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Goldman Sachs makes the case for holding commodities as a strategic move. On Brent crude, the...

Goldman Sachs makes the case for holding commodities as a strategic move. On Brent crude, the market should be well supplied in H2 as significant non-OPEC supply comes online and weak Chinese trade data signals relatively weak demand. Gold prices should decline to $1,050/oz. by year-end 2014 given a less accommodative Fed. Potash producers will maintain discipline and good margins despite falling crop prices.
Comments (11)
  • There is no inflation yet crude is up 10% in the last month.
    25 Jul 2013, 08:18 PM Reply Like
  • There is no inflation yet because the banks are sending most of the money the Fed is paying them for their MBS back to the Fed as Excess Reserves. Look at the excess reserves chart on the Fed's website. It was at $0 back in 2008, and its at $1.8 Trillion now!

     

    Most of the dollars the Fed is printing isn't getting into the money supply, it's going back to the Fed. Once interest rate go up high enough, the banks will start lending, again, at the the inflation will happen.

     

    Why doesn't the mainstream and financial press write about this?
    26 Jul 2013, 09:15 AM Reply Like
  • So gold is up for the day, we finally get a positive report from Seeking Alpha right? Nope. Seeking Alpha editors concentrate on the negative.

     

    See my comment here: http://seekingalpha.co...

     

    Goldman says $1,050 an ounce by 2014? If they still think gold is a short, why did they close their short position April 29th?

     

    If you want someone who has accurately called what's going on with gold (and challenged SA editors in the process), check my track record: http://bit.ly/14bkOpZ

     

    I'm not your typical gold to the moon or hyperinflation guy like so many either. I view it as the tortoise (gold) and the hare (debt and Fed mischief as well as banking issues (top 5 banks hold more sub-investment grade derivatives than at the height of the financial crisis) here and abroad.
    25 Jul 2013, 08:21 PM Reply Like
  • Well...I am not a gold nor a silver bug, and simply trade them just like any other instrument.

     

    Without dwelling on the charts, we have had one hell of a correction, but probably have further to go on the down side. A bull market of this length probably doesn't end so quickly, correct, and then rally toward whence it cometh. Just a superficial thought without really getting into it.

     

    The one thing I firmly believe in is that we don't have a hint of inflation. If anything, the collapse in certain commodities is signaling deflation. Bernanke alluded to it in his comments, as in 'we have an equal chance to experience deflation as we do inflation.' This coming from a man who would give his eye teeth to inflate--if even just a little bit. So, no reason to buy gold on that front.

     

    And if we are facing deflation, and as we are watching life unfold in Detroit where the aristocracy is trying to pit worker against worker (my rent subsidy versus your health care versus the next guys pension) while the leeches that created a lot of that mess slip away a la Chris Dodd with their riches, we are more likely to experience a period of anarchy if the leeches (nee politicians) can't control the outcome--and would that be a reason to own some gold? I just don't know. As a currency (Gartman's constant phrase) I am not sure it is really fungible/practical. As a hedge'? what are you hedging if you can't convert it? Like I said, I just don't know, and don't know if there is a plausible argument to be made there.

     

    So gold? Is it a chart buy? Even if there is no other fundamental reason?
    25 Jul 2013, 08:52 PM Reply Like
  • Ted, I think there are a multitude of fundamental reasons, but I am with you on deflation and have been in that camp which differs than most who are pro gold. Bernanke has been fighting the contraction with all the QE he can muster, and it has only seeped into the stock market and somewhat real estate in some areas, where the money the banks receive for their junk assets is turned into profit where they can chase it. But there will be an end to this at some point. When is the only question. Japan's episode has shown that things can play out longer than most think. That's why I view the gold play as the tortoise (gold) vs. the hare (debt and fed interference).

     

    This correction in gold is a normal correction. If one views gold as insurance, and I think they should, then allocate your portfolio to it and go about your life. You buy insurance for everything else.

     

    As far as gold as a currency, well, the Federal Reserve Notes only have 42 short years of existence without it. When there are no reins to what government can do, or the Fed, things can get a bit out of control and that's what we're seeing.

     

    I am dollar bullish and gold bullish, but do expect some pressure on gold.
    25 Jul 2013, 09:13 PM Reply Like
  • I think most have really missed the point.IMO, we are experiencing inflation in the form of a dollar devaluation. Bluntly, my veal chops are becoming unaffordable.
    At the same time, the economy is just a tad bit more than motionless.
    We have full fledged stagflation, but no Government acknowledges it.
    It is ripe for gold and silver to continue a rocky but steady rise to new heights.And may I say,ya ain't seen nuthin yet.
    25 Jul 2013, 09:01 PM Reply Like
  • If the dollar was devaluing you'd have a point - Euro up ~1% YTD and /cl up like ~16%

     

    This is about Goldman being long oil and screwing consumers.
    25 Jul 2013, 09:44 PM Reply Like
  • Goldman Sachs = Market manipulators .Dont believe anything they publish.Unfortunately the herd follows.
    26 Jul 2013, 12:30 AM Reply Like
  • margin debt is at all time highs...when the equity market breaks EVERYTHING will go down....margin calls override all fundementals
    26 Jul 2013, 08:59 AM Reply Like
  • There is no inflation yet, since the bank are sending the money that the Fed is giving them for their MBS back to the Fed as Excess Reserves. Look at the Excess Reserves on Deposit chart on the Fed's website. It was $0 back in 2008, and it's $1.8 Trillion now! Most of the QE money is just going back to the Fed, not into the money supply. Once interest rates go up high enough, and the banks start lending again . . . that's when the inflation will happen.

     

    Why doesn't the mainstream and financial press write about this?
    26 Jul 2013, 09:32 AM Reply Like
  • 1st we will have deflation.....then possible depression...then the possibility of inflation comes...but in order to have run away or hyperinflation people must have money to drive the prices up....may only be small percent with any money to buy anything
    27 Jul 2013, 04:03 PM Reply Like
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