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Palladium Explodes to the Upside
If you are thrilled about the recent performance of gold, you have to be absolutely ecstatic about the ballistic rise of palladium, which has soared by 35% in the past two months. Regular readers who already know that I have been pounding the table all year on palladium are now cashing in big time. Double dippers beware! Moves like this by industrial commodities do not occur in the face of a collapsing economy.
Palladium, named after Pallas, the Greek goddess of wisdom, has been mined in South America for over 1,000 years, was discovered as an element in 1804, and saw jewelry use start in 1939. But in 1975 it really came into its own when a nascent environmental movement got legislation passed requiring catalytic converters on all new American cars.
Toyota’s USA’s president, Jim Lentz, believes that the US car market will recover from the present 12 million annual units to 15 million by 2015. You can forget the drug induced haze of 20 million annual units free money brought us, returning in our lifetime. Fewer than one million of these will be hybrids or electrics. That means industry demand for catalytic converters is ramping up by 3 million units a year.
Which catalyst will the auto makers choose? Palladium at $580 an ounce or platinum at $1,680 an ounce? Hmmmm, let me think. They do have new management now, so maybe they’ll figure it out. Some 80% of the world’s palladium production comes from Russia and South Africa, dubious sources on the best of days. That means that a long position in this white metal gives you a free call on political instability in these two less than perfectly run countries.
Also known as the “poor man’s platinum,” demand for palladium for jewelry in China has been soaring with the growth of the middle class. On top of this, you can add $387 million of new demand from the palladium ETF (PALL) launched in January, which will soak up a hefty 10% of the world’s production.
Those set up to trade the futures can play the Decembers contract, where a margin of $3,713 gets you a 100 ounce exposure worth $53,900. If you are looking for something to stash in your gun safe, bury in the backyard, or give to the grandkids on their college graduation, get physical. You can buy 100 ounce bars at $50 over spot, or Royal Canadian Mint one ounce .9995% fine palladium Maple Leaf coins at $50 over spot. And yes, you can even buy them on Amazon by clicking here at http://www.amazon.com/Palladium-Ounce-Canadian-Maple-Leaf/dp/B003S2M49M/ref=sr_1_1?s=gateway&ie=UTF8&qid=1285257880&sr=8-1
To see the data, charts, and graphs that support this research piece, as well as more iconoclastic and out-of-consensus analysis, please visit me at www.madhedgefundtrader.com . There, you will find the conventional wisdom mercilessly flailed and tortured daily, and my last two years of research reports available for free. You can also listen to me on Hedge Fund Radio by clicking on “This Week on Hedge Fund Radio” in the upper right corner of my home page.
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I buy platinum and palladium as a hedge against the gold price, if we get a recovery, more car sales, price of platinum and palladium goes up. Gold falls. I'm in this for wealth protection as I have no idea what's going to happen next. I hold physical only and my platinum and palladium are less than my gold and silver, I just thought it might make me back a few quid if I lose on gold and silver. Don't see no recovery though but i've been buying since 2007 and it was still on the cards back then.
I'm a complete amateur at investing, like I say, just for wealth protection. Does this make sense to you guys? Is this a good idea?
P.S. I'm in europe. My dealer buys it back just minus 2% spot price so no worries who I'll sell it to.
"quid"? You must be from the UK.
Hedging gold/silver with palladium?
It makes sense except in 2008, when all equities, Au & Ag & Pd all went down 30% & 50% & 70%. Palladium got hit harder than silver or gold.
So, I don't your hedging strategy will pan out as you expect, if we have another crash like in 2008. The only hedge for that disaster was Federal Reserve Notes.
That being said, I expect palladium to do quite well in an inflationary environment. I think specs are jumping the gun a bit and piling into palladium through the ETF fund a little early... I would hold palladium, and not sell it, but I would steel myself for a very probable double-dip coming soon. How low will it dip? And for how long? I don't know, and neither does anyone else. I'd rather ride out a double-dip than miss out on palladium's long-term potential. Same goes for silver/gold.
So short term, Palladium will tank if there is any "double-dip". But in the long-term, palladium can only go up, given the international efforts to debase official currencies.
Palladium is as good as gold and silver for backing a currency. So is oil or copper. Everything is better than foreign debt, which is just paper.
Silversem
http://www.goudbelegger.com
http://www.forex.2link.be
Two or so months ago, someone who might oughta know said Russia was in full-on palladium hoarding mode, rumor was the Russians are/were backing their currency with palladium. Not sure if its true, just what I heard...
Some independent analysts like Norilsk Nickel in Germany have speculated that Russia has almost depleted their palladium stockpile from the Soviet years.
http://www.platts.com/RSSFeedDetailedNews/RSSFeed/HeadlineNews/Metals/8950078/
The Ruskies are mum on the subject, but have dropped hints that they would like to sell less palladium at the too-low market prices of present.
That would be the largest factor affecting Pd going forward, barring any "double-dip" commodities/equities collapse...
Per Norlisk Nickel: "There are bullish news/messages [around palladium]. Downside risk is not huge in numbers or possibility...[Palladium] could bring a fortune to those
wise enough to invest in it," Berlin said.
Jim Rogers, the ex-partner of Soros in the legendary Quantum fund, advises retail investors to hold gold, but stock up on silver and palladium.
I can't believe I'm agreeing with Maddie here...but Palladium has less downside risk and more upside potential at present, given that 25 countries debased their currencies to counter the USA's quantitative easing in the last 2 weeks....
I have a 150 iq, I went to Harvard and this is my opinion. Pd is a precious metal, and as with a lot of commodities, the chart tells you MOST of what you need to know. Its a beautiful chart, vicious even. Couldnt have drawn it better myself-- parabolic contours in the upswings from 2008 and summer 2010, combined with the Inv. H&S. Ben B (the artist here) should autograph a few of these charts and auction them at Christie's at some point. Do a limited issue - maybe 20 or so? Same goes for a few other commodity charts. Anyway, Pd is a strong buy (its a PM selling at 1/3 the price of Pt, and less than half the price of Au). Dont overthink this one-- Ben's right next to you capering and shouting in your ear. (Incidentally, formula for Ben: when hes speaking in restrained tones -- think Cong. testimony-- hes obviously lying; when hes shouting AND capering with a loony grin on his face, hes telling the truth. Just because hes shouting, doesnt mean hes telling the truth. For example, he SHOUTED (but did not dance a jig) at a rep from Cessna/Citation that his guy from USAF wasnt given enough time to look over the special models they were equipping for travel between his estates in Peru and Brazil in a couple of years. But he was lying, his AF guy was late.)
Good post from MHFT, probably should be deleted though, no?.. when you click on the Amazon post you get a palladium one ounce selling for something like a 38% premium (i.e. 789 vs 573)... as some of my dancer friends might say-- goldline much??
Too bad that 150 IQ and rag from Harvard did not help you in writing a coherent post. I do think that it worked wonderfully in making you an elitist prick.
ok ladybird, well having quantifiable wits is helpful in life..... Think quick!: you & me, in a room, with a Jennings retractor and a steamy bag full of shit. Solve the puzzle as fast as you can! :P
Peak oil ensures the collapse the car industry. I do wonder if palladium can be used to clean dirty energy sources like coal?
Fluid Catalytics Cracking?
Palladium is also the metal used for electrodes in the ill fated cold fusion fiasco. However the research into cold fusion has continued. There was never any repeatability in the observed reactions and there was never a good theory put forth for the observations either. However that doesn't alter the fact that there were anomalous actions seen.
If anyone has quietly made any progress toward repeatability or understanding then one of the first things they would do would be to start buying palladium and it's production sources.
Palladium is also used in Iron Man's arc reactor.
I'd like to see gold power the Iron Man suit like that! HA! As if!
Plus, you can't eat gold.
monoatomic gold - ancient egyptian/ illuminati super food
The last time the market crashed, Silver went from $22-> $9, palladium went from $550-> $175. Now both back up to where they were. If market crashes again, do they do that again, or do they go up in the face of Helicopter Ben?
I've posted this before, but nobody replies.
Are you talking about physical silver or ETF?
The former - will crash except for the brief interval of sky high pricing as hyperinflation occurs.
You have this backwards a bit-- the market will crash SIMULTANEOUSLY with hyperinflation. The sky-high pricing will itself represent the crash (in real terms). At the HEIGHT of hyperinflation, and as the market is shooting ever higher in nominal terms, it will be crashing in real terms (the 'crash'). So to put it better -- overall the market will perform OK or so-so depending on which stocks you have, though most stocks will crash by something like 80 or 90% in real terms while spiking nominally during the interval where hyperinflation is at its height. (Aka the paradox of hyperinflation.)
i.e. crash by 80 or 90%, then rebound in a big way, when a solution for the problem of america (the problem of the 100 million drug, debt, or govt assistance addicts) is hit upon (presumably by the Chinese).
"Moves like this by industrial commodities do not occur in the face of a collapsing economy."
And I suppose oil going to $140 a barrel in spring 2008 was a sure sign there would be no dip in economic activity shortly thereafter.
I am new as well and the last time this guy recommended PALL I bought it. To mychagrin the damn thing went immediately down and I hate to wait for what seemed ever to get out of the damn thing. Now, with just a dash of learning, I just checked out PALL and it sucks. Fool me once shame on you, fool me twice, shame on me. Not going to happen.
Now this sounds like a "Wall street made bubble" if you ask me.
Palladium isn't set to "explode". I anybody would have taken a close eye on the metal markets, you would see most metals are rising big.
Also, TO WHO WILL YOU SELL PALLADIUM?!
Here are also some other metals that are going through the roof:
Thulium, Lutetium, Ytterbium, Erbium, Holmium, Dysprosium, Terbium, Gadolinium, Europium, Samarium, Promethium, Neodymium, Praseodymium, Cerium, Lanthanum, Yttrium, Scandium
Sure you can buy them, but again: HOW DO YOU SELL THEM?!
Paladium and platinum are only leveraged 50:1 so they explode to the upside and downside more violently in market preturbations. You get twice the returns or twice the hit and you DO NOT know when it will be used as substitutes for debts. IE. I do not have any gold will you take palladium and platinum instead. Palladium and platinum tell you exactly when there's a delivery problem for gold.
Thx for the insight.
you forgot uranium and plutonium.
I somehow don't feel the need to put some Uranium coins in my pocket 5 inches from my nutsack.
Just saying...
Where I live, I could sell palladium at all the places I could sell gold. APMEX buys palladium and most gold dealers do. I don't own any but I imagine its pretty easy to sell.
"Also, TO WHO WILL YOU SELL PALLADIUM?!"
it amuses me to see people attempt comparisons of silver, gold and palladum/platinum
how do you compare a circulating currency / store of value (historic roles for silver and gold) against a catalyst for chemical reactions
if you are looking to protect your wealth stick with silver and gold - if you want to speculate in commodities then palladium/platinum might be worth investigating
To Toyota for slightly under spot, at a handsome profit!
I'm gonna go mine some out of my neighbor's Prius (pry...us...get it?).
lol best post so far... +573
I always though palladium was cool - but I never bought any. I have been wishing I had for a while now.
Aren't most commodities up? So you bet on a commodity in an environment where all commodities are up and you hit pay dirt.
Congratulations.
I'm quite new on ZH, so I don't know if the two permabulls here (Madhedgefundtrader and Leo The Greek) are serious or not. They look like they're not, but I'd like to have confirmation.
Leo is a little touched in the head, but he believes what he says. MHFT will say anything to drive traffic to his site. I'm sure it's funny in some snarky, insider, New Yawk way, but people have lost money listening to the jerk.
This is a great site for long term trends and genuine international perspective. It's a lousy place for investment advice. The few who know what they are talking about are professional traders or super-specialists. Hard to use that in a retail account.
Leo will write anything that he thinks will garner him a speck of attention whilst the continuing financial collapse disassembles his entire (mis)understanding of economics.
IMO the hedgefundtrader seems a little more impartial than Leo - so he seems ok to me. I have seen Leo say some things that I found suspicious though - not all the time however. I still read both of their posts though. They are both knowledgable.
More condenced ape shit from MHFT. Commodities are not rising in response to increased demand. The fed is pushing too much cash into the big banks. It has to go somewhere. This is one more bubble, brought to you courtesy of Comrade Ben and his flying monkies. Keep your powder dry.
good luck keeping your powder dry when Ben is tinkling on it with a goofy smile on his face every time you turn away for a split second.
I personally am delighted. I Own almost 200 kiloes of it. 99.99999% pure. :)
http://covert2.wordpress.com
ehe... 5 million $ in palladium in your attick right?
"Regular readers who already know that I have been pounding the table all year on palladium are now cashing in big time. Double dippers beware! Moves like this by industrial commodities do not occur in the face of a collapsing economy."
Blah blah blah selling my newsletter buy here blah blah blah
"Blah blah blah selling my newsletter buy here blah blah blah"
what percentage of the articles on ZH would you place in this category?
I'd say at least 50% and might go as high as 80%
some authors provide value while pimping their websites - others, not so much
Earlier in the year, mhft was touting the can't miss US treasury double short EFT. Ouch, that must have hurt. Also, when the Yen was at 88, he said 120 was a sure thing. When it hit 94 he was all cock of the walk. But I wonder if he took profits, or doubled down and lost the rest of his ass. Maybe that is why he is suddenly charging $199 for seminars and touting commodity bubbles.
When metals fly to the sky because speculators large and small suddenly leap into them in large numbers, that does not exactly promise economic health. It means those speculators couldn't find any worthwhile investment of a productive sort, which is more scary than reassuring. And it means companies that actually produce things will suddenly find their raw materials costing a lot more, so they will lose revenue and/or profits. How is that good for stocks?
The only ones who make money here are commodity speculators who know or guess when to get out; and the very very smart money that gets short commodities at the right time.