If you recalled my "the decoupling has started" article. I mentioned that Marc Faber tells us that money will go wherever it wants.Now Marc confirms himself that the Asian stock market could have a rebound as opposed to the U.S. stock market. The obvious reason be that the Asian stock market has underperformed the U.S. stock market by and large.He also doesn't anticipate a collapse in the stock market and real estate market because of money printi...
Sunday, 28 October 2012
Saturday, 27 October 2012
Friday, 26 October 2012
I'm always excited when I get another data point for my zero hour debt chart. Today the GDP numbers were out for Q3 2012. The media is all positive about the 2% growth in GDP year over year, but we all know 2% is not a positive number. Nowhere in that article they mention the debt growth, GDP growth is meaningless when debt grows faster than GDP. I wrote about zero hour debt here.We can see now, that our newest data point is right in line with our...
I cautioned that the silver price could plunge due to silver lease rates going down in this post on 19th August, 2012.I forecasted that when lease rates go down, the silver price would go down with it a few months later.That has come true, but now the lease rates are starting to go back up. So we could be close to a bottom formation. I'm getting my cash ready to buy silver again in a week or two.Chart 1: Silver Lease RateThe same is happening...
Thursday, 25 October 2012
Tuesday, 23 October 2012
It is very rare to see Eric Sprott in a conference, so cherish this opportunity.There is one thing I learned from this presentation and that is another thing I can monitor, namely, the silver and gold sales at the U.S. Mint here:http://www.usmint.gov/mint_programs/american_eagles/?action=sales&year=2012According to the numbers, we had 48500 ounces of gold sold in October 2012. At the same time we had 2584000 ounces of silver sold in October 2012....
There is a theorem about the marginal production cost of oil. The price of the commodity in question should always be slightly higher than the marginal production cost of oil. If not, then many companies that produce the commodity will start going bankrupt.Wikipedia has this definition for marginal cost of production:The change in total cost that comes from making or producing one additional item. The purpose of analyzing marginal cost is to determine at what point an organization can achieve economies of scale. The calculation is most often used...
Thursday, 18 October 2012
As Marc Faber famously stated: "You can print money, but you can't control where the money will flow into." This is the most important line that investors need to keep in mind when we are talking about decoupling.Since Ben Bernanke announced QE3 on September 13, 2012, we all know money is going to be created out of thin air. We just don't know where the money will flow into eventually, we can only observe.As you may know, I started monitoring...
Let's give a status update on the QE3 $40 billion/month MBS buying and $45 billion/month U.S. treasury buying.If we take a look at the federal reserve balance sheet, we see that in October 2012, nothing at all has happened. The amount of treasuries is constant (light brown + orange area). The amount of MBS is also constant. The balance sheet is even shrinking instead of expanding!Chart 1: Federal Reserve Balance SheetThis can be confirmed here.Table...
Another 1 million ounces of physical silver has been withdrawn from the same bullion vault Brink's.At this rate the vault will be emptied soon.The silver market is extremely tight right now, you can read it in this article:http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2012/10/17_London_Trader_-_The_LBMA_Is_A_Massive_Ponzi_Scheme.htmlChart 1: Silver COMEX St...
Wednesday, 17 October 2012
It's getting boring to talk about silver the whole time but when it's appropriate, it's appropriate.Last week we had an important technical indicator for silver to go up. We had a significant "golden cross" which means the 60 day moving average crosses over the 200 day moving average. Historically that means we will have a rising silver price bull market coming very soon.Chart 1: Silver Ch...
Numbers are out on the Chinese U.S. treasury holdings.In August 2012 China held $1.154 trillion in U.S. treasuries. Nothing much has changed other than that Japan almost has more U.S. treasuries than China.Chart 1: China U.S. Treasury HoldingsAs China holds its U.S. treasury holdings steady, the Chinese yuan has rallied somewhat against the U.S. dollar. I wonder what they will buy with these valuable yuan if they are not buying U.S. treasuries.Chart...
David Morgan, aka Silver Guru, talks about a real possibility of a default (or at least a slow delivery) for physical silver delivery above the amount of 30 million ounces.So swapping your paper silver or cash to physical silver on the market might end at one moment. Eric Sprott had already bought 10 to 20 million ounces of silver for a few times for the PSLV physical silver trust but David Morgan signals that you can't continue doing this for long as the silver supply is very tig...
Tuesday, 16 October 2012
Just a few days ago I saw a large drop in COMEX silver and now there is speculation on the internet about investors going for the real physical silver. They're done with the paper silver.Chart 1: Comex SilverTom Cloud was interviewed by the 'Dollar Collapse' site and is analysing just this transition to physical silver.Tom Cloud of National Numismatic Associates has this to say:Dollar Collapse: Hi Tom. It’s been an interesting couple of days for...
For all those who are concerned that precious metals will go down for the rest of this year, there is some light at the end of the tunnel.Capacity utilization rate for the total industry was up to 78.3% in September 2012 from 78% in August 2012. In particular, the mining industry recovered well, from 88.4% in August to 89.1% in September.While looking at these numbers, I don't see precious metals crashing just yet.Table 1: Capacity Utilization...
Saturday, 13 October 2012
Someone just took out 3.6 million troy ounces of silver from the Brink's vault at the COMEX. And it is registered silver, which means it's real physical silver. About $120 million at current prices. That's almost the same amount that Eric Sprott bought in his physical silver placement in July 2012.This is a very significant 1 day drop, you can make your own conclusions.See the balance sheet here: http://www.silverseek.com/article/comex-silver-inventory-update-2526941838-ounces-6956Chart...
If you are concerned about the Chinese economy, you shouldn't. Chinese exports for the month of September came in at $186 billion, a 9.9% increase year over year.We did have a little dip end 2008 where exports fell to about $65 billion, but since 2009, the Chinese kept growing their exports as you can see on Chart 1.Chart 1: Chinese ExportsAs Zerohedge's chart points out, exports and imports are mostly equal. If exports move up, imports will move...
Friday, 12 October 2012
Thursday, 11 October 2012
Here is a little thought experiment.Why are futures traders paying so much each month to roll over their natural gas contracts? The annualized cost is currently 178%, this is a high rate.Together with a contango curve from $3.4 per million British thermal units today to $3.6/mmbtu a month later and $3.7/mmbtu two months later. We can say that traders are already pricing in a rise of 10% in the coming two months.So you can be guaranteed that the natural...
According to the Chinese government gold imports in the month of August 2012 plunged to 53.5 metric tonnes from 76 metric tonnes a month earlier. As you can see this is a significant drop. It can be partially attributed to the increased production of Chinese gold because China produced 41.4 metric tonnes in August, which is 12 metric tonnes more than the average of 30 metric tonnes of gold produced per month in China since 2012. China...
Monday, 8 October 2012
Today marks the end of the fiscal year 2012 for the interest payments on U.S. debt of which I talked about here. It's surprising that the interest payments have dropped so much in 2012. Probably due to a change in the accounting method for the Department of Defense (DOD) market-based securities, we got a one-time $75 billion decrease in interest payments in the month of July. Otherwise we would have $435 billion in interest payments.So,...
Sunday, 7 October 2012
This following graph should be concerning. We have government statistics (grey and red chart) and we have the real SGS Shadowstats statistics (blue chart). The key statistic to look at is that of the discouraged worker.Let's go over the definitions first. A discouraged worker is a person of legal employment age who is not actively seeking employment or who does not find employment after long-term unemployment. This is usually because an...
Saturday, 6 October 2012
Non-Farm Payroll numbers came out at 113000 in September and the unemployment rate fell to 7.8%. Gold initially dropped as everyone thought that the decline in the unemployment rate was positive, but actually it is not. Peter Schiff mentions why in his update here.As I mentioned before here, the non-farm payroll numbers are more important than the unemployment numbers. Especially when government is underreporting on the unemployment numbers as discouraged...
Friday, 5 October 2012
Thursday, 4 October 2012
So far so good for the trend in LCNS for August 2012. As I mentioned before here and here, the LCNS is a leading indicator for the silver price. Once you see the LCNS go up, the silver price will go up a few weeks after it.In an email update from Peter Schiff last week, he mentioned that silver would be the best commodity to buy these days. I agree, there is a very good chance that silver will blast through the resistance of $38/ounce.Don't...
Wednesday, 3 October 2012
The total public debt stands at $16,171,037,343,408.57 right now, while it was $16,066,241,407,385.89 a few days ago. That's a major jump upwards...Everyone thought the debt would flatten out, but everyone was wrong. At this pace we will rapidly go through the debt ceiling of $16.3 trillion.This chart proves it:Chart 1: Total Public DebtYou can anticipate a major announcement soon about the debt ceiling and maybe a downgrade of the U.S. treasury...
Interesting presentation from James Turk. What keeps me bullish is his Gold Money Index which still indicates that gold is way undervalued at this time.Another item mentioned in the video (an item I've talked about many times) is the deficit to outlay ratio. The U.S. is spending money which is borrowed for 40% on average from foreigners.The latest data on deficit to outlay ratio in August 2012 shows that we borrowed 52% from foreigners to spend on...
Tuesday, 2 October 2012
Everyone is talking about gold and silver these days, but nobody talks about diamonds. Let's have a little peek inside this sector.There are many sorts of diamonds in different colors and different grades. The higher the grade, the more precious the gem is. Aside from being pretty, diamonds can also be used in industrial applications (Figure 1).Figure 1: Diamonds in Industrial ApplicationsWe live in the year 2012, and what is very important about...
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