Thursday, July 29, 2010
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a barrel yesterday. \n \nF r om a technical perspective, oil prices have broken out of their trading range, which is likel y to bring in more buyers for crude. With very little in the way of overhead resistance to keep prices in check, we could well wake up one morning soon to see oil prices once again in triple digits. Even without further increases, prices have moved up far enough so as to act as a governor on economic growth. \n\nMake no mistake, despite the st r ength in stock prices during the past seven months, the econom y is still in no great shakes. Home foreclosures are mounting, prompting the Obama Administration to unveil yet another plan to aid homebuyers who can’t afford their mortgage. The Fed is doing its part
Wednesday, July 21, 2010
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Originally posted by
daisyboy at Shame
Census:
here between times it became clear that Y. Norstein not enough money to finish his new work "The Overcoat." The state in such cases, it is clear to rely useless, and people thought to chip in money. But LJ user gleza was not lazy, and copied with the very Norstein. And he answered like this: C
here between times it became clear that Y. Norstein not enough money to finish his new work "The Overcoat." The state in such cases, it is clear to rely useless, and people thought to chip in money. But LJ user gleza was not lazy, and copied with the very Norstein. And he answered like this: C
Monday, July 19, 2010
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d econom y , the U.S. economy and stock market, would suffer severe losses. The drop in commodity prices might hold back inflation for a little while. However, it would be offset by higher interest rates. So the inevitable surge in inflation would simply occur a little later. \n\nThe r e is some unsettling evidence that these prognostications ma y be coming to pass. Copper and other metals have started to accumulate in warehouses. Oil stocks, by historical standards are very high. Inventories are even building among those metals and commodities whose prices have been rising faster than U.S. Stocks.\n\nIs the r e something that could bail China out and keep the commodit y party going? According to the bears, the twMost Likely candidates or Are the U.S. and the Chinese Consumers, Neither of Whom Gives much reassurance. Despit Recent cutbacks, the U.S. consumer Remains Tapped out. Without massive releveraging, I is in no position to lead worldwide growth. Hardly Seems possible releveraging And Given today's much Conditions Tougher credit and the sharp decline in home prices. (Had Rising home prices, in years past, Been an important source of Borrowing.). Could the Chinese consume r Be a Better bet? Would it seem so. After all, Chinese Consumers account for little more Than 35 Percent of the economy and , compare to about 70 Percent in the U.S. With a per capita Consumption 1/6th at Less Than That of the U.S. consumer, the Chinese consumer has Tremendous Potential . However, There Are Seemingly strong arguments That Even under a best case scenario the Chinese consumer Will Not Be Able to take up the slack Caused by a massive bust in Capital Expenditure. R history and iCall, no nation's consumer base has grown ever more Than 10 Percent much a year. And so, the bears Argue, Even 10 Percent Growth in consumer Consumption, Combined with a decline in Capital Expenditures, is likely to translate Into Little More Than 5 or 6 percent Growth for the country as a whole. In turn, Such a low rate (for China) would likely lead to Great Unemployment, social unrest, and a slew of Potentially catastrophic problems. As ou and May guess, f r us to Remain bullish on commodities and China, We Must Have Somerategize.\n\nUnlike Ame r icans, the Chinese are ruthless long-term thinkers. Their politicians do not have to answer to a fickle electorate ever y two years. They have long-term goals and they never take their eye off the ball. Rarely do they do anything by accident. In general, they make Machiavelli seem outright tame. Perhaps most importantly, they are quick to take advantage of any weakness. Last but not least, they seek to be independent, lest they lose control of their grand destiny.\n\nIn othe r words, China's decision to create a massive infrastructure and to stockpile commodities has not been done to simpl y keep its middle class leading the good life for another year or two. It is the lower class the Chinese governmen can be seen everywhere in the media - the average Chinese family will be content to own a one room hovel composed of dried dung. However, I find that a bit far fetched.\n\nMo r e seriousl y , we must recognize that today's Chinese consumers are nothing like Americans were at any time in our history. Today, the Chinese consumer accounts for only about 35 percent of the country’s GDP. In the U.S., for as long as we have records, the consumer has never accounted for much less than 65 to 70 percent of national product. \n\nLet’s pla y a r ound with a couple of numbers. Suppose Chinese consumer spending grows at a 15 percent rate for the next decade, while capital expenditures, which have been growing at a double-digit rate, slowAlready China has a lot of Infrastructure in place already. They Could not slow construction for a little while? Hardly. China Infrastructure Needs That expansion to bring the consumer up to speed. How in the world Could you get consumer goods from place to place in a country of 1.3 billion people Enormous Without an Infrastructure? Mo r eover, Bringing the Chinese consumer is Not up to snuff and Something ou Can Do half-way. To Remain content, the Majority of China's poor must-feel Their way of life is Improving. That's a lot of poor people to satisfy. The number of people in China Who survive on less than $ 2 or $ 3 a day equals Probably the Entire Population of the U.S. The Chinese Gove nment simpl r and bring can not startader. And while energy use per capita is very low, energy use as a function of GDP is very high by world standards. In other words, China has all and more of infrastructure it needs.\n\nIf y ou a r e a Westerner and making this assumption, you are making a tragic error that poses as great a threat to the West as an all-out war. Let's look at it another way...\n\nTHE RACE FOR ALTERNATIVE ENERGY\n\nMa r k Jacobson is someone I know from conferences where we have both spoken and from having interviewed him a couple of times for The Complete Investor. One reason I have been so impressed with Mark is that he has been front and center in pointing out the advantages of using renewable fuels. In 2001 he published an article in Science, one of the world’s Leading two, peer reviewed, general science magazines. Jacobson's article Argues That wind is the cheapest wa and of Generating electricity. Several Years Later I follow up with Another article Arguing That wind electrolysis - using electricity to Separate wind hydrogen from oxygen in water - Would Be a cheap way of Providing transportation fuel from gasoline Than Oil Refining. In Other Words, Obtaining hydrogen from Renewable Energies That energy carrier and using as a way of Fueling Our transportation fleet superior Economically Would Be an alternative to gasoline. Jacobson's wo r k Appeared again in the November issue of Scientific American. I am just going to look at this article in broad strokes, saving a more Detailed anal and ver mined ever y year (about 20,000 tons) to the amount that is considered to be economically viable in the ground (about 200,000 tons), silver is scarcest metal in the world. In fact, it is economically scarcer than oil. \n\nNow let’s suppose that China unde r stands this problem – reall y understands it – and knows that all commodities are scarce and getting scarcer. They realize that they don’t have very much time to erect an alternative energy infrastructure. Indeed, even if you don’t believe peak oil is here or just around the corner, you know that oil and other fossil fuels have finite supplies. So the longer you wait before you start building an alternative energy infrastructure, the less the chance you have to complete it. \nEven if one r Power continues to place little or no demand on silver supplies, Other industrial uses will consume about 70 Percent of the annual silver production and Within ten ears. Now let's speculate. Fo r the sake of argument, suppose China Wants to replace a third of energy use by and Renewable by the end of the next decade. If We Are right about the Chinese and the Potential Shortage of critical commodities, That Could Be a very conservative estimate. Taking Our Estimates of the Costs of alternative energies, as Suggested by the Scientific American article, We Can Make Some very simple extrapolations. China has about 20 Percent of the world's Population, So They May Eventually want to consume 20 Percent of the world’s energy. If their goal is 1/3rd renewable energy by 2020, that would imply infrastructure spending of over a trillion dollars a year until that time. Furthermore, that suggests the capital spending we have seen so far in China, far from being a bubble, is just a very small down payment on what will be necessary. It is no surprise that by some estimates roughly half of the country’s $500 billion stimulus package has gone to alternative energy. \n\nBut while g r owth in capital expenditures in China will prevent an economic contraction, it will come at a tremendous cost. B y 2020, electricity demand in China could easily approach 2,000 gigawatts. And, of course electricity is only a small part of the energy pie. \n\nChina could not r eplace a third of its electricit y with solar even if it wanted to. Why? Because it would mean that by 2020 China would need almost three times as much silver as is currently being mined. Of course, there may be technologies that come along that allow less silver to be used. But given that silver (and tremendous amounts of copper) will also be needed for transmission, and given that silver may already be approaching critically short supplies, the world clearly has a problem that easily rivals a massive conventional war. The horror is that this war may not only be much more costly than other wars but ultimately a war we cannot win.\n\nOf cou r se, silver is onl y one commodity. Who is to say that we have to continue with solar? Maybe wind can replovervalue - at least in the short term. China - and Especially STI stock market - Might experience a correction in the years ahead. Nonetheless, China Any dip in commodities or Should Be Treated as A Buying Opportunity. The long-term trend is Clearly and sharply up.
Tuesday, July 13, 2010
Saturday, July 10, 2010
Dettol For Skin Infection ever rising gold
F r ida y morning, we learned that the unemployment rate has now reached 10.2%, the highest since 1983. The news confirmed that the Federal Reserve is right to keep interest rates low for an “extended period of time.” The Fed wants to get the economy growing again, and that requires business expansion that will create jobs.\n\nFo r investors like y ou and I, it also tells us that the major profits going forwards will be in gold and commodities.\n\nAt the r isk of repeating m y self, by maintaining its stimulative stance, the Federal Reserve has abandoned any inclination to control inflation. Instead, the bank and the government will try to push as much money into the economy as possible in Hopes That Consumers Will Keep Spending and Business will borrow to finance expansion. The mo r e mone and gets created, Especially in the context of a weak economy, The Weaker the U.S. dollar will get, and the more expensive commodities will become. I Know What ou and May Be thinking. His r ely, if the economy is so weak, commodity Consumption can not grow. Well, That May be true in the U.S., But The Developing World Are Economies in fine shape and Expanding rapidly. In FACT, foreign dog Investors now borrow U.S. dollars at Low Interest Rates and Foreign invest in bonds, or Currencies with many high rates of return. (It's called the "carry trade.") That Could Encourage business expansion overseas remove nicely. Asstill close to recession Rather Than On Our wa well and to recovery. Last week, for instance, oil inventory drawdowns Suggest the economy is on the mend. The data paro, pero, offer a dimmer view of Where Things Are headed. The unexpected 0.4 percent increase in the Unemployment Rate, Percent to 10.2 was bad enough. But the payroll data show companies continue to shed jobs at an Alarming Rate. anothe r ill wind for the economy and That is the pace of bank lending Continues to contract, Despit the pleas from Treasury Secretary Geithner That it's a patriotic duty. Total bank credit has Contracted at an annualized rate of 9.1 Alarming Percent During The last 13 weeks. That kind of credit destruction seen hasn't Been Since The Great Depression. If we are to have any sort of meaningful recovery we’ll need the banks to step up and do their part by lending. \n\nGold continues to cue off the dolla r , moving higher when the greenback weakens. But the metal is also starting to move independentl y of our currency as well, with investors around the world seeing value in it and bidding the metal higher. Last week we discussed the central bank of India making a huge gold purchase, buying 200 million ounces from the International Monetary Fund (IMF). Now we understand the Russians have reversed course and rather than unload a portion of their central bank gold holdings they’re looking to buy more. \n\nThat kind of action is ve r y bullish for the metal over t
Thursday, July 8, 2010
How To Naturally Make Inner Lips Smaller
Du r ing the past week the stock market has shown numerous signs that the seven-month rall y , which has carried shares to not only deeply overbought territory but to their highest valuations in years as well, is getting tired. \n \nHeading into t r ading this week, the S&P 500 was 20 percent above its 200-da y moving average. This is a rather rare occurrence. For instance, even at the height of the tech bubble in 2000 we didn’t reach such an overextended point. In fact, during the Post War period the only occasions we moved up so far, so fast was briefly in 1975, 1982 and again in 1983.\n \nStocks p r omptl y fell sharply after reaching that lofty level in 1975, by 1982 and 1983 shares traded sideways for a time, consolidating their gains. But what was striking about these past occurrences was that valuations were so much lower than they are today, with trailing P/Es in the in 10 to 13 region, as compared to an off the scale reading of more than 140 for the S&P today! \n\nEven using the S&P Indust r ials as a benchmark (thereb y excluding the troubled financials) the P/E right now is 32.5. Likewise, even using the most optimistic estimate of forward earnings stocks are quite dear. Using other benchmarks, like dividend yields or price to sales, the bull case for stocks here falls short. \n \nLooking at the stock cha r ts also sends up a couple of caution flags. The S&P 500 Depositar y Receipts (SPY) ETFble top formation in the process. Finall and , we 'r and seeing the beginnings of dramatic underperformance of small caps relative to blue chips. The little guys Had Been Leading the charge by a wide margin heading Into Fairly last week's trading. But by week's end, the Russell 2000 Index of small fry off Nearly WAS 2.5 PERCENT, Where The venerable Dow Industrials Were off by less Than a quarter of a Percentage Point. Small stocks led on the way up and they'll likely spearhead a major decline, So There Recent Showing of the small fry is cause for concern '. The U.S. dolla r , Which Had Become deepl and oversold, has staged a modest recovery in the Last Few Days. That has put pressure on commodities, Including oil andgold. This Could run a bit further, But we see it as A Buying Opportunity.
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