Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum -- Ignore unavailable to you. Want to Upgrade?

To: TobagoJack who wrote (36480)	7/2/2008 6:39:33 PM
From: THE ANT	Read Replies (3) \| Respond to of 218854

Commodities in Chinese currency will shortly have only one way to go---down

To: TobagoJack who wrote (36480)	7/2/2008 10:12:32 PM
From: gregor_us	Read Replies (3) \| Respond to of 218854

Hey TJ: We're already getting a taste-test of what happens when specs are encouraged to exit the market. And I'll use the example of oil. Simply put: the stuff goes higher. (more commentary on analysis of specs and futures here: Message 24651483 ) We've been seeing specs exit the crude oil market for some months now. Of course, you will only hear the people are watch the data make that remark. There was a very good analyst out of Singapore the other night, David Bensimon, making this observation. Essentially, Open Interest has crashed, and the oil market has become a market of commercials. The hapless specs trying to short the market are driven quickly from the scene. Behind all this lies a tectonic shift, whereby global commercial users of oil have been migrating away somewhat from the cargo market, and trying to secure supply in the futures market. That change has occurred essentially because the bidding for Light Sweet grades and also diesel is fierce. For some time I have suggested people watch the GASOIL contract on ICE to see confirmation of the moves in Brent and WTIC. That GASOIL contract is the ticker-tape of real world demand for Diesel. The public is convinced that this all came out of nowhere, like a scirroco--a desert wind. Actually, it has taken years to reach this point. The diminishment of spare capacity, and the heavy demand that always lies below the current price level. Add in the the years it took for the producers to figure it out, and presto, oil at 140.00 The Congress can do nothing but make themselves look ridiculous. The smart specs are the ones who aggregate all available information. If Congress bans them, then we will have shortages-because the world will lose the liquid price signal. Then oil will move more regularly in 5-8 dollar increments. And then Congress will be even more panicked. I think it will be very hard for anyone to hoard going forward, because I now suspect the hoarding instinct is setting in. You see it in grains stockpiles, and the Hotelling Rule (a form of hoarding but one that is more rational) is probably in effect now among global oil producers. We've already had myriad commentary from Saudi, Russia, and other OPEC countries where for the first time they are saying "we should leave some of this resource to the next generation." So the cat is out of the bag now, on oil. The "speculation myth" which I called as something that would die quickly, is now dying. But Congress can try. I think they'll get oil above 150 for their efforts. Gold is sure to follow. And of course, the higher-beta Silver will launch higher, probably. Natural Gas, however, is my preferred inflation hedge. I think it continues to move slowly towards a new, global price. One question I have is at what point do Chinese equities become a renewed play on a breaking of the Yuan-USD link, with a huge reval of the CNY. Gregor