Tuesday, April 19, 2016

Dr. Albert Friedberg*:
How Does An Investor Invest In 
This Strange Alice In Wonderland World?
Friedberg Mercantile Group's fund manager Dr. Albert Friedberg* ponders the challenges of investing in this challenging environment characterized by continuous central bank pronouncements & interventions .. "This state of affairs is unprecedented in the brief 200-year history of central banking, and we have therefore no way to judge the ultimate consequences .. Monetary manipulation has succeeded in generating an explosion in debt, debt that has grown much faster than income and the value of assets. This debt will slow real incomes, much as dirt grinds the wheels of a moving vehicle. While debt service is still reasonably cheap, credit spreads will continue to widen and will make it increasingly difficult for debtors to service their debt." .. Friedberg sees central banks as taking on increasingly new & unprecedented measure to deepen & strengthen previous measures which are not working .. Friedberg emphasizes investing in value  .. he is shorting Indian, Korean & Singaporean banks in the belief that the epicentre of the coming debt crisis will be located in China & its surroundings .. on gold: "Gold is an asset that, history teaches us, will perform well in an environment of accelerating inflation. This condition existed in the ‘70s when the banking system was able to intermediate, growing bank reserves, causing money supply to grow at an accelerated pace. This is clearly not the case today and therefore we do not foresee accelerating inflation, although central banks, in their desperation, may experiment with more effective methods of growing money in the future. But gold also performs well when economic agents lose faith in the monetary authorities. The latter was probably the trigger to the Great Inflation of the ‘70s and the extraordinarily long and powerful bull market in gold: the U.S. closed the gold window, terminating the international convertibility of the U.S. dollar and marking the beginning of a new era for fiat currency. Similarly, the adoption of helicopter money may trigger just such a psychological reaction. Finally, it stands to reason that debt deflation enhances the value of gold since it is an asset that does not depend on the creditworthiness of debtors."
LINK HERE to the report

1 comment:

Anonymous said...

Tarion concerns threaten to halt projects for Toronto condo developer

Investors only learned of Tarion’s warning last month. The news sent the value of Urbancorp’s bonds plunging 50 per cent in one day and “raised significant concerns as to the ability of the company to service its debts,” Guy Gissin, a lawyer for a bondholder trustee, wrote in a letter to Urbancorp that was filed with the securities commission.

The situation now facing Urbancorp is in stark contrast to the picture the company painted to investors in Israel last year.

In its filings, Urbancorp touted itself as “one of the top ten” real estate developers in Canada, with a “AAA credit rating” and “connections with financial groups in Toronto and all over the world.” Projects under construction would bring in close to $400-million in revenue and nearly $70-million in profit between 2016 and 2018, the company projected.