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ecoface

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Posts posted by ecoface


  1. I haven't posted for a year or so, but thought I would throw this in.

    We're in for a re-test of lows, and down to c.1000-1050 USD, to flush out all but the strongest of bulls, before the final explosion.

    I think this latest aggressive correction of 6 months or so, is far too short. If I have learnt anything from this crisis over the last 5 years, it is that change happens over a much slower and longer timeframe.
    Behavourially, there are too just too many pundits, talking heads, and "experts", expecting a rally up to 1425-1550, and very few expecting another fall. Expect a rough ride. I'll come back in 3-4 months to see how this fairs.


  2. Has anyone contemplated the concept that the recent peak was the equivalent of the mid 1970s peak of 800 after which there was an 18 month correction, before the final 4.5 year explosion?

     

    If there is massive deleveraging and deflation in 2012 and 2013 which looks a real possibility, then gold will really have to prove itself.

     

    For those of a view that history often repeats itself, gold in late 1974 was at 800 (inflation adj) and dropped to around 380. A similar repeat pattern now would result in gold dropping from 1925 to 950.

     

    It took 2 years for the rapid rise from 350 to 800, then 2 years to go back to 380.

     

    This current cycle from late 2009 (at late 900s) to Autumn 2011 (also 2 years), could forseeably be mirrored by the same drop over the same duration, so a mid cycle bottom in Autumn 2013.

     

    Such a correction would flush out almost all investors. It would also mirror the classic bear trap stage of the Awareness Phase of the anatomy of a bubble. (see the graphic yourself as can't pin it).

     

    How many of you are placed to handle a fall for 18-24 months down to $950, as that is one pattern that is reasonably feasible.

     

    This kind of thinking doesn't threaten the long term bull position. It kind of makes sense if one views that this depression will take another 4-5 years post 2013. By 2018 we could see gold at over $4300 (i.e. using inflation adjusted figures the POG went from 800 to 1800 = 2.25x).

     

    If there is one thing I have learnt from the last 3-4 years of crisis, it is that the change occurs very much more slowly than previous recessions. The gold bugs are very impatient, and the powers that be, far more resilient to radical change. The hyper-inflation arising from the QEs should only feed in, once we have had the second and more devastating dip of this depression.

     

    So, what do you good folk reckon of the mid 70s mid cycle argument?

    (I do recognise that this era is worse than the 70s, but place that to one side.)


  3. Hate is a strong word, but I come close when it comes to Mervyn King for what he and his crooks are doing to sterling at the moment. Their QE2 jawboning is utterly criminal. This gold correction is not presenting much of an opportunity for Brits.

     

    For Brits it still looks okay; just shot through 50 dma at 1080.

    Next stop down 144 or 200?

    Don't be too downhearted yet :)


  4. Well I certainly agree with you that we are due a proper correction but I don't think it will reach the 200 DMA, over the past three years the 150EMA has been the far better indicator. Indeed over the past six months it has barely managed to go below the 50 day EMA. I could be wrong certainly but I would be buying at the 50 EMA.

    Double top in GBP.


  5. Bull trap in gold coming in my opinion, sucking people back in thinking we will go up to 1900 again. H&S forming right now. Prepare for deep medium term correction back to 200+ dma in long term bull trend. There are strong signs in US that in the short term there will not be QE3 (yet). This will surely kill POG for a while.

    (ouch - already got a bashing from bugs).


  6. I don't think it would have any effect after maybe a small correction. The graph below shows the response of gold to real rates since 1970, which you can see is positive till rates are 3% over the inflation rate. So really for gold to start turning negative we would need rates to be around 8% currently, which is miles away from the current rates.

     

    20110704-nhnep1ix3kw9pmcjf2mr37t1in.jpg

     

    I was pondering the idea that the only way the authorities can instill confidence in their own monetary systems and currencies, is to allow interest rates to increase, albeit marginally. A very minor increase will surely induce a short to medium correction in POG.


  7. Well, FWIW, I'm planning for a sharp fall in the POG very soon, back to around £890 or the 200 dma (for GBP).

     

    Since Dec 08 lows, we have seen 5 up legs, each lasting about 4-5+ months after the 20 dma crosses the 50 dma.

     

    The last leg up, or crossover, was in March. Therefore IMO the recent high of c.£1000 was a top and we will see a healthy pullback to test the main primary bull trend.

     

    We may see one final push up to £1110-1115, but then the correction.

     

    Anyone else care to comment on the duration of the uplegs, and my forecast for a retest of the trend lows?

     

    Thx.


  8. <b>Lightbridge Comments on Text of Senate Bill S.3060: Thorium Energy Security Act of 2010</b>

     

    "We applaud the efforts of Senators Hatch and Reid in formally introducing this bill to the Senate," said Seth Grae, Lightbridge (Nasdaq: LTBR) CEO. "This is a significant milestone for the nuclear industry and offers the hope that alternative nuclear fuels will be considered for new and existing reactors as global power demand continues to require fresh thinking."

     

     

     

    "The introduction of this important legislation by Senators Hatch and Reid, which will advance the cause of peaceful nuclear energy in the context of nuclear non-proliferation, is an appropriate recognition of the 40th anniversary of the entry into force of the NPT," said Ambassador Thomas Graham, Jr., Lightbridge Corporation Executive Chairman of the Board. Speaking as the former Special Representative of the President of the United States for Arms Control, Non-Proliferation, and Disarmament and leader of the U.S. delegation to the international conference that successfully achieved the permanent extension of the NPT, Graham continued, "the legislation introduced by Senators Hatch and Reid is a major step forward for the industry and validation for the thorium-based nuclear fuel technology being developed by Lightbridge."

     

     

     

    <a href="http://www.streetinsider.com/Earnings/Lightbridge+Comments+on+Text+of+Senate+Bill+S.3060:+Thorium+Energy+Security+Act+of+2010/5422218.html" target="_blank">http://www.streetinsider.com/Earnings/Ligh...10/5422218.html</a>

     

     

    Merryn Somerset Webb recommended in this weeks FT to watch Lightbridge based on its clean nuclear solution etc. etc.

    She's usually good, and clear was looking at this thread last week :P

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