So what’s going on in the worlds of Currencies, Metals, Ag Commodities, and other “stuff”?
Generally, the Euro is tanking, the Dollar is the “safe haven” even though it has it’s own issues, commodities in general took a hit (though Natural Gas finally stopped dropping at about the $2 / unit level (about 20 cents / gallon of gasoline equivalent). It is all due to Asia slowing down, the USA not starting up, and Europe in a meltdown. Oh, and Latin America on another nationalization binge, so driving folks away. Add in that India just decided all companies making loads of foreign exchange need to convert 1/2 of it to Rupees inside a fortnight, and folks money will be fleeing there, too. Japan is still stuck in financial molasses as it has been for decades and that just doesn’t leave much good news. That gold has been dropping puts it out of the ‘safe haven’ spotlight too.
With that, on to the charts.
There are detailed charts, with more tickers on them, and more descriptions, in the list here:
https://chiefio.wordpress.com/category/stock-charts/
For currencies, they are mixed in with bonds here:
https://chiefio.wordpress.com/2011/12/20/bonds-overview-charts/
https://chiefio.wordpress.com/2011/12/13/gld-gold-vs-silver-and-currencies/
While Ag Stuff is here:
https://chiefio.wordpress.com/2011/12/31/agriculture-stocks-and-commodities/
Metals are in this one:
https://chiefio.wordpress.com/2011/12/14/base-metals-vs-gold-and-silver/
And the energy commodities are covered with the oil companies here:
https://chiefio.wordpress.com/2012/01/01/oil-and-energy-stocks-and-etfs/
As energy commodities were / are covered on Energy Humpday we will not be covering them here too.
There are some other kinds of “stuff” and I’ll add some of them from time to time. For now, these are it.
Currencies
Governments all over the planet like to manipulate their currencies. Your job is to figure out who is doing how much and adjust for it. You can NOT just assume that “money is money”. It isn’t. It is a ‘rubber ruler’ of no particular value.
Currencies vs GLD 12 May 2012
As you can see, GLD Gold is very volatile. You could trade the jumps and drops, but it has generally been in a down trend since the peak of the ‘mini-bubble’ back in August. UUP, the “Dollar Up” bet is rising slighly, but with stronger wobbles so timing an entry matters more than the vehicle. FXB the British Pound and FXF the Swiss Franc have a gentle rise out of that dip in December but looks tied to the Euro by bank policy, so might be worth a closer look. FXA the Aussie Dollar is dropping and FXC the Canadian Dollar rising (there was a ‘pair trade’ in them suggested on the fast money currency show Friday). FXM The Mexican Peso is not very interesting. FXY, the Yen, took a big tumble in Feb Mar, and only partly recovered. IIRC there was a large slowdown in exports.
Here’s a live version, but zoomed in to 6 months so you can see recent trends better.
Euro vs other major currencies and gold
The only thing that’s really interesting on it is the yellow FXB British Pound. Yet even it is drooping the last couple of weeks.
That kind of monetary ‘wandering’ plays Hobb with export company earnings for all the players. Stability this isn’t.
Biggest conclusion I get out of it all is “Be out of the Euro and in Pounds or $US”, but that we already knew from the Eurozone Crisis. FXC Canadian is falling with oil (having risen with it prior) and FXA Australia is dropping on weak China demand.
Metals
How about the Precious Metals Group?
Gold vs Silver vs Platinum vs Palladium
Not looking all that good, are they?
Here’s a live version, six months time frame:
Precious Metals Live Chart
Through all the volatility, you can see TIP just cruising along. Treasury Inflation Protected Securities are the safe haven for now. Not gold.
Same thing at BigCharts.com with volume and slow stochastic
On that one you can see that RSI has been ‘near 20’ and is doing a ‘higher low’, while there was a big volume spike in that drop a couple of months back, but not as much volume in this drop. We are likely close to a bottom / buying point in gold.
Slow Stochastic shows a likely bounce in the next week on a trade basis.
Here is a chart of just GLD. It has RSI on it with Volume. The SMA stack is still in a falling configuration and (on the other charts) MACD is below zero while DMI is “red on top” so this is a ‘counter trend trade’. Just back to the middle of the SMA lines, then step aside again. But Slow Stochastic is looking like it’s ready for a crossover to ‘blue on top’ with a rise back to about 85 possible. This is for trading, not investing. That lack of volume on this downside move is telling. Not a lot of panic sellers left.
Gold with RSI, Volume and Slow Stochastic
Base Metals all pretty much drifting down. Don’t expect much action out of metals miners and refiners. Bulk shipping will likely drop too.
JJC Copper, JJN Nickel, JJT Tin
All in all, not good for manufacturing. Copper is in just about everything from homes to cars to electric motors and coffee pots. Tin is in solder, so not a lot of electronics demand, while Nickel is in stainless Steel – pots pans and chemical factories.
Looks like an economic slowdown.
Agriculture
Not a lot of excitement here, either. On the basic chart pretty much everything is rolled over. SGG Sugar down pretty hard. (As the Brazilian Real is also dropped, that takes down Brazilian sugar too). Even COW is down. Well, now if the lower costs will just show up in the grocery store…
JJG Grain, NIB Cocoa, JO Coffee, BAL Cotton
When the best you can say is cocoa has stopped dropping, not a lot of trade here. Folks who BUY these things will likely do well. Food processors, Starbucks, etc. BAL being down says not a lot of folks making clothes. Expect sales of farm equipment this spring to be a bit ‘light’. When prices are down, folks don’t double up on fertilizer to juice production either. Grains had been holding up, but have now started a roll off as well.
In Conclusion
The “Stuff” trade says the global economy is slowing. Not a lot of interest. Gold looks like it might have a bit of a bounce, but is still in a down trend, so don’t over stay the trade.
Musings from the Chiefio 
“You can NOT just assume that “money is money”. It isn’t. It is a ‘rubber ruler’ of no particular value.” (Chiefio)
Found this graph of interest, perhaps others will as well. I really don’t think we should get rid of the penny, I think it’s about time to redesignate it the NEW DOLLAR.
@Pascvaks: a New dollar?, what happens right now is that all the printing madness and its correlated devaluation is being “exported” to all other countries, which means that the world´s GDP is backing the US dollar, which also means that while US citizens receive “food stamps” and those who lost their job keep on receiving a check, and do not really feel the crisis, WE are paying for it, then a new and LOCAL dollar would make the difference, a kind of US Dracma, just in case you need to become a little responsible of yourselves.
@Adolfo-
The British light bonfires on Guy Falkes Day, have a feeling all money will soon be worth less than a piece of Amazon deadfall. Remember the stories of German inflation and Mark devaluation after WWI? Won’t be long, the world’s idiot finance ministers will be running for their wind windows soon.
@Pascvaks:
Interesting chart. FWIW I have my own little “inflation index”. There were some prices I learned about 50 years ago. I just compare them to the prices “today” and that’s my index. So my Dad bought a home for $7000. A decade back or so it sold for $70,000. House didn’t change much. Town didn’t change. Dollar did.
Bread was 10 cents to 15 cents a loaf ( “wonder” vs “better”). Now it’s $1 at WalMart for the crummy stuff and $3 at the higher end stores for good stuff.
Gasoline was 25 cents a gallon. Now it’s between $2.50 ( year or two back) to $4.25 now.
A postage stamp rose from 3 cents to a nickel. Now it’s moving from 44 to 50.
So I’d put the present “dollar” as worth between 5 cents and a dime (from when dimes were silver … which was the case when I learned these prices…) Roughly in keeping with that chart you posted that was dropping through a dime a decade ago. So call it a nickel to 8 cents…
In honor of that, I think it is the Nickel that ought to be marked as “The New Dollar”…
Per the penny: Well, we cheapened it from copper to zinc with a copper wash some years back. For all the “gold bugs” who want to go on the gold standard, IMHO there’s a more interesting approach. Make the penny out of copper again.
There’s a lot more copper in the world than gold, so start there. Simply set it equal to the value of the copper that is in it. Set the nickel and dime value in terms of number of pennies. After a while, come out with a new silver quarter. Initial value set to the content of silver. (Let it float relative to copper if needed). Then the half dollar and dollar coin can be added. After a while, come out with the new “Gold Eagle” of 1 oz. Along with the 1/2, 1/4, and 1/10 oz Baby Eagles. Initial value set in terms of mass of gold. NOT a “dollar” value. (One of the major problems with metal coins is that the value of the different metals moves relative to each other over time… Search on “bimetalism” and you will find it is a very old and well worn problem in economics).
Now you have a “copper”, a “dollar” based on silver, and an “eagle”.
Yes, we lose the nice decimalized relationship. So what? Post bread at “1/10 Silver Dollar” and a car costs “20 Golden Eagles”. Rarely does one need to turn a $1500 coin (or even a $150 one) into a bunch of 25 cent pieces and the banks and calculators can do it easily. As copper is running about $4 / pound, an actual “penny” would need to be 1/400 lb or about 1/20 ounce. That’s about 1.25 grams and the present penny is 2.5 grams (then again, copper is down right now) so it looks to me like we could just keep it as is, make it from copper, and it would be “worth a penny” but not a cent (meaning 1/100 paper dollar).
During the initial phase, folks would get used to the idea that a “paper dollar” only had 45 copper pennies in it (today). When the “silver dollar” came out, the paper dollar would be worth about 1/20 of a silver dollar. ( The US Silver Dollar had about 3/4 troy ounce silver in it 0.7735 so about $22 at present prices http://www.silverperounce.com/silver-coin-value-calculator/ ) so we could treat a “paper dollar” as a “silver nickel” if desired.
You can also see from these numbers the “problems” from bimetalism. Silver / copper used to be in a 100 : 1 ratio for the dollar / penny and now it is closer to 1000:1 ( 2.2 cents / penny of copper, 2000 cents per silver dollar of silver, ratio about 1000: 1 or more accurately 45×20= 900 : 1 add in gold and it gets even more out of line with past ratios. Which is why I think you just let them float…)
At any rate, but starting with the penny as a hard floor, it is easier to work into it.
@Adolfo:
Well, Utah is now recognizing gold and silver US coins as money:
http://www.silver-investor.com/blog/silver-market-update/utah-coin-act/
and our constitution says “no State shall make other than gold and silver coins to be” lawful money… which has been used (wronging in my opinion) to say that the constitutional demand for gold and silver “to be money” only applies to States. Well, if THAT is the case, then States CAN MINT MONEY. So IMHO all we need is some state to start MINTING State Gold and Silver “dollars” as legal tender.
This ought to cause a bit of a Constitutional Crisis case, as it puts legal gold and silver coins in circulation as ‘lawful money’. At that point, either THAT is allowed (and folks will flock to it) or it is forbidden (and the facade that the constitution is about states making lawful money is torn asunder…) There’s a remote third possible; that the minting is allowed but that Federal taxes on capital gains in metal coins minted by states also is kept standing; so in theory every transaction needs a capital gains record…. killing it by paperwork…. but it would be worth the effort, IMHO.
Maybe Texas could be talked into it. They could then threaten to leave the union if taxed too much…
BTW, the Gold : Silver ratio is now about 53.5 : 1 so a long ways from the ‘traditional’ 16 : 1 and also illustrates the issues with “bimetalism”…
However inflation is somewhat “contained” by the market of currencies, its real buying power would be much lesser; this will be kept until panic starts…anytime
So Pascvaks words Remember the stories of German inflation and Mark devaluation after WWI?……and we could add: and what happened afterwards?
Have you wonder why some of “them” have moved from NY to Shanghai?…perhaps they are already feeling the same metallic taste in their mouths….
@Adofo:
Inflation is a VERY slow process. About 2% per year at the moment. Stocks and metals can move that much in a day without making the nightly news.
Inflation is just irrelevant to trading.
(It does matter for investing where you buy a bond yielding 2% and hold it for 40 years…)
So part of the challenge of The Fed is trying to inflate the money supply Just Enough NOW to hold things steady, knowing full well that it was stimulate inflation of prices LATER and expecting that in 2 or 3 years they may need to contract the money supply in response.
Like adjusting the shower temperature to be Just Right when the folks in apartments all around you keep flushing the toilets and you have a long hose / nozzle between the faucet and the shower head with a 6 month delay on when the water changes show up as temperature changes….
So yes, there is a risk of high inflation LATER, but right now the increased money is mostly holding off DEFLATION due to recession. So metals and other stuff are falling in price right now.
That means it is nice to keep the idea of inflation in the back of your mind, but ignore it when deciding what to buy for a trade now.
@E.M……you slowly walk to a precipice…to suddenly fall, just waking up too late, before touching ground, to reality, just in time to remember your whole life in seconds, before passing to the light… :-)
If you had gold you would devaluate too, in order to buy cheap from silly “gentiles”.
@Adolfo:
Gold is just a material, like any other. Doesn’t matter if it is gold, silver, copper, tin, lead, grain, cotton, oil, natural gas, coal, iron, cement, whatever.
They are volatile. Both up and down.
It is fundamental to the nature of commodities. Nothing to do with “gentiles” (and watch the allusions to Jews…) and nothing to do with market manipulations. Was it some manipulative force that had gold at $300 / oz a few years ago?
It is more driven by a lot of folks following fads and getting excited about things, a little bit about fads in Central Banks, and a whole lot to do with the Euro being in doubt (where a couple of years ago it was supposed to be the Euro that was to be the new reserve currency replacing the US Dollar and gold).
Gold was similarly volatile (though at much lower ‘paper dollar’ prices) back in the 1970s. “Tricky Dick” Nixon bumped it from $35 / ounce to $45 / ounce overnight. That would be like a $500 jump today. Prior to that, Russian gold sales happened once per year most years. Jerked the dollar around when they did (as we were tied to gold).
ANY time you have a ‘thin market’ with most of the commodity held in storage and demand highly volatile, prices jump and plunge. Nothing nefarious about it. Absolutely normal.
Heck, sugar moves more than gold does in many years. And don’t even get me started on coffee and cocoa when freezes and storms happen…
Gold is no different. It isn’t special. It isn’t being manipulated. (Heck, it’s not possible to manipulate it. Supply is too diffuse and demand is global and even more diffuse. That’s WHY we went off the gold standard. We could not stabilize the value of the dollar. Being on the gold standard gives you a max / min RANGE, but a lot of volatility inside those ranges.)
EM-
Thanks, I see the distinction you’re making; appreciate the detail. I frequently pull back from the micro (or ignore it completely) and only look at the macro. Got my wires (or eyes;-) crossed and thought that as close to the edge as the Euro is, and as devalued the Dollar, etc., that we were closer to another “Friday in Late October”. I keep feeling something breathing on the back of my neck but every time I turn around I don’t see anything, just strange cloud formations, real eeeerie…
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