Timing & trends
With gold currently trading 34% below its September 6, 2011 peak, today’s chart provides some long-term perspective on this millennium’s gold market. As today’s chart illustrates, the pace of bull market in gold that began back in 2001 increased over time. In late 2012, however, the parabolic trend in gold prices came to an end and a new downtrend began in earnest. While the price of gold has recently ticked upward, in the end, this latest move has resulted in gold coming right back to resistance of its one-year downtrend.
Notes:
Does the gold rally resume? The answer may surprise you. Find out right now with the exclusive & Barron’s recommended charts of Chart of the Day Plus.
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The Canadian Dollar futures fell to new lows (90.25) this morning on statements made by the Bank of Canada.
“Inflation in Canada has moved further below the 2 per cent target, owing largely to significant excess supply in the economy and heightened competition in the retail sector. The path for inflation is now expected to be lower than previously anticipated for most of the projection period. The Bank expects inflation to return to the 2 per cent target in about two years, as the effects of retail competition dissipate and excess capacity is absorbed.”
The softness in the inflation outlook is what I believe spooked the market more than they had been expecting and brought the swift sell off in the Canadian Dollar.
Drew Zimmerman
Investment & Commodities/Futures Advisor
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It was the most surprising bull market of 2013…
One that almost nobody is talking about… And it has huge implications for natural-resource investors in 2014…
I’m talking about the bull market in Chinese commodity imports.
I know this statement might sound odd. So let me explain…
Most folks know that over the past 20 years, China has become a major player in the commodity sector. It’s the world’s largest importer of vital raw materials, like iron ore and copper. China’s emergence as a major economic power helped drive a big bull market in commodities from 2002 to 2008.
But over the past few years, calling for a “China crash” has become a popular activity for Wall Street analysts, fund managers, and CNBC talking heads. It has become so popular that if you watch financial television for a week, you’d think China is imploding.
Because China is such a major driver of commodity demand, it’s vital for us to monitor what’s going on there. As I mentioned, China is the largest importer of iron ore and copper. And as of December 2012, it surpassed the U.S. as the world’s largest oil importer. Despite what many people believe, China’s economy is still growing… and its demand for imported resources is at an all-time high.
Over the next few days, we’ll take a close look at the facts… and how they can help you make terrific investments over the coming years…
China has the world’s largest population, and its economy is growing more than 5% per year. This means a large and growing demand for cars.
In 2002, there were 3.3 million cars sold in China. It took steel, copper, and other raw materials to build each one. It took crude oil and its derivatives to keep them running.
In 2012, there were 20 million cars sold in China. That’s a huge 500% increase in just 10 years. And when you compare China’s car market with America’s, you can see there’s a tremendous amount of growth ahead…
In 2012, there was about one car for every 85 people in China. In America, the ratio was 0.9 cars per person. In other words, we have nearly as many cars as people. This simple comparison shows how China has lots of catching up to do with developed nations like the U.S.
Contrary to what many people believe, China’s economy isn’t falling apart. For proof, we can look at China’s car imports. As you can see in the chart below, they just hit an all-time high. The chart shows monthly imports of cars and car chassis (which become cars).
All of those cars need oil and gasoline. China’s demand for oil happened in spectacular fashion. As recently as 1985, China exported about 142 million barrels of oil. However, in 1993 the country’s demand for oil used up all its domestic production.
By 2002, the country imported 496 million barrels of oil. As you can see in the chart below, they hit a record high of 1.9 billion barrels in 2013. And daily imports continue to break records.
Again, China didn’t begin to import oil until the 1990s. In less than 20 years, it went from zero to the world’s largest importer. And most of that demand came from its newfound love of cars.
China’s love of cars provides a growing demand for oil… and will likely place a floor under the price of oil around $80/barrel for years. This is good news for major oil companies like ExxonMobil, Chevron, and Eni (a huge Italian oil firm). An investment with these companies gets a big boost from the numbers I’ve just shown you.
China may not be growing at 10% a year these days… but it’s still growing enough to propel commodity imports to all-time highs. Tomorrow, I’ll share why this is such big news for two of my favorite precious metals right now…
Good investing,
Matt Badiali
Further Reading:
To some, they think the NSA is perfectly fine for they respond – I have nothing to hide. However, what if it were not just emails and SMS they intercept, but your thought? Would you still feel the same way? What these people fail to grasp is you cannot hide anything – even your thoughts!
For those who do not believe in psychic abilities, it might be time to open your mind to deeper dimensions. Governments have used psychics to read minds and tell the future. In ancient times they climb the mountains in Greece and went to the oracle at Delphi for her to predict the fate of kings and events. King Croesus of Lydia where coinage first appeared, proclaimed the oracle at Delphi to be the most accurate, since she correctly reported that the king was making a lamb-and-tortoise stew. He then consulted Delphi before attacking Persia, and according to the historian Herodotus, he was advised, “If you cross the river, a great empire will be destroyed.” Croesus heard what he wanted to hear and believed the response was to his favor. Croesus crossed the river and attacked Cyrus the Great, but it was his own empire that ultimately was destroyed by the Persians. Obviously, context is everything.
We all have some sort of psychic ability. Some clearly have more than others. How many times have you thought of someone and suddenly they call? The film Minority Report is worth watching for it is a SciFi film based upon psychics who can predict violent crime and then the thought police arrest the person before they commit the act. This has long been a wish that what-if we could have stopped Hitler before he gained power?
Jules Vern’s Twenty Thousand Leagues Under the Sea was a SciFi novel at its time first published in 1870. It was based on the theory that it would be possible to create a ship that sailed under the sea. Wild idea to most back then. However, a submarine is no big deal today. The film Minority Report also has a scene where stores can scan your eyes and know who you are and greet you.
The Global Market Watch is analyzing the entire world and building a knowledge base extracted from patterns it observes in the world capital flow movements. It searches to patterns and then determines what will follow next. It may sound off the wall to those unfamiliar with programming, but it is now possible to track you and develop patterns. It is possible to create systems that will anticipate you leave your desk every day about 10AM to go get a coffee and thus the coffee maker will already respond to that pattern and the elevator will arrive at the floor knowing you just left your desk and anticipate your next move is to get the coffee.
Already, there is technology that will allow you to control devices with your mind known as mind-reading EEG neuro sensors. Neurosky.com is working to capture those brain wave patterns that can be harness into using programs. This is moving beyond voice recognition that you can have on you phone, but the next frontier is mind control.
It is now a piece of cake to link people through Facebook creating circles of friends and then predict your likes and dislikes from your associations. But you can log in to your account somewhere from a laptop, a desktop at work of home, and from your smart phone. It is easy to then see all the devices you have.
You have no idea where this is all going. The NSA is just the beginning. The revelations so far have stunned the world. They can fly above and zero in on anyone. Spy satellites can zoom in and see you working in the backyard. You can wear a mask and face recognition can still accurate identify you. If anyone in your family is arrested for anything, a DNA sample is a map to your entire family. Yes, they can even read patterns in your mind. There is no putting this back in the bottle.
Read more on Martin’s contantly updated blog HERE
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