tag:blogger.com,1999:blog-6616959642391988608.post3237048307657547623..comments2024-03-28T00:18:25.641-07:00Comments on Calafia Beach Pundit: The reflationary message of key commodity pricesScott Grannishttp://www.blogger.com/profile/14028519647946868684noreply@blogger.comBlogger20125tag:blogger.com,1999:blog-6616959642391988608.post-90000152904761737902010-04-19T16:01:20.387-07:002010-04-19T16:01:20.387-07:00Krispyhooch,
One more thing: You are not even rem...Krispyhooch,<br /><br />One more thing: You are not even remotely being rude.Johnhttps://www.blogger.com/profile/11652253509768573561noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-54312710057248795092010-04-19T15:57:47.024-07:002010-04-19T15:57:47.024-07:00Benj,
Sorry the link did not work. I have troubl...Benj, <br /><br />Sorry the link did not work. I have trouble with copy & paste on this blog so I tried to type it. <br /><br />Not that important. <br /><br />I am just a little fearful of direct China investments. I know lots of folks have done well and you have investments in the far east that should do well. I have always believed that political and economic freedom walk through time handJohnhttps://www.blogger.com/profile/11652253509768573561noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-91048397835349089832010-04-19T15:46:22.051-07:002010-04-19T15:46:22.051-07:00krispyhooch,
I'll take a stab at your questio...krispyhooch,<br /><br />I'll take a stab at your question. There are likely other factors involved but I think one signficant reason IS supply vs demand. I know it sounds trite but sometimes the simple answer is the best one. Natty gas is difficult to transport (unlike oil) so it is highly localized. That means that surpluses in one area, the USA for example, cannot be easily and cheaply Johnhttps://www.blogger.com/profile/11652253509768573561noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-12101768352319689752010-04-19T07:55:31.174-07:002010-04-19T07:55:31.174-07:00Don't mean to be rude,
But does anyone want t...Don't mean to be rude,<br /><br />But does anyone want to explain to me why natural gas has been such a laggard and why the oil to natural gas relationship is so wide presently.<br /><br />Why is it that natural gas is the only commodity not to run up.<br /><br />If supply is your answer i'm looking for better than that<br /><br />thankskrispyhoochiehttps://www.blogger.com/profile/02825653444132300520noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-34862464295769979942010-04-19T02:21:04.467-07:002010-04-19T02:21:04.467-07:00Natural gas futures gained as a stronger economy a...Natural gas futures gained as a stronger economy and prices near $4 per million British thermal units lured buyers of the industrial and power-plant fuel.Guavahttps://www.blogger.com/profile/16317907266006167845noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-75072311266298663972010-04-18T15:22:31.218-07:002010-04-18T15:22:31.218-07:00John-
The link did not work, but in general I agr...John-<br /><br />The link did not work, but in general I agree it is crazy for China to be repressive, and it should move to a democratic, free-enterprise-type state.<br /><br />That said, they are doing 11 percent GDP growth, and have a strong work ethic, little alcoholism (Russia's bane) and a good culture. <br /><br />The news programs I watch that originate from China (on channel 44.8 Benjamin Colehttps://www.blogger.com/profile/14001038338873263877noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-87235187289870915552010-04-18T14:38:44.360-07:002010-04-18T14:38:44.360-07:00Benj,
Below is a NYT link discussing China's ...Benj,<br /><br />Below is a NYT link discussing China's attempts to control the internet. It strikes me this is a country still afraid of its people. Its one of many reasons why I prefer no direct investments there and why truly big money will not seek long term shelter there. Stratfor could still be right about the country fracturing. <br /><br />http://www.nytimes.com/2010/04/17/world/asia/Johnhttps://www.blogger.com/profile/11652253509768573561noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-38196991949728137962010-04-16T09:20:57.877-07:002010-04-16T09:20:57.877-07:00Dave, Scott and others:
China announced their fi...Dave, Scott and others: <br /><br />China announced their first-quarter GDP is up by 11.2 percent! They say they expanded their money supply by 22 percent in the last year. and have engaged in a huge stimulus program.<br /><br />They import more iron-steel, lumber, diamonds and oil than we do. To say there are the world's manufacturing platform is obvious. It just makes sense that what ChinaBenjamin Colehttps://www.blogger.com/profile/14001038338873263877noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-35232711294407511472010-04-16T06:36:09.189-07:002010-04-16T06:36:09.189-07:00Benjamin,
Global Commodities are priced in dollars...Benjamin,<br />Global Commodities are priced in dollars so the value of the dollar has every thing to do with movement<br />in commodity prices.<br /><br />Scott has correctly in my opinion pointed out a tripling in commodity prices since the late nineties before the Maestro decided he would rid us of our irrational exuberance with a dose of deflationary monetary policy.<br /><br />You seem to davehttps://www.blogger.com/profile/01173750820649272172noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-19771011193892942992010-04-16T06:00:49.947-07:002010-04-16T06:00:49.947-07:00I am not a Raymond James customer (my old firm was...I am not a Raymond James customer (my old firm was swallowed by Wachovia, and they were swallowed by Wells Fargo) but I have long been an admirer of Jeffrey Saut, their chief market strategist. To RJ's credit, they provide periodic FREE missives on the market from Mr. Saut to the public on their website. This week's comment involves a discussion on potential inflation. Since this post by Johnhttps://www.blogger.com/profile/11652253509768573561noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-56310851805498958322010-04-15T19:53:57.663-07:002010-04-15T19:53:57.663-07:00This also helps to explain the real estate "b...This also helps to explain the real estate "bubble" of the 2000s. Prices were clearly moving upwards in concert with commodities and inflation generally. Note that commodities also had a tremendous correction but are now nearly recovered. Are real estate prices soon to recover also?Billhttps://www.blogger.com/profile/05145490918994594519noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-58589960595450783302010-04-15T19:36:50.942-07:002010-04-15T19:36:50.942-07:00Scott -- just checked the dept of energy website.....Scott -- just checked the dept of energy website...<br /><br />Energy was 8.4% of GDP in 2005 (the latest year figures are available). That is total GDP (not just the private sector) and more importantly, it is not adjusted for the massive increase in debt. Debt based growth is not the same as real growth. <br /><br />WTI crude oil averaged around $55/bbl in 2005, versus about $80 for this Garyhttps://www.blogger.com/profile/13335751305150509057noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-76579609987223353872010-04-15T19:28:42.580-07:002010-04-15T19:28:42.580-07:00Scott -- 10% versus 20% depends a lot on whether y...Scott -- 10% versus 20% depends a lot on whether you consider government spending to be part of the economy. Some people would argue that this "spending" is just administrative overhead (not economic activity at all), and at any rate it is paid for with debt that (in theory) has to be paid back.<br /><br />If I go borrow $2 trillion from Wachovia or Lehman (they did make loans that Garyhttps://www.blogger.com/profile/13335751305150509057noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-24744454629547776832010-04-15T19:18:03.954-07:002010-04-15T19:18:03.954-07:00Actually, energy is a bit less than 10% of the eco...Actually, energy is a bit less than 10% of the economy. A 10% rise in oil prices would therefore tend to result in a 1 percentage point increase in the CPI, all other things being equal (which is not always the case of course).Scott Grannishttps://www.blogger.com/profile/14028519647946868684noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-46592335848296825592010-04-15T19:16:58.927-07:002010-04-15T19:16:58.927-07:00This comment has been removed by the author.Garyhttps://www.blogger.com/profile/13335751305150509057noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-30525149967192302022010-04-15T19:08:02.125-07:002010-04-15T19:08:02.125-07:00Scott, I would have to do a lot of digging to find...Scott, I would have to do a lot of digging to find this chart (and I don't think your blog lets commenter's post a jpg)...<br /><br />Anyway, the chart shows the 1yr change in WTI crude prices (nearby contract) with the 1yr change in total CPI (lagged by 1 month -- oil predicts CPI)<br /><br />The correlation of the percent changes (not the prices) is north of 0.8 (varies over time, but Garyhttps://www.blogger.com/profile/13335751305150509057noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-4084304284517295102010-04-15T18:51:19.036-07:002010-04-15T18:51:19.036-07:00I'm not saying that inflation was 9%. These co...I'm not saying that inflation was 9%. These commodities could be leading indicators of the inflation yet to come. As for the bond market, I have said several times before that I don't believe the bond market is very good at anticipating inflation. The bond market currently says that inflation is not a problem, but the bond market could be terribly wrong. The bond market was behind the Scott Grannishttps://www.blogger.com/profile/14028519647946868684noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-1090915955577156622010-04-15T18:47:39.144-07:002010-04-15T18:47:39.144-07:00@Benjamin
Bernanke also assured us in 2007 that t...@Benjamin<br /><br />Bernanke also assured us in 2007 that the subprime contagion was "well contained".<br /><br />Fool you once, shame on Bernanke. Fool you again, shame on you.<br /><br />@Scott<br /><br />So if inflation over the last 13 years has been ~9% -- which by the way ties out with many consumer's actual cost of living and CPI does *NOT* -- are you saying that US Garyhttps://www.blogger.com/profile/13335751305150509057noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-13483923977457812812010-04-15T15:26:38.240-07:002010-04-15T15:26:38.240-07:00Jeez, I think this is a terrible analysis.
Deman...Jeez, I think this is a terrible analysis. <br /><br />Demand for China and India has been pushing up commodity prices. Their monetary policies and growth economies probably have much bigger impact on commodity prices than anything the USA does. It will take commodity producers time to catch up. <br /><br />China is the biggest importer of many commodities, and certainly the fastest growing. Benjamin Colehttps://www.blogger.com/profile/14001038338873263877noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-66491087466784388742010-04-15T14:51:39.997-07:002010-04-15T14:51:39.997-07:00Hi Scott,
can you comment on Natural Gas. it has ...Hi Scott,<br /><br />can you comment on Natural Gas. it has not been enjoying the same success as other commodities and, I was wondering if you could explain why.<br /><br />Thankskrispyhoochiehttps://www.blogger.com/profile/02825653444132300520noreply@blogger.com