My Favorite Investments

OIL

Though the collapse in oil has been one of the main events in markets over the last few years, it remains consistent with the other major oil falls seen over the last 30+ years…

Crude oil stockpiles are now at an 86-year high!

Total U.S. shale oil production in Jan 2016, is forecasted to be 4.67 mbd, down from the peak of 5.3 mbd in March 2015.

The Eagle Ford Shale Oil Field in Texas peaked at 1.7 mbd in March 2015 and is forecasted to drop to 1.2 mbd in Jan 2016.

Plunging oil prices mean sliding revenues, resulting in collapsing cash flows and soaring leverage ratios…

Junk yields just surpassed the all-time highs set just after the Lehman bankruptcy.

(Cold) War Between Saudi Arabia And Iran

Ummm … this nearly perfect inverse relationship is not an accident.

With Saudi Arabia and Iran pissed off at each other in a round of tit-for-tat power positioning, it’s unlikely either OPEC heavyweight will reduce oil production.

Riyadh has no intention on ending the production onslaught until the last shale driller lies crushed in the dust…

Source: www.moneyweek.com

Source: www.moneyweek.com

Source: www.tacticalinvestor.com

“The idea that long-term oil demand is going to decline in our lifetimes is pure fiction. And the longer the $30 or

$40 price lasts, the higher the ultimate rebound in the oil price is going to be because you destroy productive

capacity with low prices.

The last time we destroyed productive capacity was the latter end of the decade of the 1990s. And the

consequence of destroying that productive capacity took the oil price from $15 to $150. The longer this goes on,

the higher the resultant spike is going to be.”

--Rick Rule

Oil is now cheaper than coffee, milk, & water!

GOLD

The following table shows the 5 most recent bull and bear markets:

Thursday, Feb 11, was gold’s best day since Nov 2008 and the highest level in a year …

… with the best quarterly performance for gold in 30 years!

In less than half a month, the U.S. Mint has sold more than twice as many Gold Eagles as it sold for the entire month last year.

Central banks have been active buyers of the metal, building up their gold reserves, particularly since 2010.

Gold withdrawals from the SGE for 2015 amounted to 2596 tons, or 91% of world gold production:

Even with the steadily rising prices between 1999 and 2011, gold discoveries plummeted in 1999 and remained on the floor thereafter:

The true story of South African gold production is completely obvious from the production data, which is down a bit more than 80% from the peak in 1970.

Analysts at Credit Suisse are projecting a DEFICIT to begin in 2016 and expect that mine supply will fall by 11.5% from 2015 to 2018:

Gold Price = 1/T, Where T = Trust In Central Bankers

Governments worldwide are now extremely concerned about BANK RUNS. This is the main reason why country after country is restricting cash transactions.

Gold (= Money) Or (Paper) Currencies?

Since the beginning of the 21st century, there has been one “currency” that has outperformed all its peers in terms of preserving wealth and maintaining purchasing power…

Historically, actual “HYPERINFLATION”, meaning a currency officially plunging-to-zero, is a “confidence event.”

It’s an extremely important signal that suggests the gold BEAR MARKET is over.

Gold has near-term upside potential to $1285/oz which marks monthly resistance and contains the 40-month moving average. In addition, there should be very strong monthly resistance at $1330.

Is The Bear Market In Gold Finito?

“Remember that only 0.5% of world financial assets are invested in gold. As inflation increases and gold

appreciates, there will be virtually no supply to satisfy the increased investment demand from institutions and private investors. The existing gold stock is unlikely to be sold as prices rise. I could easily see within the next few

years that there is no gold available for sale, and this could unfold much faster than people realize. The only regulator will then be price. And that is why both gold

and silver are likely to reach levels that are unimaginable today.”

--Egon von Greyerz

@researchvaf and @researchvas

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www.valburyfutures.co.id