GOLD

[Catflap]

I'll also stick my neck out with a prediction for this month...

 

- next few days DOW and FTSE start to fall precipitously, such that they reach 10000 and 4500 by month end

 

- emergency base rate cuts happen or are signalled (BoE missed its chance today)

 

- commercial bank baleouts extended / increased

 

- Sterling will fall further, reaching 1.65 vs USD

 

- oil does not fall below 90 (and probably not much below 100), and the fact that its refusing to go lower will become a palpable concern

 

- inflation stats rise significantly

 

- all the above will cause a ramp up in fear, and gold will start to rally (6-8% up in USD, 10-15% in GBP)

 

That would bail me out nicely - I thought I had timed the commodity bottom perfectly and dumped a load of money in after the big drops, but have lost a little these last few days. This rally has to end this week - $ and financials doing better than finite commodities ffs!!. We ARE in a secular commodity bull run with volatilty and pullbacks - the trend is up, just need to hold it together and go against the sheep!

[bitbigt]

That would bail me out nicely - I thought I had timed the commodity bottom perfectly and dumped a load of money in after the big drops, but have lost a little these last few days. This rally has to end this week - $ and financials doing better than finite commodities ffs!!. We ARE in a secular commodity bull run with volatilty and pullbacks - the trend is up, just need to hold it together and go against the sheep!

Best of luck with it all

 

But I should add that I think hard commodities will fall further still over next 6 - 12 months before recovering. That said, I would/will start easing (back) in at a little below current levels.

 

[PS: why is your name italicised at the bottom of the web page, when others are not]

 

 

[bitbigt]

Deleted: duplicate post

[wren]

...anyone know the primary source of this graph?

...I thought it emerged from this bb?

Yes, I think so.

 

[wrongmove]

[PS: why is your name italicised at the bottom of the web page, when others are not]

 

I think it just means Catflap was writing a post.

[Catflap]

Best of luck with it all

 

But I should add that I think hard commodities will fall further still over next 6 - 12 months before recovering. That said, I would/will start easing (back) in at a little below current levels.

 

Ta

 

Yep, think your right - now I've seen the relationship between the dollar index and commodities/gold then I've got two options now. To hopefully still make a small profit in the coming weeks and then go short for the next dollar rally or just stay invested where I am and come back in a years time.

 

One question I've been meaning to ask re shortage of bullion gold/silver - if the next pullback/dollar rally takes gold and silver lower still and there isn't the physical available then is simply buying anything made of gold/silver an option?

 

Even if there's no coins or bars there is still physical stuff everywhere just in a different form? (ie jewelry etc). The reason I say this is that I've seen loads of comments about there being a shortage!..... at the end of the day gold is gold in any form surely and the price will go up the same.

 

What's likely to happen in the mania phase?..... will people buy anything that is made of gold?

 

Oh and another question for anyone reading - why are people buying new silver and paying VAT?..... surely 'secondhand' silver is better as there is no VAT?

[notanewmember]

And now for something completely different....

 

 

No not really.

 

 

Our inside spy in the US has another update [1/9/08], he anticipates theres more bad news to come in real estate.

 

 

I'll let Mr Mortgage man explain

 

http://www.youtube.com/watch?v=4upEgP7AbSY

[Errol]

One of the main themes running through all these discussion about the gold price seems to be a short term perspective. People are too focused on short time-spans: a week, a month or even a year.

 

Gold should be purchased as a store of value for decades.

[bitbigt]

I'll also stick my neck out with a prediction for this month...

 

- next few days DOW and FTSE start to fall precipitously, such that they reach 10000 and 4500 by month end

 

- emergency base rate cuts happen or are signalled (BoE missed its chance today)

 

- commercial bank baleouts extended / increased

 

- Sterling will fall further, reaching 1.65 vs USD, with the fall only minimised by the fact the USDX will peak out and start to slide

 

- oil does not fall below 90 (and possibly not even or much below 100), and the fact that its refusing to go lower will become a palpable concern to economists/media

 

- inflation stats rise significantly

 

- all the above will cause a ramp up in fear, and gold will start to rally (6-8% up in USD, 10-15% in GBP, by months end)

 

[EDIT: and my bones even sense a black swan approaching ...Russia? major bank collapse? terrorist attack? high-profile Western assasination?] - bundle of fun aren't I

 

For catflap and others - please do NOT take any of the above as being reliable information, advice, or sane comments. I just posted my current guestimate for this month as I've nothing better to do for a while just now, and so you can all point and laugh at me in 1 month if/when my predictions don't come true

[G0ldfinger]

Looks as if we're building a nice base here.

 

[Bobsta]

For catflap and others - please do NOT take any of the above as being reliable information, advice, or sane comments. I just posted my current guestimate for this month as I've nothing better to do for a while just now, and so you can all point and laugh at me in 1 month if/when my predictions don't come true

Darn! I wish you hadn't said that. I wasn't going to take any action based on your earlier post (that'd be a bit nuts, frankly).... But it was sure as hell making me feel better!

[kernull]

Hopefully the US $ index has peaked.

 

i am seing this clearly in USD/CAD chart. and probably in JPY. but EUR and GBP have to confirm, and also bonds not yet have a clear top. but, it will be soon, maybe monday ?

[1waving]

In wave v of 5 of a larger C wave now ----- close to a bottom - watching for the buy signal

 

 

 

A rising support line from July '05 is now at about $770 --- just below the recent bottom ---- may be a good point to watch out for.

[bitbigt]

Darn! I wish you hadn't said that. I wasn't going to take any action based on your earlier post (that'd be a bit nuts, frankly).... But it was sure as hell making me feel better!

Well for what its worth, I am taking action according to my earlier post [and I'm quite nuts], but I just didn't like the suggestion from catflap that (s)he might be taking it into acont in making his/her decisions

 

I'm planning to buy into oil, hold my stance generally away from stocks and Sterling, and remain heavy in PMs. Then, if my 'prophecy' is fulfilled, I may start easing into some non-western stock markets (via ETFs) when dow goes sub 10000. ...and will buy UK property mid/late next year. Expect to exit gold/silver no earlier than 12-24 months from now, and hopefully double my money.

 

Does that make you feel a little better again?

[Catflap]

i am seing this clearly in USD/CAD chart. and probably in JPY. but EUR and GBP have to confirm, and also bonds not yet have a clear top. but, it will be soon, maybe monday ?

 

Let's hope so - I don't think there's enough attention paid to the USDX in relation to gold/commodities on here, so it's great to see some analysis such as yours Ker.

 

[bitbigt]

And now for something completely different....

I'll let Mr Mortgage man explain

http://www.youtube.com/watch?v=4upEgP7AbSY

Great find - thanks!

[Catflap]

Well for what its worth, I am taking action according to my earlier post [and I'm quite nuts], but I just didn't like the suggestion from catflap that (s)he might be taking it into acont in making his/her decisions

 

I better stop using so many exclamation marks as it's making me look like a woman!!!!

 

Don't worry, I'm quite capable of losing my own money without your help

[Gatesy]

So far, it seems the banks have just dumped rather dodgy assets on the BoE to shore up their books. So the taxpayer will eventually get stung, but no new lending to actual customers seems to have occured.

 

I go along with GF on this one, that money in banks pockets doesn’t need to find it’s way to joe public as credit in order to stoke inflation. The money will sidestep JP straight into whatever asset is flavour of the week. The money supply and credit is created by the CB giving the money to the bank.

 

We are 6 months into this correction, yet gold still needs 25% gains to exceed old highs. Is this typical of earlier bulls?

Totally. If you take the EW model of waves, even Large waves will correct 20-30%, let alone Major waves. For me the hypothesis that this is corrective Large Wave II of up leg Major wave 3 has not yet been disproved.

 

[Magpie]

I see that magpie is again stating the obvious. The interesting question is if gold right now has the potential to go up a lot (in the not too distant future, but not instantly). My indicators all scream YES!

 

Kind of obvious of course, but it was a chart reproduced with a comment about "turdling" which implies it demonstrated something bad about sterling. Seems pretty weak evidence in that respect. And that chart in itself doesn't prove much otherwise.

 

Yes gold has room to the upside. But in a period of massive wealth destruction it also has room to go down from here. I'm more agnostic than anti-gold, but I do see a lot of denial about the current situation in a lot of goldbug arguments.

 

[Magpie]

I go along with GF on this one, that money in banks pockets doesn’t need to find it’s way to joe public as credit in order to stoke inflation. The money will sidestep JP straight into whatever asset is flavour of the week. The money supply and credit is created by the CB giving the money to the bank.

 

 

Totally. If you take the EW model of waves, even Large waves will correct 20-30%, let alone Major waves. For me the hypothesis that this is corrective Large Wave II of up leg Major wave 3 has not yet been disproved.

 

But the banks are deleveraging all the time - that money is only leaking out in small quantities - most of it is just shoring up their balance sheets to keep their insolvency from being too obvious.

 

[G0ldfinger]

But the banks are deleveraging all the time - that money is only leaking out in small quantities - most of it is just shoring up their balance sheets to keep their insolvency from being too obvious.

The Fed is now printing $19bn a day (begging bowl handouts) according to cg's last post. Better get your gold ASAP.

[Gatesy]

But the banks are deleveraging all the time - that money is only leaking out in small quantities - most of it is just shoring up their balance sheets to keep their insolvency from being too obvious.

 

Hmmm, I will ponder this overnight in my sleep and possibly post tomorrow.

[Magpie]

The Fed is now printing $19bn a day (begging bowl handouts) according to cg's last post. Better get your gold ASAP.

 

Yes, shoring up bank balance sheets that relied on imaginary money that has now evaporated into thin air. The banks are highly constrained in lending that money back out again.

 

Hyperinflation isn't impossible but the levels of money creation we are currently seeing are primarily aimed at preventing a deflationary collapse.

 

Think of it this way - my house has been half knocked down by a hurricane and is about to fall over. The gubbermint gives me enough bricks to shore up the lower levels so it won't collapse. Hey, now I have loads of inflationary bricks I can sell or lend to other people who suffered storm damage, right?

 

Wrong.

[G0ldfinger]

...

Wrong.

I see it differently. E.g. the BAD Koreans have just decided not to buy Merrill's BAD loans. Merrill will therefore soon need to get more money from the Fed's begging bowl. Meanwhile, the Koreans put their money into something reasonable and tangible, like corn, oil or gold. Now that the Koreans have second thoughts anyway, they maybe even take money out of Merrill that they had invested earlier. But no panic, the Fed will plug the hole. Hence, by printing money to keep Merrill afloat, the Fed is indirectly fuelling inflation.

 

The danger of hyperinflation is there because the central banks don't allow anything to really badly collapse. As long as this is the case, anyone who wants to can get their money out and put it into the next hot market, like e.g. commodities. The existing money is enough to fuel inflation to an extent where the inflation expectation of the consumer tips over (to the high side). Then all hell will break loose.

 

It will be extremely difficult for central banks to not let the system collapse either the one or the other side. The best outcome will be a worse version of the 70s.

[Magpie]

I see it differently. E.g. the BAD Koreans have just decided not to buy Merrill's BAD loans. Merrill will therefore soon need to get more money from the Fed's begging bowl. Meanwhile, the Koreans put their money into something reasonable and tangible, like corn, oil or gold. Now that the Koreans have second thoughts anyway, they maybe even take money out of Merrill that they had invested earlier. But no panic, the Fed will plug the hole. Hence, by printing money to keep Merrill afloat, the Fed is indirectly fuelling inflation.

 

The danger of hyperinflation is there because the central banks don't allow anything to really badly collapse. As long as this is the case, anyone who wants to can get their money out and put it into the next hot market, like e.g. commodities. The existing money is enough to fuel inflation to an extent where the inflation expectation of the consumer tips over (to the high side). Then all hell will break loose.

 

It will be extremely difficult for central banks to not let the system collapse either the one or the other side. The best outcome will be a worse version of the 70s.

 

That's a decent statement of the inflationary argument. I'm not sure that BAD Koreans come out of the situation with extra money to inject into commodities etc - if anything they lose some money, then get a bit cautious.

 

Basically I agree there are risks on both sides. But I think it's possible to be too blase about the wealth destruction and too certain that CBs will be able to create enough money to counter it.