As expected a very quiet day in the metals. Expect the majority of the time this week to be the same.
Just for fun, check Santa. He decided to post some of my correspondence with Trader Dan today.
http://jsmineset.com/2010/12/27/jims-mailbox-609/
More later if anything interesting develops.
If anyone is out there...and, from the looks of things, many are not...we have a very quiet, holiday week Monday on our hands. I would expect that any rallies in the PMs will be met by selling and any selloffs will be met by dip buying. Leaving us right about where we are.
For anyone interested, I found this article this morning from the Great Douchebag, Paul Krugman. The Nobel Laureate refutes my theory of impending inflation. I'm not going to sit here and argue with him, point by point, I'll leave that up to you as you read it. Just keep in mind that The Great Douchebag has been wrong about almost everything for years. No reason to start believing him now.
http://www.nytimes.com/2010/12/27/opinion/27krugman.html?_r=3&ref=opinion
I'll be here keeping an eye on things...if I can stay awake. Fortunately, there's a football game at 5:00 EST. Its just another in the long list of lousy bowl games but it certainly promises to be more exciting than our PM markets today.
One more thing, I keep mentioning the ongoing drought in the "winter wheat belt". Here's a picture of what I'm watching. Just think of what food inflation may look like if we have significant crop failure next year, too. Yikes!
I found an interesting article that might explain COMEX action....http://agaupm.com/speculation-why-comex-survives/#more-1599
ReplyDeleteIt seems to make sense with what we are seeing....Not sure I agree with the trader categories, but the concept of one buying silver contracts, depositing for delivery then selling out for a premium makes a lot of sense.
I didn't think this blog could get better, but anyone agreeing with me about what an asshat Krugman is, well...
ReplyDeleteHe really isn't even an true economist, he's a shrill political hack.
If Krugman pays me I can read his article.
ReplyDeleteNo way I am reading it unpaid.
If you want a good laugh, read the comments on the article! The people that read and agree with the douche are worse than him!
ReplyDeleteI am pretty sick of being referred to as a conspiracy theorist. In the end, we will see who is correct, Krugman or us.
george: well said!
ReplyDeleteThis was posted earlier by a reader. As they said, it takes a long time to load and watch but truly worth the effort. So much of what gets posted on zerohedge and even here is so frightful, you can't discuss it with anyone or get them to read it. Change is coming. Big change. This speaker talks of the change dispassionately. He is a scientist simply examining the environment he is evaluating. He comes to basically the same conclusions the fearmongers do but he sees a relatively simple "scientific" solution. I don't know if his solution is practical but I don't see the destruction everyone speaks of as being within the realm of reason either. Everyone should watch this and pass it along. I think it is very well done. http://outerdnn.outer.jhuapl.edu/rethinking/VideoArchives/MrJamesGRickardsPresentationVideo.aspx
ReplyDeleteThanks to the person who originally posted it.
Quite a FUBM (even if the EE isn't at work something drove it down - for a few moments-before it jumped back up, Chinese rate hike?)bounce on the metals chart at kitco, the NY bid is climbing steadily.
ReplyDeleteI have to run out and spend my gift money on silver.
As far as a paper by Krugman, I wouldn't wipe my backside with it. How can you get paid for being wrong on everything? Even the weathermen get it right by accident sometimes.......
How do we counter Krugman's argument? I was trying to point to rising commodity prices as a sign of rising inflation, and I was countered with the rising demand argument, along with the notion that the Fed does not print money. The second point is patently false, but I couldn't think of anything to say about Chinese demand. Rising demand would lead to rising prices, no?
ReplyDeletekrugman's point that rising commodity prices have to do with the emerging markets and their demand for new goods and materials...well, that is of course true.
ReplyDeletei don't see how that excludes the money printing/inflation argument however.
as jim rogers says:
if the economy recovers commodities will go up because of all the demand, it the economy does not recover commodities will go up because of all the money printing governments will do.
so there you have it. it's win win.
Blythe despises Paul Krugman with a hatred normally reserved only for child molesters and puppy killers.
ReplyDeleteKrugman's argument is readily rebutted by observing that gold, which has no real utility other than as a hedge against currency debasement, is going ballistic.
Demand for gold has nothing to do with drought, crop failure, improvements in developing economies, etc. Demand for gold is being driven solely by investors buying the metal to protect against currency debasement by central banks.
Krugman is a complete and utter moron. Invest in accordance with Krugman's outlook and you will be broke in a short time period.
Ha, we may shoot right thru the gap from last evening!!! JD
ReplyDeleteLaw: The typical Keynesian only recognizes and understands demand-side inflation. The Phillips Curve nonsense that economists have spouting for years.
ReplyDeleteWhat we are anticipating is supply side, cost-push inflation that will be brought upon us by the unending devaluation of the dollar. All dollar-denominated assets (inputs) will continue to skyrocket in price as long as the Fed continues QE.
According to Krugman, the Chinese eat silver and their cars run on gold.
ReplyDeleteLaw: I discuss cost=push inflation in greater detail here:
ReplyDeletehttp://tfmetalsreport.blogspot.com/2010/11/absolute-advice-for-relatives.html
A Thought... if the EE is settling COMEX contracts for cash, then depressing the price of futures contracts during the delivery period they are stuck reduces their cash outflow and improves their chances a buyer will accept a cash premium vs holding out for physical. So if this is the game being played expect the prices to jump after all of this months deliveries are settled one way or another.
ReplyDeleteblythe_masters said...
ReplyDelete"Demand for gold has nothing to do with drought, crop failure, improvements in developing economies, etc. Demand for gold is being driven solely by investors buying the metal to protect against currency debasement by central banks."
--------------------
It's no longer a commodity. It is now the only money!
I find it slightly amusing when in the short term they hit silver/gold at the same time they cheapen the buck and drive the equity indices higher - reminds me of a mirage. JD
ReplyDeleteSure, Krugman, US monetary policy is completely and unequivocally divorced from any concomitant rise in commodity prices. What an Überweenie.
ReplyDelete"For commodity prices are set globally, and what America does just isn’t that important a factor."
ReplyDelete... Then it should be no problem when the USD loses its status as the world's reserve currency. THANKS PAUL.
@ igiveup2 - I watched that video link you posted. The speaker mentioned that once we start seeing rate hikes in China, we'll start seeing inflation here in the US. Just so happens that the Chinese have just raised those hikes, now we wait to see if it comes true.
ReplyDeleteColored, start seeing inflation? What the deuce?
ReplyDeleteCheck out oil, cotton, coffee, gold, silver et al and get back to us.
Dearest Turd,everything about commodities is very interesting,especially about the soft commodities,so thank you very much for the post and the map.
ReplyDeleteWhat we are anticipating is supply side, cost-push inflation that will be brought upon us by the unending devaluation of the dollar. ""
ReplyDeleteTF, nailed it. Santa has been saying this for years.
Turd, It seems JP Morgan is refusing to talk about their copper position. There were claims out recently which had no cited sources (how convenient?) which state that the large 80-90% copper holder is _not_ JPM. I'm here to say that indeed it is. I know for a fact that JPM is refusing to talk about their copper position. We need to keep an eye on em.... If their position were not that 80% holding, they'd quickly say that they do not hold 80% publicly. We know that they hold it. We just need to figure out why they're holding it. I'm thinking its some kind of sick twisted hedge against silver...
ReplyDeleteAsia dumps the dollar, who woulda thought? ;) 80.5 never breached...Turd had 80.8 and his target was better, props Turd. Gold is looking strong on predominant selling. Awesome.
ReplyDelete@igiveup2: very informative video. Thanks.
ReplyDeletenoticed the Dollar just busted 80, promptly went to Gainsville Coins and ordered 35oz silver and 1/4oz of gold
ReplyDeleteI forgot to add...For 2011 instead of giving my kids worthless Fiat for allowance they get 1oz Australian kooks, I chose the Kooks because they are in the plastic capsule
ReplyDeleteHappy New Year To All!
igiveup2, thanks for that video, I watched it in dribs and drabs during down-time at work and again when I got home. I forwarded the video to everybody I care about. Nothing I have ever heard in an academic monotone has ever scared me as much.
ReplyDeleteSilver...she wants to run bad....
ReplyDeleteI wrapped some Silver Eagles in Zimbabwe Trillion Dollar notes that I got on e-bay for the kids this year. It seemed like a pretty clear lesson in the difference between PM and fiat.
ReplyDeleteActually the fiat was almost as cheap as wrapping paper, maybe next year I will use singles from the Fed.
Demand for Gold and Silver is being driven by real people in the real world.Not charts or computers or spending years at a University and dealing with theory,this is pure cause and effect.Take note history is happening now.
ReplyDelete