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Here is a recent conversation I had with another trader/stock-talker on Seeking Alpha.

  • Dear J:

    Just a thought.

    I’m pursuing, on various fronts, the doubling of gasoline prices in a few years. Or sooner. We don’t have an energy crisis but a petroleum distillate crisis; the rise of Asian/India motorized transportation makes it a given.

    The U.S., with its population of high drag/low mileage SUVs, will end up replacing all its cars in five years with low drag/small engine cars. Ford, Honda, Nissan, BMW, and yes, Toyota, will dine out. Hybrids — did you see that HMC sold 10 times hybrid projections? You’re probably too young to remember when the VW Rabbit diesel was the hottest car in America.

    My point: platinum, not gold. They are highly correlated, but platinum will not be a victim of rising bond yields. Every car needs it, and they will sell alot of it. PPLT is the ETF to have, very little downside, unlike gold, which will also rise but is interest-rate sensitive. If rates rise, gold will drop, but consumes will have even less disposable income to fill up their SUVs.

    Cheers,
    GZ

April 5 at 10:53am

Here Is my Response:

Actually, I am old enough and yes I agree with you on Platinum and also Palladium too! Both will perform very well. If Crude continues and goes for a new test of $100 it may start way sooner than either of us expect. Crude appears to also be breaking out of it’s trading range above $85. Not very far to break $100. The talking heads are simply saying the Oil rise is good sign of growing economy, I think it is the confirmation of the inflation monster that is looming on the horizon. Yes, both Gold and Crude are interest rate sensitive which may restrain the upside somewhat. However when Oil and Precious metals take off I don’t think it will make that big of a difference, except to cause the interest rates to be raised faster to now “dampen” the economy and control inflation. Gold may not correct anymore big test right now to see if the reverse head and shoulders w/wedge will be completed. So if the Precious metals complex starts to rise then I actually will be playing Gold, Silver, Platinum, and Palladium. Thanks for sharing your thoughts with me, I hope we both can help each other to be more profitable in our trading, along with helping other investors too!-jschulmansr

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