Category Archives: Commodities

Norway`s trade surplus plunged NOK 24 billion in August

Norway`s trade surplus plunged NOK 23,8 billion in August this year. All the way down from NOK 30,5 billion to NOK 6,7 billion in the same month the prior year. This is happening in a country that is famous for being «the last Soviet state.» A country were the Communist party is growing in popularity like never before.

But is doesn`t matter, because most of the income is coming from oil and gas. In addition; they have $1 trillion in assets called The Government Pension Fund Global, also known as the Oil Fund. The fund was established in 1990 to invest the surplus revenues of the Norwegian petroleum sector.

The fund have stocks in 9158 different companies in 73 different countries. Most of the capital is invested in stocks and some of it in fixed income securities. A small part of the investments is invested in the real estate market.

The goal is to contribute to the walfare state.

Therefore, the fund and the country is dependend on sustainable growth, markets that works well and inovation.

Oil prices jumped more than 20 percent on Monday and that`s good news for Norway. The higher the price of oil, the more they earn. 62 percent of Norway`s export comes from Mineral fuels, oils and distillation products.

We all know that these category is on the way out. So, the “new oil” is fish that stands for 9,5 percent of the exports. In other words; this model is fragile.

The biggest trading partner is the United Kingdom with 22 percent export. Second is Germany with 16 percent. Third; Netherlands at 11 percent, France and Sweden with 6,7 percent. Down on the export list we will fine the U.S at 4,7 percent and China with 2,1 percent.

Two of the biggest trading partners are in trouble. United Kingdom with Brexit and Germany near recession. In addition; we have the trade tension between the U.S and China. As you can see; a higher oil price came at the right point for the fund as 62 percent of the exports comes from oil.

Brent climbed as much as 20 percent on Monday and that is the biggest percentage move since 1990 Kuwait invasion. It jumped up to $71 per barrel in the seconds after the open, before pulling back about half of the initial surge. That was equivalent to $12 increase, and that is the largest gain in dollar terms since 1988. All this is good news for Norway that is dependend on oil.

But the Nobel Peace Prize Country need to wake up, because this won`t last forever. Higher oil prices is good but that is not enough. The Petro dollar can also be a game changer in addition to all the electric vehicles that is flooding the market. Every single EV sold will decrease the demand for oil every single day.

Nor is fish enough. Oil is good especially if you are in a cartel business. You don`t have much competition either because oil is very limited in other countries. 70 percent on this planet is water and there are lots of fish in it. Other countries can start to compete in the fish industry whenever they want. Fish is not as unique as oil. Competitors can pop up and take market shares and push the prices down. Like Russia.

Russian aquaculture is planning a new RUB 1,5 billion smolt plant and that will reduce the dependence of Norwegian fry imports. Russian Aquaculture produces around 18,000 tonnes of salmon and trout on the Kola peninsula, the for northwest of Russia. Among the owners of the company are Maksim Vorobyov, the brother of the governor of Moscow.

Russia will triple the production in 11 years. The deputy head of Russia`s Fedral Agency for Fisheries Vasily Solokov has told Tass that the Russian government is drawing up plans to make salmon production account for 37 percent of all aquaculture by 2030.

Some Russian producers are hoping to increase production to cover one third of the country`s entire salmon and trout consumption. A peninsula in northern Russia which is close to key military bases and nuclear submarines is being used to grow the country`s salmon farming regime.

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shiny bull. The author has made every effort to ensure accuracy of information provided; however, neither Shiny bull nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Shiny bull and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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Jamie Dimon said he would fire any employee trading bitcoin for being “stupid” and Prince Alwaleed belive it is a bubble and Enron in the making

I wrote about Bitcoin four years ago. At that time it was only a digital currency that no one knew something about. Now it is on the way to be mainstream. The price have skyrocketed thanks to a massive campaign.

Bitcoin was registered in August 18, 2008. It follows the ideas set out in a white paper by the mysterious Satoshi Nakamoto. The first bubble started in October 3rd, 2010. The BTC price was only $0,06. Then the price crashed down to $0,01, and a massive buying frenzy started. Now, the price is just below $6,000.

Some people love it, and some people dont. One of those who dont like bitcoin is JPMorgan Chase & Co CEO Jamie Dimon. He said he would fire any employee trading bitcoin for being “stupid.”

Saudi billionaire Prince Alwaleed do agree. They are both joining the long line of skeptics saying bitcoin is a bubble, and Prince Alwaleed said “I just dont belive in this bitcoin thing. I think its just going to implode one day. I think this is Enron in the making,” Alwaleed told CNBC.

He also said “It just doesnt make sence. This thing is not regulated, its just not under control, it`s not under the supervision” of any central bank, he said.

My computers are full of bitcoin ads. It says; “millions are buying bitcoin.” Some pro`s in the mainstream media are telling people to invest in bitcoin and specially hedge funds and other traders in Norway.

The Swedish government has successfully auctioned off some bitcoin a few days ago, collecting more than the prevailing market rate in the sale. The 0,6 BTC, along with an equal amount of bitcoin cash, which was not previously disclosed, were sold by the Kronofogden during a week-long auction for a total of 43,000 kroner.

Kronofogden is not the first government agency to sell seized bitcoin. A few weeks ago, the U.S department of Justice formally took possession of $48 million it accrued through the sale of 144,336 bitcoins since the closure of the Silk Road dark market.

China`s big government and banks have banned Bitcoin, and its growing popularity in China may have caused the government to begin to perceive it as a threat to local currency, especially as Chinese investors bought up bitcoin a bet against the yuan last year.

China is home to vast and lucrative cryptocurrency mining operations for both Bitcoin, Ethereum, and other cryptocoins. Three Chinese exchanges like Bitfinex, OkCoin and BTCC, made up over 45 percent of the global market share over the last two months.

Co-founder and CEO of BTCC, Bobby Lee said it must be fake news because the exchange was operating normally.

Many supporters belive that Bitcoin is the future. Those who endorse it are of the view that it facilitates a much faster, no-fee payment system for transactions across the globe. It is not backed by any government or central bank.

Bitcoin can be exchanged for traditional currencies; in fact, its exchange rate against the dollar attracts potential investors and traders in currency plays. Another reason for its popularity is that they can act as an alternative to national fiat money and traditional commodities like gold.

All this is a huge competition to banks and central banks, and can make instability.

To make it short; the market crashed in 1929 and Ben Bernanke have studied it for a long time. When the market crashed in 2008, Ben Bernanke started to stimulate the economy with its QE program. He «printed» money. In other words; he saved the world.

Crypto currencies are not regulated and if crypto currencies is the future, we can already now predict how it can end if the market is crashing……

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shiny bull. The author has made every effort to ensure accuracy of information provided; however, neither Shiny bull nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Shiny bull and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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Sell your shares in Zimbabwe before April 1

Chinas GDP growth were 14% a few years ago, but now the worlds second-largest economy is lowering the growth target to about 6,5% – 7% in 2016. 7% is still very good, but the economy is slowing down faster than expected.

The economic growth is slowing while China`s Central government budget deficit as a percentage of GDP is growing. The target is 3% in 2016, and China will continue to be a global economic engine. But what is the next China?

It can be Africa which is a hot commodity, but some investors are in doubt. They think it is unstable and unsafe. Some claims it is so much violence in Kenya, but the infrastructure in Kenya makes it a worthy long-term investment.

Africa

Africa is a growing economy with a huge and young population. It has so far been a daunting place to start and run a company there. Very often, it is expensive to start a new business in Africa.

Bank loans come with double-digit interest rates. The electricity grid is sub-par and diesel generators cost a fortune, but many thing are getting better according to the World Bank.

There is a lot of reform happening in Africa right now.

The World Bank publishes a parallel ranking of the countries that have pushed through the most business-friendly reforms. Five African countries are on the top-10 list, which is Kenya, Mauritania, Senegal, Benin and Uganda.

Botswana is the least corrupt country in Africa which is an important factor for entrepreneurs and their investors. This is a country that rely heavily on revenues from the diamond trade to fuel its growth.

Rwanda is an economic success story. Many years of reforms have made it much more easy to open and run a business, and it is far easier to get credit there. Only one country is better and that is Mauritius.

It has commercial links to India, China and the east coast of Africa. Mauritius is often on top of the ranking list for competitiveness and ease of doing business due to its liberal approach to regulation and taxation. What about Zimbabwe?

Zimbabwe

Zimbabwe had rough days, particularly between 2005 and 2008, were hyperinflation decimated the economy. The Central Bank issued currency with expiration dates of six months, effectively longer than the actual life of the currency.

The American dollar replaced the Zimbabwean dollar as the country`s main currency, and now Zimbabwe has started to retiring it’s almost worthless local currency in favor of the U.S dollar.

35 quadrillion Zimbabwean dollars are equal to US $1.

Monthly inflation rate hit 3,5 million percent eight years ago, and prices doubled every 25 hours. Zimbabwe has the second-worst hyperinflation in history, behind post-war Hungary.

It all started in 2000, when Mugabe changed his economic policy and implemented land reform. Mugabe granted farmland owned by white citizens to indigenous black Zimbabweans. They turned from an agriculture exporter to an importer, which resulted  in 94 percent unemployment rate and hyperinflation.

Zimbabwe is known for its mineral resources. It has the world`s second largest deposit of chrome and platinum after South Africa, and President Robert Mugabe wants to take over all diamond operations.

Zimbabwes leader since 1987, Robert Mugabe eager to nationalize Zimbabwes diamond industry, and news from Zimbabwe leaves little to be desired about the small former British colony.

He says the country`s wealth had been looted by the existing miners.

“The state will now own all the diamonds in the country. Companies that have been mining diamonds have robbed us of our wealth. That is why we have now said the state must have a monopoly,” said Mugabe in an interview with the state broadcaster earlier this month.

Foreign investor also need to hurry up and sell their shares to blacks or close before April 1st.

Companies owned by foreigners face closure unless they sell or give up 51% of their shares to black Zimbabweans by April 1, said indigenization Minister Patrick Zhuwao.

“Comply by that date or close shop, comply by that date or face the full wrath of the law,” Bloomberg quotes Zhuwao, who is also President Robert Mugabe`s nephew.

IMF asked the Mugabe administration to clarify Zimbabwe`s policy on black empowerment. Zimbabwe has agreed to major reforms including compensation for evicted white farmers.

President Mugabe is known for evicting white farmers. In 2010, the Guardian reported that Mugabe used land reforms to reward his allies rather than ordinary black Zimbabweans. The newspaper`s sources reported Mugabe and his supporters owned about 40% of the land seized from white farmers.

The white farmers received no compensations after being evicted.

«If white settlers just took the land from us without paying for it, we can, in a similar way, just take it from them without paying for it,» said Mugabe.

 

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Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shiny bull. The author has made every effort to ensure accuracy of information provided; however, neither Shiny bull nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Shiny bull and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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Is it time for the precious metals now

As you may know, there has been a brutal start of the year 2016. Equities has plummeted and the volcano have hit the bank stocks hard. All in all, we can see the stock market is down while the precious metal is up.

gold

Bank stocks bounced back on friday and they remain in green so far on Tuesday. Good for stocks, but not for the precious metals. A sell-off will keep the gold in a bearish trend and it is time to be cautious in the commodity market again.

In my technical analysis, the stock market is oversold while gold is heavily overbought, which means gold will continue within its long-term bearish trend. That being said, gold is trading below the upper bound of the trend channel, so we are not far away from the bull.

Technical momentum is signaling a momentum shift and for all I know, it can go way below 1000. The sell-off today is a profit taking from a strong gain last week that saw gold prices hit a 12-month high at $1,260.

Investors fear a slowdown in China, a volatile oil price and most of all; negative interest rate. The tide have changed. Increased risk appetite leads to a declining gold price, and Asian markets rallied on Tuesday. So did the European markets.

It`s not a bad start for the U.S stock markets on Tuesday either. The day after the Presidents Day long weekend is up (13.30 pm New York). Gold can consolidate around $1,210, but if it breaks the support level of $1,180 an ounce, it would negate the rally. The fear in the market is probably overdone. We are not in a recession, and if we should fear something, it should be the fear itself.

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Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shiny bull. The author has made every effort to ensure accuracy of information provided; however, neither Shiny bull nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Shiny bull and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

 

 

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Outrageous Predictions 2016

It`s time for some predictions for 2016, and Saxo Bank is out with their own predictions and they are outrageous. “Outrageous Predictions” are “Outrageous Predictions”. Very bold. They are outrageous, expecting next year’s El Niño to be the strongest ever. Oil making a drastic return to $100 a barrel, and EURUSD to skyrocket back to 1,23 to name a few.

Steen Jakobsen, Chief Economist at Saxo Bank, commented: “We are nearing the end of the paradigm paralysis that has dominated the policy response to the global financial crisis. Quantitative easing and other forms of intervention have failed. China is transitioning, and geopolitical tensions are as complex as ever. The marginal cost of money is rising, and so is volatility and uncertainty. It is against this backdrop we have set this year’s predictions.”

 

Predictions 2016
Saxo Bank’s Outrageous Predictions 2016

  1. EURUSD direction? It’s 1.23…
    Europe is running a massive current account surplus and its weaker inflation should, in macroeconomic logic, mean a stronger currency, not a weaker one. The race to the bottom has gone full circle, meaning we are back to a weaker US dollar again as the direct outcome of US interest rates policy.
  2. Russia’s rouble rises 20% by end-2016
    By the end of 2016, a surge in oil demand and the Fed raising rates at an inappropriately slow pace causes the Russian rouble to rise some 20% versus the US dollar/euro basket in 2016.
  3. Silicon Valley’s unicorns brought back down to earth
    2016 will resemble 2000 in Silicon Valley with more startups delaying monetization and tangible business models in exchange for adding users and trying to achieve critical mass.
  4. Olympics to turbo-charge EM’s Brazil-led recovery
    Stabilisation, investment spending on the Olympics, and modest reforms will see sentiment rebound in Brazil, with EM exports helped by cheaper local currencies. The result: EM equities to have a great year – outperforming bonds and other equities.
  5. Democrats retain presidency, retake Congress in 2016 landslide
    The Republican Party goes from strength to dramatic weakness as the rifts from an internal struggle on its future direction play out. This leads to a landslide victory for the Democratic Party as they successfully execute a get-out-the-vote campaign with Millennials coming out in droves having been frustrated by the political stalemate and weak job prospects of the last eight years.
  6. OPEC turmoil triggers brief return to $100/b oil
    OPEC’s crude oil basket price drops to the lowest since 2009 and unease among weaker as well as wealthier members of the cartel over the supply-and-rule strategy continues to grow. The long-awaited sign of an accelerated slowdown in non-OPEC production finally begins to flicker. Suitably buoyed, OPEC catches the market on the hop with a downward adjustment in output. The price mounts a quick recovery with investors scrambling to re-enter the market to the long side – once again bringing $100/barrel prices onto the horizon.
  7. Silver breaks golden shackles to rally 33%
    2016 will see a renewed confidence in silver. The political drive towards reducing carbon dioxide emissions by supporting renewable energy will add to increased industrial demand for the metal, given its use in solar cells. As such, silver will rally by a third, leaving other metals behind.
  8. Aggressive Fed sees meltdown in global corporate bonds
    Late 2016 will see Fed chief Janet Yellen embark down a hawkish path with a series of aggressive rate hikes, triggering a huge selloff in all major bond markets as yields start to rise. As the portions of bank and broker balance sheets allotted to bond trading and market making have almost disappeared, one of the vital parts of a functioning market is simply not there. This realisation sinks in too late and the entire buy-side flee into a panic selling one-way street, as highly advanced risk models lurch into a symmetric red alert.
  9. El Niño sparks inflation surge
    Next year’s El Niño will be the strongest on record and will cause moisture deficits in many areas of southeast Asia and droughts in Australia. Lower yields across agricultural commodities will curb supply at a time when demand is still increasing on the back of global economic expansion. The outcome will be a 40% surge in the Bloomberg Agriculture Spot Index, adding some much-needed inflationary pressure.
  10. Inequality has last laugh on luxury
    Faced with rising inequality and unemployment of over 10%, Europe is considering the introduction of a basic universal income to ensure that all citizens can afford to meet their basic needs. In a more egalitarian society where other values are promoted, demand for luxury goods decreases sharply – the sector collapses.

 

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Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shiny bull. The author has made every effort to ensure accuracy of information provided; however, neither Shiny bull nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Shiny bull and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication. UA-63539824-1.

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