Mark Anthony

$59 Billion Dubai Debt Default Could Have Much Wider Implications

The $59B is a big deal when we know the US government is more than $12TRILLION in debts and the world feel its safer and risk-free to stay with a debtor that is $12T in debt, rather than with a debtor that is $59B in debt. Of course the world is absolutely horrified about the extreme risk associated with the gold, which owes nobody money.

What an insane world!

Face It: The FDIC Is Broke

On Nov 25 11:34 PM Jasper M wrote:

> So the broke are broke, the wise are gone, what about the rest? Well,
> historically, people tend to avert their eyes to this sort of thing,
> until they all agree to start screaming at once.

I like this comment of yours and believe it should be voted as "comment of the day" on Seeking Alpha. Can't say it better myself. I might also add that before they all start to scream at ounce there would be dead silence. We are seeing dead silence right now, as far as the negative FDIC balance is concerned.

Thanksgiving Dinner 2009: Over the Past Year, Turkey Outperformed Gold

That's a quite entertaining article. Thanks for the thanksgiving quibs. I guess after all, turkeys with wings can still fly better than gold, even though they really can not take off from the ground.

Gold and Silver - How High Will They Go?

Ask NOT what gold can do in dollars, ask WHAT dollar can do in gold.

The correct question to ask is not high high gold can go, in terms of the dollar, but how LOW dollar can go, in terms of gold ounces.

Gold is a near constant measure of valuation. Gold doesn't change, it's the dollar that's going down.

Face It: The FDIC Is Broke

Karl's last paragraph is an interesting question. Why there is still no panic bank runs yet? I don't know. Maybe we already have.

So Karl, have you yourself run your banks yet? Get all your money out and store them in your pillow?

I have already run my own banks, long ago. I leave the minimum to take care of bills and payments. The rest are in precious metals, stocks, and some ready to use cash.

Most American people I guess have nothing to run the banks. They have no savings and are barely living pay check to pay check.

Some Americans are impossible to run their banks even if they want to. Talk about like say Warren Buffett. Most of his fortunes are in stocks. He probably have maybe ONLY $10B cash deposited in a bank. How long would it take for Warren to get all of his money out, if he is allowed to withdraw only $1000 cash a day? It's probably much easier just buy some big item, and then write a big check to pay for it, than trying in vain to withdraw cash.

How many readers have also run their banks already? How may still leave like say $100K or $200K cash in bank accounts? Let's do a survey. Let us know your thinking. Please comment below.

EU Cadmium Ban Would Seriously Hurt First Solar

Yes! The earth itself would be BANNED under RoHS regulation if it contains cadmium concentration exceeding that specified by RoHS.

Actually if the earth contains cadmium concentration exceeding the RoHS limit of 100 ppm, LIFE itself will be BANNED on earth. No life could ever survive in such a harmful environment. Fortunately the earth crust contains only 150 ppb, or 0.15 ppm of cadmium, far below RoHS's safety limit.


On Nov 12 11:44 AM rd4sndk wrote:

> Cadmium is a naturally occuring chemical extracted from prescious
> metal refining. Is the EU going to ban the "earth"? I find the EU
> controlled by a hoard of idiots that have done nothing but inacted
> rules that favor their own interest. America did well ignoring their
> elitist plans until Obama. God help us to reverse the economic disaster
> coming--if not too late. With 10.2% unemployment and the anti-business
> policies of this administration, God help us if Obama is wrong. For
> the sake of this country and the world, I really really really hope
> he succeeds inspite of his policies.

EU Cadmium Ban Would Seriously Hurt First Solar

Ucilia:

On the cadmium issue I am the first one to point it out on Seeking Alpha, about 2 years ago. And no one listened:

seekingalpha.com/artic...

Your notion that CdTe solar panel is not covered is WRONG. The RoHS covered EVERYTHING, unless something is specifically exempted. Any product sold in the EU must fall into one of three categories:

1. It does not exceed the RoHS limit on harmful elements, hence no problem.

2. It DOES exceed the limit, hence is put in a restricted list (BANNED).

3. It does exceed the limit, but an exemption is applied for and granted, so it is not banned. The product will be put into an exempt products list, a very short list as obtaining the exemption is very difficult. There is a 6 page very strict rules what can qualify for an exemption.

The current status of CdTe solar panel is nothing more than a regislative over-sight and a loop-hole. It exceeds the limit, but is put in neither the restricted product list, nor in the exempt product list. It needs to be put into one of those. First Solar itself admitted that obtaining an exemption would be most unlikely.

Cadmium Telluride Casts Shadow on First Solar

Wow. I never expected someone to just call regislations as BS and can be ignored to make money. Are we a law-less society and any one can do whatever he/she want just to make money?

Here is a more recent Seeking Alpha article on First Solar's the Cadmium issue:
seekingalpha.com/artic...


On Nov 21 02:30 AM narrowhell wrote:

> It's been a while but let me add a comment: First Solar is right
> now the leading manufacturer of solar panels in the world! It is
> amazing, because the only reason they have been the main player in
> CdTe was that all other companies were afraid of the regulations.
> They took the risk and they are now billionaires. As always, legislation
> is BS. It is best to ignore it and make money. In the end they will
> sell the company and no one will really bother them about the Cd
> or the Te. How good!

What Natural Gas Prices Say about the Domestic Economy

TraderMark:

I disagree with most of what you said. Maybe you should study the natural gas supply/demand number a bit closer:
Consumption:
tonto.eia.doe.gov/dnav...
Production:
tonto.eia.doe.gov/dnav...
Importation:
tonto.eia.doe.gov/dnav...

There is no clear indication that the consumption has dropped significantly due to economy. The numbers do not show that. The bigger effect is we have had an unusually warm 2008/2009 winter, and an exceptionally uneventful summer (no hurricane). There was a shale gas drilling boom in 2007/2008 which results in some what higher production, which lasts till this day. But the bottom line is consumption hasn't really dropped.

As for the storage, look at the chart here:
www.eia.doe.gov/oil_ga...

As you see, the storage deviation from average level was mostly built up during the warm 2008/2009 winter. There was no further build up of the deviation afterwards, if you look at the slope of the curve, in comparison with past years.

Putting the storage number into context, there is noe 3833 BCF in the storage, at average consumption of 62 BCF per day, the storage is good for 62 days. Current storage compare with same time last year, is only higher by 347 BCF, worth 5.6 days consumption, or 1.53% of one year.

So in one years time, despite of significantly higher production, and despite of a very warm 2008/2009 winter and an hurricane-less summer, the total supply exceeded total demand for only 1.5% for the past one year. Is 1.5% a lot, consider the exceptional weather condition that contributed to it?

On the other hands, the shale gas wells will not last. These wells deplete at an alarming 60% to 75% annual depletion rate once they start to produce. Unless producers keep drilling like crazy, the production will not last and will not be able to meet demand.

I am absolutely certain natural gas is extremely bullish, producers know that. But I am deeply reserved on whether UNG is the right vehicle to profit from a natural gas bull. Read here on why:
seekingalpha.com/autho...

Carry Correlation Update: Beware

Karl:

So now looks like Warren Buffett has also jumped onto the bankwagon of US Dollar Carry Trade. I thought he bought the railways using cash. He always use only cash to buy stuff throughout his lifetime. But not this time. He used borrowed money:
www.bloomberg.com/apps...

Are you going to bet against Warren Buffett, Karl?

Jump on the ships now (pun intended). Warren is too big to buy ships so he can only buy some trains. If Warren Buffett's bet on trains is a good one, dry bulk shippers are even more attractive. Check out these names: EXM, EGLE, TBSI, DRYS, GNK, SEA, SBLK, DSX.....

The dollar is finished. But the US economy itself will survive.

Carry Correlation Update: Beware

Karl:
Oh come on! You just never seem to be able to make up your mind one way or the other . At one minute you predict dollar collapse. Another minute you say the dollar depreciate must be reversed soon and you want to play dollar bull. What is it, then, Karl?

You observation of the stock index moving opposite to the dollar index is a legitimate one. It has nothing whatsoever with dollar carry trade, which, so far, only happens at a very very small scale.

As the value of dollar drops, everything else has to necessarily go higher when measured in dollar terms, though they may not necessarily actually go up in purchase power term. It's simply that people holding dollar cash and other dollar denominated debt assets are selling them and buying things that preserve value better, like stocks and commodities. This is expected.

As for the dollar carry trade, when it reaches a certain scale, the dollar index will not be at current level, but at a MUCH MUCH lower level. I haven't heard many people buying stocks on margins. I have heard no one buying gold on borrowed dollar. When James Sinclair tells people to buy gold using credit cards, then you can tell me the dollar carry trade is a bubble. So far James Sinclair, as well as most precious metal bugs, are urging people to buy using cash only, not using borrowed money.

I am one who would advocate US dollar carry trade. But I am a very very lone voice in the marketplace. I buy palladium metal on margin using a pool account. Very very few people buy anything on margin these days. Most people have too much assets parked in unused cash, let alone buy on margin.

Right at this moment the dollar seems to be dropping straight to the tiolet bowl:
quote.goldseek.com/dol...

Traders Betting on 60%+ Rise in Silver

I kid you not. $100 worth of gold is worth $100. $100 worth of silver is worth $100. $100 = $100. It's just plain English.

You must be reading 100 ounces of gold and 100 ounces of silver. Read again :-)


On Nov 19 12:54 PM Genesis wrote:

> No kidding?
>
> On Nov 19 12:24 PM AtTheMurph wrote:

UNL: A Better Natural Gas ETF than UNG?

It's not going to make an iota of difference whether it is UNL or UNG.

I continue to believe natural gas should be bullish in the next few months or a year. But ETF funds like UNG and UNL, as they can not and could not hold the actual commodity, the natural gas, as they can only hold futures contracts and can not take delivery on those paper futures contracts either, they are NOT the right vehicle to invest in natural gas, they are merely a gamble against the counter parties who wrote the future's contracts.

Read why future contracts are the WRONG way of investing in commodities, why only hoarding physical commodities will do:
seekingalpha.com/autho...

Let me use an simplified explanation. Suppose there are a million investors interested in UNL, the demand will prompt UNL to buy a lot of future contracts 12 months in advance. But no suppliers are willing to write futures contracts that far out. I am the only trader willing to provide those futures contracts. Therefore a million against one, I was able to sell a whole bunch of VERY EXPENSIVE 12 months futures contracts.

Now 12 months is up, time for UNL to SELL, they must sell as they can not take deliver. But NO industrial users are willing to buy the contracts. They already have secured supply and do not need expiring futures contracts, as they do not need to take any more delivery. Therefore a million traders are fighting against each other to sell the expiring, soo to be worthless paper. I am the only one wo needs to buy. So once again, a million to one. I get to buy back the futures contracts pennies on the dollar, the traders lose big.

Bottom line, if you are interested in commodity, buy something that you can actually hold, and hoard it. Or buy the producers.
seekingalpha.com/autho...

Dr. Copper Spots a Monster Crash

Kent:

You still do not get it. The Chinese have toomuch US dollars. They want to spend the dollars out to hoard strategic stockpiles of raw materials for their own use. SPEND means get rid of the dollars. That's the whole point. The materials are valuable, the US dollars will become worthless paper.

The US dollar must collapse, there is now no way to avoid that to happen. But certain sectors ofthe US economy WILL survive a collapsing dollar. That's because certain sectors of the US economy produce something the world needs. My favoritemining company SWC will not go out of business because the world will need the palladium it produces. Microsoft and Intel will not go out of business because the world needs their computer software and hardware. These companies, if they want, can sell their products for RenMinBi, Euro, or gold coins, regardless of what happens to the dollar.

Read here:
seekingalpha.com/autho...

Likewise, the US Federal Government may well collapse. But individual states will survive.

On Nov 19 07:23 PM Kentpaul wrote:

> I hear what you are saying but its contradictory in the sense that
> you are on the one hand saying the US economy is going to collapse
> due to inflation and a Dollar collapse, yet the Chinese who are presumably
> going to buy all the copper are buying it in dollars. The fact is
> the Chinese currency is the Renminbi not the Dollar, and therefore
> as the Renminbi rises versus the USD Chinese holders of metals will
> all things being equal lose money as there wont be enough demand
> to prop the price up in Renminbi.

Dr. Copper Spots a Monster Crash

Kent:

Tech stocks and resource stocks are fundamentally different. Technology has competition so there is never any guarantee they can consistently make 1/50 earnings. They may do well one year and be killed by competitor and become worthless the next year.

Tech companies can go to zero, but a commdity could never go to zero. It costs something to produce the material. If the price is below marginal production cost, it's unsustainable, because producers can not sustainably produce something below cost.

Thus as the US dollar goes to zero, all commodities and physical assets should be priced ever higher in norminal US dollar terms, regardless of supply/demand. If you see copper at $2.00 you better buy some because you know a few years down the road it will be $5 or $10 a pound, regardless of supply/demand, simply because it will const that much to produce a pound of copper.

Your view point of "margin of supply/demand" is too narrow a viewpoint and hence is completely wrong. You are wrong because on the demand side, there is more than current or immediate industrial demand, there is also demand to hoard a strategic stockpile to absorb future price shock. This hoarding demand will add to total demand.

Let me give you the example of precious metal rhodium. The industrial demand of rhodium is 95% depends on the auto industry, which we know is weak right now. But since the price bottom at $760 in early december, 2008, rhodium price has now reaches $2500, more than triple from recent bottom and far better than any other precious metal?

Why? because rhodium has exhibited extreme price movements in the past. It surged to $7000 in 1990. And then in recent years another surge bring the price from $200-ish to $10000+ in a few years, on a mere 4% supply deficit.

So as an industrial users, when you see rhodium below $1000, you would want to buy AS MUCH AS POSSIBLE, regardless how much you actualy need in current quarter. The stockpile never hurts. If you have not bought at $760, now you need to pay triple the price to buy the metal today, and a few years down the road you may be forced to buy at $10000 or $20000 again. So it makes perfect economic sense to buy low as much as possible.

Read more here on the rhodium story and what is the TRUE supply and demand relationship in any commodity:
stockology.blogspot.co...