Saturday, January 30, 2010

Chevron (NYSE:CVX) Down on Refining Losses

Chevron Quarterly Report

An increase in revenue for Chevron (NYSE:CVX) wasn't enough to make up for large losses in it refining business as the energy and oil company wasn't able to overcome the $613 loss, even though revenue surged by 10.3 percent in the quarter to end at $47.6 billion.

Consequently, earnings for the company plunged to $3.1 billion, a huge plunge from the $4.9 billion it earned in the same quarter in 2008.

Falling natural gas and crude oil prices were the reasons given for the poor performance.

Analysts had been looking for earnings to come in at $1.7 a share on revenue of $40.4 billion.

"In this challenging environment, Chevron's successes in operational reliability and cost management made valuable contributions to our bottom line," said Chevron Chairman and CEO John Watson. "Our financial strength enabled continued investment in our excellent portfolio of capital and exploratory projects and an increase in the annual dividend on our common shares for the 22nd consecutive year."

Annual earnings for Chevron reached $10.5 billion, or $5.24 a share, in contrast to $23.9 billion, or $11.67 a share they reached in 2008.

Chevron Quarterly Report

Friday, January 29, 2010

Goldcorp's (TSX:G)(NYSE:GG) Bearish Price Moves

Goldcorp (TSX:G)(NYSE:GG)

Along with some of the other major gold companies, Goldcorp (NYSE:GG) has been participating in the downward plunge in gold prices; not an unexpected event.

Gold futures were the main instigator in pulling shares in Goldcorp down on Thursday, as they moved in response to other market forces as well.

George Soros announced yesterday that he believed gold was in the ultimate bubble position, but I don't think that's the case, as it seems Soros is only basing his assertion on gold rising in price over the last couple of years rather than who was buying it.

Most average investors have no stake in gold in any form, and so until we those investors migrate in a big way toward gold, it's doubtful we'll be in a gold bubble until that time.

We'll obviously have corrections in gold prices based on the endless announcements by Obama to rein in the financial institutions, but that's still largely rhetoric and trial balloons, as there isn't anything detailed yet other than throwing out possible scenarios.

Inflation and safety concerns continue to drive gold prices up, and over the long haul there's nothing in the economic picture which would change that reality any time soon.

Goldcorp (TSX:G)(NYSE:GG)

UBS (UBSN.VX) Adds Gold (SPGH.P) ETN to Commodity Product Offerings


The investment bank unit of UBS AG (UBSN.VX), UBS Investment Bank, announced on Thursday it has added a new exchange traded note (ETN) to its offerings of commodity products, and is trading under the ticker symbol of SPGH (SPGH.P) on the New York Stock Exchange.

The new ETN tracks the performance of the S&P 500 Gold Hedged index.

Christopher Yeagley, the U.S. chief of equity structured products of UBS, said the ETN is offered in response to their clients who desire more exposure to the U.S. equity market while also protecting themselves against the decline in the value of the U.S. dollar as well as inflation.

ETNs, which are developed to track another market index, are senior, unsecured, unsubordinated debt securities, which are charged a fee to participate in.

UBS has a total of 11 ETNs which track a variety of commodities for its investors.


George Soros: Gold "Ultimate Bubble"

Gold "Ultimate Bubble"

Leftist, liberal billionaire George Soros said recently at the World Economic Forum in Davos, Switzerland that the "ultimate asset bubble is gold."

Soros was quoted in The Telegraph as saying, "When interest rates are low we have conditions for asset bubbles to develop, and they are developing at the moment."

While Soros may know currencies, I'm not sure that he's right on this assertion, as the pieces in place at this time lean toward gold maintaining and increasing in price going forward.

Contrary to government assertions and mainstream media parroting those assertions, we aren't in an economic recovery, and probably won't be for several more years; and even then it will probably be a weak recovery.

Although there is a weak and quiet attempt by the Federal Reserve to unwind its debt, that isn't going to happen any time soon, and the central banks around the world are continuing to print money out at unprecedented levels.

And even if there are the rumblings of a real and sustainable recovery, there is sure to be strong inflationary pressures as consequences of printing out all that money as well as growing demand for commodities from emerging economies.

While I have no doubt there will be continuing corrections in gold, and we're probably in the midst of one at the time of this writing, even so, the price of gold will continue to go up for some time to come, and I don't see how the Federal Reserve can get out of the trap it has created for itself, which would have a possible negative impact on gold prices.

The problem with Soros is he thinks just because the price of gold has been sustained for some time and has grown significantly that it reflects a bubble scenario.

As others like Jim Rogers have pointed out though, the reason gold isn't in a bubble is the regular investor on the street hasn't even started investing in it yet, and once that happens, the possibility of a real gold bubble could occur. Until that is, it's not speculation and the same types of forces that caused the real estate bubble which are driving gold prices.

Because of that I believe Soros is completely wrong here and is reading the market incorrectly. Gold price correction? Yes. Gold bubble? Nowhere near it yet.

Gold "Ultimate Bubble"

Thursday, January 28, 2010

Commodities VaR: Goldman Sachs (NYSE:GS), Morgan Stanley (NYSE:MS) and JPMorgan Chase (NYSE:JPM) Down 25 Percent from 2008 Highs

Commodity VaR Major Financial Institutions

In the midst of all the Obama proposal for restrictions on proprietary trading for commodities and other securities, it has been found via the data that financial institutions like Goldman Sachs (NYSE:GS), Morgan Stanley (NYSE:MS) and JPMorgan Chase (NYSE:JPM) have decreased their Value-at-Risk, or VaR, for commodities, by a minimum of 25 percent since their highs during the ongoing commodity surge in 2008.

That data is in reference to numbers crunched in the fourth quarter of 2009.

What VaR deals with is the confidence or willingness for a financial institution to trade in a particular market sector.

Even so, it's interesting that while the risk appetite seems to have declined some in the fourth quarter, commodities and currency investments helped some of the major financial institutions in America perform much better than they would have without those investments.

Volatile times right now will probably keep commodities in check for the short term, but almost every announcement one way or the other seems to push commodity prices in one direction or the other as uncertainty about true economic recovery, interest rates and what China will invest in commodities in 2010 has the commodity market skittish and seemingly all over the place.

Commodity VaR Major Financial Institutions

Barry Callebaut (SWF:BARN): 15,000 Ton Cocoa Bean Loss

Cocoa Bean Fire Destroys 15,000 Tons of Beans

A fire in the Ivory Coast city of Abidjan resulted in close to 15,000 tons of cocoa beans being destroyed, which were stored in a warehouse owned by Swiss chocolate production company Barry Callebaut (SWF:BARN).

The warehouse was owned by a local subsidiary of Barry Callebaut.

An unnamed official from the company said that there was always between 10,000 to 15,000 tons of beans and/or cocoa products stored in the warehouse.

For the 2008, 2009 cocoa season, the country exported close to 300,000 tons of semi-finished products and have been working hard at increasing its grinding capacity to significantly increase that amount.

The Ivory Coast is the leading producer of cocoa in the world.

Cocoa Bean Fire Destroys 15,000 Tons of Beans

Copper Drops on Lower Home Sales

Copper Prices Plunge

A drop in new home sales in the U.S. triggers a strong decline in copper prices as expectations had been construction would continue to drive copper demand, which obviously isn't the case, as the economy continues to contradict the official assertion that the recession is over and a recovery is underway.

January copper futures plunged 3.4 percent, the largest fall in about four months, ending the session at $3.2145 a pound Comex division of the New York Mercantile Exchange. Also falling even a worse percentage was Benchmark March copper, dropping 3.5 percent to $3.2225.

Copper futures for the March contract continued to get hammered in electronic trading after-hours, as prices plummeted even further to $3.1740.

Other concerns impacting copper prices falling was fears interest rates will be raised, which would help strengthen the U.S. dollar. China's recent inclination to tighten things up has also weighed on the copper market, with fears they may start raising interest rates as well to cool off their economy. That would hamper the expected demand for 2010 for copper use.

December sales for single-family homes fell of the cliff, plunging by 7.6 percent from November. Taking into consideration analysts were looking for an increase of 2.8 percent any you have about a 10 percent disconnect between estimates and reality for new home sales.

Another factor is while these realities are being faced and moving the price of copper, warehouse stocks continue to rise as demand lowers, putting even more pressure on the price of copper holding up.

Copper Prices Fall

Barrick (NYSE:ABX) Chairman: Gold Prices Will Continue to Go Up

Barrick Chairman: Gold Prices going up

Acknowledging there will always be some volatility in the short term movement of gold prices, Barrick Gold (NYSE:ABX) chairman Peter Munk said in Davos recently that the gold prices will continue to go up, and the strength of the gold trend is "here to stay."

Munk stated that the price of gold "may fluctuate," but "the key criteria should be that it's got a secular tendency now to move up year in and year out.

"While it may trade off in the two-week or three-month period, I think the trend is here to stay."

Even though gold prices have fallen 11 percent since their record high last month, the increase in the spot price of gold, which soared 40 percent in 2009, is far from over.

Estimates are gold prices could climb by 13 percent in 2010, as continued worries over inflation, interest rates and the fall in value in the U.S. dollar weight on comsumers' and investors' minds.

Barrick Chairman: Gold Prices going up

Wednesday, January 27, 2010

Commodities Prices: Sugar Prices Drop

Commodity Sugar Prices

Sugar prices fell from 29-year highs as commodities as a sector fell as well as the U.S. dollar was stronger, causing most commodity prices to pull back in response.

For sugar, that won't shouldn't be a deterent to further price increases, as continuing strong demand for the sweetener should cause sugar prices to resume their upward climb.

From the early part of December sugar prices have surged by 32 percent, as supply worries along with continuing demand pushed sugar prices higher.

That hasn't stopped countries to continue buying sugar, as new orders from a number of developing countries, including Pakistan and Indonesia keep demand high. Tailand has also recently said production estimates would be lower than expected, causing concerns over the supply side too.

If sugar prices continue to climb and begin to close above 30 cent a pound consistently, it's unsure how high it could end up going. Some traders are holding back on pushing the price even higher as it could cause a huge sell-off which could move prices quickly.

Commodity Sugar Prices

Tuesday, January 26, 2010

ExxonMobil (NYSE: XOM) Lands Iraqi Contract

ExxonMobil (NYSE: XOM) landed a contract as lead in a consortium which will work on redeveloping and growing the West Qurna-1 field in southern Iraq, said the company in a press release.

Other members of the group include Oil Exploration Co., a state-owned Iraqi oil company, which will have 25 percent stake in the venture, as well as Shell, which will have a 15 percent stake in the oil production development. ExxonMobil will hold the remaining 60 percent stake in the venture.

Exxon added in their press release that they are in ongoing talks with government official from Iraq on partaking in "other opportunities to assist Iraq in developing the country's resources."

The next stage will be to find quality vendors and will recruit and help develop local workers for the deal.

ExxonMobil (NYSE: XOM)

Statoil (NYSE: STO) Acquires 25 Percent Interest in Chukchi Acreage From ConocoPhillips (NYSE: COP)

Statoil, ConocoPhillips

With new technology which can see beneath the salt on the ocean floor, oil leases are becoming a major source of potential income on the large bodies of water, and so has generated renewed interest as oil demand continues to rise. To that end , Statoil (NYSE:STO) acquired a 25 percent working interest in 50 leases ConocoPhillips (NYSE: COP) owns in the Chukchi Sea in Alaska.

Top executive for Statoil's exploration group in North America, Tony Doré, said they already own 16 leases in Chukchi, and adding another 50 gives them a large swath to explore in the years ahead.

ConocoPhillips will begin drilling in the area sometime in 2012.

Also as part of the deal, ConocoPhillips will receive a 50 percent working interest in 16 Gulf of Mexico blocks owned by Statoil, as well as all of the 25 percent working interest Statoil has in five other Gulf of Mexico blocks they have working interest in.

Statoil, ConocoPhillips

Monday, January 25, 2010

Petrobras (NYSE:PZE) Brazil Oil Production 2009

Petrobras (NYSE:PZE)

Including gas production in Brazil for 2009, that increased overall by 5.1 percent to 2,287,457.

Gas production held down the average, as it was basically level for 2009 in comparison with 2008 in Brazil based on decreased demand. Daily gas volume in the country from Petrobras stood at 50,343,000 cubic meters a day, again, essentially the same usage as 2008.

Oil use in 2008 had stood at 1,854,655 barrels a day.

In 2008 the average combination gas and oil usage in Brazil from Petrobras was 2,275,896 barrels a day.

Oil production for Petrobras when taking in its overall global operations for 2009 came in at 2,525,260 barrels a day; up from 2,399,958 a day in 2008. That represents a 13.7 percent increase from 2008, or 140.576 barrels a day.

The drop in natural gas in general came from decreased demand from Bolivia.

Petrobras (NYSE:PZE)

Buffett, Inflation and Posco (NYSE:PKX)

Asian Steel Maker Posco (NYSE:PKX)

Knowing historically how Warren Buffett has resisted investing much in the commodity sector, it's telling that he has invested a significant amount in Posco (NYSE:PKX), the most profitable steel maker in Asia.

Posco has been an extremely successful company over the last decade, enjoying an average profit of 19.7 percent during that period of time.

The stake Buffett owns in Posco via his Berkshire Hathaway (NYSE:BRK-A) isn't a small one, as he acquired 3.95 million shares as of last February 28 for $768 million, and they've now increased in value in that short time to $2 billion.

With Buffett also buying into energy companies recently, you do have to ask the question of what it is he is doing, and all indicators seem to say he's protecting against inflation, which he knows is coming, and is already here really.

Of course Buffett won't mind the inevitable rise in prices these large commodity companies will enjoy, as his stakes in ConocoPhillips (NYSE:COP) and Exxon Mobil (NYSE:XOM) show.

In reality, the Burlington Northern (NYSE:BNI) acquisition by Buffett could easily be considered a commodity move, at least in part, as much of the freight moved by the railroad is definitely raw materials and livestock.

Concerning the ongoing relationship between Posco and Warren Buffett, Buffett somewhat contradicted the assertion by Posco executives he is looking to continue investing in the company. That caused shares in Posco to decline after Buffett rumors persisted until he addressed them recently.

Buffett maintains he would buy more shares if the price goes down, and he has no plans to sell any shares.

Asian Steel Maker Posco (NYSE:PKX)

Commodity Buying Opportunity?

Commodity dip in prices

I think so. When you look at two of the best things that could have happened for those looking for a commodity price correction, you couldn't have had better circumstances than Obama and the Chinese leadership making the statements they did last week; both of which has a negative impact on commodities' outlook and prices.

The question is if the impact of their comments will be sustainable over a long period of time or commodity prices will continue their upward surge after many of them reaching highs recently.

It seems to me there is no way commodities over the long term will suffer long-term price decreases, although times like these are great opportunities to buy up even more raw materials going forward.

The only commodity to be cautious of concerning price is copper, which increased in price in spite of the thoughts communicated by the Chinese and Obama.

Taking everything into consideration, and even if China's leaders want to try to slow down their growth, commodities will be a huge story in relationship to China for some time to come, so when this nice dips happen, it's time to stock up again and increase our positions.

Rumor is a number of funds had been seriously thinking of decreasing their exposure to commodities. Hopefully they will and the story gets out everywhere, as it should help prices drop even more and give more opportunity to buy low.

Commodity dip in prices

Friday, January 22, 2010

Marc Faber Likes Wheat

Agriculture Commodity Wheat is Cheap Now

Among agricultural commodities, Marc Faber favors wheat because of the fact it's “very, very cheap."

Talking of the best way to invest in wheat at this time, Faber said it's not through wheat ETFs, as the rollover costs connected to them makes the extremely expensive.

Rather, Faber advises potash companies or companies owning large amounts of farm land are better places to look. In some parts of the world think in terms of the word "plantations," which essentially are the same as farms, although they may operate differently.

The point is to have your money in companies with large land holdings that can be planted with wheat.

Agriculture Commodity Wheat is Cheap Now

Commodity Growth Down for Two Years Says World Bank Report

I'm not at all convinced that the report from the World Bank that commodity growth will be down over the next two years because of the economic crisis and the time it will take to come out of it.

The report states that a weakened recovery will have a negative impact on the price of commodities overall, but I think that will depend upon what the particular commodity is and what country they're talking about.

For example, they use growth rates related to developing countries over the next five to seven years as one measurement, stating they'll be fortunate if their economies growth at a rate of 0.2 percent to 0.7 percent lower than they are today.

While I completely agree that the so-called recovery is largely bogus, as the jobless rate in America "unexpectedly" fell again for the third straight week. I wonder how long this will remain "unexpected" and will be acknowledged as part of the ongoing recession?

But as far as it relates to commodity prices, I think this report is flat out wrong. Why? A five-letter word: China! Very few if any of the prices of commodities is dependent on any developing country. That's ridiculous to even think on.

China's demand for raw materials, energy and food will be the primary driver of commodity prices, with India being a much smaller, but significant player in that regard.

So to connect commodity price movements with any other country than China as the focal point of commodity price increases is to make yourself irrelevant.

Andrew Burns, lead author of the report, said this about the study: "As international financial conditions tighten, firms in developing countries will face higher borrowing costs, lower levels of credit, and reduced international capital flows."

In light of that I want to reiterate what I said above: developing countries are irrelevant to the price movement of commodities. Period! At least for many years into the future. They're completely irrelevant for the next couple of years for sure.

I have no doubt that developing countries will struggle, as the report states, but that isn't what's driving commodity prices in any way, shape or form.

Of course when you get down to it and give your attention to individual commodities, this breaks down as well, as gold is a protection against inflation and a place of safety. That will drive up the price of gold, and that should happen over the next couple of years, although the timing of any price movement can't be for sure.

Anyway, just look to China first, India, and to a lesser extent certain large industries like the housing market and auto industry in the U.S. as to whether raw materials' demand is growing.

But China is by far the best indicator, and as goes China over the next couple of years, so should go the price of commodities.

Commodity Price Growth

Commodity Prices Rise Hong Kong

Commodity Prices Rise in Hong Kong

Confirming what a number of investors and economists already know, the consumer price index in Hong Kong rose in December, primarily driven by rising food prices and other commodity prices.

The composite consumer price index in December increased 1.3% year over year. That followed on the footsteps of price increases of 0.5% in November, giving rise to fears inflation could continue growing for some time, something many have been concerned about after central banks around the world continued to run their money printing presses.

Attempting to downplay the price increases in commodities and food, the Chinese government stated this: "As the economic recovery, both locally and globally, is still at the early stage, the prevailing excess capacity on the supply side should help to contain the upward pressures on costs and prices."

Some Chinese economists disagreed with the official party line, saying increases in energy and food prices, and possibly other commodities could push consumer prices even higher than they're growing now.

Estimates are prices could increase by 3.7 percent in 2010 based on what was already said plus rental increases.

Commodity Prices Rise in Hong Kong

Thursday, January 21, 2010

J.P. Morgan Bidding for RBS Sempra Commodities

J.P. Morgan Bidding for RBS Sempra Commodities

In a bid to become of the the top commodity trading firms in the world, J.P. Morgan Chase (NYSE:JPM) is in direct and exclusive talks with Royal Bank of Scotland Group (RBS.LN) to acquire its commodity unit RBS Sempra Commodities.

One of the conditions for RBS to receive billions in aid from the government was it was ordered by the European Union to divest of its 51 percent stake in RBS Sempra Commodities. The company is a joint venture between Sempra Energy (SRE), based in the U.S., and RBS. The British government owns 84 percent of RBS.

The exclusivity of the deal comes after bids from Deutsche Bank AG and Australia's Macquarie Group Ltd. were submitted, and J.P. Morgan evidently made the best offer.

Assuming the deal goes through, the 49 percent stake held by Sempra would be part of the deal, and J.P. Morgan would own the entire company. Lazard Ltd. is handling the sale on behalf of Sempra.

People familiar with the deal said the bids coming in were at about $4 billion, which is only a slight premium over book value.

The original investment on the part of RBS in the joint venture was $1.7 billion, while Sempra Energy invested $1.6 billion in the newly created business at the time it was launched. If there was any funding needed for the businesses, RBS was the one providing it, although it's not clear that's going to be the practice going forward, and more than likely won't be.

The ability to tap into financing by Sempra Energy at the beginning of the business from RBS was one of the key elements to creating RBS Sempra Commodities in the first place. Obviously J.P. Morgan can provide financing, and that's big plus for them on top of the rest of the company's assets and strengths.

On the part of RBS, they were looking to gain access in trading markets in relationship to precious metals and energy.

Other companies like Henry Bath & Son and Sempra Metals and Concentrates Corp. are included in the deal as well, along with the energy trading division of Sempra too.

If J.P. Morgan lands the deal, which they are performing due diligence over at this time, it could be a great boost for them, as commodities are expected to perform well not only in 2010, but possibly for the rest of the decade following.

J.P. Morgan Bidding for RBS Sempra Commodities

Gold Plunges | Buying Opportunity?

Gold Prices Fall on Stronger Dollar

There is a huge demand for gold as a protection against inflation and misguided and endless printing of money, which continues to devalue the U.S. dollar, even when, as it did today, it has its occasional moments of temporary strengthening, which puts downward pressure on commodity prices for the short term.

That was the case yesterday as gold prices fell to their lowest levels in about a month, dropping by $27.40 or 2.4 percent to close the session at $1,113.60 an ounce.

News from China was given as the reason for most of the reason behind the U.S. dollar increasing in value for the day. Stock prices also fell as a consequence of the announcement from China.

Most of those who want to continue to buy gold should consider these temporary and short-term market corrections as buying opportunities, and this is a potentially good one, although gold prices could drop more depending on how much the media covers the China issue of cutting back on its lending to cool their economy, which has generated concerns of a domestic bubble.

Many of us hope that the news from China on cutting back lending continues, as it will drive the price of gold down to levels many investors have been waiting on the sidelines in hopes of. If it drops to around $1,000 an ounce, or maybe even to $1,050 and ounce, we could see big buying at that time.

Gold should continue to rise in price over the next decade or so based on the huge amount of money that has been poured into the market by the printing presses of nations around the world.

We could even have a short-term rebound in the U.S. dollar which will be touted as a major positive by the clueless, before it's hammered down again by market forces.

Either way, gold prices could begin to drop if the Chinese story continues, and that will be a great story and opportunity for gold investors looking for another great time to add to their gold holdings.

Gold prices and China Lending

Tuesday, January 19, 2010

Agricultural Prices to Skyrocket Says Jim Rogers

Agricultural commodity prices going up

Jim Rogers has continued his evangelization of commodities, especially agricultural commodities which he believes will surge in price over the next couple of years as food shortages happen across the world.

The best way to invest in agricultural commodities, and all commodities for that matter, in Rogers' estimation, is to invest in commodities directly rather than in commodity companies.

Rogers has also recently slammed the idea that China is about to experience a bubble in the country, and says those that assert that don't understand the underlying fundamentals in the country.

One other important element concerning agriculture prices is there seems to be a glut on the market in some food sectors, making it seem there is far too much food, while in reality it is probably only connected to the major foods like wheat, corn and soybeans.

Of course if that glut continues, Rogers would have to re-think his outlook for agriculture. But for now, it seems he may be right, even though in this particular season there are plenty of the three major foods available globally.

Agricultural commodity prices going up

Goldman Sachs | Oil Shortages 2010

Oil Prices

Goldman Sachs (NYSE:GS) said today that there will be crude oil shortages as supply won't be able to keep up with demand, signifying higher oil prices in 2010 and 2011.

Projections from Goldman Sachs are the demand for oil will return to pre-recession levels, while production for oil will be down, causing the shortages and resultant oil price increases as a result.

There is probably more optimism in Goldman Sachs' report than among most others watching the industry, who believe oil demand will in fact remain down for some time to come, as the so-called recovery, for the most part, really isn't one.

Consider that jobs aren't being created and businesses aren't hiring. Goldman is saying that those working will start traveling more and spending on transportation, which I personally don't see happening, as I don't even begin to believe the recession is ended, let alone that we're in a period of recovery.

Nothing points to that being what is happening at this time, and I think Goldman Sachs is wrong here and we're going to continue to see consumers and businesses keep things tight as far as spending goes.

Consequently, I think oil prices will probably remain relatively level, although I'm sure there will be occasional spikes in oil prices over the next couple of years.

I don't doubt the production side being possibly challenged, just that the demand will remain low and so lower oil production won't cause significant oil price increases because of lower demand.

Of course the wild card in all of this is the state of the consumer in China, India and Brazil. If they take on a new role of consuming much more oil, then it could cause some price increases. But as far as it relates to the American consumer, I don't see them being a price driver of oil any time soon.

Oil Prices

Monday, January 18, 2010

Commodity Currencies Poised for Growth

Commodity Currencies

Although it's impossible to know the rate of growth and/or strength commodity currencies will grow against the U.S. dollar, it's going to be a good season of time for them as commodity prices are set to increase for some time to come.

When talking of commodity currencies, we're referring to the dollars of Australia, Canada and New Zealand; all countries which rely on commodities as a large part of their economies.

History has shown that for the most part these three currencies move in unison with one another based on how the price of commodities are moving, and so all of them should be a good bet over the next couple of years to strengthen against the U.S. dollar, which continues to collapse in value.

China's seeming resumption of economic domestic growth is a good sign for these three currencies as well, as it implies China is buying up commodities again in preparation for more growth, assuming it's for that purpose and not to protect its own exports and currency primarily, although it definitely entails that.

Commodity Currencies

Saturday, January 16, 2010

Jim Rogers | Inflation Already Here

Jim Rogers and Inflation

Inflation is a surety says Jim Rogers, and in fact we're already experiencing inflation, even though some governments are lying about it.

Rogers cites a couple of issues confirming inflation is already here and will continue on for some time. First, he points us in the direction of shortage around the world in almost everything. Consequently, in that environment prices will continue to rise.

Second, countries haven't stopped printing money, and printing money always brings with it the consequences of inflation.

Not only are those things happening now, but they'll continue to happen in the future.

Again, this is why commodities will be such a good place to be, although we do need to keep track of which individual commodities are at their top prices, and which ones are suppressed.

AS of this writing, commodities like silver and agriculture are at good prices, and so are something to watch carefully.

Jim Rogers and Inflation

Jim Rogers | Why Buy Commodities?

Jim Rogers and Commodities

In a recent interview, Jim Rogers again made his simple case for why commodities will be the best investment and investment sector going forward.

With the global recession still in force, when there is a real recovery, commodities will definitely go up in value based on demand and the resultant higher prices.

If things continue to get worse or stay about at the same level economically as they are now, then we'll see more printing of money from central banks around the world, which will make commodities the place to have your money as well.

So either way, commodities, according to Jim Rogers, will be a strong investment class whether the economy recovers or struggles.

Jim Rogers and Commodities

Jim Rogers | Buy Silver

Silver Prices Going Up

Talking about base metals recently, the best commodity play in that sector, according to Jim Rogers is probably silver.

While most base metals like copper have been driven up in price recently, silver largely remains at low levels, making it a good buy at this time.

Even though Rogers has no interest in base metals at these prices, he does say it would be a good idea to keep your investment in them and not sell, as there's little or no activity in production which would change the base metal production in the years ahead, while demand is sure to increase, driving up prices.

But as of now, silver prices are one of the best base metal buys, and should make investors a lot of money over the long term if they buy low.

Jim Rogers and Silver Prices Going Up

Natural Gas Prices Going Up?

Natural Gas Prices Going Up?

The combination of increasing interest rates and stocks trading at high P/E multiples is a disaster waiting to happen, and that's the environment we're about to enter into, making alternative investments a priority for those wanting to continue to make money with their investments. To that end and in that economic environment, commodities like precious metals and energy are great ways to invest to counter the high-risk associated with equities in those times.

So in times of rising inflation, there is no doubt where the best place to put your money will be, and that should be commodities going forward, and within that sector, natural gas should really do well.

What is very positive about natural gas is it can be bought cheaply at this time with a lot of upside to it.

Over the long term, some of the factors involved with the lower price of natural gas should change, including gradual movement away from coal-run power plants (at least in the sense that some will go to being run by natural gas), demand from China, and potential decline in supply of oil, which in many cases natural gas could make up for.

All of this is saying that demand for natural gas has an excellent, and almost for sure chance of increasing the energy source in price. Add to that that you can get natural gas relatively cheap, means you need to consider it as a part of your investment portfolio.

Natural Gas Prices Going Up?

Friday, January 15, 2010

T. Boone Pickens' Natural Gas Play

Natural Gas Commodity

T. Boone Pickens seems to be becoming somewhat of a joke, as his true strategy for making money on energy has nothing to do with real concerns about alternative energy sources, but in using the government to change laws in order to help get access to taxpayers' dollars in order to make profits for his companies.

Remember his seemingly endless number of commercials on hyping wind power as an answer? He has already dropped that fad and now is going on to using natural gas in automobiles.

The wind power initiative has been a joke and disaster for Pickens, who spent upwards of $62 million in attempts to get Americans to buy into his plan, which he completely failed at. His excuse is cheap gas makes using wind power far less competitive. You mean a smart oil man like Pickens didn't know that when he started this fiasco?

Where the truth concerning Pickens and his new natural gas religion is he has large stakes in some companies which would benefit him strongly if consumers started to use even more of the energy source.

The strategy behind Pickens' efforts is completely related to government involvement based on tax incentives and changes in the way they run government-owned transportation. This is just another way of saying there is no market for vehicles to be run by natural gas, so he is attempting to force one by attempting to get Congress to being to change fuel from gasoline to natural gas. Supposedly this will cut reliance on foreign oil imports by 8 percent over the next seven years.

Now that his attempt at having thousands of those extraordinarily ugly and low-level energy producing wind turbines placed across North America has failed, this is another attempt at trying to create a market which doesn't exist by persuading the government to change to natural gas. This is all a joke, and the sooner we realize it the better, as we won't have to listen to those stupid commercials put on television by Pickens concerning his seemingly endless addiction to fads.

While this is all about money and currying government favor, it stems from the inability for Pickens to compete any more in the oil markets, which is why he's attempting to position himself as an alternative energy champion, when in fact it's only about the bottom line for him.

Natural Gas Commodity

Thursday, January 14, 2010

Marc Faber | U.S. Debt Crisis Coming

Marc Faber: U.S. Debt Crisis Coming

Although in the short term we probably won't be going through a debt crisis in the United States, according to Marc Faber, sometime over the next 10 years it will definitely hit, and when it does hit, it'll hit hard.

According to Faber, the U.S. will be forced to default on its debt, more than likely from ramping up the money printing presses even more, which will essentially destroy what's left of the value of the U.S. currency.

The two major challenges are the surging debt load of the United states government, and the costs of interest which skyrocket in the years ahead.

Anyone who understands the debt that has been taken on by the U.S. government, knows that it is growing at levels which can't be sustained, and will have to go through a time of correcting itself, where explosive economic growth, huge increases in taxes or getting the right person in office to start dismantling the horrid social programs the government refuses to deal with as far as not being able to afford them.

Concerning the costs of interest, once the interest rates start going up again, there's no doubt the cost of interest will increase as well.

Faber believes that in about five years the cost of government programs in relationship to costs of interest will rise to about 35 percent of tax revenue, a huge leap from the 12 percent experienced today. Once that happens, there will only be two things that can be done, a group of bold politicians willing to make the necessary cuts (laughter in the background), or a printing of money at levels unprecedented in history.

Marc Faber: U.S. Debt Crisis Coming

Commodities: Oil Prices Drop on Warmer Weather

Warmer Weather Drives Oil Prices Down

Cold weather has been driving the price of oil, and that seems to have come to an end for now, at least until another possible cold trend comes through in February.

If you can trust those forecasting the weather, the next month should be a much warmer one, and that should have a major impact on the price of oil during that time, as it should drop after running up for some time as the cold weather continued to linger.

With China's central bank increasing its reserve ratios, it's hard to tell if that's a statement that they're going to cut back on commodity imports at this time, as in 2009 they grew by about 56 percent for the year.

With that combination, we again, would see significant downward pressure on light sweet crude over the next month. Other energy sectors and gas should also have a similar price movement.

Warmer Weather Drives Oil Prices Down

Wednesday, January 13, 2010

Commodity Currencies Fall China Reserves Ratio Announcement

China Reserves and Commodity Currencies

After China announced it would be tightening up its reserve requirements for its banks, commodity currencies across the globe fell in value in response to the possibility China demand could slow down, which would hinder what small hope of a minimal economic recovery there is at this time.

The central bank of China said in a statement yesterday that the required reserve ratio would be increased by half a percentage point starting next weak, an obvious action showing China is going to tighten up their monetary policy.

Nations with strong links between their currency and commodities had their currencies hit lows against the U.S. dollar as a consequence of the announcement, which could dramatically influence their value for the year. The Australian, New Zealand and Canadian dollars were especially impacted by the news.

What's interesting about all this, is China seemed to be surging forward on increasing its commodity stocks for 2010, as December imports had increased by 56 percent for 2009, and commodity exports in December grew by a solid 17.7 percent, seeming to imply they were importing commodities based on consumer demand for products.

Even so, in general, commodities are expected to do well this year, but it seems those estimations have been based upon the idea we are actually in a real recovery something in my thoughts is far from being proven as a reality.

China Reserves and Commodity Currencies

Tuesday, January 12, 2010

Commodity Prices Going Up 2010

Commodity prices going up 2010

Commodity prices going up is good for investors, and the trend should continue in general throughout 2010.

The question is why the prices are going up, and how that could impact the investing situation.

For consumers, this will probably be bad news, as well as a number of businesses, because the cost of doing business and inflation puts a damper on spending; both for business and consumers.

As usual China is in the midst of the commodity demand and price surge, and the question is whether the demand is real from the point of view of using the raw materials to build to exports products, or it's a trend to building up commodity reserves in anticipation of huge price increases in the future and to protect its currency from inflation eating up its value.

Some are already heralding this as a part of economic recovery, but I highly question that, as it can't be proven at this time the motivation behind China buying up commodities again.

There are fears the increase in commodity prices could cause Americans to cut back even more on spending in 2010, making any chance of a real economic recovery limited at best. Americans are already paying down debt and saving more, putting less into the economy, and if they have to pay more for gas and food, that will leave even less to spend on other products and services.

The major commodity to be concerned with is oil, although agricultural commodities and industrial commodity prices are rising as well. With recent past experience, if oil continues to rise, it could really wreak havoc on the market, as Americans will continue to be tight with their money and stay close to home.

If that happens, we'll see a continuation of what we've been experiencing over the last several years. Commodity prices are the key to the entire scenario and how it plays out.

Commodity prices going up 2010

Monday, January 11, 2010

Jim Rogers | No China Bubble

Jim Rogers China Bubble

Jim Rogers seems to be exasperated by a number of so-called experts who seem to be calling bubbles on anything that rises in price; including countries like China.

As Rogers educated Nouriel Roubini in concerning gold lately, a bubble isn't a bubble because prices rise. A bubble in gold will happen, according to Jim Rogers, when everybody starts to start investing in gold, without knowing why. At this time very few people are investing in gold, and until that dramatically changes, there won't be a gold bubble.

Rogers maintains sometime in the next decade gold will probably hit somewhere around $2,000 an ounce.

As far as China goes, Rogers is striking out at global hedge fund manager Jim Chano, who claims China is also in a bubble, and that the bubble will burst sometime soon.

The China economy is built on a solid foundation according to Rogers, and the country is a great place to invest in.

As far a Chanos goes, who is a notorious short-term trader, you have to wonder how much of China he has shorted in a variety of companies, which is probably what caused him to make his remarks in hopes of making a quick killing.

Of course Chano may have made those trades for some time, and could be in danger of losing a lot of money betting on China being in a bubble that he thought would burst, but hasn't.

Rogers probably knows the Asian and Chinese investment sector as well as any Westerner, and if he says China's not in a bubble, I tend to believe him more than anybody else.

As far as commodities go, China seems to continue to be buying them up, but now it looks like it'll be not just for domestic consumption, but to feed the export industry, which may be starting to grow again.

Jim Rogers China Bubble Burst

China Commodity Demand 2010

Commodity prices going up 2010

The growth of raw materials imported to China had a strong effect on commodity prices, and it looks like China commodity demand in 2010 will surge higher as it seems to be moving from building up commodity inventory to using the raw materials to make products to export.

As of December 2009, it showed that commodity exports grew by 17.7 percent for the year in China, while Chinese commodity imports increased an extraordinary 56 percent for the year.

Chinese commodity consumption will continue, but demand to build products should continue to put upward pressure on many commodity prices in 2010.

Some commodities alreay going up in price for 2010 are gold, copper and light, sweet crude oil, which have already climbed significantly in the first week of 2010, and show no sign of subsiding.

Commodity investors will have to watch carefully for some commodities, as soybeans and iron ore are near record import highs, and it's impossible at this time to see if that will be sustainable during 2010.

Commodity prices went down, in general, during the latter half of 2009, but it looks like the China factor is again in big play, but we need to be sure of the actual numbers and true commodity demand in the country to be sure if commodity prices will go up throughout 2010, and which ones.

Commodity prices going up 2010

Saturday, January 9, 2010

Crude Oil Prices Going Up

Crude oil prices

Crude oil prices continue to hold at above $80 per barrel, as cold weather continues to plunge America, and other parts of the world in freezing temperatures.

Fridays' close was at $83 a barrel on the New York Mercantile Exchange, as the cold front continues to linger and shows no signs of leaving any time soon.

Over the last couple of weeks since the cold front has moved down the country, light sweet crude oil prices have continue to go up in response to the cold.

Some other energy prices have gone up as weel, with heating oil increasing to over $2.2 a gallon, while reformulated gasoline prices rose to $2.16 a gallon. One bright spot for consumers was natural gas, which lost 0.06 cents to $5.746 per million British thermal units.

Gasoline prices have shot up to $2.727 a gallon recently for unleaded for a national average.

Crude Oil Prices Going Up

Commodities Driving Canadian Dollar Up

Canadian dollar price going up on commodities

The Canadian dollar continues to strengthen against the U.S. dollar as commodity prices going up helped Canada's exports increase to their strongest level in about a year.

Against 13 of the 16 most traded currencies, the Canadian dollar price went up as a number of commodities like natural gas, crude oil and copper continue to go up in price.

Oil may be the best driver of the loonie, as it continues to rise in price in the midst of the cold spell hitting the world.

Crude oil for February delivery increased in price by 4.3 percent this week to $82.75 a barrel on the New York Mercantile Exchange. It went as high as $83.52, the top level since October 2008. Crude is Canada’s largest export.

Copper for March delivery topped at $3.544 a pound on Jan. 7, the largest price since August 2008.

Natural gas for February delivery soared to a one-year intraday high, $6.108 per million British thermal units.

About half of all export revenue from Canada comes from raw materials, making the long-term prospects of the Canadian dollar somewhat bullish.

Commodity currencies should do well over the next several years unless an unforeseen situation arises.

Canadian dollar price going up on commodities

Friday, January 8, 2010

Mackenzie Universal Gold Bullion Class

New Gold Fund

Mackenzie Universal Corporation has launched a new gold fund named Mackenzie Universal Gold Bullion Class which will invest anywhere from 80 percent to 100 percent of its assets in gold bullion or permitted gold certificates.

Other potential investments the fund leaves open to occasionally invest in are other precious metals like palladium, silver and platinum, or in companies producing or distributing precious metals.

With gold prices set to rise for probably years into the future, and growing inflation to become a part of our lives during that time as well, investing in gold should be a big part of anyone's investment portfolio going forward.

Head manager of the Canadian-based fund is Benoit Gervais.

Two versions of the fund are available for investment, including investment via American or Canadian dollars. Investors will also be able to switch between a number of funds included in Mackenzie Investment's Capitalcorp structure on a tax-deferred basis.

New Gold Fund

Wednesday, January 6, 2010

Agricultural Commodities: Florida’s Orange Crop Survives Night - Will It Survive the Week?

Agricultural Commodities: Florida Orange Crop

Concerns over the survival of the second-largest orange-producing area in the world eased somewhat overnight, as less than 1 percent of oranges in Florida suffered damage as a consequence of lower temperatures.

Even so, more cold weather is forecast for the next several days, renewing fears the industry could suffer huge losses in 2010, as the cold weather lingers on.

Concerns are within the next week temperatures could stay below 28 degrees for long periods of time, which would permanently damage the Florida oranges. If temperatures remain below that level for over a several hour period, that won't survive.

The latest estimates are up to five percent of the orange crop in Florida could be lost, although the potential for more is very real.

What has driven fear into Florida orange growers is the forecast for January 10th and 11th, which could cause some serious damage to the industry if it plays out as predicted.

Some of the steps taken by orange growers in the state are to harvest at an accelerated pace or to increase irrigation which reduces the amount of damage.

Orange growers in the area say they've never seen anything like it before, where the temperatures consistently stay in the 20s. A number of growers say if things don't change the entire crop in Florida could be at risk in the next several days.

Just last month news that the orange production was down 17 percent from last year because of disease and drought brought prices up, now orange prices have reached a two-year for orange-juice futures over the uncertainty the new risks pose.

Last year approximately 162.4 million boxes of oranges were packed by Florida orange growers through July, while estimates are only 135 million boxes were filled through July of 2009. Those numbers could plunge if things get any worse.

Agricultural Commodities: Florida Orange Crop

Commodity ETFs Double Inflows in 2009

Commodity ETFs

In 2009 commodity ETFs enjoyed a solid year, as the capital flowing into the exchange-traded funds were over double what they brought in in 2008, mirroring the growth of ETFs in general.

What was unusual in the commodity ETF sector, was that a large number of the commodity ETFs didn't perform that well, and in many cases lost huge amounts of money.

Even so, that isn't deterring investors from moving significant amounts of capital into ETFs, and 2010 looks like it'll be another banner year for them.

In 2008, commodity ETFs tookin about $13.4 billion, while in 2009 it exploded to $30.1 billion. Most of that was invested in ETFs which bet prices for agriculture, energy and metal would rise during the year.

One of the ongoing winners for ETFs was the largest commodity ETF and gold fund, SPDR Gold Trust, which continues to take advantage of increasing prices of gold, and enjoyed a 24 percent return in 2009. They should enjoy good returns for years into the future, although there will be obvious times of pullback and corrections.

To me tracking ETFs will always be the best way to invest in them, while managed ETFs not only generate more fees, but in many cases underperform because of costs, payment of management, and not really mirroring the market like an low-managed ETF will do.

Commodity ETFs

Tuesday, January 5, 2010

Commodity Prices Increasing in 2010 Says IMF

Commodity Prices Increasing in 2010

The IMF just released its view on what the price movements of commodities will be in 2010, and in general, like me, they believe a stronger demand will push the prices higher as Asian markets start to rebound.

Thomas Helbling from the IMF Research Department added though that commodity prices would be tempered by higher stocks, which could keep prices in a number of cases from exploding upwards, but still should increase gradually.

Another factor of course is whether we're really in a recovery, and if that will translate into increased demand.

For the Asian markets that could be the case, although Western markets and the U.S. aren't anywhere near a recovery, contrary to mainstream press accounts.

Even so, the commodity price index of the IMF has risen by 40 percent from February 2009, and that was during what was considered a down year.

The commodity price index of the IMF should increase to much higher levels this year, even with commodity inventories high.

Over the long term the IMF expects commodity prices to remain high in general, and not fall down to historical levels.

Commodity Prices Increasing in 2010

Cotton Futures Prices Not Manipulated

Cotton Futures Prices Not Manipulated

After a 20-month study, the Commodity Futures Trading Commission concluded there was no market manipulation which resulted in the huge spike in cotton prices in 2008.

The CFTC could find no one reason for the large increase in cotton prices, but said it was probably a great number of factors which ended in the failure of two of the top cotton producers in America.

At the time of the crazy price swings, cotton contracts were traded on the IntercontinentalExchange's Futures U.S., which used to be called the New York Board of Trade.

This was good to hear as the government can't protect grownups from losing money when they invest, and it shouldn't have wasted all this time checking into this when you consider that a lot of commodities surged in price during that time period such as copper, oil and wheat. It's called supply and demand.

Here were some of the conclusions of the CFTC:

- The trading activity of the largest longs was not consistent with activity that would cause an increase in the price of cotton futures or options.

- Many market participants active in the futures and option markets before futures prices reached limit up were cotton merchants, who held significant short positions. They would not benefit financially from manipulating the price of cotton.

- During critical time periods before futures prices reached limit up, no participant in the option market had a significant long position or sold a significant existing option position.

- The merchants with large short positions were hedged, holding sufficient physical cotton to deliver against their contracts. There was no shortage of physical cotton, certificated stocks were rising. Little interest in March contract.

Per the report, some of the reasons for the increase in prices included the increase in commodity prices, tight credit, migration to electronic trading from pit trading, large market participants and limits on cotton market prices.

Cotton Futures Prices Not Manipulated

Commodity Surge Authors

Commodity Surge Authors


Ellen Stevens

Ellen has owned or managed several multi-million dollar retail or service business through her career, and has been writing on business, the U.S. economy and the effects of the Federal Reserve and government policy on overall global financial health.


Ray Esally

Ray is an expatriate living in China, who listens to and observes the heartbeat of business in the Middle Kingdom, as well as other Asian countries.

He also keeps his finger on the pulse of China's economic policies and the resultant response of its leaders to current events.


Gary Thomas

Gary has been running Internet businesses for over a dozen years, and has been writing on business topics since 2005. His favorite financial topic is the commodity bull run, which he expects to continue on for years.

Companies associated with commodities are also of interest to this Internet, business and investing expert.


Libby Johnson

Libby worked in the banking industry for years before deciding she wanted to research and write about it, especially as the extraordinary events surrounding it have unfolded, and which has resulted in the global economy being brought to the brink of failure.


Allen Nine

Allen's specialty is currencies, precious metals, the Federal Reserve, and other central banks and their policies which are having a major impact on the world we live in.

Also important to Allen is the irresponsible government policies around the world which, overall, refuse to stop spending and to shrink the governments down to manageable size.

Contact Us

Contact Us

You can contact any of the authors of Commodity Surge at the e-mail addresses listed below:

Ellen Stevens:

Ray Esally:

Gary Thomas:

Libby Johnson:

Allen Nine:

Monday, January 4, 2010

Gold Marc Faber's Favorite Currency

Gold Marc Faber's Favorite Currency

There is absolutely no reason to have any trust in the U.S. dollar, and as Marc Faber and others have noted, it's only the short-term growing bearish sentiment which offers any support for the greenback at all. That and the fact that other central banks haven't stopped the paper money printing presses either, keeps it from completely collapsing against its currency competitors.

Still, with the potential for that to continue over long term as the recession continues to linger on, Faber still favors gold as his favorite currency, and reminds those that aren't aware of its history that it has been used for exchange for over 6,000 years, while also stating he's not aware of any paper currency lasting longer than a few hundred years.

While Faber's doesn't consider himself a gold bug, he does acknowledge that many times gold will outperform all other financial assets like it has since 1999, but the opposite can happen with equities against gold as well.

Nonetheless, I don't see how gold as currency will be outperformed by any other paper currency in the years ahead, and anybody betting against gold's performance will probably lose over the long haul.

Gold Marc Faber's Favorite Currency

Investing ETF Gold Funds - 'SPDR Gold Shares'

Investing ETF Gold Funds - 'SPDR Gold Shares'

Gold will continue to be a force for some time ahead, no matter if it gets hit by a temporary surge in the value of the U.S. dollar or not. And even if it does, it won't matter, as the greenback won't be able to hold strong for a very long period of time if it happens at all, so gold will perform stongly for years into the future, even with temporary corrections in the midst of its continual upward price movement.

With that in mind, a great way to invest in gold can be through an ETF gold fund, and one of the fastest growing in the world - not with just ETF gold funds, but all ETF funds in existence - is 'SPDR Gold Shares.

An ETF gold index fund is listed on an exchange just like a stock, and so in easy to invest in, and relatively inexpensive as well, as they are not management intensive, and other than storage costs, fairly free of other fees.

Along with trading on an American exchange, SPDR Gold Shares also trades on the Tokyo Stock Exchange, Hong Kong Stock Exchange and the Singapore Stock Exchange. That exposes it to a variety of markets around the world.

At this time, the SPDR Gold Shares fund stores and underlying 1,133 metric tons of gold in the London vaults of HSBC Bank USA. That amounts to about 36,300,000 ounces with a value of close to $40.2 billion at today's gold market price.

With very few exceptions, SPDR Gold Shares of course primarily holds gold. There are few times when it holds cash as well, but that's very temporary until new buying opportunities arise.

Investing in an ETF gold index fund like SPDR Gold Shares is an easy way for investors to participate in the ongoing bull gold market, and with the ease of trading gold like a security, it eliminates many of the barriers many investors face when thinking of investing in the precious metal.

Investing ETF Gold Funds - 'SPDR Gold Shares'

Rogers International Commodities Index fund

Rogers International Commodities Index fund

Jim Rogers is known around the world for his expertise in commodities, as well as unique perspective on what's driving the global economy; whether it's positive or negative.

A number of years ago the prolific investor looked for a way to invest in a basket of commodities and didn't find much if anything that focused on that particular market.

So to that end, he designed the Rogers International Commodities Index (RICI) fund, which allows investors to invest in commodities in a way that is weighted by the commodity guru himself.

As Rogers points out in the description of the fund, it is not only weighted with regional or American-focused consumption, but takes in the entire world, as noted by the inclusion of rice in the index, one the more consumed foods in the world, yet left off a number of indexes.

For the purpose of making it easier for potential investors to track the Rogers International Commodities Index fund, Rogers only includes commodities traded on recognized exchanges. That way verification of performance is easy, quick and trustworthy.

A total of 35 commodities are traded on the Rogers International Commodities Index fund, and that's so a wide range of commodities can be included, giving investors access to an accurate measurement of overall commodity performance, and not overly weighted raw materials which could skew results in odd and unrepresentative ways.

The Rogers International Commodities Index fund is built to appeal to long term investors, and weights commodities accordingly. The purpose is to offer consistency and and stability that can be counted on year after year.

That has worked well for the fund over the 11 years it has operated, as it has produced a solid return of about 20 percent annually since its inception, and that has included two bubble markets it has had to operate under.

With commodities in the middle of a bull market and emerging markets set to start spending again, it's a good bet that the Rogers International Commodities Index fund, and other commodity funds will perform strongly for years into the future.

Rogers International Commodities Index fund

Major Gold ETFs Hold $16.9 Billion

Gold ETF Performance 2009

The gold holdings fo the major gold ETFs have approximately an aggregate amount of gold worth $16.9 billion net on a daily basis, according to the latest figures for 2009. Those aren't the final figures for 2009, as it only takes us up to mid-December.

Overall the key gold ETFs held close to $61.3 billion, a major increase of 84 percent year over year. That means an additional 546 tons of gold was added to the reserves of these gold funds in 2009.

Price per ounce for gold during that period rose by $213 an ounce, making it a highly profitable year for most.

Net daily flows in the funds differ from the value of the gold held by the funds because it fluxuates on a continuous basis.

The value of gold in the funds increased by about 65 percent over the net value of the money put into them.

Gold ETF Performance 2009

Friday, January 1, 2010

Jim Rogers Gold Bubble 2010

Jim Rogers Gold Bubble 2010

Jim Rogers was talking investing in 2010 recently, and he said the continual concerns about the possibility of a gold bubble are unfounded, and still maintains the position that gold will eventually reach $2000 an ounce, although when that will happen of course can't be known.

Rogers added that gold is going up in price because of the falling value in the U.S. dollar, concerns over inflation, consumption of gold by China and India, and the buying up of gold by central banks.

The only bubble Jim Rogers is concerned about is one in the U.S. government bond market. Otherwise he said there isn't another bubble he sees emerging anywhere.

If there's a reason for gold prices rising, there isn't a bubble, according to Rogers. It's when everyone starts buying gold without knowing why is when you need to be concerned about a gold bubble.

As of now, the majority of people on the street haven't even looked to gold as an investment, so concerns that way are irrelevant.

For the short term, the price of gold could be affected by a temporary strengthening of the U.S. dollar, which could drive prices down for a little while. Other than that, Jim Rogers and most others believe gold will continue on its upward run in price for a long time ahead.

Jim Rogers Gold Bubble 2010

Marc Faber Gold Investing 2010

Marc Faber Gold

With the U.S. dollar being an uncertain, but potential threat to gold prices because of the possibility of surging in strength in 2010, it has caused gold bulls to reconsider how to invest in the sector, but not whether to invest in the sector.

Recently Marc Faber has stated he is migrating more toward investing in gold exploration stocks and gold producers in 2010, as they could be the best play with gold; especially if the U.S. dollar does strengthen in a significant, albeit short term manner.

Another major factor from Faber's point of view is the extremely cheap prices the gold mining and producers are going for at this time, making them highly desirable.

You do have to be a long term investor in gold for these to pay off, and so need to keep that in mind. Most gold investors are that anyway, and so should do ok over the long term.

For those just entering the gold sector and who are looking for short term profits, it probably isn't a good time to do it and you could get burned badly.

Marc Faber Gold