Some entities went after gold last night and it did not work. (So far)
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I think we are going to see low rates for a long time DT. But we will also see increasing inflation. That combination is utterly essential to heavily indebted Western nations and Japan to keep debt payments low while the debt burden itself is eaten away by the effects of diminishing buying power of the dollar. Is it not obvious to anyone else around here?
Bird, do you really think they can control rates when they can’t control money flows, nothing stays the same for long. DT
They have been doing it successfully for 100 years already.
They didn’t do it before The Great Depression and that was there downfall. DT
Look, there is overwhelming support for a low rate environment amongst all of the major developed economies (G20) and many of the Emerging market economies too. Just that information alone should give you confirmation rates will move at the pace the senior Central Banks choose. They are signaling modest rate rises in 2015. I would not bet against that if I were you. What makes you think they would lose control anyway? Who would stand in opposition?
I know you obviously believe we live in a world where economies can be manipulated all the time but if they were so successful as you like to believe why are we here? Why after many, many years of trying to stave off disaster aren’t we living in a world that still doesn’t require massive manipulation, money printing and huge debts and a middle class impoverished. DT
Sorry DT. I don’t believe in any of that. Try the snack aisle. Someone will agree with you there.
Why don’t you try the peanut gallery then you can look down on the snack aisle. DT
Sounds good. See you there. Bring a pea shooter and some elastic bands. It will be a lot of fun.
If I’m not there start without me, I’m sure you will enjoy yourself. DT
Too late! I started without you. My cats are having a ball!
Cats? We talking big cats or little cats?
Keep playing with your cats, I think they enjoy your company. DT
Normal cats Al. But they are different here in Africa. Not one is spayed or neutered. I mean zero. You can’t even find a vet who is trained to do it if you wanted it done. They howl day and night and fight like the devil. None seem to back down to dogs or Hyenas either and they actually look both ways crossing the road. There is no canned catfood or kibble in these parts of Africa either so they work hard to catch rodents or forage for food scraps. Makes them seem like a different breed of animal altogether. They are incredibly intelligent.
Good companions? Notice I did not say pets!
Maybe these countries should cross-cancel debts to each other and see who wins at the end.
So Al, Cory and Gary– since faith is defined as the substance of things hoped for, the evidence of things not seen; What is the definition of ‘Mathematical certainty’??
I don’t put faith in the category of something “hoped for”.
Mathematical certainty? Provable by the laws of mathematics.
Mathematical certainty is defines as a probability = 1
Mathematical impossibility is a probability = 0
Why do you ask?
Gold failed to break through $1350 all last week. Look at the shares. They are weak today. Silver stocks have already broken lower while gold stocks tomorrow could breakdown from their consolidations. The next move in this sector is lower for a few weeks.
Not sure I agree Kenman.
Rumblings of money opening new positions on crude and corn futures overnight. Ukraine is the keystone for that activity. I remain convinced that fuel and food will be driving inflation again as it did a few years back. Indeed, crude oil and corn are the two most critical drivers to push prices up because they impact on every aspect of our daily lives.
The thing is though, food and fuel don’t show up in core inflation numbers and core inflation is what every major government in the world uses to set economic policy, budgets and even interest rates. So in other words, the backdoor way to create some inflation in the global economy (including wage push) that does not impact on interest rate setting is to find the key to driving up both oil and corn prices simultaneously.
Do I need to mention Ukraine here?
So what I am telling you is that it strikes me as probable that Ukraine is the pincer point to pressure global cost setting by creating the circumstances to manufacture critical shortages of the two most important commodities that drive headline inflation numbers.
You simply cannot withdraw any part of that regions gas, oil, grain or fertilizer supplies without heavily impacting the rest of the globe. We simply don’t have enough alternate supply to make up the difference and we will not have more in the future.
But would Russia do all that to destabilize the West? I wish I knew.
So I will make a few predictions. Expect crude to meet or exceed the 2008 high of 145 dollars and corn to similarly reach its high seen in the same year. Bets on wheat, soy, and sugar should also work out well in my opinion. This could happen very quickly so it is time to be alert for market changes. Demand does indeed matter. Crisis, conflict and politics even more. I sense a disturbance coming and probably many of you out there do too.
So it is the commodity sector that needs focus as I keep repeating here ad nauseum.
And don’t forget natural gas. The troubles in the Ukraine will probably escalate beyond Crimea. Europe will likely suffer gas shortages due to conflict. Grain and corn shipments out of Ukraine ports will be hampered by unrest, confusion, civil war or outright attack by Russia. It is quite probable the Ukrainian economy and its currency will collapse altogether.
As the primary importers of Ukrainian grains (Syria and Egypt) are impacted we will see turmoil and unrest rise sharply in those nations again. Nor will a solution to the Syrian crisis be possible for many years to come as US/Russia relationships sour. There will not therefore be a pipeline for gas constructed across its territory to supply Europe for many years to come and this means bets on LNG storage, distribution and tankers could be stellar.
I would not bet on any gas coming out of the Middle East though. Recent attacks by terror groups on the Suez suggest that moves are afoot to sink freighters there and thus deprive the Egyptian government of critical revenues so it is possible the route could suffer blockages that last for extended periods.
This is not speculation by the way. Security along the Suez corridor is currently on high alert for exactly the reasons outlined. A sinking on that critical artery would amount to a black swan event as oil prices could soar on such news and a cleanup and removal would deprive Europe of supply for months. If it happens, be quick to make a bet on the Baltic because global freight rates will surge overnight.
Droughts in Brazil, America and Australia meanwhile that are ongoing would further pressure global food stocks leading to crisis in some countries that are net importers. Coffee looks to be peaking and will soon do a retracement but we should not be surprised to see it rising again once that is concluded. It was ghastly cheap as it was. More to the point, coffee does well in war seasons and sugar can be even better. Expect rationing in some countries.
The effect of all this though is that interest rates will stay low for a lot longer than most believe is possible even while headline inflation rages higher. That is the key to achieving currency devaluations of course which is another way of saying the debt burdens will decline in a low rate environment.
It must obviously come out in food and energy. Jimmy Rogers was right. The farmers of the future will be driving Lambourgini’s. So good quality agricultural land will only grow in demand as prices soar for grains, beef and pork. It is a commodities based future as I see it and so precious metals should indeed perform well for some years to come.
Maybe this is exactly what the last few years of economic discord have all been leading too. I know there are some out there who are skeptical of my ideas. I blither on and on and usually nobody even answers except by way of an insult (yes Matthew I mean you).
But you should pay attention to the signs if you believe the conflict in the Crimea is dangerous and also understand how all the chips are coming into position so you can better appreciate why a commodities boom, despite sounding totally improbable, is exactly what is coming.
Chris Temple gets it. He has been telling us to get into Ag and energy for weeks. I told you guys he was brilliant. Rick Rule gets it too. He has gone serious into water as I heard very recently. The guy is an obvious genius. Gary Savage gets it too but is not always appreciated for his insights.
But I know everyone here wants to hear about gold and silver to the exclusion of all else. The thing is you cannot eat it and you cannot heat your home with it either. Especially if it is just hoarded under your bed. You guys might want to think about stuff that offers a return on investment for a change. Just my opinion of course. Do your own due diligence.
I just think that everything is going to be energy and agriculture related in the coming years. Maybe that’s just nuts……but then again, maybe I will be proven dead right in the end too.
The big money is all going to be in agriculture. That’s how I see it and that is where my investment nut will be directed for retirement.
Big names have been investing in Deere & Co (DE)
http://www.insidermonkey.com/blog/bill-gates-cascade-investment-buys-some-deere-company-de-shares-306343/
Thanks Irwin! Interesting news.
BOYS something fishy with the Malaysian airplane crash . MMM TOMUCH TV ALL WORLD !
thanks IRWIN !
Thanks Irwin
don’t copy me AL !
I assumed that you were already retired.
Secondly, yes the guys you mentioned are brilliant.
Thirdly, we put our girls through pretty expensive colleges courtesy of profits on a water deal.
Some things never change, do they!
Look at Doc Al. Has he quit trying to fatten his portfolio?
Secondly….I can’t believe you read that post to the end. Do you agree?
Third, I would love to hear about that water deal one day. How the heck does one get control of water? I mean, what government would even sell the rights to the source?
By the way, Pound Sterling finally came through. Looks to be headed lower yet too. I was saying last Friday it was a short but then it looked to be waffling. Nobody here really watches currencies I gather. I just cannot understand how anyone can try estimating gold without looking at the whole picture. Makes no sense to me at all. Half the picture is in what commodities and currencies are doing. Everything is connected.
Yeh and I guess we are all birds of a feather.
The company was called Flexible Solutions.
I read 99.9% of all the posts, by the way. The educational value here is huge to me.
Birds of a feather? Not sure what you mean, Al.
What I mean specifically is that guys like us never retire. Maybe we don’t “punch the time clock” but we never retire!
You read ALL the posts? Cripes….where do I sign up for regrets and apologies? Too many of mine were not good. Mostly written in a alcoholic stew. I gave up on the booze early January though and have been making an attempt to be more civil and sensible since then. My alter personality still slips through once in awhile. Hope you can forgive me.
Yep, I read all of the posts. Most are really good. Sure there is the occasional idiot, but it is a free country. (I think so far anyway!)
Gotcha.
bird,
Yes indeed gold is driven by currencies. In that vein the dollar cycle is too short for this to be a final daily cycle low. I’m expecting another move down to test the Oct. low between now and the FOMC meeting.
Same here Gary. Been watching the Euro with fascination for years. It is still trending up now confirming the dollars decline you mention. By the way, I think you are on the right track with your commodity theory. It remains an unpopular idea except amongst a few but I think its got legs.
All markets and currency are manipulated by the same entity ! http://www.washingtonsblog.com/2014/01/top-german-regulator-precious-metal-currency-manipulation-worse-libor.html
and i CRAZY ??????? https://www.youtube.com/watch?v=h8RXTHgs_Mo
I hope you make the numbers BOYS ! https://www.youtube.com/watch?v=phzRY0DdRXk
AL i AGREE !!!!!!!! GOLD IS 100 % WINNER WAY BECAUSE 100 TRILLION DOLLAR DEBT !
A great laugh from watching a cnbc talking head asking an aviation expert why the black box has to be on the plane. They only hire wall street geniuses.
http://www.cnbc.com/id/101481437
You probably have a good reason why you don’t. Yet I would like to request if you would put Gary’s commentary along with your other ones that I download daily off itunes.
I hope you guys are keeping track of Gary’s calls and his trades. Dead wrong for 3 years now and down huge.
Why this blog chooses to publish anything by that hack is beating me.
Run from the rock climbing fool while you still can.
We are seeing some inflation now although it isn’t properly reported on but when inflation really becomes an issue lending rates will start to move up aggressively and just paying the interest on the debt will collapse the system, leading to deflation. The central bankers have not been successful at getting the money they print to where it will be effective or we wouldn’t keep seeing bubbles in different market’s. DT