This is a 28min video from Grant Williams of Vulpes Investment management (Singapore hedge fund managers). Grant is the author of the much acclaimed Things that make you go Hmmmmmmm!. The presentation details two bubbles, one about to burst and the other about to inflate enormously.
There is much money to be lost in the bursting by the unwary and conversely a great deal to be made by hitching a ride up with the other.
LINK to YouTube here:
Showing posts with label gold. Show all posts
Showing posts with label gold. Show all posts
Tuesday, October 23, 2012
Monday, October 18, 2010
Decline and Fall of the American Empire
Fed Chairman Ben Bernanke said he thought the current high unemployment and low inflation environment would linger into 2011 and as a result there is a "case for further action" on the monetary policy front. Mr. Bernanke said the Fed might expand its holdings of longer-term securities. He also said that the Fed has little experience in judging the economic effects of more asset purchases.
..the dollar will fall lower and probably substantially lower. $1.50 to $1.70 to the euro is on the cards. The Yen, the Swiss Franc and the Pound Sterling and just about all other currencies will try to follow the dollar down. This isn't just a ‘pebble in the pond", but a great big boulder. The ‘ripples will likely start over this weekend. They will hit every market there is.
EACTIONS IN THE GOLD, SILVER AND OIL MARKETS
· A look in the last week at these three markets has shown quick reactions to the falling dollar. All three went up, but both silver and gold went up the amount that the dollar fell. If that were to continue and the dollar to fall say to $1.70 against the euro, then without the gold price being pushed up by demand, the gold price would go up to $1,663.57 from the current $1,370. In the euro the gold price would not rise at all.
· Silver would follow a similar path too. Technically to discount the dollar's fall alone the price would go from $24.3 to $29.51.
· We know that O.P.E.C. members are calling for a $100 oil price to remove the impact of a falling dollar at current levels. With a $1.70: €1 dollar we should be looking much higher here too.
The U.S. Balance of Payments would look great initially [except on the China account]. But internally there would be howls, as inflation took off at a rate of knots. The point made by the Fed that they don't have experience in this area worries us. They might have a tiger by the tail. When Volker shattered 25% inflation in the mid-eighties, there were very different circumstances, such as a healthy economy and undisputed dollar hegemony. The U.S. dominated the gold market - with European cooperation. This time they have none of these and such actions won't work without them!
Possibly the end of the beginning of the decline and fall of the American Empire!
(Click on heading for full story)
..the dollar will fall lower and probably substantially lower. $1.50 to $1.70 to the euro is on the cards. The Yen, the Swiss Franc and the Pound Sterling and just about all other currencies will try to follow the dollar down. This isn't just a ‘pebble in the pond", but a great big boulder. The ‘ripples will likely start over this weekend. They will hit every market there is.
EACTIONS IN THE GOLD, SILVER AND OIL MARKETS
· A look in the last week at these three markets has shown quick reactions to the falling dollar. All three went up, but both silver and gold went up the amount that the dollar fell. If that were to continue and the dollar to fall say to $1.70 against the euro, then without the gold price being pushed up by demand, the gold price would go up to $1,663.57 from the current $1,370. In the euro the gold price would not rise at all.
· Silver would follow a similar path too. Technically to discount the dollar's fall alone the price would go from $24.3 to $29.51.
· We know that O.P.E.C. members are calling for a $100 oil price to remove the impact of a falling dollar at current levels. With a $1.70: €1 dollar we should be looking much higher here too.
The U.S. Balance of Payments would look great initially [except on the China account]. But internally there would be howls, as inflation took off at a rate of knots. The point made by the Fed that they don't have experience in this area worries us. They might have a tiger by the tail. When Volker shattered 25% inflation in the mid-eighties, there were very different circumstances, such as a healthy economy and undisputed dollar hegemony. The U.S. dominated the gold market - with European cooperation. This time they have none of these and such actions won't work without them!
Possibly the end of the beginning of the decline and fall of the American Empire!
(Click on heading for full story)
Friday, July 9, 2010
So what is the "right" price for gold?
John Nadler of KITCO( click on title for full article) opines:
Of course, now we've heard that such a price should be anywhere between $8,000 and even $15,000, but I still think that between $680 and $880, or in that range, gold would be much more in balance with its fundamentals.
Eight hundred is a number that you saw come up in the GFMS surveys as a potential target, and they gave it up to two years (even with the potential overshoot of up to $1,320).
Yeah, that could still happen, but it's all a cycle, a phase in the markets. It's currently driven by a circumstance (Europe), but not some "new dynamic" (a return to a gold-based world) that has suddenly become the new paradigm.
You also have had Barclays Wealth Management coming out, saying they envision $800 gold by January 2012, and saying in an interview on TheStreet.com that they're "shorting the GLD and buying put options on gold for Jan 2012."
Further, what am I to make of Societe Generale, which also said in April of this year that $800 gold is in the cards before the end of 2010? And so on; I am not alone in computing such figures.
Of course, now we've heard that such a price should be anywhere between $8,000 and even $15,000, but I still think that between $680 and $880, or in that range, gold would be much more in balance with its fundamentals.
Eight hundred is a number that you saw come up in the GFMS surveys as a potential target, and they gave it up to two years (even with the potential overshoot of up to $1,320).
Yeah, that could still happen, but it's all a cycle, a phase in the markets. It's currently driven by a circumstance (Europe), but not some "new dynamic" (a return to a gold-based world) that has suddenly become the new paradigm.
You also have had Barclays Wealth Management coming out, saying they envision $800 gold by January 2012, and saying in an interview on TheStreet.com that they're "shorting the GLD and buying put options on gold for Jan 2012."
Further, what am I to make of Societe Generale, which also said in April of this year that $800 gold is in the cards before the end of 2010? And so on; I am not alone in computing such figures.
Gold and silver push to fresh highs
09-Jul-10
10:22 COMDX
Gold now up $17.70 to $1213.80; silver is higher by 31.3 cents to $18.185
10:22 COMDX
Gold now up $17.70 to $1213.80; silver is higher by 31.3 cents to $18.185
Thursday, July 8, 2010
• Behind the gold takedown… central banks
Mystery solved. We think.
Given the news cycle and the buying habits of the world’s central banks of late, we’ve been wondering why gold has traded down nearly $40 bucks from its near-historic high last Thursday. And has stayed there…
Today, we believe, despite becoming net buyers of gold for the first year since 1988, central banks are “pawning” that gold at the Bank for International Settlements (BIS) -- the central bankers’ central bank -- and helping to depress the price.
“When Reserve Bank of India bought 200 tonnes of International Monetary Fund (IMF) gold in November last year,” confirms a report from International Business Times, “the bullion market received one of the biggest boosts ever and the gold prices soared in the subsequent weeks to new record heights. Reason for this was that all central banks across the globe have been increasing their gold holdings fearing the recession looming large over the world.”
Commercial banks, too, appeared to be getting into the game. For individual buyers of the yellow metal, the arrival of the big global institutions signaled the next phase of a sustained bull market in gold that would, in turn, vindicate years of nail-biting insecurity and the endurance of hushed cocktail party snickers.
Why then the reversal in the price over this past week?
While it’s not clear if India’s is among them, central banks have swapped 349 metric tons of the yellow metal with the BIS, according to The Wall Street Journal -- 82% of all the gold that central banks snapped up last year.
In exchange, the BIS has handed out $14 billion in paper cash, agreeing to sell the gold back to the central banks sometime in the future, just like your friendly neighborhood tattoo parlor/pawnshop.
“At this rate,” IBT asserts “the BIS holdings represent the biggest gold swap in history.”
As you well know, “gold is often regarded as a protection against inflation and is thought to benefit from the inflationary impact of governments’ economic stimulus packages. It has also been used as a haven against another financial meltdown.”
The fear is now if banks that lent their gold are for any reason unable to make good on the loan, “the BIS could opt to sell the gold in order to get its money back, which would amount to flooding the market with an unexpected boost to the global supply.”
Worth keeping an eye on.
Given the news cycle and the buying habits of the world’s central banks of late, we’ve been wondering why gold has traded down nearly $40 bucks from its near-historic high last Thursday. And has stayed there…
Today, we believe, despite becoming net buyers of gold for the first year since 1988, central banks are “pawning” that gold at the Bank for International Settlements (BIS) -- the central bankers’ central bank -- and helping to depress the price.
“When Reserve Bank of India bought 200 tonnes of International Monetary Fund (IMF) gold in November last year,” confirms a report from International Business Times, “the bullion market received one of the biggest boosts ever and the gold prices soared in the subsequent weeks to new record heights. Reason for this was that all central banks across the globe have been increasing their gold holdings fearing the recession looming large over the world.”
Commercial banks, too, appeared to be getting into the game. For individual buyers of the yellow metal, the arrival of the big global institutions signaled the next phase of a sustained bull market in gold that would, in turn, vindicate years of nail-biting insecurity and the endurance of hushed cocktail party snickers.
Why then the reversal in the price over this past week?
While it’s not clear if India’s is among them, central banks have swapped 349 metric tons of the yellow metal with the BIS, according to The Wall Street Journal -- 82% of all the gold that central banks snapped up last year.
In exchange, the BIS has handed out $14 billion in paper cash, agreeing to sell the gold back to the central banks sometime in the future, just like your friendly neighborhood tattoo parlor/pawnshop.
“At this rate,” IBT asserts “the BIS holdings represent the biggest gold swap in history.”
As you well know, “gold is often regarded as a protection against inflation and is thought to benefit from the inflationary impact of governments’ economic stimulus packages. It has also been used as a haven against another financial meltdown.”
The fear is now if banks that lent their gold are for any reason unable to make good on the loan, “the BIS could opt to sell the gold in order to get its money back, which would amount to flooding the market with an unexpected boost to the global supply.”
Worth keeping an eye on.
Gold will soar - heres why
From Richard Russell in Dow Theory Letters:
learn more about Dow Theory Letters here http://ww2.dowtheoryletters.com/
...As I've said a thousand times, Fed Chief Bernanke will absolutely not accept deflation...
Shrewd gold-accumulators are well aware of [this]. As the deflationary and deleveraging forces press on the US economy, the Bernanke Fed is ready to devalue the US dollar in its ("whatever it takes") battle to hold back deflation.
Let's boil the whole thing down to three sentences.
(1)The Fed will not tolerate the growing forces of deflation.
(2) To combat the deflationary forces, the Fed will devalue the dollar by printing trillions more of Federal fiat money.
(3) Once it is realized that the Fed is on the path to devalue the dollar, there will be a panic to buy and own gold.
learn more about Dow Theory Letters here http://ww2.dowtheoryletters.com/
...As I've said a thousand times, Fed Chief Bernanke will absolutely not accept deflation...
Shrewd gold-accumulators are well aware of [this]. As the deflationary and deleveraging forces press on the US economy, the Bernanke Fed is ready to devalue the US dollar in its ("whatever it takes") battle to hold back deflation.
Let's boil the whole thing down to three sentences.
(1)The Fed will not tolerate the growing forces of deflation.
(2) To combat the deflationary forces, the Fed will devalue the dollar by printing trillions more of Federal fiat money.
(3) Once it is realized that the Fed is on the path to devalue the dollar, there will be a panic to buy and own gold.
Government not true to its Founding Principles?
Rather than remaining true to its founding principles, successive leaderships have led the country deeper and deeper into foreign entanglements, and further and further down the road of populism of the sort that has left Europe gasping for breath.
The situation has now reached a crossroads. In one direction, the direction we here at Casey Research steadily advocate, there is real hope. That hope is based on remembering the principles of self-reliance that made America so economically powerful in its early career – a haven with a relatively short list of reasonable laws and regulations, administered by a minimal bureaucracy supported by a modest and simplified tax code.
Economic historian Niall Ferguson recently commented on the surprising lack of dialogue about this path in America. You can, and should, watch this video by clicking on the headline above.
The situation has now reached a crossroads. In one direction, the direction we here at Casey Research steadily advocate, there is real hope. That hope is based on remembering the principles of self-reliance that made America so economically powerful in its early career – a haven with a relatively short list of reasonable laws and regulations, administered by a minimal bureaucracy supported by a modest and simplified tax code.
Economic historian Niall Ferguson recently commented on the surprising lack of dialogue about this path in America. You can, and should, watch this video by clicking on the headline above.
The Gold Bull market
The U.S. turned 234 years old yesterday, and yet over half of the nation's money supply was created since Helicopter Ben took over the flight controls four years ago. No wonder gold is in a full fledged bull market.
David A. Rosenberg, Chief Economist & Strategist, Gluskin Sheff & Associates Inc.
David A. Rosenberg, Chief Economist & Strategist, Gluskin Sheff & Associates Inc.
Friday, April 3, 2009
Very bearish: World's largest gold buyer halts imports
India, the world's largest buyer of gold, has stopped importing the precious metal as residents are scrapping jewelry and coins to take advantage of high prices.
Dealers said there were no gold imports in February or March.
Even in January - the middle of the gift-giving wedding season - India imported just 1.8 million tonnes, down nearly 90 percent from a level of 14 tonnes a year earlier, industry data showed.
Dealers said there were no gold imports in February or March.
Even in January - the middle of the gift-giving wedding season - India imported just 1.8 million tonnes, down nearly 90 percent from a level of 14 tonnes a year earlier, industry data showed.
Wednesday, February 25, 2009
Market Reflections 2/24/2009
Reassuring comments from Federal Reserve Chairman Ben Bernanke triggered a big afternoon rally in banking shares and a big rally for the stock market. Bernanke downplayed the risk that banks will be nationalized anytime soon, stressing that their greatest value lies in their existing structure. Bank shares, the market's central area of weakness, jumped as much as 20 percent. The S&P 500 rose 4.0 percent to 773.14.
The rush back into risk hurt the dollar which fell more than 1 cent against the euro to end at $1.2850. Treasuries were little changed despite the movement into stocks. Demand was very strong for today's 4-week and especially 2-year auctions. Oil gained as stocks gained, up 3.9% for April WTI to $39.93. Gold fell back after failing to hold $1,000. February gold fell 2.5 percent to $970.50.
The rush back into risk hurt the dollar which fell more than 1 cent against the euro to end at $1.2850. Treasuries were little changed despite the movement into stocks. Demand was very strong for today's 4-week and especially 2-year auctions. Oil gained as stocks gained, up 3.9% for April WTI to $39.93. Gold fell back after failing to hold $1,000. February gold fell 2.5 percent to $970.50.
Tuesday, February 24, 2009
Market Reflections 2/23/2009
News that the government will raise its stake in Citigroup gave the bank's shares a big lift but failed to ease wider concern whether and when the banking sector will begin to recover. Driving the market to lows was a CNBC report late in the session that American International Group, the insurer that has already taken $150 billion in government funds, is asking for more money. CNBC said the insurer will post a $60 billion loss next week, a loss that will trip rating cuts and require it to raise cash.
Stocks fell very steeply with the S&P 500 down 3.5 percent to 743.33. Other markets were steady. The dollar ended at $1.2711 against the euro with the 10-year note little changed at 2.77 percent. Crude fell about 75 cents to end at $38.15. Momentum has come to a stop in the oil market though some are warning that falling demand will offset OPEC output cuts. Chinese trade data show a 10 percent year-on-year drop in oil imports during January. Gold held quietly under $1,000, ending at just over $996. There's talk that a move to the $1,005 level will trip a rush of buy stops that will quickly push it over the record $1,033.
Stocks fell very steeply with the S&P 500 down 3.5 percent to 743.33. Other markets were steady. The dollar ended at $1.2711 against the euro with the 10-year note little changed at 2.77 percent. Crude fell about 75 cents to end at $38.15. Momentum has come to a stop in the oil market though some are warning that falling demand will offset OPEC output cuts. Chinese trade data show a 10 percent year-on-year drop in oil imports during January. Gold held quietly under $1,000, ending at just over $996. There's talk that a move to the $1,005 level will trip a rush of buy stops that will quickly push it over the record $1,033.
Wednesday, January 28, 2009
Gold & Commodities, encore comment
Market focus has shifted almost completely to the size and impact of the U.S. fiscal stimulus package currently under construction.
Few are considering the consequences of such reckless spending, least of all how it will be paid for.
The unspoken truth is that the Fed may eventually "monetize," or print new money to finance the Treasury Dept.'s funding needs, if necessary.
I think the assumption that this new government spending will debase the U.S. dollar at an accelerating rate is going to become apparant by year-end.
The rush to inflation hedges like gold and oil, should likewise accelerate before the year is out.
Few are considering the consequences of such reckless spending, least of all how it will be paid for.
The unspoken truth is that the Fed may eventually "monetize," or print new money to finance the Treasury Dept.'s funding needs, if necessary.
I think the assumption that this new government spending will debase the U.S. dollar at an accelerating rate is going to become apparant by year-end.
The rush to inflation hedges like gold and oil, should likewise accelerate before the year is out.
Markets 1/27/2009
Negative news couldn't put a dent in the stock market where the Dow industrials gained 0.7 percent. Shares of financial firms were big gainers despite poor earnings from American Express which is raising its bad debt allowance further. News after the market close was definitely negative as online portal Yahoo posted a surprise loss, a big contrast to powerhouse earnings posted last week by Google.
Talk of bulging supplies and news that Shell is selling floating inventory sent a chill through the oil market where oil fell steeply to end at $41.85. Gold couldn't quite hold over $900, ending slightly lower at $898.
The dollar was little changed at $1.3150 against the euro while Treasuries were mixed, with yields rising slightly for T-bills and falling for bonds.
Talk of bulging supplies and news that Shell is selling floating inventory sent a chill through the oil market where oil fell steeply to end at $41.85. Gold couldn't quite hold over $900, ending slightly lower at $898.
The dollar was little changed at $1.3150 against the euro while Treasuries were mixed, with yields rising slightly for T-bills and falling for bonds.
Tuesday, January 27, 2009
Gold
The up move in gold has stalled.
It looks like the $90 barrier for GLD( Spider Gold Trust - Exchange Traded Fund) held a third time since September. The $50 level is likewise formidable resistance for RGLD (Royal Gold Inc.)
Some support on the charts exists at $81 for GLD and at $45 and then $41 for RGLD.
Lets assume these are the current trading ranges. An hypothetical purchase of RGLD at the bottom of this range ($41) in mid December and a sale at year end at $49 would have made a simple 19.5% gain in about a month and a half. Repurchasing it again at $41 in mid January (14th) and selling it yesterday at $49 would have made another 19.5% simple gain, this time in less thana month.
The moral of the story: a little time spent looking at a chart on Stockcharts.com or bigcharts.com will help identify these ranges. It is possible to make a little money in these dire times with simple trades like thie.
DISCLAIMER: this is an illustration. Trading is not suitable for everyone, especially the desperate, and there is a considerable risk of loss, possibly all of the money bet. Get help from a knowledgeable professional, because these current patterns may not repeat and probably wont.
Nothing written here is meant as investment advice and we are not responsible in any way for your use of this information. Thank you legal department.
It looks like the $90 barrier for GLD( Spider Gold Trust - Exchange Traded Fund) held a third time since September. The $50 level is likewise formidable resistance for RGLD (Royal Gold Inc.)
Some support on the charts exists at $81 for GLD and at $45 and then $41 for RGLD.
Lets assume these are the current trading ranges. An hypothetical purchase of RGLD at the bottom of this range ($41) in mid December and a sale at year end at $49 would have made a simple 19.5% gain in about a month and a half. Repurchasing it again at $41 in mid January (14th) and selling it yesterday at $49 would have made another 19.5% simple gain, this time in less thana month.
The moral of the story: a little time spent looking at a chart on Stockcharts.com or bigcharts.com will help identify these ranges. It is possible to make a little money in these dire times with simple trades like thie.
DISCLAIMER: this is an illustration. Trading is not suitable for everyone, especially the desperate, and there is a considerable risk of loss, possibly all of the money bet. Get help from a knowledgeable professional, because these current patterns may not repeat and probably wont.
Nothing written here is meant as investment advice and we are not responsible in any way for your use of this information. Thank you legal department.
Friday, January 23, 2009
Market Reflections 1/22/2009
Stocks fell Thursday after Microsoft missed estimates and announced a massive layoff. The Dow industrials dipped below 8,000 briefly but did end off lows at 8,122 for a 1.3 percent decline on the day. Shares of Microsoft fell 12% to $17.11. Earnings after the close were mixed with Google beating estimates mildly but Advanced Micro Devices missing estimates badly and warning of a continuing steep decline in sales.
Economic data were dismal as usual including major declines in housing starts and permits, results that aren't pointing to any recovery in the housing sector or the banking sector for that matter. Weekly jobless claims showed significant increases that point to another month of major payroll contraction. But the most talked about economic data was GDP out of China which showed the greatest slowing since 2001. The day's data had little effect on the dollar which ended at $1.3002 against the euro.
Inventory data on petroleum products showed another week of major builds, builds indicating contraction in demand and which weighed on oil prices. Oil for March delivery fell more than $1 to end at $42.89. Gold firmed slightly to $858.
Economic data were dismal as usual including major declines in housing starts and permits, results that aren't pointing to any recovery in the housing sector or the banking sector for that matter. Weekly jobless claims showed significant increases that point to another month of major payroll contraction. But the most talked about economic data was GDP out of China which showed the greatest slowing since 2001. The day's data had little effect on the dollar which ended at $1.3002 against the euro.
Inventory data on petroleum products showed another week of major builds, builds indicating contraction in demand and which weighed on oil prices. Oil for March delivery fell more than $1 to end at $42.89. Gold firmed slightly to $858.
Thursday, January 22, 2009
Gold Bounces
Gold... The shiny metal broke its recent trend of rallying along side the dollar yesterday, but the sell off was small... Negligible at best... But a breaking of the trend nevertheless.
I believe that Gold will get caught up with the currencies in the Obama bounce, but that will be a temporary thing...
I believe that Gold will get caught up with the currencies in the Obama bounce, but that will be a temporary thing...
Wednesday Market Review
Highlights
Stocks rallied strongly on Wednesday, nearly making up for Tuesday's rout. Financial shares posted big gains on bargain hunting led by PNC, up 37 percent, and Bank of America and Citigroup, both up 31 percent. Shares of IBM gained 12 percent after the computer giant easily estimates and raised 2009 guidance. Apple is likely to be a big gainer on Thursday's opening after the computer and digital device maker also easily beat estimates. But not all companies will be posting gains as disk drive maker Seagate and online marketplace eBay both missed estimates after the close.
Economic data was once again bleak as the housing market index edged down to new depths that point, despite lower mortgage rates, to further declines in home sales. The dollar retraced some of its steep gains on Tuesday, giving back about 1-1/2 cents to $1.3043 against the euro. Money moved out of the safety of Treasuries but only very slightly with the 2-year yield ending at 0.76 percent, up 6 basis points from yesterday.
Crude oil, moving in line with the stock market as a barometer of economic growth, rose 8% to $44.16. Gold edged slightly lower to $851
Stocks rallied strongly on Wednesday, nearly making up for Tuesday's rout. Financial shares posted big gains on bargain hunting led by PNC, up 37 percent, and Bank of America and Citigroup, both up 31 percent. Shares of IBM gained 12 percent after the computer giant easily estimates and raised 2009 guidance. Apple is likely to be a big gainer on Thursday's opening after the computer and digital device maker also easily beat estimates. But not all companies will be posting gains as disk drive maker Seagate and online marketplace eBay both missed estimates after the close.
Economic data was once again bleak as the housing market index edged down to new depths that point, despite lower mortgage rates, to further declines in home sales. The dollar retraced some of its steep gains on Tuesday, giving back about 1-1/2 cents to $1.3043 against the euro. Money moved out of the safety of Treasuries but only very slightly with the 2-year yield ending at 0.76 percent, up 6 basis points from yesterday.
Crude oil, moving in line with the stock market as a barometer of economic growth, rose 8% to $44.16. Gold edged slightly lower to $851
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