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Tom O'Brien was on CNBC at 7:30 this morning, he says gold to enter a correction that could last up to a year, and the dollar is about to stage an epic rally.
the dollar is about to stage an epic rally.... downwards.
If the Bernank does nothing [save for some jiggering to the long end], Robo is correct. If the Dixie gets above 75, then an unwind of the second most crowded trade will occur, namely criminal syndicate Wall Street bankers shorting our currency.
You just have to love those bankers.
[Pink slips, please.]
That's exactly right. Think of how much money could/would get caught off guard. And if DXY shoots past 75.....to 80(?), I will be selling into the rally converting as many FRN's as possible into......you name it: HY, pm's, equities, etc. which should all be on "fire sale".
+1. I personally love these "corrections," from whatever cause they may originate. You get to watch the performance of the various producers / juniors / explorers on the way up and down. It's like some kind of free CME-induced sorting process. It's fucking awesome!
Not a trader, still buying and holding on fundamentals here. Fundamentals:
1. The Free Shit Army will burn U.S. cities to the ground when the checks stop, or when the checks lose purchasing power = The checks will keep going out, deficit be damned. Bernanke is trapped.
2. There is no recovery, never has been; the credit bubble is 30 years old (http://research.stlouisfed.org/fred2/graph/?id=DGS10). Tax receipts are and remain in the shitter. Lowering rates has had no lasting effect; negative real rates (QE) has had no lasting effect; fiscal "policy" has had no lasting effect. The deficits will continue because the alternative is not feeding the Free Shit Army. Bernanke is trapped.
3. The impulse to "do something" and the fed dot gov's impulse to "manage the economy" will guide them down the path of USD destruction.
4. Long time members here know I've long believed we will have one final, scare-the-sheep-into-submission deflation before Bernanke unleashes the presses for the last time. The banksters and Bernanke will use deflation to achieve political consensus. The populist revolt against government spending will be overwhelmed by SEIU, the FSA above (well, that's the same thing as SEIU, isn't it?), seniors, government employees, and the rest.
5. Popcorn prices will continue to skyrocket.
Popcorn prices will continue to skyrocket.
Popcorn prices will continue to skyrocket.
... and the price of bread too, but circuses will continue to be free to the public.
They burned the Johhny-come-lately's who just jumped on the gold train (like all the 'buy-silver-crash-JP-Morgan' types who bought over 40 and freaked at the smashdown). Predictable. The price gets pumped - and then dumped - they make money covering all the naked shorts they wrote to push the pricce down and maybe even scared some newbiew out of their recently bought physical. Want to bet a bunch of hedge funds sold their new gold holdings back to JP Moprgan - leaving only 5 owners for that pile of gold oin their new vaults instead of 10?
Each smackdown goes to a higher 'low' - this is still a controlled and managed retreat, not a rout. The big boys are still making a ton of money at every retrenchment. Hell, JP Morgan may even manage to get out from under all its silver shorts eventually. The big boys have a hell of a lot of free money to play with but the economic fundamentals are still working against them:
National debt is at absurd levels - and is even worse than it should be thanks to government bail outs and the taking on of all the bad debt the banks and Wall Street created - no mark to market for all the mortgage backed securities held by the Fed. The US HAS to keep a cycle of debt roll over going ad infinitum - but they're running out of buyers. How much has he Fed bought lately every time we have a T Bill auction? (Is there enough money in the world to keep that cycle going? I doubt it)
The WORLD is locked into a NEED for perpetual growth to support the current debt system - and like it or not that is an impossibility on a planet with finite resources. You CANNOT keep growing forever and if you do you guarantee human extinction. The US has been showing NEGATIVE real GDP 'grpwth' for over a decade. We've been increasing debt aty an ever faster level instead of paying it down.
The banks and Wall Street are focused on a short term 'make money ' game at the casino where they can and have fixed the games. But the Casino is on fire and they haven't even noticed yet. I do not see how this can end well. At BEST we end up with a nice big war in the Middle East to grab oil supplies we can no longer pay for (putting allour unemployed to work as cannon fodder). But our industrial base is gone and I don't see any focus on rebuilding it. The global guys care only about the cheapest possible labor model and think that in a world on fire they'll be fine as the new lords in the castle overseeing all their new serfs. But I suspect the future serfs will not submit all that willingly. They're like the Roman elites who never thought they could lose control. They thought they could control the Goths they employed to protect Rome, that a world dependent on slave labor would last forever. They knew they'd debased their money into worthlessness but figured they could perpetuate a failing Empire forever. They never expected the barbarians running through the streets of Rome and the collapse of Empire.
Excdellent recap, Cynical,
"The global guys care only about the cheapest possible labor model and think that in a world on fire they'll be fine as the new lords in the castle overseeing all their new serfs. But I suspect the future serfs will not submit all that willingly."
Regarding the ever cheaper labor in the rest of the world, these dudes are not the serfs and peons of the developed world. They will not cower as we do, nor be so divided-----they are in on-going revolutions where rhetoric is strong and meaningful.
I wish them luck with managing these these 'human resources' when the unions get off their asses and begin to organize because these dudes believe in what the unions are selling as well as democracy.
Again, thanks om
which would mean what? BTFD Bitchez
All the doomers will turn out wrong - durable goods on the rise, a new boom is coming. Last week, a bunch of "next leg down, total collapse"-newsletters filled my mailbox. Now a big silence. No collapse, crisis over, gold and silver down, stocks up. Boring world we live in.
Uh-huh. Yeah, talk about confirmation bias. One "positive" data point negates the last 500 negative ones.
Enjoy your poverty.
You may have a point - I just ordered a backpacking wood stove from Utah , It looks like good quality workmanship although I need to see it first - I would pay twice as much for a european product if they made the stuff.
American goods are becoming cheap.
Funny but GDX, GDXJ SIL, SLW and other proxies for the mining stocks are not down anywhere's near the same percxentage as GLD - GDX and SLW are even UP at the moment.
While the smackdown may be hitting the metals and their ETF's the producers are faring much better. That would be a bullish long term indicator to me. Maybe with throwing the kitchen sink at gold they banks don't have enough ammunition for a full front assault. You're NOT seeing a similar smackdown on the mining stocks. Unusual because they'd get slammed along with gold lately during the staged attacks.
The only was that happens is Ron Paul becomes President. Everyone else are puppets.
That is a real kneeslapper considering even the "save haven" swiss are devaluing their currency.
I hopes he's right. I'd like to buy some more gold.
You should understand that I was not reffering to time differences, but to emotional perception.
I love that term "dynamically managed", why dont they just say "fly by the seat of your pants and hope you dont get killed".
dynamic hedge = hedge your hedged hedges as your core position blows up.
"with Paulson funds loosing almost 40%"
The word LOSE -- to deprive, to cease to be in possession of -- is spelled L-O-S-E. The word LOOSE -- not secured or attached -- in contrast......
Sometime circa 2003, a strange mass phenomenon occurred, in which many thousands of educated, intelligent people suddenly, and seemingly simultaneously, forgot how to spell "lose".
Loose monetary policy = lose your money
People are easily confused
Thank goodness someone else noticed as well. The same relief I felt when i started reading ZH.
Just buy physical and wait for the CB's to start fighting over it.
My phyz stash has shown no volatility at all except for an addition yesterday. I agree that the price could come back a bit. I'm lookin forward to a paper price just above the cost of the paper and ink, maybe 3 cents. So thats 3 cents for gold and 3 cents for silver. Whoodanooe gold and silver paper would have the same value one day.
With all the black swans circling, I would expect the Asian buying season to be epic. This latest manipulation smells of desperation. Did Hugo initiate the fear? When will we know if he actually received his gold and if it is real.? We need a Venezuelan mole.
Newspaper reports that Gaddafi disappeared taking some Gold with him... So now they still need to come up with the Gold for Chavez
JP Morgan and HSBC put up that $1.2 million reward for his Dead or Alive carcass.
Ship him some newly forged gold plated tungsten bars.
Once he finds out they're fakes, what the hell can he do about it, invade the US?
Expect an epic 'boating accicent' in transit. All that tungsten....uh, 'gold' on the bottom of the sea. Lloyds will pay off - at the bottom of the current price dip - in paper. What's Hugo gonna do?
Umm, buy Physical AU from the COMEX with the Fiat AND stand for delivery?
Apple trade initiated at Capital3x and it is an interesting one!
Despite the biggest, fastest drop in GLD in over 3 years, only 7 days of longs are underwater. Over 98% of all GLD longs are still in a winning position.
Shake it up baby....twist and shout. :-)
Ahem...lesser minds don't need to understand the transitory nature of global asset dislocations which have highly efficient transmission mechanisms (all of which I, the great and powerful Bernank have my fingers wrapped on the control dials for). You mere mortals still think that yellow metal has some value? Hah! I'll just turn that dial down to show you a thing or two. Let me know when the pain is too much (so I can turn it down some more). You think NoBama is running this show? Hah! At least Bubba Clinton knew who the real boss is (close enough anyway since he identified the bond Mkt which I, the great and powerful Bernank, keep on the dials most within my reach).
Now back to your regularly scheduled programming.
Why should we trust a newsletter that can't even spell the word LOSING!
"Paulson funds loosing"
I don´t know what to do know...Steve Jobs leaving...my oh my..or Bernanke speaks....I am scared to death...(thumb in my mouth lying in the corner, sobbing uncontroably)....actually not...I am still buying gold....real gold...not the paper trade....all I hear is a bunch of weenies begging for more free cash from Bernanke...or crying becase their toy idol is leaving...is this the E Channel now.....
its very simple now...we have spent to much..we can´t pay it back in real terms so we either default..or print to cheapen the dollar..Euro..Yen....and soon the emerging markets will start printing....Brasil does not want a strong Real...GOLD will do fine..very fine
And what really pisses me off is that I amg going to hear about APPLE all day long....every channel....all day long
Tried to pick up 60 American Eagles at the coin shop yesterday - no luck. Shame. Would rather buy from a coin dealer with cash (no paper trail at the coin shop either) rather than online with a credit card.
Thankfully this dip should free up some inventory from weaker hands. I am betting the coin shop guy will have some next week.
<$1550 would unleash the dogs of massive physical supply squeeze as everyone from your Black Swan Concierge to Sovereign nations jump in and buy like it's a Blue Light Special.
Here are the charts from the trade on Apple
Apple will be the main course at an Android feast.
All the charts
It's just plain ole' funny hearing all the predictions now. Oh, the bubble has burst, it's overdone, it could trade below $1500.00, bla bla, blah. Meanwhile, when it broke $1900, they were talking $2000.00, $2100.00. Come on dude, nothing has changed. hard to trade it but better to just own it.
This is exactly like the Post 5 margin calls on Silver working like that kid in the pool as he attempts to hold that volleyball down in the pool. Eventually it's going to explode upward.
The dollar has been falling for a hundred years and gold did not rally that whole period. EPIC FAIL for those who seem to think gold is always correlated to the dollar.
Well gold WAS directly 'correlated; to the $US - more like locked in at a FIXED exchange rate for much of that time which is why Nixon refused to exchange any more gold for $US - gold was on sale at bargain prices under the fixed peg. Even after the dust settled on that move, great efforts were made to hold the price of gold low to make the paper money look stronger than it was. You can only hold the beach ball under water for so long.
Gold is correlated to negative real interest rates.
X 100-1 Long John
Thank you CME and all the other merc's for allowing me to Merk my dealer!
For whatever it's worth...funny how all the brokerage firms came out and upped their gold targets, and then gold got smashed. But, here's Dominic Schneider of UBS
The sharp selloff in the gold price has raised concern among investorsabout whether the metal had reached unsustainable pricelevels and that more weakness lies ahead. The CME Group also announceda 27% increase in maintenance margins to USD 7,000for each 100-oz futures contract at Comex. While a dip to the lowerrange of our 1- to 3-month trading range at USD 1,724/oz isat hand, month-to-date the metal is still up more than 7%, andyesterday’s decline should be seen in this context. This begs thequestion of whether markets will sell down the gold to price levelsprior to the US credit-rating downgrade, which would bring themetal down to USD 1,640/oz, our former trading range low. Wedo not expect this to happen. US public finances are far from gettingbetter, especially with economic growth likely to slump. A firmdurable goods order report for July does not change this picture.In addition, the structural problems in the Eurozone have yet to betackled seriously enough to prevent a disintegration of the euro inthe long run.
We advise investors to build up long positions in gold from a diversificationperspective. Our forecasts remain unchanged. For investorswho want to be positioned more conservatively, the rise inoption volatility toward 30% offers very attractive opportunities toset strike levels at USD 1,640/oz. Selling volatility (put options) at thislevel would bring a 9-10% annual yield over the next 1-3 months.
Treasury purchases will decrease by China look slike as they worry more and more about the devaluing dollar:
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