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  • Thoughts on the Silver Crash [View article]
    Was silver's upside move too steep prior to this sell off? Absolutely; nothing grows to the sky. But to argue that this is just normal market activity with respect to margin increases, etc. you are being naive. Banks aren't making any money from their core business which is lending, so now they are relying on their prop desks for profits while continuing to hide billions in losses on the balance sheet characterized as "held-to-maturity" assets. Their goals are aligned with the Fed who needs to engineer a risk-off trade to drive down interest rates.

    This country is approaching $15T in debt and gaining speed. When the next headline read something like "U.S. Government to Completely Eliminate the Military, Social Security, Medicare, and Medicaid;" I'll listen.

    Portfolio insurance just got cheaper.
    May 5 04:16 PM | 12 Likes Like |Link to Comment
  • Thoughts on the Silver Crash [View article]
    You could be right; without question the long-term trend is still up. Though I do think there is some weight to the argument that the (formerly) elevated price levels brought some metal to the market in the form of recycling, etc.
    May 5 04:25 PM | 6 Likes Like |Link to Comment
  • Farewell Precious Metal Stocks, Again [View article]
    Michael,

    The leveraged ETF's present a couple of problems. First, they are meant to provide 2x or 3x daily exposure and as such reset each day which leads to significant tracking error over time. Secondly, these leveraged instruments utilized swaps with entities like Citi and Goldman to gain exposure to their target asset class, which introduces counterparty risk.

    KP
    Apr 21 04:18 PM | 5 Likes Like |Link to Comment
  • Does GLD Have the Proper Amount of Gold in Its Vault? [View article]
    Roger,

    In a taxable account the treatment as a collectible is reason enough to avoid GLD, SLV. I prefer (CEF) for it treatment as passive and E&Y audits the bullion holdings. The track record goes back to 1961.

    KP
    Apr 1 08:57 PM | 5 Likes Like |Link to Comment
  • Thoughts on the Silver Crash [View article]
    Excellent point.
    May 5 04:23 PM | 4 Likes Like |Link to Comment
  • Central Fund of Canada Share Offering Presents Buying Opportunity [View article]
    I agree that PM's will exhibit extreme volatility, however the Fed appears poised to engage in almost perpetual QE given the size of its balance sheet. Politically the path of least resistance is to inflate the debt away, and even if that attitude changes it is likely to late for belt tightening as a viable solution. Not to mention that any belt tightening would be disastrous for real estate and stocks, the values of which seem to be the Fed's third mandate these days.
    Apr 24 11:29 PM | 4 Likes Like |Link to Comment
  • Central Fund of Canada Share Offering Presents Buying Opportunity [View article]
    It is a fund that passively holds the metals on behalf of its shareholders. As such, it is not taxed as a collectible at the 28% rate, which is a pitfall for long-term holders of GLD or SLV. Ernst & Young also audits the physical bullion not to mention the track record back to '61.
    Apr 24 11:26 PM | 4 Likes Like |Link to Comment
  • TIPS: A Poor Inflation Hedge Today [View article]
    There is far too much sovereign debt around the world for a repeat of the stagflation of 70's. Stagflation would be a rosy outcome given the challenges we currently face.
    Jul 1 02:38 PM | 3 Likes Like |Link to Comment
  • Central Fund of Canada Share Offering Presents Buying Opportunity [View article]
    I can't quite figure out the Sprott offerings; both PSLV and PHYS. Intuitively it seems the convertibility would make these funds track the spot price closely. However, upon going to stockcharts.com and plotting the PHYS against the gold continuous contract reveals rather significant under performance of the fund.
    Apr 24 11:36 PM | 3 Likes Like |Link to Comment
  • The Case for Apartment REITs [View article]
    I agree that current valuations are lofty and an investor looking for an entry point should wait for a significant pullback. That being said, the weak economy does not allow renters the flexibility to buy. While they may move somewhere else due to a rent increase, they are still renting and thus contributing to the demand side of the equation. There is some weight to the household consolidation/"move in with mom and dad argument," but we are still seeing a net increase in the number of renters and vacancies declining at the end of the day.

    As construction stagnated in the midst of the crisis, we are several years away from meaningful supply increases. The bargaining power will not be on the side of renters until single family home prices decline another 20%+.
    May 20 06:41 PM | 2 Likes Like |Link to Comment
  • Interview: Jim Rogers on Long Agriculture, Short Bonds and ... Soccer [View article]
    To be sure, the ghost cities are clear indicator that real estate is overpriced in China. Those price levels must come down substanitally to promote widespread affordability for the middle class.

    However, those ghost cities were largely constructed with cash/savings rather than leverage. Therefore we should not see the same destruction of lenders' balance sheets that we saw in the U.S., which could limit the overall damage.
    May 11 04:01 PM | 2 Likes Like |Link to Comment
  • Central Fund of Canada Share Offering Presents Buying Opportunity [View article]
    Appears to be profit taking by retail investors. The fund is now trading at a 2.4% discount which is as deep as I can recall over the past few years. This is not the type of action that occurs at a top. Silver, which is now about 57.4% of the fund, may be due for a break but the fundamentals remain intact.

    For some great insight on the day-to-day I suggest a few resources; King World News Weekly Metals Wrap, Ed Steer's Gold & Silver Daily, and Trader Dan Norcini.
    May 1 12:28 PM | 2 Likes Like |Link to Comment
  • Central Fund of Canada Share Offering Presents Buying Opportunity [View article]
    Nice selloff today. Important to note that the paper silver market is/was radically out of touch with the physical market. The sharp upward move over the past several months signifies the unwinding of the manipulative short positions in the paper market as physical market participants begin to understand that there simply is no silver available for delivery even at these prices. Corrections may be sharp but the fundamentals remain firmly in place.
    Apr 26 02:43 PM | 2 Likes Like |Link to Comment
  • Central Fund of Canada Share Offering Presents Buying Opportunity [View article]
    Thank you for the kind words and I could not agree more.
    Apr 24 11:31 PM | 2 Likes Like |Link to Comment
  • Inverse/Leveraged ETFs: Inappropriate For Long-Term Investors [View article]
    Agreed; these vehicles may certainly be more practical (than options or short positions) for the average investor to express short-term trends. Then of course it is a question of whether or not average investors can correctly identify such short-term trends. History suggests not!
    Mar 11 06:28 PM | 1 Like Like |Link to Comment
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