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The Warrant Report

 (A Special Saturday Edition)

 

The Meltdown From A European Perspective

 

On Tuesday, November 18th, we had representatives of Finansbanken, Bank of Copenhagen visiting here in Ajijic, Mexico. They made a presentation to those in our community interested in investments and in possibility utilizing their services. I have had the opportunity to visit with Pramda and Torben on previous occasions and it is always an enjoyable meeting and to hear their great insights on the markets from their European Perspective in Copenhagen.

 

Pramda Ralhan - Head of Private Banking, North America

pra@finansbanken.dk

www.finansbanken.dk

 

Torben Melsted - Head of FX Sales

torben.melsted@finansbanken.dk

www.finansbanken.dk

 

They presented a wonderful slide show which I am furnishing to you on my website.  You will not want to miss their great charts, a few of which I do not recall ever seeing.  One in particular is of "The Kondratieff Cycle & Cycles Within Cycles (Wheel Within A Wheel). Another chart perhaps you have seen before is, "Where To Find Value" Gold: The Ultimate Store of Value During the Kondratieff Winter. This is John Exter's - Inverse Pyramid (Liquidity).

 

So allow me to present some of Pramda's and Torben's comments in my bullet point format:

• Virtually all assets classes have been affected

• As if in one day the world was turned upside down

• Much of the selling is forced selling

• Japan started this mess with interest rates in the early 1990's - Bank of Japan and then Greenspan

• Major de-leveraging cycle ahead - credit destruction and stocks will follow credit down

• Potential target is 5000 - 5500 for the DOW

• Low possible in 2011 or 2012

• Chinese GDP will probably drop to 6.3% in 2009

• Oil prices to stay depressed for 2009 around $65 a barrel

• Global trade has come to a halt - Baltic Dry Index down over 90% - see chart

• Currently expects the U.S. dollar to be strong as the de-leveraging continues

• Gold, cash and treasuries did good in the 1930's

• Gold could possibly test the $600 level in U.S. dollars but is up in most other currencies

• See a stronger Japanese Yen and U.S. dollar

To briefly summarize, they are rather negative on the financial markets as the forced selling will continue due to the de-leveraging and liquidation of the debt in the world. The strong possibility of social unrest weighs heavy on the mind of Torben and would be a nightmare scenario for all of us. Of course, as we all know, there are always opportunities, whether in the currency markets, gold or the shares of sound resource companies.

 

Please follow this hyperlink to my website to view their Power Point Presentation.

 

They also have a newsletter, Market Pulse, click on the hyperlink for the November issue and if you are interested send Pramda an email requesting to be placed on the email list.

 

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Dudley Pierce Baker’s Personal Portfolio

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