The Effect of War on Silver

Silver (PSLV, SLV) is one of the most thermally and electrically conductive materials on this world. Silver is also the best light reflecting element. Silver is being used for war equipment like aircraft and tank engines, automobiles,electrical connections, guns, torpedoes, radiator connections, rockets,warheads, submarines. In fact, silver is essential during wartime periods.Silver-Investor.com points out:"Notice that in a wartime period, silver...

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Another Correlation: What is China's Real Growth Rate?

In the last week of August, Marc Faber gave a signal that all is not well in China. He points out that the Chinese statistics of 7% growth are inflated to the upside. There is a big chance for a hard landing to come in China because many statistics point to a significant slowing of the Chinese economy. For example, in July, industrial production declined sharply (Chart 1).Chart 1: China Industrial Production (yoy)It is very important to know that...

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Got Gold Report August 26: Gold/Silver moving upwards

Got Gold Report has put out another report: http://www.youtube.com/watch?v=PjkDiavXLTgInteresting to know is that the LCNS for gold is moving upwards again, indicating a higher price for gold (and silver) in the future.Chart 1: Gold LCNS (Got Gold Report)Silver is doing even better (Chart 2).Chart 2: Silver LCNS (Got Gold Repo...

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Correlation: Australian Dollar Vs. Iron Ore

Another correlation to add to our list:Positive correlation between AUD/USD Vs. Iron Ore price.=> http://brazilianbubble.com/chart-the-correlation-between-iron-ore-price-and-the-australian-dollar/Very important correlation to trade on. If you see a disparity like this:You can bet that either iron ore prices will go up, or the Australian dollar will go down. So you can just put your money in both bets, you always win.Reasoning? If you bet...

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Gold: Supply and Demand

Just a note to myself. Eric Sprott has got supply and demand numbers for gold out:http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2012/8/24_Sprott_-_We_Are_Staring_At_Chaos_%26_Collapse_In_Front_Of_Us.htmlGold Supply = 4000 tons/annumGold Demand = 6500 tons/annumGold Lease = 2500 tons/annumWe'll just have to find out what these numbers mean...

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Keith Fitz-Gerald and Chris Martenson on Japan

Keith Fitz-Gerald talks about Japan in this interview with Chris Martenson.The problem in Japan is its enormous government debt, which is 250% of GDP. Its population is very old, 30% of the population is going to die by 2050 and there are very few newborns.He expects the yen to fall due to these dire prospects (200 USD/yen), but notes that the only reason why the yen (and the dollar) are so strong these days is because these two currency markets are the only markets big enough to absorb all this safety haven liquidity (listen at 28:00). More so,...

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Euro Vs. USD: Take Two

5 months after I wrote the article about the Euro Vs. the USD, it looks like the USD has won the match against the euro. Since April 2012, the euro has lost 5% against the USD. Let's look at what has changed in those months.Following list gives the most important indicators for the future of a currency:Current account balance of the countryTotal national debt of the countryInflation rateInterest rateIf the current account balance of the country is...

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Summary of All Discovered Correlations

I have found many correlations since I started blogging in January 2012. I'm really surprised at the amount of correlations I found.So I wanted to summarize all correlations in this post. Positive correlations mean that if one goes up, the other goes up too. Negative correlations mean that if one goes up, the other goes down.Positive correlations:1) Silver premium Vs. Silver Price 2) Baltic Dry Vs. Industrial Commodities3) Baltic Dry Vs. Copper4) Copper Vs. S&P5) Oil Vs. Dow Jones6) Agriculture Price Vs. Health of Economy7) Agriculture...

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Belgium: Real Estate Starts Falling

I live in Belgium and follow the real estate market closely. I said previously that Belgium's housing is in a housing bubble. Now that prediction starts to come true. We already knew that in the first quarter, real estate was dropping. Today we have new numbers and we see that Flanders is continuing with its drop in apartment prices. Also construction site costs are falling.Goldman Sachs is saying Belgium real estate is 60% overvalued. That means...

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Scott Minerd: The Faustian Bargain

To add more credence to the importance of interest rates on the assets of the federal reserve (and the banks) I will point to this article of Scott Minerd: The Faustian Bargain.He says that it only takes a rise of 1% in interest rates to render the fed insolvent."Now, a 100 basis-point increase in interest rates would cause the market value of the Federal Reserve’s assets to fall by about 8% or approximately $200 billion which would leave the Federal...

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Non-Farm Payrolls and Unemployment: Another Correlation

I came across an interesting Zerohedge article about the odds of QE3. In that article they point out that QE3 odds are based on unemployment rate and non-farm payroll numbers, which will be released in about two weeks.Table 1: Zerohedge's odds table for QE3Actually, I think this table is redundant because a rise in payrolls (Chart 1) always accompanies a decline in unemployment rate. We will need the chart of the working-age population (Chart 2)...

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Analyzing Federal Debt held by Foreigners

As U.S. treasury yields (TBT, TLT) are starting to spike upwards, investors should pay more attention to this new trend. To help investors monitor U.S. treasury yields I'll point out another interesting correlation between U.S. debt held by foreigners and U.S. bond yields. We will see they are inversely correlated. If foreigners sell U.S. bonds, bond yields will go up.The total public debt consists of two components:1) Debt held by the public which...

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Marc Faber: Middle East Conference 2012

At long last, Marc Faber showed up again on a conference. This time it's the Middle East Hedge Funds World Conference 2012.Enj...

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A Detailed Federal Reserve Balance Sheet

Just by having heated (and uncomfortable) discussions with seekingalpha commenters I learn new things. This is what you get when you write financial articles without any financial background.But there are positive things coming from discussions.Today I found a very nice interactive chart to follow the Federal Reserve's balance sheet (Chart 1).You can play with the interactive chart here:http://clevelandfed.org/research/data/credit_easing/index.cfmChart...

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The Simplified Bank Stress Test

Bloomberg reported on 20 August 2012 that banks are stepping up their U.S. treasury buying. As deposits increased 3.3% to $US 8.88 trillion in the two months ended July 31 2012, business lending rose 0.7% to $US 7.11 trillion, Federal Reserve data show. This inherently means that banks aren't lending money to the private sector, but are lending their money to the U.S. government. Peter Schiff pointed this out on the Peter Schiff Show of 20 August...

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Silver Inventories at CME and Lease Rates

Just a few weeks after I turned bullish on silver, articles are sprouting out of nowhere about silver inventories being historically low.http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2012/8/17_Expect_Major_Silver_Price_Spike_As_COMEX_Inventories_Decline.htmlHowever, I see signs of a temporary weakness in silver.1) The silver stocks at the CME aren't actually going down anymore. They are going upwards (Chart 1).Chart 1: Silver Stocks...

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China U.S. Treasury Holdings Steady in June 2012

Nothing special has been reported in Chinese U.S. treasury holdings. The amount of U.S. treasuries held by China are almost unchanged at $US 1.164 trillion.http://www.china.org.cn/video/2012-08/16/content_26252410.htmChart 1: Chinese U.S. treasury holdi...

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Capacity Utilization highest since April 2008

Good news for inflationists!Capacity utilization for July 2012 came in at 79.3 (up from 78.9 a month ago), which is the highest number since April 2008. That also means we are nearing the danger zone of 80. Once we get above 80, you can bet that we will get high inflation after a few months from now.All different industries were higher in capacity utilization with the mining industry posting an astounding 90.4 capacity utilization rate in July 2012,...

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Amber Gold, another MF Global

This is very important news. It seems that more and more ponzi schemes are showing themselves. Gerald Celente already lost in the millions when he bought paper gold (which was to be delivered in physical a few months later). Now Amber Gold isn't going to pay back their customers as reported by Zerohedge.It's reported that 7000 people lost their money and may not ever get it back, or only a percentage of it.I recommend everyone to start asking for physical delivery of gold, because this is going to worsen in the future. Only pay cash when you get...

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Comparing the Dow Jones and Shanghai Composite against Europe

Over the last few years after the 2008 crisis, I want to give a performance update for the Dow Jones vis a vis the Shanghai Stock Exchange. The Dow Jones has gone up 50% after the 2008 stock market plunge (Chart 1), while the Shanghai Stock Exchange has gone up first, but essentially lost all of its gains in the period between 2010 and 2012 (Chart 2).Indeed, many economists have pointed out that the U.S. stock market has outperformed almost every...

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China Gold Imports drop another 10% in June 2012

China Gold Imports have dropped another 10% from the previous month.Although we see decreasing demand from China for gold, China says it will keep buying more this year as the precious metals market is set to grow throughout the second half of this year. Analysts say physical demand is still strong.Chart 1: China gold imports from Hong KongInstead, China is buying more and more U.S. treasuries.Chart 2: China U.S. treasury holdi...

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Update on Silver Net Short Positions: LCNS

On Monday 6th of August, the Financial Times leaked the news that the silver manipulation probe is likely to be dropped by the CFTC. It turned out that this news was premature. One of the 5 CFTC commissioners, Bart Chilton, said on 08 August 2012 that the investigation will continue as silver manipulation did occur. The silver manipulation probe was initiated in 2008 following a number of allegation of silver manipulation. Bart Chilton already found...

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China Outperforms Anyone

Charts do tell us something. For example, when we plot the GDP of the top 20 countries in the world in a nice stacked area chart, we can clearly see that no other country than China has significant positive GDP growth. At this growth pace, it will only take 5 more years before China becomes the largest economy of the world on a country by country basis.Yes, only 5 years! Because GDP growth may be denominated in percentage terms (which seem to...

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Biggest drop in U.S. bonds in 2 months

A little update on the decoupling experiment I started 2 months ago. I wanted to see if the S&P could decline together with a decline in U.S. bonds and the U.S. dollar. This would mean each graph (red, green, blue) on chart 1 would go down. It hasn't started doing that yet.What I did want to take note of is the big decline in U.S. bonds (green graph). On Friday 3 August, 10 year U.S. bond yields spiked to a 1.563% yield. This is almost a 10 basispoints...

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Merger and Acquisition (M&A) activity is growing in silver mining

In a previous article I pointed out how bright the future is for silver. For example, one of my predictions is slowly coming to fruition. Chart 1 shows how the total silver stock (green dots) is starting to decline, indicating signs of increasing silver demand (or decreasing supply). Even the registered silver (blue dots) has started to decline just recently.Chart 1: CME Silver StockThe silver price has been forming a base around $US 27/ounce in...

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