Interesting analysis of how China has drastically ramped up their commodities purchasing and how that portends a major devaluation of the yuan. China May Be Preparing To Deploy Economic 'Nuclear Option' (newsweek.com) China has been buying up commodities at a rapid clip, prompting analysts to wonder out loud whether Beijing is preparing to choose the economic "nuclear option." "China is preparing for something major. That seems increasingly obvious judging from the stockpiling of important resources. Could it be that they are preparing a major one-off devaluation of the CNY?" Andreas Steno Larsen, CEO of Steno Research, wrote last week. Accumulating resources like gold and oil beforehand could provide some financial security and bargaining power, helping to stabilize the economy against potential negative effects of a devaluation, such as increased import costs and inflation.
China is in trouble. Rising unemployment and especially youth unemployment. Oppress 1 billion people and then take away the increased economic situation they’ve been gaining and suddenly you are screwed.
That could go hand-in-hand with economic turbulence. Despite its dystopian character they could very well be planning a simultaneous invasion of Taiwan to help buoy their economy and unite their populace behind a cause.
The best indicator that gold is going to go on a tear is when I sell it. I sold my relatively small stake a few months ago.
...and positioning... ...and preparing... ...and planning... ....and planting ops here... ....and setting up eyes on our bases, recon via balloons over our skies, and [funky shit with their satellites]...and chipping away at us with fenty and driving division a thousand different ways, and flooding in ops by the thousand through our porous southern border.... ***BUT*** RUSSIA!!!!
I finally decided enough of this nonsense. It’s a dumb investment. I don’t plan to ever buy any again. which probably means you should and enjoy a multiyear gold boom.
maybe, but I've always seen investing in commodities as a bet against human innovation, &, hence, a sucker bet The Simon–Ehrlich wager was a 1980 scientific wager between business professor Julian L. Simon and biologist Paul Ehrlich, betting on a mutually agreed-upon measure of resource scarcity over the decade leading up to 1990. The widely-followed contest originated in the pages of Social Science Quarterly, where Simon challenged Ehrlich to put his money where his mouth was. In response to Ehrlich's published claim that "If I were a gambler, I would take even money that England will not exist in the year 2000" Simon offered to take that bet, or, more realistically, "to stake US$10,000 ... on my belief that the cost of non-government-controlled raw materials (including grain and oil) will not rise in the long run." Simon challenged Ehrlich to choose any raw material he wanted and a date more than a year away, and he would wager on the inflation-adjusted prices decreasing as opposed to increasing. Ehrlich chose copper, chromium, nickel, tin, and tungsten. The bet was formalized on September 29, 1980, with September 29, 1990, as the payoff date. Ehrlich lost the bet, as all five commodities that were bet on declined in price from 1980 through 1990, the wager period.[1] Simon–Ehrlich wager - Wikipedia
The problem with most commodities, excluding hard commodities like gold and silver, is you can’t directly invest in them. You have to invest in funds that try to replicate commodities indexes with futures. But ultimately you must sell those positions unless you want tons of corn dumped on your driveway. By far the biggest traded commodity is oil. When the futures contracts are about to expire, and these commidity future “investors” are selling, commodities traders eat their lunch, diminishing some of the profits leading to big variances between the spot price returns and the futures fund return. I think this phenomenon is called contango. So not only are commodities a poor long term investment due to technology, you can’t even consistent replicate the spot price returns. Gold and silver are different as they are storable. Still long term you’d expect they’d match inflation but with lots of variability that can last for decades.
