Watch out for liquidity traps
Chris wanted to focus this morning on potential liquidity traps in the markets. While he does address gold he says there are some other areas out there that are a larger concern.
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Mandalay had a very encouraging Q2 report, and I finally have a small position and am looking forward to adding to it over time and on dips.
Why should folks buy energy companies, considering:
Saudi announced an increase in production 1.4 million barrels a day, and Iran going to come introducing another 1 million barrels a day as soon as sanctions are removed?
Why should folks buy energy companies?
Because Boone Pickens said oil might rise to $70 by the end of the year (and I remember, some time back, about how right he was about natural gas going to $6 at the end of the year). He said if we use as much oil in the second half of the year as we used in the first half, we’ll see $70 oil by the end of the year. The rub for me is is the economy going to hold up. Will the economy tank without QE and force the Fed to reintroduce QE early next year?
I am sure Pickens has no interest in oil when he claims it will see 70 dollars again this year. He is a pure unbiased analyst 🙂
NO BID…………….got physical………..always cash in the pocket………
THANKS CHRIS…………..
Without Bailout money Jim Cramer is a ZERO ! Jim Cramer is a Bankster CNBC Control Corrupt TV crook ! don’t trust him !
plus he worked at GOLDMAN’S……..strike two……….
Yes the Goldman story aaa ,,, Agree !
btw, glad to see you back…………………………..j the long……………..
stay clean………..or you will be…………xxxxxx out…………………..ha,ha,
Chris,
You’re spot on regarding the liquidity trap and bond markets. Mainly the junk bonds. Oil is about to get clobbered down to the low 30s and that will cause the junk bond collapse. And when the junk bonds collapse the stock exchange will collapse.
By September stocks, oil, gold, everything will be heading south. I think oil will bottom soon though. The stock exchange won’t be just a correction, it’s going to be a crash. And there won’t be QE to prop it up. The Fortune 500 stocks are going to get pummeled.
Once gold and miners hit bottom, that’s the play and the biggest rebound. I’m looking harder at new technology stocks more than energy stocks. Petroleum stocks are not on my radar. Maybe one day, but not soon.
If we can just hold on til closing, don’t forget that the answers to all of todays problems will appear, free of charge, by a chorus of clowns on stage in Cleveland. Talk about an answer to our prayers!
Seriously though Chris, I like your analysis of what could happen when everyone is chased out of all the sectors, leaving gold the only place to try and get their losses back to even.
Gold gonna take off like a scalded cat.
Scalding aside, but if its got no legs its not going to move.
Best line of the year Chris. You really made me laugh today. You said:
“At some point…..when there is nowhere else left to go, that’s when gold is going to take off again. Its going to be like it was in the 1970’s. We are not there yet but that’s what’s coming ”
Funny stuff, man!
“Liquidity trap”? Dont’ you mean, “credit freeze”? A true liquidity trap would be a rejection of the currency, or an overnight devaluation of the currency. Not having enough liquidity, enough capital.
So – get liquid? Cash on hand, not in a bank?
I’m buying!
just bought some Mandalay this morning, after its quarterly report yesterday showing profitability at current gold and silver prices. (plus has cash on hand)
Although I think interest rates will go up, but only 0.5% over next 6 months, I would not touch bonds.
Why should I, when stocks like Mandalay have a P/E = 10 and dividend = 5.1%?