Podcast: Eric Janszen on Financial Sense: The Big Picture 2007

[FRED]

Click on the link below to hear the podcast.

Financial Sense: The Big Picture 2007 (mp3)
Financial Sense: The Big Picture 2007 (Windows Media)
Financial Sense: The Big Picture 2007 (WinAmp)
Financial Sense: The Big Picture 2007 (RealPlayer)

[Jim Nickerson]

Re: Podcast: Eric Janszen on Financial Sense: The Big Picture 2007

Financial Sense: The Big Picture 2007

nothing happens when I click the link.

[Jim Nickerson]

Re: Podcast: Eric Janszen on Financial Sense: The Big Picture 2007

CASH may not be TRASH, so says EJ. 1/6/07.

Gross, Pimco, thinks rates will drop by 12/2007. Fed funds 4.25%, with 5 and 10 year yields hovering at perhaps 25 basis points higher. http://www.pimco.com/LeftNav/Feature...naury+2007.htm


I believe EJ sees it differently.

[jk]

Re: Podcast: Eric Janszen on Financial Sense: The Big Picture 2007

you recommend cash, ej. u.s dollar-type cash? euro cash? pound cash?

[EJ]

Re: Podcast: Eric Janszen on Financial Sense: The Big Picture 2007

you recommend cash, ej. u.s dollar-type cash? euro cash? pound cash?

Not to be a wiseguy, but the answer is "yes." In 2000 it was easy to make the decision to move to 10 year treasuries and to ride out the "Ka" until mid 2001, but this time dollar risk must also be hedged. Let's put together a basket of bonds, shall we? Nor am I as comfortable with 5 year duration this time around as last, as the risk that rates might spike unexpectedly in the following 5 years are higher now than in 2000. Maybe give up some gains if rates fall to 4.25% in 2007 but if they spike in 2008, we'll be glad we're holding a 2 year duration. Probably a ladder of 6 month, 1 year, and 2 year bills and notes. What's "cash" to you?

[metalman]

Re: Podcast: Eric Janszen on Financial Sense: The Big Picture 2007

Not to be a wiseguy, but the answer is "yes." In 2000 it was easy to make the decision to move to 10 year treasuries and to ride out the "Ka" until mid 2001, but this time dollar risk must also be hedged. Let's put together a basket of bonds, shall we? Nor am I as comfortable with 5 year duration this time around as last, as the risk that rates might spike unexpectedly in the following 5 years are higher now than in 2000. Maybe give up some gains if rates fall to 4.25% in 2007 but if they spike in 2008, we'll be glad we're holding a 2 year duration. Probably a ladder of 6 month, 1 year, and 2 year bills and notes. What's "cash" to you?

so, er, is gold "cash" too?

[Jim Nickerson]

Re: Podcast: Eric Janszen on Financial Sense: The Big Picture 2007

What's "cash" to you?

Since Finster joined iTulip, I would say after him, cash is zero-maturity bonds in the currency of the realm. How about that!!

[EJ]

Re: Podcast: Eric Janszen on Financial Sense: The Big Picture 2007

so, er, is gold "cash" too?

metalman... Gold is money but it ain't cash until you can slip gold coins into a gasoline vending machine at the local gas station. A sovereign to fill 'er up?

Jim... Greenspan said years ago the Fed watched Money at Zero Maturity not M3 as the measure of the money supply. It's looking healthy now. And I bet the Fed is sure they can keep it that way...

...as they have since 1980...

So, has the economy grown 7x since 1980? 30% since 2001? If not, maybe some inflation waiting in the wings?

[metalman]

Re: Podcast: Eric Janszen on Financial Sense: The Big Picture 2007

metalman... Gold is money but it ain't cash until you can slip gold coins into a gasoline vending machine at the local gas station. A sovereign to fill 'er up?

yes, if the bonars are not a function of the gold at the central bank, they ain't cash.

[akrowne]

Re: Podcast: Eric Janszen on Financial Sense: The Big Picture 2007

Jim... Greenspan said years ago the Fed watched Money at Zero Maturity not M3 as the measure of the money supply. It's looking healthy now. And I bet the Fed is sure they can keep it that way...

While the Fed may be watching it (and I'm glad they're not just watching M1), I think it is still artificially narrow. This is because "higher" credit instruments with non-zero maturity can also be used as "money" or at least spur consumption. I believe MZM wouldn't include consumer credit or HELOC, bonds and MBS, various securities being used as trading collateral, etc. Even derivatives are "money-like" in that the presence of derivatives spurs further speculative behavior.

I wonder if, in actively staving off deflation, if the Fed will simply neglect these higher forms of credit in favor of keeping MZM (which doesn't go higher than the M2 level) relatively constant. Hmmm....

[akrowne]

Re: Podcast: Eric Janszen on Financial Sense: The Big Picture 2007

Is it just me or was the scariest thing Eric uttered that the Fed needs a "sudden event" as an "excuse" to inject liquidity (housing decline too gradual)?

Been a long time since we had a terrorist attack, huh?

You know what they've got waiting in the wings now... formally axing the reserve requirement!

Would it really help?

[General Cole]

Re: Podcast: Eric Janszen on Financial Sense: The Big Picture 2007

Eric,

In your book "America Bubble Economy", you recommend Gold as one of the major investment in this bubble period. Now, it's not gold, it's cash? Why the sudden change in perspective?

[EJ]

Re: Podcast: Eric Janszen on Financial Sense: The Big Picture 2007

Eric,

In your book "America Bubble Economy", you recommend Gold as one of the major investment in this bubble period. Now, it's not gold, it's cash? Why the sudden change in perspective?

Cash short term, gold long term. See No Deflation! Disinflation then Lots of Inflation.

How much of each you hold when through which periods of the disinflation/inflation Ka-Poom cycle depends on your risk tolerances. Check with your investment advisor.

[Spartacus]

At what time does EJ come on?

listened to the whole thing 2 times - maybe Jim P's putting me to sleep each time, just before Eric comes on?

Who needs Ambien, anyway?

[medved]

Re: Podcast: Eric Janszen on Financial Sense: The Big Picture 2007

you recommend cash, ej. u.s dollar-type cash? euro cash? pound cash?

Here is my "cash" : http://finance.yahoo.com/q/bc?s=PRPFX&t=5y

Gold .................................................. ... 20%
Silver .................................................. ... 5%
Swiss Franc Assets (bonds) ....................... 10%
U.S. and Foreign Real Estate and
Natural Resource Stocks ............................ 15%
Aggressive Growth Stocks .......................... 15%
U.S. Treasury Bills, Bonds
and Other Dollar Assets ............................... 35%

They rebalance this mix through the year to keep the same ratios.

Note the steady performance through the recent Ka-Poom cycle starting from the year 2000. This fund consistently beats all the other funds in the same category, at least, over the last 5 years: http://biz.yahoo.com/p/tops/ca.html

m.