With respect to RN selling some shares
-- nobody.....absolutely nobody could have predicted the sharp decline in all things commodies over such a short period of time
-- NOT's current stock price is where it is today due to factors outside of RN's control....the proxy battle didn't help as well
-- data suggests RN continues to hold a substantial amount of NOT shares
Looking forward
Huge stimulas packages for all nations around the world
Much of the stimulas money to be spent on infrastructure
Many mines shutting down.....supply destruction
Gold.....as a currency....breaking new highs in non US currencies...on the rise in $US
Inventories of various commodities continue to rise due to demand destruction (copper, nickel, oil).....however, several commodity prices beginning to rise...despite the build up of inventories....20% or more off their Nov lows
Inflaction with be bullish for all things commodity
A case for inflation
The only way to get out of this financial mess...given the current course of action...is to inflate ourselves out
It's like this.....the core of the problem....real estate
All the banks are stuck with mortgages on properties that ain't worth the amount of the mortgage. To value these properties at market value on the books, the holders of the morgages would have to take huge writedowns...affecting thier credit scores......creating a need for them to have to raise more cash .....to keep the ratio's in line...exposing them to failure.....requiring the government to once again step in
To advoid this....change the rules with respect to mark to market....allow the properties to retain their value on the books....therefore, no writedowns and no need to raise cash
Then....create inflation...so as to increase the property value to match or exceed the value of the mortgage on the books.....therefore, no recongnized loss...no writedown
Question is this....
What will it take to create such inflation in property values....without creating similar inflation with all things commodities
Conclusion
NOT and the ROF ........ a great play for commodities
