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Latest Comments130 Comments
Could PowerShares DB Commodity Index's Base Be a Launching Pad?
Corn acreage competes with soybeans, so supplies will be influenced by producers' planting intentions. Naturally, the crop yielding the higher profit margin will be favored.
On Nov 25 11:13 PM thegreatyakk wrote:
> Around my home, the price of regular unleaded has fallen beneath
> the price of E85 ethanol, I assume this is happening in many other
> places. If gas stays low (lower than ethanol) for a prolonged period
> of time, will this create a large glut in corn inventories as ethanol
> becomes unpractical? Is this already priced into agricultural commodities?
Gold 1, Oil Analysts 0
On Nov 16 08:02 PM otbricki wrote:
> Gold has nowhere to go but down from here. We are in a deflationary
> spiral for the next year because of massive deleveraging destroying
> money faster than the Fed can force-feed it into the economy.
>
> Longer term though the pendulum will swing the other way and gold
> become a good investment as oil skyrockets and the dollar tanks.
>
>
Ethanol's Short-Term Bottom
VeraSun’s (VSE) problems arose, in part, it hedged its feedstock corn near the top of the market.The long-term forward contracts locked in what turned out to be higher-than-market prices. Meantime, VeraSun’s unfettered competitors could buy their corn more cheaply. That left VeraSun's hopes riding on high oil prices (ethanol bids firm up in a tight oil market). The recession, however, knocked the wind out of the petroleum complex and the accompanying credit crunch limited the company’s ability to finance its working capital needs.
On Oct 30 09:55 AM ESQ118 wrote:
> vse bankruptcy immenient... why is that?
Golden Opportunities?
For gold, net shorts topped out as prices reached their spring peak. Sellers, thus, locked in the market's highest prices through futures. Commercial net short interest has since been lightened to a level not seen in years,
On Nov 03 04:31 PM Smarty_Pants wrote:
> If commercial open interest is declining then another upleg is about
> to start shortly. Maybe it won't be the onset of the "big one" but
> prices are very likely to move higher from here.
>
> If commercials are reducing their net positions it means that the
> current prices are too low. They will be much more likely to wait
> for another rally in price back to 'realistic' levels before taking
> any more positions on the short side for future delivery.
>
> The commercials aren't stupid. They close out their short positions
> when prices get "too low" and re-establish them when prices are "too
> high". It's their business to know what they're doing. When they
> all do the same thing, it's telling you something (or it ought to
> be).
>
> Of course pinpoint timing is another story. Commercial Open interest
> figures will tell you which way the big boys are leaning though.
> Keep your eyes open.
Gold Stocks Rebound
Note the cautionary tone that was sounded in the piece : "...investors shouldn't forget that gold mining issues are still highly correlated to bullion. As gold goes, so goes - more or less - mining shares. The correlation of daily price returns between GDX and GLD, in fact, stands at 73%, even after counting the seemingly disparate performance records this year."
On Nov 06 05:07 PM paultaut wrote:
> Looks like gold is on its way to the low to mid $600 range, this
> appears to coincide with the last cautionary statement:
> .... have growth and can fund that growth ...
>
> What rebound? The Bear market bounce, is that what you are talking
> about?
Gold 1, Oil Analysts 0
The last five US recessions followed 20 to 30 percent declines in the gold/oil ratio from then-recent highs. The current market got followers of the ratio particularly nervous. The ratio nearly 50% from its February 2007 high to a trough at 6.4-to-1. If nosedives in the ratio are indeed predictive, the recession forecast then would figure to be a real whopper.
And why would a dip in the ratio predict bad times to come? Put simply, rising oil prices – relative to a monetary constant like gold -- slows industrial and consumer demand, choking off economic growth.
On Nov 13 08:10 PM The hand wrote:
> maybe it is time for gold to leave its relationship with oil. this
> marriage should annulled as they have little in common except a coincidental
> relationship that has little love.
>
>
Jeffrey Christian: Gold and Silver Could Spike
Keep in mind the format of this article was an INTERVIEW, not an analysis. The "star" in an interview is the interviewEE, not the interviewER.
An interviewer's goal is to get the interviewee to offer his/her insights and opinions.
There's plenty of analysis elsewhere on HAI. As examples, I direct your attention to "Consumers Buy Into Inflation" at www.hardassetsinvestor... and "Venti-Sized Gains For Coffee" at www.hardassetsinvestor....
On Nov 16 01:31 AM Jake2 wrote:
> "HAI: Everyone I talk to is bullish on gold. I wonder: What could
> go wrong? What could keep gold prices down?"
> You"ve been talking to the wrong people. What's wrong is no one is
> buying. Didn't someone tell you? Gold is down 14% in the past few
> weeks. How about some hard headed analysis from Hard Assets once
> in a while instead of tendentious twaddle.
Consumers Buy Into Disinflation
The Bureau of Engraving and Printing hasn't stepped up the minting of new currency--YET. What happens first is an increase in the issuance of Treasury bills, notes and bonds. Increased Federal Reserve Note production follows as tranches of bills and notes are redeemed.
The indicator can head downward during the current disinflationary phase before turning north when the dollar's reinflated.
On Nov 14 05:40 PM Consider_this wrote:
> Response to Hervert Hoover,
>
> Inflation of prices of items (not produced in the country) without
> corresponding increase in *WAGES* of people is actually deflationary.
>
>
> It's not hard to envision why if wages don't have inflation, price
> inflation ends up deflationary overall.
>
> In the end, true inflationary spiral can happen only if WAGE is also
> inflating.
>
> My problem is that with global arbitration of wages; and production
> capacity of GOODS and ENERGY is outside of the country; and outsourcing
> controlling wage increase domestically; the only way you can get
> into an inflationary spiral within the USA; is if USD complete depegs
> with the rest of the world and goes into a downward spiral.
>
> However, that kind of inflation-attempt would happen with a high
> price: Cutoff of foreign goods and energy (too expensive); Cutoff
> of govt funding; Removal of USD as a reserve currency.
>
> Because we will lose (reasonably priced) energy and foreign goods,
> whether the economy will end up collapsing completely, thereby skipping
> wage increase (to increase wage, you need to have functioning economy
> and jobs), or be able to go into an inflation period, is unclear.
>
>
> This is the part that inflation scenario arguments that I cannot
> find. In pre-globalization days, it is possible to have Germany style
> chaos; In modern integrated era, WHAT IS THE MECHANISM to achieve
> overall wage gain?
Why Sugar Has Never Been Sweeter
On Nov 15 01:22 AM John Tandlich wrote:
> Does anyone know the ticker symbol for the ETF that tracks sugar?
Got a Beef with the Market? Buy Cattle.
On Nov 09 05:49 PM willydo wrote:
> There is a Pure cattle etf. It is ECYQF.
Insights from a Derivatives Salesman
Using Futures to Buy Metals Wholesale
Platinum, yes. Diamonds no. Platinum trades in 50-ounce contracts on the New York Mercantile Exchange.
Using Futures to Buy Metals Wholesale
It's not just proof set gold coins that are considered "numismatic items" under 31 USC 5112 which, in pertinent part, states:
(q) Gold Bullion Coins.
(1) In general.— ...the Secretary shall commence striking and issuing for sale such number of $50 gold bullion and proof coins as the Secretary may determine to be appropriate, in such quantities, as the Secretary, in the Secretary’s discretion, may prescribe ...
(7) Treatment as numismatic items.— For purposes of section [2] 5134 and 5136, all coins minted under this subsection shall be considered to be numismatic items.
I can't presume to get inside Secretary Paulson's head.
Suffice to say that the Secretary is constrained in obtaining gold for coin making. He must first obtain bullion only from domestic, not worldwide, sources produced within 1 year of the month in which it was mined, but pay no more than the average world price.
Then he must direct the bullion to be alloyed to exacting standards for blanking, recut dies and schedule minting at the sole venue permitted for gold coin production.
All that takes time.
Using Futures to Buy Metals Wholesale
Option on gold futures are just that: options on FUTURES, not physical metal. The exercise of these options results in the "delivery" of futures into the holder's account (long futures if a call is exercised, short futures if a put is exercised).
Upon exercise of a call, you'd then have to await receipt of a delivery notice to acquire actual metal as outlined in the article.
Using Futures to Buy Metals Wholesale
Gold coins are deemed "numismatic items" under the controlling section of the USC (Title 31, Section 5111) which states:
The Secretary of the Treasury—
(1) shall mint and issue coins described in section 5112 of this title in amounts the Secretary decides are necessary to meet the needs of the United States;
(2) may prepare national medal dies and strike national and other medals if it does not interfere with regular minting operations but may not prepare private medal dies;
(3) MAY [emphasis added] prepare and distribute numismatic items; and
(4) may mint coins for a foreign country if the minting does not interfere with regular minting operations, and shall prescribe a charge for minting the foreign coins equal to the cost of the minting (including labor, materials, and the use of machinery).
The section you cite merely prescribes the conditions under which the coins must be minted and distributed IF the Treasury Secretary deems their production is in the interest of the United States.