Chew On This One
Maybe it's the massive blizzard about to hit New York and Boston? I don't know but the markets are so boring today that I thought I'd disappear down the rabbit hole for a moment or two.
Part of the reason that things are so quiet today is the general lack of news. The only noteworthy item was the release of the December U.S. trade deficit. It shrunk. This, of course, caused Reuters to cheer, happily proclaiming that perhaps Q4 GDP won't be as awful as first projected. (http://www.reuters.com/article/2013/02/08/us-usa-economy-trade-idUSBRE9170J520130208) Of course, this is silly. The U.S. is a consumption-based economy and when imports fall, we are consuming less. And, as usual, ZH provides a better analysis ( http://www.zerohedge.com/news/2013-02-08/us-trade-deficit-drops-lowest-january-2010-crude-imports-plunge-1997-levels).
The gold market yawned at the "news" and that, usually, is that. However, I soon thereafter received an email from a rather enlightened individual who noticed, contained within the Reuters story, was this little nugget: "Friday's data showed U.S. exports surged by $8.6 billion during the month, boosted by sales of industrial supplies, including a $1.2 billion increase of non-monetary gold."
Hmmmm. Well that's interesting, now isn't it? Why on earth would the U.S. see a $1.2B increase in "non-monetary gold" exports? (The concept that any type of gold is "non-monetary", notwithstanding.) The alert emailer further suggested that:
"When the deficit shrinks, it is a sign that the US creditors are not accepting the USD as a means for conducting trade.
The US has to pay with something else (oil/gold) and curtail imports.
So what happened in Dec?
Imports – largely driven by autos (likely to be Germans) and oil dropped in total by 2.7%
Exports – largely driven by oil exports and gold increased by 2.1%
Someone is asking for payment in oil and gold and not USD is the message.
One can take a guess but my gut tells me it is either China or one of the non-friendly oil producers asking for gold."
OK, now we're onto something. So....is it possible that this is finally beginning to happen? We know that plenty of other nations are transacting gold-for-oil deals. Just google "Turkey Iran gold" and see what you get. Anyway, the timing of this fits well. QE∞ was announced back in September and this is data for the very next quarter, Q4. Again...hmmm.
Now, here's one that, admittedly, is a bit of a reach. Reading these emails this morning reminded me of an email I received earlier this week. An alert Turdite caught this on the facebook feed of one of his relatives who is a flight attendant. This particular person was simply perturbed by the delay in her flight schedule and posted this seemingly innocuous bit of information:
Yesterday was a very long day that ended in the disappointment of not getting on my flight to Dubai due to weight restrictions! Yeah, isn't that a real kicker!! I was #10 on the standby list and they kept calling us one by one and then~bam! Stopped after #9! Even with quite a few empty seats left on the plane, the cargo in the belly was so heavy (and valuable monetarily) that they couldn't chance adding more standby passengers."
A flight to Dubai with cargo that is "so heavy and valuable monetarily"? Hmmmm. Well that's interesting, too.
Look, I know it's all anecdotal and, once you disappear down the rabbit hole, you can easily hang yourself by the rope you use connecting all of the dots. But I thought this was interesting enough to share with you. Lots of possible implications to ponder. Knock yourself out and have a great day.