ChartDaddy Returns

Tue, Jan 8, 2013 - 1:36pm

This is way more charts than I've ever given you in one post. I hope you're ready.

For now, the metals are both being contained below their 200-day moving averages of gold at $1667 and silver at $30.82. So, while the metals continue in a holding pattern, I thought that today would be an excellent day to give you this massive update and, perhaps, make some general assumptions about 2013.

The problem with doing this is knowing where to start and how to put these into an order that makes some sort of logical sense. Since "logical sense" eludes me at this moment, I'm just going to dump them on you, instead.

First up, here are daily charts of the euro and copper. Note how closely they tracked each other through 2012. Actually, it would probably be more accurate to say "look how closely copper tracked the euro". Also notice how both declined in mid-December but recovered in late December.

Now look how closely silver has also tracked the euro in 2012. Note that silver fell in mid-December, too, but did not see the rebound that copper did. Hmmm. Is paper silver undervalued by 10%?

Next, let's look at the bond market. I've suggested to you that QE of $85B/month is not enough to fund the 2013 deficit, which looks to be in the $1.6-1.7T range. Falling prices/rising rates would also suggest that more Fed "support" is needed in the bond market. My guess is we'll see it soon...probably when the 10-year approaches the 127-128 level and the Long Bond is threatening to break down through 140.

Let's begin the currency discussion with the POSX. Remember and never forget that the POSX is simply a reflection of The Pig versus other rapidly-devaluing fiat currencies. The fact that the POSX is flat over the past five years only means that other global fiat have declined in value by an equivalent amount.

So, in that context, look at The Pig vs the yen. Yikes! Were you aware of this? We'll definitely need to watch this relationship over the next few weeks and months.

Another very interesting currency chart is the Swissie. From mid-2010 through mid-2011, the Swiss franc rallied almost 40% as it was perceived to be the final and only "safe haven" fiat currency. Well, the Swiss didn't like that too much as they keynesian-foolishly feared that a strong franc would wreck their economy. So, they did what all centrally-planning keynesians do, they devalued by pegging the swissie to the euro in early September of 2011. (Recall, too, that this left gold as the only remaining "safe haven" currency and it was carpet-bombed a full five minutes before the announcement was made and has been firmly held in check ever since.) Well, now, the swissie (and, by extension, the euro) has begun to form a massive, bowl-shaped bottom on this weekly chart. Hmmmm....could this foretell a POSX breakdown in 2013?

Let's now switch to crude, where a trading opportunity may be developing. (Full disclosure: Like most everything else, I missed the boat quite often in crude in 2012.) Look at these charts. A pullback to 91-92 would sure seem to present a buying opportunity for a move to 98-100. From there, a consolidation would paint the chart with a massive, cup-and-handle formation and would make the chart look like 115+ by mid year.

The old adage among grain traders is "buy on Valentine's Day and sell on Mother's Day". That strategy certainly looks like a good idea in 2013, too. The drought in the U.S. Midwest has not lessened at all this winter ( so you can rightly expect some rapid gains this spring if the next growing season begins dry, too. I'll definitely be looking to dabble in beans next month, especially if price can fall a bit further, toward $13.

And this is interesting. Have you been to the market lately and thought, "Damn, that shit's expensive" when looking at steaks and burgers? If so, this next chart will show you why. It's a weekly chart of Live Cattle and note that since the advent of Quantitative Easing in 2009, beef prices have risen over 60%. Is your salary up by 60%, too? No? Hmmm...the major problem here is that soaring "protein" prices will ultimately lead to civil unrest, first in the 3rd world but, eventually, here in The West, as well. Watch this closely in 2013 as it has the potential to develop into a real problem.

And get a load of this next chart...Lumber. Apparently lumber didn't get the memo post-QE∞. Since mid-September, it's up over 40%. Permanently low rates means a housing recovery? I don't think so but clearly the lumber market does! Either this sucker rolls over soon or, eventually, a lot of other commodities are going to have to play catch up. Another chart to watch closely in the weeks and months ahead.

And, finally, here's the S&P. I guess we're all just dumb-as-a-box-0f-rocks for buying metal over the past four years when we could have been buying and holding stocks, instead. UP over 100% since the initiation of Quantitative Easing in March of 2009, more than just about any other paper "asset" and you get a dividend! Isn't it interesting that all of this money printing leads stocks higher than everything else? Gee, I wonder why that could be?

Perhaps THIS has a little something to do with it. Please take the time to read this very important and informative article from ZH. It's one of the most important things they've written in quite a while.

And buried within that article is the paragraph near-and-dear to my heart and the hearts of all of Turdville. This is the mechanism through which JPM conceals their manipulative actions from the CFTC and everyone else:

"Now the JPM spin is well-known: the CIO was merely there to "hedge" exposure, as a direct prop bet would be illegal as per the Volcker Rule, not to mention the avalanche of lawsuits and the regulatory nightmare that would ensue if it became clear that the firm was risking what amounts to deposit capital to fund massive, highly risky prop trading bets. Which, when one cuts out the noise, is precisely what JPM did of course, especially since the "hedge" trade blew up just as the market tumbled in the spring of 2012, a time when it should have otherwise hedged the balance of the firm's otherwise bullish posture. That it did not do this refutes the logic that this was a hedge, and confirms that what JPM was doing was nothing short of using an internal, heavily shielded hedge fund, which had $323 billion in collateral as investable equity, to trade away, knowing very well no regulator would dare touch JPM."

OK, that's all for today. I look forward to reading your comments.


About the Author

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old tradesman
Jan 9, 2013 - 1:36am

this isnt the meeting I was talking about but it will do!

How much are you going to pay for food if you don't grow it. WSHTF.

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Why Is George Soros Selling His Gold And Buying Farmland?

August 26, 2011 | 29 commentsby: George Maniere | about: AGQ, includes: BARN, GLD, IAU, MOO, PHYS, PSLV, SLV, UGL

Here’s a great trivia question for you.

What asset has appreciated more than any asset since the year 2000?

Answer: Farmland. 1,200%

Food prices are skyrocketing all across the globe, and there’s no end in sight. The United Nations says food inflation is currently at 30% a year, and the fast-eroding value of the dollar is causing food prices to appear even higher in contrast to a weakening currency. As the dollar drops in value due to runaway money printing at the Federal Reserve, the cost to import foods from other nations looks to double in just the next two years — and possibly every two years thereafter.

That’s probably why investors around the globe are flocking to farmland as the new growth industry. Investors are pouring into farmland in the U.S. and parts of Europe, Latin America and Africa as global food prices soar. A fund controlled by George Soros, the billionaire hedge-fund manager, owns 23.4 percent of a South American farmland venture Adecoagro.

Commodities are still the best play for the long term and legendary investor guru Jim Rogers confessed that he has been buying farmland himself.

People are still going to eat. Mother Nature has taken her wrath out on the world as of late to such an extent that farmers cannot get loans for fertilizers right now without putting their land up as collateral and with too little rain or too much rain the farmland that has been in a family for generations could be wiped away in a trick of fate. Therefore the supplies of food are going to continue to be under pressure. This leads me to conclude that agriculture is going to be one of the greatest industries in the next 20 years, 30 years.

That’s because demand for food is accelerating even as radical climate changes, a loss of fossil water supplies, and the failure of genetically engineered crops is actually reducing food yields around the globe. Ceres Partners, which invests in farmland, has produced astonishing 16% annual returns since its launch in 2008. And this is during a depressed economy when most other industries are showing losses.

Ceres partners has investment opportunities for dairy, green house vegetable operations, beef cattle and rice plantations. Ceres reported that most commodity exporting countries of South America are facing highly favorable conditions, particularly those with stronger fundamentals that have easiest access to external financing and stand to benefit the most from low global interest rates. Foreign direct investment in the economies of the region increased almost 20% during 2010 compared with the same period a year ago.

The region’s economy expanded 6% in 2010 and according to ECLAC´s latest report; South America will grow 5.1% in 2011. In terms of countries, the fastest growing this year will be Argentina (8.3%), Peru (7.1%). Uruguay (6.8%), Ecuador (6.4%), Chile (6.3%), Paraguay (5.7%) followed by Colombia (5.3%), Venezuela (4.5%) and Brazil (4%).

For its soils and weather conditions, abundance of natural resources, good infrastructure and the unique possibility of acquiring large extension of productive farmland; South America is indeed worldwide considered a top place to buy, lease and manage agricultural lands for profit. The region accounts for 59% of global exports of oil seeds, 11% of grains and 37% of meat; with Argentina, Brazil, Chile and Uruguay being among the top 10 food exporters.

So this begs the question, how do my readers invest in farmland without actually buying a farm? While it does not invest in farmland directly, the Market Vectors Agribusiness ETF (MOO) is the closest thing we might come to a farmland ETF. MOO seeks to replicate the price and yield performance of global agricultural business. It is a modified market capitalization-weighted index consisting of publicly traded companies engaged in the agriculture business that are traded on global exchanges. It provides exposure to companies worldwide that derive at least 50% of their revenue from agriculture business. Another interesting agribusiness ETF is BARN. Barn offers global exposure to the farmland industry, focusing exclusively on companies involved in agricultural products, livestock operations and the manufacturing of farming equiptment.

Before I take my leave as long as we’re talking about commodities to own I would be remiss if I didn’t mention gold and silver. I own some gold and silver and if they correct down, I hope I’m smart enough to buy more. The IMF is trying to sell its gold and if it does it will drive the price of gold down and that may well be the last opportunity to buy gold for a long time. While I spent a good portion of this essay on farmland I would still encourage my readers to buy on any pullbacks physical coins and buy ETFs like GLD, Sprott Physical Gold Trust (PHYS), iShares Gold Trust ETF (IAU), ProShares Ultra Gold ETF (UGL), SLV, Sprott Physical Silver Trust (PSLV), ProShares Ultra Silver ETF (AGQ) or you can buy mining companies (even though they have lagged the physical and the ETFs) because I believe that people are human and would rather own the metal above the ground that they can hold rather than own great wealth beneath the ground.

A reader asked me if I feared the correction in commodity prices. I told him that’s exactly when you’re supposed to buy. Corrections are not to be feared but rather expected and embraced.

Jan 9, 2013 - 12:56am

Sorry if this is image overkill...

...but I found it the other day and I think it is very interesting.

This is actually part of a larger report from Ron Paul. you can find it here:

Jan 9, 2013 - 12:44am

Goldcorp to adopt "all-in" cost measure

"For several years, investors have complained that the real cost to produce gold is far higher than the “cash costs” reported by gold companies. Now Goldcorp Inc. is doing something about it.

The Vancouver-based miner has begun to report what it calls “all-in” cash costs. Unlike traditional cash costs, which simply add up the cost of digging an ounce of gold out of the ground and selling it, Goldcorp’s all-in cost also includes sustaining capital, exploration expense, and general and administrative expenses.

The result is a much more realistic measure of what it costs to produce an ounce of gold. For 2013, Goldcorp expects by-product cash costs of US$525 to US$575 an ounce. But on an all-in basis, it anticipates costs of US$1,000 to US$1,100 an ounce...

...Goldcorp anticipates all-in costs of at least US$1,000 an ounce despite being a low-cost producer. If high-cost producers used the all-in measure, some of them would be struggling to report any sort of positive margin at the current gold price of US$1,659."

Jan 9, 2013 - 12:24am

re: funding without qe

" @grinners Submitted by ivars on January 8, 2013 - 4:06pm. They got through by borrowing." but isn't the way they borrow via selling treasuries? and if there was no QE for the '11 to '12 period how where they borrowing enough? would there have to have been a trillion in regular sales to cover the deficit?

Jan 9, 2013 - 12:21am

According To The Bretton

According To The Bretton Woods Calculation, Gold Is Worth $20,000 Per Ounce

In a recent investor letter, QB Asset Management explains how an inflationary reset button could slash the real value of the rapidly growing U.S. national debt:

“Using the U.S. as an example, the Fed would purchase Treasury’s gold at a large and specified premium to its current spot valuation. The higher the price, the more base money would be created and the more public debt would be extinguished. An eight-tenfold increase in the gold price via this mechanism would fully reserve all existing U.S. dollar-denominated bank deposits (a full deleveraging of the banking system).”

QB maintains a chart of the shadow gold price (SGP). The SGP uses the Bretton Woods calculation for determining the exchange rate linking gold to the U.S. dollar. The calculation is base money divided by U.S. official gold holdings. Here is QB’s latest chart. It includes projections of the base money supply through June 2015, assuming the Fed prints $85 billion per month. The SGP soars to $20,000 per ounce:

Read more:
old tradesman
Jan 9, 2013 - 12:18am
old tradesman
Jan 9, 2013 - 12:01am

@ puck

this guy hit the nail on the head. (but you have to admit alex is waking up alot of people out of there sleep)

Jan 8, 2013 - 11:47pm

I have been a bit disappointed in Chris Duane lately.

He seems like he has mostly been shilling for his rounds, but he's back on track with this one.

Jan 8, 2013 - 11:44pm

@Mr. Fix...

"When plunder has become a way of life for a group of people living together in society, they create for themselves in the course of time a legal system that authorizes it, and a moral code that glorifies it." ~ Frédéric Bastiat

They will steal everything we have, and by gunpoint if they first manage to get our guns away from us. I hope this means we may have some meaningful amount of time to stop them first by waking more and more of the sheeple up, but I mostly doubt it.

I see more major false flags coming that will give them even more opportunities to use force against us and steal more of our wealth and freedom. Are we supposed to believe that all the incidents that have occurred since at least 9/11 until now have just been fortuitous occurrences for those in power who mean to do us all in? Hell no...all that shit is planned well ahead of time in their little fucked up think tanks just as depicted in Savoie's well-constructed story of them plotting to confiscate our phyzz.

Funny how every time just after something happens they are all right there ready to pounce on us...the media all have the same storyline, the politicians immediately have thousands of pages of legislation that just appears out of thin air ready to deal with the "emergency", yet it's always written in a way to take away more of our freedom. i.e. Patriot Act or all this gun stealing bullshit.

Even the healthcare bill was written and refined over years and years previously just waiting to be sprung on us at the right time...then when they had the power they created a false narrative about how tragic America's healthcare system was and just like that Pelosi pulls nearly 3000 pages of shit out of her ass ready to rock! And of course it's all such an urgent emergency that nobody could have time to read the damn thing...just vote for it first and THEN find out how much freedom and liberty and money we've all lost afterwards! lol

The next financial crisis' will be unleashed on us just like in 2007/08: They'll once again say, "the whole world will collapse", UNLESS the gubment steals the 15 trillion in American savings in retirement funds to save the day, and whoosh...just like that all that wealth will be evaporated right before our eyes just like with all the trillions in the bailouts and just like how all this QE has done. IOU's for everybody.

But they do still need/want our guns (and ammo). Man, that's the key, isn't it??? Get our guns and they can start wiping us out by the millions. All they need are some more phony shootings, escalated war so they can initiate the NDAA full-force on us, martial law in Detroit or some other screwed up city, another fake terrorist attack only this time blamed on ex-veterans or TEA party people.

Who knows...screw it...I'll go down in a hailstorm of lead if they want to try and bring that shit to my front door...but I won't go down alone and their ranks will be diminished. That's what the loser minions or police and military on their side need to realize. We have millions on our side, and we'll hit them back even harder and they will die too. We'll see who has the stronger will at that point in a prolonged engagement.

Edit: massive food shortages will be planned as well. They aim to starve us out...majorly inflate prices, cut off the supply chains, etc. Stack up your food and water supplies as well as lead and lead-delivery systems folks!

Jan 8, 2013 - 11:23pm

zippy's silver chart

with chart action like this i can see why Turd was expecting a rebound in silver

stack 'em

and crack 'em

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Key Economic Events Week of 10/19

10/19 11:45 ET Goon Chlamydia
10/20 8:30 ET Housing Starts
10/20 1:00 pm ET Goon Evans
10/21 10:00 ET Goon Mester
10/21 2:00 pm ET Fed Beige Book
10/22 8:30 ET Initial Jobless Claims
10/23 9:45 ET Markit Oct flash PMIs

Key Economic Events Week of 10/12

10/13 8:30 ET CPI and Core CPI
10/14 8:30 ET PPI
10/14 9:00 ET Goon Chlamydia
10/15 8:30 ET Philly Fed
10/15 8:30 ET Empire State Idx
10/15 8:30 ET Import Price Idx
10/16 8:30 ET Retail Sales
10/16 9:15 ET Cap Ute & Ind Prod
10/16 10:00 ET Business Inv

Key Economic Events Week of 10/5

10/5 9:45 ET Markit Svc PMI
10/5 10:00 ET ISM Svc PMI
10/5 10:45 ET Goon Evans
10/6 8:30 ET Trade Deficit
10/6 10:00 ET JOLTS job openings
10/6 10:45 ET Chief Goon Powell
10/7 2:00 ET Sept FOMC minutes
10/7 3:00 ET Goon Williams
10/8 8:30 ET Initial jobless claims
10/9 10:00 ET Wholesale Inventories
10/9 12:10 ET Goon Rosengren

Key Economic Events Week of 9/28

9/29 8:30 ET Advance trade in goods
9/29 9:00 ET Case-Shiller home prices
9/29 10:00 ET Consumer Confidence
9/30 8:15 ET ADP employment report
9/30 9:45 ET Chicago PMI
10/1 8:30 ET Personal Income and Spending
10/1 8:30 ET Core Inflation
10/1 9:45 ET Markit Manu PMI
10/1 10:00 ET ISM Manu PMI
10/2 8:30 ET BLSBS
10/2 10:00 ET Factory Orders

Key Economic Events Week of 9/21

9/21 8:00 ET Goon Kaplan
9/21 10:00 ET Goon Evans
9/21 Noon ET Goon Brainard
9/21 6:00 pm ET Goon Williams & Goon Bostic
9/22 10:30 ET Chief Goon Powell on Capitol Hill
9/22 Noon ET Goon Barkin
9/22 3:00 pm ET Goon Bostic again
9/23 9:00 ET Goon Mester
9/23 9:45 ET Markit flash PMIs for September
9/23 10:00 ET Chief Goon Powell on Capitol Hill
9/23 11:00 ET Goon Evans again
9/23 Noon ET Goon Rosengren
9/24 1:00 pm ET Goon Bostic #3
9/24 2:00 pm ET Goon Quarles
9/24 10:00 ET Chief Goon Powell on Capitol Hill
9/24 Noon ET Goon Bullard
9/24 1:00 pm ET Goon Barkin again & Goon Evans #3
9/24 2:00 pm ET Goon Bostic #4
9/25 8:30 ET Durable Goods
9/25 11:00 ET Goon Evans #4
9/25 3:00 pm ET Goon Williams again

Key Economic Events Week of 9/14

9/15 8:30 ET Empire State and Import Price Idx
9/15 9:15 ET Cap Ute and Ind Prod
9/16 8:30 ET Retail Sales
9/16 10:00 ET Business Inventories
9/16 2:00 ET FOMC Fedlines
9/16 2:30 ET Powell Presser
9/17 8:30 ET Philly Fed
9/18 8:30 ET Current Acct Deficit

Key Economic Events Week of 9/7

9/9 10:00 ET JOLTS job openings
9/10 8:30 ET Initial jobless claims
9/10 8:30 ET PPI
9/10 10:00 ET Wholesale Inventories
9/11 8:30 ET CPI
9/11 9:45 ET Core CPI

Key Economic Events Week of 8/31

9/1 9:45 ET Markit Manu Index
9/1 10:00 ET ISM Manu Index
9/1 10:00 ET Construction Spending
9/2 8:15 ET ADP employment
9/2 10:00 ET Goon Williams
9/2 10:00 ET Factory Orders
9/3 8:30 ET Initial jobless claims
9/3 8:30 ET Trade Deficit
9/3 12:30 ET Goon Evans
9/4 8:30 ET BLSBS

Key Economic Events Week of 8/24

8/24 8:30 ET Chicago Fed Idx
8/25 10:00 ET Consumer Confidence
8/26 8:30 ET Durable Goods
8/27 8:30 ET Q2 GDP 2nd guess
8/27 9:10 ET Chief Goon Powell Jackson Hole
8/28 8:30 ET Pers Inc and Consumer Spend
8/28 8:30 ET Core Inflation
8/28 9:45 ET Chicago PMI

Key Economic Events Week of 8/17

8/17 8:30 ET Empire State Manu Idx
8/17 Noon ET Goon Bostic
8/18 8:30 ET Housing Starts
8/19 2:00 pm ET July FOMC minutes
8/20 8:30 ET Jobless claims
8/20 8:30 ET Philly Fed
8/20 10:00 ET LEIII
8/21 9:45 ET Markit flash PMIs July

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