Thursday, June 23, 2011

40 day Reprieve

The oil release should calm the price by adding supply for about forty days.  That means that right after the Grove meeting ends, supply will once again fall.  The math is simple:  Lybia's loss of supply is 1.5 million barrels per day, and there will be 60 million barrels used out of the world's above ground reserves.  So 60/1.5 is 40 days.

I expect the market to continue to wash their recent ranges for these next forty days.  Bernanke is using QE Light to again put a floor under the market, and the fresh oil supply will calm the oil market as well as the precious metal market.  Precious metal supply will also increase and this will keep a lid on the price.  I expect that the markets will trade here until late July.


  1. Interesting article:

    Looks like the Chinese can't count very well. 1/3 of the actual amount sent is accounted for as received.
    The Chinese have been notoriously bad/inaccurate. Some of their people will report Pt imports as other "things" in order to get a lower tariff, (for example, nickel refining by-products). So, the imports do not show up as Pt, not in the numbers that the Swiss customs show.
    Any thoughts?


  2. Go on about the Chinese....what do you mean 1/3 of the amount was received?

  3. If you review the link, you will see this:

    “The discrepancy between the Swiss and Chinese data remains, and is widening. The Chinese data indicates that imports from Switzerland were only 19,880 oz, compared to the 62 k oz the Swiss reported. As highlighted previously, this indicates that perhaps Chinese platinum demand is not weakening as much as suggested by the official figures.”

    The Swiss say they ship 62K oz of platinum to China, however, China says they only imported 20k from Swiss. They claim 1/3 of what the Swiss say they shipped. Really odd, no?


  4. FED FISHER today

    QE is done for now.

    We are going doooooooooooown.

    Got USD'S?

  5. The NYFed announced two days ago they would continue the bond purchase program.

    FYI there is massive deflation in the system in the form of MBS and other assets. There is massive deflation, but there is also inflation of upwards of 10%. If you read my older posts, you would know that is my theory.

    I have written at length about "steady inflation" and that it is matter of time, one and one half year from now approximately, until the system capitulates, and fiat money is worthless.

  6. You, Schiff, Sinclair etc are going to get drawn down.

    QE3 is not coming as fast as you guys think it is.

    They are going to mess with the markets expectations about QE3 before they pull the
    QE3 trigger.

    Expect pain in all your positions unless you have a heap of USD powder dry to add oil, acres and ounces.

  7. Fiat is not a store of value. It maintains no holding, and is losing proper to inflation, which is much higher than the rate that is publicly given. QE Light is a stand in at a time when M2 is extremely large and the markets are swamped with debt/credit. Yes liquidity is tight but that is because deflation is also massive. Really, you are playing a strange game even considering the system: the system is not real because the metric that is used to price all goods, fiat, is absolutely worthless and has no real value.

  8. "the system is not real because the metric that is used to price all goods, fiat, is absolutely worthless and has no real value."

    No Value? LOL.

    Funny...I just bought 3 kilos of silver with that "no real value".

    It has value for now.