Best Of The Best Share Discussion Threads

[traderabc] 18/11/2009 17:43

Gold is getting frothy

Bob Moriarty
Archives
Nov 18, 2009

We live in a world that is totally insane. We have one US government agency buying worthless paper from another US government agency and the public nods their heads in agreement just as if it makes perfect sense. It doesn't make any sense at all; it's like taking water from one end of a swimming pool and carrying it down to the other end and believing you are making a difference.

Pundits are proclaiming an end to a most mild recession, deeming it "Green Shoots." Are they color blind? How about "Black Shoots?" How about 22.1% unemployment if you use the real world measurements derived by John Williams of ShadowStats.com?

[traderabc] 18/11/2009 13:10

If the last article is correct then this is one to consider. It's hard to believe that this is supposed to represent something real and tangible, an ESSENTIAL commodity, priced at almost nothing just before winter.

Nat Gas ETF








Edited, Bought a few at 4.9

[traderabc] 18/11/2009 13:05

'nearly always...'



Gold to Natural Gas Ratio and
what it could potentially mean
by Sol Palha, Tactical Investor | November 17, 2009
Print

Every success is built on the ability to do better than good enough. Anonymous

Right now we have an extreme development in the natural gas market; natural gas prices have dropped to a multi year low and the oil to natural gas ratio and Gold to natural gas ratio are both trading in the extreme ranges. History illustrates that all extreme moves nearly always produce counter moves in the opposite direction which are just as strong if not stronger. In Feb 2009 we made the following statement to our subscribers in regard to the oil to Gold ratio.

[traderabc] 18/11/2009 13:02

I sleep better with the metal

Richard Russell snippet
Dow Theory Letters
posted Nov 17, 2009

November 16, 2009 -- Question -- The Treasury sets the official price of America's gold at $42.22. Why doesn't the Treasury mark our gold to market?

Answer -- This is part of the Treasury's (in collusion with the Fed) idiotic and pathetic attempt to hold the price of gold down. In effect, the Treasury is saying, "gold is only worth $42.22 an ounce. Which is why we price our gold there. The market is crazy saying gold is worth over $1,100 an ounce. If gold was worth over $1,100 an ounce, we'd price it there."

[traderabc] 18/11/2009 12:52

Japan's hi-tech bid to boost food

Japan is only growing 40% of its food needs, leaving it dependent on imports.

In an effort to combat the problem, a Japanese company is experimenting with a "hi-tech" approach to farming.

Roland Buerk reports from Yamanashi.

[traderabc] 18/11/2009 12:44

Alix Steel

TheStreet.com
Published on Monday, Nov. 16, 2009 1:31PM EST
Last updated on Monday, Nov. 16, 2009 5:18PM EST


Jim Rogers, renowned global commodities investor and author, says gold prices will hit $2,000 (U.S.) in a decade.

Gold prices have risen 20 per cent in the past year, recently testing a new high of $1,133.50. With strong speculative fund buying, a weakening U.S. dollar and inflation fears, investing in gold is a popular trend as the precious metal becomes an alternative asset class.

Physically backed SPDR Gold Shares (GLD-N111.970.340.30%) has risen almost 15 per cent YTD and Market Vector Gold Miners ETF (GDX-N51.530.190.37%) has popped over 30 per cent.

Rogers' love of gold is nothing new, but with gold in a strong bull market, I wanted to know if the trade was too crowded.

Jim Rogers: I don't ever like to buy something making all time highs however I'm not selling my gold. Gold is going to go much higher in the course of the bull market. Doesn't mean it can't go down 20 per cent next year but during the course of the bull market it is going to go much higher it is certainly not a bubble yet.

Jim you are typically a contrarian investor. If everyone is buying, shouldn't you be selling?

Jim Rogers : Yes, I should be selling at the top, but I don't think this is the top. Gold, if you adjust it for its old highs, adjust it for inflation back in 1980, gold should be over $2000 an ounce right now. In my view, in this bull market in commodities gold will make all new highs adjust for inflation.

What about mining stocks as a way to play rising silver and gold prices?

Jim Rogers: Not with my money. The studies show that you would make more investing in commodities themselves rather than commodity stocks unless you are a very good stock picker. If you are a good stock picker, unless you find a company that is going to discover silver in Berlin you buy all you can and then you call me and I'm going to buy it too ....short of something like that and there are a hundred gold stocks and most of them don't pan out. But if you own gold, gold is making all time highs.

Aside from gold, what other precious metals do you own?

Jim Rogers: I own silver as well. I would suspect that if you were buying [gold or silver right] now silver would be a better buy. I mean gold is making all time highs, [but] silver is 70 per cent below its all time high. Now, if my thesis is right about commodities that they're going to make new all time highs, obviously you would make that much more [money] in silver than in gold.

What about palladium and platinum?

Jim Rogers: I own them all. I think probably now the better plays would be palladium and silver but again let me hit you over the head and say I am world worst market timer and trader. I think you would make more money with silver and palladium at this point but I own all four [gold, silver, palladium, platinum].

What would you say would be the best diversified portfolio right now?

Jim Rogers: If the world economy is going to get better , commodities are going to lead the way because there are shortages developing in all commodities. If the world economy is not going to get better, I promise you stocks are not going to be a good place to be, but commodities will be the better place to be because they're printing so much money. And if the world economy doesn't get better they are going to print a lot more money. So if you're going to own something you should own commodities or you should own currencies. That's another way that you can invest in what's going on in the world.

When will gold hit 2k?

[traderabc] 17/11/2009 20:44

Tuesday, November 17, 2009
Marc Faber on Bloomberg 16 Nov on U.S. Asset Prices, Stock Market


Marc Faber Discusses U.S. Asset Prices, Stock Market

[traderabc] 17/11/2009 20:01

Stewart Thomson
email: [e-mail]
Nov 17, 2009

1. Are your gold buy orders in the market right now below current prices? If not, why not?

2. Gold investors have gone from denying the head and shoulders pattern on gold exists, to claiming "it's too popular, it won't work", to finally yesterday's "I'm missing out, gold will never correct and I'll never get any." Three strikes. An all-wrong Triple Play. Today I'll help those who struck out, I'll help you bat several way out of the park.

3. You have seen the power of a massive head and shoulders continuation pattern in action. The era of gold volatility has begun. You have seen the upside. Not the downside. Don't worry, you will.

4. The downside is going to feel like the banksters put a $100 downside price sword thru your head to your toes and pulled it out as fast as it went in. If you like adrenaline, what's coming will make the action into $680 seem tame.

[contrarian2investor] 17/11/2009 17:22

traderabc,

Pi's from all income tiers have already started buying physical gold and other metals. Whilst only a small % compared to stocks and paer purchases. Thei purchases will increase over the next few years.

I have read on several occasions that numerous large (global) financial houses are Naked shorters of gold and/or don't hold enough physical gold to fulfil/deliver on purchases immediately.

c2i

[traderabc] 17/11/2009 17:15

26 March 2008

Arrests over Ethiopia's fake gold
By Elizabeth Blunt
BBC News, Addis Ababa



The value of the missing gold is around $16m for just one case


Twenty-six people are under arrest over the discovery of 90kg (14 stone) of fake gold in the vaults of Ethiopia's central bank, a senior official says.

The fraud was discovered after some of the supposed gold was sent to South Africa, where it was found to be gold-plated steel.

[traderabc] 17/11/2009 17:11

First it was Ethiopia....


At Least One Central Bank Held Fake Gold


Washington’s Blog
Tuesday, Nov 17th, 2009

Rob Kirby seems like a fairly respectable fellow. But I am thoroughly agnostic about Kirby’s claim that a large portion of the world’s gold has been cut with tungsten. Big claims require big evidence, and I haven’t seen it yet.

True, as Mike Hewitt points out, a Chinese company boasts about making gold-plated tungsten:

A coin with a tungsten center and gold all around it could not be detected as counterfeit by density measurement alone … We are well accustomed to exploit more innovative applications of tungsten products. Gold-plated tungsten is one of our main products.

But there is no evidence that gold-plated tungsten has been used as a counterfeit.

However, we do know that at least some gold held by central banks is fake. For example, as the BBC noted last year, some 90kg of gold held by Ethiopia’s central bank was really gold-plated steel.

Obviously, this is not a first world country or banking center we’re talking about. Ethiopia is one of the world’s poorest countries.

But the fact that any central bank has fallen for fake gold means – in a rational world – that a full audit of the gold holdings of central banks worldwide should be conducted.

[traderabc] 17/11/2009 15:40

Thanks for the input c2i .

I liked this bit

"4) The last force is a hybrid of the old standby "gold bug" crowd and represents a new retail crowd outside of and distinct from the old line street wise buyer in India and China or hard money person. I call this force the nickel and dime force. It means that all over the world (in a hundred or more countries) small amounts of gold are being bought by people because of the unnerving events of the last 18 months. The buyers of this gold are people from the highest to lowest income tiers. Collectively they could swamp even the institutions with buying power."


That must be us ;-)

It's high time humanity or the 'little guys' if you like, acting in concert 'swamp' the markets, millions of ordinary people can have incredible effects on paper markets, just imagine what we could do if we insisted on only buying the real 'hard' physical asset, the ponzi fiat currency fraud would be history in no time, sound money would lead to sound economic policy, which could only go hand in hand with sound foreign policy.

That would be 'change' I could relate to.

[traderabc] 17/11/2009 15:30

Tiny Mauritius Tells US To Shove Its Dollar, Buys 2 Metric Tons Of Gold From IMF At $1,115 An Ounce


Tyler Durden
Zero Hedge
Tuesday, Nov 17th, 2009

The latest development in the gold bubble saga, and one which will likely cause the precious metal’s price to spike even higher, comes from the tiny island of Mauritius which according to Dow Jones has purchased 2 metric tons of Gold from the IMF for $71.7 million. The price works out to approximately $1,115 per ounce. More as we get it. (and yes, this is a picture of Mauritius not some CNBC anchor hangout).



The International Monetary Fund announced Monday it has sold two tons of gold to the central bank of the Indian Ocean island of Mauritius for nearly $72 million.

[contrarian2investor] 17/11/2009 15:14

Hi all,

Meredith speaks, video lasts for 11mins:

Meredith Whitney Hasn't Been This Bearish in a Year
by: Edward Harrison November 17, 2009



c2i

[traderabc] 17/11/2009 15:13

AGRI-FOOD THOUGHTS
by Ned W. Schmidt, CFA, CEBS
Schmidt Management Company
November 16, 2009

Bounty is the child of shortage. The grandchild of bounty is also called bounty, and begets again shortage. When those generations are born with fanfare, the world is made well aware of the situation. However, creeping shortages go unnoticed. The latter are also more serious as they reflect structural changes emerging in supply-demand. Globally, Agri-Foods may be giving birth to an era more akin to shortage than bounty.

During most of the post World War II era, supply was dominant in the global Agri-Food system. That situation seemed to many to be likely to persist indefinitely. In the last decade, as a new Chinese economy emerged, the global Agri-Food system has become more dominated by demand. China has learned that feeding the population is not a food problem, but an income problem. Give the people jobs that generate incomes, and they will simply buy the food. India, with another billion people to feed, may also, despite the best efforts of some politicians, come to fostering income growth in order to feed the nation.

[contrarian2investor] 17/11/2009 15:13

Hi traderabc,

Great thread, well done and keep up the good work.

Here is an article that might be of interest:

Beverly Hills based hedge fund manager Ken Gerbino's views on the state of the economy, politics, gold purchases and their likely impact on precious metals prices.





c2i

[traderabc] 17/11/2009 15:12

Arrogant Fed hasn't learned a thing


The bubbles, toils and troubles that nearly wrecked the financial system should've been obvious to the policymaking numbskulls whose monetary tricks made matters worse.
[Related content: Federal Reserve, recession, politics, financial crisis, Bill Fleckenstein]
By Bill Fleckenstein
MSN Money

"Arrogant and incapable of learning."

When a teacher uses those words to describe a student, it's an isolated (if regrettable) situation. But the repercussions are widespread when "arrogant and incapable of learning" fits the Federal Reserve like a glove.
Still clueless after all these bubbles
Frederic Mishkin, a former member of the Fed's board of governors, wrote an article in last Tuesday's Financial Times that displayed that he, and presumably other Fed heads, have learned exactly nothing from the disastrous consequences of their activities in printing money over the past couple of decades.

[traderabc] 17/11/2009 15:11

Silver Prices to Hit New Highs in 2010

Marc Davis
BNW Business News Wire
Posted Nov 16, 2009

Silver may yet outshine gold in 2010 as spot prices for the white metal respond to the prospect of a surge in industrial demand. With a little additional help from investment demand, silver may even rally into the $25 range.

So says Chintan Parikh, a commodity analyst at the CPM Group – a leading New York-based commodities research, consulting, asset management and investment banking organization.

“Prices may spike as high as $25,” he says. At the very least, it should breach its most recent high, which was set at $20.79 in the spring of 2008, he adds.

[traderabc] 17/11/2009 15:06

Gold $5000+

[traderabc] 16/11/2009 22:14

Jim Rogers Interview With Wall St. Cheat Sheet

Fri, Nov 13, 2009

Interviews


Jim Rogers is one of the most respected investors in the world. I had a chance to chat with him the other morning to get more details about some of his recent comments in the media …

Damien Hoffman: Jim, you were in the media a few times last week and I want to follow up on a few points you made. You said on Bloomberg that Nouriel Roubini did not do his homework regarding the asset bubbles about which he is now warning. Can you explain what homework he did not do?

Jim: All of it. How can you talk about a bubble when assets such as silver are 70% below their all-time high? Same for coffee, sugar, cotton, natural gas, and many more. I have a problem talking about a bubble when assets are this depressed from their all-time highs.

A bubble is when assets are screaming to new highs everyday, everyone is talking about them, and everyone owns them. Right now, virtually no one owns commodities. So for Mr. Roubini to talk about a bubble in commodities defies comprehension. It proves he does not understand markets.

I am flabbergasted at Mr. Roubini’s comment about bubbles because there is not a single market in the world making all-time highs except Gold, US Government Bonds, Cocoa, and the Sri Lankan stock market. That’s hardly reason to call for a bubble. So, I am most perplexed about this alleged bubble which is out there.

If an asset rises 100% in one year, that’s a great year, but not necessarily a bubble. Look at oil. It’s up huge off the bottom but nowhere near it’s old highs. Look at Citigroup. The stock is up 3 or so times off the bottom …

Damien: … and I doubt long term shareholders feel like they are in a bubble.

Jim: Exactly. And since Mr. Roubini thought oil would stay below $40 a barrel for all of 2009, I would love for him to tell me and the rest of the world exactly where are all the oil supplies because the International Energy Agency (IEA) — which has the best global data set on energy supplies — has no idea where is the oil. Mr. Roubini should tell us where this price suppressing oil supply is hidden. All the oil possessing countries in the world have declining reserves. All the oil companies have declining reserves. So Mr. Roubini must know something the rest of us don’t.

Damien: On another note, Gold has been reaching new all-time highs, although not inflation adjusted. You said Gold may reach $2,000 an ounce over the next decade. Can you explain what variables will push Gold to $2,000?

Jim: First, I hope you will keep Mr. Roubini’s statement where he said Gold going to $2,000 an ounce by 2019 is “utter nonsense.” I think you’re going to get a chance to call him before 2019 to ask him what he thinks of Gold at $2,000 and why he thought it was “utter nonsense.”

Regarding variables, it’s very clear there is huge suspicion about paper money around the world. This suspicion is gathering steam. Governments are printing huge amounts of money. This has always led to higher prices. Maybe I am wrong and it’s different this time. But I doubt it.

Additionally, no new large gold mines have been opened in decades. Some of those mines are over 100-years old. They are all depleting. On the other hand, central banks have huge Gold reserves above ground — and they are less interested in selling than in the past.

If you adjust Gold for inflation and go back to it’s former all-time high in 1980, Gold should be over $2,000 an ounce right now if you want to say it’s reaching new inflation adjusted all-time highs. That does not mean Gold has to get back to a true all-time high. Nothing has to. However, I suspect that given all the money printing in the world, we will see much higher prices for hard assets.

Despite Gold’s potential, I think I will make more money in other commodities such as silver, cotton, or coffee — all of which are terribly depressed.

Damien: Speaking of other assets, as an outsider living abroad, what is your opinion on US Equities?

Jim: This is one of the few times in my life I have not had shorts anywhere in the world. I have also not had a lot of longs in the stock market because I’ve chosen longs in commodities and currencies. I have kept away from shorts because there is a gigantic amount of money being printed and it has to go somewhere. I thought some of it would end up in the stock market, and it has.

How much higher can the equity markets go? I don’t know. There are a lot of problems in the economy, but I don’t know when those problems will cause a downdraft in the stock market. All we’ve done is paper over the problem, so I expect we’ll have to deal with those issues in the future. Printing and spending money we don’t have simply prolongs the problems and makes them worse in the long run.

If the world economy improves, commodities will lead the way due to demand and shortages. If the world economy does not get better, commodities are still a great place to be because governments are printing so much money. And, if the world economy doesn’t get better, they will print even more money!

Damien: Jim, thank you for taking the time to share your outlook and opinions. I greatly appreciate it.

Jim: You are very welcome. Your site is very impressive. I look forward to staying in touch

[careful] 15/11/2009 09:51

inflation is already soaring.
but not the way they choose to measure it.
because of indexed linked payments that will never happen.

inflation was very high up to 2007, but the way it was fiddled made it look low.
oil at $150, commods high house prices tripled, shares soaring.

what a racket.

[nabcom] 15/11/2009 09:23

Well we have Jim R giving it 10 years to get to $2000, Roubini calling that "rubbish" Peter Schiff talking the big numbers

I am a fan of the James gang (Rogers, Turk, Dines) plus Faber and Schiff and there doesn't seem to be any disagreement as to where we are going in the long term but as a slow accumulator I would be like to be ready for any drop to $800 as I can't imagine it staying their for very long

Coffee is a must on waking up, wouldn't be without it :-)

I see have recently released cocoa, lead and tin ETCs

[smelgy] 14/11/2009 20:14

..........we all know that $2000 gold by 2011/12 is a given. Big question is, is $3-4-5-6000 gold possible?

It really isn't worth debating. Gold and Silver are going through the roof within the next 3 years. Inflation will soar and paper currencies are being debased at the average rate of $1000 per minute. Wake up and smell the coffee..........