Red-Hot Resources

"Luck is not chance, it’s toil; fortune’s expensive smile is earned.”

Thursday, September 18, 2008

Commodities -- Up, Down and All Around

Here's an excerpt from my second Red-Hot Commodity ETFs issue for today ...

Central Banks around the world have apparently decided it’s “free money day.” I’m thinking of driving by the Federal Reserve, just to see if they throw a billion dollars at me when I make a sad face. Hey, the First Bank of Sean could really use that kind of cash infusion. Anyway, needless to say, this is supportive for gold.

And you want to know what is REALLY supportive for gold? British regulators just banned short-selling of financial stocks. Why don’t they write “PANIC!” on their foreheads with magic markers and run around screaming on the trading floor? It would have the same effect.

If paper gold keeps going higher -- and it certainly could -- we may suddenly see gold eagles available on the market again. The disconnect between paper and physical gold was something I touched on in my Wednesday column, which you can read here:

In other news ...

Russian President Threatens Arctic Annexation
Russia's long-term development and its competitiveness in global markets depends on developing Arctic resources, President Dmitry Medvedev said Wednesday, demanding that Russia mark its Arctic territory so it can claim a large share of the region's mineral resources.

XX Sean's note -- if they go ahead, what are we going to do? All our troops are tied up imposing freedom on the ungrateful in Iraq.

Russia in Georgia separatist pact
Russia has signed friendship treaties with Abkhazia and South Ossetia, sealing diplomatic ties with the breakaway Georgian regions. The accords include a pledge of military assistance from Russia.

XX Sean's note -- gosh, somebody needs to blink in this US/Russia New Cold War. There is a gold miner I really want to recommend but can't, because it has a big honking mine in frakkin' Russia! The potential geopolitical fallout is brutal.

Russia to help Cuba build space center
Moscow is ready to help Cuba develop its own space center, Russia's space agency chief said on Wednesday after talks in Caracas with Venezuelan and Cuban officials, Itar-Tass news agency reported. Russia has stepped up efforts to develop closer links with both countries, which are ideological enemies of Washington, including sending Russian strategic bombers on a mission to Venezuela this month.

XX Sean's note -- they're driving cars from the 1950s in Cuba and they're going to build a space center? Why not build something a little more practical, like a GM plant?! Will their spaceships look like classic Plymouth cruisers? Holy mother of God, this world is out of whack! By the way, did you hear that Fidel Castro bedded 35,000 women? Apparently he had them delivered to his office twice a day -- "one for lunch and one for supper". And yet he was so obviously an angry person. How is that possible?

Corn, Soybeans Slump as Report Shows Slowing Export Demand for U.S. Crops Corn fell the exchange limit in Chicago and soybeans dropped to a nine-month low after a government report showed a slowdown in overseas sales from the U.S., the biggest producer and exporter of both crops.

Mining Stocks Price in 50% Drop in Commodities, Sanford C. Bernstein Says Mining stocks are discounting as much as a 50 percent decline in commodity prices as the market factors in ``a significant cyclical downturn,'' Sanford C. Bernstein & Co. said.

Gold rush drives into second day
After a $70 rally on Wednesday, the biggest one-day gain in dollar terms, gold futures rose $50.20 to $900.70 an ounce after jumping as high as $926 on the Comex division of the New York Mercantile Exchange. Gold bugs have been proven correct in the contention that "an overwhelmingly vast and complex pool of nested financial derivatives would ultimately result in cascading defaults and ruin for major portions of the banking system," wrote Citigroup analyst John Hill.
"Frankly, we're surprised that gold is not already at $2,000 per ounce," he added.

Gold redefined: the price correction is over, some analysts say
Jon Nadler, a senior analyst at Kitco Bullion Dealers, said it's "not clear whether or not the rally is broad-based retail buying or just another profit-oriented fund play." He said that at the moment, it "appears to be more of the latter than people lining up in front of their coin shop after having lined up to make a run on their respective banks."

Labels: , ,

Check out my new gold and energy blog at