The Real Experiment That Is Being Carried Out In Japan [View article]
I can tell you. They have a terrible 4.2% unemployment rate and their extremely affluent consumers enjoy mildly declining prices every year. Abe couldn't let that stand, after all, he's heard for years how horrible the evil deflation was.
The 12 Biggest Mistakes The Media Make When Covering Gold Markets [View article]
Generally I agree with what you write here, but I would point out that the concept of 'intrinsic value' has no place in economics. All value judgments are subjective, there exists no such thing as 'intrinsic value'. If Krugman actually made arguments involving intrinsic value, it only serves as additional proof that he's not an economist but little more than a political hack. I will never understand how the Nobel committee could demean its prize by giving it to him....probably the prize has become a contrary indicator.
Right on. Sinclair sometimes sounds like he's hallucinating. I agree it is a complete waste of time to focus on manipulation theories. Obviously, if the alleged manipulators have tried to hold prices down, they haven't been exactly successful since 2000 (regardless of the recent downtrend). The long term charts of gold & silver actually are among the 'cleanest' charts in the commodities universe (i.e., they are very amenable to technical analysis, including EW theory), which I guess is due to the fact that these markets have very large participation.
The Fed Is Not Pushing Stock Prices Higher [View article]
Much ado about nothing. The Fed's ministrations have increased the broad US money supply TMS-2 by approximately 80% since the fall of 2008. The central bank can create this money, but it has no control over where the money goes as it percolates through the system. Which assets the central bank buys at the outset in these money creation exercises is irrelevant in this context, as the recipients of the funds then have them available and can use them for whatever they like. At times, the new money will predominantly flow into stocks, as has happened recently.
There has never been a 'shortage' of gold. There cannot be one, as all the gold ever produced still exists above ground. It is a waste of time to try to analyze gold as though it were an industrial commodity like copper. Gold must be analyzed like a currency...talking about a 'gold shortage' is the same as talking about a 'dollar shortage' or a 'yen shortage'. It just doesn't make any sense.
New production from mines is basically irrelevant to the gold price. The total extant gold supply is approximately 170,000 tons. Annual mine supply is 2,600 tons, or 1.4% of the total supply of gold. If mine supply were to increase by 20%, it would add 0.28% to the total gold supply per year. A drop in the ocean. The supply of dollars has increased by 10% annualized or more for almost 50 consecutive months by way of comparison (80% cumulative since the 2008 crisis, in terms of broad money TMS-2). - and the value of the dollar has actually increased in that time.
I actually don't expect there to be hyperinflation (when that particular juncture comes, i.e., when the choice will be between defaulting on the government's debt or going the hyperinflation road, selective default may well be chosen), but the fact that there hasn't been hyperinflation so far does not prove that there won't be one. Historically it has been observed that an inflationary policy can be pursued for extended periods of time without the general level of prices increasing much (some prices rise, some remain the same, some even fall...), as the public often tends to increase its demand for money in parallel with the increase in its supply - after all, inflationary policy is pursued mainly during times of economic weakness, and low economic confidence will tend to increase the demand for cash balances. However, if the authorities do not stop the inflationary policy, the public one day wakes up to this fact. Then the demand for money can decline rapidly. Note that in all historical hyperinflation events, the actual phase during which the underlying currency system broke down was a very short term, non-linear event. The usual progression is from 'no notable price increases' to 'notable, but still shrugged off price increases' to 'very notable price increases explained as a temporary necessity' to 'collapse of the currency's value'. The final phase in this progression is actually the by far shortest and often happens in the space of a few months.
Google's Android Seems Unstoppable - What Could Derail It? [View article]
I don't think so. It appears it is not a big problem and was fixed long ago. A few users simply didn't notice that their devices were set to the wrong time zone. See reply # 13 on this thread: http://bit.ly/YIqmSZ (I googled this after reading your comment, since I haven't experienced the issue I was curious).
Your Bond Allocation For 2013: It's Time To Lower Your Risk [View article]
You're overstating the deflation case imo. The US true money supply TMS-2 has grown by about 80% since the 2008 crisis, so it seems obvious that 'fear' of deflation alone is sufficient to get the central bank to print like crazy. However, I agree that treasuries are a buy....t-bonds are once again the most hated market in the world this year (the Barron's 'smart money' poll had a 93% bearish consensus on bonds, the highest ever; they've been dead wrong on treasuries for years). A big deflation scare could see the SPX fall quite a bit, but I assure you there won't be any actual deflation (i.e., negative money supply growth).
Sprott seemingly forgets that the total gold supply extant in the world amounts to about 170,000 tons. The numbers he is quoting are a drop in the ocean. Gold cannot be analyzed as though it were an industrial commodity like oil or copper. Neither central bank or Chinese buying or variations in the mine supply really matter to its price. The main price driver is the reservation demand of existing gold holders.
Stunning Bond Collapse Will Be Gold's Gain [View article]
I would add that the futures curve in gold actually looks increasingly bullish as well. What I mean is that nearby delivery months have recently a tendency to go into slight backwardation (February has been in backwardation for the past three weeks or so) and further out months have very little contango. This happened also shortly before the most recent $270 rally from the low 1500ds to just below $1800. To give credit where it's due, this is something Keith Weiner, one of the authors at my blog has pointed out to me. Since I have seen this signal working a few times already - usually when it coincides with a fairly neutral/bullish set-up in the commitments of traders report - I think it is worth keeping an eye on.
Apple: 7 Reasons Shorts Can't Sleep At Night [View article]
Current configuration: short interest ratio of 1, which is very low, but it has actually been even lower at times over the past two years (i.e., it takes one day's worth of average trading volume to cover all outstanding shorts). Put/call open interest ratio: 0.67 (67 puts outstanding for every 100 calls), which is actually lower than 90% of all readings over the past 52 weeks. Wall Street ratings: 32 'strong buys', 4 'buys', 2 'holds, zero 'sells' (this is dangerous, as it can lead to downgrades, see today's downgrade by Nomura, which helped drag the stock over 3% lower, breaking the $500 support level in the process). So the fact of the matter is that only very few people are actually betting on AAPL going down - they are vastly outnumbered by the longs, in both the stock and its options. And yet, the stock has clearly entered a strong downtrend. Having said that, the hurdle it must now climb on occasion of the earnings report is no longer as high as it once was, due to lowered expectations. So the earnings release could produce a bounce based on that consideration and the fact that it looks 'oversold'. Nevertheless, if I were long the stock (discl.: I have no position in it at all, neither long nor short), all these data points would worry me , because they indicate extremely stubborn bullishness in the face of very negative price action.
Nokia Vs. Research In Motion: Only One Will Survive [View article]
In fact, capitalism is the only rational economic system. Socialism is literally 'impossible', as a socialist economy cannot engage in economic calculation. Economic calculation requires a price system, but when the means of production are collectivized, there no longer are prices. The only reason why the socialist COMECON survived for so long is that its planners were able to observe prices in the capitalist West, which enabled them to engage in rudimentary calculation. They were so to speak 'socialist islands in the capitalist sea', a bit like the Federal Reserve actually... However, had socialism been adopted globally, as e.g. the Fourth International had planned, then the division of labor and with it the entire economy would have broken down into small autarkic units within a few years, living from hand to mouth, scraping along close to the subsistence level. We would definitely NOT have conversations about 'smart phones'. :)
Gold Market Turns To China For Support [View article]
Simply eye-balling the chart, it seems there is zero correlation between Chinese gold imports and the gold price. In fact, they almost appear to be a contrary indicator. However, I'm inclined to believe that they simply don't indicate anything. In London alone, some 2500 tons of gold change hands every three to four days if memory serves, and the total size of the investable stock of gold is probably close to 80,000-90,000 tons (depending partly on how one classifies certain types of 'close to bullion' jewelry). Why would imports of 90 tons over a whole month matter? It's a drop in the ocean. In fact, there is a widespread misconception as to how gold prices are formed. Due to the large stock, reservation demand is by far the biggest demand component, and this cannot be measured (one can only make qualitative statements about it based on other factors, such as real interest rates, inflation expectations, money supply growth, etc. etc.).
The Real Experiment That Is Being Carried Out In Japan [View article]
Abe couldn't let that stand, after all, he's heard for years how horrible the evil deflation was.
The 12 Biggest Mistakes The Media Make When Covering Gold Markets [View article]
If Krugman actually made arguments involving intrinsic value, it only serves as additional proof that he's not an economist but little more than a political hack. I will never understand how the Nobel committee could demean its prize by giving it to him....probably the prize has become a contrary indicator.
Are Gold Stocks Oversold? [View article]
Silver: Let's Get Ready To Rumble [View article]
The Fed Is Not Pushing Stock Prices Higher [View article]
The World's First Gold Factory [View article]
The World's First Gold Factory [View article]
QE Hides In The Shadows [View article]
Historically it has been observed that an inflationary policy can be pursued for extended periods of time without the general level of prices increasing much (some prices rise, some remain the same, some even fall...), as the public often tends to increase its demand for money in parallel with the increase in its supply - after all, inflationary policy is pursued mainly during times of economic weakness, and low economic confidence will tend to increase the demand for cash balances. However, if the authorities do not stop the inflationary policy, the public one day wakes up to this fact. Then the demand for money can decline rapidly. Note that in all historical hyperinflation events, the actual phase during which the underlying currency system broke down was a very short term, non-linear event. The usual progression is from 'no notable price increases' to 'notable, but still shrugged off price increases' to 'very notable price increases explained as a temporary necessity' to 'collapse of the currency's value'. The final phase in this progression is actually the by far shortest and often happens in the space of a few months.
Google's Android Seems Unstoppable - What Could Derail It? [View article]
(I googled this after reading your comment, since I haven't experienced the issue I was curious).
Your Bond Allocation For 2013: It's Time To Lower Your Risk [View article]
However, I agree that treasuries are a buy....t-bonds are once again the most hated market in the world this year (the Barron's 'smart money' poll had a 93% bearish consensus on bonds, the highest ever; they've been dead wrong on treasuries for years). A big deflation scare could see the SPX fall quite a bit, but I assure you there won't be any actual deflation (i.e., negative money supply growth).
Bernanke Sets Gold Free For Now [View article]
Stunning Bond Collapse Will Be Gold's Gain [View article]
Apple: 7 Reasons Shorts Can't Sleep At Night [View article]
short interest ratio of 1, which is very low, but it has actually been even lower at times over the past two years (i.e., it takes one day's worth of average trading volume to cover all outstanding shorts).
Put/call open interest ratio: 0.67 (67 puts outstanding for every 100 calls), which is actually lower than 90% of all readings over the past 52 weeks.
Wall Street ratings: 32 'strong buys', 4 'buys', 2 'holds, zero 'sells' (this is dangerous, as it can lead to downgrades, see today's downgrade by Nomura, which helped drag the stock over 3% lower, breaking the $500 support level in the process).
So the fact of the matter is that only very few people are actually betting on AAPL going down - they are vastly outnumbered by the longs, in both the stock and its options. And yet, the stock has clearly entered a strong downtrend.
Having said that, the hurdle it must now climb on occasion of the earnings report is no longer as high as it once was, due to lowered expectations. So the earnings release could produce a bounce based on that consideration and the fact that it looks 'oversold'. Nevertheless, if I were long the stock (discl.: I have no position in it at all, neither long nor short), all these data points would worry me , because they indicate extremely stubborn bullishness in the face of very negative price action.
Nokia Vs. Research In Motion: Only One Will Survive [View article]
However, had socialism been adopted globally, as e.g. the Fourth International had planned, then the division of labor and with it the entire economy would have broken down into small autarkic units within a few years, living from hand to mouth, scraping along close to the subsistence level. We would definitely NOT have conversations about 'smart phones'. :)
Gold Market Turns To China For Support [View article]