drminky

Took out this position today. Can't hold with oil stationary at top of channel.

Oils looking pretty overbought to me. Its gonna be hard to maintain that momentum. If we see a slapback in oil, and just a fraction of that hot money rotates back into gold, which being oversold looks like a likely destination, those miners are gonna fly..

When the next gold rocket flies, its gonna look even more impressive in Sterling terms. The turdling has resumed its death-spiral and looking even bleaker than last time..

I'm certainly getting more bullish as time goes on, but I'm still 90% convinced we're going to get an eye-watering sell day before we start a sustainable uptrend. Where that sell takes us is the important thing, if the bears wait much longer I can't see it even getting to $850 to be honest, hence my comment that they were running out of time.

 

I've waited patiently and avoided a fair few sell offs over the past month or so and I'm now confident that we are close enough to the end of this correction that I'm prepared to start adding to my core positions. I'm just doing it very slowly to avoid getting caught out by that monster drop I think is coming.

 

Of course, while I've been waiting over this past month I've also managed to build a good cash pile and make some very good profits by trading, so I'm actually quite pleased with how this correction has worked out (so far). The core position is the key, once you have that in place and the price has moved well past your average, you can afford to be more adventurous with your strategies and less worried about short term drops or missing the boat on rises.

 

On the less serious side, I couldn't help but chuckle at what must have been going through the heads of the shorts as gold did that $20 moon shot. I'm guessing a few sets of underpants took a beating today.

Agree, what happens now all depends on what the price does. If we were to go into another retest of 850, we'd essentially be at the trigger point very very soon. If the price were to bump and grind around this level, we might see another month or two before we get there. If we slowly grind upwards, it might take until the end of the summer. In any case i still maintain that now is an excellent time to be accumulating the quality PM miners. On balance the price risk on these is heavily favoring the upside IMO..

Why did I know even before clicking that this article would be by Mrs Caroline Superbull Brown?

 

OK, I read it back in February. Well, everyone, let's just keep printing. Scary numbers don't matter anymore.

 

Buy gold!

Well, i don't mind that they been bashing gold so hard lately. Because the quicker they knock it down, the sooner we reach the 'trigger price', and the less consolidation we have to endure

At this juncture, I've been buying up the mining stocks like they are on firesale, which is essentially what they are. Even with the weakness in physical in the last few days, some stocks have been holding up quite nicely. Many are essentially already so cheap its almost ridiculous to discount them even further. I believe there's some serious smart money moving in right now, as these bargains are obvious to anyone who believes in gold's bull run. Some of those beaten down juniors are looking especially enticing..

At this juncture, I'm liking SSRI, JAG, DNN, SLW, MFN, YAU, NEM among others. What are the esteemed people on this board liking right now?

I think I'm losing my faith...

 

I'm in danger of selling up and going back to 5% savings accounts!

When even the faithful start to despair, that's usually a sign we are near the bottom!

http://quotes.ino.com/chart/?s=NYBOT_DX&am...p;t=l&a=100

Going by the usual script, the $US run shouldn't have too much legs left in it, it usually kisses the 100dma before failing and falling to lower lows. Now that the cutting cycle appears to be coming to an end, we may not see such rapid declines in the dollar and gains gold for a little while, but remember, even according to the US govts own cooked statistics, we are still in negative real interest rates.

Personally, my gut feeling is that we've probably seen the low of this correction, but not for the last time. We've almost but not quite washed all the speculative excesses out. So I think there'll be a bit of a bounce into the mid 900s perhaps, some consolidation for a couple of months and a retest of the lows toward the end of the summer before finally hitting the trigger level and taking off again..

This is a great time to be accumulating beaten down mining stocks IMO

http://news.yahoo.com/s/ap/20080328/ap_on_....5RD05GiVib.HQA

Fed offers $100 billion more to banks

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

ECB to Offer Banks Six-Month Cash for First Time

Lots of money being pumped in today in an apparently coordinated move..

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

Taxpayers May Be Liable From Bear, Mortgage Rescue

By Craig Torres and James Tyson

March 26 (Bloomberg) -- Even as the Bush administration insists it won't risk public funds in a bailout, American taxpayers may already be liable for billions of dollars stemming from Federal Reserve and Treasury efforts to quell a financial crisis.

History suggests the Fed may not recover some of the almost $30 billion investment in illiquid mortgage securities it received from Bear Stearns Cos., said Joe Mason, a Drexel University professor who has written on banking crises. Treasury's push to have Fannie Mae and Freddie Mac buy more mortgage bonds reduces the capital the government-chartered companies hold in reserve at a time when foreclosures and defaults are surging.

Regulators ``are playing with fire,'' said Allan Meltzer, a Fed historian and economics professor at Carnegie Mellon University in Pittsburgh. ``With good luck, none of these liabilities will come due. We can't expect that good luck, and we haven't had it.''

Doesn't bode well for the dollar.. Or the pound..

Yeah, your take is pretty well spot on. However, the inflation they are going to create this time around is going to show up in worldwide stats like CPI. There is no way inflation on food and energy cannot show up. Also, China for the last 10-15 years has been exporting deflation, which has been contributing to our CPI numbers being subdued.

 

It is going to be a real feat for the bankers of the US to try a carry trade like Japan did. Most of the Yen Carry trade found its way into worldwide property prices, which was generally accepted by the masses and did not surface in Central Banks' targeting numbers.

 

So I not sure the same could apply again with the US.

I think they'll let inflation rip for a while - its in their interests to do so for now. As long as the public keep swallowing the line that the inflation is only temporary and will moderate in the future recession/depression. The public have done a good job at buying this spin so far - at least in the west. This is what those low bond yields are about. They got lots of mileage yet before the public fully wake up to the inverse robin-hood game of stealing from the poor to give to the rich going on. Just look at all the people on forums repeating the mantra that 'oils gonna come down to $20-$30' and all that. They fully buy it! Its when the ten year and 30 year bond yeilds head sharply north that the inflation game will be up for the Fed..

To answer your first question you have to look at what happened in Japan. Japan has a ZIRP and government bail out of banks and still no rising prices. Infact they have been suffering from deflation for years. For inflation to take hold and and end up with hyperinflating you need rising wages. Without rising wages (or borrowed money to spend) you are going to cut back which starts a deflationary spiral. At the end of the day if no-one is going to borrow from banks because of tighter standards then all the money the banks get from the fed wont get into the economy pushing up prices. The money has to get into the economy, that is why Bush is bypassing banks and giving money directly to the masses, however this will also fail if they don't buy goods and services with the money. As I said before the bond market is not seeing inflation and therefore is predicting the fed is going to fail, whether they do or not is the 64,000 dollar question.

 

Treasuries are risk free investments paying the lowest yield in 50 years - the last thing you want to get into if you are predicting inflation and the best investment if you are predicting deflation.

Actually, Japan is a fascinating case. I have a different take on it than most analysis. I think Japan is the perfect example of exactly the type of INFLATION that we will see play out. What?, you say, but Japan had DEFLATION! Of course, they did. But they also created on hell of a lot of inflation too! Just not in Japan!! Its the carry trade! And this is exactly what will happen. Japanese banks simply weren't willing to lend on deflating assets (Domestic Stocks, Real Estate), especially with Japans' demographic outlook being so dire, hampering any chance of a full recovery. So domestically rates were punitively high - even with base rates at zero! But they were perfectly happy to lend cheaply en masse to invest abroad on any asset classes that were still APPRECIATING. So the Rampant money creation found its way out of the country, instead of where it was intended to go. Likewise Ben's helicopter drops will not laregely go into the US real estate market, the money will flow into whatever still has any hope of upside left - certainly energy, food, commodities, and perhaps eventually back into foreign emerging markets again.. And of course this time, uniquely, inflation is a GLOBAL PHENOMENON..

And even if you don't buy into my take on Japan, well look at how that wonderful 'deflation' affected gold priced in yen over the last 5 years..

http://www.goldpreciousmetals.com/charts_historic_jpy.asp

Spooky.

What a week! The 5th Biggest Securities firm in the US suffers a bank run and is bought out using public funds to prevent a collapse. There goes the final nail in the coffin of interbank lending! The Fed Cuts rates by TWENTY-FIVE PERCENT in one hit! Goldman Sacks and Morgan Stanley go begging at the fed for funds - to reduce the 'stigma!' . Fannie and Freddie get relaxed capital requirements so they can buy up more mortgages. The Bank of England intervenes to prevent a panic run and collapse of one the the top 5 banks in the UK..

what to do in this situation? SELL GOLD!! SELL!! SELL!! SELL!!

So true. The only difficult thing here is the personal challenge I have set myself to get a trade as close to the bottom as possible.

I'm going to drip in for however long the price keeps coming down.. just pulled the trigger on some silver as the price has become attractive to me.. still waiting for gold and the mining stocks to settle down tho..

haha

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

Goldman, Morgan Stanley Use Fed's Wall Street Window (Update2)

By Yalman Onaran and Christine Harper

March 19 (Bloomberg) -- Goldman Sachs Group Inc., Morgan Stanley and Lehman Brothers Holdings Inc. said they've borrowed from a program created by the Federal Reserve to jumpstart lending amid concern that Wall Street faced a cash shortage.

``We have tested the window because we want to remove the stigma from the window,'' Morgan Stanley Chief Financial Officer Colm Kelleher said in an interview today, referring to the Fed lending program. ``It's meant to be there for normal business. It's not meant to be there as a last-recourse thing.''

-------------------

Yes, just to remove the 'stimga'.. no other reason, like we may have actually NEEDED it after Bearn Stearns went kaput and the last remains of interbank lending went with it!

Deflation could happen ((short term) - and longer term for overpriced assets - houses etc)

Sure it could.. Obviously, leaving the overleveraged western economies to their own devices, deflation is most definitely what would happen. Question is, will central banks and governments be able to turn a deflation into a stagflation or hyperinflation through goosing the money supply, or is deflation inevitable?

..hopefully here we can talk about the arguments in a rational way without the vile and viscious attempts at character assassinations that are becoming commonplace over there, it seems.

CC-debt is the next big thing on the crunch agenda.

hahaha i was thinking exactly the same thing! I wouldn't be touching a credit card company with a bargepole right now!

Today is a great day for Commodity bulls. They are dumping some GREAT miners (such as AEM) with reckless abandon, not to mention the Agriculture stocks, and NatGas stocks and of course physical PMs.. its gonna be fun relieving them of their holdings they are in such a hurry to dump.. all while the Fed is monetizing like CRAZY!!

..Ahh feels good to put in my first post on the new gold forum. OMG the 'other' forum has become SOOOO hostile to anyone who mentions gold or inflation at any time.. the deflationists over there are really bullying anyone with a view that challenges the new 'consensus' out of the forum altogether.. So much for learning or rational debate!