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Tao Jaxx

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  • The Trade That Led To The Demise Of PIMCO Total Return [View article]
    Good article. I was always amazed at Gross's rock star status, even more so now. I agree with the author as to the lack of basic understanding of economics BG displayed. True, he beat the index for so many years, but by adding risk to his portfolio. Simple as that.
    Sep 30 08:35 AM | Likes Like |Link to Comment
  • Gold - Support Level At $1215 Remains Firm [View article]
    Gold "enjoyed support" @ $1315, $1415, $1515, $1615, $1715, $1815 and even $1915 as well.
    Sep 30 08:20 AM | 2 Likes Like |Link to Comment
  • Gold - Resting On Support At $1290 [View article]
    So much for the title of the article….
    Aug 21 04:29 PM | Likes Like |Link to Comment
  • A Brief Note On The Second Quarter [View article]
    Sure, starting from a subsistence economy where millions starved to death. Last time I checked, in 1984 the US could feed everyone around.
    Plus, Chinese growth numbers are cooked up by the Politburo in closed session and miraculously, the Statistical Office comes up a year later with numbers matching the "forecast" to the second decimal lol
    "all sorts of problems", you aint seen nuthin' just yet..
    Jul 31 11:13 AM | 2 Likes Like |Link to Comment
  • A Brief Note On The Second Quarter [View article]
    2.4% a "low level of real growth"? What do you think we are, Sierra Leone?, This is a
    $17Tn economy
    For 2011–2013, real GDP increased at an average annual rate of 2.0 percent. That means each year, we add a country the size of Austria to our economy.
    Jul 31 09:51 AM | Likes Like |Link to Comment
  • Why I Upped My Gold Short: My Market Outlook [View article]
    Nice article, same position as mine (short gold since November 2011). Works nicely so far.
    I covered half of my gold shorts to short copper, which should nicely deflate as the "China über alles" theory eventually goes down the drain .
    Here's my rationale back in 2011, responding to the yelling peanut gallery claiming that cash $ would turn worthless. Remains just as true today:
    "From 1999 to 2011
    - accumulated world inflation has amounted to 60.4%, including oil and food (Source: IMF WEO September 2011 database)
    - gold prices have increased 427.4% (from $275 in December 1999 to $1531 in December 2011 even after correcting that month). That's more than 300% real appreciation linked to "Armageddon fear" that's going to correct unless Armageddon happens. As it does not materialize, the correction will happen. I don't know when but it will, hence gold is -at current prices- riskier than cash."
    Jul 31 09:33 AM | 1 Like Like |Link to Comment
  • James Turk More Bullish On Silver Than Gold [View article]
    Ya think?
    Jul 24 01:55 PM | 1 Like Like |Link to Comment
  • China's Unrelenting And Mythological Midas Touch [View article]
    Very good article, well researched and reasoned.
    Short gold and copper on my side. Doing well on gold, not so much on copper.
    But that may change, once local governments run out of empty shopping malls and see-through buildings to build.
    May 30 08:22 PM | Likes Like |Link to Comment
  • China's Unrelenting And Mythological Midas Touch [View article]
    Yep, 1.3 Bn inhabitants, over 10Mn sq. kilometers and it takes two weeks to report GDP numbers (1 month for an estimate in the US, corrected twice each subsequent month).
    And it falls right on target to what the Communist Party decided 18 months ago.
    May 30 08:17 PM | 1 Like Like |Link to Comment
  • China's Unrelenting And Mythological Midas Touch [View article]
    "Any tonnage that the ETFs cough up will be more than offset by miner hedging".
    You are aware that "miner hedging" means forward sales of gold, right? And that it means extra gold SUPPLY, OK?
    So that ETFs coughing up metal and miners hedging do not offset one another but ADD UP to one another.
    Just checking you're making informed choices.
    May 30 08:14 PM | Likes Like |Link to Comment
  • What Jim Rogers Is Buying Right Now [View article]
    Why should I care what Jim Rogers is "buying"? He was touting gold at $1,900 and FXI (China large caps) at $46.
    Not sure he's buying anything in fact. Making noises for sure, but buying?
    May 20 01:55 AM | Likes Like |Link to Comment
  • Reuters Omits The Grey Areas About China Gold Demand [View article]
    Lots of questions. A few answers:

    “Do you have a data source showing what % of the China Yuan carry trade is hedged with futures metals contracts?”
    No I don’t.
    Simply, this whole thing is about arbitraging onshore/offshore yuan, not about having exposure to gold, whose volatility can eat up in a day a year’s worth of arbitrage, so offshore/onshore yuan plays have to be 100% hedged.

    “if everyone is doing the same futures trade, then the premiums for placing the hedge would go up, and add much more cost to hedging the asset of the carry trade.”
    First, gold is seldom in backwardation and when it is, it does not extend beyond the current contract, all later ones are in contango. So you can set up the deal for one month out and, say, 6 months out and get the LOC for the one-month out for which you do the physical import. Even in backwardation, you are looking at a net cost of less than 10 basis points yearly, which is less than the offshore/onshore difference.

    “You cannot enter a future sales contract without putting an equal value of cash.”
    Course you can, I do that all the time. You need to post initial margin only.

    “Zero hedge shows that gold prices have tracked closely with the Yuan/$ rate”
    I (and anybody else) can show you perfect correlation between any two sets of completely unrelated series. It even has a name: it’s called spurious correlation

    “however, I don't believe that much gold is in investors hands. It is MUCH less than that. According to this chart, it is only 16%”
    Not sure who “” is and where they get those numbers but in the 52% of jewellery, a good chunk gets available as prices rise. And even 16% of 170000 tons is 27000 tons so more than 10 times yearly production.

    “iron ore as collateral”.
    Iron ore gets processed and drops out of the iron ore market. Gold extracted stays around on the market, available for sale for ever.
    May 18 09:45 PM | Likes Like |Link to Comment
  • Reuters Omits The Grey Areas About China Gold Demand [View article]
    I take your points but my understanding is different: The term "gold as collateral" is a misnomer.
    Gold (and copper, nickel etc) are not used as "collateral" as in A lends money to B provided B pledges gold it owns as a guarantee for the loan.
    Gold (copper etc…) are used as a physical import simultaneously re-exported through a sale on the future market. The physical import allows access to Yuan financing through a letter of credit. Domestic yuan financing is then used for offshore yuan lending to capture the interest rate difference between onshore and offshore yuan. That's all there is to it and the price of gold/copper… is irrelevant as there is a simultaneous purchase and sale of the underlying metal.
    The system can work with gold at $1300, $1800 or $800.
    Costs of production are a side show: there are 170,000 tons of extracted gold of which 60 to 70% are held as investment and therefore available for sale when investors switch back to income producing assets. Yearly production is 2,000 tons, so tiny in comparison. Don't get fooled by comparison with oil or gas. Any drop of oil or whiff of gas produced is consumed, never to return, hence the impact of production costs on market prices. Any ounce of gold produced is sitting here for ever, available for sale depending on market expectations as to the future of gold price. So 100,000 tons potentially available for sale, compared to 2,000 yearly production.
    Just my $.02.
    May 13 07:51 PM | 1 Like Like |Link to Comment
  • Reuters Omits The Grey Areas About China Gold Demand [View article]
    I think you're right about the collateral but not about this "China Gov't buys all below $---- (name your price here)"
    Where in the article do you see "an official position to buy gold for its central bank only below $1250"
    It's just Pierre Lassonde (a gold miner, no less) saying so. Talk about a cast iron guarantee...
    But yes, the much touted "imports" were just financial collateral offset by equivalent sales on futures, so net demand was zero. How else could gold prices nosedive as they did last year while China would import half of the yearly production?
    May 12 10:31 AM | Likes Like |Link to Comment
  • Does China Really Have 1,000 Tons Of Gold Locked Up In Shadow Financing Deals? [View article]
    I don't hate nor love gold, or copper, or 10y US Treasuries or stocks for that matter.
    Hate and love are emotions. Anybody investing on the basis of emotions deserves to -and will- lose their money.

    The minute inflation rears its ugly head, I'll "love" gold like crazy lol.
    Nothing irrational here. Only thing I "love" is a green P&L. Only thing I "hate" is a red one. Gold is treating me well so far.
    Apr 20 10:16 AM | 1 Like Like |Link to Comment