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Gold 50 DMA Approaching Fast: Major Support Or Breakdown Level?
With gold having dropped nearly $100 in a very brief period, as the Fed is doing all it can to prevent an all out gold rout (hey it worked the other way around too, and stopped the intended dollar free fall), spot is now a mere $13 away from the 50 DMA. Will this prove a material support level or will it be breached, leading to a cascade all the way down to the 950 previous support. For the latter to happen one can see the DXY going back all the way to 80 which the banks will certainly not be too happy to see. Alternatively, a collapse in spot will present a great accumulation level (at a cost basis below that of India, and other fringe CB accumulators) as Bernanke is still dead set on inflating trillions of toxic mortgages (the ones he is unable to collateralize the dollar with).
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MACD says much lower for gold. MACD for US$ will cross well before 80.
$950/$1000 looks like an obvious retracement and support area on the weekly chart. Dollar to 80/82 makes sense too, technically.
http://stockcharts.com/h-sc/ui?s=$usd&p=W&yr=3&mn=0&dy=0&id=p76142745927
http://stockcharts.com/h-sc/ui?s=$gold&p=W&yr=3&mn=0&dy=0&id=p76142745927
Chart went parabolic basically at the end of october, so you could target a "bottom"
for gold at around 850. I don't think it will go that low however.
Support should be around previous resistance levels which looks like about 1020 on those weekly charts. This is a healthy retracement.
Not really.
i can see over this post if you promise not to use the godfather of lagging crapicatos, again and turn to chartreading.
Econ 101:
The economy only grows/inflates when people take on more debt. Debt is money, So is available credit. If you spent it, or if it can be spent, its money.
Peak Credit was reached in 2007. Consumers could no longer borrow either as want or availability of loans.
So 54 Trillion (peak) Dollars of consumer debt/credit started collapsing.
Since the consumer can no longer inflate the economy by borrowing the FED takes on the role primary borrower Prints/Borrows 1.5 Trillion to stave of the collapse.
IF AND ONLY IF that 1.5 Trillion could be multiplied through fractional reserve lending would there even be the slightest chance of inflation.
However, The consumer doesn't want to borrow and the banks don't want to lend. IE Peak Credit occurred in 2007. We are most definitely going through deflation.
There is no way we can possibly inflate the dollar enough to stop the coming collapse debt and credit.
Even if they did print enough money since its not going in the hands of the people that spend it (you and me), it does not actually qualify as real money. Remember, money is only money if it can be spent on goods and services. If it sits in the bank accounts of plutocrats that are being bailed out then to the economy it is not money. Homes cant go up in value if you and I cant buy them.
So what does this mean for gold?
Gold is an Asset.. not a commodity.
The US Dollar is ALSO an asset. It works just like the rest. The more of it that exists, the less valuable it is. Gold works the same.
Assets have values respectively to each other. It takes so many dollars to "TRADE" (not buy) for so many ounces of gold.
There used to be 54 Trillion Dollars (Actual Money + Debt) that existed. Since the amount of available Dollars is DECREASING (due to deleveraging / paying off debt) in supply its value is going up in comparison to other assets.
But why is gold going sky high right now and why is the dollar collapsing?
Gee.. I don't.. know why are equities sky high right now?
Simple... you have all been fooled again by the same banker masterminds that took your money by collapsing the housing market after you over paid for that asset just like you are this one. Stimulus money and speculation is running gold and equities to the roof and driving the dollar to the ground... if you don't get out before the rug is pulled you are going to understand the quote that "those who fail to learn history are doomed to repeat it".
P.S. The currency crisis is coming..(this is not lost on me)... but only after the economy collapses...not before... Wait till it does... then trade for gold and get it for a better price. Buying now is a suckers bet.
You wait to buy bottom dollar, you ain't going to get.
Econ 101:
The economy only grows/inflates when people take on more debt. Debt is money, So is available credit. If you spent it, or if it can be spent, its money.
Peak Credit was reached in 2007. Consumers could no longer borrow either as want or availability of loans.
So 54 Trillion (peak) Dollars of consumer debt/credit started collapsing.
Since the consumer can no longer inflate the economy by borrowing the FED takes on the role primary borrower Prints/Borrows 1.5 Trillion to stave of the collapse.
IF AND ONLY IF that 1.5 Trillion could be multiplied through fractional reserve lending would there even be the slightest chance of inflation.
However, The consumer doesn't want to borrow and the banks don't want to lend. IE Peak Credit occurred in 2007. We are most definitely going through deflation.
There is no way we can possibly inflate the dollar enough to stop the coming collapse debt and credit.
Even if they did print enough money since its not going in the hands of the people that spend it (you and me), it does not actually qualify as real money. Remember, money is only money if it can be spent on goods and services. If it sits in the bank accounts of plutocrats that are being bailed out then to the economy it is not money. Homes cant go up in value if you and I cant buy them.
So what does this mean for gold?
Gold is an Asset.. not a commodity.
The US Dollar is ALSO an asset. It works just like the rest. The more of it that exists, the less valuable it is. Gold works the same.
Assets have values respectively to each other. It takes so many dollars to "TRADE" (not buy) for so many ounces of gold.
There used to be 54 Trillion Dollars (Actual Money + Debt) that existed. Since the amount of available Dollars is DECREASING (due to deleveraging / paying off debt) in supply its value is going up in comparison to other assets.
But why is gold going sky high right now and why is the dollar collapsing?
Gee.. I don't.. know why are equities sky high right now?
Simple... you have all been fooled again by the same banker masterminds that took your money by collapsing the housing market after you over paid for that asset just like you are this one. Stimulus money and speculation is running gold and equities to the roof and driving the dollar to the ground... if you don't get out before the rug is pulled you are going to understand the quote that "those who fail to learn history are doomed to repeat it".
P.S. The currency crisis is coming..(this is not lost on me)... but only after the economy collapses...not before... Wait till it does... then trade for gold and get it for a better price. Buying now is a suckers bet.
+1
I prefer my quote:
"The gold thugs are going to get their asses handed to them."
What... no chumba? Maybe he's out buying more gold.
Or now maybe tulips.... I don't know. History repeats for sure, but it also repeats at a higher frequency for those that are greedy or incapable of recognizing over bought or over priced shit.
How many of you were on a "protect your money" campaign in 2005 when housing was at its pinnacle? Not many, I bet. But now everyone chimes in here about the impending dollar collapse and how they tell their friends and neighbors to inhibit future growth by removing MORE DOLLARS FROM CIRCULATION by buying gold THEREBY EXACCERBATING DEFLATION and drive another speculation bubble.
Amazing that so many bought into the hysteria.
If foreigners all went out of the USD and the treasury market. There would be no deflation, there would be a currency crisis in the USD. That is quite a while away though. There has been zero deflation for the past ten years, there has only been inflation. The inflation grew through the shadow banking system creating the $700 trillion derivatives bubble. While the credit derivatives market had been backstopped last year, it is still only a small fraction of the market. The real crisis hits the entire US government bond market supported by IRS ad infinitum collapses. Until then the bubble will continue non-stop. There are also huge short (possibly un-backed) positions in the precious metals market by the big banks. The reason for this new dollar rally is to insure that the treasury auctions go over well.
fucking fool
Is the bubble in Banana ben fiat paper or gold ? Just when mainstream sheeple like you think you have this bubble thing figured out.......hahaha
Your an idiot...
The dollar bubble has been inflated for the last 40 years. You just seem think that bubbles only increase the vaule of assets. Some bubbles are inverted and actualy reduce the value of assets like the dollar which has lost 97% of its purcahinsg power since the 70's. This inverted bubble was formed by tons of digital fiat dollars entering the system either through being directly borrowed into existance or by the fictiscious values of peoples homes and stocks going up. When this bubble pops the dollar is going to increase in value to find equalibrium with the actual ammount that are in existance since all of the digital dollars are evaporating.
Its one thing to borrow money that exists that you cant pay back and then print money that currently doesnt exists to pay off the debt. (think zimbabwe).
Its another to have borrowed it into existance and then print it to pay back the debt once those digital fiat dollars start to dissapear (think federal reserve). The inflation has already happened the second it was borrowed into existance when those digital fiat dollars hit the economy. Printing the actual money now will only bring us back to equalibrium but crash in the available ammount of digital dollars is happening faster than the ammount that is currently being printed.
That also decreases the amount of assets that foreigners own in the US at the same time. It decreases the value of their holdings. It also decreases the capacity for foreigners to buy US assets to begin, ergo the supply gut of US Treasuries. The amount of printing that occurs now is after the fact. The shadow banking system and the fantasy they created is a much larger concern. The shadow banking system was not and still not counted in the money supply data.
Liar.
Oh, REALLY?
Which MACD are you referring to?
A MACD on a 1-day, 2-day, 3-day, weekly, hourly, 30-minute chart ...?
What are the short and long periods of your MACD averages, and are they simple, exponential, or front-weighted?
MACD means nothing by itself. In fact, it usually means nothing when combined with other indicators, too.
http://www.dailyspeculations.com/wordpress/?p=4205
**Always a good read>>>> www.dailyspeculations.com
What Nazi flagged this as "junk"?
I don't agree with most of it, but there are legitimate points here and in any investment you should have an open mind to contrary viewpoints...
I am a simpleton, i admit. If someone cheats me i tend to get alittle pissed and quit doing business with those.
The USA has been manipulating the markets, beating on gold, silver and oil for some time to bring the dollar up.
Surely if a dummy like me can figure it out, others, like China for example are aware of it too. Are they not pissed? Is japan pissed?
How long can we expect to do business with other nations?
I own a good bit of silver and i am pissed!
I own silver and gold too, but I haven't bought any for a while now. As soon as we started breaking records every day, the chart fully pointed to a parabolic blowoff. This is simple technical trading, so manipulation need not be involved. BTW the last thing bernanke wants is a strong dollar, they are doing everything in their power to inflate the currency to the moon right now.
how did the Indian central bank gold purchase show up on your technicals ? It didn't did it ?
these days no valuations really make sense anymore except buy one get one free non perishables
can i put my matching 401k into canned tuna?
what a nic!
call me a kook but I think everything is overvauled these days compared to what avg joes can afford these days... yet, on the other hand, the super rich have so much wealth they can move markets/prices with a shake of their change purse
all signs point to a sick depression once the rich recoil to their ivory towers - it doesn't matter how much money we print since it wont fill the debt holes and pour out to the people
the next bubble fo' sho'
Have central banks shut down the printing presses?
Weaker gold price indicates that the market is not confidant in the FEDs ability to re inflate the economy. BB probably does not want to see a rout in gold.
Or else, gold is no longer the anti-investment (there are no good investments, so park your money in gold).
No... nothing makes sense anymore, to those who insist on reflating bubbles.
Been harping on here for weeks that you gold thugs are about to get your asses handed to ya. Believe me yet?
No worries, I don't need credit. All I need is chumba to weigh in with some profane stupidity. GG, ditto.
Wake up people. Stop sucking on your gold bars, remove the rose colored glasses, and watch the manipulation unfold before you. Either go along with it, or go against it and lose bigtime. Yes Bernanke is printing dollars to oblvivion, but he is also manipulating gold too.
Gold was at 1227, you got your fiat ass handed to you.
Not confident in the FEDs ability to do anything.
They can do some things.
1. Print money.
2. Destroy the middle class.
3. Put on a nice conference at Jackson Fuckin Hole
Beyond that, we agree.
"9. Gold at current prices is simply overvalued."
What, pray tell then, is the current value of Gold? Knowing that, we would be able to tell when it is undervalued. Current mathematic valuations say that Gold is dirt cheap and Silver is almost free.
Just because something is expensive to you in your brief sense of history, framed by Fiat printing, doesn't make something "overvalued".
Oopsy...
That was a reply to a link that a previous poster made:
http://www.dailyspeculations.com/wordpress/?p=4205
How do you figure that Silver is almost free??
For silver to really take off we have to have not only a return to sound money, but a return to bimetalism!
+10000
BINGO.
"mathematic valuations" now thats rich. I forgot there was MATH involved.
Gold is suffering as realization hits that we are in deflation, despite all the recent harping about inflation.
Gold will still hold as a store of value, but all assets will face pressure as cash-flow failures prompt bankruptcy filings and FDIC resolutions, despite mark-to-fantasy accounting on the balance sheets.
Here comes "Attack of the Prechterites".
You must give into their righteousness no matter how crazy it is.
You must give in.
You must give in.
They can remain crazy longer than you can remain sensible.
Let them in. Let them infect you with the warm inviting shower of manipulative love.
You'll never find anything better. Never.
Stop cock blocking the tiny precherite penis. It's so small you'll barely feel it.
I love this place, I swear to god....
Yes, cash flow should normally show the problems - I guess if they can modify the balance sheet they could also add imaginary revenue and cash flow, in fact Bush had signed an order that allowed companies to report financials that did not comply with GAAP under certain circumstances.
This might be the period of certain circumstances.
Under our deflationary scenario, cash would normally be king but they will likely change the game under that scenario and replace the dollar with a regional currency that is "more stable or has confidence". When that conversion takes place, we are not sure what the exchange will be - how many $ for how many Ameros. Equities can always issue more shares as well (same dilution as the $ with printing = inflation). Gold is the only asset that will preserve buying power over time.
A wise trader once told me to watch out for even lower prices when something has fallen "too fast, too far" and Gold qualifies for this in my view. That and 25 cents will get you a phone call.
But there sure were a lot of sellers of Gold once it hit $1200. The one fly in the ointment for this opinion is the good support for Gold miners during this drop. But there are a lot of profits in the Gold miners to be taken before year end. Considering there are a lot of paper losses on the books to offset the profits, don't be surprised if we see some vicious selling into year end. We shall see.
A wise trader once told me to watch out for even lower prices when something has fallen "too fast, too far" and Gold qualifies for this in my view.
Wise indeed.
Wonder if the same may be true in the opposite direction?
How do you know that the "Fed is doing all it can to prevent a gold rout". That seems to be fantasy and speculation without a source or quote.
+1.
Give it up Tyler. What is the Fed doing to "prevent an all out gold rout".
Agreed. The Federal Reserve is much more concerned about a dollar rout than a gold rout-- for the simple reason that they require relevance out of their quaint fiat money system. Gold does absolutely nothing for them, except that it provides a "quick and dirty" measure for the level of trust the world holds in its policies.
As for the oringinal discussion-- it wouldn't surprise me to see gold break through the 50-day EMA and test the 200-day. But I think for a number of reasons, the longer term support is pretty solid.
To put in another context-- all you would really need for gold to rebound back to highs would be another public statement by one of our Fed Governors, merely considering expanding the $$ commitment and time for current MBS purchase program, due to end in March 2010. That would imply the printing presses would keep on humming, and the USD would be treated like the ugly stepchild it is.
I think the Fed, however, has something "deflationary" in store early next year-- as a little induced fear is just the prescription for everyone to play along on the next round and reflation and moral hazard.
I might be a tad bit too cynical in my assessment, though.
Despite what Tyler might believe, the only reason the dollar hasn't crashed (while, of course, fulfilling the Fed's agenda of looting and pillaging - the very purpose for which the fiat dollar was designed) is because of Fed's shenanigans. The Fed is trying to SUPPRESS Gold - and has been suppressing it for the past four decades - not "prevent a gold rout".
+1
For the first time in ages,the 10 y now has crossed the 3.5% threshhold. Is the FED losing control?And the question remains,how equities manage to stay a flaot,even with Ero/Jpy falling?. But we still lack the fundementals,and it is all gaming. I suspect the Europeans are doing something we don't know about
Due to my job I have trade restriction, need to get a trade approved and hold for 30 days so most of my stuff is longer term macro focused. As a short term trade you could buy a levered inverse gold etf with a tight stop loss and let it ride if it breaks through resistance.
GLL should do it.
Looks like a replay of last year when the premium on physical expanded as the paper price dropped.
If it goes the same way again paper price may drop under $1000 but physical will just be sold out; it's mostly sold out already.
You may be able to buy paper gold under $1000. I wouldn't know, I never bought paper gold. And I never sold physical.
There are a lot of people waiting to jump into gold on any correction. I can't see it going below $1,000 given that it will seem like a good entry point for many. If we get some news that creates momentum to the upside, then everyone will pile in then.
In other words, no three-digit gold and it may turn and head higher at any moment given the right catalyst.
It's dangerous to assume that because you feel a certain way that everyone else does. I'm a buyer but not until the bounce off of 950 and then I'm only partially in. Heck even Kitco is saying that gold's going back to 1070. That's like a Realtor saying it's a crappy time to buy a house.
perhaps kitos/nadlers views are shaped by the same forces as other gold interests that wish to keep the price low so we can all get some. I thank them profusely. Due to other farsighted policies americans have more free time to actually have a life. I had a business, sometimes it had me. Now i am free.
FREE AT LAST ! OH shit how am i gonna pay my taxes? Hahahahahha
That's my assessment of Nadler almost to a "T".
He's a perma-bear on gold because he's a shill for Kitco's wealthy clients, and the last thing they want is him saying that gold is a buy at these, or any, level. They want the price low so they can accumulate as much as possible on the cheap. They can't rush out a buy huge quantities without driving the price to the moon, they have to do it in small amounts over time.
Thus, Nadler is paid well to scare Joe Sixpack away from buying the gold the wealthy elite seek to buy for themselves.
Same thing with the Koreans and Chinese bad mouthing gold, saying it's too expensive right now. Hell, maybe it is too expensive right now. Maybe by 100 bucks or so, but what about next year? Will it be too expensive next Christmas when it's at $1500 an oucne?
That's okay. I'll just buy more at cheaper prices. Unless they're all out...or they stopped minting...or it's $100.00 over spot...or it's filled with tungsten...
Well, they are mostly out. And they did stop minting. And the price over spot is approaching $100...
http://www.apmex.com/Product/1/1_oz_Gold_American_Eagle___Random_Year.aspx
Good thing the spot price is saying everyone's selling!
you are assuming many people at the same time decided to sell their gold when fundamentals indicate its the only safe place to put your value!? Are you blind? Do you not see the government ramp job before each t bill auction. There is a definite pattern, week after week.
Do you not hear the lies on MSM or is that the only place you look for news?
Do i sound angry? You bet i am. Bad enough gov. and MSM lie to us, worse yet when we fall for it. Thousand oz long silver. HI ho
I guess you didn't hear the sarcasm in my voice.
Is this thing on? Testing...one ...two..
ROTFLMAO
My apologies. Emotion overrode awareness of sublties
This whole caveat emptor thing is just getting a bit out of hand. LOL
the selloff in gold, was mostly paper gold. how can anyone believe the value of gold could be falling, when the availability of physical, has been drying up. the gold value is an anchor in a storm. the turbulance, is in the environment around it. the dollar is not gaining value. thats like saying if I add some water to this wine, it will be better, and I will have more. nothing has changed. don't let this bullshit cause you to doubt yourself. this is war, and we are fighting for our future. quit being pussies. a little bit of rough weather, and you want to run inside, and hide. 14 trillion and growing debt, reduced tax revenues, increased social safety net pressures, CRE and second wave of mortgage defaults in the pipeline. people curbing spending habits.bond market getting nervous, world trade down, derivatives increased 10% since market froze. totally distorted stock market, oh yeah everything is gonna be fine. I'll just sell my pm's and get some REITs, and some solid gov backed bonds, and some boeing and alcoa, and maybe some of that priceline, and other assorted outperformers. thats the ticket
+1000 - I could care less what paper gold is doing. It is a derivative and sits above cash on Exter's Pyramid. When the time comes, those who stayed too long will lose and weep. I love those snotty commentators who pronounce metals overvalued. A claim on nothing is what is overvalued.
http://www.istockanalyst.com/article/viewarticle/articleid/3700065
Why Technical Analysis Points to a Drop for Gold Prices
John Roque, a technical analyst at WJB Capital Group, points out that gold has reached a +2 standard deviation above its 200-day moving average.
What does this mean?
A +1 standard deviation of any event occurs roughly 31% of time, while a +2 only happens 5% of the time (the flat line of the bell curve).
So in other words, a +2 standard deviation is a fairly extreme measurement. And in this case, it signals that gold is overbought.
But here's the rub: Since 2006, gold has hit a +2 standard deviation on two other occasions – and the price fell by 22% and 29% respectively.
There's another important indicator, too…
What the "Skew" and "Smart Money" Shows Us
Another indicator that shows gold is richly valued is the "skew" on options. Skew is simply the difference in volatility between call and put options that have the same strike price and expiration.
This week's edition of Barron's mentioned that the volatility of the SPDR Gold Shares ETF is higher for out-of-the-money puts than it is for calls. Just two months ago, it was the opposite. This suggests that people are buying more downside protection by way of put options than trying to take advantage of price appreciation with calls.
Action in the options market is often called the "smart money." Investors will often look to the options market to get an idea of where the "smart money" thinks the market is going. In this case, the "smart money" is getting increasingly cautious on gold.
wait til it hits 3 standard deviations....
and even if it pulls backs a bit and stays above the 200dma...down the road 2 standard deviations above the mean would be higher than where it currently is...doesnt indicate an inflection point...but probably does signal a consolidation...quicker the better.
gold's bull market doesn't end until the end of 2015.
Utter NONSENSE.
Chart are useless in a manipulated market, true or false?
False.
lies, lies , everybody lies in order to avoid confusion. You may be right, But theres no trust in anything!
Thanks , The gold 20, 10, 5,1,year indicators all say inclined to buy more to me.
Besides its got a nice shine!
to every side of an options contract you have a buyer and a seller.
who do you think is selling the options to the smart money? the dumb money who cant get approved in their etrade account for riskier than level 1 options? let alone understand the idea of selling puts...especially in a large enough scale to skew a market.
on another note...a sharp retraction in the gold price would cause a lot of dumb money to notice...and would cause a lot of smart money to sell a shit load of protection to dumb money because the smart money knows gold is consolidating before it hits new highs..and so on and so forth. the dumb money primes the pump for new highs...always have...always will.
gold bull market doesnt end until the end of 2015...
+1
At the coin shop today i was shown a 100 oz Silver bar. Thats all he was able to get.
He has sold several thousand ozs in the last few weeks. Its the only business in town thats doing well. If it werent for the casino there would be no activity here at all.
No rounds, no 10 oz bars either. Cant get them, when he does hes sold out same day. Perhaps its cause we are somewhat isolated here on the coast, surrouded by hills and gated communities that you could drive right by and never notice. Its easily an hour drive to the next coin shop across the mountain.
When things go to hell we will hardly notice it . Gosh i love this place.
Oregon coast is the place to be .Bring your own food LOL
Bloomberg Radio - featuring investing in Gold 3:30pm EST
http://www.bloomberg.com/audioplayers/playr_owm.html?clipName=Bloomberg%...
I don't know what's behind those moves, but gold market was heavily manipulated for a long time and it still is. Fed should be happy to see that it's still able to expand its balance sheet in real terms, but for average investor nothing has really changed (unless you trust fiat money more than you did two or three weeks ago).
I sold GLD at $1200, smelled correction coming, and figure I'll jump back in after this necessary but temporary correction. The Fed must keep you guessing. Their work to get the dollar to reverse course is the culprit here, as well as the need to crack the whip and keep the Bernanke renomination on track. Child's play. If gold gets to three digits for God's sake BUY. 2010 deficits are going to be awful, and the presses will be running night and day. The formal announcement of QE II after the re-collapse in real estate is apparent by mid year will also trugger the run for the exits that will be marked by the ascent of gold.
As long as the printing presses run to hide the debt destruction (and the continuing QE that has institutions buying Treasuries and the Fed buying their inventories of GSE) gold will be a "buy" as the objective marker of where we stand in the relativistic world of fiat currencies in decline.
what are your thoughts if the Amero is introduced? will that create a nosedive in both the dollar AND gold at that point since the powers that be will have a fresh new tool to manipulate and cook up?
So what would trigger the gold bugs to finally sell and lock in some type of profit/wealth from all the hording?
Gold is wealth. What would trigger 401k-ravaged stock bugs to finally sell stocks, buy gold and lock in some type of wealth?
LOL THanks
the problems with gold lie in the fact that people dont trust whether or not their contracts are going to be honored.
its up vs all currencies...not just the dollar.
Thank you for confirming my thoughts. I am proud to be a goat amongst the sheep and welcome company.
If trading isn't your livelihood this is quite a tennis match.
well I remember the day LEH blew up..they were massively net short gold. So if the deflation comes back, just gotta wait for the banks to start dropping.
Meanwhile, the smaller PM stocks, such as EXK and NXG and TGB, have barely pulled back at all. Time for gold share outperformance?
why would they when they discount high single digit gold already
Ahhh there's nothing like gold to get people worked up. Even oil doesn't do it like the yellow metal.
Most posters here are far smarter and far more successful than me, so I have a couple of questions. I would appreciate answers. I'll try to check back but I have a short attention span, so no promises. Here goes:
1. Those of you who say that you can't buy food with gold, why do you say this? Can you buy food with 100 shares of Citi, or a straddle? What is it that makes the dollar money? Is it just a law that says we have to accept it or is it emotion and confidence? If it's the latter, what happens if the confidence evaporates? The reason I ask is that the people I know who are buying physical gold have already lost confidence in the dollar, right? I mean, I don't have any because Krugerrands look too much like those stupid ass presidential dollars. I keep fearing I might drop one into a vending machine. If i was smarter, I might get some, because I'm losing confidence in the dollar as well, in spite of what I think will be a prolonged bounce. Hey, maybe I can still get some... Hmmm. Ah, but then I'd have to worry about whether it was tungsten or not. Okay, enough about that.
2. Since the value of any security is the discounted present value of it's future cash flow and since future cash flows are predicated on how well the company deploys assets, how can you determine what anything is worth when government has made it legal to make up asset values? Do you think more assets are overstated or understated? How do you know?
3. One last one. This is for the really smart people here....the one's who can see the future. Why is it that every successful trader eventually blows up? Leeson blew up, LTCM blew up. Livermore blew up. Pickens blew up twice, once in natgas and then in oil dumb sonofaiatch. Rogers wrote that silly ass book about riding around the world on his motorcycle, but with the stuff he spouts if he goes all back in I have no doubt he'll blow up too. Same with Soros. Just wondering....is it inevitable?
I'm so confused. I thought Obama was going to work for me, not Goldman Sachs. I think I'm just gonna go buy some Winchester shells, or maybe Remington's.
3. One last one. This is for the really smart people here....the one's who can see the future. Why is it that every successful trader eventually blows up? Leeson blew up, LTCM blew up. Livermore blew up. Pickens blew up twice, once in natgas and then in oil dumb sonofaiatch. Rogers wrote that silly ass book about riding around the world on his motorcycle, but with the stuff he spouts if he goes all back in I have no doubt he'll blow up too. Same with Soros. Just wondering....is it inevitable?
not if you are actually able to learn... most traders at least once they become successful tend to narrow their focus. Rather than expanding their focus to understand why something is currently taking place...they tend to think that its continuation is inevitable. after a 51.6 year bull market in real estate(meaning good times for all...as we blew up the balloon) its very hard for any of the lessons learned from before and during the depression to be passed through to todays generation.
the lack of actual experience and extremely high level of arrogance among the new generation of wall streeters and the governments inability to not shoot itself in the foot undoubtedly shows its coming to an abrupt end.
ill stay very short fixed income...most specifically treasuries...and long equities and commodities because they will at least reflect inflation.
as long as we can ask questions.....
What happens to society when the average worker having earned callouses
and other work hazards sees large money go to someone on Ophra or the stockmarkets which shoveling paper for paper make millions in hours?
Or the ball players salaries etc. free money by our count! As a tradesman i feel devalued and almost useless in society. None of my employees valued their labor or product, only their time . Life is short, who wants to waste it working?
And why make a product if only price is respected, not quality.Thanks China!
Gold= quality dollar =doubtful
By the time I reach social security retirement age (presuming the social security system still exist) the minimum retirement age will be 75 or thereabouts. Chances are I will be dead before then. Why break my back if I'm never going to collect? Plus higher federal taxes are in our future. Who wants to work to pay taxes?
Why would he work for you.
He works for his employers. The self-serving filth of New York. GS & JPM are the US Government. When was the last time taxpayers were looked after???
Vale 1776.
regards
get yourself a bag of junk silver, pre 1963 coinage
This is a tough one. The run up was parabolic for a month, up to last week. There are too many weak/patsy hands in the game. They just lost their short hairs.
Those in for the long pull, well, this is not to, to bad. Reading the charts is like tea leaves at my gramma's house around new years- matter of in- terpretation. MA's, envelops, fibs, macd's, etc., are worth assessing. IT all depends on your game plan, manipulation or not.
I'd say that the gld is holding up under a bit of stress. There is buying under the market. Stay tuned- the revolution will be televised
Gold might take a peek (or perhaps do an intraday spike) below the 50 dma, but won't go lower than $1080. Unless you are able to predict the future, I would suggest start buying somewhere around the 50 DMA/$1100 area. Below $1100, buy at will. Those who don't own any Gold, I would suggest them to buy it right the fuck now. Those waiting for $1000 Gold (or even $1050) will be waiting FOREVER.
All the certitude of a religious zealot. The sign of an amateur, and someone who is way too emotionally invested in their book. And I say this as someone who has made money on both the long and short side of precious metals.
Studies show that those who are the most certain of their predictions about the future make the poorest forecasters.
I'd be interested in reading that study... care to share?
I love the logic by the way because it sort of implies that those who are not too sure about their predictions make the best forecasters.
What's the value of prediction from a guy who thinks that potentially it might conceivably, but with no strong probability reach 1100?
Be convinced of your predictions otherwise don't place a trade or open your mouth, because the market has a way of convincing you that you are wrong all the time, so if you are shaky to begin with, you might as well start looking for another field of study. This does not mean you should stick to your guns no matter what. Apply discipline but place trades with conviction.
One bird in the hand is worth two in the bush . Whish is more fun?
I'll take the one in the hand. The 2 in the bush sound like dykes.
regards
lol
Pride goeth before a fall. And cometh before a really nasty ass kicking. It's all in figuring out what's coming and what's going. I know you're afraid you just need to embrace the fear and fuck up anyway.
http://www.youtube.com/watch?v=lzymBKGV8rw
A question for you Gordon and others. What do you think about the very obvious trens in the last week that gold is rising when U.K and U.S markets are closed and falling very heavily as soon as these markets open. I am asking just because I do not know the techncalities of the market, I personally believe since the crisis has started that U.S and U.K central banks are doing a lot to take the gold price down, is this merely coincidence? Could this be done at times these markets are closed (through some company of course) Or would it be too difficult for them and they do not want to risk the possibility of being noticed? If your answer is yes they would not dare to do it in other markets, then I will shape every long-short position according to that, as my gold is in a developing country bank, and the markets close 1 hour after U.S opens..I am so annoyed to helplessly watch them crash the gold...
We know the Arabs have not gotten their gold, even though they asked for it 7 months ago, they are trying to start their own ETF...
We know China had a bitch of a time getting their gold in London, had to get lawyers, etc....
COMEX is delivering cash, instead of gold (technically in default already)...
We know the US Mint ain't making eagles...
We suspect worldwide ETFs are short PMs...
I think it is not crazy to assume there is a physical gold shortage, even as the price is coming down.
In light of these things, I wonder the following (tin hat on):
Would the FED let the dollar go up for a little while to get the price of gold down so that some of these places could:
1. purchase some gold, cheaper, to cover their shorts?
2. convince people that gold was a loser to get them out of it and into other things, thus loosen up weak hands and increase supply?
3. help themselves and their friends out before the whole thing collapses?
Add on bonus:
1. you look like you are defending the dollar as you are being considered for reconfimation.
2. you look like you are defending the dollar to the Chinese and others who hold lots of them.
3. You get the US public off the backs of congress and the FED for a while.
4. It helps folks swallow the story that the economy is improving.
great post! Thanks. Am aware of some of the same things, like pre tbill auctions. But you have a better way with words.
I am a merehuman too. Not a trader and certainly not a master of the universe. I am playing catch up big time. I must be silly to watch at times. I don't care. I will put my logics out there as they form and see where it goes. I'm glad to see you posting and remember your first post which got a lot of good response. I am a miscreant (MsCreant) because I am tired of being lady like, good, and nice, when all it does is get me taken advantage of. But there is a lot of ego in it, being bad. merehuman may be the best name on the board. Not ego, just real. Love it! I need to work on that.
I hope you keep hanging out. You and I are on the same PM boat. I may be making a mistake not getting off just now, but I am not playing this like a day trader. I expect social security to fail. I expect my annuity that I can't get into until I retire or get fired, to be confiscated by the government, or fail when all the insurance companies fail. If all these things happen, PMs are my hedge. So I take money I don't need to spend today and put it in PMs. I also see PMs as a vote against the government and their currency handling. That is political and sometimes it costs you a little to express your opinion. Considering that soldiers are dying for my so called freedom, losing a little money, short term, in PMs, to express my displeasure is nothing. It is the very least I can do to starve the beast.
Peace, friend.
I suggest you read this:
http://fofoa.blogspot.com/2009/12/gold-ultimate-un-bubble.html
Na. I've seen alot of abyss divers in my time. And you are doing great. See ya on the bottom. Carry lots of gold. It'll help you sink faster. LOL
am tired of being lady like, good, and nice.
me too. stopped being nice with men a very long time ago. i think you are the only female i admire, besides my sister, mother and daughter.
i think white woman mostly suck. i think they are at the heart of this here collapse.
all these broke dick men in charge, wish their wives would give them an STD and die a really slow death. kinda like what the europeans did to the native americans when the sheriff came to town.
Spot on, MsCreant.
Well put MsCreant. However, you didn't explicitely mention that gold is down far more in dollar terms than in Euro or Swiss Franc terms. I doubt the drop is approaching the 30 moving average when priced in Francs.
As the world financial circumstances deteriorate, we can expect all kinds of currency shenanigans, just as in GD-1. However, this time around there is no currency in the world that is backed by gold in any fashion, which leaves gold "defenseless". Add to this defenselessness the trait of uncorruptableness, which is becoming a very rare commodity indeed. Gold will become very sought after by the masses for this reason.
As in GD-1, the worlds governments will be pandering to labor and will start rounds of competative devaluations to increase employment and balance trade deficits. When this happens, we can expect central banks to start leading proxy wars on enemy currencies through gold price manipulation. If I want to devalue my currency in dollar terms, I can also achieve this indirectly by lowering it in gold terms. Thus the CB's will unknowlingly work in tandem to drive the price of gold up by trashing their currencies at it's altar.
"How much is enough, Gordon?"
It is never enough.
These are prices from crooked Comex paper contracts. Perhaps we should view this as a dumping of gold paper contracts in favor of physical gold bullion. After all, the Comex is now having major trouble providing delivery of physical gold. They're offering cash and the ETFs as substitutes. In my view, they're already in default.
Ask yourself what would happen during a Comex default. The paper contracts would crash as traders ran in the other direction. In fact, this week, there was a day on which gold went up and the GLD ETF went down. Expect this to get more and more confusing for traders as they try to figure out what's really going on.
Have to agree with ya. Paper gold can go to 960 easy. Physical gold will hold the 1100 line until phase 3 launch hits.
1100 line i mean by normal everyday people. The banks already pay 1350 under the table for it relying on us to supply them with cheap raw material.
the paper etf's supplement the commercial shorts, to suppress price. the etf's were needed, as the market began slipping out of the PTBs grasp. and soon it will break loose. the etf's are seen as the regular guys way to play gold, but they were designed to serve their creators, with your funds. thats right, you pay to get screwed.
Not one man in a million understands deflation...
Deflation is when M0 eats M1 M2 M3 and then craps it out. Rides it home. Eats it again and craps it out again and then goes shopping.
for tp no doubt
That is exactly right, Hephasteus.
Your prize? 1 billion Ameros, to be issued at a later date under a different Administration.
Here's an interesting take by Wenzel on this. http://www.economicpolicyjournal.com/2009/12/gold-down-over-8-in-last-fo...
The huge support is at 1045 but I doubt we'll get there. That's the price India bought $7b worth. I'm already looking to add some physical, it looks cheap to me.
fan fjuc**** tastic handle n pic. love larry so much will pretend like those are reasons to buy gold. which be done.
that said still one more chance to lighten up or simply hedge ur ace before that ace gets a hole torn in it in 2 weeks / 2 months.
good bounce yet coming next week ... great chance to simply be prudent and practice effective risk mgmt.
always play safe kids: never trade without protection !
...but the present Gold price is a Mark-To-Model fantasy wherein Fiat currencies have trustworthy value opposed to real truth which is that given the current US inventory of gold it would have to be valued at
$45,583/oz
to back all the paper printed.
-mob barley
I stand by my December 2nd prognostications....my money is still on a filling of the GLD gaps by year end thru January, reconsolidation at the high end of the 1020-1080 range then a skyrocket due to some "new" market issues that will castrate the economy in Q1.
Be Leery of this Parabolic Move in GoldHow to demoralize the gold bugs in a few easy steps (especially those who have recently joined the bandwagon):
Step 1: bounce off the 50 dma, to suck in some more gold bugs, all of whom are absolutely certain that gold will never go below $1,100, and will react like a pack of trained monkeys by "buying the dip."
Step 2: Take the price of gold to a lower high to suck in even more gold bugs.
Step 3: Take the price down from there to a lower low, to a point that triggers a rush for the exits by the speculative longs, who have accumulated a position that is in extreme statistical outlier territory, which represents a tremendous amount of "fuel" to propel a large correction (I know. I know. This time is different from all of the other times that this same configuration has existed).
Step 4: Trend following funds will take it from this point, liquidating longs and establising shorts. Price of gold drops to a level that gold bugs are absolutely certain it could never drop to.
Step 5: Listen to the howls of indignation from gold bugs about market manipulation and conspiracies. Remember, whenever gold goes up, it's always because of the fundamentals; never the result of speculation. And when it goes down, it's always the result of a conspiracy; never the result of a trade that has become too one-sided.
you guys have to step back and take a deep breath. Like in the dot com glory days, everyone in that world thought that everyone else also had their hand and concerns on the internet economy pulse.. wrong! most people never cared!!
fast forward here.. normal joes who are going to go out and buy gold, ain't staring at the trendlines hour by hour - they hear a buzz and jump in... the daily static is just the same people like you trading it back and forth to each other. Those outsiders buy in and forget about it
Said in another way ... Gold Bugs don't give a damn what the daily trend is. They are buying Gold since they believe the dollar will GO AWAY
So unless everything finally goes to total shit, this is just another greater fool bubble
Of course, the obvious response to your post is for us to simply to keep on taking delivery. Which is exactly what we're going to do, and there's not a damned thing you can do about. That scares the shit out of you, doesn't it? We get to listen to your howls of "I'm smarter than you" indignation, like the one above.
Using trendline/channel since November, 2008, support is around $1,000, and resistance around $1,200.
Central banks and other large dollar holders are salivating at the possibility of getting out on strength, and getting gold at lower prices.
This the latest from eric janzen: His record & calls are unreal.His thought on gold,the dollar ...
http://www.itulip.com/forums/showthread.php?p=138356#post138356
If I sell gold today, what shall I buy with the cash that is not as expensive or even more expensive than gold?
In 1980, when gold peaked at $3,000 in 2009 dollars, investors had the option to sell gold and buy a 30-year Treasury bond that was so cheap they'd earn 15% interest until the year 2010. Today, when gold is supposedly a “bubble,” a 30-year bond earns only 4.3%, maturing in 2039. Is that cheap?
What’s cheap? Stocks? Corporate bonds? Real estate? Emerging markets? Commodities? Oil?
In the Asylum Market, all asset classes are correlated to government policy to dish liquidity to minimize the macro-economic impact of the latest crashing asset bubble and halt the process of asset price deflation and default.
Logically, when that policy is finally reversed and liquidity is withdrawn, all asset prices will correct: bond yields rise, gold prices fall, stock prices fall, housing prices fall. But only in the short-term, as we’ve forecast here and seen twice since we started up in 1998.
In the short-term, all assets correlate to government monetary policy. In the long-term, one stands out as negatively correlated to the weakened and weakening structure of our economy, and with it our reduced economic, political, and military position in the world--all that underpins the value of our currency.
Longing to Own Stocks
We’d like to own stocks. But it hasn’t been time to own stocks since March 2000 when iTulip readers got out of the stock market. It’s been time to be in gold since 2001 when iTulip readers read Questioning Popular Financial Advice.
Our thesis is not the standard gold bug line.
Also:
That’s why China, Japan, the UK, and all the others hold noses and continue to buy U.S. debt. If they don’t the U.S will experience both a liquidity and a solvency crisis, leading to a sovereign debt and currency crisis. If that happens then more than a million U.S. military personnel have to hitch hike home from 700 plus overseas bases in more than 130 countries. The Fifth Fleet has to steam out of the Gulf of Oman, abandoning the Saudis to fervent religious opposition leaders eager to settle old scores with repressive regimes that the U.S. protected, one after another, for 60 years. The lid comes off the whole global pressure cooker, capped by U.S. military power that’s financed by foreign governments that buy our debt and prop up the dollar. A dozen simmering conflicts erupt around the planet at once.
That’s why I don’t buy the dollar crash and hyperinflation story. The dollar has always been a political and not a market-based currency. The world is built on the U.S. dollar. If the dollar collapses so does the world. Hyperinflation will be the least of our problems in that conflagration. We will get another outcome. But what?
That’s why China, Japan, the UK, and all the others hold noses and continue to buy U.S. debt. If they don’t the U.S will experience both a liquidity and a solvency crisis, leading to a sovereign debt and currency crisis. If that happens then more than a million U.S. military personnel have to hitch hike home from 700 plus overseas bases in more than 130 countries. The Fifth Fleet has to steam out of the Gulf of Oman, abandoning the Saudis to fervent religious opposition leaders eager to settle old scores with repressive regimes that the U.S. protected, one after another, for 60 years. The lid comes off the whole global pressure cooker, capped by U.S. military power that’s financed by foreign governments that buy our debt and prop up the dollar. A dozen simmering conflicts erupt around the planet at once.
I agree completely, that is what would happpen in the event of a USD collapse. I must point out that the only way this has been avoided thus far is by lying about everything: markets, bank solvency, US fiscal condition, unemployment...see why some of us think it can't be discounted?
That’s why I don’t buy the dollar crash and hyperinflation story. The dollar has always been a political and not a market-based currency. The world is built on the U.S. dollar. If the dollar collapses so does the world. Hyperinflation will be the least of our problems in that conflagration.
This is a very commonly-expressed idea: "USD collapse is too horrible to think about, so our analysis dismisses it." In fact, in a hyperinflation, hyperinflation itself will be the crux of the problem, manifesting as lack of access to resources of all types; failing to account for it could cause you to not be able to feed your kids. Read about the Argentine currency collapse.
We will get another outcome. But what?
A coordinated, cooperative and sequential global currency devaluation; at least, IMO that's the plan. Coordinated and cooperative are at this point obvious givens. Sequential is an effort to mask the immediate impact of creating tens of $Trillions out of thin air. Currency dilution is the trend, and the trend is your friend.
Ooops, that's the standard goldbug line.
That's pretty full of hubris. Sorry Mr. Janzen, but you don't know what the hell you are talking about.
Well, that's the standard dollar-bug line.
I am not sure the "outcome" will be apparent to somebody who has his head buried in the sand.
Gold is not down in value, just down compared to the US dollar that has found some short term strength.
Gold has been trading inversly to the dollar and it has deceased in "dollar price" this week as the dollar has increased in strength.
The last time the US dollar was at 76.57, gold was trading at 1000 dollars.
Gold is trading at 100 dollars more than it did when the dollar was last at these levels. When the dollar continues it's decline, gold will resume it's rise. It is acting as a currency now, more than a commodity. Look at it as a USD/Gold cross
" fringe accumulators "
A central bank is a central bank. Gold is not going below 1000, too many people buying on pullbacks for that. China comes to mind... are they fringe ?
If we see a price around $1024, you'll hear an announcement from the ChiComs. They'll be long gold by buying the IMF reserves PLUS have call options on the GDX.
I just can't seem to shake the feeling that as soon as Bernanke is reconfirmed, dollar will resume its slide and gold its ascension.
+100
http://seekingalpha.com/author/sw-richmond/comment/797247
Here's the setup I see:
Bernanke confirmation senate panel vote Dec 17th.
Bernanke goes to full senate after Jan 1 '10
DOW and S&P (incorrectly) seen as proxies for economic health, are up for the year and up a lot from their lows
Gold is off its high
I say people go into the holidays with the situation pretty much the way it is. No real need to debase the dollar anymore right now to juice equity markets. The MSM can be counted on to repeatedly state that gold has lost its luster. Bernanke and Wall Street can hold the senate hostage and show their power. Short trading weeks coming up with historically low volume; thin markets present magnificent opportunities for market hanky-panky.
Stocks up lightly into the end of the year, gold down or sideways.
Unless Dubai blows up UK banking, in which case UK gets ring-fenced and looks like a remake of "Oliver Twist".
When gold was trading at $1225 last week, I did a few rough calculations to try to put things into perspective for myself. In addition, I continued to unload the gold I had bought a decade ago at an average price of about $285. I hadn't quite finished selling when the hundred dollar drop came, which may or may not be a benefit in disguise. We'll see.
At last week's price, the following conditions existed:
---all the world's reported above ground gold represented 10.4% of world GDP
---the Fed's gold, valued at current prices, represents 35% of US currency in circulation, and if one can extrapolate the same currency/GDP worldwide, total world gold value might represent as much as 163% of currency in circulation
---the Fed's gold, valued at current prices, represents 12.5% of the Fed's BS (adjusting the BS for the market value of the Fed's gold)
I don't know whether these numbers are high or low, and I suspect there are folks who even doubt the Fed owns any gold. I merely did the calculations for some perspective.
What I have seen is that in many minds gold has suddenly assumed mythical status, when in fact it is merely a shiny metal with some amusing physical properties. Yes, it has a history, but inherently it is nothing special.
Having spent most of my adult life in regions of the world where gold was never forgotten (unlike in the US), I find there is a misunderstanding in the US about the "mystique" other cultures put on the metal. Yes, many Asian cultures have always looked at gold as a store of value, but not in some mythical, almost religious manner, but rather as nothing more than what the words say: a store of value. Much of this was because there was little or no faith in banks, and even less faith in the ruling authorities. Many women used gold as a safety net, as most were unable to hold other asset classes.
When people were flush, a portion of their money went into gold. When times were tough, out came the gold and it was turned back into the paper people needed to buy food and shelter. Any visitor to a gold market, whether in the Chinatown of Bangkok or the souks of the Middle East, will see just as many people in the selling line as the buying line. In fact, last week, the lines were much longer on the sell side.
The availability of housing, and the increased ability of common folk to own land, has taken some of the luster off of gold. I have witnessed an increasing desire among those flush with cash to put it into land and less into gold as their "store of value". For the most part this means at least one house which will be used as a residence, though for some it means RE speculation and the dream of capital gains. The availability of mortgages---a relatively recent occurence in many parts of the developing world---has allowed people who before could not even dream of accumulating enough capital to buy a home, to find a permanent place of residence. Many of these people, now content to have a roof over their heads, are paying their mortgages and not buying gold. They prefer gold's replacement. China is a good example of this today. Reports of accumulation notwithstanding, common Chinese are using their paper to buy far more cars and apartments than gold. They are also loading up on jade, where prices and sale volumes continue to set records. Suddenly, the range of available asset classes for several billion of the world's people has widened considerably. It's not just gold anymore.
I have seen some folks mentioning peak gold in the same way we heard about peak oil last year. I do not think this is the case, though that is only an opinion. As one link in this thread noted, the worldwide average cost of gold acquisition is about $500 per ounce. Where I spend a good deal of my time, I believe it is far less. Since gold went above $1000, I have witnessed a massive migration of people from rural farmland to gold mining areas, and have seen people coming out of the jungle after a few days with several kilos of grape-sized nuggets. Obviously not everyone is so lucky, but the few successes encourage tens of thousands more to grab the pans, a knife, a bow and arrow, a vat of mercury and a tin of cyanide and head up river and upstream in hopes of finding something shiny they can turn into paper. Production will undoubtedly increase markedly.
Finally, how much gold is there in the world? The WGC might say 162,000 tonnes. I wonder, though, does China report all the gold they are finding in the western part of the country? Does Russia report on its Siberian production? Do the ethnic minorities I watch, who do not even have a written language, send off a message reporting their discovery? Maybe in the overall scheme of things this new production is not much. On the other hand, nobody knows. Given that, projections of price appreciation of the metal are based on incomplete information.
In sum, I'm neither a bull or a bear on gold. Though this is blasphemy, I just look at it as another asset, prettier than tungsten but a poor sister to a five carat D-IF diamond, of which I would need about 31 to make a troy ounce, but about 15000 ounces of gold to buy that ounce of compressed carbon crystal. Then again, most of the people I see everyday would rather have a half acre of land and three rooms than a handful of shiny metal, though the diamond would tempt them.
Sorry for the length, but as I do not have much to say, I like to use as many words as possible to demonstrate that fact (ever read a Malcolm Gladwell book?). All are more than welcome to flag as junk.
You give us a lot of good food for thought. I hope there is gold being hoarded that will come on the market. At first it would depress prices, but I think the economy is in such a shambles that everyone, worldwide (this would be like a "printing" which would not be indefinite) will need gold as a touchstone, a base. It would be a good thing if more could have it, that there was actually enough to distribute to represent the value of all the assets in the world. I believe we will need to wean ourselves off of corrupt, politicized, inflatable, fiat. Gold seems to cross cultural and geograhic borders like nothing else (your diamonds, I cannot comment on). Land is not portable.
Thanks for your post. I may be gold buggish, but I am not so narrow that I can't appreciate a thoughful post!
It's not as complicated as you make it out to be.
China wants to buy more gold, so do many other governments and sovereign wealth funds. Chinese officials have publicly stated that the only reason they are not buying large quantities in the open market is for fear of driving up prices dramatically. They want to buy it quietly, under the radar, and accumulate significant amounts over time. It would only take a small fraction of their gigantic dollar reserves to buy all the gold held by US government (8,000 tons).
I regret I did not buy enough early as you did. I hope gold price comes down to $285 so that I can be as lucky as you are. But I'm afraid China will see to it I don't get my wishes.
Yes, many Asian cultures have always looked at gold as a store of value, but not in some mythical, almost religious manner, but rather as nothing more than what the words say: a store of value. Much of this was because there was little or no faith in banks, and even less faith in the ruling authorities.
Which are the exact reasons we accumulate it here: little to no faith in banks, even less in ruling authorities. There's nothing religious about it; perhaps had our culture never been pushed away from gold at gunpoint, we would not appear to act as if we'd discovered some long lost mystery. In fact, we have discovered something long lost: a genuine "store of value", something we were robbed of decades ago by "our servants." Thanks for your interesting post.
wow you and ms go way back. i admire this.
Many women used gold as a safety net.
now, what culture?
my parents equipped me and my sister with a dowry, catholic baptism papers, diamonds and cars from germany and detroit. well i got a BA (no idea how) sis got an MBA from harvard, now working for a public school district in MA, life is gone in that relationship.
not mine†
Gold has had a parabolic move and was extremely overbought: that was obvious.
The USD rally I forecast has only just begun.
http://www.zerohedge.com/forum/market-outlook-0
A few decent articles on gold:
Congressman Ron Paul of Texas this week introduced legislation designed to curb the ability of the President or the Treasury Secretary to manipulate worldwide gold prices. The "Monetary Freedom and Accountability Act" restores proper congressional authority over gold policy by requiring that body to vote its approval before the President or Secretary buys or sells gold.
http://www.silverbearcafe.com/private/12.09/manipulating.html
Gold and Silver: Why They Are Important, And Why They Are Often Manipulated:
"In the absence of the gold standard, there is no way to protect savings from confiscation through inflation. There is no safe store of value. If there were, the government would have to make its holding illegal, as was done in the case of gold. If everyone decided, for example, to convert all his bank deposits to silver or copper or any other good, and thereafter declined to accept checks as payment for goods, bank deposits would lose their purchasing power and government-created bank credit would be worthless as a claim on goods. The financial policy of the welfare state requires that there be no way for the owners of wealth to protect themselves.
This is the shabby secret of the welfare statists' tirades against gold. Deficit spending is simply a scheme for the confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights. If one grasps this, one has no difficulty in understanding the statists' antagonism toward the gold standard."
Alan Greenspan, 1967
http://www.silverbearcafe.com/private/12.09/manipulated.html
Info required: How many analysts wrote articles about the coming gold collapse over the past 5 years? Just the ones who used charts and graphs please.
Interesting thoughts Chindit. I sold some of my commodity stocks when the charts suggested that a correction was coming, especially in the metals sector. I'm now waiting to repuchase at a lower price what I sold. Metals, as with everything else, never go up in a straight line and there's good returns to be made for those who will buy on weakness and sell their speculative position on strength while still holding a core position.
I am a 'bug' but I've learned that stubbornly ignoring the trends has meant losing out on solid profit potential. I do hold a core position that doesn't get sold.