Peter Schiff has come under fire for exposing the macro-economic weaknesses in the United States, especially the horrid policies of the Federal Reserve and the government bailouts.
Schiff has gained notoriety and confidence from people because he accurately predicted the collaspe of the housing market and credit crunch well before they happened, and is now projecting the collaspe of the U.S. dollar and the collapse of the bond market, which he thinks is already in a bubble that is ready to burst.
Some of criticized Peter Schiff for some of those investing with him losing money because the exact timing of things hasn't come about yet. But that's ridiculous when you really think of it, as there is no investor or financial advisor in the world that hasn't been wacked by the timing of the market, which those like Warren Buffet, Peter Schiff and Jim Rogers all recognize is impossible to do.
So when taking into account the insights of Peter Schiff and also Jim Rogers, we have to realize that the U.S. dollar will collapse. It's impossible for the government to keep the fiat money presses running and offer up trillions in bailouts without having to pay for that money. The only way they can do that is by printing it out, as other countries like China can no longer take on dubious U.S. debt, as they'll lose big time as the dollar falls in value.
What we need to do is plan in a way that takes the reality that the U.S. dollar will plunge in value. It's no longer a matter of if, only a matter of when. Whether it's in 2009 or not doesn't matter, we need to put our money in things that will not be tied to the dollar in any way, as it will be highly diluted.
A few things to keep in mind for 2009 are the surety that gold and silver will perform strongly, as there's very little else that could be considered a haven of safety for people's money. Also the oil contango or super contango provides an excellent opportunity for safe investment, and should be considered going forward, as the predictable oil futures market is extended beyond what it usually is, the reason it's now being called a super contango rather than just a contango.
Silver prices will probably outperform gold in 2009, when you take into account percentages, although gold is more the haven than silver will be, and probably safer.
Platinum prices in 2009 are a toss up to me, as there are market factors that could drive platinum futures up even though its use in the auto industry will decline. Gold prices have caused Indians who usually buy it in large amounts to start looking to platinum as an alternative as gold prices and futures continue to soar. So platinum prices could receive some support depending on how much demand comes from India, and how much platinum they buy in 2009.
Peter Schiff has the overall economic picture accurate, and so investing in the right commodities will be the most profitable over the next five to ten years. Even after the global economy starts to recover, and gold isn't looked to as a place of safety, then the growing middle classed in China and India will resume their buying again, and raw materials demand will soar, and the commodity bull market continue.
How will grains do in 2009? That is also a toss up in my book. The usual factors will have to be watched, as the recent drought in Argentina and also China has people concerned over the near future of wheat, corn and soybeans. The only problem this year is the harvest has been so successful and food so plentiful, that even with the weather challenges there's so much on the market that it's not offering fundamental support to increased prices.
You also have the economic factor to consider, as people continue to cut back on all spending, and are only buying the bare necessities in order to survive. That will change in the long term, but short term it will affect the prices.
So going forward, keep in mind the overall economic situation as mentioned by Peter Schiff. Those who invest in commodities and develop strategies accordingly, will hold onto their money, those that don't believe the economic situation as defined by Schiff will find themselves struggling to survive as the normal way of investing no longer will cut in over the next several years.
Showing posts with label Platinum 2009. Show all posts
Showing posts with label Platinum 2009. Show all posts
Saturday, February 7, 2009
Commodities | Raw Materials Down in 2009?
A recent report from the Economist Intelligence Unit (EIU) says that industrial commodities will probably continue to fall in 2009 as the price index is projected to plunge by up to 41 percent this year.
On the other hand, in 2010, expectations from the EIU report says prices of the majority of industrial raw materials should bounce back in at least a limited amount in prices, although in the long term most investors and futures traders are positive about the return of the bull market in commodities.
In the auto industry, that continuing decline will cause natural rubber demand to fall even more, as synthetic rubber becomes more competitive in price (that'll last as long as petroleum prices remain down), and platinum, while expected to fall in demand in 2009, possibly pressuring platinum prices and futures down, there could be an override there from investors speculating.
The recent announcement that Indian consumers are migrating from gold to platinum may offer some support in 2009 as well.
Obviously gold and silver futures and prices should enjoy a solid year in 2009, as investors continue to look for the few places of safety available, as confidence in the U.S. slides as investors start to understand forced liquidation propped it up when it should have been falling, and now they're starting to flee it as they see the fundamentals and huge bailouts will continue to undermine its strength.
Availability of credit in the latter part of 2008 and early part of 2009 have also affected the movement of commodity stocks as financing has held back acquisition of raw materials in many cases and many companies.
Cutbacks by producers has also generated the possibility that supply may be more difficult to acquire this year, putting more pressure to meet demand and move the stock prices higher. Shortages could be a reality with some raw materials in 2009.
Demand for metals in the consumer electronics sector has also left demand down, and so prices are expected to be pressured down for metals used there too.
The one unknown question out there is how far along companies are in forced liquidation. If their positions are mostly unwound, base metals may be a little stronger than expected, although most aren't holding out much hope for 2009, and are looking for 2010 for the beginning of a modest recovery.
Some companies may have enough cash and credit lines available to tap, and so may do well, others probably will take longer, the reason its such a mixed commodity futures market at this time, and investors are being cautious.
That's also a factor with the U.S. dollar, which will assuredly contract and collapse some this year. Again, the U.S. dollar has benefitted from forced liquidation because of commodities being sold to raise capital which has artificially kept the U.S. dollar strong because of most commodities being dollar denominated.
With the ongoing recession across the world, there's little hope that oil prices and futures will rise any time soon, a reason the super contango has been helping the pocket books of those investing in it.
Investors are simply buying and storing oil in supertankers until prices start to move again. Their hope is obviously the storage costs won't outpace the price increase, however incremental they may be.
Because it's a super contango, the futures are much further out than normal, and investors can more easily make those decisions.
Although it's not quite here yet fully, the commodity market, as far as gold and silver goes, is starting to behave somewhat predictably again, as investors run to a haven of safety with their capital.
Other industrial raw materials and futures will struggle to go up this year in any meaningful way, and we can expect this behavior for the rest of 2009.
On the other hand, in 2010, expectations from the EIU report says prices of the majority of industrial raw materials should bounce back in at least a limited amount in prices, although in the long term most investors and futures traders are positive about the return of the bull market in commodities.
In the auto industry, that continuing decline will cause natural rubber demand to fall even more, as synthetic rubber becomes more competitive in price (that'll last as long as petroleum prices remain down), and platinum, while expected to fall in demand in 2009, possibly pressuring platinum prices and futures down, there could be an override there from investors speculating.
The recent announcement that Indian consumers are migrating from gold to platinum may offer some support in 2009 as well.
Obviously gold and silver futures and prices should enjoy a solid year in 2009, as investors continue to look for the few places of safety available, as confidence in the U.S. slides as investors start to understand forced liquidation propped it up when it should have been falling, and now they're starting to flee it as they see the fundamentals and huge bailouts will continue to undermine its strength.
Availability of credit in the latter part of 2008 and early part of 2009 have also affected the movement of commodity stocks as financing has held back acquisition of raw materials in many cases and many companies.
Cutbacks by producers has also generated the possibility that supply may be more difficult to acquire this year, putting more pressure to meet demand and move the stock prices higher. Shortages could be a reality with some raw materials in 2009.
Demand for metals in the consumer electronics sector has also left demand down, and so prices are expected to be pressured down for metals used there too.
The one unknown question out there is how far along companies are in forced liquidation. If their positions are mostly unwound, base metals may be a little stronger than expected, although most aren't holding out much hope for 2009, and are looking for 2010 for the beginning of a modest recovery.
Some companies may have enough cash and credit lines available to tap, and so may do well, others probably will take longer, the reason its such a mixed commodity futures market at this time, and investors are being cautious.
That's also a factor with the U.S. dollar, which will assuredly contract and collapse some this year. Again, the U.S. dollar has benefitted from forced liquidation because of commodities being sold to raise capital which has artificially kept the U.S. dollar strong because of most commodities being dollar denominated.
With the ongoing recession across the world, there's little hope that oil prices and futures will rise any time soon, a reason the super contango has been helping the pocket books of those investing in it.
Investors are simply buying and storing oil in supertankers until prices start to move again. Their hope is obviously the storage costs won't outpace the price increase, however incremental they may be.
Because it's a super contango, the futures are much further out than normal, and investors can more easily make those decisions.
Although it's not quite here yet fully, the commodity market, as far as gold and silver goes, is starting to behave somewhat predictably again, as investors run to a haven of safety with their capital.
Other industrial raw materials and futures will struggle to go up this year in any meaningful way, and we can expect this behavior for the rest of 2009.
Subscribe to:
Posts (Atom)