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  • What Is The Gold-Oil Ratio Telling Us? [View article]
    There was correlation between the two until around 1990's when the Chinese became the main supporters of the U.S. dollar.

    Dollar was back by gold, then it was back by petro, then Chinese slave labours, then wars by proxy in Syria, Ukraine .......
    Dec 18, 2014. 09:33 AM | Likes Like |Link to Comment
  • Gold Will Remain Weak On Stronger Dollar [View article]
    It was reported earlier that the Central Bank's gold reserves decreased by $4.3 billion, according to Vesti Finance. However, in actuality, it is international reserves assets that have decreased — not gold.

    Russian international reserves assets decreased from $420.5 billion to $416.2 billion, according to the central bank. This is down, following a slight increase the week before — when they inched up from $420.5 from $420.4.

    Gold reserves, which are included in international reserves, have remained unchanged — despite the drop in international reserves.

    I don't think any central banks will part from their gold reserve in this uncertain time with the exception of Ukrain. However, Ukrainians' gold wasn't sold, it was stolen.
    Dec 13, 2014. 06:31 AM | 1 Like Like |Link to Comment
  • Oil’s slide could become a positive for coal miners, J.P. Morgan says [View news story]

    "Some how the lower price for natural gas is going to increase the price of coal is the thesis of the day."

    Liquid natural gas price will likely be lower for at least 6 months to 2 years due to lower oil price. Natural gas is a byproduct of liquid natural gas. If the lower oil price were to cause curtailments of further shale gas/liquid natural gas developments. There will be less natural gas production which will likely push up the price of natural gas. When the price of natural gas goes up, coal price will go up.

    However, most of the shale gas companies are hedged and they can stay on course regardless of the price for at least 6 months.
    Dec 12, 2014. 06:39 PM | Likes Like |Link to Comment
  • Oil’s slide could become a positive for coal miners, J.P. Morgan says [View news story]
    Fi by,

    Which major coal stock? Is it ACi or BtU?
    Dec 12, 2014. 09:02 AM | Likes Like |Link to Comment
  • Oil’s slide could become a positive for coal miners, J.P. Morgan says [View news story]
    BTUs are not all the same. Coal does not compete with oil. It competes with NG for electric power generation. NG is produced as a byproduct of LNG which competes with oil. Shale gas/LNG will shut down at below $60/barrel which means no more excess byproduct at below cost of production. NG price will go up due to supply and demand. When that happen, coal price will go up unless oil is down to $10/barrel and the power plants are burning oil for electricity again.
    Dec 12, 2014. 08:49 AM | 1 Like Like |Link to Comment
  • Outlook For Gold [View article]
    It's not gloom and doom but simple mathematics. A currency backed only by credit is always only as good as the credit backing it. As Pimco said in 2011, the US is Greece in terms of internal debt and external debt. The only thing maintaining the dollar is the world trade, which produces excellent credit also backs the USD. When China starts to get its trade and other nations start to use something else such as the Special Drawing Rights, it will happen when the IMF Quota and Governance Reform package is passed which would allow the Chinese Yuan, and maybe even gold, to be included in the SDRs basket. When the shift occurs, the USD has nowhere to go but down.

    As Henry Thornton explained, they are two factors explaining FX. One is fundamental and long term. Two is capital flows.

    We have strengthening of the capital flows, but the trade balance excluding oil is ugly.

    The only way to curb consumption and restore terms of trade is to accept bankruptcy for all over-levered actors including the governments. Well, you know the governments will not do that so item 1. in terms of trade will stay horrendous.

    As for 2. It is a combination of factors which is making a knee-jerk capital flow to the USD "safe heaven" which is ill-conceived because the dollar external debt and internal debt are horrendous. But the flow makes things look temporarily of a "strong dollar".

    When total debt to GDP gets lower or US has a trade surplus, and rates are positive in real terms in the US, then I'll join your "Don't worry, be happy" camp.
    Dec 7, 2014. 06:39 PM | 1 Like Like |Link to Comment
  • Outlook For Gold [View article]
    "the price of gold typically moves in the opposite direction of the U.S. dollar."

    The strong dollar is the result of support from foreign private investors parking their money here since we are the cleanest shirt, not because we export more than we import or the 3-5% GDP growth which doesn't mean much in global economy when measured in real purchasing-power terms-

    If the U.S. Congress failed to pass the IMF's Quota & Governance Reform Package by the end of this year, IMF may implement the reform package in pieces to bypass the U.S. Congress. Supports of the dollar from foreign governments will gradually or drastically reduce once the package is implemented. I think that is when we'd know whether gold is money or relic.
    Dec 6, 2014. 08:42 AM | 1 Like Like |Link to Comment
  • I Want Coal For Christmas [View article]
    #1 Tax subsidies similar to the farm and ethanol.

    #2 Deregulate and reign in EPA.
    Dec 2, 2014. 02:02 PM | Likes Like |Link to Comment
  • Gold Remains In A Downtrend [View article]
    I received my 2014 GAE yesterday. I now have some 2008, a lot of 2009, some 2010, 2013 and 2014 GAE. I'm looking forward to $1050 to $1100 so I can get my hand on some 2015.
    Dec 2, 2014. 01:57 PM | Likes Like |Link to Comment
  • Arch Coal Expresses Serious Concerns about EPA's Proposed GHG Regulations [View article]
    I swear if the GOP doesn't defund the EPA, I'll start making donation to the democrats.
    Dec 2, 2014. 01:47 PM | Likes Like |Link to Comment
  • Why Gold Is Collapsing [View article]

    You are spot on. The Chinese are more than happy to buy the dip. Some even suspect that they created the dip to buy more cheap gold when it's still available. However, Putin doesn't have that luxury as the ruble and oil price tank. He is pushing back by buying both paper and physical gold. I infer Putin expects oil will follow gold price and the smaller gold market is lot more easier to manipulate.
    Dec 1, 2014. 01:52 PM | 3 Likes Like |Link to Comment
  • Bounce for oil and precious metals [View news story]
    "Or is this a dead cat bounce?"

    I have reached a point that I just don't care about the price of gold anymore. I account the gold in ounces now, not in dollar.

    After taking a beating in coal, I'm taking anther blow in oil but I'm not selling either. I'll start doubling down if oil goes below $55. Saudis has enough reserves to tolerate low oil price for at least 2 years but QE4 can easily turn things around.
    Dec 1, 2014. 12:13 PM | Likes Like |Link to Comment
  • The NY Fed Declares The End Of The Deleveraging [View article]
    "It's a bit like saying driving at 65 mph is fine except what if you hit a telephone pole ?"

    Driving 65 mph is fine if one were in good physical health with a 2010 Honda Accord. Enabling an old man in poor health with a 1990 Yugo to drive at 65 mph is simply irresponsible.
    Nov 28, 2014. 04:42 PM | Likes Like |Link to Comment
  • The NY Fed Declares The End Of The Deleveraging [View article]
    "We can assume that those with credit are credit worthy
    We know that overall, they have less debt than in the past"

    My FICO is 847 and I just purchased a commercial building in Brooklyn, NY for $1.75M with no out of pocket cost. I used another builder as collateral to get 3.675% loan. If interest rates stayed low 4 years later when the rate readjust, I can pay off the balance 9 years later if interest readjusted higher than 4.50% and maintain positive cash flow.

    If the interest rate stayed low which I think it will, I get to own a building outright 24 years later with no out of pocket cost and approximately $3000 a year positive cash flow. It's crazy to not take advantage of the low rate if one were credit worthy.

    Sub-prime mortgage was even bigger part of the credit market and they had to QUALIFY for it. Now, we have sub-prime auto loans and we hand out student loans to kids majoring in political science, African studies, criminal justice, basket weaving ........... , who will likely be working multiple part time jobs when they graduate. My friend's dead mother just received a pre-approved credit card application recently.

    Rodney Dangerfield's First Economics Class
    Nov 27, 2014. 10:41 AM | Likes Like |Link to Comment
  • Investors Take Note: The Swiss Gold Referendum Has Already Changed The Gold Market [View article]

    That is what I thought would happen in 2012 when Germany demanded repatriation. We are living in an upside down world where fundamentals mean nothing. Gold price would go whatever the money printers want it go until COMEX is broken.
    Nov 27, 2014. 09:32 AM | 3 Likes Like |Link to Comment