Thursday, May 27, 2010

US Dollar Collapse: Reversal in Confirmation TNR.v, CZX.v,, NGQ.v, GBN.v, ASM.v, EPZ.v, KTN.v,, MGN, VTR.v, GDX, SLV, HUI, XAU, BTT.v,

"We will speculate on the real events behind the scene on a day of Cyber Meltdown: spectacular Dow Crash by the magnitude of 1000 point in fifteen minutes. We will develop a very strong argument in favour of Inflation and its cost based on PhD Thesis: At what point price of Oil becomes prohibitive to use Helicopters by Ben Bernanke in his open market operations. We will draw some lines on How Lithium, Gold and price of Oil are connected and what it means to be grounded. In the end we will leave you with the question: Where to invest - In Ben Bernanke, Ink Factory, Helicopters, Oil or Gold and Lithium?
Our memories from 2008 meltdown and the
last deflation strike in March of last year are still too vivid for us to stay rational amid recent market panic of this week. Was it the fat finger, Cyber Meltdown or revenge of the Government Sachs, which was striped of its Olympus glamour is not so important - the most important message is the reaction of the Market itself and actions of the people in charge to follow."

We have further confirmation of US Dollar Bearish reversal with double Top in the making now. We need to clear 85.17 on the down move to make it decisive. China's confirmation of confidence in Euro was the last shoe to drop for Green Fellow levitation: as you can see below it was a very expensive exercise. Markets were again in a free fall and they better stop now at the key technical levels. Second Deflation Scare episode is almost over and price will be paid by further debasement of all currencies against the Gold, Silver and Oil amongst other commodities.

Dow is in Bullish Reversal now at the key technical level confirming the third test of the lower band of recent trend. We have a very bullish candle two days ago and yesterday the level was retested by late day selling. Today's action provides another confirmation for Deflation Scare to be subsiding and Euro panic is slowing down with news from China, declining review of SAFE Euro holdings. Fear index below is confirming its Reversal and appetite for Risk assets will be coming back with further improvement in indicators fooled by flood of liquidity provided. Euro bail out with almost 1 Trillion in USD terms and QE on the run have shadowed domestic bills for another 30 billion in Job support program and further requests for capital from bottomless Freddy and Fannie.

Risk appetite is coming back and this Summer can be really Hot in some sectors, we think that Oil starting from 70 USD now after this Second Deflation Scare on sovereign default will provide necessarily catalyst for the move above 90 USD. Our Lithium play will be enjoying next bull leg up with oil passing north of 80 USD.
"Recent Oil Spill shows the real price for Oil and leaves no doubt for us that there will be no more cheap oil: offshore drilling is costly now, it will be even more costly later. Relatively cheap Oil is in the hands of state owned companies in not so friendly to U.S. places. Oil squeeze will come from diminishing production rates and rising Inflation. The move will be even more explosive than in the Gold market - in the end only minority of people is effected by the gold price even now, Oil is the underlining of all Western Energy Diet. It is not sustainable. Emerging markets are taking more and more share of world wide production, oil producing countries are spending more at home. If you account all cost to produce, deliver and protect Oil supply to U.S. corp the price is already above 150 USD/barrel.
Peak Oil and Lithium: Joint Operating Environment 2010
Please pay attention,
this report is written by those who knows the Real Price of Oil. If you account all military needed to protect Oil supply lines and cost of wars to get more oil, price will be well above 150 USD/barrel already. Now we all have another problem: there is simply no more oil enough for all. Will future wars for oil be the only answer?"
Another "liberation" operation like Iraq, this time against Iran will break the camel's back with no return point. Competition for Oil is heating up and aggressive move by China into Electric Cars leaves no other options for US than to follow. In order to keep power China needs gradually improve standard of living, it will bring upside pressure on labor cost. Electrification will not only provide Energy Security to China, but will significantly reduce the cost of its transportation element and provide another opportunity to stay among low cost producers. Situation is completely different to U.S. - they have capital to invest in Electric Mobility CAPEX now and rip the rewards of lower cash cost on transportation side later. We will refer you to the
Economics of Electric Cars.
Recent Ash Cloud events in Europe brought a very sobering sense of the feeling to be grounded. It is amazing how many things are taking for granted. This time it is Ash Cloud - what will happen with oil above 150?
Electric Cars is the only commercially viable technology today to sustain mobility world wide with rising Oil prices. Lithium is at the heart of Green Mobility revolution - it is an industry adopted standard for batteries and billions of dollars are invested into battery technology and upcoming by the end of this year Electric Cars on a mass market scale. This Bull market is still very young - only a year or so from the beginning after the crash of 2008.
We will provide you with few links to study the subject further:"

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