Tag Archives: commodities

  • Blog
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    When Every Country Wants to Sell, Who Buys?

    The world is trapped in a quest for 'Demand'
    by Gregor Macdonald

    Tuesday, April 22, 2014, 5:14 PM

    25

    Understandably for the US, which sustained a consumption supercycle for several decades, the post-financial crisis period has kicked off a new trend: Americans want to consume less, and make more.

    Americans want to own less stuff, use less energy, and produce their own goods. In short, Americans want to sell

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  • Podcast

    Ugo Bardi: The Banquet of Consequences

    Why we've earned the coming future of resource scarcity
    by Adam Taggart

    Saturday, April 5, 2014, 6:15 PM

    23

    Everybody, soon or late, sits down to a banquet of consequences.

    ~ Robert Louis Stevenson

    "Growth is the problem; not the solution" says Ugo Bardi, Professor of Physical Chemistry at Italy's University of Florence and author of the recent book Extracted: How the Quest for Mineral Wealth is Plundering the Planet.

    In this week's podcast, Professor Bardi and Chris discuss resource depletion and its growing impact on geopolitical events and the world economy.

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  • Insider
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    Understanding the Secular Shift of Capital into Commodities

    Higher prices can happen even if the economy slows further
    by charleshughsmith

    Wednesday, July 17, 2013, 1:27 AM

    10

    Executive Summary

    • The commodity complex is already beginning to rise following oil's upside breakout
    • Natural gas is trending higher
    • Copper appears to have bottomed
    • Wheat and coffee's downtrends are ending
    • A secular rise in commodities can happen even in the face of slower economic growth and lower demand

    If you have not yet read Part I: Get Ready for Rising Commodity Prices available free to all readers, please click here to read it first.

    In Part I, we examined the conventional narratives used to explain the price of oil and found that they no longer account for oil’s breakout to a new uptrend.  I suggested that financialization and speculation could power oil much higher, despite sagging global demand for physical oil and a potentially deflationary global recession.

    This thesis has been met with widespread skepticism when I’ve aired it privately, and I think this skepticism arises from the newness of this narrative. In the past, oil has responded to supply-demand and inflation/deflation. The notion that oil could rise in a finance-induced “scarcity amidst plenty” is neither simple nor intuitive.

    If oil tracks higher, we can anticipate that the primary commodities (energy, agricultural, and construction) may well rise, even as end-user demand weakens, as oil underpins all production and transport. The 2.5% rise in producer prices over the past year suggests this is already occurring.

    The secondary reason is that lower prices eventually push marginal producers out of business, tightening supply and giving the remaining producers pricing power.

    As noted in Part I, regardless of what we see as key drivers or what we think oil “should do,” oil has broken out technically.

    Is there any evidence to support the idea that the uptrend in oil will trigger higher prices in other commodities? Let’s start with the CRB (Commodity Research Bureau) index that reflects a basket of commodities…

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  • Blog
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    Get Ready for Rising Commodity Prices

    Driven by hot money seeking a low-risk haven
    by charleshughsmith

    Wednesday, July 17, 2013, 1:27 AM

    13

    The human mind seeks a narrative explanation of events, a story that makes sense of the swirl of life’s interactions.

    The simpler the story, the easier it is to understand. Thus the simple stories are the most attractive to us.

    But conspiracies and power groups do not always provide comprehensive explanations for what we observe.

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  • Blog
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    Everything Is Being Sold

    Market crash warning
    by Chris Martenson

    Thursday, June 20, 2013, 7:55 PM

    44

    Global financial markets are now in a very perilous state, and there is a much higher than normal chance of a crash. Bernanke's recent statement revealed just how large a role speculation had played in the prices of nearly everything, and now there is a mad dash for cash taking place all over the world.

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  • Blog
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    Are the Predominant Macro Trends About to Reverse?

    Sensing a disturbance in the Force
    by Adam Taggart

    Monday, May 20, 2013, 8:29 PM

    9

    I felt a great disturbance in the Force

    — Obi-Wan Kenobi

    If you've been watching the precious metals closely what a day! Both gold and silver plummeted in overnight trading. And by "plummet," I mean the gut-wrenching vertically-straight-down kind of free-fall (silver was down nearly 10% over a matter of minutes). Then, after a few hours of partial recovery and stabilizing, the precious metals went parabolic in the up direction.

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  • Blog
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    Marking the 4-Year Reflationary Rally: How Much Better Off Are We Really?

    Growing amounts of data show a failure to thrive
    by Gregor Macdonald

    Monday, May 6, 2013, 3:31 PM

    0

    The U.S. stock market rally has recently passed its fourth anniversary after the terrifying lows of March 9, 2009.

    During that time, massive and unconventional reflationary policy from the Federal Reserve has managed to lift the S&P 500 by nearly 70%. But perhaps even more improbably, it has finally (?) built a floor under U.S. residential real estate prices.

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  • Insider
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    Protecting Your Wealth from Deflation

    And from a broken system run for the benefit of the banks
    by Chris Martenson

    Monday, April 15, 2013, 9:18 PM

    35

    Executive Summary

    • The current gold slam has *nothing* to do with the fundamentals for precious metals, which are very favorable right now
    • How bad would deflation be?
    • Evidence that deflation is arriving
    • Why our current monetary system has become so compromised by the banks
    • How to best protect your wealth from both deflation and the banks

    If you have not yet read Part I: This Gold Slam is a Massive Wealth Transfer from Our Pockets to the Banks, available free to all readers, please click here to read it first.

    About Those Wealth Transfers

    The biggest news of the recent past is the flow of gold from West to East. 

    (Source)

    With China importing 835 tonnes of gold in 2012 that we know about (and they may well be doing more under the table for official purposes) and also standing as the number one producer of gold, with ~360 tonnes of domestic production, none of which is exported, China is consuming at least 44% of total yearly world gold production.

    Connect that with India importing between 200 and 300 tons per quarter (2011 imports were 967 tonnes, and 2012 was 864 tonnes), and this represents another 33% of total world mine output.  Add in Russia buying more official gold, and you suddenly find that a commanding proportion of the newly mined gold in the world is headed East, where it used to stay largely in the West.

    To be clear, I view gold as money and therefore wealth itself.  Everything else that can be manufactured out of thin air is merely a claim on wealth.  In these terms, the West is slowly but steadily bleeding control of wealth to the East, something I thought our leaders were both aware of and focused on.

    Knowing the lower prices will only exacerbate this West-to-East flow, I therefore thought that the bullion banks and central banks would not have dared push that dynamic any further.   But apparently no, obviously I was wrong, which pains me on several levels.

    Add to this the various things going on in the world today, and I honestly thought we were in the most gold-favorable landscape of my life.

    Consider:

    • Negative real interest rates (powerfully gold- and commodity-friendly throughout history)
    • North Korea threatening nuclear and conventional war
    • Open confiscation of wealth in Europe from bank accounts
    • Japan doubling their monetary base in a brazenly desperate bid to stoke inflation by attacking Japanese trust in their own currency
    • Extremely unfavorable bond yields up and down the yield ladder
    • Continued European stress and discord with the possibility of a Eurozone disintegration

    Taken together, this level of system, sovereign, and institutional uncertainty is about as gold-friendly a situation one could concoct…

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  • Blog
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    Say Goodbye to the Purchasing Power of the Dollar

    Mr. Bernanke goes to Crazytown
    by Adam Taggart

    Monday, March 25, 2013, 3:29 AM

    108

    On a long solo car trip this past weekend, I downloaded several podcasts to listen to as the miles passed. One was a classic: The Invention of Money, originally released by NPR's Planet Money team back in January of 2011. I highly recommend listening (or re-listening) to it in full.

    The podcast is a great reminder of how any currency in a monetary system is a fabricated construct. A simpler way to explain this is to say it has value simply because we believe it does.

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  • Blog
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    Let’s Stop Fooling Ourselves: Americans Can’t Afford the Future

    Unemployment, taxes & unfunded retirements are squeezing us
    by Adam Taggart

    Tuesday, March 12, 2013, 3:24 PM

    61

    The truth is: The three adult generations in the U.S. are suffering, and their burdens are likely to increase with time. Each is experiencing a squeeze that is making it harder to create value, save capital, and pursue happiness than at any point since WWII. At that point, we were a creditor nation with an economy exploding into dominance on the world stage. Now, however, the U.S. is the largest debtor nation and our economic hegemony is increasingly at seige across a number of fronts.

    A continuation of the status quo is a decision to sleepwalk face-first into the constraints hurtling towards us.

    Instead, shouldn't we stop fooling ourselves and ask: What should we be doing differently?

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