Engineer

Independence Day: Decoupling Gold and Silver from the Dollar

Some people miss the point of the whole article:

When real estate is down, stock markets are down, commodities are down, bonds are down, and savings are paying a negative real rate of return, what can the average person turn to preserve their wealth?

Like the author says, I think you know the answer to this question.

Sorry, There Is No Silver Conspiracy

"It's different this time" in that this past shorting event has seen the RSI for all bullion investments pushed down to all-time, even ridiculous, lows. All this at a time when the bullish fundamentals remain completely unchanged.

I find it telling that during this event, the buying in the bullion ETFs has skyrocketed. You know, it is possible to have short and long postions at the same time, through separate entities.

Gold Speculators Rushing In?

If you want a truer view of things, try this graph with a y-axis log scale and you will see that compared with the 1970s, today's "parabolic" rise is just getting started.

Magazine Covers as Contrarian Indicators

I used to believe in the "magazine cover theory" once upon a time too.

Then I investigated my own preconceived notions, and looked at the covers of "The Economist" going back to 2000. Interestingly, many of the covers were right! See for yourself: www.economist.com/prin....

Covers might be an indicator - they might not be.

Serendipitously, my colleague just walked into my office with a fortune cookie from lunch that advised "Don't worry about the stock market. Your investment is good."

He asked me "how often should one take investment advice from baked goods?" I had to laugh.

Gold, Silver and the Great Unwind: No Conspiracies Here

MIchael, could you please address the following question for your next post?

"Why is physical silver nearly impossible to obtain in the midst of a price collapse?"

Thanks.

Wind's Our Future, but Natural Gas Is Now

I think we have to be careful about throwing around the "100 Year" blogbite. According to the EIA (eia.doe.gov), the US uses 21,653 bcf (2006) and has proven reserves of 211,085 bcf (2006). This is only 10 Years.

Of course, the new report by the American Clean Skies Foundation says that the EIA's estimates are too low and puts the ultimate reserves at 2,247,000 bcf. Great, we are back to our "100 Years".

But even if you believe in the higher reserves number, the "100-Year" value is based on current consumption levels of natural gas. If you intend to displace petroleum with natural gas, the "100-Years" drops to "39 Years". If you intend to displace petroleum and coal with natural gas, this drops to "28 Years". Refer to eia.doe.gov/aer/pecss_....

28 Years is still a long time, but I would curb the enthusiasm a little.

On Short-Sellers and Dishonest Executives

Even legitimate short selling is skewed - simply by creating two owners for every shorted share dilutes all shares temporarily creating downward pressure on the value. The benefit of "liquidity" is pretty weak justification. IMO "liquidity" is far better served by a strong cashflow statement rather than arbitrary rules that only serve market makers. Disclosure: exiting the stock market and putting all of my money into my own businesses.

Scotia Capital: Gold Uptrend Will Continue into 2009

I agree with fx: This is useless information. The only thing it's telling you is that Scotia is more interested in the trade than in the actual value of what it is they are trading.

Gold's Finest Hour: How to Buy Now

Andyn, yes gold accumulates, but people accumulate too. An important indicator is the amount of gold available per capita, which is probably now less than one ounce per person.

The Gold-Oil Ratio Approaches All-time Lows

I would argue that gold would have to rise in this current environment. I disagree with those who argue that gold has no value. Physical gold has value as a STORE of energy in that 1) it takes a discrete amount of energy to extract and refine (which is becoming more expensive incidentally), 2) it resists corrosion, 3) it is easily divisible, 4) it is recognizable worldwide and is to some extent incorruptible and 5) it is beautiful. I challenge you to find me another store of energy accessible to everyone on the planet that has these unique qualities (aside from other PMs).

Not all Metals are Created Equal (Part I)

I agree with geo and ozzy. Also note the 'y-axis' in all the graphs above. These graphs show value relative to the $US. What has the $US done over the same time period???? A large part of the so-called 'bubble' in commodities has been illusionary - it is merely that the unit of value they are measured in has become diluted.