Alex Filonov

Safe Haven Investments: Imminent Danger and Opportunities

To author: I'd rather like to know which of my statements are wrong.

1. Norilsk Nickel did play dollar carry trade. They borrowed billions of dollars from Western banks and used them to buy companies and buy back own shares. Current financial situation of the company is not good, to put it mildly. If you don't believe me, just do quick Google search.

2. Until 2000, price of platinum was close to the price of gold. Fast growth after that can be attributed to the EU laws requiring clean cars, which means catalyst converters using platinum or palladium. Price jump in the beginning of this year was caused by production shortages in South Africa. Now, when car production in US (and probably in EU as well) is falling off the cliff, who is going to consume that platinum and palladium? So far, platinum price returned to the long term trend, close to the price of gold. To have it go higher you need some new industrial use of platinum group metals. Fuel cells can be that, but for the fact that they are about 3 years to mass production for the last 10 years.

3. Long term palladium price trend (you can get it here: www.platinum.matthey.c..., as well as platinum) tells me that in normal conditions, palladium price should be between $200 and $300. But these are not normal times: car production is way down and Norilsk Nickel, the biggest palladium producer, is squeezed for cash. As for PAL, It doesn't look good. If they have to close mines at prices below $200, can they survive at all?

Safe Haven Investments: Imminent Danger and Opportunities

Good luck with metals. Yes, palladium is way too cheap, but it just might happen that Russians are dumping it on the market. Norilsk Nickel played dollar carry trade and lost. They can't shut down production, because it's already sold by long term contracts. They can't even reduce production, because they need every dollar of liquidity they can get.

As for platinum, only some breakthrough in fuel cell technology can save it. Long term price is no more than 1.4 of gold and sometimes it goes below gold. So, even at $800 it's not that cheap.

How the U.S. Financial Crisis Resembles Japan’s 'Lost Decade' - And How to Play It, Part II

That's not even funny. Great Depression was about deflation. Japanese Great Depression was about deflation. What does it have to to with inflation?
Global infrastructure boom? With US in depression? Wrong on both sides:
1. If US, a buyer of last resort, isn't buying much anymore, who is going to develop infrastructure?
2. If they still do, where are they going to buy heavy machinery? CAT, DE, and above mentioned GE are still American companies! As well as hundreds other names.
As for gold, it was, is and always will be a tool for hoarding. Has nothing to to with investment. And way too much dependent on demand from developing world. Still not clear how situation in Vietnam (ban on gold import) and India (drop of gold imports in the last several months) impacts gold market. BTW, India consumes, at average, 30% of gold.