Is the Status Quo being challenged?

What is a social movement? More often than not it pertains to an issue of sizeable magnitude that has grown over time and includes measurable societal swings of the current culture. Both socially and economically.

George H.W. Bush's 1989 Presidential Inaugural Address included the following:

"I have spoken of a thousand points of light, of all the community organizations that are spread like stars throughout the Nation, doing good. We will work hand in hand, encouraging, sometimes leading, sometimes being led, rewarding. We will work on this in the White House, in the Cabinet agencies. I will go to the people and the programs that are the brighter points of light, and I will ask every member of my government to become involved. The old ideas are new again because they are not old, they are timeless: duty, sacrifice, commitment, and a patriotism

The market(s) reaction to Friday's economic numbers was amazing to watch. Gold and silver prices soared, treasury prices surged to new highs (new yield lows). Equity and options traders appeared to "jump ship" pushing the stocks and indices into strong oversold readings.

Could it have been the "perfect storm" of news creating a sense of doom that avalanched back down the mountain of worry? The Economist encapsulates the driving force as:

What preys on the minds of financial and business-world risk takers is not a single threat but a multitude of them, regurgitated in one big hairball of risk. And all are about policy.

I can understand the move in gold and silver and the equity markets. But treasuries getting pumped up reminded me of a spoiled child threatening to hold his breath until getting what he wants - QE III. Earlier in the cycle I would agree with

Clearing Houses: The Next Too Big To Fail?

Fed Chairman Ben Bernanke quoted a great line from Mark Twain's character Pudd'nhead Wilson recently:

"If you put all your eggs into one basket, you better watch that basket."

It appears that all eyes are not watching the same basket. The giant game of "hot potato", a game I thought was over and done with, has an additional round or two yet to come. The existing TBTF institutions have managed to mitigate the impact of any default(s), of their own making, by flipping the concentration of risk onto the Clearing Houses themselves. The organizations responsible to honor and settle most derivative contracts will at some point in the future get exercised on their "short puts" and pay the lender in cases of default.

Clearing houses are not new. They have been in existence in the US for at least 150 years as

The U.S. economy does not appear to be as healthy and robust as government reports suggest. The Treasury and equities market(s) reaction has been to keep alive the possibility for additional stimulus. Traders and investors in Precious Metals markets are seeking protection and bracing for the negative effects of monetary policies that just don't seem to work or worse, fail.

The latest Fed meeting minutes suggest that the Fed governors are still willing to accommodate the economy via another stimulus should GDP slow down, or if the inflation rate moves above 2%, or if unemployment begins to rise again. Reading further, the continued "talking down" regarding the advances in precious metals by Fed governors should be taken as nothing more than an attempt to shift blame for "delegitimizing" the dollar to higher gold and silver prices instead of failed policies.

GDP has been reported as growing, but so are government

Show Me the Money - or Lack of It!

The rumor mill continues to churn as the myths morph into perceived reality. It is an interesting time in which we live. Managing expectations can be a costly task. This seems to be the case within the precious metals as the FOMC did not deliver (immediately) upon its earlier hint of QE III. In reality, the knee jerk reaction of selling seems limited in comparison to the deflationary forces that have been brewing in the background.

Reality always wins in the end. As much as I hate to admit it this is the case. Deflation is not a good thing, and I would prefer not to see it take hold again. Gold, silver and platinum prices will not escape the downward pressure on prices should deflation return. As previously discussed, although history has shown that gold tends to retain its purchasing

Precious Metals - Outlook Update

Gold and silver dropped into support zones after hitting resistance hard two weeks ago. The corrections may still be in progress but on a near-term basis appear complete, or nearly so.

Platinum (PPLT)

I'm not sure it was widely noticed but platinum is again trading at parity with gold. Historically, platinum usually trades at a premium to gold, and the at the end of 2011 was trading at a $150 discount to gold. The trend should continue to favor a return to platinum maintaining a premium over gold. For more detail see my article: Platinum: Once in a Lifetime Opportunity for Strong Gains.

The correction off of the recent high at $171 continues to unfold as expected. The support zone at $156.75 to $155.70 remains the likely area to complete the move. An additional support zone at $152.20 to $147.70 remains important as

What happened to gold and silver? Both had reached their respective cruising altitudes, were switched over to auto pilot and then - WHAM. Strong turbulence shook the markets as resistance became more of a 'brick wall', stopping all forward momentum. The impact created a "slap down" type reversal, leaving a high body count in its wake. So what is going on? Have the bulls surrendered to the bears?

Research & Outlook Update

From our article Silver Launches Higher Into 2012:

In fact, resistance at $33.50 and $37.50 should not pose much more than a place for silver (SLV) to pause and catch its breath before heading higher.

It is a break with follow-through of that upper zone at $37.50 that needs to occur before stronger upside momentum picks up speed and intensity.

That upper resistance zone in SLV proved to be more of a "brick wall' creating a "mini"

Interesting to watch the media scramble to come up with reasons the markets do what they do - ebb and flow. Gold and silver prices declined for the week and here comes chicken little again "the sky is falling, the bubble has burst, blah, blah, blah". The flavor of the day pinned lower metals prices on the ongoing Greek debt deal.

There was an "eye catcher" though on Kitco.com. Allen Sykora said:

Precious metals, along with most other markets, were caught in a "Greece fire" on Friday as a deal struck to get the country its second bailout appears to have been scuttled by last minute demands from European leaders.

The wisdom of the street dictates that any sovereign debt default within the eurozone will weaken the euro, strengthen the U.S. dollar and in turn weaken equities, Treasuries, and precious metals. Gotta be that way folks - no ifs,

Background & History

Platinum is currently cheaper per ounce than gold. This is a situation that has never occurred before and it could lead to huge gains over the next 12 to 18 months. For most of the last decade platinum traded at a 100% premium to the price of gold. Not only is platinum more difficult to mine, the major deposits are within Zimbabwe, South Africa, and Russia, which in some circles are not considered the most stable countries. Add to that prices are down nearly 20% in the last five months and the incentive to get it out of the ground is not very high.

South Africa’s Anglo-American Platinum (AAUKF.PK) – the world’s largest platinum producer, stated that production costs will reach $1567 per ounce in 2012. With prices still hovering around the $1500 per ounce level producers are reluctant to produce only to lose money on each

That sound you heard as the New Year rang in was no doubt the collective sigh of relief felt by so many that a double-dip did not occur in 2011. Last week's economic reports may have shed some much-needed sunshine on the continuing US economic saga. The U.S. economy should continue its slow but steady pace of recovery (expansion, to some) in 2012. The overall political area added volatility throughout 2011, and I suspect it may increase, up to and including the November 2012 elections.

Globally, the Arab Spring saw many leaders and dictators facing a growing demand from their citizens for their “head on a plate" -- and some got it (Osama bin Laden, Moammar Gadhafi). Algeria, Bahrain, Egypt, Iran, Iraq, Israel, Jordon, Kuwait, Lebanon, Libya, Morocco, Palestine, Saudi Arabia, Syria, UAE, Tunisia, and Yemen all saw uprisings intensify in 2011, with several continuing within the Middle East as

Return to Part ll

Cotton as with just about all commodities has optimal growing conditions, which are found in many places around the world. Cotton requires longer periods of sunny days and temperatures that don’t dip toward frost or freezing. Cotton as a global commodity is impacted by climate (weather) change. But due to the growth of international trade, one area's short fall is made up by the bumper crop of another.

Here are (courtesy of indexmundi.com) 2010 – 2011 cotton production stats, exports, imports, and domestic consumption:

The top 5 cotton producing countries:

1. China
2. India
3. United States
4. Pakistan
5. Brazil

The top 5 cotton exporting countries:

1. United States
2. India
3. Australia
4. Brazil
5. Uzbekistan

The top 5 cotton importing countries

1. China
2. Bangladesh
3. Turkey
4. Indonesia
5. Thailand

The top 5 countries– cotton domestic consumption

1. China
2. India
3. Pakistan
4. Turkey
5. Brazil

Impact of La Nina on Cotton Supply Chain

Here are the two basic cotton

<< Return to Part I

Cocoa

As La Niña strengthens and moves into its third year it has been forecast to be considerably weaker than last year (one of the strongest La Niña’s on record). The effect/impact on weather for West Africa tends to be plentiful rainfall, which in turn produces near perfect growing conditions for Cocoa. The caveat (weather-wise) would be for persistent rainfall throughout the growing season, or if La Nina weakens quickly either could have an impact on the “mid” crops, which are harvested in Q1 of 2012.

The Ivory Coast – the world’s largest cocoa producer – recently announced total cocoa production for the 2011-2012 season would be 1.6 million tonnes. Many question this forecast labeling it “astonishing”. Cocoa farms within the Ivory Coast contain some of the oldest trees and age tends to lessen productivity and require copious amounts of fertilizer to stimulate growth. It

La Nina as it pertains to climatology occurs when the waters of the east central Pacific Ocean are notably cooler than normal. Where as a result, global weather patterns are subject to shift, particularly within the tropical regions. Most notable are delayed seasonal rains, a higher than average or less than average rainfall and shifts in the equatorial air temperature. Coffee, sugar cane, cotton and cocoa all have optimal growing conditions, where excessive can destroy a crop as easily as not enough.

An October 2011 report from the National Oceanic and Atmospheric Administration (NOAA) states:

“NOAA expects La Niña, which returned in August, to gradually strengthen and continue through the upcoming winter.

With La Niña in place Texas, Oklahoma, New Mexico and parts of surrounding states are unlikely to get enough rain to alleviate the ongoing drought. Texas, the epicenter of the drought, experienced its driest 12-month period on

BACKGROUND

The verdict is still out on copper. The market has not confirmed a bottom at 2.99, based on the front month spot price. The monthly chart pattern and the oscillators I use have not given buy signals yet. So, what is the near, mid and long- term picture? What is copper telling us economically? Questions that some answer, some wonder if they can be answered, while others still warn-- if you are looking for 100% certainty, don’t bet on copper to oblige.

Supply and demand will ultimately command direction and price. Copper remains closely correlated to the global economies and markets. Copper is an excellent conductor of electricity and heat and is used in technology, electronics and the automotive industries. The average auto carries between 45 to 100 lbs. of copper; PCs, mobile phones, tablets and many other electronic gadgets also use copper wiring and contacts. Commercial and residential

Fact or Fiction

It is that time of year when gifts may come in small packages. Where demand for profit preempts all else and "shop early" takes on a whole new meaning. The 2011 holiday shopping season has by my estimation set an all time "pre" record. Relegating both Halloween and Thanksgiving to secondary status in the process. I can personally validate this stat from visits to both Home Depot (HD) and Lowe's (LOW) in mid October - pre - Halloween. Entire Holiday departments were open for business selling: trees (artificial), lights, ornaments, cards, gift wrapping, and hats that play "Jingle Bells."

As in years past, a possible near term buying opportunity for traders using a shorter time frame exists. By taking a look at the performance of retailers and their supply chains on a 5 year basis it can be concluded that &quot;Black Friday&quot; retail sales sets the tone

So what is the story with silver – did the bubble burst? Is it headed for $50 an ounce or more? What about the gold/silver ratio: Is it headed towards new lows or new highs and what does it really mean? What is the real supply and demand picture for silver?

Silver remains a precious metal despite years of being the "bastard stepchild" to gold. An attempt to corner the silver market drove prices to historical highs in 1980 and more recently towards $50 an ounce based on several proven and unproven factors including short covering of a reportable massive JP Morgan (JPM) short position inherited from the takeover of Bear Stearns, global economic concerns resulting from sovereign debt defaults to currency devaluations to political unrest.

Technically, I have a strong case that silver has been tracing a corrective pattern off of the 2011 highs which may be complete with

FACT or FICTION

Have you seen the latest adverts from Mercedes Benz -

Think gold has increased in value?

Wait until you see what your Mercedes is worth.

Due to unpredicted global demand and shortened supply, your leased Mercedes-Benz may be worth more than you owe, and it if is, we will even pay off your lease and write a check for your equity. Take advantage of this rare market opportunity while it lasts.

Ain't it grand being a part of the 1%!

Record Setting Rallies

If you bought the S&amp;P 500, the Dow Jones Industrial or the Nasdaq Composite at the beginning of October your account would be up between 12 and 14%. That is what I just heard from a smiling delirious reporter on a major cable news station. In fact no matter where I turned this morning it was the same story -- up up

Gold Remains In a Correction Within a Longer Term Bull Market

Fact or Fiction

Discussions on gold usually center on its “bubble status.” Is it in a bubble? Has the bubble burst? Is it reacting to inflationary pressures? Deflationary pressures? Is it really a trusted storehouse of value? What do I get from owning gold? Many questions and just as many opinions are given as answers.

Bitten by the gold bug back in 1979, I have observed first hand the parabolic rise to $850 in 1980 and have researched through years of historical data charting gold prices (by hand for many years) ever since. I watched as the Central Banks of England, Germany, France, Ireland and several other countries sold their gold reserves at the 1990 lows ($253) in preparation and acceptance of the European Rate Mechanism (ERM), a fiat currency based system. The ERM was put in place to

MARKET MOVERS

Natural Gas is not a new energy source, but has become a more important fuel source going forward as the major economies of the world find solutions to global warming. Its abundance, environmental unassailability and numerous uses spanning many sectors give natural gas a role as a clean energy source, a significant role that will steadily increase. In the United States many utility companies have already or are in the process of replacing coal burning furnaces with cleaner natural gas burning furnaces to produce electricity.

Natural Gas is a combustible mixture of hydrocarbon gases. Mainly carbon dioxide and water vapor. These are the same compounds we exhale when breathing. Coal and oil are composed of more complex molecules containing a higher carbon ratio and higher nitrogen and sulfur content. When combusted (burned) coal and oil release higher levels of carbon emissions, nitrogen oxides, and sulfur dioxide. This combined