Here are the latest items and commentary on current economics news, market trends, stocks, investing opportunities, and the precious metals markets. We also cover hedges, derivatives, and obscura. And it bears mention that most of these items are from the “tangibles heavy” contrarian perspective of JWR. (SurvivalBlog’s Founder and Senior Editor.) Today’s focus is on international countertrade.
Precious Metals:
First up, at Kitco: Don’t Throw In The Towel Just Yet Even If USD Moves Higher – Analysts
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Despite a stronger Dollar and fresh hopes for peace on the Korean Peninsula, spot silver ended the week on Friday at a respectable $16.49 USD per Troy ounce.
Stocks:
After next few rate hikes, Fed needs to be ‘very, very careful:’ Dallas Fed’s Kaplan
Countertrade:
One seldom-mentioned part of international commerce is countertrade. This modern-day barter is typically done by companies–or countries–that are resource rich but cash poor. The more that a currency unit becomes distrusted, the more important that countertrade becomes. For a country like Venezuela, with a hyperinflated currency that is considered “trash”, countertrade becomes crucial. Countertrade and offset trading can also be exempt from tariff regimes, in a few circumstances. Countertrading is “a layer deep” in most companies and hence unavailable for individual investors to directly profit by it. But I can foresee two opportunities: 1.) Investing in firms that profit from brokering countertrade and offsets, and, 2.) The advent of a new hybrid forward selling derivatives geared toward planned countertrade, primarily among precious metals mining firms. (The latter has not yet appeared, but given the labyrinthine and constantly-expanding world of derivatives, I expect to see them, within a few years.) See The Global Offset and Countertrade Association (GOCA) website, for details on how countertrade works.