Short-Term Gold Profits From Euromageddon - Soros Style [View article]
I looked at financials in the third quarter 13 F and you're correct that Soros is holding a tremendous amount of nonmajor bank financials. As I only looked at the major banks, I missed these additions.
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]
Always follows Soros if you can figure out what he is doing today. I only looked for the majors in the latest 13f - and I may have missed some of them.
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 is a structural problem, not a difference in ratio, debt, etc - technically Japan is worse than everybody but is doing better than the Eurozone. This is because the euro was designed without the relief mechanisms that are built into the government structures of the USA, Japan and GB. 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]
China is probably buying gold to depress the price of the RMB without directly buying dollars which will get them labeled a currency manipulator. Also, the Chinese gold demand trend in tonnes was flat for the last 12 months.
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]
Hmm. So gold is not a bubble? There was not a peak in September 2011? We'll see. 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]
A questions to ask about where America is in the cycle: Which cycle? 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.
No Demand For Gold Except Safe Haven - 3rd Quarter Supply And Demand Analysis [View article]
The WGC report showed India was the strongest market in the 3rd qtr up 12% in investment and 7% in jewelry. The report concluded that the 4th Qtr in India would be stronger but not enough to overcome the weakness in the 1st half. Also some news reports that Indians are turning to silver instead of the traditional gold due to cost - as yellow gold is out of style in international fashion perhaps as fashion change also.
The Election Stimulus And Recession - Analysis And Forecast [View article]
I think you have to separate this into business and consumer confidence. Consumer confidence has been recovering and continues even with the Obama reelection despite very weak income growth. Business confidence has not increased significantly and remains at what are described as recession levels. If rising consumer confidence results in increased retail sales we should see business confidence increase.
The Election Stimulus And Recession - Analysis And Forecast [View article]
Freddy,
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]
You didn't mention that the other correction to euro imbalances is for Germany to have inflation while other countries have none. The ECB seems to think it can generate selective deflation without generating inflation in Germany. Not to get in to too many details but what used to be widely accepted (yes, Keynesian) economic theory states that deflation is very hard to achieve and incredibly destructive while inflation is relatively painless and inevitable. Looks like inflation in Germany is popping up first in housing - expect more inflation in Germany unless the Euro blows up.
The Tipping Point: Recession Danger High [View article]
Freddy, 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]
We're in a depression already: An extended period of high unemployment and excess manufacturing capacity. 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]
The recession of 1937 was preceded by a positive yield curve. When interest rates are hard against the zero boundary the yield curve can only be positive so it loses its predictive power. In normal times you're absolutely correct about the yield curve.
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.
The Gold Bubble Is Leaking: First Quarter Supply And Demand Update [View article]
I had a typo in my line about middle class income. It should have been "1970's" instead of "things were better for most families in the 1980's". Middle class lost ground from 1980 on.
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]