A lot of words have been written about the bear market price of gold. Conspiracy theories aside, much of the talk is of a less fearful investor, moving back into a risk-on phase of an economic cycle. But gold is not a special commodity. It seems to follow the same laws that have beset the metals index as a whole. There has been a clear down trend in hard, and energy commodities since Feb this year.
The cliff like drop in the gold price is more or less mirrored for copper and silver two industrial metals that have real uses, therefore robust markets. China the biggest buyer of is in a slowdown phase. Silver's biggest consumer, PV panel sales have seen a market collapse. If growth in china continues to cool, commodities as a whole will cheapen.
This falling trend has been seen before, and then reversed by bouts fo quantitate easing, this continues at a faster pace, with Japan now targeting to inflate its own economy by increasing the Yen supply. Seems that these actions are losing their potency, new money is not leaving the reserve banks at any kind of velocity.
The good news is there is a floor in the gold price. At least one that makes it uneconomic for miners. Peak gold was estimated to have passed in 2000, but records in volumes of recovery continue to be broken. But the cost of extraction sits somewhere around $1,200 per ounce up from about $500/oz at the peak. Gold bugs are right to stay away from miners.
In my estimation gold will not diverge from its downward trend as long as metals prices follow the same trajectory. Its still risk off, in all markets, the velocity of money at least in speculative trades has ground to a halt.
Saturday, 20 April 2013
Thursday, 4 April 2013
Capital Idea to save on Labour
The industrial landscape balances between the supportive forces of capital or labour. Things are tipping toward capital. Last decade after the tech bubble popped, was called the jobless recovery. But hindsight says it was more a debt binge, on non-productive capital. Thats to say we imported domestic durables from Asian countries with low-cost labour, and little government regulation.
Labour is still king in certain industries like clothing and footwear. In fact China is losing to even lower labour cost sources like the Philippines and Thailand. Burma is going to see enormous growth in the coming years, with firms taking advantage of the dirt poor that are ready to work.
But this era is seeing the rise of the small-scale robot. Affordable Computer Numerical Control (CNC) machines, 3D Printers, robotics, give the industrialist command over a flexible production line, that can turn out prototype and duplicate product very quickly.
Many of the crowdsourced projects in the design and technology category on kicstarter.com are from entrepreneurs looking for the capital needed to buy tooling, to up production rates of their prototype gadget. And the price of entry is not that high for the kit that would enable production in the thousands.
The fall of USD has been a boom for local manufacturing. Its allowed many to bring their manufacturing home, in a low worker configuration. Machines with a low number of technicians managing them can produce components with high tolerances necessary for a new level of quality. Many manufacturers are having difficulty finding the skills necessary to fill these jobs. Worker incompetence can cost firms dearly, a new level of attention to detail is necessary.
Bringing R&D and production departments together allow the synergy necessary to shorten the cycle of production changes. Allowing a product to evolve faster. This is a slingshot to innovation. Traditionally the firm that imports, wears a large inventory, thus prolongs the iteration of a product. In some cases will need to discount the remaining stocks, when the next shipment is due to arrive. Small scale manufacturing gives the owner the freedom to innovate, and keep margins high on a just-in-time schedule.
Many have been burned by outsourcing, everything from whole production runs out of spec, to firms competing against illegal runs of their own stolen intellectual property. Larger firms are going to a hybrid model, having separate designed components outsourced across a number of different manufacturers. This provides some insurance against the many levels of theft.
Some suggest the 3D printer will change the face of manufacturing, but economies of scale, and efficient supply chains are still cheaper, for the moment. But the idea of digital delivery of products to your personal 3D printer are not outside the realm of possibilities. This era of manufacturing, may be the bridge to that future.
Labour is still king in certain industries like clothing and footwear. In fact China is losing to even lower labour cost sources like the Philippines and Thailand. Burma is going to see enormous growth in the coming years, with firms taking advantage of the dirt poor that are ready to work.
But this era is seeing the rise of the small-scale robot. Affordable Computer Numerical Control (CNC) machines, 3D Printers, robotics, give the industrialist command over a flexible production line, that can turn out prototype and duplicate product very quickly.
Many of the crowdsourced projects in the design and technology category on kicstarter.com are from entrepreneurs looking for the capital needed to buy tooling, to up production rates of their prototype gadget. And the price of entry is not that high for the kit that would enable production in the thousands.
The fall of USD has been a boom for local manufacturing. Its allowed many to bring their manufacturing home, in a low worker configuration. Machines with a low number of technicians managing them can produce components with high tolerances necessary for a new level of quality. Many manufacturers are having difficulty finding the skills necessary to fill these jobs. Worker incompetence can cost firms dearly, a new level of attention to detail is necessary.
Bringing R&D and production departments together allow the synergy necessary to shorten the cycle of production changes. Allowing a product to evolve faster. This is a slingshot to innovation. Traditionally the firm that imports, wears a large inventory, thus prolongs the iteration of a product. In some cases will need to discount the remaining stocks, when the next shipment is due to arrive. Small scale manufacturing gives the owner the freedom to innovate, and keep margins high on a just-in-time schedule.
Many have been burned by outsourcing, everything from whole production runs out of spec, to firms competing against illegal runs of their own stolen intellectual property. Larger firms are going to a hybrid model, having separate designed components outsourced across a number of different manufacturers. This provides some insurance against the many levels of theft.
Some suggest the 3D printer will change the face of manufacturing, but economies of scale, and efficient supply chains are still cheaper, for the moment. But the idea of digital delivery of products to your personal 3D printer are not outside the realm of possibilities. This era of manufacturing, may be the bridge to that future.
Tuesday, 2 April 2013
EBay are Trashing their Monopoly
As from the first of May, Ebay ups their commission from 7.9% of the final sale value to 9.9%. The last change 12 months ago, that made them a flat 7.9% changing from a multi-tier system, which was arguably cheaper for lower priced items.
The move is slowly changing EBay from an Auction site into a browsing to the instant purchase. Insertion fees are all but gone for the casual lister, even for the Buy it Now option. Sellers must consider the GST level of tax when selling items. And thats before you pay quarterly GST if you are a business. There will be a lot more Buy it Now buttons on items come June, just to ensure the margin necessary to cover all these fees.
EBay's profits are down on last year, but their PayPal system brought in a larger portion of the firm's profit. So if you sell on EBay and receive monies via PayPal, you'll be slugged another 2.4% on your sale. Gone are the days when you spent a half a dozen dollars to get an entry put into the old Trading Post.
Don't begrudge a monopoly player acting like one, but there are a set of free listing me too sites in Australia to choose from, that are becomming quite popular:
gumtree.com.au - Free to list, free to sell, but feature advertising spots are a dollar or two for a range of, front page, front of search list options.
tradingpost.com.au - An old timer which recently stopped its fortnightly issue dead tree edition. Free to List, free to sell. Mainly listings for cars, boats and caravans.
craigslist.com.au - Underused in Australia, but not dead. Each major Australian city is prefixed before craigslist in the URL. Free to list, free to sell, no fees at all.
There are dozens of others that don't get any exposure, because frankly they aren't used. One can list their item for sale in twelve different places. If its rare, or unique you might have people stumble upon your hidden gem. Alternatively list on EBay at a price that won't sell, with the realistic price inserted for the same item elsewhere.
The move is slowly changing EBay from an Auction site into a browsing to the instant purchase. Insertion fees are all but gone for the casual lister, even for the Buy it Now option. Sellers must consider the GST level of tax when selling items. And thats before you pay quarterly GST if you are a business. There will be a lot more Buy it Now buttons on items come June, just to ensure the margin necessary to cover all these fees.
EBay's profits are down on last year, but their PayPal system brought in a larger portion of the firm's profit. So if you sell on EBay and receive monies via PayPal, you'll be slugged another 2.4% on your sale. Gone are the days when you spent a half a dozen dollars to get an entry put into the old Trading Post.
Don't begrudge a monopoly player acting like one, but there are a set of free listing me too sites in Australia to choose from, that are becomming quite popular:
gumtree.com.au - Free to list, free to sell, but feature advertising spots are a dollar or two for a range of, front page, front of search list options.
tradingpost.com.au - An old timer which recently stopped its fortnightly issue dead tree edition. Free to List, free to sell. Mainly listings for cars, boats and caravans.
craigslist.com.au - Underused in Australia, but not dead. Each major Australian city is prefixed before craigslist in the URL. Free to list, free to sell, no fees at all.
There are dozens of others that don't get any exposure, because frankly they aren't used. One can list their item for sale in twelve different places. If its rare, or unique you might have people stumble upon your hidden gem. Alternatively list on EBay at a price that won't sell, with the realistic price inserted for the same item elsewhere.
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