Greg Pinelli

Bernanke's Great Lie: The Gold Standard and the Great Depression

I don't know that we needed 50,000 words to tell us paper money/credit is too easily manipulated and that gold and silver provide what amounts to an independent arbiter....It's interesting that a poster thinks the gold standard is "malarkey" yet rants that money is manipulated and bubbles created precisely so consumerism can run rampant.
and also kotika....dude..Milton Friedman originally was both an Objectivist and Austrian disciple who thought the gold standard was just dandy. There's NO reason it couldn't work..except that people in power are scared to death of it...and people who fancy themselves investors like where there ammunition comes from.

The Great American Ponzi Scheme (Part II)

Why would anyone think the big auto makers represent a "viable industrial base???" What? Until March 2009? Bailouts of individual companies is bad business. ALL the builders won't go under..you'll see the stronger ones like Toll Bros. survive..and I'm not surprised..the product I see them finishing in San Jose is excellent..and will sell.
All this Home Depot collapse nonsense aside...construction will go under the table..where much of it should be anyway. Skilled workers...finish carpenters, framers, masons, tile, etc...can start to build the small remodel and build to suit stuff they should be doing anyway..They'll make more and take a career step they'll feel satisfied about.
IF YOU REALLY WANT AN INDUSTRIAL BASE AND A COUNTRY THAT CAN ONCE AGAIN BUILD THINGS..STOP TELLING EVERY HIGH SCHOOL KID THEY NEED TO GO TO COLLEGE. University is largely a joke run by people who couldn't change a flat tire if their lives depended on it...but don't have any trouble intimidating their students and ranting about how rotten regular people are...Bring back shop class and trade schools!

Buying USO Is a No-Brainer

Mark is right on the money..buy USO on an average in basis with a slight twist. Start with 10% of funds now and move progressively up the purchase ladder...Even intelligent investors are not fully aware of how close the oil market is to seeing ANY future product development at these prices..that means a huge marginal squeeze. The turnaround point will happen VERY quickly and the price chasing begins...The next week would be a pivotal time to make an intial committment...
I'd be wary of oil price forecasts from the industry..in many cases these forecasts are really threshold price levels where they either drill and sell or might as well go play golf.
It's VERY interesting how we are at prices of two headline commodities..oil and gold..one spot market HUGE, the other miniscule in comparison..yet each commands tons of investor interest and opinion..AND BOTH ARE AT LEVELS..TODAY..XMAS 2008...SOME OF US WILL NEVER SEE AGAIN.

Silver and Gold: More Than Just A Christmas Carol

Any investor would be hard pressed to find a trading vehicle that's held up better than Gold in the past year. My expectation is that the support levels are going to shortly find a lot of air between themselves and spot..
What we are seeing..and it will prove in hindsight a critical inflection point in how MONEY is viewed..is the new ascendancy of silver and gold. I'm NOT a fiat money hater. The U$ regime provided tremendous stability and flexibility at its zenith and lasted for half a century.That's all past....there isn't ANY currency that can be used with confidence as an exchange base..and my belief is the people who get lots of US$ in the near future are going to start seriously ACTING upon the notion that they are holding a hot potatoe. Being in the boat with the fewest holes is stretching optimism to its limits.

Inflation Is in Our Future...Not Deflation

Readers!!! The above article was MISTITLED by Alpha..it is supposed to be INFLATION IS IN OUR FUTURE..NOT DEFLATION....
And it most certainly is..Those who wait for prices to start rebounding before they recognize the EFFECT of credit expansion will already have lost the investment edge. Keep your money in hand for the next few months..except for gold. I strongly suggest that anyone not in physical gold begin NOW..
The idea that prices are going to sink..or that the Fed can kill inflation and precious metals won't prosper is a nonsequitor..They ALWAYS prosper in extreme credit creation conditions. Beggar thy neighbor currency devaluations don't mean some currencies are strong..only that some are sinking more slowly.

Cramer Is Right about Ultrashort ETFs

I listened to Cramer's discussion on Ultra short ETFs (a monologue really!)
and he made some very interesting points. He was making two arguments, however..not just one. The first I agree with..the second I don't.
The first argument is that these ETFs dodge the margin requirements that individual investors ave to contend with..a very valid and telling argument. It would appear that there is special treament of these investments and they definitely put the shorting on a beneficial footing it wouldn't otherwise enjoy.
The second argument is that these funds don't work..It's very hard to make that stick! I owned SRS at an entry of $70..sold it at $110..I can't imagine that anyone who held it at $200 or above (5-6!!! standard deviations above the norm) didn't have enough sense to sell
These vehicles are very useful..and I've made money on them all..However, they also have characteristics that I'm amazed the SEC didn't consider disqualifying.

Could Coal Recover?

The logic of supply and demand...unfortunately... not going to be relevant for coal. It's a political whipping boy and the key player's will be the environmental hard cases..Carol Browner..et al. There is a reason Obama gave her an in house "new" position. The EPA will be remade in an image that coal investors are going to abhor.
Those of you who've read my posts know that I'm very bullish hard/real assets and resources by next Summer..However, coal is a frightening example of what a committed group of ideologues can do to a critical resource if they hate it enough.
Beward ALL coal related investments..the upside?? Nat gas will be the love child until renewable energy plays its hand...and this is a niche hand at best. I'd keep my eye on nuclear energy also.

Peter Schiff: Outlook for the Gold Market

Mr. Schiff has a very finely tuned BS Meter (as does James Grant and Richard Russell)...what he and others (including myself) believe is going to happen in the next 12 months is frightening. At some point in 2009...very likely mid to late Spring..the trillions (over 10 trillion by then) of dollars and Euros in credit will begin to gush towards users. The loan stampede and reversal of asset price decreases will thaw into a gusher. Oil..base metals..and especially gold and silver will find buyers scrambling to buy from bare inventories and producers gearing up at breakneck speed.
The Fed will then be in a very uncomfortable spot..prices will indicate tightening...but tightening will never fly with the Obama Administration because the ordinary person will not have had time to yet become solvent. THAT'S WHEN THE RUSH TO BUY TANGIBLE ASSETS WILL TAKE OFF AND WILL LAST DEEP INTO 2010. All this is not going to follow the simple minded linear thaw we read about..the turn will come like a bolt from the blue.

James Grant Wants to Know: Who Will Buy Our Greenbacks?

A trillion here..a trillion there..pretty soon we're talking real money..or in a couple of years..maybe not. Grants article is brilliant in that it both recalls the past concerns and justifications for leaving a gold standard behind and the present profligacy that a stand alone paper system allows. With much humor!
The problem with pure paper systems is that they ALWAYS lead down the same road. Since 1913 the inflation of the money supply has lead, as we are often reminded, to a dollar being worth only a few cents. 2009 might well mark the year it began to even lose its medium of exchange value.
Gold didn't (and wouldn't) provide a "straightjacket." Growth would be measured and very even...and prices would fall continuously by increment.
While the US and Europeans justify limitless monetary pumping that they promise they'll deal with later the real leadership in gold backed currency could come from the Arab oil countries. The first step in this process is the accumulation by those governments of gold...its also the first step for every Alpha reader. When it hits $2000 next Fall the rush will be on.
The reason Mr. Grant didn't stop halfway thru his article and went on to broach the notion of a gold standard is without it we are left helpless before Greenspans and Bernankes of this world without one...Why wail about the present if one has no solution??

Why Gold Hasn't Been a Hedge Against Inflation

People really pay you to talk about gold?? Tha's astounding. Gold's not a hedge against inflation? Have you EVER looked at a chart? Gold is one of the very few investment to be up during the past 4 years..It is not only a hedge against inflation..it's one of the few that exist.
So lets talk a few facts Mr. Lee..
1. Since July 2008..Gold has gone from $980 to $840 and change (Sunday Asian Market)..a decrease of 14%..most..if NOT ALL due to panic deleveraging..Ever heard of that? I thought not.
2. Oil (WTIC) has gone from $145 to $42 and change....a decrease of 71%!

THESE STATS ARE FROM inflationdata.com....C... inflation since Jan 2006 to Nov 2008 is 12.17%...GOLD'S GAIN IN THAT SAME TIME FRAME IS +64.71%..

The Declining Dollar: Can It Be Saved?

Yo..CJJ..let's get a few facts straight..bosin.j may be precisely wrong but he's roughly right..whatever stimulus is provided to financial institutions in the "Please God save us" economy can be multiplied many times over in loans. The Fed has decided to go off line and will monetize whatever. Do YOU understand what that means? Do YOU think that is only what the newspapers print?
The US$ is going to have very rough seas and the Treasury and Fed don't care....this economy is NOT going down because of a few trillion here or there.

Despite Recession, Oil Demand - and Prices - Will Rise

Alternative energy is a niche players..and it ..at best..takes the place of SOME coal and SOME nat gas..It might take the place of home heating oil..but guess what!?..The places where oil is used don't have the prerequisites for wind or solar..sun or wind! What a surprise.
Oil ue will not match depletion...and product cuts (which may or may not happen) and lack of field development and drilling (which is ABSOLUTELY happening) means a shortfall..
Spring 2009...oil at $65 and rising (FAST)

The Yen Is on Fire, Gold and Silver Continue Their Breakout

For weeks we've been hearing (on this site and others) that the Fed was out of "bullets!" Nothing could be further from the truth. The Fed has unlimited resources since they are created out of the imagination and virtual air.
The demise is not to be worried about..hedge with gold and some of the equities Mark mentions above..SLW and AUY look very solid..and ESPECIALLY beaten down CDE is highly desireable.
In this upswing gold will likely cross the $940 range before retreating..Silver is (as always!) the outlier..my sense is it could go to $15 by the end of January.

How OPEC Can Support Oil Prices - UBS

Not understanding that lower oil prices (especially those FAR) below production costs on virtually every new project in the world) really amount to padding the present for consumers and robbing them later is iamazing.
blu (above) has it right...Peak Oil (simply substitute DEPLETION if the words politically offend) is ripping future supply apart at about 6-8%..depending on the age of the field.
So...ZERO production growth...6% depletion...4-5% demand destruction..I'd say people better keep their fingers crossed the recession lasts..because it could be the last time they be able to afford gasoline.

Is the Second Great Depression Imminent?

It's a horse race trying to determine which set of circumstances is the greater delusion..that the government can massively "bail" institutions out with no profound monetary consequences..or that last Summers oil price scare was just a bad dream and we can console ourselves with plentiful and cheap fuel!
I wouldn't be so quick to head to the farm and start plowing the back 40 right away..there are a few more fiscal tricks up the governments sleeve..and a wave of infrastructure projects is among them. Tax revenues for these things are only a nuisance the Fed can easily bypass...The ultimate cost...a debasement of paper currencies around the globe and that $2000+ gold that many think is the province of nutburgers...it isn't.