Seeking Alpha

filipo

filipo
Send Message
View as an RSS Feed
View filipo's Comments BY TICKER:
Latest  |  Highest rated
  • GLD: Market Teetering On A Breakdown [View article]
    Fish, Charles, Gel,
    Most if not all wars occur in a deflationary environment, although sometimes the deflation has been preceded by inflation.
    In that case there is debt deflation depression.
    19th cent European expansionary colonial wars also happened in a deflationary environment.
    Once the wars get on, they are always inflationary. Look at what the Napoleonic wars did with the British £.
    It is therefore untrue that the goldprice should go down when there is deflation.
    In theory the gold price should decrease though with deflation as deflation means that all asset categories decrease in price with deflation. Gold however has always been the exception. Gold thrives with deflation, not because of deflation itself but because of the geopolitical tension that deflation always causes.
    Geopolitical tension is the prelude to wars. Investors sense that and invest in gold as a consequence especially if these wars involve a nation that produces the reference currency.
    The paradigm shift of a reference currency into something else brings monetary uncertainty and stress, hence the success of gold.
    So, in fact it's a consequence (inflation) > consequence (deflation) > consequence (inflation) pattern we have here.
    Aug 27 04:16 PM | Likes Like |Link to Comment
  • GLD: Market Teetering On A Breakdown [View article]
    Is that an Egyptian papyrus, Charles, I perceive on your logo ?

    How many years do you think that US fracking business will last ?
    Aug 27 08:32 AM | 1 Like Like |Link to Comment
  • GLD: Bulls Are Playing A Dangerous Game [View article]
    Aha, I have a follower.
    But you are right, Prezzo, I should be more careful and more humble.
    Predicting the gold price is difficult enough, but predicting USD/euro is still more difficult.
    I won't use it as an excuse, but since the euro plunged vs the USD, gold in USD terms has been lagging, while in euro terms it has been doing tremendously well.
    Right now, it's at euro 31,100/kg, or up a whopping 7% this year.
    Aug 26 02:56 PM | Likes Like |Link to Comment
  • GLD: Market Teetering On A Breakdown [View article]
    PParaska,
    Avi's like God's ways are indeed beyond our understanding.
    We can only conjecture.
    Aug 26 04:01 AM | Likes Like |Link to Comment
  • GLD: Bulls Are Playing A Dangerous Game [View article]
    It looks like the Jackson Hole effect is over. It's at $1,288 again, against all and Avi's odds.
    Aug 26 03:51 AM | Likes Like |Link to Comment
  • GLD: Market Teetering On A Breakdown [View article]
    OK, but people who laugh a lot tend to live longer.
    Isn't that a sound reason to feel happy about ?
    So, if I can contribute to making you laugh and hence feel happy, I'm happy too.
    Aug 25 11:48 AM | 1 Like Like |Link to Comment
  • GLD: Market Teetering On A Breakdown [View article]
    It's always great to make people smiley and happy.
    Aug 25 11:21 AM | 1 Like Like |Link to Comment
  • GLD: Market Teetering On A Breakdown [View article]
    paparaska,
    "You clearly don't understand how to trade based on the probabilistic setups IN BOTH DIRECTIONS that Avi is giving you in these articles."

    The probalilistic setups Avi is giving are basically down.
    Whenever the long term awaited increase of the gold price would be happening, Avi will change his mind, call it a typo and still predict a downturn.
    Avi is fundamentally a gold hater who, for the case of gaining credibility, says he's LT long gold.
    You have to be blind or completely misinterpret his sarcastic descriptions of the gold bug to still beleive he can be favorable to any gold price hike.
    Avi is an institutionalised gold basher of high intellectual level and operating with very shrewd demoralizing methods.
    Actually, Avi could be a clever spokesman of whoever like the Fed, who wants to fight gold.
    Aug 25 11:08 AM | 3 Likes Like |Link to Comment
  • GLD: Market Teetering On A Breakdown [View article]
    Avi,
    "But, the sign that does leave some hope for the bullish move to 130+ is that the decline, thus far, has lacked significant conviction by sellers, as we have not seen any serious high volume selling."

    I wouldn't bet your hope on that.
    The fact that there were few sellers can be explained by the absence of large demand.
    Or do you envision the possibility of large sales without large demand ?
    Aug 24 03:23 PM | Likes Like |Link to Comment
  • Gold Actually Thrives In Rising-Rate Environments [View article]
    Vet,

    I happen to know a few inhabitants of Cyprus and they all regret they didn't turn more of their cash savings into gold before the bail-in happened.

    Any idea why ?
    Aug 23 02:13 PM | 2 Likes Like |Link to Comment
  • Gold Actually Thrives In Rising-Rate Environments [View article]
    Good article.
    In the past rate hikes were indeed needed to fight inflation.

    Now, they talk of increasing rates, not because of inflation (there is none according to their statistics and there won't be any in the near future due to lower oil prices), but because they got ashamed of their ZIRP.
    ZIRP is indeed perceived -and with reason- as not done. It hurts the pension funds, it hurts the pensioners and it hurts those who save.

    Since Treasury and US Bond sales mirror the trade deficit, demand for Treasuries and Bonds is huge. Other participants buy American debt in big quantities to fight the increase of their own currencies versus the USD and protect their labor market.
    In that regard, the Fed has no other option than to keep rates low: what would happen if they would start to pay high(er) rates on their own vast debt ?
    Debt would grow out of control rapidly. What would happen to the US export and trade balance ? It would face disaster.
    Therefore, I consider the question "will we rise rates, yes or no ?" as a purely academic question.
    I hope Yellen knows that.
    Aug 23 08:50 AM | 4 Likes Like |Link to Comment
  • GLD: Bulls Are Playing A Dangerous Game [View article]
    1826787568756
    You seem to forget that in the meantime there have been a few trillions of new money created, not only in the US but also in Europe and China, more than ever ever before in history.
    If you take the currency as the unit, that puts the "high" gold price in a completely new perspective.
    It tells that not gold is expensive, but currencies are cheap, maybe not to Joe sixpack, but certainly to John Wallstreet.
    Aug 22 10:03 AM | 1 Like Like |Link to Comment
  • GLD: Bulls Are Playing A Dangerous Game [View article]
    182655487765

    "as a company gets larger and larger, the rate of growth slows down."

    Although sheer company size also might play a role, it is not that, that I wanted to highlight.

    What I meant to say is that in a ZIRP (zero interest rate policy) -environment like we witness today, with capital that can almost be lent free by new companies, and with no limitations on open competitiveness, these companies can start producing the same items as older companies whose equities are listed, but the new ones can produce much cheaper because their debt is not serviced by expensive obligations at historic high rates.
    Hence, the pressure to lower the prices becomes higher for the older companies too and their profit margins erode.
    Hence, the return on investment of these older companies tend to zero, hence the return on equity of their shares tend to zero, mimicking the ZIR.

    Classical examples that we witness today are (NYSE:CAT) and (KKO).

    Although I own shares of (KKO) myself (I sold CAT beginning of the year), I'm perfectly aware of what's going on: these companies can only survive if they buy other new companies (KKO bought Monster) at high price (Acquisitions) or if they merge (Mergers).
    And this brings us to chapter "M&A", a very popular theme nowadays, with a reason.
    Aug 22 09:50 AM | Likes Like |Link to Comment
  • GLD: Bulls Are Playing A Dangerous Game [View article]
    182696558765
    I would be surprised if BRKA would offer the same extraordinary gains in the next cycle as it has offered during the past business cycle.
    When the cost of capital is nearly 0, due to ZIRP, it's impossible that companies keep on having a return on investment of 10% or more as was the case until now.
    When companies with high ROI have to compete in an open competition environment, due to ZIRP, they attract ever fiercer competition and this leads to profit margin erosion.
    Overtime (20-30 years) this phenomenon will lead to a decrease of the company profits until return on equity will equal ZIR.
    Look at the Nikkei: it saw the company profits fall by factor 4.
    Aug 22 06:30 AM | 1 Like Like |Link to Comment
  • GLD: Bulls Are Playing A Dangerous Game [View article]
    182876587

    OK, wait 'n see.
    Aug 21 07:03 PM | Likes Like |Link to Comment
COMMENTS STATS
2,767 Comments
2,511 Likes