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Guest Post: The End Of The Gold Bull Market

Tyler Durden's picture




 

Submitted by Casey Research

David Galland, Managing Director of Casey Research, interviews… David Galland.

Q. With gold and gold stocks on a tear, does Casey Research still recommend holding 1/3 of a portfolio in cash?

A. The answer depends, of course, on what country you are currently sitting in. Were I sitting in the eurozone, I would have already moved much of my safe-harbor cash into the “resource” currencies such as Canada and Norway… i.e., countries that are rich in the natural resources that the world needs and will always need.

If my derrière were resting in a seat planted on U.S. soil, as it is, and I didn’t plan on doing any significant overseas spending, then I would feel relatively comfortable – for the time being, with a larger than usual allocation to the dollar. But I would have been diversifying into the resource currencies as well.

Q. Hold the fort, dude – how can you write frequently about the demise of the dollar and yet be “relatively comfortable” holding the stuff?

A. In a nutshell, the monetary inflation, quantitative easing, and insane spending of the U.S. government, emulated by countries around the globe, have set the table for a large serving of currency depreciation down the road.

Once that depreciation begins to appear in the form of price appreciation, we’ll look to trade our greenbacks for more in the way of tangibles – probably more gold… maybe real estate in a good location, location, location… maybe more silver… maybe deep-value energy stocks… maybe antiques… maybe some of all of the above.
 

For the time being – because price inflation is not out of control and yields are so low – there is little real carrying cost to holding a larger allocation to cash, and the flexibility and security of having cash is a big plus. 

Q. What about gold and gold stocks today?

A. Gold is sound money. Always has been, probably always will be. In the sort of crisis now underway – a crisis that to no small extent is now focused on sovereign fiscal and monetary excesses – gold has a particularly important role in protecting wealth.

If you don’t own it, start accumulating it, preferably on the inevitable dips. If you do own it, hold it and consider accumulating it up to somewhere between 20% and 30% of your portfolio, though the exact amount will depend on factors such as your cash flow needs, personal debt obligations, your age and work status, etc., that we can have no way of knowing. 

One of the nuances in answering this question has to do with deciding what form of gold to own. While we like physical gold held in a safe place, you don’t want to go overboard, because things can happen. For instance, robbery, or even a house fire that melts your wealth back into the dirt.

In addition, at some point the gold bull market will end, and when it does, the scramble to sell will likely overwhelm the coin dealers to the point where they literally take their phones off the hook. That creates the potential for big gaps down in the price between the time you decide to sell and are actually able to sell. Mind you, I don’t see that being a concern anytime soon – but it’s always worth keeping in the back of your mind.

There are a number of other bullion alternatives – a big positive being that many are easy to buy, hold, and sell – including allocated and unallocated gold accounts, electronic gold, gold ETFs, and so forth. Some are better than others – and all are worth understanding before making investments. Our Casey’s Gold & Resource Report is a good source for this sort of info.

Generally our recommendation is to hold your gold in a variety of investment vehicles as that will mitigate the risks of having too many eggs in one basket.

Turning to gold stocks, savvy investors will already be well positioned in the best of the best. And will own many positions risk-free, having already recaptured their original investment. If that is the situation you are in, and you really understand the companies you are invested in, then at this point either hanging in for the big upside or trading the surges and dips makes sense. If you are new to the sector, I wouldn’t chase the stocks just now – but rather put in stink bids – i.e., 10% to 20% below the current market, and look to get filled on a correction.

If you are new to the gold stocks, or risk-averse, then look to build a portfolio of large-cap gold stocks such as we cover in Casey’s Gold & Resource Report. Those will attract a lot of attention from the public at large, and from institutions, as the bull market gathers steam.

If you have experience with gold stocks, and a higher tolerance for risk, then you may want to focus on the small-cap Canadian explorers and developers. Those juniors have amazing volatility and, when the news is good, the upside can be breathtaking.

Regardless of the approach you take, don’t chase stocks as they move higher – but look to build your portfolio on dips over the next few months.

The idea is to get positioned before the underlying price of gold reaches a level where the public starts to come into the sector in a big way – at which point, if history is any guide, the early investors will make stunning returns.

Q. At what price do the gold stocks catch fire?

A. Some years ago, we had someone spend the better part of a week in a musty storage room full of old Canadian newspapers, paging through past issues and recording the price and volumes of the gold stocks during the last big run-up, in the 1970s. We then compared that data to the gold price in inflation-adjusted dollars in order to determine the price when the broader investment public began piling into the gold. The number worked out to about $1,250 per ounce in today’s dollars. In other words, when gold decisively takes out $1,250 an ounce and holds above that level, if history is a guide, we may start seeing the average guy on the street – and the institutions – pile into the stocks.

Of course, while interesting from an historical perspective, that analysis has no scientific basis. The key point, therefore, is that during the last big gold bull market the public wasn’t involved in the gold stocks when they should have been – in the run-up phase – but rather only piled in after the price of gold bullion soared, relatively late in the bull market. So far, the average Joe and Jill are just not in this market. But they will be.

Q. How high do you think gold will rise?

A. At our recent Crisis & Opportunities Summit, an attendee asked how high we thought the dollar price of gold would reach in this bull market.

My response was that there really is no way of actually forecasting that number, for the simple reason that, in a fiat currency regime, the underlying unit of valuation is so intangible. Let’s say you lived in Zimbabwe some years ago and owned an ounce of gold. One day your ounce might be worth 1,000 of the local currency units. A year later, it might be 1,000,000. Or even 10,000,000,000.

While the U.S. is no Zimbabwe – at least not yet – its currency is just as intangible, for the simple reason that the government can print the stuff pretty much at will. To say that gold will go to $5,000 in the current crisis is really just another way of saying that the dollar currency unit will fall by some significant degree. But, given the uncertainty in the economy and the unknown of what actions the government and the Fed might take next, we really can’t know how much purchasing power the currency unit will lose in the months and years just ahead.

To date, the government has been extraordinarily – breathtakingly – willing to abuse the dollar. They have largely gotten away with it so far, but that certainly doesn’t mean they will get away with it forever. When the time comes for the piper to be paid, we suspect he’ll be paid pennies on the dollar… which could easily result in gold trading for $3,000, $5,000, $10,000 per ounce – but, who knows, maybe even $10,000,000,000.

The point is, given the choice between dollars and gold, you are far more likely to preserve your wealth over the duration of this crisis with gold.

Q. Is the gold bull market getting old? How much longer can it last?

A. Having been around and actively involved in hard assets – as the editor of “Gold Newsletter” and the conference director of the New Orleans Conference – during the last big gold bull, I hope I can provide some useful perspective.

For instance, I can well recall when, in late 1979, all of the many gurus of the day were predicting gold would keep going higher and higher still. Well, as we all know, it didn’t.

What’s interesting about this time around is that there is almost no scenario we can envision that is going to kick the legs out from under the gold market – at least not anytime soon. In contrast, in the late 1970s, the gold bulls coulda/shoulda seen that the Fed had a lot of room to act – i.e., by pushing up interest rates – in order to tackle the price inflation that was the key driving force in the soaring gold prices of the time.

Today, the situation is profoundly different. Starting with the fact that this is, at the core, a debt crisis. And the one thing you can’t do in a debt crisis is to encourage interest rates to rise. Look no further than Greece for that lesson.

So, we have an unprecedented monetary inflation, truly out-of-control sovereign spending and debt, unprecedented levels of private debt, unprecedented trade deficits, a massively overbuilt and overpriced post-bubble real estate market, and, importantly, near historically low interest rates.

So, we have to ask ourselves – other than continuing to exercise its powers of fiat money creation – what ammunition does the government have at its disposal to address the structural problems of today’s economy? And, of course, actually creating more money and more debt isn’t addressing the structural problems, it is compounding them.

Of course, the government can default on their sovereign obligations – an option I think we’ll see Greece and others of the PIIGS take, and probably fairly soon.

They can also continue to inflate, which we expect them all to do.

And they can… no, actually, I think that about sums it up: default or inflate. In either scenario, gold is going to be seen as the ultimate safe harbor.

Q. Won’t the government see gold as a threat to its fiat currency and try to do something about it?

A. Of course, governments might try any number of stunts that could affect gold. For example, raising margin requirements to curb playing the markets with leverage, or even attempting outright confiscation.

All we can do is to monitor the situation closely and try to anticipate their next moves in order to get out of the way. A number of people I know have opened safety deposit accounts in other countries as one way to hedge their bets against confiscation. Others have bought numismatics – but be careful on that front, because that can increase illiquidity.

It is not out of the question, in my view, that before this is over, we could see a revaluation of gold in order to re-link the U.S. dollar to it – because sooner or later, as the crisis reaches its climax, something is going to replace the fiat currencies – but at this stage it’s impossible to guess what that will look like. If we did see a return to a gold standard, then the government could actually be responsible for sending gold up by many multiples.

Back to the present, at this point I can’t see anything that is going to derail this bull market – but I do see a whole lot of things with the potential to send it into the stratosphere.

Q. Thank you for your time.

A. My pleasure. Always happy to be of help.

Q. You’re kind of strange, talking to yourself and everything. You know that, right?

A. Sometimes I wonder. 

 

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Wed, 05/19/2010 - 17:00 | 361583 Mako
Mako's picture

I expect huge bounces in all indexes including gold and in both directions.  As far as inflation, I am sorry it's gone.  Gold will trade on two factors 1.) destruction of the system 2.) general uplift as generated by the rest of the market(ie bounces within the cycle).   By the time this is all over you will see swings in gold of $100s in hours.

Eventually the credit system will collapse, with it production will collapse, then you will have decades and decades of negative or near zero growth, production will come to a stand still. 

If you think you are just going to cash at your gold and live like a King you are in for a rude awakening. 

Wed, 05/19/2010 - 17:04 | 361607 anarkst
anarkst's picture

"Eventually the credit system will collapse, with it production will collapse, then you will have decades and decades of negative or near zero growth, production will come to a stand still."

If I were you, I'd take it a day at a time. 

Wed, 05/19/2010 - 17:17 | 361641 Mako
Mako's picture

Eventually you will have to take it a hour at a time, then it will have to be minute at a time... the ones that get liquidated will be taking it seconds at a time until their seconds are gone.

Wed, 05/19/2010 - 17:31 | 361669 spartan117
spartan117's picture

Mako,

Been following your posts for awhile now and appreciate what you have to offer.  Do you see a timeline in your "The Road" scenario?

God, I hope I don't have to eat my thumbs.

Wed, 05/19/2010 - 18:40 | 361776 Mako
Mako's picture

Could be one day if the right derivative goes poof, or slow death for decades, eventually the financial system you know of right now will not exist this time.  This was is magnitudes larger than the previous peak wave. 

If I were to throw a wild guess out there, end of 2012 we will probably not be talking about much of this.   I don't think that will be the bottom, the bottom will be decades in the making.  IMHO

 

Thu, 05/20/2010 - 01:25 | 362322 Oracle of Kypseli
Oracle of Kypseli's picture

We love and respect Mr. Casey's opinion.

However, Mr. Casey can only make money during fluctuations and uncertainty. Gold hovering at $250 or at $1250 does not give a feeling of uncertainty.

Thus, people will not read his columns.

Nonetheless, many of us do need his opinion when uncertain. (Circular logic, but true) we are mere humans

 

  

Wed, 05/19/2010 - 20:22 | 361914 trav7777
trav7777's picture

What the fuck would the point of cash be in such an apocalypse, Eeyore??

You zombie apocalyptics make me laugh; you are nuttier than the most ardent goldbugs.

By the way, ZERO GROWTH does not equal PRODUCTION COLLAPSE.

YOU are the problem, because YOU cannot see past fuckin paper and credit!  The world does NOT need to freaking END because of line items on an accounting ledger.  We still have 80+mbpd of oil, the lights will come on, the sun will still come up.  GFD, life goes on, even in Argentina during a collapse, even in Zimbabwe, even in Beirut during the civil war.

Christ almighty all this Douchingerian fretting over the end of goddamned PAPER and ponzis.

Wed, 05/19/2010 - 23:37 | 362250 GoodBanker
GoodBanker's picture

Trav, you and Denninger both know that all the gangs in the world will unite and systematically rape and pillage everyone, just as they have longed to do since the days of their ancestors, the Mongols. Mongols vs. Rome = Mongols. Gangs vs. American people = Gangs. See, Denningerian logic at work. In the event of a currency collapse, the gangs will immediately activate their telepathic abilities and communicate as an organized, efficient collective while the rest of us panic in disarray, shooting blindly at our neighbors and school children. Please. Denninger needs to get the hell out of the yuppie bubble he's lived in for the whole of his adult life and experience REAL LIFE. A lot of these "gang bangers" - not the fun kind - are just disenfranchised youth looking to make a buck; few if any of them have ever had to fight for food, and most would be just as perplexed as John Q. Taxpayer if they were forced to enter an upper-middle class neighborhood in search of sustenance.  

Seriously, I get sick to death of the paper bugs CONSTANTLY asserting that the elimination of a medium of exchange less than 40 years into its infancy will result in a global upheavals and nuclear warfare. We're more likely to start a nuke war because we let narcissistic imbeciles have the keys to the ignition, not because the bankers are sticking it to us the same way they have since the days of Abraham. Say it with me, everyone: ARGENTINA. There, doesn't that feel better? They still eat down there... drink and snort a bit too, if you catch my drift. I would note, however, that they are not universally blessed with an endless supply of $5 lattes, flat screen television sets (though the Chinese STILL trade with them), and Hummer H2s. Big freakin' deal.

I actually do side with Denninger on a number of issues, one of which is the inevitable failure of MANY police forces throughout the country to maintain popular support. Of course, I see this as a result of an impending revulsion with standing authority figures once the public wakes up to a fraction of the crimes perpetrated against them, not as a result of millions of heartless gang members laying waste to anything in their paths.

Thu, 05/20/2010 - 08:19 | 362628 bernorange
bernorange's picture

Argentina got bailed out by the IMF.  Should the dollar collapse, who's going to bail us out?

Thu, 05/20/2010 - 09:46 | 362862 trichotil
Wed, 05/19/2010 - 20:49 | 361974 BumpSkool
BumpSkool's picture

yeah - "production will collapse" .. and with it Gold production too. I'll be on the beach with the Gold nuts  ... livin' it up

Wed, 05/19/2010 - 22:03 | 362108 Spitzer
Spitzer's picture

Fuck am I ever sick of comments like this.

 

What if you have money that you don't ever plan on spending ? 

If you would need to sell your gold in 6 months to live off of then you are not wealthy enough to own any in the first place. Some people have enough cash to live for a year opr 2 but might actually want to preserve their fortune during a stagflationary depression.

Wed, 05/19/2010 - 16:56 | 361591 Whizbang
Whizbang's picture

"The point is, given the choice between dollars and gold, you are far more likely to preserve your wealth over the duration of this crisis with gold."

Wealth? Who the hell has any of that lying around?

Wed, 05/19/2010 - 21:00 | 362005 Gold...Bitches
Gold...Bitches's picture

Me.

Wed, 05/19/2010 - 23:44 | 362256 DoChenRollingBearing
DoChenRollingBearing's picture

Me too.

Thu, 05/20/2010 - 03:55 | 362423 saulysw
saulysw's picture

Hey! I got myself a bottle of Berri Vodka and Absynth ("Green Fairy") and am trying it out. I can see what you are getting at, it makes a potent brew. Strange mix of tastes too. I doubt it will become my favourite, but it is interesting. I think I'll feel the effects by the time glass 3 goes down...at which point you probably won't hear from me as the Captch question will become impossible to solve, even with a calculator.

Wed, 05/19/2010 - 17:01 | 361603 repo 105
repo 105's picture

The lack of anything hardly at all in the slight bit negative being posted or written regarding Gold throws up a huge red flag. I remember looking at building lots in Water Color on 30A for $1.2 million no where close to the beach. They ain't making no more of them I was told. As luck had it, I passed, way too much good news. Let the flaming begin.....

Wed, 05/19/2010 - 17:23 | 361656 Raymond K Hassel
Raymond K Hassel's picture

 You just aren't looking in the right places - check out John Nadler on Kitco.com for a nice aggregation of daily gold bashing - I wish that pussy would open up a comments section - I agree with your post though - it worth the effort to find contrary views to build perspective.

Wed, 05/19/2010 - 17:38 | 361681 akak
akak's picture

Jon Nadler is the quintessence of arrogant, disingenuous and dishonest bankster-associated sociopathy.  Read him at your own disgust, and trust anything he has to say at your own financial (and moral) peril.

Wed, 05/19/2010 - 17:58 | 361723 goldfreak
goldfreak's picture

John Nadler? ha ha, he's probably in here trolling around bashing gold.

Wed, 05/19/2010 - 19:21 | 361769 akak
akak's picture

Why not?  He's already been outed by many different individuals, trolling and posting viciously anti-gold posts in a number of other forums, notably on MarketWatch and in Kitco's own forum --- before he was banned by his own company's moderators, LOL!

Thu, 05/20/2010 - 08:09 | 362604 e_goldstein
e_goldstein's picture

Ha! Bagdad Bob (Nadler) flagged your posts as junk.

Thu, 05/20/2010 - 15:55 | 363744 akak
akak's picture

Hey Jon "Baghdad Bob" Nadler, I've got a news flash for you --- the enemy tanks are rolling into your city of paper ponzi corruption, and they are made of GOLD!

Wed, 05/19/2010 - 22:07 | 362118 Spitzer
Spitzer's picture

Shorting gold was the hot topic on Fast Monkey today

Wed, 05/19/2010 - 17:06 | 361613 DoChenRollingBearing
DoChenRollingBearing's picture

If gold goes down enough to make my gold only 5% of my wealth (I am about 6% now), then I'll just buy more.

Insurance against .gov and best wealth preserver.

Eventually all going to my kid (grandkids?).

Wed, 05/19/2010 - 17:06 | 361614 goldfreak
goldfreak's picture

trolls here?

Wed, 05/19/2010 - 17:17 | 361645 ratava
ratava's picture

Gold bitches!

Wed, 05/19/2010 - 17:53 | 361712 goldfreak
goldfreak's picture

troll bitches?

Wed, 05/19/2010 - 17:09 | 361625 JW n FL
JW n FL's picture

 


Limited Gold Sales


Limited sales of 12,965,649 fine troy ounces of gold that was acquired by the Fund after the

second amendment of the Articles of Agreement may take place on the basis of prices in the

market. A key element of the new income model is the eventual creation of an endowment

with the profits from gold sales.

http://www.imf.org/external/np/pp/eng/2010/041410.pdf

Wed, 05/19/2010 - 17:24 | 361661 jomama
jomama's picture

for someone who loathes gold as much as you do, you never miss a 'gold' topic to type in your 2¢ worth...

Wed, 05/19/2010 - 18:02 | 361733 JW n FL
JW n FL's picture

I do try to post information that almost all can find useful...

 

As opposed too.... Bitch, Whine and / or whatever it is you offer...

 

Instead of bashing me sharing useful information, how about you be a sport and read something and share any interesting facts you may find... so that the community here can benefit, if we all read and share then maybe we can be better versions of ourselves for the  knowledge gained?

 

Do you know how many Metric Tonnes of Gold the IMF plans on flooding the markets with? while the markets are not at $1,250 an oz.?

 

***** "On September 18, 2009, the IMF's Executive Board approved gold sales strictly limited to 403.3 metric tons, representing one eighth of the Fund's total holdings." *****

http://www.imf.org/external/np/exr/faq/goldfaqs.htm

 

See sharing can be fun and helpful to your fellow man... I hope that you, can better get into the spirit of things... for the benefit of all!

Wed, 05/19/2010 - 18:39 | 361778 Hephasteus
Hephasteus's picture

Oh look. The IMF is going to pull the 400 metric tons of gold out of it's ass trick again. I'd lease that but gold is heavy and the mileage would suck. I wonder if they do parties. Everyone should see the latest tired old IMF stupid pet tricks.

Wed, 05/19/2010 - 20:59 | 362002 BumpSkool
BumpSkool's picture

+100 ..right on man ... moreover cut the "flood the market" drama...IMF sells zero IN the market...they sell 100% OFF the market in private sales

Wed, 05/19/2010 - 21:42 | 362075 geminiRX
geminiRX's picture

The IMF has gold my ass. Sprott offered to buy the last lot that went on sale and the IMF refused the offer. Hmmm....wonder why?

Wed, 05/19/2010 - 18:49 | 361792 Selah
Selah's picture

Over half of that Gold was sold to India, Sri Lanka, and Mauritius. Sprott wanted to buy the remaining amount but his money was refused as well as that of another bidder.

They wanted to take possession of the Gold, rather than just get a receipt.

Wed, 05/19/2010 - 20:49 | 361975 Gold...Bitches
Gold...Bitches's picture

and thats before the issue as to whether the IMF has any gold beyond that 400 tons and is just a ledger entry.

Wed, 05/19/2010 - 22:10 | 362122 Spitzer
Spitzer's picture

Hey wise guy, the IMF gold sales is what sparked the previous rally to $1225.

Wed, 05/19/2010 - 23:44 | 362255 Pegasus Muse
Pegasus Muse's picture

I doubt the IMF has any gold. The only thing they're selling is lies and BS.

They can prove me wrong.  They can do an independent audit/assay of their "holdings".

 

Wed, 05/19/2010 - 18:57 | 361803 mitack
mitack's picture

Fuck off yomama, you are fooling noone.

JW, thanks for the insight and pls dont feed the trolls.

Wed, 05/19/2010 - 19:07 | 361816 Apocalypse Now
Apocalypse Now's picture

You and JW are fooling no one.  Troll.

Thu, 05/20/2010 - 00:34 | 362294 JW n FL
JW n FL's picture

How is my posting sourced and sited material "fooling anyone"?

 

What am I fooling people for? and how by offering information to what I see as a continuing manipulation of pricing for Gold by the powers that bee... (pun intended, don't get stung)

 

Are you in politics? double talk, trash talk without making a point of any kind? Go suck Palin's dick! Pro-Lifer!

Wed, 05/19/2010 - 17:12 | 361628 LeBalance
LeBalance's picture

Does a sane man answer using language like this:

"A. In a nutshell, the monetary inflation, quantitative easing, and insane spending of the U.S. government, emulated by countries around the globe, have set the table for a large serving of currency depreciation down the road.

Once that depreciation begins to appear in the form of price appreciation, we’ll look to trade our greenbacks for more in the way of tangibles – probably more gold… maybe real estate in a good location, location, location… maybe more silver… maybe deep-value energy stocks… maybe antiques… maybe some of all of the above."

Once it begins to appear that is when we should jump? /roflmao!/

Buying real estate (an asset which has been road pizzad!)? /oh my!/

Maybe antiques? lol, maybe pocket pool?

This is a professional? /////we'll can you, Doug.  Thanks, have a great day.  Door's over there.  Have a great flight.  Nice talking to the wife.  Sure I got your card.  Don't mention it.  Yup, will talk soon.////

Wed, 05/19/2010 - 17:43 | 361690 akak
akak's picture

You know, LeBalance, precisely the same thoughts went through my head while reading the above portions of the "interview".

I may not be a Wall Street trader, but even I know that the wisest and most profitable moves are only made BEFORE they become the obviously correct ones to Joe Sixpack!  Casey is asking us to make sure that we close the gate AFTER the horse has bolted from the barn.  And THIS is supposed to be serious investment advice?

Wed, 05/19/2010 - 19:04 | 361809 mitack
mitack's picture

Joe6Pack will never figure out what is going on.

He will only "feel" that something has gone wrong

when he cant get his, well- 6Pack...

If you equal yourself with J6P go find another forum.

On a separate note I agree with your stance that

this "research" stinks...

Wed, 05/19/2010 - 17:19 | 361644 Goods
Goods's picture

This interview is utterly useless. We need to ask Leo what he thinks.

Q:So Leo is gold a good place to put your money in?

Thanks for quoting me, and as far I can tell, calm is restored and the markets are heading up again. Not good for gold.

Q:And how will this calm be restored?

calm will be restored when the trillion dollars starts being felt in the financial system.

Q:So which sector would you recommend investors put their money in?

Buy Chinese solars now!

 

Q:But is China a safe place to invest? Jim Chanos has called it the mother of all bubbles, with their wasteful spending and zombie malls.

 

There is no more China and America, it's Chimerica. Fortune 500 companies are deeply embedded in China. And China still needs the US consumer to grow their middle class.

 

 

Q: So China is the future?

Buy Chinese solars now! Thank me later!

And thank you Leo for sharing your precious time with us today!

Wed, 05/19/2010 - 17:46 | 361694 akak
akak's picture

LOL!

But you forgot the gratuitous photos of scantily-clad women to conclude your Leo interview!

Wed, 05/19/2010 - 17:47 | 361695 akak
akak's picture

(double post --- damned slow website!)

Wed, 05/19/2010 - 19:07 | 361815 mitack
mitack's picture

The website is just fine.

Thats just your junkbox full of worms and malware...

 

Wed, 05/19/2010 - 19:33 | 361836 akak
akak's picture

Actually, this ZeroHedge site crashes and locks-up on a daily basis.  I'm not sure why, but it can be impossible to get on for 20 or 30 minutes at a time lately.

Wed, 05/19/2010 - 21:23 | 362042 DosZap
DosZap's picture

akak,

ditto's......................crashes, offline for sometimes hours.

Wed, 05/19/2010 - 22:09 | 362121 Trial of the Pyx
Trial of the Pyx's picture

That's pretty funny and all, but you do realize it is actually pretty high praise that you are clipboarding Leo's posts to use against him later?  You got a special "Leo" folder you keep 'em in?  I hope somebody dislikes me that much some day.

Wed, 05/19/2010 - 17:31 | 361668 Harbourcity
Harbourcity's picture

How is it that people talk about the collapse of the financial system and that it can happen at any time (black swan) but still feel comfortable in cash (like they'll see the collapse coming and have no problem buying gold).

There is so much arrogance out there. 

Wed, 05/19/2010 - 17:36 | 361676 Hansel
Hansel's picture

+1, the world is myopic

Thu, 05/20/2010 - 02:25 | 362369 freshanus
freshanus's picture

Gold may very well be the place to be, but for the near and intermediate term future I'm in cash.  I'm curious to hear what the gold crowd feels about my reasoning:

1) As nations and states begin to default we will see deflation and defaulting before any sort of monetary revamp or hyperinflation.  To clarify, I'm not in cash now because I think I can jump to gold quickly when I need to--I'm in cash now because I've been out of stocks for two years and believe cash is the safe spot for the next crash.  I sure as heck ain't happy about the 0% return I get on it, but I'm taking this financial staircase one step at a time.

Just as the big banks have not defaulted overnight, we will not move to a gold standard or a Mad Max scenario overnight.  There will be years of policy adjustments and stick saves to try and right the ship.  However, gold may become common in countries outside the US that don't have the fiscal flexibility we do.

2) So speaking of fiscal flexibility: the current monetary system may be preserved for a good while longer by cutting entitlement and defense spending.  I know it sounds crazy now, but bear with me for a moment.  We have elections every year.  There will be huge turnover coming up and I guarantee you the tone of Congress will change soon.  At the Federal level we have done nothing in terms of reducing spending, and as we all know there is plenty of fat that can be cut.

3) The government does not want people using gold and they will make an effort to eliminate it if they see it taking hold.  This could be through taxation, market manipulation, prosecution...who knows.  I think we'll see a cash black market before a gold black market.

4) Bernanke will not monetize dollars into the hands of the poor and middle class.  The guy is a banker.  If he monetizes he'll do it in the same way he's done so far: buy mortgages and other shit assets and let them rot on the Fed balance sheet.  This ensures a subtle and in some ways nonexistent form of inflation--he's only locking in the inflation that already occured during the housing boom!

5) The gross inequality of gold distribution may cause people to reject it.  Imagine a crash scenario with a small community comprised mostly of farmers and tradesmen with no gold, and one ZH day trader with 1000 ounces of gold.  Do you think the farmers and tradesmen will let the ZH trader rule over their community because he has all the gold?  Or will they form their own monetary system?

Don't underestimate the ability of states and communities to create their own fiat currency.  It's trivial to do and it may make more sense for them than letting gold owners rule.

6) I don't know where the gold supply is being held and just how much physical gold is actually exchanging hands in the market.  If we're all trading a small quantity of gold back and forth then we're being played.  I worry that certain players can drop supply into the market when they want to and we wouldn't know it till it hit us.

Really I think the best argument for being in gold right now is the amount of media attention it's getting.  Just as the average joe rushed into .coms and real estate without thinking, he may dive into gold based on emotion.  That said I'll continue to monitor ZH for quality gold arguments that may change my mind.

Wed, 05/19/2010 - 17:36 | 361678 junkyard dog
junkyard dog's picture

The government is not going to confiscate all the gold. They do not have the balls to do it. Only fools will give it to them. During FDR's time, people had respect for the government, believed the government was going to protect them from communist and needed the gold. Today government is a joke; a lying bunch of thieves.

I remember years ago a bunch of little neighborhood assholes, who always threw sticks at my dog house and teased me until I growled and barked, kick their soccer ball into my yard.  I grabbed that ball and dragged back to my dog house. I dared them to come get it. They went and got their parents. I ate that fucking ball right in front of them. They never threw another thing at me or my house again.

That is what will happen if the government comes to get my gold, I will eat them.

 

Wed, 05/19/2010 - 19:10 | 361819 mitack
mitack's picture

Good luck crushing your teeth and make sure your balls dont get in the way...

Wed, 05/19/2010 - 22:19 | 362144 Hephasteus
Hephasteus's picture

He who lasts laugh laughs hardest.

He who cruels last cruels hardest.

Put a cork in your threatening.

Wed, 05/19/2010 - 19:45 | 361867 Miss Expectations
Miss Expectations's picture

Speaking of gold confiscation, here's an interesting item that I saw on Craigslist today, WWI Iron Cross Ring...your consolation prize for giving up your gold.

http://wilmington.craigslist.org/jwl/1748400307.html

 

Wed, 05/19/2010 - 21:02 | 362008 RockyRacoon
RockyRacoon's picture

You go, dawg!  I'll rummage their trash cans and destroy their gardens, then I'll eat their cat!

They'll never catch me, but I will be avoiding the homestead with the 3 blue-ticks.

Wed, 05/19/2010 - 17:48 | 361703 JonTurk
JonTurk's picture

word on the street is that FED/ECB orchestrated the gold dump after ny open today.. just look at the EUR -- ppt at work, they pushed the button after ESM tested 200 day MA..

Wed, 05/19/2010 - 17:48 | 361704 speculator
speculator's picture

So many gold bugs talk about the '79-80 highs as if we're guaranteed to get back there in inflation-adjusted terms before this bull market ends. But look at a chart of that top: gold made a quick over about 3 months, then crashed hard and kept falling for 20 years as inflation ate 60% of the dollar's value. 

Lots of commodities made tremendous spikes in the 1970s, and a few of them (sugar and cocoa come to mind) remained well below even their nominal peaks even at their recent parabolic highs. The point is that commodities bull markets each have a life of their own, and the behavior in each is driven by internal trading pyschology, not some measure of long-term fundamental value. 

I wish it weren't the case, since I've built a website around a massive database of mining stocks and reserve data, but in the aftermath of a global credit bubble it's hard to still be a bull on commodities. 

For the bulls (or shorts looking for weak prey), here's my baby: http://miningalmanac.com

This engine lets you do the research that Casey et al. do, but on your own, for free. 

Cheers

-Speculator

 

Wed, 05/19/2010 - 17:56 | 361717 akak
akak's picture

Everything you say is quite true, and bears keeping in mind. 

However, I cannot help but notice that during the gold spike of 1979-1980 (which I disinctly remember, and participated in), the world did not face the massive levels of unsustainable governmental deficit spending that it does today, nor was it facing the very real (if not imminent) dangers of systemic financial and monetary collapse.

Any analogies to past price cycles are all but meaningless today, as we are facing a fundamental realignment of the economic, financial and monetary paradigms.  Just as the phase change from water to steam with rising temperature occurs suddenly in the diagram of vapor pressure vs. temperature, so are we most likely facing a phase change of our own.  In such a case, past rules and relationships are of little or no value in predicting conditions under the new paradigm.

Wed, 05/19/2010 - 20:53 | 361990 Gold...Bitches
Gold...Bitches's picture

Phase change?  No

Paradigm Shift?  Yes

Wed, 05/19/2010 - 21:08 | 362017 TheGoodDoctor
TheGoodDoctor's picture

I agree. Once I read Ted Butler, I knew we are living in different times. At the time of the last gold spike you speak of we were the world's greatest creditor. Now we are the world's greatest debtor. Seems like a hockey stick to me. At least when the SHTF.

Wed, 05/19/2010 - 21:39 | 362036 TheGoodDoctor
TheGoodDoctor's picture

Doh!

Wed, 05/19/2010 - 21:34 | 362058 RockyRacoon
RockyRacoon's picture

Once your thesis is fully understood the calls for a top in gold will stop.

The fools won't buy, of course, but maybe they will STFU!

I sorta miss the old trolls.  They did have one or two good points nestled in all the crap.

Had they only been reasonable they could have stayed.  Why so much vitriol?

Sheesh! I'm spacing my stuff out like JW.  Is it contagious?

Wed, 05/19/2010 - 20:41 | 361957 trav7777
trav7777's picture

Look, why is it that anyone who says buy gold is a freakin SPEC expecting to get his "cash out" at the "top"?!?!

I mean, half the people are expecting to buy chickens with this stuff or trade it for something else or walk somewhere it can be exchanged for more stable local paper.

Yet, OMG we're gonna have a BUBBLE in gold...at $1200 an oz, far out of the price range of all but the rich.

Look, the rich already bought all the gold while everyone was sleeping.  Gold supply has declined since 2000, its peak year.  You're not seeing a bull market, you're seeing declining supply dynamics and nothing else.

If gold pulls another 1979, there won't be a dollar left to cash into.

To all the people who hate gold, wtf is your option?  Stocks?  FRNs?  What is the better option?

It's like people cling to their FRNs and the notion that the USA will stay the Empire and if that fails, well there's no backup plan.  So they claim it'll be madmax.  There's no in between.  A bunch of people beholden to paper.

Wed, 05/19/2010 - 23:13 | 362230 GoodBanker
GoodBanker's picture

Look out, Trav! Gold's crashing! Rush to dollars! You know as well as the trolls do that every single fiat currency collapse in the history of the world has resulted in Mel Gibson traversing a post-apocalyptic desert landscape in search of the last few drops of oil (despite the v8) while fighting off gangs of Johnny Rotten's illegitimate children. Your gold will be of NO value in Thunderdome!

 

Wed, 05/19/2010 - 21:30 | 362055 RockyRacoon
RockyRacoon's picture

You have a very attractive and functional site.  There should be some increased interest in miners should the tower of fiat fall. Best of luck.

Wed, 05/19/2010 - 21:35 | 362063 BumpSkool
BumpSkool's picture

you could start by kicking out the idea that gold is a commodity (where is the consumption element?) ... but that might negate you whole thesis?

Wed, 05/19/2010 - 22:34 | 362172 Trial of the Pyx
Trial of the Pyx's picture

your site is worth a click

 

thanks

Thu, 05/20/2010 - 07:04 | 362499 speculator
speculator's picture

Thanks guys. I'm glad you like it. We're still polishing up the site and adding features, but as far as I know it's the best online reference for data on miners.

I got the idea because resource and production data is a bitch to gather, and even if you have it you have to adjust for stuff like other minerals, cash, debt, fractional property ownership, etc, etc, and then you need a complex spreadsheet to sort the wheat from the chaff. One of my worries has been that we were going to overwhelm users with too much data, so it's nice to see that people get what we've built. -Mike  http://miningalmanac.com

Thu, 05/20/2010 - 01:14 | 362317 Oracle of Kypseli
Oracle of Kypseli's picture

All of you be reminded that no one should have 100% gold.

If you don't want to get hurt keep 30% max.

If high inflation eats your dollars, gold will more than compensate for the loss of purchasing power of you dollars.

If gold goes down, that means happy days are here again.

So why are you talking trash in either direction?

Joe six-pack can only afford a few coins here and there. then as I posted before, he will cash them to put a deposit for a yellow VW convertible for his daughters graduation. End of story.

Grow up. keep buying gradually never to exceed 30% of your investment money.

Don't forget that miners use hedging, they presell at specific levels and when it moves against their hedging formulae they loose money no matter how much gold they extract.

Sometimes the mines flood, there are strikes, there are environmental issues, there are collapses and on and on.

 

Chill out. Please keep this blog interesting

 

Wed, 05/19/2010 - 17:54 | 361714 Ando
Ando's picture

"If you are new to the gold stocks, or risk-averse, then look to build a portfolio of large-cap gold stocks such as we cover in Casey’s Gold & Resource Report. Those will attract a lot of attention from the public at large, and from institutions, as the bull market gathers steam."

Look at a 10 year chart of gold...WE ARE UP OVER 500% IN A DECADE!!!!!!!   The big hedge funds already have HUGE positions in the miners.  YOU ARE TOOO LATE. SELL SELL SELL

Thu, 05/20/2010 - 20:42 | 361726 akak
akak's picture

Gold is not up "over 500%" in the last ten years.  Try ~370%.  And discounted for inflation, around 230%.  Still not shabby.

 

EDIT: Interesting to note that two people here evidently consider basic mathematics to be "junk".  Such, apparently, is the blind hate-filled "logic" of the kneejerk gold-bashers.

Wed, 05/19/2010 - 18:05 | 361727 goldfreak
goldfreak's picture

Another troll? Nadler? Newbegold?

I bet some of these people bashing gold are the same person with different handles.

 

Wed, 05/19/2010 - 18:04 | 361738 GoodBanker
GoodBanker's picture

Up 500% in a decade? Jesus H Christ, are you Whizbang? Neither of you seems capable of simple RoR calculations. Go back to school... if you're already there, drop out.

Wed, 05/19/2010 - 18:00 | 361728 vonchor
vonchor's picture

When too many people are crowded into the same trade and they all think it can only go up, watch out for a trendline break to the downside. Furthermore, if there's another market crash and people get margin calls, watch gold sell off too as correlation goes to 100% downside for everything as people have to raise money and/or have their positions liquidated involuntarily by their broker. 

Also, unless you're trading futures, gold in physical or etf form incurs taxation on any profits at ordinary income rates regardless of how long you hold the position.

Gold may go to the moon or it may go way back down. Just don't get convinced it can only go in one direction - that's a good way to lose big. It's not a religion folks its an investment.

{my 2c and your mileage may vary}

Wed, 05/19/2010 - 18:12 | 361749 speculator
speculator's picture

"Furthermore, if there's another market crash and people get margin calls, watch gold sell off too as correlation goes to 100% downside for everything as people have to raise money and/or have their positions liquidated involuntarily by their broker. "

Ding, ding, ding! We have a winner! 

Why does nobody else seem to think that the deflation trade of 2008 can happen again? Once again this spring the dollar and treasury bears have taken a licking -- why not the gold bugs? 

Wed, 05/19/2010 - 18:22 | 361753 goldfreak
goldfreak's picture

Anybody drinking this Kool AId?

Wed, 05/19/2010 - 18:48 | 361761 speculator
speculator's picture

You mean is anyone else bearish on gold? I hope not, at least not yet! 

BTW, I was bullish in March at 1100 when DSI showed 20% bulls. Now that the tide has turned and traders have been 20-1 bullish for 3 weeks, I'm the bear. It's that simple.

I own physical and have for ages, since when I was the nutcase, and the hard stuff is not for sale, just paper (futures).

-Speculator

http://miningalmanac.com

 

Wed, 05/19/2010 - 19:44 | 361864 dnarby
dnarby's picture

Seems to me the chance of another deflation impulse (that is strong enough to push gold down) is a 50/50 bet.

Therefore, buy half now, half later.

IMO no point risking it all going for the big kill.  Just be happy you put down the Kool-Aide.

Wed, 05/19/2010 - 20:47 | 361969 trav7777
trav7777's picture

You won't get the other 50 in the deflation...if 2008 comes back, that is.

It'll all be gone.

Don't bend down to pick up wallets when the nightclub is on fire.

If there are wholesale liquidations of physical, there will be PLENTY of those with cash looking to get out before the dollar does a supernova.

Why in hell would anyone liquidate physical anyhow?  You can walk from your stupid paper debts.

I, to the life of me, do not even comprehend how you people can conceive of GOLD as either an investment or a "trade."  This speculator mindset is what's wrong with this country.  Everyone trying to make a quick buck doing jackshit productive.

Wed, 05/19/2010 - 22:16 | 362140 Hephasteus
Hephasteus's picture

Gold drops ONCE in a crash. IT goes ballistic on double dip. Learn it live it.

Wed, 05/19/2010 - 18:25 | 361759 akak
akak's picture

It may be an investment for short-term daytraders, but for many of us, gold is a store of wealth, and the only perceivable safe form of savings.

Wed, 05/19/2010 - 22:21 | 362149 Spitzer
Spitzer's picture

 Gold was up $25 on the day of the flash crash. GOLD WAS UP $25 THE DAY OF THE FLASH CRASH.

Wed, 05/19/2010 - 20:43 | 361962 trav7777
trav7777's picture

Paper prices are irrelevant.
Most here are not buying gold for a "trade," pardner, but TO trade.  For stuff like cows.

If the DOW goes to the basement and all things start getting liquidated, the dollar's lifespan will be measured in days, then hours.  Your "trading account" might hit 7 or 8 figures before the government does a brute force FDR and reduces it to 5 digits while oil gains another 2.

Wed, 05/19/2010 - 20:57 | 361995 Gold...Bitches
Gold...Bitches's picture

When too many people are crowded into the same trade and they all think it can only go up, watch out for a trendline break to the downside. 

Sigh, ok, lets go over this yet one more time.

0.2% of investment money is in gold.  Yeah, its a top because EVERYONE is in it.  I say again, 0.2%.  Definitely a bubble, yeah, that's it, right.

Wed, 05/19/2010 - 18:29 | 361762 scofflaw
scofflaw's picture

Seems to me the right strategy, which I am pursuing, is to own physical gold and hedge with puts on GLD.  I think the deflation argument is not without merits in the short-term so the hedge may be prudent and if there is going to be a day of reckoning in paper gold the GLD puts might make good sense on their own merits.

Wed, 05/19/2010 - 18:39 | 361775 speculator
speculator's picture

Puts are great if you time it just right, but why not use futures? There's no penalty for being off by a few weeks or months. You can just lock in your exact price. 

I've done this for years to hedge my physical when the market gets overbought and overbullish. 

Wed, 05/19/2010 - 19:12 | 361823 scofflaw
scofflaw's picture

If you use futures to hedge and gold goes up you don't participate in the upside, do you?  The gain on physical holdings is offset by losses on futures.  A long physical - long GLD puts will protect you in the event gold declines but it still enables you to participate in the upside.  Maybe I'm not understanding how you are using futures to hedge but I think I have that right. 

Wed, 05/19/2010 - 19:43 | 361859 speculator
speculator's picture

You're right, if you don't use a stop and hold your futures short position you don't participate in the upside. There is timing involved here, as with puts, just no time decay. 

For instance, I sold futures over 1200 in December, and gold fell over 100 bucks, but I was surprised when it failed to follow through to the downside and DSI sentiment data showed only 20% bulls, so I closed the position. I'd be surprised again if gold made a newhigh in the next few weeks and again I'd be out and unhedged. It's tricky -- I've timed the tops pretty well since I started doing this in spring '06, but have been wrong too, as when I turned bearish last September at 1000. With hedging the idea is to reduce risk, not take it on, but as with any trading you have to set stop-losses and get out when things don't go as expected.

Wed, 05/19/2010 - 18:41 | 361781 JR
JR's picture

Is the Federal Reserve rewarding its special friends and punishing the competitors of its friends? With the curtain of secrecy, only the most naive American would give the owners of the Fed, after their record of misrepresentation and outright lying, the benefit of the doubt. And now a member of Congress has gone on record to suggest that this is exactly what could be happening.   

Fed to Blame for Gold Surge, Currency Woes: Ron Paul |CNBC.com | 17 May 2010

The Federal Reserve's practice of indiscriminately printing money is the chief culprit that has led to the surge in gold and demise of the euro, Rep. Ron Paul (R-Texas) told CNBC Monday.

As gold hits a succession of all-time highs and the euro struggles for mere survival, Paul said debt overloads at the base of the recent currency trends can be traced directly to the US central bank.

"The Federal Reserve behind the scenes has the power to create money out of thin air. It's very bizarre," Paul said. "They can bail out their friends and let the people they don't like fail, and create a trillion dollars or more out of thin air in order to prop up some companies at the expense of others ... It's absolutely bizarre and, yes, the American people right now I think are waking up to it."                        

Paul linked the disruptions to the departure in 1971 from the old Bretton Woods global currency system. He said he has been anticipating the surge in gold as confidence in currency wanes, and after the Bretton Woods collapse.

"This is the unwinding of a system," he said. "Until we replace it with something else you're going to continue to see this."

But Paul predicted that the system will be changed as more and more people begin to see its fundamental flaws.

"The gold surge recently has people discovering they're really printing money," Paul said. "They're just kidding themselves and kidding the American people that the Fed can keep doing what they're doing, because the economic laws will bring this to an end and probably in the not-too-distant future."

http://www.cnbc.com/id/37189251/

Wed, 05/19/2010 - 18:44 | 361784 chumbawamba
chumbawamba's picture

End of the gold bull?

BAHAHAHAHAHAHAHAHAHAHAHAHA!!!

Whatever.

I am Chumbawamba.

Wed, 05/19/2010 - 19:00 | 361808 Kina
Kina's picture

Nobody knows where this is all going to end up. Deflation, Inflation, Hyperinflation, new currency....troubles in Europe, China looking suspect..... and everybody in debt up to their ears.

Looks like a good time to hold insurance. It comes at a cost if your house doesn't burn down, but with so many bushfires raging....

I hold gold and silver because nobody can say what the end result of this global financial tumoil is going to be, but it could be nasty.

At the end of the day I can feel comfortable that gold and silver will preserve some value even if most other things are getting trashed. And it seems that most of the bullets in the gun have been fired and we are on our last round, QE1/2/3. If that fails..

 

 

Wed, 05/19/2010 - 19:24 | 361837 merehuman
merehuman's picture

This entire post was troll bait. HI all. Lol

HI HO Silver!

Wed, 05/19/2010 - 19:25 | 361840 bilbert
bilbert's picture

+10

Wed, 05/19/2010 - 20:57 | 361996 I think I need ...
I think I need to buy a gun's picture

the stock market is crashing.......

everyone into treasuries so once everyone is safely in the dollar they can devalue your money. Oh wait thats already started.

They are sneaky

Wed, 05/19/2010 - 21:04 | 362010 cognitis
cognitis's picture

US fixed gold at $20.67 in 1900, so gold hasn't conserved wealth as well as even T-Bills.

Wed, 05/19/2010 - 21:25 | 362046 DosZap
DosZap's picture

cog,

We didn't have the FR System in 1900....................and we were ALL Americans.................

Try those #'s now, T-Bills are paying really well.

Wed, 05/19/2010 - 21:35 | 362064 goldfreak
goldfreak's picture

Nadler, give it up man, nobody believes the BS anymore, even with 10 different handles

Wed, 05/19/2010 - 21:41 | 362071 BumpSkool
BumpSkool's picture

yawn yawn yawn ... Gold is NOT a commodity ... only fools believe so ... its a f-in' monetary aggregate...and its not consumed...its hoarded and traded... And sure...this is what the end of a Gold bull looks like... if it were over we'd be $300 down in 48 hours.

Wed, 05/19/2010 - 22:13 | 362132 deacon_blues
deacon_blues's picture

I diversify my portfolio:  98% silver; 2% Gold; 1% palladium.  Sprinkle some mining penny stocks on top.

Thu, 05/20/2010 - 06:24 | 362488 mwmolloy
mwmolloy's picture

Your post is 45% silly and 55% bad maths. 

(I mean that in a loving, friendly way)

Wed, 05/19/2010 - 22:20 | 362146 Instant Karma
Instant Karma's picture

I own my share of gold, silver, platinum, and palladium coins. Seems to me we've hit an intermediate term top in all these markets. From a technical point of view, gold just double topped and is coming back down. The charts suggest $1000 would be reasonable support. Silver cannot get through $19-20 per ounce, and is coming back down. Silver has been more range bound than gold, and could take a run back down to $15 just in the normal course of events, or back down to $10 in a panic. Silver often trades more like an industrial metal like copper. Platinum and Palladium got crushed today and may have broken there uptrend lines. Economic concerns mean fewer cars means fewer catalytic converters means lower PGMs.

In short, if we have another debt market implosion, albeit in Europe, the metals may get cut in half, again, as they did in the last go around. If the metals are priced in dollars and the dollar is soaring due to debt destruction, the metals will likely cave.

It's cyclical, and would an excellent entry point. I bought out of the money puts on SLV the past couple days, just in case.

Wed, 05/19/2010 - 22:26 | 362160 goldfreak
goldfreak's picture

More of the same BS

 

I own gold but It could go down, blah blah blah

Wed, 05/19/2010 - 22:47 | 362188 Trial of the Pyx
Trial of the Pyx's picture

I disagree, this post was not trolling.  This was a considered opinion with which you happen to disagree.

 

 

Wed, 05/19/2010 - 23:47 | 362259 Instant Karma
Instant Karma's picture

Gold is going down. Silver, and PGMs more. The top is in until the fall most likely.

Wed, 05/19/2010 - 22:30 | 362165 Spitzer
Spitzer's picture

So what's the bubble here ? a 10 year bull market in gold or a 30 year bull market in US bonds ?

 

Wed, 05/19/2010 - 22:44 | 362183 akak
akak's picture

The 100 year bubble in Federal Reserve fiat bullshit currency!

Wed, 05/19/2010 - 22:58 | 362201 Grand Supercycle
Grand Supercycle's picture

 

EURUSD buying support is still evident.

Daily chart is now extremely oversold, will post a chart soon.

http://stockmarket618.wordpress.com

http://www.zerohedge.com/forum/latest-market-outlook-1

Wed, 05/19/2010 - 23:12 | 362216 GoinFawr
GoinFawr's picture

Where're all the trolls? A title like this on a thread should have them slavering to post, no? Hunh, MB they have a healthy respect for Casey and his crew? If so, at least they have that going for them. 

Op-ex week looks to be up to its usual PM shenanigans (read: 'egregious manipulation'), though those with a vested interest in those options becoming worthless may have thrown the baby out with the bathwater a little early this week; still two days left. On the other hand I suppose that could also mean that there are still two days left for them to really shit the showers.

Upon reflection, I take that 'shenanigans' back. After all, if something is repeated often enough and loud enough, and enough rubes buy (in this case:sell) into it, these things can become self-perpetuating. Either that or those with much to lose feel completely at their ease while they're finger fucking the paper market without her consent, knowing full well the CFTC won't even blink while they wave their tiny privates under that "watchdog's" nose.

Meh: suits me, loadin' up some more. And I'll take delivery, thanks.

 

Thu, 05/20/2010 - 01:12 | 362318 Kina
Kina's picture

Not too much change in the Perth Mint AUD$ prices

I bought when the AUD was strong, the AUD fall has maintained my prices. Now when gold and silver do make their recovery and the AUD stays low.

http://www.perthmint.com.au/metalPrices.aspx

 

Thu, 05/20/2010 - 04:49 | 362445 goldfreak
goldfreak's picture

cup and handle formation on gold? next target 1450

 

http://jessescrossroadscafe.blogspot.com/

Thu, 05/20/2010 - 05:52 | 362472 Kina
Kina's picture

The CFTC and SEC have allowed corruption for a decade, I doubt they have any intention of doing anything now. They will sit back and watch it continue, one would think they are part of it all.

Thu, 05/20/2010 - 06:07 | 362480 MarketFox
MarketFox's picture

The destruction of a significant portion of over $50 Trillion in debts.....dwarfs the money printing efforts....

 

Governments will become austere by default....

 

When gold starts to sell in vending machines and is discussed on late night television....then the top end distribution of high prices is maturing....

 

Deflation is the most powerful economic force now.....and maybe even for the next 50 years ....because unlike Japan....the US citizens have very little savings....in that the wealth is highly concentrated.....and taxes are going up in all aspects of taxation.....

 

The destruction of massive debt and taxing capital are deflationary....

 

That being said....there are many very successful and intelligent people betting the ranch on inflation.....

 

Might be a long wait....

 

Ask Japan.....and then multiply by 2x....

Thu, 05/20/2010 - 12:03 | 363126 GoinFawr
GoinFawr's picture

1990, this isn't Marketfocks.

Japan had a low unemployment rate.

The US doesn't.

Japan had a robust manufacturing industry.

The US sold that out years ago.

Officially reported inflation rates have for years now been doctored to exclude everything that might demonstrate an increase in inflationary rates. Which means the price of necessities like food, an increase in which is a symptom of inflation,  doesn't get counted. 

 I recommend a visit to shadowstats.com

 

Thu, 05/20/2010 - 18:25 | 364219 mtguy
mtguy's picture

I agree and will add the when Japan started into their deflationary mess some 20 years ago, not only did they have a robust mfring industry, they also had a huge personal savings rate --double-digits. It has since dropped to something like 2% due to their aging population.

Japan has hopelessly lost its edge and IMHO will never return to anything close to its glory days in the 80's.

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