyrated in sync with the prospect of reaching a solution to the U.S. political gridlock that is threatening the global economy.
    Observers believe Washington eventually will find a way to raise the debt ceiling and thus avoid a calamitous default, but the damage to the U.S.’s dominant role in the global financial system may already have happened.
   With the global economy for the second time in two years held hostage to U.S. political bickering over the federal debt ceiling and budget, international creditors, including China, are clearly worried with the consequence that the diversification of international reserves away from U.S. dollars is likely to accelerate.
    Even Stanley Fischer, former Bank of Israel governor, World Bank chief economist and International Monetary Fund first deputy managing director, seemed taken aback by how partisan politics in Washington are undermining international trust in the U.S.
    “This is a remarkable period in that both monetary policy and fiscal policy in the United States are at the center of uncertainty in the world, and about the world economy, and that is an extraordinary situation,” Fischer told Bloomberg television.
    “This was usually the country you could rely on,” Fischer added, thereby raising the prospect that the creditworthiness of the U.S. can no longer be taken for granted.
    This growing distrust in U.S. political leadership is likely to speed up the momentum toward a more multi-polar world, to paraphrase Christine Lagarde, IMF managing director, who on Friday noted the share of emerging and developing economies of global output will rise to nearly two-thirds from one half in the next decade.
    “So the stage is set for a world, 20 or 30 years from now, where economic power will be far less concentrated in the advanced economies—and more vastly dispersed across all regions,” she said.
    As if to underscore this coming shift in economic power, the People’s Bank of China and the European Central Bank on Thursday agreed on a bilateral currency swap with a maximum size of 350 billion yuan, or 45 billion euros. This was another step toward the internationalization of the renminbi that will eventually allow it to become an international reserve currency.
    And Hong Kong’s securities exchange said it would apply a bigger discount to U.S. Treasuries used as collateral, an indication of how swift global financial markets are reacting to the threat of a U.S. default and the pivotal role of Treasuries in global finance.
    “Politicians don’t quite seem to have grasped how important the Treasury market is to the global financial system,” HSBC chief economist Stephen King told Reuters.
    Amidst the tumult in Washington politics, President Obama nominated Federal Reserve Deputy Governor Janet Yellen as successor to Ben Bernanke, an comforting decision as it guarantees continuity and an experienced hand in guiding U.S. monetary policy through the risky process of winding down quantitative easing and eventually normalizing policy.  

    Through the first 41 weeks of this year, the global trend toward lower rates continues to weaken as central banks have now raised rates 22 times, or 5.6 percent of this year’s 395 policy decisions by the 90 central banks followed by Central Bank News, up from 5.4 percent the previous week and from 4.7 percent at then end of June.
    Brazil again raised its rate this week, its fifth rate hike in a row, and signaled that it is likely to continue tightening by repeating the same statement that has accompanied the previous rate rises.
    Some economists had expected the Central Bank of Brazil to signal that its tightening cycle was coming to an end and viewed the lack of any new statement as a sign of further rate rises.
    Emerging markets account for 45 percent of the 22 rate rises worldwide, with Brazil, Indonesia and India accounting for nine of those rate rises.
    Tajikistan was the only other central bank to change rates last week, illustrating the absence of global inflationary pressures.
    Policy rates have been cut 90 times so far this year, or 22.8 percent of this year’s policy decisions, the same percentage as in the previous week but down from 25.3 percent after the first half of 2013.
    Despite the unease hanging over financial markets from politics in Washington and the downward revision in global growth forecasts by the IMF, the message from two central banks last week was surprisingly upbeat.
    South Korea, which held its rates steady, said exports were improving and domestic demand was improving while Peru, which also held rates steady, said indicators of the external market had shown a slight recovery.
    But embattled Indonesia, which paused after raising rates four times this year, had an opposite view, seeing a slowing global economy that will put pressure on its exports.
    The Bank of England also maintained its policy stance last week, but made no comment, as usual.

    LAST WEEK’S (WEEK 41) MONETARY POLICY DECISIONS:

    This week (week 42) six central banks are scheduled to hold policy meetings, including those from Russia, Singapore, Sri Lanka, Thailand, Mozambique and Serbia, which pushed back its meeting to Friday from Thursday.

    www.CentralBankNews.info

AUDUSD remains in short term uptrend from 0.9280. Further rise to test 0.9526 resistance is still possible, a break above this level will signal resumption of the longer term uptrend from 0.8847 (Aug 5 low), then the following upward movement could bring price to 1.0000 zone. Support is now at the upward trend line on 4-hour chart, a clear break below the trend line support will indicate that the upward movement from 0.9280 has completed, then deeper decline to 0.9200 area could be seen.

Provided by ForexCycle.com

By MoneyMorning.com.au

What’s the first thing you hear when you begin investing?

Our bet is it’s the same as one of the first things we heard as an investor.

At first glance it seems to be good advice. But when you look at it closely, it turns out it could be the worst advice investors ever take.

What are we talking about?

We’re talking about diversification – or as we prefer to call it, investment suicide…

One of the biggest fibs put around by mainstream investing pros is that investors should have balanced and diversified portfolios. They spin that yarn not because it’s the best advice, but because it suits them.

The more diversified your portfolio the less attention you need to pay to your investments.

That suits most of the financial services industry because it means they can cream off a few percentage points every year without having to do much work…and without having to talk to you.

They’re the same folks who, contrary to all the evidence before them, still tell you ‘buy and hold’ is still a winning formula for stock investing, when in reality it’s the worst form of investing.

Stock Pickers Beat Index Trackers

But we won’t dwell too much on ‘buy and hold’ versus active investing today. We’ve made our view clear on that over the past few years. Our view is that investors need to be active. That doesn’t necessarily mean trading in and out of stocks every day.

Being an active investor just means taking an active interest in your investments and your wealth. It just means frequently monitoring and adjusting your asset allocation.

The result is you’ll have more confidence in the stocks you pick. This gives you a better chance to outperform the broader index.

That’s important, because if you look at the performance of the All Ordinaries index going back to 1999, it has only gained 71.9%. That’s not terrible. But it’s not great either. So let’s see how the index stacks up against just a handful of blue-chip stocks:

Source: Google Finance

Every stock in this sample except Telstra [ASX: TLS] has at least doubled the performance of the All Ordinaries since 1999. Seeing that the five stocks we’ve chosen make up such a big part of the index, it just goes to show how a diversified portfolio kills returns.

Also, note the companies we’ve selected. They are big blue-chip stocks: BHP Billiton [ASX: BHP], Commonwealth Bank of Australia [ASX: CBA], Telstra [ASX: TLS], Westpac Banking Corporation [ASX: WBC], and Woolworths [ASX: WOW].

Those are big blue-chip stocks. If we’d picked a few small- or mid-cap stocks then the outperformance could have been even greater. But we wanted to give a genuine example of a handful of stocks many investors would have owned in 1999.

Of course, that’s all well and good, but won’t a diversified portfolio protect you in a falling market? Isn’t that the real point of having a diversified portfolio?

If that’s what you think you may be in for a surprise…

No Protection from a Diversified Portfolio

The following chart shows you the peak to trough for the same stocks and index from 2007 through to 2009:

Source: Google Finance

Not surprisingly given the nature of the financial meltdown in 2008, CBA shares fell the most, down 54.4%. But you’ll also note that the second worst performance was the All Ordinaries, down 53.7%.

In short, despite the tales you’ve often heard about diversification saving investors from falling markets, in this example the opposite is true. If you’d held these five stocks through the meltdown your portfolio would have dropped 38%.

While no one wants their stocks to fall, it’s still 15% better than the diversified index portfolio.

And if you had actively managed your portfolio, then maybe you could have sold out on the way down. But we won’t take that for granted. Besides, the point we’re trying to make is that diversification doesn’t always reduce your risk or minimise your losses.

In the case of the 2008 meltdown it actually increased your risk.

This shows the virtue of concentrating your portfolio into a small number of stocks that you’ve carefully picked out from all others. And while we aren’t a fan of ‘buy and hold’, even that strategy using just five stocks is better than a diversified ‘buy and hold’ strategy.

It just goes to show that over the longer term the conventional wisdom about buying a diversified portfolio isn’t necessarily true. Our view is (and our analysis confirms this) is that in order to build wealth, diversification isn’t the winning formula. The best approach is to pick a small number of individual stocks and actively manage them.

Cheers,
Kris+

Join Money Morning on Google+

From the Port Phillip Publishing Library

Special Report: UNAVOIDABLE: Australia’s First Recession in 22 Years

By MoneyMorning.com.au

Facebook (FB)…Groupon (GRPN)…Zynga (ZNGA)…Angie’s List (ANGI).

When we saw a rash of social media companies like these go public, I was sceptical.

To me, while their services were popular, their business models – their actual way of monetising that popularity – didn’t seem very secure, never mind lucrative.

I mean, who wants to own Angie’s List anyway? Great website…weird stock.

The main problem? While the lion’s share of these web companies’ revenue comes from advertising, as mobile technology advances, they’re struggling to keep pace.

For example, when Facebook launched last year, CEO Mark Zuckerberg and his band of overzealous investors faced one glaring issue: no mobile ad revenue…at all. And the stock tanked.

Oddly enough, Twitter faces the same issue. I say ‘oddly enough’ because Twitter isn’t supposed to have a mobile problem.

Its ‘microblogging’ concept is designed specifically for tablets and smartphones, so users can give immediate commentary anywhere…anytime.

But like everyone else in the social media industry, when people use Twitter’s mobile app, the company makes far less money from advertising.

However, unlike everyone else, Twitter has a lesser-known side business that’s proving very lucrative…

And when the company filed its S-1 last week, everyone focused on ad revenue and ignored this…

Almost a year ago, Tech & Innovation Daily noted that Big Data is one of today’s seven most investable technology trends.

Research firm IDC agrees. It says the Big Data market is growing seven times faster than the entire information technology sector and is on pace to be worth $16.9 billion in two years.

And Twitter proves why…

The company is selling its data.

You see, thanks to its public, real-time data, nothing compares to Twitter. Its endless stream of news, events, trends, opinions and experiences provides a wealth of insights and opportunities.

In fact, it’s spawned a vast commercial ecosystem called ‘Social Listening’.

Emerging from the innovation pipeline are social data firms – companies that essentially collect, dissect and analyse information. And they’re buying Twitter’s data to help their clients get a leg up on the competition.

Here’s How…

Ever wonder how Google (GOOG) ranks search queries?

Or how supercomputers crunch numbers light-years faster than humans?

In a word…algorithms.

When it comes to processing and analysing data and calculations, computer algorithms have become critical. Especially given today’s immense (and increasing) amount of data.

Just ask the clients of social data-mining firms.

Companies like DirecTV (DTV).

Let’s say there’s a service outage in a certain area. Rather than wait for an onslaught of calls and complaints, DTV can use Twitter’s social data analysis to stay ahead of the problem.

It’s certainly not the only one…

• The United Nations uses Twitter algorithms to identify civil disorder hotspots.

• Five Guys worked with Washington, D.C. social data firm New Brand Analytics to analyse how its hamburgers measured up against the competition.

• Human resource departments use Twitter data to evaluate potential recruits.
  Even the Library of Congress is cataloguing tweets.

• And Wall Street is using Twitter’s algorithms to get an edge on the market.

Take Dataminr, for example…

Dataminr serves active traders – something it did very well last week.

Five minutes before news broke about the shooting on Capitol Hill, Dataminr issued a sell alert to its subscribers. Its algorithm had picked up on tweets from eyewitnesses about the shooting.

The algorithm analysed the timing and location and determined that an urgent situation was developing. One with a high chance of a negative market response.

The program warned Dataminr…Dataminr warned its subscribers…and moments later, the S&P dropped by 20 points.

Fund managers also use algorithms to assess ‘sentiment scores’.

In other words, they trace investors’ mood on stocks – the forces that can push stocks higher or lower.

Very powerful, profitable information.

The question is: If knowledge is power, what’s the price for it?

Well, Japanese company NTT Data (Tokyo: 9613) paid Twitter $35.6 million per month last year for data.

Along with Gnip, Data Sift and Topsy, these four companies account for the bulk of Twitter’s data revenue.

They’re essentially data brokers. Or what Twitter calls ‘certified data resellers’.

Twitter sells its data to these firms – who, in turn, sell to companies looking for niche information.

So How is Twitter’s Competition Responding?

Well, Facebook has largely avoided the data-mining business, as it isn’t set up for conversations and real-time events like Twitter is. Rather, it’s geared towards sharing
among friends.

But with an eye towards Twitter’s additional data revenue, Facebook has recently partnered with companies to provide information about certain topics.

Like Twitter’s ‘trending’ application, tools can focus on people in certain areas and monitor emotive phrases. They can then create a heat map or sentiment score.

For decades, businesses have spent countless hours and millions of dollars trying to understand the past. But the innovative minds at Twitter are measuring the present.

They know that whenever we use social media, we provide vital, actionable information for companies to use in the here and now. And the company is finding ways to monetise that information.

Martin Biancuzzo
Contributing Editor, Money Morning

Publisher’s Note: Twitter IPO Hits Pay Dirt From Data Mining article originally appeared in The Daily Reckoning USA

GOLD: Bearish, Looks To Weaken Further.

GOLD: With the commodity bearish and pointing lower, further downside pressure is likely. The threat is for more weakness to occur on breaking below that level possibly towards the 1,250.00 level. A turn below here will shift attention to the 1,215.00 level and next the 1,180.00 level. Its daily RSI is bearish and pointing lower suggesting further downside. Conversely, resistance lies at the 1,329 level where a breach will target the 1,399.79 level. A cut through here will open the door for a run at the 1,433 level. Further out, resistance resides at the 1,450.00 level, its psycho level. All in all, GOLD remains biased to the downside.

By fxtechstrategy.com

Source: JT Long of The Gold Report (10/11/13)

http://www.theaureport.com/pub/na/born-libertarian-doug-casey-on-ron-paul-and-the-price-of-freedom

The country may be going in the wrong direction, but born Libertarians Dr. Ron Paul and Casey Research founder Doug Casey are enjoying the power of sowing dissention by spreading ideas. In this interview at the Casey Research 2013 Summit in the wake of Ron Paul’s keynote address, Casey tells The Gold Report why he believes the U.S. is looking more like ancient Rome in its final days and how he is planning for the coming crisis—in another country watching on his big-screen television.

The Gold Report: Doug, we are at your conference in Tucson, Arizona, the day after former Congressman and presidential candidate Dr. Ron Paul gave the keynote speech to a sold-out crowd. How did you two first meet?

Doug Casey: It was about 30 years ago. Ron used to attend my Eris Society (named after the Greek goddess of discord) meetings in Aspen, Colorado. Everyone from Sonny Barger of the Hells Angels motorcycle club to Burt Rutan, inventor of SpaceShipOne, would meet to discuss ideas.

TGR: In those 30 years have Ron Paul’s ideas changed much?

DC: Ron believes he was born a libertarian. He’s right. I believe in Pareto’s Law, the 80–20 rule. I prefer to think that 80% of humans are basically decent, which is to say that they were born libertarian oriented. But it takes a while to crystallize what that means. Ron and I, and many others, have moved beyond gut libertarianism to a structured, intellectual libertarianism.

Some people see the same things we see through a totally different lens, however. Those people tend to be the other 20%, or perhaps 20% of that 20%, or even 20% of that 20% of that 20%. They range from being wishy-washy on ethical subjects to being sociopaths or even outright criminals. These people are at the opposite end of the spectrum from us in every way.

TGR: One of the things Ron Paul mentioned last night is that a true libertarian advocates for the freedom of everyone to do what he or she wants as long as it’s not hurting someone else. This includes people who don’t agree with your views.

DC: Exactly. As opposed to busybodies who want to tell everybody else what to do. They think they know best and are perfectly willing to put a gun to your head to make sure that you do what they think is right.

TGR: We are meeting in the midst of a government shutdown. Ron Paul called it a paid holiday for federal workers. Are we doomed to an endless cycle of these man-made crises?

DC: I would like nothing better than to see the shutdown go on forever, but unfortunately the government is only shutting down things that inconvenience people, like monuments and national parks, things that should not be owned by the government to start with. I wish they would shut down all their praetorian agencies, like the FBI, the CIA and the NSA. Shut down the IRS. I am much more concerned about Silk Road being shutdown than I am the U.S. government being shut down.

TGR: Do you think regular people care whether government is shut down or not?

DC: Over half of Americans are living off the state, receiving more from the state than they’re putting into it, which makes them receivers of stolen property. They see the government as a cornucopia and therefore a good thing so they want it to be open and sending them checks.

The situation is fairly hopeless at this point and it’s likely to get a lot worse before it gets better. Trends in motion, in whatever direction, tend to stay in motion until they hit a crisis at which point they transform into something else. This trend is not only in motion, but it’s accelerating in the wrong direction.

TGR: Ron Paul said that the charade on the American people is that the two parties are different, that actually it’s not that we need a third party, but we need a second party. Your presentation compared the end of the Roman Empire to the state of the U.S. today. Is the current political system doing a better or worse job of protecting freedom and liberty in the U.S. compared to ancient Rome?

DC: The founders consciously modeled the U.S. after Rome, everything from the way government buildings looked to having an assembly and a senate. We are similar right down to the Latin mottos. When you model yourself after something, you eventually tend to resemble it. That partly explains why we are on the slippery slope of constant wars, less freedom, more power for the executive, destruction of the currency and barbarians at the gate. Another part is the natural tendency of all empires to reach their level of incompetence and then decline. It’s to be expected. Entropy dictates all things wind down and degrade.

As I pointed out in my speech, America has gone through periods of what paleontologists call punctuated disequilibrium. Things evolve gently in one direction and then experience massive change very quickly. I’m afraid that the U.S. might be approaching a phase similar to the one the Romans experienced before Diocletian made himself emperor. He completely changed the character of Rome; he believed that in order to save Rome, he had to destroy it.

As we go deeper into this crisis, of which we’re just currently in the early stages, there’s every chance that the American people are going to look for a savior, a strong man, probably a military person because Americans love and trust their military for some reason. I see the military as not much more than a heavily armed version of the post office, but I suspect that we’ll find someone who is the equivalent of Diocletian, who will change the whole nature of society radically in the wrong direction.

TGR: Do you believe in changing from within the system or just getting out from under the system? Would you ever run for public office?

DC: I think the situation is beyond retrieval at this point. People generally get the government they deserve. At this point, Americans are much more interested in freebies than they are in personal freedom. They are like scared little rabbits. They’re much more interested in safety than they are in personal liberty. I think they’re going to get what they deserve good and hard over the years to come. I would much rather watch what goes on in the U.S. on my widescreen TV in the lap of luxury in another country than be in the epicenter of things here. The system is beyond the point where it can be reformed.

And, no, I have zero desire to run for office. Plus, anyone who runs for office disqualifies himself for being in a position of power by the very fact that he wants to be in that position. My friend Harry Browne always used to say that when he ran for president on the Libertarian ticket the first thing he’d do if he were elected would be to quit—at least after rescinding all outstanding Executive Orders and recalling all the troops. Anyway, even if Ron Paul had been elected president and if he tried to make the necessary changes, the public would have rioted, Congress would have impeached him, and the heads of the CIA, FBI and the military would have sat him down and subtly intimated that they have the power and he shouldn’t do anything they don’t want done—or undone.

I don’t think a change can be made at this point. I’m just interested in seeing what happens when we really get involved in a really big crisis, which I think is going to happen in the next couple of years as we go back into the trailing edge of the economic hurricane that started in 2007.

TGR: One of the things that has come up as part of the shutdown debate is healthcare. Do you have health insurance? And, how would you control healthcare costs?

DC: First of all, I don’t call it health insurance because it doesn’t insure your health. That’s something that you’re personally responsible for, not some third party. I call it medical insurance. Just as I call the FDA the Federal Death Authority because it probably kills more people every year than the Department of Defense does in a typical decade by slowing down the approval and hugely raising the cost of new drugs and technologies.

Getting to back to your question, no, I don’t have medical insurance. If anything goes wrong with my body, I’ll treat it as I would if something goes wrong with my car. I’ll find the best doctor elsewhere in the world where medical costs can be 20% of what they are in this country. I’ll pay for it in cash. I don’t want to have to fight with an insurance company, or the government, about what’s covered or not.

The whole idea of everybody having medical insurance is a corruption that arose during World War II when companies used insurance to attract workers. Then we had Medicare and then Medicaid. These are the reasons costs have escalated. In a free market society, medical costs should have collapsed and gone down in the same way as the cost of computers have collapsed and gone down even as they’ve gotten vastly better. People think they need the government in medicine, but it’s been totally counterproductive. It’s done the opposite of what was intended.

TGR: One of the things Ron Paul mentioned is that his speeches on college campuses, including UC Berkeley, have been some of the most well received. Do you have hope for the next generation?

DC: Yes, there is reason for hope over the longer term. Generally, older people in this country have voted all these “benefits” for themselves, and they don’t want to have their rice bowls broken. The younger people are being turned into indentured servants to pay for these benefits. Young people are figuring this out.

Another worrisome thing is that a lot of young people have indentured themselves by taking on huge amounts of college debt; $1.2 trillion is the current number. They can’t even discharge it through bankruptcy, although many are unable to pay it. More and more are deciding that doing four years in a college, to experience indoctrination from wrongheaded professors, is a complete misallocation of both their time and their money.

If I had to do it again, I definitely would not go to college. I recommend others skip college, unless they need to learn a specific technical set of skills, such as doctoring or lawyering or engineering or a science where you need lab work. Most kids today, however, are going off to college for things like gender studies, political science and English. These are things you should learn on your own, on your own time, at no cost. Meanwhile, avoid the indoctrination of the creatures who hang out in university faculty rooms who teach because they are incapable of doing anything else.

TGR: Ron Paul intimated that we’re in a middle of a revolution. You said that the solution to our problems would be less command and control and more entrepreneurs. Are the small business owners the real revolutionaries?

DC: They could and should be, but it is becoming increasingly difficult to start a business because of the regulatory and tax environment in the U.S. Smart people are leaving in droves. There just aren’t enough left to change things. I’m afraid we’re just going to have to let things take their course.

The main function that Ron Paul has served was educating people, which is necessary and laudable. But, the odds of him succeeding in changing things are close to zero.

TGR: You talked about the role of education and Ron Paul mentioned the power of the Internet to circulate new ideas based on the theory that ideas have consequences. Your ideas are having an impact thanks to the power of the Internet. Does that bode well for the future?

DC: It does. The Internet is the best thing that’s happened since Gutenberg invented movable type and the printing press; it’s a marvelous thing. That’s exactly why the government wants to regulate the Internet. It sees it as a huge danger.

TGR: Does suppressing ideas ever work? Is it working in China?

DC: Actually, in many ways China is freer than the U.S., but that’s not one of them.

If you are a businessman and you keep your nose out of politics, it actually is freer. You’ll have less taxes, less regulation in China than you would in the U.S. But instead of emulating the free part of China, the U.S. government is trying to copy the Internet restrictions because it sees the Internet as a danger to the existing order. And they’re right.

TGR: But didn’t the governments of Middle Eastern countries find out that ideas have a life of their own and they find a way to spread despite attempts to shut them down?

DC: They do, so let’s hope for the best.

TGR: Finally, Ron Paul said that things are worse than the government will admit and the idea of economic growth this year is a dream. He said we need to be serious, but not despondent. Make financial plans, but have fun doing it. Do you agree and are you having fun yet?

DC: I am having fun. I’m doing this not because I need the money, but because it’s amusing and it’s good karma to sow dissention in the ranks of the enemy.

TGR: Thank you for sharing your thoughts.

DC: Thank you.

The audio recordings of the Casey Research 2013 Summit are available here.

Doug Casey, chairman of Casey Research LLC, is the international investor personified. He’s spent substantial time in more than 175 different countries so far in his lifetime, residing in 12 of them. And Casey literally wrote the book on crisis investing. In fact, he’s done it twice. After “The International Man: The Complete Guidebook to the World’s Last Frontiers” in 1976, he came out with “Crisis Investing: Opportunities and Profits in the Coming Great Depression” in 1979. His sequel to this groundbreaking book, which anticipated the collapse of the savings-and-loan industry and rewarded readers who followed his recommendations with spectacular returns, came in 1993, with “Crisis Investing for the Rest of the Nineties.” In between, Casey’s “Strategic Investing: How to Profit from the Coming Inflationary Depression” broke records for the largest advance ever paid for a financial book.

Casey has appeared on NBC News, CNN and National Public Radio. He’s been a guest of David Letterman, Larry King, Merv Griffin, Charlie Rose, Phil Donahue, Regis Philbin and Maury Povich. He’s been featured in periodicals such as Time, Forbes, People, US, Barron’s and the Washington Post—not to mention countless articles he’s written for his own websites, publications and subscribers. Casey Research currently produces 11 publications on a variety of investment sectors and maintains two websites.

Want to read more Gold Report interviews like this? Sign up for our free e-newsletter, and you’ll learn when new articles have been published. To see a list of recent interviews with industry analysts and commentators, visit our Streetwise Interviews page.

DISCLOSURE:

From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles on the site, may have a long or short position in securities mentioned and may make purchases and/or sales of those securities in the open market or otherwise.

Streetwise – The Gold Report is Copyright © 2013 by Streetwise Reports LLC. All rights are reserved. Streetwise Reports LLC hereby grants an unrestricted license to use or disseminate this copyrighted material (i) only in whole (and always including this disclaimer), but (ii) never in part.

Streetwise Reports LLC does not guarantee the accuracy or thoroughness of the information reported.

Streetwise Reports LLC receives a fee from companies that are listed on the home page in the In This Issue section. Their sponsor pages may be considered advertising for the purposes of 18 U.S.C. 1734.

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Source: JT Long of The Gold Report (10/11/13)

http://www.theaureport.com/pub/na/busting-the-myths-that-could-wipe-out-your-investments-louis-james-marin-katusa-and-rick-rule

The Gold Report sat down with three of the mythbusters-in-chief at the recent Casey Research 2013 Summit. Louis James, Marin Katusa and Rick Rule debunk myths that range from quantitative easing to crowdfunding, and touch on an array of resource sectors, including gold, platinum, palladium and oil. Get insights about the work investors need to do to succeed and learn why age matters.

Myth: Quantitative Easing Is Being Tapered Off

The Gold Report: Why is the theory of tapering or turning quantitative easing (QE) off a myth and who really benefits from QE?

Rick Rule: My view, as an investor, not an economist, is that QE is misnamed. I think it’s another way of saying counterfeiting. It exists in large measure because we’re running a trillion-dollar deficit and, while we can hoodwink investors into funding two-thirds of it, we need to print away the last third.

TGR: What are the consequences of turning off QE?

Louis James: Federal Reserve Chairman Ben Bernanke said himself that he had certain criteria he wanted to see before tapering—employment in particular. Those have not been met. Employment figures have improved, but only in—I guess the technical term would be “crappy” jobs. Long-term employment, the middle class’ bread and butter, is not better.

TGR: Rick, you defy common sense and argue that bull markets are bad and bear markets are good, but it doesn’t feel that way.

RR: JT, at the risk of being sexist, women are normally more rational shoppers than men. Think about the stock market as a mall.

In the mall, the store on the left-hand of the entrance has a big flashing sign that says, “Bear Market Merchants All Goods 70% Off, No Reasonable Offer Refused, Come Back Tomorrow—Prices May be Lower.” The store on the right-hand side has a tiny sign that says, “Bespoke Bear Market Merchants, No Deals Ever, High-Margin for Merchants, Don’t Even Think About Asking for a Deal, Prices May be Higher Next Week.”

If you’re going to buy a pair of shoes, which store would you go to?

This is a no-brainer. When people buy physical goods, they act rationally. When they buy financial goods, they want to overpay. It’s totally irrational and it’s extraordinarily common. If you want to become wealthier, why wouldn’t you buy financial assets when they’re on sale?

TGR: Staying with the mall analogy, does that suggest that people are afraid stocks with be on even deeper sale tomorrow?

Marin Katusa: You have to look at the timeframe. This is a great market if you’re an accredited investor and have an account with someone like Rick Rule or you subscribe to the International Speculator and follow the right management teams. Today, you can invest in deals with five-year full warrants that would not have been available three years ago. Rick and I have been in meetings where the venture teams laughed at me when I requested full warrants. Rick just said, bite your lip, smile and wait. And he was right.

If you’re buying stock today in hopes that the market will go up the next day, you’ll be in a lot of pain. But if you have a two-to-five year timeframe, you can get guys like Bob Quartermain and Lukas Lundin on sale.

LJ: What would you give to go back in time and buy Apple just after the Apple II came out? Or buy Microsoft when DOS was new?

Over the course of the last decade, what I think of as the first half of this great bull cycle, billions of dollars have gone into the ground and done good work.

Companies with 10 million ounces of high-grade gold in a safe mining jurisdiction are on sale below IPO prices. Some companies with excellent management and assets in hand are selling for less than cash value. You can buy these companies now, instead of looking for the next Apple or Microsoft.

RR: Words like want and hope in speculation are truly four-letter words, profanities. Having a stock in your portfolio that cost $200,000 and has a current market valuation of $40,000 is unfortunate, but irrelevant. Investors need to take advantage of their education and do their best with the situation at hand. Right now, things are cheap. When things are cheap you’re supposed to buy. In bull markets when things are expensive, you’re supposed to sell.

Right now, buying is easy because you have no competitors. In a bull market, selling is easy because everybody is a buyer. If the market is desperately looking for bids and you are scared to death because your stocks can’t catch bids, you have to bid. They say the market was desperate for asks, but this market is desperate for bids.

Myth: The Commodity Super Cycle is Over

TGR: Some have said this the end of the commodity super cycle. Is that a myth? And is it more or less of a myth in some sectors than others?

RR: The narrative that existed in 2009–2010, when the commodity super cycle was the currency of all financial thinking, is unchanged. The first part of that narrative was founded on the idea that world population growth was taking commodity consumption higher. World population growth is not over.

The second part of the narrative was that as poor people gained more freedom, they got richer and consumed more. Political liberalization in emerging frontier markets has continued and people are wealthier and are consuming more.

A third part of the narrative was that Western consumers had lived beyond their means and as a consequence were debasing the denominators, the fiat currencies. If you debase the denominator, the nominal value of stuff would go up. We have not stopped debasing the denominator.

The entire narrative associated with the resource industry bull market is intact. Nothing has changed except the price.

A cyclical decline in a secular bull market is a different way of describing a spectacular sale for people who understand that the narrative hasn’t changed.

TGR: Are there some sectors that still feel as if it’s a commodity super cycle?

MK: Definitely. Look at oil.

RR: But your readers don’t want to look for hot sectors, because they are overpriced. They want to look for cold sectors. They want to find the sector, management team or the company that’s going to be hot.

TGR: If oil is hot right now, what is going to be hot?

MK: From the energy side, I think within three years uranium will be hot.

TGR: Why the three-year timeline?

MK: There are three major catalysts. First is the end of the U.S.-Russia Highly Enriched Uranium Purchase Agreement (HEU). The last shipment will happen at the end of 2013.

Second is the transitional agreement, in which the Russians will provide up to 50% of the uranium on a new pricing metric than the HEU agreement. Only this time, the Russians have new dance partners: Saudi Arabia, China, India, Korea, even France. The reality is the Americans will have to pay more for uranium from the Russians.

Third, nuclear reactors are not all being taken down; they’re being built. Japan plans to bring its reactors back on-line, just not on the timeframe the junior resource sectors wants them to. The Japanese cannot afford to pay the most expensive electricity prices in the world and stay competitive. They have no choice but to move forward with nuclear power.

TGR: Is the end of HEU already priced into uranium?

MK: Yes, both because the market is determining what it’s worth today and because Japan shut down 40 nuclear reactors. That’s a black-swan game changer that shifted everything.

Yet, the long-term price is 50% higher than the spot price and more than 90% of the uranium being consumed and traded is based on the long-term price. That’s the equivalent of saying gold today is $1,300/ounce ($1,300/oz), but if you want to take delivery in three or four years—which is what nuclear utilities do for uranium—you have to pay $1,900/oz. Or copper at $4.50/pound if you want delivery in five years. That’s the situation in uranium today.

TGR: Louis, which sector are you looking forward to?

LJ: There’s talk on the streets about helium, although I’m not sure I want to move in that direction. I’m happier focusing on something right in front of me and that I understand. Finding a company that has a multimillion-ounce, high-grade deposit and is on sale at half-price is similar to going into the supermarket and finding the thickest, most beautifully marbled T-bone steak, fresh cut today, on sale for half-off. Why bother with hamburger of unknown quality?

Myth: The Market Has Hit Bottom

TGR: We keep hearing that we’ve hit a bottom, which would imply that the market is moving up. However, Rick, you have described it as a bifurcated market in which the bad stocks will continue to sink, which would be a good thing. How do we know which companies will sink and which will revive?

RR: That’s a critical question. Before your readers classify stocks, they need to classify themselves. Are they the type of person who will put enough time and attention into securities analysis to compete on their own? Or do they need other people to help them compete?

While securities analysis and stock selection in the junior market is imperfect, it can be done. It requires understanding the stock. If you’re not willing to understand the stock, you need an adviser.

TGR: How many hours does that work take? What questions should investors be asking?

RR: Speculators running their own portfolios without advice should limit the number of stocks in the portfolio to the number that they can spend two or three hours a month working on. That means reading every press release, proxy, quarterly and annual report. Read the president’s message and measure it against what he said the company would accomplish over the year.

Speculators unwilling to do that need to hire somebody who will. That may mean subscribing to one of the trading services offered by Casey or hiring an organization like Sprott to be a broker or a manager.

Getting to bifurcation and stock selection, if 15% of the stocks are moving higher, 85% are moving lower. You won’t be able to concentrate 100% in either camp, but if you get more right than wrong you’ll make so much money that the outliers will be irrelevant. If you get it wrong, you’ll lose so much money that you ought to be in some other business.

TGR: Are there fewer brokers walking the streets of Vancouver these days?

MK: Definitely, also fewer analysts and fewer corporate development positions and many fewer investor relations people.

There are more BMWs, Mercedes and Ferraris on sale, and, now, more offices becoming vacant.

TGR: Does that mean only the best are left?

MK: Not necessarily.

RR: But it does reduce the population. To be a responsible analyst, you once had to look in a cursory fashion at 4,000 companies. Today, having only 3,000 companies to look at is an advantage.

The three of us look at data in a summary fashion to try and dispose of a company. You look for something to kill your interest. The good news is that the population of timewasters is down by at least a third. That’s unfortunate for their shareholders, but that’s their problem not ours. Our job is to look after our subscribers or clients.

Myths: Region, Sector and Price as Destiny

TGR: Let’s talk about regions. Is it true that the Yukon is remote?

LJ: It’s no more remote now than it was last year. You can’t write off the Yukon or anywhere without looking at and understanding the specifics of individual opportunities. Miners with remote projects that have high enough margins are able to barge or truck diesel fuel in and run gen-sets, etc. If Canadians can mine diamonds in the Arctic Circle, they can mine gold in the Yukon.

Remoteness by itself is not the issue. The issue is margin. If you’re in the Yukon and you’ve got something low-grade, with low recoveries and complex metallurgy—don’t call us, we’ll call you. If you have something high-grade, open pit, that leaches, tell me more.

TGR: Rick, in your presentation you talked about platinum and palladium. Is that an area where the super cycle needs to whip things up?

RR: I don’t think it even requires a super cycle. With platinum and palladium, I can look empirically at simple supply and demand. On a global basis, the platinum and palladium industry doesn’t earn its cost of capital. That means one of two things will happen: The price of platinum and palladium will increase or there won’t be enough platinum and palladium to supply current demand.

In the context of supply, you don’t have to worry about investor inventories because there are almost none. The world supply of existing, finished platinum and palladium is less than one year’s fabrication demand.

The consequence of the industry not earning its cost of capital is that production has fallen by 19% over six years. New mine supply is falling. South Africa itself accounts for 70% of world platinum production and 39% of world palladium production.

In South Africa, the industry has deferred $5 billion in sustaining capital investments; workers are dying and infrastructure is more and more decrepit.

A skilled worker crouching 7,000 feet underground in 105 degree heat, in two inches of water, makes $700 per month. An unskilled worker who mucks the material on his hands and knees 400 meters from the mine face to the adit makes $200 a month. A migratory worker sustaining a family in the homeland is probably sustaining another family at the mine face. Wages have to go up, but they can’t because the companies don’t earn their cost of capital.

According to the majority of South Africans, social take—taxes and royalties—has to go up, but can’t because companies don’t earn their cost of capital.

Prices have to go up. Platinum and palladium prices can go up because their utility to users is so high. It goes into high-carat jewelry. Platinum goes up a smokestack. Mostly, it goes out a tailpipe.

It costs $200—the cost of a catalytic converter in a new car—to give us the air quality we enjoy today. There’s a social consensus in favor of stricter air quality standards. If the price of platinum and palladium doubled, the catalytic converter would cost $400 in a $27,000 new car; the demand impact would be de minimus.

LJ: We all know the often-quoted phrase that most of the gold ever mined in the world is still sitting in purified form on the surface in one form or the other. Platinum and palladium are different; they are consumed. I agree with Rick.

I would go one step further regarding South Africa. It’s not just the economics that don’t work; it’s the country itself. It’s a balloon resting on pins. I see platinum and palladium as speculation on South Africa going up in flames, which is an easy bet to take now. I’m sorry for the South Africans, but it’s a bad situation with no easy way out.

The Myth of NextGen Talent Supply

TGR: There’s been a lot of talk about the dearth of young, qualified people coming up to take their place in management teams. Has the next generation of managers, and investors for that matter, left the sector? If so, what will happen?

MK: There’s a significant age gap in our industry. When I was taking geology courses at university our professor would ask why we were taking this class. There are no jobs. He recommended we go into computers, and a lot of people did.

Unfortunately, good management teams are very difficult to come by. Only 1 in 3,000 projects ever becomes an economic mine and I’d say investing in the right people is more important than any other factor.

LJ: This scarcity makes the investor’s job a little easier. Just type the CEO’s name in Google and look up his history. Has he done this before? Has he succeeded? Was he an accountant or a used car salesman? Google is one of our primary triage tools.

People is the first of Doug Casey’s famous Eight Ps. If I hear about a story that fits our general criteria, the first thing I look at is management directors. If I recognize the name of someone who has lied to me or whom I don’t trust, I don’t even look at the project.

TGR: New people coming up need to get experience by being in a successful project. Are there enough successful projects that they’re learning how to do it?

LJ: I don’t necessarily agree with that angle. All experience is good experience. A person can learn a lot from working for a company that does something wrong. It’s having lots of experience, both good and bad, that is so important. The problem is that, unless you get very lucky, you need to have experience to really call shots well, and there are not enough people out there with the decades of experience needed.

On the bright side, because there is money in the field now, geology departments are no longer shutting down; enrollment is up. Supply is improving, but it will be another 5 to 10 years before the supply of highly experienced personnel really improves.

RR: Let’s personalize it for your readers. There are three analysts in the room: an old one and two young ones.

I guarantee you that, as a consequence of the bear market they just experienced, the two younger analysts will make their readers more money with less risk in the next bull market.

Youth isn’t enough. You need to have a decade under your belt so that you have lived through the changes. Marin and Louis just lived through the kind of challenges I lived through in the 1980s. They now have the two things needed to survive in this racket: legs and scars.

MK: He’s not joking about the scars.

RR: The transfer of the mantle from the Doug Caseys and Rick Rules of the world to the Marin Katusas and Louis Jameses is underway. The batons are being passed.

TGR: Is the bear market making a better generation of investors? Will they be more patient, have more perspective given what they’ve been through?

MK: If they stick with it. It’s all about timeframe and perspective. The bear market will wash out a lot of investors; do not allow yourself to become a victim. But, as Rick said, investors have to mitigate risk to stay alive until the next leg in the bull market.

RR: You’re wrong there, Marin. You have to thrive. The year 2000, which was the market bottom, was one of the best investment years of my life. And 2001 was even better, as was 2002.

A bear market is when you make your money. You don’t get to put it in your pocket until things turn, but you make your money by thriving in bear markets. You don’t thrive in bull markets. You cash the checks. It’s very different.

LJ: I expect this will be a painful experience for a lot of people. Some will learn a lesson, but it will be the wrong lesson. The lesson will be: Don’t invest in commodities; they’re too risky. That lesson will stick until the prices go bananas again, when they’ll give it another try and get taken to the cleaners again.

To buy low and sell high, investors have to be able to sell high, which means they are expecting people to act irrationally when prices are very high—which means they didn’t learn the lesson. It’s unfortunate for our world that human nature is so, but it is so, and investors who ignore the opportunities this creates don’t do anyone any favors.

Myth: The U.S. Is Reaching Energy Independence

TGR: Marin, going back to energy, there’s been a lot in the media about the International Energy Agency (IEA) report about energy independence in North America. Will we be the Saudi Arabia of natural gas?

MK: North America is already the Saudi Arabia of natural gas. Unfortunately, so are the Russians.

The report said that if these eight assumptions happen the way we hope, America will become almost energy independent. The media forgot about the eight assumptions and they got rid of the word almost.

The U.S. has done a great job of bringing North American innovation to the shale industry, but the industry has many other challenges to work through.

TGR: Is Saudi Arabia still the Saudi Arabia of oil? Its wells are getting long in the tooth and the country is building nuclear plants for domestic use.

MK: We’re all asking that question. The Ghawar oil field has been producing oil since before Elvis hit the scene and today produces about half of Saudi Arabia’s oil. There is significant risk in relying on these old elephant deposits that have been producing for more than 50 years.

RR: I agree. What has happened in the U.S., and to a lesser degree Canada, is unique because our competitive markets still work. For example, 50 or 60 competitors at Eagle Ford tried and failed using various completion techniques, each time getting better and better. Ultimately, Eagle Ford was an extremely messy success.

In most of the world there’s one quasi-state oil company looking at a basin. There’s no competition trying different solutions. Exporting American or Canadian technology doesn’t work without exporting the messiness of the North American energy exploration business.

Marin, would exporting technology from Eagle Ford work in Argentina’s Vaca Muerta Shale?

MK: It would take billions of dollars to make it work at Vaca Muerta. A junior company with a $10 million ($10M) market cap and $500,000 to make management’s salary and payment on their BMWs will never be able to develop this billion-dollar shale potential. It will require a big company, like a Chevron.

Myth: Crowdfunding Is the Future

TGR: We heard a lot about the potential for crowdfunding to save the resource sector by funding more companies. True?

MK: I’d like to make sure that all of your readers stay the hell away from crowdfunding for the resource sector. I’ve heard it works OK in the tech sector and among the let’s-make-a-movie crowd, where all that is needed is to raise $150,000 for something that may or may not work.

In the resource sector, real exploration cannot be done for $2–3M. If people want to invest in the sector, go to someone with a track record, someone who knows what he’s doing. Subscribe to Louis’ newsletter and educate yourself. Stay the hell away from crowdfunding for the resource sector.

RR: The last thing the sector needs is more companies. The idea that the crowd would invest $3M in a de novo project when there are companies out there that have spent $80M on an existing project, yet have a $6M market cap, is the most counterproductive activity that one could imagine. If there are 3,000 public companies doing exploration on a global basis, we don’t need another 300. We need 2,000 fewer.

LJ: It’s one thing to go directly to the masses with an art project that some snob at the National Endowment for the Arts turned down, but entirely another to do so for a mine project no knowledgeable investor will touch.

The Mythbusters’ Choice

TGR: What myth would you want our readers to stop believing in?

LJ: I would like to dethrone the “grade is king” myth. It’s not grade; it’s margin. You can have an exceptionally high-grade deposit in an exceptionally expensive, difficult or kleptocratic jurisdiction, and it won’t work. You could have a water table that’s so fluid that you spend more money pumping water than mining. There are so many things that can go wrong or add to costs. Too many people believe if a project is high-grade, it has to make money. No, it doesn’t. High margin is paramount, not grade.

MK: I think the myth that the commodity bull market is over is insane. We’re nowhere near being over. This is the opportunity of a lifetime. This is when you start doing your homework and investing money.

RR: The idea that bear markets are bad and bull markets are good is bullshit. It’s the other way around. Bear markets are good. Bull markets are bad.

LJ: Bullshit is a technical term.

TGR: I enjoyed talking with the three of you. Thanks.

Audio recordings of the Casey Research 2013 Summit are available here.

Louis James is the master of metals at Casey Research, where he’s the widely read and well-respected senior editor of the International Speculator, Casey Investment Alert and Conversations with Casey.Fluent in English, Spanish and French, Louis regularly takes his skills on the road, evaluating highly prospective geological targets and visiting explorers and producers at the far corners of the globe and getting to know their management teams.

With a background in mathematics, Marin Katusa left teaching post-secondary mathematics to pursue portfolio management within the resource sector. He is regularly interviewed on national and local television channels in North America such as the Business News Network (BNN) and many other radio and newspaper outlets for his opinions and insights regarding the resource sector. Katusa is the chief investment strategist for the energy division of Casey Research. He is the editor of the Casey Energy Report, Casey Energy Confidential and Casey Energy Dividends newsletters. A regular part of his due diligence process for Casey Research includes property tours, which has resulted in him visiting hundreds of mining and energy producing and exploration projects all around the world.

Rick Rule, founder and chairman of Sprott Global Resource Investments Ltd., began his career in the securities business in 1974. He is a leading American retail broker specializing in mining, energy, water utilities, forest products and agriculture. His company has built a national reputation on taking advantage of global opportunities in the oil and gas, mining, alternative energy, agriculture, forestry and water industries.

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1) JT Long conducted this interview for The Gold Report and provides services to The Gold Report as an employee.

2) Streetwise Reports does not accept stock in exchange for its services or as sponsorship payment.

3) Louis James: I was not paid by Streetwise Reports for participating in this interview. Comments and opinions expressed are my own comments and opinions. I had the opportunity to review the interview for accuracy as of the date of the interview and am responsible for the content of the interview.

4) Marin Katusa: I was not paid by Streetwise Reports for participating in this interview. Comments and opinions expressed are my own comments and opinions. I had the opportunity to review the interview for accuracy as of the date of the interview and am responsible for the content of the interview.

5) Rick Rule: I was not paid by Streetwise Reports for participating in this interview. Comments and opinions expressed are my own comments and opinions. I had the opportunity to review the interview for accuracy as of the date of the interview and am responsible for the content of the interview.

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Streetwise Reports LLC receives a fee from companies that are listed on the home page in the In This Issue section. Their sponsor pages may be considered advertising for the purposes of 18 U.S.C. 1734.

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101 Second St., Suite 110

Petaluma, CA 94952

Tel.: (707) 981-8999

Fax: (707) 981-8998

Email: [email protected]

USDCHF – Although the pair triggered a corrective recovery the past week, its broader medium term downtrend remains intact. If its present attempts on the upside fail, look for USDCHF to return to the 0.8967 level. Further down, support lies at the 0.8900 level with a turn below here leaving the pair targeting the 0.8850 level followed by the 0.8800 level. Its weekly RSI is bearish and pointing lower supporting this view. On the other hand, the alternative scenario will be for the pair to retake the 0.9278 level followed by the 0.9454 level. Further out, resistance resides at the 0.9496 level with a break paving the way for a run at the 0.9750 level and subsequently the 0.9838 level, its Jun 2013 high. On the whole, the pair remains biased to the downside on further bearishness.

By fxtechstrategy.com