Timing & trends

JIM ROGERS: Increases in Silver not yet parabolic

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Posted by various authors

on Thursday, 14 March 2013 07:50

buying-silver"Silver and gold and all commodities will continue to go up in an orderly way for another ten years or so, and eventually the prices will be very, very high”.

“I hope something stops it going up in the foreseeable future and we have a correction,” he added. Explaining his wish, Rogers warned that “a parabolic move and all parabolic moves end badly”. Most investors don’t notice something until there’s a good, nice bull market in place, such as with gold and silver, he said, adding after ten years of price rises in gold, people are starting to notice. “Eventually, everybody’s going to be owning gold, and then we’ll all have to sell our gold. But that’s a long way from now, he predicted. The legendary investor doesn’t consider the recent increases in precious metals as parabolic. “If silver continues to go up like it has been over the past 2 or 3 weeks, yes, then it would get to triple digits this year. And then we’ll have to worry. It’s not parabolic yet”. “There’s never one in history that hasn’t popped,” he noted.

 " Silver is The Investment of this decade " Eric Sprott

Ed Note: Some copy from a Website focused on a Silver Shortage:

"Silver is a vital commodity to our way of life. Silver is a precious metal that is being trashed as an industrial metal. As a result, it is within years of becoming the first metal to become extinct according to the U.S. Geological Survey. At some point the shortage is going to become so obvious, that people are going to rush to turn in their depreciating dollars for real silver money. That is just the monetary demand of silver, the industrial and strategic demand is another huge factor we should consider.Silver is a precious metal a monetary metal and an industrial metal, Industry alone requires over 900 million ounces each year , Silver has antibiotic antibacterial anti fungal and anti microbial properties . Silver is used in Dentistry Photography electronics Mirrors optics Medicine and in clothing , Silver is the best thermal conductor of all metals and The Best Electrical Conductor ,Silver is also an important catalyst in chemical processing.As far as getting it out of the ground, that will take energy which seems to be only getting more expensive,China is now the world’s third largest silver miner after Mexico and Peru, and the world’s largest Silver refiner,Get in on the bonanza and get your physical silver today while it is still available at a affordable price. In the next few years you may loose your ability to get in on one of the greatest investments that will protect your financial security when the dollar implodes and economic chaos appears in your area - you will be happy you did .USA geologist society have predicted that Silver will be the first element of the periodic table to run out by 2020. Physical silver outperformed the mining stocks by 4 times during the last bull market .Only about 2% of COMEX silver contracts are actually settled by physical delivery, and the rest are settled for cash or rolled over , Decades of market manipulation has made silver the most underpriced commodity in history Be thankful that you have realized this in time to capitalize.JPM and HSBC are behind the Big Silver Short.Get yourself some physical silver and take possession if you want any certainty of cashing in before the paper silver derivatives become worthless.The COMEX does not have the 103 million ounces they claim to have."
Silver, above ground, is more rare than gold! There is seven times as much gold above ground as compared to silver!

The total amount of above ground silver in the world on a per capita basis is less than one quarter of an ounce per person !
GOLD is the money of the KINGS, SILVER is the money of the GENTLEMEN, BARTER is the money of the PEASANTS, but DEBT is the money of the SLAVES!!!




Timing & trends

The 3 Charts Traders Need to Watch This Week

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Posted by Jeff Clark: Stansberry Research

on Tuesday, 12 March 2013 07:25

Of the 1,000 or so charts I looked at this past weekend, three stood out…

The first one that stood out was the S&P 500 Index plotted against its Bollinger Bands.

Bollinger Bands measure the most likely trading range for a stock or index, given the most probable level of volatility. When an index trades above its upper Bollinger Band, it's in an extremely overbought situation and is vulnerable to a reversal lower…

The red circles on the chart show the five times in the past year when the S&P 500 closed above its upper Bollinger Band. In all four previous occasions, the S&P 500 fell back down toward its lower Bollinger Band over the next month. A similar move this time around could lead to a drop of around 40-60 points in the S&P 500 – if only to relieve the extreme overbought condition.

Screen shot 2013-03-12 at 7.07.42 AM

.....2 more charts plus all commentary HERE


Timing & trends

The Contrarian - food, shelter and clothing

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Posted by Chad Wasilenkoff, CEO Fortress Paper

on Monday, 11 March 2013 15:44

WASILENKOFF"Buy when there's blood in the streets, even if the blood is your own." - Baron Rothschild

This contradicts roots of basic human and animal nature, fight or flight.

Most of us think short term, smoke when we know it’s bad for us, eat junk food when we know we shouldn’t and make short term decisions on investing when we know there are long-term trends that are undeniable.

As far as I can see there are some strong arguments for macro trends that can’t be ignored... barring any material exogenous event. Populations are growing and people need more food, shelter, energy and clothing. Items that will be more valuable will be farmland, fertilizer, cheap energy, infrastructure and fibre to cloth these growing populations.

Economies in trouble, areas underserviced by infrastructure or job creation can offer opportunities for future growth and attractive government concessions or financing.

The Saudis just announced a renewable energy roadmap with plans to install 54 GW of renewable energy by 2032 including solar, wind, waste-to-energy and geothermal. The Saudis would end up being one of the largest green energy generators in the world. This irony is mindboggling.

Right now I am focussing on the long-term trend of increased future fibre needs;

  • Increase in personal income and middle classes in China and India are driving food and fibre consumption

Food 1

  • Food demand  is projected to grow by 12% from 2010 to 2015, 24% by 2020 and is expected to reach 43% by 2030

  • Today there are over 1 billion undernourished people

  • Global consumption of meat has been growing much more rapidly than the consumption of grains and seeds. As the demand for meat rises, the demand for grain and protein feeds used to produce meat grows exponentially.

Food 2

Food 3

Food 4

  • Production of natural fibers will remain constant or sink (Cotton for example has in the last sixty years fluctuated between 29 and 36 million hectares)

  • In the short term demand may be filled or exceeded, but long term Fiber requirements are projected to increase 20% by 2015, 40% by 2020 and 80% by 2030

  • Fiber consumption per capita has grown from 8.3 kg in 2000 to almost 12kg per capita per year in 2010

  • One third of the world’s population suffers from water shortage and is expected to grow to two thirds by 2025

  • Irrigated cotton grown in hot and dry environments requires 20-35 times more water than cellulose fibers

  • Some of the biggest environmental disasters were caused by “forcing” agriculture in less than idyllic locations. The Aral Sea in Kazakhstan formerly one of the four largest lakes in the world has mostly disappeared by using the water for irrigation over less than 20 years. Lake Chad is almost gone

Chad Wasilenkoff is the CEO of Fortress Paper, a TSX listed company with more than 700 employees in Europe and North America.


Timing & trends

The world of investing as we have known it – is over

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Posted by Lance Roberts of Streettalk Live

on Monday, 11 March 2013 08:50

Portfolio Management Must Change

I am out of town this weekend for our annual Spring Break family reunion and skiing extravaganza. These events are becoming much more fun as all of the kids are getting older and more independent. There is lots of eating, drinking, laughing and great conversation to be had. Most importantly, however, is simply the time to reconnect with family.

Therefore, this week’s missive is by Bill Hester from Hussman Funds which touches on something that is very important to me. The world of investing as we have known it – is over. The historical principles of valuation metrics, allocation, portfolio weighting and risk management are no longer valid in many ways.

The rise of electronic trading, algorithms, dark pools, exchange traded funds (ETFs), and high frequency trading has irrevocably changed the landscape of investing. When combined with continued central bank interventions, which artificially inflate asset prices and suppresses yields skewing historical valuation metrics, the advantage has clearly been shifted away from individuals to those that control the money and information flows.

However, it is the illusion of success that keeps individuals in the game.  When markets rise and their portfolios increase in value – they become overly confident believing their current success is based on their skill.  However, this illusion is quickly dashed when the next cyclical bear market occurs. 

For investors, the rules of the game have clearly changed. Unfortunately, not for the better. No longer due the rules of fundamental investing apply.  Today, it is simply the understanding of price momentum, trends and money flows.

The “rise of the machines” have not only changed the way we MUST think about investing – but also about the expectations of returns from allocation models.  Bill does a great job of explaining this.

>> Read More. Download This Weeks Issue Here.


Timing & trends

Hoye: Critical Minds - Massive Corrections & Asset Bubbles

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Posted by Bob Hoye: Institutional Advisors

on Saturday, 09 March 2013 07:29


"Gold Goes Into a Death Cross" "Civilized people don't buy gold."

– Financial Times, February 20

– Charles Munger, Berkshire Hathaway, CNBC, May 4, 2012

If policymakers were civil in serving the public interest rather than ambitious, we would not seek the protection of buying gold.

"After a series of failed business ventures, Kwon Eui Moon decided to get rich in a more traditional way in South Korea by taking out a mortgage in 2002 and waiting for house prices to soar."

– Bloomberg, February 20

It did not happen.

"There are widening divisions among Federal Reserve officials about the value of its efforts to reduce unemployment."

– The New York Times, February 21

"Investors in asset-backed securities are seeking relief from record-low yields by snapping up riskier securities tied to jewelry loans and cars parked at dealership parking lots."

– Bloomberg, February 20

"Bernanke minimized concerns that easy monetary policies has spawned economically-risky asset bubbles."

– Bloomberg, February 22

One problem is that Bernanke still thinks that throwing more credit at a post-bubble credit contraction will make it go away. Another is that too many interventionist economists still think that "inflation" is raising consumer prices. Stocks and lower- grade bonds soaring to dangerous levels, accompanied by massive credit expansion, does not register as inflation.

The classic definition is "an inordinate expansion of credit". It works for inflation in both tangible and financial asset prices.

In the 1600s, Amsterdam was the world's financial and commercial capital. The term "easy" credit dates to then, and the Dutch had a practical term for its consequent disasters – "diseased credit".





The following is part of Pivotal Events that was published for our subscribers February 28, 2013.


"What we have here is an attempt to communicate,"

Of course, this is a modification of the classic line by the "Captain" (Strother Martin) in the movie Cool Hand Luke and it refers to Bernanke's testimony, this week. And his public utterances seem to be instructional, behind which have always been the intense desire that financial markets follow the textbook touts – puhlease!

In the movie, Luke (Paul Newman) responds to the Captain's abuse with "I wish you would stop being so good to me, Cap'n."

And this is what most critical minds would hope for – that central bankers would stop abusing financial markets with shopworn theories. But then, according to the academics is that their deliberate currency speculation does not force prices up. It is the public's "expectations of inflation" that forces prices up.

As reported by CNBC recently, the Great Man exclaimed, "My inflation record is the best of any Federal Reserve chairman in the post-war period."

He has been part of the interventionist bandwagon for a long time – initially as an academic and with the Fed since 2002. Our view continues that the Fed has been accommodating since it opened its doors in January 1914. Needless to say, but this has never curbed great speculative moves, nor prevented the consequent phases of forced liquidation. De-leveraging as it is now called has not been the result of Fed policy change, but due to Mother Nature and Mister Margin overwhelming the benighted desires of the central bankers who happen to be on shift when a speculation becomes excessive.

As we like to observe. The job description of central bankers has been corrupted to the point where it includes trying to get the speculative accounts "out of line". The job description of the margin clerk is quite the opposite and that is to "get the accounts in line!".

In Tuesday's testimony Bernanke boasted "We know when to stop accommodation". Sure, and bulls will always know when it is time to sell.


Base metals (GYX) tried to break above resistance at the 406 level, made it to 404 at the first of the month and dropped to support at the 380 level.

Since April a year ago, the trading range has been between 406 and 350. The recent high was accompanied by considerable enthusiasms about "inflation". And 406 was the best that could be achieved. Often March can see seasonal strength and it will be interesting to see how prices behave.

The dollar is approaching an overbought condition at 81.9.

Last week we noted that if agricultural prices (GKX) slipped below 439 it would indicate further weakness. The low on Tuesday was 433, which extends the decline that began last summer at the high of 533.

The action is moderately oversold.

Crude oil has declined from 98.24 late in January to 91.92 on Tuesday. As noted last week there is minor support at this level.

With this, the CRB has declined to support at 292. It is somewhat oversold at the daily RSI of 30.

Screen shot 2013-03-09 at 6.20.21 AM

Commodities could become stable to firm for some weeks. However, considering the desperate attempt at currency depreciation, the real issue is that they have not been soaring "to the moon".

Commodities and other hard assets as well as financial assets all played their key roles in building a great bubble. This completed in 2007 when the dynamics of a classic financial mania climaxed. The feature of five previous post-bubble contractions has been a financial crash () and economic collapse () followed by a weak business cycle () and rebounding financial markets () .

Inflation bulls may be perplexed and disappointed that the "juice" from reckless policymakers has not been driving commodities, or even gold and silver. Central bankers may propose but the markets dispose and over the past year the market decided that the big play will be in lower-grade bonds – around the world. This has been bubbled to a dangerous condition, with the problem likely to be "discovered" around mid-year.

Gold and silver rallied into September's news that the Fed and the ECB were going to aggressively buy lower-grade bonds. These continued up and the "juice" did not go into precious metals.

The first global business expansion is maturing and as it rolls over commodities will weaken. The completion of the great bubble included the CRB soaring from 182 in 2001 to 474 in June 2008. The Crash took it down to 200 in March 2009. We still think that the high of 370 in April 2011 was a cyclical peak. The subsequent low was 266 in mid 2012 and the rebound spiked up to 321 in September.

Essentially, since November the CRB has been trading between 291 and the high of 305 at the first of February. Yesterday's 292 is testing the low and with the RSI at 30 the action is moderately oversold.


A few weeks ago we noted some research studies with titles "Five Compelling Reasons to Sell Gold". One service's convictions topped this with "Twelve Reasons".

The mood is grim and it is appropriate to move from anecdote to measured sentiment. The following chart updates the one in our "Precious Metals Report" of February 15th. Quite simply, sentiment is now more, repeat more, bearish than at the depths of the 2008 Crash.

Screen shot 2013-03-09 at 6.20.09 AM

The February 15th "Special" noted that it could take a couple of weeks to clear the problems in the gold sector.

Are we there yet?

Let's review how far we have come since the halcyon days of last September and with the fateful April-May of 2011.

In the spring of 2011 the Daily RSI on the silver/gold ratio soared to 92 when we noted that that level of speculation had last occurred at the sensational blow-off in January 1980. We noted that the action was dangerous.

Going into the dismal low of May 2012 the monthly RSI registered the worst oversold in twenty years.

With the rush up to September, the Daily RSI reached 84 when we again noted dangerous conditions.

It seems that these speculative thrusts were mainly discounting the evils of central banking. Particularly so for the surge into September, which was inspired by the ECB and the FED proclamations about reckless buying of lower-grade bonds.

The old story about "inflation" and gold has not been working. Gold and silver bugs may have had their last hurrah and could be looking for a new mantra.

Mother Nature seems to be providing it with the distinctive turn to the gold sector trending opposite to the orthodox sector. This is one of the features of a post-bubble contraction and it could run for many years. There will be cyclical swings with golds underperforming during business expansions and doing well on the recessions.

A transition to the gold sector "doing well" seems to be developing.

On the nearer-term, stability in the CRB could help as could stability in the dollar.

Beyond dismal sentiment numbers, relative valuations are at lows. The HUI/Gold has dropped from 62 in 2006 to 22. This compares to the low of 23 a year ago in May. The Daily RSI is as at 24, which was also reached then.

Since the crash into 2001 gold stocks have soared relative to the general stock market. HUI/SPX climbed from 0.026 to 0.56 (no typo) last September. The low last May was 0.28 at a weekly RSI of 30. Now the low today has been 0.23, with an RSI of only 22.

Clearly, the excesses of the speculative surges to May 2011 and to September 2012 are being fully offset. This is also a massive correction of the fabulous outperformance of golds relative to the big stock market.

The ChartWorks is watching for the trading opportunity and investors could continue accumulation.

Screen shot 2013-03-09 at 6.19.59 AM

Link to January 12, 2013 ‘Bob and Phil Show’ on TalkDigitalNetwork.com:



E-MAIL bhoye.institutionaladvisors@telus.net

WEBSITE: www.institutionaladvisors.com


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