Brian Hicks, co-manager of our Global Resources Fund (PSPFX), is in London this week for the London Metal Exchangersquo;s 2009 Metals Seminar, which kicked off the annual LME Week gathering of leading commodities analysts from around the world. Here are Brianrsquo;s notes from the seminar: Danny Quah, professor at the London School of Economics, gave a compelling presentation that centered on China and the global recovery.nbsp; His main theme focused on the global economys shifting center of gravity, which has been steadily moving eastward to China over the past decade.nbsp;nbsp; He also mentioned that China isnt dependent upon U.S. consumption to create growth ndash; that notion is an old paradigm from the 1970s. Exports to the U.S. only make up approximately 15 percent of total exports, versus the 40 percent of total exports going to Southeast Asia.nbsp; Michael Jansen, director of commodities at JP Morgan, is one of a few who see ...

At least something good has come out of the economic crisis; it blew off the purple robes that clothed economists and exposed their naked flanks. Still, they don’t deserve the beating they’re getting in the press – with snide remarks and sarcastic comments; they deserve better. A beating with sticks!

Even Alan Greenspan admitted he had “found a flaw” in his own thinking. We will have to imagine the giggles from the back of the room – if anyone had been awake. It was as if Stalin had confessed to being rude to his mother or Bernie Madoff copped a plea for shoplifting. The mea was fine, but the culpa didn’t seem to measure up to the facts. He, more than any living human being, was responsible for the biggest financial debacle in history; you’d hope he’d be a gentleman about it and hang himself.

Meanwhile, the queen of England visited

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Despite rising Treasury Note yields, US stock markets yesterday closed at their highest level for 2009. Also, commodities were driven higher by reports indicating that the recession is abating, but the US dollar retreated on concerns of the huge issuance of government bonds.

Elsewhere, Chrysler completed its deal with Fiat, the US Treasury Department announced that ten banks would repay TARP funds, and the Obama administration is dropping its plan to cap salaries at firms receiving bailout funds and has backed away from a large-scale reduction in the number of agencies overseeing financial markets.

Coverage of these events on camera this week included discussions with John Hussman, Chris Whalen, Peter Peterson, Paul Krugman, Mohamed El-Erian, Laszlo Birinyi, Jim Rogers, Jim Grant and Francisco Blanch.

The selection kicks off with the highly regarded John Hussman sharing his wisdom and concludes with an interesting snippet on Africa as an investment destination.

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If inflation doesn’t get us, incompetent government action will. This is the view of one of our favourite common sense Economist, Willem Buiter, professor of European Political Economy at the London School of Economics and Political Science.

Buiter warns that the “the next big crisis … will be a crisis of state ‘overreach’ and of government failure” and that “stultifying state capitalism, initiative-numbing over-regulation and overambitious social engineering may well be the defining features of the next socio-economic system to fail.” We’ll drink to that.

What follows is the conclusion of the Den Uyl lecture Buiter gave in Amsterdam on 15 December 2008 (emphasis added). Print it out and stick it to the door of your fridge. It’s one of the best accounts we’ve read of the brave new world will be ushered in by the recent financial

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I would like to state for the record that what’s happening to the U.S. economy is freaking me out. And I think that if you’re not scared, you’re not paying attention.

That said, there are positive steps you can take to protect yourself and your portfolio — and I’ll get to three of those steps in a minute. But just because I’m worried doesn’t mean things can’t end well. With some luck, maybe President Obama’s economic team can stabilize things.

Then again, maybe not.

The Latest Madness
Out of Washington …

The Fed will probably let hedge funds borrow from its new, Term Asset-backed Lending Facility (TALF) — a program that is expanding to as much as $1 trillion!

The idea is that securities that have no buyers will be sold …

GoldDrivers 2009 - Extraordinary Bullish Outlook For Gold Eric Hommelberg

Gold proves itself as only true alternative for the dollar Confidence in currencies shaken to the core Gulf countries are keen to break away from the link with the US dollar Chinese appetite for US debt in decline Former Bank of England official expects dollar collapse Investors fleeing into gold as US prints trillions HSBC, Citigroup, Merril Lynch, Goldman Sachs all turning bullish on gold Senior gold shares ready to move higher after impressive 100% bull run since October 2008 Junior gold shares waking up - bottomed out in December 2008

This piece is an update on “GoldDrivers

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Christmas may be over, but Obama is keeping the ’season of giving’ going on the Hill…the next bubble will be in public debt… Stock prices are more ‘normal’ than they were a year ago…how many chickens can get in a plane engine? What is bad for GM is bad for America…just when you think you have things figured out, the facts change…and more!

After five straight days of losses, Wall Street managed to steady itself yesterday. The Dow rose only 12 measly points; but that was a relief for most investors.

Oil held steady too - at $35. And gold lost a dollar, to drop to $807.

The big question is a question of faith. How much faith do you have in the feds? They aim to get inflation fired up. They’ve got the fire-starters. They’ve got the matches. They’ve doused on the gasoline. But so far, the whole world economy is still

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“Yes, one right at the back, red tie, just underneath the cabinet rack,” said Ben Bernanke.   The Fed chief was giving a speech at the London School of Economics on Tuesday. When time for questions came, our old friend, Terry Easton, wearing a red tie, raised his hand. Aren’t you just making the situation worse, Terry wanted to know. Isn’t there a better alternative? The Austrian school, for example?Here at the Daily Reckoning, we are ‘Austrians,’ in the sense that we think Hayek was right and Keynes was wrong. We don’t believe you can control the business cycle… nor improve on what the free market produces. Given our druthers, we would tell the feds to butt out… and let the ‘invisible hand’ of the free market sort out the current mess.Ben Bernanke gave a central banker’s reply. He spoke much and said little. ...

ust a week to go now before Barack Obama finally gets his feet under the Oval Office desk. Priority #1: Getting the much-discussed economic stimulus package pushed through Congress and approved.

Question is: Will the oft-dithering Congress actually take some action to enact this proposal? You can bet that the hallowed halls of the Capitol are buzzing with debate and counter-debate at the moment, but trying to get blustering lawmakers to agree on something requires the patience of a saint.

Meanwhile, Federal Reserve Chairman Ben Bernanke is 3,000 miles away, where he made a speech at the London School of Economics today. I was struck by this tasty soundbyte:

“It is unacceptable that large firms, which government is now compelled to support in order to preserve financial stability were among the greatest risk-takers during the boom period… The existence of too-big-to-fail firms violates the presumption of a level playing field among financial institutions.”

Unacceptable,

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The money-printing hand writing is on the wall, says Justice Litle. A severe inflation threat is on the horizon. But the bond market is still pricing in a bout of deflation. And that makes Treasury Inflation Protected Securities (TIPS) an amazing deal right now.

This from Taipan Daily:

The euro is fast approaching an inflection point.

On Jan. 15th – Thursday of this week – the ECB (European Central Bank) will meet to decide how much to cut interest rates. The general consensus is that the cut will be big.

I wonder if the euro will “pull a sterling” and go up instead of down on the news. The chart certainly leaves room for that possibility.

As you can see, the euro’s move higher in December was sharp and swift. The ensuing downdraft has been more of a sideways lurch, creating something of a wedge

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