Global Mining Investing $69.95, 2 Volume e-Book Set. Buy here.
Author, Andrew Sheldon

Global Mining Investing is a reference eBook to teach investors how to think and act as investors with a underlying theme of managing risk. The book touches on a huge amount of content which heavily relies on knowledge that can only be obtained through experience...The text was engaging, as I knew the valuable outcome was to be a better thinker and investor.

While some books (such as Coulson’s An Insider’s Guide to the Mining Sector) focus on one particular commodity this book (Global Mining Investing) attempts (and does well) to cover all types of mining and commodities.

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Monday, January 28, 2008

The real cause of inflation

It never ceases to amaze me how ill-conceived the public, media, even economists conception of inflation is. If you believe the rhetoric inflation is caused by an excess of consumption, that if your economy is growing too strong, then you get prices increasing because producers are unable to supply product. This never happens actually. You will find that economies in the long run are always able to meet demand. The reason for this is because of:
1. The almost universal availability of substitutes - If any product becomes scarce and prices rise, buyers are inclined to buy a similar product that serves the same purchase.
2. The pricing mechanism - Price rises in any single product will rise and in the process discourage consumption, or at least defer it until prices fall, or the person's capacity to buy improves through their increasing income or debt raising capacity.

A global economy offers even greater capacity to reduce inflation because there is greater possibility of substitution or competition, but it does have to overcome the added transport and marketing cost of selling that output, and thats a long-run commercial decision.

The 'demand-based inflation' enthusiasts would have you believe that greater wealth creation is creating that demand across the whole economy. Some dont even bother to explain it - its just there 'suddenly'. But thats nonsense because the increase in wealth is due to expansion of economic output. It also does not account for the 'late' arrival of inflation. We have had 13 years of low inflation despite strong economic development. If you think that is a good thing consider that during the Industrial Revolution, under a gold-standard, there was no inflation. Price variable was essentially stable.

The reality though is that we have had inflation over the last 18-odd years, its just that the CPI is designed not to measure it. This is because the CPI measures only the increase in prices in products that are important to the poor. But the inflationary phenomena is a monetary phenomena caused by excess supply of money relative to the amount of goods & services in production. Now since the wealthy hold the bulk of the money and people want to make more, the bulk of this money flows into business & personal investments such as factories, property and stocks, not into household consumption. The implication is that this money is in a sense sterilising the inflation such that price rises dont flow through to basic goods and services. At some point asset prices become overpriced, and are sold down. This process will eventually lead to bankruptcies, whether because interest rates are raised to address inflation or just because of default because the factory sales fell, or the home owner lost their job.
Andrew Sheldon
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Japan Foreclosed Property 2015-2016 - Buy this 5th edition report!

Over the years, this ebook has been enhanced with additional research to offer a comprehensive appraisal of the Japanese foreclosed property market, as well as offering economic and industry analysis. The author travels to Japan regularly to keep abreast of the local market conditions, and has purchased several foreclosed properties, as well as bidding on others. Japan is one of the few markets offering high-yielding property investment opportunities. Contrary to the 'rural depopulation' scepticism, the urban centres are growing, and they have always been a magnet for expatriates in Asia. Japan is a place where expats, investors (big or small) can make highly profitable real estate investments. Japan is a large market, with a plethora of cheap properties up for tender by the courts. Few other Western nations offer such cheap property so close to major infrastructure. Japan is unique in this respect, and it offers such a different life experience, which also makes it special. There is a plethora of property is depopulating rural areas, however there are fortnightly tenders offering plenty of property in Japan's cities as well. I bought a dormitory 1hr from Tokyo for just $US30,000.
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Investment Strategy

If you are investing for the long term, you still need an investment strategy. Dont be fooled by the rhetoric of fund managers. The reason they advise you to 'buy & hold' is because they dont want to compete with you in sell-offs. Markets and industrial sectors are cyclical, so they demand trading to get the best returns. Fund managers actually cant hope to match the performance of small investors (if you are half good) because they have to manage huge amounts of funds and charge you a fee besides.
MY ADVICE is (i) look at a range of market indices and decide upon what level of correction would give you the justification you need to get in & out of the market. It might be a 5-10% retracement or a break of trend. (ii) Diversify if you dont have an intimate knowledge of the company or management. More than 30% in one company is aggressive.

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The NZ property market is shaping up as one of the most attractive property investment markets for the next few years. High yielding property and the collapse of the NZD make NZ the perfect counter-cyclical investment if you buy right! In addition, there is no capital gains tax, transfer taxes, VAT/GST or wealth taxes in NZ, so rest assured that NZ property is tax-effective! Learn more now!

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