Gold gets crushed...gold equities get demolished!...but CBs get physical

And yet the beat goes on...the beat being the need for QE to continue else economies collapse.

Spain records negative GDP, Japan goes QE full bore and now all the discussions centre around the need to cut back on austerity.

Central banks seeing the "inflation" set out to protect themselves
http://www.bloomberg.com/news/2013-04-24/gold-rout-for-central-banks-buying-most-since-1964-commodities.html

Jim Sinclair explains it here (lets get physical)...If he is a master, and I believe he is...something quite interesting this way comes.

http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2013/4/25_Sinclair_-_This_Is_The_Beginning_Of_The_End_For_The_Gold_Shorts.html


Meanwhile gold equities behave as though gold goes to $900 from here. They are down 50% since November 2012, The SP500 makes new highs...

Just when you think you get things...your pants get pulled down.

Mr Gundlach says re QE: "there is no exit”

 Worth a watch

http://www.cnbc.com/id/49086734

“I think it will be more likely that the Federal Reserve buys all the Treasury bonds that exist than starts selling them,” he said.

“I have no concept what the Fed exit will look like!”

 

All looks great UNTIL it doesn't

The 3 years before the GFC and the two years after. The market participants missed the extent of the carnage that was to come. Complacency? Blindsided? Blackswanned?

What is not priced in now? And by how much?

IF the "solution" to a debt bubble is "inflation" why would you be holding government bonds now? Timing though can be a killer - You can be right and very early.

I suspect few see "runaway inflation". Yet inflation has been the standard since the creation of the Federal reserve...except for some deflation in the 1930s (under the gold standard)

As Kyle Bass said recently (in his letter to investors)

The fallacy of the belief that countries that print their own currency are immune to sovereign crisis will be disproven in the coming months and years. Those that treat this belief as axiomatic will most likely be the biggest losers. A handful of investors and asset managers have recently discussed an emerging school of thought, which postulates that countries, as the sole manufacturer of their currency, can never become insolvent, and in this sense, governments are not dependent on credit markets to remain fiscally operational. It is precisely this line of thinking which will ultimately lead the sheep to slaughter.



 

 

 

Gold stocks "shooting fish in a barrel"

There is no reason to own gold stocks. Run by poor managers, who don't believe in their product, in countries all too eager to get their hands on more taxation. and yet that is a definition of a bottom...total disdain.

This chart from Morris Hubbartt...shows sentiment at rock bottom...

http://www.superforcesignals.com/images/stories/folder8/rydexpreciousmetalsmay18.jpg

May not be "shooting fish in a barrel" but the huge out performance of gold v the xau, will revert at some point...hopefully in the next 4 weeks...gold stocks can then take off!!..with a double fro here over the next 18 months!

ps - for full disclosure, I didn't see this sort of correction coming!....not with Gold at $1,600USD! Ouch

Investing Themes - As investors, from time to time we have to change our thinking about what is good as opposed to what was good.

Below is an exerpt of an article written in 2004. The timing may have been off...but when compared to say gold, commodities, even real estate...the banks have been a poor relative investment...I missed the explosion in credit would give them a "last hurrah" - it did. I suspect their glory days are over!...Utilities anyone?

The past is certain, the future obscure.

Thales (640 AD - 546 AD)

...(edit).

The banks are a case in point. You would be in the majority to think that investing in Banks has been a good investment over the last 10 years - and you would be correct! But if we look more closely at the performance of banks over the last 2 years we see things may have changed. We all know that lending has grown at tremendous rates and over the last few years, banks have continued to lend an ever increasing amount, as the growth in residential property borrowing verifies.

On this basis you would assume that all Bank share prices would be well in excess of that achieved 2 years ago. Not so. The “Big 4” banks are all under their record highs and their recent performance is nothing to get excited about – especially if you consider the high volatility they have shown. ...

Could the bull market in “debt” be coming to an end and could this lead to lower profits (or lower growth in profits) for the banks? It is possible.  (comment: years early CT! :-))

2011:
- higher capital adequacy
- higher wholesale funding
- lower debt demand/growth
- governments demanding their pound of flesh
headwinds!!

"Gold in a bubble"...Mr Sprott in the negative corner

http://www.sprott.com/Docs/MarketsataGlance/2011/02%20_11_Debunking%20the%20Gold%20Bubble%20Myth.pdf

Some very good measures in this article to put this argument into perspective. Mr Sprott also likes silver for the rest of the decade - better than gold.

US equity bear market still in tact.


Meanwhile,
Today Gold is at $1,408, Silver at $34.68
Overseas equity markets are taking a battering.
Japan down nearly 20% in 2 days!

When Private goes public - ding ding ding?

This article decribes Glencore as the Goldman Sachs of Commodities. Why list, why now? The last big Pivate equity IPO was Blackstone in 2007 - good timing! Is this also a good time to de-risk if you are long term owner of a commodity business? You can make an argument for access to capital markets etc etc but taking some money off the table probably makes sense even if they are early.
http://uk.reuters.com/article/2011/02/25/uk-glencore-idUKTRE71O1AX20110225

The firm currently operates as a privately held partnership, with staff sharing the profits according to a performance-based incentives scheme. Sources familiar with Glencore's plans say it may list 20 percent of the company, possibly split between the London Stock Exchange and Hong Kong. Such a listing could yield up to $16 billion and value the firm at as much as $60 billion.