A couple of days ago, one of my “thoughts” pointed to looking at the “Mexico” connection. I mentioned several transportation companies that might prove to be potential investments or trades because of the improving trade with the USA’s southern neighbor. This morning, no less than the crazy man of CNBC suggested a reason why a market player would consider my advice.
- Because of rising wages in places like China, and rising transportation costs, it now makes sense for auto companies to build their factories in a place like Mexico, where wages are low and it’s easy to ship the cars they build to the U.S. via the rails,” Cramer explained.
Given the strengthening US auto market, Jim Cramer’s auto factory theory gives some support to my suggestion that you look to those markets for potential trades or investments. Heck, in my humble opinion, looking there is more solid than playing the gold market. I know, I know, gold is going to $5,000, no, $3,000, no, I mean $2.000, or so it is predicted …
- What will happen with gold?
The above is such simple question from a reader and yet it provokes my sense of rebellion. Yes, I want to fight back against all those snake-oil sales folks out there pushing fear just to get some of your heard-earned money. Gold is a prime focus of these malevolent creatures, as it is for some financial pundits and some Wall Street gurus who are not malevolent creatures; they are just bad oracles. I mean here we are in the prime of the gold-buying season around the world, in the middle of yet another US financial brinksmanship debacle, still in the throes of cheap government money, global quantitative easing, massive global debt, excessive inflation nonexistent and gold cannot even hold above $1700. Who knows what will happen long term, but what won’t happen near term is the price of gold going to $5,000 or $3,000. In fact, $2,000 is looking a bit far off, given the recent economic turn in China, the slow but steady progress in Europe, the resurgence of other emerging economies, and the erratic but mostly positive economic data in the US …
- Home prices posted their biggest annual jump in more than six years in October in a sign the housing sector continues to recover, data analysis firm CoreLogic said on Tuesday.
- The manufacturing sector contracted in November and posted its weakest performance in three years, a report showed on Monday. Companies taking part in the survey said uncertainty over the negotiations in Washington was a factor.
- Nonfarm productivity increased at a much faster clip than initially thought in the third quarter as businesses held the line on hiring even as output surged, with unit labor costs falling at their fastest pace in almost a year.
The last data point is both positive and negative. True, fewer workers are doing more for less money, but it is also true that there is lots of work to do. Management can only squeeze so much from workers. As demand increases, management will have to hire more workers to keep up. Makes sense, right? Oh, one more thought on gold – the last data point points to minimal US inflation, as wages are a key component of core inflation, according to the US Federal Reserve.
And BTW, check out the world of coffee and tea, as the big dog is moving again.
- Starbucks Corp plans to open more than 3,000 new shops in the Americas in the next five years, an increase of more than 20 percent.
Trade in the day; Invest in your life …
