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Ed Zimmer
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Ed is a graduate of The School of the Ozarks (now known as College of the Ozarks) in Southwest Missouri. He spent 14 years in broadcast news in the Midwest covering, among other things, commodities. He is currently manager of a healthcare support facility doing over two million dollars a year in... More
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  • China Calling Dollar Shots?
       As if we needed another reminder of why government should not have their fingers in the economic pie, it now appears that comments out of Communist China regarding the dollar carries a lot of more weight than one might have thought.
       Reuters is reporting that Peng Junming, an investment strategist with China Investment Corp, today commented that "China now has a voice in influencing the dollar's exchange rate and the interest rate on US Government debt."    The comment triggered a rally in the US Dollar.
       Junming went on to say that China has the capability of influencing the commodity futures market as well.   He added that there was no urgent need for China to increase gold buying for now because prices are high.

      This does call into question the role that governments, especially those without free markets, should be playing in the entire market arena.     China is the Monster in the corner, with an uncertain appetite for commodities.     Being closed with it's information, it is impossible for markets to anticipate for sudden increases in demand which may not be apparent for several months or even years (i.e. China's current Gold holdings).   Even China's economic might, touted as 8-10% increases in GDP, is suspect with reports of empty cities, warehouses of consumer goods, decreasing energy consumption all contradicting Chinese claims of growth.
       China has been on a buying spree of commodities and it would not be beyound the realm of reality for China to be both trying to control things overtly as well as covertly.    China holds far too much US debt, so a drop in the dollar would be bad for the Chinese, just as increase in the Gold price, coming at the same time that China is becoming a gold Consumer, goes against the idea of central planning.   China recently began a major push for consumer purchases of silver and gold, so keeping prices down would be along the state lines, thus a repudiation of gold now, so that China can keep buying.
        Junming also said "although the dollar belongs tothe US, china has a role to play in determinng the dollar's exchange rate."      As the biggest holder of US Debt, I really can't argue with the statement.    It just makes me wonder if dollar denominated investments are the best choice for the long run.    It also makes me wonder who is holding the reins.

    Disclosure: Disclosure GLD, SLV, Physical Metals, retirement accounts
    Jan 12 11:33 AM | Link | Comment!
  • The more things change....
       President Obama and his team plan on going on national television Tuesday evening to tell American’s that things are not as bad as we thought and most likely, we’ll hear that “change” is just around the corner.     The core of this optimism is a less than expected cost of TARP because the money is being paid back faster than they expected.    Treasury Secretary Geithner wants to use some of those monies to pay a little on the national debt.    Couple that with lower unemployment percentages and lower job loss last month and hey, the green shoots are back with a vengeance.
    All the rhetoric and spin in the world is not changing the situation on the ground.    Even though the job losses are coming down, they are still job LOSSES.    Millions of Americans are on extended, extended, extended unemployment benefits, designed to do nothing more than get them through the holiday season and into the dead of winter.   Hopefully by then they will find a job or taxpayers will be asked to fund another extension to the extensions.    People don’t protest when it’s cold and maybe by spring the green grass shoots can be translated into those much talked about green shoots we hear about.
    As far as taking some of that money and paying down the deficit, that would be a nice idea, considering it helped raise the deficit in the first place.    Wouldn’t you think that having borrowed that money from the taxpayers that it should go back to the taxpayers?     President Obama apparently wants to use it for the unemployment benefits.    I guess if you’ve already borrowed it, why pay it back?    But if you aren’t going to pay it back, then you are just REDIRECTING the BORROWED money and we still have the deficit problem.
    Speaking of the deficit problem, most of which BTW ended up on the public debit side rather than the government debt side (by a margin of better than 95% to 5%).     The Treasury Department apparently mislaid the memo about increased “openness” of government.    The debt to the penny daily update has failed to update for days at a time, but did finally show the debt exceeding the government limit, but a few accounting tricks and it dropped below the limit once again.  (as of Dec. 7th, the last notation was still from December 3rd)   That BTW is the same limit that was supposed to be breached in October, November and now this month, but thanks to the Treasury Department, we’ve been able to stay below the limit even while paying all those extended benefits!    Maybe Congress doesn’t need to act; the Treasury Department is doing fine on its own in this regard.   But don’t hold your breath, Congress has no backbone (a few vertebra, just no backbone) and will give the government whatever it wants since as I mentioned before, it’s cold and people don’t protest when it’s cold.
    Finally, that change that keeps being talked about seems to be those businesses that still have access to credit that are willing to take a loss (subsidized of course) to undercut existing businesses and increase market share in this time of turmoil.     As they put existing companies out of work and more people out of a job, they assure that when the dust clears in six months or a year, that they will own a monopoly (or close enough) and can then raise prices at will (inflation, remember that?) because there is no choice. (Anyone remember the Reagan years?)
    Yep, Change is great, of course for many people, change is the only thing left in their pockets and that may not cover the cost.
    Dec 07 2:30 AM | Link | Comment!
  • Still time to buy Physical Silver
      Buy the Dips.   We get told this on a regular basis, but trying to time our purchases to the ups and downs of the daily swing can be frustrating and harrowing at the same time.

      Everyone is talking about how they got in at under $10 an ounce or under $12 and while I'm comfortable at my entry point, I'm also looking for continued opportunities because of what I believe to be a bullish direction for silver.

      The Key here, like all good buys, is to be happy where YOU are, not where someone else says they are.    We all have the neighbor who, when you drive the new (or new to you) car home, they compliment you on the purchase and then want to know what kind of a deal you got.   Once you tell them, there is the inevitable "Wow, I could have gotten it for "XX"".   The point here is, if YOU think YOU got a good deal, who cares what the neighbor thinks?     If you are comfortable with the purchase and can sleep at night, then you don't worry about where others are.

      Yes, you can make money day trading silver, and you can lose it.   It's like any other investment.   But in the long run, Silver has benefits that dollar don't.   It's not backed by the Federal Reserve, it takes extreme heat to change its shape and it's still Silver, unlike FRN's.    It has medical uses and it's pretty to look at (again, unlike FRN's).

       There are what I believe to be a few more opportunities to purchase physical silver and one of them is occuring right now.    Don't bet the farm, but if you have a few spare FRN's, now's the time to invest in YOUR future.   It's YOUR deal, do your research and decide for yourself.   You can hold a FRN that is steadily losing value since March, or you can hold Silver which has doubled in value in relation to those FRN's in a years time.   

    Disclosure: Disclosure: Long SLV, GLD, Physical Silver, retirement accounts
    Dec 03 10:25 AM | Link | 1 Comment
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  • Despite 25% Margin Increases, Silver still a buy. Paper is under $37 but completed auctions say $45-50 per ounce. Do the math
    May 5, 2011
  • Cross Contagion. Areas that are unexpected or little researched. Outcomes that are downplayed when they should have been emphasised
    Mar 17, 2011
  • Silver breached the $30 mark again today, expect margins to be raised in another lame attempt to stop the rise. Darn those specualtors! :)
    Feb 8, 2011
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