Correlation Economics Backup

This one is a classic Robert Kiyosaki Video from 2008 where he is preaching his famous quote: "Cash is Trash" And rightly so...

Today the premium for PSLV soared to its all time high of 30% to spot price. Why on earth would someone pay a 30% premium to spot price? Yes, exactly because the physical silver is much safer as the paper silver. It just shows that physical and paper silver are decoupling. It also shows that physical silver will soon lead the market price of silver. People buy at these high prices because they see silver prices going up in the future. I'm also recently keeping an Excel file with the price of PSLV/PHYS together with the premium of PSLV/PHYS over time. Let's see which correlation I can deduct from these numbers. You can find the premiums on the Eric Sprott sites: PHYS premium PSLV premium

Greece wants out. But the only way to do that is to default in a big way by devaluing their currency. If it does happen though, we will see massive losses on bank's balance sheets and we will see a cascade effect to neighbouring countries like Italy, Spain, Portugal and Ireland. It will be good for the euro though, because we don't have to keep supporting the Greece people anymore.

The economy will ultimately be influenced by disasters. As we start off 2012, the year of the end of the world, let's start monitoring the disasters of this world. In Januari most notable are: - Dead black birds in America Arkansas (possibly fireworks) - Dead fish in Norway Troms - Volcano anomaly in Germany Laacher See (which could really be the end of Europe if the volcano errupts) RSOE EDIS Radio Distress-Signalling and Infocommunications

We already know Japan and China were going to dump US treasuries. I indicated in a previous post that China was going to cut more than 60% of its US treasury holdings. But what I didn't know is that also Russia is dumping its US treasury holdings. This chart says it all: Since last year Russia dumped 38% of its US treasury holdings from $176 billion dollars to $110 billion dollars and will likely continue dumping. What I don't get is how the 10 year US treasury yield is still below 2%... Soon, that will change.

I discovered a nice tool to filter on every stock you pick. It is important to search for stocks that have following characteristics: 1) low P/E ratio 2) high earnings growth 3) high dividend yields The O-metrix tool will calculate a ratio based on this formula: O-Metrix = (Dividend Yield + EPS Growth) / (P/E Ratio) X 5 The higher the O-Metrix score, the better the company. I would pick companies with an O-Metrix score higher than 3. The tool is free and downloadable here: O-metrix tool The O-metrix tool has one Achilles vulnerability and it's quite a big one too. It doesn't take in account the Price to Book ratio. It is very risky to buy companies with a high Price to Book ratio as they can fall very hard when their earnings growth plunges.

When it comes to how much Foreign Exchange Reserves + gold a country has we can have 3 different statistics: 1) FER + Gold per capita 2) FER + Gold as a % of GDP 3) FER + Absolute amount of gold reserves 1) FER + Gold per capita: The leader here is Singapore with $36000 USD per capita. Hong Kong  is second with $22000 USD per capita (I have seen all those gold shops in Hong Kong, it really is amazing). United Arab Emirates is third with $17000 USD per capita. Japan has $7500 USD per capita. China has $1100 USD per capita. India has $240 USD per capita. (Belgians have only $1500 USD FER + gold per capita, which is a shame.) 2) FER + Gold as a % of GDP: Libya and Singapore have more gold reserves than GDP. Ratio = 1.1 Hong Kong: FER + gold reserve is 70% worth of GDP Taiwan and China: FER + gold reserve is 40% worth of GDP Vietnam, Japan, India: FER + gold reserve is 20% worth of GDP Belgium: FER + gold reserve is only 2.5% of GDP (what a shame again) 3) Absolute amount of FER + Gold...