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IMO, the only thing that will drive the PoG is DEMAND-- we first seen it with oil, copper, iron, molybdenum, zinc, lead and now nickel, and not because of "declining U.S. dollar, looser global monetary policy, rising Asian demand and geopolitics play supportive roles." but only because of rising Asian DEMAND.
-- and according to the chart posted below, anything other than rising Asian DEMAND is bullshit. Gold has little or no correlation to the US markets nor does it have any proper correlation to the dollar.
Gold has lagged other commodities badly-- Merriam-Webster's dictionary defines "lag" as:
1 a : to stay or fall behind : LINGER, LOITER b : to move, function, or develop with comparative slowness c : to become retarded in attaining maximum value
Let's face it, gold is retarded, but that doesn't mean it won't get a turn at being in a state of scarcity. I believe that gold is a classic late cycle play on the Chinese economy.
Which is why I'm bullish for the year.
...and yes, we are short-term overbought and due for a correction, but my bet is to buy the pullback.
oddly enough-- I haven't been watching any bike racing -- and I still have a current subscription with cycling.tv ... The last controversy with Quickstep got me to finally ignore the sport.
...fear not, I'm still a fanatic and now I'm looking to replace my MTB.
With all this brutal winter riding, I (not surprisingly) snapped the swingarm (chain-stay) off the old Jamis. I also cracked the small lever at the pivot (bell-housing) to the shock.
The bike is in a sorry state, and parts are hard to come by.
Anyway, I want to stay with a full-suspension set-up, so I'm down to two choices: Specialized Epic Marathon or an Ellsworth Truth.
otoh, I might take a little time away from riding-- and take up speed skating (?) -- in the community that I live in, there's a great outdoor rink that doesn't seem to be used very much.
I wonder how fast I could skate, and how much it would hurt if I crashed into the boards at full throttle...?
...and about your report, you want to take the time to write it, I'll certainly sit here and take the time to read it.
thanks.
Sold Trican Well Services (TCW-TSX) $21.70 < +14% >
Climate Change Revisited
By Doug Hornig
http://www.investorsinsight.com/wwnk_va_print.aspx?EditionID=450
Weekly Investor Alert
http://www.usfunds.com/docs/alert/alert_print.asp
I ride in the winter myself-- so I took great interest in the story.
thanks for posting
I have a small circle of friends... no, I mean, a small circle of stocks that I regularly trade-- TCW just happens to be one of them.
T/A got me in-- the blast up was pure luck.
thanks for noticing.
You have to be careful with all the assumptions and linkages between markets ... creating a scenario of gloom and doom, and then positioning your portfolio for the worst possible outcome is a quick path to poverty.
Since March of 2003 the Second Gulf War has been absorbing about a 1-billion US dollars per week-- yet that's when the markets bottomed out and began this terrific bull run-- not only that, we're going onto the fifth year with the nice folks at the Stock Traders Almanac pronouncing "January Barometer a positive reading for 2007. The full-month January Barometer has a brilliant 13 and 1 record in Pre-Election years. This positive reading reinforces our 2007 forecast for the year of 10-15% gains to the highs of 2007."
So is it safe to assume that the only thing that can derail this bull-market is peace in the Middle-East...???
-- don't get causality confused with casualty.
I will agree is that precious metals and oil/gas are the only two commodities (that I follow) that should be played from the long side ... everything else, including uranium is consolidating.
note the accumulation-- very bullish.
let me tell-ya something-- it's all bullshit.
-- according to my charts, I'm speculating we'll see gold breaking through $800 sometime towards the end of this year ... so why time it...?
I'm also speculating that the fed will reduces rates as opposed to raising them.
I'm also speculating that small caps will grossly outperform big caps.
-- anything on the Russel 2000 will fly.
if I'm right, then there's no need to time your entry point-- you'd be better off buying a PM mutual fund that specialises in small caps and sit on your hands ... so why time it...?
fwiw, buy now and hold for exactly 1-year.
that's my call.
fun when they start to work
Silvercorp looks good to me here-- although it's probably a little too senior for your taste...?
Bot Trican Well Services (TCW-TSX) $19.08
natgas up 12%
easy guys, no need to buy it all at once.
did you ever buy into IE.TO...?
...just curious
what a correction-- but it now looks like a good long...
thanks
China's economy -- Still roaring
http://www.economist.com/daily/news/displaystory.cfm?story_id=8406955
China's economy grew by a dramatic 10.7% last year, but this year will be slightly quieter
ROSS PEROT, a populist American politician, predicted in the early 1990s that a trade pact with Mexico would create a ‘‘giant sucking sound’’ as jobs headed south. Instead, America experienced full employment. So giant-sucking-sound detectors turned to China. In time, China became the workshop of the world, although by then America had long hollowed out much of its manufacturing.
Now there really is a giant sucking sound—not one made by the flight of jobs, but by China ferociously hoovering up commodities and raw materials. Although it accounts for roughly 4% of global GDP (measured at market exchange rates), China consumes 30% of the world’s supply of minerals and other raw materials. This time around, the world has not only heard the sucking sound, but has also felt its effects, as the prices of commodities such as iron ore, copper and zinc have soared, doubling or tripling in just a couple of years.
How has China suddenly developed such a big appetite? The economy has been growing at a dizzying rate, recently by double digits. Much of this growth is driven by fixed-asset investment, which now accounts for more than 50% of GDP a year—a higher proportion than that of any other country at any time in history. This relentless capacity for expansion has created an insatiable demand for raw materials.
China also wastes a lot. Take energy consumption. China required 4.3 times as much energy as America in 2005 to produce one unit of GDP, up from 3.4 times in 2002. It can be argued that much of China’s new investment has not yet reached optimal efficiency. That may be true, but it does not explain why things are getting worse: China consumed 15% more energy per unit of GDP in 2005 than it did in 2002. India, also a rapidly expanding economy, consumes only 61% as much energy as China per unit of GDP.
China’s wasteful growth has brought joy to commodity producers and their bankers and shareholders worldwide. With rising profitability and stock prices, they have been happily expanding mining operations and acquiring or merging with rivals. But there are reasons to believe that the surge in commodity prices worldwide has run out of steam.
There is strong evidence that the current cycle of China’s investment-led growth has peaked. A clear sign of overheating is the increase in accounts receivable. Although sales appear robust, Chinese firms are beginning to find it difficult to get paid in cash, either because their buyers cannot turn over their own stocks fast enough or because they have trouble borrowing money to finance their purchases. The receivables of the 166 largest state-controlled Chinese firms rose by 14% in the first half of 2006 from a year earlier. For over a third of these firms, receivables now account for more than 30% of total sales, which is twice as high as the average gross margin for Chinese firms. It was the escalating volume of ‘‘triangular debts’’ or receivables between different domestic firms that led to the overheating and consequent severe austerity programme in the mid-1990s.
China’s growth has become too expensive in many ways. Overinvestment pulls up prices of raw materials but, simultaneously, overcapacity depresses the prices of finished products. Whereas prices of imported raw materials rose sharply between 2003 and 2005, those of Chinese exports to America fell by 5.2%. As a net importer of raw materials and a net exporter of finished products, China is paying a high price for its growth, particularly to commodity-producing countries.
China needs a break to catch its breath, in more ways than one. As anyone who has been to the mainland in recent years knows, all the major cities are choking with smoke and environmental damage has reached appalling levels. The government knows this and during 2006 tightened the screw on the economy several more turns. Interest rates will continue to rise. The trouble is that much of the liquidity comes from hot money, which finds its way into China around foreign-exchange controls in anticipation of a yuan appreciation. Each rise in interest rates only encourages more speculative inflows. This means that China will inevitably allow the yuan to appreciate further in 2007 (though not as sharply as worriers in Washington, DC, would like), while also further relaxing capital controls, to keep the growth of money supply at least partly in check. The central bank has taken other measures to reduce liquidity, including telling banks not to lend to ‘‘overheated sectors’’ such as steel, cement, coal and power, and forcing them to buy central-bank bills.
These measures are already checking investment growth. The economy will grow more slowly in 2007. This will help the country make the transition from investment-led growth to expansion led by private consumption. The slowdown of the American economy, China’s largest export market, will further force China to focus on stimulating domestic demand.
All this suggests that the good times for commodity producers are about to come to an end. Although commodity producers will mourn it, a quietening of China’s roar will help sustain its growth. And, for the health of China and its neighbours, a pause for breath—of cleaner air, one hopes—will definitely be welcome.
Energy Picks for 2007
By Catharina Milostan
http://news.morningstar.com/article/printArticle.asp?id=181991
US investor fuels concern on China stocks
SHANGHAI - Jim Rogers, a prominent US fund manager, has fueled concern about a bull run in China's stock market, analysts said, by suggesting in a TV interview this week that stocks may have become overvalued.
http://www.chinadaily.com.cn/china/2007-01/26/content_794112.htm
The majority of stock bloggers are now bearish (a little more than last September)
http://tickersense.typepad.com/ticker_sense/2007/01/historical_blog_2.html
c'mon, you need to be more diplomatic -- like me...!
<vbg>
the thread is in the free section, therefor I cannot "ban" anyone.
but what I can do if you insist on being a pain in the ass-- is to report a TOS
yes please, fuck off...!!!
in regards to gold stocks-- what I would like to see is a correction back down to the 200-day MA (XGD.TO) and a successful test of support-- I'm not wildly bullish at the moment simply because of seasonality.
anyway, take a look a 3-year weekly of the GLD-- I think a move down to 600 and then I can see new highs on the year.
and why would it make a difference in what direction you post...?
you are posting on my thread.
the chart looks accumulative-- but don't understand the business.
here's what I don't get-- why do you and Andy post on this thread when you damned well know that I'm a Catholic, a born-again Christian and in your little mind, a so-called "zionist?"
This thread never had a racist slant until you two showed up.
-- in fact, the only colour I'm interested in is GREEN...!!!
Time To Become A "Gloom & Doomer"?
Gary Halbert's Weekly E-Letter
My Early Indoctrination
Not long after starting my career in the investment business in 1976, I found myself with a small group of rather eclectic clients. I'm not sure how it happened, but when clients like you, they tend to refer their likeminded friends and business associates to you. When I say these clients (not all, mind you) were rather eclectic, I mean that they were very conservative politically (that was one reason they liked me), and they were also very much into the "conspiracy theories" that so dominated the 1970s and '80s and to a much lesser extent, even today.
By conspiracy theories, I mean the Trilateral Commission, the Council On Foreign Relations, the Bilderbergers, etc., etc. At the ripe old age of 24 in 1976, I bought into the conspiracy theories hook line and sinker -- at least for a few years. I subscribed to all sorts of publications that claimed to track the conspiracy groups and expose their intentions. It was fun for a while.
[FYI, my early infatuation with the conspiracy theories ended after a few years when I concluded that: 1) all these powerful people around the world couldn't agree on that many things over several generations; and 2) the quasi-socialism they supposedly desired would bankrupt their capitalistic businesses that made them so rich and powerful. So my interest in the conspiracy theories waned by the end of the 1970s.]
This same group of early clients (again, not all) was also of the gloom and doom mentality. They believed that the US was headed for a new Depression and financial crisis for a variety of reasons, ranging from deficit spending to moral decay to the plans of the conspiracy groups. This, too, was very easy to buy into for an impressionable 24 year-old. So in addition to the conspiracy theories, I was also indoctrinated into the gloom-and-doom mentality.
By mid-1977, I had subscribed to dozens of newsletters and other publications that focused on these negative issues, so it was no surprise that when I started my own newsletter in late 1977, I was not only a conservative politically, but also a gloom-and-doomer. What a combination!
This is a long introduction to say this: Because of all the newsletters and other publications I subscribed to a long time ago, I am still on a LOT of mailing lists. I see a lot of the promotional mailings, and now Internet promotions, that many of you probably get as well. There are some common threads among most of these promotions that are intentionally designed to play on our emotions and get us to subscribe and/or invest our hard-earned money. I will explain these common threads as we go along.
http://www.investorsinsight.com/forecasts_va_print.aspx?EditionID=454
yes, this is bad-- the doping problem become bigger
hopefully they blow this thing apart before the start of the TdF
and we actually see something that resembles fair play in cycling biggest event
I'm thinking about market sentiment-- and one of my favorites is the "Sprott Outrage" indicator ... whenever I see John Embry becoming unglued I know we have a strong buying opportunity (in his fund) regarding the PM sector ... Right now, I'm seeing Eric Sprott strongly defending his energy fund on both RobTV and through a series of articles that are being propagated through various channels on the internet.
dummies sell at market bottoms, and Sprott is now strongly defending his funds from redemptions
fwiw, bear markets don't normally run for much longer than 18 months
markets tend to move:
1/3 up
1/3 down
1/3 sideways
...and like I was saying-- sloppy trading for the next six months taking into account that the sector (XEG.TO) topped out about 9 months ago -- 15 months ago for the natural gas sector
<vbg>
1930's...?
try the 16th century
generally these boards are filled with manic depressives who'll latch on to any argument to promote their Mercantilistic view of the world
http://en.wikipedia.org/wiki/Mercantilism
don't worry, be happy
the markets rose last year, they'll continue to rise this year
-- and the depressives will continue to miss out on the greatest bull market of all time
Cyclingnews went a little farther and added some analysis-- here's the last paragraph of their story:
The prevalence of asthma in the professional peloton has been the subject of debate for more than a decade. One study before the 1996 Olympics showed that 45% of cyclists had asthma that required medication. While other forms of corticosteroids offer some performance enhancing benefit, inhaled versions such as those found in asthma drugs, and beta-agonists like salbutamol, are not considered to be performance enhancing, and are allowed in competition with a TUE.
http://www.cyclingnews.com/news.php?id=news/2007/jan07/jan19news
Loveless brothers
Jan 11th 2007 | MOSCOW
From The Economist print edition
Another Russian gas conflict was averted, but a short oil war broke out instead. Europe should take heed
http://www.economist.com/displaystory.cfm?story_id=8521935
Gold, silver, platinum and palladium price forecasts for 2007
By: Lawrence Williams
http://www.mineweb.net/gold_silver/574487.htm
LONDON (Mineweb.com) --Giving credit where credit is due, Mineweb is showing here the precious metals price forecasts, and reasoning, for 2007 from Ross Norman of thebulliondesk.com precious metals website for this year’s London Bullion Market Association annual competition. Last year Norman was the winner in the LBMA competition gold price category and runner up for the other three precious metals. Over the past five years he has claimed two firsts, a second and a third in a field which includes leading bullion analysts from the global precious metals market, including Mineweb correspondent Rhona O’Connell.
Predicting precious metals prices can be a pretty pernicious exercise as too often one is left with egg on one’s face when the reality may prove far away from the prediction, however good the analyst. This year Mineweb will also be running a similar competition, open to all its readers, but just seeking predictions on the gold high, low, average and year-end prices for 2007. Details will be published on Mineweb this weekend. We hope a good number of readers will participate.
Norman is universally bullish on precious metals prices again this year following good runs in the previous few years.
ROSS NORMAN’S 2007 FORECASTS AND REASONING
Gold - High $850.00. Low $580. Average $716.
"We remain manifestly bullish for gold. Over the last five years gold has notched up a successive 23%, 25%, 5%, 20% and now a 23% rise ; for 2007 we expect the gold price to rise by a comparatively modest 18% to an average of $716, with a possible spike to an all time record high of $850. Whilst a weakening US dollar, stagnating mine production, buoyant oil prices, ongoing geopolitical tension and the spectre of inflation may provide a positive backdrop, we expect that sentiment by institutional investors demand growth arising from a broader access to gold both across a broader geographic spectrum as well as in terms of more products such as ETFs and bullion-linked indices. However, the fragmentation of the gold market that follows in consequence may well lead to increasing problems with liquidity and thus price volatilitity is also expected to remain high."
Silver - High $14.85. Low $11.95. Average $13.60.
"Despite less than inspiring fundamentals, silver confounds the critics having put in successive gains of 28%, 38% and 42% over the last three years. Even these very significant rises pale compared to the increases seen in the base metals sector where many of those metals play host to silver as a by-product (rises of between 44% for copper and 148% for nickel were seen in 2006). Investor demand, however, remains resolute and is driven by the belief that mine supply is finite, while industrial and consumer demand from the newly industrialising BRICS nations are likely to lead to levels of demand for goods that the West now takes for granted. The consenus seems to be that the long term impact on commodities will be deep and will be long term. Silver remains a beneficiary of that mood and we forecast 'stronger for longer'."
Platinum - High $1495. Low $1075. Average $1350.
"After years of a supply deficit, South African miners have been working hard to close the gap - but it just keeps racing away from them. There has been an ongoing concern that high yet volatile prices could trigger massive spend by industrials looking for substitutes. With the possible exception of fuel cells, the all important auto and industrial sector remains wedded to platinum and strength in the US and Asian economies is likely to continue to fuel demand. However, jewelllery demand is expected to suffer again in 2007 with platinum as wedding bands being more than compensated for by demand for allocated loco Zurich investment platinum."
Palladium - High $550. Low $290. Average $435.
"Late 2006 and 2007 has seen supply disruptions of oil, gas and indeed palladium from Russia that are vaguely reminiscent of the palladium shenanigans of 8 years ago. The effect back then was explosive upon the palladium price and there is merest possibility that we may be brewing for a second round of Russian delayed supplies which could potentially become the main issue affecting palladium in 2007. That aside, we remain positive about palladium prices notwithstanding concerns of a slow-down in the US economy as industrial demand slows. As a comparator to platinum, palladium remains very cheap while sharing most of the same chemical properties while palladium jewellery demand is at last establishing itself. We are bullish for palladium in 2007 and expect the auto sector to continue to drive the market higher (pun intended) as palladium makes in-roads (pun intended) into platinum usage on diesel catalytic convertors - a market which had historically very much favoured platinum."
2007 Energy Macro Outlook -- Orion Securities
• We are stepping into 2007 with a bullish outlook for crude oil. Our current forecast calls for 2007 WTI prices to average US$67.50/bbl. We think that our estimate is conservative, considering lack of spare production capacity around the world and continuing strong demand.
• Over the past seven years, OPEC used its spare capacity to make additions to world oil supply; we believe most of this spare capacity has since been used up.
• Saudi Arabia claims that it could increase its capacity to in excess of 12 MMbbl/d by 2010-2011, which we see as overly optimistic. Since 2004, commodity prices have strengthened and Saudi Arabia significantly ramped up its drilling, while its production has been declining. Although there are likely significant untapped oil resources within Saudi Arabia, we believe it will take a lot of capital and – most importantly – time to develop them.
• The world consumes over a billion barrels of oil every 12 days, and we are not finding billion-barrel pools very often – certainly not every 12 days.
• Twenty years ago, 15 fields had the capacity to produce over 1 MMbbl/d. Today, only five fields are thought capable of such levels of production.
• The EIA forecasts 2007 world oil demand to average 86.5 MMbbl/d, up 1.8% from 85.0 MMbbl/d in 2006, while supply is expected to increase 1.7% to 86.1 MMbbl/d – a shortfall of 400,000 bbl/d of production.
• The tightness in supply and no signs of a significant cooling-off of worldwide demand point to higher oil prices in 2007.
• One secure source of future oil production growth is Canada’s oil sands.
On energy-- I expect we're close to a bottom ... I wouldn't be surprised were in a stage where drillers start to rally on bad news ... but I do expect sloppier trading for the next 6-months.
that said,
Jean-Francois Tardif, portfolio manager, Sprott Asset Management was recently interviewed on RobTV and his target for oil is $200
yes, $200
So if the median for the oil/gold ratio is 15, you'd have $3000 gold.
...and all of this happening within a Clinton presidency...?
betcha the masses at large will be reminiscing about the good old days of Bush/Cheney/Rumsfeld.
ironic...
nice find-- good explanation for why the PGM markets haven't corrected along side oil, copper and gold.
I reckon PAL is a good buy (again) in this range.
yeah, it seems that it's only the anglo countries with inverted yield curves-- probably the only economies in the world with over heated real-estate markets.
the problem I have with intermarket relationships is that once the herd is looking at the same shit as the "traders in the know" it stops being a factor.
take the US inverted yield curve as an example
if trading from the short side knowingly expecting a crash because of the inversion, or because Bernanke has a copter, or because you think GWB is an asshole-- over the last 6-months, the only asshole is you and the only thing crashing is your portfolio
according to this
http://www.bloomberg.com/markets/rates/japan.html
and this
http://www.bloomberg.com/markets/rates/germany.html
yield curves around the world are surprisingly steep-- and we're all connected.
seemingly the world is booming, commerce is expanding, consumption continues to rise.
life is good...