It May Take a Dragon to Breathe Fire Into Markets

At the Cambridge House’s Vancouver Resource Investment Conference this week, I am part of a special debate on whether China will boom or bust with bestselling author Gordon G. Chang. The title of Chang’s book, The Coming Collapse of China, states his position quite clearly and I look forward to the intellectual challenge of convincing him otherwise.

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Markets Seen and Unseen

Reporting from Buenos Aires, Argentina…

“…it was the age of wisdom, it was the age of foolishness…”
    ~ C. Dickens, 1859.

When we hear people talk about the “tale of two economies,” we expect to find them referring to the Wall Street vs. Main Street match up. An important one, to be sure. Or maybe they’re comparing the economies of two different countries or regions; one healthy, the other moribund. The “developed vs. developing” comparison, for example, is a common one. Or maybe it’s private vs. public, that raging debate between the forces of capitalistic enterprise and socialistic control. The main problem with the latter being, as history has shown, that you eventually run out of the former.

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System D is for Free

Joel Bowman, reporting from Buenos Aires, Argentina…

It’s all happening today, Fellow Reckoner. Gold, stocks, oil…all have rallied to important highs. That’s what the papers say anyway, so it must be true.

Gold has “reclaimed the rally,” reported one outfit. The Midas Metal was trading for around $1,634 an ounce last we checked, up $24 in as many hours.

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System D is for Free

Joel Bowman, reporting from Buenos Aires, Argentina…

It’s all happening today, Fellow Reckoner. Gold, stocks, oil…all have rallied to important highs. That’s what the papers say anyway, so it must be true.

Gold has “reclaimed the rally,” reported one outfit. The Midas Metal was trading for around $1,634 an ounce last we checked, up $24 in as many hours.

[Read more...]

Crude Oil: The Best Bet for 2012

Crude oil may not only be the best commodity play for 2012, it could prove to be the best commodity play of the next three to four years, soundly beating both gold and silver. I’m not talking about oil producers, refiners or drillers…or any individual stock — but the real thing: crude oil itself.

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Euro Rallies on Positive IFO Index and a Successful Spanish Debt Auction

The euro (EUR) sure enjoyed a better night rebounding from close to its annual low versus the US dollar. A surprisingly upbeat IFO business climate index combined with a pledge of more funds for the bailout and a positive Spanish auction to send the common currency higher. The IFO Institute’s index, based on a survey of 7,000 German business executives, rose to a three-month high of 107.2 from 106.6 in November. Economists had expected the index to drop to 106. November’s number had surprised on the upside also, so this month’s value certainly seems to confirm a trend that indicates Germany’s economy may be able to push through the credit crisis to remain on a solid growth path.

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$100 – The New Floor for Crude Oil

In the midst of the news about the EU crisis, it’s worth pointing out that oil prices have quietly crept back over $100 a barrel. West Texas Intermediate is $102 as I write. Brent crude, which many argue is the more important figure, is $111. This is remarkable given how weak the global economic recovery has been.

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SNB Threatens to Weaken Franc Again

Grunting and pointing… That’s about what the trading in currencies has been since yesterday morning… A tight trading range has formed around the euro (EUR), and that keeps everyone else corralled too. The euro tried a couple of times yesterday to mount a rally, but each time was knocked back down. The markets are in no mood to allow the euro to post big gains, when there is this Berlusconi budget vote hanging over the euro like the Sword of Damocles. Yesterday, I told you late in the letter, that there were rumors that Berlusconi (you know the Prime Minister of Italy) would step down… Well, rumor has it that he has agreed to step down, in exchange for support of his budget…

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The Ghost of Smoot-Hawley?

These past 9 years, with debt plaguing the performance of the dollar, have been quite interesting; watching the debt explode to the upside, and the dollar implode to the downside… But now, the Eurozone has taken on their own debt problems, and so it is that investors look for a safe haven… The US has debt coming out its ears, has had its credit rating downgraded, and has just scratched the surface of debt, with the unfunded liabilities staring us right in the face… The Eurozone peripheral countries, otherwise known as the PIIGS or GIIPS, whichever you prefer… for me, I just call them the debt ridden countries of the Eurozone! Well, the Eurozone no longer offers a respite from the dollar and all the US debt…

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