Is Greece Bankrupt Yet?

On 31 July 2012 Greece finance minister Christos Staikouras told on television that Greece is on the edge of bankruptcy. If no aid comes from the ECB, Greece won't be able to pay its ECB debt obligation on 20 August 2012. Greece has a repayment due of 3.8 billion euro.Consecutive debt repayments and spending cuts in 2012 have reduced Greece's debt to GDP from 160% to  132% (Chart 1). This means Greece is going into the right direction concerning...

Read More

Insider Trading Update: Yahoo, J.P. Morgan Chase, Hewlett Packard, Akamai Technologies, Sipef

Today I present you notable bullish insider transactions for the last 13 weeks. Discussed companies are Yahoo, J.P. Morgan Chase, Hewlett Packard, Akamai Technologies, Sipef.The analysis can be read he...

Read More

'Free Irwin' Road Show

I can't withold you from this free video of the Peter Schiff show. As you might have noticed, I'm a Peter Schiff fan.&nb...

Read More

U.S. Second Quarter GDP Growth Slows Down

Today the second quarter GDP numbers came out. Real GDP growth slowed down to 1.5% from 2% in the first quarter (Chart 1).Chart 1: U.S. GDP GrowthThis is a significant drop in GDP growth and is conform with the slowdown in the U.S. PMI of which I talked here. As the U.S. PMI went below 50 for the month of June 2012, we can expect a further contraction in GDP growth in the months ahead of us.  This bad news increases the odds of further quantitative...

Read More

Silver off to the races

As I predicted before, silver is having a breakout these days. And the evidence is piling up. One of the evidences of a bullish scenario is the silver stock at the CME. As you can see on chart 1, the silver stock at the CME is declining, ever since Eric Sprott did his PSLV offering of $US 200 million on the market on 12 July 2012. I predict that registered silver will start to decline soon (blue dots).Once the silver price breaks the $US 30/ounce...

Read More

How low can negative yields on Swiss bonds go?

We have been seeing negative bond yields in Switzerland and Germany. Which is very odd if you ask me. The question begs to be asked: "How low can negative yields go?".To give an answer to this you need to have an understanding of the price-yield curve of bonds. You can gain money if yields go lower (bond price rises), but you will lose money because you need to pay interest on the negative yield. So there should be an equilibrium point and as a scientist...

Read More

Gold Price at Record Highs in Euro

Just a little update to tell everyone that gold is likely to reach an all time high today and possibly break out in the next months.Chart 1: Gold Chart in E...

Read More

Spain is following Greece in its path to bankruptcy

The situation in Spain is looking worse every day. I believe Spain is following the path of Greece into bankruptcy.Let's take a look at the Spanish bond yields. At the end of 2011 we got the massive ECB bailout package named Long Term Refinancing Operation (LTRO). This relieved the bonds of certain peripheral governments like Italy, Greece and Spain. Lately though, with many Spanish regions on the verge of bankruptcy, Spanish bond yields...

Read More

Belgium Gets Negative Borrowing Cost

And finally, Belgium also started to earn money by borrowing from others.Investors actually pay us to put their money in our government bonds. The 3 month Belgium bond yield has gone negative on 19 July 2012. I thank you very much for this free money!Chart 1: Belgium 3 Month Bond Yi...

Read More

LIBOR scandal and the Significance of it on gold & silver lease rates

Following the LIBOR scandal we need to take a look at gold and silver lease rates, because lease rates are calculated as LIBOR - GOFO (London Interbank Offered Rate - Gold Forward Offered rate).The London Interbank Offered Rate is the average interest rate estimated by leading banks in London that they would be charged if borrowing from other banks. GOFO is the interest we need to pay if we swap gold for U.S. dollars. Whenever GOFO goes down (or gold lease rates go up), it means people are craving to get their hands on gold. At the same time, when...

Read More

Status on the CRB Index

Just recently, sentiment in the commodity market has been positive. Capacity utilization improved, the CRB index started to move upwards, chances on QE3 are improving, the dollar index moves into a top formation. In this article I will discuss the prospects in each sector of the CRB index.On Tuesday 17 July 2012 the capacity utilization rate came in at 78.9%, up from 78.7% the previous month. As I noted here, the capacity utilization rate is a leading...

Read More

Copper turns back to Backwardation

It seems that the red graph is going down, which means it is likely that copper goes into backwardation again. So the copper price should rise if all goes well, together with the S&P.Chart 1: Copper Conta...

Read More

Capacity Utilization in June 2012 at 78.9%

Good news! The capacity utilization rate for the total industry in June 2012 came in at 78.9%, up from 78.7% a month ago (Chart 1).Interestingly, the mining industry posted its biggest gain in capacity utilization. Mining had a capacity utilization of 89.4%, up from 89.0 % a month earlier.So no worries, inflation is still in the game.Chart 1: Capacity Utilization R...

Read More

Bankrupt Cities in the U.S.

Let's follow the bankruptcy of cities in the U.S. Maybe a trend can be found.Table 1: Bankruptcies in U...

Read More

How to calculate profit on government bonds? Case Study on Belgian Bonds

A couple months ago, Belgium sold government bonds to the public. For example 10 year bonds at 5%. I'm living in Belgium, so I took this example. I've never really looked at how profits are being made by selling/buying government bonds. So let's analyze this a bit. This is just a note to myself.Let's take a 10 year Belgian government bond at 5% (Chart 1). Suppose I bought an amount of 1000 euro of these bonds. This means that after 10 years I get...

Read More

Funny Peter Schiff Video about Student Loans

Diana Carew VS. Peter Schiff. I am worried about the debt of students these days. How in the world are they going to pay it off... They need at least 5 years to pay off their debts. In Europe, we start with savings after graduating, in America they start with debt...

Read More

The Status on Silver

This article is a summary on the most recent developments in the silver market. I will talk about the silver technicals, silver-gold ratio, silver investment, silver depletion, silver long/short positions and silver warehouse stock.Let's start with the technicals. A pretty concerning picture for silver can be witnessed on the gold-silver ratio chart (Chart 1). You can see that in mid 2010, silver started to outperform gold until mid 2011. During...

Read More

ECB Overnight Deposits Drop by more than Half

As I already predicted in this article, the ECB overnight deposit dropped. It didn't drop by a bit, it dropped  in HALF and it's not a glitch.Now where will this 500 Billion Euro go, I wonder. I'll keep you posted, stay tuned.They could go to: bonds, gold, real estate, land, overseas currencies.500 billion euro is not a little bit of money, it is huge. The financial stimulus in 2008 was comparable to this 500 billion euro. You can buy a...

Read More

Eric Sprott Taking Silver Off The Market With Offering

Yesterday, Eric Sprott priced a follow-on offering at $US 200 million, which is a 20% increase in its silver holdings. This will certainly increase the silver price at a faster pace by taking silver away from the market. Eric said silver would be at $US 50/ounce at the end of the year, maybe he's just trying to speed it up to get his call on being right. :-)Too bad for PSLV holders who lost 4% premium, but I'm sure it will go much higher in the future....

Read More

Composition of Fed Balance Sheet Indicates Low Interest Rates For Eternity

I have been talking a lot about the federal reserve balance sheet. But what is it composed of? And how did it evolve higher?Chart 1 gives the composition. You can see that QE1 and QE2 were mainly bond purchases (light brown area). QE3 should be another round of bond purchases and should expand the light brown area again.Second, the spike in 2008 was mainly lending to financial institutions at the time of the banking collapse. This lending has been...

Read More

China May 2012 Gold Imports from Hong Kong Still in an Uptrend

A little update on China's gold imports from Hong Kong. For May 2012, China imported 75.6 metric tons from Hong Kong. Pretty disappointing if you ask me, but the trend is still going up. The May 2012 imports are a sixfold increase from a year earlier, but down from April 2012's record.Chart 1: China Gold Imports from Hong K...

Read More

ECB Rate Cut and its Effect on Euribor

On Thursday 5 July 2012, the ECB cut its main refinancing rate to 0.75% and its deposit rates to 0%. After LTRO I and LTRO II, we have another stimulus to supply credit to the markets.In my previous article on LTRO I, I noted that the Euribor was manipulated lower to make it easy to lend (Chart 1). Chart 1: 3 Month EuriborBut it wasn't working out for the markets, because all the money was kept at the ECB deposit facility (Chart 2).Chart 2:...

Read More

How Likely is QE3? 70% likely.

Ben Bernanke has been saving his ammo in the past months. Each time the fed meeting was held, markets were hoping for QE3, but they didn't receive any. This is evidence by the U.S. federal reserve balance sheet on Chart 1.Chart 1: U.S. Federal Reserve Balance SheetToday, we have passed several months and we already see that the economy is starting to deteriorate. Not only in Europe and the emerging markets, but especially in the United States. In...

Read More

Angela Merkel With Hitler Moustache

Today at 18:00 on the Dutch NOS News, we could see Angela Merkel with a Hitler Moustache. Of course unintended, but it begs the question: "why do people even notice"?Is Angela's mandate so similar to Hitler's? I disagree.We could argue that Angela is pro austerity, but her actions are all but pro austerity. The best example is the bailout of the PIIGS by Germany.Anyway, I just couldn't resist posting this nice souvenir to Angela Merkel.Angela Merkel's...

Read More

Denmark: Negative Interest Rates

It's amazing that central banks actually started to send key interest rates below 0%.Denmark just put the key interest rate to -0.2%. Of course, they have no choice as the Danish krone is pegged to the euro.Chart 1: EUR/DKKSee Moneybags' video bel...

Read More

Allana Potash: Update

Agriculture has been in a bear market since February 2011 as evidenced by the Rogers Commodity Index for Agriculture (RJA). But surprisingly, since June 2012 something interesting happened. We got a spike of 16% in the agriculture price due to supply concerns in the corn, soybean and wheat market (Chart 1). This spike is also felt in stocks like Potash Corp. of Saskatchewan (POT) and Mosaic Company (MOS). As agriculture prices increase, so will the...

Read More

Copper Price VS. Contango Report

I decided to start monitoring the contango-backwardation curve of copper (Chart 1). In a previous article I noted a pretty significant correlation between contango and price of copper.We see that the negative correlation between copper price and 1 yr futures contango is still existing. But it's difficult to predict the price of copper, because the contango curve and the price curve are almost exactly following each other. We could say we almost have...

Read More

Silver Net Short Positions Hit Record Low Again

In my previous article about net short silver positions I said that silver would explode upwards once the net silver short positions started to increase.Today the June 2012 numbers came out and we see that the net short positions have not gone in an uptrend yet. So we wait..., until the spring suddenly unwinds.Chart 1: LCNS Net Short Positions in SilverData: http://www.cftc.gov/OCE/WEB/data....

Read More

Baltic Dry Index Reacting to Iran Oil Embargo

Since Europe banned crude oil imports from Iran on 1 July 2012, the Baltic Dry Index has shot up 10% already from 1000 to 1103 (Chart 1). The reason for this spike isn't because Europe is banning crude oil imports from Iran, but rather the consequence of it. Due to this ban, Iran has renewed its threat to close the Strait of Hormuz. Approximately 20% of the world's oil, which is about 35% of seaborne traded oil, passes through this strait. As...

Read More

France's 7.2 billion euro tax is a non-event

France just raised taxes on the rich and is trying to get 7.2 billion euro in tax revenue in 2012 and 33 billion euro in 2013.So what does this mean to the deficit of France? France's GDP is 2.56 trillion euro. France's debt is 90% of GDP. Its total debt is therefore 2.3 trillion euro.What is 7.2 billion on 2.3 trillion euro? It's 0.3%. So it basically does nothing to the French debt.You could argue that it is a first step to decrease the yearly deficit. But the deficit is currently 70 billion euro/annum. So we have a 10% decrease in the deficit,...

Read More

U.S. debt jumps by $US 75 billion overnight

U.S. debt jumped $US 75 billion overnight, which is a pretty big jump. Total U.S. public debt jumped from $US 15.781 trillion (28-Jul-2012) to $US 15.856 trillion (29-Jul-2012). The debt ceiling of $US 16.7 trillion is coming closer and closer.Historically, the biggest jumps were $US 154 billion overnight on 31-Dec-2010, $US 166 billion on 30-Dec-2009 and $US 166 billion on 29-Jun-2010. Average jump in debt is $US 3.5 billion.Chart 1: Total U.S....

Read More

Euro Selling Has Stopped

The new numbers of the Currency Composition of Official Foreign Exchange Reserves (COFER) have been released and it shows that the the world has stopped selling euros (Table 1). Claims in euros have increased from $US 1.413 trillion to $US 1.423 trillion, an increase of 0.7%. Claims in U.S. dollars have increased from $US 3.513 trillion to $US 3.548 trillion, an increase of 1%. Interestingly, the increase in U.S. dollar claims is flattening out as...

Read More