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Latest Comments30 Comments
Gold Bugs Beware
www.resourceinvestor.c...
www.resourceinvestor.c...
Gold Bugs Beware
OK.
This is what I found :
See at link for full article / graphs :
www.resourceinvestor.c...
Got Gold Report – COMEX Commercials Least Net Short Gold In Years
By Gene Arensberg
10 Nov 2008 at 08:22 AM GMT-05:00
The big news this week is that the largest of the largest traders for gold futures, the commercial traders on the COMEX, are now the least net short gold they have been in years.
----------------------...
ATLANTA (ResourceInvestor.com) -- Regardless of whether or not the world is near the end of the giant financial “Charlie Foxtrot” we have all endured up to now, the largest of the largest traders of gold futures now have the fewest bets that the U.S. dollar price of gold will fall further than they have had in years.
As of Tuesday, November 4, traders classed by the Commodities Futures Trading Commission (CFTC) as commercial held a collective net short position (LCNS) of just 76,406 out of a total 303,908 contracts on the COMEX, division of NYMEX in New York. A net short position means that the trader profits if the commodity goes lower in price.
Yes, the current COMEX commercial gold net short positioning is the lowest in years. Indeed, we have to go all the way back to June 7, 2005 to find a reporting week which shows a lower LCNS (67,052 then), back when gold closed at $424.87.
That doesn’t mean that gold can’t go lower still, it can. It just means that the big dogs in the futures trading arena are not positioning like they think it will. To the contrary.
More about that very interesting and potentially bullish development below in the Gold COT section, including what it might signal the commercials’ expect, but first, let’s look at the gold and silver ETFs and the CFTC Commitments of Traders Reports (COT).
With the huge disparity in Comex price (low) , and physical price (high) , I wonder if many are buying on the Comex to take delivery at a lower price-
Except that the shorts (in silver , concentrated among a few banks only ) ,
Dont have the metal to deliver?
Wha happens den?
Gold Bugs Beware
How about me?
Stocks are hardly the "new flight to safety".
GS and GE may be a place to park a bit , but we aren't going to get the deal Buffet did , and I dont think they and their ilk will be the new "gold rush place to be".
Bonds may crash as interest rates rise - not right away, but I dont plan on timing it to the last second fully invested.
Foreign stocks are a good diversification tool , but as Peter Schiff has found out to his surprise , no panacea.
Nobody knows how low/how long all these entities may go , but everyone does know that gold wont disappear.
So , as I said per demand -
How about me?
"Supply"
I'm positive that you are aware , and dont you think you should have included in your supply analysis (after all , it's what you were thinking when you wrote it, I'm sure) ,
The number of new supply projects put on hold and cancelled outright as the lifeblood of the majors -
The Juniors -
Have been decimated and incapacitated to the point where expected new supply (badly needed to replace depleting resources) is not coming onstream as thought.
Note that this was not expected to be enough in the first place to replace resource inventory - now , fuggetaboutit.
Now , your point may be that supply in the nearer term is your point ,
but now we have to consider if prices will continue to drop or shoot up.
The consensus has seemed to have morphed , across the board , into something like this:
"Harrumph , gold may drop further , but even if it doesn't , it will not rise appreciably for some time , and will more likely range trade".
But the consensus is always wrong.
Where's that there $200 buck oil everyone knew was coming?
Where's that $100 buck bottom in oil everybody was talking about.
Here's a consensus :
Nobody nose nutin' .
Hold onto some gold.
Are Base Metals Back? China Seems to Think So
Hey , look - it's working!
Due to this article , the whole world is scrambling to buy , and the price is skyrocketing!
I dont think pumping is a fair word to use to describe this article.
Is Gold A Sucker's Bet?
Gold is finite , unlike any/all unbacked currencies ,
And in uncertain times just a bit of additions (globally) to gold holdings can spur quite a rally as a result.
Many assumptions of "what should happen next" have proved to play out otherwise . Anything can happen , and
A meteoric gold rise is certainly one possibility in a panic.
Here is the key point -
It would be foolish to put an inordinate percentage of a portfolio into gold .
But it would be just as foolish to put none into it.
Would a 5 or 10% portfolio stake be any more risky than the conventional investments that have rendered pension funds , municipalities , and investment gurus
penniless?
Gold is not a short.
It is an investment which should be held in a portfolio in a reasonable percentage per diversification along with utilities , industrials , etc.
If it does drop , it will only mirror what the more conventional arenas have done. (Why are losses in those "acceptable" , but if gold drops , not?)
If it skyrockets , it will offset some losses in other sectors.
By limiting gold , and all other sectors , to only a % of ones portfolio ,
one doesn't have to figure out what it "should do" at a certain point , but
rather benefit from a large price increase should it occur, and yet not get killed by a drop.
Taking a Risk - With 20% Yields
Cold Calls with "inside info".
This is always a red flag.
But I agree that shippers and real estate funds are sectors to scrutinize for strong players that will pay dividends , survive , and prove to be bargains in an eventual turnaround in their respective sectors.
Last Gasp of a Doomed Currency
The debt accumulated over the past decade or so , which will continue to rise , cannot be repaid.
As a result , Peter , myself , and many others recognizing this have looked to hard asset investments as a safety/profit vehicle in this scenario.
But what we have not factored in to the "certainty" of our calculations is the timing.
For how long can a strong government continue unabashed , even if financially untenable?
Thus the recent downdraft in gold , resource stocks , etc.
The problem is that everyone (correctly) can ascertain the fundamentals ,
But NOBODY can ascertain the timing - though many think they can.
This recent downdraft proves that.
ALL the resource guys are in shock.
Maybe the debt burdens will cause the dollar to disintegrate next year -
OR MAYBE IN TEN YEARS!
Nobody freakin knows .
So balanced investing , including partial profit taking , is necessary.
Another thing that "Nobody Freakin Knows" -
Will a $ breakdown create "Blood In The Streets" ,
As some hypothesize ,
Or rather a slowly lessening of standard of living , eventually tapering off at a lower plateau than now?
The latter would allow for a gradual accepting of "less" ,precluding the scenario of an environment prone to disorder.
Remember , we've come a long way from the lifestyle of the Kramdon's in "The Honeymooners" , and yet they were able to accept their level of lifestyle .
We may be just TOO BLOATED , and a peg down wont hurt.
Real Estate values will eventually taper off and find a bottom , and that market will eventually stabilize at lower levels as dictated by its own internal supply/demand characteristics (likely helped by less supply coming on to the market) ,
But this wont help the problem of unrepayable (and continuously increasing) debt ,
And so Real Estate stabilization WILL NOT be the key to better times -
Rather just to a stable Real Estate market.
Why Tax Credits for Health Insurance Won't Work
Yeah Russ , that's the ticket -
The article itself in no way trashed the opposition plan.
Are libs blind on one side of their brain and dont realize what they themselves do -
Or simply disingenuous?
I honestly dont know the answer.
Xyrus -
Good point -
No spending cuts - no solution.
Coeur d'Alene Mines: Compelling Silver Investment
This is why people lost money in the tech craze , and why I've lost my profits in the metals runup -
Meaningless analysis based on hype and no math.
Fannie, Freddie: Beyond the Balance Sheets
I personally have seen complete junk go into their portfolio.
I'm a nobody , so multiply that by (how many others?)
There is no way to value this entity.
It may be hopelessly technically bankrupt , with the only positive , as the writer points out , that the government will add it to its welfare list ,
along with everything else at this point , to keep it floating ,
And then at some magical point in the future real estate prices will rise and it will become viable again.
It's applicable that the writer posts in biblical fashion , because that's what this is at this point -
A "belief" that the gov can carry everything on its back , no matter the load , and everything will work out ok.
You can get 5% on a 4 or 5 year cd , (also gov. backed!) , and there are other beaten down stocks with potential to invest in not dependant on government welfare to survive.
Just my opinion.
Why Thornburg Mortgage Will Survive
Who cares if it rises from .25 to .35 ?
Or even to a buck -
Please remember that the value in buying distressed stocks is that they retain their former potential in one form or another and can possibly rise back to former levels -
ie: I took a shot at AES after it dropped to 1 (from 60!) because its South American problems and the industry collapse in general didn't warrant the drop -
It was still a viable , worldwide energy producer.
I eventually sold my shares at 16 , and my bonds doubled, + 16% int. while holding , when called at par. (I bought them in 40's w/8% coupon).
Thornburg has no such potential for this per dilution ,can EASILY (though not for certain) still go bust , and it is foolish to take risks here with many other beaten down stocks with much more safety and potential gains.
Gold's Divergence Between the Paper and Physical Markets
Gold can fly into the thousands , or drop below 500.
But nobody was hypothesizing that gold "can drop below 500 and still be in a bull market" before the recent part of this drop ,
nor was the economic analysis related to this presented.
Bottom line - Dont listen to no one , and allocate in an intelligent and diversified manner to be protected against all potential eventualities ,
Remembering, per various advice offerings, "nobody nose nutin".
"Still in a bull market below 500" may be a concept of intellectual interest , but aint no use to an investor being demolished by the drop to know that his investment is "still in a bull market".
Venezuela Gold Miners: 'Misappraised'
Foist , Chavez didn't take , or threaten to take KRY-
He told them "no go - you're in an environmentally sensitive area , and you can't mine there".
How do you fight that? BC in Canada does the same thing every day.
Second , despite the above , which is simply a savvy ruse to screw KRY , any investment in V will be beaten down to the bone , so that Chavez can make a "fair bonifide offer " -
Based on the beaten down price , which he beat down!
Maybe some nibbling at distressed prices is do-able , but I wouldn't
go heavy in V -
Especially when you can literally close your eyes and buy distressed mining stocks in AAA locations these days?
Eastern Platinum and First Uranium Top Raymond James' Favorites List
What is the significance of that?
It should trade at the actual price forecast?
It seems top me that one half that forecast is quite high a valuation in itself?
Gold Miners Not Necessarily Golden: The Case of Northgate Minerals
"the Corporation is currently holding ARS with a par value of $72,600,000, which currently lack liquidity.
The estimated fair value of the Corporation's ARS holdings at June 30, 2008 was $61,987,000, "
No liquidity and a 10.6mil. drop in "estimated value" , if it did have any value?
Then again , maybe that's the definition of AAA these days?