Wednesday, October 21, 2009

Podcast With The Optimistic Bear

Last night I participated in a podcast with Michael Surkan of The Optimistic Bear.

We discussed a number of issues ranging from international banking, the inflation/deflation debate and health care to generational cycles and the secular changes I see developing in attitudes toward risk. You may listen to the full interview in the player below.



There were some other issues that I was hoping to touch on. For instance, I did come across as quite the pessimist in the interview. In fact, I see myself as more of an optimist. I view the contraction of credit and falling asset prices as positive, not negative. In order for organic productivity-inspired growth to occur, the dead waste needs to be cleared first. So I don't view the onset of depression as "armageddon," rather as the first stage to future prosperity.

If time were never an issue, I could have also elucidated some areas I believe will be kind to investors in the intermediate term. I am very positive on the prospects of South America. Much of the continent has far more favourable demographics than other emerging markets. And from a generational perspective, many nations have put their dark histories with dictatorial governments behind them (eg. Pinochet). Chile, Colombia, Uruguay, Brazil, Peru and eventually Argentina (when they get their house in order) should all be ideal investment areas over the coming decades. I am also very positive on the eventual application of nanotechnologies, and I believe this will be a spectacular area of growth once the required investment resources are freed from their current wastefulness.

I'd like to thank Mike for being a great host and having me on his show. Hopefully my readers find it to be worthy of their time. It was the first time I have attempted something like this, so any feedback on the subject matter or even my communication abilities would be much appreciated!


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12 comments:

Willy2 said...

The real estate problems in Spain and Ireland are the result of the introduction of the Euro in 1999. Alle european countries had to adjust their interest rates to the level of Germany right before the introduction. This meant that rates in Spain and Ireland had to go down to the german level. In 2001 & 2002 the ECB lowered rates again. And that meant that rates in Spain and Ireland went lower as well. And was an additional reason the real estate bubble in those countries continued to grow.

Anonymous said...

Yes, money supply in Japan went "through the roof" but that money wasn't invested in the japanese economy. It went abroad and was used for the yen carry trade. As a bonus the yen was pushed down in value and benefited the japanese export companies.

Mikhail said...

I enjoyed doing the podcast with Matt. I am always happy to have him on for another episode to give him a chance to tell listeners why is bullish. :)

Willy2 said...

It didn't contain any shocking news but I certainly liked it. Perhaps Matt is bullish because the prospects for going long gold, silver, agriculturals and short the stockmarket are very good in the future.

Anonymous said...

I think Matt should add the website Marketskeptics to "Other links". He regularly comments on why "Agriculturals" are a good buy in the next coming months.

Anonymous said...

Update: the link to "MarketSkeptics" should be this.

Warning: The writer is a (hyper-)inflationist !!

mike.montchalin said...

I really enjoyed the podcast; especially about kicking the can down the road. Ok, isn't it about time to give it another kick? And with these bailouts being the present value of future taxes,.... and that present value already being spent,... I'm just hoping that tin can isn't a five gallon bucket....

Toronto condominiums said...

Hello. Thank you for your optimism, this is the first blog I came across which is not merely skeptic. I totaly agree that the countris in South America are of great potential, however, the thing is that the whole US and Europe are in great debt and they've been in debt for a long time. So reforms are necessary. On the other hand, I must admit that I feel a bit unsure about Obama's reforms which, in my opinion, lead to even greater debt.
Take care,
Elli

Anonymous said...

Did this interview attrack an increased number of visitors for this blog ??

Mike said...

This was a very interesting discussion, thanks for doing it and posting it to your site. In terms of the markets, given yesterday's reversal, I just wanted to point out that I saw at http://www.goldalert.com/gold_price_blog.php that there were large put purchases on the SPY and IWM at the open today:

"SPY March 70 puts, bought 14,000 and SPY March 90 puts bought 2,500; IWM customer bought 10,000 Nov 59 puts at 1.51"

So I think this helps support my view that the markets may have topped out, or at least some whales think so.

mannfm11 said...

Matt,for one, when they used common sense in American medicine, you could probably have seen a doctor for $50 or less. The office visit isn't what costs, as I believe for $50 to $70 cash you can see a doctor. It is the group of nonsense tests. And, if you are in the US, stay away from the Catscan machine. They are liable to use it to diagnose a toothache. Cost? The last one I got was $2500. They might as well have robbed me at the door and turned me away, as it didn't solve anything.

As far as deflation? For one, I think ZIRP will cause huge deflation. The Fed should raise rates, not for inflation reasons, but to allow people a return on their savings. There is an infinite amount of money one would have to save at zero. The ultimate confusion is that savings equals debt. The nonsense is it equals investment, but the price of what is called investment is subject to inflated or deflated values and the value of everything in this system revolves around debt, the liquidity and value of it. Thus, even gold, a store of value will liquidate at a value that equates to the debt system. I believe in Japan, the growth in money was due to people deciding to hold cash in hand because there wasn't any interest being paid.

Matt Stiles said...

mannfm11,

Most economists don't distinguish between forced and voluntary savings. But if one is to talk about savings it is imperative to make the distinction.

Voluntary savings occur when someone postpones the ability to consume in the present in order to be able to consume more in the future. This kind of saving has been almost non-existent for decades. Forced savings occurs when money is created out of nothing in order to use for speculation.

The difference between investment and speculation depends on the type of savings used.


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