Hello Carranza2, I think you must reconsider -
(1) As to you adding more energy in the form of oil, I hesitate, although I did recently establish a position in Shenhua Energy, the Chinese coal miner that is larger than Peabody in terms of reserve and annual mined tonnage; and
(2) Regarding you sensing a disturbance in the Force, yes, I sense a disturbance as well, although we might either be sensing the same disturbance from different directions, and / or getting disturbed by many different disturbances. Hard to say at this confusing juncture, but I am betting “and” rather than “or” .
We have been in a bull market powered by fiat currencies printing and leveraged on debt. I say so because while I was sitting in waiting for lunch, I saw a whole lot of wholesome young ladies with hem lines way high, neck lines too low, and all were exhibiting bull market behaviors of all sorts. The popular lunch (bento) boxes went for about USD 60 per serving without drinks, and the restaurant at the Ritz was jam packed.
Also, Hong Kong, a traditional exchange market of HK real estate, China manufacturing, and Greater China financial plays, is now way busy with activities we heretofore know nothing about, specifically, in a word, mining, and in two words, mining and energy.
I have experienced enough such market periods in Hong Kong to know that it absolutely cannot last, and should the broader financial market fall apart and drop 30% over the course of the next 12 elapsing months, I would not be surprised.
Should my worst fears and best hopes come true, energy will fall, because energy is a bull market play. Let me be even more explicit – in my view, just as bulk shipping rates are way distorted by financial players betting this way and that way, with and against the physical market, the same is happening in the energy markets, and all are floating on a deluge of powerful and so far costless money.
The direction of money cost is now up, and the volatility of relative value of money is rising. Soon enough some accident will happen, and … well, let us leave the likely to others’ imagination, and move on while the moving is still good.
If we must panic, then do it first.
Fear is a survival trait, and panic is rational.
Over the past week I had signed a contract that allows me exit from a fair-sized private equity deal I had greedily engaged with, and I look forward to collecting the 8 remaining checks out of a total of nine – much as Indiana Jones eye the exit and especially the light at the exit. The candles are flickering, ceiling descending, deluge thundering, and . . . something bad this way comes.
This morning I went through all of my personal and corporate accounts via cyber connect, and systematically moved all spare change away from USD, into Asian (SGD, Yen) currencies, and of course paper gold certificates, all in anticipation of the USD-proxy HKD that should be flooding into my coffers in between now and the fateful March end date. I hope the paper money construct that is USD holds together before then.
I have a few other USD-denominate opportunities that may or may not ripen, in time if ever, and should they mature into being, I will turn the proceeds into still more gold and Asian (including my home currency HKD which I believe will eventually disassociate from the systemically poisoned USD) currencies, hopefully at a faster rate than the likes of the Jihad Gulf states, Mother Russia, Middle Kingdom China, and the chocolate-making Euroland. There will be a run on the USD, and when it happens, it will be biblical.
Sure, the USD may ferociously rise, temporarily, as the hedge funds elbow each other to death as they squeeze through the closing and crushing gates leading from paper assets, but USD will certainly be far less than it is now, for sure.
Now, as energy is a bull market play, gold is a bear market act.
Imagine the planet’s private and sovereign paper wealth that must find a secure hideout from what is more than likely to be a cataclysmic and biblical financial storm, and you would actually consider shorting black gold against true gold.
Gold is the very supply-limited financial parachute in a world where the monetary system is about to blow up.
Gold is so very inexpensive, still.
I just held a phone conversation with my 34 months young toddler daughter, Erita the Coconut, who is now in London, checking out the museums and shops. She has just arrived from Italy, after two weeks play, for one more week of play. The holiday is so far reasonable, if only because I was light USD for so long.
“Erita, dada miss you”
“Dada, come to London”
“Erita, dada is working”
“No, dada; come play with Erita”
“Coconut, you play with Aroonie and Lassamie, then come to dada”
“Ok”
I do not want to have to answer my daughter’s question one fateful day, “daddy, why did you not buy gold?”.
I believe we are entering a period when cash is king, and gold is emperor.
Gold has no equal. That is a belief of mine, and the belief will be tested, and be validated, says I.
Chugs, J |
