Agflation and Australian Agricultural Companies

The phenomenon of Agflation is gaining headlines and will increase in the near future. It is the inflation of products of the land, such as wheat, corn, soybeans, basically food supply commodities. There are various reasons for this and the problems will get worse. Some of the reasons include population growth leading to more people to feed and at the same time less land for agriculture. Natural disasters worldwide has recently had dramatic effects on agriculture. The recent environmental push for biofuels also mean that products are grown for fuel rather than to feed humands. None of these causes will go away soon but may increase in severity.

From an investment perspective, agriculture companies have fundamental reason for appreciating in price. Some of the Australian agriculture companies are below. Please feel free to comment if you find other significant companies.

AAC  AUSTRALIAN AGRICULTURE COMPANY
CAQ  CELL AQUACULTURE
CSS   CLEAN SEAS TUNA
ELD   ELDERS
GFF   GOODMAN FIELDER
GNC GRAINCORP
IPL    INCITEC PIVOT
MSF  MARYBOROUGH SUGAR
NUF  NUFARM
PAG  PRIME AG
RIC   RIDLEY
RHL  RURAL CO
SHV  SELECT HARVEST
TAN  TANDOU
TGR  TASSAL
WCB WARRNAMBOOL CHEESE

Dethroning the US Dollar - Part II

Following the brief article Dethroning the US Dollar,
the present article continues to track what's happening in the world of US dollars and money printing.

A lot of the details of what is to be said here can be obtained from online media, just Google it. Basically, the market has risen dramatically in the last two years. Compare this with the rise in 1932 after the 1929 crash and the subsequent crash of 1937 which took longer to recover.

The situation now is on a much larger scale. Many major banks around the world was bailed out. A big Depression was averted for now. The solution was that the government saved the banks.
- Where does the money come from? They print them. The QE2 is nothing more than printing money to pay debts.
- How can the US do that? Because the US is the reserve currency and the real physical commodities are sold in US dollars.
These news are well known in the media to anyone who wants to read.

However, what many people are in denial about is that the risk of hyperinflation, in which the currency can become so worthless that it can cost billions of dollars for a loaf of bread. Is this ridiculous? Look at the history of Germany in 1920's, Yugoslavia in 1990's and Zimbabwe recently. Here is a potential way events can unfold.
US prints more money - Cannot pay off debt - inflation becomes hyper - people's life savings are worthless.

Why would a goverment do that? Why print money and make your currency worthless? Simply, there is no other way out. The solution is to declare bankcruptcy of your country or make your currency so worthless that everyone knows you cannot pay anyway. Rest assured, the people pulling the strings and controlling the monetary policy would have bought other assets before they devalue the nation's currency. THEY would not hold their savings in their own currency.

So is this devaluing real? Here are some evidences:
Geithner says "US will not Devalue Dollar" (they always say the opposite) -
China's holding of US Treasuries tumbles -
China cuts US Treasury holdings by the most ever -

The wold community knows the US dollar is losing its value fast. There are plans already to introduce a One World currency. Here is a document by the International Monetary Fund (IMF) entitled: Reserve Accumulation and International Monetary Stability.
http://www.imf.org/external/np/pp/eng/2010/041310.pdf
The world currency already has a name: Bancor

Some other articles:
Yes, China can choose to just say no to one export from America - inflation

World finances go topsy-turvey -

Stan Weinstein's Secrets For Profiting in Bull and Bear Markets

Continuing the series of summaries of investment strategy book's, here is the acclaimed book by Stan Weinstein on Secrets for Profiting in Bull and Bear Markets. It is presented in point forms so that it is quick and easy to read. 

The points includes when not to buy stock, how not to sell stocks, how to sell stocks profitably, when not to short sell stocks and when to short. In addition, Weinstein has identified the pattern on how stocks rise up and decline in FOUR stages.

Don't buy

- overall market is bearish

- stock in negative group

- stock below its 30 week MA

- its 30 week MA is decreasing

- stock has already advanced a lot

- if stock has poor volume characteristic on breakout

- stock has poor relative strength

- stock has nearby overhead resistance

- by guessing a bottom

Don't sell (stock you already have):

- sell based on tax considerations

- sell based on dividend yield

- sell based on PE or because PE is too high

- average losses by buying more stock that is going down.

- wait of the next rally to sell

- refuse to sell because market is trending up

- keep holding stock because it is high quality

Selling stocks

- use stop losses - based on MA and previous support level

- don't use stop loss based on percentages

- First stop loss should be based only on the previous support

- Other stop losses adjusted based on MA

- Increase the stop losses to higher bottoms

- use stop loss at number slightly less than a round number.

don't short

- because of high PE

- because  price has rise too much

- because everyone thinks it's going to crash

- stock trades thinly

- a stage 2 stock

- stock that is in a strong group

- without protecting with a buy stop loss

- a stock that is above its Rising 30 week M.A.

- a stock with positive relative strength

Do short

- negative market

- negative group - group chart broken below 30 week MA, and declining relative strength.

- its stage 2 increase  was very strong, clearly above 30week MA

- Volume confirmation not necessary for shorts, since prices on the way down don't need strong volume

- Short when the price break down below a certain level. Place buy stops at the previous peak.

STAGES

1. Base phase - trending in range

2. Advancing phase- moving strongly upwards. 30 week MA also  starts increasing after breakout. BUY

3. The Top Area - 30week MA starts to level off. Place sell stop below this range.

4. Declining phase - don't need strong volume to confirm this phase. SELL

RELATIVE Strength = Price of Stock / Price of Market Average