Justin Thyme

We will all soon find out if it goes to $1650 minimum...

 

Then we can all pile in!

 

Who needs to do TA - let's just follow this guy!

I take comfort in the fact that these sell-offs seem to intensify in the run up to the CDS auctions. I'm in the red for the first time since I bought into gold in September last year but am sure we're going to have the mother of all bounces before Crimbo. Just glad I sold up and moved to Asia for a while.

I hope Ologhai hasn't topped himself

Seriously though, by Crimbo, we'll be laughin' !

Ohhh thanks for that, you topped up my wereallgonnadie-ometer. Blimey that is exceptionally dismal news for the markets and for anyone who doesn't own gold.

You're welcome. Like many, I expected gold to be a lot higher than it is now but it turns out we've waited a bit longer than the goldbulls told us we'd have to but these banks can't keep the all plates spinning forever and that'll become obvious to the world in the price of gold come the corporate defaults . . .

We're right, they're wrong . . . simple as that !

You're right of course. As you say if LEH passes without too much of a fuss we still have the WaMu CDS auction which was suggested in one article I read for this Friday (24th). It's not that I want any of this to happen, it's just I want to be proved right about gold, I think you probably feel the same.

WaMu and the Icelandic Three are just the tip of the iceberg. The CDS market is the main course while the CDOs were a starter. I read this today on Bloomberg and it served as a reminder of just how right I was to buy gold and silver.

Oct. 22 (Bloomberg) -- Investors are taking losses of up to 90 percent in the $1.2 trillion market for collateralized debt obligations tied to corporate credit as the failures of Lehman Brothers Holdings Inc. and Icelandic banks send shockwaves through the global financial system.

 

The losses among banks, insurers and money managers may spark the next round of writedowns on CDOs after $660 billion in subprime-related losses. They may force lenders to post more reserves against losses after governments worldwide announced $3 trillion in financial-industry rescue packages since last month, according to Barclays Capital.

These fires are going to burn for years to come and the global central banks are going to be printing heavily for years to come. Let gold sink because there are untold buyers out there. Forced-selling is back today in preparation for WaMu's CDS auction on Friday. Gold is at $750, the Asian exchanges fell sharply. Sooner or later there'll be nothing left to liquidate and on that day - before Crimbo, I think - the goldies' party will start again.

I'm starting to think the derivative issue is going to be a slow deflationary drip, rather than the collapsing catalyst so many thought it would be. What else is in the mix that could send gold through the roof, do we have to wait for the dollar default? So far, whilst clearly the intervention has heavy inflationary overtones, I don't see any buckling or cracks in the system any more. It pains me to say this but they do seem to be dealing with everything in a controlled manner at least as well as they could given the mess they've got themselves in to. Do people see a slow death or do some still predict it will collapse under its own weight?

Plenty more defaults and auctions to come. Patience . . .

If the Lehman CDS deadline passes without incident, one has to ask if the hedge funds and banks have anything left to liquidate come the next round of CDS auctions.

Good chart. I'm thinking almost exactly the same thing for a number of reasons.

 

1) A mid cycle bull usually has a 50% correction.

2) Elliot wave theory shows we've made a 4 point move down with a final 5th incomplete.

3) There isn't a great deal of support at these levels but a lot of strong support in the $650 area.

4) Deleveraging. Until this ends, people will have to keep selling gold.

This TA is all very well but I think, come Tuesday, when we find out exactly who's short of funds to settle their share of the $300+bn of Lehman CDS liabilities, the market won't give a monkey's about charts. There'll be a mother of all panics and gold will react accordingly. If it turns out that everything's fine and dandy, then we can talk about charts.

I'm probably totally wrong but there's gotta be a reason why the interbank rates have remained stubbornly high. There's gotta be a reason that the Fed's dicount window dished out about £440bn a DAY last week and $420bin a day the week before despite the bailout approval, despite the backstop in commercial paper and despite the Fed and its counterparts around the world guaranteeing interbank lending.

I think a hedge fund has bitten the dust somewhere

As for GF's 'get out of the kitchen' comment. Well, it's blunt, but it's true. What else would you expect from GF? :-) I fail to see how anyone following this board's overall views on PMs could fail to see that there are no guarantees with gold or silver, especially when the whole of the world's economic powers are pulling out all the stops to make sure normal service is resumed ASAP. It is the long term cost of that intervention which we're looking for protection from, not the daily lottery of the exchanges which govern gold prices as well as shares.

Fully appreciate that reasoning but we also have to remember that PMs will rise in value as more new investors get on board ie Joe Public. I realise that the shenanigans going on over at the COMEX don't reflect this . . . yet but, ultimately, more people buying in means the higher prices for PMs from which we'll all benefit. We're counting on PMs becoming a bubble from which, I'd imagine, we'll all want to get out of before it pops one day some years hence.

I've been invested in PMs for just over a year now and I've only recently hardened my conkers to the volatility through more reading and the realisation of the sheer scale of manipulation going on but the triumph of PMs over this misinformation and deliberate fiddling is dependent upon investor education and that is the aim of this forum, yes ?

Right or wrong, it would've been better to point Ologhai in the direction of a relevant article or post.

As wrongmove has pointed out, there is *always* a need to keep a sense of perspective on precious metals, and you'd have to be extremely brave -- or called Goldfinger :-) -- to dive fully into gold at any price, let alone recent prices. However even if you did, as long as you do it with your own money and not money ear-marked for the new family home, or your imminent retirement, or borrowed from a credit card, then you have -- as the quote goes -- nothing to fear but fear itself.

 

Can *anyone* honestly think that the pound or the dollar are going to retain their current value once the dust has died down? Will the Alt-A loans in the USA, or credit card debt in the UK, or the huge job losses to come in retail & restaurants etc do anything other than require more spending and borrowing to stave off social collapse?

 

This whole PM situation is not necessarily about making money, it's about NOT LOSING SO MUCH money in the face of the financial chaos. Or at least trying not to. If you're totally in any asset -- cash, property, shares, PMs -- you're asking for a thrashing with a slight chance of getting very rich indeed if you're right. Most of us though will just hope to spread our risks around and hope that something helps balance out the bad bets.

No argument from me on this at all but, let's be honest here, most who have invested in PMs have done so with a view to realising a profit. If this wasn't so, then why would there be so much focus on buying on dips in, say, silver ? Sure, there is the "insurance" element but when you go out and insure your life, do you ask for a specific sum assured based on what your dependents would need to live comfortably or do you plonk down £100,000 and ask "I want the maximum sum assured this premium can buy me" ?

The underlying hope of many PM investors, I suspect, is to one day, when the much-heralded fiat currency destruction we're expecting actually arrives, is to exchange some of our pile for a damn sight more than what we can now with a view to, perhaps, buying a nice house or what have you without a need for credit.

There is nothing wrong with a member expressing concerns and seeking reassurance which is what I think Ologhai was looking for as a relatively new entrant into PMs. These moves are disconcerting to some so I just thought that he should've received a better response than "get outta the kitchen".

I am mentally prepared for $500 -- a 50% from $1,000 similar to the one in the 70s from $200 to $100 before it took off to $850.

 

Below $500 I would conclude that it is too late anyway, and would hang on. I'm a hopeless case for the cartel. Sorry!

But is this mentality not the same as that employed by those who, in predicting the end of the UK property boom, effectively "told the time from a stopped clock" for 4 years over at HPC ?

Ologhai's concerns are probably shared by a few forum contributors who, for whatever reason, are too afraid to vocalize their reservations on here given the virtual deification of gold. Absolutism is unwise when it comes to investment IMHO, hence my reluctance to be 100% submerged in PMs.

I suspect that if gold went to $500, a LOT of people who didn't get in as early as you did, would be seriously f***ed off; especially if they emulated your 100% PM strategy.

I must confess to feeling less concerned about the falls in POG having read a few articles about, amongst other things, the COMEX farce. My eyes have been opened further by the sheer scale of the disinformation the central banks, governments and even the financial media keep firing at us. On Youtube last night, I watched a collage of footage featuring Paulson, Bernanke, Darling et al charting their statements from the beginning of the subprime debacle to the present day. CNBC's contempt for gold and what it represents would be laughable if it wasn't for the fact that nigh on every commentator - with the notable exceptions of, among others, Philip Manduca and Jim Rogers - displays a smugness that I'd like to wipe off their face with a baseball bat.

When I sold my property last year, I knew things would get bad but tended to ignore doomsday predictions from people like Cgnao when I was lurking over at HPC believing, instead, that surely the central banks wouldn't let it get to the nightmare scenario he depicted with such conviction - boy, was I wrong ?

I scoffed at the the existence of the "PPT" but have since learned that it is real and in operation doing its utmost to make gold look like a losing bet every day the COMEX opens in NY. Anecdotes reporting shortages of physical gold are widespread and each day, more and more people are abandoning faith in the financial system while waiting for another shoe to drop.

This from an Icelandic gold bug, posted 1st Oct.

 

kitcomm.com thread

 

If only all Icelanders had put something like 5% of their savings into the yellow stuff.

Now THAT was chilling !

I'm about 25-30% in gold and silver and have no plans to increase holdings. Although I sincerely believe that the financial system's screwed, I also happen to believe that there will be life after any full-on collapse. I've got a wedge in Swiss Francs and Yen but I'm also waiting for the next downleg in equities so I can buy beaten up stocks in key sectors like water and oil explorers not to mention a couple of Japanese multi-nationals.

Precious metals are all very well but as much as I believe gold/silver will surge eventually, I'm not entirely convinced the Chinese, the Russians and the Japanese are going to dump US treasury bonds anytime soon.

We are all on the roller-coaster now, get used to it and pass the sickbag.

Hmm, looks like Marc Faber's jumped off according to this Bloomberg report . . .

As markets may recover from now to next March, the full sense of security will come back into the market, and people will not be that interested in gold,'' Marc Faber, the managing director of

Marc Faber Ltd. and the publisher of the Gloom, Boom & Doom report, said in an interview on Bloomberg Television

A mate of mine sent me this today - sorry, he did not include a link so no idea who's 'thought for the day' it is!

That's from the Fat Prophets

www.fatprophets.co.uk

Anyone with any explanations for the current price action in gold ? I'd've thought the whole bailout rejection issue would've seen gold fly but we're heading toward $850. I can understand the dollar strengthening against the euro given Trichet's more dovish tone but the system is still screwed. I realise investors can be a daft lot most of the time but surely the case for gold over US Treausuries has been made ?

If there are queues outside ATS Bullion, then why is gold displaying such weird price action ?

Do you have a link?!?

http://www.cnbc.com/id/26944410

OMG

I never saw that coming

Is anyone waiting to take advantage of when the Treasury market tanks ? Shorting the Ishares Lehman 20yr ETF was mentioned somewhere not so long ago but any more suggestions would be welcome

Up $50

One for the morale.

 

Edit: I know if I was in paper, I would be a nervous wreck at the moment.

 

Edit edit: Oh, just noticed gold up $30 hence the rocket... and here was me all morose like.

Good to see the numbers with a "+" in front of them. The decoupling from crude is very encouraging.

I was most encouraged to see gold rising while oil was flirting with $100 late on Friday. If this is the beginning of the deterioration of the tie between their price correlation, it's got to be good news, right ?

er . . . ok this is starting to get a bit scary. Silver's into the 10s, crude's approaching the ton and the dollar's on steroids. I know, I know - the fundies remain the same but how low can gold go ?

Silver just about to head into the elevens Gutting

Are the CBs capable of moving the worlds biggest currency by 10%? I somehow doubt it. Why hasn't the market "done a Soros"?

er . . . in the short-term, evidently so.

Inflation running at 5+% and interest rates at 2% and printing presses running at the whim of the government. The market hasn't done a Soros as you put it because the dollar isn't sterling. It is the world's reserve currency and China, Russia and the OPEC nations hold an awful lot of it. Admittedly, gold bulls haven't had things run their way but the dollar's position is precarious enough to to be prone to suffering a collapse at the slightest provocation.