Best of the Week
Most Popular
1. Stock Markets and the History Chart of the End of the World (With Presidential Cycles) - 28th Aug 20
2.Google, Apple, Amazon, Facebook... AI Tech Stocks Buying Levels and Valuations Q3 2020 - 31st Aug 20
3.The Inflation Mega-trend is Going Hyper! - 11th Sep 20
4.Is this the End of Capitalism? - 13th Sep 20
5.What's Driving Gold, Silver and What's Next? - 3rd Sep 20
6.QE4EVER! - 9th Sep 20
7.Gold Price Trend Forecast Analysis - Part1 - 7th Sep 20
8.The Fed May “Cause” The Next Stock Market Crash - 3rd Sep 20
9.Bitcoin Price Crash - You Will be Suprised What Happens Next - 7th Sep 20
10.NVIDIA Stock Price Soars on RTX 3000 Cornering the GPU Market for next 2 years! - 3rd Sep 20
Last 7 days
Google Alphabet (GOOG) AI Deep Mind Stock Trend Analysis - 17th Apr 21
Stocks and Bonds Inflationary Slingshot - 17th Apr 21
Best Smartphone Selfie Stick Tripod Review by ATUMTEK Works with Samsung Galaxy and Iphone - 17th Apr 21
How to Give Budgie's First Bath | Easy Budgie Bathing and Water Training with Lettuce - 17th Apr 21
Record-breaking Decrease in New Passenger Vehicle Sale in Europe - 17th Apr 21
US Stocks Climb A “Wall Of Worry” To New Highs - 16th Apr 21
Gold’s Singular Role - 16th Apr 21
See what Anatomy of a Bursting Market Bubble looks like - 16th Apr 21
Many Stock Market Sectors Are Primed For Another Breakout Rally – Are You? - 16th Apr 21
What Skyrocketing US Home Prices Say About Inflation - 16th Apr 21
Still a Bullish Fever in Stocks? - 16th Apr 21
Trying to Buy Coinbase Stock on IPO Day - Institutional Investors Freeze out Retail Investors - 15th Apr 21
Stocks or Gold – Which Is in the Catbird Seat? - 15th Apr 21
Time For A Stock Market Melt-Up - 15th Apr 21
Stocks Bull Market Progression Now Shows Base Metal Strength - 15th Apr 21
AI Tech Stocks Buy Ratings, Levels and Valuations - 14th Apr 21
Easy 10% to 15% Overclock for 5600x, 5900x, 5950x Using AMD Ryzen Master Precision Boost Overdrive - 14th Apr 21
The Current Cannabis Sector Rally Is Pointing To Another Breakout - 14th Apr 21
U.S. Dollar Junk Bond Market The Easiest Money in History - 14th Apr 21
The SPY Is Nearing Resistance @ $410… What Is Next? - 14th Apr 21
The Curious Stock Market Staircase Rally - 14th Apr 21
Stocks are Heating Up - 14th Apr 21
Two Methods in Calculating For R&D Tax Credits - 14th Apr 21
Stock Market Minor Correction Due - 13th Apr 21
How to Feed Budgies Cucumbers - Best Vegetables Feeding for the First Time, Parakeet Care UK - 13th Apr 21
Biggest Inflation Threat in 40 Years Looms over Markets - 13th Apr 21
How to Get Rich with the Pareto Distribution - Tesco Example - 13th Apr 21
Litecoin and Bitcoin-Which Is Better? - 13th Apr 21
The Major Advantages Of Getting Your PhD Online - 12th Apr 21
Covid-19 Pandemic Current State for UK, US, Europe, Brazil Vaccinations vs Lockdown's Third Wave - 12th Apr 21
Why These Stock Market Indicators Should Grab Your Full Attention - 12th Apr 21
Rising Debt Means a Weaker US Dollar - 12th Apr 21
Another Gold Stocks Upleg - 12th Apr 21
AMD The ZEN Tech Stock - 12th Apr 21
Overclockers UK Build Quality - Why Glue Fan to CPU Heat sink Instead of Using Supplied Clips? - 12th Apr 21 -
What are the Key Capabilities You Should Look for in Fleet Management Software? - 12th Apr 21
What Is Bitcoin Gold? - 12th Apr 21
UK Covd-19 FREE Lateral Flow Self Testing Kits How Use for the First Time at Home - 10th Apr 21
NVIDIA Stock ARMED and Dangeorus! - 10th Apr 21
The History of Bitcoin Hard Forks - 10th Apr 21
Gold Mining Stocks: A House Built on Shaky Ground - 9th Apr 21
Stock Market On the Verge of a Pullback - 9th Apr 21
What Is Bitcoin Unlimited? - 9th Apr 21
Most Money Managers Gamble With Your Money - 9th Apr 21
Top 5 Evolving Trends For Mobile Casinos - 9th Apr 21
Top 5 AI Tech Stocks Investing 2021 Analysis - 8th Apr 21
Dow Stock Market Trend Forecast 2021 - Crash or Continuing Bull Run? - 8th Apr 21
Don’t Be Fooled by the Stock Market Rally - 8th Apr 21
Gold and Latin: Twin Pillars of Western Rejuvenation - 8th Apr 21
Stronger US Dollar Reacts To Global Market Concerns – Which ETFs Will Benefit? Part II - 8th Apr 21
You're invited: Spot the Next BIG Move in Oil, Gas, Energy ETFs - 8th Apr 21
Ladies and Gentlemen, Mr US Dollar is Back - 8th Apr 21
Stock Market New S&P 500 Highs or Metals Rising? - 8th Apr 21
Microsoft AI Azure Cloud Computing Driving Tech Giant Profits - 7th Apr 21
Amazon Tech Stock PRIMEDAY SALE- 7th Apr 21
The US has Metals Problem - Lithium, Graphite, Copper, Nickel Supplies - 7th Apr 21
Yes, the Fed Will Cover Biden’s $4 Trillion Deficit - 7th Apr 21
S&P 500 Fireworks and Gold Going Stronger - 7th Apr 21
Stock Market Perceived Vs. Actual Risks: The Key To Success - 7th Apr 21

Market Oracle FREE Newsletter

FIRST ACCESS to Nadeem Walayat’s Analysis and Trend Forecasts

Words of Wisdom - Stay the Course with Commodities

Commodities / Gold & Silver Mar 25, 2008 - 11:23 AM GMT

By: Dudley_Baker

Commodities Here's more from that subscriber of ours down in Argentina who we have dubbed 'Crazy Like a Fox' for his insights into the economy, financial markets and commodities and the way he has positioned himself in these troubled times to profit from those insights. Like his previous emails to us which we edited into articles ("Crazy Man's Rant - He's Crazy like a Fox", "A Crazy Man's Rant or Right On - You be the Judge", "Lighten up and Enjoy the Commodities Ride" and "Commodities are for 'Crafty' not 'Crazy' Investors) we have done the same with his latest which we received this past Thursday after the commodities debacle of Wednesday. If his previous 'emails' are any indication you will enjoy and prosper from what he has to say.


"Hey amigo, remain tranquilo, as they say here.  While I too don't like these past few days in terms of the markets and what has happened to commodities, nothing has changed with the fundamentals. Don't sell because there is nothing out there to improve your financial circumstances.  I remain totally committed to commodities generally and the precious metals and oil specifically.  Selected base metals, other energy and agriculture are also worth staying the course.  Whatever you do, don't allow yourself to be confused or worse, convinced, that this sector has seen its peak.

I repeat - it is most important to realize that nothing of consequence has changed with the fundamentals. The magnitude and scope of the current credit crisis remains unparalleled.  It is a mortgage, credit, liquidity, solvency issue based on much derivative slime which is leveraged up to 35 to 1 and which is highly subject to margin calls. That, in part, is what hits us in the commodities sector when the folks need to sell to meet a margin call. If that wasn't enough, the Wall Street investment banks frequently do their normal trick with short sellers and those long with trailing stops. That is just normal Wall Street tactics to slaughter the little guys and to pick up the pieces.  It is temporary and something that can't be used to alter the dominant trend.
 
What the Fed uses to buy time and to avoid an immediate meltdown is to print money at a rapidly increasing rate of about 14% annualized now as well as to reduce interest rates to below even the official rate of inflation. Last weekend with Bear Stearns they added the element of taking over the underpriced/overpriced derivative paper which is now owned by the taxpayer. If this formula continues to be applied in the future, you can count on a much further depreciated Greenback and much higher inflation and commodity prices. Given Fed chairman Bernanke's record and academic credentials, this is almost guaranteed to happen.
 
Therefore, please stay with your commodities and precious metals/oil specifically. You know that the 1980 peak price of gold was $850 which today using official, not real, inflation rates would be over $2,275.  Clearly gold under $1,000 today has a long way to go. Moreover, the gold/oil ratio is way out of whack in that either oil has to decline substantially or gold must appreciate dramatically to restore its traditional ratio/relationship. With no world currency of consequence currently backed in any way by gold today, you may be assured there is no discipline in the currency sector in terms of printing/creating more of it. When investors get scared they will reflexively revert to the only real money there is...gold.  Because there is so little of it, prices will skyrocket, especially once the little retail investor gets a sniff of it in its last parabolic price increase phase. That is when I exit.
 
This year 2008, we will have a bumpy economy which will continue that way until the elections on November 3rd. Politicians, including central bank Fed folk, will do their predictable best to have voters feel good until they cast their votes. This means those of us in the commodities sector will periodically wonder whether we are still on the correct course. No fear. All is well in that economic fundamentals have not improved. However, I predict that the period following the November 2008 elections through 2009 and 2010 will be the crisis phase. Much of the derivative sludge which we have begun to see remains hidden on the books of insurance companies, pension funds and other institutions not normally thought of as banks. When this slime emerges in stages ever so slowly during the two years ahead, there will be a rush to real value - commodities and real money...gold. 
 
I will continue to remain with my selected investments throughout the undulations of the markets for as long as I see charts which show me higher highs and higher lows. Only a breakdown on that front will cause me to alter course. We must continue to remind ourselves that the marketplace is always choppy and that there is no need to alter our carefully chosen course. To attempt selling high and buying low is a mugs game given the sophistication of the big institutions and brokerages who have all the tools and smart guys with their programmed computer trading. Stay the course and forget about trading because we can't win if we attempt to play with the big boys under their rules. If anything, you should BUY more precious metals stocks, warrants and especially bullion or bullion surrogates! This dip is custom made for investors.

Please don't second guess yourself or allow the nonsense you see on tout TV/CNBC. It is very dangerous to your financial wellbeing.
 
Chao”

These words echo my opinion that this is an incredible time to be buying the junior mining shares and their long-term warrants. We have arrived at a serious turning point and the recent pullbacks have set the stage for the coming rally.

We invite you to visit our website , view and listen to our new video tutorials , spend some time in learning center and sign up for our free Saturday email, The Warrant Report.

Dudley Pierce Baker
Guadalajara/Ajijic, México
Email: info@preciousmetalswarrants.com
Website: PreciousMetalsWarrants

Dudley Baker is the owner/editor of Precious Metals Warrants, a market data service which provides you with the details on all mining & energy companies with warrants trading on the U. S. and Canadian Exchanges. As new warrants are listed for trading we alert you via an e-mail blast. You are provided with links to the companies' websites, links to quotes and charts, tips for placing orders and much, much more. We do not make any specific recommendations in our service. We do the work for you and provide you with the knowledge, trading tips and the confidence in placing your orders.

Disclaimer/Disclosure Statement:PreciousMetalsWarrants.com is not an investment advisor and any reference to specific securities does not constitute a recommendation thereof. The opinions expressed herein are the express personal opinions of Dudley Baker. Neither the information, nor the opinions expressed should be construed as a solicitation to buy any securities mentioned in this Service. Examples given are only intended to make investors aware of the potential rewards of investing in Warrants. Investors are recommended to obtain the advice of a qualified investment advisor before entering into any transactions involving stocks or Warrants.

Dudley Pierce Baker Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules