Links

A study published here a while back by Rick's Picks reader Wim Grommen explained how constant tinkering with the components of the Dow Industrial Average has inflated and obscured its true value. Now comes another paper from Wim that shows why a global economic era characterized by high innovation, prosperity and major productivity gains has likely peaked. For the full report click here.

Paid-up subscriber Jonathan Auerbach's very bullish reports from Africa are the man-bites-dog story of the economic world.  I will continue to keep readers apprised of his travels, since his reports are eye-openers, especially for those who think the world is lacking in great investment opportunities.  For further information, please contact Auerbach & Grayson at their New York City office. Here's Jon: "I am aware that some of you may be securely buckled into one of several 'Africa Days', currently the trendy invite (what do you mean, you weren't called?) in New York where our firm for the second consecutive year was voted 'Best Broker in Africa' yesterday at the annual NYSE African Investor Day. Nevertheless, most of our Africa desk is on location, so forget the applause and take a few minutes to absorb some boots on the ground thoughts about Nigeria.I have been regularly visiting for over 10 years always hammering (I am never without a nail) the value of participating in this country's (population 140 million) growth. For a long time easier said than done but now after two years of extraordinary events of massively reformed regulatory governance and transparency by the Central Bank, SEC, and Stock Exchange, you must consider investing in average annual growth over the past five years that is only exceeded by India, China, Pakistan, and Vietnam. "Looking forward, at current growth rates Nigeria should pass South Africa in nominal GDP within 5 years. Over the past couple of days we have met head-to-head with the leading banks currently selling at a weighted P/B of 0.9 at a 2011E P/E of 6.3, and an average dividend yield of 8%. These are clean banks as the Central Bank took a machete to the bad banks and NPLs. The oil and gas sector is going through

On Saturday's Korelin Economic Report, Rick and Roger Weigand discussed last week's market tumult.

This interview was to have concerned my recent editorial concerning Amazon’s avoidance of sales taxes. However, with stocks and commodities plummeting on Thursday, we instead talked about the likelihood of further carnage as the ‘risk trade’ unwinds globally. We also discussed the deflationary implications of all this, notwithstanding the relatively piddling inflation that is likely to continue at the grocery store.

The headline from Auerbach & Grayson's latest report says it all.  For a full report on what is shaping up to be The Perfect Storm, click here.  We are grateful to charter subscriber Jon Auerbach for making it available to Rick's Picks subscribers.

Al Korelin and Rick Ackerman discuss the day’s activities for Gold and Silver, and the implications that a Greek default might have on the markets.

When we talk about how our Government is corrupt and decadent to the core, it is items like the following in particular that raise our ire.  I received this as an e-mail with the suggestion that I recirculate it to 20 others. I'll recommend that you do so by copy-and-pasting it to friends.  Here's the message**: "No one has been able to explain to me why young men and women who serve in the U.S. military for 20 years, risking their lives protecting freedom, only get 50% of their pay while politicians who hold their political positions in the safe confines of the Capitol, protected by these same men and women, receive full-pay benefits after serving just one term. "It just does not make any sense. "From Fox News on Monday, we also learned that the staffers of Congressional family members are exempt from having to pay back student loans. This will get national attention if other news networks broadcast it. When you add this to the facts noted below, you wonder where it will all stop.  Thirty-five states have filed lawsuits against the Federal Government for imposing various, unlawful burdens upon them.  It only takes 38 states to convene a Constitutional Convention. This will take less than a minute to read. If you agree, please pass it on. This is an idea that we should address. For too long we have been too complacent about the workings of Congress. Many citizens had no idea that members of Congress could retire with the same pay after only one term, that they specifically exempted themselves from many of the laws they have passed (such as being exempt from any fear of prosecution for sexual harassment) while ordinary citizens must live under those laws. "The latest is to exempt themselves from the

This past Saturday, Rick Ackerman was interviewed by Al Korelin of The Korelin Economics Report. During the interview, Rick discussed the economy and offered his views on the gold market. The full eight-segment show may be heard here.

If you've ever suspected that Wall Street stacks the statistical deck to boost share prices, here's an academic paper that explains exactly how it is done.  The author, Wim Grommen, a Rick's Picks reader from the Netherlands, goes as far as calling the constant recalculating and rejiggering of the Dow Industrial Average a pyramid scheme.  Click here for the complete study, which explains how, from a mathematician's perspective, the Crash of 1929, as well as the exponential rise of U.S. stocks during the 1990s, were brought on by bogus math.