Greece! It has less people than the city of Los Angeles! Now ask yourself, is U.S. cash a trap waiting to be sprung

Image by Steve Rhodes via Flickr

The Euro is suffering because of the initial reluctance of the EU countries to take action regarding the Greek debt crisis. A devaluation of the Euro is overdue, and necessary. It will actually strengthen the Euro's trade deficits over time, and bring prosperity (eventually) But forget Portugal, Ireland, and Spain. In the greater scheme of the international markets, they are small fry.

However, it is the eventual devaluation of the U.S. dollar that should have Americans much more concerned. Beware of what is happening in California, Florida, Illinois, Ohio, Michigan, North Carolina,  New Jersey  and even Texas. These states have all spent over 1 billion on their unemployed alone, bankrupting their unemployment budgets. They also have between 13.7 and 17% unemployment, huge debts and deficits, and in some cases, housing prices have been cut in half.

Like the "Pigs" of Europe, these states also cannot print their own money, thereby inflating their way out of the current malaise. As the PIGS of Europe are having a huge, negative impact on the Euro, these states, (the HUGE federal debt notwithstanding) will have the same affect the U.S. dollar. It is a certainty. The only question is, how long can "king dollar" (as Larry Kudlow likes to call it) remain king. It currently is only king because there are no princes in waiting (as regards other world currencies). So, is "Prince Gold" quietly mounting a coup against the King. How about "King Commodity" who is somewhat weakened right now, but will be gathering strength as 2010 progresses.

Many developing countries, including China, India, Indonesia, Russia, South Korea, Brazil etc. are already looking to gold as a substitute for the prominence of the U.S. currency. Many individual investors and fund managers in these countries and throughout the west, have also moved into gold and commodities as a hedge against the demise of the usd. Some have recently added the Canadian and Aussie dollar to their international currency accounts as these two countries are considered "commodity rich"!

Whether they are right or wrong, sentiment is what moves the market. Anyone who thinks that gold, oil, uranium, titanium, natural gas, copper, diamonds, platinum, palladium, REE's or Lithium are not good places to put your money in this environment, just isn't paying attention. We are taking advantage of the current market disarray and buying these commodities


The U.S. dollar is a bubble waiting to explode into hyper inflation. Cash is a trap waiting to be sprung, and the current downturn is just that, a downturn that was expected and somewhat welcome by smart investors. Being in cash at the beginning of May was smart. Being in cash in June won't be.

 

 

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Microsoft ordered to pay $490M in Patent infringement case.

Image via CrunchBase

A small Canadian technology firm, i4iLP , is being heralded as the "David" who took Goliath to court and won. Microsoft was ordered to pay i4i $290 Million in a Texas court for infringing i4i's patents in xml, as they were utilized in it's MS word product. Not only has the court found in favor of i4i and ordered the reward, but it has also ordered Microsoft "not to sell" MS Word in the United States.

The case is: i4i Limited Partnership and Infrastructures for Information Inc vs Microsoft Corp, U.S. District Court, Eastern District of Texas, Tyler Division, No. 6:07CV113.

This case is not unlike a similar Texas court case involving another small Canadian Company, Wilan Technology Inc , who has sued 20 major wireless companies including Apple and Intel, for infringing on it's many wireless patents for Wimax, Wifi and other applications.

Wilan , (WIN/TSX) traded yesterday at $2.18 per share. It has already won patent infringement lawsuits against other wireless companies and has signed licensing agreements with 180 Tech companies over the past two years. I happen to believe it is extremely undervalued. that is why I increased my position this spring by over tenfold.

Some legitimate bloggers (and some infringing companies disguised as bloggers) like to vilify such companies, calling them "patent trolls" etc. however in these two cases, they would be wrong. In both cases the companies were started up in the early 90's by serious techies with great ideas, who created great technology but didn't have the legal know how or resources to protect their intellectual property.

It appears that i4i took a patient route in protecting their xml technology against the infringing company, Microsoft. Wilan's problem was that, because it owns so many of the underlying patents for current wireless technology, (over 550 patents) that many companies would not have the products they have (blackberry, ipod etc) had they not infringed on Wilan's patents. Because of this, two years ago, Wilan replaced it's tech centric CEO with a top U.S. patent lawyer, Jim Skippen, and from that moment on, a professional team was put into place to go after the infringing companies.

The first results have been many licensing agreements with the likes of RIM (Blackberry), Nokia, Westinghouse, Agilent, TigerDirect, Casio, Infinion, Samsung, Fujitsu and many more companies who were infringing on it's patents. 20 others, including some of the largest like Intel, Apple, Motorola, Broadcom, Acer, Marvell and Sony, are currently in a Texas court trying to fend off the inevitable.

The Patents number 550 and include: (from http://Wilan.com)

CDMA – A third generation wireless platform

DOCSIS – A standards-based technology to provide high speed internet and other data over coaxial cable networks

DSL – A standards-based access technology that provides broadband Internet access over twisted pair telecommunications wiring

Wi-Fi - The underlying technology of wireless local area networks and other products based on IEEE 802.11 specifications

WiMAX (4G) – Broadband wireless technology that provides longer-range wireless connectivity based on IEEE 802.16 specifications

V-Chip – The V-Chip patents allow the user of multimedia devices to filter out programming they consider inappropriate for their children to watch, whether that be from a Television broadcast, DVD/VCR/DVDR or Computers that have the ability to receive and process broadcast signals. The Federal Communications Commission has mandated that the V-Chip be included in all digital television receivers and digital reception devices offered for sale in the United States.

A number of followers, including this writer, believe that Wilan will be trading between $5 and $10 by the end of the year. Personally I think it is a $25 stock in waiting. that is why I have increased my holdings so much. It now pays dividends, albeit small, but the outlook for years to come is very bright. It owns great technology, has a dedicated hard working management team, has increased it's income solidly during the worst financial crisis since WW2 and it continues to sign dozens of new licensees every month.

Caution, don't invest in this or "any" company based on what you read in blogs. Do your own research, and consult with an experienced investment adviser before you buy any stock or mutual fund and always remember:

"Look after the pennies, and dollars will look after themselves"!

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