Why I am bullish on Silver-------By Shan Saeed

Strategic insight from the market: Bullish on silver

Silver is called a poor man’s gold. Its so true and correct in the present circumstances when there are lot of headwinds in the global financial market. Silver is your wealth insurance and protection.  Silver prices set to rise in 2013 thanks to China. Consumption in China, the world's second largest user, could climb to record 7,700 metric tonnes next year.

Investors in China are seeking out silver as an alternative value investment with the economy cooling for a seventh quarter. According to the research firm from Beijing Antaike notes that demand for silver is set to jump as much as 20% in 2013, with investors seeking to preserve their wealth and get insurance.

Consumption may climb to 7,700 metric tonnes after gaining 6-8% in 2012.  Even for China, this would be a record level. China is the world's second biggest user of the metal.

Silver soared 15% and holdings by exchange traded funds jumped 6.5% in 2012. According to my research, the demand for silver is coming from jewellery and coins, which accounts for 33% of demand, and electrical appliances and solar panels.

A possible solar industry recovery is also expected to help the white metal's demand, with the government targeting 21 gigawatts of solar power installations by 2015. This compares to an installation of 2.6 gigawatts in 2011.

Moreover, statistics have also shown that overall jewellery sales in China rose 19.3% for the first eight months of 2012 as compared to last year. China's week-long National Day Holiday dubbed 'Golden Week' for domestic consumption lasted longer than usual this year, aiding sales.

Buyers mainly targeted gold and silver jewellery and clothes. Chinese consumers also became top luxury buyers resulting in 25% of global purchases. Shoppers from the Asian continent are also pushing global sales of luxury items to new heights, aiding the sector post its third straight year of strong growth since the global recession.

While Europeans contributed 24%, Americans 20% and Japanese 14% to global luxury sales, China's retail and catering industries saw a surge in sales during the eight-day national holiday, driven by demand for jewellery, clothes and home appliances. Combined sales of major retail enterprises in the country rose 15% to $126.3 billion during the September 30-October 7 holiday period as compared to the previous year's holiday period. Even as the Shanghai Composite Index heads for a third straight annual drop, silver has climbed to touch 592 million ounces as of mid-October-2012.

Bailouts will continue: Moral Hazard, High Economic Cost and Burning of Tax Payers money

For those whose bread is buttered by the status quo, falling money supply raises the never-ending cry for more stimulus. Again from the Telegraph:

"This credit contraction is what happened in Japan in the early 1990 and we have to be careful not get into deflationary spiral," said Prof. Richard Werner from Southampton University, a Japan expert. "They to need to launch true QE or an expansion in broad credit creation, and it cant be done easily."

The Bank of Japan threw money into the big black hole of stimulus for decades. The country now has pretty bridges that no one uses, and a debt-to-GDP ratio of over 239% — the highest in the known world. Japan is a country where the young can't find jobs, won't marry, and live with their parents well into their thirties. Real estate has yet to find a bottom and exports are shrinking. The Nikkei 225 is at 8,900 — well off its all-time highs of 39,000. Japan is a case study in what not to do.

SILVER IS THE BEST OPTION IN THESE UNCERTAIN FINANCIAL MARKETS.

Since that high-volume, blow-off top in the spring of 2011, silver has slowly but surely lost value. Few investors stayed out of silver until late August 2012 when it met its five-year up-trend line and broke out of its shorter-term down-trend range.

SILVER OUTLOOK FOR 2013: Positive

I expect the price of silver will bounce along that uptrend in a similar way to the action I saw from 2008 through 2010. Strategic investor’s goal should be to buy when it hits that line.  Legendary asset manager Eric Sprott said this will be the "decade of silver" during which silver will hit $100. Silver is the next best investment after agriculture.

On June 18, 2012, the Federal Reserve (and the Office of the Comptroller of the Currency) quietly issued firm warnings to all banks to prepare to implement the new rules that make gold a legal currency — the same as cash.

I will tell you all about this "Bank of Bankers," a powerful cabal that presumes to dictate even to the U.S. Fed, and how their actions will lead to the most profitable gold opportunity of lifetime. There is no reason for Europeans to expand a business or buy a house when the European economy continues to fall apart and the political situation is in chaos. To own or build is to become a target in the next riot. You can't spend your way out of a debt crisis. The world has to eat the pain at some point. Sooner will be less painful than later. But, the powers that be won't listen to reason. There will be more stimulus, bailouts, and money printing. It will continue until it can no longer stay afloat. Buy silver on the dips.

Disclaimer: This is just a research piece and not an investment advice. All financial transactions carry a RISK

Upside of the energy market: Oil secret at north dakota's bakken pool belt By Shan Saeed

THE GOLD INVESTMENT IN OIL

I think most investors and people in general have probably heard plenty about North Dakota's Bakken oil pool. After all, investors are aware of this huge development taking place. My job as a financial market economist and wealth protection strategist is to share new investment opportunities that nobody is talking about. So my passion for people in my networking, I call them savvy and strategic gurus to remain ahead of the curve as investors, they need to recognize the incredible potential of this unique shale oil formation... and details on top Bakken oil producers since 2007. Let me share few facts flowing out of the Bakken suggest there is much more light, sweet crude there than previously believed...

I'll to get right to the point. Here are a couple quotes from two of the biggest oil companies in the Bakken, Continental (NYSE: CLR) and EOG Resources (NYSE:EOG).

ENERGY MARKET EXPERTS AND GURU

From Continental's CEO Harold Hamm:

"The latest game changer is the Three Forks lower benches. We've literally found an additional oil saturated reservoir in the Bakken that again, makes this world-class oil play bigger and better."

From Continental's President Jeff Hume:

"I believe we just have a larger petroleum storage system than we previously thought, and the reserves will increase as we get that data in hand, and that will be later this year."

From Continental's Senior VP Jack Stark:

"Continental acquired 6 cores of the entire Three Forks formation in 2011 and discovered there were up to 3 additional layers within the Three Forks formation. The significance of this discovery, and what makes it such a game changer, is that the volume of oil in play for the field almost doubles with these added reservoirs."

And from EOG CEO Mark Pappas:

"... we have more potential upside and growth opportunities than we've previously indicated... we're much more excited than we were a year ago about our remaining Bakken and Three Forks potential."

These insiders are estimating Bakken recoverable oil reserves may be 60% higher than currently thought... And it all has to do with layers. Shale is a sedimentary rock, meaning it is layered. Further exploration keeps turning up deeper layers of oil-producing shale.

At first it was just the Bakken, the upper level. Then they found the Three Forks Formation beneath the Bakken. Together, the Bakken and the Three Forks have around 3.5 billion barrels of recoverable oil.

More recent drilling revealed the Sanish formation under the Three Forks, which has another 1.5 billion barrels of oil. But now companies are finding more oil below the Sanish level — and they're pretty excited about it. Continental is in the process of selling off other assets and plans to focus all of its future spending on its Bakken holdings. That's right, Continental — the same company that drilled the very first Bakken well in 1995 — is going "all in" on the Bakken.

Knock, Knock: This is Opportunity

The vast majority of investors have never heard of the Bakken. Even those who know about the Bakken don't know that there could be 60% more oil there. This is what you might consider "breaking news." The U.S. Geological Survey is currently reassessing the Bakken's recoverable reserves.

Results are due in 2013, but I guarantee the "whispers" will begin circulating sooner than that. In fact, they may have already started. Oil prices have dropped sharply over the last few weeks as investors are terrified of what the lunatics in Greece will do next... And they've pushed my favorite Bakken stocks down to the point where they trade with P/Es of 7, even 5! If reserve estimates jump 60%, these P/Es would effectively be 3 and 4. But don't worry — those ultra-low P/Es won't last...Happy investment in the energy market

Disclaimer: this is just a research piece and not an investment advice. All financial transactions carry a RISK. 

NATURAL GAS WILL BE KING IN 2013------> By Shan Saeed

I wrote an article for a malaysian magazine in Sept 2012, SMART INVESTOR in which I mentioned about the growing important of Natural Gas. In July NG was trading at $2.5 bttu. Today, the price stand at $3.6 bttu--[ New York Times Oct 12, 2012]. An increase of 44% in just 75 days. Pure increase in wealth preservation in these turbulent times. Natural gas will remain king in 2013. In my humble opinion, Natural Gas prices will touch $4.95 bttu by next year. And while it will continue to be dirt cheap, prices will start inching back up next year. Also worth noting is that going forward, I foresee and definitely we would see more trucks and buses running on natural gas. There will be major approval on exports. The economics on exports are just too juicy to ignore. Those who are properly positioned now in natural gas are going to see some nice, steady growth in 2013.

In USA, Domestic oil production will also remain strong, offering dozens of opportunities for investors. I'm particularly fond of some of the latest enhanced oil recovery technologies, like this one that's now being utilized by BP, Exxon Mobil, Chevron, and Halliburton. North Dakota will continue to pump out oil fortunes as well, and Arctic drilling will aggressively resume next year when the season starts up again.

Although I suspect to see more delays and more proof that the economics of many of these Arctic drilling operations simply don't make sense right now... And I don't even want to think about an oil spill up there, where it will be impossible to properly clean it up or control a gushing well-head. But you know how that goes... The bureaucrats and oil companies will worry about that when it happens. Fabulous.

Regardless, the Arctic drilling experiment in USA will continue in 2013. But I'm sharing with my clients and potential investors how to take position in the energy market on enhanced oil recovery and domestic operations in North Dakota for the big pay-day.
These are just a few of my predictions that I shall use to make my strategy in 2013 for the energy market. Of course, nothing is set in stone...
Major geopolitical events, social unrest, economic recovery revisions, Europes doomday, acts of God, Arab Spring. Israel/Iran tension. Potential war. Supply disruption. Pick your poison. All of these issues go with us into 2013, and the risk premium — which I calculate to be around $20 per barrel will remain. All of these things can make us change course at any given time. I will stay nimble.

OIL PRICES IN 2013. -----STRATEGIC ANALYSIS
Get ready for the oil disruption going forward. Saudi Arabia is quitting oil business in the next 10 years and changing their energy mix. It's a super tight oil market, and it will only get tighter. And the market knows this. It's pricing in the potential for all of these scenarios. And I believe at least of one will hit home next year...The geo-political and strategic position makes oil premium very high and oil supplies will remain under pressure. Oil is headed for $150 a barrel in 2013. Happy Investment in the energy market.

Disclaimer:: This is just a research piece and not an investment advice. All financial transactions carry a RISK.

Japanese are ready with QE as well

Japanese Yen is ready 

for Quantitative Easing 

as well------By Shan Saeed

Ben Bernanke formula QE--Quantitative Easing is going global. Japanese, 
Europeans and British are following him. I was the first one who informed
 last year that QE will go global and many advance economies would adopt
 QE in order to spur growth and stimulate the GDP rate. Just look at Japanese, 
the country is adopting QE in her market. The global economy is in the midst 
of printing money and this will eventually give rise to gold and other real 
assets going forward. Investors need to critically analyse their assets and 
pre-position audit of their portfolio for asset and wealth protection. 

• inShare

Japan's Debt to GDP is 227%, no real plan to pay down this debt, 
interest rates near zero, close to zero economic growth for the past 
20 years and horrible demographics making it difficult to grow, 
would you buy buying the currency of this country? Throw on top 
of all this that the country is trying wildly to devalue its currency, 
now would any investor buy?. Japan recently announced it is expanding 
its quantitative easing program by 10 trillion yen to 55 trillion yen 
(something in the $120 billion range).  The Japanese have stated over 
and over again during the past year that they want to devalue the yen, 
which is trading near all-time highs. In the foreseeable future, Yen 
will be in the range of 95-100. At present, Yen stands at 80 against USD. 

Part of the problem is most of the currencies around the world 
are just as bad. Europe is going to enter a recession and has huge 
debt and banking woes, and the United States is printing money 
and spending like a drunken sailor. Therefore, Japan is a total 
fiscal basket case and cannot devalue its currency! 

With the major global economies printing money Real Assets 
like Gold and Silver will rise in value against all of the currencies. 
What will happen is the yen, dollar and euro will remain in trading 
ranges against each other, but all will fall in value in terms of gold.
The yen’s inability to devalue against other paper currencies despite 
being so fundamentally weak is just another argument to invest in 
gold and other real asset stocks going forward. Happy investment in 
the global financial market. 

Disclaimer: This is just my research piece and not an investment advice. All financial transactions carry a RISK

FISCAL PROFLIGACY COULD BE DANGEROUS.

By Shan Saeed

INDEPTH ANALYSIS OF THE MAJOR GLOBAL PLAYERS:

Some people feel that fiscal policy is the only hope to get the economy out of recession or to get into the growth momentum. Its debatable. I know there is a portion of the economic populace out there who thinks the government needs to spend its way and stimulate its way out of this recession [see Nobel Memorial Prize in Economics Sciences-winning economist Paul Krugman]. Expansionary fiscal policy could be devastating for some economies in the developed world. I think it is the monetary policy that gets the economy out of recession. Nobel Laureate Late Milton Friedman from Uni of Chicago was a strong advocate of this policy and I follow him very closely in terms of economic strategy. Christina Romer [ ex-Chairwoman Obama Economic team] while addressing at Brooking institution in March 2009, made the same emphasis on the importance of monetary policy over fiscal policy.

However, I do not think it is possible at the moment. Let’s forget the writings of John Maynard Keynes and if spending by the government would even succeed. The fact of the matter is that I do not think the United States is even in a position to do this with analyst, economist and other experts talking about fiscal cliff hanging on the wall.

STRATEGIC ANALYSIS OF COUNTRIES HAVING DEBT TO GDP RATIO HIGHER THAN 100%

According to the International Monetary Fund, some of the countries in the world that have debt-to-GDP ratios of over 100 percent, or larger debts than the size of their economies.

Countries                   %Debt to GDP                      Year                Region

Japan                                        230                              2011                Asia

Greece                                     160                              2011                Europe

Saint Kitts/Nevis                      153                               2011                North America

Jamaica                                   139                              2011                North America

Lebanon                                  136                              2011                Asia/Middle East

Eritrea                                     134                              2011                Africa

Italy                                         120                              2011                Europe

Barbados                                 117                              2011                North America

Portugal                                   107                              2011                Europe

Ireland                                     105                              2011                Europe

USA                                        103                              2011                North America

Singapore                                101                              2011                Asia

Sources: IMF Via Wikipedia, World Bank, ADB, Economist, Bloomberg

As you can see, other than Singapore, these are mostly really weak economies. There are four of the five PIIGS (Portugal, Italy, Ireland, Greece and Spain) and some small Caribbean nations that have been hurt by the global slowdown as it hit the tourism industry. Most of these countries are experiencing near zero growth or in a recession. In the case of Greece, we have an out and out collapse of the economy, and Japan has basically been in a 20-year recession.

My point is, even if the USA can stimulate the economy by QE3, it will not have a positive impact in the long run. With a debt-to-GDP ratio near 103 percent, and headed to more than 110 percent by next year, the debt is too high to spend more. Most studies show that when your debt gets over 100 percent of GDP, your economy slows, productivity slows down, purchasing power is reduced, living standards come down and inflation rises

When President Franklin D. Roosevelt started his New Deal in the early 1930s and Japan began its downturn in the early 1990s, both countries had debt-to-GDP ratios of less than 30 percent. They had room to spend to stimulate the economy not only in the short run but also in the long haul.

Therefore, even if you believe in Keynesian economics, the United States has betrayed the belief that you should save during bad times to have money to spend during bad times. The United States for the last 40 years has mostly run deficits and failed to save for the rainy day that has now arrived. It’s not so much that austerity works. It’s that it is forced. It’s either you cut back or default or print money and go into hyperinflation.

ECONOMIC OUTLOOK FOR USA

Right now, USA need tough decisions to made. A combination of defense cuts, streamlining of entitlements (e.g., raising the retirement age) and decreasing taxes must be implemented. However, both President Barack Obama and Mitt Romney, the likely Republican Presidential nominee, are failing to address any of these real problems. This will probably see the so-called fiscal cliff pushed back another year no matter who gets elected.

The way this will end is either in stagnation, with rates staying low and little to no economic growth; mediocrity for the next 10 years; or, more likely, sometime in the next three to five years, despite all of the Federal Reserve’s efforts, interest rates will begin to spike and it will cause a crisis that will force streamlining of the economy and real change to occur. My money is on the latter. I feel that the market will force the hands of politicians, not the other way around.

What does this mean? In the long run, it means the USA will need to reshape it economic model to show the turnaround. When cuts are made, it will be the closing of dozens if not hundreds of U.S. military bases and a change in the U.S. political system. It may seem unlikely because it will have been open for so long. 

However, remember that at one time the “Sun Never Set on the British Empire,” with Britain controlling one-fourth of the world’s land mass. The British Empire was far more powerful and greater than the American Empire has ever been. It might come under pressure as well in the next 3-5 years. The only way to really get out of this mess is by making tough decisions, decreasing taxes, cutting entitlements, cutting spending and letting the free market system to work without government intervention /regulation. The question is, does the United States have politicians with guts enough to make these changes or will the market force the government’s hand?

Disclaimer: This is just a research piece and not an investment advice. All financial transactions carry a RISK. 

Gold is ready for an upsurge: Get your hands on the yellow metals before it gets too late

By Shan Saeed

GOLD SUPPORT FROM ROMNEY

Gold is on the rise. FED has finally decided to launch QE3 to stimulate the economy which is showing little improvement in economic growth. With Romney sharing in one of his addresses that Gold standard needs to be brought back, giving further boost to Gold prices in the international markets. Even Nobel Laureate and New York Columnist Paul Krugman wrote in New York Times titled Galt, Gold and God on Aug 23, 2012 issue.

I’ve watched markets and how they act for over 14 years now. All of that history has helped to give me an edge when investing in the financial markets and advising my investors globally. 

 
For instance, many investors say that $1,900 per ounce was the ultimate top on the price of gold. I tend to disagree with many people and investors. I was the one of the persons coming out with a shout of $2000/per ounce for gold in the next 4-years in 2009. If we pay attention, the market will demonstrate us that 2000 is very much on the cards. How does the market guide us? It guides us by going through a period of consolidation. Gold has consolidated in a sideways triangle [descending triangle] for right at a year now. 

Well, when any financial asset is “topping out,” it doesn’t consolidate anywhere near its highs. Instead it has a blow-off top and makes another failed stab at the highs and then sinks like a rock. That’s not what I’ve seen happen in the price of gold at all. But those who don’t understand market patterns and the cycles that it goes through think that the pullback and range that has happened in gold is a sign of weakness. But actually it’s a sign of strength. Plus Gold has got solid fundamentals, i.e. REAL CURRENCY, NO DEFAULT OR DEPRECIATION RISK OR COUNTERPARTY RISK.

You see, any asset occasionally needs to tread water sideways for a bit to build a base from which to launch from. It’s actually a very healthy thing and keeps an asset from going parabolic into an unsustainable trend. Also, it’s been normal for gold to go through long periods of consolidation before hitting new highs. Pull backs and consolidation are part of the market game.

GOLD HISTORY FOR INVESTORS TO GET DEEP INSIGHTS.

2008

For instance, this happened going into 2008. Gold slumped into a range that bottomed in about eight to nine months and then hit fresh highs around 19 months from its peak (or 10 months after its lows). 
2006
This very same pattern happened in 2006. Gold bottomed about five months later, but ultimately took around 16 months to go on to new highs. 
Both of these consolidations were followed by very “trendy” periods, where gold launched higher and seemed almost unstoppable. But that’s the kind of thing that routinely happens out of healthy, sideways consolidations. 

So, where gold stands now, it’s been within that descending triangle consolidation for about a year. Even within that consolidation there’s formed an even tighter consolidation known as a symmetrical triangle ever since last May.  This symmetrical triangle will break out within the next month or two to the upside. The price target will push gold out of the roof and making manay investors rich.  That larger pattern has a minimum price target of almost $2,000 an ounce is very much there

In simple English, let me explain what the end result of all of this gold movement. It means that within a couple of months a spike higher in gold will happen. That spike will be large enough to shake up the gold bears, who thought gold had topped out. As it begins to stop them out and margin call them out of their positions, it will unleash quite a bit of buying pressure on gold, which will eventually take it up to around the $2,000 mark, likely within the next 9 to 12 months. China wil shake the market as she has already started a new market called PAGE i.e, Pan Asia Gold exchange just like COMEX ^ LME.

I believe we are at the bottom of gold’s range now and we’ll soon see it have mostly “up days” from here on as it begins its ascent higher. As gold trades above $1,675 an ounce, we’ll see the upward ascent speed up quite a bit. This will mystify many investors and have them scratching their heads because they’ve felt that gold was “dead in the water” for so long now. They won’t expect it to “come back to life” like that and they’ll wonder where all of this upside momentum has come from. Happy investing in the gold market.

Disclaimer: This is just a research piece and not an investment advice. All financial transactions carry a RISK. 

MARKETS WILL SWING INTO DESPAIR----By Shan Saeed


I see a lot of volatility in the global financial markets till 2015. Markets are swinging into all directions these days, not from hopeful to guarded but rather, from panic to despair, as positive news is hitting the wire with less and less frequency. Corporate profits will hit rock bottom and massive umemployment is on the way. There will be more volatility and downside risk to the market creating massive selling pressure. USA is set to hit recession by Q-1 2013 with high unemployment rates and softening retail sales and confidence numbers indicate the world's largest economy is facing something more sinister than a soft patch. UK is already in recession while Europe is a sinking ship with no life. The European debt crisis is getting worse, as borrowing costs soar in Spanish bond markets on fears the country will need a bailout. China's once red-hot growth rates are cooling but it will rebound with GDP expected to touch 8.7% in H2 going forward. With such uncertainty building, expect volatile market swings fueled by fear-based trades to continue. The market sits somewhere between panic and despair. People are worried, market policy makers have thrown everything people can expect but still the slow down continues. Europe, meanwhile, must pay down massive debt burdens, which won't happen overnight. Europe's economy will go in deep recession for the next 3 years. 

A giddy mix of slow developed world growth and a meaningful cyclical slowdown in the emerging markets makes growth in the second half and therefore earnings vulnerable. The most visible sign of stress is the European crisis and this rumbles on. Talk that Greece may default on its debts and exit the euro-zone has gone on for some time now, with many hoping for policymakers to design an orderly exit for the country while keeping the larger Spain and Italy in. That might no longer be possible but will happen soon as countries will find the exit door from the euro zone. Yields on the 10-year Spanish bonds have soared beyond 7.60 percent, well above a 7 percent level branded as out of hand by the markets and suggesting the country needs a massive financial lifeline.

Euro-zone nations have created a financial firewall, known as the European Stability Mechanism, to prop up struggling economies, though a court in Germany is mulling a case to decide if bailing out other nations violates national law. That court isn't expected to decide anytime soon, which hampers policy makers' room to act. As a result, a messy Greek exit from the Eurozone is becoming increasingly likely, which could prompt the larger Spain to default and ditch the currency as well. Although it is frequently argued that a Greek exit is now manageable, no one knows what the consequences of such a development would be, especially now that Spain looks more likely than ever to have to apply for a full program and Europe's weak firewalls seem likely to be tested. 




Disclaimer: This is just a research piece and not an investment advice. All financial transactions carry a RISK.