Jim Rogers will be part of the new index fund named Rogers Global Resources Equity Index (RGREI), where he'll be the person choosing the companies which will be included included in the index.
It is an index which will focus on five sectors: agriculture, alternative energy, forestry, energy and metals, and mining.
When the index is filled, it'll include 200 stocks representing the commodity sector.
According to Eugene Lee, head of equities at Spain's Banco Bilbao Vizcaya Argentaria (BBVA), which is working with China's CITIC Group to develop the index, they already have a base on investors from Latin America interested in investing in an index like the one they're putting together.
Jim Rogers already has his name on the Macquarie and Rogers™ China Agriculture Index, and of course his own Rogers International Commodities Index (RICI).
Rogers believes we still have years of the commodity bull market left to run.
Showing posts with label Commodity Investing. Show all posts
Showing posts with label Commodity Investing. Show all posts
Saturday, February 19, 2011
Friday, October 15, 2010
Marc Faber Recommended Gold Before Gold was Cool
While we haven't hit the place where gold is in danger of being in a bubble, there are an increasing number of institutional, and to a smaller degree, individual investors, putting a portion of their assets into gold.
Marc Faber has been calling gold for a long time before investors saw the possibilities gold offered because of trending government and Federal Reserve policies.
As with commodity investors Jim Rogers and Peter Schiff, Faber sees gold as one of the ultimate defenses against out-of-control government inflating and debt. What is being called quantitative easing today.
Faber hasn't encouraged investors to buy up more gold as a result of the obvious stimulus packages set in play, but has been seeing this happening since the early 2000s.
In one of his books named 'Tomorrow's Gold,' published in the latter part of 2002, Faber told investors they needed to put some of their assets in gold at that time. It was lower than $350 an ounce then.
In the early part of 2001 he called gold mining stocks cheap as well, which has also played out to be true for a large number of them.
All of this is in response to the macroeconomic changes about to hit the U.S. and Faber understood the signs of, and consequences of those actions, the reason he was so clearly right, and continues to be in regards to investing in gold.
Faber has also recently stated that gold prices are still relatively cheap, and quantitative easing will continue as the government is completely out of control and won't stop.
He recommends for people to become their own central bank and hold their own gold, as the Federal Reserve will continue to print money, as will many other central banks around the world.
While gold will build the wealth of those investing in it, Faber also sees it as financial self-defense against the misguided practices of the Fed and others endlessly printing money.
Faber advocates investors to allocate resources to gold on a monthly basis.
Marc Faber has been calling gold for a long time before investors saw the possibilities gold offered because of trending government and Federal Reserve policies.
As with commodity investors Jim Rogers and Peter Schiff, Faber sees gold as one of the ultimate defenses against out-of-control government inflating and debt. What is being called quantitative easing today.
Faber hasn't encouraged investors to buy up more gold as a result of the obvious stimulus packages set in play, but has been seeing this happening since the early 2000s.
In one of his books named 'Tomorrow's Gold,' published in the latter part of 2002, Faber told investors they needed to put some of their assets in gold at that time. It was lower than $350 an ounce then.
In the early part of 2001 he called gold mining stocks cheap as well, which has also played out to be true for a large number of them.
All of this is in response to the macroeconomic changes about to hit the U.S. and Faber understood the signs of, and consequences of those actions, the reason he was so clearly right, and continues to be in regards to investing in gold.
Faber has also recently stated that gold prices are still relatively cheap, and quantitative easing will continue as the government is completely out of control and won't stop.
He recommends for people to become their own central bank and hold their own gold, as the Federal Reserve will continue to print money, as will many other central banks around the world.
While gold will build the wealth of those investing in it, Faber also sees it as financial self-defense against the misguided practices of the Fed and others endlessly printing money.
Faber advocates investors to allocate resources to gold on a monthly basis.
Peter Schiff On Gold, Dollar, Inflation, Fed and China
Peter Schiff is known for his justified criticism of the Federal Reserve and the disastrous policies they've enacted which is the destroying the economic life of the United States and its citizens, and ultimately affects nations around the world.
Although he sees a disaster coming if they don't change course, there are things people can do to protect themselves against the addictive Federal Reserve policy of printing money, which is another way of saying inflating.
Today they've attempted to change the name to quantitative easing to make it sound like they're doing something different. But it's the same thing.
While Schiff sees hope, he doesn't think the government and the Federal Reserve will do the right thing, and they're going to keep on inflating. Which means they're going to print money to acquire bonds. It's only a matter of how much they're going to buy, not whether or not they're going to do it.
The result of all this will be gold prices and many other commodity prices continuing to rise, the U.S. dollar continuing to collapse, and inflation in other areas soaring.
Schiff says the government will attempt to hide the amount of inflation they're creating, but the ongoing rate of unemployment will force them to continue to print money, which will eventually reveal the monster they've created, as they acquire an enormous amount of bonds with each round of quantitative easing.
Another possible scenario, says Schiff, is he sees the possibility of Treasury yields being held back by the Federal Reserve. At that time corporate and municipal bonds would probably surge, which could woo the Fed into acquiring them too. If that happens, in Schiff's view, he sees the potential complete collapse of the U.S. dollar.
Probably the best hedge against all of this happening, or even part of it happening, is to hold gold.
Schiff says he believes gold and the Dow will eventually move to a 1-to-1 relationship. He has no idea what that number will be, but if the Dow were to move to 10,000, he sees gold moving to $10,000. If the Dow is at 3,000, he sees gold at $3,000 an ounce, etc.
According to Schiff, he sees a correlation between the bear markets of 1930s and the 1970s. In 1932 said Schiff, an ounce of gold equaled the value of the Dow. The same happened in 1980 after the bear market of the 1970s.
When the Dow shrinks in value, it tends to line up with the price of an ounce of gold.
If we end up entering into a period of hyperinflation, all bets are off there as far as the value of the dollar, which could lost almost all its value, according to Schiff.
Besides gold, Schiff likes the agricultural sector, energy, commodities in general, and China.
Everyone should own at least some gold says Schiff.
Although he sees a disaster coming if they don't change course, there are things people can do to protect themselves against the addictive Federal Reserve policy of printing money, which is another way of saying inflating.
Today they've attempted to change the name to quantitative easing to make it sound like they're doing something different. But it's the same thing.
While Schiff sees hope, he doesn't think the government and the Federal Reserve will do the right thing, and they're going to keep on inflating. Which means they're going to print money to acquire bonds. It's only a matter of how much they're going to buy, not whether or not they're going to do it.
The result of all this will be gold prices and many other commodity prices continuing to rise, the U.S. dollar continuing to collapse, and inflation in other areas soaring.
Schiff says the government will attempt to hide the amount of inflation they're creating, but the ongoing rate of unemployment will force them to continue to print money, which will eventually reveal the monster they've created, as they acquire an enormous amount of bonds with each round of quantitative easing.
Another possible scenario, says Schiff, is he sees the possibility of Treasury yields being held back by the Federal Reserve. At that time corporate and municipal bonds would probably surge, which could woo the Fed into acquiring them too. If that happens, in Schiff's view, he sees the potential complete collapse of the U.S. dollar.
Probably the best hedge against all of this happening, or even part of it happening, is to hold gold.
Schiff says he believes gold and the Dow will eventually move to a 1-to-1 relationship. He has no idea what that number will be, but if the Dow were to move to 10,000, he sees gold moving to $10,000. If the Dow is at 3,000, he sees gold at $3,000 an ounce, etc.
According to Schiff, he sees a correlation between the bear markets of 1930s and the 1970s. In 1932 said Schiff, an ounce of gold equaled the value of the Dow. The same happened in 1980 after the bear market of the 1970s.
When the Dow shrinks in value, it tends to line up with the price of an ounce of gold.
If we end up entering into a period of hyperinflation, all bets are off there as far as the value of the dollar, which could lost almost all its value, according to Schiff.
Besides gold, Schiff likes the agricultural sector, energy, commodities in general, and China.
Everyone should own at least some gold says Schiff.
Saturday, March 13, 2010
UBS (NYSE: UBS) Looking at Commodities
UBS Commodity Investing
Even though UBS (NYSE: UBS) largely got out of the commodities business during the economic crisis, and sold some of their holding in that sector at that time, officials at the company confirm they are again poised to enter that market again in the near future; possibly sometime in 2010.
While selling off most of its commodities assets, UBS did hold on to exchange-traded and index funds, and also it precious metals business. Its energy and base metals business it sold to Barclays (LON:BARC), which included oil, gas and power supplied to the U.S.
Some of their rivals ramped up their commodity play in 2009 and were very successful in their respective commodity units, generating good income, and positioned to continue on with that success in 2010 and beyond; making UBS somewhat behind their major rivals in that regard, and so we'll see them make a number of moves to shore up their depleted commodities investment unit soon.
UBS Commodity Investing
Even though UBS (NYSE: UBS) largely got out of the commodities business during the economic crisis, and sold some of their holding in that sector at that time, officials at the company confirm they are again poised to enter that market again in the near future; possibly sometime in 2010.
While selling off most of its commodities assets, UBS did hold on to exchange-traded and index funds, and also it precious metals business. Its energy and base metals business it sold to Barclays (LON:BARC), which included oil, gas and power supplied to the U.S.
Some of their rivals ramped up their commodity play in 2009 and were very successful in their respective commodity units, generating good income, and positioned to continue on with that success in 2010 and beyond; making UBS somewhat behind their major rivals in that regard, and so we'll see them make a number of moves to shore up their depleted commodities investment unit soon.
UBS Commodity Investing
Thursday, March 4, 2010
JPMorgan (NYSE:JPM) and Citigroup (NYSE:C) Chasing Commodity Investment Leaders
JPMorgan and Citigroup Looking to Commodities
Now that many of the banks and investment banks like JPMorgan (NYSE:JPM) and Citigroup (NYSE:C) have finished shoring up their foundations and building up their reserve capital, they're looking at generating revenue, and the commodity bull market may be the best place to do that in the years ahead, as they try to catch up with competitors like Goldman Sachs (NYSE:GS), Morgan Stanley (NYSE:MS) who make a lot of money in the sector, and are positioned well to continue doing that.
Although mergers and acquisitions and initial public offerins are expected to increase some this year, that business won't be a huge revenue generator until we truly emerge from the recession.
So commodities are one of the few growth sectors left which have a good chance of increasing revenue and profits for banks and their investment bank units.
JPMorgan and Citigroup Looking to Commodities
Now that many of the banks and investment banks like JPMorgan (NYSE:JPM) and Citigroup (NYSE:C) have finished shoring up their foundations and building up their reserve capital, they're looking at generating revenue, and the commodity bull market may be the best place to do that in the years ahead, as they try to catch up with competitors like Goldman Sachs (NYSE:GS), Morgan Stanley (NYSE:MS) who make a lot of money in the sector, and are positioned well to continue doing that.
Although mergers and acquisitions and initial public offerins are expected to increase some this year, that business won't be a huge revenue generator until we truly emerge from the recession.
So commodities are one of the few growth sectors left which have a good chance of increasing revenue and profits for banks and their investment bank units.
JPMorgan and Citigroup Looking to Commodities
Wednesday, March 3, 2010
Mark Mobius Likes Commodity Countries
Mark Mobius - Commodities in Emerging Markets
Emerging market guru Mark Mobius likes two things about investing in the BRIC countries, and that is consumers and commodities.
The head of Templeton Asset Management said he continues to look for strong performances from countries with strong natural resources and infrastructure and consistency in place to extract and distribute them.
With growing middle classes in BRIC nations, Mobius also likes industries prepared to service them like retail, banking and disposal product firms.
Anyone investing in BRIC economies need to have a longer term outlook to be successful says Mobius, as they are volatile and move up and down quite a bit.
Market timers and other need not apply here or you could get slaughtered from the short term fluctuations of the markets.
Mark Mobius - Commodities in Emerging Markets
Emerging market guru Mark Mobius likes two things about investing in the BRIC countries, and that is consumers and commodities.
The head of Templeton Asset Management said he continues to look for strong performances from countries with strong natural resources and infrastructure and consistency in place to extract and distribute them.
With growing middle classes in BRIC nations, Mobius also likes industries prepared to service them like retail, banking and disposal product firms.
Anyone investing in BRIC economies need to have a longer term outlook to be successful says Mobius, as they are volatile and move up and down quite a bit.
Market timers and other need not apply here or you could get slaughtered from the short term fluctuations of the markets.
Mark Mobius - Commodities in Emerging Markets
Commodities Rise on Weaker Dollar
Commodity Prices Rise as Dollar Drops
A number of commodity sector rose as the U.S. dollar weakened against major currencies.
Enjoying the increase were energy, metals and grains, with major crops like corn, soybeans and wheat increasing; something the grain market has been looking and hoping for for awhile.
Also rising in response to the collapsing dollar were gold, silver and copper, while on the energy side price also rose, even though they would normally have fallen on the news oil and gasoline pireced remained higher than expected for the previous week.
Oil gained $1.19 to finish the session at $80.87 on the New York Mercantile Exchange.
Commodity Prices Rise as Dollar Drops
A number of commodity sector rose as the U.S. dollar weakened against major currencies.
Enjoying the increase were energy, metals and grains, with major crops like corn, soybeans and wheat increasing; something the grain market has been looking and hoping for for awhile.
Also rising in response to the collapsing dollar were gold, silver and copper, while on the energy side price also rose, even though they would normally have fallen on the news oil and gasoline pireced remained higher than expected for the previous week.
Oil gained $1.19 to finish the session at $80.87 on the New York Mercantile Exchange.
Commodity Prices Rise as Dollar Drops
Thursday, February 25, 2010
Are Silver Wheaton (NYSE:SLW), Silver Standard Resources (NASDAQ:SSRI), Endeavour Silver (AMEX:EXK) Lost Causes?
Future of Silver and Gold Mining Companies
Some are out there talking as if companies like Silver Wheaton (NYSE:SLW), Silver Standard Resources (NASDAQ:SSRI) and Endeavour Silver (AMEX:EXK) are going to start to slow down in growth, largely based on assertions and innuendo rather than facts.
We can't continue to make investments decisions maybes or could haves, rather we must base it on solid data and evidence if we want to do well with our commodity investments.
While it may be a good time to take a breather and look at the overall economic landscape, there's no way I would sell my silver or gold investments at this time, although it would depend on what I was investing in, such as silver or gold futures or specific silver or gold mining companies, or maybe even physical gold or silver.
There is this foolish idea floating around that we have to put more money into equities just in case we actually enter into a recovery. That's somewhat stupid to me, although, again, a specific company could do well in the current economic and investment climate, like many have done throughout the years.
But to assert our time of risk is over and we should start to move our money into equities in general is just plain dumb. We are far from being over risk, and we are in more dire straits with sovereign risk with the PIIGS and consumer confidence declining, along with a so-called economic recovery with no jobs being created.
Even the talk of future interest hikes by the Federal Reserve is irrelevant. Ben Bernanke has already stated he's going to hold things where they are for some time to come, and even if you don't trust Bernanke, he's right in that he will have to do it, as he and the Federal Reserve are caught in a trap they can't get out of, and he's going to bide his time in hopes something will emerge which will help him and the Federal Reserve.
Silver and gold companies like the ones mentioned above are far from running their course, and it's highly unlikely they'll stay down for any long period of time going forward, although there will always be market corrections.
Future of Silver and Gold Mining Companies
Some are out there talking as if companies like Silver Wheaton (NYSE:SLW), Silver Standard Resources (NASDAQ:SSRI) and Endeavour Silver (AMEX:EXK) are going to start to slow down in growth, largely based on assertions and innuendo rather than facts.
We can't continue to make investments decisions maybes or could haves, rather we must base it on solid data and evidence if we want to do well with our commodity investments.
While it may be a good time to take a breather and look at the overall economic landscape, there's no way I would sell my silver or gold investments at this time, although it would depend on what I was investing in, such as silver or gold futures or specific silver or gold mining companies, or maybe even physical gold or silver.
There is this foolish idea floating around that we have to put more money into equities just in case we actually enter into a recovery. That's somewhat stupid to me, although, again, a specific company could do well in the current economic and investment climate, like many have done throughout the years.
But to assert our time of risk is over and we should start to move our money into equities in general is just plain dumb. We are far from being over risk, and we are in more dire straits with sovereign risk with the PIIGS and consumer confidence declining, along with a so-called economic recovery with no jobs being created.
Even the talk of future interest hikes by the Federal Reserve is irrelevant. Ben Bernanke has already stated he's going to hold things where they are for some time to come, and even if you don't trust Bernanke, he's right in that he will have to do it, as he and the Federal Reserve are caught in a trap they can't get out of, and he's going to bide his time in hopes something will emerge which will help him and the Federal Reserve.
Silver and gold companies like the ones mentioned above are far from running their course, and it's highly unlikely they'll stay down for any long period of time going forward, although there will always be market corrections.
Future of Silver and Gold Mining Companies
Wednesday, February 24, 2010
Charlie Munger Warns on America
Charlie Munger on Economics and America
Anyone reading Charlie Mungers parable over at Slate over the weekend should come away very sober, with the realization why precious metals like gold and silver, along with other commodities, will do well over the years ahead.
The parable by Charlie Munger attacked on two fronts. The first was the outrageous practices of the U.S. government which is out of control with its spending and taxation, and discourages entrepreneurs from flourishing when all they do is take wealth away from them and redistribute it like the growing socialist government and administration we now have.
On the private business side, Munger blasted the derivative trading of the banks which were a major part of the underlying problems many of us face.
While this is all true and accurate, we still face the consequences of the actions of the U.S. government and major banks no matter what is done in attempts to deal with the root causes.
This is why commodities will continue to be the major success story over the next decade or more, as real things will continue to be in demand, rather than things most people can't begin to understand.
Charlie Munger on Economics and America
Anyone reading Charlie Mungers parable over at Slate over the weekend should come away very sober, with the realization why precious metals like gold and silver, along with other commodities, will do well over the years ahead.
The parable by Charlie Munger attacked on two fronts. The first was the outrageous practices of the U.S. government which is out of control with its spending and taxation, and discourages entrepreneurs from flourishing when all they do is take wealth away from them and redistribute it like the growing socialist government and administration we now have.
On the private business side, Munger blasted the derivative trading of the banks which were a major part of the underlying problems many of us face.
While this is all true and accurate, we still face the consequences of the actions of the U.S. government and major banks no matter what is done in attempts to deal with the root causes.
This is why commodities will continue to be the major success story over the next decade or more, as real things will continue to be in demand, rather than things most people can't begin to understand.
Charlie Munger on Economics and America
Tuesday, February 23, 2010
Managed Commodity Assets Fall
Managed Commodity Assets Fall
Managed commodity assets fell for the first time in over a year, said Barclay's Capital, evidently based on worries over the global economy.
Overall commodity assets under management dropped to $245 billion, a $12 billion fall from the $257 billion from last month.
In what I think is a strange response to uncertainty, investors took close to $500 million out of exchange-traded funds, with the majority of that being funds backed by gold and a variety of other precious metals.
At a time when uncertainty should drive smart investors to gold, the idea that taking it out of gold and moving it to something else is ignorant and bizarre, although obviously a lot more was happening than only that in the overall commodity managed assets picture.
Managed Commodity Assets Fall
Managed commodity assets fell for the first time in over a year, said Barclay's Capital, evidently based on worries over the global economy.
Overall commodity assets under management dropped to $245 billion, a $12 billion fall from the $257 billion from last month.
In what I think is a strange response to uncertainty, investors took close to $500 million out of exchange-traded funds, with the majority of that being funds backed by gold and a variety of other precious metals.
At a time when uncertainty should drive smart investors to gold, the idea that taking it out of gold and moving it to something else is ignorant and bizarre, although obviously a lot more was happening than only that in the overall commodity managed assets picture.
Managed Commodity Assets Fall
Sunday, February 14, 2010
Commodities and Sovereign Default = Opportunity
Commodities and Sovereign Default
It's interesting to read what some think will be the ruin of commodities because of the potential sovereign default from a growing number of countries, including Greece, Ireland, Spain and Portugal.
Of course the problem with ignorant writers on commodities is they're clueless as to how you make money with commodities, which is when they're on the way up or on the way down, so whether the price is going up or down for commodities is irrelevant from that point of view.
These writers only think in terms of whether or not those trying to make money on commodity prices going up are going to get clobbered, not realizing or even in some case - even knowing, that you make money either way.
For those investing in commodities, it doesn't make any difference whether you make the money on upwards or downwards price movements.
So don't forget to include that in your decision making going forward, as potential significant price movements in commodities one way or the other are always potentially great opportunities to make a lot of money.
Commodities and Sovereign Default
It's interesting to read what some think will be the ruin of commodities because of the potential sovereign default from a growing number of countries, including Greece, Ireland, Spain and Portugal.
Of course the problem with ignorant writers on commodities is they're clueless as to how you make money with commodities, which is when they're on the way up or on the way down, so whether the price is going up or down for commodities is irrelevant from that point of view.
These writers only think in terms of whether or not those trying to make money on commodity prices going up are going to get clobbered, not realizing or even in some case - even knowing, that you make money either way.
For those investing in commodities, it doesn't make any difference whether you make the money on upwards or downwards price movements.
So don't forget to include that in your decision making going forward, as potential significant price movements in commodities one way or the other are always potentially great opportunities to make a lot of money.
Commodities and Sovereign Default
Monday, January 25, 2010
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
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
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
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
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
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
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
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
Thursday, December 31, 2009
Nat Rothschild Investing in Russian Alumninum Company Rusal
Rusal Aluminum
Nat Rothschild has made a deal to be a foundational investing in the Russian aluminum company Rusal, which will go public in January 2010. Rusal is controlled at this time by Russian billionaire Oleg Deripaska.
Also signing on to the deal is Paulson & Co, the American hedge fund giant headed by John Paulson; Robert Kuok, a wealthy Malaysian-Chinese; and Vnesheconombank, or VEB, the Russian state development bank.
How the deal is set up is the four investors, including Rothschild, will be guaranteed shares when the company goes public in exchange for an agreement to not sell them over a period of several months.
The major listing will be in Hong Kong, and secondarily in Paris on January 29. Rusal expects to raise about $2 billion from the offering, which represents a 10 percent stake in the company.
For the most part the reason for the float is to raise money to pay down the enormous $17 billion in debt Rusal has. Most of that came from acquiring a number of businesses not too long before commodity prices fell.
Because the deal is considered highly risky, retail investors won't be allowed to participate in the IPO. Once the deal goes forward, Rusal will be the first Russian company listed on the Hong Kong exchange.
Rusal Aluminum
Nat Rothschild has made a deal to be a foundational investing in the Russian aluminum company Rusal, which will go public in January 2010. Rusal is controlled at this time by Russian billionaire Oleg Deripaska.
Also signing on to the deal is Paulson & Co, the American hedge fund giant headed by John Paulson; Robert Kuok, a wealthy Malaysian-Chinese; and Vnesheconombank, or VEB, the Russian state development bank.
How the deal is set up is the four investors, including Rothschild, will be guaranteed shares when the company goes public in exchange for an agreement to not sell them over a period of several months.
The major listing will be in Hong Kong, and secondarily in Paris on January 29. Rusal expects to raise about $2 billion from the offering, which represents a 10 percent stake in the company.
For the most part the reason for the float is to raise money to pay down the enormous $17 billion in debt Rusal has. Most of that came from acquiring a number of businesses not too long before commodity prices fell.
Because the deal is considered highly risky, retail investors won't be allowed to participate in the IPO. Once the deal goes forward, Rusal will be the first Russian company listed on the Hong Kong exchange.
Rusal Aluminum
Saturday, December 12, 2009
Printing Money Benefits Commodities
With central banks and governments addicted to printing money as their preferred strategy to salvage the economy, that will have long term benefit to commodities investors, as prices are sure to rise in response the the inflation-producing activity.
So one indicator all of those interested in commodities as an investment can look for is how their particular country is managing their money supply.
If they're printing money at a huge rate, you can count on inflation kicking in, especially with many commodity prices, and so you can be sure that, along with growing demand for commodities in Asia will ensure there's a ripe commodity market for some time into the future.
This doesn't mean all commodities will go up in price, but in general there will be an upward price movement in the commodity sector.
Add to this the demand for food, energy and precious metals, and you have a good look at where commodity demand, and ultimately prices will head. Just watch the amount of money being printed along with supply and demand as the major factors driving long term commodity prices.
So one indicator all of those interested in commodities as an investment can look for is how their particular country is managing their money supply.
If they're printing money at a huge rate, you can count on inflation kicking in, especially with many commodity prices, and so you can be sure that, along with growing demand for commodities in Asia will ensure there's a ripe commodity market for some time into the future.
This doesn't mean all commodities will go up in price, but in general there will be an upward price movement in the commodity sector.
Add to this the demand for food, energy and precious metals, and you have a good look at where commodity demand, and ultimately prices will head. Just watch the amount of money being printed along with supply and demand as the major factors driving long term commodity prices.
Banks Expanding Commodity Staff
With a look toward inevitable inflationary pressures, banks have been adding to their commodities staffs as they look to make some good money in the sector as faith in the U.S. dollar continues to plummet.
It is expected to be a banner and breakout year for commodities this year, as investors have more appetite for risk and economic uncertainty make commodity investing look good.
The reason why there is more appetite for risk in the midst of economic uncertainty is the growing demand for commodities, which will continue no matter what the economic circumstances are.
Real economic recovery seems to be happening in China, and so there is no doubt the middle class demand for goods will drive up the price of commodities, not only next year, but for several years ahead.
This is why large banks are ramping up their commodities units in order to perpare for this inevitable trend to continue, as the commodity bull market has been on hold in general during the economic crisis.
Another factor has been the derivative industry, which won't function like it has in the past, and won't be destructive to banks, but won't make them any money (for the most part) either. Bank commodity investment will continue to grow, along with their staffs, as a result.
It is expected to be a banner and breakout year for commodities this year, as investors have more appetite for risk and economic uncertainty make commodity investing look good.
The reason why there is more appetite for risk in the midst of economic uncertainty is the growing demand for commodities, which will continue no matter what the economic circumstances are.
Real economic recovery seems to be happening in China, and so there is no doubt the middle class demand for goods will drive up the price of commodities, not only next year, but for several years ahead.
This is why large banks are ramping up their commodities units in order to perpare for this inevitable trend to continue, as the commodity bull market has been on hold in general during the economic crisis.
Another factor has been the derivative industry, which won't function like it has in the past, and won't be destructive to banks, but won't make them any money (for the most part) either. Bank commodity investment will continue to grow, along with their staffs, as a result.
Thursday, December 10, 2009
Commodities More Than For Diversification
In the past, commodities as an investment were considered a good way to diversify your portfolio. Those days are quickly leaving us as commodities are now considered a great way to generate real returns, and not just a hedge against losses or way to add balance to an investment portfolio.
One of the ways institutional investors are going about doing that is simply in trading commodities more actively. With the commodity bull market poised to resume, a large number of institutional investors say they're going to increase their commodity holdings over the next year.
A recent survey discovered that investors, like mentioned, aren't looking simply for diversification of portfolios at this time, but are looking for absolute returns. That's a lot different than what they were seeking last year with their commodity investments, which also included commodities investment as a hedge against inflation, which is still true, but no longer the key element in commodity investment decisions.
Another trend seems to be away from commodity index funds into direct investment in commodities, as well as investment in a variety of commodity exchange-traded funds. Many commodity investors are looking for more active positions rather than holding positions going forward.
The potential fallout for commodity prices is there could be a lot more volatility in the commodities market from managed commodity positions than from holding patterns associated with commodity index funds. That may also result in commodity prices having more downward pressure as well.
Estimates are that commodity assets under management at the end of 2009 could be as high as $240 billion.
Most of those that invest and follow commodities continue to believe that we're still in the midst of a commodity bull market and commodity prices overall will continue to rise.
One of the ways institutional investors are going about doing that is simply in trading commodities more actively. With the commodity bull market poised to resume, a large number of institutional investors say they're going to increase their commodity holdings over the next year.
A recent survey discovered that investors, like mentioned, aren't looking simply for diversification of portfolios at this time, but are looking for absolute returns. That's a lot different than what they were seeking last year with their commodity investments, which also included commodities investment as a hedge against inflation, which is still true, but no longer the key element in commodity investment decisions.
Another trend seems to be away from commodity index funds into direct investment in commodities, as well as investment in a variety of commodity exchange-traded funds. Many commodity investors are looking for more active positions rather than holding positions going forward.
The potential fallout for commodity prices is there could be a lot more volatility in the commodities market from managed commodity positions than from holding patterns associated with commodity index funds. That may also result in commodity prices having more downward pressure as well.
Estimates are that commodity assets under management at the end of 2009 could be as high as $240 billion.
Most of those that invest and follow commodities continue to believe that we're still in the midst of a commodity bull market and commodity prices overall will continue to rise.
Saturday, September 19, 2009
CME Offers Commodity Speculation Recommendation
In an effort to curb the influence of speculation in the commodity markets, CME Group offered up some of its own recommendations, among which is a stronger role for the Commodity Futures Trading Commission in reference to energy products in hard singel exchange positions, specifically those at exchanges that are regulated.
"We recognize that misperceptions can undermine confidence in well-functioning markets, which is why we support the CFTC's mission to provide regulatory certainty and to ensure that the energy markets can operate efficiently," said Terry Duffy, CME Group executive chairman. "Regulatory parity, however, must be given to all markets under the CFTC's jurisdiction."
But as CME's Donohue states, a number of studies have disproven the idea that commodity speculators have been the force behind driving commodity prices and energy prices up, and rather it's the supply and demand factors which drive prices, and not commodity speculators.
Donohue also, probably rightly, added, that if there are limits imposed on index funds, that will more than likely simply move the funds to invest in markets that are unregulated.
The government needs to simply stay out of attempting to be the central planner for the economy, it hasn't worked anywhere in the past, and it won't work now or in the future. Supply and demand drives commodity prices, not speculators.
"We recognize that misperceptions can undermine confidence in well-functioning markets, which is why we support the CFTC's mission to provide regulatory certainty and to ensure that the energy markets can operate efficiently," said Terry Duffy, CME Group executive chairman. "Regulatory parity, however, must be given to all markets under the CFTC's jurisdiction."
But as CME's Donohue states, a number of studies have disproven the idea that commodity speculators have been the force behind driving commodity prices and energy prices up, and rather it's the supply and demand factors which drive prices, and not commodity speculators.
Donohue also, probably rightly, added, that if there are limits imposed on index funds, that will more than likely simply move the funds to invest in markets that are unregulated.
The government needs to simply stay out of attempting to be the central planner for the economy, it hasn't worked anywhere in the past, and it won't work now or in the future. Supply and demand drives commodity prices, not speculators.
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