Links

Bob Prechter recently reiterated his deflationary outlook in an interview with Jim Puplava of Financial Sense.com. Click here  for some choice excerpts.

Click here for the latest dispatch from Auerbach Grayson, No Free Lunch on Wall Street.  "This is not our first rodeo," writes Grayson global technical strategist Richard Ross, "and we have no intention of letting a classic low volume, thin market, late summer squall on the heels of the best month (July) in a year, throw us from our Bullish stance. Nothing has changed from a week ago and today we reiterate many of the same emerging, frontier and developed market themes which we have espoused for months in markets both up and down."

Chuck Cohen sees numerous signs that gold shares are (finally!) about to break out.  Click here to access his 12-page report.

Dave Rosenberg's latest Gluskin-Sheff report notes that the dramatic collapse in asset values in the past two years has generated severe trauma to the baby boomer balance sheet. Click here  to see this graphically.      

Over at James Howard Kunstler's sensational blog, Clusterfuck Nation, there's a well-reasoned argument that "this recession, or whatever you want to call it," is actually a "compressive deflationary contraction" -- i.e., "an accelerating systemic collapse of activity due to over-investments in hyper-complexity." Read the complete essay by clicking here.

I received the following note concerning Gold Resource Corp (GORO) from Peter Spina at Goldseek.com.  He is very enthusiastic about the company, but I'll leave the due diligence to you: "In my 15 years as a gold investor, there are only a handful of companies that I have seen hold the vision and ability to execute a new gold deal, project like the management of Gold Resource Corp (GORO) has. After Rob McEwen purchased US Gold Corp. from the Reid brothers, they continued on with Gold Resource Corp., going public in late 2006. Just over 3 years later, they announced commercial production on July 1. With high-high grade gold and silver along with base metals, production costs are ultra-low. $200 an ounce and falling to around $0 as production moves to 200,000 gold eq.  a year. "Major points: GORO is now in production, significant dividends are likely to begin in the coming quarter or two (1/3 of cash flow targeted towards dividends going forward), and up-listing to NYSE: AMEX now underway.  Unlike most gold deals put together, GORO has sustained an incredibly disciplined share structure, under 50 million shares and 53FD. No debt, cash flow beginning in a big way, the company is currently being revalued by the market. "Here is my update on GORO, world-class ore grades, creating a world class deposit: http://news.goldseek.com/PeterSpina/1279242000.php

Hollywood sound editor Michael Redbourn has been nominated for two Emmys, but he's also a blogger with some interesting opinions on an eclectic variety of subjects. We asked him to write on a topic of his choosing for Rick's Picks, and he came back with some disquieting facts concerning the approximately $500 billion cost of caring for America's illegal aliens. For a look at the facts and figures, along with extensive links, click here.

No sooner had we finished reading a breathless note from our friend Chuck Cohen -- "Major, MAJOR bottom here" -- than we received an e-mail from Jonathan Auerbach at Auerbach & Grayson saying more or less the same thing. Each notes that bullish sentiment as recorded by AAII, a contrary indicator, is about as low as it gets.  While I greatly respect both of these guys, and although I think stocks are going higher over the near term, I remain skeptical that we are witnessing the start of a major bear rally. To access the A&G report -- a fascinating read, as always -- click here.  I will post Chuck's essay as commentary over the weekend.

[Note:  The following comes from the latest issue of Elliott Wave Theorist. Bob Prechter is arguably the world's foremost expert on deflation, and in this interview segment he covers a crucial point in the inflation-vs.-deflation argument.  It is a must-read for anyone interested in the topic.  RA] When almost everyone believes that the Fed's interest-rate policies will eventually create awe-inspiring inflation, it's difficult for other voices to get heard. Bob Prechter argues that the real effect of the Fed's "extra-credit" policies will be deflation -- and that's what will hamper an economic recovery. He went into the lion's den recently to talk with the managing editor of the Daily Crux, a financial website that mainly focuses on the inflation side of the argument. In this excerpt from the interview, which runs in full in the June 2010 Elliott Wave Theorist, Prechter talks not only about why the Fed's action won't create inflation but also about what might come after we have walked through the valley of deflation.  Click here to access the complete segment of the interview.