‘Gold Bullion Or Cash’ is a well produced, high quality, educational short video that uses music, images, facts and quotations to show how gold has been a proven store of value throughout history and an important diversification today. [Length: 4:39]

So says Mark O’Byrne (www.GoldCore.com) in edited excerpts from his original article* which Lorimer Wilson, editor of www.munKNEE.com (Your Key to Making Money!), has further edited below for length and clarity – see Editor’s Note at the bottom of the page. (This paragraph must be included in any article re-posting to avoid copyright infringement.) 

The video is an updated, revised and refined follow-up to the award winning ‘Goldnomics – Cash or Gold Bullion?’ video which was the most watched video about gold bullion in 2011.

The video looks at:

• The ‘gold bubble’ and the many gold myths and misconceptions
• The importance of gold in context of the European, US and global debt crises

and explains:

• Gold’s safe haven and currency status and
• Gold’s importance in our uncertain world given its extreme rarity and liquidity

To view ‘Gold Bullion Or Cash’, please click on the image below, or here.

 *http://www.goldcore.com/goldcore_blog/media-release-gold-bullion-or-cash-video-launched-today-shows-why-gold-safer-cash-long

Editor’s Note: The above article has been has edited ([ ]), abridged (…) and reformatted (including the title, some sub-titles and bold/italics emphases) for the sake of clarity and brevity to ensure a fast and easy read. The article’s views and conclusions are unaltered and no personal comments have been included to maintain the integrity of the original article.

Why spend time surfing the internet looking for informative and well-written articles when we do it for you. We assess hundreds of articles every day, identify the best and then post edited excerpts of them to provide you with a fast and easy read. Sign-up for Automatic Receipt of Articles in your Inbox and follow us on FACEBOOK | and/or TWITTER so as not to miss any of the best financial articles on the internet.

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2. Protect Your Portfolio By Including 15% Gold Bullion – Here’s Why

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6. Richard Russell: Demise of the “Yankee Dollar” vs. the Rise in Gold

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7. Richard Russell: PLEASE MOVE INTO GOLD!

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9. Gold & Silver: THE Answers to Escalating Financial Doom

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10. Believe It or Not: Only 1 Fund Has Outperformed Physical Gold Since 2007!

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MunKNEE.com Editor-in-Chief Lorimer Wilson with the world's first 100-kg, 99999 pure gold bullion coin with a $1 million face value. It was produced by The Royal Canadian Mint.

Buying and selling warrants associated with commodity-related companies (including those of gold and silver miners) can be very confusing if you are not aware of the unique information required to do so and understand just how to go about it. Below you will find all the information you need to know on the subject. Words: 2110

So says Lorimer Wilson editor of www.FinancialArticleSummariesToday.com (A site for sore eyes and inquisitive minds) and www.munKNEE.com (Your Key to Making Money!). Please note that this paragraph must be included in any article reposting with a link* to the article source to avoid copyright infringement.

Wilson goes on to say:

1. Buying Warrants

a) TSX/TSXV Symbols
Warrants trade exactly like the underlying common stock and, as such, they are assigned a symbol. Since most warrants are associated with Canadian companies it is easy for Canadian investors to execute orders using their Canadian symbol but less so for Americans.

b) CUSIP Numbers
For American investors the best and most accurate way to trade in warrants is to use the security’s CUSIP number which stands for the Committee on Uniform Security Information Procedures. The American Bankers Association established this format of unique codes for all North American stocks, bonds, puts, calls, warrants, etc. as assigned by Standard and Poor’s. The CUSIP number consists of a combination of 9 characters, both letters and numbers, which act as a sort of DNA for the security uniquely identifying the company or issuer and the type of security. The first 6 characters identify the issuer and are assigned in alphabetical order; the 7th and 8th characters, which can be alphabetical or numerical, identify the type of issue; the last digit is used as a check digit. For a complete list of CUSIP numbers, pink sheet symbols and much, much more please visit www.canadianwarrants.com.

c) Pink Sheet Symbols
Stocks and warrants that trade on the Pink Sheets fall into one of two categories:

1. companies that don’t meet the listing requirements of the New York, American or Nasdaq stock exchanges or
2. companies — usually foreign — that are unwilling to jump through the regulatory, legal, and accounting filings that accompany listing on the major exchanges. That is the case with most of the commodity-related companies with warrants. They are Canadian based and see no reason to create a duplicitous legal and accounting department just to be traded on the NYSE. They have already met all those legal, regulatory, and accounting requirements in their own country and feel that the burden is on YOU to read their home country filings

and consist of a 5-alpha symbol ending in ‘F’ for Foreign for the 5 warrants that fall into this category.

2. Selling Warrants

Some investors erroneously believe that you have to hold warrants until the expiration date but that is the worst thing you can do because when warrants expire they will do so without any monetary value i.e. they are worthless. Instead, investors must treat warrants as they would stocks and either sell then when the warrants have met their price objective or well before they expire.

3. Exercising Warrants

a) Leverage
The leverage of a warrant – the extent of the advantage or disadvantage of buying the warrant at its current price relative to the current price of the associated stock given the exercise price of the warrant – is a doable calculation but is better left up to those in the business to provide. www.PreciousMetalsWarrants.com is one such provider calculating the leverage of each warrant at both random stock price levels and at fixed stock price percentage increases which is ideal for comparing the leverage advantage of one warrant versus another. Of the 3 sites that provide warrant information they are the only one that provides this unique time/price increase calculation. That being said, it is an expensive subscription service.

b) When the Exercise Price is Achieved
It is important to note that if your warrants are “in the money”, i.e. the common stock is trading above the exercise price of the warrants, and the warrants are approaching the expiration date, you must take some action because, unlike call options where the value of the expired option is placed automatically into your brokerage account, that is not the case with warrants. When warrants expire they expire worth absolutely nothing!

From an American perspective you have only one viable option and that is to sell your position before the expiration date (and to do so 6 to 12 months before the expiry date is highly recommended because the value of a warrant often drops drastically during its final months of life) because, according to U.S. law, Americans cannot exercise a Canadian warrant unless its associated shares have been registered with the SEC because, should they exercise a warrant, they would be receiving a newly issued share which would be illegal.

From a Canadian perspective you have the option of either exercising the warrants (i.e. converting them into actual stock in the associated company according to the terms of the warrant) once they are “in the money” or selling them outright at any time before they expire. The latter would seem the most convenient way to go because to exercise your warrants you will need to have your brokerage firm send the warrant certificate to the company’s transfer agent along with the exercise price at which point they would send you the common shares of the company. As I see it why not just sell the warrants in the market and if you really like the company and want to continue with them, then just purchase the common shares. Simple, clean and saves a lot of time and paperwork and you are in the exact same position.

c) When an Early Buy-Back Offer is Made
Should a company make an offer for your warrants via an early buy-back offer you have the choice of either accepting the offer or selling your warrants outright unless the company had a specific early call feature (which you should have been aware of at the time of purchase) in which case you would be legally obliged to sell.

d) When There Is a Stock Exchange Arrangement
In a stock exchange arrangement, the warrants will continue on as warrants of the acquiring company with the same expiration date and with the exercise terms adjusted to reflect the terms of the stock exchange in the merger. The owner of said warrants will want to assess the prospects of the new owner to assess the upside potential of their ‘new’ warrants and if the assessment is not positive to sell out before others come to the same conclusion.

4. Interacting With Brokerage Firms

a) Canadian Brokers

As there are symbols for all Canadian warrants Canadians will find the placing of orders very easy to execute and, as such, convenient to use online brokerage firms if so inclined. Be that as it may, please make note in the last paragraph in this section how ‘exactly’ to go about placing your order with a broker.

b) Non-Canadian Brokers

The situation is not as straight forward for those individuals using non-Canadian brokerage houses because many online brokers are not set up with the symbols for the warrants you might wish to trade. As such, it will be necessary to deal with a broker directly and have him/her enter the order for you. Because a broker needs the correct symbol for placing the order the most important thing you can do is give the broker the actual CUSIP number for the warrant you wish to purchase and, where possible its Pink Sheet symbol, to avoid any confusion on the part of your broker.

5. Communicating with Non-Canadian Brokers

Your broker may need to be educated on how to exercise an order. As such, never ‘ask’ your broker if they will execute your order for warrants but, instead, ‘tell’ them exactly what you want them to do. If you just ‘ask’ many brokers will say they don’t trade in Canadian warrants so they can’t execute your order. However, if you ‘tell’ them exactly what you want them to do on your behalf most will be more than happy to comply – and below are exactly what instructions you should give them.

6. Placing an Order to Buy or Sell

Warrants, like many small cap stocks, often have very thin markets (i.e. demand) and, as such, usually have a big spread between the bid (the price at which you are willing to make a purchase) and ask (the price at which you are willing to sell) price. As such, it is imperative that you place only “limit orders” when buying or selling warrants associated with Canadian commodity-related stocks.

• When American investors go online and see that a warrant of interest is trading with a U.S. symbol placing an order should be problem free. However, if it has a Pink Sheet symbol the price for the most recent bid or ask price should not be used as a basis for establishing a new bid or ask price because that price will just be the last trade in the U.S. and therefore may be days, weeks or even months old compared to the bid and ask prices on the more active Canadian exchanges. In such situations you should visit here for the up-to-the-minute bid and ask prices, as quoted in Canadian dollars. You can also go here where you can access comparative charting capabilities for both the warrant and the associated stock, recent news on the company, its latest financials, 30 day price history and access to the most recent research on the company. You will also need to go to a currency conversion site to get the current U.S. dollar to Canadian dollar exchange rate because you will be buying the warrants priced in Canadian dollars.

There are two kinds of orders that can be placed when attempting to buy or sell a security:

1. Market Orders: A market order does not have a set price and is therefore executed immediately at the current ‘market’ price. Markets, especially OTC markets, can be highly volatile, and the price of execution may differ dramatically from the price at time of order entry. Those who use market orders are more concerned about the speed of the execution as opposed to the price.
2. Limit Orders: A limit order has a set price and may only be executed at the set price; however, a limit order may never get executed because the market may move away from the set price. Those who use limit orders risk not having an order executed.

a) To place an order to buy, for example, 5,000 warrants of ABC Mining Company with a CUSIP number of 123456789 and you want to limit the price you pay to $1.43 Canadian then give your broker these specific instructions:

• “I want to buy 5,000 ABC Mining Company warrants, CUSIP number – 123456789 – at a ‘limit price’ of $1.43 in Canadian dollars”. Add the words “which will be good until cancelled” if you are entering a stink bid or if you are trying to buy a very thinly traded warrant.
• Ask your broker to confirm the order by reading the order back to you and it’s done. It is as simple as that!

b) To place an order to sell 3,500 warrants of ABC Mining Company with a CUSIP number of 123456789, for example, and you don’t want to part with your warrants for less than, say, $1.69 Canadian then instruct your broker as follows:

• “I want to sell 3,500 ABC Mining Company warrants, CUSIP number – 123456789 – at an ‘ask price’ of ‘no less than’ $1.69 in Canadian dollars” and again add the words “which will be good until cancelled” or “until the close of business today” if you want the opportunity to reassess your ask price at the end of the day.
• Ask your broker to confirm the order by reading back your instructions to you and it is done. Again, it is as simple as that!

Why Bother Investing in Warrants

1. In 2010 a basket containing 1 each of the long-term commodity-related warrants went up 91% while their associated stocks “only” went up 57% – thats 60% more.
2. Warrants are priced 70% to 75% less, on average, than their associated stocks and, therefore, you are in an ideal position to leverage your dollars very effectively.

There’s your answer as why you should consider investing in warrants as opposed to their associated stock. Investing in warrants gives you the opportunity to earn more dollars (in percentage terms) with considerably fewer dollars at risk.

Conclusion

Please help me spread the word about warrants (also read Gold Bugs: Here’s How to Make the Most of the Continuing Bull Market in Gold!) and share this article with your financial advisor/planner.

Why spend time surfing the internet looking for informative and well-written articles when we do it for you. We assess hundreds of articles every day, identify the best and then post edited excerpts of them to provide you with a fast and easy read. Sign-up for Automatic Receipt of Articles in your Inbox and follow us on FACEBOOK | and/or TWITTER so as not to miss any of the best financial articles on the internet.

Related Article:

1. Gold Bugs: Here’s How to Make the Most of the Continuing Bull Market in Gold!

All you gold bugs out there (and budding gold bugs too!) should find this article of extreme interest. With gold about to make a major move upwards in price NOW is the time to position your gold-investment allocation to maximize your dollars deployed and returns generated. Those in the know will not be investing in physical or paper gold, or even the stocks of the miners, but in the long-term warrants of the very few mining companies that offer such an opportunity. This article provides a primer on the MAJOR advantage that long-term warrants have in a market upleg and identify the specific warrants that are available. Words: 1037

MunKNEE.com Editor-in-Chief Lorimer Wilson Holding a Gold Bar

All you gold bugs out there (and budding gold bugs too!) should find this article of extreme interest. With gold about to make a major move upwards in price NOW is the time to position your gold-investment allocation to maximize your dollars deployed and returns generated. Those in the know will not be investing in physical or paper gold, or even the stocks of the miners, but in the long-term warrants of the very few mining companies that offer such an opportunity. This article provides a primer on the MAJOR advantage that long-term warrants have in a market upleg and identify the specific warrants that are available. Words: 1037

So says Lorimer Wilson editor of www.FinancialArticleSummariesToday.com (A site for sore eyes and inquisitive minds) and www.munKNEE.com (Your Key to Making Money!). Please note that this paragraph must be included in any article reposting with a link* to the article source to avoid copyright infringement.

Wilson goes on to say:

This article is an updated version of my one-of-a-kind proprietary index of gold and silver companies with long-term warrants (GSWI) and gives you  insights into the ‘secret world’ of warrants and identifies the constituents of each.

Before we go any further here is a definition of warrants: a security that gives the holder the right, but not the obligation, to acquire the underlying (associated) security at a predetermined (i.e. exercise or strike) price and within a specified period of time (i.e. term or duration).

As of the close of business on January 31, 2012 there were:

• 151 warrants listed on TSX/TSXV (98 and 53 respectively) of which
• 105 (i.e. 70%) are associated with commodity-related stocks, excluding funds and merchant banks, of which
• 37 have a duration of 24+ months duration before expiry, i.e. long-term (LT), which is considered the minimum investment term of which just
• 21 are involved in the mining, exploration or royalty aspect of the business.

The Gold and Silver Warrants Index (GSWI)

The 21 LT tradable warrants of the 19 companies (2 companies have 2 LT warrants each) involved in gold and silver mining, exploration and royalty stream endeavours have been gathered together into an equal dollar-weighted proprietary index named the Gold and Silver Warrants Index (GSWI). The details of the index are as follows:

a) Company Size:

Surprisingly to most financial writers and financial advisors/planners not all LT warrants are associated with penny stocks – the ‘juniors’ – although they do account for 65% of the total as the breakout by market capitalization shows below:

• 3 are large-cap (Kinross, Franco-Nevada, New Gold)
• 4 are mid/small-cap (Dundee, Endeavour, Gran Colombia, Primero)
• 12 are micro/nano-cap in size

b) Type of Activity:

• 10 are producers,
• 7 are explorers (i.e. juniors),
• 2 are royalty stream companies (Franco-Nevada, Sandstorm) of which
• a) 1 deals exclusively in gold;
• b) 1 deals in gold and silver plus other commodities.

c) Warrant Duration:

• 2 have 60+ months duration; (New Gold wt. A, Franco-Nevada wt. A)
• 1 has 48 – 59 months; (Crocodile Gold)
• 6 have 36 – 47 months; (Dundee, Gran Colombia, Primero, Rio Novo, Sandstorm wt. A, Vista)
• 12 have 24 – 35 months

d) Constituent Companies:

1. Armistice Resources
2. Astral Mining
3. Bridgeport Ventures
4. Brigus Gold (2 warrants)
5. Crocodile Gold
6. Dundee Precious Metals
7. Endeavour Mining
8. Franco-Nevada
9. Golden Minerals
10. Gran Colombia
11. Kinross Gold
12. Lupaka Gold
13. New Gold
14. Northquest
15. Primero Mining
16. Rio Novo Gold
17. Sandstorm Gold (2 warrants)
18. U.S. Silver
19. Vista Gold

For more detailed information on each of the above 19 companies and their LT warrants (21) plus the other 84  commodity-related warrants go here.

Why Invest in Warrants?

There are 2 very attractive reasons: to maximize your dollars deployed and returns generated.

1. Warrants on average cost 70 - 75%% less than their associated stock allowing you to either buy more exposure to a specific company or spend less dollars for the same exposure as buying their associated stock.
2. In an upleg LT warrants outperform their associated stock by as little as 50% (averaged 59.6% in the last major upleg) and occasionally by more than 300%. To be candid, however, the reverse is true in a down market.

Which Warrants Should You Invest In?

Warrants perform in relationship to that of their associated stock so their purchase should not be done without considerable research.

a) Given the fact that no warrant ETFs are available to buy you could buy a basket of warrants consisting of an equal number of warrants from every company mentioned above. For example, if you were to restrict your warrants portfolio to just those of gold and silver companies, and just 100 warrants of each LT offering, it would amount to approximately $8,000 at today’s prices plus commission expenses.

b) You could do your own due diligence of each of the 19 companies and decide which company or companies are to your liking and purchase their associated warrants accordingly. (Go here or read Interested in Buying Gold or Silver Mining Company Warrants? Here’s How to learn exactly how to go about placing orders to buy and sell warrants – and much more.)

c) You could restrict your selection of companies early on by:

1. management experience/reputation;
2. specific products (gold or silver);
3. business emphasis (producers, developers, explorers or royalty payers);
4. market capitalization (large, mid/small, micro/nano);
5. countries of operation (world-wide, excl. Africa, excl. Venezuela, etc.);
6. stock /company fundamentals;
7. technical analysis of stock;
8. expiry date of warrant;
9. price volatility of stock/warrant;
10. degree of liquidity of stock/warrant;
11. trading depth of stock/warrant;
12. currency in which stock/warrant trades

Conclusion

Now you some insights into the ‘secret world’ of warrants and those very few companies with LT warrants that make up the constituents of the GSWI.

 Why spend time surfing the internet looking for informative and well-written articles when we do it for you. We assess hundreds of articles every day, identify the best and then post edited excerpts of them to provide you with a fast and easy read. Sign-up for Automatic Receipt of Articles in your Inbox and follow us on FACEBOOK | and/or TWITTER so as not to miss any of the best financial articles on the internet.

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1. Interested in Buying Gold or Silver Mining Company Warrants? Here’s How

Buying and selling warrants associated with commodity-related companies (including those of gold and silver miners) can be very confusing if you are not aware of the unique information required to do so and understand just how to go about it. Below you will find all the information you need to know on the subject. Words: 2110

2. What Are Warrants, Options & LEAPS?

Our government is broken. Our economy is broken. Our infrastructure is crumbling. Our major institutions — education, religion, culture — are inadequate to the tasks at hand. These are all signs of an old world passing away and clearing the way for a new one to arise in its place. The sooner we let go of our assumption that going back is desirable, or even possible, the sooner we’ll be able to fully embrace the new things that lie ahead. [Let me explain.]

So says Sara Robinson (www.alternet.org) in edited excerpts from his original article* which Lorimer Wilson, editor of www.munKNEE.com (Your Key to Making Money!), has further edited below for length and clarity – see Editor’s Note below. (This paragraph must be included in any article re-posting to avoid copyright infringement.)

Robinson goes on to say, in part:

There are many serious theorists out there describing the deep structural changes we’re undergoing…There are so many now, in fact, that their very numbers might be taken as evidence that we’re going through something uniquely new and deep. [Below are the views/theories of four such individuals.]

Joseph Stiglitz – Shift from Manufacturing to Knowledge Work

The current economic crisis is doomed to last exactly as long as we put off building what is necessary to the new information economy. The current phase shift is taking us away from industry-as-we’ve-known-it, and on into an economy that will have us relying more and more on many different kinds of knowledge work. When we come out the other side, there will still be farmers and manufacturers but even they will be leveraging the power of the Internet to create new wealth. Everybody will. Unfortunately, people are misunderstanding the moment and, as such, investing in the wrong things.

So says Joseph Stiglitz in a recent article in Vanity Fair in which he argues that our current economic woes are the result of a deep structural shift in the economy — a once-in-a-lifetime phase change that happens whenever the foundations of an old economic order are disrupted, and a new basis of wealth creation comes forward to take its place.

The last time this happened was in the 1920s and 1930s, when a US economy that was built on farm output became the victim of its own success. Advances in farming led to a food glut. As food prices plummeted, farmers had less money to spend. This, in turn, depressed manufacturing and led to job losses in the cities, too. Land values in both places declined, impoverishing families and trapping them in place.

We remember this as the Great Depression. It lingered until the government stepped in — largely through the war effort — with unprecedented education, housing, transportation, and research investments that created new pathways for all those surplus farmers to come in off the farm, for the factory hands to get back to work, and for both groups to move into the modern industrial middle-class. Stiglitz thinks that we’re going through much the same kind of process again now, as the postwar manufacturing-based economy that saved us 80 years ago moves offshore, leaving our manufacturing workforce just as surplus and idle as those 1920s farmers were…

Who in the world is currently reading this article along with you? Click here

Austerity and debt reduction will get us nowhere, in this view. In particular: it won’t change the fact that we have too many manufacturing workers and too few information workers. Stiglitz argues forcefully that this gap is likely to remain open until our governments make a long-term commitment to do what they did in the 1940s — that is, fund the kind of aggressive education, research, and infrastructure investments that will finally get us fully transitioned to the new phase.

Thomas Homer-Dixon: Shift in Reliance on Oil

Stiglitz is far from the only theorist who’s trying to look beyond the phase change, and figure out what new form wealth might take when we get to the far side of it. Another one is Thomas Homer-Dixon, a Canadian economist who wrote The Upside of Down.

Homer-Dixon marshals evidence that all great empires rise and fall by controlling the dominant energy supply of their age.

• The Romans used roads and aqueducts to harness solar energy (in the form of food) from around the Mediterranean basin, and used that surplus to fund the most complex society of its time.
• The Dutch empire rose on its superior ability to master wind technologies — the windmill and the ship — to extend its land holdings, run early manufacturing industries, and extend its trading reach around the globe.
• The British empire rose on coal-powered steam engines, which gave it more productive industries, railroads, electrical generators, and faster ships.
• The US eclipsed the Brits due to its vast wealth in oil — a far more concentrated and fungible fuel — and inventions from cars and planes to plastics and fertilizers that allowed it to make the most of its advantages and
• The Chinese are now making huge investments in renewable energy and safer, more efficient second-generation nuclear power, which they can use to fuel their ascent to global primacy.

The bottom line in Homer-Dixon’s theory is that everything that Americans understand as “wealth” under the current paradigm comes from oil. It’s the foundation of our entire economy, and the ground our superpower status stands on:

• our cities are built on the assumption of cheap, plentiful oil,
• our consuming patterns are made possible by a fleet of oil-burning trucks, ships, and planes that bring us goods made in oil-driven factories
• our war-making machine, which is largely tasked with protecting our oil interests around the world, is the single largest consumer of energy on the planet,
• even our food is created with vast oil-based inputs of fertilizer and pesticides; and we enjoy a year-round variety of foods (bananas! chocolate! coffee!) that is unprecedented in human history because oil makes cheap transport and refrigeration possible.

The pain and fear caused when we are forced to face this fundamental fact explains quite a bit about why ideas like climate change and peak oil are so viscerally terrifying to so many Americans. (In many right-wing circles, denial about the American oil addiction is now a core piece of their political identity. It’s considered anti-American to even suggest that getting off oil is necessary or possible.) We are so deeply invested in oil, in so many ways, that it’s almost impossible for us to envision a world beyond it. We stand to lose so much that it’s hard to fathom it all and this, says Homer-Dixon, is why no empire has ever survived an energy-related phase shift with its full power intact. The reigning hegemons are always too deeply invested in the current system to recognize the change, let alone respond to it in time, and so they are always superceded by some upstart that’s motivated to put more resources and risk into aggressively developing the next source. The decline of oil as the energy reality of the world has deep implications for every aspect of American life in the coming century. It’s a phase shift at the deepest level.

Gar Alpervitz and Umair Haque: Shift in Structure of Capitalism

Other theorists, including Gar Alperovitz, Jeffery Sachs and Umair Haque, agree that there’s a phase shift happening under our feet — but they believe the real shift lies in the changing structure of capitalism itself. Forming markets is a core human activity that we’re not any more likely to abandon than eating or breathing but our understanding of the purpose and value of markets — and the role of capital within them — is overdue for a profound change.

Haque argues that twentieth-century capitalism’s cornerstones shift costs to, and borrow benefits from people, communities, society, the natural world, or future generations and that “both cost shifting and benefit borrowing are forms of economic harm that are unfair, non-consensual, and often irreversible.” The result is a great imbalance that we are finally being forced to fully reckon with, one that will call us to radically change our focus, creating a totally new kind of capitalism.

Haque makes a distinction between “thin” and “thick” value.

• Things with “thin” value tend to be artificial, unsustainable, and meaningless to anyone but the people who produce and consume them. Hummers, McMansions and Big Macs are all examples of thin value items. They’re produced without any recognition of our larger values context or the externalized costs to the community, and consuming them tends to add to the overall imbalance in our economy. Thin value, he writes, is “profit that is in many ways a financial fiction, because it fails to exceed a fuller, truer economic cost of capital” and the phase shift is evident in the fact that the companies that are falling hardest right now are the ones whose past profits have relied most heavily on monetizing our common wealth for private profit.
• “Thick” value — produced by companies that practice “constructive capitalism” — is value that is sustainable, that has a moral component that matters, and that multiplies itself. Companies that practice it tend to win because they produce things that have a deeper meaning to people. Their real wealth isn’t what they’re able to extract from the rest of us, but in their long, deep, trusting relationships with their customers. The world is shifting from the economics of a game reserve to those of an ark, says Haque. The companies that are thriving now are the ones that increasing their focus on “constructive advantage” — “how free a company is of deep debt to people, communities, society, the natural world, or future generations.” While this focus-shift is far from complete, the current economy abounds with firms that are showing us a new way forward. (Apple is a prime example of a company that creates “thick value,” but we’ve seen recently that its commitment to this ideal has some rather glaring “thin” spots.)

Alperovitz’ vision extends this by revamping how wealth flows in society. He points to a quiet revolution that’s already much further along than anybody realizes — the move toward worker- or consumer-owned cooperative businesses, in which distant shareholders are replaced by local stakeholders who have a deep personal interest in how every aspect of the business is run.

Already, four in 10 Americans belong to some type of co-op business (if you have a Costco or a credit union card in your wallet, you’re already on board here); and America’s 30,000 cooperatives provide over 2 million jobs. The UN has declared 2012 to be the Year of the Co-Op, in recognition of the fact that nearly half the world’s population now belongs to cooperatives. Co-ops are already forming a formidable challenge to Wall Street-driven 20th-century capitalism, and their expansion through the coming century would represent a massive redistribution of labor and wealth — a phase shift that favors the direction Haque suggests.

Conclusion

Our government is broken. Our economy is broken. Our infrastructure is crumbling. Our major institutions — education, religion, culture — are inadequate to the tasks at hand. These are all signs of an old world passing away and clearing the way for a new one to arise in its place. The sooner we let go of our assumption that going back is desirable, or even possible, the sooner we’ll be able to fully embrace the new things that lie ahead.

The ownership premium in Canada’s largest cities is unprecedented, dangerous to new buyers, and unlikely to persist – and if analogies to the U.S. situation at its peak back in 2005 are at all valid, this is bad news. [Let me explain.]

So says Ben Rabidoux (www.theeconomicanalyst.com) in edited excerpts from his original article* which Lorimer Wilson, editor of www.munKNEE.com (Your Key to Making Money!), has further edited below for length and clarity – see Editor’s Note below. (This paragraph must be included in any article re-posting to avoid copyright infringement.)

Rabidoux goes on to say, in part:

The chart below] shows the price/rent ratio of the largest cities in Canada. Note that Vancouver is roughly 60, Toronto and Montreal are roughly 35, while Calgary is in the low 30s.

Below is a chart from the NY Times showing price/rent ratios in U.S. at their peak.

[A comparison of the chart and table above] implies that valuations in Vancouver are off the charts compared to any US city at [their] peak, Toronto and Montreal valuations are as stretched as Palm Beach and San Diego were at peak, while Calgary valuations are comparable to Las Vegas.

Who in the world is currently reading this article along with you? Click here

While this sort of ‘analysis’ is admittedly shallow and does not look at other macroeconomic variables, it’s nevertheless troubling considering the findings of a prescient research note from the Fed Reserve Bank of San Francisco which sounded an early warning bell in the US by looking at this very metric:

“The majority of the movement of the price-rent ratio comes from future returns, not rental growth rates. This will not comfort everyone, as it implies that price-rent ratios change because prices are expected to change in the future, and seemingly out of proportion to changes in rental values.

We found that most of the variance in the price-rent ratio is due to changes in future returns and not to changes in rents. This is relevant because it suggests the likely future path of the ratio. If the ratio is to return to its average level, it will probably do so through slower house price appreciation.”

I personally am a huge believer that rents underpin residential house values…[and,] because of this, I am greatly troubled by the unprecedented gap between house prices and rents, which the IMF recently calculated is the most stretched in the developed world:

Conclusion

Virtually every metric that academics use to gauge house price vulnerability points to cause for concern. [As mentioned in the opening paragraph,] the ownership premium in Canada’s largest cities is unprecedented and unlikely to persist – and this is bad news.

* http://theeconomicanalyst.com/content/house-price-rent-ratios-canadian-cities-alarming-levels

Editor’s Note: The above article has been has edited ([ ]), abridged (…) and reformatted (including the title, some sub-titles and bold/italics emphases) for the sake of clarity and brevity to ensure a fast and easy read. The article’s views and conclusions are unaltered and no personal comments have been included to maintain the integrity of the original article.

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Related Articles:

1. American/Canadian Home Price Performance Comparisons by Major Cities

The following charts indicate relative performance of US home prices in Phoenix, Los Angeles, San Francisco, Chicago, Las Vegas, New York and Miami to Canadian home prices in Vancouver, Calgary, Toronto, and Montreal. US home prices are reflected in Canadian dollars for comparison purposes. Words: 240

2. Unlike the U.S and U.K, Canada’s Home Prices Are STILL Rising!

Canada, France and Switzerland stood alone among nine markets measured in recording annual price gains, based on second-quarter data, with inflation-adjusted price increases of 5%, 5% and 4%, respectively, compared to declines of 6% in the U.S., the U.K. and Australia, 10% in Spain and 14% in Ireland. In fact, Canada’s home prices have escalated 44% since 2005 – with a high of 68% in Vancouver – and they are up 7.7% in the past 12 months! Words: 1244

3. Believe it or Not: Australia’s Housing Bubble is Worse Than That in the U.S.

The explosion of Australia’s mortgage debt is viewed by many economists and commentators as the key factor behind Australia’s unaffordable housing [and the primary] reason why Australia’s housing bubble is larger than that experienced in the United States in the mid-2000s. [Another factor is] the strangulation of fringe urban land supply via increasingly restrictive planning processes. [Let me substantiate that contention by comparing the two countries housing situation via a number of descriptive graphs. Words: 817

4. Price:Rent Ratio Suggests House Prices Have Further to Fall

The rat-through-the-snake process of working down existing and prospective distressed properties is likely far from over, and how that process plays out will no doubt have an impact on how much housing prices will ultimately adjust. [Let's take a look at some differing points of view in that regard.] Words: 497

5. U.S. House Prices Have MUCH Further To Fall! Here’s Why

There has been a deluge of articles recently about the upticks in the housing data…[yet, while] I do not dispute the improvement in the data regarding home starts, permits, pending sales, etc.,… [see graph below] these data points are still mired at very depressed levels so the assumption is that if home building is stabilizing then it is only a function of time until home prices began to rise as well. Right? Not so fast.. [Let me explain.] Words: 1100

6. We Can Now Rule Out Another Housing Collapse, Can’t We?

According to both the Case Shiller and RadarLogic indices housing prices have been essentially flat for the past 2 years after having fallen by a third from their 2006/7 highs. [That being said, surely we can now rule out another collapse, can’t we? Words: 764

7. A Housing Boom is Coming! A Housing Boom is Coming! Here’s Why

Yes, you read that right; get ready for the next housing boom. You’re probably thinking, “How could that be with all the mortgage delinquencies and foreclosures going on, and the record levels of housing inventory? Well, it’s not going to happen soon – [probably] not for several more years – but it’s coming. [Let me explain to you why it is inevitable.] Words: 589

More…

The Fed justified the previous round of quantitative easing “to promote a stronger pace of economic recovery and to help ensure that inflation, over time, is at levels consistent with its mandate”. In effect, the Fed has been trying to increase inflation at the macro level, but what does an increase in inflation mean at the micro level — specifically to your household? [Let's take a look and see.]

So says Doug Short (www.advisorperspectives.com) in edited excerpts from his original article* which Lorimer Wilson, editor of www.munKNEE.com (Your Key to Making Money!), has further edited below for length and clarity – see Editor’s Note below. (This paragraph must be included in any article re-posting to avoid copyright infringement.)

Short goes on to say, in part:

The Bureau of Labor Statistics (BLS) divides all expenditures into eight categories and assigns a relative size to each. The pie chart below illustrates the components of the Consumer Price Index for Urban Consumers, the CPI-U, which I’ll refer to hereafter as the CPI.

The slices are listed in the order used by the BLS in their tables, not the relative size. The first three follow the traditional order of urgency: food, shelter, and clothing. Transportation comes before Medical Care, and Recreation precedes the lumped category of Education and Communication. Other Goods and Services refers to a bizarre grab-bag of odd fellows, including tobacco, cosmetics, financial services, and funeral expenses…

The chart below shows the cumulative percent change in price for each of the eight categories since 2000.

Click for a larger image

Not surprisingly, Medical Care has been the fastest growing category. At the opposite end, Apparel has actually been deflating since 2000. The latest Apparel number is the first fractional nudge above zero in about nine years. Another unique feature of Apparel is the obvious seasonal volatility of the contour.

Transportation is the other category with high volatility — much more dramatic and irregular than the seasonality of Apparel. Transportation includes a wide range of subcategories. The volatility is largely driven by the Motor Fuel subcategory. For example, the spike in gasoline above $4-a-gallon in 2008 is readily apparent in the chart.

The Ominous Shadow Category of Energy

The BLS does not lump energy costs into an expenditure category, but it does include energy subcategories in Housing in addition to the fuel subcategory in Transportation. Also, energy costs are indirectly reflected in expenditure changes for goods and services across the CPI.

The BLS does track Energy as a separate aggregate index, which in recent years has been assigned a relative importance of 8.553 out of 100. In other words, Uncle Sam calculates inflation on the assumption that energy in one form or another constitutes about 8.55% of total expenditures, about half of which (4.53%) goes to transportation fuels — mostly gasoline. The next chart overlays the highly volatile Energy aggregate on top of the eight expenditure categories. We can immediately see the impact of energy costs on transportation.

Click for a larger image

The next chart will come as no surprise to families footing the bill for college tuition. Here I’ve separately plotted the College Tuition and Fees subcategory of the Education and Communication expenditure category. Note that the steady staircase in this cost matches the annual cost increases in late summer for each academic year.

Click for a larger image

Core Inflation

Economists and policy makers (e.g., the Federal Reserve) pay close attention to Core Inflation, which is the overall inflation rate excluding Food and Energy. Now this is a somewhat peculiar metric in that one of the exclusions, Energy, is an aggregate that combines specific pieces of two consumption categories: 1) Transportation fuels and 2) Housing fuels, gas, and electricity. The other, Food, is the major part of the Food and Beverage category. I should explain that “beverage” for the BLS means alcoholic beverages. So coffee and Coca Colas are excluded from Core Inflation, but Budweiser and Jack Daniels aren’t.

The next chart shows us the annualized rate of change (solid lines) and the cumulative change (dotted lines) in CPI and Core CPI since 2000.

Click for a larger image

Consumers, especially those who’ve managed expenses over several years, are most closely attuned to the top line.

Inflation and Your Household

The universal response is to moan over price increases and take delight when prices are cheaper but, in reality, households vary dramatically in the impact that inflation has upon them:

• When gasoline prices skyrocket, a two-earner suburban family with long car commutes suffers far more than the metro family with short subway commutes or retirees with no commute.
• Also, the pain is even more extreme for low income households whose grocery money shinks with gas prices rise. Remember, Uncle Sam excludes energy costs from Core Inflation.
• Households with high medical costs are significantly more vulnerable than comparable households with low expenses in this category.
• The BLS weights College Tuition and Fees at 1.493% of the total expenditures but for households with college-bound children, the relentless growth of tuition and fees can cripple budgets. Of course, Mr. Bernanke would point out that, with a healthy dose of Core Inflation (extended, of course, to wages), those debt-burdened college grads will pay down the loans with inflated dollars…

Which brings us back to the Fed’s efforts to manage the level of Core Inflation. At the macro level, Mr. Bernanke and his Federal Reserve team can doubtless make a theoretical argument for playing puppet master with inflation, but will their efforts — ZIRP and Quantitative Easing — achieve the desired goal?…

* http://advisorperspectives.com/dshort/updates/CPI-Category-Overview.php

Editor’s Note: The above article has been has edited ([ ]), abridged (…) and reformatted (including the title, some sub-titles and bold/italics emphases) for the sake of clarity and brevity to ensure a fast and easy read. The article’s views and conclusions are unaltered and no personal comments have been included to maintain the integrity of the original article.

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1. A Look at Inflation Specifics Over the Past 5 Months

Core CPI [continues to rise, remaining] above the Fed’s inflation target of 2%. [That being said,] how inflation is impacting our personal expenses depends on our relative exposure to the individual components. [Let's take a look at the specifics.] Words: 291

Core CPI [continues to rise, remaining] above the Fed’s inflation target of 2%. [That being said,] how inflation is impacting our personal expenses depends on our relative exposure to the individual components. [Let's take a look at the specifics.]

So says Doug Short (www.advisorperspectives.com) in edited excerpts from his original article* which Lorimer Wilson, editor of www.munKNEE.com (Your Key to Making Money!), has further edited below for length and clarity - see Editor’s Note below. (This paragraph must be included in any article re-posting to avoid copyright infringement.)

Short goes on to say, in part:

The Trends in Headline and Core CPI

The chart below shows Headline and Core CPI for urban consumers since 2007. Core CPI excludes the two most volatile components, food and energy.

Click for a larger image

Core CPI has been on the rise and has now risen above the Fed’s inflation target of 2%. However, the more attention-grabbing headline CPI has moderated in recent months after hitting an interim high in September 2011, a decline that was primarily driven by lower energy costs, especially as reflected in the transportation category. This trend, however, appears to be reversing. Gasoline prices have been steadily rising since mid-December…

For a longer-term perspective, here is a column-style breakdown of the inflation categories showing the change since 2000.

Click for a larger image

Note: For additional information on the component composition of the Consumer Price Index, see: 

Slicing & Dicing Consumer Price Index Data of the Past 11 Years

The Fed justified the previous round of quantitative easing “to promote a stronger pace of economic recovery and to help ensure that inflation, over time, is at levels consistent with its mandate”. In effect, the Fed has been trying to increase inflation at the macro level, but what does an increase in inflation mean at the micro level — specifically to your household? [Let's take a look and see.] Words: 957

* http://advisorperspectives.com/dshort/updates/Inflation-X-Ray-View.php

Editor’s Note: The above article has been has edited ([ ]), abridged (…) and reformatted (including the title, some sub-titles and bold/italics emphases) for the sake of clarity and brevity to ensure a fast and easy read. The article’s views and conclusions are unaltered and no personal comments have been included to maintain the integrity of the original article.

Why spend time surfing the internet looking for informative and well-written articles when we do it for you. We assess hundreds of articles every day, identify the best and then post edited excerpts of them to provide you with a fast and easy read. Sign-up for Automatic Receipt of Articles in your Inbox and follow us on FACEBOOK | and/or TWITTER so as not to miss any of the best financial articles on the internet.

We are trying to get out of a debt led crisis with more debt. The facts show this and we have compiled some of the more troubling data by putting the entire debt market into perspective here [and it clearly shows that] we flat out have an addiction to borrowing. [Read on!]

So say excerpts from an article* at www.mybudget360.com which Lorimer Wilson, editor of www.munKNEE.com (Your Key to Making Money!), has further edited below for length and clarity. (This paragraph must be included in any article re-posting to avoid copyright infringement.)

The article goes on to say, in part:

The total market of debt shows our addiction to borrowed money. It is now up to an astonishing $53 trillion and continues to grow. Take a look at this frightening data:

In 2001 total credit market debt was up to $28 trillion. Today it is now well above $53 trillion and inching closer to slapping on another trillion dollars this year. If you look at Greece as a microcosm of the bigger issue, you realize they are treating a solvency issue as if it were a liquidity issue. Let us be absolutely clear that all of this debt will never be paid off. This warrants repeating: The $53 trillion in total credit market debt will never be fully repaid [and, in spite of that,] it continues to grow…

Do people really think we,[the U.S.] are going to pay off our $15 trillion national debt when our deficits look like this:

We’ve been running continuous budget deficits since the late 1970s. We had a brief respite when it came to having a surplus with the tech boom but that was blown out the window completely with the real estate mania. Contrary to what most will say, deficits do matter and massive deficits really matter.

Why spend time surfing the internet looking for informative and well-written articles when we do it for you. We assess hundreds of articles every day, identify the best and then post edited excerpts of them to provide you with a fast and easy read. Sign-up for Automatic Receipt of Articles in your Inbox and follow us on FACEBOOK | and/or TWITTER so as not to miss any of the best financial articles on the internet.

Let us be abundantly clear that the total market debt is incredible. You now start having this challenging race where you are trying to avoid having your total debt surpass your annual GDP. The US has passed that mark and so have many other countries. The results in the long-run are never positive especially when people wise up and start asking for their money back. Since most don’t have the funds, they pay for it via inflation and a devaluation of their currencies…

Higher Education (Student Loan) Debt

The access to easy debt creates massive amounts of bubbles. We saw this in housing and now we are seeing it here in the U.S. with the giant higher education bubble. [Take a look at the chart below which shows just how serious the situation is.]

Keep in mind this is only a tiny part of the student debt market. This year we will surpass $1 trillion point for student loan debt. I believe this will be another crisis that will hit and many indebted students are already feeling this. Many are being sucked into paper mill for-profits that are essentially scam factories that raid the government backed student loan funds. They lobby Congress to make it easier for them to report horrific placement data and change the metric on default reporting so it doesn’t look as atrocious. Even with these softballs from our bought out politicians, the data is still horrible.

Conclusion

A debt bubble cannot be solved with more debt…The financial media missed the tech bubble bust and the housing bubble bust so gear up because they will miss the next debt bubble bust as well.

*http://www.mybudget360.com/day-of-reckoning-for-global-total-debt-total-credit-market-debt-consumer-debt-large-charge-of-household-debt-trillions/

Editor’s Note: The above article has been has edited ([ ]), abridged (…) and reformatted (including the title, some sub-titles and bold/italics emphases) for the sake of clarity and brevity to ensure a fast and easy read. The article’s views and conclusions are unaltered and no personal comments have been included to maintain the integrity of the original article.

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1. Americans Greasing the Tracks for a Financial Crash! Here’s Why

For the bulls yesterday’s news of a much higher-than-anticipated jump in consumer borrowing is yet more proof that the recovery is on track. [For the bears it is outright confirmation that America's spending is setting it up for a major financial crash! Let me explain.] Words: 527

2. National Debt Burden per Capita-to-Income Index at 50 Year High – and Growing!

Wars and depressions largely characterize the periods of time where there have been significant run-ups in the level of the U.S. National Debt Burden per Capita [i.e. the U.S. National Debt Burden per Capita-to-income Index], with the debt taken on to support the costs of the U.S. Civil War and World War II being the most significant. Today… it is perhaps most comparable to the Great Depression. [Take a look.] Words: 326

3. 75% of Americans are in Deep _ _ _t!

Rising education and medical costs, on-going credit card interest payments, well used personal lines of credit and large mortgage debt and home equity loans – most a penchant for living beyond their means – is keeping 75% of American households in some degree of debt. Take a look and then pass it on to your friends, neighbors and co-workers.

4. The Global Debt Clock: A World Debt Comparison

The clock is ticking. Every second, it seems, someone in the world takes on more debt. The idea of a debt clock for an individual nation… [is old hat - see links below to many such debt clocks - but] our clock (here) shows the global figure for all (or almost all) government debts in dollar terms. Words: 300

5. In Debt? Here are 10 Ways Out

When people talk about getting their personal finances in order, they usually try to find relatively pain-free and low-cost ways to reduce debt and increase savings but this is a long-term approach which some people just cannot “afford”. [For them] …it may be worthwhile to consider taking the hard way out of debt. [Let me explain.] Words: 1370

6. American Grads: Here’s a Great Guide to Personal Finance

Graduating from college can be an exciting and stressful time. Suddenly you need to find a job, replay loans and make solid financial decisions. Fortunately, you don’t need to be unprepared. Below are some budgeting basics to keep your spending under control, some suggestions on how to set financial goals and a list of the top 10 American cities for starting out.

7. 2 Ways to Reduce Your Debts Using the “Snowball” Method

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