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Surge Of Inexplicable After Hours Selling Takes Gold Volatility Index To All Time Low
In addition to the rout in the ES, VIX and GC which we pointed out earlier, there were some additional fireworks behind the scenes in today's after hours session. The CBOE Gold Volatility Index, the ^GVZ plunged by the most in over a year, as the index hit an all time low of 15.92 without the underlying making much of a notable move. The most curious aspect of the trade was that the entire dump occured in the AH session. Many were left scratching their heads over what caused this monstrous unwind in long vol positions: was this the unwind of a massive long ES/short GC arb? We don't know, although if rumors that a major fund is planning to stand for delivery of Dec gold turn out to be true, then obviously someone got confirmation today. Keep a close eye out on the GVZ. Should this price level persist on Monday, then the front futures contract will likely surge.
A trader whom we managed to reach late in the day had this to say on this stunning move:
Typical course of action for HFT and other commodity pranksters is to shake out new contract holders. They did it with absolute gusto today, shorting thousand of contracts into thin markets. That didn't work. Gold held up. Now, taking into account that peripheral EU spreads are hitting new highs, hedge funds are getting redemption requests etc, why would you go home long ES and short GC? So what they did is they sold ES into and after the close. After that ES/SPY close they can't run these 'start arb' HFT strategies any more that go long S&P and short Gold as well. Gold's closing time is 1:45pm. They had to cover shorts.
If the short covering in paper persists, perhaps the world won't even need the Krieger/Keiser physical PM campaign to destroy Blythe Masters.
And a bonus observation of the gold curve is the Gold February contract, where in the last minute someone bought 2k contracts, which represents 200,000 ounces or about $272MM worth of gold. Not a bad purchase for the last trade on the slowest day of the year.
As usual, we welcome our readers' perspectives on this largely unexpected move.
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Smells fishy, like Courtney Love's crotch.
it is her amygdala that counts, not the crotch.
Did they ever find the ones belonging to the late Mr. Cobain?
grossly clever response.
With the emphasis on the word "grossly."
such high prices of Silver is depressive....should we expect some correction if the DOLLAR
surges to new highs??
The new normal. As gold approaches $1600oz I suspect $100 price intra day price swings will be common. Standard operating procedure of any futures market. Just enough to bump all you small players out. (I'm not a player)
thats right. although look at the casino experience; everybody knows it is fixed though many try their odds...i suppose is in your blood - you lucky you dont have it...
TD,
Germany prepares a very tight cooperation with Rusia.
Ackermann (Deutsche Bank) “invites” Russia in the EMU!
„Sicher würden die Geschäft mit Öl auf den internationalen Märkten in Dollar abgewickelt, worauf Russland wenig Einfluss habe. Die russische Regierung habe aber „bestimmte Ideen“, diesen Börsenhandel auch in Russland und dann in Rubel zu organisieren. Er könne sich zudem den verstärkten Einsatz des Euro bei Abrechnungen im Energiesektor vorstellen, sagte Putin ohne konkreter zu werden. “
Even if Russia cannot decide by herself in which currency oil has to be paid, Putin has some ideas how to organise this trade in roubles. He can also see ways to use the euro more in energy trade.
Looks like preparation of the dollar demise for me. When????
The daily porn from Welt online and here the link: http://www.welt.de/wirtschaft/article11235590/Ackermann-will-Russland-in...
I don't understand the meaning or significance of this event, though obviously the move today looks very different from anything previously (only up-going spikes). Can anyone explain this in simple terms?
I'm with honestann.
Although I have learned a lot about gold in recent years (and have been a fan for decades), my knowledge is very weak on paper gold trading instruments (futures, options, volatility, etc.).
Any pros who explain all this will have a grateful audience...
It does seem like all of this is coming together, no?
Can you enlighten us with a non vacuous post about the meaning of this? Thought not... LOL! (just pokin' ya! We are all friends here). Have a beer it's Friday night.
Una cerveza on a Friday night. Maybe another as well. Flacon, have one on me!
Sip, sip, sip! :)
I dunnknow but can you homos get a room?
The original topic was about gold. My question is;
When gold crashes and goes back to is irrelevant life at $250 an oz, will Zerohedge(and other goldbug blogs) become extinct? Is the timeline-tagline directly correlated to the price of gold? Down like an elevator.
I hope not cuz Reggie will loose his platform and his brilliant marketing campaign will be revealed as a total failure.
Only if you stop showing up and posting, monkeyfucker.
Yes probably. it should be all over by 2020 or so, but it will be $250 new dollars per oz (10k old ones) and you'll have been "extincted" long before, along with all the other paper dinosoars.
hiha
Why do all the MIT students learn the Floyd Warshall Algo?
To deal with the downside of a gold bubble.
http://en.wikipedia.org/wiki/Floyd%E2%80%93Warshall_algorithm
Because they're "too smart" to see that they only need Dijkstra's to find an exit?
I was hoping for Bellman–Ford from you and you disappoint me with Dijkstra.
You wanna use your chips as space heaters, that's on you; I've got better things to do with my cycles.
Your momma! Your momma uses her cycles with Reggie! Oh snap!
My momma would snap Reggie like a twig, monkeyboy.
Tell Cheetah that he needs to get tested, m'kay?
Yo momma needs to get tested after Reggie used her cycles, OH!
Look, GrayStroke, all I'm sayin' is you have an ethical obligation to let Cheetah know about your status, given your domestic partnership.
Then CSCO DUAL will really disappoint.
Hi Jamie
Suggestion : don't read them, then.
mrgneiss is the right name for you!
Long time ago Geology major Bearing here likes your earthy name. Any rare earth metals in gneiss?
mrgneiss, only thing i learned from you is that you are an asshole. What you learned from me is that i am outspoken. Oh yea i appropiately junked you.
i usually get the laymans view from...
http://harveyorgan.blogspot.com/
http://www.caseyresearch.com/gsd/
they both are daily and free.
ed and harvey and lots of other commentators are calling for a bust because of the huge shortage of physical gold and silver. maybe this will come sooner than expected.
i have stopped telling friends and family a couple of years ago about whats likely coming. yesterday at a community event several friends cornered me asking me about gold and silver. i do know that if there is a pop of even $50- $100 in gold it will have dire consequences for anyone on a fixed income support.
you have to have physical for any kind of survival scenario.
It was a bet on a Gold correction. People who keep expecting a massive gold correction, or the standard limit down commodity crush have no idea why Gold's at 1,350 to begin with and have missed the entire move. Gold is bullish here-it didn't do what it needed to do to imply the vaunted 1250/1160/975 correction. We're going up. We're doing 1,550. Or we're doing SPX 1000. OR BOTH. Or, if we do SPX 1,350 as some think, we'll do Gold **1,750** .... maybe higher. Hence the dump.
imo
Well, themos, you already partly explained this before I even arrived on this thread. Thanks! Monday should be interesting.
I still only want physical gold.
No offense but by the time you drive to your dealer when it's crashing your dealer will buy it back at 30% off of spot and the price will have dropped 50%. Just saying nothing goes up Forever. I can hit the sell market button any time (cept over night)
Max this comment is mostly for the idiot below called "Logical Thought" LOL [& a lil'bit for you too]
Gold HAS gone up no matter *what* the economy's been doing [boom or bust part of cycle], for over 10yrs, and would've been doing so during the 90s too if it weren't for CB collusion to supress price.
I didn't say Gold will go up do matter what. But it is and has and will keep going up in the current environment & under current policies. In fact, fifty [&MORE], FIFTY fucking year move in USD [down] & Gold [up]. Might be a trend, but I'm not sure, I'll be sure to check with you two idiots.
What will change that? You see, a free market [relatively-WAS, in the US] is about balance primarily. So the market TRIED to correct the imbalances reprented by this continuous unidirectional move [growth, & credit] coninuously facilitated by Gov't policies since WWII: that was the crash of 2008. What did The Ben. Ber--nank [& The Green.--Span] do? They printed, like crazy, now **$4T**
Now take your Grammar School understanding of the situation somwhere else.
I make a point of not eating pullback losses. My money moves. I wouldn't call you an idiot but your money might be.
you're good. you can avoid pullback losses in the gold market of 2010 and not effectively lose your position in the bull market. learned it juggling cranking chain saws did you?
>>We're going up. We're doing 1,550. Or we're doing SPX 1000. OR BOTH. Or, if we do SPX 1,350 as some think, we'll do Gold **1,750** .... maybe higher.<<
Right, so you're one of those "no matter what happens, gold goes up" guys... Uh, okay, sure.
Certain conditions must be met for gold to go down on a sustainable basis. The Fed must either totally change its policy or be abandoned, and short of a lynch mob stringing Bernanke up on a lightpost, I just don't see that happening.
Or the USD has to do a monster, commodity-crushing, equity-eviscerating, bond-buoying, margin-calling, bear-market-short-cover-rocket-fueled-flight-to-safety-rip-your-fucking-face-right-off-and-eat-it-in-front-of-your-raw-bloody-cheek-bones rally.
THAT would do it. In fact, at this point I'm pretty sure that's the ONLY thing that would do it.
...And then it would go right back up again. Because as Tmosely pointed out, that's not sustainable.
Poetry.
sure didn't change the medium term trend last time. Nor will it ever
>>Certain conditions must be met for gold to go down on a sustainable basis.<<
http://seekingalpha.com/article/227143-at-1300-an-ounce-gold-s-future-pe...
http://seekingalpha.com/article/237514/comments
Thanks for commenting here so those inclined to respond don't have to slog through a swamp of ignorant drivel to make their point.
Your understanding of gold is incomplete.
The price of gold is an expression of currency instability in whatever currency it is being priced in. Therefore, you must look at gold in currency terms. For instance, gold in USD has been a good bet for the last two years:
http://stockcharts.com/h-sc/ui?s=$GOLD:UUP&p=D&b=1&g=0&id=p23680168432
Gold in Sing dollars? Not so much:
http://stockcharts.com/h-sc/ui?s=$GOLD:EWS&p=W&b=5&g=0&id=p78387525253
If you study the POG, you will find it does the worst in a stable, low inflationary environment, ~1.5-2.5%. If you study gold production, you will find it is at 2% annually.
Therefore, if you only expand your currency at the same rate as gold is produced, your currency is... (wait for it)...
Quite literally, as good as gold!
Which is incedentally where that phrase came from.
That is the store of value thesis for gold.
Now... If one delves into GATA, and reads, and reads, and reads, one comes up with an entrirely new possible price for gold.
Then if one delves into FOFOA, and reads, and reads, and reads, and reads, and reads, and reads some more... One comes up with an even more entirely new possible price for gold.
And that is the investment thesis for gold.
http://www.TheTailDoesNotWagTheDog.blogspot.com/
"And that is the gaming thesis for gold."
It's a game or gambling when you can lose all your money. Possesion of rare metal is physical wealth.
How many people on average have died through slavery, conquest, and swindle for each ounce of gold or silver?
Each ounce of metal whether newly mined, or ancient coinage was obtained through human blood, sweat, and tears. People gave their lives for the gold and silver I now hold in my hand.
Have fun with your electronic digits!
I will say one thing...throughout "civilized" history, gold has always had SOME value. The same can't be said for a piece of paper. If we go beyond "civilized", food and weapons, and a community working together are the only things that will matter for a while. But, when "civilization" finally reappears, gold WILL have value again, not a piece of paper.
Marvel not
such riches (gold mines) grow in hell; for it may be
that region best deserves the precious bane.
-- John Milton, Paradise Lost (Book I).
And you assume that the gold supply will increase by 2% for how long?
who calls themselves "logicalthought"? your wife must be your only fan, if that. what a shit stain for a personality you have.
whereas the gallery of puppets in your mom's basement think you're the bomb, right?
oh, i'm just trying to tough'n him up!
besides, i'm a legend in me own mind, snowball.
how did you know that i live in me mum's basement? am i that transparent?
By 'no matter what happens, gold goes up' do you mean 'as long as whats been happening-keeps happening, gold goes up'?
I am one of those gold only goes up guys because of currency fundamentals. However, I am realistic that it will not go in a straight line and may take a few time-outs along the way. There is so much international currency manipulation that the precise course cannot be predicted. But I am a long term gold bet for the very simple reason that the sheer amount of American currency relative to the real output of goods and services has to be inflationary on the long term. There are many short term deflationary trends but the currency still sits there. Traders will come and go as they will but the long term is absolutely up. How much and when are open to debate. When I was a kid, gold was $35/oz. It now moves in the $1350-1400 range. Yes, it took a time out during economic surges but then resumes it's upward path. It will always do so because of out of control fiat currencies. The way I look at it there is much more risk to not owning it in the event of a currency meltdown. If you own it you can cash it in at any time if necessary. Gold goes up because all fiat currencies go down. Very simple.
money quote? "there is much more risk to not owning it."
I think it's more $ going down due to QE (although it will probably rise against the Euro in the short to mid term). It's that old supply/demand thing. QE and liquidity pumping increases the supply of M0/M1, which is used transactionally to buy things, so the purchasing power of the $ drops rekative to the world FX market. The demand for the $ isn't rising as fast as the QE is increasing supply.
In that case, yeah gold goes up, both in nominal $ terms, and as a safe-haven play.
All very logical actually.
Would it not be totally plausable to have the Euro crisis continue to push the USD much higher on a short term basis? - crushing the markets but at the same time vaulting gold? We've all witnessed that over the last few days. Would seem very likely this pattern could continue as the end of the EU may be upon us.
I still believe that if gold rockets to the oft-predicted $1,650, then the Dow will be printing over 14,000.
Conversely, if the Dow crashes down to 9,600 (summer lows), then gold could drop to $1,150.
That's basically the way it has worked out so far.
But of course, in the markets, anything can happen at any time, so I'll adapt to any changes in this relationship, should it occur.
But I will let the market decide first.
Glad you're holding the bag.
How come Robo gets so many junks?
It would be nice if everybody who did signed their name to it...
I'm curious to see how many Internet Tough Guys are among them...Now THAT guy's a dick.
Robo is always entertaining/informative to read. My guess why Robo gets junked is that someone believes Robo's avatar, and is jealous, or they are looking for some insight that they are constitutionally incapable of understanding.
Sometimes a picture of a hot chick is just as hot as a chart that is making a person a lot of money.
he usually gets junked inversely to the amount of hot chick pics he adds to his posts.. with no pics, junks go to infinity
Easy, he gets junked because he is not afraid to say that the goldbugs are dreamers who haven't a clue what really drives the global economies.
Basically they are mad that Robo is making more money in equities than they are making in their gold trades.
In the theme of the Fight Club; Robo can take a punch.
right. you make enormous sense.
one question:
if gold is irrelevant, then why did FDR need to make it illegal to implement keynesian economics? and since gold is no longer illegal to own, what is to stop it from continuing to outcompete keynesian economics outside of short-term interest rates moving to 20% (if that)? do you believe rates are going to 20% anytime soon?
take our advice, Ujane, begin averaging into physical immediately. if rates got to 20%, then move it into fiat bonds. if there is a paper crash, buy CAT fiat stock certificates when there is blood in the streets.
simple. your welcome, Ujane.
dude. wtf? over?
the dow to gold ratio has fallen from 40 to 8. gold is up 500% over equities in the last 10 years. This is not opinion, just fact. Where will it stop? The entire gold rally has occurred under the cover of equity rallies:
1) gold rallies a lot...ooooh too scary, its a bubble
2) then equities join in...good I own them
3) Yeah, I know gold rallied a lot, but just look at my cisco stock it is up 32%
4) stocks correct, gold goes even higher, even scarier
5) finally gold joins stocks and corrects (whew, good thing I never bought gold -see!)
6) "risky" gold bottoms first, then stocks bottom 6 months later
repeat chorus
All the while, folks stay out of stupid gold. Just like they thought dotcom boom was too risky. Netscape marked the bubble in 1996! And then, finally, they jumped into the nasdaq to catch the 4 month rise in 1999, only to be holding the bag.
Really?
http://finance.yahoo.com/echarts?s=SLW+Interactive#symbol=SLW;range=2y
And yes, I did buy in Nov. and Dec. 2008, all the way through 2009. Precious metals mining shares have been the ONLY that's worked in the last few years, aside from the occasional DNDN.
Been long physical since 1999 and 2001, and yes, that was just luck. Lost my ass in the tech bubble.
echo the above.. "Robo making more...than gold trades" Trades? Are you out yer fuckin' mind? Ain't nobody here stupid enough to be trading PM's, lest an occasional "buy the dip" etc
check ujane above, he avoids pullback losses in the gold market because his money moves.
Ooops - I sit corrected. Catchy phrase that: "my money moves" WTF? Dude, mine does, too......out of FRN fast as I can manage it
If Robo's avatar's tits were real, then she'd be hot. As it is, she is a metaphor for a financial system on steroids. Pumped up and fake.
I think the tits are real. Too small to be fake. Now Pamela Anderson, you would have a metaphor there...
Not a problem. I junked him.
I enjoyed your posts more when they included pictures of hot ass chicks.
Individuals are recognizing that nearly all currencies are being debased.
The response of governments to global banking fraud is "austerity" - or increased taxes on citizens, reduced social benefits (already taxed BTW), and INFLATION.
Yes, do not doubt that INFLATION is the goal of the FED and other government "banks".
Equities won't help you in inflation nearly as much commodities.
Maybe they are gaming the market, but maybe they don't get it.
"The response of governments to global banking fraud is "austerity" - or increased taxes on citizens, reduced social benefits (already taxed BTW), and INFLATION"
effing spot on, Jam-packed sentence, that. Nice one. Spread it around and the 'Individuals' will keep increasing in numbers.
Best Regards
Thank You.
I agree, more individuals needed.
Regards back.
sounds stupid but "liquidity and by extension volatility dries up when there is no money." that's my take. in short "an actual sovreign default" is the ultimate in fiat destruction. gold doesn't protect you. even operating under a gold standard requires "governments to pay their bills." when fiat currency is "destroyed in order to save it"...well, "judges must eat, too." needless to say it is quite the understatement to say in our particular epoch with our particular activities "the American Experiment is more capital intensive than most." Does the European variant even ask where the growth comes from? If the answer is "through lending more" inevitibly "there comes an awakening." The results in Europe appear to me "historical in nature."
fiat does not get destroyed, it escapes one market and finds another.
really? "in what form" and "towards what market"???? if you answer "the bond market" i'm hittin' the "the red button of death." interview the Japanese Finance Minsiter and ask him..."how does it feel to be the holder of a couple of trillion of US treasuries right now"? If you think the answer is "I'll just print more yen and it'll be just fine!" then CONGRATULATIONS, you've just won an all expense paid trip to "head the treasury department of Ireland"!
anything for anything. MBS can get sold and go to Dow stocks, Dow stocks can get sold and go to gold, treasuries can get sold and go to swiss francs ect...Prices fall as money exits the asset. Money does not just dissapear.
On the other hand, money can simply appear from nowhere? There's a disconnect there someplace. Even The Bernank has explained how money is created in normal banking transactions. But you're saying it never gets un-created?
Oh, ya mean like the $4 trillion in "market cap" that evaporated? Or the $4 Trillion in "home equity"? or the......... [don't quote me on the numbers]
The dollar has a market cap too and when it is in the same fundamental trouble as your 4 trillion market cap company, the same thing will happen to it.
isn't it already?
isn't the bernanke racing against the opposite trend in m3 as the shadow banking system deleverages? and, in a sense, isn't he also fighting with one arm disabled by paying banks interest (for the first time) to keep their reserves at the fed (rather than lend them)?
.
Credit money can never be "uncreated", despite what the deflationistas propound.
A simple example: The USA housing meltdown, which is often held up as a shining example of deflation through credit excess.
Sure, credit money was created, and lent to the poor sucker as a mortgage. The deflationistas argue that the destruction of the underlying value of the equity of redemption, is deflation (of money + credit). The "created" money has magically disappeared (supposedly), and has not found its way into the general economy at all.
Nonsense.
The created money for the over-priced mortgage went somewhere. It went to the previous owner via the enormous purchase price, it went to the builder/developer, it went (in part) to the FIRE economy.
The created money has not disappeared - rather, it has been allocated, and is still swirling around the bowl of churn, awaiting its chance to seek a return.
People who claim that our present travails are proof of deflation, are deluded.
Then the only outcome will be inflation when all that pent up created reserves hit Main Street? That's good to know. The inflation/deflation argument is solved.
Ok, moving along...
Nonsense you are only looking at one part of the transaction. The destruction of money comes from the banks (mortgages holders) balance sheet. They have the mortgage listed as an asset. Their stated assets are less more cash is required to bolster their reserves. Your no deflation or shinking of the money supply shows the educational standard of a robo mortgage signing machine.
So a bank takes a hit to it asset values but no value is lost, yeah good one...
Goat, in a normal economic scenario, I would tend to agree.
However, where you have fractional reserve banking, the credit raised to sustain the loan is created from thin air - when the equity implodes, it is the achetypal zero sum game. Indeed, as you say, "no value is lost".
Not only that, brainiac, but the bank has already either got full value for the credit created by (a) flogging it off to your pension fund, or (b) getting paid 100 cents in the dollar from your taxes.
Think long and hard.
Actually, if anything, it is the debt on the balance sheet that is the "created" money. Money is created as debt (or counter-party risk) when "uncreated" dollars are loaned to the borrower. It is the counter-party risk that is being destroyed right now (ballance sheet money), and it will show up as losses to someone somewhere, guaranteed.
You my friend are 1000% correct.
I see the other point raised by the buck has to stop with someone. After all the loan must appear as someones asset somewhere and well, its gone or atleast fallen in value. If this has been used a a store of wealth somones wealth has just taking a beating.
but somebody will still get 100c on the dollar, somebody will get 99c on the dollar and somebody will get 88c on the dollar.
Couldn't agree more. I've always thought that as well. Especially the money on someone who sold a home; they're out there somewhere with all that money the received when they sold the home at an inflated price.
I am sure he is looking for anothere
home to buy,no one ever sells his home unless he wants
to move to another place.
Pretty unusual for such to be the case. IF the seller had fully paid off the mortgage, sure, but that means he already paid several times the value of the house to the bank who made the previous mortgage loan. In other words--his "return" in the current payment is still quite possibly less than he paid to own the place.
Most frequently, though, the dollars created by the bank go to pay off the lien on the seller's property.
There's a VERY long line of holes to be filled with the "created" money before anyone has actually gotten 100% of that principal returned.
It's just the flip-side of the creation effect, where that loan goes into another bank to enable more loans which go to other banks to enable...etc.
As others have eluded to, this is simply not true. In accounting, it's called impairment. Whether it's a hard asset like a house that burned down, or a receivable that is 180 days past due. You write the asset down, expense the loss. Thereby 'uncreating' the money once thought the asset held.
Close, but no cigar.
The actual loss shows up as a reduction in the bank's capital account.
The money supply is only reduced when the bank replenishes its capital.
Credit can evaporate but not actual currency, unless you start burning it like the Weimar Republic. The two usually go hand in hand but not necessarily. We have a deflationary credit contraction with an inflationary currency policy. In the short run the deflation has won. In the long run the currency should win out. The Fed is trying to make that happen. They need inflation to bail out our overspending government and the banks.
If dow stocks get sold and got to gold, then it has to go to gold paper, not PHYS AU. Elsewise, it's going to be stuck like a male german shepherds harry wanger in his mate of choices warm wet yoni.
it does ya know
http://www.southparkstudios.com/clips/222624/the-importance-of-saving-money
and re hot chicks hopefully you'll get the Shakira ad before the clip.
In the case of Chrysler bonds, rights were subordinated and any value (money) did disappear for the holder. If you don't hold it, you don't own it.
Hense the jump back into dollars. If the euro dives hard, the dollar will run back up until our problems whack it down again. If that happens well of course need qe3 because the fed hates a strong dollar, how dare average people be able to afford basic staples!
Watch for belgium on Monday. A poor auction and were on our way. Seems more like dollar up, PMs and commodities down.
PMs have been going up in dollars on euro weakness. Not always but its been happening.
And yet, I know of people with large Euro holdings that want to convert them to (and have done!) physical Au and Ag. Not dolears.
True for M0, not so true for M3. M3 gets annihilated by the anti-money called debt, when it explodes and defaults. the M3 based on the promise-to-pay of the now defaulted debt becomes worth nothing and "disappears".
I'm fairly certain that a number of French Judges met the Guillotine, but perhaps that is our point.
The homosexual Keynesian economists have told us that the only way increase economic activity is to "blow-shit-up" - I'm thinking of "World-War-II-got-us-out-of-the-depression" indoctrination.
So.... let's get this over with, who wants to be blown up first to save the world? Nobody is volunteering, looks like we will have to pick someone...<kaboom> <billions of economic activity just created!> <kaboooooom> <trillions more work to be done!>.
The most honourable pudgy and Nobel Prize Winning Economist His most Excellency Paul Krugman suggested that digging ditches would spur "homosexual-style-Keynesian-economic-'growth'". I kid you not!
Yeah, Krugman needs a good kick in the nuts!
You should challenge Krugman to a 'Rochambeau'.
Bastiat refuted that idea in explaining the "broken window" phenomenon. However, it does not prevent keynsians from believing that myth. A lot of average citizens believe some portion of it as well.
"Foolish money reacts while smart money plans" Eric De Groot.
Trade your plan; plan your trade.
"Life is what happens while you're making other plans" - J. Lennon
"Want to hear God laugh, make a plan."-- ?
"....tell him your plans" - Woody Allen
Or eat some LSD.
"A fool and his money are soon parted", no matter what his plans.
"On a long enough timeline,..." ; we all are.
http://www.youtube.com/watch?v=cAQCNvybcXk
1998 gold $300, SPY 1185
2010 SPY 1185, gold $1300....
"That's basically the way it has worked out so far".
Correct. Robot won't post the Dow/Gold chart of the last ten years. He is full of shit on gold.
And unlike gold which is a constant, the DOW makeup changes as bankrupt dogs are removed for fresh blood companies to enter. In other words, the DOW is rigged to look good while gold is gold.
That is a very, very good point Market... so simple yet oft overlooked. + 1000
And we wouldn't want any historical facts like that to get in the way of Robot's one day charts would we? ;o)
When the Dow/Gold ratio is 2:1 or 1:1, then gold's TRUE and FAIR value will be openly understood, IMO.
I have no idea what that number will be.
Robots have no use for gold anyway, so who is surprised? (silver, on the other hand.... notice how Robot never talks about silver? That's because he is made of silver, copper and lead).
"That's because he is made of silver, copper and lead)."
You are what you eat!
I always like to think of Robot as the sexy damsel he posts. Makes me feel gentle towards him, not to mention somewhat stimulated by the charts.
Falcon
Robots have no use for gold anyway, so who is surprised?
Actually they use quite a bit of gold for the contacts. And if this robot is to be sent into space, it has more as gold foil, gold wires, etc are used to ensure reliability. You would be amazed how much gold there is to make the ISS function properly.
MarketTruth - Just out of curiosity, are/were you behind that financial newsletter (Market Truth) published out of Hong Kong earlier this decade?
If so I remember your calls on gold around 2003-2004 (approx), and analysis on money supply - plus where gold was headed.
There have been 14 additions/deletions to the Dow 30 in the past 15 years.
Nice way to keep the illusion of prosperity going, while half the index implodes.
They should have put Apple in when they had a chance -- but no! They pick Cisco.
All valid points. But the trick is to buy when the real implosion is scheduled.
And that will not be until we run out of oil. Until then it's all noise. Gold is going back down.
This entire market burp was brought on by some real estate nonsense. That will be fixed in the not too distant future. The economy will chug along in it's cycles until the real event happens, then you will want to own the physical. But gold will decline back to it's lows before that happens.
wow.
Ujane, by this time, i have come to view you as a comrade in debate. out of genuine concern for your well-being, i strongly recommend that you begin averaging into physical precious metals with at least some of your fiat paper money. Since we agree that precious metals are very important to have in the long-term, then you can average into more as your expected decline occurs. the downside of not getting started on any precious metals is that you may be wrong and they never look back to the prices you expect. get some, buddy.
You just don't get it. This "burp" was caused by the oil peak.
Gold is declining in production and has been since 2001. There is no bubble.
So we have passed the regurgitation peak.
Thanks for letting me know.
Whew... that's a load off.
Just one question. What makes $ so valuable? At least Iraqi dinar maybe supported by oil but $ is supported only by air carriers and ..... what, sorry I don't remember.
"But gold will decline back to it's lows before that happens." - gold is supported by history, cannot print it, cannot eat it, but still got something in it.
Gold will not go back down,(to any measurable degree) until the US Debt is brought to a managable level.
Which will never happen,at least for the rest of my life.
(And where do you see an economy return strong enough to cause idiots to start charging again?.)
The reason it moves up, is FEAR, and a lack of CONfidence in the paper notes we call dollars,coupled with Pac Rim countries coming of age, and sucking more off the market into their reserves,and populations purchasing it like Europeans do.
Gold is one thing, Insurance.
Gold has been tracking the USD of late, and when it goes up, so does Gold.(totally the opposite of the usual).Why?,because folks know it's shit.(USD)
When Europe explodes in the next 2-4 weeks, and it is going to do so, you had best have your holdings in hand.
Without something of value backing any currency, all that keeps it afloat is confidence.
After all, it's just pulp,with ink, and a lie printed on it.
Debt to GDP must be at a manageable ratio, ours is off the charts.
As far as telling friends and realtives about protecting themselves, I have given up.
If they want to roll the dice, its their ass.
Insurance,we all buy it for protection, why would you not do the same for your lifes savings?.
I'm sorry but how do you know that?
1980: "Gold at $800 an oz, S&P at 150." Gold at $30,000 an oz suddenly sounds reasonable, doesn't it?
I don't see gold that way. I see gold as the old bretton woods $35/oz peg. After 71 when the Nixon shock went down we had the run up after.
Way I see gold/$ is $1000 coverted to gold in 1970 makes 28.57 oz. Held that gold until today you have $38,500ish
October 2008: SPX 666, gold $681.
Anyone who thinks gold will go up if stocks crash is living on another planet. Hedge funds will be dumping their GLD as if it was uranium during the week of Three Mile Island.
Calendar check over here, please!
http://www.youtube.com/watch?v=OW3_j6SoHXM
You could very well be right. The question you should ask is WHY. Because gold holdings are a store of value. That value must be tapped when funds are needed. Just proves that gold is what it has always been. When the average holder of PMs needs funds, and all other assets are useless or valueless, they sell their metal. That never changes.
good point ( I don't think logicalthought is living up to his name)
>>You could very well be right. The question you should ask is WHY. Because gold holdings are a store of value. That value must be tapped when funds are needed. Just proves that gold is what it has always been. When the average holder of PMs needs funds, and all other assets are useless or valueless, they sell their metal. That never changes.<<
You can call it a "store of value" or a "True Value hardware store"... All I'm saying is that if stocks dive the price will go down.
You don't mean to say that the trade in precious metals has mostly been based on easy money and that it is a speculative trade ready to burn thousands of people who bought into Soros'...erm..."idea" that everybody and their brother should buy gold?
Say it ain't so...
you guys just can't wrap your heads around the notion of "real" assets, can you?
Everything is a fuckin paper trade in a casino, to "make" money.
Why are you acting like gold bugz have an affinity for Soros? He is a tool of control, used to deceive; he speaks from both corners of his mouth, on subjects such as gold. Anyone trading "gold" because of an adherence to a percieved notion that gold is a blessing from Soros is getting lucky, because that mean ol' bastard cares for no one but himself.
"that mean ol' bastard cares for no one but himself."
That proves my point exactly. His idea is about Reflexivity, which basicaly says that the markets are always in a state of flux depending on who knows what, who thinks they know what and people guessing they know what. Soros realises that he is in a position of power and opportunity to make money by making the home-gamer believe what Soros wants them to believe.
He will raise the tide and pull the rug out from under you in less than 30 days. Look at a chart of gold in 1983 and you'll see that I'm not kidding.
Stock mutual fund redemptions are coming in at a record pace. Much of this excess money is moving into precious metals. Morgan can basically control the price through the use of derivatives on the PMs, keeping them down long enough for all the money to be moved out of the "crooked stock market" and into something reliable, like gold. Watch for Morgan to start to take the other side of the trade, then thweeeeee--pppppppttttt! There goes the rug.
And you and many others who bought into Soros' bullshit will be on your back again. No one had to come and confiscate your 401(k), you gave it to them hand over fist.
That's sad.
Orly I have no idea what you are talking about. I think you give Soros and other Market Manipulators far too much credit. If people go out and buy silver, and then we use the silver as collateral as loans, I think there would be much more partnership in the world than if we used a FIAT standard of monie that any country and corporation can abuse due to everyone being able to make non performing loans. Facebook facebux are as good to me as dollars, and neither will ever constitute a store of value, to me, and many others. Soros only wishes to manipulate the game to his benefit. It is not to his benefit for Americans and the rest of the world to do such a thing as corner the silver market, because then people like him, oligarchs, lose their control over the markets. All markets are connected in space, except the paper market, because it does not exist. Soon the curtain will be lifted, for the world to see.
"Soros only wishes to manipulate the game to his benefit."
Pretty soon the non-reality of "paper money" may end up crashing around your ears.
Just think about it, please.
Any wealth based on a promise-to-pay has SEVERE counter-party risk. Any debt-based asset will drop in value (includes debt-backed paper money). The coming Euro Ponzi unwind is going to crash the system. That is a VERY GOOD reason to have physical gold - no counter-party risk. I don't mind if Gold drops to $100/oz IF M3 drops by a factor of 100 (possible if the Eurozone unwind really detonates. ALOT of the US M3 is based directly or indirectly on Eurozone promises to pay).