- Agriculture is an inelastic sector.
- 30% of the house-hold income has to go into food.
- Walmart, ITC, Tesco, RIL , Bharati to make an imminent entry into corporate farming.
- Scarce land supply competing with urbanization
- Poor productivity in farming due to an avg age greater than 50 yrs
- Food supply unable to keep pace with a global pop. to explode to 9 billn. by 2050.
- Global warming depleting current agri. output.
- Massive farm to fuel programme
- Increasing intake of food per capita due to rising discretionary income
Wednesday, March 26, 2014
Agricultural Sector ........long term story
Monday, March 24, 2014
Foreign Grip Loosens on Treasuries as U.S. Investors Buy..........Bloomberg
http://www.bloomberg.com/news/2014-03-23/foreign-grip-loosens-on-treasuries-as-u-s-buyers-bolster-demand.html
Overseas creditors such as China and Japan enabled the U.S. to spend its way out of the recession as they gobbled up 80 percent of the nation’s Treasuries. Now, their holdings are dropping toward the lowest level in a decade, while homegrown investors have picked up the slack.
Foreigners are slowing their purchases of U.S. government debt as central banks and reserve managers tried to diversify away from dollar-based assets on speculation the Fed’s policy of printing money by buying bonds would debase the greenback
me - Japan like situation; lost decade; lower yields for many years ???
Overseas creditors such as China and Japan enabled the U.S. to spend its way out of the recession as they gobbled up 80 percent of the nation’s Treasuries. Now, their holdings are dropping toward the lowest level in a decade, while homegrown investors have picked up the slack.
Foreigners are slowing their purchases of U.S. government debt as central banks and reserve managers tried to diversify away from dollar-based assets on speculation the Fed’s policy of printing money by buying bonds would debase the greenback
With the Fed moving to end its own debt purchases this year, the willingness of U.S. investors to finance a greater share of America’s $12 trillion in marketable debt securities is now providing a crucial source of demand.
Becoming less beholden to foreign creditors also means the U.S. can limit the risk any reduction in their buying will trigger a sudden surge in borrowing costs for the government, companies and consumers.
Yields (USGG10YR) on 10-year Treasuries, a benchmark for everything from mortgages to car loans and corporate bonds, have confounded forecasters by falling this year as an economic slowdown in China and political crises from Thailand to Ukraine helped fuel demand for the safest assets among U.S. investors.
After reaching a 29-month high of 3.05 percent at the start of the year, yields on the benchmark 10-year note ended at 2.74 percent last week. That compares with an average of 4.7 percent in the past two decades and 5.84 percent for past 30 years.
The yield was 2.77 percent as of 7:21 a.m. in New York.
Foreign Holdings
Of the $8.1 trillion in U.S. government notes and bonds not held by the Fed, overseas investors owned $5.4 trillion as of January, data from the Treasury department and the central bank compiled by Bloomberg show. The figures exclude Treasury bills, which have maturities of one year or less.
The total is equal to about 67 percent, approaching the lowest level since the government began releasing the data in 2000. Overseas investors scaled back their pace of U.S. debt purchases last year, increasing their holdings by $228.2 billion, or 4.1 percent, the least in seven years.
China, the largest foreign creditor with $1.27 trillion of Treasuries as of January, has slowed its accumulation to about 3.1 percent annually since 2010. That compares with an average yearly increase of 34 percent in the 10 years before.
benchmark Philadelphia Gold & Silver Index in December traded at the cheapest ever relative to the price of bullion
The ratio of the Philadelphia Gold & Silver Index to gold futures reached 0.066 on Dec. 5, the lowest since the data begins in 1983. The measure was at 0.075 yesterday, and averaged 0.16 in the past 10 years
me : when shares of gold mining companies are trading at about historic lows; bubble in gold prices are far away.
me : when shares of gold mining companies are trading at about historic lows; bubble in gold prices are far away.
Signs-of-A-Gold-Supercycle
Gold might be entering a 2 yr long super cycle
by Gary Wagner
www.TheGoldForecast.com
http://www.kitco.com/news/video/show/Chart-This/613/2014-03-17/Signs-of-A-Gold-Supercycle-Chart-This
Silver Vault for 600 Tons Starting in Singapore on Demand
Silver Bullion Pte, a Singapore
supplier of coins and bars to retail investors, opens a 600
metric ton vault tomorrow as investor demand increases.
The storage could hold silver worth $390 million at prices on March 21. The company doubled sales to 1.04 million ounces in 2013 from 517,000 ounces a year earlier, said Gregor Gregersen, who founded the company in 2009.
The storage could hold silver worth $390 million at prices on March 21. The company doubled sales to 1.04 million ounces in 2013 from 517,000 ounces a year earlier, said Gregor Gregersen, who founded the company in 2009.
Thursday, March 13, 2014
China premier warns on economic slowdown as data fans stimulus talk
(Reuters) - Chinese Premier Li Keqiang warned on Thursday that the economy faces "severe challenges" in 2014 - comments that came as weak data fanned speculation the central bank would relax monetary policy to support stuttering growth.
Li hinted Beijing would tolerate slower economic expansion this year while it pushes through reforms aimed at providing longer-term and more sustainable growth.
"We believe we have the ability, and all the means, to ensure that economic growth will stay within a reasonable range this year," he said.
He also signaled the government will allow further debt defaults after Shanghai Chaori Solar Energy Science and Technology Co Ltd failed last Friday to pay an interest payment on its five-year bonds.
The first default on a domestic bond was hailed by experts as a landmark that will impose more market discipline, a break from the past when bonds enjoyed an implicit guarantee because the government would bailout troubled firms to ensure stability.
Wednesday, March 12, 2014
Soros Says Europe Faces 25-Year Slump Without Overhaul....Bloomberg
Billionaire investor George Soros said Europe faces 25 years of Japanese-style stagnation unless politicians pursue further integration of the currency bloc and change policies that have discouraged banks from lending.
While the immediate financial crisis that has plagued Europe since 2010 “is over,” it still faces a political crisis that has divided the region between creditor and debtor nations.
At the same time, banks have been encouraged to pass stress tests, rather than boost the economy by providing capital to businesses, he said.
Europe “may not survive 25 years of stagnation,” Soros said in the interview with Francine Lacqua. “You have to go further with the integration. You have to solve the banking problem, because Europe is lagging behind the rest of the world in sorting out its banks.”
He said more “radical” policies are required to avoid a “long period” of stagnation.
European bank shares are “very depressed,” making it an “attractive time” to invest, Soros said. Still, he said it is going to be a “very tough year” for lenders as they try to shrink balance sheets and boost their capital to pass the European Central Bank’s stress tests, he said.
Soros also said Ukraine should serve as a “wake-up call” for Europe, because the political turmoil the country now faces stems in part from the same problems that triggered the region’s financial crisis.
The European Union required “too much” of Ukraine and offered “too little” as the country attempted to join the political bloc, he said. That enabled Russian President Vladimir Putin to fill the void and gain power in Ukraine, he said.
Misery index in Japan is set to shoot up to a 33-year high.
The big QE gamble
that Ben Bernanke undertook in the US, Japanese Prime Minister Shinzo
Abe has repeated in Japan. The Bank of Japan initiated a massive
monetary stimulus last year. The aim was to boost economic growth and
raise inflation rate to 2%. Has the monetary stimulus really worked? As
per an article in Bloomberg, the misery index in Japan is set to shoot
up to a 33-year high. The misery index, which reflects economic
hardship, adds the jobless rate to the inflation level. The misery
index is set to rise to 7 percentage points in the three months starting
April when Japan increases it sales levy to 8% from 5%. This would
punish consumers who are already struggling with a depreciating currency
and stagnant wage levels. The cost of living in Japan has shot up to a
five-year high. The monetary stimulus may have pushed up asset prices.
But it has not been a bane for wage earners and savers.
Thursday, March 6, 2014
Nifty/VIX
Above indicates : Short Nifty and Buy VIX (view 6 - 8 months)
Vix is currently trading near its historical low levels. Historical data suggest that VIX has strong negative correlation of around 0.8 to the Nifty. This means every time VIX falls, Nifty gains. And when VIX gains, a market fall is near imminent.
Saturday, March 1, 2014
Deflation is not affordable....
1. Deflation makes money worth more and all the rest worth less.That
includes labor, which is the commodity that most Americans rely on in the
marketplace. Deflation is thus a wealth transfer from those that don’t have
money to those that do. About 50% of Americans own zero net assets.It is fair to
say that only a very small percentage of Americans will profit from this wealth
transfer.
2. Deflation makes debts and the interest payed over them worth
more.It is very
bad for Government, which owes $15 trillion.
3. Prices decline because demand is crashing. Demand is crashing because the money supply is contracting
and that is a very serious problem indeed. Deflation hinders economic growth. Inflation has the
opposite effect: people dump cash and this supports economic growth. That’s why
contractions are usually deflationary, while booms are usually
inflationary.
me - @ this time of high debt levels and income/wealth inequality concern......... Deflation is not afforable.
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