Monday, October 31, 2011
Occupy your Money, Buy physical silver Bullion. In this vid, Patrick MontesDeOca chats with Eric Sprott in this exclusive interview that took place at the Silver Summit in Spokane, Washington the week of October 17, 2011. Mr. Sprott speaks in riveting detail about the Silver Market and it’s outlook through this year and next, in this not-to-be-missed interview.
This price volatility is taking its toll on investors. Some have abandoned stocks altogether in favor of safer assets such as Treasuries. While greater safety sounds appealing, the trade-off is subpar returns. At present, 10-year Treasuries yield just 2.2%.
Fortunately, there is another strategy investors can use to minimize price swings in their portfolios and earn better returns than Treasuries. Both these goals can be achieved by owning low volatility stocks. Even better, these stocks tend to outperform the market over the long-haul.
[StreetAuthority co-founder Paul Tracy calls these "forever stocks." Simply put, they're safe, dependable stocks you can buy, hold practically forever, and sleep well at night doing it. [If you haven't seen his special presentation on "forever stocks," go here to learn more.]
Data show that low-volatility stocks outperform the market in the long run, without the big price fluctuations. For example, the Standard & Poor's Low Volatility Index, which consists of the 100 least volatile stocks in the S&P 500, gained 80% in the past decade compared with a return of 42.9% for the S&P 500, including reinvested dividends. Also, between 1968 and 2010, the least volatile large-cap U.S. stocks gained 10.2% a year and outperformed the most volatile large-cap stocks, which returned just 6.6% a year, according to Financial Analysts Journal.
The best way to find these low-volatility stocks is by using a simple tool called "beta," which measures the volatility of a given stock relative to the overall market. The overall market carries a beta value of 1, so a stock beta of 0.5 means the stock is half as volatile as the market. No need to calculate beta yourself; Yahoo Finance, Reuters and many other financial websites and databases calculate individual stock betas for you.
I've found three great low beta stocks that are worth a further look. Adding these steady eddies to your portfolio should dampen price swings and help you sleep better at night.
1. General Mills (NYSE: GIS)
This global foods giant produces cereals, baked goods and other foods under the Cheerios, Wheaties and Pillsbury brands. In the past five years, the company's sales grew 5% a year to $14.9 billion, and earnings per share (EPS) improved 13% yearly to $2.48. A beta of 0.22 indicates that General Mills shares have less than a quarter of the market's volatility.
General Mills has a 113-year dividend history and has raised dividends an average of 11% in each of the past five years. The current $1.22 annual rate, gives shares a 3% yield. The company is very profitable, with 17% operating margins, twice the 8% food processing industry average, and 25% return on equity (ROE). Analysts predict General Mills' international expansion and new products will drive 8% annual earnings growth in the next five years. This stock won't deliver you fast-and-furious gains, but you can expect reasonable returns and steadily growing dividends with this stock in the long-term.
2. The Southern Company (NYSE: SO)
Because of highly predictable cash flow and earnings, utility stocks often have low betas. Southern is one of the least volatile utilities, with a beta of just 0.28.
Southern provides electricity to 4.4 million customers in Georgia, Alabama, Florida and Mississippi. Although Southern's sales grew 5% a year in the past five years to $17.5 billion, earnings per share grew much slower, just 2% year to $2.37, because of ongoing investments in new generating capacity. Future earnings, however, should rise as these new power plants come on-line. Analysts look for earnings growth to accelerate to 6% a year during the next five years.
Southern has paid dividends for 63 years and increased payments for 10 years in a row. In the past five years, dividends have grown 4% a year to a $1.89 annual rate. Southern shares yield 4.3% and have returned 11.8% a year to investors in the past decade.
3. Kimberly Clark (NYSE: KMB)
Kimberly-Clark sells diapers, tissue and other paper items under the well-known Kleenex, Scott and Huggies brands. The company holds the No. 1 or No. 2 market share in more than 80 countries. During the past five years, Kimberly-Clark's sales grew 5% a year to a current $19.7 billion, while earnings per share also grew 5% a year, to a recent $4.68. Dividends have grown 10% a year during this time frame, to a current annual rate of $2.80.
In the next five years, Kimberly Clark plans to accelerate annual earnings growth to a 7-8% rate by cutting $500 million in costs, expanding in Asia and Latin America and boosting sales of higher-margin hygiene and health care products.
Kimberly Clark has hiked dividends for 39 years straight. Shares currently yield 3.8%
Risks to consider: Low-volatility stocks do well during bear markets, but can underperform badly during market rallies. For example, in 2009, low volatility stocks gained 19.2%, but underperformed compared to the S&P's 26.5% climb. To be successful with a low volatility strategy, you must commit for the long-term.
Action to take--> Any of these three stocks are low-risk holdings and are suitable for conservative portfolios. My top pick is General Mills, which has the lowest beta and the highest historic earnings and dividend growth of the three. I also like Kimberly Clark because of its steady dividend growth and expansion into high-growth emerging markets. Southern Company is a safe play on electricity demand as the U.S. economy recovers.
Trends are what allow traders and investors to capture profits. Whether on a short- or long-term time frame, in an overall trending market or a ranging environment, the flow from one price to another is what creates profits and losses. There are four major factors that cause both long-term trends and short-term fluctuations. These factors are governments, international transactions, speculation and expectation, and supply and demand.
Major Market Forces
Learning how these major factors shape trends over the long term can provide insight into why certain trends are developing, why a trend is in place and how future trends may occur. Here are the four major factors:
Governments hold much sway over the free markets. Fiscal and monetary policy have a profound effect on the financial marketplace. By increasing and decreasing interest rates the government and Federal Reserve can effectively slow or attempt to speed up growth within the country. This is called monetary policy.
- International Transactions
The flow of funds between countries impacts the strength of a country's economy and its currency. The more money that is leaving a country, the weaker the country's economy and currency. Countries that predominantly export, whether physical goods or services, are continually bringing money into their countries. This money can then be reinvested and can stimulate the financial markets within those countries.
- Speculation and Expectation
Speculation and expectation are integral parts of the financial system. Where consumers, investors and politicians believe the economy will go in the future impacts how we act today. Expectation of future action is dependent on current acts and shapes both current and future trends. Sentiment indicators are commonly used to gauge how certain groups are feeling about the current economy. Analysis of these indicators as well as other forms of fundamental and technical analysis can create a bias or expectation of future price rates and trend direction.
- Supply and Demand
Supply and demand for products, currencies and other investments creates a push-pull dynamic in prices. Prices and rates change as supply or demand changes. If something is in demand and supply begins to shrink, prices will rise. If supply increases beyond current demand, prices will fall. If supply is relatively stable, prices can fluctuate higher and lower as demand increases or decreases. Effect on Short- and Long-Term Trends
If government spending increases or contracts, this is known as fiscal policy, and can be used to help ease unemployment and/or stabilize prices. By altering interest rates and the amount of dollars available on the open market, governments can change how much investment flows into and out of the country.
With these factors causing both short- and long-term fluctuations in the market, it is important to understand how all these elements come together to create trends. While these major factors are categorically different, they are closely linked to one another. Government mandates impact international transactions, which play a role in speculation, and supply and demand plays a role in each of these other factors.
Government news releases, such as proposed changes in spending or tax policy, as well as Federal Reserve decisions to change or maintain interest rates can have a dramatic effect on long term trends. Lower interest rates and taxes encourage spending and economic growth. This has a tendency to push market prices higher, but the market does not always respond in this way because other factors are also at play. Higher interest rates and taxes, for example, deter spending and result in contraction or a long-term fall in market prices.
In the short term, these news releases can cause large price swings as traders and investors buy and sell in response to the information. Increased action around these announcements can create short-term trends, while longer term trends develop as investors fully grasp and absorb what the impact of the information means for the markets.
The International Effect
International transactions, balance of payments between countries and economic strength are harder to gauge on a daily basis, but they play a major role in longer-term trends in many markets. The currency markets are a gauge of how well one country's currency and economy is doing relative to others. A high demand for a currency means that currency will rise relative to other currencies.
The value of a country's currency also plays a role in how other markets will do within that country. If a country's currency is weak, this will deter investment into that country, as potential profits will be eroded by the weak currency.
The Participant Effect
The analysis and resultant positions taken by traders and investors based on the information they receive about government policy and international transactions create speculation as to where prices will move. When enough people agree on direction, the market enters into a trend that could sustain itself for many years.
Trends are also perpetuated by market participants who were wrong in their analysis; being forced to exit their losing trades pushes prices further in the current direction. As more investors climb aboard to profit from a trend, the market becomes saturated and the trend reverses, at least temporarily.
The S & D Effect
This is where supply and demand enters the picture. Supply and demand affects individuals, companies and the financial markets as a whole. In some markets, such as the commodity markets, supply is determined by a physical product. Supply and demand for oil is constantly changing, adjusting the price a market participant is willing to pay for oil today and in the future.
As supply dwindles or demand increases, a long-term rise in oil prices can occur as market participants outbid one another to attain a seemingly finite supply of the commodity. Suppliers want a higher price for what they have, and a higher demand pushes the price that buyers are willing to pay higher.All markets have a similar dynamic. Stocks fluctuate on a short and long-term scale, creating trends. The threat of supply drying up at current prices forces buyers to buy at higher and higher prices, creating large price increases. If a large group of sellers were to enter the market, this would increase the supply of stock available and would likely push prices lower. This occurs on all time frames.
The Bottom Line
Trends are generally created by four major factors: governments, international transactions, speculation/expectation, and supply and demand. These areas are all linked as expected future conditions shape current decisions and those current decisions shape current trends. Government affects trends mainly through monetary and fiscal policy. These policies affect international transactions which in turn affect economic strength. Speculation and expectation drive prices based on what future prices might be. Finally, changes in supply and demand create trends as market participants fight for the best price.
Oil has been markedly absent in the financial headlines lately. While the recent clamor over EU solvency and weak global growth has temporarily displaced its media attention, oil’s crucial importance to the world economy has not dwindled in the slightest. Oil remains the world’s greatest single energy source today, providing over 1/3 of our energy supply. Although it is well understood that the oil price is critical to the global economy, we sometimes neglect to appreciate how tightly oil supply is correlated to global growth. By historical standards, the world has been coping with constrained oil production and high oil prices for most of the past six years. This tightness in oil supply has been a significant factor limiting global growth, and it would appear that no matter what financial solutions are eventually engineered by our politicians, global growth will remain significantly restricted by the real economy’s ability to produce oil. Limited global supply growth means that the Western world now faces significant competition for oil from emerging markets whose citizenry are willing to work much harder for far less. This will continue to result in a narrowing gap of per capita consumption between emerging and developed economies as the emerging economies continue to gain relative economic strength, wage growth, currency appreciation and purchasing power. We believe strategic investments in oil producers and service companies will offer an effective way to profit from this trend.
Production – Where’s the Growth?
We begin with a review of global oil production. We first wrote about Peak Oil back in 2005; and speculated that we were approaching the pinnacle of global crude oil production.1 As Figure 1 below illustrates, since that time, global oil production has grown very little, appreciating by a mere 2% in total production. This production plateau generated the 2008 oil price spike to nearly $150 per barrel. Subsequently, despite the economic stagnation experienced by developed economies, the price of Brent Crude Oil has averaged over $78 per barrel, four times higher than the ~$18 average that Brent traded at in the 1990s.2
Despite this extremely large and sustained increase in price, oil production has failed to grow meaningfully. Over the past ten years, most experts have consistently overestimated future production growth and have continually revised their forecasts lower as a result. Figure 2 from the U.S. Energy Information Administration (“EIA”) below charts production forecasts made in 2000, 2005 and 2010. Over the last decade the EIA has revised its global oil production estimates lower for 2015 and 2020 by 14% and 18%, respectively. In light of these downward revisions, it still seems extremely optimistic that supply will increase significantly in the coming years.
Figure 3 above illustrates that the International Energy Agency (“IEA”) estimates have been just as inaccurate, forcing it to reduce its global oil production estimates year after year. It is also important to reflect on the pricing environments that were predicted years ago when these optimistic forecasts were made.
Above are charts of the EIA’s 2002 and 2010 oil price predictions. Over the last eight years its high case future price prediction has increased by over 600% from the low $30s to north of $200, while the median reference price has gone from below $30 to almost $150 by 2035. Reflecting on these historical price forecasts really puts into perspective the amount that production growth has disappointed. Had the oil price stayed in the EIA’s 2002 predicted price range, global production would have significantly declined. In fact, all of the production growth we have experienced since then can essentially be attributed to high cost oil operations which are economically dependent on very high oil prices.
We highlight the magnitude of these forecast errors not to criticize their sources but to emphasize how terribly unprepared we are to deal with an oil production-constrained world. Economic growth is well correlated with oil consumption as increasing global GDP requires increased energy use that is heavily oil dependent. Conversely, if oil supply is limited or declines, real economic growth tends to stagnate, if not decline, in lockstep. If a country begins to lose its access to affordable energy its economy will likely shrink.
Why are Prices High? – No More Giants
There are a number of reasons why there has been so little growth in supply. First, and most importantly, global supply is struggling to grow because we are not finding and bringing into production any new “super giant” oilfields. This reality was well documented by the EIA in a study it published in 2008.3
The EIA study revealed that the largest 1% of oilfields (798 total fields) in the world account for over 50% of global production. Remarkably, in this group, there are 20 super giant fields which account for roughly 25% of global production. All of these super giant fields were discovered decades ago.
What has been discovered and brought into production in the past few decades are smaller fields, which normally have higher decline rates. As these new smaller fields replace production from larger fields, and older larger fields age, we can expect the global observed decline rate to increase from the current estimated rate of 6.7% (or 4.7 million barrels per day annually).
Rising Production Costs Necessitate High Prices
Oil prices are also high due to rising production costs, and it’s worth noting that new production sources, such as offshore, tar sands and other unconventional sources are amongst the highest cost producers today. These oil sources now make up a significant and growing percentage of global production. As a result, it is becoming clear to many industry analysts that current oil production cannot be sustained under $75 a barrel and the price required to sustain production seems destined to continually rise.
Middle East Exports are Increasing in Cost and Risk
There have also been significant political developments of late which have permanently altered the dynamics of the oil markets. The so-called “Arab Spring” uprisings in countries such as Egypt and Libya are forcing these and other major oil producing nations to spend more of their oil revenue on social assistance programs. For example, as a result of newly announced social spending in Saudi Arabia, it is forecasted by The Institute of International Finance, Inc. that the budget balancing price of Saudi oil will jump from $68 per barrel in 2010 to $85 per barrel in 2011 and then continue to rise, but at a slower pace, to $110 per barrel by 2015.4
In general, it can also be said that political instability and social unrest are very detrimental for oil investment and production. Recently, as Libya collapsed into civil war, production went to near zero causing extreme volatility in the Brent Crude price. As the Middle East region continues to experience riots and protests, we can only assume that there will continue to be heightened risk of disorderly political change which could dramatically increase prices in the future.
Regardless, it now appears that even if, politically speaking, the status quo is maintained, the majority of the Middle East exporting nations are now producing at or near capacity while domestic consumption is increasing. Their economies and populations are continuing to grow and mature and, as a result, their exporting capacity will in turn be limited and possibly begin to terminally decline.
Major Oil Companies’ Production in Decline
The struggle to grow oil production, especially non-OPEC production, was highlighted in a recent report by Deutsche Bank’s Paul Sankey that measured the dramatic oil declines for major oil companies in Q2 2011.5 Despite $120 per barrel Brent pricing during Q2 2011, the results of more than 20 major oil companies showed a 1 million barrels per day year-over-year decline. The sample group in the report accounted for over 1/3 of global production, so it would be difficult to expect smaller companies to make up their shortfall.
Supply Constrained and Prices to Remain High
In summary, even though the oil price has been averaging 4-5 times higher than the most knowledgeable industry watchers would have expected just eight years ago, global production has remained relatively stagnant. Government agency production estimates have been overly optimistic and a review of the oil market environment suggests production will continue to disappoint. High prices are now required just to maintain current global production. Even with robust pricing, it is beginning to appear that a tremendous amount of our existing production is at risk due to rising rates of decline and political instability. These factors may soon push global production into an irreversible decline. (more)
It has been just over 48 hours since our call that PIIGS the world over will scramble to demand the same concessions that were just granted to Greece courtesy of its economy being in the toilet and getting worse (thanks to lies to misrepresent the Greek economy as being worse than it really was). We already got Ireland yesterday. Now it is Portugal's turn. Reuters reports that "Portugal asked Mexico on Saturday to tell fellow G20 members next week that the United States should offer "financial help" to resolve the euro zone sovereign debt crisis, describing it as a "systemic and global" problem, a Portuguese government source said." Of course, the "US" is a clear proxy for "everyone else" - that the US, whose politicians can't agree on a fiscal stimulus for the US, let alone for some country by the straits of Gibraltar they have never heard of, will not move an inch to save Portugal is a given. Which means that once Portugal is, as it anticipates perfectly well, shut down by the US it will commence demanding for help from those who at least can grant it - the EMU and the Eurozone. And when those refuse, Portugal will do the glaringly obvious: take a page right out of the Greek textbook and proceed to suicide its own economy. And why not - it worked miracles for Greece. Now: two down and two to go. The only question is when does Italy do precisely the same logical next step, and tell the world that its $2+ trillion in debt, the second most in the Eurozone after only Germany, is unsustainable, and will need a modest haircut. 20% should do it. We wonder, what will that do to French banks (and their "perfectly hedged" US proxies - such as MF Global and others)?
The story from Reuters:
"The crisis isn't in the euro zone. It is a systemic and global crisis and we hope that other big G20 countries intervene," the source told reporters in the capital Asuncion, speaking on condition of anonymity.
The source added that Washington should help resolve the crisis "by boosting trade and also with financial help."
No one from Calderon's delegation in Asuncion could immediately be reached for comment.
Financial markets rallied strongly this week after European leaders hammered out a deal to recapitalize their banks, boost the firepower of a euro zone rescue fund, and impose hefty losses on holders of Greek debt.
Portugal's deepending financial plight was described in great detail late last week by Ambrose Evans-Pritchard of the Telegraph:
Monetary contraction in Portugal has intensified at an alarming pace and is mimicking the pattern seen in Greece before its economy spiralled out of control, raising concerns that the EU summit deal may soon washed over by fast-moving events.
Data released by the European Central Bank show that real M1 deposits in Portugal have fallen at an annualised rate of 21pc over the past six months, buckling violently in September.
"Portugal appears to have entered a Grecian vortex and monetary trends have deteriorated sharply in Spain, with a decline of 8.4pc," said Simon Ward, from Henderson Global Investors. Mr Ward said the ECB must cut interest rates "immediately" and launch a full-scale blitz of quantitative easing of up to 10pc of eurozone GDP.
The M1 data - cash and current accounts - is watched by experts as a leading indicator for the economy six months to a year ahead. It has been an accurate warning signal for each stage of the crisis since 2007.
A mix of fiscal austerity and monetary tightening by the ECB earlier this year appear to have tipped the Iberian region into a downward slide. "The trends are less awful in Ireland and Italy, suggesting that both are rescuable if the ECB acts aggressively," said Mr Ward.
A shrinking money supply is dangerous for countries with a high debt stock. Portugal’s public and private debt will reach 360pc of GDP by next year, far higher than in Greece.
And where monetary shrinkage arrives, economic deterioration is always next. But just to make sure of that, Portugal has just set the first of many dates for a General Strike. Mark November 24th on your calendars. This is when Greece officially becomes Portugal.
The good news is, a recent pick-up in consumer spending is fending off fears of another U.S. recession.
The bad news is, it's coming at the expense of Americans' savings.
On average, consumers put 3.6% of their hard-earned dough into savings in September, the government reported Friday. It marks the lowest level of saving since December 2007, when consumers stashed away only 2.6% of their income.
But deciphering the meaning of the savings rate is a tricky business.
On one hand, many economists had hoped the Great Recession would spark a newfound period of thrift and frugality, lessening consumers' vulnerability to financial shocks in the future. (The recession did have this effect for a while, sending the savings rate as high as 7.1% in mid 2009.)
On the other hand, American businesses have argued that without an increase in demand for their products, there's no incentive for them to create more jobs. If consumers continue to save rather than spend their money, why should the restaurant down the street, the local big-box retailer or even large American manufacturers ramp up their hiring?
On Thursday, the government's latest report on U.S. economic growth showed that since July, consumers have started to slow down the amount they add to their savings, to ramp up their spending more instead.
Adjusted for inflation, consumer spending rose 2.4% in the third quarter.
That was not only strong enough to boost overall economic growth in the recent quarter, it also led some economists to boost their forecasts for fourth quarter growth.
But at the same time, others are reluctant to carry their optimism into their 2012 forecasts.
Mark Vitner, a senior economist at Wells Fargo, points out that the increase in spending has come even as consumers saw their disposable income fall 1.7% in the third quarter (adjusted for inflation and taxes).
"The sluggish income growth cast doubts on how sustainable the pickup in economic growth is," he said. "Without an increase in income, consumers can't afford to keep increasing their spending at the the pace that they have."
Considering all the attention investment pros (and financial magazines) lavish on picking the right stocks and funds, I can understand why you might think superior investing ranks above all else when it comes to a secure future and a comfortable retirement.
Savvy investing is certainly important — you don't want to blow your savings on lousy funds or ineffectual strategies. And you'll end up richer if you happen upon a winning investment. If you'd owned the Sequoia Fund for the past decade, for example, a $10,000 balance would have grown to more than $16,000 now, vs. $12,800 if you'd simply earned the market return.
But as a practical matter you can't know in advance which fund or stock will beat the market — in fact, over the past 15 years, only 55% of U.S. equity funds did so, according to Morningstar. Rather than pinning your hopes on higher returns, I'd say boosting your savings rate is a surer way to improve your retirement prospects.
To see what I mean, check out this example. Let's say you're 35 years old, earn $60,000 a year, and sock away 10% of your salary (including your company match) into a 401(k) that's already worth $75,000. And assume you're stashing your retirement moolah in a diversified portfolio of 60% stocks and 40% bonds.
You're doing a reasonable, though not spectacular, job of preparing for retirement. Your savings rate is decent, though it could be better. As for investing, you're hardly a slouch, but ideally you should be devoting more of your 401(k) to stocks.
The key is starting with an overall plan — that is, deciding on the appropriate asset allocation, or blend of stock and bond funds that makes sense given your age and stomach for risk.
Indeed, when the folks at T. Rowe Price ran the numbers on this saving and investing regimen, they projected that you'd have a 68% chance of accumulating enough money to retire in 30 years on 70% of your pre-retirement income and not deplete your funds until age 92.
Not bad. But if you could do just one thing to improve your outlook, what would it be? Save more or earn more?
You can't, of course, say you'd prefer an 8% annual return instead of 6% and turn a dial higher to get it. The investing world doesn't work that way. So to try to earn more you have to invest more aggressively.
In this example, both increasing your savings rate from 10% to 12% and shifting to a more growth-oriented portfolio that's 80% stocks and 20% bonds — an appropriate mix for a 35-year-old — will boost your chances of retirement success. But saving more has a larger effect than earning a higher return would.
In the real world you're not limited to one move. You can bump up the amount you save and improve a sub par investing strategy. Do both those things — which, ideally, you would — and you can feel even more confident about achieving a secure retirement.
In theory, later in your career, when you're more likely to have a large balance in your retirement accounts, a relatively modest increase in your rate of return could boost the size of your nest egg more than upping your savings rate would.
On a $500,000 portfolio, for example, an additional half percentage point of return would translate to an extra $2,500 a year, more than someone earning $100,000 would get by moving from a 10% to a 12% savings rate.
Trouble is, the more risk you take in pursuit of loftier gains, the more your returns will jump up and down from year to year, and the harder your portfolio will get hammered during market setbacks. Take a 55-year-old a decade from retirement — for that person, a pedal-to-the-metal approach is no help. Because you have less time to recover from a setback, it slightly cuts your chances of reaching your goals.
That said, you still have one way to effectively earn more on your portfolio — without ratcheting up risk: Pare investment fees.
Annual expenses for stock funds average 1.5%, while the yearly tab for bond funds comes in at roughly 1%. By opting for low-cost options like index funds and exchange-traded funds, which often charge less than 0.5% annually, you may be able to reduce your costs by anywhere from a half to a full percentage point a year. Over the course of a career, that can boost the eventual size of your nest egg a good 10% to 20%.
Finally, there's one more compelling reason not to rely on astute investing. Given the sluggish growth and onerous levels of government debt here and abroad, even the most savvy investors may have to settle for relatively modest returns. That could be a major problem if your retirement security hinges on racking up big gains. Boosting your savings rate is a surer way to increase the ultimate size of your portfolio.
So by all means, make sure you're investing as well as you can. If you really want to improve your prospects, though, save more.
[Ed. Note: Chris Powell (GATA) had some remarks on this piece.]
by Philip Barton, GoldStandardInstitute.net:
The current estimate for the amount of gold stock in the world is in the region of 170,000 tonnes. As the very first step, it needs to be acknowledged that an estimate is all that is available. Running a worldwide survey on how much gold people own is rather pointless. Even in good times, people are noticeably reluctant to discuss their true wealth. In troubled times, such as now, that becomes an unwillingness to even be interviewed. Nevertheless, it also needs to be emphatically stated that 170,000 tonnes is far too low an estimate and that it is time for a revision. Every single media outlet repeats this same figure, or similar, as though it is gospel.
Included in this 170,000 tonnes is the 10,000 tonnes estimated as being the total amount of gold mined in the history of the world prior to the Californian gold rush of 1848. This was simply a guess.
|Date||Time (ET)||Statistic||For||Actual||Briefing Forecast||Market Expects||Prior||Revised From|
|Oct 31||9:45 AM||Chicago PMI||Oct||-||60.0||58.9||60.4||-|
|Nov 1||10:00 AM||ISM Index||Oct||-||53.0||52.1||51.6||-|
|Nov 1||10:00 AM||Construction Spending||Sep||-||0.8%||0.3%||1.4%||-|
|Nov 1||3:00 PM||Auto Sales||Nov||-||NA||NA||4.07M||-|
|Nov 1||3:00 PM||Truck Sales||Nov||-||NA||NA||5.97M||-|
|Nov 2||7:00 AM||MBA Mortgage Index||10/29||-||NA||NA||4.9%||-|
|Nov 2||7:30 AM||Challenger Job Cuts||Oct||-||NA||NA||-211.5%||-|
|Nov 2||8:15 AM||ADP Employment Change||Oct||-||130K||100K||91K||-|
|Nov 2||10:30 AM||Crude Inventories||10/29||-||NA||NA||4.735M||-|
|Nov 2||12:30 PM||FOMC Rate Decision||Nov||-||0.25%||0.25%||0.25%||-|
|Nov 3||8:30 AM||Initial Claims||10/29||-||400K||402K||402K||-|
|Nov 3||8:30 AM||Continuing Claims||10/22||-||3700K||3675K||3645K||-|
|Nov 3||8:30 AM||Productivity-Prel||Q3||-||2.8%||2.8%||-0.7%||-|
|Nov 3||8:30 AM||Unit Labor Costs -Prel||Q3||-||-1.0%||-1.1%||3.3%||-|
|Nov 3||10:00 AM||Factory Orders||Sep||-||-0.5%||-0.2%||-0.2%||-|
|Nov 3||10:00 AM||ISM Services||Oct||-||53.0||53.7||53.0||-|
|Nov 4||8:30 AM||Nonfarm Payrolls||Oct||-||100K||88K||103K||-|
|Nov 4||8:30 AM||Nonfarm Private Payrolls||Oct||-||130K||114K||137K||-|
|Nov 4||8:30 AM||Unemployment Rate||Oct||-||9.2%||9.1%||9.1%||-|
|Nov 4||8:30 AM||Hourly Earnings||Oct||-||0.2%||0.2%||0.2%||-|
|Nov 4||8:30 AM||Average Workweek||Oct||-||34.3||34.3||34.3||-|