I Hear The Secrets That You Keep

The markets, in addition to being one of best forms of intelligence on the planet, are a top notch weather forecaster.

The information is there for everyone to read. For many, their forecasts remain a secret, but for those able to read capital flows,

I hear the secrets that you keep
When you're talking in your sleep

Talking In Your Sleep, In Heat (1983), Romantics

Connected money's inflows in natural gas remain strong.

Natural Gas ETF and the Commercial Traders COT Futures and Options Stochastic Weighted Average of Net Long As A % of Open Interest:


Natural Gas ETF and the Nonreportable Traders COT Futures and Options Stochastic Weighted Average of Net Long As A % of Open Interest:


Headline: Severe Arctic Outbreak Forecast for Mid-January

The latest indications are that nasty cold will burst onto the Plains and spread over much of the nation during the middle of January.

Warning, if you don't like cold, reading this could be painful as it appears the "ice man cometh."

AccuWeather.com Long Range Expert Joe Bastardi says that while much of the eastern half of the nation will start the month with above-normal warmth, brutal cold will roll southward from the Arctic during weeks two and three of the month.

"The worst of the cold will lie over the northern Plains and Upper Midwest but will spread out from there," Bastardi said.

Source: accuweather.com

Eric: Your wake up call for natural gas could not have come at a better investment time, Australia is the "Worlds largest exporter of Coal" Queensland, Australia Flooding Impacts Global Coal Mining Exports

Coal is not cheap stockcharts.com

Courtesy of Bob

Drama In The Silver Market

The entrance of Carlos Slim into the market will not alter the strength of a trend that showed signs of accelerating in early 2010. The entrance of big names and money, however, will add to the drama on both sides of the trade as 2012 approaches.

Headline: Is the World’s Richest Man Getting Into Silver?

A source in mergers and acquisitions out of Europe has alerted King World News that Carlos Slim may be looking to enter the silver market in a big way. Gold and silver are in big bull markets and this is attracting the attention of some of the smartest money around the globe. James Turk commented, “If this deal does happen Eric, this is going to make the silver shorts choke.” Fresnillo has a current market cap of roughly $19 billion.

Source: kingworldnews.com

Graphite Market

(CIGA) Tom suggests that China, similar to rare earths, controls the graphite market.

Hi Eric,

I think that JS Mineset readers would be interested in knowing that China also controls the world graphite market.

Largely due to Lithium Ion battery growth, upgrading of steel mills, and growth in nuclear energy, especially next generation pebble bed reactors.

The graphite market is not small- about the same size as Nickel and many times larger than rare earths.

CIGA Tom

Headline: Graphite: A Diamond in the Rough for Investors?

Today I want to look at China's dominance of critical raw materials for clean-tech. Most people think that they left graphite behind when they graduated from pencils to pens early on in their school days, but the truth is that this slippery substance remains a crucial part of our daily lives. Consider the laptop computer, which has by and large replaced pens for most of us over the past decade — did you know that there is actually 10 times more graphite than lithium inside a lithium-ion battery?

Graphite has long been a key ingredient in steel, castings, lubricants, vehicle brakes, golf clubs, tennis rackets and — no surprise — pencils. But this polymer of carbon — a chemically identical sibling of both diamonds and coal — will become increasingly important in coming years due to its chemical, electrical and thermal properties. Its ability to remain stable in ordinary corrosive environments, conduct electricity and resist heat allow it to serve as a key component in applications like the storage batteries and nuclear electricity generation stations that will power us into the future.

Source: seekingalpha.com

Are You Still Kicking Yourself?

Those intent on classifying investment world into emotional states have lost the “the game” before it starts. Gold, silver, real estate, stocks, bonds, neither the pessimist’s nor optimist’s best friend, are investment choices directed by market forces. There is no long or short side of the trade – only the right side.

Market forces have been pushing gold and silver for more than a decade. Media spin, a tool of the operators, will use labels to slow group recognition. The weak hands unable to find the right side are always kicking themselves while they fight emotional labels.

The operators will begin to unload when the pool of investors still kicking themselves starts drying up. There is no profit in something that does not have the liquidity (volume) to support a massive transfer from strong to weak hands.

That’s the nature of the beast in speculation and why wealth tends to get concentrated in this business. The end of the mark up phase for gold is coming. It will occur at levels that will surprise even the bulls.

Headline: Gold: a pessimist's best friend

I'm kicking myself for not buying gold. I have a gold bug friend who has been talking it up for years. I ignored him; I goofed.

Gold jumped 30 percent last year. It has quintupled over the past 10 years, leaving stocks and most other investments in the dust.

Whenever an investment rises that far, a prudent investor will hesitate, wondering if he'd be buying into a bubble that's bound to burst. That might be the case here, but some level-headed investment pros think gold has farther to go.

Source: stltoday.com

The Hammer Of Change Has Already Dropped

The market, regardless of the actions of central planners, has been and will always be in charge. This painful lesson from history, unfortunately, is rediscovered within a backdrop of finger pointing and astonishment roughly every hundred years. Today, is yet another cycle of rediscovery by a public far too distanced from the lessons of history.

Central planning always chooses the path of least resistance even if it means shooting itself in the foot (against market forces) in the process. The larger economies of the West, despite the suggestions otherwise, follow this axiom. While their on going default through currency devaluation is often disguised by friendly headlines and economic spin today, it is no different in terms of consequences. Currency devaluation, the path of least resistance, is not a policy choice limited to smaller economics such as Venezuela. The following chart illustrates the devaluation of fiat (paper money) relative gold as measured by all global currencies.

Approve or disapprove, recognized or not, the hammer of change has already dropped.

Gold London PM Fixed and U.S. Dollar Broad Index:


Source: edegrootinsights.blogspot.com

Headline: Venezuela Devalues Bolivar For Imported `Essential Goods,' Unifying Rates

Venezuela devalued its currency for the second time since January, enabling the government to increase revenue at the risk of pushing up the world's highest inflation rate.

The government will weaken the exchange rate on so-called essential goods such as food and medicine by 40 percent to 4.3 bolivars per dollar on Jan. 1, unifying its two fixed foreign exchange rates in bid to pull the economy out of recession, Finance Minister Jorge Giordani said today on state television. Imports of essential goods were previously bought at a rate of 2.6 bolivars per dollar.

Source: bloomberg.com

Connected Money Will Reposition As OPM Does the Heavy Lifting

While the US and its monetary supports continue whistling past the graveyard in regards to the U.S. dollar (US Dollar Seen Rising In 2011 After 2010) their headline rhetoric continues to obscure reality.

The upside breach of the short-term downtrend in WA (see chart below) implies a resumption of the downtrend. Connected money, done beating the grass to startle the snakes - particularily the impressionable retail snakes, will begin repositioning as other people's money (OPM) does the heavy lifting during the markdown phase.

U.S. Dollar Index and the Commercial Traders COT Futures and Options Stochastic Weighted Average of Net Long As A % of Open Interest


Retail money, heavily influenced by the constant grass beating of the media despite the obvious trend, finds itself on the wrong side of the trade, again!

U.S. Dollar Index and the NonreportableTraders COT Futures and Options Stochastic Weighted Average of Net Long As A % of Open Interest


There are no coincidences in this business.

Headline: Gold Rises to Record Closing Price on Haven Demand, Sovereign-Debt Concern

“Gold has done so well this year because government activity indicates record deficits, low interest rates and an obvious lack of fiscal discipline,” said Tom Winmill, who manages the Midas Fund in New York. “The U.S. monetary policy will lead to a devaluation in the dollar, and all eyes are focused on the next default in the European community.”

Source: bloomberg.com

State Budgets: Day of Reckoning

The formula (vicious cycle) at work at the State level as described by 60-minutes.

State Budgets: Day of Reckoning


Source: youtube.com

From Bob