Tony Daltorio

End of the Commodity Super-Cycle

Here is an article that shows typical Wall Street "thinking", with the emphasis on the short-term and on momentum. I am seeing more and more of these anti-commodity articles. That tells me it's time to aggressively accumulate positions in commodities and commodity stocks for sizable gains over the next 2-3 years.

This Is Just the Beginning

Your argument about how foreign money has to flow into US Treasuries is absurd. Let me put it to you this way - Let's say there was a fire engulfing both your home and your neighbor's home. You only had time to save either your own family or your neighbor's family,not both. Would you let your family burn? I don't think so. Most of the foreign money will stay home to take care of their own problems. Foreigners no longer have the spare money to take care of the US too.


On Feb 09 02:35 AM bcncv wrote:

> I agree with your assessment of required foreign money flowing into
> treasuries, but not necessarily the conclusions. Foreign capital
> will continue to seek the safety of treasuries until there is actually
> a better investment out there. Where else can it go? Europe? Japan?
> China? Emerging Markets? Until there is something else out there
> that is considered "safe", I don't see this money going anywhere
> else. Even then, the general consensus (right or wrong) is that the
> US will lead the world out of this recession. If that turns out to
> be true, the foreign money in treasuries will shift into US equities
> very quickly.
>
> For those thinking China will be a magical economic story, I think
> you should revisit that thesis. Compare it to the US in 2006, with
> overextended credit, poor risk models, and insufficient due diligence
> on loans. Then multiply that absurdity by 10,000 and you have China.
> While visiting China, I got to see exactly why the Chinese (those
> that can) keep their money in US treasuries and NOT in Chinese securities.

This Is Just the Beginning

It is always fun to read all of the comments that Peter Schiff generates. What amazes me most is how arrogant most of my fellow Americans are - those darn foreigners would never dare to not buy our Treasuries - they'll do what we tell them to do and like it. However,they will dare to NOT show at upcoming Treasury auctions. And please remember that many of those darn foreigners live in countries with huge surpluses, not huge debts like the US. It is these countries that will be, as Peter Schiff suggests, much better positioned for the future than the US.

Key Reasons to Be a Dollar Bull

This article shows what happens when so-called investors focus on the short-term. Within a year, both deflation and de-leveraging will be yesterday's news. And what do think would happen if the US government stops the bailouts. Right or wrong, the perception will be that the US has thrown in the towel. This will cause overseas investors to panic and cause a major dollar selloff. One of the current main props for the US dollar at the moment is the hope that all the bailouts will "solve" the problem.

Why the Fed Can't Prevent a Deflationary Depression

This article is "typical" of Wall Street thinking - no one thinks outside the box! Is there a law that the Fed and the Treasury must use the banking system to get the money out there? They could simply give money directly to corporations or consumers. Remember Ben's helicopter?
Also, many economists outside of Wall Street consider the whole concept of the velocity of money pretty much a discredited idea.

The Inflation / Deflation Debate

I am always amazed by the deflationists. Whatever trillions of dollars has been lost in the debt bubble or by asset deflation, the Fed can print up in an instant! They have made it very clear that they are headed down that path(QE). What is so hard to understand about that?


On Feb 03 09:47 AM GRAR wrote:

> Steve, your point that deflation will reign for the next two years
> while the seeds of the next inflationary cycle being sown is well
> taken. However, I will point out two of the central arguements in
> favor of longer term deflation that you did not address.
>
> Firstly, while money supply is in fact rising, money supply does
> not take into account the destruction of credit. Credit is currently
> contracting at a very fast rate, and it is happening across the board:
> mortgage debt, consumer debt, yen carry trade, margin accounts, commodity
> speculation, etc. are all unwinding. This reduces the amount of spendable
> assets even if it doesn't show up on graphs of money supply.
>
> Secondly, assets are going down in value, which also does not show
> up in money supply. Estimates range as high as $4 Trillion in assets
> have simply dissappeared in the last year. Virtually every asset
> class (with the exception of bonds) has fallen off a cliff.
>
> These factors are directly deflationary since the money in your pocket
> is worth more than last year, and many people have access to much
> less money than they did last year.
>
> They could also contribute to longer term deflation after the fundamental
> trends are broken, since they also contribute to a deflationary "mood".
> If consumers are afraid to spend, it forces prices down, etc. While
> it is impossible to predict mass psychology, but it is not unreasonable
> to predict that consumer sentiment will not return to what it was
> in 2007 any time soon.
>
> So will we have inflation in 2010? I would guess not, but there is
> no need to place a bet on it yet. In the meantime you can invest
> for deflation, keeping a careful eye out for leading signs of inflation.
> I suspect that is what most traders are doing anyway.

A Whole Lotta Nothing

You are 100% incorrect! It is DEFLATION that is impossible over the long term. Whatever number you come up with for losses from the debt bubble - $50 trillion, $100 trillion, etc. the Fed can print that in an instant. And when all else fails, it will eventually just print up that money


On Feb 02 11:11 AM Dow5000 wrote:

> Schiff was right in his prediction but very wrong in his response.
> STRONG evidence exists that his investment recs lost more than the
> S&P last year. Why? As right as he was in calling the debt bubble,
> he was as equally wrong in his inflation/ global decoupling theory.
> Inflation is IMPOSSIBLE when real estate values are plunging and
> debt is being defaulted at increasing rates. As bad as it is in the
> US, it is worse overseas. So, his dollar destruction theory cost
> him big time. The dollar is effectively the "tallest midget in the
> room." Buckle up everybody - while Bush was Hoover, Obama will be
> FDR! Ouch.

Buy American = Goodbye Global Friends

It just goes to show how dumb American policy makers are. This country desperately needs "foreigners" to buy trillions of dollars of worthless paper called US Treasuries or the country collapses. So what are we doing to the "foreigners"? We punch them in the nose and give them the finger. Do not be surprised when they give the US the finger right back.

Wall Street Snake Oil

You are absolutely correct about Goldman! What this country needs is to have no future Treasury secretaries from Goldman Sachs.


On Jan 29 10:48 AM PrudentMan, CFA wrote:

> How was the epitome of peddling "snake oil" missed, Goldman Sacher.
> They constructed incomprehensible, worthless securities and derivatives,
> peddled them to their institutional clients, then went short. No
> conflicts of interest here. No violations of the Law of Agency. No
> violation of fiduciary responsibility. No prosecution because they
> own Congress and the Administrations and have their people placed
> in powerful political executive positions.
>
> I know that other financial institutions have done the same thing
> but not on the scale of the Sacher. No firm has placed so many employees
> in such high offices of government without even Congress' hearings
> or consent because they don't want the conflicts aired in public.

Wall Street Snake Oil

In my article specifically, I did not recommend buying the ETFs. I recommend investors buy actual TIPS bonds from Uncle Sam. The TIP ETF symbol was added after I wrote the article.


On Jan 30 02:22 AM E Thomas St. wrote:

> TIP isn't paying a dividend at the moment and I haven't seen any
> news that they will. IPE is very thinly traded and could be shut
> down. The irony of decrying snake oil here.

Peter Schiff Answers His Critics

Peter Schiff is damn good at what he does. From my 20+ years in the investment business, market timing is THE hardest thing to try to do. The key is to invest for the long-term (5+ years). Mish is not only delusional with his fairy tale thinking about deflation, but he is also your typical American investor who never looks longer term than a month or so -- "I want my million and I want it now, not in 5 years!"

The Shedlock-Schiff Affair: A Chronicle

Mish is simply one of those deflationary nut cases who tries to shout down anyone who disagrees with his delusional scenario.

In Defense of Peter Schiff: A Response to Mish

You are absolutely correct - all the deflationists are "traders" whose time frame never extends beyond a few months. Not exactly "deep" thinkers, but your typical "I want it now" Americans.


On Jan 27 07:30 AM somecatch wrote:

> I've noticed the same thing. Those who predict delflation are invariably
> trying to make short term predictions with a time horizon of less
> than two years. In the longer term, Schiff is almost certainly right
> on. Short term predictions suit the needs of the financial media,
> not investors. For the media, it's all about attracting eyeballs
> and generating ad revenue in the short term. Schiff represents his
> clients. The media represent their advertisers and shareholders.
> There's little doubt that short term prognostications help generate
> "churn" for the financial industry. Schiff freely admits that he
> doesn't know what will happen in the short term.

Let the Peter Schiff Backlash Begin

Peter Schiff is damn good "big picture" thinker. If you take the advice of a "big picture" thinker, you have allocate to him sufficient time, such as 5 years. I know this doesn't fit well with your typical American "investor" - I gotta make a million bucks and I gotta do it this week!

The Cult of Peter Schiff - Is It Deserved?

Comparing Peter Schiff to the Dimbulbs that regularly appear on CNBC air is liking comparing brilliant sunlight to the light of a distant star many, many light-years away. No comparison. Peter Schiff is actually right a good bit of the time, unlike most CNBC guests who are wrong most of the time.