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More Money in Cash Right Now Than Equity in U.S. Companies

Now, there is a very good reason investors are reducing their allocation to stocks. As we’ve said before, we think the equity premium – what people are willing to pay for stocks – is regressing to the mean. It was so high for so long because corporate cash flows in the second half of the last century benefitted so much from low interest rates and globalisation.

Dan Denning | November 6th, 2009 | Continued

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Feature Article

Price of Gold Communicates U.S. Monetary and Fiscal Policy is Lousy

It’s also possible that the Fed thinks a weak dollar will reduce America’s trade deficit, boost its export competitiveness, and lead to higher employment. We think this is a pipe dream. And we’re not talking about a lead pipe. We’re talking William Blake-style opium.

Dan Denning | November 5th, 2009 | Continued

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Feature Article

India Beats China to Walk Away With 200 Tonnes of IMF Gold

India’s central bank is now the proud owner of 557 tonnes of gold. That gives it the tenth largest gold holdings among central banks. But it probably isn’t finished. Gold makes up just six percent of India’s foreign exchange reserves. There’s plenty of room for that to grow.

But don’t forget China. China has $2.3 trillion in foreign exchange reserves…

Dan Denning | November 4th, 2009 | Continued

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U.S. Government Must Roll Over $3.4 Trillion in Debt Over Next Four Years

And if America can’t find anyone willing to finance its deficits, what then? Well, the luxury of issuing debts in the currency you also print is that you can print money to pay for them. Technically, you can never become insolvent when you enjoy this privilege. The Fed, for example, can create new money to buy debt issued by the Treasury, funding deficits ad infinitum.

Dan Denning | November 3rd, 2009 | Continued

About this Site

The Daily Reckoning offers an independent and critical perspective on the Australian and global investment markets. We do not propose to tell you what the news is. You can find that out anywhere for free.

Recent Articles

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Mortgage Crisis: Shark With an Appetite

It shows you that we are past the viscous subprime crisis, when that shark chewed through the balance sheets of a number of banks and financial institutions, in some cases devouring them whole.

6Nov2009 | Chris Mayer | 3 comments | Continued
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Market Feels So Weak Because it IS So Weak

The stock market rallied throughout most of yesterday’s trading session, then stumbled into the close. This pattern has become unnervingly familiar of late.

6Nov2009 | Eric J. Fry | 1 comment | Continued
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Historically, the Only Reserve a Central Bank Can Trust is Gold

Imagine what would have happened if pharaoh had stocked up on radicchio instead of grain? Those 7 lean years would have been a lot leaner than they were.

6Nov2009 | Bill Bonner | 3 comments | Continued
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Higher Oil Prices, the New Normal

Oil prices have bounced more than 150 percent off their December 2008 lows, despite the fact that inventory levels remain at historically high levels.

5Nov2009 | Evan Smith | 1 comment | Continued
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Crude Oil Becoming Much Harder to Find

And, yeah, I guess we need SOME crude oil, cause our Priuses cannot ALWAYS run on electricity. So I guess its fine to use crude oil if we have to, as long as we can obtain the oil in an ecologically friendly way…

5Nov2009 | Eric J. Fry | 4 comments | Continued
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Tesco is a Buy

Tesco designs, makes, sells, rents and services top drives. A top drive is a motor that sits on top of rig and spins the drill. I don’t want to get too geeked up in the technical aspects of this…

4Nov2009 | Chris Mayer | 1 comment | Continued
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The Growing Pile of Cash On Corporate Balance Sheets

“Cash is the financial equivalent of a big, soft pillow,” Chris continues. “It helps you sleep better at night. After the credit crisis turned small balance sheet leaks into lethal holes…

4Nov2009 | Eric J. Fry | 0 comments | Continued
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