bitbigt Posted September 9, 2008 Report Share Posted September 9, 2008 I listened to Friday's Financial Sense podcast on the way into London this morning (which I thoroughly recommend, BTW). I can't remember which guest mentioned it, but $775 was cited as an important level. Break below it and it signals the market is ignoring intervention and taking a short-term deflationary view (potentially until around year end). Go above it and take $850, and the intervention is being priced in and the market has realised we're in inflationary mode. Really important message between the lines there - that we must not miss: There is now a core acceptance that we ARE in inflationary mode (due to recent interventions increasing money supply), and its now just a question of watching people/markets realise this sooner (next stop 850) or later (next stop 775) ...yipee!!! Link to comment Share on other sites More sharing options...
GatheringStorm Posted September 9, 2008 Report Share Posted September 9, 2008 I listened to Friday's Financial Sense podcast on the way into London this morning (which I thoroughly recommend, BTW). Last Saturday's Financial Sense spooked me. Conspicuous by its absence was Eric Kings usual "you've got to belieeeeeeve type rant" by which he encourages people to stay in their gold stock positions. I thought Puplava himself sounded a bit subdued as well. They're both wealthy men who will not be ruined by this sort of volatility/end of gold bull whatever, but their relentlessly bullish talk has kept many ordinary people in gold/gold stock positions to their great cost. This gold stock correction has made most of the newsletter writers etc. look clueless and it's positively embarrassing watching Elliott wavers trying to make sense of it all. Link to comment Share on other sites More sharing options...
bitbigt Posted September 9, 2008 Report Share Posted September 9, 2008 Commodities down; it’s DEFLATION! yeah - and it rained today so there's no global warming Link to comment Share on other sites More sharing options...
drbubb Posted September 9, 2008 Report Share Posted September 9, 2008 TIME to buy oil, maybe And the Dollar hit USD-79.80 (I called USD-80 key resistance With cross market at/near important turning points, perhaps gold is too Link to comment Share on other sites More sharing options...
alexreeve Posted September 9, 2008 Report Share Posted September 9, 2008 USDX looks like it has fallen off a cliff but Gold not reacting at all??? Link to comment Share on other sites More sharing options...
warpig Posted September 9, 2008 Report Share Posted September 9, 2008 Nice quote. Apparently there is too much at stake to let the free markets decide. But logic, and history, dictates that decide they ultimately will. Link to comment Share on other sites More sharing options...
cazlane Posted September 9, 2008 Report Share Posted September 9, 2008 yeah - and it rained today so there's no global warming Denial-it is not just a river in Egypt you know Still on for my $6 silver by year end at this rate Link to comment Share on other sites More sharing options...
cazlane Posted September 9, 2008 Report Share Posted September 9, 2008 Nice quote. NOBODY is bigger than the market! Link to comment Share on other sites More sharing options...
ologhai Posted September 9, 2008 Report Share Posted September 9, 2008 friggin' hell. I'm sure that in long-term bull markets, there are lots of times when people are shaken out by prices falling just when people think they shouldn't fall any more right when they should be hanging on. I'm also pretty sure that in a bear market (or when a bull market is over), there are lots of times when people keep hanging on all the way down and simply get wiped out because they refuse to let go. Link to comment Share on other sites More sharing options...
qwerty Posted September 9, 2008 Report Share Posted September 9, 2008 Marc Faber latest view. "We shouldn’t dismiss entirely the possibility that all the bailouts fail to revive credit growth and that a deflationary secondary depression is now under way," writes Dr.Marc Faber in the latest edition of his highly respected Gloom, Boom & Doom Report. "The sharp deceleration in credit growth, with rising default rates across the board, could suggest that debt liquidation is now occurring...[but] Ben [bernanke of the US Fed] and Hank [Paulson of the Treasury] may replace private debt with government debt in order to bail out the system. "That such a bailout will diminish the purchasing power of the Dollar even more (it should be highly inflationary) is clear... "Under this scenario, renewed US Dollar weakness and strength in commodities – in particular, in Gold – should reappear." Link to comment Share on other sites More sharing options...
PricedOutNative Posted September 9, 2008 Report Share Posted September 9, 2008 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) Denial-it is not just a river in Egypt you know Still on for my $6 silver by year end at this rate Link to comment Share on other sites More sharing options...
ChrisP Posted September 9, 2008 Report Share Posted September 9, 2008 This gold stock correction has made most of the newsletter writers etc. look clueless and it's positively embarrassing watching Elliott wavers trying to make sense of it all. At what point does it stop being a correction and start becoming a bad investment recommendation? Link to comment Share on other sites More sharing options...
id5 Posted September 9, 2008 Report Share Posted September 9, 2008 ... (BTW I was hoping for inflation as deflation means complete collapse and all the problems that will bring) I hope FFS that it makes up its mind soon so I can work out where best to put my investments. At the moment just about every investment is like a car on knackered shock absorbers, go over a bump and everyone ends up feeling travel sick Link to comment Share on other sites More sharing options...
drbubb Posted September 9, 2008 Report Share Posted September 9, 2008 USDX looks like it has fallen off a cliff but Gold not reacting at all??? IT WILL... the US financial sector appears to be haemorraghing again with Lehman Bros now reportedly close to being acquired, while the latest industry figures reveal that 119 US banks are now insolvent. We believe a US rate rise is highly unlikely with the possibility of a further meltdown for the investment banks and a systemic risk to the entire US banking sector. In addition, Freddie Mac and Fannie Mae, after losing a total of $US14b over the last 9 months, are both being bailed out by the Treasury which might cost taxpayers up to $US200b.We now hear that the US auto industry is asking for a further $US50b in Govt assistance to stay competitive. Have I missed something or has the US suddenly become the ultimate welfare state where the Govt waves a wand and simply prints more money? This is bad news for the already surging budget deficit, bad news for money supply growth, very bad news for the US bond market and even worse for the US economy. We believe the actions of the Govt confirm our view that the US economy has serious structural issues and publicly-funded handouts and bailouts are a short term fix to a long term problem which merely prolongs a naturally-led recovery process. Although we expect equity markets will rebound after the Fannie and Freddie bailout, the recent developments are deeply disturbing and very negative for US bonds and the long term health of the US economy. When investors assess the real implications of the actions of the Govt, the Fed and the Treasury we expect the US dollar to resume its long term downward trend, while in contrast, we expect commodities and gold in particular, to recovery strongly. Loss of faith in paper assets. At the end of the day the strength of a currency reflects the underlying strength of the economy and we think the long term outlook for the US economy is negative. In short term sentiment can dictate performance, however over the long term the economic fundamentals will drive the direction of a currency. We believe the fundamentals for the economy and therefore the currency, are structurally weak. Our view is the sharp rebound in the US dollar is not a reflection of a flight to quality, but just a flight. In addition to the weak outlook for the US as Europe lurches towards negative growth, we think the combination of both events will drive a strong recovery in gold as investors recognise the weak fundamentals for both the Euro and the US dollar. As a result we expect a significant loss of faith in paper assets Link to comment Share on other sites More sharing options...
drbubb Posted September 9, 2008 Report Share Posted September 9, 2008 IT WILL... Added to my GLD calls today Link to comment Share on other sites More sharing options...
bitbigt Posted September 9, 2008 Report Share Posted September 9, 2008 Denial-it is not just a river in Egypt you know Still on for my $6 silver by year end at this rate Denial is a tiny trickle compared to the SimplisticAnalysisInTheEx Stream At least you do plan to buy some sometime, and I just hope you do have the wisdom to catch 'the' bottom. I bought more Ag today. We can then sell together at USD 30+ and have a good (virtual) drink together Link to comment Share on other sites More sharing options...
drminky Posted September 9, 2008 Report Share Posted September 9, 2008 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.. Link to comment Share on other sites More sharing options...
bitbigt Posted September 9, 2008 Report Share Posted September 9, 2008 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) I'd suggest your comment highlights the widespread confusion, and hence the crazy markets... All this 'hot air' (presuming you mean bale out money) is going into two baloons, not one! The first is the set of things that hit bubble prices in recent years: most noteably houses. And you're right, the tear is so big that prices will fall a lot further before a patch can be achieved. But the second is all the stuff of daily living: That baloon never reached anything like its full capacity, and has no tears. The same hot air is filling this rapidly, with obvious consequences. ...inflation in daily living, and that will be bullish for gold! 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. Link to comment Share on other sites More sharing options...
needmorespace Posted September 9, 2008 Report Share Posted September 9, 2008 Added to my GLD calls today That's brave. How far out are you going? I'm mulling this too. January 65s maybe. Link to comment Share on other sites More sharing options...
drminky Posted September 9, 2008 Report Share Posted September 9, 2008 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! Link to comment Share on other sites More sharing options...
bitbigt Posted September 9, 2008 Report Share Posted September 9, 2008 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! Excellent point! I have been feeling quite sure there will be something of a fall in bond prices soonish - and I believe US government bond yields have actually already started to increase, given the F+F baleout. But I hadn't thought about the possibility of that accelerating and what that would mean. I wonder, do people general realise how incredibly massive the bond market is compared to stock markets, which themselves dwarf the PM markets? If a tiny, tiny fraction of that bond money diverted to PM, then even I would have to post a rocket picture! Link to comment Share on other sites More sharing options...
Bobsta Posted September 9, 2008 Report Share Posted September 9, 2008 IT WILL... When investors assess the real implications of the actions of the Govt, the Fed and the Treasury we expect the US dollar to resume its long term downward trend, while in contrast, we expect commodities and gold in particular, to recovery strongly. Who's "we" DrBubb? Maybe the Russians will save us. Crash2006 over at HPC seems to think so... i've just heard russia has started to sell all its dollars. LOL! Link to comment Share on other sites More sharing options...
ziknik Posted September 9, 2008 Report Share Posted September 9, 2008 Oils gone below $100! Link to comment Share on other sites More sharing options...
Bobsta Posted September 9, 2008 Report Share Posted September 9, 2008 Oils gone below $100! Cue OPEC. Link to comment Share on other sites More sharing options...
notanewmember Posted September 9, 2008 Report Share Posted September 9, 2008 Oils gone below $100! Next target $80, then $60. At $60, I ll be buying some ETF oil, wont be the end of the world eh? Link to comment Share on other sites More sharing options...
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