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Guest Post: On The Brink Of An Asset Explosion, II
Submitted by Toby O'Conner of GoldScents
Let me start off by saying the market should be correcting. Sentiment has reached ridiculous bullish extremes, the kind of extremes that led to the January /February correction.
That correction separated the second leg of the bull from the third. But let’s face it, sentiment has been in this condition for several weeks now and the best we could muster was a minor correction of 30 points on the news the SEC was filing charges against Goldman Sachs for fraud.
We’ve had three opportunities to “sell the news” with the April jobs report and recently with INTC and AAPL earnings. None of them have panned out. The market could use the Greek excuse as a downside catalyst, the same as it did in January. And now Greek short term bonds are tanking as the EU waffles about writing that check in front of the German elections in May.
All in all it boils down to the market has had every chance to correct and it has failed to do so.
Last month I speculated that we were On the Brink of an Asset Explosion. Well, we may not be on the brink anymore. We may very well be moving into the heart of the explosion right now.
We’ve just seen one of the most powerful rallies out of a corrective low in many years. Until Friday the market had held above the 10 day moving average 42 days in a row. That’s the longest stretch in over 10 years. Since the February 5th low the market has risen 71% of the time. That’s the kind of stuff parabolic blow off tops are made of.
I don’t really think we are in a parabolic blow off top just yet. What I do think is that we may have entered a runaway move similar to the August 06 to February 07 time frame.
During a runaway move, corrections tend to be uniform in both magnitude and duration. During the 06/07 rally all corrections fell in a range of about 20-35 points.
So far the rally out of the February bottom has followed this script. The February corrective move dropped 25 points in 4 days and the recent pullback on the Goldman news dropped 30 points in three days.
If the S&P and Dow can follow the Russell, Nasdaq, NDX, midcaps and banks to new highs, the odds are going to increase dramatically that the market is now in one of these runaway rallies.
It’s anyone’s guess as to how long one of these moves will last. The rally in 06/07 lasted 7 months. I can tell you that once a market gets drawn into one of these things you can pretty much throw out every trading tool as the mechanics of the rally just roll over any and all trading strategies. Sentiment becomes useless, cycles get stretched to ridiculous lengths, technical analysis and oscillators are worthless.
There are a couple of signs to look for as one of these moves comes to an end and I will keep subscribers updated as the move progresses.
The next question we need to ask ourselves is which sector is likely to see the largest gains if this kind of move takes hold? I expect a rally like this will affect every sector as virtually all assets have been moving in tandem since the March 2009 bottom.
Before I answer that question I think we need to recognize one indisputable fact. And that is that the stock market is undeniably in a long term secular bear market, and has been since March of 2000. And, it’s a bear market the Fed and every central bank in the world has chosen to fight tooth and nail with the one weapon at their disposal. I’m talking about the printing press.
As you can see from the next chart it’s a battle that is only producing temporary periods of false prosperity driven by bubbles. As anyone with a little common sense can understand, you cannot drive an economy by creating bubbles. Bubbles always pop and are followed by periods of economic devastation.
Perhaps our leaders should look at this chart and figure out that it isn’t the size of the dose that’s the problem. WE ARE USING THE WRONG MEDICINE!
Hello, Keynes was wrong! You can’t fix this kind of problem with a printing press. All this does is make the problem bigger and ultimately more painful.
I dread the end result of the current liquidity experiment when the government debt and currency bubbles burst. Unfortunately, there is no short term cure for a currency crisis. I’m afraid the world is going to learn this lesson the hard way, once again.
So the question is where should we be invested if the price explosion unfolds, or maybe I should say continues?
Firstoff, let’s take a look at the stock market.
If, and this is a big if, the S&P does manage to make it back to the old highs one would be looking at a 30% gain from today’s level.
Now that’s certainly not a bad return but we also have to take into account that this is still a secular bear market and as such, it’s probably wishful thinking that the powers that be can force the market back to the old highs on the back of a government debt and currency bubble. Realistically I think we have to expect the upside is probably limited in this area to maybe another 20%, give or take.
Next let’s look at the ‘go to’ sector from the last cyclical bull market – energy.
At first glance there appears to be more potential in this sector than the general stock market. But is there really?
For one thing, the leading sector of the last bull rarely ever leads the next one. We can see from the chart this is, in fact, the case.
Energy is woefully underperforming and there is a reason for this. The world has now moved into a long period of ‘on again off again’ recession. The energy sector has lost a very important fundamental driver which is the demand side of the equation. Demand for energy is going to be permanently impaired during this prolonged period of high unemployment.
Energy also has another strike against it. Unfortunately, spiking oil prices always have and will lead to economic contraction. High oil prices are oil’s worst enemy because they lead to economic collapse and that means even less demand.
I’m afraid the energy sector will probably be on a wild roller coaster ride for years to come as monetary policy drives prices to levels that stymie economies, followed by price collapse as demand evaporates during periods of recession.
So even though it appears the energy sector has a lot of room to run, the reality is that the fragile global economy will collapse long before oil reaches $147 again. I suspect the upside in the energy sector is probably limited to 20-30% at best.
If the stock market isn’t a great place to put our capital and the energy markets are going to be impaired for years to come, which investment sector should we look at, you ask?
That one is easy to answer. We go to the one secular bull market that’s left. The one area where the fundamentals are actually improving. The one and only sector that stands to benefit from these insane monetary policies.
Gold! Precious metals.
This is the one sector where the fundamentals aren’t impaired. In fact, they are only getting better and better as the powers that be continue down their misguided Keynesian path to ruin.
Now let me point out that every secular bull market in history eventually ends in a bubble. Gold will be no different. After it has gone up far enough and long enough we will reach a point where the public comes to believe that gold is a sure thing, just like they thought tech stocks were a sure thing and just like they bought into the housing myth that real estate only goes up in price.
The difference is that the precious metal markets are fairly small markets. When the public finally catches gold fever it will drive a bubble the likes of which none of us have ever seen before. I expect $5,000 gold is probably a conservative estimate for a final top.
Now keeping in mind that this secular bull is far from over, let’s take a look at mining stocks.
Unlike the S&P and energy sector the mining sector has already tested the old highs. As a matter of fact the mining sector has led this bull from the very beginning.
When the rest of the market was putting in a final bottom in March of last year, the miners were already over 100% above their November lows. How’s that for relative strength?
From today’s level back to the old highs would yield miners a 20% gain. That’s probably equal to the best we can expect from either the stock market or the energy market.
However, miners are not limited by impaired fundamentals like virtually every other sector. The mining sector has an incredible wind at its back. Does anyone really believe mining stocks ($HUI) would be trading anywhere close to $519 with gold at $1,500? How about with gold at $2,000?
Before the secular bull is over I expect we will indeed see $5,000 gold. I would be completely dumbfounded if mining stocks don’t have 500-1000% of potential in them during the remainder of this secular bull market.
So one can fight with a secular bear market and impaired fundamentals for small gains or one can just get on board the only remaining secular bull market and hold on for one heck of a ride. This is how millionaires and billionaires are made. Not by trying to trade in and out of impaired markets.
So if we are on the verge of an asset price explosion I want to be invested in the one area best poised to benefit from the fundamental driver of that explosion…gold!
Toby Connor
GoldScents
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god damnit.. no more of this rally please! Fuck, I'm feeling bullish now. Loading up!
There is no spoon.
That quote jumped off the page for me, as I've been saying it myself for 6 months now. I am not, nor have I ever been a gold fan. But I think the first 2/3 of this article are a perfect summary of where we are today, the author put together one of the most lucid and logical explanations I have read on the subject, and I agree with the author that when the animal spirits are finally dead, the animals will be as well. When it breaks, this worldwide liquidity explosion in all of its various iterations will usher in a time of great pain for all of mankind. You can't eat gold... maybe all you can do with it is cast it into slugs.
When all hell breaks loose, those who have food would only take gold for exchange.
Hence, YES! you can eat gold.
True, however if/when all the redundant activities of life as we know it fade into the oblivion of fan blades, there will be few choiced to continue making gold to trade for food. Food supply is, for the most part, infinitely renewable.
I for one am hedging my bets, by going long.....replacement fan blades.
BLADEZ BITCHEZ!
While I don't necessarily disagree, worst case scenario, there will be a period of time (maybe a couple of weeks, maybe much longer) where PMs will guarantee nothing but the preservation of wealth. In my opinion, not having a few months worth of food (minimum) and some form of personal defense is irresponsible (even if you've got 50 ounces of gold and 500 ounces of silver buried in your back yard).
One day you might wake-up and find the US dollar rising against the Euro, the Aussie, the Canadian dollar and the stock market, but plummeting against gold. If this happens, the death spiral has begun and, instead of wondering who will trade you their food for your gold, you'll be wondering which street gang[*] breaks into your house, blows you away and takes your gold.
[*] My guess is the most dangerous gangs will be made up of former gov't employees of the enforcer-thug variety (law enforcement).
Granted guys. Food storage is important on worst case scenario. Dont forget though that most people's pantry (at least my wife's) even in good times, is good for a few months.
Hopefully, the unwind will be gradual just like in Japan. Twenty years so far muddling through.
Nonetheless, I am going to gear up for replacement fan blades myself.
Lead will be more valuable than gold.
+1. With lead, you can get gold.
More like a Darwin Award...
Whatever, you know those farmers and people who grow food will still take worthless pieces of paper or digits.
"lucid and logical?"
Gold to 5000!!!
AHAHAHAHAHAHAHAHA!!!!
You people are on drugs, obviously.
90% of the zerohedge people were wrong about gold to 2000, but nevermind that, let's just move the target for the rally HIGHER, even though we can't even make it to 2000...
Notice how nobody here ever gives any sort of timeline for when this move will occur? That's because you don't know, it's not based on facts, and it's just wishful thinking.
Keep smoking that hopium. When the bottom falls out, only the physical holders will be bagholders.
"Notice how nobody here ever gives any sort of timeline for when this move will occur?"
I do.
+1EN: I scrolled madly to the bottom to make exactly this comment.
Hey All: Let's think about what underlying degrees of freedom we can assign in Eliot's infinite degree of freedom model (thus meaningless) to describe our honest and loving FED, those (that ain't workin,' that's the way ya do it, ya short the CDS in the Greek Exchange, ...) at Sacks of Gold, Man and their gaming parlor.
/complete waste of time/ or as Fab puts it: intellectual masturbation.
Buy High!
to...
Sell Higher!
The middle market will wake up some day and decide they need to hedge in Gold and thats when the price will really take off, now how can we herd those sheepeople into that buy? hmmmmm?
The! End! is Near!
The! End! is Near!
Read the good book... its coming, The End! Buy Gold! Hurry!
Buy! High! You are in on the bottom floor @ $1,100 an ounce! http://www.youtube.com/watch?v=RIIDseg7Gr8&feature=related
And, it should be pointed out, gold has lost ground to inflation from its 1980 peak of $850 to now. Adjusted for inflation, $850 in 1980 would be $2,221. Those who bought gold during the last inflation scare are still waiting for the big payoff. And many investors who have invested in gold mutual funds, which invest primarily in gold mining stocks, have been on a roller coaster. Gold funds lost 37.5% in October, according to Morningstar, and soared 21% in November.
http://www.usatoday.com/money/markets/2009-02-18-karats-invest-gold_N.htm
You may now junk the sourced and sited facts.
The Gold price exceedeed $800/oz for all of TWO trading days in January 1980.
Anyone unlucky/stupid enough to have bought on one of those TWO days and is still holding today has earned a negative inflation-adjusted return over the 30 year period.
I am not one of those people and personally do not know anyone who is.
http://goldprice.org/30-year-gold-price-history.html
http://goldprice.org/images/monthly_dollar.gif
Looks the same(ish) to me on this chart? maybe you have a differnet 30 year chart you use?
As per Daily London Fix, prior to 2007 the Gold price exceeded $800 on only TWO days, January 18, 1980 ($835) and January 21, 1980 ($850). The next highest quote in January 1980 was $760 on January 16 and the average for the entire month was $675.
IMHO, using the $850 Gold price to "prove" that Gold performs poorly as an investment is absurd, to say the least.
on Sun, 04/25/2010 - 11:43
#317004
As per Daily London Fix, prior to 2007 the Gold price exceeded $800 on only TWO days, January 18, 1980 ($835) and January 21, 1980 ($850). The next highest quote in January 1980 was $760 on January 16 and the average for the entire month was $675.
IMHO, using the $850 Gold price to "prove" that Gold performs poorly as an investment is absurd, to say the least.
Bam_Man,
You are in Government? or Sales? http://goldprice.org/images/monthly_dollar.gif speaks for itself... Mr. Hung Up on $850 non-adjusted dollars... and this graph is by Gold people for Gold people in which the currency of choice has been flatened, to show a more favorable curve.
$800 dollar an ounce Gold ='s $2,200 dollar an ounce Gold now... in inflation adjusted dollars.
So what you have in 1980's dollar's is $400 dollar an ounce Gold, roughly.
Buy High! to Buy Higher! its a free(ish) Country, do what you want.
Tough to know what the price should really be. The physical world will always beat Ben Dover's Excel spreasheet. Now there is something you cannot eat.
"The physical world will always beat Ben Dover's Excel spreasheet. Now there is something you cannot eat."
QUOTE OF THE DAY! You have been qualified to win a "Fuck yo couch Bernenke" t-shirt. The drawing will be at the end of the moneth.
on Sun, 04/25/2010 - 13:51
#317109
Tough to know what the price should really be. The physical world will always beat Ben Dover's Excel spreasheet. Now there is something you cannot eat.
A Nanny Moose,
You choose to soften the blow with "whats the real value?" as if the markets have not been managed to this point?
You are hoping even though there is not more pricing pressure ($400 dollars an oz in 1980's dollars, verse the $850 price spike)... that thru end user accumulation of the physical you can bring about the rapture?
My ammo trumps anything shinney that you may have, now... run along to your prayer meeting, spread the word and pray for the end... or whatever suits you.
Of course there is hackistry and cheerleading in the Gold Bug industry. No one every shouts, "Overpriced Crap For Sale!"
That said, I bought in 2002 - 2004. That's gone well enough I can afford to miss the peak when I sell. I got lucky enough to buy my house in 1996, too, so I could sell and collect enough return to buy another house at more or less 1996 prices. Not because I'm so brilliant or Real Estate is such a great investment. Because of what I paid for what I bought, and when. Just like anything else.
Where you start your chart always influences the end point you're trying to convince everyone of. Everyone loves the DOW chart from 1/1/30 - 1/1/00, don't they? But not so keen on the chart from, say, 1/1/99 - 1/1/2009.
I'm not trashing your opinion on gold and how it's being discussed and marketed. Just saying it's no different from how anything else is discussed and marketed. And when you buy, and for how much, is all that matters.
I find it odd, that with the scenario painted, anti Gold folks, do not for some odd reason, verbalize(before they drag out charts, and quote adjusted for blah,blah), we know that.
This time, is UNLIKE any other in HISTORY.......throw the friggin charts in the dumpster.If Gold goes to $5k+ an oz. US, what the hell you going to exchange it for?..the rest of the currencies will suck as bad or worse.
We are all in a dilema.........IF it comes to this, Gold will be of value,( whether it will be of USE, is quite another) but as it stands in this case, it don't mean nuttin.
Gold is, always has been Insurance.........have some for this, if nothing else. Next up, Basic essentials, food, water, medical supplies, prescriptions of at least 90 days or more(IF you have a good Dr, that understands).
Storage of water,,,,,,,,,emergency you have 40-55gallons in your Hot water tank, and in your toilets(tanks).........save it!
Most of the bottled water now is in plastic bottles that disentigrate in time..get the large COOLER types,,,,,,,,,,,,,,,
Harden your homes, have friends?.......get together formulate a plan,people do not plan to fail at anything, as we know, we fail to plan.
Get caught WITHOUT SEVERAL Hi Cap weapons, and lots of ammunition,(each caliber),stick to STD calibers,NATO is best, spare parts (if neccessary), then you screwed yourself, and your family.
Teach your GF/Spouse, how to shoot, defend themselves, or at least how to reload mags for you........
I have talked to alot of LE/SWAT/Spec Ops Folks.........if the SHTF, really hit's it, YOU will have to care for yourselves.....ask anyone who went thru Andrews aftermath, made Katrina( Katrina was governmental stupidity) look like a picnic, and what happened on the streets/residences that were not damaged........
You did not get in or out, period w/out a damn good reason...and few there were........
You have no H2o, no electricity, no gas, no fuel, what you doing for lights, heat, cooling?.
In this case, survival, and barterable items REIGN.
Don't want to be interred?,disarmed,wealth confiscated,have an alternate plan, and separate cache's.............
Maybe a tad extreme for some of you, but if you have been in IT....it's very real.
Why do people bother answering these anti gold nitwits.
They've been wrong all along
If I ever taught my spouse to shoot, I'd be a dead man!
OH, Yes. Truer words were never spoken.
You can't live with them, you can't live without ...
(them, shooting them, take your pick; make up your own)
Who keeps posting this crap on zerohedge? The "prepper" nonsense is the same marketing technique used by the goldbugs. You can't even see that you have been fooled into buying things you didn't need and can't use.
Whatever plan it is you think you have, it won't last past the point at which everything goes to hell, if that is what is going to happen, which in all likelihood, it isn't. I just want to know, are you a boomer? Are you over age 50?
I open a can of peaches and voila! I am not as hungry. Repeat. Now I am full. See, not a useless purchase.
If you bought something and are not using it then you are the problem. Unless it's GOLD BITCHES!!!
I agree with almost every word... but the band wagon your jumping on... is pro-gold no matter what.. sell it to people no matter who they are and no matter how prepared they are...
"Gold is, always has been Insurance" Quoting you... yes, I own gold... bars are great... and smaller amounts work for trading... someone posted this link and I will now share it with you... http://www.gainesvillecoins.com/ coins, bars and other.. in stock...
****** "Storage of water,,,,,,,,,emergency you have 40-55gallons in your Hot water tank, and in your toilets(tanks).........save it!
Most of the bottled water now is in plastic bottles that disentigrate in time..get the large COOLER types,,,,,,,,,,,,,,,
Harden your homes, have friends?.......get together formulate a plan,people do not plan to fail at anything, as we know, we fail to plan.
Get caught WITHOUT SEVERAL Hi Cap weapons, and lots of ammunition,(each caliber),stick to STD calibers,NATO is best, spare parts (if neccessary), then you screwed yourself, and your family.
Teach your GF/Spouse, how to shoot, defend themselves, or at least how to reload mags for you........
I have talked to alot of LE/SWAT/Spec Ops Folks.........if the SHTF, really hit's it, YOU will have to care for yourselves.....ask anyone who went thru Andrews aftermath, made Katrina( Katrina was governmental stupidity) look like a picnic, and what happened on the streets/residences that were not damaged........
You did not get in or out, period w/out a damn good reason...and few there were........
You have no H2o, no electricity, no gas, no fuel, what you doing for lights, heat, cooling?.
In this case, survival, and barterable items REIGN." *****
All great advice... but pumping gold for the masses, pushing idiots into something they know nothing about...
Ok... how about this... in the end (which is not coming any time soon) people with gold walking around trying to feed thier families will get gunned down for said shinney shit. Plain talk. Food, Ammo, necessities and then Gold... The idiots here are all gold.. all the time... no real facts to go with... they are not here to educate or help there fellow American's.. they are here to sell shit not make a positive difference in peoples lives thru education.
I hope that you better understand my position.
we have heard all this how many times?
still the market goes up
and one thing with gold is they are doing everything in their power to push it down and stocks they are doing everything in their power to push up
take your poison
on Sun, 04/25/2010 - 11:54
#317017
we have heard all this how many times?
still the market goes up
and one thing with gold is they are doing everything in their power to push it down and stocks they are doing everything in their power to push up
take your poison
yabs,
Gold does nothing but sit there.. trying to herd the idiot masses into something that may (or may not) make them money is the game yes.... money moving, not money sitting makes the world go round...
now take you retired idiot ass to miami beach and play some shuffle board and shut the fuck up...
You are nothing but a drain on people who try to keep the world spinning, so that your dumbass can have something other than candle light to read by... you are useless dead weight, you spreading ignorance is the fucking problem.
You want to talk idiot masses? Take a look at anyone with a JP Morgan Chase savings account denominated in USD earning 0.25%. Now compare and contrast with people holding physical bullion. The spread in IQ has gotta be at least 40-50 points. And I bet the savings account morons outnumber the bullion vault type by 20 to 1.
Don't be a douche bag. Ignorance is the hallmark of the non-bullion crowd who live paycheck to paycheck using credit cards, waiting for the social security check. Building wealth that is impervious to the evil of socialism is the essence of applied wisdom.
Firstly... have you upgraded to the 416 conversion kit? https://www.brownells.com/.aspx/pid=31987/Product/AR_15_M16_OPS_416_GAS_PISTON_CONVERSION_KIT
Next... Gold is great for people like me or you that are in fact using it as a backstop... not for people who can not afford food... I have went on and fucking on about physical... but most here are salesman and not out for the betterment of the people... they are just here to pump and dump, like the government does with the stock market.. jobless recovery... lets see how long they can feed on themselves?
As for the Obama socialist arguement... he is Bush part two.. he's no different that the rest...
You who I have taken the time to chat with should know my position, our shared position.. but dont fucking back up some salesman over someone you know tells the truth and I might add actually cares about people other than who the next sucker is that I can make a sale too..
Buy ammo... .223 is still running short... Be well brother..
Wow, cherry picking the last top in gold as your baseline really makes your arguments persuasive... I guess if I cherry pick $35 / oz in 1970, I could say that gold has outperformed. Honestly, it just makes you look so weak, why do that to yourself? I buy gold, BECAUSE I HAVE THE MEANS AND THE DESIRE. The plebs can keep their paper promises from Obama.
Gold is high... the only way for it to go higher is for more un-rest to happen... if $850 is the bench mark (in the 80's) we are now in the $400 dollar range (in 80's dollars)... so the pressure, even if it is there... has been manipulated out of the pricing. Gold is not for everyone, it is for people who understand the market is fixxed and who can defend it in the event that shit hits the fan... other than that anyone who holds gold is nothing more than a victim waiting to happen.
Why, after I have taken the time to share with you would you side with some fucking salesman? that don't fucking pencil out Bro...
and this chart ( http://goldprice.org/images/monthly_dollar.gif )shows peaks and valley's from a historic high... we are closing in on the top again (maybe not, but for people who are betting, or needing to make a good investment?) and the buying at the top and risking $1,000 bucks and oz. to make maybe $200 bucks? $5,000 an oz works if the markets fail... and if they fail people will need Food, ammo, necessities before they will need Gold that someone would shoot them for... in my honest opinion.
HOW DARE U MAKE FUN OF OUR RELIGION!!!?!?! GOLD IS THE ONLY ASSET THAT IS SHINY, PRETTY, AND YOU CAN HOLD IT IN OUR HAND!!!!!!!
THE UNITED STATES WILL BE ZIMBABWE NEXT YEAR!!!!
STOCK UP ON FARM LAND AND CANNED HAMZ!!!!
GOLD BITCHEZ!!!!!!!!
I'M TOO GAY TO MAKE A GOOD ARGUMENT AGAINST U, SO NOW HERE COMS THE JUNK!!!!
FAIL
^^ FAIL
Translation: "I don't know how to build a successful trading strategy in this market and I haven't seen any that work in such a market; therefore, just because I haven't seen one, I'm going to make a blanket statement that they do not, and cannot, exist."
Best trading strategy: 100% liquid
25% Physical PM's
40% USD
20% Euro
15% Canadian
Except for the USD, Euro, and Canadian, I agree!
I disagree. The best trading strategy is to continually manage uncertainty using a support vector machine that takes multiple financial indicators as input. All of this "buy and hold asset classes X, Y, and Z" is for Neanderthals.
:) - Don't have a desk or a feed, the best we neaderthals can do is punt on something vaguely reliable beyond the mid-term..
Missing link,
if everyone did that, us you suggest, then who would be first on the exit bottleneck when the proverbial eventuality?
I hear you, but...
There are always sour grapes in any market discussion. Point well taken. And none of us is completely objective, but I'm an arb, trading mostly commodities, delta nuetral. I don't care about price movements, so I shouldn't have a dog in this fight, but I do.
RT has done a great job with his graphs so I'll just mention what really troubles me about this market. First, the dash to trash. Buy all the damn consumer cyclicals and gadget makers you want. I couldn't care less.
But who in the cornbread hell buys mortgage insurers who are hopelessly underwater and have been prohibited from writing new policies. By what magic does that make sense? How can AIG still be worth anything at all? What is the nature of the new government hydras known as Fannie and Freddie, and what is their mission? Clearly not profit.
Window dressing at the end of quarters has gone on forever, but window dressing at the close, every day? That doesn't pass the smell test. I am less conspiracy minded than most here, not a tough standard, but the front running and stop running alone tell us the SEC is out to lunch.
Those who see gold as a good way to stash their cash probably already have some gold; those who trash gold are the ones who have already missed the boat. What's hard to understand about that? Hopefully, someone who is on the sidelines will make a lucid decision and start their gold acquisition. Or not. Their proclivity has already been demonstrated.
pro·cliv·i·ty –noun, plural-ties.
natural or habitual inclination or tendency; propensity; predisposition: a proclivity to meticulousness.
This has been a public service.
Translation: I've never traded before in my life, and I'm just some random douche with a blog. So, instead of "buy and hold in STOCKS" my philosophy is "buy and hold in GOLD, BITCHEZ!!!"
You know, cause buying and holding always works. It didn't before? Well, gold is different, this time...
Join the gold bitchez religion today!
At this point, it would be foolish to think the the S&P won't go to 1350-1400. But, man oh man, I do not want to be the "greatest fool" and be searching for a seat when the music stops. (That's a double metaphor. Pretty good for a Sunday.)
Someone on CNBC said 'unfortunately, the right thing to do is to keep buying the market until it doesn't go up anymore'
Just like the stock market in Zimbabwe, which in nominal terms was the global winner. If you subscribe to the idea that markets foretell economic conditions 3-to-6 months out, then perhaps what our current markets are trying to tell us is that hyperinflation is the iceberg that lies dead ahead.
THE YOU S IS ONLY ZIMBABWE!!!!!! EVERYBODY WILL LOSE ALL THEIR MONEY SOON. WHO NOS WHEN BUT SOON!!!!! THEN, WE'LL ALL BE GROWING GARDENS AND EATING MEAT FROM A CAN!! THE END IS NEAR!!! THE END IS NEAR!!!!
JOIN THE GOLD BITCHEZ RELIGION TODAY, BITCHEZ!!
Next DOW key resistance is 11,250/300
If that level is penetrated next target is 11,900
MARKET UPDATES:
http://www.zerohedge.com/forum/latest-market-outlook-0
And it appears that three people junked the only person in this thread that seems to know what they're talking about.
11250 is the target on the Dow, 1228 is the target on the S&P. Grand Supercycle is spot on.
That douche with a blog that made the OP is a tard.
But screw all that, cause GOLD'S target is 65 million. By next week! Right after the Zimbabwean currency crisis in the US that makes us the next third world shithole!
The end is nigh my brothers. Junk the non-believers. Buy the goldbug hype and join our religion today, bitchez!!!
Why does every article on zerohedge goes about the fact that the markets are about to rally?
Because very article from Dow 7500 on until now was bearish?
I think that the fact that ZH is now getting more bullish and saying that they can't fight the tape is a sign. A sign that we're coming to the end of this rally, at least.
"throw out every trading tool"
Hasn't that been the case for this market for a long time now?
** Edited for Content **
I'm staying out of this crazy stock market. Implosion is the drop of a hat imminent. I am going to take my first stab at some T-Notes this week in a long time. I think the I-Bond rates are going to drop to around 2.3% from the current 3.36% and maybe closer to 2% so no more I-bonds for me right now. I think we are going to see close to a 3% 5yr auction this week coming, and close to a 3.60 7yr auction. Since everything else at the banks are paying less than 1/2%, I will take those Treasury rates at this time.
I could care less if the stock market goes to 25k, no way I am risking my money in such a construed bubble of crap. When the bottom falls out like it did in housing, its gonna get ugly as hell.
Treasuries can loose value just as fast, if there is a reversal to higher IR's
The 10-year is where the money is. Do you think we're going north of 4.0%?
Yes, I fully believe we will see the 10yr over 4% soon. PIIGS will help.
Print
Is the US Facing a Cash Crunch? Gordon T. Long APR 23, 2010 11:30 AM The US cash-management challenge is significant, and any surprises or further delays in economic rebound will likely trigger serious market reactions.
Editor's Note: Gordon Long is a former senior group executive with IBM and Motorola, a principal in a high tech public start-up, and founder of a private venture capital fund. He is presently involved in private equity placements internationally along with proprietary trading involving the development and application of Chaos Theory and Mandelbrot Generator algorithms. For the full version of this article, click here.The US government is caught in a cash vise and is being squeezed between too slow a rebound in tax revenues and the limitations on how quickly it can realistically take its funding requirements to the US Treasury auction. The US Treasury was saved in March by what the government reports as “proprietary receipts.” Those receipts require an explanation that isn’t well publicized since it begs the question of what happens next month without the $117 billion journal entry.
The March cash management numbers from the US Treasury’s Financial Management Service are alarming and in my estimation have become perilous. The economy is simply taking much too long to recover, which is affecting urgently required tax receipts.
If the US Treasury issues even higher debt supply to the market too fast, it threatens driving up interest rates prematurely and thereby elevating already strained government financing costs despite already increased supply. Since the US government has steadily reduced maturity duration over the last few years to obfuscate a growing debt problem, the issue is compounded by the rapidly increasing levels of rollover funding now additionally being required.
It’s a tricky balance between gauging how fast tax receipts will return and what supply the monthly Treasury auction is able to absorb. Cash flow is the primary reason small businesses fail unexpectedly. This is also why sovereign governments fail abruptly.
We witnessed in Greece what happens when investors get nervous. Yields not only spike but typically move to even higher levels than most originally thought possible.
US Treasury Cash Requirements
On April 14 the Financial Management Service, a bureau of the US Department of the Treasury, released its Monthly Treasury Statement for March 2010. I was waiting for it because of what I saw in February: The gap between receipts and outlays was widening disturbingly.
I knew the US Treasury was going to have to pull a rabbit out of a hat, or we might see a similar scare in the US Treasury auction, with a spike in treasury yields that occurred in Greece. What was reported was a mystery and for those that read Extend & Pretend: Gaming the US Tax Payer, I’ll call this Suspicious Clue #8.
Suspicious Clue #8
The report shows US Treasury receipts were down disturbingly and almost all government outlays were up. I personally have had Profit & Loss responsibility on numerous occasions during my career and I would have been apprehensive facing the auditors or board of directors with such a blatant example of mismanagement. Absolutely no cuts in expenses, with falling revenues, all made to marginally appear better than the February report by a single line item called “other.” Executives get fired for such a report but governments just carry on until the inevitable crisis event finally occurs. Then the traditional blame game begins, blame is assigned and belated and poorly formulated policy responses are enacted.
So what is this “other”? When you examine the Outlay Ledger of the Department of the Treasury for March 2010 (below), you see it to be a one-time item classified as a negative outlay. For the non accountants, this is a government receipt that is placed in the outlays as a negative amount, thereby showing government outlays to be smaller than they otherwise would have been. Though this is acceptable accounting, it would lead to the wrong conclusions, unless you read the details buried in the back pages. This “other” is referred to as a “Proprietary Receipt from the Public.”
An IRS document explains just what that means in an accounting context (source: 04-13-10 The Incredible Shrinking Deficit Salon.com):
This is a $117.3 billion amount! The total 2010 US tax receipts for US corporations is only budgeted to be $157 billion!
My investigations suggest that it’s likely TARP (Troubled Asset Relief Program) money being returned to the US Treasury, along with a slowdown in TARP issuance versus budget. Assuming this is the case, and not simply an aircraft carrier or two we’ve sold and are now leasing back like California is doing with all state-owned buildings, we still have a major problem. What happens next month? The TARP fund returns will stop or we will run out of aircraft carriers. Is unemployment going to surge or are corporate tax receipts going to expand by over $117 billion next month?
Timothy Geithner and the US Treasury somehow dodged the bullet because of “other” this month. How does it look for next month for cash management? Let’s consider tax receipts to see if there is a possible rabbit in the hat there.
Tax Receipts
You personally met your April 15 tax filing deadline and you likely took some consolation in your tax frustrations by knowing you weren’t alone. The quiet truth is you’re becoming more alone each year if you haven’t understood the new realities of the US tax game. Forty-seven percent of Americans (source: Nearly Half of US Households Escape Fed Income Tax -- AP) and two-thirds of US corporations (source: 04-11-04 Most US Firms Paid No Income Taxes in '90s -- Boston Globe) will pay no taxes in 2010. Where do you fit? These are pretty startling revelations to most of us and don’t bode well to fixing the monthly Treasury cash requirements quickly, especially with unemployment still stubbornly elevated.
Personal Income Tax
The Associated Press reported on April 7, 2010:
With the government presently talking about once again extending unemployment benefits, it appears we have more downside than upside on the income tax revenue receipt line item going forward.
Corporate Tax
The Center for American Progress reported in 2004, while fighting President George W Bush’s further cuts in corporate taxation:
The last special General Accounting Office (GAO) study concerning corporate taxation was in 2004 and it showed:
In 2005 the GAO issued another report. The Washington Post’s analysis in "Many Firms Didn’t Pay Taxes" highlighted:
It’s only become worse, with President George W. Bush tax cuts and corporate-friendly tax policy. President Barack Obama has been too preoccupied with spending to consider revenue receipts as a priority.
Additionally, offshore tax accounting is completely un-policed and highly secretive with approximately 30 countries serving as tax havens to help corporations avoid taxes. The addition of $605 trillion derivatives market now makes it almost impossible to police global corporations from tax avoidance.
When we compare corporate tax receipts to Nominal GDP we see huge disparities that are now built into the US Corporate Taxation policy. When GDP was growing, US Taxation wasn’t. The effective rates after loopholes and offshore accounting created the following results.
A Horrific Chart
This alarming chart suggests one or more of three possibilities:
1. There’s no relationship between corporate taxes and GDP.
2. Corporate pretax profits have seen near exponential growth over the last 30 years without being reflected in US taxes receipts.
3. Pretax corporate profits have become more and more an offshore phenomenon.
Investors are operating under the notion that an improvement in the economy and employment will alleviate the pressures on the Treasury auction. This notion I believe is misplaced. Though I’m skeptical about significant improvements in either the economy or employment, this view is moot in comparison to what will actually be required to make a material difference to tax receipts. The problems described above are intractable without major congressional policy initiatives. Congress is presently doing nothing to address them. In fact they’re headed in absolutely the opposite direction.
Corporate and personal taxes aren’t going to materially fix the US cash crunch short-term.
So the question is even more difficult to answer. Where will tax receipts come from to keep the US Treasury from being forced to place accelerating supply on the monthly Treasury auction?
Debt Issuance
I know many of you are saying we’ll just be forced to place more supply on the Treasury auction and accept higher rates. As I mentioned earlier, the US has already moved down the duration curve steadily over the last few years to make increasing debt levels less onerous. It obviously comes with huge risk, considering interest rates are at all-time historic lows.
If we were forced to refinance the national debt at 5.5% versus the present average maturity of just over 2%, we’d have a serious problem. We need to place corporate tax receipts versus interest payment rate charges in perspective.
This is too far out to be critical to our monthly cash management concerns, but is still a major strategic consideration affecting short-term US Treasury auction options. Closer in however, the US Treasury is obviously caught in a vise about not pushing rates up any faster than absolutely necessary for concern that in the not-too-distant future the very existence of the US and its ability to service its debt may be at stake.
Conclusion
The US cash-management challenge is significant. Taking out this month’s “plug” number, any surprises or further delays in economic rebound will likely trigger serious market reactions.
"This story is not going to stop at the end of the year. There is inertia in the deterioration of credit metrics."
-- Moody’s Investor Services
http://www.minyanville.com/articles/print.php?a=27938
Thank you. That is a fabulous article. The week of the 25th of April will be VERY interesting. I could not find a link to get on their "free" article mailing list. Is it subscription only?
Wow... A 38 Inch Comment
Why don't you submit it to Tyler and ask him if you can guest post it next time?
I had a 38 inch email from an ex girlfriend once...
I started reading the intro...
Skipped to a couple of the lead paragraph sentences...
Dozed off a little...
Remembered why she was an "ex" girlfriend...
Skipped to the conclusion... then hit delete.
Sounds like eveyone has had a mouthful
hahaha!
Seriously, this should be a ZH Guest Post. Not just more "we're drowning in debt" rhetoric, it shows in detail how US debt financing could face game-changing events in the next few months.
The price is wrong bitch.
'asset explosion' = 'currency collapse'
Yea- buy gold, some old crappy bet. The XLE just broke out, sorry it
ruined this guy's theory. Next stop=$65.00 Why own gold when COP is trading at a 8-9 forward p/e (they should make $1.50 last Q, reported soon, look at refining margins and CVX's guidance) and COP paying 4% dividend. Buy something that gets used.
Anyone can see the rotation into energy, out of tech, financials and healthcare, for the moment.
JPM will crush gold.
As USD printing is turning exponential, in a downturn energy stocks will also decline, gold will go up. Wrong move dude.
If you don't like PM's, invest in nothing. Just have good time not worrying about ups and downs. You will sleep better.
JPM can maybe manipulate the US Mkt, but not the Global Mkt.
When the MANIC phase hit's Joe Six Pack, everyone and his dog will be fighting to get an ounce...........silver is going to the moon soon.........Po man's Gold.
And, with the Soverign Global Debt Crisis in play, I see no way out.
The IMF is already wanting to devalue the hell out of all major Western countries currencies.........esp the US.
Don't get caught with a loss of 10-1, or a lot worse.
this has been on machughs site for over a year
It is time to prepare for catastrophic wave (C) down. Read this weekend's report for what is coming.
yeah like hes been accurate
This is another "it will go up, then down" article. One problem I have with this article is that he thinks energy led the last bull market. Financials and reits led the last bull market. Energy was the last sector rotated into after all the others quit working. In addition, the main reason he mentions for mining being fundamentally sound is continuous money printing, which energy should also benefit from.
One last thing he says is that gold will be another bubble, and I disagree (how can sound money ever be a bubble?), but time will tell. I will say that in addition to our fiat currency being backed by the full faith and credit of the U.S. and its ability to levy taxes, it is also backed by the nation's accounting laws, which we abolished last March. I will not invest in a market of companies graded and judged by fictional rules. What does ownership then imply? I would be a shareholder of fictional income and fictional assets. Without sound investments available for a given currency, the currency has no value (for me, at least).
People tend to say the same thing about real estate, no? The fact that neither gold nor decent RE will ever go to zero in the foreseeable future doesn't mean that they'll necessarily stay very near whatever their market price is at any point in time.
It's a hard question to answer, and more philosophical. You allude to the market price, which would be in dollars I assume, which makes answering the question difficult. Our fractional reserve, fiat currency is bubble optimized. Would a sound money system create the same dynamism in asset prices? I don't know that the question is answerable without trying it. With respect to your real estate example, you only pay for the privilege of renting it from the government; you never really own it.
It's easy for RE to go to zero--it has expenses associated with it. Gold does not, except for the cost of a safe, or whatever other method you use to keep it. Running companies also has expenses associated with it. With ever growing government, those costs are going to keep going up. Again, Gold is only aided by such action (via the impairment of production by miners).
Of course RE has maintenance costs, but that's not the major reason why RE bubbles are possible. Even if I had a magic house, which never needed maintenance, was immune to war, riots and natural disasters, always resided in a safe, desirable neighbourhood, and so on, you would still get burned if you bought it from me at 35% over its (no doubt impressive) long-term value at the peak of a housing bubble.
I'm sorry - did I miss the part where the Fed was subsidizing gold purchases? Where owning your own gold was considered a human right? Think about what happened during the RE bubble and you will never compare it to PMs again.
But I didn't make a generalised comparison of RE to gold.
Hansel, i have somewhat the same assessment as you. If there is a world full of dollars, why will people not use those dollars to purchase useful energy before less useful gold? Should there be a huge excess of dollars, then sure gold will benefit. but the idea that there will be inflation while energy prices decline is just a little specious for me.
I don't know if you are trying to disagree with me or just making a statement. I think energy prices are in a bull market. I can see a correction perhaps to the mid $60s on a shorter timeline, but ultimately I think they go higher and stay there. Limited supply, growing user base, reserves in geographically unstable areas, and more utility and value versus dollars are justification to me.
Toby Connor is actually Gary Savage of http://www.smartmoneytracker.blogspot.com/
I don't know why he's using an alias - perhaps he realized he drove away too many people/subscribers with all his horrible calls this year (not surprising considering his knowledge of markets is of the kindergarten level), and needs to attract new suckers. Not only is he a fake paper Gold bug, but is a COMPLETE and TOTAL idiot as well. He's one of those fools who thinks that paper Gold and physical Gold are the same thing. The guy doesn't even own physical for chrissakes! You have been warned.
Tyler, I'm disappointed that ZH would even consider posting material from the likes of "Toby". Perhaps you need to vet people more carefully before you allow them to contribute.
good outing GG. total fluff piece.pure drivel from the start.
That's not good enough, Gordon. Clearly, you don't like the guy. That should not be a problem. That's not the issue. What paticular fact or conclusion did you disagree with? I went back up to the top of this thread and re-read the original article and there is not much that I disagree with.
Dave
Yes, the OP is obviously bullshit.
But, how is holding physical gold better than holding paper gold?
Seems to me that when gold drops, you'll be the last ones holding the bag.
Or is your argument that gold can never drop? We see how well that argument has worked with other assets.
Dare I say "Good Call!" Gordon... Good for you, you even got junked by a Gold salesman for telling the truth...
Thanks for the heads up.
One question for anyone out there. In the article's second sentence, he talks about sentiment levels being "ridiculously" bullish. What metrics is he talking about. The ones I watch are high, but not yet ridiculously so.
Energy and mining will be the go to sectors FOR THE NEXT DECADE. Peak oil, bitches.
Down week next week due to the Goldman/Grease FIREs, Treasurie's worthless sales of worthless ass shitty FIAT doelarrs, and Op/Ex on friday. I have a minimal up Monday (up 15-40 points), flat tuesday, down wednesday (down 10-20), down thursday (down 15-25), and down friday (down 40-70). Gold will have tested support at $1145 starting tuesday, and it will beak to its second support level of $1135 on friday. Then we have 4 straight up weeks. Hyperinflation is a hellava drug.
And I have another question while I'm at it: without going all tea party on me, I'm interested in opinions about just how much predictive ability the market offers. I know it's manipulated and distorted, so I don't need a primer on that. I'm just interested in whether anyone has any thoughts about whether the market tells us anything whatsoever, and if so how much.
I personally don't think it has any. I say this after intially thinking so when I first started on Wall St, and now believe no such thing. One for instance, and there are many, would be Bear Stearns. Up until about a week before its collapse, it was a $90 stock. Movements due to insider trading I guess you could call predictive, but also illegal.
I think the market is a lagging indicator. Given all available information and an eagerness for knowledge, a person can come to a sound conclusion about the future. However, most people are lazy/ignorant and learn details far after they happen, so "the market" prices things in as they permeate through society. This is my personal opinion, and as they say, opinions are like assholes. Everybody has one.
Oil, gold, and silver prices will tell you EVERYTHING you need to know.
yeah, it tells us that it is overvalued when standard deviations get out of whack on the low side for the put/call ratio and the vix, and the high side for insider selling and PE ratios.
gold is money
PREACH!
Real Gold & Slvr................
http://kingworldnews.com/kingworldnews/Broadcast_Gold+/Entries/2010/4/24_Ted_Butler_on_the_Metals_Market.html
http://kingworldnews.com/kingworldnews/Broadcast_Gold+/Entries/2010/4/24_James_Dines.html
So, in essence we have a market and an economy on the tipping point.
A devastating earthquake in California,
A desperate North Korean dictator starts a war with S. Korea,
Israel Attacks Iran, or Iran attacks Israel, (take your pick)
A Bombshell news report of a large financial firm about to go under,
......
They say that of all money in the market the sell side is the largest, because its easier than going long. So, until every last drop of the sell side is wrung out, the market will work its way higher.
The technicals on the 10-minute, the 60-minute, the daily, and perhaps the weekly charts are now wrung out, there may still be a little breathing room on the technicals of the monthly charts. (the monthly charts which nobody looks at.)
After that, you have to start looking at long term inflation adjusted charts, which you could not bash over people's heads to get them to accept the facts.
They say the sell side is largest??? I've never heard that. Are you talking about shorts? 401k/IRA dumb money is 99.9% long, and has been since the 401k was instituted. What are you talking about?
Bernanke counts on the 401k being long and has been burning the sorts with relative ease.
it seems as though the fed monitors the stocks with the highest sort positions on a daily basis and pushes the lever higher, sort squeezing them higher and leaves the ashes behind.
:) I'm fully aware of that. I have first hand experience.
http://www.isdacdsmarketplace.com/exposures_and_activity/top_10_cds_positions
You goldbugs aren't looking deep enough I'm afraid. Your emotional bias only allows you to look at information which confirms your outlook on gold prices. History is a fantastic guide to the outcomes of the recent market/economic actions, yet a bunch of bloggers who are trying to join the dots on the fly think they have the gold market and the geopolitical landscape worked out.
Many of you have done serious study into your bullish confirmations but history is littered with experts who were blown out on one-way bets.
Your analysis of gold's reaction to particular outcomes doesn't add up. Fiat world collapses and suddenly gold rockets? When defaults, bankruptcies and trillions in wealth vanish into thin air? Please. Gold will hold its value as a bartering tool but the destruction in paper would bring gold down with it. Defaulting hedge funds for example would have no choice but to unwind billions from the paper gold market as commodity prices collapse. We already saw this in 2008, yet people seem to have very short memories. Did the supply and demand or wealth store value of gold, oil and copper suddenly alter by 50-75% overnight? Because the price seemed to think it did.
I'll potentially buy some gold as a diversification tool for the run up in 2011. I'll wait for the late 2010 collapse first though. In fact I'll prob buy some physical off the suckers on this site when they can't take the pain and become forced sellers.
You speak of history, then you note "the destruction in paper". Never before in history has a FIAT currentsea, especially one that reaches the corners of the globe, collapsed in an epic scale. In fact, the doelarr is the first ABSOLUTE FIAT world reserve that was considered worth its weight; it is not. When the weight drops, gold is going sky high.
Also, when asset classes across the board collapsed in the fall of '08, not only were PMs the first to rebound, they never looked back. The rest of the market had an epic failure into March of '09. Gold pushed by all that junk, and has lead the recovery ever since.
"Gold by nature is not money, but money, by nature, is gold." - Karl Marx
I worked in Israel (paid in USD) in the 70's and with very high inflation my local coleagues on payday, they would buy 22K gold cemicircle profile wire which was turned into a crude bracelet disguised as jewlery.
They would only keep enough cash for the essentials, which they also bought right away, as the prices were going up. The supermarket pricers had the high speed price guns. No IR readers those days.
Maybe this is a good business model guys (22K gold wire). Even if they confiscate gold, they will not confiscate jewlery.
When you want to use it for "cash substitute" how will you convince the counterparty that it is actually 22K gold?
40 dollar assay set. Results in 15 seconds.
Gold buyers have scales and assay sets. They range from $15.99 chemical to $500 for electronic.
http://scales-n-tools.com/index.php?main_page=index&cPath=10&gclid=CIOiiKWgo6ECFV195QodogcxxA
Why bother,IF this scenario comes to pass, your Gold will be confiscated, and the price revalued by the NEW BANKING ORDER, at $10-$50k???????? per ounce.................the only way to start fresh.
If that happens, I'll stop making software and start digging muck out of the river bed with my bare hands. Productivity is gonna plunge.
i'm still waiting for my KGC and IAMGOLD to get back up to even. i've made more selling $19 and 20 strike calls against KGC than i have in a year of owning the share. Ditto IAMGOLD.
Haven't made a dime on gold in three years, because I've gotten the fever every time at the high. I don't have the fever now.....
uh-oh.....
This is a ZIRP induced micro-bubble in domestic equities.
Some early warning signs have surfaced recently: M3 peaked and is falling. 10 Year yeild kissed 4% and is also falling. 4 week moving average of net inflows into domestic equity funds is barely above zero.
This rally will end as soon as we see some actionable good news, in the sence that it signals to the market the end of ZIRP. Perhaps something along the lines of a blowout headline UE number, on the order of + 350,000 sometime this summer.
I can hardly wait till Yipcarl, the 305000 dollar man, makes a comment to this gold thread. It'll be good for 200 more comments....lol. No slant against the guy, he is entertaining at best.
All this time, I've been investing in the Market?
I thought I was on Intrade. No wonder I keep getting those silly statements from companies come year end.
I wonder if I was supposed to do something with them?
why don't you jsut wite "i think gold goes to 5000 and higher" ??? why do you have to write this long-ass "commentary?" the charts, the Fed, the s&p, more charts - save the folks time reading, say what you MEAN to say and be done!
Look, we all realize a few things:
-the market is manipulated
-fundamentals can be ignored, sometimes for awhile
So, I figure this manipulation has a 50/50 chance of working. And it if it works, it will work until it doesn't, then fall off a cliff.
You know, it all gets so tiresome. I know I'm pretty new posting here, but I have been lurking almost from the beginning. You gold bugs this, you paper pushers that...bla bla fucking bla. You know what? INVEST IN THE WORLD YOU WANT TO LIVE IN!
I'm not 100% sure all the details of the world I want to live in...but it sure as hell doesn't have any goddamn federal reserve in it. You like the status quo? Invest in paper, knock yourself out. Refusing paper investments is withdrawing your consent, your complicity and your productivity from that which oppresses you. Not often in this world you even get that choice. Bitchez.
+1, you have to put your money where your mouth/brain is. I too go through periods where I can't stand listening to everyone else's opinion.
Have another drink.
Thanks I did, on vacation...
Very strange times we now live in. I will increase my holdings of gold, FRNs in the safe, extra ammo, etc. upon my return to America.
If the world does NOT go to Hell, well, my anxieties are lessensed!
But, when I get back, YO am getting prepped up for bad times. And it costs little and gives me a new hobby at low cost.
Ive been hearing the same worn out theories and looking at charts with all those pretty colors for months and the market continues to trade higher.Its simple. The market will trade higher. Remember, There will be a huge auction next week. What do you think is going to happen? Market will go up. I wish you guys would stop preaching like John Houseman. "They make money the old fashion way, They earn it " has been changed to "They Transfer money the new fashioned,They steal it". THE MARKET IS RIGGED. The money is coming from us Taxpayers..Jesus christ, When will you get it through your heads.
You too.
Sir, yes sir!
When it happens. And, it will.
The real question is, "How can I co-invest with the criminal elite so I can recapture some of my lost wealth?"
The chart of the SPX should start in about 1990 to get a better feeling for bubblicious market action.
The chart of gold would look slightly less scary if done in log form.
What would gold or silver be worth if most people decided to have 5% of their net worth in gold? A lot more.
But let’s face it, sentiment has been in this condition for several weeks now and the best we could muster was a minor correction of 30 points on the news the SEC was filing charges against Goldman Sachs for fraud.
Possibly the market has figured out, after reviewing all that has become available, that it is the SEC that is committing the fraud in the matter. That would be simply recognizing that it is back to business as usual with an Obama Agency in full lie mode. I may agree that the current stock market is overvalued. That is much different from considering that a politically motivated legal action meant to further governement control of the economy should trigger a sell off.
The ISDA info shows that there is more net $$$ positions on GE Capital than on either France, Portugal, or Greece. Would that be an indication of the real risk? And if the guarantees on the GE Capital debt are not renewed, what is the result? My advice to GE is to hang on to the network for a while longer. Otherwise the future would be much like the past of CIT.
Here are some more pretty charts and a few questions for you:
http://www.leap2020.eu/GEAB-N-44-is-available-Global-systemic-crisis-USA...
Anyone?...Anyone?...Buuuuueller?
Gee, last time we had a wealth-effect from high stock prices, people were inclined to go speculate in the housing market. Instead of seeing the stock market as the playground to speculate with risk and seeing the home as the no-risk fall back position, that got flipped around.
I can't imagine that will repeat again (in our lifetimes). So what will be different this time around when people start feeling the wealth-effect from high stock prices? I'm thinking the money comes out of the stock market this time.
Stop your grinnin and drop your linen, China just announced new stimulus package to be revealed in August, 2-4 trillion yuan, just as big as the one they did in fall of 08.....
Buy gold, blah blah, sit on it while Saxena, the best in the business, just said on Bloomberg, we are producing about 82.5 mil barrels/day and we need 86 globally, and in case you didn't read it, Reuters said N. Korea sank that S. Korean ship, I reiterate, XLE broke out, I am long COP @ $56, and VLO @ $19. VLO has been basing $18.90-19.50 and is ready to break out. COP is going to $64, paying 50 cents dividend in early May.
Look at VLO here- it's broken it's longterm downtrend with both moving averages as support, coiled to breakout...
http://stockcharts.com/def/servlet/Favorites.CServlet?obj=ID3524589
checkout COP while your there.
good luck.
If any scholars out there wanna help me out with my banking class I value your opinions on the following question for my upcoming essay:
In 1981-82 the US Gold Commission after long and hard deliberations decided against a return to the gold standard. Why do you think it did not recommend that the standard be reestablished?
I am unfamiliar with this commission.
the blowoff will be in treasuries, who cares what the yield is, once once you see the principle going higher, you will want some of it.
PS - You look smashing in that photo of you.
The collapse laboratory:
2/11/09:
Zimbabwe - gold for bread
MDC activist Sam Chakaipa returns to his village in rural Zimbabwe to find his friends and neighbours starving to death, reduced to panning gold powder from the rivers to exchange for food at an exorbitant rate
http://www.guardian.co.uk/world/video/2009/feb/11/zimbabwe-gold-panning-...
QED.
Wow, another implicit assertion that the US is somehow similar to Zimbabwe.
How original.
Actually, you can eat gold ... just can't digest it.
Wonder if Reggie has done research on Australian banks.
by JW n FL
on Mon, 04/26/2010 - 00:59
#317144
by yabs
on Sun, 04/25/2010 - 11:54
#317017
we have heard all this how many times?
still the market goes up
and one thing with gold is they are doing everything in their power to push it down and stocks they are doing everything in their power to push up
take your poison
yabs,
Gold does nothing but sit there.. trying to herd the idiot masses into something that may (or may not) make them money is the game yes.... money moving, not money sitting makes the world go round...
now take you retired idiot ass to miami beach and play some shuffle board and shut the fuck up...
You are nothing but a drain on people who try to keep the world spinning, so that your dumbass can have something other than candle light to read by... you are useless dead weight, you spreading ignorance is the fucking problem.
reply flag as junk (7)
by AR15AU
on Mon, 04/26/2010 - 10:54
#317620
You want to talk idiot masses? Take a look at anyone with a JP Morgan Chase savings account denominated in USD earning 0.25%. Now compare and contrast with people holding physical bullion. The spread in IQ has gotta be at least 40-50 points. And I bet the savings account morons outnumber the bullion vault type by 20 to 1.
Don't be a douche bag. Ignorance is the hallmark of the non-bullion crowd who live paycheck to paycheck using credit cards, waiting for the social security check. Building wealth that is impervious to the evil of socialism is the essence of applied wisdom.
I think you may have read me wrong
I am not retired unfortunetly and if one applied logic and common sense to the situationa and the market was free
Gold would have gone to the moon long ago and stocks would collapse
we all know that and we all know it must happen eventually
but what I am saying is that TPTB can maybe keep this going alot longer than people think
Everyone thought it would crash last year and here we are in May and its still going up. With Money printing and eventual soveriegn default it may even be better to won some stock in a good company than cash. Just because a country defaulyts does not mean the world stops
people still need to eat, but most currencies in this situation also go down
I'm saying this is not a simple situation and Gold i'm sure will eventaully be king but its all about timing as TPTB still want to knock the price down
When we keep reading articles about how overbought and expensive the market is,we now get Bloomberg telling us it's never been cheaper!It reckons the S&P is only on a pe of 14.2.
http://www.bloomberg.com/apps/news?pid=20601087&sid=ayxUdbONKGwo&pos=3
One thing is certain... you can always expect a guy from a BLOG called goldscents.com to be unbiased about gold.
Hell, why call 5000 as the top? It can easily go to 50000 when the gold bitchez crowd comes to town.
What a load of tripe.
"every secular bull market in history eventually ends in a bubble. Gold will be no different. After it has gone up far enough and long enough we will reach a point where the public comes to believe that gold is a sure thing"
Like the people on zerohedge that say "gold will never go down EVER again"?
Or the 50000 commercials for grandma to put her social security check into GOLD from Rosland Capital?
"In times of crisis gold is the asset that goes UP, not down..."
LOL at you goldbugs. Gold will never hit 2000, much less 5000.
"Y'all niggas are on dope."
I disagree when the whoile system collapses (which it will) the ones who hold physical gold will be the only ones not to have lost everything
on Mon, 04/26/2010 - 09:04
#317889
I disagree when the whoile system collapses (which it will) the ones who hold physical gold will be the only ones not to have lost everything
yabs,
The system will not fail, people are working to hard to maintain the lie... but it may, it is possible.... But if it does fail... you will bow ( http://www.telegraph.co.uk/news/newstopics/theroyalfamily/2511057/Debretts-advice-on-how-to-bow-and-curtsey-correctly.html ) to whomever has the ammo... Gold will not have shit to do for you except make you a target and or more accurately a victim.
Food, Ammo and then Gold... or not.. its a free(ish) Country... do what you want.