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What Will Pop The Gold Bubble - Update [View article]
Short-Term Gold Profits From Euromageddon - Soros Style [View article]
Still, the reason I pointed out Soros' increased financial investments versus gold is that euromagedon will be very bad for financials but good for gold. However inflation and excess money supply growth generated by efforts to preserve the euro should be good for financials as well as gold so Soros's financial purchasing could mean he was pursuing a different investment strategy than safe haven. Given Soros is a Keynesian/demand side economist, it's unlikely he's doing this but what do I know?
If Soros is buying gold in anticipation of euromageddon then he will sell the majority of his financials relatively quickly. If the fourth quarter 13 F report shows that he's sold his financials and kept his gold than the likelihood is that Soros is buying gold as a safe haven.
There are a couple of hints but nothing definitive in the investment strategy shown in the third quarter 13 F.
Soros appears more defensive on his financial investments versus his gold. He bought $1/2 billion in AIG and paired it with what appears to be a defensive put. For his gold miner stocks, he added an aggressive call.
Finally, the gld and the gold mining stock together equal around 4.5% of the Soros portfolio, close enough to the 5% I was always taught was the amount you wanted to have in gold, etc. for hedging or safe haven.
If euromagedon holds off till the fourth quarter 13 F report is issued, we can look at it and try to figure out what he's doing. If it arrives before then I'm sure Soros will tell us exactly what he thinks.
I'll be making a change to point out the amount of the increase in financials. Thanks for pointing this out.
Short-Term Gold Profits From Euromageddon - Soros Style [View article]
I'll look at it the 13f more carefully and make a comment on the composition of financial stocks.
Short-Term Gold Profits From Euromageddon - Soros Style [View article]
The euro-mess arises from the fact that the Eurozone is not a OCA - Optimal Currency Area like the USA, Japan and Britain. There are 5 factors that make up an OCA with the two most important being risk sharing and labor mobility - neither of which exist in the Eurozone at this time. For example, when the tsunami hit Japan and Sandy hit the NE there was an existing mechanism to share the risk through the Federal governments.
More directly, in China and in the USA stimulus efforts were focused on areas that needed help rather than those that could pay
for them. For example, in the USA the most extended unemployment benefits were available in areas that had higher unemployment.
This article goes into OCA's in more detail: The Euro Deal: Expect Much Greater Economic Contraction Than Forecast http://bit.ly/Wv2P7v
Note that the predictions in the article, written a year ago, are coming true.
No Demand For Gold Except Safe Haven - 3rd Quarter Supply And Demand Analysis [View article]
Gold will eventually be much higher than it is today - but it going to have a lots of ups and downs before then. Any dollar crisis is a couple of years off so it's not going to be a factor. Japan crisis is closer but what exactly will it do to the price of gold - this will boost the dollar but only have a short term safe haven effect on gold prices.
No Demand For Gold Except Safe Haven - 3rd Quarter Supply And Demand Analysis [View article]
In my first article, published when gold was around $900, I gave a sell target of $1600. Fairly good call of the 2011 top for a prediction in 2009.
In my last article, Second Quarter 2012 Gold Review: Short Term Profit Opportunity, Long Term Sell http://bit.ly/T4yr2U, gold was at $1670 and is now at $1725. This is still the current trend.
This latest article is just alerting investors of the continuing demand trends and when to sell to maximize the short term opportunity from safe haven investing. I'm working on an article on the technical details of safe haven trading which will be out Friday or Monday, if the editor gods of SeekingAlpha decide to publish it.
No Demand For Gold Except Safe Haven - 3rd Quarter Supply And Demand Analysis [View article]
Cheaper energy than the rest of the world will do a lot to fix the problems that America has endured since the Oil Embargos of the 70's. Fracking is going to change a lot of economic dynamics.
So where does gold fit in a cheap energy economy?
No Demand For Gold Except Safe Haven - 3rd Quarter Supply And Demand Analysis [View article]
I'd like to hear any comments from India also.
The Election Stimulus And Recession - Analysis And Forecast [View article]
We'll see.
The Election Stimulus And Recession - Analysis And Forecast [View article]
The movement was small - a couple of months of slightly better performance. As far as "silly" goes - I think that's the nicest thing anyone who disagrees with me has called me recently.
As always, I hope you're right on the upswing in the fourth quarter. Obviously housing and auto sales are positives and the drop in energy prices will help. Hurricane Sandy is going to make it hard to figure out exactly what is happening in the fourth quarter due to the destruction and or delays in delivery of retail inventory but it should have a positive effect on first-quarter GDP. Nevertheless, the addition of the euro mess makes the likelihood of any significant rally small before the new year.
European Sovereign Debt Crisis: Up Next, German Real Estate Bubble? [View article]
The Tipping Point: Recession Danger High [View article]
Hope you're right. A 3rd Q bottom could happen just from getting the election behind us.
Is your projection of a worse post election outcome from an Obama or Romney victory? If so, why? I don't like either one's economics.
The Tipping Point: Recession Danger High [View article]
If we go into a recession (a period of negative growth) things will get worse.
However, going to even more of the so called business friendly practices of GWB will make things worse.
Not many good choices in this election.
The Tipping Point: Recession Danger High [View article]
Personally I think there will be tremendous growth in equities in the near future but there's going to be at least one significant drop before the sustained growth. There are three factors that make me think that the market will drop: the euro-mess, the slowing world economy including the US, and peaking corporate profits.
We'll see.
The Gold Bubble Is Leaking: First Quarter Supply And Demand Update [View article]