The Shanghai Composite Index (SCI) has been rallying. It is up 8. 37% this year as of April 14, well above the comparative gains of the NASDAQ, DOW, Russell 200, and SP 500. But playing the Chinese capital markets involves excessive political and economic risk. However, my investment advice is that you should build a well-diversified portfolio that would enable you to play Chinese growth stocks, especially those of the small-cap variety. China is the second largest economy in the world and is continuing to roll along at a nice pace. The International Monetary Fund (IMF) estimates that the U. S. will grow its GDP by 2. 8%, this year compared to a stellar 9. 6% for China. While the risk is high in trading Chinese stocks, especially of the small-cap variety and for smaller trading accounts given the current selling of Chinese reverse merger stocks, you could also play China via some good exchange-traded funds (ETFs). This way, you can minimize the risk to your capital. In the ETF area, I like the PowerShares Golden Dragon Halter USX China ETF (AMEX/PGJ), which has strong small-cap components. If you are looking for more of a blue-chip focus, take a look at the iShares FTSE/Xinhua China 25 Index (NYSE/FXI), which holds the top major companies in China How to Invest in Gold. Holding this fund allows you to own large blue-chip Chinese companies that you would otherwise be unable to get access to easily, unless you trade Asian markets. The ETF is based on the Xinhua 25 Index, consisting of 25 of the largest and most liquid Chinese stocks. The FXI ETF is a relatively conservative play on Chinese stocks. With $7. 96 billion in assets as of March 31, the FXI ETF has delivered solid results since its launch on October 5, 2004. The current yield on the FXI ETF is 1. 41%. The FXI ETF has a large-cap focus and would be more suited to conservative investors, albeit even more speculative investors should have some large-cap holdings in their portfolios for diversification purposes. The FXI ETF has no software or hardware stocks. The five top sectors as of March 31 include financial services (51. 38%), telecommunications (16. 65%), energy (15. 49%), basic materials (12. 74%), and industrial (3. 75%). The top four holdings have been the same since the start of 2010, so you get a sense of what areas the fund likes. gold extremely underinvested The large financial portion presents a higher-risk element, especially given the decision to slow down lending in China. The 10 top holdings are China Mobile, China Construction Bank, Industrial And Commercial Bank of China, CNOOC, China Life Insurance, China Unicom, China Petroleum Chemical, Petrochina, China Telecom, and Bank of China. As far as its comparative performance goes, the FXI ETF has done well versus its peer group, which is defined as the Asia-Pacific region, excluding Japan. The longer-term results have been fairly good, but there has been some underperformance over the last five years. Based on the net asset value (NAV), the FXI ETF has a five-year return of 14. 31% versus 10. 49% for the group. For the last three months, the FXI is up 4. 22%, compared to negative 1. 18% for the group. The FXI ETF may work for more conservative investors looking for some blue-chip Chinese stocks. You should have a longer-term perspective due to the above-average volatility. The risk of this ETF is below average based on a 0. 96 beta versus the group. Retire on This One Hot Stock why invest in commodities! This stock is up 232% since we first picked it. Our expert analysts say it will go up another 100% in the next 12 months! Our top 19 stock picks were up an average of 173. 57% in 2010 (not a misprint). See where we are making money in 2011 and get our combined 100 years of investing experience working for you starting today. Get your FREE report on our top stock pick immediately here.
09/12/2011
09/09/2011
Barclays Silver ETF (SLV) Finally Started Trading
Last week after much publicity and a long wait, the Barclay's Silver ETF (SLV) finally started trading. And it looks like the wait was worth it. Each share represents 10 ounces of silver. Trading began at $129 a share and at the end of trading for the first day, the new Exchange Traded Fund closed at $138. 12 after trading more then 2 million shares on it's first day of trading. This new fund appears to be immensely popular with traders. It is one of the new Exchange Traded Funds that is acting more like a commodity then a stock. Exchange Traded Funds which ten years ago were very conservative and were mostly mirrors of major stock indexes, are now getting very creative in the sectors they represent and also in the underlying financial instrument they represent. You can now but an ETF that invests in gold, silver or oil. When the equity markets are looking dull, investors can now move their money into funds that are driven by commodities. While not as volatile as the futures markets, these funds can still have wide price swings. Silver and Gold have been recently trading at multi decade highs. With inflation beginning to increase and volatility in world energy markets, these metals could continue to increase in value. Another factor, especially driving the price of silver is the approval of Barclay's new silver fund. The fund is backed by physical silver and trading in this fund has created a demand for physical silver. Gold is Money This will likely continue to drive the price of silver upward. As the second day of trading ended with 1. 5 million shares traded and silver continuing to move slightly upward, there is speculation on how long this trend will last. Silver however, is not driven by day to day news, like many equities. It is driven by long term trends. This particular trend started with the introduction of the gold standard and the end of the use of silver as money. With the introduction of the new Silver ETF, this long term trend is reversing. Silver is now for the first time in years, being stored as wealth again. Another trend is the use of silver as an industrial metal. With the industrialization of India and China, the use silver as an industrial metal is increasing. There is now competition for physical silver for use as an industrial metal and for storing of physical silver for investment Investing Gold ETFs. This appears to beginning of a long term trend that will keep the pressure on silver prices to move upwards. Another factor, especially driving the price of silver is the approval of Barclay's new silver fund. The fund is backed by physical silver and trading in this fund has created a demand for physical silver. This will likely continue to drive the price of silver upward. As the second day of trading ended with 1. 5 million shares traded and silver continuing to move slightly upward, there is speculation on how long this trend will last.
09/08/2011
09/05/2011
Best Gold Etf
Gold investment is a tremendous technique to protect your investing and hedge to survive fallout from economic turmoil. However not everything regarding gold bullion sparkles. Gold is heavy, it is hard to hold, and it can set out a metallic detector. How much money Should You Invest Selling gold often means that consumers are inspecting the pure gold personally, purity testing, and weighing every bit. A few countries insists that you announce all gold purchases exceeding the certain amount, also still some prohibit owning gold at all! But this is not just the inconvenience of having
08/29/2011
Mutual Funds - A Secure Investment
Mutual funds are a collection of stocks and/or bonds invested in different securities, which include fixed market securities and money market instrumentals. It facilitates investors to put their money under an efficient investment management. There are three types of mutual funds namely, income funds, growth funds, and balanced funds. The basic principle underlying mutual funds is to pool in money with other people to convert it into funds. Mutual funds generally buy shares in stocks wherein an experienced fund manager performs the task of selecting, purchasing and selling off the stocks himself Gold is Money. Certificates are then issued to the shareholders as a testimony of proof of their partnership and participation in the emoluments of funds. There are particularly three ways in which you can make money from a mutual fund. They are: 1. Benefits can be earned from the commission on stocks, and interests on bonds. All the income received all round the year is paid by the funds in the form of a distribution How much money Should You Invest. 2. The fund will have an outstanding benefit provided the funds sell high priced securities. Most of the profits are given back to the investors in a distribution. 3. The value of the funds share automatically increases with an increase in the value of unsold high priced fund holdings. Accordingly, you can always sell shares of your mutual fund for profits. Many people find investing in mutual funds an attractive option to that of dealing directly with the stock market because it is comparatively safe. In fact, these days, mutual funds have become the first preference of many investors. Mutual funds provide a balanced and better approach compared to conventional stock market alternatives. It has an added advantage of investing in several distinct sectors and firms, so, if one company suffers losses, the others may be rising. Investing in mutual funds, therefore, minimizes the loss-bearing risk of monetary assets. In a nutshell, here are the salient points of the advantages of mutual funds: 1 gold rises as global monetary cracks. Cost-effectiveness of investing in mutual funds: The main advantage of investing in mutual funds is the efficient management of your finances. Investors buy funds because they lack the competence and time to manage their own portfolio. It is a cost effective method, especially for a small investor because it is expensive to get a manager to manage individual investments. 2 why invest in commodities. Diversification: Compared to individual stocks or bonds, mutual funds diversify the risk of bearing loss learn to invest gold. The basic intention being to invest in a diverse number of assets in order to overcome the negatives of loss making stocks or bonds by the profits reaped by others. 3. Economy of Scale: The transaction expenses are relatively low as a mutual fund is bought and sold in large amounts of credits. 4. Liquidity: Mutual funds provide the opportunity of converting shares into cash at any point of time. 5. Simplicity: It is easy to buy a mutual fund. Most companies have their own automatic purchase plans, and the minimum investment rates are very small. Therefore, investing in mutual funds is certainly a secure investment as the chance of loss is spread out, and the opportunity for gains are numerous. At the same time, it is both cost-effective and an investment that gives great future returns. The days of depending on government largesse in meeting old age financial requirements are growing dimmer by the day. Hence, investing in mutual funds can be a wise choice, especially for those who plan for an early retirement and hope to enjoy a secure senior citizenship.
08/09/2011
Mutual Funds Ratings
A mutual fund employs investment advisors who pool together people's money and invest in stocks, bonds and other securities in accordance with the fund's mandate. People, who invest in a mutual fund, are issued shares that have sufficient liquidity, thus ensuring that the investors can sell shares that have appreciated in value and accrue capital gains. Investors also receive interest and dividend income that may be disbursed in the form of money or additional fund holdings. Although, the fund's investment advisors are registered with the SEC and are expected to have considerable expertise in selecting appropriate investments, the investor has the responsibility of evaluating a fund's prospects before undertaking an investment. This may seem like a daunting task but with a bit of research, one may be able to distinguish a performance oriented fund from a non-performing one. The article on "Mutual Fund Investment Advice" provides a general introduction to mutual funds. This coupled with a good understanding of mutual fund ratings can help an investor choose an appropriate fund. Understanding Mutual Funds Ratings Mutual fund rating agencies save investors the time and the effort of having to assess the funds on their own. Generally, people rely on the ratings provided by Morningstar and Lipper. Both Morningstar and Lipper use a ranked system of ratings for mutual funds. The former uses stars while the latter relies on numbers. The stars or the rankings are assigned in ascending order of performance. The best performing fund has a 5 star rating (Morningstar) or ranks 5 on a scale of one to five (Lipper). Analyzing the mode of assigning ratings to a Domestic Equity fund may help us understand the manner in which Morningstar assigns mutual fund ratings. Morningstar categorizes a domestic equity fund into one of the following 9 categories, viz. Large value, Large blend, Large growth, Small value, Small blend, Small growth and Medium value, Medium blend and Medium growth. To classify the equity fund into one of the aforementioned categories, the underlying stocks in the mutual fund are classified on the basis of valuation and market capitalization. Relative valuation helps in classifying stocks as undervalued or overvalued. The ratio between the market price of a stock and the earnings per share gives P/E. The P/E of a stock is compared to a benchmark and a stock with a P/E ratio, that is higher than the benchmark, is classified as a growth stock while a stock with a lower P/E ratio is believed to be a value stock. PEG, which is the ratio between P/E and the growth rate of the stock, should be used along with P/E to determine whether the high P/E is really justified by the growth rate. Funds, that demonstrate both growth and value characteristics, are referred to as blend funds. In other words, we have a table with 3 columns, viz. growth stocks, blend and value stocks. Market capitalization, that is defined as the product of the current price of a share with the number of outstanding shares, is used to classify each of the underlying stocks in a domestic equity mutual fund as large cap (large), mid-cap (medium) or small cap (small). Thus, we end up with a style box that has 3 rows of market capitalization and 3 columns of valuation. Classifying each underlying stock, of the equity fund, on the basis of valuation and market capitalization culminates with the classification of the fund into one of the aforementioned 9 categories. After categorizing a fund into the style box, its past performance is compared to other funds within the same style box and stars are assigned on the basis of risk adjusted returns. Just like the domestic equity style box, Morningstar offers the international equity style box and a fixed-income style box. It also provides gold mutual funds ratings. Lipper also categorizes funds before comparison. However, Lipper does not compare the fund to other funds within the same category but compares funds to a benchmark for each category Gold vs Stocks. Moreover, the process of categorizing funds reflects the areas where the fund invests, the amount of flexibility used by the fund manager and the extent to which the fund is aggressively managed. Limitations of Mutual Funds Ratings Morningstar and Lipper assign ratings by comparing the fund's past performance with that of comparable funds, within the same category, and with the benchmark for each category respectively. Since past performance is not indicative of future results, it is not prudent to rely solely on ratings of mutual funds. One needs to look at the performance of long tenured fund managers, the Expense ratio and the Turnover ratio in addition to ratings. Absence of load fees or low load fees in addition to low / no 12b-1 (promotion and distribution) fees are some of the characteristics of a good fund. The ratio between the fund's annual operating expense and the fund's average net assets gives the Expense ratio. A low expense ratio is again a desirable feature. The mutual fund's Turnover is defined as the ratio between the gross sales proceeds and the total assets of the mutual fund. Frequent trading reduces returns on account of high commissions and spreads. Moreover, the shareholder is expected to pay taxes on the yearly capital gains, that are received, thus diminishing return on investment. Hence, a low Turnover ratio is favorable. It's also sensible to investigate whether the fund manager believes in his / her picks and invests heavily in the fund. Going through the Statement of Additional Information (SAI) will help an investor determine whether the fund manager invests in the fund. It's evident that top rated mutual funds need not be the best performers, since past cannot be relied upon to predict the future.
Semiotics of Investment The Wall Street Fashion System
The Semiotics of Investment:The Wall Street Fashion System Semiology is generally understood as the science of signs. It may encompass, according to Roland Barthes, -any system as signs that include images, gestures, musical sounds, objects, and the complex association of all of these, which form the content of ritual, convention, or public entertainment:these constitute, if not languages, at least systems of signification" [1] Semiology is founded upon linguistic theory and become a separate science when Ferdinand de Saussure proposed a solution that cut through the maze of existing approaches to create a unified discipline based upon a single, clearly defined concept:the linguistic sign. Saussure then committed to drawing a radical distinction between synchronic (evolutionary) and diachronic (static) linguistics. Saussure's new approach not only brought linguistics into the modern era but opened up a new approach into the study of human behavior. This approach has been exploited to provide fresh approaches to understanding diverse fields such as art, architecture, social anthropology, philosophy, literary criticism and even fashion and advertising. In 1967, Barthes published a groundbreaking work of this genre called The Fashion System. His observation of the phenomenon of fashion was -linked to a certain economic gap within societies, characterized generally by the need to sell an object (clothing) at a rate faster than its wearing out. - Barthes points out several steps that lead to establishing a fashion system. 1. Democracy creates one style of dress for all men. 2. One style of dress creates a need for distinction. 3. The arrival of Dandyism:the manner of dress of -distinction. - 4. The Fashion System arises, creating a systemic form of distinction, killing off Dandyism. 5. The Fashion System expands its domain into other categories of goods and services (Barthes outlines garment, food, furniture, and architecture). In addition to outline the development of fashion, Barthes also makes an important point contrasting societies without fashion to our own. For the ancient Chinese, where clothing was governed by fixed codes:-the absence of fashion corresponded to the total stagnant nature of society. -(Roland Barthes, The Language of Fashion, p 91). Towards a Wall Street Fashion System Similar to the choices we make when buying clothes, an investor may follow traditional rules of investment or follow the latest trend. In both investment and in dress, persons may follow conformist rituals, even when -expressing- themselves learn to invest gold. In both cases, the true individual, acting on their own decision and impulse is anomalous and rare. Thus investment, like fashion, is process of innovation and conformity. The system of fashion described by Barthes may also account for the general system of manufacture of finished goods where there is a need to create -psychological obsolescence. -Psychological obsolescence is necessary to solve the problem of overabundance related to automation and productivity and relates to -planned obsolescence,- a characteristic of monopolistic competition, where producers may rely primarily on the premature physical breakdown of the products to accelerate sales. Here the U. S. auto manufactures of the 1970's come to mind. As better quality foreign imports renewed meaningful competition and the need for product improvement on behalf of the U. S. automakers, the dependency of profits and growth came to depend primarily upon psychological obsolescence and organic growth. Automobiles, like clothing, became subject to increasingly rapid stylistic changes to advance sales. Still, the legacy of planned obsolescence remained. As product quality improved, the brand imagelagged. GM, Ford, and Chrysler remained relatively weak next to their Japanese counterparts. Recently, GM was displaced as the largest automaker in the world by Toyota, a global brand with a reputation for reliability. Pychological Obsolescence Psychological obsolescence is the very logic of fashion and is a combinatorial system based on the desire for profits and growth coupled to novelty and change. This attribute of production permeates not only clothing, automobile manufacturing, and consumer technology products (i. e. iPhone), but Wall Street investment products and even, to some extent, governments budgets for prisons and military. How To Invest In Precious Metals IRA All products are part of a generalized system where second order meanings may decide whether one purchases a product, invests in a company, or approves of a government plan. How do you get persons to invest in something when they are otherwise unmotivated and disinterestedHow do you get someone to sell an investment they are already comfortably -in-, only to buy anotherWhere salesmanship an advertising failed, the Wall Street Fashion System has succeeded. In the past, most investors, like owners of clothing,are too content to stay put in the same old stock, buying and holding. Salesmanship and advertising were only first generation solutions to generate inorganic demand. Methods were simple:solicit customer interest, and sell them something they don't need, similar to so much else sold in the post World War II consumer economy. From the post depression era until recently, Wall Street firms presided over an era where over-investment (or over-speculation) was not a problem for fee driven and transaction orientated firms. Excessive speculationwas strictly a customer problem, similar a woman with 200 pairs of shoes in her closet she never wears, or a man stuck with a monster truck with no use for it and can no longer afford to pay for gas. Nonetheless, the poor performance of individual investors relative to the wealth of white shoe investment banks led to the now classic question, -Where are the customer's yachts- Times have changed. The logic of fashion has now permeated the field investment to a degree that over-investment and bubbles (based first on themes or memes and then on speculation) are so pronounced that they threaten the system itself. No longer is over-investment merely a customer problem but a problem for the producers of investments themselves, the Wall Street investment bankers and to the stakeholders of the entire system, the non participants that must support market failure that is no longer firm specific but systemic. Why are markets failing Because a revolution has taken place in production more important than that of the industrial revolution. A revolution that has occurred but has not been observedBecause it is primarily at the level of abstract concepts such as semiotics and simulation, it has been largely missed despite the visible affects operative nearly everywhere. Chiefly, it is at the level of signs, where differentiation and value creation takes place in the post industrial economy, shifting the center of gravity of production from the material to immaterial. Lost in this exchange is tangible wealth in favor of a new system whereby wealth is created from intangible assets such as information flow, images, and entertainment. In this new world, capital and value no longer follow the economic laws of the past, when supply and demand, labor and capital were reliable descriptors of economic relations. We have entered a new world. The mismatch between economic behavior and conventional analytical models are legible at every level, giving rise to what Jean Baudrillard proclaims as "the exponential phase of speculative disorder. "Price bubbles in stocks, housing, and now oil rotate in phases as affects of this generalized disequilibrium, producing financial bubbles with greater frequency and extremes than in the past gold rises as global monetary cracks. [2]What we have today is a generalized system of exchange that is ruled less by the traditional forces that determined prices than by the science of semiotics and the propagation of information as memes. Baudrillard, a radical, contemporary thinker influenced by Barthian Semiology, fused semiotics to classical economic criticism and social anthropology to arrive at broader and more advanced critical position, that of the political economy of the sign. In the political economy of the sign, values have passed beyond their historic reference of use and utility regulated by the law of supply and demand, to a more subtle governing structure that is coded with meaning and difference. The logic of fashion institutes a system of false or inessential differences. Consider that a critical view lying outside of fashion would not invest meaning or importance in stylistic changes. A shirt, for example, as long as it would function for the purposes it was designed for would not need a replacement. Similarly, a market slowdown for investment would not require a false boom (fueled by inorganic production and consumption) somewhere else in the economy inaugurated primarily for the growth of financial firms and to maintain full employment in the economy. In recent years, growth has been maintained largely by the creation of a counterfeit economy, based more on a simulation of real demand that relies more upon the creation of meaning and desire than the satisfaction of needs. In the past ten years alone we have witnessed fake companies (dot. com) fake earnings (World Com, Enron), and fake demand (driven by securitized mortgages, featuring low documentation, subprime and negative amortization loans). More recently, we witnessnedartificialscarcity and exaggerated demand (Oil). While few would argue against the counterfeit quality of both the NASDAQ and housing bubbles, many would argue today that the oil boom is in fact real and prices are a result of scarcity. However, few would argue that heightened investor speculation recently led to an unprecedented overpricing of oil in relation to the underlying fundamentals of supply and demand. Investment firms today resemble fashion houses in creating reasons for us to buy. Buying low, holding the same investment for long periods, and selling high (the traditional investment theme) does not maintain full employment, pay bonuses on Wall Street and make investment firms grow. No longer satisfied with the salesmanship of its brokers, Wall Street creates investment themes that have arbitrary life cycles that resemble fashion trends. It maybe difficult to decide on which theme will prove dominant as there are many themes expressed at one time. Whatever the case may be, just as fashion contributes to faster sales and arbitrary pricing of new clothing lines, once an investment theme becomes dominant, itcontributes to an irrational pricing of assets in fashion. Semoitic Triangle of InvestmentGoogle Presentation Semiotic Markets Woody Dorsey has developed a system that assists in identifying these themes. Dorsey is the founder and president of Market Semiotics, an independent research firm that analyzes the market on the basis of behavioral finance. For the past 20 years, he has developed a system on analyzing price behavior of securities that have more in common with fashion trends than rational price behavior. Dorsey uses semiotics and memetics (the study the propagation of information) to discern what he sees as transient investment themes. The history of markets, he says, -is defined by a compelling concept that becomes so simple and so popular that it becomes a slogan. -These slogans provide cues to timing market tops. [3] Fashion Bubbles on Wall StreetHard to believe, but investment, like fashion, may be described as a synchronic (evolutionary) sign system that evolves over time where the fashionableness or -buzz- of your investment is as important as its earnings. Here the most powerful investment houses such as Goldman Sachs, UBS, or Merrill Lynch act as deciders in a language that is determined not by the speaking mass (the investors) but buy those that sell the investments, as they sit most prominently at the origin of the system. This is not to say that the investment houses act independently of real trends in the economy. It is better to understand how they interact with them. When considering that investment products may be manufactured as deliberately as clothing or automobiles, one must take note and more critically examine this process. Nasdaq BubbleThe internet created a reason to invest in technology stocks. Wall Street was more than happy to make this known and use the media to propagate this story to the masses. The buzz created around the internet allowed for more news coverage, more investment, until finally a frenzied peak was reached when any public company with a . com next to its name was trading at fantastic levels. As technology and Internet stocks swooned, a little known analyst named Henry Blodget made a bold prediction. He called for a $400 price target for Amazon, even though at that time Amazon had never made a profit. Blogdet claimed his prediction was based on sound analysis, based on new "metrics. "A month later, Amazon's stock price rose above Blodget's own expectations (124%). Blodget quickly rose to fame and was rewarded a high paying job at Merrill Lynch. Soon after, Wall Street created a new verb to describe brash predictions for the price of a stock, to "blodget" a stock was synonymous which hyping a story to pump up the price. When Amazon's stock declined over 90% from its peak, Blodget's credibility as analyst was called into question. In 2003, he was charged with civil securities fraud by the SEC. Blodget later settled without admitting or denying allegations and was barred from the securities industry for life. Mary Meeker was another highly touted Internet analyst that made bold predictions regarding the price of Internet stocks. She recommend Priceline at $134. 00 per share and kept recommending it as fell to less than $3. 00. Why the persistenceIt was alleged that she did because her firm, Morgan Stanley, made millions in fees raising money for Priceline. Once a critical mass of these stocks failed to deliver on promises, they crashed, causing the entire economy to go into a recession as money abruptly moved out of the market. Internet stocks, as a sign or a meme, changed dramatically as the bottom fell out of the market. As the buzz was gone, analysts like Meeker and Blodget failed to act as deciders and influences dispensing meaning. After the crash, it was revealed that many analysts were issuing buy recommendation on stocks they privately were advising other persons to sell. Internet and technology stocks dropped dramatically across the board, as old metrics referencing traditional valuation methods such as price to earnings returned in vogue again. Housing Bubble The recession brought about by the collapse of the . com bubble prompted the Fed to dramitically lower interest rates. At the same time, Wall Street was pioneering new, innovative mortgage products. As a result of lower interest rates and easy access to mortgages, a buzz in housing developed and prices began to rise. Media coverage confirmed this trend with a focus on housing reminiscent of the . com hysteria just a few years before. Only three years removed from the NASDAQ bubble, the housing boom followed a similar thematic description. By late 2002 or early 2003, housing was the commodity of the moment and entered its high fashion phase. A bubble soon developed as values becoming more radically divorced from fundamentals than anything we have seen in the past. As prices rose without corresponding rises in rents or population growth, citizen journalist took to the web and started -housing bubble blogs,- decrying the divorce of prices from traditional references such as rents or cost of construction. Mainstream media pundits, however, largely continued to maintain the boom was based on -sound fundamentals,- acting as cheerleaders to the magnificent price rise. When the boom stalled, few in the investment industry predicted a collapse or even a national correction. This was largely based on relying on the past as an indicator of future performance comex gold price increases. Not since the Great Depression had house values dropped nationally in any given year. Even as house prices began to decline and foreclosures stressed the system, top government officials, including the legendary Alan Greenspan, doubted that the prices would decline nationally. Greenspan maintained that the housing market was not susceptible to bubbles, in part because every local market is different. Local bubbles had developed, but never enough of them at once to cause a national collapse. A 2004 report jointly written by the top economists at five organizations - the industry groups for real estate agents, home builders and community bankers, as well as Fannie Mae and Freddie Mac repeated this now demonstrably false conviction, that -there is little possibility of a widespread national decline since there is no national housing market. - The swift collapse of Fannie and Freddie in September of 2008 was a stunning end to two powerful institutions. Gold Money Report Painfully, just weeks prior to their collapse, government experts and insiders maintained these institutions were sound and well funded. The price implosion in housing followed a familiar theme as it transitioned from the commodity of the moment to, in many parts of the country, a pariah. Housing was now too closely associated with pain, financial fraud, and over consumption. As oil replaced housing as the commodity in fashion, both Mac Mansions and SUV's took on the same connotation as a sign, symbolizing the profligacy and excess of a bygone era. In 2008, as the housing market tumbled an unprecedented 16% in one year, Wall Street firms and hedge funds were aggressively shorting the very products they helped to create as debt finance capitalism devoured itself. This time troubles were so large that investment houses themselves were not untouched. Just days after the failure of Lehman Brothers (the fourth largest investment banking firm) and AIG (the world's largest insurance company), a short sale ban was place on financial firms. Treasury Secretary Hank Paulson asked for an unprecedented $700 billion from Congress to save the markets from what he characterized as a total collapse. Oil Bubble In 2001, BRIC, an acronyms for Bazil, Russia, India, China, began as a thesis by Goldman global strategist Jim O'Neil Investing Gold ETFs and Silver ETFs. It contained a sweeping idea that intimateda highrate of economic growth and a strategic relationship between emerging economic powers. China and India would be the principal suppliers of manufactured goods and services while Brazil and Russia would dominate as suppliers of raw materials. Over time, cooperation between these emerging powers would potentially result in a powerful economic bloc that would rival western economic blocs such as the Group of Eight. In April of 2003, the United States invaded Iraq ostensibly to fight the war on terrorism and establish a pro-western, democratic government. As the war in Iraq wore on, a cloud of controversy grew over its direction and the ultimate intentions of the United States. Oil emerged as a theme. During this time, strong growth in demand for oil came from rapidly developing economies in Asia, particularly China and India. The BRIC story morphed into fundamental narrative developed around insatiable growth from the worlds two most populous countries. A new term, Chinda, like BRIC before it, was created to more easily condense an idea and transmit it as a meme. On March 30th, 2005,Arjun N. Murti, a respected energy analyst at Goldman Sachs, called for oil to reach a "Super-Spike" of $105 per barrel in the near future, sending shock waves throughout the world. Oil had already dramatically risen from a low of about $17 a barrel in 1999 to price to about $50 a barrel at the time of Murti's prediction. As prices continued to dramatically rise while supplies rose and demand waned, the price rise was increasingly blamed on speculation. Oil, in fact, had become more than a commodity of use, it become a commodity of sign, trading like a precious metal or stone whose value is similar to currency or status object. As prices rocketed to historic levels, the commodity complex rose in sympathy, inflaming prices to a point of crisis. Food riots in the third world and home foreclosures in the United States and Britain were blamed in part by the rising costs of oil. By May of 2008, Murti, emboldened by the realization of the prediction of $105 oil, upped the ante, calling for a new price surge. Despite signs of slowing global demand and rising inventories,Murti foresaw oil reaching $200 per barrel. Murti, a hybrid driver with a well know "green streak," was not bothered at all by the prospect of higher prices. If anything, higher prices would lead to early adoption cleaner sources of energy. Lacking even "new metrics" to support his premise,Arun Murti became the HenryBlodget ofoil. By now, it "become a very fashionable area to write about," said Kevin Norrish, a commodity analyst at Barclays Capital, which began predicting high oil prices around the same time as Goldman. -To try to get attention from people, people are coming out with all sorts of numbers. "One senior analyst from, D. R. Hirsch, a Senior Oil Analyst for Management Information Services, predicted $500 oil on CNBC , just as oil hit inflation adjusted all time highs. About this time, the CEO of Grazprom, Alexi Miller, meanwhile, called for $250 by 2009. These calls for ever higher prices contrasted with emerging data showing diminished demand and increasing inventories. By September 16, 2008, oil had dropped from a all time high $147. 27to close at$91. 15 a barrel on the NYMEX, signaling the declining credibility of analyst prognostications and a diminished importance in the fundamental narrative driving the price of oil. As the price of rose to new highs, the politics and the meaning of oil changed. Certainly, among investors, oil has come to symbolize value in a way that gold and precious stones have served in the past. But oil has taken on a negative connotation with consumers and become laden with as a symbol of environment degradation, financial and political manipulation. These negative connotations spell trouble to an industry in the long run as alternative energy businesses emerge and a buzz gathers around new resources of energy. The decline in the value of oil brings signals the need for a new order of business, with Wall Street firms gearing up for its next story to sell, a new sign and its next meme, provided Wall Street can survive to tell it. In summary:It is meaning in circulation that, in large part, determines the value of exchange. Meaning is propagated by memes and determined by connotations of the sign. How to Invest in Gold Origin of the problem:tied the conception of man as a maker and for growth in profits (psychology of increase based on ancient social and environmental conditions and magnified by modern capital markets) which translates into the need to provide for full employment and growth (even if it means generating waste). The system has reached a critical phase. Solutions:wealth creation should be tied better aligned with productive labor and organic growth. What is needed are alternative forms of exchange that lie primarily outside conventional transactions. Alternative forms of exchange are needed that emphasize reciprocity and collaboration. Summary and Biographical Information.
