Ron2008

Look Who's Betting on Inflation

Good points, Anthony. India certainly isn't buying gold this year.

"Demand will fall more," Suresh Hundia, president of the Bombay Bullion Association, said. "Only those who are short will buy at these prices."

He estimated gold imports to fall to 350 tonnes in 2009 from 523 tonnes last year.
in.reuters.com/article...

According to Daman Prakash, a director with MNC Bullion, high prices have kept consumers away, with festival sales this year being 60%-65% below last year's sales.

In a glaring example of how high prices have hit demand, Chennai, a major market in southern India, is likely to import only around 1-2 tons of gold in the festival months of August to November compared with 6-7 tons last festival season. Average imports during the festival season has been 10-12 tons in previous years before poor demand hit imports since last year.

In the next three to four months, there are about 30 days Indians consider auspicious buying gold.

During the January-August period, India's gold imports fell to 91.6 metric tons compared with 261 tons in the same period last year, according to preliminary data from the Bombay Bullion Association.
online.wsj.com/article...

On Sep 14 09:17 AM Anthony B wrote:

> So, gold is going to decouple from other commodities? Possible short-term,
> but if gold is to remain that high commodity traders will move down
> to other commodities that are underperforming on their traditional
> price ratio to gold. At that point my previous comment is again
> important: "All this money is being pumped into commodities, but
> without wage inflation who is going to buy them. From Felix Salmon's
> article last week on depressing income stats: US median household
> income $51,295 in 1998, $50,303 in 2008."
>
> And then in response to China and India's growth, which I don't doubt
> can remain in upper single digits, I think Philip Davis has a good
> perspective, "China and India, which account for roughly 40% of the
> world’s population, consumed about $2.5 trillion of goods and services.
> The US, with 4.5% of the world’s population, has $10Tn of consumer
> spending. A 10% drop in US consumption would need to be offset by
> a 40% increase in China and India’s consumption - it’s not going
> to happen, folks! Just this weekend, in Member chat, our main topic
> was dead and dying malls (anecdotes by members) and poor retail sales.
> China can’t keep manufacturing goods if no one is buying them - Economics
> 101."

Dollar and Precious Metals: Apocalypse Not Yet?

In the week that Gold went to $1000, the latest DCOT report said that producers only added 1,712 longs. Funds added 37,503 longs.

Producers were mainly selling into this rally. They added 53,960 shorts.

On Sep 14 11:37 AM Mayascribe wrote:

> Actually, I started looking into this when you did the Burning Platform
> Insta about Barrick and Silver Wheaton.
>
> I just checked out Barrick's home page, and there's nothing stated
> that they have completed buying back their hedges. But they did just
> have the $4B offering for that purpose. According to my broker, Barrick's
> buy back of the hedges contributed to gold pushing through $1000.
>
>
> After the conversation I sold my recently established positions of
> (seekingalpha.com/symbo...) and (seekingalpha.com/symbo...)
> for a small profit, in my e-trading account. We'll see if he's right.
>

Index Funds Don't Drive Oil Prices

I don't think that quarterly data is accurate enough for you to make any assumptions. Let's wait for the weekly data to come out.

The oil data is different than most other commodities. Virtually all of them increased the net longs on 6/30/08 over 3/31/08.

What's the U.S.'s Energy Policy?

On Sep 11 01:23 PM tripleblack wrote:

> Spain has discovered that they lost 9 jobs for every 4 they created
> via Cap and Trade / Green Engineering.
>
> Obama has promised to "create 4 million green jobs".
>
> OK, let's do the math, that would mean we destroy 5 million more
> jobs than are created.
>
> Cool. Reminds me of the logic behind the Cash for Clunkers debacle.

That Spain study was found out to be inaccurate.

What's the U.S.'s Energy Policy?

On Sep 11 08:20 AM The Greatest Rip Off of our Time wrote:

> Truly the supply vs demand proclaim could not be further from the
> truth today. Remember the “Rogue Trader.” Crude oil jumped $4.00
> in the blink of an eye.
> Really, just because you take a product off the shelf, you can’t
> run around tell everyone that demand if picking up. Everyone knows
> that oil is sitting everywhere in storage, there is simply no more
> room to put it anywhere else. Control the supply and you control
> the market, it is so very simple. I suspect that if one digs deeper
> into the report of crude inventories dropping in this week IEA report
> that one would find that the refiner’s simply cut back on crude oil
> imports. As was the case in the last IEA report on crude, which
> just happens to drive the price of crude oil up. Notice how the
> rise in gas and other petroleum product inventory took a back seat
> to the drop in crude inventories. I find that interesting.

The lower inventories were probably due to 30 million barrels of oil added to floating storage in Aug and Sep. The oil never made it to shore.

Rough Times Ahead for Natural Gas

Excellent article. Thanks.

Oil Supply and Contango: Drawn Down

I bet those inventory numbers don't include the floating storage. Oil on tankers increased by about 30 million barrels in August and Sep.
scarcewhales.blogspot....
See chart at bottom of the article.

Floating oil has increased by 100 million barrels this year.

Gold Above $1,000: Indicative of an Imminent Market Fall?

$1200 gold in the next two weeks? Only if Barrick decides to keep buying futures to get out of their hedges at a stupidly high pace and cost themselves billions.

Natural Gas Is a Trade, Not an Investment

Cash NG is now at 2.06. Watch Nov NG futures crash in the next few weeks.

U.S. Natural Gas ETF: What You Need to Know

Fred, you are dreaming if you think NG is going to $5 in 3 months. Storage will become so full in Oct that the spot NG market will crash severely. This will bring the futures down with it.

They used to talk about NG being at 3.2 tcf by Nov 1st. It is there now in August.

Over the last 5 months NG in stroage has grown by 1553. The 5 year average for this time period is 1268.

The 5 year average of injection from now to Nov 13th is 723. If they add 723 to the current total of 3204 then storage will be 3927. That is far above the recent previous high in 2007 of 3545.

If they keep adding to inventory at a 22% higher than the 5 year average rate, they will add 885 to storage. That would put the total over 4000. Which, I believe, is higher than the storage capacity available.

A price crash in the Nov and Dec NG futures is coming.

Noticed the Oil Backup?

Your facts are wrong.

The bill was actually signed into law by President Bill Clinton in 2000.

en.wikipedia.org/wiki/...

Shouldn't the President that signed this legislation into law be held more responsible than one Senator?
==============

Uh no?

Funny how Republicans want to blame Clinton for signing a Republican sponsered bill that was passed with a veto proof majority.

Inventory Drop Supports Oil Rally

"We continue to believe that there are good fundamental underpinnings for the ongoing oil rally."

You are kidding right? Supply is huge and demand isn't going anywhere. You state how huge the supply is then you make this statement?

Poor article.

Time to Go Long Natural Gas and Short Oil?

NG is low priced because the specs are short. Today's trading makes that very clear. Specs were dumping every commodity. So most commodities were down. But NG was up because the specs are short NG.

Offshore Oil Storage Trade Just Got Less Profitable

OPEC said 130 million on June 2nd..

The global oversupply of crude oil will clear by the end of the year as an economic recovery spurs demand, said OPEC Director of Energy Research Hasan Qabazard. There are more than 200 million barrels of excess oil in the market in addition to 130 million barrels held on tankers at sea, Qabazard said today at a conference in Abu Dhabi.
www.bloomberg.com/apps...

I wonder if this number includes the diesel and jet fuel that's in floating storage.

Will Oil Traders Get Squeezed?

Futures traders provide a useful service as long as there aren't too many of them. The commercials should be the only ones moving the market. Speculators should only be providing liquidity.

But in 2008, it was all about speculators moving the market and everybody else, including commercials, getting screwed.