Homage to Clyfford Still

The depreciation of the Euro (blue) and the Dollar (orange) against Gold.
[The purple has no significance in itself. It's simply caused by the overlap of the two colors. Sometimes it's the Euro and sometimes it's the Dollar. It depends on which currency is stronger and thus in the background.]

From Gregor.us

The most disturbing thing here is the breakdown of the price mechanism- the contraction in non-OPEC oil supply despite the 2008 price surge.

It is clear that oil supply is plateauing. The price surged for coal in 2008 as well, but its discount relative to oil encouraged adoption. Gregor Macdonald predicts recapitulation into a predominately coal-biased global economy within five years.

Luxury Goods

"Luxury is a necessity that starts where necessity stops."

- Coco Chanel (attrib.)

The story of civilization, if told with economy yet in all its comprehensive beauty, can most cogently be explained through the evolution of the unnecessary goods of society. These are the most interesting aspects of civilization and in many ways the quintessence of peaceful society. Civilization is the story of the specialization of labour, the rise of trade, and the creation of a leisure class of scholars and artists and dissipated wealthy. All of these narratives revolve around the unnecessary good.

The unnecessary good exists outside of the dynamic equilibrium that governs supply and demand because its logic befuddles the balancing power of price. Sadie and I have a toast to the unnecessary. It's simply, "Fearless luxury."

If you wanted to ask my 17 year-old self his opinion, he'd tell you, "The moment a good's fundamental utility disappears, it becomes art."

These days I'm more of a Pierre Bonnard man.

Risk on.

Prices are starting to look somewhat reasonable for the first time in over a year:
Coal Company stocks and physical Lead are both down 20%.



























Brazil and India down about 15%






























I hadn't been aware of the recent performance of the Estonian economy until today, but for the very compelling reasons outlined in John Dizard's article in the FM section of the FT the other day, I believe this fund would provide good diversification to a not-Dollar portfolio. Estonia is on track to join the EU next year, so investing in its stock market provides Euro exposure without the structural weaknesses of the European economy.

SEB Eastern Europe Small Cap Fund

The Dollar is close to median value against the Euro ($1.35) and strong against the basket of currencies which make up the dollar index.















I think we are entering the moment where the paths diverge between the V-shaped recovery of low debt, youth oriented, growing economies, and the W-shaped recovery of the over-leveraged, sluggish, aging countries.

Remember the international investing formula detailed before on these pages. An successful economy and candidate for investment must contain Attractive Women + Quality Music + Decent Educational Opportunities + Young Population + Low Debt/GDP ratios + Accelerating Credit Expansion (installment plans, mortgages, etc.)

With Quality of Music and rate of Credit Expansion counting the most in projections.