March 2014, Week 1 Edition
Gold shot up above $1350 on Monday, March 3, after tensions escalated in Russia's conflict with her southern neighbor (who was previously a captive member of the Soviet Union), Ukraine, which is also the pathway for much of Europe's energy supplies, so oil is rising too - though not as fast as gold. I also heard some indications last week from new Fed Chair Janet Yellen that she might slow the "tapering" of the Fed's money-pumping policy of "quantitative easing." This combination of a slowing U.S. economy and rising tensions in Eastern Europe caused gold's sharp rise, vs. smaller upward moves in silver and oil.
Saturday morning's edition of Barron's slammed gold in their Commodities Corner ("The Gold Rally's Fatal Flaws" by Tatyana Shumsky), even while Russia's Vladimir Putin was sending troops to occupy the Crimean peninsula (including the warm-water port of Sevastopol) in supposedly-sovereign Ukraine. In essence, the Barron's author seemed unaware that the Ukraine crisis was already brewing. Sometimes, analysts just look at a chart or local market dynamics, while ignoring the big, bad world around them.
Amazingly, Barron's gold author Tatyana Shumsky was credited as co-author (with Ira Iosebashvili) in Friday's Wall Street Journal article that was bullish on gold: "Gold Bugs Return after Last Year's Rout."
The Journal article begins: "Investors are buying gold again. Gold is up 11% this year and wagers on rising prices are at a four month high in the futures market. This month, investors were net buyers of SPDR Gold Shares, the biggest exchange-traded fund that buys gold, for the first time since December, 2012."
Two moose hunters, Wally and Jeff, flew a float plane into the interior of
the Yukon Territory of Canada. They land on a very remote lake, unload and set
up camp and before heading out moose hunting. After several days both manage to
shoot giant moose.
When the plane returns to pick them up, Ron, the bush pilot looks at the size of
these magnificent beasts and says to the hunters, "Hey guys, my little float
plane won't lift all of us, the camping equipment, and both of those animals.
You'll just have to leave one of those moose. We'd never make it over those
trees on the takeoff." And he pointed toward the far end of the lake…