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Gold/Mining/Energy : Big Dog's Boom Boom Room -- Ignore unavailable to you. Want to Upgrade?

To: teevee who wrote (144027)	1/22/2011 2:38:38 AM
From: JimisJim	Read Replies (1) \| Respond to of 206093

<It is foreign inflows that are taking the markets upwards.> You may be right. But where is the volume? I agree that there must be a lot of money on the sidelines, but where is it parked? Are institutions sitting on cash, too? Money has fled muni bonds. Is it going to tsy paper, too? I think more foreign inflow is going to tsy paper than equities, but can't point to any hard evidence of that. US dollar down, gold/silver down from highs (temporary?)... where is the money? All cash? That only pays off in deflationary environments. I'm not saying you're wrong -- I just can't figure out what everyone is doing with all that cash since stuffing mattresses doesn't seem likely for the big pots of corporate/institutional cash that must be out there somewhere. Jim

To: teevee who wrote (144027)	1/22/2011 12:44:55 PM
From: teevee	1 Recommendation Read Replies (1) \| Respond to of 206093

Deflation in house prices still has a grip on the US retail mindset in the US resulting in a buyers strike that has spilt over to other sectors, including equities, with the mindset being "cash is king". Commentary suggests that 2011 will be the peak in foreclosures, and by inference, lead the bottoming of house prices, and following, a change in mindset as a new generation emerges. I am taking a longer and historical perspective. Post Viet Nam war, up until about 2002, commodities collapsed and North America subsequently enjoyed 3 decades of decreasing and/or stagnant commodity prices. Additionally, deliberate over building by utilities resulted in low and stable electrical costs up until the early 90's. In the mid sixties to early ' 70's, the US economy was over 80% of global GDP-now the US economy is about 15-17%. With the Bric countries emerging from the 3rd world, there is a minimum of another decade of growing commodity consumption (oil, gas, non ferrous base metals, copper being the most important, iron ore and coal). THE problem is that there is incredible pressure on the supply side. This has also spilled over to the food as evidenced by the performance of agricultural and fertilizer stocks and the increasing number of food price riots. The 3rd world response is now to buy all the ore deposits, producing or near production mining companies, and oil and gas companies they can, ensuring supply, regardless of price to their respective economies. Security of supply is now king and cash is trash. For example, and from a perspective of international politics, national energy companies from Japan, China, India, Italy, Germany etc are striking oil and gas field development deals with Iran, where they put up 100% of development capital for 50% interest, with all production dedicated to their respective home economies at world prices-another example of chasing security of supply at any cost. This all tells me that the US dollar cannot continue as the international trade currency. The US is facing a brave new world and a set of international economic and political circumstances not encountered before. Domestically, as North America faces intrastructure expansion and rebuilding of 50 plus year old utilities, it must be done in a high commodity price environment. One of the cunumdrums is that interest rates must be low and remain low to attract financing to this kind of development investment. In additional to QE to deal with the ongoing fallout from the financial meltdown, keeping interest rates low in an inflationary environment is what the Fed must achieve and maintain to foster growth in the economy. I have been heavily over weight in oil and gas and mining and continue to be, as this is the only way to protect my purchasing power and hopefully stay ahead of inflation.