drminky

I don't see any problem with trading personally. As long as you keep yourself covered with a hefty core position. We are pretty much on this forum all in agreement that gold is going much much higher in the long term. So whats the harm some of the more aggressive of us in keeping say 10 - 20% of your PM holdings as 'tradeable', with the aim of selling when gold becomes overbought in the short term, in order to gain more ounces when gold becomes short-term oversold? Just like GF and many on here, I've been watching this market for around 4 years now, as been steadily accumulating over that time, and have learnt a lot (through a lot of mistakes mostly) and got a much better instinct for calling big swings in the market. Since we are all more or less in agreement that gold is still in a secular bull market, can we not discuss such things without been shunned by the over-zealous? Isn't that why we all defected from HPC in the first place? Surely we are not going to make the same mistake and let 'consensus think' stifle any debate here? That would be a great shame..

To all UK GEI members - have your lunch infront of the computer screen today - $1000 is coming very soon.

Gold better blast through $1000 decisively, or else we got a massive double-top in $US with a huge negative divergence on our hands.. That will be one hell of a party invite to all the gold shorters lurking in the background.. Still, whatever gets me more gold cheaper with my fiat paper can only be a good thing in the long run!

http://www.financialsense.com/Market/cpuplava/2009/0218.html

Gold, Is the Future Still Bright or Fading?

For those who haven't seen todays wrapup. Excellent analysis.

Kitco is down - always a bullish sign

Well, amongst all this bullishness I see, I have to say, I've been busy selling into this strength today. Never my core physical holdings, but taking profits on some gold stocks, and lightening up on a little goldmoney silver. Its well possible we might have a little further to run, but I'll stick make money on my core positions if thats the case. Ditto if it really is 'different this time' and this is the beginning of a run on all fiat currencies.. Does anyone else feel we are just a little overextended at this point?

"Yesterday, we saw a city-wide bank run in Hong Kong when thousands of jittery depositors at Bank of East Asia (BEA) demanded their deposits back." - Puru Saxena

 

I´am surprised that we haven´t seen any bank runs in U.S.A.

???

Indymac bank not ring a bell?

Oh they are preparing alright!

Army Unit to Deploy in October for Domestic Operations

Beginning in October, the Army plans to station an active unit inside the United States for the first time to serve as an on-call federal response in times of emergency. The 3rd Infantry Division’s 1st Brigade Combat Team has spent thirty-five of the last sixty months in Iraq, but now the unit is training for domestic operations. The unit will soon be under the day-to-day control of US Army North, the Army service component of Northern Command. The Army Times reports this new mission marks the first time an active unit has been given a dedicated assignment to Northern Command. The paper says the Army unit may be called upon to help with civil unrest and crowd control. The soldiers are learning to use so-called nonlethal weapons designed to subdue unruly or dangerous individuals and crowds.

When the currency has no buying power anymore, yet the country is full of guns, the guns just might BECOME the buying power!

I agree IAG looks cheap, but part of that is the market discounting the permitting problems and trouble they've got maintaining production levels..

For a value play right now, at $1.50 Northgate looks enticing..

Been bullied around lately by the NSS brigade methinks.. look at that 4 million share sell order at 30% below market value last thing on a friday!!! Just a little suspicious!..

Todays market wrapup by Gary Dorsch on FSN is interesting. Seems to suggest its the Saudis and the Kuwaitis pumping petrodollars and oil into the US to bring down oil prices, in order to influence the US election and get their preferred (hawkish) republican candidate into the whitehouse.

 

If that's the case, we can expect gold/oil/commodities to remain under pressure until the election, then watch for the possible HUGE reversal, as this gets unwound.. It would certainly explain the La-La-goldilocks-topsy-turvy market in the US right now, that seems to have thrown all TA out the window. I mean the OVERSOLD readings on the HUI right now FFS!.. and no bounce to speak of!! Wasn't nothing supposed to go up or down in a straight line?

And just like clockwork, bring down oil prices and the voters will come.. The most rigged game in town..

http://www.bloomberg.com/apps/news?pid=206...&refer=home

Todays market wrapup by Gary Dorsch on FSN is interesting. Seems to suggest its the Saudis and the Kuwaitis pumping petrodollars and oil into the US to bring down oil prices, in order to influence the US election and get their preferred (hawkish) republican candidate into the whitehouse.

If that's the case, we can expect gold/oil/commodities to remain under pressure until the election, then watch for the possible HUGE reversal, as this gets unwound.. It would certainly explain the La-La-goldilocks-topsy-turvy market in the US right now, that seems to have thrown all TA out the window. I mean the OVERSOLD readings on the HUI right now FFS!.. and no bounce to speak of!! Wasn't nothing supposed to go up or down in a straight line?

Regarding commodities, they are somewhere between the two examples above. But they've now been deflated, tears are all being fixed, and they're soon to start reinflating due to the hot air that basically everywhere.

Most notably the bond market!!

Look at those below inflation yields! Imagine if there was a run on bonds and that money spilled over into commodities instead! It'd be hyperinflationary carnage! That's why its been so neccessary to smack down commodities these last few days. Gotta keep 30 years of inflation (actually more like 70 years worth) bottled up in paper, so it doesn't turn and run to real things.. We should actually be glad that the market hasn't woken up yet. Buys us more time to prepare! Keep using that overvalued paper to buy real things, while our paper wages can still buy things at all!

It’s like a giant hot air balloon with a massive tear in the side, they are blowing as much hot air into it as they can but they just can’t re-inflate it!!!!

 

(BTW I was hoping for inflation as deflation means complete collapse and all the problems that will bring)

If they can create a massive inflation in zimbabwe, where the (non-black market) economy has basically stopped functioning altogether, what makes you think they cannot create an inflation in the US? The bailout/nationalisation of Fannie and Freddie, for example, is simply swapping a bond default risk for an inflation risk. It is simply not true that a stalling economy will automatically mean deflation. It was wrong in the 70s, and unless there is a drastic change of course, it will be wrong again this time..

Bottom line: imminent global depression just been made less likely or curtailed, but the global inflation monster has just been given a big adrenalin injection

Exactly, I find it simply mind boggling that the market action of the last few months has given ZERO discount to the possibility of inflationary intervention, yet all we ever see from Government action is exactly that.. every time!

Just bought some gold & silver.

 

Expect massive drops.

Could well be. At least now we know why silver was brutally attacked last thing on friday. The PPT will have to be out in force today to smash down G&S. A run on the dollar must be prevented at all costs to keep up the spin that this is somehow GOOD news!

Er, speaking of anti-goldbug, here I am...

 

Doesn't that graph make gold look like a pretty awful investment or inflation hedge over the period. From 1985 to the present day, any investment or savings account paying 3% interest would have beaten it. Not terribly impressive. Admittedly it would have beaten a pile of cash in a shoebox under the bed, but that's about it.

And what return would you have got if you'd invested in the Nasdaq in 2000? Or in property in mid-2007? I'd wager a fair bet nobody on this forum was holding much in the way of investment gold before 2000..

On the “creamy centre” theory, I believe it was said on FS that it would coincide with the US election due to the fact that the republicans would never get re-elected with oil at $145 a barrel, after the election things would then carry on with the dollar starting to fall again once all the representatives knew their seats were safe.

 

It’s a theory I’ve thought has merit and I’ve been happy to hold until after the election, though today I’ve just spotted this. http://www.marketoracle.co.uk/Article6092.html

 

 

 

Now I believe Volker's policies are generally believed to be what saved the dollar before and marked the top in the gold market in 1980, If this is to be repeated then I would worry would the gold market signal the top on the very news of Obama’s election due to Volkers involvement or is this piece of information being overplayed and he has very little input on economic policy.

Even IF Obama was to appoint Volcker (and that's a big IF, considering his tax-and-spend policies), I'm not sure there's anthing even Volcker could do to save the system now. 10 years ago perhaps, but I'm not sure now. The US is essentially checkmated. If they lower rates, or keep this low, they get runaway inflation. If they raise, they break the entire system. Either way, the people lose in the end..

Great analysis on FS today on the $US bounce by Chris Pupluva:

http://www.financialsense.com/Market/cpuplava/2008/0903.html

Question is, do we see further weakness in gold and commodities due to this cyclical inflation moderation, or is it all discounted into the price already?

Also interesting how he points out that ultimately, this dollar bounce will be self-defeating and kick out the last remaining supports of the US economy..

Do all the US traders who are chanting 'U.S.A' as the rest of the world is dragged into recession malaise realise that 'non-decoupling' works in reverse too? ie the rest of the world dragging the US down further into the pit?

Wrongmove,

What makes you think we do not welcome diverse opinions here?

 

Intelligent bear arguments will help "keep us on our toes"

 

I wish we had seen more of them in July.

I nailed the top on Oil, but failed to see it would extend to Gold.

 

I suppose I was blinded by my own position in Juniors

What I don't understand is that since the beginning of the correction in oil, oil has been on average falling faster than gold. This should be somewhat bullish for the energy-hungry gold miners, as their margins improve, but why has the HUI:GOLD ratio basically mirrored the OIL:GOLD ratio and fallen off a cliff? That makes no sense to me..

THE FACT that so few are willing to CALL A BOTTOM here,

 

is actually a bullish sign.

Too many saw the low at $850, and then again at $800

Wasn't there some murmurings out of OPEC that they would likely defend $100 a barrel with supply cutbacks? If so, any spike low below that could be short lived indeed.. that should help put a floor on gold prices, you'd hope, but as mental and irrational as the markets are right now, nothing would surprise me anymore

LOL Bloomberg still fishing for reasons the Euro is falling against the dollar.

Yesterday it was because of speculation the ECB would cut rates

Then this morning its reported 'German Producer-Price Inflation Reaches 27-Year High', so scratch that idea

Then its on speculation German investor confidence will hit record low

Then its reported 'German Investor Confidence Rises More Than Forecast', so scratch that idea

Now its apparently on speculation that German Growth is set to slow

And don't get me started on the 'speculation that the US will raise rates'

Why can't they just come clean and admit there's NO APPARENT REASON for anything like the UNPRECEDENTED rally in the dollar, which, given the negative real interest rates and the state of freddie and frannie is beyond any rhyme or reason!

Now that it's beginning to look very unlikely Freddie & Fannie'll be able to raise funds in the market given their lack of credibility it looks like the US Treasury is going to have to dig into its wallet over the GSEs and treasuries are probably going to tank. Does anyone have any suggestions on a play on US Treasuries ? I seem to recall some comments a few years ago concerning the Ishares Lehman 20 yr ETF but does anyone have any other ideas ?

Shorting Treasuries? Sounds like a good idea fundamentally, but one risky play in the short term, considering this topsy-turvy funny-money world where dollar is rallying, not to mention the stock market looks set to tank bigtime! ..but the easiest way is perhaps through the ETFs

try the AMEX:TBT for example

Proshares Trust Ultrashort 20+ year Treasury Fund

http://www.proshares.com/funds/tbt.html

UltraShort Lehman 20+ Year Treasury ProShares seeks daily investment results, before fees and expenses, that correspond to twice (200%) the inverse (opposite) of the daily performance of the Lehman Brothers 20+ Year U.S. Treasury Index.

The most common explanation I have seen for the recent upturn in stocks is that traders are in a "flight for safety". The first step may be selling developing country stocks and exotic investments (gold is classed as exotic by many) and buying US stock (among other thiongs). I guess the next move would be to liquidate those, if global slowdown pans out.

A 'flight to safety' to the eye of the storm?

..or a bunch of pigs rushing in to feed at the fed discount window trough?

Well, gold surged over the last few years on correct expectations that inflation (CPI/RPI) would rise. Gold now seems to be falling back because the expectations going forward from here have changed.

 

For example, oil. It has driven up inflation, but now it has dropped (~20%!). For oil to keep driving up (YoY) inflation, it is not enough that it just stays high. It has to continue rising. But it has dropped. Another few months of this, and oil will be dragging inflation down.

 

With a flurry of bad numbers from Asia and Europe (now technically in recession), the market does not see it flying up from here to well beyond $140, which would be required to continue to drive inflation. And with things like property tanking in most countries at the moment, debt driven money supply is not seen as likely from here.

 

The fact that these expectations are driving shares up (presumably reduced fear of rate rises) will be short lived, as deflation is hardly likely to be good for shares, either.

 

 

Didn't gold tank last time, just as boom turned to recession? The very same month, I believe, in the USA. And with demand seemingly dropping, all comodities have suffered badly (I know gold is not a commodity to many here, but it sure seems to trade like one). Plus, hot money is being pulled out. The hedge funds (which seem a far, far more likely explanation to me than the "PPT") are pulling out, or even shorting. They just follow trends. They have no political agenda. They will happily chase prices up or down, as long as they are the correct side of the trade, and massed punters are the wrong side.

 

 

So it seems to me that if you think the market is wrong, and we are actually on the verge of a renewed credit boom, then pile in. But why not wait for a more obvious bottom first? Gold has shed 20%, so it needs to gain 25%, just to get to where it started. And it was cheap at the peak, apparently, was it not? I had always thought that the very first rule of TA was don't try to catch a falling knife. If you miss the bottom by 10%, so what?

Yes, Bernanke and the central bankers talk a lot about managing inflation expectations.

..not so much about managing INFLATION though..

So, because of ( A ) a great slowing down/recession in the western economies, the market sees reduced demand for oil and commodities going forward ( B )

So low oil and commodities ( B ) makes the stock market rally, led by financials and consumer discretionary ( C )

Simple Logic: if A = B and B = C, then it follows A = C

So we are to believe a great downturn in demand and consumption in western economies = higher stockmarkets, improvement in discretionary spending and financial sector profits?

These guys are GENIUS!

its like herding sheep, really..

I am very worried about deflation too. Unfortunately, I have not so much time to spend on it, since I am busy working more so that I can keep up with the price increase by 35% from British Gas and the increased food prices, lunch has gotten 15-20% more expensive too recently. But yes, other than that, extremely worried about deflation.

Of course, one must also factor in the fact that the Central Banks are going to use this massive correction in Commodities and PMs as a sign they've 'won' against inflation and inflation expectations, and a sign they can go on throwing ever vaster sums of printed money at every problem that comes their way with no consequences.. until the next inflation wave hits, that is..

IF Elliot Wave counts are to be believed, we are now witnessing the final wave 5 of this downmove. If that indeed proves to be correct, we are very near the bottom and by Monday we should be expecting to see a start of a recovery. That means NOW is the time to be picking up the bloodied and broken Mining stocks..

And for those who are doubting the integrity of the bull market in gold (not that I am), I have one piece of advice for you. SHORT the stockmarket and financials with everything you got! Because if the move in gold and commodities is valid, that is signalling deflation, and the stockmarket is setting itself up for the SPILL OF THE CENTURY. You gotta ask yourself, if the euro is suddenly so weak on the back of crumbling european economic prospects, why the hell are their stockmarkets rallying?

I don't get it.

 

 

War breaks out, team america try to pick a fight with russia - Gold plummets.

Eurozone economy shrinks for the first time since the eurozone exists - All european indicies rise.

US inflation data is scary bad - Gold plummets again.

 

Could someone explain this economics thing to me please?

Welcome to the "new" world. 40 is the new 20. White is the new black. Up is the new down. Bad is the new good. Losses are the new profits. Bear is the new bull. Socialism is the new Capitalism. Insanity is the new Common Sense."

make sense now?