bowman711

U.K. Toxic Bank Plan: More Gains For Gold

I don't know what the amount of 'toxic loans' are in the U.K., but I was wondering if there are, say $800 billion in toxic loans, and the government 'covers' the loans with a $390 billion program, how is that inflationary? it would seem to me that $100 billion in deflation covered by $50 billion in inflation would be merely half as deflationary.

Gold Loses Its Shine

isn't owning in GLD or IAU akin to owning a gold-backed currency? The shares of the two ETFs are readily tradable, as would be a gold-backed currency. True, it isn't a universally tradable as dollars, but those who own GLD or IAU really have paper that says it is backed by gold just as a gold-backed currency is paper backed by gold.

It looks like the free market is responding to a demand for gold-backed paper 'money.'

The Calm Before the Next Financial Storm?

Will gold go up to $4-5,00/oz because
1. The government stops maniipulating the price and lets it go up? or,
2. The upward price pressure will make the government lose control of price through their manipulation? or,
3. Will Obama do what FDR did the last time the economy was in a similar situation - outlaw the private ownership of gold?

Gold as a Truly Last Resort

I agree with the comments on base metals. As the economy winds down, manufacturers will use up much or most of their raw materials, letting those inventories diminish. At some point, the economy will start to turn around, and the first element of the whole economy that will be replenished will be the raw materials manufacturers use in the products they manufacture. So, a position in base metals should be the first to start to rebound in a rebounding economy. A second position that would seem sensible would be in shipping as shippers and railroads scramble to bring the raw materials to the manufacturers.

Oil stocks would seem to be sensible because many products are made from petroleum, and the shippers will need fuel to power their ships or trains.

I also think this should be a good indicator as to when the bear market is ending and a bull market starting. There might be rallies, even significant rallies, but until enough confidence in the economy is indicated by manfacturers increasing their inventories of raw materials, base metals, intermediate rallies will not have the 'legs' needed for a sustained bull market.

The Ghost of Crude Oil Futures (Part 1/2)

I don't have any proof, but the government has said it will do whatever it takes to save the economy, so it seems reasonable to me that the government is driving the oil price down to help save the economy. There is also an outside chance it is done to give the Big Three auto companies time to sell out their large vehicles and to build fuel efficient autos and trucks.

Falling Oil Prices: The Bright Side of the Meltdown

Enjoy the low oil/gasoline prices while you can. The longer the prices are surpressed the more exploration and development of new souces becomes reduced or even curtailed. Then, when the economies of the world start to recover, there will be even greater shortages than there othewise would be. The shorter the supply, the higher the price will go. At some point in the next few years, you will be happy if oil goes back DOWN to $147/barrel.

Oil's Slide: A Result of Capitulation Selling?

With governments around the world throwing trillions of dollars into the economies to try to 'save' the economy, is there ANYONE who thinks they wouldn't be doing all the can to lower the price of oil, probably the single most critical commodity needed by every industry? [Even a church youth pastor is dependent on oil so his parishoner's parents can bring them to church.]

On Precious Metals and the Euro

I would say that gold should be viewed as a store of value. Whether it is faced with inflation or deflation, eventually - sooner or later - gold should find its equilibrium in relation to the rest of the economy. Thus, if gold will buy one 'good suit' at equilibrium it will buy one 'good suit' whether it is priced at $200 (deflation) or $2,000 (inflation) when equilibrium is reached sgsin after a significant change. The value of gold may vary greatly during times of change, but eventually it should find that 'good suit' equilibrium level again.

Oil Price vs. Gas Price: Is $1 a Gallon Realistic?

If $147/barrel was a bubble, why isn't $40/barrel a few months later an 'unbubble?' Never in the history of oil has there been such a steep decline so fast. This decline is especially suspicious to me because people still need to heat their homes, drive to work, and most factories are still producing some level of their goods. Even if unemployment is 10%, that means than 90% are still driving to work. Does anyone believe that anywhere near 2/3 of people heating with oil or oil related products have stopped heating their homes?

Even more important, $40 oil is making it uneconomic for oil companies to explore for and develop new oil sources.

Again, there is something very suspicious about such a drop in the price of oil, and I suspect it is just like the gold/silver price, being manipulated by the Fed/Government to make the economy and/or the dollar look better than it is. Or, it is being done to try to stave off a full depression.

Considering a Position in Oil Again

My suspicion is that Governments/Central Banks are driving the price lower in an effort to stave off recession/depression just as they are manipulating the money supply and gold. In the end, however, economics always wins over governments and their handiwork.

Considering a Position in Oil Again

The more oil drops in price, the more I am beginning to think it is being artificially manipulated. Oil isn't buggy whips; it is still needed in every area of society and industry. People still have to heat their homes, drive to work, and, yes, to make and ship whatever industrial production goes on even during a recession - or depression., At $147/barrel it may have been in a 'bubble' caused by speculation. At $43/barrel it has be in a just as artificial 'unbubble.'

Oil Won't Drop Forever

There is an interesting observation about a quirk in DXO (and probaby similar ETFs) here: finance.google.ca/grou...

Oil: A Slippery Slope Ahead?

One other thought: the author gives Oilsands Quest (BQI) as a (bad) example in his article. Has BQI dropped so much in price due to economics or drop in oil demand, or because it is a favorite of the well-researched hedge and mutual funds that were forced to liquidate anything they could to meet their cash requirements?

Oil: A Slippery Slope Ahead?

The monthly oil chart at futures.tradingcharts.... shows the huge drop in the price of oil. A drop due to loss of demand for oil - or due to the forced liquidation of all holdings by hedge and mutual funds? I side with a drop due to forced selling to cover leveraged positions or meet fund redemption demands.

At some point, this financial crisis will pass. What do you think will happen to the price of oil stocks when these funds start investing in them again? I'll bet 10,000 shares of BQI that when they do, oil will find its level approximately at the level it was in the middle of 2006 (see chart) and continue up at about the same rate it did until mid 2006.

Credit Markets and the Price of Gold

If the government wanted all those 'zillions' of dollars to benefit the economy, they should have put it into massive public works system infrastructure projects. Instead, it was mainly used to bail out Paulson's and Bernake's friends on Wall Street. This should give some idea where the Government's priorities lie.