I'm Appearing on CNBC This Morning
They don't want picks, so I guess it will be a free-ranging discussion between me and another analyst. I hope he's bearish on commodities -- mud will be flung (just kidding).
"Luck is not chance, it’s toil; fortune’s expensive smile is earned.”
Here's an interesting trend ...
According to the Bank for International Settlements, the share of foreign-exchange deposits held in dollars by OPEC, including
Now we hear that the United Arab Emirates (UAE) will switch 8% of its foreign-exchange reserves from U.S. dollars into euros before September.
The U.A.E. is already “in a limited way” selling part of its dollar reserves, according to UAE Central Bank Governor Sultan Bin Nasser al-Suwaidi. The total value of the UAE's current reserves is $24.9 billion, 98% in dollars and 2% in euros, so the diversification means the UAE will dump nearly $2 billion in greenbacks.
The UAE is just following the trend set by Russia, Switzerland, Sweden, Italy, New Zealand and Qatar -- to stop piling up so many US dollars.
To me, this casts a shadow over the Dollar's rally off its November lows ... that move is starting to look a little long in the tooth. It wouldn't surprise me to see the US dollar start sliding sooner rather than later.
And yes, that should be good news for gold -- which was up $6.60 today, by the way.
Now for gold...
This week gold holdings at streetTRACKS Gold Shares, the largest gold exchange traded fund [NYSE:GLD], added another 3.09 tonnes to 452.01 tonnes of gold bars held by a custodian in London for the trust. The previous week saw an addition of 7.4 tonnes.
That's 10 tonnes of gold added in two weeks. Wow!
XX My take -- we're seeing investment dollars "buy the dips" in both silver and gold. This is being helped by end-of-year rebalancing. Many investors probably figure that both gold and silver will be higher six months from now, so they're allocating money to ride that wave. And it looks to me they're getting gold at a sweet deal.
As for stocks -- Australian gold stocks are already going ballistic as Red-Hot Asian Tigers subscribers well know. Canadian stocks not so much -- but they should follow the trend. Sit tight, hold on, and we could be in for a rocket ride in precious metals in the first quarter.
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Dec. 26 (Bloomberg) -- Gold in New York rose the most in a week after Iran rejected a United Nations resolution imposing sanctions and said the country will continue its nuclear program, boosting the appeal of the metal as a haven.Now, most people roll their eyes when they hear the Iranians say they need nuclear power for fuel. After all, Iran is sitting on one of the richest desposits of oil and gas in the world, right? But it's also one of the most mismanaged oil and gas deposits in the world. Hence, we get headlines like this...
Read the rest here: http://tinyurl.com/yyqt29
For at least 18 months, Iran has failed to meet its quota for oil production set by the Organisation of the Petroleum Exporting Countries, he said.
The strong suggestion, Stern said, is that Iran's oil production is now actually falling, despite the bonanza that exporters have enjoyed from a period of record-high crude prices.
...Overall, according to Stern, it "seems plausible that Iran's claim to need nuclear power might be genuine, an indicator of distress from anticipated export revenue shortfalls."
Declining output from the aging Cantarell field will trim Mexico's output of Mayan heavy crude oil by 50,000 barrels per day from early January, a leading oil official in the country said.
Mexico's oil exports of 1.85 milllion bpd will dip to 1.8 million bpd from 8 January, said Raul Cardoso, the head of Mexico's delegation attending Thursday's Opec meeting in Nigeria.
Read the rest by CLICKING HERE. PEMEX says it will bring more production online later next year to make up for declining production. Anyone who thinks it will matter more than a fart in a whirlwind needs their head examined.
Finally, I about fell out of my chair when I read this take on America's financial situation, The US Is Insolvent.What do you think that will do to the price of gold?
Last week, crude stockpiles plunged by 6.3 million barrels as imports fell and production of gasoline and distillates rose. The drop, the fourth straight, was much larger than the 2.25-million-barrel decline analysts polled by Bloomberg had expected.So, it sounds like a lousy time to be in heating oil. Keep your eye on gasoline, though. Gasoline stockpiles are currently about 3% below last year, and they should be building at this time of year. Instead, thanks to warmer-than-normal weather, everyone's been driving to the mall!
Refiners were able to increase their run rates overall to 90.7%, up from 89.1% the previous week, to produce more gasoline and distillates, which include fuels such as jet fuel, diesel and heating oil. Last week, gasoline supplies climbed by 1 million barrels, and distillates shot up by 1.2 million barrels.
The increase in distillates stunned analysts, who had been expecting a drop of 500,000 barrels, because they assumed colder weather and the closure of Texas and Louisiana shipping channels would shave production.
I've always found Jerry Pournelle an interesting science fiction writer. He and his sometimes partner Larry Niven sometimes write books about humans using their brains to overcome stronger, faster, often more technologically advanced alien adversaries (see The Mote in God's Eye, or any of the Man-Kzin Wars series -- the earlier ones are quite good). Well, Jerry has an interesting solution to Global Warming.
Labels: global warming
The World Gold Council’s regional office in Dubai announced that the retail gold sales increased by 41% in the third quarter of 2006 compared to the same period of 2005. Sales figures in the UAE increased from 1.4 Billion Dirhams in the third quarter of 2005 to 2 Billion Dirhams in the third quarter of 2006.
Gold Rises From Six-Week Low Amid Buying by Jewelers, Investors
Dec. 18 -- Gold rose from its lowest in more than six weeks amid buying from jewelers and investors in Asia.
Still, the precious metal is unlikely to rise beyond $630- $640 an ounce as the year ends because of clusters of orders to sell at that levelHave you noticed how bearish sentiment is getting on gold all of a sudden. At the same time, we're seeing bullish sentiment on the US dollar, even though our Treasury secretary was just in Bejing, groveling before the Chinese to ask them to modify their policies and let their currency rise against ours. Well, considering the fact that the Chinese turned him down flat may be reason enough to be bullish on the dollar.
The fact that Westinghouse is now owned by Japan's Toshiba may also have helped secure the deal, especially after Japan's new Prime Minister Shinzo Abe signalled an intention to restore friendlier ties with China.
BEIJING, Dec. 16 (Xinhua) -- China's crude oil imports are expected to reach 140 million tons in 2006, up 10.2 percent on last year, according to the Ministry of Commerce (MOC).I guess the oil bears will say that China's crude oil imports are slowing down, from 14.1% growth in the first 10 months of the year to 10.2% for the whole year. But what is China's seasonal oil import demand? I'll check into that and see if it normally slows down in November and December anyway.
Liang Shuhe, deputy director with the Foreign Trade Department of the MOC, said that China's demand for crude oil would total about 290 million tons this year, of which 48 percent were imports.
According to Liang, China's total output of crude oil is expected to reach 183 million tons in 2006, with 7.40 million tons for exports.
Liang said the fast growth of the economy has forced China to depend more and more on imports because of the limited domestic production, predicting that the steady increase in imports was likely to continue.
Statistics from the MOC show that China's crude oil imports increased by 14.1 percent in the first ten months of this year to reach 120 million tons.
The Chinese government removed tariffs on oil imports in November and opened its domestic oil market to foreign companies in December to cut the cost of oil imports.
Well, it sounds like we should get out the tanning butter and hop aboard those cruise ships, eh? But what kind of impact will the melting Arctic ice have on our economy ... even our civilization? Because while the Artic melts, the Greenland ice cap also melts and the Antarctic ice cap also melts. Maybe they aren't melting as fast, but they're still melting.
And here's the bad news: Scientists have long realized that ice reflects heat and as the quantity reduces so, too, does the amount of heat that can be bounced away from the Earth. So, the warmer the Arctic gets, the faster the Earth warms up.
Read the rest HERE.
"We don't see a major trigger on the horizon that will force spot prices down,'' Merrill analysts Vicky Binns and Daniel Hynes said in the report. "The delay of Cigar Lake and the imminent arrival of India into the commercial fuel market have created a notable increase in demand.''
About 440 reactors contribute 16 percent of the world's electricity currently, according to the World Nuclear Association. At the end of November, 28 plants were under construction with a further 62 ordered or planned. India, which runs 16 reactors, is building another seven, and targeting nuclear capacity of 40,000 megawatts by 2020.
Merrill is forecasting global supplies, estimated at 164.8 million pounds this year, to rise 4 million pounds during the next two years. Increased demand in Russia will limit exports while rising costs and planning delays are likely to slow output from smaller projects worldwide.
Still, Kazakhstan has the potential to ``flood the market'' if it meets its 2010 output goal of 39 million pounds, Merrill said. The nation produced about 10 million pounds in 2005, and Merrill's forecasts assume that will climb to 26 million by 2010.XX My thoughts: Kazakhstan has ambitious plans, but anyone who thinks those mines will come online without trouble or delays has another thing coming. In the meantime, demand is only going to ramp up. I expect uranium, currently trading around $63 per pound, to see $110 before it sees $50.
Oil producing countries have reduced their exposure to the dollar to the lowest level in two years and shifted oil income into euros, yen and sterling, according to new data from the Bank for International Settlements.
The revelation in the latest BIS quarterly review, published on Monday, confirms market speculation about a move out of dollars and could put new pressure on the ailing US currency.
Russia and the members of the Organisation of the Petroleum Exporting Countries, the oil cartel, cut their dollar holdings from 67 per cent in the first quarter to 65 per cent in the second.
Meanwhile, they increased their holdings of euros from 20 to 22 per cent, the BIS said. The speed of the shift may help to explain the weakness of the dollar, which recently fell to a 20-month low against the euro and a 14-year low against sterling.
Casual observers like myself have described the US economy as being in a hideous state of unbalance. On the one hand, we have the aforementioned Wall Street smoothies raking in unbelievable bonus fortunes, while the rest of the nation sinks into home equity quicksand wearing lead-lined suits manufactured in ARM mortgage reset hell. The afflicted house owners can't even sell their houses because the market is glutted with houses just like theirs, now worth less than the mortgages owed on them and, guess what, the supply of Greater Fools has finally dried up.
In defiance of Congressional requests to immediately halt closures of library collections, the U.S. Environmental Protection Agency is purging records from its library websites, making them unavailable to both agency scientists and outside researchers, according to documents released today by Public Employees for Environmental Responsibility (PEER). At the same time, EPA is taking steps to prevent the re-opening of its shuttered libraries, including the hurried auctioning off of expensive bookcases, cabinets, microfiche readers and other equipment for less than a penny on the dollar.
Last month without notice to its scientists or the public, EPA abruptly closed the OPPTS Library, the agency's only specialized research repository on health effects and properties of toxic chemicals and pesticides. The web purge follows reports that library staffers were ordered to destroy its holdings by throwing collections into recycling bins.
Labels: global warming
The world's largest energy company is still spending hundreds of thousands of dollars to fund European organisations that seek to cast doubt on the scientific consensus on global warming and undermine support for legislation to curb emission of greenhouse gases.
The rising ocean is "going to shave off a ton of landscape along the coast," which could drown marshes that act as buffers for storm surge, raising the likelihood of major flooding when the next hurricane hits, said Jim Morris, marine studies professor at the University of South Carolina and director of its Belle W. Baruch Institute for Marine and Coastal Sciences.
Labels: global warming
Labels: commodity supercycle
Really? That’s why he’s going to
Oil and natural gas are down as well! Apparently everyone in
Energy stocks are off their earlier highs. Gold stocks got shellacked. Silver stocks have lost their luster. Well, you know what they say: Tomorrow is another day. We’ll see how long sweet-talking Paulson can work his magic.
132,000 were added to the payrolls … way more than the 100,000 estimated.
But that’s lower than the expectations ADP had set with its report earlier this week. Some traders were expecting 170,000 or so new jobs.
Manufacturing and construction jobs were decimated. All the growth came in the service sector.
And last week’s job growth was cut to 79,000 from an initial estimate of 92,000. Which makes traders think this one will be revised down as well, because it simply isn’t reflecting the slowing in GDP growth.
But at the same time, many people are saying “Goldilocks Scenario.” “This is what a soft landing looks like,” is what I heard on CNBC. So the bottom line is it challenges the growing view that a recession is coming – and that is VERY GOOD for commodities.
Oil and natural gas are both up today, helped along by more unrest in
Nope! It’s all about expectations. Traders are telling the Fed: “We don’t believe this jobs number, and we don’t believe you when you say you’re going to keep raising rates.” That puts pressure on the dollar on the one hand – because it’s becoming clear in an ugly sort of way that one of the main things propping up the dollar has been the fact that the Fed pays higher interest rates than the European Central Bank -- and without rate hikes, inflation may rear its ugly head again (though it looks pretty darned comatose right now).
So, to cut to the quick: I expected a disappointing jobs number, which would boost precious metals prices. The number came in higher than the consensus expectations, but not as high as the ADP # predicted earlier in the week. Gold is up (for now) and the dollar is down.
Of course, that could all change by the end of the day, but for right now, it looks like I made the right bets for the wrong (or half-wrong, anyway) reasons. Good news is, I don’t care. RCS stocks are on fire lately! Two of them made SOARING gains yesterday.
And in Red-Hot Resources (the trading service, not this blog), we have a nat gas driller and a silver stock. The day’s not over yet -- this fickle market could turn against me and slap me down hard -- but this looks like a good time to be in both.
Are you in Red-Hot Resources yet? If not, click HERE, or call 1-800-291-8545 and we’ll hook you up IMMEDIATELY.
Not everyone is having a good day. A friend of mine – a better trader than I am – has been pretty bearish on commodities lately. Even though we disagree, I listen to him a lot. He’s a very sharp guy – we just don't see eye to eye on how commodities are going.
OUCH! Nothing hurts worse than being right, but being right at the WRONG TIME. After he got stopped out, copper tanked. It’s still tanking, on worries about rising inventories in
As the saying goes: “The market can remain irrational longer than you can remain solvent.”
Let that be a warning to us all. I’d rather make the right bets for the wrong reasons than be brilliant and make smart bets at the wrong time.
Buoyed by high prices, demand from Asia and a weak U.S. dollar, the gold industry has flourished since prices bottomed out in 2000 and probably is only halfway through the current boom, a leading industry official said Wednesday.
"Overall, our market is strong and will remain strong for some time to come," said Ronald Stewart, senior vice president for exploration for Canada-based Kinross Gold Corp., the eighth-largest gold producing company in the world.
The dollar bounced like it had springs on its shoes. First, it headed higher on the coat-tails of better-than-expected ISM numbers from yesterday. But the dollar really got its wings thanks to the ADP jobs report. ADP processes about one-in-six private sector paychecks in America, so when it says 158,000 new jobs were created last month -- the largest gain since June – economists and traders sat up and took notice.
So were we wrong on our bearish dollar/bullish gold outlook? Maybe, but not likely. Sure the dollar bounced, but it was way oversold – a reflexive bounce had to happen sooner or later, because nothing travels in a straight line, including currencies. Looking at the charts, this bounce is coming without a technical leg to stand on. And as for fundamentals, well, this is where it gets interesting …
The ADP report is considered by some to be the best single predictor of the government's nonfarm payroll report, but that’s like winning a beauty contest at a leper colony. There are no good predictors of the nonfarm payroll report. And hoo-boy, has the ADP been wrong before.
In June, the ADP forecast private-sector gains of 368,000, while the government report showed just 107,000 new jobs created in the private sector and 27,000 government jobs. Since then, the ADP has been off by an average of 48,000 from the government figures. The much-maligned consensus of economists has been off by an average of 46,000.
What the ADP number does is put a lot of bullishness in the market for both the dollar and Friday’s employment numbers. The market is expecting growth in non-farm payrolls on Friday of 100,000. If those numbers aren’t very good, the dollar could be headed for its next meltdown.
Meanwhile, the Chinese are making noise about shifting funds from Treasuries … The Middle Eastern oil sheiks would rather invest in Asia … and the Fed’s no-rate-cut boat is coming up against the rocky reality of a housing meltdown.
Labels: US dollar
According to TradeTech’s monthly edition of Nuclear Market Review (NMR), for the month ending November 30th, “Most sellers adopted a ‘wait and see” approach, choosing to offer only small quantities (of U3O8) in anticipation of future price increases.” Transaction volume for November was significantly lower. Several deals were made for U3O8 equivalent for less than 50,000 pounds.
NMR editor Treva Klingbiel wrote, “Extremely tight near-term uranium supply is exerting pressure on all segments of the uranium market, including the loan market.” TradeTech’s Loan Rate for November 30 is 7.50 percent per annum. She pointed out, “Lenders continue to seek much higher loan rates, particularly for loans extending beyond a few months.”
Read the rest here: http://tinyurl.com/trp34Naturally, I would think this would make the picks in my Golden Age of Uranium report potentially even hotter! They could move a lot higher, faster, than most people think possible. Do you own this report yet? Maybe you should!