Wednesday, October 26, 2016

Medium term 10 year bond rates to stay below 1.95

Rates can go higher, but not dramatically so. It's going to be very difficult to get the 10-year much beyond 1.95, at least over the course of the next year or two.

Ten years from now, where will rates be? A lot higher than where they are right now. Where will they be a year from now? Not much higher than where they are now.

Monday, October 24, 2016

Trend is up despite some warning signs

SHARE PRICES ARE UNIVERSALLY HIGHER as all ten of the markets comprising our International Index have risen in tandem, and they’ve done so with some sense if vigor, for four of the ten have risen by more than 1% and as several others were very nearly 1% higher. It is rare when there is this sort of universality in equity prices around the world, and historically such occurrences have taken place either at the very beginning of material new moves or at the very end of sustained bull or bear markets.
Margin debt continues to give us a great reason for pause and concern about equities. There are any number of ways to look at margin debt numbers and we’ve included charts of margin debts several times over the course of the past several weeks noting that the peak in margin usage characteristically… at least since the turn of this century… has led the downturn in equity prices by a year and one half or so.

We have to admit that the trend is up; that the monetary authorities are continuing to supply reserves to the systems around the world and that that supply is making its way into equity prices rather than into plant, equipment and labor. We are seeing, in broad global terms, what we have previously referred to as the Zimbabwe-isation of the global capital markets and we’ve no choice but to accept that fact and to recognize that that trumps all other “fundamental” and/or technical concerns:

Thursday, October 20, 2016

If I was forced to buy or sell gold in US dollar terms.....

If you made me take a position in dollar gold—if you said, “Dennis, you have no choice, you must take a position, you must either buy it or you must either sell it”—I'd be a buyer, but only if a gun were held to my head and I were forced into taking action.

Wednesday, October 19, 2016

Why Corn prices may have bottomed

It's time to be a buyer of corn, so maybe it's time to look at the Teucrium Corn Fund(CORN).

If there's one thing in the world you can absolutely count on, it's that year in, year out—as long as the weather is average―we produce more grain every single year than we did the previous year.

Our farmers are the best in the world. Our agricultural universities continue to do a better job at genetically making plants better and more efficient. We apply better types of fertilizer each year than we did before, because the genetically modified crops use less water and use less fertilizer.

We're just better at growing crops. This year, we're going to grow a crop of corn totaling 15.1 to 15.3 billion bushels. It was only 10 years ago that a 12-billion-bushel corn crop was a record crop. Now we're growing 15 billion. Next year, unless the weather gets ugly, we'll grow 15.4 billion.

Corn prices have come down a long way. Everybody knows we're going to produce an all-time record crop and yet, corn doesn't make a new low. One of the oldest rules in the book is that a market that doesn't go down any longer on bearish news isn't going to go down anymore.

That's why I like corn.