That's just silv ... er, er silly. Based on the chart, and the blow off top at around 50 from around 17, there had to be a year of consolidation, maybe even a two year bear market, hey, we're almost there, it will be May 2013 soon enough. I think anything in the $25 to $30 range is a good entry price for the next silver bull market. Realistically, the lows might be in already in July, but the way silver trades you just have to expect those 50% decline bear markets every once in a while.
People talk about the Fed printing trillions of dollars, which it surely is, but that money is being sucked out of the economy by the big banks and sent back to the Fed as "Excess Reserves" so they can earn .25% interest risk free until they become solvent again. Inflation is only created when printed money circulates and chases goods and services. If it gets hoarded, as it is now, the price level remains unaffected.
UNG Gains 15% In A Single Day: Watch Out For A Hangover Sell-Off [View article]
Looks like we are getting a move back toward 20 rather than a sell-off as far as UNG is concerned. I think the storage data are showing that we could very well be back close to the normal storage range by the end of the storage season in October as electricity demand picks up and marketed supply falls. My target price for UNG is 25.
Natural Gas Bears Now In Full Retreat [View article]
Historical levels of contango are actually quite mild. The current extreme contango is a temporary phenomenon, unless some fundamental cause for it persisting can be given. GASZ will lose significantly in the mean-reversion to come.
Solar Power Has Been Totally Eclipsed By Gas [View article]
Nonsense. Gas at these prices is a temporary glut, the futures price for January 14 delivery is already above $4. Drilling has all but ceased which means prices will be back at $10 within a year or so. Production is already falling off significantly and prices are rising fast.
Solar may have been overbuilt in not-so sunny Germany, but here in California un-subsidized solar can easily compete with 25-30 cents per kwh from the major utilities. There may be temporary overcapacity given current adoption rates, and solar is not for everyone, including perhaps Icelanders, Greenlanders, and Norweigians. But contrary to what you say, this is the perfect time to invest in solar industry precisely because things look so bad in the short run and stocks are selling at bargain prices. Long run, forecast: Sunny!
Natural Gas Has Nowhere To Go But Up [View article]
Well, cost basis around 14.75 so not a victim yet, at any rate, with the current trade around 17. I'm not saying to marry it. This is clearly a short term-trade. Should UNG hit 30 any time soon, I'll be out.
Natural Gas Has Nowhere To Go But Up [View article]
The original estimates were that prices needed to be in the $8-12 range to make fracking profitable. I believe that is still accurate, these are typically expensive wells to drill and the hydraulic fracturing process adds additional cost. Demand is sure to increase from electricity generation, trucking conversion, etc., but the real problem is supply. At these prices, no one is looking for gas and the number of pure gas wells has fallen to absolutely minimal levels. When this happens, production is sure to fall and prices rise, irrespective of what happens to demand.
Natural Gas Has Nowhere To Go But Up [View article]
Obviously, backwardation is caused by a belief among traders that the spot price of a commodity is high today but will decline in the future. Given the current contango in natural gas (June nat gas at 2.18, December nat gas at 3.11) we are a long way from such sentiments at the moment. However, if we had a very hot summer, sharp production drops and a price spike, we might see some backwardation in the nat gas market. UNG has only been around since 2007. Since its inception, natural gas has pretty much gone in one direction, down.
One needs to consider, however, the possibility that institutional money entering the commodities markets has created an artificial contango which reflects investors appetite for ownership of paper, but not physical, commodities. Do we have any volunteers for conducting such a study?
Natural Gas Has Nowhere To Go But Up [View article]
Probably right. But with only a few hundred pure dry gas wells hoping to supply the entire 15 trillion dollar economy, plus some supposed export market over the next few years, I'd say anything was possible.
Natural Gas Has Nowhere To Go But Up [View article]
"Foolish" is perhaps a bit rhetorical. Even if prices rose back to the range of $8-10 it probably wouldn't get exported due to cheaper supply elsewhere and transportation costs. Given the historic price volatility and the extremely low level of actual drilling for domestic gas (see above comment) together with the enormous domestic demand of the world's second largest economy, I just don't think its likely we will be exporting much nat gas in the future.
Natural Gas Has Nowhere To Go But Up [View article]
Many in the industry have stated that natural gas leases are now in name only; drillers are really looking for liquids (NGL's or crude) but call the wells "gas wells" to control the acreage.
If they basically stop drilling altogether (i.e. 200 gas wells rather than 1600), supply will fall while demand increases which everyone agrees it will. Prices will rise. And one or two fields profitable at $1.50 (assuming they exist) cannot supply the entire US market.
I don't have a crystal ball. But the CEO of CHK thought the bottom would be $4; he just couldn't predict the weather.
Silver: $25 in Sight [View article]
Silver: $25 in Sight [View article]
Silver: $25 in Sight [View article]
People talk about the Fed printing trillions of dollars, which it surely is, but that money is being sucked out of the economy by the big banks and sent back to the Fed as "Excess Reserves" so they can earn .25% interest risk free until they become solvent again. Inflation is only created when printed money circulates and chases goods and services. If it gets hoarded, as it is now, the price level remains unaffected.
Silver: $25 in Sight [View article]
UNG Gains 15% In A Single Day: Watch Out For A Hangover Sell-Off [View article]
Natural Gas Bears Now In Full Retreat [View article]
Natural Gas Bears Now In Full Retreat [View article]
Solar Power Has Been Totally Eclipsed By Gas [View article]
Solar may have been overbuilt in not-so sunny Germany, but here in California un-subsidized solar can easily compete with 25-30 cents per kwh from the major utilities. There may be temporary overcapacity given current adoption rates, and solar is not for everyone, including perhaps Icelanders, Greenlanders, and Norweigians. But contrary to what you say, this is the perfect time to invest in solar industry precisely because things look so bad in the short run and stocks are selling at bargain prices. Long run, forecast: Sunny!
EIA Data Continues To Be Supportive Of Natural Gas Thesis [View article]
Natural Gas Has Nowhere To Go But Up [View article]
Natural Gas Has Nowhere To Go But Up [View article]
Natural Gas Has Nowhere To Go But Up [View article]
One needs to consider, however, the possibility that institutional money entering the commodities markets has created an artificial contango which reflects investors appetite for ownership of paper, but not physical, commodities. Do we have any volunteers for conducting such a study?
Natural Gas Has Nowhere To Go But Up [View article]
Natural Gas Has Nowhere To Go But Up [View article]
Natural Gas Has Nowhere To Go But Up [View article]
http://bloom.bg/IbGl9V
If they basically stop drilling altogether (i.e. 200 gas wells rather than 1600), supply will fall while demand increases which everyone agrees it will. Prices will rise. And one or two fields profitable at $1.50 (assuming they exist) cannot supply the entire US market.
I don't have a crystal ball. But the CEO of CHK thought the bottom would be $4; he just couldn't predict the weather.