smart-money-report.com Blog

As usual, the Aden sisters nail it:

These mega Kondratieff upmoves normally last around 22 years or more and since we’re only six years into this mega upmove, it still has many years to go. This means commodity prices will likely be rising for the next 15 years or so. This tells us that you’ll want to keep a large portion of your assets in tangible assets like gold, other metals and commodities, and not in paper assets like stocks and bonds.Gold’s mega uptrend since 2001 is reinforcing this. The booming rise in oil and the ongoing demand in the face of diminishing supplies in the years ahead is yet another reinforcement of this emerging mega uptrend.

Those who recognize this will profit handsomely. But those who follow the mainstream and keep a large portion of their savings in common stocks, especially those approaching retirement age, will be disappointed. And while we certainly don’t have a crystal ball, the markets and history are also telling us we’re going to be in for a period of wars and social unrest in the upcoming years.

In other words, what we’ve seen in recent years is going to continue and it’ll probably intensify. This too will provide an underlying boost for gold because it tends to rise along with global tension. And considering that gold hit over $2000 an ounce in 1980 at the last Kondratieff peak, adjusted for inflation, it still has a long way to go in the years ahead before it even approaches that previous high.

Read the whole thing.

I missed this before. But this Ben Barnacke quote should erase any doubt about whether he is going to be an easy money Fed chairman:

Focusing on the medium-term forecast horizon is necessary because of the lags with which monetary policy affects the economy. In my view, data arriving since the last FOMC meeting have not materially changed that assessment of the risks. In particular, even if in the Committee’s judgement the risks to its objectives are not entirely balanced, at some point in the future the Committee may decide to take no action at one or more meetings in the interest of allowing more time to receive information relevant to the outlook

Jack Chan has the gold charts that say it all. I totally agree with his last paragraph:

Price action from the three gold charts of the year speak loud and clear. All three have now broken out to historic highs, with absolutely no overhead resistance. You could say the sky is the limit, but please refrain from saying “to da moon”. Last time when the “to da moon” crowd was making noises, it was the beginning of a two year correction in gold stocks. (Dec 2003) So, the question is, where do we go from here? Frankly my dear, I don’t know and I don’t care. We have a bull market, trend is up, pick a spot, join the party. Keep a core position at all times, take some profits every now and then, re-enter on buy signals, and go fishing. When the gold party is over, bag the chips, and we move on to the next party. Perhaps by then, stocks like Intel and Nortel are in a new bull market……

Indeed.

In a tizzy over high U.S. gas prices? You could always try filling up your tank in Europe.

Average price of a gallon of gas, including tax, on April 10:

* Average for 50 states
Source: Energy Information Administration

The new silver ETF (SLV) was approved by the SEC yesterday and is set to launch today. So now we have a gold ETF (GLD), an oil ETF (USO) and a silver ETF (SLV) — three very useful financial instruments.

Here’s a guide to SLV.

From Sentimentrader.com by way of Alchemy of Trading:

…to say that there is a high degree of uncertainty in the air is unequivocal. We’re seeing that in many of the sentiment measures on our site, and it was re-affirmed this morning in the Investor’s Intelligence sentiment survey that was just released. That survey shows that more than 28% of respondents were uncertain about future direction, the highest in almost two years. The bulls will tell you that uncertainty while equities are trading at new highs is undoubtedly bullish, but perhaps they should take a look at history. The last five times the S&P 500 traded at a new high and at least this many folks were neutral, a month later the S&P was positive only 1 of those 5 times, and showed an average return of -2.0%. Oh, and the time before that was July 1987.

Here’s a chart showing gas prices adjusted for inflation. What’s all the hoopla about? And, by the way, if gas prices are so high why isn’t the consumer changing behavior?

I wrote about this in the Smart Money Report. There are times when the mining stocks are cheap to the metal and there are times when the mining stocks are expensive to the metal. Right now they’re expensive.

Trader Mike has some valuable links to information on position sizing.

The U.S. Mint is spending more to make a penny than it’s worth:

Right now, the market value of the zinc and copper within a single penny is valued at nearly 0.9 cents. And since it costs an additional 0.6 cents to manufacture a penny, according to the paper, the Mint is paying roughly 1.5 cents for every penny it makes.