GOLD

[romans holiday]

Gold is anti-fiat. The next Dollar-roasting will come.

Sure, but the next leg up could be up to a year away yet. There's a good chance Sinclair is going to miss that target of 1650 by January 2011.

[InternationalRockSuperstar]

Sure, but the next leg up could be up to a year away yet. There's a good chance Sinclair is going to miss that target of 1650 by January 2011.

 

not as much chance as there is of you missing your target of sub $1000 gold by the end of time!

[romans holiday]

not as much chance as there is of you missing your target of sub $1000 gold by the end of time!

Sub 1000 is still possible. It depends on how heavy deleveraging becomes... with gold then recovering quickly. I think there is more of a chance to see a 3 digit price than $1650 by January next year. Yet, I think a continued tracking sideways is the most probable outcome for the year due to the problems with Eurozone.

 

Many were predicting gold to rocket up this year. Instead, it has tracked sideways with a chance of going back to 1000 on deleveraging, which is what I predicted this January.

 

http://www.greenenergyinvestors.com/index....st&p=151250

[InternationalRockSuperstar]

Sub 1000 is still possible...

 

blimey. I thought you'd given up on that one as well.

[warpig]

FWIW, I think within the next 6-12 months we will see a huge divergence between the paper and physical price of gold. At some point the COMEX spot price for gold will become meaningless.

[50sQuiff]

Sub 1000 is still possible. It depends on how heavy deleveraging becomes... with gold then recovering quickly. I think there is more of a chance to see a 3 digit price than $1650 by January next year. Yet, I think a continued tracking sideways is the most probable outcome for the year due to the problems with Eurozone.

 

Many were predicting gold to rocket up this year. Instead, it has tracked sideways with a chance of going back to 1000 on deleveraging, which is what I predicted this January.

 

http://www.greenenergyinvestors.com/index....st&p=151250

 

I just can't see it panning out like 2008, RH. I can't see the gold market giving everyone a neat, predictable opportunity to buy ever again. Everyone is looking for this pull back in gold on deleveraging and I think it's just not going to come. This time any fund liquidation will be matched by physical buying, anticipating Bernanke's final QE bombshell and the failure of major banks or sovereigns.

 

It's what Prechter is missing. Investors and wage-earners will see their paper financial assets being vapourised and their digital currency in the bank possibly disappearing completely. Prechter's thesis for gold relies on them responding by hoarding ever more digital and paper assets!

 

 

[romans holiday]

I just can't see it panning out like 2008, RH. I can't see the gold market giving everyone a neat, predictable opportunity to buy ever again. Everyone is looking for this pull back in gold on deleveraging and I think it's just not going to come. This time any fund liquidation will be matched by physical buying, anticipating Bernanke's final QE bombshell and the failure of major banks or sovereigns.

 

It's what Prechter is missing. Investors and wage-earners will see their paper financial assets being vapourised and their digital currency in the bank possibly disappearing completely. Prechter's thesis for gold relies on them responding by hoarding ever more digital and paper assets!

Hi 50s, you could be right. I'm not dogmatic on it. I like to work with likelihoods and probabilities. I see the probability of a 3 digit price declining on events such as central bank buying, and Euro problems. But the real possibility remains, so am hedged, even though I've been quite confident on the price here, and not wanting to lighten up. It also helps if your hedge is the next strongest currency, and the one that would benefit from deleveraging proper. The main thing imo is to be liquid in the strongest currencies, gold and dollar.... and to remain as free as possible from anxiety, which can lead to rash decisions.

[50sQuiff]

Hi 50s, you could be right. I'm not dogmatic on it. I like to work with likelihoods and probabilities. I see the probability of a 3 digit price declining on events such as central bank buying, and Euro problems. But the real possibility remains, so am hedged, even though I've been quite confident on the price here, and not wanting to lighten up. It also helps if your hedge is the next strongest currency, and the one that would benefit from deleveraging proper. The main thing imo is to be liquid in the strongest currencies, gold and dollar.... and to remain as free as possible from anxiety, which can lead to rash decisions.

 

I know you're not dogmatic about this RH, I think your strategy is very pragmatic, especially if you're earning Korean Won! Sterling on the other hand is a much more confusing situation now. A collapse is very possible, yet it's undervalued and no alternative currency looks like a good buy, except perhaps the SFr.

 

Paper sellers meeting some resistance at the moment..

[warpig]

Just out of interest, can someone who believes in Pretcher's near term gold outlook please set out a set of circumstances, that for them at least would prove his theory incorrect? What I'm wondering is... Is it possible for the time it will take for him to be proven wrong, make it too late to get in to gold?

[romans holiday]

Just out of interest, can someone who believes in Pretcher's near term gold outlook please set out a set of circumstances, that for them at least would prove his theory incorrect? What I'm wondering is... Is it possible for the time it will take for him to be proven wrong, make it too late to get in to gold?

Here's the problem. People have their cherished idea and run with it. So on the one hand you've got Sinclair calling for hyper-inflationary destruction of the dollar.... then on the other hand you've got Prechter calling for the monetary destruction of all assets except the dollar.

 

Sinclair focuses on fundamentals. Prechter on behaviour. Neither considers an approach which can take both the fundamentals [economic rational laws] and behaviour [human "irrational" herd behaviour] into a unified whole. And when you think about it we should because they are the two poles around which the economic world revolves. So maybe the gold price will be found somewhere in the middle, on the equator, equidistant from the icy abstract extremes.

 

Just a thought.

[warpig]

Too true. Maybe we need an economic version of "string theory"...

 

Here's the problem. People have their cherished idea and run with it. So on the one hand you've got Sinclair calling for hyper-inflationary destruction of the dollar.... then on the other hand you've got Prechter calling for the monetary destruction of all assets except the dollar.

 

Sinclair focuses on fundamentals. Prechter on behaviour. Neither considers an approach which can take both the fundamentals [economic rational laws] and behaviour [human "irrational" herd behaviour] into a unified whole. And when you think about it we should because they are the two poles around which the economic world revolves. So maybe the gold price will be found somewhere in the middle, on the equator, equidistant between the icy abstract extremes.

 

Just a thought.

[G0ldfinger]

RH: JS considers behaviour too. In fact, it is funny how Prechter ignores the behaviour of masses surrounding currency collapses.

[Happy Nihilist]

Just out of interest, can someone who believes in Pretcher's near term gold outlook please set out a set of circumstances, that for them at least would prove his theory incorrect? What I'm wondering is... Is it possible for the time it will take for him to be proven wrong, make it too late to get in to gold?

 

Prechter has obviously been wrong on Gold this last decade. In my view, the last chance for him to redeem his Gold call "a little," is if we were to see Gold drop below 2008 lows of 680 in the next 12 months. Personally I don' t see that happening, and think the worst case scenario would be limited by the 233 week EMA, currently around 850. We shall see. Anyway, I think Gold's unexpected resilience (from Prechter's point of view) demonstrates that he has underestimated the investment demand for Gold (safe haven) in what otherwise is a broadly speaking deflationary environment (?).

[50sQuiff]

RH: JS considers behaviour too. In fact, it is funny how Prechter ignores the behaviour of masses surrounding currency collapses.

 

The thing that worries me, is that Prechter has shown better than anyone else, that he understands how and why financial events and long-term trends will unfold. His timing is absolutely horrible, but the world has basically been unfolding according to his views. More so than any other bearish pundit anyway.

 

However, for someone that apparently prides himself in his understanding of investor and consumer psychology, he seems to have a large gap in his thinking on gold. He seems to think that in a world of paper asset destruction, bank defaults and a crumbling financial system, that people will hoard zeros on a screen, prefixed with $ signs.

 

EWI seem to be getting as stubborn as the bullish stock speculators that they so love to mock. Conquer the Crash was very open minded on gold - Prechter recommends buying some, and admits that he may be missing something that would precipitate a dash to hard assets. But now they get more dogmatic with every upleg of the bull market.

 

Jim Sinclair on the other hand is a victorious veteran of the last Gold War. He has amazing insight into how high the stakes are and how the big players operate. But then there's always the concern, he's an old general fighting yesterday's battles. That said, I'm liking his thinking nowadays, now he's moved on from "the dollar is going to zero in 45 days" and is talking about financial warfare waged against sovereign states using derivatives.

 

Jim is very cognizant of "MOPE" - management of perception economics. What he misses, is that his perceptions are being well managed as the Fed tries to stoke inflationary expectations in the face of massive deflation.

 

 

[warpig]

I think that sums it up nicely.

 

Prechter has obviously been wrong on Gold this last decade. In my view, the last chance for him to redeem his Gold call "a little," is if we were to see Gold drop below 2008 lows of 680 in the next 12 months. Personally I don' t see that happening, and think the worst case scenario would be limited by the 233 week EMA, currently around 850. We shall see. Anyway, I think Gold's unexpected resilience (from Prechter's point of view) demonstrates that he has underestimated the investment demand for Gold (safe haven) in what otherwise is a broadly speaking deflationary environment (?).

[Jake]

Just out of interest, can someone who believes in Pretcher's near term gold outlook please set out a set of circumstances, that for them at least would prove his theory incorrect? What I'm wondering is... Is it possible for the time it will take for him to be proven wrong, make it too late to get in to gold?

Good post. I like Prechter, as you know...But I am glad (so far) I follow Gordon's advice re gold. I actually think Gold may be somehow 'unavailable'... either sold out or, well..just not available.

I don't like the way he point-blankedly rejected Frizzers argument re divergence between physical and paper gold, it struck me as rather fundamentalist and adamant. Then he says he listens to almost no one because the crowd can pollute your thinking. Maybe he should loosen up a bit...or maybe he will be vindicated. He did say the best market timer was Arch Crawford and ,if you look at Crawford forecast for late summer it isn't pretty.If you look at his (Prechter's) chart taking us to 2016 and beyond anything is believable if we see out what he beholds. One thing is certain it won't be a pretty place. And he does recommend having some gold and silver in case we have a lock down crisis.

 

You may not like him because you don't want to believe what he has to say re Gold. I would take him on board and consider that he may be worth listening to as a counter balance. Wrong he has been so far (on gold). Lets hope that continues.

[Jake]

Prechter has obviously been wrong on Gold this last decade. In my view, the last chance for him to redeem his Gold call "a little," is if we were to see Gold drop below 2008 lows of 680 in the next 12 months. Personally I don' t see that happening, and think the worst case scenario would be limited by the 233 week EMA, currently around 850. We shall see. Anyway, I think Gold's unexpected resilience (from Prechter's point of view) demonstrates that he has underestimated the investment demand for Gold (safe haven) in what otherwise is a broadly speaking deflationary environment (?).

Another nice post. Let's give him another 12 months and see where we are then. I think Gordon would agree with you re safe haven. 'in all this darkness, gold shines'.

[d2thdr]

The thing that worries me, is that Prechter has shown better than anyone else, that he understands how and why financial events and long-term trends will unfold. His timing is absolutely horrible, but the world has basically been unfolding according to his views. More so than any other bearish pundit anyway.

 

I disagree. He has been calling 'crash' since 2002. He does not seem to have any insight IMO. Boy crying wolf comes to mind.

[G0ldfinger]

I disagree. He has been calling 'crash' since 2002. He does not seem to have any insight IMO. Boy crying wolf comes to mind.

I thought he had been out of the market since 1987 - pre-crash. So, he has lost out on a 600% profit.

 

http://gold.approximity.com/since1985/DJIA.html

[romans holiday]

RH: JS considers behaviour too. In fact, it is funny how Prechter ignores the behaviour of masses surrounding currency collapses.

Yes, but Prechter is looking at present mass behaviour not case histories. Consider that the behaviour of masses is now on the face of it deflationary. In the real economy, consumers are paying down debt and/ or saving. They are valuing money more... making money more valuable relative to assets... deflation.

 

Then we have the behaviour of investors which is inflationary; spending their savings [or should I say, leveraging up] and bidding up asset prices. But this behaviour is motivated by the ideology of monetarism; the CBs are printing ergo inflation. As we have seen, the inflationary behaviour of investors is very fickle... all it takes is some headline and they panic sell... showing how uncertain they are about their inflation expectation, or should I say ideology.

 

I think the actual behaviour of the masses in the real economy today negates any threat of hyper-inflation any time soon [we can argue about what that behaviour will be in the future... but this will be theoretical.... and most probably based on our own biases].

 

 

I think what Prechter is missing with gold is that in a global currency market, where currencies are traded as commodities, instability [and uncertainty] between those currencies will make gold increasingly attractive. Buying gold on currency instability is a form of investor behaviour which is not based on ideology, but on the real needs of investors [not to mention those of CBs] ....akin to the real needs of consumers to save money/ pay down debt... and yet Prechter seems to be ignoring this behaviour and sees it being bought merely as an inflation hedge on an ideological basis.

 

That investors are buying gold as a currency need not entail gold be the anti-dollar. It is perfectly logical that they could strengthen together as safe havens for liquid capital.

 

I'd suggest a common flaw to both Sinclair and Prechter is the idea that gold and dollar must be anti-thetical.

[InternationalRockSuperstar]

I think the actual behaviour of the masses in the real economy today negates any threat of hyper-inflation any time soon

 

the behaviour of the masses does not negate any threat of hyper-inflation, since hyper-inflation is caused by a very small minority within the population.

 

PS the hyper-inflation already started almost a year ago. if you mean mental price rises and currency repudiation, well that's probably a little over two years away.

[harvipark]

They guys at inovideo seem to have changed their gold forecast........

 

http://www.youtube.com/user/inovideos#p/u/1/YYAezicS-t4

[warpig]

To the contrary, I "don't want to believe what he has to say re Gold" because there's no truth to what he says. He doesn't believe gold is a currency, otherwise he wouldn't treat it like any other commodity. Someone should take him to a Central Bank and show him they don't store copper or soya beans in their vaults. Gold is the currency of last resort.

 

There is no value in his opinion.

 

You may not like him because you don't want to believe what he has to say re Gold. I would take him on board and consider that he may be worth listening to as a counter balance. Wrong he has been so far (on gold). Lets hope that continues.

[electroweak]

Nice analysis on ZeroHedge:

http://www.zerohedge.com/article/howard-bu...n-gold-standard

Howard Buffett Said "Human Freedom Rests On Gold Redeemable Money", Called For Return To Gold Standard

A must read essay by Howard Buffett, father of the "legendary" investor who initially was so very much against derivatives then promptly changed his tune, discusses fiat money and gold, and concludes that "human freedom rests on gold redeemable money." In this stunningly simple, straightforward, and flawless analysis, Buffett's father stresses the relation between money and freedom and contends that without a redeemable currency, an individual's freedom and one's access to property is dependent on goodwill of politicians.

...

"Is there a connection between Human Freedom and A Gold Redeemable Money? At first glance it would seem that money belongs to the world of economics and human freedom to the political sphere. But when you recall that one of the first moves by Lenin, Mussolini and Hitler was to outlaw individual ownership of gold, you begin to sense that there may be some connection between money, redeemable in gold, and the rare prize known as human liberty. Also, when you find that Lenin declared and demonstrated that a sure way to overturn the existing social order and bring about communism was by printing press paper money, then again you are impressed with the possibility of a relationship between a gold-backed money and human freedom."

[Jake]

To the contrary, I "don't want to believe what he has to say re Gold" because there's no truth to what he says. He doesn't believe gold is a currency, otherwise he wouldn't treat it like any other commodity. Someone should take him to a Central Bank and show him they don't store copper or soya beans in their vaults. Gold is the currency of last resort.

 

There is no value in his opinion.

Well if it makes you feel better I have something special for you...an admission of error on gold by the man himself-well as close to admission of error one could get. Make it your last Prechter interview! From 3:10 on.

 

http://www.elliottwave.com/freeupdates/arc...s-No-Haven.aspx