- Update - the Graveyard - USD/JPY
- Physical Gold - the major new trend
- The Graveyard - USD/JPY
- USD Pairs - All lined up?
- The Canterbury Rebuild (and NZ monetary policy)
- Pullbacks in the Gold market are healthy
- For those that haven't already, it's time to Buy Gold
- China - are Chinese stocks now super cheap?
- View archive...
To whom this may concern.
I have no hesitation in recommending ROBERT LEAN as a person of integrity and honesty.
He has a full and ready understanding of the Financial Markets.
Robert studiously studies the day to day market events and readily passes this information and his well constructed views, on to his clients for their appraisal to make their own decisions.
He is extremely patient and takes care to be sure his client is fully clear on all the information he gives.
Robert is always searching for ways to make transactions easier and fine tuning market strategies.
He is a shining example of humanity in the hard and tough world of finance.
John Sims – November 23, 2012
I have known Robert Lean and used his services as a broker for some 8 years now. During that period Robert’s attention to detail; friendly service; and professional integrity have been exemplary.
On more than one occasion Robert has gone well beyond the call of duty to assist in a trading opportunity.
I would strongly recommend Robert Lean to anyone considering trading leveraged products.
Andrew McClure – November 7, 2012
Top qualities: Expert, Good Value, high Integrity
Peter Jones – September 6, 2011
top guy! gives great advice
Mukul Tauja – September 3, 2011
Robert has an in depth knowledge of the financial markets and has helped to some very profitable trades as well as preventing some significant losses. A highly recommended and trusted advisor.
Top qualities: Personable, Expert, Creative
Peter Blaikie – September 1, 2011
This trade is progressing slowly but surely. To recap, the bones of this trade are;
# The 30 year run of trade surpluses has now turned to deficits as the Japanese turned off their nuclear power stations after the Tsunami inspired Fukushima disaster. As a result the Japanese now import the vast majority of their energy requirements.
# Japan’s demographics are poor with the population forecast to decline to 90 mio by 2055 from the 127 mio peak in 2004. Those citizens that are left will be much older too.
# The Bank of Japan has set forth on a new round of monetary policy easing. Top Japanese research house Nomura have been widely quoted recently regarding the new policy saying that the “JPY is likely to weaken due to the BoJ becoming more proactive as a result of likely changes in government leadership as well as changes at the Japanese central bank in coming months.
# …and the budding theme that we here at Edge Capital are watching with great interest is the vast supplies of cheap energy (shale gas) that the U.S is currently harnessing. We think this could be a major kicker for the U.S in coming years. Cheap currency and super low interest rates have been prevailing for 5 years now, add super lean business organisations and top it off with cheap energy. That should be one tasty cake when baked.
P.S. Got to love NZD/JPY on this basis too !
Much has been written about Gold’s dramatic rise in price over the past decade or so and it certainly appears that this trend is set to continue for some time yet.
However within this trend of increasing demand for Gold a new trend, and probably the most important development yet, is starting to take hold and this is the demand for investors to hold actual physical gold.
The significance of this development is that in the early part of Gold’s rising trend the market was to a very large degree driven by the paper market with the introduction of Exchange Traded Funds which tracked and were backed by gold. Investors flocked to these funds and as a result more and more of these types of funds were brought to the market. Such has been the proliferation of these funds that many in the market are starting to wonder if indeed these funds actually hold the amount of gold they profess to hold. There may not be anything in this concern and perhaps these funds do indeed have the amount of gold they say they do but the very idea of being ‘pooled’ with other investors is certainly losing its attractiveness.
According to the World Gold Council purchases of gold bars and coins have increased nearly 100% since 2009, whereas additions to Exchange Traded Funds are down by nearly three quarters in the same time period.
Investors are becoming increasingly concerned about developments in the financial markets and they know that throughout history gold has been a safe haven for their wealth, the more the value of paper currencies are eroded by such things as QE the more valuable their Gold becomes. Now accompanying this increasing fear is the increasing desire to hold their gold in a secure vault in their own name or for some burying it under the floorboards at home is the way to go (not something I would particularly recommend but everyone to their own).
The matter of secure vaulting has also been much highlighted recently as many holders of physical gold have their gold stored in Bank vaults and Banks are notorious for leasing out the gold that they have in their vaults. There have been many cases recently of significant gold investors requesting delivery of their gold, that is supposedly being held in a Bank’s vault, only to be presented with delay tactics from the Bank while the Bank struggles to obtain the Gold to deliver back to its client.
In recognition of this increasing trend in the desire to actually own physical gold in your own name and in a secure commercial Non- Bank vault (no leasing to worry about or pooling of ownership) we at Edge Capital Markets have obtained access for our clients to a Gold purchasing service that was previously only available to wholesale clients, with the accompanying very attractive precious metal prices, of course actual delivery of the metals is available for those who want to provide their own storage at home (spade and extra floorboards not included).
The traders’ graveyard that is USD/JPY is tempting me again.
You’ll recall this year we broke the 5 year downtrend which has promised, but failed, to deliver much to date.
We know the ugly Japan demographics, their newfound reliance on imported energy since the Tsunami (and the subsequent trade deficits – first series in 30 years) and the recent series of monetary policy easing’s which should all weaken the JPY, propelling USD/JPY higher.
To whit the charts look promising right now.
A quarter of a buck last week I’m delighted! I definitely would not have made so much without your ongoing help and professionalism. This is a small token of my appreciation. You are the Tiger Woods of brokers!
Thank you very much for what you did today. Its great that you were able to successfully reinstate my positions but what is more important to me is that irrespective of the outcome, you were concerned enough to ask the question and fight for me.
Knowing the size of the accounts you have, I really do feel very very humbled by your actions.
If you could just arrange for the AUDNZD cross to race to 1.49 without any wildcards that would be wonderful
You are rapidly attaining legendary status with all of us here after your freakishly good/speculator calls in the NZD and GBP/CHF in recent weeks. Well done mate.
To Whom It May Concern
This morning I received a call from a long time “Kiwi” subscriber of mine who operates a successful business. He told me that he now intends to devote his full-time to Forex Trading and asked me what I thought.
I told him that Forex Trading is a very challenging undertaking for which key attributes to long term success are to be disciplined in one’s approach, to employ effective money management and to utilize good information sources.
Whilst he is more than satisfied with the information which I supply, I gave him the contact details of a Wellington FX broker whom I know well, Graham Parlane, so that they could schedule a meeting.
In addition to being a highly experienced, competent and honest individual, Graham serves his clients very well indeed from what I have seen – providing them with information, trading ideas and counsel beyond the level which is typical.
A good Broker can be as useful to You as a good mechanic can be for your Car. Graham is in my view, just such a Broker.
He displays a real commitment to servicing his customers & as a professional trader in his own right; he “eats what he sells” !
There are certainly no guarantees in FX trading but having a good team on your side is certainly an advantage!
I note a number of currency pairs against the USD are all poised neatly below short term resistances. After a long period of (boring) consolidation I wonder will these levels hold once again, confining us to familiar ranges, or are we on the cusp of a break out and a decent trend?
I still expect a resumption of USD weakness on the basis of, all other things being equal, that QE3 will weaken the USD just as the prior installations did. Also I expect Chinese PMI’s out tomorrow to confirm that the worst is behind for the Chinese economy.
I will be buying these pairs (on strength) on a 1 hour hold above the seemingly co-ordinated trend lines.
Fig 1 – NZD/USD
Fig 2 – AUD/USD
Fig 3 – EUR/USD
Fig 4 – GBP/USD
On Friday, following the previous day’s OCR, I had a catch up with the Head of Forecasting at the RBNZ.
The price action suggested that market had seemed somewhat confused by what the OCR review and the Governor’s maiden speech on Friday morning was telling them. The OCR was perceived as hawkish while the speech, some 24 hours later, elicited a dovish reaction.
Amongst many things discussed came the statement that the RBNZ viewed the rebuild as ‘real’ and for me that statement is really the kicker given the last paragraph of the OCR statement…
|”While annual CPI inflation has fallen to 0.8 percent, the Bank continues to|
|expect inflation to head back towards the middle of the target range. We will continue to|
|monitor inflation indicators, such as pricing intention and inflation expectation data,|
|closely over coming months.|
What they are saying here is that they expect inflationary pressures to come out of Canterbury as firms compete for (tight) labour and materials and that they are watching closely.
For a gauge on the timing of any such effect I thought this graph in this week’s ANZ’s Market Focus was interesting.
The chart clearly suggests that building activity died in Canterbury the year after the quake (as you’d expect) but now the rebuild is becoming FULLY UNDERWAY.
Since the recent and short lived breach of USD1800 on Oct 5 the price of gold has taken quite a tumble, closing today just above USD1700 mark. Once again any precipitous move downwards in the price of the precious metal has produced a myriad of claims from many in the finance community of its imminent demise. I noted that even in the NZ Herald last weekend a well known NZ market commentator had added in his article on a possible property crash that Gold was also showing signs of a bubble (nothing else was included to back up his claim in relation to Gold, he obviously believes that no context information was required). These Market commentators are probably the same people who were claiming that Gold’s run was over when the price fell below USD1550 as recently as May of this year, and other similar calls throughout the past decade whenever Gold has suffered a significant pullback.
I am not saying that this current pullback is necessarily over, after all both the 100 and 200 day moving averages are still quite a way down from here sitting around the USD1650 level thus it is quite possible that this current pullback could target that level, what I am saying is that throughout Gold’s bull run of the last 12 years significant price pullbacks have been necessary (and therefore healthy) for the run to continue over the long term.
With regard the movement in the price of Gold over the past 3 months, it should be noted that the expectation of QE3, followed by the actual announcement of it, caused quite a huge run up in the price. Now of course the market is waiting for the enaction of QE3 to start taking effect, so this latest pullback was not entirely unexpected, even though the severity of it was probably not so expected.
At times like these it is sensible to not panic and to continue to maintain a core holding in Gold, if your expectation (as is mine) that the precious metal has still considerable upside in its future price.
Just remind yourself why you purchased Gold in the first place and reflect on whether any of those fundamental reasons have indeed altered in any way, if they haven’t (and I would suggest that this is the case) then continue to hold Gold and wait to be rewarded for doing so.
Despite the fact that many of today’s financiers treat the subject of gold with nothing short of disdain, whatever your level of wealth gold should be a part of your strategy to increase or protect your wealth over the long term future.
Consequently, the following information is with regard to buying and holding gold for the long term (a number of years) and is not a short term trading recommendation as buyers need to be aware that gold is susceptible to significant price moves both up and down especially over the short term.
The four basic reasons to hold gold are:
- Gold has proven to be a reliable preserver of wealth.
- As well as protecting wealth its been performing extremely well as an investment for the past decade.
- Gold being treated as real money has been normal practice throughout history and likely to be normal practice in the future.
- And very importantly in the current environment it is insurance against financial crises.
So let’s explore more fully the above reasons to hold gold in your investment portfolio:
- Storage of wealth – a common example given is that in the 1920’s a Wall St executive could buy a high quality men’s business suit for USD35.00 which was also the cost of an ounce of gold at that time. Today a high quality men’s suit for a Wall St executive would cost around USD1700-1800 which is the cost of an ounce of gold in today’s prices.
I have also read reports that an ounce of gold bought a Roman senator his toga and sandals 2000 years ago but I am not quite sure how to substantiate this claim.
Despite years of inflation gold has maintained its purchasing power, but the same can certainly not be said for the money in your pocket or saved in the bank. Over those same years inflation has massively eroded the value of cash – it now takes nearly $1000 to purchase what you got for $100 forty years ago.
- Gold= Money – in many past civilizations gold has been used as money. However, gold is totally suitable for this purpose as it is rare, standardized in purity and weight , divisible, and indestructible. The reserve currency of the world the US dollar was taken off the gold standard by President Nixon in 1971 (note that the time since is the same forty year period mentioned above with regard erosion of the value of money) and consequently since 1971 the world’s currencies have been what are known as fiat currencies i.e. paper currencies not based on a relative value to gold. Prior to 1971 the US dollars convertibility into gold had kept the worlds currencies on a sound footing due to the fact that all currencies were convertible into US dollars and therefore convertible into gold.
Throughout history countries and empires have attempted to create a monetary system that is not based on gold and yet all of these fiat monetary systems eventually failed and the paper currency in use went out of existence. There is no reason to believe that this will not be the eventual fate of today’s fiat paper currencies. Therefore it is highly probable that at some point in the not too distant future the world will return to some sort of gold standard i.e. return to normal. If this occurs it is likely that holders of gold would see a significant appreciation of the value of their gold.
- Gold’s stellar performance as an investment over the past decade. At the turn of the new millennium gold was priced at approx USD $400. Since then it has risen steadily and the average annual return over the past 12 years has been approximately 15%. Gold’s current price is ranging between USD1750-USD1800 and the expectation from many of the large financial institutions is for gold to rise to above USD 2000 during or even prior to 2013.
Central banks are playing a huge role in this outperformance, according to the World Gold Council central bank purchasing of gold has soared, with the 157.5 metric tons of gold bought by central banks in the second quarter 2012 being an increase of 62.9% from the 1st quarter 2012 and a 137.9% increase on second quarter 2011. And when you consider that prior to this last decade central banks were net sellers of gold they have certainly realised which way the wind is blowing. With central banks, and in particular the Chinese central bank who has become the largest importer of gold, likely to continue this hoarding of gold there is no reason to suspect that this upward trend will not continue for a number of years to come eventually rising above USD5000.
- Insurance – in times of financial crises assets that are held electronically or on paper can quickly have their value eroded or even disappear in the worst types of crises. Gold being acknowledged as a safe haven makes it an asset to jump into when you are wanting to take your funds out of the financial system and seek the protection of something that is real and everlasting ie Gold.
China growth this year is forecast to slip to about 7.7% before bouncing back into the 8% range next year depending on who you listen to, rates of growth that are just incredible for anywhere else in the world.(see…IMF Forecasts China Real GDP To Grow 7.8% in 2012, 8.2% in 2013. The World Bank forecasts growth in China’s economy this year is 7.7 per cent, and rebound in 2013 to 8.1 per cent.)
The RBA, who have about as much skin in the China game as anyone, continue to see demand from China staying (relatively) strong for another decade. As such the recent weakness in China related commodities is likely to have been largely an inventory cleanout rather than the end of an era.
Further, the Chinese authorities are already deploying substantial stimulus measures and have vast resources at their disposal in the form of $3 trillion plus in FX reserves.
Chinese stocks have been falling since the Shanghai Composite Index topped out at 6000 around 5 years ago. Today, Chinese equities are the cheapest in 15 years on an inflation adjusted basis.
Technically there is massive ‘bullish divergence’ on the medium term charts with the run down over the last 6 months not confirmed by the MACD momentum studies.
Fig 1 – Note the clear bullish divergence of the MACD momentum indicator
Fig 2 – a Longer term perspective. China has been growing at 8-11% for the last 5 years and their stock market is 1/3rd of the price it was. Really?
There are numerous ways of capturing the China story via your BBY Online platform from individual companies lasted on various exhanges around the world to ETF’s that look to replicate/exceed the main index.