tag:blogger.com,1999:blog-55848343428867393922024-03-14T02:23:19.420-07:00"Juicy grabs" Succulent financial market insightsBlog dedicated to opportunities in the financial marketsGreen Trivialhttp://www.blogger.com/profile/07301210921660586787noreply@blogger.comBlogger28125tag:blogger.com,1999:blog-5584834342886739392.post-11638860973548115312012-08-01T02:25:00.000-07:002012-08-01T02:40:16.626-07:00"Debt bomb"with lyrics - must watch video<div class="separator" style="clear: both; text-align: center;">
<iframe allowfullscreen='allowfullscreen' webkitallowfullscreen='webkitallowfullscreen' mozallowfullscreen='mozallowfullscreen' width='500' height='400' src='https://www.youtube.com/embed/GXcLVDhS8fM?feature=player_embedded' frameborder='0'></iframe></div>
<br />
<br />
DEBT BOMB<br />
(Lyrics by Dominic Frisby)<br />
<br />
Aw, aw baby, yeah, ooh yeah, huh, listen to this<br />
<br />
Mortgages, cars, consumer shite<br />
Government spending all through the night<br />
Pensions and healthcare and welfare rights<br />
Education , wars to fight<br />
<br />
Run up a deficit, ignore the facts<br />
Blame someone else, put up tax<br />
I can’t deny we had a crack<br />
But now we gotta pay it back<br />
<br />
Debt bomb, debt bomb, you’re a debt bomb uh hu<br />
The addiction to credit just goes on and on and on – give it to me<br />
Debt bomb, debt bomb, you’re a debt bomb<br />
A bail-out ooh you turn me on<br />
<br />
You know what you’re doing to me don’t you. ha ha,<br />
I know you do<br />
<br />
If you can’t afford it don’t be ill at ease – no<br />
Spend it anyway, you’ve got voters to appease<br />
Take the prudent savers and just give them a squeeze<br />
That’s the economics of Keynes<br />
<br />
Quantitative easing, zero interest rates<br />
Steal from the future, hide the bad mistakes<br />
We gotta keep those asset prices high<br />
Don’t matter if the credit’s dry<br />
<br />
Debt bomb, debt bomb, you’re a debt bomb uh hu<br />
Try to pay the debt off with inflation<br />
Debt bomb, debt bomb, you’re a debt bomb<br />
Malinvestment ooh you turn me on<br />
<br />
A boom brought about by credit will always bust<br />
You’ve then got two choices, decide you must<br />
Abandon the addiction, the credit lust<br />
Or the currency collapses , it just turns to worthless dust<br />
<br />
Debt bomb, debt bomb, you’re a debt bomb uh hu<br />
Destroy the country’s money, anything to carry on<br />
Debt bomb, debt bomb, you’re a debt bomb<br />
Bubbles ooh you turn me on<br />
<br />
More on the author can be found here: http://dominicfrisby.comGreen Trivialhttp://www.blogger.com/profile/07301210921660586787noreply@blogger.com0tag:blogger.com,1999:blog-5584834342886739392.post-16325136831579405032012-04-05T12:30:00.000-07:002012-04-05T13:04:24.745-07:00JP Morgan`s Blythe Masters enters defense modeBlythe Masters, the famous and infamous, depending on who you`re talking to, head of commodity trading desk at J.P. Morgan, made a rare appearance on CNBC today.<br />
<br />
She denied blogosphere rumors about J.P. Morgan being involved in silver manipulation, saying "it would be wrong and we don`t do it". She made the case that it might appear so from the outside due to hedging of client positions by having short positions to offset price volatility.<br />
<br />
However, it would be most interesting to know who exactly are all those clients she`s talking about. One of the accusations brought about against J.P. Morgan is that the FED is using JP as a proxy to manipulate the silver price. If this is true, J.P. Morgan doesn`t do anything by itself but rather representing a client(the FED), acting as a tool. It`s a well known fact that J.P. Morgan is part of all those closed door FED meetings as you can see in <a href="http://ldereport.com/2012/02/21/wsj-today-fed-writes-sweeping-rules-from-behind-closed-doors/">this article</a> written by <span class="by-author"> <span class="author vcard">Lynn Forester de Rothschild and in the picture below. Take note that not only that J.P Morgan shows up among the banks that held closed door FED meetings but it outmatches the other banks by far when it comes to the sheer number of held meetings. </span></span><br />
<span class="by-author"><span class="author vcard"><br /></span></span><br />
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Blythe concludes the interview on an interesting note, dismissing the need for certain transparency after pandering to the politically correct crowd: <br />
<br />
<i>"..the key is to ensure that that regulation is good regulation and with
this type of topic the devil is almost always in the details. So in the
interest of greater transparency, less
systemic risk in the system, less connectivity between major
players...on all of those things we feel great strides have been made in
advancing regulation to promote those objectives.
<b>Having said that, we have to aware of unintended consequences and
there`s a real risk of those unintended consequences.</b> For example:<b style="color: #cc0000;"> if
you make it difficult for institution to transact in
commodity markets by excessively exposing their actions to the public
domain too quickly</b>, it would actually drain liquidity and make it harder
for those institutions to hedge."</i><br />
<br />
Of course, if the rumor claiming J.P. Morgan is acting as FED`s proxy in manipulating silver and gold prices is true, "exposing their actions" would severely hamper their ability to play the market.Green Trivialhttp://www.blogger.com/profile/07301210921660586787noreply@blogger.com0tag:blogger.com,1999:blog-5584834342886739392.post-13706547409996077852012-03-19T07:08:00.000-07:002012-03-22T11:39:26.821-07:00Steve Jobs rolling in his grave on dividend increase announcementStephanie Link(few minutes ago on CNBC): "Steve Jobs would be proud". This is what mainstream "analysts" think or are meant to think about Apple`s dividend increase.<br />
<br />
As you may have heard already, Apple announced a dividend of 2.65$ and a share buy back program. This is something Steve Jobs fearlessly fought against since he took over the company. Unfortunately his famous motto "Stay hungry, stay foolish" died along with him at Apple.<br />
<br />
Yes, some Apple shareholders must be popping the champagne bottles right now, but this actually spells trouble for Apple in the long run. This is yet another confirmation that Job`s creative genius died along with him.<br />
<br />
The mainstream bank "analysts" should ask themselves how come Warren Buffett is also totally against the idea of dividends and yet has managed to outperform the market by far. <br />
<br />
A dividend comes along with lots of strings attached. It comes bundled together with higher expectations built into it. There`s no hunger, just complacency. Tim Cook is taking company in the wrong direction and this will only become obvious in time. Company is still running on Job`s inertia and his plans, but as soon as those are out...expect Apple to be just another tech company. By raising dividend, Apple pretty much proved it`s not going anywhere in the long run. <br />
<br />
What both Jobs and Buffett knew was that nothing beats potential growth. Paying a dollar in dividend today is destroying 10 dollars of growth tomorrow. In our case, Apple has, apparently, enough spare cash, but it`s not as much as the cash dumping into dividends that presents an issue, but the totally different way of relating to business strategy that should concern everyone. <br />
<br />
When rival industry will be fully capable of emulating Apple`s current position in mobile computing, trend which is already happening, Apple won`t have much to hang on to. In the absence a creative genius like Jobs, Apple will end up stuck with no growth prospects coming out of novelty products that should force industry to emulate and follow. In the end, Apple will have nothing else to show for except a fat big drag of a dividend on a stagnating company.Green Trivialhttp://www.blogger.com/profile/07301210921660586787noreply@blogger.com0tag:blogger.com,1999:blog-5584834342886739392.post-31951566675705313832012-02-26T14:33:00.001-08:002012-03-25T04:01:46.654-07:00Total colapse or United States of Europe<div class="MsoNormal" style="font-family: inherit; text-align: justify;">
<span style="font-size: large;"><br /></span></div>
<div class="MsoNormal" style="font-family: inherit; text-align: justify;">
<span style="font-size: large;"><b><span style="line-height: 115%;">The pulse</span></b></span></div>
<div class="MsoNormal" style="font-family: inherit; text-align: justify;">
<span style="font-size: large;"><br /></span></div>
<div class="MsoNormal" style="font-family: inherit; text-align: justify;">
<span style="font-size: large;"><a href="http://i.telegraph.co.uk/multimedia/archive/02136/athens-burning_2136848i.jpg" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img border="0" height="208" src="http://i.telegraph.co.uk/multimedia/archive/02136/athens-burning_2136848i.jpg" width="320" /></a></span><span style="font-size: large; line-height: 115%;">In the
recent months, we`ve witnessed some tumultuous events going on in Europe. The
old continent is confronting an economic and social crisis, the likes of which
it hasn`t faced for the past 80 years, ever since the great depression of the
1930s. </span></div>
<div class="MsoNormal" style="font-family: inherit; text-align: justify;">
<span style="font-size: large; line-height: 115%;">The money has run out, as debt
of EU countries has reached unsustainable levels. Street protests and
riots start to resemble more and more full blown revolutions, as we`ve
recently seen in pictures of burning Athens. </span></div>
<div class="MsoNormal" style="font-family: inherit; text-align: justify;">
<span style="font-size: large;"><br /></span><br />
<span style="font-size: large;"><br /></span><br />
<span style="font-size: large;"><b><span style="line-height: 115%;">The context (2008-2010)</span></b></span></div>
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<span style="font-size: large;"><br /></span></div>
<div class="MsoNormal" style="font-family: inherit; text-align: justify;">
<span style="font-size: large;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgbyM3fG_Z9wb3U5MOOjyHqdMsRk1ZLPCLJJSNWxaVQLkHZgfvApOlSr-XRpxmaIMbW9S3PO-gM4-mMZ6d11whrYtimbWZrviH9wZ2kp1kmc-zOjo8erAo6bqjkFSbEvkZbT1VdLQHh0sY/s1600/Ben_Bernanke_quantitative_easing_2.jpg" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img border="0" height="240" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgbyM3fG_Z9wb3U5MOOjyHqdMsRk1ZLPCLJJSNWxaVQLkHZgfvApOlSr-XRpxmaIMbW9S3PO-gM4-mMZ6d11whrYtimbWZrviH9wZ2kp1kmc-zOjo8erAo6bqjkFSbEvkZbT1VdLQHh0sY/s320/Ben_Bernanke_quantitative_easing_2.jpg" width="320" /></a></span><span style="font-size: large; line-height: 115%;">To put
things in context a bit: the 2008 crisis, which originated in the US, swept
throughout Europe, bringing a credit crisis, lack of economic growth, higher
levels of unemployment and uncertainty. </span></div>
<div class="MsoNormal" style="font-family: inherit; text-align: justify;">
<span style="font-size: large;"><br /></span></div>
<div class="MsoNormal" style="font-family: inherit; text-align: justify;">
<span style="font-size: large; line-height: 115%;">In the years
that followed, 2009 and 2010, spirits became animated, throughout the world, by
a so called “economic recovery”, which US Federal Reserve started by doing two
big QE(quantitative easing) programs, injecting cash liquidity into the
financial system to jump start the flow of credit to businesses, that in turn should
have generated job growth and consumption. The employed technique was similar to that of a
paramedic doing electroshocks on a car crash victim. However, what it managed
to achieve, was to just extend the patient`s agony, as year 2011 showed patient
was still very much agonizing in a coma. </span></div>
<div class="MsoNormal" style="font-family: inherit; text-align: justify;">
<span style="font-size: large;"><a href="http://www.occupythegame.com/occupy_wall_street_pictures_996.jpg" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img border="0" height="320" src="http://www.occupythegame.com/occupy_wall_street_pictures_996.jpg" width="239" /></a></span><span style="font-size: large;"><br /></span></div>
<div class="MsoNormal" style="font-family: inherit; text-align: justify;">
<span style="font-size: large;"><b><span style="line-height: 115%;">The context (2010-2011)</span></b></span></div>
<div class="MsoNormal" style="font-family: inherit; text-align: justify;">
<span style="font-size: large;"><br /></span></div>
<div class="MsoNormal" style="font-family: inherit; text-align: justify;">
<span style="font-size: large; line-height: 115%;">Year 2011 culminated
with the Occupy Wall Street movement, which started on Wall Street, in New
York, US, but quickly spread to whole country and basically throughout the
world soon after. Core of the movement was made up by young disenfranchised individuals
with huge student loan debt. Unable to get jobs, in a sluggish growth
environment where most companies laid people off, shipping jobs overseas,
occupiers have taken their frustration on the Wall Street banking and financial
sector who was recipient of several government bailouts since the 2008 crisis
began. Movement spread to several US cities, sparking riots and clashes with
riot police. However, winter of 2011 came and Occupy movement entered in
hibernation mode, waiting to be <a href="http://www.guardian.co.uk/world/2011/nov/11/occupy-movement-winter-what-next">resurrected
in the spring of 2012</a>. </span></div>
<div class="MsoNormal" style="font-family: inherit; text-align: justify;">
<span style="font-size: large;"><br /></span></div>
<div class="MsoNormal" style="font-family: inherit; text-align: justify;">
<span style="font-size: large;"><br /></span><br />
<span style="font-size: large;"><br /></span><br />
<span style="font-size: large;"><a href="http://static.guim.co.uk/sys-images/Guardian/Pix/pictures/2011/10/14/1318590649440/global-occupy-crowdmap-007.jpg" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" height="192" src="http://static.guim.co.uk/sys-images/Guardian/Pix/pictures/2011/10/14/1318590649440/global-occupy-crowdmap-007.jpg" width="320" /></a></span><span style="font-size: large; line-height: 115%;"> </span><br />
<span style="font-size: large;"><br /></span><br />
<span style="font-size: large; line-height: 115%;">The Occupy movement
spread as wide as South America, Europe, Australia and in Asia,
marking the sign of these distressed economic times on a global scale. </span></div>
<div class="MsoNormal" style="font-family: inherit; text-align: justify;">
<span style="font-size: large;"><br /></span></div>
<div class="MsoNormal" style="font-family: inherit; text-align: justify;">
<span style="font-size: large;"><br /></span></div>
<div class="MsoNormal" style="font-family: inherit; text-align: justify;">
<span style="font-size: large; line-height: 115%;">In Europe,
many companies followed the US pattern, closing factories and outsourcing jobs
to stay competitive, laying off thousands of people on monthly basis.</span></div>
<div class="MsoNormal" style="font-family: inherit; text-align: justify;">
<span style="font-size: large;"><br /></span></div>
<div class="MsoNormal" style="font-family: inherit; text-align: justify;">
<span style="font-size: large; line-height: 115%;"> Under these circumstances, a great number of
European countries have become unable to sustain themselves, as revenue
generated from taxes became lower and lower. The IMF (International Monetary Fund)
stepped in as a financier of last resort. However, the IMF is not in the
business of giving something for nothing, and asked in return harsh austerity
measures and cuts in government consumption, which basically means cutting
wages, sacking people, cutting state departments and so on.</span></div>
<div class="MsoNormal" style="font-family: inherit; text-align: justify;">
<span style="font-size: large;"><br /></span></div>
<div class="MsoNormal" style="font-family: inherit; text-align: justify;">
<span style="font-size: large;"><a href="http://thedopieschron.files.wordpress.com/2011/06/piigs.jpg" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img border="0" height="187" src="http://thedopieschron.files.wordpress.com/2011/06/piigs.jpg" width="320" /></a></span><span style="font-size: large; line-height: 115%;">As IMF acted
more on the EU periphery, throwing a bone to the none Euro-zone countries in
Eastern Europe, the ECB (European Central Bank) took a direct role in helping
out Euro-Zone countries, those currently using the Euro currency, such as
Italy, Portugal, Greece, Ireland and Spain, also known as the infamous PIIGS (Portugal,
Italy, Ireland, Greece, Spain). They`ve chosen to do so, to save the European
monetary union, in an attempt to spread financial contagion. The help was given
indirectly by having the ECB buying government bonds of those afflicted
countries.</span></div>
<div class="MsoNormal" style="font-family: inherit; text-align: justify;">
<span style="font-size: large;"><br /></span></div>
<div class="MsoNormal" style="font-family: inherit; text-align: justify;">
<span style="font-size: large; line-height: 115%;">2011 was the
year of several deep budget cuts throughout Europe, lots of political shakeups
and street protest. Berlusconi, Italy`s prime minister, lost his decade long
grip on Italy, Greece`s Papandreou government having suffered same fate, both
being replaced with government of technocrats appointed by the <a href="http://en.wikipedia.org/wiki/Troika_%28triumvirate%29">EU Troika</a>. As
these governments were politically unwilling or unable to impose fiscal
austerity measures, they were replaced by putting pressure on the political
parties in those countries. The ECB wanted to make sure their money would not
be wasted and real measures were going to be implemented.</span></div>
<div class="MsoNormal" style="font-family: inherit; text-align: justify;">
<span style="font-size: large;"><br /></span></div>
<div class="MsoNormal" style="font-family: inherit; text-align: justify;">
<span style="font-size: large;"><b><span style="line-height: 115%;">The 2012 predicament – The two paths</span></b></span></div>
<div class="MsoNormal" style="font-family: inherit; text-align: justify;">
<span style="font-size: large;"><br /></span></div>
<div class="MsoNormal" style="font-family: inherit; text-align: justify;">
<span style="font-size: large;"><a href="http://anticap.files.wordpress.com/2011/08/color-greece-austerity-web.jpg" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img border="0" height="248" src="http://anticap.files.wordpress.com/2011/08/color-greece-austerity-web.jpg" width="320" /></a></span><span style="font-size: large; line-height: 115%;">Year 2012 found
these newly elected governments, especially the one from Greece, led by Lucas
Papademous, unable to implement the needed austerity measures and cuts. Recent
riots in Greece have resulted in total chaos and the burning and looting of
museums as well as major corporate stores and several buildings throughout Athens. Greece,
unlike the other PIIGS countries can no longer be helped by buying their
government bonds, as their yields(or interest Greece government has to pay) has
skyrocketed to unsustainable levels. Greece currently receives aid packages
conditioned upon implementing harsh austerity measures. However, given the
looting and recent chaos in the country, it has become apparent, Greece may not
tolerate this level of austerity. A deep division between Angela Merkel(the
German leader) and the German financial minister(Wolfgang Schäuble), has
basically created two paths going further as follows:</span></div>
<div class="MsoNormal" style="font-family: inherit; text-align: justify;">
<span style="font-size: large;"><br /></span></div>
<div class="MsoNormal" style="font-family: inherit; margin-left: 0.25in; text-align: justify;">
<div class="separator" style="clear: both; text-align: center;">
<span style="font-size: large;"><a href="http://www.fxtimes.com/wp-content/uploads/2011/11/schaeuble.jpg" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img border="0" height="150" src="http://www.fxtimes.com/wp-content/uploads/2011/11/schaeuble.jpg" width="200" /></a></span></div>
<span style="font-size: large;"><u><span style="line-height: 115%;">Path One – supported by Wolfgang Schäuble </span></u></span></div>
<div class="MsoNormal" style="font-family: inherit; margin-left: 0.25in; text-align: justify;">
<span style="font-size: large; line-height: 115%;">Optimistic (Schäuble): Greece defaults and EU union is strong
enough to take the hit</span></div>
<div class="MsoNormal" style="font-family: inherit; margin-left: 0.25in; text-align: justify;">
<span style="font-size: large;"><br /></span></div>
<div class="MsoNormal" style="font-family: inherit; text-align: justify;">
<span style="font-size: large; line-height: 115%;"> Pessimistic (Merkel): Greece defaults and
risks taking the whole EU monetary union
down with it</span></div>
<div class="MsoNormal" style="font-family: inherit; margin-left: 0.25in; text-align: justify;">
<span style="font-size: large;"><br /></span></div>
<div class="MsoNormal" style="font-family: inherit; text-align: justify;">
<span style="font-size: large; line-height: 115%;"> </span></div>
<div class="MsoNormal" style="font-family: inherit; text-align: justify;">
<span style="font-size: large; line-height: 115%;"><br /></span></div>
<div class="MsoNormal" style="font-family: inherit; text-align: justify;">
<span style="font-size: large;"><a href="http://topnews.net.nz/data/Angela-Merkel252.jpg" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img border="0" height="178" src="http://topnews.net.nz/data/Angela-Merkel252.jpg" width="200" /></a></span><span style="font-size: large; line-height: 115%;"><u>Path Two – supported by Angela Merkel </u></span></div>
<div class="MsoNormal" style="font-family: inherit; text-align: justify;">
<span style="font-size: large; line-height: 115%;"><br /></span></div>
<div class="MsoNormal" style="font-family: inherit; margin-left: 0.25in; text-align: justify;">
<span style="font-size: large; line-height: 115%;">Optimistic (Merkel): Keep sending money to Greece, while
pressing them to implement deep cuts and austerity, thus avoiding a Euro Zone
meltdown and contagion.</span></div>
<div class="MsoNormal" style="font-family: inherit; margin-left: 0.25in; text-align: justify;">
<span style="font-size: large;"><br /></span></div>
<div class="MsoNormal" style="font-family: inherit; margin-left: 0.25in; text-align: justify;">
<span style="font-size: large; line-height: 115%;">Pessimistic (Schäuble): Keep sending money to Greece and
sustain the necrosis, risking death of the Union, instead of cutting the leg
and saving the body. </span></div>
<div class="MsoNormal" style="font-family: inherit; text-align: justify;">
<span style="font-size: large;"><br /></span></div>
<div class="MsoNormal" style="font-family: inherit; text-align: justify;">
<span style="font-size: large;"><b><span style="line-height: 115%;">Total collapse or United States of Europe</span></b></span></div>
<div class="MsoNormal" style="font-family: inherit; text-align: justify;">
<span style="font-size: large;"><br /></span></div>
<div class="MsoNormal" style="font-family: inherit; text-align: justify;">
<span style="font-size: large; line-height: 115%;">However,
both of the above scenarios might result in a total collapse of the European
Union, as the money to keep buying PIIGS debt is just not there. </span></div>
<div class="MsoNormal" style="font-family: inherit; text-align: justify;">
<span style="font-size: large;"><br /></span></div>
<div class="MsoNormal" style="font-family: inherit; text-align: justify;">
<span style="font-size: large;"><a href="http://www.thehollandbureau.com/wp-content/uploads/2011/12/United-States-Europe_0.jpg" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img border="0" height="146" src="http://www.thehollandbureau.com/wp-content/uploads/2011/12/United-States-Europe_0.jpg" width="320" /></a><u><span style="line-height: 115%;">In the
optimistic scenario</span></u></span><span style="font-size: large; line-height: 115%;">
(if you can call it that), and if the above plans do work, Europe will be totally
reshaped, sovereignty taken away from EU countries, with a tight centralized
control imposed by Germany, the de factor leader of the European Union. Under
this scenario, all the important economic decisions will be taken by a central
European commission, while the European governments will have to act as
servants, executing the orders. Europe will become a federal state, following
the US model.</span></div>
<div class="MsoNormal" style="font-family: inherit; text-align: justify;">
<span style="font-size: large; line-height: 115%;"> Influential voices</span><span style="font-size: large; line-height: 115%;"> in Germany, such as the <a href="http://www.reuters.com/article/2011/09/04/us-germany-europe-idUSTRE7831IE20110904"><u>ex chancellor Gerhard Schroeder,</u></a> have already called for a United States of Europe. </span></div>
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<span style="font-size: large; line-height: 115%;"><br /></span></div>
<div style="font-family: inherit; text-align: justify;">
<blockquote class="tr_bq">
<span style="font-size: large;">"The current crisis makes it relentlessly
clear that we cannot have a common currency zone without a common
fiscal, economic and social policy," </span><br />
<span style="font-size: large;"> "We will have to give up national sovereignty."</span><br />
<span style="font-size: large;">"From
the European Commission, we should make a government which would be
supervised by the European Parliament. And that means the United States
of Europe."</span></blockquote>
</div>
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<span style="font-size: large;"><br /></span></div>
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<span style="font-size: large;"><br /></span></div>
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<span style="font-size: large;"><a href="http://www.pakalertpress.com/wp-content/uploads/2011/12/The-Shocking-Truth-of-the-Pending-EU-Collapse1.jpg" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img border="0" height="150" src="http://www.pakalertpress.com/wp-content/uploads/2011/12/The-Shocking-Truth-of-the-Pending-EU-Collapse1.jpg" width="200" /></a><u><span style="line-height: 115%;">The
pessimistic scenarios</span></u></span><span style="font-size: large; line-height: 115%;">
will bring about a total collapse of the Union, with grave economic repercussions,
compared to which the 2008 crisis will look like a mere a prelude or anemic appetizer. </span></div>
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<span style="font-size: large;"><br /></span></div>
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<span style="font-size: large; line-height: 115%;"><a href="http://en.wikipedia.org/wiki/May_you_live_in_interesting_times">"May
you live in interesting times</a>" is an old and curios Chinese curse
which brings this whole political debacle to a new level of understanding. </span></div>
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<span style="font-size: large;"><br /></span></div>
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<span style="font-size: large;"><br /></span></div>Green Trivialhttp://www.blogger.com/profile/07301210921660586787noreply@blogger.com0tag:blogger.com,1999:blog-5584834342886739392.post-30780593037976875542011-10-27T06:04:00.000-07:002012-02-15T07:11:27.478-08:00Signs of worldwide economic collapse and the rise of the US dollarOctober has been a pretty spectacular month with regimes falling all over the Middle East, swept by the so called Arab Spring revolution. <br />
In Europe, the France and Germany duo represented by Merkozy has grown apart in what seems to be a very poisoned and fragmented relationship. Illustrative of the tensions between them would be a weird occurrence when Sarkozy told an audience that Merkel helped herself with another serving of cheese while claiming she`s on diet. There is a very clear resentment and distrust between European leaders. Sarkozy also blasted David Cameron, the UK prime minister for interfering in Euro zone affairs while not being part of the Euro zone. The brits on the other hand are seriously considering exiting the EU. Berlusconi just presented yesterday a joke of a plan that infuriated Merkel, plan of increasing retirement age to 67 years by 2026(seriously?2026?). It`s no wonder Merkel took this proposal as a bad joke.<br />
<br />
Europe has achieved so far, after long and hard fought battles, to have an EFSF fund worth around 400 billion euros. However, this sum is not nearly enough to prevent possible bank failures that may arise as result of 50% or higher "haircut"( aka forcing banks to take losses on Greek bonds) on Greek, Italian, Spanish or Portuguese debt. Most experts would conclude that the sum required would be close to 3 trillion euros, which is considerably higher. Only problem is that no one in Euro zone is willing to come up with the money, so what they`re trying to do now is borrow that money from outside sources and call that "leveraging the EFSF". Problem therefore amplifies as no one wants to lend them the money. So far US treasury secretary, Timothy Geithner refused to commit US money(as we all know US is in a deep hole herself), Brazil politely refused saying EU should be able to come up with ways of funding, China basically said no,no while criticizing reckless social entitlement programs, which they`ve called unsustainable. Few months earlier China contemplated helping EU in exchange for trade advantages that EU clearly dismissed as it would dig EU way deeper into a hole and trade deficit. However, situation now by the end of October is much more dire for China than two months ago when China supposedly offered help in exchange for trade benefits. China had to recently buyback shares on a number of Chinese banks to sure up investor confidence, plus there are ample reports of places in China where real estate market crashed 50% and would seem this is only the beginning of what should be a spectacular crash. There was also a reported case of 25% crash in real estate price happening overnight, due to some real estate developer slashing prices spectacularly on their offerings. As China is clearly in a hole at the moment, it`s very much unlikely they`ll give Europe more rope to hang themselves with. To add offense to injury, Sarkozy has just announced yesterday that he`ll try to negotiate with China some kind of lending deal for leveraging the EFSF. Good luck with that mission impossible! And this is where we are today.<br />
<br />
All these developments, however, where extremely sugar coated by the media, giving false hope to investors while saying Europe is working on a plan to work out a plan to eventually think about working out a possible plan in drafting a plan. Market went up each time these non-event news popped out. Goes to show whole market is controlled by high frequency traders that have less common sense than a 10 year old that can only express himself through knee jerk reactions. Nothing new under the sun though. <br />
While the non-event news were extremely sugar coated to be regarded as good developments, the bad ones were strategically given out at the end of market sessions(like the initial NO vote for EFSF in Slovakia).<br />
As things stand at the moment, market has prized in a full recovery in EU and worldwide consequently. Nothing can be more false. There has never been such a perfect storm for a total market collapse, as US is in shambles with revolution brewing in the streets, revolutions sparkling out in Europe(Italy, Spain, Greece, UK), China poised for a violent hard landing.<br />
<br />
While things are heading for collapse in Europe, in the US market has never been this bad, with consumer confidence dropping to 2008-2009 levels. This month`s earnings had pulled major negative surprises such as Apple missing its target for first time in many years. Banks reported dismal results, which they`ve tried to sugar coat and point to profits that only exist in some of their cooked books. <br />
As even the darlings of US recovery, such as Ford and Apple are beginning to stumble, prospects in US look very dim. Presidential candidate Ron Paul made a statement recently saying real unemployment number is north of 20% and growing.<br />
Companies are laying off people left and right. Banks are making huge cutbacks in personnel, Bank of America planning to lay off 30.000 employees with At&t, Bristol-Myers, Verizon and many others to follow suit. All these layoffs are perfectly mirroring situation in Europe, where Philips, Novartis and Nokia laid of dozens of thousand of people and planning more layoffs. <br />
Yes, some would make the case market is growing in some areas, as some are doing good. However in most of these cases, companies are just stealing market share from other competitors(such as Google taking market share from Yahoo, Microsoft, Apple, RIM), market as a whole is seriously crashing. You can`t have overall market growth when 1 or 2 companies are growing 20% while 5 other similar companies are shrinking 30%. Talking heads on TV that want to make this case are just doing their usual sugar coating routine.<br />
<br />
Now let`s take a stroll back down the memory lane of 1930 and the great depression. See how similar news headlines and sugar coating were to what we have today. For every warning piece of news there were few others to counter balance it for good measure and give confidence to investors:<br />
<blockquote class="tr_bq">
<br />
<div style="color: #990000;">
<i>In March of 1929 newspaper headlines began to hint that things were
not quite as rosy as people had been led to believe. <b>However, for every
piece of bad news, there was an upbeat message to counter the bad news.</b>
Here’s a good example of a 1929 newspaper headline story, excerpted from
the New York Herald Tribune, and which ran on March 28, 1929.</i></div>
<div style="color: #990000;">
<i><b>Headline: ‘Stocks Soar As Bank Aid Ends Fear of Money Panic’</b>. The
story read, in part, “The stock market strode out from under the shadow
of a panic in call money … revived in all its old strength yesterday. </i></div>
<div style="color: #990000;">
<i>Assured that the New York banks were ready … to prevent a money
crisis, the public and the professional trader set out to repair the
damage done to prices on Monday and the major part of Tuesday.</i></div>
<div style="color: #990000;">
<i>Stocks in the aggregate, though bucking a 15 per cent rate for loans,
enjoyed the greatest advance … in a single day in the last two years.
Not even the surging bull markets of … 1928 saw such a day of heavy
buying.”</i></div>
<div style="color: #990000;">
<i>This sort of reportage was typical of the 1929 newspaper headlines,
right up to and following the market crash in October. Investors were
told that this was just a ‘correction’ and the market would remain
prosperous through at least 1930.</i></div>
</blockquote>
How should investors position themselves given this dire context?<br />
<br />
Some would argue governments will start to print more money in order to resume growth and therefore safe havens such as gold and silver are the place to be. In support of this view, we have seen recently some money printing coming out of Bank of England. However, it`s the same Bank of England who doesn`t think other central banks will follow suit (Fast forward to min 4:50 <a href="http://stks.co/o4Y" rel="nofollow" target="_blank">http://stks.co/o4Y</a> ).<br />
In the US, there is big opposition from Republican presidential candidates against further money printing which resulted from popular Tea Party rhetoric. FED members are fearing of being replaced as an act of political retribution for more money printing. Several candidates have made strong statements, saying they`ll be looking to replace Ben Bernanke and other high ranking FED members. <br />
Others have also argued the case that while US is heading to an election year, likelihood of more money printing is very low during 2011-2012. Revolution fermenting on the streets(in all major US cities) and violent protests are not helping the money printing case either, as money printing would further ignite people on the streets due to higher living costs that would result as consequence. <br />
In case of a world economic collapse(where we pretty much are as we speak), US dollar would seriously appreciate, giving US consumer an edge and calm the spirits on the streets. A perspective that would entice politicians heading into elections. <br />
Printing money at this juncture might be a risk that many won`t be willing to take. Opponents of more money printing can now also make the strong case of previous failures of QE1 and QE2 to really re-ignite the economy. Similar policies undertaken by Bank of England have also failed to deliver. <br />
<br />
If we look back at 2008, both gold and silver crashed badly until stimulus started to kick in. We`ve seen silver lose half of its value going from 18 to 9 dollars. I`d say it`s very likely that we`d see a repeat of this scenario unfold again with few minor adjustments such as steeper and longer decline due to factors mentioned above. Also, what many analysts failed to notice so far is that the Euro zone countries that suffer the most, such as Spain or Italy are actually very rich countries. Mr. Richard Sulik, the leader of the SaS party in Slovakia, one that opposed the EFSF, made the case that Italy could easily raise the money by selling some of its huge gold reserve. This might be a last resort option that many are failing to take into account. After Europe would have exhausted all the alternative financing options with the money of other countries, they`ll see no other choice but to finance themselves by selling their ample gold reserves in the open market.( <a href="http://www.businessweek.com/news/2011-09-15/greece-needs-default-abandon-euro-over-loan-sulik-says.html"><i>Sulik said Italy should sell its gold reserves instead of also participating in any bailout program. )</i></a><br />
If the EU states follow such action and start selling gold, France, Italy, Spain, Portugal will begin to start taking offers on their gold on the open market. It`s pretty obvious what the effect of such move might be. Oh and I forgot to mention ECB can`t print money as EU law forbids it and they`ve even acted on raising interest rates since 2008. While some EU members like France, would love to see money printing by ECB, Merkel and Germany clearly opposes. <i></i><br />
<i><br /></i><br />
<i>S</i>o far we`ve seen an interesting price action in gold and silver. They`ve performed on par with the market in general. When market was doing well, based on fake sugar coated news, gold and silver was doing well also, when some bad news surfaced, both gold and silver went down. This trend was broken recently due to false expectations of money printing from Europe( on wishful thinking of France) and false QE3 news coming from US in an attempt to throw a bone to the starving market.<br />
Some say that in times of dire economy, gold and silver are the safe havens. However gold and silver have performed well only in lukewarm times of relative uncertainty. Whenever seriously bad news came flooding in, silver and gold sold off quite heavily. In absence of good news and in the company of dread coming out of media, such as we`re about to soon see as reality has a tendency to hit you in the head, gold and silver should crash on par with the market. Unfortunately, whether you like it or not, best place to be at the moment in whole world is the US dollar and the US bonds. <br />
<i><br /></i><br />
I`d advise going long<i> <a href="http://www.blogger.com/goog_1520040218">UUPT</a></i><a href="http://www.google.com/finance?q=AMEX%3AUUPT"> </a>or for the ones with little more risk appetite, start looking for a window to short precious metals. Plays to look at:<a href="http://www.google.com/finance?q=AMEX:GLL"> GLL</a> for gold and <a href="http://www.google.com/finance?q=AMEX:ZSL">ZSL</a> for silver. In the event of full market crash which should be much bigger than one we`ve faced back in 2008, gold and silver might drop much more than they did in 2008. Gold might hit 1000$/oz and silver 10$/oz. <br />
<a href="http://www.businessweek.com/news/2011-09-15/greece-needs-default-abandon-euro-over-loan-sulik-says.html"><i></i></a>Green Trivialhttp://www.blogger.com/profile/07301210921660586787noreply@blogger.com0tag:blogger.com,1999:blog-5584834342886739392.post-68422404772047010592011-10-13T02:38:00.000-07:002011-10-13T02:39:00.866-07:00Investor psychology in volatile timesVolatile times prompt for a better understanding of investor psychology. Following chart is pretty conclusive and enlightening. It sums up pretty well the emotional roller coaster investors and traders go through on daily basis:<br />
<br />
<i></i> <br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgBQu04mMeBuBuOOifItdTvu9kHBLS4acwet-VBS6Ovb2UVrKODgOhqMxJAgRWukOho6mvFTP9tSUfacnAfzx1vfL2pGUcowy6DC-taL_7hUBdWNtR_AnyrOT8OfO-ry4CQhnCZPD_SFSQ/s1600/investorPsychologyCycle.jpg" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" height="360" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgBQu04mMeBuBuOOifItdTvu9kHBLS4acwet-VBS6Ovb2UVrKODgOhqMxJAgRWukOho6mvFTP9tSUfacnAfzx1vfL2pGUcowy6DC-taL_7hUBdWNtR_AnyrOT8OfO-ry4CQhnCZPD_SFSQ/s640/investorPsychologyCycle.jpg" width="640" /></a></div>Green Trivialhttp://www.blogger.com/profile/07301210921660586787noreply@blogger.com0tag:blogger.com,1999:blog-5584834342886739392.post-14545794330799013402011-10-09T13:22:00.000-07:002011-10-09T14:08:58.552-07:00Slovakian libertarian Party(SaS) stands against EFSF bailout packageSlovakian Speaker of Parliament, Richard Sulik is against Slovakia voting for the EFSF bailout package. He`s leader of the Freedom and Solidarity, or SaS, a libertarian party who`s part of a 4 party coalition that forms the government. <br />
<br />
Richard Sulik believes in the principles of the Austrian School of Economics and doesn`t uphold the mainstream idea that the solution to debt lies in more debt. <br />
<br />
At the moment Slovakia, a very small country in the EU is last country standing who has yet to decide about the implementation of the EFSF plan to bailout Greece and possibly other EU member states via pumping up(capitalizing) the banks. Slovakia is expected to contribute 10 billion euros to this bailout package, which is biggest contribution of all EU member states using the euro currency in relation to its GDP. <br />
<br />
On October 11th the Slovakian parliament will vote on the EFSF package. Out of the 4 government coalition members, 3 will vote in favor and only Sulik`s Freedom and Solidarity party will vote against. However the socialist opposition will have final word, as their vote will be decisive. The opposition is trying to pressure or blackmail the other 3 government coalition parties to dissolve the government and to hold new elections in exchange for positive vote to support the EFSF package on October 11th. <br />
<br />
As Sulik claims, it might all end up in some sort of compromise. Slovakia could support the EFSF package with a vote but not chip in with the required money. <br />
There`s also the possibility of a political deadlock which could in turn derail the whole EFSF project. <br />
<br />
No matter the ending, one thing is sure. The efforts of France and Germany have been seriously delayed by the "stubborn" Slovakia and a delay in this case could prove fatal. This might be the reason as to why both <a href="http://news.ninemsn.com.au/article.aspx?id=8357712">Merkel and Sarkozy have announced today</a> that an announcement about capitalizing banks will come only at the end of October. They are probably waiting for a clear outcome and positive resolution from Slovakia.<br />
<br />
Lots of things can happen though in 3 weeks. Economy has embarked on a roller coaster ride, one which an EFSF bailout might not be able to stop. Anti-banks protests have bursted out in full force throughout US and they`re also spreading throughout Europe. If they snowball to something significant in the coming weeks, Merkozy(Merkel&Sarkozy) can kiss the EFSF idea goodbye. <br />
<br />
I`ll leave you with a video of Richard Sulik making his case against the EFSF: <br />
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Green Trivialhttp://www.blogger.com/profile/07301210921660586787noreply@blogger.com0tag:blogger.com,1999:blog-5584834342886739392.post-38162977692082163412011-10-08T05:07:00.000-07:002011-10-08T05:51:43.221-07:00Solutions for a dysfunctional world economyPretty funny video and cerebral at the same time. Have watched it 5 times already:
<object width="500" height="450"><param name="movie" value="http://rt.com/s/swf/player5.4.swf?file=http://rt.com/files/news/juice-news-termination-economy-301/i706827a0cee99877424dd03d025547c3_2011_10_08-juice-news.flv&image=http://rt.com/files/news/juice-news-termination-economy-301/ibb5b099e57faecdb1944ff062458ec5a_cray-rapper-on-rt.n.jpg&skin=http://rt.com/s/css/player_skin.zip&provider=http&abouttext=Russia%20Today&aboutlink=http://rt.com&autostart=false"></param><embed src="http://rt.com/s/swf/player5.4.swf?file=http://rt.com/files/news/juice-news-termination-economy-301/i706827a0cee99877424dd03d025547c3_2011_10_08-juice-news.flv&image=http://rt.com/files/news/juice-news-termination-economy-301/ibb5b099e57faecdb1944ff062458ec5a_cray-rapper-on-rt.n.jpg&skin=http://rt.com/s/css/player_skin.zip&provider=http&abouttext=Russia%20Today&aboutlink=http://rt.com&autostart=false" type="application/x-shockwave-flash" allowfullscreen="true" width="500" height="450" /></object>Green Trivialhttp://www.blogger.com/profile/07301210921660586787noreply@blogger.com0tag:blogger.com,1999:blog-5584834342886739392.post-85438505238903178612011-10-05T08:07:00.000-07:002011-10-05T08:19:46.853-07:00The good news that rallied markets yesterday is actually bad newsYesterday we`ve had a small rally into the close based on news that European states were going to recapitalize banks. News was hailed with small rally at the end of a bad market day in US, followed by a rally in Europe.<br />
<br />
The irony of it is that this news is actually bad. It will lead to a cascade of country downgrades, which in turn will further spook investors and create a downhill market.<br />
<br />
<object id="cnbcplayer" height="450" width="500" classid="clsid:D27CDB6E-AE6D-11cf-96B8-444553540000" codebase="http://download.macromedia.com/pub/shockwave/cabs/flash/swflash.cab#version=9,0,0,0" > <param name="type" value="application/x-shockwave-flash"/> <param name="allowfullscreen" value="true"/> <param name="allowscriptaccess" value="always"/> <param name="quality" value="best"/> <param name="scale" value="noscale" /> <param name="wmode" value="transparent"/> <param name="bgcolor" value="#000000"/> <param name="salign" value="lt"/> <param name="flashVars" value="startTime=000"/> <param name="flashVars" value="endTime=000"/> <param name="movie" value="http://plus.cnbc.com/rssvideosearch/action/player/id/3000049464/code/cnbcplayershare" /> <embed name="cnbcplayer" PLUGINSPAGE="http://www.macromedia.com/go/getflashplayer" allowfullscreen="true" allowscriptaccess="always" bgcolor="#000000" height="450" width="500" quality="best" wmode="transparent" scale="noscale" salign="lt" src="http://plus.cnbc.com/rssvideosearch/action/player/id/3000049464/code/cnbcplayershare" type="application/x-shockwave-flash" /></object>Green Trivialhttp://www.blogger.com/profile/07301210921660586787noreply@blogger.com0tag:blogger.com,1999:blog-5584834342886739392.post-54136082184537047252011-10-04T10:21:00.000-07:002011-10-04T12:49:26.704-07:00Ocuppy Wall Street livestreaming<iframe frameborder="0" height="340" scrolling="no" src="http://cdn.livestream.com/embed/globalrevolution?layout=4&color=0x00b319&autoPlay=false&mute=false&iconColorOver=0xffffff&iconColor=0xe4f9e6&allowchat=true&height=340&width=560" style="border: 0; outline: 0;" width="560"></iframe>Green Trivialhttp://www.blogger.com/profile/07301210921660586787noreply@blogger.com0tag:blogger.com,1999:blog-5584834342886739392.post-79205999238107831652011-09-30T14:56:00.000-07:002011-09-30T15:11:59.104-07:00Where is silver heading short-term?<div style="font-family: Times,"Times New Roman",serif;">
Head of Weldon Financial, Greg Weldon has a global following of some of the wealthiest investors in the world including individuals, institutions and financial firms.</div>
<br />
<br />
<i style="color: #660000;">When asked about silver specifically, Weldon replied, “Particularly in silver, you have done a lot of work (to the downside). You have to take a really big step back and say if this is a wealth deflation that has a little bit further to go to, what levels could some of these things decline to and still be in the context of an ongoing secular bull market?<br />Meaning a bull market that will ultimately produce new highs when you get another round of countries debasing their currencies. Because that will happen, it’s a question of how we get there. Silver has already retraced 50% of its entire bull market going back to the year 2000. You are coming into the 5 year moving average at $26. Could it dip to $21, it could. Could gold go lower, absolutely.</i><br />
<br />
<br />
<b><span style="font-size: x-small;"><span style="color: #660000;">You can read <a href="http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2011/9/30_Weldon_-_Here_is_Where_We_are_Headed_After_the_Recent_Smash.html">here</a> the full article. </span></span></b><i style="color: #660000;"><br /></i>Green Trivialhttp://www.blogger.com/profile/07301210921660586787noreply@blogger.com0tag:blogger.com,1999:blog-5584834342886739392.post-80735942800154174712011-09-23T01:50:00.000-07:002011-09-23T02:01:02.780-07:00China accused US and EU of supressing gold priceIn a recently released US embassy wikileaks cable, China accused US and EU of suppressing gold prices.<br />
<blockquote>
<i>The China Radio International sponsored newspaper World News Journal (Shijie Xinwenbao)(04/28): </i></blockquote>
<div style="color: #990000;">
<i>"According to China's National Foreign Exchanges Administration China 's gold reserves have recently increased. Currently, the majority of its gold reserves have been located in the U.S. and European countries. The U.S. and Europe have always suppressed the rising price of gold. They intend to weaken gold's function as an international reserve currency. They don't want to see other countries turning to gold reserves instead of the U.S. dollar or Euro.<br />
Therefore, suppressing the price of gold is very beneficial for the U.S. in maintaining the U.S. dollar's role as the international reserve currency. China's increased gold reserves will thus act as a model and lead other countries towards reserving more gold. Large gold reserves are also beneficial in promoting the internationalization of the RMB."</i> </div>
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This clearly goes to show that suppression of gold and silver prices is not just a fantasy of conspiracy theorists and that it`s in fact the true opinion of major players on world stage such as China. Russia also holds similar views. <br />
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Source: http://cables.mrkva.eu/cable.php?id=204405<br />
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All these developments that are gradually coming to light are extremely bullish signs for gold and silver.Green Trivialhttp://www.blogger.com/profile/07301210921660586787noreply@blogger.com1tag:blogger.com,1999:blog-5584834342886739392.post-25799386747834793592011-09-13T05:05:00.000-07:002011-09-13T06:48:38.380-07:00Is media worshipping fake gurus? Nouriel Roubini`s case might present affirmative answerNouriel Roubini aka Dr. Doom is well known in the mainstream media circles as "the one who predicted 2008 economic crisis" as this would represent some huge credentials and credibility. There were many others like for eg Ron Paul who predicted the crisis and don`t take the credit they rightfully deserve. Let me give you a few names of people who besides this Dr. Doom predicted the 2008 crisis just as well if not better: Ron Paul, Peter Schiff, John Paulson, Jim Rogers.<br />
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However mainstream media doesn`t like or doesn`t want to highlight the so many times when their guru sweethearts are dead wrong. <br />
Back in 2009, a while after the Jedi Master Dr. Doom made the economic crash prediction, he also made this extremely bold and confident statement about gold price:<br />
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<b>“Maybe it will reach $1,100 or so but $1,500 or $2,000 is nonsense,” Roubini said.</b> Source <a href="http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aOfwpkHV2clM&pos=5">here</a>.<br />
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Now in 2011, 2 years after we have gold sitting above $1,800 and poised to break the $2,000 barrier. <br />
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Back in 2009, Rogers openly contradicted Roubini, saying that Roubini`s idea of "gold bubble" is nonsense.<br />
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Now looking back in retrospect; should we stop listening to Roubini aka Dr.Doom!? Or should we at least take his statements with a lot of salt and not view him as the oracle that he`s(obviously) not.<br />
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I`ll leave you with some quality entertainment in the company of Dr. Doom.<br />
Enjoy! :)<br />
<object id="cnbcplayer" height="500" width="500" classid="clsid:D27CDB6E-AE6D-11cf-96B8-444553540000" codebase="http://download.macromedia.com/pub/shockwave/cabs/flash/swflash.cab#version=9,0,0,0" > <param name="type" value="application/x-shockwave-flash"/><param name="allowfullscreen" value="true"/><param name="allowscriptaccess" value="always"/><param name="quality" value="best"/><param name="scale" value="noscale" /><param name="wmode" value="transparent"/><param name="bgcolor" value="#000000"/><param name="salign" value="lt"/><param name="flashVars" value="startTime=000"/><param name="flashVars" value="endTime=000"/><param name="movie" value="http://plus.cnbc.com/rssvideosearch/action/player/id/1116350780/code/cnbcplayershare" /><embed name="cnbcplayer" PLUGINSPAGE="http://www.macromedia.com/go/getflashplayer" allowfullscreen="true" allowscriptaccess="always" bgcolor="#000000" height="500" width="500" quality="best" wmode="transparent" scale="noscale" salign="lt" src="http://plus.cnbc.com/rssvideosearch/action/player/id/1116350780/code/cnbcplayershare" type="application/x-shockwave-flash" /></object>Green Trivialhttp://www.blogger.com/profile/07301210921660586787noreply@blogger.com0tag:blogger.com,1999:blog-5584834342886739392.post-3227132834661689242011-09-13T02:06:00.000-07:002011-09-13T02:09:55.551-07:00Gold and silver action yesterday - artificial action of margin callsWhat we`ve seen yesterday in gold and silver was artificial action of margin calls in other asset classes, not much justification any other way. <br />
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Today we`ve seen gold&silver resume their natural upward trend which perfectly fits current environment. <br />
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Sharon calls it like it is. Perhaps one of the few voices on CNBC who do that. <br />
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<object id="cnbcplayer" height="500" width="500" classid="clsid:D27CDB6E-AE6D-11cf-96B8-444553540000" codebase="http://download.macromedia.com/pub/shockwave/cabs/flash/swflash.cab#version=9,0,0,0" > <param name="type" value="application/x-shockwave-flash"/><param name="allowfullscreen" value="true"/><param name="allowscriptaccess" value="always"/><param name="quality" value="best"/><param name="scale" value="noscale" /><param name="wmode" value="transparent"/><param name="bgcolor" value="#000000"/><param name="salign" value="lt"/><param name="flashVars" value="startTime=000"/><param name="flashVars" value="endTime=000"/><param name="movie" value="http://plus.cnbc.com/rssvideosearch/action/player/id/3000045013/code/cnbcplayershare" /><embed name="cnbcplayer" PLUGINSPAGE="http://www.macromedia.com/go/getflashplayer" allowfullscreen="true" allowscriptaccess="always" bgcolor="#000000" height="500" width="500" quality="best" wmode="transparent" scale="noscale" salign="lt" src="http://plus.cnbc.com/rssvideosearch/action/player/id/3000045013/code/cnbcplayershare" type="application/x-shockwave-flash" /></object>Green Trivialhttp://www.blogger.com/profile/07301210921660586787noreply@blogger.com0tag:blogger.com,1999:blog-5584834342886739392.post-82581740453618593922011-09-10T06:47:00.000-07:002011-09-10T07:07:35.251-07:00Obama`s 447 billion job plan - great news for gold and silverPresident Obama announced a plan to create jobs by putting people to work in infrastructure projects. <br />
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While idea has potential to achieve some economic growth(similar measure was taken by Germany back in the 30s with some success), it doesn`t address the core issue. Same issue that made Solyndra solar company, backed by Obama with state funds, go into bankruptcy. <br />
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Core issue is lack of cheap labor of course. US should have drastically lowered the minium wage or have it removed altogether. No company will be tempted to hire US workers, when they can do it elsewhere for less than 1/4 the cost. In many places in China such as assembly lines, similar to ones creating Ipads and Ipods, workers get paid 0.5$/hour. Not to mention these people have no holidays and often work the weekends. Dark side some don`t even want to mention is that many such workers get on demand injections to sleep through the holiday, so that they can save money. <br />
Most if not all US citizens will rather go on food stamps than endure such working conditions. <br />
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The only reason some companies still hire in the US, is that they`re forced to do so. They`re forced to hire locals in the service industries, such as hotels, fast food chains and retail outlets. However, in the heavy industrial sector(where the real money is) things are much different. Here no company is tempted to hire locally and government so far has totally failed to change that. <br />
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Currently China is appreciating its currency, the renminbi, but it`s not nearly enough to make US competitive in the international labor market. EU countries face similar problems which will only get worse. <br />
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While President wasn`t very specific on how he`ll be providing the financing for this 447 billion job plan, one thing is pretty sure given the previous track record. <br />
This money will be created out of thin air one way or another. Plan includes Obama`s campaign promise from years ago to cut taxes on low income individuals and small business but increase taxes on the rich and big corporations. <br />
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Even if this tax plan is put to work, there`s no way in hell it could cover for 447 billion spending package. It will most likely be the result of money printing. Don`t expect US gov to sell military bases, planes and cruisers or anything like that. <br />
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Needless to say that any printing of such huge amounts of money is extremely bullish for gold and silver.<br />
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This is why I`m long: AGQ, UGL, DGPGreen Trivialhttp://www.blogger.com/profile/07301210921660586787noreply@blogger.com0tag:blogger.com,1999:blog-5584834342886739392.post-18473980775614632242011-09-07T02:58:00.001-07:002011-09-07T03:27:02.387-07:00Swiss franc peg - IIMore on previous topic...<br />
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<object id="cnbcplayer" height="500" width="600" classid="clsid:D27CDB6E-AE6D-11cf-96B8-444553540000" codebase="http://download.macromedia.com/pub/shockwave/cabs/flash/swflash.cab#version=9,0,0,0" > <param name="type" value="application/x-shockwave-flash"/><param name="allowfullscreen" value="true"/><param name="allowscriptaccess" value="always"/><param name="quality" value="best"/><param name="scale" value="noscale" /><param name="wmode" value="transparent"/><param name="bgcolor" value="#000000"/><param name="salign" value="lt"/><param name="flashVars" value="startTime=000"/><param name="flashVars" value="endTime=000"/><param name="movie" value="http://plus.cnbc.com/rssvideosearch/action/player/id/3000043907/code/cnbcplayershare" /><embed name="cnbcplayer" PLUGINSPAGE="http://www.macromedia.com/go/getflashplayer" allowfullscreen="true" allowscriptaccess="always" bgcolor="#000000" height="500" width="600" quality="best" wmode="transparent" scale="noscale" salign="lt" src="http://plus.cnbc.com/rssvideosearch/action/player/id/3000043907/code/cnbcplayershare" type="application/x-shockwave-flash" /></object>Green Trivialhttp://www.blogger.com/profile/07301210921660586787noreply@blogger.com0tag:blogger.com,1999:blog-5584834342886739392.post-54512678841332260732011-09-07T02:03:00.000-07:002011-09-07T02:40:03.884-07:00Swiss franc pegged to euro - More reason to buy gold and silverSwitzerland is becoming less "Switzerland" with each passing day. Following the banking secrecy scandals, which dimmed image of safe haven country, now even more shocking news emerge.<br />
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In a desperate bid to stop currency appreciation and protect exports, Switzerland took a drastic measure. They`ve announced pegging their currency to the euro at a minium rate of 1.2 francs per 1 euro.<br />
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Investors and some banks preferred to keep their investments in Swiss francs as it used to be one of the last currencies with big gold exposure, Switzerland having an annual inflation rate of just 1%. <br />
Now that the major safe haven currency has gone bye bye, very few alternatives remain. Some say the Singapore Dollar, Norwegian Krona, Canadian or Aussie Dollar might present such safe havens.<br />
However, all countries associated with these currencies run the risk of doing same thing as Switzerland. If their currencies will start to be seriously hunted by safe haven speculators, they`ll just try to devalue in a bid to protect their exports<br />
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<div class="separator" style="clear: both; text-align: center;"><iframe allowfullscreen='allowfullscreen' webkitallowfullscreen='webkitallowfullscreen' mozallowfullscreen='mozallowfullscreen' width='320' height='266' src='https://www.youtube.com/embed/doPbFWgen7M?feature=player_embedded' frameborder='0'></iframe></div><br />
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Now what are the alternatives? There`s only the obvious choice of gold and silver and probably some mining stocks. The latter will be subject to a future piece, as it might present interesting alternative with much upside. <br />
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Suggested plays, silver and gold leveraged 2x etf/etns: $DGP, $UGL and $AGQ.Green Trivialhttp://www.blogger.com/profile/07301210921660586787noreply@blogger.com0tag:blogger.com,1999:blog-5584834342886739392.post-81941520480196912992011-09-01T02:53:00.000-07:002011-09-01T06:01:08.105-07:00QE3 on its way - Best entry point for silver and goldQE3 got delayed for the time being. At Jackson Hole, Ben Bernanke assured the audience of zero interest rates for many years to come. He also talked about monitoring the fragile economy and mentioned further quantitative easing during fall, if deemed necessary.<br />
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This should be a nice break and accumulation period for precious metals, mainly silver and gold. <br />
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Historically both gold and silver have rallied during the cold season. As economy should but won`t get back in full swing, the obvious holes will make it easier for all the roaches to come out of the woodshed.<br />
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You have been warned! :)<br />
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Best plays should be AGQ and UGL, gold and silver ETFs with 2x more exposure. If you`re to profit anyways, why not do it in style?!Green Trivialhttp://www.blogger.com/profile/07301210921660586787noreply@blogger.com0tag:blogger.com,1999:blog-5584834342886739392.post-35609095331770181972011-05-05T14:12:00.000-07:002011-05-05T14:19:47.604-07:00Yandex IPO - The Google of RussiaBy the end of May, Yandex<iframe align="left" frameborder="0" marginheight="0" marginwidth="0" scrolling="no" src="http://rcm.amazon.com/e/cm?t=juigra-20&o=1&p=8&l=bpl&asins=6130524897&fc1=000000&IS2=1&lt1=_blank&m=amazon&lc1=0000FF&bc1=000000&bg1=FFFFFF&f=ifr" style="align: left; height: 245px; padding-right: 10px; padding-top: 5px; width: 131px;"></iframe>, the most popular search engine in Russia is launching its IPO on Nasdaq exchange. Yandex holds over 60% market share of Russia`s internet search market, with Google down at little over 20%.<br />
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This could prove to be a great bet on Russia`s future development as an emerging market. Search engines like Yandex and Google take advantage of a booming economy by providing ad opportunities on the best place to advertise these days, the World Wide Web.<br />
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The Google IPO was initially priced too cheap and presented a great opportunity for early buyers. If history repeats itself, a somewhat similar scenario could unfold again.<br />
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This Google or <a href="http://www.google.com/finance?q=NASDAQ%3ABIDU">Baidu</a>(<i>another great story by the way</i>) of Russia, if you will, had its share of controversy lately by providing the FSB, the Russian secret service with some information regarding certain blogger. Some tried to spin this as a risk associated with Russia.<br />
However every communication and Internet company in both eastern and western world is bound to cooperate with the state aparatus and the state agencies if required. All communication companies in US and Europe have provided, are providing and will keep providing information based on request of government agencies. I see this as a non issue that shouldn`t affect the IPO or the company going further.<br />
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Dmitry Medvedev's plan to create a Silicone Valley in Russia is apparently on track. During the <a href="http://www.guardian.co.uk/business/2010/jun/23/dmitry-medvedev-silicon-valley-visit">Silicone Valley visit</a>, the meeting with CEOs of Google, Twitter, Cisco, Apple and other tech companies was but an early signal towards such future developments. <br />
In a bid to ease Russia`s reliance on energy sector, the creation of a strong internal technology market could provide the needed diversification and greatly boost economic growth. This unfolding scenario will give Yandex even more growth opportunities going further. Its 60% market share of Russia`s Internet search market could provide the key element in this largely unexplored and undervalued growth market. <br />
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Will this IPO fare well and present good growth opportunities? I`d say "yes". Russia is at the moment among the most undervalued emerging markets and could be the source of some amazing success stories.Green Trivialhttp://www.blogger.com/profile/07301210921660586787noreply@blogger.com0tag:blogger.com,1999:blog-5584834342886739392.post-4253087104014617082011-04-30T16:06:00.000-07:002011-05-01T11:42:59.678-07:00Caterpillar and Komatsu - Two juicy morsels<div style="text-align: justify;">No matter what corporate mining website you turn to, one thing won`t go away from the pictures there. Yes, it`s the CAT logo branded on all those trucks, excavators and specialized heavy machinery.</div><div style="text-align: justify;"><br />
</div><div style="text-align: justify;">With the commodity boom and mining operations heavily intensifying cross the world, <a href="http://www.google.com/finance?q=NYSE:CAT">Caterpillar</a> is best positioned to take advantaged of such momentum. Everyone in the world is buying their highly professional machines as there are not many alternatives to what they can offer. Even Chinese companies are buying their high tech machinery. </div><div style="text-align: justify;"><br />
</div><div style="text-align: justify;">Mining operations are expected to grow at an accelerated pace across the world within the next 5-10 years, as signs of heavy demand are already sparkling everywhere.</div><div style="text-align: justify;">CAT not only has recovered from the 2008 economic crisis but their shares are worth more now than back in 2008. This is truly amazing. There aren`t many that can boast such achievement. It goes to show the momentum this company has and the future potential. </div><div style="text-align: justify;"><br />
</div><table cellpadding="0" cellspacing="0" class="tr-caption-container" style="float: left; margin-left: 0px; margin-right: 0px; text-align: left;"><tbody>
<tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgmyQQQ9Svp0HZR902XXoUdIpjAV_IFVSCDbM8nIU909tuPL4ZE80WD9oBYknyzAGV2K0LgVrOS86_I5SgiuLCgb5DujrX6ilEQVDwAGCAFSnnJ0Eu90bl16GVb5h19XMK2BgCYtodew8Y/s1600/Caterpillar.jpg" imageanchor="1" style="margin-left: auto; margin-right: auto;"><img border="0" height="121" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgmyQQQ9Svp0HZR902XXoUdIpjAV_IFVSCDbM8nIU909tuPL4ZE80WD9oBYknyzAGV2K0LgVrOS86_I5SgiuLCgb5DujrX6ilEQVDwAGCAFSnnJ0Eu90bl16GVb5h19XMK2BgCYtodew8Y/s400/Caterpillar.jpg" width="400" /></a></td></tr>
<tr><td class="tr-caption" style="text-align: center;">Caterpillar 2008 vs 2011</td></tr>
</tbody></table><div style="text-align: justify;"><br />
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<br />
Japanese rival Komatsu<iframe align="left" frameborder="0" marginheight="0" marginwidth="0" scrolling="no" src="http://rcm.amazon.com/e/cm?t=juigra-20&o=1&p=8&l=bpl&asins=B0002YNPD8&fc1=000000&IS2=1&lt1=_blank&m=amazon&lc1=0000FF&bc1=000000&bg1=FFFFFF&f=ifr" style="align: left; height: 245px; padding-right: 10px; padding-top: 5px; width: 131px;"></iframe>(PINK:<a href="http://www.google.com/finance?q=PINK:KMTUY" id="rq-" title="Komatsu Ltd. (ADR)">KMTUY</a>) has also been a good performer on par with <a href="http://www.google.com/finance?q=NYSE:CAT">Caterpillar</a>. It could provide an interesting alternative. As you can see in next chart, <a href="http://kmtuy/">Komatsu</a> has been performing on par with CAT, even outperforming here and there. For the sake of comparison, I`ve also added a Chinese rival that recently managed to equip themselves with some <a href="http://www.im-mining.com/2010/12/15/cummins-supply-agreement-with-leading-chinese-haul-truck-player-xemc/">capable technology</a>. Xiangtan Electric Manufacturing Group (XEMC), ticker <a href="http://www.google.com/finance?q=SHA:600416" id="rq-" title="Xiangtan Electric Manufacturing Co.,Ltd.">600416</a> listed in Shanghai. </div><div style="text-align: justify;"><br />
</div><table cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: 0px; margin-right: 0px; text-align: left;"><tbody>
<tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiaAAvJMcUpRSH9QD1CARHfoZJ0sIQmc6yDfaLMuOUlgkm_BD1d2uJ8ovSmuVZn7CKxKimLW-jrsiCtcejl95dGtTtwhZqnY07CCtAbQRtXJA7JMPKri2NQ5R-ura7C0fq9gQfZa6Dd_y4/s1600/Cat+vs+kamatsu+vs+chinese.jpg" imageanchor="1" style="margin-left: auto; margin-right: auto;"><img border="0" height="130" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiaAAvJMcUpRSH9QD1CARHfoZJ0sIQmc6yDfaLMuOUlgkm_BD1d2uJ8ovSmuVZn7CKxKimLW-jrsiCtcejl95dGtTtwhZqnY07CCtAbQRtXJA7JMPKri2NQ5R-ura7C0fq9gQfZa6Dd_y4/s400/Cat+vs+kamatsu+vs+chinese.jpg" width="400" /></a></td></tr>
<tr><td class="tr-caption" style="text-align: center;">XEMC(yellow) vs Caterpillar(red) vs Komatsu(blue)</td></tr>
</tbody></table><div style="text-align: justify;"><br />
</div><div style="text-align: justify;">Worth noting that the Chinese XEMC has been a strong performer for the past 5 years. During the past year, however, Caterpillar and Komatsu<img alt="" border="0" height="1" src="http://www.assoc-amazon.com/e/ir?t=juigra-20&l=btl&camp=213689&creative=392969&o=1&a=" style="border: none !important; margin: 0px !important; padding: 0px !important;" width="1" /> performed better. </div><div style="text-align: justify;"><br />
</div><div style="text-align: justify;">All these 3 can prove to be good choices. <a href="http://www.amazon.com/s/?ie=UTF8&tag=juigra-20&link_code=btl&camp=213689&creative=392969&search-alias=aps&field-keywords=Caterpillar" target="_blank">Caterpillar</a><img alt="" border="0" height="1" src="http://www.assoc-amazon.com/e/ir?t=juigra-20&l=btl&camp=213689&creative=392969&o=1&a=" style="border: none !important; margin: 0px !important; padding: 0px !important;" width="1" /> offers, over the other two, a larger market, bigger diversification of customer base and could provide best stable growth. The other two, however, are serious contenders and could provide some very pleasant surprises down the road.</div>Green Trivialhttp://www.blogger.com/profile/07301210921660586787noreply@blogger.com0tag:blogger.com,1999:blog-5584834342886739392.post-34572433637826758322011-04-26T14:48:00.000-07:002011-04-28T05:34:38.794-07:00End of silver rally?<div style="text-align: justify;">Silver had a big vertical rally during last few months. The famous SLV etf had a 63% increase over the past 3months. Silver failed however to break the 50$/ounce resistance level and move higher. Today it experienced a 4% drop.</div><div style="text-align: justify;">Will it consolidated around these levels for a few days and edge higher above the 50$ resistance level or will it crash back to the 40$ threshhold? </div><div style="text-align: justify;"><br />
</div><div style="text-align: justify;">The silver price increase was indeed abrupt with lot of enthusiasm driving a rally. Over enthusiasm though can quickly turn sour and into panic for the faint of heart. More and more people seem to believe silver is due to crash and general perception might shape a short term price trend, which in our case points lower.</div><div style="text-align: justify;"><br />
</div><div style="text-align: justify;">Jim Rogers<iframe align="left" frameborder="0" marginheight="0" marginwidth="0" scrolling="no" src="http://rcm.amazon.com/e/cm?t=juigra-20&o=1&p=8&l=bpl&asins=B004P5OQFG&fc1=000000&IS2=1&lt1=_blank&m=amazon&lc1=0000FF&bc1=000000&bg1=FFFFFF&f=ifr" style="align: left; height: 245px; padding-right: 10px; padding-top: 5px; width: 131px;"></iframe>, a known silver bull is cautious, being fearful of such sudden spikes in price that can signal a heavy fall. Also, ahead of Ben Bernanke<iframe align="left" frameborder="0" marginheight="0" marginwidth="0" scrolling="no" src="http://rcm.amazon.com/e/cm?t=juigra-20&o=1&p=8&l=bpl&asins=B004EYT58G&fc1=000000&IS2=1&lt1=_blank&m=amazon&lc1=0000FF&bc1=000000&bg1=FFFFFF&f=ifr" style="align: left; height: 245px; padding-right: 10px; padding-top: 5px; width: 131px;"></iframe>`s press conference, things are particularly worrisome for silver. If Bernanke signals a hike in FED`s interest rates, small and insignificant as it may be, markets could react creating a faster and bigger sell-off in silver, dragging prices further down and faster, creating a downward momentum that could trigger panic selling.</div><div style="text-align: justify;"><br />
</div><div style="text-align: justify;">Of course, there`s also a likely option, Bernanke will go ahead with printing extending quantitative easing in some way or announcing a QE3, which will give silver another reason to rally further into unknown all time highs.</div><div style="text-align: justify;"><br />
</div><div style="text-align: justify;">However, worth considering beyond the above that silver industrial demand may drop significantly at higher prices which in turn could trigger a sell-off. Certain silver alloys and silver based compounds could be replaced with cheaper alternatives. There are already signs of that happening in certain industrial sectors.</div><div style="text-align: justify;"><br />
</div><div style="text-align: justify;">I myself see silver going higher mid-long term, but I see a potential threat arising and lurking in the shadows at these levels. A case of "too fast, too soon" is already shaping up in the mind of Mr. Market<iframe align="left" frameborder="0" marginheight="0" marginwidth="0" scrolling="no" src="http://rcm.amazon.com/e/cm?t=juigra-20&o=1&p=8&l=bpl&asins=1604190086&fc1=000000&IS2=1&lt1=_blank&m=amazon&lc1=0000FF&bc1=000000&bg1=FFFFFF&f=ifr" style="align: left; height: 245px; padding-right: 10px; padding-top: 5px; width: 131px;"></iframe>.</div>Green Trivialhttp://www.blogger.com/profile/07301210921660586787noreply@blogger.com0tag:blogger.com,1999:blog-5584834342886739392.post-89382215994103091262011-04-22T02:23:00.000-07:002011-04-29T09:16:19.911-07:00Rare earths - Best opportunity in commodities?<div style="font-family: inherit; text-align: justify;"><span style="font-size: large;">Rare earths have shown a killer price increase over the past year, dwarfing most commodities<iframe align="left" frameborder="0" marginheight="0" marginwidth="0" scrolling="no" src="http://rcm.amazon.com/e/cm?t=juigra-20&o=1&p=8&l=bpl&asins=0137015453&fc1=000000&IS2=1&lt1=_blank&m=amazon&lc1=0000FF&bc1=000000&bg1=FFFFFF&f=ifr" style="align: left; height: 245px; padding-right: 10px; padding-top: 5px; width: 131px;"></iframe> and by the looks of things trend will most likely continue. </span></div><div style="font-family: inherit; text-align: justify;"><span style="font-size: large;"><br />
</span></div><div style="font-family: inherit; text-align: justify;"><span style="font-size: large;"><b>What are these <a href="http://www.amazon.com/Lanthanides-Tantalum-Niobium-Geochemistry-Characteristics/dp/0387500898?ie=UTF8&tag=juigra-20&link_code=btl&camp=213689&creative=392969" target="_blank">rare earths</a><img alt="" border="0" height="1" src="http://www.assoc-amazon.com/e/ir?t=juigra-20&l=btl&camp=213689&creative=392969&o=1&a=0387500898" style="border: none !important; margin: 0px !important; padding: 0px !important;" width="1" />?</b></span></div><div style="font-family: inherit; text-align: justify;"><span style="font-size: large;"><br />
</span></div><div style="font-family: inherit; text-align: justify;"><span style="font-size: large;">Rare earths are rare earth elements that are not actually so very rare in the ground but they can`t be easily found in any plentiful supply in just one place, which makes mining for such elements pretty difficult. </span></div><div style="font-family: inherit; text-align: justify;"><span style="font-size: large;"><br />
</span></div><div style="font-family: inherit; text-align: justify;"><span style="font-size: large;">They are used in most of today`s consumer electronics(LCDs, Ipads, ...), high tech weaponry, hybrid cars and so on. </span></div><div style="font-family: inherit; text-align: justify;"><span style="font-size: large;"><br />
</span></div><div style="font-family: inherit; text-align: justify;"><span style="font-size: large;"><b>Demand</b></span></div><div style="font-family: inherit; text-align: justify;"><span style="font-size: large;"><br />
</span></div><div style="font-family: inherit; text-align: justify;"><span style="font-size: large;">Demand for such rare earths is gradually increasing due to countries such as India, China, Russia, Brazil. The middle class is becoming increasingly well represented and it aims towards a more plentiful western way of living. <b> </b>The consumer electronics, cars and other utilities that support such industries will dramatically increase demand for rare earths.</span></div><div style="font-family: inherit; text-align: justify;"><span style="font-size: large;">On top of these developing countries, western consumption of such goods will also tend to increase as hybrid cars, smartphones and other such electronics become more popular. </span></div><div style="font-family: inherit; text-align: justify;"><span style="font-size: large;"><br />
</span></div><div style="font-family: inherit; text-align: justify;"><span style="font-size: large;">At the moment China controls 97% of world`s production of rare earths, with one third of world`s known reserves being located in China. </span></div><div style="font-family: inherit; text-align: justify;"><span style="font-size: large;">In 2010 China restricted exports of such rare earths and mentioned it`s considering importing to meet growing domestic demand. Thus, as a result, world`s supply became increasingly lower.</span></div><div style="font-family: inherit; text-align: justify;"><span style="font-size: large;"><br />
</span></div><div style="font-family: inherit; text-align: justify;"><span style="font-size: large;"><b>How to play it</b></span></div><div style="font-family: inherit; text-align: justify;"><span style="font-size: large;"><br />
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<tr><td style="text-align: center;"><span style="font-size: large;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh7eYjIhJH1VKt_1wsvzI5JolNCHxXRJ5zjzrmZ4EL9_DrYSv74jxIjWYTCFI3zXKlKPvjNryYkpDYglqX2h8u5Zv5wM14_KbAsHK96omfKa-miYUedaWpMnDHsgej2hUPGlZqOdUDmiD0/s1600/remx.jpg" imageanchor="1" style="margin-left: auto; margin-right: auto;"><img border="0" height="138" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh7eYjIhJH1VKt_1wsvzI5JolNCHxXRJ5zjzrmZ4EL9_DrYSv74jxIjWYTCFI3zXKlKPvjNryYkpDYglqX2h8u5Zv5wM14_KbAsHK96omfKa-miYUedaWpMnDHsgej2hUPGlZqOdUDmiD0/s400/remx.jpg" width="400" /></a></span></td></tr>
<tr><td class="tr-caption" style="text-align: center;"><span style="font-size: large;">REMX-Market Vectors Rare Earths ETF</span></td><td class="tr-caption" style="text-align: center;"><span style="font-size: large;"><br />
</span></td></tr>
</tbody></table><div style="font-family: inherit; text-align: justify;"><span style="font-size: large;">A rare earths ETF was recently launched on the market. Market Vectors Rare Earths ETF(ticker: REMX). Over the past 6months it had an increase of 42%. Looks pretty promising right?</span></div><div style="font-family: inherit; text-align: justify;"><span style="font-size: large;"><br />
</span></div><div style="font-family: inherit; text-align: justify;"><span style="font-size: large;">Well, let`s look over some other options such as rare earths stocks. As we can see in this next chart, the Rare earth stocks such as Molycorp or Avalon Rare Metals have been best performers over the past 6 months. </span></div><div style="font-family: inherit; text-align: justify;"><span style="font-size: large;"><br />
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<tr><td style="text-align: center;"><span style="font-size: large;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiCVX0EZ_Q9rnchbi8NfoWQCNrR54XY_E3-iSs70kdJgOC1Zv2O9_jHpNQ7kHv24SxTA6kXFK1PcK_Hq853cndO4gFAMCHhCsNYOdf9Mq4h83WAdWX_1OVzGfOHLzJRppUG2V_7L00mdtU/s1600/rareEarthplaysComp.jpg" imageanchor="1" style="margin-left: auto; margin-right: auto;"><img border="0" height="136" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiCVX0EZ_Q9rnchbi8NfoWQCNrR54XY_E3-iSs70kdJgOC1Zv2O9_jHpNQ7kHv24SxTA6kXFK1PcK_Hq853cndO4gFAMCHhCsNYOdf9Mq4h83WAdWX_1OVzGfOHLzJRppUG2V_7L00mdtU/s400/rareEarthplaysComp.jpg" width="400" /></a></span></td></tr>
<tr><td class="tr-caption" style="text-align: center;"><span style="font-size: large;">Rare earth ETF vs Rare earth stocks comparison</span></td></tr>
</tbody></table><div style="font-family: inherit; text-align: justify;"><span style="font-size: large;"><br />
</span></div><div style="font-family: inherit; text-align: justify;"><span style="font-size: large;">Worth noting however, the ETF is relatively new to the market and will most likely catch more attention as more people find out about it. As a stock, Molycorp is pretty well positioned as they are closer to starting production having reactivated their rare earths mine. </span></div><div style="font-family: inherit; text-align: justify;"><span style="font-size: large;"><br />
</span></div><div style="font-family: inherit; text-align: justify;"><span style="font-size: large;"><b>The Outlook</b></span></div><div style="font-family: inherit; text-align: justify;"><span style="font-size: large;"><br />
</span></div><div style="font-family: inherit; text-align: justify;"><span style="font-size: large;">The major advantage China has holding its rare earths monopoly is due to their approach to mining. Mining for rare earths requires extensive environmental permits as its one of the most damaging to environment especially if done in a cost effective way. At the moment China has no such concerns even if some of its rare earth operations are said to be one of the most polluted places in the world. </span></div><div style="font-family: inherit; text-align: justify;"><span style="font-size: large;"><br />
</span></div><div style="font-family: inherit; text-align: justify;"><span style="font-size: large;">It would be pretty difficult to get such cost effective mines up and running in other places. Opening up a mine, getting permits and so on would take over 4-5years. During this time demand is expected to spike dramatically and the price of rare earths to follow accordingly. </span></div><div style="font-family: inherit; text-align: justify;"><span style="font-size: large;"><br />
</span></div><div style="font-family: inherit; text-align: justify;"><span style="font-size: large;">US is looking to build up a strategic reserve of rare earths. The defense department is most concerned of securing enough of these. Lots of other industrialized and developing countries are expected to follow suit.</span></div><div style="font-family: inherit; text-align: justify;"><span style="font-size: large;"><br />
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<tr><td style="text-align: center;"><span style="font-size: large;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh2m0iYp1iv3_GMtTINxRv65ZSAsq6d0BE4z-PMTUiQRF2tmSfw9YaxxlUddrWp8GltO26yI6PxbpX9jl-WpdSvMkS3b_Y9sr1p2slmhWbzKYBshccQ0S3x_XI9h3Q25XHzXrPB6rJzEKQ/s1600/molycorp.jpg" imageanchor="1" style="margin-left: auto; margin-right: auto;"><img border="0" height="131" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh2m0iYp1iv3_GMtTINxRv65ZSAsq6d0BE4z-PMTUiQRF2tmSfw9YaxxlUddrWp8GltO26yI6PxbpX9jl-WpdSvMkS3b_Y9sr1p2slmhWbzKYBshccQ0S3x_XI9h3Q25XHzXrPB6rJzEKQ/s400/molycorp.jpg" width="400" /></a></span></td></tr>
<tr><td class="tr-caption" style="text-align: center;"><span style="font-size: large;">Molycorp 9 months chart</span></td></tr>
</tbody></table><div style="font-family: inherit; text-align: justify;"><span style="font-size: large;">As a result of all of the above, the supply bottleneck is expected to narrow down further. Also worth considering that rise in stock price of rare earth players such as Molycorp, which increased at around 600%/year, is expected to continue at an accelerated pace.</span></div>Green Trivialhttp://www.blogger.com/profile/07301210921660586787noreply@blogger.com0tag:blogger.com,1999:blog-5584834342886739392.post-69605803066495707922011-04-18T08:10:00.000-07:002011-04-29T09:10:57.185-07:00Glencore IPO - Storm the gates or live to fight another day?<div style="text-align: justify;">Some of you may or may not know that one of the biggest IPOs of this decade is hitting the markets this May. International commodity trader giant Glencore will seek listing on the London and Hong Kong stock exchanges. <b><br />
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</div><b>Who is Glencore? </b><br />
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Glencore<iframe align="left" frameborder="0" marginheight="0" marginwidth="0" scrolling="no" src="http://rcm.amazon.com/e/cm?t=juigra-20&o=1&p=8&l=bpl&asins=031265068X&fc1=000000&IS2=1&lt1=_blank&m=amazon&lc1=0000FF&bc1=000000&bg1=FFFFFF&f=ifr" style="align: left; height: 245px; padding-right: 10px; padding-top: 5px; width: 131px;"></iframe> is a major powerhouse commodity trader and one world`s largest supplier of commodities, the child born out of Marc Rich & Co split. Marc Rich & Co split into Glencore International AG and Trafigura AG. Both of these two are today`s top commodity traders with stakes spanning the globe summing up well over 100 billion Dollars.<br />
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Glencore`s been known as a very secretive private company with a shady past, a company that has made riches by dealing with countries such as Iran under embargo at the time, illegal dealings with USSR, apartheid South Africa and Iraq under Saddam Hussein. Parent founder Marc Rich has been for many years in FBI`s top 10 most wanted list until 2001, when US president Bill Clinton issued a presidential pardon within the last few hours of his term.<br />
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Presently, Glencore owns stakes in many big oil&mining operations across the globe. It also owns significant stakes in food commodities, being major stockholder in few such food commodity companies. <br />
Glencore has over 50.000 employees wordwide and boasted an annual revenue of 144.9 billion $ in 2010.<br />
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<b>Why Glencore?</b><br />
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What`s interesting about Glencore in regards to its oil&mining operations is that company deals with whole production cycle in most cases, from prospecting and extraction to smelting, refining and final delivery. This gives the company a big upper hand over others in cutting out the middlemen and in being able to better control cost and deliveries. It also helps them secure huge contracts over long periods.<br />
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Company boasted a dividend post IPO but some are still worried that a dividend might not last for long post IPO.<br />
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Being spanned all across the globe and owning various commodity plays, Glencore becomes attractive as an index commodity play in itself, presenting investors with a lot of diversification both in terms of assets and in terms of geographical diversity of its operations, reducing risk of social, political regional instabilities and of natural disasters. <br />
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Many of the big budget hedge funds and wealthy investors are reportedly keeping money aside awaiting this IPO. As it is expected to be one of the biggest IPOs of the decade, it might well become a momentum stock, generating a lot of interest in the few days. Therefore could also be a short term in and out trade, speculating on the hysteria of the initial launch. A few London underwriters reported that the upcoming Glencore IPO sucked the wind out of the market, making clients pass on few new IPO releases, saving money for the Glencore IPO.<br />
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<b>Why not Glencore?</b><br />
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Some are worried about the motives and timing of such an IPO. A few speculated that the main drive behind Glencore`s IPO decision has been the current boom in commodity prices and a possible early warning of a soon to burst bubble. Other voices say that certain Glencore stockholders are looking to exit the company. Official Glencore motivation for an IPO is to raise cash for further acquisitions down the road.<br />
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Tony Hayward, ex BP CEO is expected to get a high level Glencore management position, a move that raises some questions in regards to corporate credibility and company image. Tony Hayward has became notorious after the Gulf of Mexico BP oil spill, where as the BP CEO he managed what some labeled as a disastrous PR damage control campaign.<br />
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Security analysts claim that while it`s relatively simple to put a price on Glencore`s commodity stakes in several companies, same can`t be said about its trading side of business. Evaluating the trading business will be subject to lots of different interpretations and lead to different views on what IPO share price should be. Aftermath of IPO might leave some analysts with bitter comments targeted at what might be seen as "outrageous valuation" which in turn could hurt the stock price going further.<br />
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Last but not least, Glencore`s secretive past dealings apparently torn out of a Tom Clancy spy novel, could hurt shareholders confidence. <br />
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<b>The bottom line</b><br />
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Regardless the aftermath of this IPO, this listing is certainly generating a lot of interest worldwide, keeping lots of hedge funds and wealthy folks with finger on the trigger.<br />
Share price will also be key ingredient in deciding whether to storm Glencore`s gates or live to fight another day. <br />
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Will this make you money or not? One thing is certain. Dozens of people in Glencore management positions are about to become millionaires following this IPO. Will investors share same fortunes? Remains to be seen.Green Trivialhttp://www.blogger.com/profile/07301210921660586787noreply@blogger.com0tag:blogger.com,1999:blog-5584834342886739392.post-14797974923841460942011-04-14T03:34:00.000-07:002011-04-29T09:09:23.177-07:00CNBC piece on MongoliaA very interesting <a href="http://www.cnbc.com/id/42584629">CNBC piece on Mongolia</a> came out today. <br />
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Few highlights from the article:<br />
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<div style="color: #990000;"><i>But it is not just gold reserves sitting in the mountains and deserts of Mongolia<iframe align="left" frameborder="0" marginheight="0" marginwidth="0" scrolling="no" src="http://rcm.amazon.com/e/cm?t=juigra-20&o=1&p=8&l=bpl&asins=B003ELQLKA&fc1=000000&IS2=1&lt1=_blank&m=amazon&lc1=0000FF&bc1=000000&bg1=FFFFFF&f=ifr" style="align: left; height: 245px; padding-right: 10px; padding-top: 5px; width: 131px;"></iframe>, a country similar in size to Alaska. The CIA world fact book says the North Asian country is also rich in copper, coal, molybdenum, fluorspar, uranium, tin and tungsten deposits. </i></div><div style="color: #990000;"><br />
</div><div style="color: #990000;"><i>“The undeveloped mineral wealth in Mongolia is spectacular – this is a country that really is sitting on a pot of gold. It has one of the largest undeveloped copper, gold and uranium deposits in the world and is believed to have the largest untapped supply of coal,” </i></div><div style="color: #990000;"><br />
</div><div style="color: #990000;"><i>“Thanks to positive recent political and economic developments, Mongolia is set for spectacular growth which is becoming noticed globally. And backed by its resource-rich landscape of world class deposits, Mongolia has been coined the <b>“Saudi Arabia of Coal”</b> with strong parallels to previous natural resource booms around the world,” he said. “Whilst Australia needs a rail road, a port, a ship and another port to get raw materials to China we can simply drive it into China over 300 kilometres of desert,” said Baatar, who admits big investment is needed to help get its huge natural resources to market.</i></div><br />
Worth mentioning Mongolia Energy(ticker:<a href="http://www.google.com/finance?q=PINK:MOAEF">MOAEF</a>) is very diversified in its energy and metals portofolio with momentarily focus on coal and one of the most undervalued mining companies.<br />
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<i>I`ve expressed my views on Mongolia Energy in a <a href="http://juicygrabs.blogspot.com/2011/04/ultra-juicy-play-in-mongolia.html">previous article</a>.<i> </i></i>Green Trivialhttp://www.blogger.com/profile/07301210921660586787noreply@blogger.com0tag:blogger.com,1999:blog-5584834342886739392.post-40199321869738531552011-04-13T12:25:00.000-07:002011-04-29T09:08:28.013-07:00Bank of America slaps Goldman - Oil and precious metals upFunny how Bank of America<iframe align="left" frameborder="0" marginheight="0" marginwidth="0" scrolling="no" src="http://rcm.amazon.com/e/cm?t=juigra-20&o=1&p=8&l=bpl&asins=0307717860&fc1=000000&IS2=1&lt1=_blank&m=amazon&lc1=0000FF&bc1=000000&bg1=FFFFFF&f=ifr" style="align: left; height: 245px; padding-right: 10px; padding-top: 5px; width: 131px;"></iframe> came out today saying oil will most likely go higher to 120$-160$ range, just one day after Goldman predicted oil going to 105$. <br />
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Might as well flip a coin. Market seems to sway according to these market gurus. Perception is reality I guess.<br />
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Makes you wonder how much is manipulation and how much is it real foresight. I guess line`s pretty blurred as it stands.Green Trivialhttp://www.blogger.com/profile/07301210921660586787noreply@blogger.com0