Hedge funds have been pushing SLW hard for the last several months predicated on the FEDS QE infinity. Well, that hasnt played out and now appears that fundemental thesis is temporarily broken. People in the commodity markets have been riding cheap money for over 5 years.The hardest part is to understand when that change is taking place.Austerity is NOT inflationary. Higher taxes are NOT inflationary.Government decreasing spending is NOT inflationary.Low wage jobs are NOT inflationary.Rentals are NOT inflationary.Short interest in SLW is 1% of total shares outstanding.That is extremely complacent for a company trading at 16 times sales and a PEG over 4. The valuation in this stock is way over extended for reasons that simply dont make any sense when the price of the commodity in the model is NOT inflating and actually has stagnated for over 18 months.
The street knows all about this 80 Billion a month and has seen the writing on the wall.That writing is telling people the FED needs to "normalize" policy ASAP. The best way to do that is allow interest rates to rise and the dollar to appreciate hence the reason all commodities are falling.....Look at corn soybeans cotton wheat....Those softs are dropping in the face of one of the worst droughts in history. China cancelled a huge soybean shipment on Wednesday.This is NOT inflationary actions.
Everybody "knows" about this $80B? Obviously not, since the 45B for the past year has come out of revenues driven by selling short term debt and buying long term debt, thereby raising long term debt prices and lowering interest rates.
There is no short term debt left to TWIST into long term debt, these new purchases are strictly from printed money starting this year.
The street may be reacting to this doubling of what looks like TWIST--but is purely inflationary designed to degrade the dollar to make us more "competitive".
I can't wait for the dollar to be worthless so we can be the largest seller of goods to the world for essentially--free, since the dollar will be worthless. I'll be a millionaire, but that will be the price of a Big Mac.
Jim Rogers invest in agriculture and energy. If what you claim is true, then you must be smarter than Jim Rogers. Why are you on this board? Mmmmm..... that tells me you are a amateur because professional who have time do not post on this board. They don't even care about this board.
I have been trading the commodities market since 1996.I am a home player.Ive been a holder of SLW below 5 a share.I have recently unloaded my entire SLW position.The writing is on the wall for the bull run we have see for the last 12 years.The ultra easy money is comming to a close.We have just seen the biggest drought in history and all the softs are getting hammered.A very large soybean shipment was refused by China on Wednesday. That is a problem if you understand what soybeans are used for.We now "hear" that China is looking to blow up the "bubble" in gold/silver.Well, I can tell you to look at what China does and NOT WHAT THEY SAY......The chinese people are so innodated with hoardes of copper/silver/gold that a move to the downside will push a whole new level of bullion back into the market.You can understand why they would want to "talk" the markets higher.The people in charge loved what the fed has done and now that easy money policy is shifting to neutral...... Good Luck
And when interest rates rise what happens then?
Where do you get the funds to pay the higher interest due.?
What happens to your tax base when you destroy consumption?
I always thought that rising interest rates was a reaction to high inflation.
The party is over, and the value, and I mean value of any commodity is based on what it commands in relation to other goods and services.
And lets not forget that the USD is a debt commodity instrument.
It certainly isn't money.
It is, simply phrased ...
A promise that it has value and is tradable for commodities/goods/services.
Is there an over supply of USD's world wide?
How did that happen?
Could it be to pay for interst on debt, and supplying goods and services through social programmes?
They have no choice but to throw in the towel - it's NOT working.
The damage has been done and all they have left is that they promise that things are about to get better.
We got nothin left in the tank.
New plan ....
Hey, why don't we just tell them that we will be good for it.
That will be some time.
So could it be that soy beans are becoming more valuable then debt debased fiat money?
Your arguements are interesting but the damage is done.
Inflation deflation, the FED and the banksters don't care.
Business will be good for them under either scenario.
The banks already own the USA, Europe - most of the Western world.
May I make a suggestion, there is an opening coming up at the Treausury and one at the FED real soon ... You should apply.
I think I would rather have You in charge vs Good ole Jammie.
The value of SLW will hold, the model is sound.
And what it is priced in dollar terns is the least of my worries.