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May 01 2018

moneymetals

Marc Faber: Countries Unwise to Let Antagonistic U.S. Hold Their Gold

Well now, for a closer look at America’s politics internationally and what it all might mean for gold and silver, let’s get right to this week’s exclusive interview.

Marc faber

Mike Gleason: It is my privilege now to be joined by a man who needs little introduction, Marc Faber, editor of The Gloom, Boom and Doom Report. Dr. Faber has been a long-time guest on financial shows throughout the world, and is a well-known Austrian economist and investment advisor, and it's a tremendous honor to have him on with us today.

Dr. Faber, thanks so much for joining us again, and how are you?

Marc Faber: Well, it's my pleasure to be on your show. Thank you.

Mike Gleason: Let's start out here with the equities Marc. Now the U.S. stock markets peaked in late January and made their lows for the year in early February. Stocks have been trading in a range since, but are currently pushing back towards those lows as volatility has certainly picked up. If you had to guess about which way the markets are likely to break from here, what would it be, and do you think we've seen the top for 2018 or can speculators keep pushing the markets higher for a bit longer?

Marc Faber: That's a good question and I think everybody's interested in the answers and everybody has a different view, but I have maintained that the January 26th high for the S&P up 2,872 was like a mirror image of the low on March 6th, 2009 when the S&P was at 666. At that time, everybody was bearish and leading strategy and I don't want to name who, but they were predicting for the S&P to fall to 400. And what happened is that, because sentiment was so negative, and the market was so oversold, the market turned around and actually on very poor earnings, started to go up. And now, we have, in January, a high, when everybody felt that the market would go higher and what then happened is that on good earnings, stocks didn't move up, but started to go down.

So, I think we are in a situation where it is likely, it's not yet a hundred percent sure, in order to get a clearer picture, if a major bear market has started, we would have to make a low below the February low, but that hasn't happened yet. But looking at the market and the market action and the momentum and the number of stock that are actually making new lows, I'd say there is a fair probability that the market will disappoint point very badly.

Mike Gleason: Dr. Faber, it seems to us that the fate of precious metals markets is tied pretty closely to stock prices, at least in the near term. We lack either fear or greed to drive any trend change. Here in the U.S. there's very little demand for safe-haven assets. If you look at sentiment in the metals markets you'll find that the greed factor is also missing. Now that could all change if gold and silver can catch investors' attention by significantly outperforming stocks for a while longer or if we get the long overdue correction stocks.

Now Marc, you wrote recently about two items you feel would signal a major top in the equity markets. The first had to do with the public going all-in, coupled with an excessive amount of speculation. The second would be the revelation of a major fraud. Those items will be familiar to anyone who had taken a good look at the 2008 financial crisis. Are you expecting history to repeat itself here?

​Read/Listen to the full podcast (source) ​

April 24 2018

moneymetals

China Takes the Long View on Gold-Silver... and So Should You

A cursory look at Chinese history can convince you that China should not be underestimated when it sets its sights on a particular goal.

Even before Mao Zedong took over the reins in 1949, and the first Five Year Plan began in 1953, centuries of history demonstrated that long-term planning, while not always meeting expectations, is a core behavioral trait of the Chinese psyche.

And more often than not, it has enabled them to hit the mark.

Expect eventual success for the One Belt, One Road Initiative – the world's largest construction project, estimated to cost $80 trillion dollars – linking the Asian mainland, (including Central Asia) with Europe via high speed rail, communications links and vibrant financial trading platforms.

And expect this project to be a major factor in bringing about what Doug Casey and others believe could become the greatest commodities bull-run that most of us now living are going to see.

The petro-yuan. A game-changer?

And oh, by the way, China recently officially launched a petro-yuan contract at the Shanghai International Energy Exchange. It marks the first time overseas investors have been able to access a Chinese commodity market – an oil futures contract – that can be settled, not only with U.S. dollars, but also Chinese Yuan, eventually a basket of currencies... and gold.


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February 13 2018

moneymetals

DOW JONES INDEX CORRECTION & CRASH LEVELS: A Chart All Investors Must See

As the Dow Jones Index continues to drop like a rock, the worst is yet to come. Today, investors once again plowed into the markets because they are following the Mainstream Financial advice of BUYING THE DIP. Unfortunately, those who bought the dip before yesterday’s 1,032 point drop and the 400+ point drop this afternoon, have thrown good money after bad.

Of course, we could see a late day rally to calm investor’s nerves…. but we could also see an increased sell-off. Either way, I could really give a rat’s arse. Why? Well, let’s just say the Dow Jones Index has a long way to fall before it gets back to FAIR VALUE. However, my fair value is likely much lower than the Mainstream analysts’ forecasts.

I wanted to publish this post today but will be putting together a Youtube video with more detail this weekend.

If you haven’t seen this video, I highly recommend that you do. When I published that video, the Dow Jones Index was trading at 26,100. Today it is already down to 23,400. However, as I stated, we have much further down to go. Here is my newest chart:

Dow jones index - feb. 9, 2018


Continue reading (source)

January 25 2018

moneymetals

The Market Underestimates The Tremendous Energy Consumption By The Gold Mining Industry

While the gold mining industry reports energy as only 15-20% of its total production costs, the total amount consumed by the industry is much higher. The market underestimates the amount of energy consumed by the gold mining industry because of the way it is listed in their financial statements. Thus, it takes a great deal more energy to produce gold than the market realizes.

Due to the complex supply chain system that we depend upon, most of the energy that is consumed in the production of goods, services, materials, metals, and commodities is hidden from plain sight.For example, a gold mining company will list “Tire Costs” in their Financial and Sustainability Reports. However, even though a tire cost is listed as a material cost, the majority of a tire’s production cost comes from burning energy… in all forms and in all stages.

For example, Barrick Gold consumed nearly 25,000 tons of tires in 2013 on its mining operations. According to the Rubber Manufacturing Association, it takes roughly 7 gallons of oil to produce a standard car tire. And from the article, This Is What A $42,500 Tire Looks Like, stated the following:

Caterpillar 797 tire

One of the many unique aspects of the Cat 797 are its tires: More than 13-feet-tall, weighing 11,860 pounds, each Michelin or Bridgestone 59/80R63 XDR tire costs $42,500 and that’s when you buy the full set of six required by each $5.5 million truck.

Contains nearly 2,000 pounds of steel, enough to build two small cars and enough rubber to make 600 tires to put on them.

If the Rubber Manufacturing Association says it takes 7 gallons of oil to make one standard tire, and this article claims that the 13-feet-tall tire used by the Caterpillar 797 haul truck contains enough rubber to make 600 tires, then it takes 4,200 gallons of oil to make one of these giant tires. If we take a more conservative estimation of a smaller mining truck tire, it would likely consume at least 2,000 gallons or oil, or nearly 50 barrels of oil.

​Continue reading.. (source

January 23 2018

moneymetals

Gold Market Consolidates Near Important Levels as Government Shuts Down

Inline image 1The gold market has been mired in a four-and-a-half year basing pattern. The rally that began late last year has taken prices up toward a major resistance zone. It’s make or break time!

Gold - jan. 19, 2018 (chart)

Also on the cusp of a potentially big move is the bond market.

Bonds haven’t been making headlines like the stock market, but where the bond market heads next could be crucial for stocks as well as metals (not to mention housing and lending).

The 30-year Treasury bond is forming a potential head and shoulders top. A sustained break below the major support line would confirm a new bear market in bonds. Lower bond prices would mean rising long-term interest rates – a potential precursor to rising inflation rates.

Bonds - jan. 19, 2018 (chart)

The government shutdown doesn’t do anything to inspire confidence in the creditworthiness of the U.S. Treasury.

Although no immediate threat of default exists, brinksmanship could escalate in future showdowns.

The government shutdown of 2011 caused the U.S. to suffer its first ever credit rating downgrade.

Senate Democrats pulled this latest political stunt over DACA – a controversial amnesty program for children of illegal immigrants. DACA affects very few Americans directly. It barely registers as a line item in the $4.1 trillion federal budget. Yet it caused the government to lock up and threatens to lead to a constitutional crisis down the road.

Continue reading (source)

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