Morning Market Report: OPEC and Crude Awakenings

It was as if I said I worked for the Susquehanna Hat Company (one of my favorite Abbott and Costello skits). That re hash of Jim Sinclair’s $12,500 gold prediction brought a number of unhappy responses and cancellations to this little newsletter. I’ve found out that not everyone likes the career trader and CEO of a real African junior gold mine; some even calling him and by extension, me, a "weirdo", a "doom & gloomer" and a "kook".

Upon further reflection, I’ll state this: If the price of gold does indeed rise to even several thousand dollars per ounce, it will be curtains time for the dollar. By that point it won’t matter if the figure is $7,000 or over $12,000. The buck’s buying power will pretty much be dead whether it be for an ounce of gold, a barrel of oil, or a bushel of corn. It would be akin to measuring the price of gold now in astronomically devalued Zimbabwean currency. The real point of the exercise of calling a future price of gold is to attempt to give perspective on the coming destruction of fiat currencies versus a hard and real and lasting asset such as gold. I can’t predict exactly when this will come to pass. Whether the banker’s lose control as early as this summer, or can extend and pretend for another few years is anyone’s guess.

Stock Market Outlook in Brief

As of early this morning, the futures are showing a little green. The market by a number of indicators has become a bit oversold and is due for some sort of dead cat bounce. We could see this take place over the next few days, but I’m still in the camp that sees further bleed in the days ahead. QE and macro economy doubt has a neutralizing effect on the bulls as we witnessed last summer. This doesn’t take rocket science to figure out.

Crude Awakenings

Earlier this week I optimistically stated that we could see a handle on crude back into the 80’s. Forget about that. The OPEC meeting in Vienna was a debacle – like herding cats. Saudi Arabia came out of the meeting pledging to meet the needs of its big customer, the U.S. While I don’t trust any OPECer, I am willing to be open minded enough to the thought that S.A. realizes that through the roof prices might create demand destruction, which would not be in their best interests. But try telling that to Venezuela, Iran and Libya, Ha! The cartel has we have known it is done, finished, kaput. I guess a Middle Eastern spring will do that. lol.

As always follow me on Twittter for updates to this newsletter, though I will largely be out of pocket for the morning attending a school play with my first grader son playing the role of tree.

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