By Doug French, Contributing Editor, Casey Research Figuring out what’s going on in Ukraine is like following the plot of Tinker Tailor Soldier Spy. Bloomberg reports Viktor Yanukovych’s ouster as “Moscow-backed,” while Al Jazeera calls Ukraine’s new government “Western-backed.” Which one is it? We’re supposed to trust what’s reported on the ground. But as wordsmith Theodore Dalrymple says, we should […]
Author: Casey Research
China’s plan seems to be to acquire a total of 6,000 tonnes of gold to put its holdings on a par with developed countries and to elevate the international appeal of the renminbi. Meanwhile in the futures market, the basic problem is that there are many more transactions that could put a claim on gold than there is gold registered for delivery in the COMEX warehouses. There are 107 times more open-interest positions than there is registered gold.
It’s a numbers game, and it is… but it’s also all about timing. We all know that China is slowing. But how quickly and how steeply will its economy fall? There is no one answer. China’s transition will hit manufacturing and exports first. If you’re brave enough to short China, these sectors are your best bets. At the same time, consumer-based companies and services should ramp up as GDP per capita increases. So slow growth won’t be hitting all areas at once. You’ll have to pick and choose your battles.
Intense conflicts over water will probably not be confined to the developing world. So far, Arizona, California, Nevada, New Mexico, and Colorado have been able to make and keep agreements defining who gets how much of the Colorado River’s water. But if populations continue to grow while the snowcap recedes, it’s likely that the first shots will be fired before long, in US courtrooms. If legal remedies fail… a war between Phoenix and LA might seem far-fetched, but at the minimum some serious upheaval will eventually ensue unless an alternative is found quickly.
Editor’s note: the price plateaus mentioned in this article are all in nominal terms. When using inflation-adjusted prices, prices have still risen dramatically, though less dramatically. By Marin Katusa, Chief Energy Investment Strategist Between October 1973 and March 1974, the price of oil shot sky-high. OPEC embargoed its output, and prices spiked from $3 a barrel to $12 – a […]
Editor’s note: As controversial as the subject of peak oil is, the comments about global warming and other environmental problems are equally controversial. This site does not subscribe to the view that global warming concern is overblown or that technology ‘”will save us” from man’s overuse of finite natural resources without serious ill effects on many populations due to cost […]
Scarcity is a powerful force and it leaves those in control of limited resources wielding great power. We think a scarcity of uranium will increase Russia’s power; control over some of the last big, easy oil deposits has earned Saudi Arabia great global influence. Petronas’ deal with Progress is a sign that shale gas could generate similar prowess for North America, and is a strong reminder that the global race for resources will provide some with money and power while leaving others in the dust.
One of oil’s most important characteristics is its fungibility, which means that a barrel of refined oil from Texas is equivalent to one from Saudi Arabia or Nigeria or anywhere else in the world. The global oil machine is built upon this premise – tankers take oil wherever it is needed, and one country pays almost the same as the next for this valuable commodity.
Well, that’s true aside from two factors that can render this equivalency void. In fact, crude oil prices range a fair bit according to the quality of the crude and the challenge of moving it from wellhead to refinery. Those factors are currently wreaking havoc on oil prices in North America: a range of oil qualities and a raft of infrastructure issues are creating record price differentials. And with no solution in sight, we think those differentials are here to stay.
In less than a week’s time, the Facebook IPO has gone from the most-hyped technology event since Google went public into “blame-storming” mode. Details concerning the stock’s sudden drop, the market’s inability to process orders, and the (mis)behavior of insiders are starting to emerge. And it doesn’t look good.
Graphite has been getting a lot of buzz recently, raising bullish expectations among some investors and even talk of a future bubble. Why? The price has risen steadily over the past couple of years and attracted a lot of attention. Let’s have a look at why some market participants are excited about this mineral and see if it’s worth our investment dollars.
“What made Instagram worth $1 billion to Facebook?”
When asked this question recently, I responded with an immediate, “Nothing.”
I’m not usually so terse or emphatic with my answers, as any longtime reader knows. But in this case, there really was nothing inherently valuable inside Instagram that made them worth the unbelievable sum Facebook agreed to pay. Yet they did it anyway. Clearly, there’s something missing from a traditional valuation analysis here.
In an interview with Louis James, the inimitable Doug Casey throws cold water on those celebrating the economic recovery.