Monday, July 22, 2013


Farming has been a disaster for 30 years. The average age of farmers across the world is in the 60s. How much do agriculture commodity prices have to rise to entice a new generation of young people - or you for that matter - to enter the industry?

Current selected agricultural commodity futures prices:
Corn: $215 per metric ton
Wheat, No.1 Hard Red Winter: $307 per metric ton
Coffee, Robusta: 107 cents per pound
Coffee, Other mild arabicas: 123 cents per pound
Sugar No.11: 16.30 cents per pound
Cotton: 86.5 cents per pound
Soybeans, U.S. No.2 Yellow: $548 per metric ton
Cocoa beans: $2360 per metric ton
Rice, 5% broken milled white rice: $550 per metric ton
Beef: 180 cents per pound
Chicken: 106.5 cents per pound

Thursday, July 18, 2013

Mention of gold and silver investment in books

This graph shows the frequency of appearance of the phrases "gold investment" and "silver investment" in 5 million books over the past 6 decades. At present moment, it looks like we're still quite far away from the bubble period of 1979/1980. Lots of books about these investments have been published right after the bubble burst in 1980, as we can see from the graph. Maybe lots of authors were late to the party, considering that it takes a few months to publish books. 

Tuesday, July 16, 2013

Debt ticking time bomb.

As of July 12, the Treasury had redeemed/repaid approximately $5,848,194,000,000. 

How is that possible considering the annual tax revenue is roughly $2,500,000,000,000? 

Ans: An additional $6,477,293,000,000 was borrowed/printed from the public/world/Fed. Net increase in publicly circulated debt has increased by $629,099,000,000 so far this year.

Ponzi Scheme! Bernie Maddoff would have been proud of this achievement. They should have made him secretary of the treasury instead of throwing him behind bars.

Thursday, July 11, 2013

Thoughts about Gold price correction

When will gold hit bottom? I have no idea. A 50% correction, which is normal in a long-term bull market, will put gold at about $950. So far it has corrected 37%, the biggest correction in its 12-year bull run. As Jim Rogers have been saying since 2011, what is abnormal is not the correction, but the decade-long winning streak. A correction must come for gold to make a nice solid bottom, from which it can take off again.

I have taken this opportunity to increase my silver holdings by a further 50% so far. I am getting more very soon. I can't get enough of it. Prices may fall further, but then I'll just buy more.

Given that such price movements are normal in markets, Gold-bugs and anti-gold-bugs alike still try to justify it with various reasons. The gold-bugs say there is price manipulation in the market. The anti-gold-bugs say "Aha! I told you gold is a bubble!"

Manipulation may be successful in the short run, but I imagine it is impossible in the long run. One will simply lose too much money trying to manipulate the market. When I ask conspiracy theorists to explain to me step-by-step how manipulation works, they are at a loss of words. Gold is exchanged in more than 10 independent exchanges worldwide. In the long run, prices are set by supply and demand of gold, not some wall street guys shuffling paper around. If the government has been manipulating the gold market, they have failed horribly. Gold has risen more than 4 fold in the past 12 years.

As for those crying that gold is a bubble, it is weird to hear this coming from them, considering that they missed the ride from $250 to the current price of $1250 (it hit $1900 in 2011). It's also amusing that they are not detecting the mother of all bubbles - government bonds, especially the US long-term government bonds.

In the mean time, continue accumulating!

Tuesday, July 9, 2013

NYT 1976

Gold rose 800% back then, shortly after this piece of article was published. Overall it rose 2400%, before the bubble popped.

New York Times, August 29, 1976:
"Two years ago gold bugs ran wild as the price of gold rose nearly six times.  But since cresting two years ago it has steadily declined, almost by half, putting the gold bugs in flight.  The most recent advisory from a leading Wall Street firm suggests that the price will continue to drift downward, and may ultimately settle 40% below current levels. 
The rout says a lot about consumer confidence in the worldwide recovery.  The sharply reduced rates of inflation combined with resurgence of other, more economically productive investments, such as stocks, real estate, and bank savings have combined to eliminate gold's allure.
Although the American economy has reduced its rapid rate of recovery, it is still on a firm expansionary course.  The fear that dominated two years ago has largely vanished, replaced by a recovery that has turned the gold speculators' dreams into a nightmare."

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