My Financial Review

Frozen

2012-02-06T03:39:00.001-08:00

The blog is frozen for now - maybe in the future I will reactivate it.

China and Russia agree to use Yuan in bilateral exchange

2010-11-24T05:30:00.000-08:00

That's the news of the day! China and Russia agreed to start using Youan instead of Dollar in bilateral economich exchange. The Chinese yuan will start trading on Russian exchanges at the start of December, after China allowed the yuan to trade against the ruble in the interbank market from Nov. 22

Here's the source.

Facts and myths about investing in diamonds

2010-11-23T05:28:00.000-08:00

I mentioned some time ago that to invest in diamonds, you need to know what you are doing. It is not something accessible to the average retail investor. It is easy to buy a diamond at an inflated price, the price of diamonds are not transparent. This is because price reports are not accessible to average investor. You need to put out a considerable amount od money to have access to some information.
In addition, it is not an investment for ordinary people, even if they already have some capital. The barrier of entry is not inconsiderable. The prices of diamonds have always been and will be high for retail customers, as it customarily applies a high margin of intermediaries. On the other hand, the retail customer, individual investor has no access to investment diamonds at wholesale prices. A wide selection of diamond, the investment can start from 30000 USD. You can invest in diamonds from the amount of 15 grands, but in this case, there is limited room for maneuver applicable only to selected groups of jewels.

Also as I mentioned before the liquidity of investment alternatives in general, and diamonds in particular is low. It is not as liquid an investment as with any eligible security, when the purchaser is located within a few minutes. Similarily to investments in real estate to sell the diamond you need to find in the final buyer ready to pay for the price, which is accepted by us. In some cases, due to the high value of the gem, it will be an issue for some time.

And finally - diamond framed in jewelry, whatever its parameters, and the certificate will never be treated as an investment.

Reemploying gold standard?

2010-11-09T00:25:00.000-08:00

Everyone's talking about it already, so just to mention. The representative of the World Bank said that there gold maybe should be treated as a monetary anchor for exchange rates. It's not a question of a return to the gold standard of how it existed many years ago, but nevertheless it is admitting that the role of gold is not so, as some "banksters" would like us to think.

Robert Zoellick - World Bank president, in an article published in the Financial Times has admitted that it should consider the adoption of gold as a reference point in market expectations about inflation, deflation, and future trends in exchange rates. Although some textbooks consider gold to be "old money" - markets use it today as an alternative monetary asset.

Here quotation in the original:

"The System Should Also Consider employing gold as an international reference point of market Expectations about inflation, deflation and future currency values. Although Textbooks May view gold as the old money, markets are using gold as an alternative monetary asset today."

Chinese rare-earth metals blackmail ...

2010-10-25T00:16:00.000-07:00

Isn't it interesting that the themes of economic war is always appear at the end of the year? Some time ago I wrote about the concept of global economic wars. Last year's autumn Russians blackmailed us with gas. And recently the currency war subject appeared...

In the meantime, the columns of the international press warn about the Chinese blackmail with rare earth elements. What the hell is it?

The point is that China is the world's dominant manufacturer of the elements necessary in our technological civilization of today, such as cerium, lanthanum, erbium, etc. ... They are necessary for the manufacture of most modern electronics, from LCD monitors starting on hard disks ending. China has about 30-40% of discovered deposits of rare earth metals. Other deposits are also present in the U.S., Canada and Australia, but their exploitation was halted at the end of the 90s the last century, because it became uneconomical due to low cost imports from the Chinese.So the China monopolized the supply of these raw materials, and is now starting to exploit its position in international competition.

This year China will export 40% less than those of raw materials last year. Next year, exports will probably be limited by a further 30%. Japan alone consumes 30 thousand tonnes of rare earth metals, and this year China will export only 24 thousand tons! I think everyone is aware of how this will affect the prices of electronics and we give a competitive edge consumer electronics manufacturers from mainland China. Everybody panics.

Some commentators argue that it is part of our strategy of building competitive advantage for Chinese companies, on the one hand, and informal trade war with the U.S. and Japan on the other.

It seems to be an interesting decade ahead of us ...

World currency war

2010-10-12T00:34:00.000-07:00

Headlines recently spread the news of a possible "currency war". What is it? In an interview with the newspaper Financial Times, IMF chief Dominique Strauss-Kahn warned on Tuesday about attempts to rescue the economies of individual countries using the currency exchange rates. According to Strauss-Kahn that could lead to currency war. Well, the problem is that, as the currency strengthens and others weaken, the goods from a country with a strong currency are increasingly expensive, decreasing the demand and the economy weakens. The normal market mechanism. There would be nothing extraordinary, if it was not built deep into the current system of paper currency mechanism, allowing for printing money to control the value of the currency.

In many countries, "the idea that currency can be used as a political weapon" is becoming popular. The problem is that if some people start to weaken their currency, the other will do the same for the race.

But in the era of paper currencies is the only rational action, to do the depreciation of currency to remain on the surface and rescue the economy's competitiveness. This action is also an unstoppable. Everyone will ask, "If others can weaken and print their currency and there is no guarantee that they will not do that, then why should I not do it, or give anybody any guarantees?". So we are awaiting rally of currencies debasement.

The last attack went in the direction of China. "According to American and European politicians, the Chinese yuan is undervalued by 25-40 percent. Giving Chinese companies an unfair price advantage and increasing the attractiveness and the export of goods from that country at the expense of other states." China, of course, said to leave them out because they do not have a problem ... And they're playing the same stacked deck what every other "honest" player ...

By the way, whether or not you think that the scenario of the World Economic Wars exercised in front of our eyes ...

Gold as an insurance policy

2010-10-05T13:32:00.000-07:00

In its latest report, Gold: Hedging Against Tail Risk, the World Gold Council shows that a modest, consistent holding of gold mitigates the potential for significant loss of value during extreme market events.

In the analysis the World Gold Council shows that during the period between October 2007 and March 2009 an investor with a portfolio of US$10 million experienced an additional US$500,000 financial loss simply by not maintaining a position in gold. The study used a composition similar to a benchmark portfolio, which included an 8.5% allocation to gold, to show that total losses incurred during the period reduced by 5% relative to an equivalent portfolio without gold. In 18 of the 24 tail risk scenarios2 analysed by the WGC, portfolios which included gold outperformed those which did not. The analysis suggests that even relatively small allocations to gold, ranging from 2.3% to 9.0%, can
have a positive impact. On average, such allocations can reduce the Value at Risk (VaR) while
maintaining a similar return profile to equivalent portfolios which do not include gold.

My comment on that is simple. If you want to protect yourself in case of fire, you buy an insurance policy. If you want to protect your money from financial meltdown, you buy gold. And if someone says, that gold does not produce income stream, ask them "and insurance policy does"?

3,4% GDP growth forecasted for Poland for the following year

2010-09-15T02:10:00.000-07:00

In its latest forecast for economic growth, the European Commission predicts that the Polish economy will be one of the fastest growing in Europe. The growth rate is estimated at 3.4% by the end of this year.

Prof. Marek Belka, president of the NBP is even more optimistic. According to him, GDP growth of 3.5% this year seems very likely. If the country increases the dynamics of investment, it is possible to increase even at 4.0%.

Recently also bank UBSpresented its forecast estimating that GDP growth in Poland by end of next year at 3.9%. Government forecasts a 3.3% GDP growth.

Why appreciating Chinese Yuan will not solve trade imbalance between US and China

2010-09-08T14:38:00.000-07:00

I came across an interesting article written by Ronald I McKinnon from Stanford University. The main point of this text is that appreciating Chinese currency will not solve (as many might think) the problem od trade impalance between US and China. Three main points of the article sum up that "in the short term , foreigners should stop bashing China on the exchange rate" which should be settled stable. "In the medium term, better balance net saving in the U.S. and China. The U.S. should cut back on its huge fiscal deficits and constrain private consumption while China continues stimulating private consumption." In the long term, China should continue to encourage the “internationalization” of the RMB. China would be well on the road to becoming a “mature” international creditor."

Gold supply and demand trends

2010-08-25T12:04:00.000-07:00

World Gold Council annouced recently new data on gold supply and demant trends. According to the release demand for gold for the rest of 2010 will be underpinned by the following market forces:

India and China will continue to provide the main thrust of overall growth in demand, for the remainder of 2010.
Retail investment will continue to be a substantial source of gold demand in Europe.
Over the longer-term, demand for gold in China is expected to grow considerably.
Electronics demand is likely to return to higher historic levels after the sector exhibited further signs of recovery.

Total gold demand in Q2 2010 rose by 36% to 1,050 tonnes, largely reflecting strong gold investment demand compared to the second quarter of 2009. Investment demand was the strongest performing segment during the second quarter, posting a rise of 118% to 534.4 tonnes compared with 245.4 tonnes in Q2 2009. The largest contribution to this rise came from the ETF segment of investment demand, which grew by 414% to 291.3 tonnes. Physical gold bar demand, rose 29% from Q2 2009 to 96.3 tonnes. With the return of demand for consumer electronics, industrial demand grew by 14% to 107.2 tonnes, compared to Q2 2009.

Slavery of debt

2010-08-24T14:23:00.000-07:00

Watching videos and reading internet publications often leads to interesting associations. Yesterday saw a film entitled "The International." Alldays actual statement is said there, let me quote:

"You control the debt, you control everything. You find this upsetting, yes?" But this is the very essence of the banking industry, would make us all, Whether we be Individuals or nations, slaves to debt. "

Here's the movie part:

Simply speaking banks make money by offering indebted cities, states or countries credit, secured by the most diverse "businesses", of course, squeezing of the billions of dollars.

How this scene reminds me of a conversation with general and this dialogue:

"- The ibbc is specifically structured to handle the particular needs of your type of organization. Of course we can give you better rates and terms than any other competitors, but we can offer you much more: weapons, intelligence, logistical support, everything that the revolutionary freedom front would need to revive itself.

- But in exchange for what? You must understand, the rff has no money.

-Money is not this institution's primary medium of exchange.

- What are you proposing exactly?

- We believe that with the right kind of direction and support, the rff could become a very influential force in your country. Perhaps potent enough to stage a successful coup in the coming months.

- And if this were possible, what does your bank hope to gain from it?

- The gratitude and consideration of a very influential friend."

Isn't it just how a big international business is beeing done? Example? Bank of Credit and Commerce International, which served as the inspiration of the writers for the film "The International" and create his film counterpart IBBC.

Goldman Sachs suggest that gold will cost 1300USD in 6 months

2010-08-16T01:38:00.000-07:00

Goldman Sachs in it's recent report for it's customers suggests that the recent sell-off in gold has left speculative long positions in gold oversold relative to US real interest rates, which has set the stage for a rally to 6-month gold price target of $1,300/toz.

Goldman also expects that the US Federal Reserve will return to quantitative easing measures in late 2010 or early 2011, which will obviously act as a strong catalyst to carry gold prices to higher levels. What is also underlined - monetary and financial demand for gold continue to provide support to gold prices over the long-term. Emerging and developing economies and in particular China, India and the Russian Federation have been the key drivers of monetary gold accumulation via on- and off-market purchases while advanced economies have halted sales.

Investment in silver

2010-08-08T13:19:00.000-07:00

Silver can be a dark horse in the precious metals bull market - this makes me to write a bit about the possibilities of investing in this metal. Just like the gold one could write a lot anout silver. I will try to expand on.

One difference, which in addition to the suitability of industrial and traditions affects the investment nature of the silver and distinguishes them from the value of gold is the concentration per kilogram. Kilo of silver is simply far less worth than a kilogram of gold, making tangible problems for storage of larger values in silver. Thw same value of silver which weighs 635 kg of metal can weigh only about 10.5 kilograms of gold. Additionally chemical characteristics of silver and its susceptibility to react with various chemical compounds make it difficult to store.

Paradoxically, however, it was silver and not gold was for centuries a major monetary metal. That was because of its availability in the crust and thus the possibility of a finer coin values - more comfortable in use by small daily transactions.

After these historical digressions so let's get to the relevant part of the article is the potential for investing in silver.

The first and most important option is to buy silver buillon. There is a variety on the market, exemplified by the Chinese Pandas, Canadian Maple leafs, American Silver Eagle, but reigns in our region firmly on the denomination, the Austrian Philharmonic 1.5 Euro, weighing one ounce and 0999 sample.

A curious thing is that, due to its unusually low face value in relation to the value of the metal, it was an interesting coin for those who want the border to transport larger amounts of cash. I do not know if this is a true story, but as in the Union can be transported across borders sums not more than 10,000 EUR is such an amount here in these coins is much greater in value than paper banknotes. Clever, is not it?

Where to buy these coins? In our conditions only on the auction unless they are at reasonable prices. Yes numismatic shops have them but more expensive. Philharmonikers can of course be bought in Vienna, in the Austrian Mint.

Another way to invest in silver are bars. The numismatic shops have different inventions with subtitles and stamped pictures, and the price going back to heaven and not giving the actual value. I do not recommend buying patterned bars. Nobody is buying them, and are generallyit's better to look for those whose price is closest to the spot price. Weighs are different, usually an ounce, also 50 and 100 gram.

Another option is to buy silver medals. I would classify them as patterned bars. Generally it is for me an exotic misunderstanding. Weights, sizes and designs vary depending on the inventiveness of the author.

Another possible way to buy and keep buying bags of silver is a silver granules destined for jewelers. While easier to buy (just type in Google), it significantly harder to sell. Thus, if we are not jewelers do not recommend it because I'll be with a sack of silver in the basement.

Turning from the physical to the silver paper certificates worth mentioning. I wrote earlier about certificates for precious metals listed on the stock exchange.

Stiglitz: government needs to stimulate the economy

2010-08-06T13:16:00.000-07:00

The U.S. government must undertake a "second round" of the stimulus to boost the anemic economic recovery - says Nobel economic laureate Joseph Stiglitz. The economic recovery is so weak that it is unable to produce jobs for let alone 15 million Americans entering the labor market,who wish to find jobs and can not - said the former World Bank Lead Economist in an interview with Bloomberg. The stimulus must be better designed. Must be concentrated on the rate of return on investment on education, infrastructure, technology. Referring to concerns that the U.S. government can not afford to support the economy because of the huge budget deficit and growing public debt, Stiglitz expressed his conviction that the actions of the stimulus in the long run will reduce the debt public, because the speed of economic growth.

My comment? Load of crap and bullshit. Who else believest that printing another pile of dollars and taking more dbt will solve anything in the long run?

U.S. GDP - the second quarter remains weak

2010-07-30T06:40:00.000-07:00

The recent report of Bureau of Economic Analysis does not show the upturn in consumer demand, which are likely to remain a brake on the U.S. economy. The data are generally weak and make the investors will be anxiously waiting for next week published data on activity and employment.

The U.S. economy in the second quarter grew at a rate of 2.4%, slightly slower than the market expected (2.5%) and slower than in previous quarters. Data for the first quarter was revised upwards to 3.7% (from the initially 2.7%), and the data for the fourth quarter adjusted slightly downward to 5%. But the true picture of the scale of recovery we get after eliminating the effect of increases in inventories - then the growth will be 2.2% for the fourth quarter of 2009 and 1.1 and 1.3% for the first two quarters of this year.

The deceleration in real GDP in the second quarter primarily reflected an acceleration in imports and a deceleration in private inventory investment that were partly offset by an upturn in residential fixed investment, an acceleration in nonresidential fixed investment, an upturn in state and local government spending, and an acceleration in federal government spending.

The Bureau emphasized that the second-quarter advance estimate released today is based on source data that are incomplete or subject to further revision by the source agency. The "second" estimate for the second quarter, based on more complete data, will be released on August 27, 2010. Annual revisions, which are usually released in July, incorporate source data that are more complete, more detailed, and otherwise more reliable than those previously available. This release published today includes the revised quarterly estimates of GDP, corporate profits, and personal income and provides an overview of the effects of the revision.

The head of BP leaves - the company has 17 billion dollars loss in second quarter

2010-07-27T00:56:00.000-07:00

BP today announced that BP CEO Tony Hayward is to step down with effect from October 1, 2010. He will be succeeded as of that date by fellow executive director Robert Dudley.

Bob Dudley now directs the operation to remove patches of oil in the Gulf of Mexico. Hayward step down is related to the ecological disaster in the Gulf of Mexico and a record loss in company history - 17 billion dollars in the second quarter.

For many weeks Hayward, was severely criticized for not very vigorous fight against oil spills, the undervaluation of BP scale disaster, especially for behavior that broke the image of the group. BP statement quotes "The tragedy of the Macondo well explosion and subsequent environmental damage has been a watershed incident. BP remains a strong business with fine assets, excellent people and a vital role to play in meeting the world's energy needs. But it will be a different company going forward, requiring fresh leadership supported by robust governance and a very engaged board."

Bob Dudley, the future president, since May has been responsible for combating spills in the Gulf of Mexico and takes the challenge personally, because he comes from the state affected by the catastrophe - the Mississippi. He joined BP from Amoco after the merger of the two companies in 1998. For five years he managed the TNK-BP, BP's Russian company. He retired from that position in 2008, previously persecuted by Russian authorities, which deprived him of a visa.

Hayward will remain on the BP board until November 30, 2010. BP also plans to nominate him as a non-executive director of TNK-BP.

BP press release.

Gold in BullionVault

2010-07-24T14:05:00.000-07:00

Original text.

In recent times a lot of talk about gold. The crisis reminded everyone that the position of investment in precious metals may be a good insurance in case of "difficult times". The problem is, however, that both known forms of investment in gold, ie purchase of physical gold and paper have their disadvantages.

Buying physical gold is associated with the costs of storage and insurance. Gold paper, in turn, means the lack of certainty that the certificate possessed is the actual position in gold bullion.

The offer of something intermediate comes from the Galmarley Limited - a company with its service www.bullionvault.com .

Buying gold in BullionVault is to purchase physical gold allocated, which is stored in one of three selected treasuries in London, New York or Zurich. The owner of the purchased gold is a specific person assigned to a fraction of a specific physical bars given with the serial number. In this way we can have more confidence than with other allocated gold certificates.

Typically, the issuer of such certificates assure us that they have position covered in gold, but do not give us the serial numbers of bars, where we have actually invested money. In the case of BullionVault company presents on its website certified by an independent (known by name and signature) auditor a list of bars, along with the code numbers and names of purchasers.

The system also allows to conduct transactions for the purchase of sale of gold in each of the three treasures at prices fixed by the market. The company obviously gets storage fees for the gold. In addition, fees are collected for the sale and purchase of and charges for bank transfer. The costs are obviously lower for larger amounts.

In order to prevent money laundering, and to safeguard the assets held, the company requires payment only by bank transfer to an account in the UK. Transfer return for payment of our funds is made only on the same account from which money has been paid. In a decisive means it increases the safety and transparency.

I think that this type of option to invest in gold may be worth considering for those who wish to invest more money in gold (due to the costs of small amounts do not make sense) and store them, for example, outside the country.

Poland is in early recovery phase

2010-07-20T05:21:00.000-07:00

"The current situation in the economy indicates that we are in the early recovery phase" - said for TVN CNBC the head of National Bank of Poland Marek Belka. "Data on the production of the last two months are very comforting. (...) It seems that it is driven by external demand, and this is not inflationary" - he said. "Latest figures show that we are dealing with a very slow pace of wage growth and higher employment. This is good.(...) In total we are dealing with an early phase of recovery" - he said.

The Central Statistical Office (GUS) has announced that industrial output rose by 7.0% m/m in June, and in annual terms - it was up by 14.5%, compared to a 13.5% rise in May (revised). Having eliminated the influence of seasonal factors, sold production of industry reached the level higher by 11.7% than in the corresponding month of the previous year. In the period of Jan-Jun, 2010, industrial output grew by 10.6% y/y. As compared to June 2009, an increase in sold production was reported in 27 (out of 34) industry divisions. Ten economists surveyed by the news agency ISB expected industrial output to rise by 12.0% y/y in June, with forecasts between 10.1% and 13.5%, at the average at 11.95%.

Deficit is good?

2010-07-18T14:43:00.000-07:00

When Bob McDonnell was elected a half years ago the Governor of Virginia, the state budget was in a deplorable state. In June 2010, he faced $ 1.8 billion deficit. The calculations showed that, without a reduction in spending in 2012 would increase r to 4.2 billion. McDonnell had three options: reduce spending, raise taxes, or opt for both. The governor chose the first: cut off $ 4.2 billion expenditure. Led to the state budget from 4 years ago. Did not raise taxes.

In terms of attractiveness for business, Virginia was on the second place behind Texas in the list of CNBC's 10 most business friendly states. The list authors took into consideration: cost, labor, economic conditions, education, quality of life and innovation, transportation, maintenance, friendliness and access to investment capital. California's Silicon Valley, or Alabama - the center of the defense industry laboratories did not make it to the list.

This shows that indeed it is possible to live without deficit, and this is clearly against these who believe that deficit is good. The rate of growth of spending, at every level of government is unsustainable. You don't tax your way to prosperity. You live within your means.

Investing in art or collecting art

2010-07-17T10:13:00.000-07:00

Original text.

The discussion on investing in pieces of art boils down to finding answers to the question of whether investing in art can be simultaneously an act of collecting works of art from aesthetic reasons. Otherwise - if we can be an investor having an emotional and aesthetic attitude to the piece of investment?

The works of art, being the investment should satisfy our sense of aesthetics of course, but the buying and selling them to for emotional reasons (and, those with an aesthetic touch to the work is easy) is a bad idea.

There is, in my opinion a mistaken belief that works of art are a good choice to invest money.

If someone buys a work of art as a collector - he buys what his heart dictates, the average increase in prices over time is not higher than income from bank deposits. Yes, this kind of investment can earn money if someone does the task professionally, buys and sells in the appropriate moments, or without the rest will be devoted to this as a private investor.

Thus, for the pleasure of a work of art lets buy things to meet the aesthetic feelings. And for investments only if we deal with this and do that professionally.

IMF forecasts continuing global recovery

2010-07-12T23:50:00.000-07:00

IMF launched updates to the IMF’s World Economic Outlook (WEO) and Global Financial Stability Report (GFSR). IMF warned that uncertainties surrounding sovereign and financial sector risks in parts of the euro area could spread more widely, posing difficulties for both financial stability and the economic outlook. However IMF forecasts world growth to rise to 4 ½ percent this year, before falling somewhat to 4 ¼ percent in 2011. The IMF officials underline large differences around the globe with the United States expected to grow at about 3 ¼ percent in 2010, the euro area at 1 percent, Japan at close to 2 ½ percent, and emerging and developing economies averaging about 6 ¾ percent. In its market update to the GFSR, the IMF points to restoring progress toward financial stability to contain the risks and keep the economic recovery on track. Government policies in advanced economies should focus on credible fiscal consolidation. While IMF remains cautiously optimistic about the pace of recovery, there are clearly dangers ahead.

Source.

Golden news

2010-07-09T02:06:00.000-07:00

Currently some pieces of news seem to be more valuavle than the others, particularly valuable are the news about gold, in a situation where the gold has lost some momentum for some time in recent days.

This time we were served by news under the title: "European banks use gold reserves to raise cash" sourced here.

European commercial banks have begun using their holdings of gold to raise cash with the Bank for International Settlements using swap operations. The BIS took 346 tonnes of gold in exchange for foreign currency in "swap operations" in the financial year to March 31, according to a note in its latest annual report (specific part of the report where this information is mentioned, can be found here). The Bank for International Settlements (BIS) is an international organisation which fosters international monetary and financial cooperation and serves as a bank for central banks.

Co to clear out the meaning of the news information - in a gold swap, one counterparty, in this case a bank, sells its gold to the other, in this case the BIS, with an agreement to buy it back at a later date. In the past the BIS has occasionally engaged in gold swaps. There has been no mention, though, of any such operation in recent years. The gold swaps detailed in the annual report began in December last year and have surged since January, when the Greek debt crisis erupted. The amount raised in the operations, just over $13 billion at current prices, is small compared with the wholesale money markets. But the fact that banks are using their gold holdings to raise capital is a further indication of the stress in the sector.

Banks used gold swaps simply to gain liquidity. The gold was not sold in the strict sense, but contained a sale transaction, and commitment to future repurchase (swap), which is a de facto a gold backed loan. As the authors themselves admit the article is not anything unusual, such an instrument is available and has been used in times of crisis, precisely because gold is real and undeniable value to back loan.

It's just another argument in a discussion whather gold is really a money itself or not. It proves that it was cheaper and more convinient to make a gold swap than for example a Euro swap, beacuse of true value represented by gold, which is of course not present when you back the loan by fiat currency.

How to buy gold in secure manner

2010-07-07T01:34:00.000-07:00

Original post

The question "how to safely buy gold," I have been asked some time ago. What's the answer? First of all, I suggest to read the information about investing in gold , which has already appeared on the blog.

The basis is, of course, common sense and some basic rules:

Secure source - recognized dealer is safe and guarantees that the product we buy is of such quality as it is declared. One should avoid any occasion, sales, promotions, if we are not absolutely sure what we buy, one shall never buy from strangers on the street, at fairs, etc;
Guarantee of quality - do not buy products not marked of unknown mint, strange looking, in parts, as a last resort go to a trusted jeweler and the best of Assay Office;
Be careful with money - it is connected with the first point, buying from a major dealer in a transaction carried out in a safe environment or a trusted online store versus buying at the gate in dark corner of the street where we can get hit in the head
Stay anonymous - gold is safe if no one knows about its existence, and its owner is safer if no one knows that he/she owns the gold, hence the less information about us we give the other side of the transaction, the better;
Limit transactions - do not buy too big amount at once, if you will be cheated or a consignment sent to us will be stolen - we lose a large amount, it is better to make smaller batches of transactions;
Be critical - have sensitive senses and any deviation from the norm in the preceding paragraphs, any ambiguity in the item description, any doubts shall be interpreted to the disadvantage of such a transaction - after all we have the money and we want them to spend;
Know what you are buying - if you buy a coin - you need to know how it should look like, what are its types and variants, which differ, and how to identify fraud.

I think that being sensitive to the above to avoid being pulled, and if we let go by some "opportunity" - well, if someone wants to play then let him into gambling, it is not investing in gold. If you want to gamble go to the casino.

Liquidity of alternative investments

2010-07-03T13:19:00.000-07:00

Since we elaborate on the investment diamonds the subject shall be taken more comprehensively. One of the important aspects of any investment is to be able to recover the capital invested in it. It is therefore notable that alternative investments are characterized by generally lower levels of liquidity than traditional. This lower level of liquidity is due to the fact that either the markets for the assets are shallow, or there is limited number of buyers, or they are governed by specific laws.

In the case of works of art it can be said that a rapid sale at an attractive price is rather excluded. You can leave your work at the auction, but these are organized on the dates indicated and the more it is worth the smaller the number of potential buyers. Any sale by the gallery or antique shop is also associated with the expectations of the purchaser and the commissions.

Real estate market is much more liquid, but also here (especially in times of crisis) the sale may take several months and may not always be able to get us a satisfactory price.

As to whether the philatelic or numismatic values there is quite a wide market for such items.They can be sold on auction sites or in specialist shops. Auctions are a quick and usually the number of transactions concluded there guaranteed to sell your item. However, the more expensive item the longer we will have to wait for the buyer. In turn, shops can take items to consign or buy, but often money they are offered less attractive than at auction.

Therefore, when planning to make investments in alternative assets or markets should be considered for rapid exit and liquidate our assets.

Original text here.

Investment in stamps

2010-07-01T06:11:00.000-07:00

Examples of alternative investments can be selectively chosen to buy philatelic. Selectively chosen philatelic values can be expected to return on money invested in them. But to truly choose should be guided by the knowledge of the area, market orientation and sensitivity. In case you do not have special knowledge about the subject you can invest in some investment products like this one.

Substitute for the dollar as an international currency?

2010-07-01T03:05:00.000-07:00

Dollar is the currency of international uncertainty and should be replaced by a more stable system - such conclusions can be drawn from a report recently published by the UN Department of Economic and Social Affairs.

The report called the "World Economic and Social Survey 2010" supports the proposal for a long time to be submitted to the International Monetary Fund (International Monetary Fund), which called for the creation of an international standard for the transmission of liquidity. A new global reserve system could be created, one that no longer relies on the United States dollar as the single major reserve currency. The dollar has proved not to be a stable store of value, which is a requisite for a stable reserve currency.

Under this proposed system, the State would no longer need to buy foreign currencies, as it has long been China's market for U.S. dollar. Rather then it would cummulate the right to acquire foreign currencies, or so-called Special Drawing Rights (SDR), instead of the same currency.

According to the proposal, it would be supported by the SDR basket currencies, which would ensure that it would be less vulnerable to fluctuations in the single currency. And due to the fact that the value of special drawing rights shall be determined by the International Monetary Fund, changes in the value of the currencies could be tailored to the current situation.

The report states, inter alia, the need to reform institutions such as the International Monetary Fund and World Bank in such a way as to more reflect the changing balance of power in the global economy. Not only it should mean a change in the share of votes in these institutions, but rather the report calls for the creation of a new agenda for global surveillance and control of financial institutions. The demands coincide with what it is getting louder for some time, but we'll se what it really will come to. For now, different players have different visions of how to organize the global turmoil that has developed.

Investing in diamonds

2010-06-29T02:53:00.000-07:00

Original post

For some time it is seen that investment in diamonds is beeing strongly promoted amongst individual investors. While the acquisition of precious stones may actually be an interesting way to an alternative investment, upon deeper reflection, I see a fundamental problem. In my opinion, unfortunately, precious stones market is relatively shallow and not easily available to ordinary investors.

While the sale of gold, silver, coins or stamps is not much trouble in the case of diamonds (like the rest of the other alternative investments such as wine) the chance to sell the purchased the stone is smaller. Where would we have to go with the stone? The knowledge needed to assess the value of the jewel is so large that it is highly risky for buyers and sellers without specialist know how. There are of course jewelers, but they offer us a deep discount prices.

What this conclusion? If someone does not have a secure outlet and does not know the diamond market, let this idea go.

Anyway. It is a common problem with the rest of all alternative investments. Their liquidity is the lower, the more it is a niche market and the more knowledge is crucial for this to make such investments.

Repay the loan or defer?

2010-06-27T05:38:00.000-07:00

Originally published here.

I wrote recently what it might be bad and good debt. I was asked a question recently about that topic. It sounded like this: "I have some money and credit, do not know whether to pay part of the credit, or defer the money?".

Exactly. Question remarkable. For as it will pay the lower installments and the loan amount it will cost less. But how to live without any savings? Bingo!

I answered yes. "Ask yourself whether you are insured on the circumstances of job loss or illness. What happens in this situation and whether you will have to handle credit and for how long. Then, when you most need the money the bank does not lend them back to you. So think and count . If you put them on savings account, even if you lose on the interest it will cjust become the cost of your insurance policy, but you can sleep peacefully knowing that whatever happens you have for half a year repayments. "

Of course, everything depends on the amount. You can spend some money to repay a part of the savings. The main thing is to take a calculator to count and think about - make a plan.

We will have dollar crisis and bond crysis within the next six years

2010-06-26T14:17:00.000-07:00

Interesting video about that - worth watching.

Gold is definitely not in a bubble yet...

2010-06-25T00:36:00.000-07:00

“The Budget should be balanced, the Treasury should be refilled, public debt should be reduced, the arrogance of officialdom should be tempered and controlled, and the assistance of foreign lands should be curtailed lest the Republic become bankrupt. People must again learn to work, instead of living on public assistance.”

Marcus Tullius Cicero, 55 BC

Interesting report about gold concluding that gold ist definitely not in a bubble yet.

International regulation initiatives can not be contradictory

2010-06-24T09:38:00.000-07:00

Profesor Marek Belka - chairman of the National Bank of Poland said in an interview published at the site www.obserwatorfinansowy.pl that it would be best to have full co-ordination of regulatory initiatives, if not all over the world, then at least around the major financial centers. But he remarked the situation of the financial sector and its impact on the economy is different in different continents and therefore the proposed regulatory arrangements are going in other directions. The Europeans - unlike Americans - are focused on regulating the derivatives markets. Meanwhile several countries have raised questions about the introduction of special tax for the financial sector. In this situation it is difficult to say whether the Americans will bring some solutions by themselves, without waiting for other partners in the G20. The important factor is that - if these initiatives are not coordinated - at least they shall not be conflicting....

More information available here.

World Gold Council invests in Bullionvault

2010-06-23T14:37:00.000-07:00

The World Gold Council, the market development organisation for the gold industry, and Augmentum Capital , a growth capital fund backed by RIT Capital Partners, have announced an investment in BullionVault. They have completed a £12.5 million funding round in the Company in exchange for an equity interest. BullionVault, which is based in West London and began operations in 2005, provides investors with an around‐the‐clock platform to buy and own 100% physical gold via the internet.

SDR is creation of money ... out of nothing?

2010-06-23T13:03:00.000-07:00

August 28 2009 - The International Monetary Fund conjures up a 250 billion U.S. dollars. Sounds unbelievable? None of these things. On August 28 2009 there was a new allocation of Special Drawing Rights (SDRs). Let me explain how that conjure up a miracle of the IMF money.

I do not think everyone knows - once SDRs were associated with gold and took cover in gold being the country's contribution to the IMF. Were then detached from the gold and in some ways lost its role as an international currency. Their valuation was based on the basket of currencies.
The loss of meaning can also decided that the whole issue so far SDRs was worth approximately 33 billion U.S. dollars today. It's not much, given the depth of the financial market in the world.

So after breaking the gold SFRs became a real fiat money, which only covered with a promise to the international recognition of their accounts.

But back to the heart of the matter, what is creating such as SDRy money? This explains a little document describing how accounted for in the new issue of allocation of SDRs in the accounts of the central bank. Well, this is done in such a way that the central bank being a member of the agreement in the IMF SDR has two accounts, let's call them the credit (which accounted for obligations to the IMF) and debit (which accounted for foreign exchange reserves held in the IMF). Credit account denominated in SDRs and debit denominated in SDRs are both using the same interest rate on a weekly rate set by the IMF. This is important for understanding the mechanism of allocation.

So what is the allocation of Special Drawing Rights? Well, the credit account shall be credited to a specific loan amount and debit account the same amount. End.
Suddenly, the central bank has a higher foreign exchange reserves, while a larger position in terms of commitment by the IMF for SDR. We have magically created money, that will increase active and passive was the central bank's balance sheet.

This is not really maybe creation of money out of nothing, but it is the same as issuance of paper money. In both cases, we have increased the balance of active and passive central bank. Except that in this case the issuer is the IMF.

Interest allocation and liabilities SDR tolerate each other until the part of the SDR did not sell. Thus, the allocation is for the participating bank "sterile" in terms of cost. But it is convenient and attractive beacuse SDRs held on the asset side can be used to repay obligations or exchanged for other currencies. This increases the amount of money on the international financial market and improves overall liquidity. Indebted countries could be due to these funds, restructure its debt. But ...

It should be noted that the important thing. The allocation is proportional to the amount of state participation in the fund. It is obvious, therefore, that little get less and more large.

Finally it is worth mentioning that the current total allocation SDRs is equivalent to 33 billion dollars. The new allocation will be 250 billion, so you can see the scale of the International Monetary Fund. In addition, on September 9 2009 IMF planed to allocate another, slightly modified by granting SDR scheme, a total of 21.5 billion SDRs (about 33 billion U.S. dollars).

Credit Suisse recommends buying polish zloty

2010-06-22T04:26:00.000-07:00

Polish zloty may consolidate in a scenario assuming that concerns about the debt crisis in European countries will expire - Credit Suisse analysts estimate.
The Swiss bank notes that the Polish zloty was one of the most losing currency in the past two months. According to CS, the appreciation can affect well-being of the economy, orders from Germany and the capital inflows associated with privatization.

Credit Suisse recommends addressing the long position on Polish zloty, which assume that over the next two months Polish currency shall strengthen to 3.975zł per euro. Investors are paying around 4.06 zł per euro today.

Source: http://www.parkiet.com/artykul/7,941732.html

Other precious metals - platinum, silver, palladium

2010-06-21T06:26:00.000-07:00

Originally published here: Other precious metals - platinum, silver, palladium

Much is written about gold as the precious metal in which we place their investments, while considerably fewer people are engaged in investment in silver, platinum and palladium. I would like to present below a brief description of these precious metals in the context of investment.

SILVER
Silver from the dawn of history has been used for monetary purposes. After the departure of its use for minting coins essential use was left to use it in jewelry and industry. It is also used for investment purposes. But VAT in EU, margins imposed on investment bars or silver coins can reach 100% of spot prices, which makes such investments unprofitable. Finally, silver is two to three times more volatile than gold. It usually means a much more dynamic growth, but significant declines, not seldom the order of 30%. This is due to the shallowness of the market and the fact that the majority of silver mining on the occasion of producing other metal ore mining (copper, zinc).

Investors interested in purchasing silver for investment purposes can be purchased (as in the case of gold), bars and coins. Forget all inventions like collector coins (unless bought silver below spot prices) or scrap silver (cutlery used for eating, rather not to invest). Generally, when investing in anything so that you can then sell it at a fair price.
As in the case of gold, there are specialized funds that invest in the metal and its related assets.

PLATINUM

Another precious metal, which attract the interest of investors is platinum. This is one of the most rare on earth metals, which is producing only a few countries (78% of platinum comes from South Africa, 13% from Russia, and 5% from the U.S. and Canada), and who, together with the invention of automobile catalytic converters has gained a lot of industrial demand . Platinum has a feature that makes it interesting for the investor - is hardly available. It is, unfortunately, by the way, which puts it beyond the reach of the average small investor. This caused a difficult availability of platinum, that never in history has not been used for monetary purposes.
The most popular platinum coin tracking, you can replace the Platinum American Eagle, Canadian Maple Leaf Platinum and Platinum Australian Koala. There are also platinum bars.

PALLADIUM

At the end we come to the palladium, perhaps the least known of precious metals, which may be of interest to investors. Basically, this is an industrial metal and not noble. because of its rarity, however, is interest to investors. Palladium is used in dentistry, chemical industry and electronics. Growing field of applications is the production of palladium catalysts for diesel engines. The largest producer is the Russian Norilsk Nickel Group (producing this as a raw material as a side effect of its core business which is the production of nickel.). Significant production of palladium comes also from South Africa. Investment in the palladium may take the form of purchase of coins or bars. They are available as hard as platinum and because of the Bespoke Design, some suffer from low liquidity.

Head of the European Central Bank Jean-Claude Trichet, has accused France and Germany to contribute to the current crisis in the euro area.

2010-06-21T00:17:00.000-07:00

In an interview with the German "Welt am Sonntag" Trichet pointed out a compromise Stability and Growth Pact of 2004, which allowed for a relaxation of fiscal discipline.

- I wish that German public opinion also strongly protested when we decided to buy government bonds - said, referring to the unprecedented decision of the ECB in May this year, aiming to stop the speculative attacks and to restore stability in the market.

According to Trichet, Paris and Berlin have not been able to maintain high standards for which they were fighting themselves. Instead, the same softening caused severe penalties, which assumed the Stability and Growth Pact for the distension of public expenditure. - The governments of these countries could not rely on, not just in recent months, but years - he added.

More flexible Yuan exchange rate

2010-06-20T13:52:00.000-07:00

The Chinese central bank announced that China will begin a gradual greater flexibility in the renminbi exchange rate. This way the country responds to harsh criticism caused by linking the yuan to the dollar quotations.

However, changes will not be violent. The Bank strongly denied that it intends to revalue the currency at one time. According to Chinese experts, "there is no reason to fluctuations or changes in exchange rate".

Reuters notes that China's message probably means the actual completion of the exchange links the yuan to the dollar. Quotations yuan and the dollar are linked for last 23 months. This way they wanted to counteract the effects of Middle global crisis, which could hit its economy.

Underestimation of the currency, according to critics, gave China until now an unfair competitive advantage in trade.

It is likely that the central bank will use its system for the reference rate for the yuan, to bring the currency back on a path of gradual appreciation against the dollar, which is followed by three years, until mid-2008

Eurozone will split apart?

2010-06-19T13:15:00.000-07:00

Last week Poland expressed concern that efforts to improve the eurozone’s economic governance should not turn non-euro area countries into second-class members of the European Union. But today this however becomes less concerning, as now Europe is facing another approach to divide and to create two speed system. This time inside the eurozone itself. As reported in today Daily Telegraph
Germany and France are examining ways of creating a "two-tier" euro system to separate stronger northern European countries from weaker southern states. A two-tier monetary system in the 16-member euro zone is being examined as a "plan B" in case it would not be possible to keep from Spain, Portugal, Greece and Ireland from collapsing under dept pressure.

Now everypne will be denying as these are only unofficial speculations, but this is and shall be considered as one of possible scenarios. This is why Dimitry Medvedev - Russian President - says about Rubel becoming a new reserve currency, and possibility that eurozone will fall.

Gold in the beginning of 2010

2010-06-18T14:46:00.001-07:00

Gold beginning in 2010

There was an article I read recently that covered the wave of hysteria concerning increase in the price of gold and purchases by some central banks. This led me to a closer study released by the World Gold Council data on the situation in the gold market in early 2010.

It seems that in the first quarter of 2010 some central banks increased (according to official data) their gold reserves is Russia (26.6 tons by March 2010 and further in April, 4.9 tons), Philippines (9.6 tonnes ), Kazakhstan (3.1 tons) and Venezuela (3.1 tonnes).

As regards the demand for gold is very noticeable, a significant demand decrease in the first quarter of 2010 from the ETF funds. It amounted to just 3.8 tonnes in the corresponding quarter of 2009 amounted to 465.1 tonnes. Demand from these funds was also less than three months earlier when he was 54 tons. It seems to me that this is a significant extent due to the high price of gold. Funds purchased a significant part of his stock a year ago and now probably part of the customer realizes a net gain thus is less demand.

SDRs

2010-06-18T13:06:00.000-07:00

Special drawing rights (Special Drawing Rights, SDR) is an international unit of account having a non-cash nature of money. SDR was created in order to stabilize the international monetary system by the IMF in 1967. Initially, the value of SDR units were determined as the value of 0.888671 g fine gold (was sometimes called "paper gold"), since 1974 is determined on the basis of a basket of currencies, consisting out of the euro, yen, pound sterling and the dollar, in proportions dependent the importance of the currency in international financial transactions. SDR units were issued three (or four ?)times. For the first time in 1970-72. In three installments, a total of 9.4 billion. The second time in the years 1979-1981 a total of 12 billion, also in three installments. The last allocation od SDRs took place in 2009. SDR units are awarded to countries-members of IMF, in proportion to their shares transferred to the IMF.

Investment in physical gold (2)

2010-06-14T05:41:00.000-07:00

Originally published: Investment in physical gold (2)

In what form we can invest in physical gold.

Formy złota fizycznego Forms of physical gold

1. Bars - gold bars have the form of flat rectangular castings made of gold purity .999. They usually occur in the weights 1,2,5,10,20,100,1000 grams and 1 / 2 oz and 1 oz. Each bar is usually described is the name of the manufacturer, the purity of gold from which it was made, and weight. Very often, bars are closed in airtight plastic containers called "Certi card" because of the shape of a credit card. The bag often contains an additional certificate of minting. Sometimes in bullion, or certificates there are serial numbers (you can check the manufacturer's website). Examples:

Australian Mint bars, PAMP, Switzerland, Germany and other mint. Usually the price dealers are formed around 15% over spot price. Usually packaged in plastic packages with the certificate. Here are some sample images.

2. Bullion coins - in other words, coins are minted by mints of various countries, sometimes with no indication of currency, designed for the value specified in the ore from which they were minted. Most can be found as follows:

White-tailed Eagle - purity 999.9 issued by the NBP. On the reverse - a stylized silhouette of the eagle and information on the weight of the coin. The front of the emblem of the Republic of Poland and the denomination. Margin smooth. The coin is accompanied by a certificate along with technical data and a brief description. Available denominations are: 50 zł weighing 1 / 10 oz 18.0 mm diameter and 100 zł - 1 / 4 oz, 22.0 mm, 200 zł - 0.5 ounces, 27.0 mm; 500 zł - 1 oz, 32 , 0 mm.

Krugerrand - beaten gold purity .916 in the South African Mint are legal tender in South Africa (currently not used as currency, but rather place). It is the most popular bulion coin in the world. Available coins are 1 oz, 1 / 2 oz, 1 / 4 oz, 1 / 10 oz. Below photo:

Wiener Philharmoniker - minted gold coins purity .999, available in sizes 1 oz, 1 / 2 oz, 1 / 4 oz and 1 / 10 oz. Description of the parameters can be found here (PDF) . Below the picture.

Sovereign - a British coin of gold purity .916, and containing 7.9881 grams of bullion, coins are also available half-sovereigns. Specifications and history of coins available here (PDF). Photo below:

Other: American Eagle , Maple Leaf , Chinese Panda

3. Collector coins - made of gold (depending on the emission parameters) can provide capital investment because of two fundamental components of their price. The first component is the value contained in the bullion coin. Its value can be calculated multiplying the weight of the coins by purity of gold contained in it. For example, the typical collector coin issued by the NBP in recent years the face value of 200 PLN weighs 15.5 g and is made of gold purity .900. Therefore contains 13.95 g of pure gold. Another coin 100zł issued by the NBP weighs 8g and also made from the gold .900, therefore contains 7.2 g of gold. This way you can know the content of gold in the coins to calculate its price.
The second component is the price of collector coins collectible value resulting from their performances and the amount of effort. In the case of investment in gold as such it interests us here so that was the lowest at the time of purchase and the highest at the time of sale, but primarily interested in knowing the price of gold. If you buy coins at the issue price, the value of "Collector" translates to a margin of the issuer (NBP).

4. Jewelry and scrap gold - may also constitute a kind of capital investment, although the prices here are much more diverse. In the case of jewelry we are dealing with a multiplicity of purities (such as calculating the actual content of the ore gave above) and variety of prices (resulting from the artistic merit of the product). Jewelry as an investment should be valued in the portfolio at a price of scrap gold in order to avoid surprises in case of sale. This approach, of course, affects the approach to the purchase. Note, however, that the primary purpose of your jewelry is to decorate, not the investment.

Sovereign Wealth Funds

2010-06-13T13:02:00.000-07:00

Recently - especially in times of economic crisis - may be more surprising that investment from the United Arab Emirates, and China buy shipyards, automotive industry are investing in or buying the companies. Who are these institutions being in control of such fabulous capitals?

These government controlled wealth funds (sovereign wealth funds), also known as sovereign investment funds or national funds established for the purpose of state investment in foreign financial assets. These funds are usually created from the foreign reserves of countries such as China and oil exporters. Remain under the control of the governments of these countries and no longer satisfied with their governments to borrow cash, or buying their bonds: they want to take over the assets that give them a better rate of return.

For example, set up in 1960 to invest oil revenues Kuwait Investment Authority brought together more than 100 billion dollars. And recently acquired 3.1% stake in aviation group EADS. For the largest of the state funds shall be deemed to Abu Dhabi Investment Authority manages up to 500 billion dollars. Recently, Russia launched the Stabilisation Fund, which since 2004 shall be part of the proceeds from oil sales: today, this fund is worth over 100 billion dollars. China recently announced its intention to set up a fund, equipped with a 200 billion dollars.

Currently, there are dozens of sovereign wealth funds around the world. The largest are:

* Abu Dhabi Investment Authority (United Arab Emirates - Abu Dhabi)

* Investment Corporation of Dubai (United Arab Emirates - Dubai)

* Saudi Arabian Monetary Agency, the Foreign Holdings (Saudi Arabia)

* Kuwait Investment Authority (Kuwait)

* Qatar Investment Authority (Qatar)

* Libyan Investment Authority (Libya)

* China Investment Corporation (China)

* Government of Singapore Investment Corporation (Singapore)

* Temasek Holdings (Singapore)

* Korea Investment Corporation (South Korea)

* Government Pension Fund - Global (Norway)

Their appearance in the U.S. and Europe as investors administrations huge sums of money on acquisitions caused concern among politicians and business areas. Countries with rapidly growing - as in China - foreign exchange reserves, follow in the footsteps of countries where the savings come from extracting oil and other raw materials, creating a state fund to invest in the economy of developed countries. And raises concerns that these funds often remain under strict political control of the governments of these countries.

How to measure global wealth?

2010-06-11T01:26:00.000-07:00

Today I read a certain article in which I read, inter alia, that "the level of global wealth in 2009 increased by 11.5 percent. The value of managed assets is 111.5 billion dollars. - Almost as much as in 2007. " After the reading two reflections appeared to me.

The first is a reflection was on the question of "how to measure wealth" in general. Well, because beeing rich means else in Bangladesh and something else in Sweden. This is a general problem that is difficult to cope with. Professor Grzegorz Kołodko tried to analyze this in his book, "World on the move". I recommend it as interesting reading, after having to filter out a little bit of socialism from the text.

The second reflection is by temporal nature. As we know the value of money changes over time (as a result of inflation). Thus, the 2007 U.S. dollar is not the same as U.S. dollars today. Meanwhile, I do not know whether it was included in the source data. But comparing the nominal value would be a serious, though common mistake on the merits.

The consequence of this is to reflect whether it can measure the total value of assets that are taken to calculate the "wealth" should not be what is the universal currency like gold? Although, as some people may not know, it is subject to inflation.

Marek Belka elected a new president of Polish National Bank

2010-06-10T13:24:00.000-07:00

Today a majority of 253 votes Polish Sejm chose prof. Marek Belka as President of the Polish National Bank. I think that it was necessary and good to select as soon as the President of the NBP, where the vacancy stood open at the presidential position afer tragic death od Mr Sławomir Skrzypek in Smolensk air crash in April.
Definitely it seems to me that filling a Central Bank governor has given a clear signal which can improve our assessment among foreign investors. I also think that this may contribute to the stabilization of Polish zloty.

Can the collectors coin be an investment?

2010-06-10T06:10:00.000-07:00

Numismatics is an alternative way to invest and diversify the investment portfolio, collector coins are also a funny way to invest money. Please note, however, that such investment should be a way to diversify, and rather should not be the main investment. In addition, investments in coins require a dose of knowledge on the subject of the investment.

The opportunity is there all the time. The lower number od collectible coins is produced into circulation the higher growth potential. In the case of gold coins, the price also affects the value contained in the bullion coin. Additionally important are the aesthetic qualities that belong to the series.

What then is the answer to the question posed in the title? Of course the coin may be an investment, even pretty good, provided they are properly chosen the appropriate cost, in good states of preservation and stored in appropriate conditions.

Some interesting article about polish silver production

2010-06-09T01:02:00.000-07:00

Here you can find some interesting article about Polish silver production.

Mark Faber's interesting lecture. Worth watching.

2010-06-07T13:25:00.000-07:00

Mark Faber's interesting lecture. Worth watching.

Investment in physical gold (1)

2010-06-05T05:33:00.000-07:00

Originally published here (Investment in physical gold).

Some time ago I wrote about investing in certificates for gold. Now It's time to say something about investment in real metal.

First a small explanation. The price of physical gold is typically made up of many components such as the bullion price, the cost of minting (margin mint), dealer's margin, transport costs, the value of collector, etc.. Please pay attention to what is the ratio of the price of gold on the specific type of manufacturer and store, in relation to the price of pure bullion contained in the subject. It should be remembered also that a well converted by the content of the ore. sample.

Grams and ounces
Weight in gold very often given either in grams or ounces (oz). With regard to the ounce of gold used Trojan (jeweler) equal to 31.1035 g.

Gold purity
In turn, attempt to determine the way gold is pure gold content in the melt. The first way is to try to determine an application of ore content in the melt. For example, an alloy containing 99.9% pure gold will attempt to set 999 (or .999 0,999 depending on the record).

Carats
There is another division of purity of gold, determined in a carat, which corresponds to the contents of a carat weight of 1 / 24 of pure gold in the alloy.

Europe stuck by Hungarian turmoil

2010-06-04T14:11:00.000-07:00

Once again we have the market turmoil. This time caused by the risk of default by Hungary (see also here), theis led to a rapid weakening of the zloty, and euro.

As shown in the chart above we were hit by some 1.5% to 3.68% depending on which currency is referring.

How, in turn, can be seen from the following chart (gold price) - the the euro, which, although much less than a dollar, but also weakened.

You can read the comparison as this comment.

Gold Certificates

2010-06-03T15:02:00.000-07:00

Originally published here.

As I said gold can and should also be a complement to the investment portfolio.

Forms of investment in gold can take the form of investment in physical gold, ie gold bullion coins, collector coins in gold and gold bars. Another form is to invest in certificates of gold funds or other investment vehicles, that declare that the certificate has (or does not have) coverage the physical bullion.

Buying physical gold is the safest due to the control of a resource (possessed gold), but also the most expensive due to the cost of storage and insurance.

Certificates in which the exhibitors declare coverage in physical gold will obviously have a higher value for the buyer than those that only reflect price movements in the bullion markets. Just the investment risk will be lower. However, we should always answer the question if we have confidence in the issuer and whether the risk (eg, associated with its bankruptcy) is acceptable for us. Please note that in the event of bankruptcy issuer certificate does not protect us, no Bank Guarantee Fund exists, and the document received is worth paper. There are other ETF (Exchange Traded Funds) that are gold funds, which issue such certificates.

The third type of investment certificates into gold, are the ones that do not meet the physical metal. Typically, the issuer of such certificates occupies a position in gold futures contracts or options on the metal. This is not always described in the specification, however. Sometimes it merely declares that the price of the instrument will reflect the price of gold and it will provide liquidity in the market by maintaining an open offer buying and selling a certain amount of certificates. They show that they have no coverage in the physical metal, only to mimic the price of gold, there is a risk of insolvency of the issuer and the lack of liquidity of the market. Liquidity is significantly greater than for physical gold and certificates listed previously covered in gold, but there is always a risk its loss. The undoubted advantage is the possibility that such an instrument is responding to short-term moves much faster than for items in the physical metal. The disadvantage, significantly higher risk.

Iran escapes from the euro into U.S. dollar and gold?

2010-06-02T05:30:00.000-07:00

Originally published here.

I found very interesting information. The Iranian central bank announced that it intends to replace 45 billion of its foreign exchange reserves into dollars and gold . It is based on anonymous sources of Chinese Xinhua agency.

It is very interesting that not so long ago we all ran away from the dollar. Now, the euro is bad, and the dollar a good ... At the end, all will anyway go to the gold, because after one or more reserves transfer from one fiat currency into another paper, they will end up in setting everything in gold.

Oil and weakening dollar

2010-06-01T11:05:00.000-07:00

Extract from text published here.

If we look at oil prices and the dollar from a broader perspective to see that since the late 90s followed a progressive weakening of the dollar against gold, the euro and the franccorrelated with powerful increase in oil prices. It is not surprising. Why? After all, if we give the price of raw material (for which global demand fluctuates though, but it is not a turnover of 400%!) in the currency, which real purchasing power is declining - is a simple law of economics says that prices will rise inflationary. Monetarism explains that increase in the money supply (today dollar is printed with a passion ) will cause the price of goods to increase.
So we have a partial explanation of the component in oil prices. Other components of the growing consumption and speculation - of course.
Interestingly, the relationship between events in the world of oil and interaction between the dollar and the euro presents the chart below (borrowed from here - an otherwise interesting article on precisely the same interaction between the oil and currency markets).

Elements marked on the chart:

1st January 1999 - the start of the euro.
2nd January 1999 - October 2000 - Euro weakens against the U.S. dollar.
3rd November 2000 - Prices of crude oil from Iraq are beginning to be quoted in euros.
4th April 2002 - OPEC suggests possibility to swap the quotation of oil to the euro.
5th April 2002 - May 2003 - the euro strengthens against the dollar.
6th June 2003 - Iraqi Oil again begins to be quoted in dollars.
7th June 2003 - September 2003 - the euro is weakening to the dollar
8th October 2003 - February 2004 - Russians begin to suggest a swap move with oil prices and the euro, the euro strengthened against the dollar.
9th February 10, 2004 - OPEC does not decide to switch to euros.
10th February 2004 - May 2004 - the euro is weakening the dollar.
11th June 2004 - Iran has suggested the creation of a competitive oil market in London and New York.
12th June 2004 - the euro once again begins to recover the value of the dollar.

Conclusion. In addition to the U.S. dollar as a reserve currency, for many years the dollar has been the currency of account of the market undermining the oil producers. Oil producers might look for some alternative. Venezuela will not cry on the dollar. Arab states also probably will not regret it. Question is - what will happen in return. Or Euros, or SDR, and perhaps the Chinese yuan?

Bad debt and good debt

2010-05-31T12:40:00.000-07:00

Originally published here,

Unfortunately, we live in times when possession of credit card debt for consumption and living on credit has become fashionable, cool, trendy, etc.. Saving on the other hand, is so old-fashioned, fit for the generation of our grandparents and parents, but not for today's twenty or thirty years old. As you can see the problem is widespread in the western countries. After all the "credit crunch" has found its beginning in the fall of loans, of which a large part was spent on consumption.

Well, but what's the problem - anyone? One could blame the banks, yet it should not give credit cards or loans to people who at least turmoil in the economy are clearly unable to repay them. Indeed. Banks in times of prosperity struggled to give more loans. They had excess cash and looked for opportunities to make restitution to the lending. Now, suddenly, all sources of cash dried up, and those customers do not want to pay ... Once again, bankers admit that they can not count.

This brings us to the heart of the matter. To take or not take credit for the situation when the need right now? What is wrong and what is good debt?

Now the case is obvious (at least for me). If someone incurs credit to consume the money from it (in other words, pass), and part from them in return is not having nothing but fun, this is a bad and stupid debt. Such pleasure is to have things in advance, which could be successfully purchased a half years later.

Another issue is to meet the specific needs (let's call it existential), where the money from the loan is earmarked for the purchase of needed items (call ti an investment in durable good), and this is where you need to have it earlier if it is necessary to ensure decent living conditions, or is to make money (like buying a car for example). Such a debt could be described as "good" under a few conditions. Well, again, taken over the financial and never without a safety margin debt is not good. Just as there will be a good investment over the risk acceptable where the risk benefit balance is negative. If such a loan is taken on the "investment" for which the balance of benefits is extremely positive that can actually be a good way to finance it, provided that the borrower will be able to serve in all conditions.

The same applies to any credit for investment. Since both the loan and the issuance of the investment is a risk, then for the sake of this debt and for the sake of investment, skill, or calculate the swirl in the situation we will not be able to repay this debt and when the investment will not come out the losses will default. And once again this returns to the balance of risks and benefits. Again returning to calculate the margin of safety (because such a loan and no savings, there are many). Who did not do this balance and did not sat down with a calculator in hand has a bad debt, even without knowing it ...

The role of gold in the investment portfolio

2010-05-30T02:11:00.000-07:00

Originally published here.

When U.S. government (and similarly, many governments of other countries) is trying to extinguish the financial crisis, flooding the market of large supply of money, everyone begins to wonder how this supply will actually influence the market.

Well, the increased supply of paper money in times of crisis will undoubtedly turn investors to put their purchasing power in some more stable asset, which is not under the control of any institution. Such a position in investment portfolio should be in gold. It represents really the only stable reference point against currency, which supply is based on administrative decisions and not on objective economic phenomena.

Gold in the investment portfolio is a kind of stabilizer, it protects against the effects of inflation and changes in the foreign exchange market. That is why the gold price in any country must be considered in relation to two factors: the global gold price and exchange rate changes.

It should be noted that there are several possible forms of investment in gold, the two most important are:

Physical metal,
Certificates based on gold

Certificates based on gold - these are two types: those in which the writer claims that are covered in gold and those that do not have this coverage and are based only on contracts for gold. It is obvious that the latter in an emergency (and whether the current crisis does not prove that the exceptional situation is just happening to us) can not endure and suffer collapse. Then the only way to store the value can be physical gold. It is recommended to keep a certain percentage of the portfolio in physical gold. Some part of the portfolio however - that should possibly respond to short-term changes in bullion prices can be based on the certificates, with full awareness of riskiness of that instrument.

Global Economic Warfare

2010-05-29T01:38:00.000-07:00

Original text available here.

It is obvious that the picture that emerges from the actions of Russia and Gazprom (Gazprom and yet it is Russia), involving construction of gas "ticks" around central Europe pipeline North Stream and South Stream - the whole picture - makes us ask ourselves to what extent the Gazprom are politically motivated and to what extent purely business.

Nowadays, the boundaries between politics and economics seem to blur even more than 100 years ago. Government-controlled programs to rescue the fallen New York bankers, the Chinese colonizing Africa , and massive state investment funds - all this shows us how modern business is becoming a tool that could serve to exerting political pressure. "War is just a continuation of politics by other means" - Carl von Clausewitz wrote. Well, today to reach their political goals they do not need to carry out conventional war. In cases where the globalized world economy involves a very strong network of connections both aggressor and victim of aggression and devastation of a single economy by the military action brings fewer benefits than its "hostile takeover" measures of economic pressure. The economic war is therefore a continuation of war and politics by other means .. .

Hence, in my mind that the concept appeared not to have entered the era of world economic wars ... The name itself refers to the works of famous Polish science fiction writer Jack Dukaj. " "Black Oceans" book contains an interesting concept of Instant Economic Wars - instant world of economic wars, waged by states and global corporations, consisting of mutual hostile acquisitions, speculative attacks on exchange and absorb each other's assets ... Science Fiction?

Not really. Today we are experiencing the problems in the financial markets are a powerful player with the amount of capital that allows to generate on demand boom or slump in the whole of the exchanges. The problem becomes in asymmetries in access to information and the manipulation of access to exchange-traded contracts are concluded in millisecond intervals by the automated system coupled with each other supercomputers. The problem is excessive leverage, virtual assets have no real cover in the raw materials. the current crisis is completely dependent on market manipulation and creation of virtual securities ...

We are witnessing the incredible size posuniętych pressure and manipulation of the value of money. We see the printing of currency which does not have to cover any physical good. We are facing price manipulation gold and silver on an unimaginable scale.

All this makes the already appropriately organized state or private holding companies can exert a political pressure for the whole economy and country. This is confirmed by our local experience to an agreement between Russia and Germany on the gas in which business and government passes on the border of corruption and immorality.

It's no wonder that the concept of modern economic war is also in the studio work of the National Defence Academy in Poland. Also U.S. Department of Defense defines an economic war as "aggressive use of economic resources to achieve national goals." I would slightly modified this definition. It is about the use of economic resources to achieve the interests of a group. The nation state in times of global corporations (that are transnational in nature and that have a giant budget begins depreciate.The economic war is thus out, from the military domain, and enter into a period where the barbaric global guerrillas will fight each in the name of any political interests of a political or terrorist group interest.

It seems to me that we are entering a very interesting, and dangerous at the same time, the period when the burst will be local and global economic conflicts. In turn violent conflict increasingly will serve the implementation of political and economic interests, or even a purely economic sense and will become an extension of global economic wars in their bloody version.

Alternative Investments

2010-05-28T01:28:00.000-07:00

Original text available here.

Alternative investments are not included in the so-called traditional forms of investment. They are by nature very specific investments. These include the purchase of works of art, collectors' items, stamps, coins, investment in sports, etc..

The main benefit related to such investments, primarily to reduce volatility of fluctuations in portfolio, diversification and effective use of low correlation with other traditional asset classes. For example, investment in works of art are less correlated with financial markets than other types of assets on these markets. Such investments are characterized by generally higher barrier to entry and lower liquidity (though not always).

Some of the alternative investments include hedge funds, private equity and funds of funds. I would prefer a different definition. For alternative investments, therefore, I suggest to consider investment in other low-correlated asset class with the financial markets. In this respect, investments in land and property could be just to include alternative investments. Gold and would somewhere on the border.

But are all alternative investments available only for big investors? Well, no. Although the art can cost millions of dollars, but sometimes you can buy a work of an artist at an affordable price.

Similarly, philatelic value. Here also the subject of careful selection of investment you can earn pretty well. Examples are stamps removed from circulation, with errors or rare specimens given in a little amounts.

Other examples include antiques, art, ancient manuscripts, maps, wine (yes, some people invest in wine) ...

General principle that emerges from this is the fact that it is not the amount of money allocated to invest is paramount in this type of investment. Here (because a small number of studies available to the public and the specificity of the market) is most important in-depth knowledge about the subject investment. Without knowing the philately and numismatics, paintings, it will be difficult for favorable placement in these areas of the capital.

Baltic Dry Index

2010-05-27T01:28:00.000-07:00

Text originally published here.

There is an index of which few analysts mention, and which is quite important for the imaging of the current state of the global slowdown. This index is the Baltic Dry Index (BDI). This is an indicator showing changes of the cost of carriage by sea a specified quantity of goods at a specified distance.

As we know most of the international transport is carried by sea.At the same time tonnage available to carry goods on a global scale is very inflexible. Increasing the number of ships by a few percent requires a few years. Thus, the conversion price of transporting goods is a good picture of prosperity in the world. Why?

In the event of poor market conditions, international trade in goods is falling and automatically ships become increasingly empty in the seaports. To prevent this (the ship in port is the loss), the companies lower the price of sea transport per tonne. Conversely, at the moment when the boom is high. Heavy traffic makes it difficult to find a free ship and freight rates are high.

These changes just illustrates the BDI. Indirectly, it shows the most important demand for goods transported by sea: the grain, metal ores, coal, building materials, oil, etc.. It shows indirectly, when exchange of goods in the international market is high or low and can provide foregoing business indicator.

The index is calculated and published by the Baltic Exchange organization. Daily data are collected for transportation costs on specific routes for different types of goods for the four classes of tonnage of ships. Then the prices are averaged and weighted relevant indicators.

Here is an example graph of the index. When you click to move to the current charts.

My Financial Review

Frozen

China and Russia agree to use Yuan in bilateral exchange

Facts and myths about investing in diamonds

Reemploying gold standard?

Chinese rare-earth metals blackmail ...

World currency war

Gold as an insurance policy

3,4% GDP growth forecasted for Poland for the following year

Why appreciating Chinese Yuan will not solve trade imbalance between US and China

Gold supply and demand trends

Slavery of debt

Goldman Sachs suggest that gold will cost 1300USD in 6 months

Investment in silver

Stiglitz: government needs to stimulate the economy

U.S. GDP - the second quarter remains weak

The head of BP leaves - the company has 17 billion dollars loss in second quarter

Bob Dudley now directs the operation to remove patches of oil in the Gulf of Mexico. Hayward step down is related to the ecological disaster in the Gulf of Mexico and a record loss in company history - 17 billion dollars in the second quarter.

Gold in BullionVault

Poland is in early recovery phase

Deficit is good?

Investing in art or collecting art

Recent comments to gold swap transactions of Bank for International Settlements

IMF forecasts continuing global recovery

Golden news

How to buy gold in secure manner

Liquidity of alternative investments

Investment in stamps

Substitute for the dollar as an international currency?

Investing in diamonds

Repay the loan or defer?

We will have dollar crisis and bond crysis within the next six years

Gold is definitely not in a bubble yet...

International regulation initiatives can not be contradictory

World Gold Council invests in Bullionvault

SDR is creation of money ... out of nothing?

Credit Suisse recommends buying polish zloty

Other precious metals - platinum, silver, palladium

Head of the European Central Bank Jean-Claude Trichet, has accused France and Germany to contribute to the current crisis in the euro area.

More flexible Yuan exchange rate

Eurozone will split apart?

Gold in the beginning of 2010

SDRs

Investment in physical gold (2)

Originally published: Investment in physical gold (2)

Formy złota fizycznego Forms of physical gold

Sovereign Wealth Funds

How to measure global wealth?

Marek Belka elected a new president of Polish National Bank

Can the collectors coin be an investment?

Some interesting article about polish silver production

Mark Faber's interesting lecture. Worth watching.

Investment in physical gold (1)

Europe stuck by Hungarian turmoil

Gold Certificates

Iran escapes from the euro into U.S. dollar and gold?

Originally published here.

Oil and weakening dollar

Bad debt and good debt

The role of gold in the investment portfolio

Global Economic Warfare

Alternative Investments

Baltic Dry Index