Monday, 20 August 2018

With Silver At Lows, What Lies Next?

Bali & World News & Views editor's comments. 
Lawrence watching the markets

Silver is on sale. It is is selling  at the price that it cost to get out of the ground and ship it. 

The downside risk is minuscule the upside potential is phenomenal. 

Anybody can afford it with silver selling as little as $14.50 per ounce. 

Add some to your portfolio now. You won't regret it in coming years. 

Don't worry about daily or weekly swings. Silver always goes up throughout history longterm.

Aug. 20, 2018 3:17 PM ET

Silver has seen a particularly steep drop in the past six years.

However, the metal could be set for significant upside in the event of dollar weakness.

In my opinion, silver is a commodity to watch at this point in time.

Over the past five years, gold and silver have both been trending lower, with silver seeing a relatively larger drop:


The current sentiment on silver is quite bearish. Given the low prices of silver, this implies that mining for the metal is likely to be unprofitable when one considers costs of capital and development.

However, the flip side of this is that given the inherently more volatile nature of silver, the investment tends to perform better than gold during periods of rising prices for metals more generally.

Under what circumstances could we see such a scenario unfold? In this regard, it helps to take a look back at the period 2008-2011, where silver significantly outperformed gold as an investment.

Gold is held in high regard as an alternative reserve currency, which is not necessarily the case with silver. Theoretically, silver tends to outperform gold during boom periods, given the wide use of the metal in industrial output.

That said, silver did outperform gold from the 2008 to 2011 period, when global economic output was significantly lower than normal. While this is contrary to what one might expect, silver was particularly buoyant during this period.

There are two possible reasons why this might have been the case:

1. Silver, as well as gold, were in significant demand in the face of U.S. dollar weakness.

2. Additionally, silver has traditionally been seen as a cheaper but more volatile instrument than gold. In this regard, it may well have been perceived as a cheaper alternative than gold with significantly more upside, while remaining a suitable hedge against a weaker dollar.

The main factor holding down metals prices at this point in time is a strong dollar. The greenback is largely being perceived as a safe-haven asset at this point in time, therefore diminishing the demand for gold or silver.

However, it is my opinion that if we do see a rally in precious metals, silver will likely see further upside than gold for the reasons I have outlined.

While rising interest rates in the United States has been lifting the dollar, there will eventually reach a point where rates in Europe and Asia will also start to rise and a limit will be reached on the extent to which the Federal Reserve can raise rates without placing economic growth at risk.

Once this happens - then I anticipate that we will see at least a short-term spurt in demand for precious metals, and silver would be set for significant upside at this point.

When we compare the performance of silver to the USD/EUR, we see that in 2016, silver rallied during a period of USD weakness. In my opinion, silver is poised to rally should we see:

1) A slowdown in the trajectory of interest rate rises in the United States

2) Continued growth in economic output which would concurrently lead to further silver demand

Going back to my previous point, when the dollar had started to weaken against the euro after a period of prolonged strength, we saw silver rally significantly at the same time:


It may well be the case that we see a similar pattern emerge once growth in the greenback hits a ceiling. For this reason, silver is a commodity to watch at this point in time.

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
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Sunday, 19 August 2018

Sleepless In Lombok as Several major quakes hit

I'm sure it was a very sleepless night for everybody on the Island of Lombok last night starting with a large 4.6 earthquake that hit just in the early evening followed by 6.9 around 10 pm. 

This quake was of similar magnitude to the size of the seven point that hit on August 5th. killing over 460 people, injuring thousands and destroying most homes in Northern Lombok.

I can't imagine what it's like to live on Lombok the past two weeks, especially in northern Lombok by the Gillis, Sengigi and main city of Mataram with these daily quakes and aftershocks.

We felt them in Bali as well but not significant enough to cause any major concerns especially at Bali Paradise Beach Estates and Bali Luxury Villas Sanur where we know that the construction is far above normal standards.

As a precaution our family did evacuate during the larger quake last night only to return home a few minutes later.

Our thoughts and prayers go out to all those families on Lombok who must be having psychological trauma over consistent quakes which included two more later this morning.

We are doing small our share to ease their pain including previous contributions.

Today our two sons Xander and Darius will be delivering much needed staples and few treats to The The Gandhi Memorial Intercontinental School (GMIS) for distribution to needy Llombok families 

Xander and Darious 2018-08-20- Donations for Lombok earthquake victims

Azizah, their mother, my wife who is a Bali Notaris went shopping for our sons Contribution this weekend as shown above.

They will be delivering these packages of rice, noodles, chocolate, and biscuits to The Gandhi Memorial Intercontinental School (GMIS) where they go to school later today .

We are hoping that these photos will encourage others who read it and see those at the school to do so as well.

We encourage everyone around the world to contribute money and items to these destitute people in Lombok who need your help.

God bless them and keep them safe. Let's pray that these quakes causing so much stress on the tens of thousands of homeless people stop soon.

Earthquakes Moving East ?

Update : I am not an earthquake specialist but I do pry myself on watching trends whether it's investments real estate or even earthquakes.

Just dawned on me that earthquakes are like financial markets. They stay real calm for some time and then all of a sudden they will explode and have a affect on everything around them destroying people's lives.

I have also just noticed since the August 5th. seven point went off they killed 460 people is that  the earthquakes have been shifting along the fault line towards the East the last few days.

As of today they even start appear to be starting to shift away from Lombok and far away from Bali.

From what I understand of earthquakes when one goes off it puts pressure on other places on the fault line.

The fault line actually runs from the top of Lombok all the way to the eastern Islands of Indonesia and beyond.

So perhaps what is happening is like a domino effect after earthquake happens in one part it puts pressure on another part further east, etc. etc.

I pray that I'm right. my  basis for this theory is my intuition and my Nostradamus crystal ball. 

After all I was once called the Nostradamus of Bali by an overzealous newsletter writer.

Second, stronger quake hits near Lombok hours after 6.3 quake triggers landslides on Indonesian island:
7:08am Aug 20, 2018A second and stronger earthquake has cut power to the already devastated Indonesian island of Lombok, after a 6.3 magnitude quake triggered landslides.
According to the US Geological Survey, the shallow magnitude 6.9 quake struck last night, causing a blackout and toppling buildings. This was followed by 5.5 and 5.9 magnitude aftershocks.
Local authorities are yet to confirm if there are any casualties from the latest disaster, after earthquakes on the island earlier this month killed 460 people.
Some of the devastation in North Lombok after the quake earlier this month. (AAP)
The first earthquake to strike yesterday caused landslides on Mount Rinjani and damaged buildings.
An Associated Press reporter on Lombok said the latest in the flurry of quakes caused panic and power blackouts in parts of the island.
The landslides on Mount Rinjani, an active volcano, caused panic in villages with a video shot by the Indonesian Red Cross showing huge clouds of dust billowing from the mountain's slopes.
Foreigners help an Indonesian survivor woman in Gili Trawangan island after an earthquake struck northern Lombok earlier this month. (AAP)A girl injured in an earthquake is treated in Mataram, Lombok. (AAP)
The National Disaster Mitigation Agency said one person died from a heart attack during the biggest of the daytime quakes and nearly 100 houses near the epicenter were severely damaged.
Series of quakes rocks Indonesia's Lombok
The shaking from the daytime quakes toppled motorcycles and damaged buildings in Lombok's Sembalun subdistrict, including a community hall that collapsed. The hall had sustained damage in earlier quakes, said disaster agency spokesman Sutopo Purwo Nugroho.
A magnitude 7.0 quake on August 5 killed 460 people, damaged tens of thousands of homes and displaced several hundred thousand people on Lombok. Estimated damage has been put at more than five trillion rupiah (A$467 million).

Mount Rinjani has been closed to visitors following a July earthquake that killed 16 people, triggered landslides and stranded hundreds of tourists on the mountain, an active volcano.

Saturday, 18 August 2018

Rediscovering Bali's Northern sights and attractions

Yesterday started off as a second day of unseasonable rain and gloomy weather in southern Bali.

When you live in Bali you get spoiled especially during the dry scene season from March until November when it typically never rains.
Lawrence with the boys in front of our estate on a normal sunny day
Even though it was still 24° outside in the rain was warm but the low pressure was depressing.

We were not looking forward to to drive 3 to 4 hours drive to Lovina on Bali's North Shore under these conditions.

My wife Azizah, a Bali Notaris  needed to participate in  a I.N.I. Bali, 110 anniversary and I.P.P.A.T., 31st.  anniversary celebration in Lovina at the Krisna Fantastic waterpark.

About midway through the trip we stopped at beautiful lake Batur which was still a little overcast but the weather was starting to clear and we are optimistic.

We vowed to come back to spend the night there with our  boys some day to go fishing and enjoy the cool mountain air. 

One thing I've learned living many places in the world we always put off going to places while we are living there because you think that you can always go there.

My advice is to go there while you live there and enjoy. Don't let the tourists have all the fun.

 There is a beautiful mosque Lakeside making for a stunning photo
Later as we began the curvy 90° turn road which would take us over the mountain and to Lovina.

 We stopped and fed the monkeys. 

Instead of giving them bananas, which everybody gives them and they are bored with we gave them some beautiful sweetbreads, which they really enjoyed.

They were well behaved and it's obvious who was a boss, the big one in the front, who came right up to me and took the offerings gently.

A word of caution. Always be careful around monkeys. Some of them can be extremely aggressive and a few of them are taught to steal your valuables such as sunglasses, cell phones etc.


We arrived at the top and enjoyed the stunning view of three lakes.

 After 22 years of living here I have seen many improvements in tourist attractions. Some very entrepreneur Balinese have come up with the idea of taking these beautiful lake spots and turning them into fun shots with swings, pods and walkways.

For a mere dollar $1.50 per person they will allow you to use the swing's pods and walkways, making for some unbelievable photos.

Darius had no fear as he jumped on the swing even though there was a straight free fall below him. 

Again a word of caution. Be extremely careful. There are not the safety restraints and Govt. regulations that are normal in the West. Swing at your own risk!

 It wasn't long before Azizah took up the challenge  making for some great photos

Dad got into the fun but after decades of pushing the envelope sailing three years from Hawaii to Bali. Then sailing almost every day around Bali or to Komodo and finally losing my yacht and almost my life in a class five cyclone off of Darwin I don't  "push the envelope" too much anymore. 

My Leo  nine cats lives only has a few left!


 Every time I visit this area and many others in Bali I'm reminded why Bali is constantly ranked as one of the top islands the world. 

Recently, according readers of Tripadvisor, the largest online travel website,  Bali was ranked as the fourth most sought after destination in the world following Paris, London, and Rome.

We may not have the historic artifacts of those three cities but we do have scenery that will blow your mind. And weather that is attractive all year round. All at her small percentage of what you would pay for similar activities in Paris, London or Rome. 

For Asians Bali is the number one sought after destination in the world in 2018.

 When you consider that there are over seven Billion Asians within a 6 1/2 hour flight to Bali you understand why we are so popular.

 Mom and Darius could not miss out on an opportunity to get in the pod.

Nice to Darius  enjoy on something other than an iPod.

 Later we attended the Noatris  anniversary in Lovina.

Azizah sat for hours watching group after group from various  municipalities show off their talents along with her own group from Kungklung who gave a little dance.

Our son Darius enjoyed four hours of bliss at the Krisna Fantasic water boom park which only cost less than a dollar an hour. Far less than the ridiculous prices of $50 in the West for similar entertainment.

I escaped and found a brand-new Beach club called Spice right on Lovina beach which was almost empty and had first-class service with excellent food. It was a not long before I was sound asleep in the beach chair.

On our way back we took a different route over from Singaraja and stopped over at one of our favourite restaurants, the Bali Golden monkey Chinese restaurant. 

If anything  their food has improved to the point where I  commented to Azizah, "the best Wong Ton soup I've had four years

Darius seconded the motion by approving the Nasi Goreng.

This morning we woke up to the sunrise with normal seasonal sunny days of 24 to 30° temperature and I'm reminded once again why we love Bali and why I personally believe after travelling most of the world that Bali is the best place in the world to visit and to live.