James Seaberg

Why Commodities Are Likely to Struggle in 2008

Why are only long positions deleveraged with margin calls, not short positions? The execution of the shorts makes the commodities rise faster than physical demand would have pressured their prices up. The shorts like J.P.Morgan Bank with its outsized gold short position has to buy the contracts back. This rises the prices of the commodity. It is not the winners which are deleveraged by margin calls, it’s the loosers. The commodity bugs are the winners. My advice: Stay with the winners then you will not encounter margin calls.

5 Reasons Why the U.S. Dollar Will Weaken Further

The dollar can fall every year for the next 100 years, if the US inflation rate is larger than the inflation rate in any country or country-bloc of any currency with which we express the price of the dollar. E.g: If the US has a 13 % inflation p.a. in the next 100 years and Europe has 10% p.a., then the dollar will fall in average each year 3% in the next 100 years compared to the Euro. This is all other things being equal. As they are not, some variations will come into play but will not change fundamentally the long-term bias for the dollar to decline as long as the US inflates more than another country whose currency we use to as a comparition.