Oct. 7 (Bloomberg) — Colin Hamilton, an analyst at Macquarie Group Ltd., discusses China’s demand for commodities, metal prices in 2012 and his recommendation of thermal coal. Hamilton talks with Linzie Janis on Bloomberg Television’s “Countdown.” (Source: Bloomberg)
Goldberg Sees `Pockets’ of Value in Emerging Markets
Oct. 7 (Bloomberg) — Pablo Goldberg, head of emerging-market research at HSBC Holdings Plc in New York, talks about the outlook for global markets and his investment strategy. Goldberg speaks with Susan Li in Hong Kong on Bloomberg Television’s “First Up.” (Source: Bloomberg)
The Best Dollar Investment on Earth
The Best Dollar Investment On Earth
by Karim Rahemtulla, Senior Correspondent, Wall Street Daily
Friday, October 7, 2011: Issue #1617
The dollar’s recent rally, which began on the first day of September, is likely being aided by how unappealing other world currencies look right now. Consider…
The euro is toxic…
The British pound is more debt ridden than the dollar, and its proximity to the Eurozone doesn’t help…
The Aussie dollar is facing a correction, thanks to downward movement in resource prices, commodity prices and a possible slowdown in China…
The Japanese yen is treading water – even in the face of government promises to devalue it for export purposes…
And the Chinese yuan – well, it could be a good option if it was more transparent. But it’s in China’s interest to keep it low, making it a slow mover at best.
Enter the Canadian dollar.
Look to the Canadians for Housekeeping Tips
Canada is in the enviable position of having a fiscally strong currency that’s well supported by internal growth and exports.
You see, the Canadian dollar’s – affectionately called the “loonie” – fortune is tied to the commodities markets (to an extent), which could present the mother of all currency trading opportunities.
Think about it… Canada isn’t going to step in and support the loonie. Policymakers want it to depreciate. At current levels, a strong loonie makes exports uncompetitive.
However, given the incredible job Canadians did getting their economic house in order, it hasn’t been cooperating.
Canada is what the United States wants to be – a place with all the freedoms enjoyed in America, minus the fiscal and monetary insanity.
Canada’s a place where people have to make a significant down payment to buy a home.
Its environmental regulations don’t stifle its massive resource-based economy.
Not more than a decade ago, Canada was an economic basket case.
Back then, you could buy one Canadian dollar of for US$0.55. Fast-forward to three weeks ago, and it takes more than one U.S. dollar to buy one Canadian dollar.
Although the commodities boom helped, it isn’t the sole reason behind Canada’s economic miracle.
Politicians and the populous made tough choices to rein in government spending before it reached “Greek proportions.” And it worked.
As a low-debt nation with strong economic diversification, Canada is now the envy of most of the western world.
Why I’m Bullish on The Canadian Dollar
I’m presently very bullish on the Canadian dollar.
Not only does it offer better stability than the U.S. dollar, but it also stands to benefit from a future recovery of its major trading neighbor to the south.
The Canadian dollar is down about eight percent in recent days, as the greenback has become the refuge from the European crisis. Plus, the commodities markets are crashing because of low global growth prospects.
While it could continue into the foreseeable future, it doesn’t change the long-term picture a bit…
The United States will continue to print money and Europe will embark on a massive reflation.
Such a reality only makes the loonie more attractive as time goes by, as I expect it to be the main beneficiary of the reflation in commodities prices with plenty of upside tied to global recovery.
A good starting point to average into the Canadian dollar is through the Rydex CurrencyShares Canadian Dollar ETF (NYSE: FXC). And the time to buy is right now, while the U.S. dollar is perceived to be the king.
I suggest initiating a position today, and adding to it on any future weakness.
Bottom line: The forthcoming stimulus in the United States, along with all the money to be printed in Europe to bail out the PIIGS, must come home to roost.
When it does, the offshoot will be higher commodities and gold prices. By default, the Canadian dollar will rise.
Good investing,
Karim Rahemtulla
Note: This article was originally published by Wall Street Daily, here.
Article by Investment U
The Next Big Shale Gas Boom
by Justin Dove, Investment U Research
Friday, October 7, 2011
Which country has the most shale gas reserves outside of the United States and China?
Canada? Nope.
Australia? Wrong again.
According to the U.S. Energy Information Administration (EIA), Argentina ranks third in recoverable shale gas reserves. Argentina has 774 trillion cubic feet (Tcf) of technically recoverable shale gas resources, with more than half of that in the Neuquén Basin on the western side of the country.
(Courtesy: EIA, Advanced Resources International, Inc.)
Political Intervention
Following the economic crisis it weathered in the early 2000s, Argentina imposed strict regulations and price controls on its oil and gas production. Since Argentina’s currency devalued incredibly in a short period of time, Argentinians couldn’t afford exported oil and gas. Thus the government put strict price controls on production within the country to keep the economy moving.
Over the last decade, however, the sanctions diminished competition and production has since flat-lined in the region. In 1999, Spanish-based Repsol (OTC: REPYY.PK) bought a controlling stake in Argentina’s YPF S.A. (NYSE: YPF).
As Thomas Lott wrote for Seeking Alpha, “Given the difficulty of selling natural gas and oil at international market prices, it comes as no surprise that Repsol, as owners, spent little on developing hydrocarbon reserves. In fact, they let fields mature, milked YPF for dividends and invested little in the business.”
Due to growing consumption and falling production, Argentina began ramping up in 2008 and 2009 to recover some of that lost production and competition.
Oil and Gas Plus Programs
By passing the Oil Plus and Gas Plus programs in 2008, the Argentina government is allowing exporters to sell oil and gas at much higher prices than previously possible. Last year the Oil Plus program proved its benefit for the first time, and it is possible the Gas Plus program could begin improving gas production very soon.
The vast reserves and improved political climate have already attracted major players, such as:
- ExxonMobil (NYSE: XOM)
- Chevron (NYSE: CVX)
- Total S.A (NYSE: TOT)
- Petrobras (NYSE: PBR)
- Apache (NYSE: APA)
But there are a few smaller companies that could benefit.
- Transportadora de Gas Del Sur S.A. (NYSE: TGS) – According to the EIA, TGS is “the leading natural gas transportation company” in Argentina. It “claims to operate the most extensive pipeline system in Latin America.” Its pipelines connect the “Neuquén, San Jorge and Austral basins with Buenos Aires and other demand centers.” It has an inconsistent dividend record, however, it paid out $1.505 per share in May – quite substantial considering the stock price was $3.71 at the time.
- Gran Tierra Energy Inc. (AMEX: GTE) – Gran Tierra Energy is an oil and gas exploration and production company based in Calgary, Canada and operating in South America. Gran Tierra has projects in Columbia, Brazil, Peru and Argentina. It recently announced a joint venture with Petrobras in the sub-salt fields play off the coast of Brazil. It also recently acquired Petrolifera Petroleum Ltd., from which it inherited land in the Neuquén Basin. It’s a mid-cap company valued at about $1.37 billion.
The Future of Argentinian Shale Production
Although things look good for the future of Argentinian shale production, not everyone is convinced.
“Shale gas could develop very quickly in Argentina, but only at the right price and we’re not there yet,” Halliburton Co. (NYSE: HAL) Chief Executive David Lesar told investors in September.
It’s important to keep in mind the politics involved with Argentina, but the third-most shale gas reserves in the world are nothing to shrug off. When big players like Exxon and Chevron take notice, investors should, too.
Good investing,
Justin Dove
Article by Investment U
Ristuben Says Stocks `Good Buy’ for Long-Term Investors
Oct. 7 (Bloomberg) — Erik Ristuben, New York-based chief investment officer at Russell Investments, talks about the impact of Europe’s debt problems on financial markets. Ristuben speaks with Susan Li on Bloomberg Television’s “First Up.” (Source: Bloomberg)
Larsen Says Europe Will Prevent `Sovereign Armageddon’
Oct. 7 (Bloomberg) — Jens Larsen, chief European economist at RBC Capital Markets, talks about efforts to resolve Europe’s sovereign debt crisis. He speaks with Francine Lacqua on Bloomberg Television’s “The Pulse.” (Source: Bloomberg)
Gold Gains on Week, Central Banks Should “Create and Inject More Money” to Fight “Worst Ever Crisis”
London Gold Market Report
from Ben Traynor
BullionVault
Friday 7 October, 09:00 EDT
SPOT MARKET gold prices spiked 0.5% to $1661 an ounce – within 1% of this week’s high – immediately following news of better-than-expected US jobs data on Friday. The gold price did however hand back all its gains within half an hour.
Stock markets and industrial commodities also rallied on the release of US nonfarm payrolls, which showed 103,000 nonagricultural jobs were created last month. Last month’s report showed no jobs were added in August – though this has now been revised up to 57,000.
“[However,] long-term support for gold and silver from continued concerns over a possible US recession remains in place,” reckons Marc Ground, commodities strategist at Standard Bank.
“In addition, Eurozone debt problems will also continue to remain a focus, and consequently benefit precious metals.”
Going into the weekend, gold prices are up more than 1.5% and heading for their first weekly gain in five weeks.
Silver prices also spiked following the nonfarms release, before they too fell, dropping back towards $32 per ounce for a weekly gain so far of around 6.7%.
“Gold and silver are our top commodity picks heading into 2012,” says a report from Morgan Stanley out today.
“Gold, and silver to a much lesser extent, are viewed as safe havens and store of value as well as the closest thing to a global reserve currency.”
The British government fears it may have to pump more money into Royal Bank of Scotland – which received the world’s largest bailout three years ago at £45 billion – as part of a Europe-wide move to recapitalize the banking sector, according to a front page story in today’s Financial Times.
RBS has sought to play down the story, telling news agency Reuters that its exposures to Greek debt “are modest relative to core Tier 1 capital”.
Ratings agency Moody’s meantime announced Friday it has downgraded RBS by two notches from Aa3 to A2. Moody’s has also downgraded another eleven UK financial institutions, including Lloyds TSB, Santander UK, Co-Operative Bank and Nationwide Building Society.
“The downgrades do not reflect a deterioration in the financial strength of the banking system or that of the government,” said a Moody’s statement.
“The right thing at present is to create some more money to inject into the economy,” said Bank of England governor Mervyn King yesterday, following the Bank’s decision to expand its quantitative easing program by £75 billion.
“This is the most serious financial crisis we’ve seen at least since the 1930s, if not ever.”
Over in Europe, the process of approving the EU agreement of July 21 – which includes granting the European Financial Stability Facility powers to recapitalize banks – goes on.
The Netherlands yesterday approved the agreement, while in Slovakia meantime the Freedom and Solidarity party has tabled a compromise proposal to its three ruling coalition partners that a committee be set up to decide how EFSF funds would be used in the country.
The European Central Bank’s Governing Council meantime “does not consider it would be appropriate that the central bank would leverage the EFSF,” outgoing ECB president Jean-Claude Trichet said yesterday.
The central bank did say it will launch a new €40 billion asset purchase program. The program will target covered bonds – debt back by the cash flow of underlying investments, adding further details will emerge next month.
The ECB resisted calls for an interest rate cut, leaving its rate at 1.5%.
“But [Trichet] did do what was necessary to avoid a counter-productive market response,” notes the FT’s Lex column.
“”By shifting the ECB’s language to say that policy was no longer ‘accommodative’, he made it easier for his successor, Mario Draghi, to cut.”
“There has been a recent shift in central banking across the world,” adds Gerard Lyons, chief economist at Standard Chartered Bank in London.
“In the West toward easing and in emerging markets putting tightening on hold with an option to ease if necessary.”
In New York, meantime, the Occupy Wall Street protest – which has seen demonstrations against US banking sector bailouts – nears the end of its third week.
The protest – which has drawn media comparisons to the Arab Spring – has steadily grown since September 17, when a handful of protesters pitched a tent outside the New York Stock Exchange, and has spread to other US cities.
“The government’s doing the work for us,” said one protester when asked to explain the movement’s growth.
“All they have to do is cut some more people’s insurance and unemployment benefits and it won’t be a bunch of 20-year-old white college students out here.”
The State Bank of Vietnam meantime has said a number of banks can reopen gold trading accounts on the international market, news agency Reuters reports.
The SBV banned international gold dealing 15 months ago in an effort to close the gap between global and domestic gold prices.
Gold value calculator | Buy gold online at live prices
Editor of Gold News, the analysis and investment research site from world-leading gold ownership service BullionVault, Ben Traynor was formerly editor of the Fleet Street Letter, the UK’s longest-running investment letter. A Cambridge economics graduate, he is a professional writer and editor with a specialist interest in monetary economics.
Please Note: This article is to inform your thinking, not lead it. Only you can decide the best place for your money, and any decision you make will put your money at risk. Information or data included here may have already been overtaken by events – and must be verified elsewhere – should you choose to act on it.
Datawind CEO Says $35 Tablet Computer Available in India
Oct. 7 (Bloomberg) — Suneet Singh Tuli, chief executive officer of Datawind Ltd., discusses the company’s Aakash tablet computer, available in India for $35. He speaks from New Delhi with Owen Thomas on Bloomberg Television’s “Countdown.” (Source: Bloomberg)
MUFJ’s Brown Says `ECB Is Bust,’ Needs Recapitalization
Oct. 7 (Bloomberg) — Brendan Brown, chief economist at Mitsubishi UFJ Securities International Plc, talks about France and Germany’s political divisions and the European Central Bank’s balance sheet. He talks with Owen Thomas on Bloomberg Television’s “Countdown.”
Forex CT 7-10-11 Video News Update
Video courtesy of ForexCT – A leading Australian forex broker, liscensed by the Australian Securities & Investments Commission, offers the MetaTrader4 and PROfit Platform to retail traders. Other services include Segregated Accounts, Trading workshops, Tutorials, and Commodities trading.
