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theshareminator

theshareminator
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  • The Commodity Bear Market: Are Prices Really Cheap Today? [View article]
    Good piece of analysis!

    As Russom mentioned the cost-base has risen, and worth mentioning the trickle effect of global fiat currency since QE and asset sales following 2008-09.

    US rate rise is an uncertainty, dollar strength will further reduce growth prospects and right now they are competing with a devaluing Euro. I'd be surprised if we saw any action by the Fed this year.

    China rate cuts and stimulus talks even expected to weaken the Yuan further.

    How can the US act now in a world racing to devalue their currencies?
    May 16, 2015. 09:36 AM | Likes Like |Link to Comment
  • Guess What Happened The Last Time The U.S. Dollar Skyrocketed In Value Like This? [View article]
    "If it were a true, meaningful, and enduring flight to safety reminiscent of a true panic orthy of this article"

    Give it time. The dollar is at record highs to the Euro but wait for the US growth picture to unwind. Europe will continue to deflate with uncertainty over Greek banks and potential fallout + the ramp up by NATO and Russia in eastern Europe. It's all part of a plan (it seems to me) to cause instability in Europe. The dollar is the safer bet, assuming they continue to grow. But a strong dollar will weaken exports, a weak oil price will hurt domestic production and tax revenues and harm future investment and growth in the Shale Gas industry. We've yet to see cross-market energy bond defaults but it won't be long. Just like the sub-prime crisis, there is a debt bubble waiting to burst.

    Perhaps China's property bubble and faltering construction output will burst first triggering an exodus from these junk bonds. I could be wrong, China may avert a crisis by lowering rates or through monetary stimulus ahead of the event but I don't see how the junk energy bonds won't cause write-downs and a correction at some point.
    Feb 11, 2015. 07:43 PM | 1 Like Like |Link to Comment
  • Why Projections For Tesla To Sell 500,000 Cars In 2020 Are Absurd [View article]
    Rather than compare figures with Microsoft, which I believe is pointless in the context of different sales strategies, sector strengths/weaknesses etc. I would like to ask the author or anyone who knows has there ever been a car manufacturer to achieve 56% CAGR over six years? Clearly not from current revenue base the author has said, but what about from car sales position point of view. What has been Tesla's CAGR to date? I would agree with the author that unless Tesla experience a sudden surge in demand from the far East (on a grander scale than the popularity of the Bentley) then these figures are completely unsustainable. That does not mean we should all sell now though, the market hasn't figured this out yet.
    Sep 19, 2014. 05:47 AM | Likes Like |Link to Comment
  • The Bull's Self-Delusion [View article]
    I'm interested in hearing how the author called the gold market peak in order to assess how credible this article and future contributions will be. Can you or the author provide some links please, many thanks
    Sep 3, 2014. 06:42 AM | Likes Like |Link to Comment
  • The Great American Economic Growth Myth [View article]
    Thanks for taking the time to reply Paul, appreciate your clarity on these points.

    I'm from the UK so it is often like trying to learn another language when reading about the US monetary system and the dollar which makes up something like 85% of global currency transactions! I understand debt creation makes up most of the new money supply within our economy but what of other factors such as external investment?

    Existing money supply entering the economy that is. At what point does money cease becoming a loan? I suppose if we view all fiat currency as the I.O.U. it was intended to be when first created then it never ceases to be debt. I tend to view debt as a series of payments due rather than all currency creation given the relative stability of western currencies.

    Interesting to hear your views concerning inflation, certainly a valid example regarding the effects on oil prices. If I'm understanding your argument the Fed induced recession was sparked by rate rises to curb runaway inflation of oil prices. What I don't understand is why there hasn't been commodity inflation more recently given QE to firm up bank assets and an increasing global midde-class (demand). Has there not been excess credit to fuel national debts in the past decade and if so why has this not had an inflationary effect?

    I understand your point 'Debt is the oldest form of money...' and agree responsible lending is what matters. My second point was really concerning govt debt and why it must increase. Is there a point whereby it's public debt is considered too large? In your example with the shoe maker, farmer and wheelwright, the notes are presumably traded in controlled supply but is there not an issue of confidence when too many notes build up on one side i.e. a trade deficit?

    I would be interested to hear your views regarding US govt debt and how you think this will impact economic growth in the coming years?

    Thanks again

    Jack
    Jul 10, 2014. 07:13 AM | Likes Like |Link to Comment
  • No, Gold Is Not A Hedge Against A Financial Crisis [View article]
    I get where you are coming from and agree like all commodities it is vulnerable to a variety of factors. The reason for my post was in answer to your point 'I don't remember anybody promoting Palladium back then'.

    Palladium is not and will never be a hedge against currency debasement, risk of national defaults and global turmoil. At the time (2010) gold was. Yes gold was manipulated to new highs through the excessive use of ETFs. I would argue it has been manipulated to recent lows too. There are numerous reports of people paying $100/oz+ premiums in order to buy physical this year. Reports from India today suggest there has been a $160/oz premium since imports of gold were curbed.

    Yes gold can be recycled and is stored... but who has access to this? Central banks store the majority of it. Chinese demand continues to surprise analysts but is expected to rise in the coming years.
    http://bit.ly/1lWnaig

    People in general don't have disposable income to purchase gold, certainly not in any great quantity. The few people that do often have sufficient amounts of cash whatever the economic climate.
    Jul 10, 2014. 06:02 AM | Likes Like |Link to Comment
  • No, Gold Is Not A Hedge Against A Financial Crisis [View article]
    Cagdas - difference between Gold and Palladium? Gold is backed and stored by central banks around the world. Gold is a store of value to people in India, China and many other Asian nations. The difference is Palladium is not. Palladium notably suffers when car sales fall and this tends to coincide during downturns.
    Jul 3, 2014. 12:40 PM | 2 Likes Like |Link to Comment
  • The Great American Economic Growth Myth [View article]
    Paul,

    I'm trying my hardest to understand this point you made but I'm struggling.

    - "As an economy grows, so too must the amount of money in it. Our money system is a debt based money system; debt must increase as the economy grows. Inflation and distortion in asset value is most often the result of excess credit creation; the sub-prime example is a good example."

    Firstly money supply, (as I understand it) can be measured in a number of different ways - I assume you mean 'the monetary base' - affecting inflation, exchange rates, price of goods etc. Certainly responsible monetary base growth is necessary but is that happening right now?

    On your second point why must debt increase as the economy grows? If this is well-managed corporate debt or private housing debt for growth then I agree. If this is government borrowing in order to fuel growth I disagree. On this point, must debt always increase? How then does debt fall in periods of growth?

    I agree excess growth in monetary supply is often responsible for inflation and distortion in asset values but how do we define 'excess'? Has the US monetary supply not been expanding excessively ever since the 2008 crisis? One might argue not considering economic growth is still weak and this whilst interest rates remain at record lows. Excessive debt or monetary expansion?
    Jul 3, 2014. 11:49 AM | Likes Like |Link to Comment
  • Blowing Bubbles At The Federal Reserve [View article]
    The debt he is referring to is probably the public debt being accumulated by the US and most western economies. It is forecast that the US national deficit which has been falling since 2011 (I think) is due to plateau and begin rising again in 2015.
    Jul 3, 2014. 09:29 AM | Likes Like |Link to Comment
  • Gold And Silver - Fundamentals Do N.ot Matter [View instapost]
    Thanks for sharing your analysis. From what I can gather the emphasis is on the buyer to pick up their game. But surely the sellers play an equally important role. My point being given the record number of reductions in ETFs this year, specifically in Q2 are there enough willing sellers going forward to significantly impact the price of gold? I think dynamics are changing regardless of buyer demand but an increase would be most welcome.
    Dec 1, 2013. 10:20 PM | Likes Like |Link to Comment
  • Gold And Silver - When Fundamentals Fail And Charts Prevail [View instapost]
    "To an extent, the paper markets are bogus, but the number of contracts being sold are large, much larger than buyers, and this ironically reflects the reality of supply v demand. As to the physical, China being the largest buyer for whatever is available, there is no reason for China and the other buyers to want price to go to higher levels when they can be buying so cheaply."

    This is an interesting point. Are the significant number of ETF sales from Chinese holders in a concerted effort to reduce the PoG in order to buy physical cheaply? Most commentators suggest the US govt are orchestrating the devaluation of gold but who does it serve if not the Chinese? I enjoy articles, they add a different element to the mix on this site.
    Nov 17, 2013. 10:06 PM | Likes Like |Link to Comment
  • GLD: When Will The Gold Bugs Give In? [View article]
    I've read through these figures with an open mind. I am neither long nor short on gold currently. The only figure that stands out to me however is how ETFs are down year on year where as physical demand is up. The question gold bears should ask is how much longer will the ETF positions continue to fall presuming take up of physical gold continues as per the figures in the report. I wouldn't buy gold but equally if I held today I wouldn't be inclined to sell. As some here have commented US economic growth will begin to plateau once QE draws to a close. I think we are also nearing a bottom now. Miners struggling to turn a profit will be forced to cease operations should the gold price fall further, affecting future supply. The sign to look for will be an improvement in ETF positions next quarter.
    Nov 17, 2013. 12:55 AM | 1 Like Like |Link to Comment
  • African Barrick Gold: Teetering On The Brink [View article]
    Great analysis! I think you've highlighted exactly why this is not a good near term investment. High AISC. As for company value you can't place a standard $100/oz tag on a resource that costs more to dig up than its worth. ABG is highly leveraged however which makes it an excellent recovery play should gold prices rise.
    Oct 1, 2013. 08:38 AM | Likes Like |Link to Comment
  • Another Gold Rally Bites The Dust [View instapost]
    Robert - your statement "In conclusion; emotions and attacking people that publish bearish articles on gold isn't enough to sustain a long-term rally in the metal" confuses me as so far as I am aware, what people write here or anywhere else for that matter has little to no effect on the price of gold.

    Also I'm curious as to whether your articles concerning gold, which are well written and explained reflect only your views for the short term technical outlook?

    Judging by your sentence "All the pillars that have supported the gold bull market are proving to have been made out of sand, and it is highly unlikely another 2008 Black Swan event will drive gold/SPDR Gold Trust (GLD) or silver/iShares Silver Trust (SLV) back to new highs anytime soon" you are not concerned with China's increasing demand for gold, nor the US debt ceiling, nor the Euro debacle, all three of which are not currently in the focus of the media. The latter two have previously created great unrest in the markets when the media's spotlight was on them.

    I would be interested to hear your views concerning what is widely believed to the manipulation of the gold price. According to some sources JPM are partly to blame

    http://bit.ly/16C6e93

    It is a controversial subject but I am not a gold bug for the record and more than happy to discuss these topics with yourself or anyone, I won't bite like others you mentioned.
    Sep 26, 2013. 10:08 AM | 1 Like Like |Link to Comment
  • Momentum: The Real Bearish Factor For Gold [View article]
    Boris - I found your arguments well researched and presented. The case made for the price elasticity of demand for gold is a strong one and if I may I'd like to expand on that point.

    The US has been debasing it's currency for years so I don't believe there is a 'fear factor' surrounding it's growing debt. We witnessed what happened when the decision to raise the debt ceiling was delayed and recently the thought of tapering has impacted greatly. But there is a factor that does not act like Jewellery Consumption, Industrial Demand and World Investment. And that is China.

    According to this chart, Chinese demand has increased to a level that now equals total world production. This goes against the World Investment trend you highlighted.

    http://seekingalpha.co...
    Sep 26, 2013. 08:36 AM | 1 Like Like |Link to Comment
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