Gold & Precious Metals
Two days after publishing his annual letter to shareholders, Warren Buffett is on speaking on CNBC in an extremely rare appearance – Money Talks
“We were buying it on Friday, but it’s cheaper this morning and that’s good news.” Will he buy more? “Absolutely.” – Warren Buffett
Warren Buffett: Ukraine won’t stop my stock buying
Warren Buffett said he’s not at all discouraged that the stock market is under pressure due to the conflict in Ukraine.
In a live interview Monday on CNBC’s “Squawk Box,” Buffett said, “When I got up this morning, I actually looked at a stock on the computer (for) the trades in London (of a stock) that we’re buying, and it’s down and I felt good.” He would only acknowledge it is an “English” stock.
“We were buying it on Friday, but it’s cheaper this morning and that’s good news.” Will he buy more? “Absolutely.”
Buffett said that would be true even if he knew Ukraine would turn into a major conflict.
“You’re going to invest your money in something over time. The one thing you can be quite sure of is if we went into some kind of very major war, the value of money would go down. That’s happened in virtually every war I’m aware of. The last thing you’d want to do is hold money during a war. You might want to own a farm, you might want to own an apartment house, you might want to own securities. During World War II the stock market advanced.”
Buffett recalled that he bought his first stock in 1942, just after Pearl Harbor, when the macro situation didn’t look very good, either.
….whole interview HERE
Opportunities, Dangers & Risks that produce these Opportunities & Timing – This article contains Michael’s interview with Don Vialoux on Money Talks March 1st. Just below is Don’s Monday comment which is extensive, focusing on this weeks coming Economic Events, Stocks & Market Breakouts & Breakdowns and a Weekly Review of over 40 charts. One of the most thorough and valuable assembly of facts, opportunities & risks to avoid that you will find – Money Talks
U.S. equity markets have a history of moving higher during the first two weeks in March. The period is the second highest two week period in the year, second only to the Santa Claus rally period. March is the fourth strongest month in the year for the S&P 500 Index and third strongest month in the year for the TSX Composite during the past 62 years. Best performing sectors in the month during the past 22 periods are Energy, Consumer Discretionary and Financials. Weakest performing sectors are Health Care and Consumer Staples. Strongest sub-sectors are Retail and Chemicals. Weakest sub-sectors are Gold and Biotech.
Don Vialoux’s Interview with Michael Campbell March 1st 2014:
{mp3}mtmar114hourxyz{/mp3}
Selected seasonal trades continue to work (e.g. energy, oil services, gasoline, crude oil, base metals, grains, uranium, chemicals)
International events could influence equity markets. The Ukraine is a focus, but developments in Turkey, Venezuela and Argentina also are on the radar screen. China’s PMI reports are scheduled to be released over the weekend and on Monday. A wide variety of other China data is released and the People’s Bank of China is expected to make an important announcement in the middle of the week.
Economic news this week is expected to confirm that weather has slowed growth. The latest weather forecasts call for colder than average temperatures in North America for the next two weeks.
Earnings reports are not a significant influence on equity markets this week.
Short and intermediate technical indicators remain overbought.
The Bottom Line
Stick with favoured seasonal trades for now.
Much more HERE including 50 Charts & Commentary
I’ve received so much great feedback from my Feb. 17 question-and-answer column, I’ve decided to do another Q&A issue today.
The mere fact that I’m getting so many mailbag questions in and of itself tells us all that something is brewing out there, big time!
So with that in mind, let’s get started.
Q: The S&P 500 has hit new highs and so has the Nasdaq. So what’s happened to the stock selloff you warned about?
A: Yes, those two indices have hit new record highs, a long-term confirming signal for the long-term bullishness in the equity market. But neither the Dow Industrials nor the Dow Transports have hit new highs, which is a bearish development in the shorter-term.
Keep in mind that unlike important market bottoms, important market tops take time to develop. I suspect there might even be another attempt at new highs in the Industrials before the markets really top out. Cycles point firmly lower heading into the summer.
Per my warnings, you should already be out of stocks and speculators should consider the short side with futures or inverse ETFs. I repeat the important support levels to watch going forward:
For the DJIA, major support comes into play at the 14,000 to 14,373 level, followed by 13,937 and 13,400.
For the S&P 500, major monthly support is at 1524.50.
Q: Larry, you have been right as rain on your forecast for increasing geo-political conflict. Since you put that forecast out just over a year ago, we’ve seen Egypt blow up, Libya, Yemen, Turkey, Argentina, Venezuela, Thailand and, of course, the latest and most violent, the Ukraine.
A: Yes, it is truly amazing. And we are still at the very beginning of the ramp up in the war cycles. It’s going to get worse, much worse, and it will eventually hit the streets of Europe (again, but in a much more violent fashion) and in the United States.
I was recently invited to speak on the war cycles at the Army and Navy Club in Washington D.C. Not sure if I can make it, but it seems like everyone is now interested in what the war cycles are predicting.
I find the developments in the Ukraine particularly interesting. The Ukraine is a hot-bed for Russian/U.S. and European relations. On the one hand, Putin wants to rebuild the former Soviet Empire’s vast strength and reach, and on the other hand, Europe is trying to hold together the European Union and single currency, while the U.S. of course sides with Europe in the matter.
Could we be on the verge of another cold war? Absolutely. Could the Ukraine end up causing military conflict? Yes, it could.
But at its root, the problem in the Ukraine is due to two forces. One, the corrupt government, and two, the fact that the country was already split along the fault lines of language, with half the country speaking Russian and the other half, Ukraine.
Keep in mind that the war cycles rise all the way to 2020. So, yes, it’s going to get a whole lot worse, and once commodities bottom, the cycles of war will become the number one force that will drive them higher.
Q: Bitcoin is dying, just like you said it would. Is there a way to short it?
A: There is a bitcoin exchange in Hong Kong — the ICBIT derivatives market — but I would not short the currency. With what happened to Mt. Gox recently, where $300 million has gone missing, who knows what your counterparty risk is if you’re short bitcoins on a winning trade. You may never get paid.
I would not buy, sell or trade bitcoins — or any other digital currency, for that matter.
Q: Gold’s rally seems to be fading, no?
A: Yes, it seems to be. There is very tough overhead resistance scaled in from $1,360 to $1,400. A test of $1,360 remains possible but it’s becoming more and more doubtful. Gold remains in a three-year bear trend that has not yet bottomed. Ditto for silver and for mining shares as well.
Q: Grains have had a strong rally. Is their bear market over?
A:The polar freeze interrupted the trend in the grain markets, but it did NOT change it. The trend remains negative and the lows for the agricultural sector have not yet been seen.
Q: When will inflation come back?
A: Not for a while, so don’t listen to all those out there preaching hyperinflation. It’s not going to happen.
The chief reason: The governments of Europe and the United States are engaging in fiscal policies that are sending money into hiding. Raising taxes, confiscatory measures, tracking everything you do, and more. It’s all part of the rise in the cycles of war.
Q: What do you think of Facebook paying $19 billion for WhatsApp?
A: I think it is utterly insane. I think Facebook’s valuation is equally insane.
I believe Facebook is topping as I pen this column and I would not be surprised to see it lose more than half its value over the next few months.
Q: Some are predicting $50,000 gold. Do you agree?
A: Absolutely not. To get to $50,000 gold, the world would have to go back to the dark ages. That is not likely to happen unless the powers-that-be are stupid enough to try and back the world’s monetary system with gold.
Ironically, that would be exceptionally deflationary, and cause a massive global depression that would make the 1930s depression look like a walk in the park.
And there isn’t one single government on the planet that would want to back its money with gold, China included.
Gold can and will get to $5,000. Maybe even $7,500. But $50,000? No, that’s the stuff of crackpots and conspiracy theorists and nothing more.
Best wishes and stay tuned,
Larry
Posted by Larry Edelson
“[T]he geographical quantities in the calculations are more measurable and more nearly constant than the human.”
Sir Halford J. Mackinder, The Georaphical Pivot of History
There seems a lot more at play here with Russian troops now occupying the Crimea. Robert Kaplan told us a couple of years ago what to expect in his brilliant book, The Revenge of Geography…
…”It was an old story this, Europe versus Russia: a liberal sea power-as were Athens and Venice-against a reactionary land power-as was Sparta and Prussia…
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