"When misguided public opinion honors what is despicable and despises what is honorable, punishes virtue and rewards vice, encourages what is harmful and discourages what is useful, applauds falsehood and smothers truth under indifference or insult, a nation turns its back on progress and can be restored only by the terrible lessons of catastrophe." … Frederic Bastiat

Evil talks about tolerance only when it’s weak. When it gains the upper hand, its vanity always requires the destruction of the good and the innocent, because the example of good and innocent lives is an ongoing witness against it. So it always has been. So it always will be. And America has no special immunity to becoming an enemy of its own founding beliefs about human freedom, human dignity, the limited power of the state, and the sovereignty of God. – Archbishop Chaput


Wednesday, November 12, 2014

Soybeans and Shortened Life Expectancy

If you ever see me on the street and I am making some incoherent mutterings, I ask for your sympathy. You see, I am suffering from what is referred to as an acute case of SOYBEANITIS.

This is a serious condition brought on traders by prolonged, incessant exposure to the bean market. It impacts different traders in different forms but the one common among them all is that it results in an inability to form complete sentences. Short bursts of random words such as:

"What the ****!"

"You've got to be kidding me!"

" I am not believing this"!

"What kind of idiot would do that"?

"NO way"!

"What planet do they live on?"

When a trader afflicted with soybeanitis attempts to string all these expressions together, the words come out  in rapid fire succession, more often than not, completely jumbled, intermixed, interposed and transposed with the result that it produces a strange amalgamation of sounds that some have said sounds a great deal like the Klingon language from the old Star Trek shows.

What I am referring to is a follow up to the chart I posted earlier today. After today's session, those zombies on "The Walking Dead" are probably former soybean traders.

Here is the updated chart AFTER the close of trading today.

There are a couple of things to point out here. First, in the early part of the session, funds went on a buying binge across the entire grain floor. They took this month bean contract up through the 100 DMA yesterday and proceeded to push it even higher. In the process they closed the gap formed on the continuous chart back in mid-July. That gap was formed from the transition from the July contract to the August contract which was trading at a discount to the July as traders had begun to dial in the enormity of this year's crop.

However, after the fund buying exhausted itself, the market began to slowly fade. I get the impression that a lot of guys were looking at the huge rally from off the lows near $9.00 and turned to one another remarking: "What in the hell are we doing way up here?"

Whether or not that is true is immaterial. What did happen however is that the market seemed to run out of buyers up here. Price then faded and as it did, it looks as if some of the longs began to bail out. I am unsure at the moment but I suspect we finally awakened some serious commercial hedge-related selling.

The point is that the bulls failed to hold the priced above the 100 DMA. If they had been able to come in and buy it near that level and push it back away from there, I would have to say that they had a very good chance at changing the bear trend and actually cementing a longer term bottom. Now, I am unsure once more.

Not only did they fail at the 100 DMA, they also failed to hold the price at the BOTTOM OF THE FORMER GAP. They had pushed into that gap in yesterday's session and actually closed the gap, but they penetrated through the upper edge of the gap again today. However, by the time the closing bell rang, price had fallen below the low of the gap. From a technical analysis perspective, that constitutes a failure and would normally usher in some selling.

With this market however, who the heck knows? I thought the same thing after we got that USDA report on Monday. Then yesterday all hell broke loose to the upside with that outside reversal day ( in the meal) erasing the outside reversal day lower from Monday.

I was actually hoping we would see yet one more outside reversal day today so we could make it a perfect trifecta. By the way, I am trying to recall any time in my entire trading career in which I ever saw three back to back outside reversal days. Guess that will have to wait for another time?

The way this market has been of late, who the heck knows what it will do next. As of today however, the bulls have been wounded somewhat as the beleaguered and shell-shocked bears managed to land a body blow. Stay tuned - this one ain't finished yet... but maybe the bears are starting to dig in up here.

Quick comment on gold - nothing doing right now... just stuck in a range as I had noted the other day. It might be a season for price consolidation before a fresh leg lower or the bulls might be able to take it up through $1180 and try changing the handle to a "12". Just like the beans, the jury is still out.


  1. Soybeanitis?!?! Lol!
    Thanks for that. :-)

    1. Dan,

      I find it interesting that you feel you need to use this sort of rhetoric:

      "that is what drives the gold cult members nuts when it comes to my stance on this stuff"

      I wonder... do you include Jim Sinclair in this group?

      Hey, this is your blog and I see you have followers that enjoy berating the so-called GOLD CULT... fine. And of course, the opposite takes place on these... as you label them Gold Cult sites.

      The only thing I would like to add to this discussion besides the wonderful name calling we have all degraded to.. is that the PEAK and DECLINE of unconventional oil production (much sooner than later) will impact the fiat monetary system in a way most do not understand.

      The failure of the precious metal community is not playing TIT FOR TAT against TRADERS vs, supposed GOLD CULT , but rather the failure to understand the fundamentals of the oil industry. The major oil exporters, especially in the Middle East are doing everything they can (EOR & Infill drilling) to keep production from declining.

      Basically, the global oil industry is using technology to keep the annual decline rate at bay, but the overall depletion rate of the reservoirs are increasing at higher rate each year.

      Which means.... the world will more than likely not experience a subtle peak and decline of oil production, but more like a SHARK FIN. Without oil production growth... the U.S. Dollar and fiat monetary system runs into a great deal of stress.

      This is not something that will take DECADES to occur... but rather years.


    2. Rocco - if the decline in production is likely to be so severe and soon, it seems odd that producers would not sit on their inventories now to sell them later at the drastically higher price. Ah, well, I guess they don't understand the myriad facets of energy production and consumption as well as you :)

      I do agree that 'cult' is not a great word, and probably only serves to be divisive. Unfortunately, I don't know of a better one. Basically I think we want a word that encapsulates 'community of people who are wedded to a worldview in spite of any new evidence'. Do you have a better one? Gold Ideologue seems appropriate, but not very catchy.

    3. SRSrocco;

      I disagree with your assessment of the oil industry very strongly. You sound like Matthew Simmons reincarnated.

      by the way, if it acts like a cult, quacks like a cult, talks like a cult and believes like a cult, it is a cult.

      One can believe gold has a place in a portfolio without being part of the conspiracy clan and constantly predicting roaring bull markets will "happen any day now". Traders and investors who are not part of the cult have a realistic view of the markets and take what they get without having to blame their failed predictions on some "evil conspiracy".

      I see nothing that would suggest God has a sense of humor in any of this because reading first hand accounts of people's lives being ruined, both financially and in some cases, personally, because the piss poor advice, wild theories, reckless predictions and flat our ignorance that pervades the gold community is not the least bit humorous among the people I abide with. Perhaps you hang out with a different group.

    4. Dan,

      I will reply once and once only. Peak conventional hit in 2005... and we have been bumping at 73 mbd since 2005. The only increases have come from tar sands and shale oil. However, these unconventional sources need high prices to be sustainable.

      In order for the global oil industry to keep production at 73 mbd at an annual decline rate of 5-6% (IEA), we had to add 4+ mbd of new production to offset the decline rate. Some of this was new fields, and some was increased EOR.

      While the U.S. Shale Oil industry drills very deep wells and then extends them horizontally to get at the shale oil, the Saudis are doing the exact opposite. The Saudi's have used fresh water and now salt water injection to flood their oil fields. This pushes the oil to the top of the reservoir.

      So, Saudi Aramco drills a horizontal well and extracts the oil (with water mx) until the water reaches that level and it shuts in the well, and drills another one HIGHER. How long can they continue this before they reach to top of the reservoir???

      Dan... you maybe quite keen in trading the paper markets, my hats off to you, but it seems as if you do not understand the reality taking place in the oil industry.

      Of course, you will disagree and that makes perfect sense... but I believe we will see a peak and decline of the Eagle Ford and Bakken probably by 2016 give or take a year. Once the world realizes Shale Oil & Gas is more like a Ponzi scheme... Peak Unconventional will have arrived.

      Let's just wait around and see what happens.


    5. SRSrocco;

      we'll agree to disagree on that Steve... I am a good 'ol boy from Texas and do know a bit more about the oil "bidness" than you might happen to think. But that's okay - differing opinions about markets are always with us. that is what makes it all interesting.

      Thanks for the comments... enjoy the day!

    6. "Once the world realizes Shale Oil & Gas is more like a Ponzi scheme... Peak Unconventional will have arrived."

      Ah, 'ponzi'. Now *there* is a word that has lost all meaning entirely. A Ponzi Scheme is a very specific con game, but thanks to Zero Hedge it now means simply 'unsustainable'. Herbalife is a Ponzi (kinda, yea!), Social Security is a Ponzi (close!), Gold Markets are a Ponzi (not very close!), Apple Inc. is a Ponzi (what does that even mean!?). Why are we ruining perfectly good words like this?

      Basically, whenever I see someone say 'X is a Ponzi', I know to take anything they say with a huge grain of salt, because there is pretty low ceiling on the level of sophistication at which they are capable of reasoning.

    7. Dan,

      Pardon me for being a hypocrite. I will reply once more. I spent 3 1/2 hours on the phone a few days ago speaking with an individual who has been in the oil and gas industry for nearly four decades.... and right there in TEXAS.

      This individual knows just about everyone in the business who are looking for oil projects PROFITABLY in Oklahoma, Texas and Louisiana. When I say profitably... I don't mean the insanely unprofitable shale gas or marginal shale oil industry.

      Breaking even on a point forward basis which is most of the shale energy industry is not a sound way to invest.

      You don't know how many engineers and oil geologists in the OIL INDUSTRY have contacted me via my website to tell me that SHALE is not the answer, but only a short-term relief (Band-Aid) before we head into a severe decline.

      Unfortunately, most investors listen to the SELL SIDE BROKERAGES who promote a good story, while the Shale Energy Industry reports quite the opposite to the SEC.

      Dan, I will leave it at that. I like to reply in a gentlemanly fashion. The Peak and decline of the U.S. Shale Oil & Gas industry will come much sooner than later.

      .... especially if oil prices continue to fall.


    8. SRSrocco;

      Thank you for the interesting comments Steve but let's leave it that. I have friends who will tell something different.
      Everyone has an opinion - neither of us are going to resolve this here and besides, neither of us have the time.

      Hey you never know, it might be all a moot point in a few years since the greenies will have us all on windpower and solar anyway!
      personally I am waiting for the dilithium crystals that they use on Star Trek!

  2. 19 days Sp500 closes above 5SMA and to be the worst rallies last hour of the days. Usually,anything beyond 18 considered outlier .This too bullish to be true. I need a flying Buddha in order to short SP

    1. I was going to joke about how funny "flying Buddha" sounded, and, tongue in cheek about how it must be a candlestick term, and then I googled, and found out IT WAS!

    2. You good, Eric, I need that flying Buddha to quadruple my account but you suggested me not doing this because of crazy leverage.Thanks

  3. Gold is dead for now.

    All the action is in RTH today, another world record high.

    As the U.S. Consumer is virtually unstoppable.

    1. XLY is waking up again. Been asleep for a while. Go, XLY, Go! Baby needs a new pair of shoes.

    2. Yup Mark, Macy's missed on earnings and so did JCPenny

      At least post credible information if you are going to post something.

      Its more like the consumer is still dead until there is real wage growth.

      Central banks interventions, smoke and mirrors is all that is left to prop this recovery up still. Not consumer spending.

    3. Sorry Barney, the chart of XLY says otherwise. If you really want to go into the swamp of fundamentals, at least recognize that the crash in the price of gas is rocket fuel for XLY. Macy's was up 5% today. JCP up 8%. Don't fight the tape.

    4. JCP down after hours. Ok, I'll give you that. The point is, the chart is the chart, regardless of whatever narrative you like to hang your hat on. That goes for Macy's, gold, T-Bonds, anything.

      If XLY starts to dump, I'll be the first one to say it turns out the gas price didn't mean a thing, and just get the heck out. Not going to stay around and argue about how XLY just has to go to the moon, according to some dead economist, and if it doesn't then it must be manipulation. No. I'll just get out and move on.

    5. The XLY believes what the economic cheerleaders are selling them.

      If the best results one can get from 0% historic low interest rates is these type of earnings results from retailers, then how could the Fed ever raise interest rates?

      The bond market sees it, but the Fed keeps bluffing about raising interest rates even as interest rates keep falling.

      The bond markets are saying recession, not a consumer led recovery don't you think?

    6. Bond market could be saying soft economy, no inflation, no wage pressure, plenty of room for Fed to stay easy, dividends look awesome as compared to bond interest, stay with stocks.

      OR, bond market says economy and consumer flat on it's back, earnings probably all priced in and ready to dump, stay away from stocks.

      See? Easy to spin it any way one wants. Fish around the internet and you can find 10 of each of those. That's why I only trust the charts. XLY is in a solid long term uptrend.

    7. LOL....Barney thinks the world is coming to an end. After-all, his beloved gold MUST begin rising. When he walks out into the world, everything is seen through a filtered lens that tells him everything has gone to shit. After all, his gold is not rising. And of course, "money printing" is to be blamed.

    8. Well one can see who has no reality and who is wearing the rose colored glasses Eric.

      The Bond markets generally are correct.

      Also if gold is just a commodity, why would it be going up in the current deflationary trend?

      Central banks are the only ones that believe gold is a currency otherwise they would not hold gold right?

    9. I guess the Democrats had this huge victory because the unstoppable consumer is so thankful about this recovery.

  4. SP500 hitting the 2040-2050 resistance area.
    If it tops there, I'll be watching for the completion of a diamond (see T.A) which, after an upwards trend, would be another warning of a change of trend towards bearish.
    Watch out for 2040-2050, as many analysts say that with all this QE from central banks, and international money flows seeking a safe haven into the US, retail money still not in the train, etc...nothing can stop the rise of the SP and Dow.
    Nothing, until everyone is on the same boat.
    I don't know when this will happen, but I'm keeping an eye on this area for now, still looking for an opportunity to short, rather than to buy.

    1. One could be something of a doomer, and still think we are good to 2250, per Jeremy Grantham's letter from 5 months ago. Still looking more or less on track. Grantham is well respected in doomer circles.


  5. (Reuters) Funds buy 8K wheat and11K corn while selling 8K beans, 4K meal and 4K soy oil.

    seeing that soybeans alternation again with jan beans up down up down on candlestick chart last 4 sessions.

    soybeans spreaders long against corn and wheat said to be bailing once beans went red.

    wheat had the large managed fund net short on the run.

    as Dan has mentioned, the lower crude oil and thus gasoline/heating oil beneficial to the meats. wasn't there a record high in perhaps april feeders today.



  6. Ags they are saying it was record volume today: (1.562 mil contracts in the 5 major Ag markets)

    interesting as Dan has mentioned GLD tonnage and HUI prices back into 2008 levels. the USDX had it's 2008 high of 88.46 not quite reached last week!

    GC still moving opposite DX very close inverse relationship this week.

    GLD holdings decline 0.25% to 722.67 (ransquawk.com)

    (reuters) end-users of corn dialed up their purchases and consumption of corn amid the friendly price environment that prevailed in late summer and early autumn. Projected corn use by livestock feeders, the largest corn user group, is up 125 million bushels from the June estimate as a combination of firm cattle and beef prices alongside weak corn values boosts cattle production margins and promotes herd expansion.

    2 sessions to go..cheerio!

  7. GLD continues bleeding gold. Since November 1 it's down 2.5% to ~723 tons. Everyday it goes down. Lost another ~2 tons today. This just doesn't feel like the bottom to me. I know the miners are bouncing a bit but really feels like the rug will be pulled out soon if GLD tonnage is the tell.

  8. Here's a little nugget came out today

    The Swiss Financial Market Supervisory Authority found evidence of ’serious misconduct’ by UBS employees in trading precious metals and most markedly in silver in an investigation of the bank’s foreign exchange and precious metal trading operations, it emerged today.

    Traders have used electronic chat media to front run silver prices. That is to say traders have been illegally employing their knowledge of an upcoming silver transaction to profit from price-sensitive orders."

    1. And this was once a conspiracy theory, but today 5 big banks including JPM got caught manipulating the Forex markets and the usual settlement for getting caught.


      One has to seriously start asking the question what markets are Free and not being manipulated?

    2. barneyb6;

      Please refer to some of my previous articles discussing these things. There is a huge difference between saying that big speculative interests attempt to do unethical and dishonest things to fatten their trading profits and saying that the big banks are working as agents of the Fed to suppress/control the gold price.

      Throughout my entire trading career, I have seen many instances of big specs being caught and fined by the CFTC for pulling crap in the futures markets to push price in their favor or to try to start rumors.etc,. to influence price direction. It happens far too often but that is a far, far cry from saying that markets are not "free" and are all manipulated.

      that is what drives the gold cult members nuts when it comes to my stance on this stuff. I am the first to admit that big specs, be that hedge funds or big banks will try to push prices around when they can. I have written lots of articles about that. But that is one thing - saying that one set of banks is doing this as "agents of the government" to control the price of gold is altogether and entirety different matter. Why they cannot see that is beyond me.

    3. confirmation bias: people hear only what they want to hear

      as they say, you can tell someone's a goldbug, but you cant tell them much

    4. Yes one must be a gold bug if they talk about manipulation Ophelia.

      And no I get what Dan is saying above that the big banks do this all the time to move markets in they direction they want.

      Also I am happy to invest in all the markets to try and make money, not just the gold market.

      It just creates doubt in the markets to see this manipulation.

      It makes one ask why would a central bank not try to protect its currency from gold rising against it?

      Same as we all know the central banks are supporting the stock markets and any time the Dow or S&P tank some Fed guy comes running out of the woodwork talking about more QE to save them from falling.

      It seems all the central banks care about is the market directions is my point.

    5. Clearly, this manipulation is the ONLY reason gold is not skyrocketing amid all of the crazy amount of "money printing" that is going on. What more evidence do you need? ......Afterall, this is clearly addressed by the following gold-buggism rules #2, #5 & #9

      2. The price of gold cannot fall, it can only be manipulated lower: When gold’s price falls, it is an unnatural act. It can only occur as the result of an international cabal of Central Bankers and politicians. Its a conspiracy, and we know who the guilty parties are.

      5. Central Bankers are printing money relentlessly, and this can only drive Gold prices higher: NOTE: You must ignore, for the moment, that Gold has not gone higher for the past 2 years as Central Banks around the world have ramped up QE. This only means that ultimately, Gold will go much much higher.

      9. Gold is a rejection of government, and their control of fiat money and finance: There are no printing presses that produce gold, it is finite, natural and God created. How much we scrape out of the ground each year is limited, and the only variable to the old equation. (Just ignore Man’s natural tendency to organize into to City-States over the past 12,000 years).

    6. Of course the gold price can fall Eric, if it is only a commodity it should fall along with all the other commodities right no matter how much money is printed?

      Only central banks see gold as a currency.

  9. EURUSD sideway too long. And no big news for the rest of the weeks. A boring one ! I smell DAX gone burst first before SP

  10. Looks like Turd has trotted out my name again in an effort to rally the base. He does that now and then whenever his sheep are getting restless, threatening to jump the fence. I must still be a burr under his saddle, and that makes me smile. Of course, about half of what he said is just flat out wrong, as usual. I won't bother linking it here. No point in sending traffic over there.

    One clarification though. We (us three mods at the time) were messaging Turd and Stephanie for 2-3 days asking for guidance on what, if anything to do. Main Street was careening off the rails. No response. Silence. When action was finally taken, suddenly Stephanie reappears and reads us the riot act. Fine. Where the hell were you then? We had to make a decision, and we did. She said "the mods have to change". DPH and I said "then get yourself some new mods."

    Another clarification. It was Mod Jefferson, also known as Turd's faithful lap dog JY896, that dropped the nuke on those accounts. Not DPH or myself. If Turd cares to look at the record, that's what he'll find. IF Stephanie lets him. ;)

    What we were fighting against was what, two plus years later, came to full fruition when Turd and his "Board" decided the batshit angry crazy stuff on the public Main Street was bad for business, turning people away. We told them exactly that, back then, and got the boot. Bottom line, Turd and Stephanie LIKE the batshit stuff.

    1. Just curious, Eric - what does 'main street was careening off the rails' mean? Was it just the crazy stuff, or was I a contributor to that? I ask because apparently that's what is being said now as the reason for shutting it down, and it's being blamed on zman, Motley and Alonzo Jazzberry, whom apparently everyone thinks is me.

    2. No, this was about a year before you came around. July of '12. "Off the rails" in terms of threads spiralling into nothing but a series of profane ad hominum attacks. That sort of thing. Not simply pertaining to diverse opinions or even to whacked out conspiracy theories. Just really hateful, hurtful stuff.

    3. The current shutdown seems two pronged. To eliminate guys like you, with diverse opinions. And also to get whack jobs like Fix off the front page. Two birds with one stone. Turd likes the batshit stuff, but let's face it a lot of it was starting to get too "out there", even for him, and more importantly, dominating a lot of threads, diluting the main metals doomsday conspiracy message. For example, he was clearly exasperated recently with Ebola, Ebola, Ebola, dominating every thread.

      And he just said himself "But we're never going to get there if the only publicly available content is a daily discussion of a news event that is dominated by "trolls" who post opinions in direct opposition to the sites main theses. You can get that anywhere else on the internet FOR FREE. Why would anyone pay $10/month for it here at TFMR?"

      So, he saying straight out that confirmation bias is the product that he is selling. Guys like you, or like zman now, were (are) messing with his business and are not welcome.

      "It's not personal Sonny, it's just business". Though any back and forth between Turd and myself got personal a long time ago, lol.

    4. Interesting - I had assumed everything was hunky dory there when the metals were higher. When I arrived, Craig was always talking about how proud he was that his site was one of the most civil on the internet, not one of those 'cesspools' with people fighting and being rude to each other. It was already a laughable assertion when I was there, and appears to have gotten significantly worse since.

  11. That's completely accurate in everyway.

    Turd and his manager have a tendency to deflect blame and create a situation, in this instance he brings up a 2+ year old needless point of reference about EO or myself, in order to take the focus off of them in this latest instance.

    It's a classic gaslighting technique. They're never accountable and they see no problem unless it's something that bothers them personally otherwise they could care less what concerns others.
    They're both noticeably self-centered.

    Maybe Turd or Stephanie should remind everyone how or why the private message spying thing was deemed necessary for over 2 1/2 years instead of making crap up that in the end was the right call and they were too dense or smug to even care or consider it.

    They're basically doing the exact same thing right now as several of the few remaining posters are voicing their concerns or ideas.

    News flash: they don't care what you think or see happening because your foresight challenges their short term myopic outlook.
    Their self-centered and blind to it.

    1. My impression is that they don't like to bring you up because you were such a prolific commenter - pretty much everyone knew who you were and had some sort of positive relationship with you. If you were commenting there today, you could be an uber-zman - dissenting voice with all the street cred. zman didn't really start commenting frequently until his viewpoint shifted (which is odd, but more power to him).

  12. and this EO. :-)

    Be not deceived; God is not mocked: for whatsoever a man soweth, that shall he also reap. Gallations 6:7

    this one especially for you Stane - so that you can be born again. and again, and again, and again.

  13. Our favorite billionaire Eric Sprott dumped another $1,050,000 on Monday.


    1. Wow.... a perfect case of 'Do as I say, not as I do'

      Thanks for the link!

  14. Anyone who bought retail stocks 5 years ago made a lifetime's worth of gains in just a few years.

    Anyone who shorted foreign currencies and/or went long USDX using a typical leveraged FX account made a lifetime worth of gains in 4 months.


    1. Massive Volcanic Eruptions Wreaking Havoc On The World.

      Man these headlines get better and better

    2. Mark, do you see the irony in your statement above?

      The only reason so much money has been made in the stock markets in such a short period of time is because the doom and gloomers predictions of a market crash came true.

      The doom and gloomers were right when they said the 2007 asset bubbles would pop.

    3. Correct

      And all Joe retail see's is the indexes. Not the stocks that comprise the index. How is a portfolio that is holding the same stocks that comprised the DOW in 2007 doing now ? GM anyone >? Its all about what stocks are entering and exiting the index

  15. Nobody cares about Soy. Lets talk gold

  16. The British public is apparently being prepared for something going off in Syria; over the past 24 hours BBC TV and news.bbc.co.uk have both geing running "history of he Syrian conflict" propaganda, and this morning tightly-coirdinated articles have appeared in the tabloid newspapers.

    Ukraine has gone very badly for NATO, Russia has now struck a deal to supply nuclear reactors to Iran, and the recent APEC was littlle short of a humiliation for Obama, with the TPP in tatters and Japan and China apoarently "hugging it out"

    Watch what happens this weekend while attention is distracted by the G20 meeting in Brisbane

    1. Very Astute observation regarding the Syrian news coverage Ophelia. Its worth watching intently to see if the increased coverage is a premonition. Fingers crossed nothing drastic and costly comes of it.

      However I disagree with the opinion that NATO has lost out on Ukraine, Rather I believe its the complete opposite as you need to consider the strategic big picture. In fact i consider Putin to be the best thing to happen to NATO since the USSR disappeared off the map, as it now has been completely reinvigorated and given a meaningful and valid purpose to exist as there is a single clear and common enemy in which to rally its members against.

      With this new strategic landscape not only will non NATO countries start knocking at the door to want to get 'in' to the club which raises the prestige for the organisation but also the Western Military Industrial Complex wins big time with increased defense spending across the board, especially since spending per capita has been declining in Western Europe over the last 20 years. Also noteworthy is that this is one of the very few manufacturing industries left in the West that hasn't been outsourced to China.

      Also worth a mention are the Natural Gas industries of the Northern America and Qatar which get to increase their customer base and fill their pockets by the vacuum left when the likes of Gazprom are forcefully pushed out of the european gas market.

      Sadly I see wins for everyone except the poor citizens of the Ukraine.

    2. There is a large block of land stretching from somewhere east of Warsaw to somewhere west of Tokyo; it is always going to be there, and the people who live there by and large identify more with each other as a nation state (whether Tsarist, Stalinist, Oligarchic, Kleptocratic or Democratic) rather than showing allegiance to any other nation or culture (European, Chinese, Japanese or Turkic-Arabic). This is adequately demonstrated not just by the failure of French (1812), Anglo-American (1918- 21) and German (1941) attempts to conquer it, but also by ongoing cinsensual initiatives to reinforce integration around a common core (involving e.g. Belarus, Kazakhstan and at least a substantial majority of people in Crimea, Donbass and Moldova-TransDniestr).

      The West is going to need to co-exist and do business with the people in this region and - absent a NWO "Hunger Games" scenario - antagonizing them and driving them into the arms of a resurgent China which is as much an economic counterweight as Russia is a military one is not the most obvious way to make a success if it. Rather, it smacks of desperation

      I think US Foreign Policy is at best "awkward" but that's not my problem; my problem is to successfully and profitably navigate an uncertain World, and right now everything from ISIS to Victoria Nuland to Iran to the South China Sea to the TPP to socio-economic stresses in €uroland tell me that my surplus wealth is best deployed elsewhere than in the financial assets offered by western Sovereign and Financial institutions.

      I do not believe Precious Metals are a panacea; I do believe that productive tangible assets which throw of a running yield (productive farmland, distressed real estate and core infrastructure) represent the best hedges against what I anticipate might be an exceptionally bumpy ride if Queen Hillary comes to power in 2016

    3. Nice summation OB.
      And yes, Hillary's a hawk.

    4. OB Without communism being the binding ideological glue keeping the caucasians, central/northern asians and white slavs together, the concept of having a united people of vastly different cultures under the Russian federalist banner is not as strong as many believe.

      There are grudges, prejudices and paranoia going back over a millennia between the various tribal and cultural groups and simply i cannot see the concept of 'Putism' being able to coerce and bend the will of these people when push comes to shove.

      With enough pressure there is plenty of room for secession and regionalism to grow as the whole federalist Russian entity without a strong ideological backing is still relatively new.

      Also again with external pressure ex soviet satellites will decouple from the Moscow party line completely and follow their own paths.
      You can see early signs of pressure as China is now forging a path to the central asian satellites and ultimately these ex soviet satellites will become rivals to Moscow if they have to compete in and for the same markets. ie Gas to China.


    5. UPDATE

      "Secretary of State John Kerry has apparently held talks with Saudi Arabia, the United Arab Emirates, Turkey, and Russia about potentially transferring power away from Assad"


      Assad - for better or worse - has been democratically elected: the rulers of the UAE and Saudi have not

  17. Note that the South China Morning Post is typically strongly anti-Beijing in its editorial bias: http://www.scmp.com/comment/insight-opinion/article/1638365/new-world-order-takes-shape-china-rises

    "The Asia-Pacific Economic Co-operation summit in Beijing presented China, as host, with an opportunity to assert regional economic leadership. The outcome - endorsement by all 22 Apec economies to create a Chinese-led Free Trade Area of the Asia-Pacific (FTAAP) - represented a diplomatic achievement for China in the face of American lobbying to downplay the idea
    .... The FTAAP has been described variously as a bid to take leadership away from the US, as a shift in the centre of world power"

    There is also this editorial to consider http://www.scmp.com/comment/insight-opinion/article/1638963/chinas-proposed-free-trade-pact-puts-pressure-us-conclude

  18. This week is a boring one, no big move except NZD. However,tomorrow will be a big day for all markets such commodities, forex and stocks. Long NZD highly recommended but need a pull back

  19. Trader Dan:
    Please explain to me what kind of site this is... Is this a closed community where you don't welcome new readers or contributors? If so, just say it and I'll find somewhere else to exchange ideas on the commodity markets. I've posted 3 times in the last 12 hours, but haven't seen the posts appear here.

    1. Thanks for posting. What happened to my earlier comments?

    2. kk

      I have also noticed that from time to time Comments require approval - it isnt always the case, but over the past couple of months one or two "disruptive influences" and Indian commercial spambots have been targetting the site, and I completely respect Dan taking forceful action to tune this out

      From reading the a comments you will quickly see that we certainly do not always agree either with Dan or with each other: it is pretty much a free-fire zone within commonsense bounds of civility and respect for the fact that Dan provides both this forum and his input free of charge

      Many of are guilty of straying off-topic - as in the case of M above, frequently towards discussion of Gold - and Dan appears to be broadly tolerant of this; similarly, although almost all of us acknowledge that markets are currently "inefficient" and share a common view that Metals have a role to play in any portfolio, people here (especially me) show little tolerance for blatant lies and misinformation propagated on some other websites. Dan himself, when the blood is up, can wax quite eloquent about e.g. allegations of systematic manipulation and misstatements of fact

      In my mind, therefore, this website does not host either a self-referential "community" or a bunch of like-minded individuals, but is a Broad Church which welcomes all creeds (even non-believers)

  20. A new record, after unsubscribing for 15 times, once again I receive garbage from Mauldin Economics and their lapdog Grant Williams. Pretty sad

    1. Bill Mauldin is merely the more successful version of Craig Hemke--a complete tool.

  21. This comment has been removed by the author.

  22. Ophelia, we both know that this is a first class site.

  23. Some here appear to be professional traders, which I am not, but I have an opinion on the future price of gold which I think is well-reasoned. Gold will rise when confidence in the US dollar falls, as I believe it will, and soon.
    The reason is that the US has a mountain of debt and unfunded liabilities which it cannot hope to repay in sound currency. In order to stave off the default, US government and the Fed have adopted fiscal policies designed to depress interest rates below what market forces would otherwise dictate. if market forces were allowed to prevail without intervention, the interest cost on the US debt would quickly begin the debt death spiral.
    The near-zero interest rate policy would not be possible without investors' belief in low inflation, for if they thought inflation was 4%, they wouldn't lend money at 3% or less for a negative real return. So, if rates are to remain low enough for the US (and most of the industrialized world) to afford their debts, inflation must remain benign.
    Keeping inflation extremely low in the face of a 5-year $4 trillion increase in the money supply is no small task, especially when anemic economic growth keeps the supply of goods and services from growing significantly. What must happen when the money supply increases dramatically and the GDP remains relatively static? More money supply chasing the same goods equals reduced purchasing power for the dollar, UNLESS demand for those goods is suppressed in spite of ample money. So where did all the new money go? Evidence suggests it went into the stock market, propelling prices to new highs. It also went to make whole the banks, FNMA and others who lost billions in the 2007-08 mortgage debt crisis. And, much of it is circulating in international markets or has increased the dollar reserves of many nations. But, the massive increase in the supply of dollars is there never the less, as is the US debt, so low inflation is a prerequisite for the debt's affordability.
    I don't believe the US government's inflation figures, which are manipulated to give the appearance of benign growth in the cost of living. (They've even begun to propagate the rumor of the danger of disinflation, which they see as disaster for the economy.) But evidence of higher than reported inflation exists.
    During the great 2008 pre-election healthcare debate, it was widely reported that healthcare spending makes up 17% or so of the US economy, and that the cost was rising at about 9% annually for more than a decade. The passage of Obamacare has done nothing to stem this tide, other than to redistribute some of the cost among the payers. If you multiply 17% of the economy by 9% price growth, you get 1.5% overall inflation effect from that one element alone, if all other prices remained flat. Have all other prices remained flat? Au contraire.
    Crude oil was selling at $17.50 twenty years ago, and in spite of the recent collapse, it's $77/bl today. That's a compounded 7.7% annual price increase on a commodity that makes up about 1.3% of GDP. By itself, that adds about another one-tenth of a percent to the overall 20 year inflation rate. Without even considering any other elements, we've already arrived at the currently reported inflation rate. I'm quite certain the reported inflation rate is bogus, and is being used to keep rates low, so we can afford our massive debt.
    The truth will ultimately come to light, interest rates will rise, confidence in the dollar will be lost, and gold, other precious metals, and commodities will rise in price dramatically, as priced in dollars. Hastening the loss of confidence in the dollar will be appearance of alternatives to the dollar for pricing and trading commodities on international markets, which is already underway (e.g. special drawing rights, etc.)
    Just an amateur's opinion...

    1. Totally agree but such outcomes too soon. Before those things happening, USD unwinding need to end.Look at outside USA. Now all carry trades reversed, all USD coming back home.Even Europeans,Japanese, investors of BRICs sell EUR, JPY, Rubble.. to buy USD then invest across all US markets such equity, bond, real estate....USD bottom and will go very high. In such environment, gold and oil will be crushed. Then USD hurts US economy, there will be inflation and after that gold could rebound. Be patient. Time to come time to go.

  24. P.S. One element of the US economy that has bucked the inflationary trend is labor costs. Median family income in the US has been falling slightly over several years, thus reducing the standard of living for the middle class, as prices continue to rise, albeit at rate that is reported as less than 2%.

    1. kk

      I have no beef with anything you have written above, though the markets can remain irrational for far longer than I have patience

      The one thing none of us have a crystal ball for is timing, and I sense that for several of us the prospect of a long drawn-out sideways pattern is both the worst possible outcome and also one of the more likely scenarios

    2. Yes, timing is the thing.

      I also was fine with it, until the last paragraph. Not that the guesses were bad, but with the certainty of it all. There are a lot of moving parts in this world, and being so certain of all those outcomes seems a dangerous thing. And truth? Who's truth? Truth is a slippery thing.

      But back to the timing. I can't just place my bets and wait 20 years for payday. I feel better being more nimble and opportunistic about it all. I want to be on the right side of the major trends whatever they may be. If gold gets another day in the sun, I'll be on board again soon enough to participate. But it might not get another day in the sun, at least not anytime soon. Nothing is certain, and there's the rub.

    3. I think the USD will hang in there far longer then most people previously thought.
      I see no collapse on the horizon.

      Even Turd's persistent collapse meme is under question by himself at this point...

      "As shown so far, no one has any idea of WHEN this will happen. Hell, I thought for sure we were doomed in 2010. And 2011. And 2012. I've often said, "never underestimate the power of TPTB to prolong and extend"."

      He left out 2013...and 2014 and...?
      How can someone be so wrong and yet continue with the same tired doomer outlook while touting they're sure of their current assertions?

      He thought FOR SURE they were all DOOMED.
      He basically admits he was completely wrong up to this point yet still fancies himself as a beacon of foresight and vision while being mostly wrong.

      It's those darn TPTB that are interfering in his doomer scenario that is almost 5 years old at this point.
      But hey, it's only a matter of time...even if it takes decades to manifest or not.

      The folks there apparently aren't concerned they've followed the semi-hysterical rantings of someone who gave investment advice based on a short term concern that the end was near in 2010 eventhough were headed towards 2015.

      At what point does the BTFD/ empty vaults meme become laughably meaningless?
      2020...2030...2040? Today?

    4. I've often wondered this. It's so important when you hold a belief to understand what evidence would falsify it. Over there the approach to beliefs appears to be more of a 'til death do us part' deal.

      I do wonder if he still uses the word 'imminent' all the time.

    5. "At what point does the BTFD/ empty vaults meme become laughably meaningless?
      2020...2030...2040? Today?"

      I'd say a couple 2-3 years ago.

    6. Pfft, you guys don't know what you are talking about. Stupri emrere[sic] intinge!

    7. I'm always amazed at the way the doomers so grossly underestimate the raw power of the forces they are choosing to tangle with. The idea that the powers will simply stand by and watch the modern financial system disintegrate is just the purest fantasy.

      There is no secret about why the world did not end in 2008: the people in a position to do so did not let it end. This is something the knuckle draggers seem to be completely unable to understand. Even granting that sovereign default is a possibility, because of "a debt it will never be possible to repay!", it most certainly does not follow that Mad Max will be the result. Countries go bankrupt all the time, and the world does not end. One egregious example is Argentina, which is definitely insolvent and bankrupt, and boasts one of the best performing stock markets of the year.

    8. Rico - I've seen this sentiment from a lot of 'reformed' PM bugs. Still committed to the idea of near-omnipotent TPTB, but now admitting that their actions/motives were not accurately predicted in this particular case.

      This seems dangerous to me. The real issue is that the world is far, far too complex to be explained by the motives of any particular group. To believe otherwise is to commit the all too common sin of overeager agenticity, and to be vulnerable to falling victim once again to an ideology that claims to know what it is 'really' going on and what is coming.

      We do not know. We cannot know. To whatever extent TPTB exist, they do not know either. The world is us, every one of billions of agents acting in their own rational self-interest. Some of us of course have powerful levers to pull, but even these are numerous and they will *never* pull in the same direction.

    9. With all respect I see Americans seems to focus ONLY in their domestic market whereas FED very active globally and USA exports INFLATION to the whole world that why US inflation very low. Why Americans worried about US inflation this time ? Foreseeable future yes but not now

    10. Hi Linh...good observation.
      Most of the doomer types we're referencing on here are US-centric in their outlook. Rico makes some good points.

      They're so tightly focused on their narrow view of an inevitable (yet delayed) collapse that the big picture escapes them at times.

  25. Something to keep in mind: Weekly US domestic meal usage = 580,000 tons. 4 panamaxes of meal from Argy = 264,000 tons.

    Weds' volume in Chi Wheat & Corn 2nd & 3rd highest ever .. the 16k decline in corn Open interest indicating short-covering dominated trade.

    as the usd/jpy goes up they sell gold in japan: TOCOM shorts sold 12.16 tonnes of gold Friday-Tues as the Yen has rallied from the 114.50 level.

    japan selling platinum the same way. historically platinum is $200 above gold price, so the better physical buy now is a platinum coin.

    GC has held the 50-ma on 4-hour chart ever since it regained that ma tuesday- comes in at 1158.1 the 50ma-4h now.
    if a moving ave works it works in all time frames.


  26. no investing longs in stock mkt, too overbought:

    since no pullback on weird wollie weds, looks like the boyz have sold everybody calls, so they'll yank it down next week.

    china data poor again and china GDP downgrade has commodities fairly funky.

  27. Feb #Cattle print 170!!

    Hog futures have turned higher over the last week on expectations retailers and consumers will step up buying of much lower priced pork. However, some analysts suspect the gains in hog futures could be short-lived if buyers do not step up.

    Ags bottom line: Corn has little to no reason to be rallying at current, but if funds decide they want to be long grains going into year end, good luck talking them out of it. Charts are positive, basis is still firm as are spreads. Continue monitoring these three aspects for clues to markets changing direction.

  28. Lets see what Yellen has in store for us today.

  29. Only a matter of time before an incident happens with a Russian plane going down somewhere.

    "Russia to Fly Bombers to U.S. Gulf as Ukraine Escalates"


    1. where have we seen this kind of gratuitous provocation before?



      personally, I blame Jamie Diamond for all of this

    2. I agree OB...payback is a bitch.
      I'm a wee bit concerned that some type of incident or accident could escalate things from where they are now.

      It wouldn't take much.

  30. Hi all, I been reading about the BOJ yen devaluation and some are saying that this is global deflation being exported. Could someone explain the dynamics of The BOJ Qe that would cause global deflation? Tia


    this unabridged letter from the FBI's Hoover to Martin Luther King is nothing but a watered-down version of some of the hate-filled responses I get to some of my Comments on Goldbug websites: http://www.zerohedge.com/news/2014-11-13/full-letter-written-fbi-martin-luther-king-has-been-revealed


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