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  • A Few Quick Observations On Crude [View article]
    "So, oil prices fall, all things equal, GDP goes up."

    Not necessarily. If U.S. producers reduce production because it is unprofitable, this will have a negative impact on GDP due to all the activity that declines as a result of the correlation with oil production, capex including new drilling activity, transportation of oil, etc. Also, with lower US production, oil imports may end up INCREASING, not decreasing. Additionally, a stronger USD relative to other currencies will probably result in even more consumption of imports.
    Nov 30, 2014. 02:01 AM | 2 Likes Like |Link to Comment
  • A Few Quick Observations On Crude [View article]

    What do you think are the best ways to indirectly play this drop in oil? With capex definitely coming down, is there a lot of downside opportunity in the oilfield logistics sector? Or pipeline companies that transport oil? I would love to hear your opinion. Thanks.
    Nov 29, 2014. 07:06 PM | Likes Like |Link to Comment
  • A Few Quick Observations On Crude [View article]
    "Low crude oil prices serve 2 main purposes:

    1) Jumpstart a lingering global deflation to spur consumption around the world."

    Falling asset/commodity prices IS NOT deflation. For deflation to occur, the supply of money and credit must be CONTRACTING...not just slowing down in growth, but contracting. This is certainly not happening.

    Also, I'd love to hear an explanation from the voodoo Keynesians about why they say falling prices are so terrible for consumer spending...ya know, the hype about a "deflationary spiral" lol...but in the case of falling oil/gas, they say "This is just so wonderful for consumer's like a hundred billion dollar tax cut!!!" WHATEVER.
    Nov 29, 2014. 06:54 PM | 2 Likes Like |Link to Comment
  • Gold Is Way Overrated [View article]
    Wow, now I know you are totally irrational and it's not worth commenting any further. Carrying gold coins versus carrying buildings and land....uh yeah, okay.
    Nov 29, 2014. 06:14 PM | 4 Likes Like |Link to Comment
  • Gold Is Way Overrated [View article]
    "Well, you could also have bought some stocks, invested in real-estate, started a business, etc. and gotten even better returns!"

    That is hilarious! As if using so much energy to invest and start a business is even close to the simple action of swapping paper currency for gold. Give me a break. Also, most people holding gold aren't looking for "returns." They are simply trying to preserve purchasing power. So of course there are much better options to become wealthy. But gold should not be used to "become rich." It is used to store wealth, not create it.
    Nov 29, 2014. 06:09 PM | 3 Likes Like |Link to Comment
  • Gold Is Way Overrated [View article]
    Not only are central banks buying a lot of gold, they already collectively own thousands of tons of it. Why across all cultures and throughout the entire world would all central banks be holding the exact same asset? Hmmm...maybe just a coincidence I guess. Or maybe it's just "tradition" as Bernanke said.
    Nov 29, 2014. 06:04 PM | 1 Like Like |Link to Comment
  • Gold Is Way Overrated [View article]
    I find it fascinating that you would mention LAND and BUILDINGS as better hedges than gold. Why not hold all three if possible? You seem to have an irrational hatred toward gold. It's like if gold rises in price it means your narrative and fantasies won't come true, so you NEED it to go down to provide validation for yourself.

    Also, good luck trying to carry land and buildings out of the country if it comes down to that.
    Nov 29, 2014. 05:53 PM | 1 Like Like |Link to Comment
  • What Does The Year 1941 And Gold Have In Common? [View article]
    "falling oil is good for corporate profits"

    Exactly why I said this is good news for gold miners. The price of gold is rising versus other commodities. The last two times we heard this hype about deflation included the early 2000s and 2008 - two of the greatest times ever to buy gold miners. This time will be no different.

    You say you foresee "global deflation" but based on what? As I said before, deflation does not = falling asset prices. Deflation is a contraction in the money supply. Where do you see this occurring?

    BTW - Hyperinflation is not what you think it is. We already have inflation in excess of 2% and 10-year bond yields that have spent a lot of time below 2% in the past several years and isn't far above 2% now. Hyperinflation is not simply really high inflation. Hyperinflation occurs when psychology changes and people lose confidence in the currency and will do anything to swap it for tangible goods as soon as possible.

    I doubt we disagree about timing. I am reading Avi's stuff as well and know the gameplan. But you do know that he is already long many gold miners, right? Well, he is.
    Nov 29, 2014. 05:42 PM | 1 Like Like |Link to Comment
  • What Does The Year 1941 And Gold Have In Common? [View article]
    last chance - FYI: The hype about "deflation" and oil prices declining not being good for gold is just a bunch of hyped-up nonsense. In fact, gold measured in other real tangible commodities has been moving upward pretty significantly. Look at a chart of Gold/Oil and GLD/DBC (commodities index). This is positive for the gold mining sector as the thing it sells (gold) is priced much higher relative to miners' commodity input costs.

    Also, just so you know, falling asset prices is not deflation. We haven't had deflation in this country for the last 80 years or so.
    Nov 28, 2014. 10:53 PM | Likes Like |Link to Comment
  • Gold Is Way Overrated [View article]
    Over centuries? So if someone in the early 70s had $50 that they wanted to save and pass on to a grandchild, purchasing an ounce of gold would have been a bad idea because the saving is not taking place over a really, really long, long time? Even after a 40% drop in price over the last three years, it seems like the ounce of gold would have preserved purchasing power rather well, doesn't it? But you're saying it only works over centuries and not decades? Hmmm...
    Nov 28, 2014. 10:34 PM | 5 Likes Like |Link to Comment
  • Gold Is Way Overrated [View article]
    Please keep writing articles exactly like this one. I don't want any gold bulls left when I decide to load up.
    Nov 28, 2014. 01:29 PM | 8 Likes Like |Link to Comment
  • What Does The Year 1941 And Gold Have In Common? [View article]
    "If I said a low inflation doesn't bother me was not because that I didn't like a perfect economy...."

    This has nothing to do with a "perfect economy." It is about theft. Inflation is theft. It's that simple.
    Nov 28, 2014. 10:33 AM | 1 Like Like |Link to Comment
  • What Does The Year 1941 And Gold Have In Common? [View article]

    Peter has been buying gold and recommending others buy it since it was below $300. His "timing" has not been off at all. Did it ever occur to you that maybe Peter isn't interested in "trading" gold and is more concerned about the big picture? As golfin mentioned above, Peter understands the box that the Fed is in. Despite the significant drop in the last 3 years, gold is still up over 4x in dollar price compared to where it was when Peter began buying. His "timing" is hardly off. That being said...yeah, if you are interested in "trading" gold, then listen to people like Avi who do it for a living. That's not the business Peter is in.
    Nov 28, 2014. 09:57 AM | 2 Likes Like |Link to Comment
  • What Does The Year 1941 And Gold Have In Common? [View article]
    Patrick - Do you realize that even a CPI rate of 2% results in currency losing half of its purchasing power every 35 years? You don't think that's a problem?
    Nov 28, 2014. 09:38 AM | Likes Like |Link to Comment
  • What Does The Year 1941 And Gold Have In Common? [View article]
    Don't be fooled by the modern-day definition of inflation. The "economists" purposely try to make everything seem complex, while it's actually very simple.

    First of all, the printing of currency with QE and expansion of credit via ZIRP IS inflation. It doesn't CAUSE IS inflation. Look at an older dictionary and you'll see that inflation is defined as an increase in the supply of money and credit.

    Inflation robs us of purchasing power as our dollars are diluted. Inflation is beneficial to those who receive the new money first - the banks. We just get stuck with the EFFECTS of inflation: higher prices. Depending on where the new money flows, the higher prices can show up in assets like stocks, bonds, real estate, and commodities or in consumer prices. Usually both.

    In addition to encouraging the expansion of credit, ZIRP robs us of interest income as these low rates are artificial...set by a monetary politburo and not the market. ZIRP is like a subsidy to the banks as they get to keep the money that would normally be paid to us in interest.
    Nov 25, 2014. 10:50 PM | 6 Likes Like |Link to Comment