On Zerohedge, the article of the ECB deposit facility sparked my attention. Apparently, banks are depositing their money into the ECB at an alarming rate (Chart 1).Since the crisis of 2008, this deposit facility had risen a lot (250 billion euro), but has only recently skyrocketed to more than 800 billion euro.This deposit facility at the ECB is a macro-economic indicator of market tension residing at the European banks. It is seen as a "safe haven" during economic turmoil in Europe. The higher this ECB deposit facility rises, the more banks...
Monday, 30 April 2012
Sunday, 29 April 2012
Friday, 27 April 2012
On Zerohedge, I saw an update on the GDP to Debt growth ratio. This reminded me to update the Zero Hour Debt chart. So I added a few data points I got from these two sites:GDP: http://www.bea.gov/newsreleases/national/gdp/gdpnewsrelease.htm Total Public Debt: http://www.treasurydirect.gov/NP/BPDLogin?application=npChart 1: Zero Hour DebtConclusion: we are still on the way to cross the zero hour debt line in 20...
Today in the news, Spain's unemployment came in at 24.4% (Chart 1), with youth unemployment at 50.5% in February 2012. At the same time Spain's credit rating was downgraded by Standard & Poor's from A to BBB+.Chart 1: Spain UnemploymentIt's not looking well for Spain, the 5th largest country in Europe. Surprisingly, the bond market stayed flat after the downgrade of Spain (Chart 2).Chart 2: Spain 10 Yr government bond yi...
Wednesday, 25 April 2012
Lately, there have been more and more articles popping up about a Eurozone break-up. Let's objectively analyze if this concern is validated. To make it easier for me I'll consider the PIIGS (Portugal, Ireland, Italy, Greece, Spain) to be southern Europe.The different aspects I will look into are the following:Unemployment RateBond YieldsGDPDebtInflation RateCurrent AccountGovernment BudgetTo see my analysis, go to my article: Will Europe Break ...
Tuesday, 24 April 2012
If you haven't noticed yet, Europe is now again contracting. GDP has been negative since 2012 (Chart 1). And the PMI is also contracting, which means the negative GDP will become even more negative going forward.Europe is going into a depression, and this time it's for real, just like in 2008.Chart 1: Europe PMI and GDPMeanwhile, nothing problematic has been reported in the United States. The PMI there is still above 50 (53.4). US GDP is still projected...
Sunday, 22 April 2012
In this article I want to present the status of the real estate and commodity market in Asia, with its implications on the global economy.On "The Money and Wealth Show", Marc Faber has been talking about movements in the real estate and commodity markets. He talks about similarities between the Great Depression and the current crisis.Marc Faber notes: "Eventually the financial system will cease to exist." Suggesting we will at some point go to a barter system. This barter system has already showed up in Greece at this moment. He also mentions...
Thursday, 19 April 2012
The Silver Institute published its demand-supply results for silver during 2011. Notable is that we are contracting from 2010, but we are still much higher than we were in 2008.Interestingly, industrial demand fell over the whole line, even investment demand. But demand for coins skyrocketed upwards with a 20% increase from the previous year 2010. You know who buys coins? Yes, the common Joe Six-pack. We are all aware of the coming collapse and people...
According to the CME, silver stocks at warehouses hit a 10 year high this week. This seems to be bad news for silver investors, but I will present a different picture on this. Brother John pointed out already that stockpiles are at record lows in one of his silver updates and I'll present a more detailed analysis about this in the following article: CME Silver Stocks at an all time high, or are they?.From Zerohedge:For those who aren’t familiar with the terminology, the registered category of COMEX warehouse bullion stocks generally refers to gold...
Wednesday, 18 April 2012
Recently, the long term silver (PSLV) (SLV) lease rates jumped to a one year high since May 2011 (Chart 1).On 17 April 2012, the one year lease rate was 1.05%, the 6 month lease rate was 0.73%, the 3 month lease rate was 0.47% and the 1 month lease rate was -0.26%.It is notable that the 1 month lease rate didn't increase as much as the longer term lease rates. Another interesting point is that the long term lease rates almost doubled in a very short...
Tuesday, 17 April 2012
Capacity Utilization in March was 78.6% for the total industry, which is 0.1% lower than the previous month (Chart 1). I expected a bigger decline, but was surprised that it fell so little. Maybe there is hope that it will go up in the future, which is good for gold. To see my analysis on gold, go to my article: Capacity Utilization for March 20...
Saturday, 14 April 2012
Friday, 13 April 2012
In the news of today, Spain has been in the center spot of attention. Spanish bond yields have been rising quickly and financials have seen weakness in their share price. In this article I want to see which banks have the most exposure to Spain and to the PIIGS in general.During the stress tests of July 2011 the exposure of 90 banks to the PIIGS countries' government debt was released by the European Banking Authority (EBA).To find out which banks are exposed to the PIIGS and which banks to avoid, please go to my article here:Analyzing bank...
Thursday, 12 April 2012
Wednesday, 11 April 2012
I previously dissected the U.S. deficit HERE. Citing that the U.S. budget deficit is increasing at enormous speeds.Today, reported on Bloomberg, the U.S. budget deficit widened to almost 200 billion in March. Extrapolation brings us to more than 2 trillion in budget deficits in 2012 compared to 1.4 trillion in budget deficits in 2011.That's a 40% increase in budget deficit year over year. Hyperinflation is on the horizon.Link: http://www.bloomberg.com/news/2012-04-11/u-s-budget-deficit-widened-to-198-2-billion-in-march.h...
In December of last year there was a big concern that China would stop importing gold due to lack of demand. This was derived from the fact that gold imports from Hong Kong to China dropped 62% in December 2011. As a consequence, the gold price plunged from $US 1700/ounce to under $US 1600/ounce.Lately though, the gold imports from Hong Kong to China have stabilized around 40 tonnes/month (Chart 1). This drop of 62% seems to be huge, but when we look at the long term chart the picture is entirely different.Go HERE to read the entire artic...
Tuesday, 10 April 2012
Let's bring to mind the amazing correlation between the price of copper and the S&P. When copper rises, the S&P rises and vice versa.Financials will always be vulnerable and could crash like in 2008, bringing down copper. But don't forget Ben Bernanke. I predict he will initiate QE3 when the stock market falls 10%.Chart 1: Copper VS. S&am...
Monday, 9 April 2012
Today we record the lowest premium for the Sprott physical silver and Sprott physical gold trust, indicating a disinterest in gold and silver.The premium for PHYS fell to a record low of 2.33% (Chart 2). The premium for PSLV fell to a record low of 5.86% (Chart 1).(and if nobody wants it, it's time to buy it)Chart 1: PSLV Premium (%) (blue) VS Price (USD) (orange)Chart 2: PHYS Premium (%) (blue) VS Price (USD) (oran...
Sunday, 8 April 2012
With the China PMI indicating a contraction in GDP growth (of which I talked about HERE), another sign has emerged of China slowing down.The LME Copper Warehouse Stocks Level has started a trend change and is actually rising (Chart 1). This build in inventories is probably indicating a slowing down the economy. A part of this build is due to Chinese markets staying shut for a public holiday on Wednesday 4 April 2012: Qing Ming Festival (清明节). Shanghai reopened on Thursday.To see my analysis on this trend change go to Copper...
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