OilyGasMiner

Why Gold Will Decline More than the Markets

I think it's safe to say that the US government is on the brink of default for the first time. Before it was NEVER a real threat, however given the nature of the economy and their growing debt, the becomes more and more of a possibility.

As the above point mentioned
"At any point in time Gold’s value needs to be thought about in the context of its then current and prospective purchasing power, having regard to prevailing and prospective macro-economic conditions."

What is the context though? an ailing economy, country at war, rising debt levels, rising unemployment, lack of liquidity, lack of consumer confidence. THE LIST GOES ON! I do agree that there is a possibility that Gold may fall more than the market, however this will be for a short period of time, with a massive spike occurring in gold for a major correction.

Precious Metals Will Depose Cash from Its Temporary Throne

Peter, it seems our thoughts appear to align very well. Is it no surprise that the money supply is up over 100% over the past few months? According to Obama, TARP has already spent some $300B of the $750B. Hence money is being pumped at a RAPID pace into our withering economy.

I fully agree that this action coupled with the US debt increasing each day, will only result in furthe devaluation of the US. Dollar.

We must recall that the massive sell offs in hedge funds aren't usually voluntary and fund managers are being FORCED to sell because many investors believe that they are forced to sell. For example in Canada, investors with RRIFs, must pay taxes on at least $10,000 of their investment. However this value was determined at the start of the year, and with some portfolio's down by over 50%. They are now actually paying taxes on 20% of their current portfolio. Due to the lack of transparent investment advice, we will continue to sell these massive sell offs take its toll on already undervalued equities. It is only a matter of months IMO before we see a commodity correction.

And as we know "Concurrently, the U.S. Government runs large operating deficits in circumstances where its National Debt approximated $9.6 trillion at July 31, 2008, up from $9 trillion at December 31, 2007 and $6.2 trillion at December 31, 2006."
Quote Source: www.stockresearchporta.../

The question is with the money supply increasing, debt increasing, unemployment increasing, foreclosures increasing, consumer confidence on the decline. How worse can things really get?

Peak Oil, Cars, and Depressions

Great Post Jim, I think we must always be aware that peak oil is a definite possibility. Obama has spoken of adding more resources to Nuclear Energy production and I believe he will carry out the policy as he assumes power in January. If you recall carbon taxes on oil and mining companies were increased, and i suspect that this was done with an intention to finance both nuclear and other alternative energy resources, such as solar and wind. However the real gems I believe are in the undervalued mining and oil companies in Canada, especially the junior firms. Many are trading well below cash and this indicates to me a substantial blessing in disguise. As people focus on other industries many of us alike ;) will have the ability to pick up some cheap picks and ride the train when commodities rebound. I do appreciate your post, and if you feel my points are valid, I'd encourage you to check out the sub cash firms.. I got a decent sized list at: stockresearchportal.co....

Cheers,

OilyGasMiner

Friday Market Preview: Was Dow 8,000 the Bottom?

The "bottom" ? we will never truly know the bottom until we begin to rebound to higher levels, and create solid floors to land on.

This is glued together by the confidence of investors and consumers alike.

Perhaps once the president elect begins to instigate his policies we might see a more permanent turnaround.

Until then I believe we will continue to see pops and drops, we are too emotional at this point in time.

Is Hyperinflation on the Horizon?

With trillions being pumped into our economy, and the lowered interest rates.. this indicates to me a massive devaluation of currency, leading to higher prices to compensate for the rising cost of living. However it is important to note where the actual cash is being deployed. As it is going to institutions rather than the consumer directly, the likelihood of inflation is reduced. However if the bailout is carried out as intended, and trickles down, I can see hyperinflation starting to develop over the next few months

Should We Really Bail Out the Big Three Automakers with $73.20 Per Hour Labor?

We have GOT to reduce wages.

I'm sorry, give them an ultimatum. REDUCE or be eliminated. Period.

And as for Pauslon's comments where he says “To adequately reform our system, we must make sure we fully understand the nature of the problem, which will not be possible until we are confident it is behind us”


This is more properly read as:

We can’t figure out what caused the serious structural cracks to develop so fast in that huge wall over there so let’s throw as much sh_t against it as we can and hope some of it sticks and stops the wall from falling. Then let’s analyze the components of the sh_t that stuck and see if we have enough of that kind of sh_t left to fill the rest of the cracks and make the wall stable again. Only by determining the kind of sh_t we need by trial and error will we ever figure out why the wall cracked in the first place!”

Laugh it up everyone. We need humor during these times.

Full Read: www.stockresearchporta.../

Paulson's Shocking Change of Heart

As Paulson said: “To adequately reform our system, we must make sure we fully understand the nature of the problem, which will not be possible until we are confident it is behind us”

which translates to: “We can’t figure out what caused the serious structural cracks to develop so fast in that huge wall over there so let’s throw as much sh_t against it as we can and hope some of it sticks and stops the wall from falling. Then let’s analyze the components of the sh_t that stuck and see if we have enough of that kind of sh_t left to fill the rest of the cracks and make the wall stable again. Only by determining the kind of sh_t we need by trial and error will we ever figure out why the wall cracked in the first place!”

We all need a chuckle during these times.

Source: www.stockresearchporta.../

30-Year Bond Auction: Sorry, Paulson, Not a Good Result

John, Paulson clearly has his own agenda that is NOT aligned with that of the American public. If ONLY he could be held accountable. I've never seen one layman have to much influence over world markets. He SHOULD be scrutinized to the full extent. Luckily for him, his term is almost over. I do feel sympathy for the next US Treasurer, that has to take over his mishap.

As Paulson said: “To adequately reform our system, we must make sure we fully understand the nature of the problem, which will not be possible until we are confident it is behind us”.

In translation: “We can’t figure out what caused the serious structural cracks to develop so fast in that huge wall over there so let’s throw as much sh_t against it as we can and hope some of it sticks and stops the wall from falling. Then let’s analyze the components of the sh_t that stuck and see if we have enough of that kind of sh_t left to fill the rest of the cracks and make the wall stable again. Only by determining the kind of sh_t we need by trial and error will we ever figure out why the wall cracked in the first place!” lol

Source: www.stockresearchporta.../

Oil Breaks Below $60

I find it interesting that market forces and selling pressure has defeated OPEC’s efforts to cut supply to artificially boost prices. This is clear indication that we are heading deeper into a recession. The question is will continual supply reductions result in an upward movement of the price per barrel? Or will the market NOT react until the financial sector has been catered to by the new Obama regime? In either case NOW is a prime opportunity to take hold of undervalued oil equities, or perhaps the purchase of oil futures. I’ve been scoping the Canadian market for opportunities as I find that this will yield the greater return relative to the US. Their economy is more sound, and regardless of the notion that the contagion will tank their economy, we are finding that the opposite is true. They are many prospects trading below cash value that will result in a handsome reward for those who are patient and willing to wait. For Cdn I personally use the Canadian portal at www.stockresearchporta... that some of you might find helpful. Don’t get me wrong, I’m not saying to buy today, tomorrow, or next week. The key issue is that no one can foresee the bottom. No technical analyst or equity analyst for that matter. We are living in unprecedented times, and let’s face it, the majority of our market analysts ARE YOUNG. What does that mean? It means they have no experience of situations of this magnitude. We ought to get back to our history books and review the past trends during the depression and get ourselves properly educated to brace the stormy markets ahead. We must be patient, and we must be knowledgeable. Be prepared.

China Stimulus Package Boosts Commodities, Hurts Our Wallets

China's actions came by no surprise really. They're biggest trading partner is the States and consumers simply aren't selling. Chinese Exporters got burned prettty badly.

I can't imagine how the companies that Walmart made reduce prices must feel.

But all in all, if we check which countries owns the US DEBT we'll see that China is on top of that list.

One little currency trade could be devastating.

IMO China has the US by its stronghold.

Gold: Protect Yourself from Future Inflation

Jason, the proof is defiantly in the pudding. Both Gold and Gold equities is the only safe haven I see from the rapidly rising prices that NO ONE is focusing on.

OBBBAAAAAMAAA where are you?

UBS Lowers Gold Expectations Again

Very interesting.. I remember when Merill said Gold is going to $1500 WITHIN the next few years.. I agree Econ 101, there is definately some manipulating going on.. gold prices should be much higher than the current trading price.. I figure once OPEC makes the final oil cut and the price starts to recover..the commodity train will be in full force again.

I read the first post of a gold valuation series today, thought I'd share for other gold diggers out there ;)

www.stockresearchporta.../

OilyGasMiner

OPEC's Pity Party: Portents for the Global Economy

blackbody,

the regulatory body IS run by both criminals and idiots. Fundamentals have NOT changed, only the "perception" of fundamentals. Which is trickled down through the reg. agencies.

Speculation is simply a premium on top of fundamentals. But when the reversed occurs, we see manic conditions as existed in our current economy. The question is. How do we capitalize on the current market?

80 Years' History of Brutal Gold Stock Corrections: How Does Today Compare?

Boris,

Good history lesson. I think this is supplemental information used by many value investors during times similar to our current economy. The reason for the drastic recovery percentages..is due to the fact that fundamentals hold true, and the market always realizes the proper valuation over the course of time.

Have confidence, and invest patiently.

Response to Bloomberg's 'Gold May Pay Only in Case of Maximum Despair'

Michael, you've seemed to uncover a group of the less intelligent individual flabbering their jaws on the market. I trust no one but my own analysis and perception of what is going on in the market. I do this as I've realized how LOST analysts are relative to retailers. As Jim Cramer would say: "THEY NO NOTHING".

Gold is not just a speculative play, but is also a sound investment, I hate the fact that their is this huge misconception that you MUST be rich to afford it, and I'm glad you've highlighted that. Gold rises during times of uncertainty. But as other investments posses a lag period, where it takes time for prices to truly reflect its trued value. And in essence one could say that at these levels the yellow bricks are considered undervalued. no?

I read that "Finally, it was reported last week (again I have not been able to verify this) that the European Central Banks sold 7.6 tons of gold in the week ended October 10. If this is true, that ought to have put downward pressure on the gold price"

This might also indicate the sagging prices in the market. But, a word of warning for investors, be ready to pounce, because once gold starts to take off, you'll be saying. Shoulda, Woulda, and Couldas.