De Graaf

Gaza War: Expect a Spike in Oil, Gold

A lot of people a truly blindfolded, as I read these comments.
Just by saying that a dollar will rise in times of war, could be true, in case of severe ground war in oil-rich nations.
Not when a few thousand troops and a handfull of tanks march into a dense populated Gaza strip! The fact that oil will rise for this matter is just fear mongering, and minor in effect after the speculation dimms out in a few weeks.

As for commenter NOWHEREMAN, who says gold didn't rise against all currencies, I would say; wake up and get your sources right!
Look at the link below, where James Turk shows a nice table of gold relative strenght against all major currencies.
Its is concluded that gold rose double digits against these projected currencies, even on basket average!

goldmoney.com/en/comme...

For every sole soul outthere; Gold will rise and the Gaza war will help temporarily, but not with oil prices of 70 / 80 dollar a barrel. Just 50 at max for a few weeks. Then its falls back again. Gold thrives on the deflationary force in the economy combined with the (hyper)inflationary policy of the FED. Oil has minor influence at this point in time.

brgds

$60 a Barrel Oil in 2009?

The overspeculation in July '08 was only possible with the consensus belief of emerging market demand together with established Western society demand. Also there was Shell who had lower than expected reserves and double digit growth numbers from BRIC countries.

Whats left of that 'perfect' storm without leverage? Without worldwide demand? And with oil tankers used for oversupplies, deep-sea exploration still advancing and money being spend to complete projects!?

There is going to be enough supply for 2009 keeping prices down. Speculation of the longs is off for now. The only issue surrounding oil and every other price for commidities out there is inflation. The Federal troublemaker.

IF monetary deflation is countered appropriately with the current FED policy of inflation. We will be seeing $60 dollar a barrel soon enough. Its has nothing to do with demand, only inflating its way out of indebtedness for 2009 if we ever see monetary velocity again this year.
Artificial prices or lets say; quantitive easing. Not for the benefit of us all, but for the benefit of the indebted. That means most of us...note me and not the (US) creditors.

Its a Keynesian story, and I hate it by now. It supplies us with ''phony profits" that actually don't make sence if you correct it for real inflation. Its all for the peace of mind. The easing of pain, the masking of government incompetence of the years. A weak solution for the problems we face in our capitalistic world. It should be forbidden, for the sake of responsibility.

Give me a new world of capitalism, based on gradual prosperity and minor social buffers. Give me a government, so small, it only serves for protection and necessary programs to gradual growth and long term policies for the better. Abandon progressive taxation, and tax every soul at 10 percent. Let capitalism grow out to normal risk taking, not excessive, thereby not growing the gap of the rich and poor. Make sure everybody keeps up. Excess money should be invested for the standards of living of all people, technology and environment. Forget the old American consuming of resources. Use wisely, live wisely and share our love competences with everyone around you for the better.

Until that moment happens, forget oil and buy gold/silver. The only values left in this world since the beginning of mankind.

brgds,

The Weight of Money in 2009

Its a pleasure to read from the fine hand of Mr. Hansen. Excellent contributor to Seeking Alpha by the way.

I understand the leery attitude to gold from commenter Constructe. It remains to be seen what gold will do next, although my senses instigate a very prosperous period ahead for the value metals. Due to the fact, that these precious glimmers are the only 'value' in the year ahead.

Mr Hansen has a good point about the weighting of money on the sidelines. Its sparkling to go some place to appreciate and the bond markets isn't that interesting anymore with the low yields (actually negative corrected for inflation). Also, considering the high bond prices and inflationary policy of the FED, I think this bubble is about to collapse as emerging countries sell their bonds at peak to put in use domestically. One way or another, (socialist) countries need money for their expenditures. Commodities are down, so that doesn't supply aggregate revenue to cover balance sheet properly.

Having said that, gold (better; precious metals in general) becomes more popular by the day. The daily price hikes will remain volatile but that is nothing different than its historic behaviour, although somewhat magnified momentarily. This gives opportunities, as I view it.

Diversification of money on the sidelines is going to feed the coming precious glimmer bull ahead. We had all the bubbles you can think of, except for the true value bubble of gold. This one is due.

Not only private institutions and investors will participate above $1000 but also the emerging country SWF and governments authorities will boost their reserves by diversifying into gold and silver (two of the precious glimmers) but also don't forget palladium and platina.

There is money to be made in 2009 and everyone is willing to participate as recent losses are eating the investors soul out of his/her body.
What was is that drives people? Greed or competition? You name it. One way or another, we will see the flock of sheep (or birds) jump the fence to reap the rewards.

Have a good one all.

111th Congress Convenes Monday: Let the Games Begin

As I feel myself very attracted to macroeconomics and intermarket relations I will be very intrigued by these developments of the coming twelve months.
American politics at second, world politics is my main focus.

I wonder if some commenters can supply me/us with a focus board group or blogspot where people like I can join the debate about problems and issues that affect us all. It would be a great learning experience in these unprecedented times surrounding us.

Anyone who cares to share a distinguished discussing group/board/blog with me?

Thanks in advance.

New Trend for Emerging Gold Producers: Amalgamation

If you want to make money in 5 years from now, without to much risk despite common consent, is buying Rusoro Mining. Its a steal and the fundamentals are great. Also preferred partner with the Venezuelan government.

Rusoro is almost a penny stock that is set to boom like Yamana Gold currently does. The only thing which lacks is the proper pricing of the stock.

Buy now, not a second later. Rusoro Mining Ltd.

Don't Miss the Coming Gold Bull

Central banks are not selling gold beyond their agreements which is due in 2009. There is a mere 150 tons to be sold under the agreement but a lot of CB's have already stated they will not sell gold or supply gold for their mints at this point. Thats one of the reasons the mints are out of coins. Central Banks are hoarding their gold.

If a country decides to sell gold, it will be sold over the counter (read; without market interference) to China, India and the Middle East. Those are countries with low percentiles of gold diversifications in there reserves.

IMF and/or Central bank selling (apart from the gold agreement II) will not alter the price of gold, unless a JP Morgan is involved with a concentration of shorts backed by US Fort Knox (FED) gold reserves. For more information read GATA.com.

brgds,

The Great Depression vs. Today's Economic Crisis

I see a lot of interesting comments but I didn't see this one passing by;

The situation now in relation with Japan is the fact that Japan had the wrong policies with a positive Rest Of World economy available for exports.
This time, the whole world is on its butt in recession. That gives a different recovery curve. Instead of a V-curve, you can expect an L or U-curve for the United States at this point in time.

Japan has got 'healthy' reserves and a better policy today. America is worst off this time because there just is no demand from other countries. The outcome looks awful, but so is the entire world economy in the coming years.

This, is a tough one to battle. Whatever the outcome, I expect to see a devaluation of the dollar currency or a severe deflationary period for the US. Either way, gold and silver assets will flourish to new highs.

Global Stock Market Performance in 2008

I was hoping to see the stock market performance of the worlds major markets. I always prefer to see the major markets in contrast with the upcummers.

Anyway, Vietnam is my pick for investing your excess money for some fine results in the future. Booming business, as soon as the recovery picks up again.

The Dr. Doom Space Is Getting Crowded

The 'best advisors' for Doom and Gloom perspectives are definately;

1. Nouriel Roubini
2. Peter Schiff
3. Nasim Taleb
4. Jim Rogers
5. ...

IMO

Preventing the Depression of 2009

Simply said; The proposed index target of +8% YoY is insane.

You don't want another index number out there that can be easily manipulated.
The best way to regulate the new financial system, is with low leverage and real organic growth! Abandon leverage higher than 10:1.

Appoint a SEC type organisation (private or government, even both) to ensure the market functions with integrity and responsibility.
Foremost, the US government should again publish the M3 numbers and integrate the oil and food prices into the core CPI numbers.

High volatility in oil and food prices will make sure that money expansion is controlled in an appropriate manner, offcourse with the right policies being enforced.

President of Euro Pacific Capital on Gold and the Dollar

The first thing that catches me reading this interview with Peter Schiff, is the tone of the interviewer, Norman. Its absolutely negative. Total disbelief in Mr. Schiff.

Its obvious that Norman does not have a clue how this crisis evolved, considering his questions. He can't even place the asset deflation in the private sector in the same equation of the inflationary policies of the Federal Reserve. A little sad to see that Norman does not have its facts mind lined up the right way the market moves.

Let me explain this to you Norman, though I'm not always fond of the way Peter explains all of his doom and gloom, he is right.

The asset deflation we saw this year, especially since August, is caused by deleveraging. Banks, institutations, hedgefunds and investments funds/banks use 10 to 1 and even 35 to 1 leverage for investing and lending. This money was active in the private sector.

Ok, now when you have a credit crisis, with the relating lack of confidence in the financial markets. Banks tend to stop lending to eachother not knowing who has the toxic assets on their balance sheets. The result is a stop on interbank lending. Money flow halts and the money supply and velocity rapidly contracts.

The toxic mortgage related assets on investment bank balance sheets, take their tole, requiring money to keep the reserve levels intact. The risk taken was to large and so good assets are being sold to cover the losses on the balance sheets. This triggers customers (other banks and vehicles) to start selling their good assets, resulting in a firesale considering the huge amount of money being spent in the economy per dollar on balance. (leverage). This phenomenon is also known as asset deflation. (not monetary deflation)

Now, the FED policies are based on supplying credit to the markets, like they did under Greenspan after the dot.com bubble to stimulate house ownership. The results today are overpriced houses.
The current policy is again supplying excess credit to the markets, to stimulate the US economy that already has an overspent consumer based on debt. The economy runs on consumer demand for 70 percent of US GDP. Thats bad Norman like Peter points out, despite the monotone prayer.

So to finalize this for you Norman, for once and for all;
FED policy = inflationary
Financial system deleveraging cycle(s) = (asset) deflationary

Inflation + deflation = 0
($3 trillion) + (- $7 trillion) = - $5 trillion and thus deflationary.

Does the equation ring a bell Norman?

brgds.

Four Reasons for an Immediate Rise in Gold

Aitvaras has a point with regard to the ETF's.
If we see another wave of asset deflation, like we had in 2008 and especially since August, then we are likely to see the ETF's dropping as they are representing paper gold in dollar denomination.

That is one of the reasons, gold could go down, if the FED's inflationary policy does not result in proper countering of the deflationary forces in the private sector.

But, having said that; I tend to feel we have an true secular bull for gold and silver. Inflation will rule in the end. Big time.

brgds,

Four Reasons for an Immediate Rise in Gold

I couldn't agree more. Nothing to add to your four points except for the deflation aspect of the equation.
If deflation gets grip on the world economies, than we have a different situation for gold. History show gold goes up in deflation, but that was when were still on a gold standard. This era is somewhat different.

Basically, when monetary deflation rapids, gold could be going down, as people tend to flee to the fiat dollar currency. But my senses are with you for inflation and a great appreciation of gold and silver assets.

brgds.

My 9 Predictions for 2009

Predictions '09 whoehaha,

What kind of predictions are that?

'2009 GDP growth negative' - tell me something we didn't know already.

'Gold 'soars' past $1100' - Gosh, you really 'soaring' now aren't ya?
We're already there in two clicks. This is not a prediction, its a given with current US policy.

'Oil at $100' - from what demand? War with Israel en Iran!?, haha you must be kiddin'. The world won't let Israel go into that alley. If so, the sovereign state of Israel is history. The entire Middle East will stand on there toes to arrest that move.

I think commenter CLH gets it firmly. There is no value in your prediction. Never was and will be. Again, this is just popular b'sjitt.

Where is the value, Sullivan?

My 8 Value Plays for '08: The Results

gHo-gHo-gHo-Gold is wat you need.

If you'd put your money where your mouth's at, you be living with pops and moms in no-time Sullivan.

Don't come to me saying that nobody could ever predict this crisis in 2008. There were few savvy minds like Peter Schiff and Nouriel Roubini who had to minerals, but the rest of Pundit America is just one-big-fake popularity show.

This summary of 'value plays 2008' deserves credit for showing your upmost incompetence just like the pundits on Fox. Utterly incompetent considering 'value' plays are not realised in one year. Value is unlocked in the long run. So I would recommend to face reality and get a real job.

What a prank.