GOLD

[romans holiday]

I am 30% gold, 30% silver and the rest in cash. Hope it performs.

 

The world will become a better place... for you and for me and the entire human race [damn have no music key on the board]

[Ret45]

This is on the Elliott Wave site - questioning why gold has not performed given all the insecurity in the markets...

 

 

Home > Precious Metals

Gold: NOT The “Safe-Haven” You Think It Is

 

By Nico Isaac

Fri, 05 Sep 2008 14:30:00 ET Email | Print | RSS | My Updates Bookmark and share It!

 

According to mainstream financial wisdom, when the plane of the U.S. economy runs out of fuel in mid-air and starts hurtling toward the earth’s surface, investors do have one parachute of safety: Precious Metals.

Alas, things aren’t so hunky dory. Over the past year, passengers aboard Flight Wall Street have repeatedly hit the “Eject” button -- only to find that gold's parachute fails to open.

Take, for instance, the just-experienced “Carnage” of Thursday, September 4. On that day, the U.S. stock market suffered a complete system breakdown: the Dow Jones Industrial Average plunged 344.65 points into fresh bear market territory.

If ever there was an event to release the precious metal parachute, this across-the-Big-Board plummet SHOULD have done so. Yet -- at the day’s end, gold followed stocks down, below the psychologically important $800 per ounce level.

(Will Gold Provide Shelter From the Financial Storm? The September 2008 Elliott Wave Financial Forecast reveals whether NOW is the time to park your money in precious metals. Get the full story today)

I have two-and-a-half words for you: “What Safe-Haven?” Over the last year, every major engine of the U.S. economy -- from real estate to retail, employment to energy, and credit to commodities -- has malfunctioned. Yet, gold prices are down more than 20% alongside a 15% decline in the Dow.

Which brings us to Main Street’s “exception” to the stocks down, gold up rule: A greenback rally to 11-month highs. To wit: “Gold Drops On Dollar Gains. The dollar’s strength or weakness remains the number one factor in determining the direction of gold.” (Sept. 3 Reuters)

Sorry Charlie, such logic does not fly. And to prove it, the July 21, 2008 Short Term Update put together a myth-busting chart of the 52-week correlation between the U.S. Dollar Index & gold, and stocks & gold since 1999. (Reprinted below)

 

 

Amidst the confusion of failed cause-and-effect analysis, it’s easy to lose track of actual events; namely this: Since setting a record high on March 17, gold prices have lost more than 20% in value. In the days leading up to the reversal, Elliott Wave International President Bob Prechter went against the bullish gold bandwagon and presented a special March 14 Elliott Wave Theorist. In Bob’s words:

“What’s Next For Gold? If the relationship shown here holds true, and if gold behaves as it did in 1980, it should peak concurrently with the economy.”

Don’t get caught with a faulty parachute

[qwerty]

[damn have no music key on the board] laugh.gif

 

 

The handshake

Seals the contract

From the contract

There's no turning back

The turning point

Of a career

In Korea, being insincere

 

The holiday

Was fun packed

The contract:

Still intact

 

The grabbing hands

Grab all they can

All for themselves

After all

 

It's a competitive world

Everything counts in large amounts

 

The graph

On the wall

Tells the story

Of it all

Picture it now

See just how

The lies and deceit

Gained a little more power

 

Confidence

Taken in

By a sun tan

And a grin

 

The grabbing hands

Grab all they can

All for themselves

After all

 

It's a competitive world

Everything counts in large amounts

 

The grabbing hands

Grab all they can

Everything counts in large amounts

 

© 1983 Martin Lee Gore - Depeche Mode

 

 

http://uk.youtube.com/watch?v=J0mrq1PNS3w

 

 

 

 

 

 

[romans holiday]

Alas, things aren’t so hunky dory. Over the past year, passengers aboard Flight Wall Street have repeatedly hit the “Eject” button -- only to find that gold's parachute fails to open.

 

Poor choice of analogy. A gold parachute? Would go down quicker than a lead balloon.

 

edit to add: This guy's time line is too short [or non-existent]. We will continue to see a period of deflation followed by an inflationary scare in the near future. All going to plan... no alarms and no surprises here.

 

 

Here's a better analogy. In the coming whirlwind all paper assets will be swept about. Only the monetary metals will be left standing.

 

http://kr.youtube.com/watch?v=qqsyXdj_p_I

[Compounded]

The conversation between Jim Puplava and Frank Barbera making up the first hour of pt 3 of this week's Financial Sense is excellent :

 

http://www.financialsense.com/fsn/main.html

 

I just listened to it and recommended it, it's scary

 

"In terms of dividend return the DOW is still higher than at the 1929 peak"

 

ZG "Cantarell is a disaster", "OPEC is cutting production because of geology to but pretending it's voluntary".

 

The gold chap was bullish too.

[sylvester]

edit to add: This guy's time line is too short [or non-existent]. We will continue to see a period of deflation followed by an inflationary scare in the near future. All going to plan... no alarms and no surprises here.

 

May I coin a new phrase? 'Dis-inflation' strikes me as a good term for what happens when you get the mix of deflation and inflation. The 'dis' part appeals on all levels and even the youths will understand that 'dis' is a bad thing. And it rhythms with dis-information too which is nicely relevant to what is going on.

 

You heard it here first...

 

 

[Steve Netwriter]

A couple of things from Jim's site:

 

There appears to be growing views that gold may have bottomed.

This chart from Trader Dan is most interesting:

 

 

from his pdf file:

http://www.jsmineset.com/cwsimages/Miscfil...r_9-12-2008.pdf

 

 

The second:

 

Posted On: Saturday, September 13, 2008, 2:26:00 PM EST

Murenbeeld Analysis Supports Bright Future For Gold

 

Dear Friends,

I would like to introduce you to a fine piece of analysis by Dr. Martin Murenbeeld of Dundee Wealth Economics in Toronto. An avowed gold bug, Dr. Murenbeeld has been uncannily accurate in his gold forecasts and his latest analysis, which was presented at the recent Denver Gold Forum, posits that gold's "long term outlook remains positive." Even so, he cautions that the gold market will remain "volatile" in the meantime.

 

Dr. Murenbeeld’s analysis correlates closely (his is a bit more conservative) with Jim’s take on the gold market and if you want to bet against either of them I suggest you do so at your own peril.

 

To access Dr. Murenbeeld’s analysis in PDF format please click the following link. Several other papers on gold are available on the Denver Gold Forum web site which you can access here.

 

Over the years I’ve been associated with several alumni of Dundee (and still am in fact) and I can assure you that these people really have a good handle on the gold business. To access Dundee Wealth’s website please click here.

 

David K. Duval

Managing Editor

 

A good bit to read:

http://www.jsmineset.com/cwsimages/Miscfil...nMurenbeeld.pdf

[Steve Netwriter]

From the Dr. Martin Murenbeeld pdf file:

 

[romans holiday]

May I coin a new phrase? 'Dis-inflation' strikes me as a good term for what happens when you get the mix of deflation and inflation. The 'dis' part appeals on all levels and even the youths will understand that 'dis' is a bad thing. And it rhythms with dis-information too which is nicely relevant to what is going on.

 

You heard it here first...

 

Yes, I have heard this word bantied about a bit lately. Strikes me as a disingenuous way of avoiding the word deflation.

 

It is certainly better than the use of stagflation.

 

Edit to add: I like to use "hyper" deflation... though I recognise it can be misleading. It refers to first assets deflating.... then the dollar itself deflating [hyper-inflation of the currency].

 

http://www.greenenergyinvestors.com/index.php?showtopic=4169

[drbubb]

There appears to be growing views that gold may have bottomed.

This chart from Trader Dan is most interesting:

 

The Commercials are shift back toward a neutral bias

[dst]

May I coin a new phrase? 'Dis-inflation' strikes me as a good term for what happens when you get the mix of deflation and inflation. The 'dis' part appeals on all levels and even the youths will understand that 'dis' is a bad thing. And it rhythms with dis-information too which is nicely relevant to what is going on.

 

You heard it here first...

 

Read the term on wikipedia a while back, this is how it is defined there

 

http://en.wikipedia.org/wiki/Disinflation

 

Disinflation is a decrease in the rate of inflation.[1] Being how much prices are increasing per unit of time, it can be expressed using the word disinflation: The slowing of the rate of inflation per unit of time.

 

For example, one month the annual rate of inflation was 4.4% and the next month the annual rate of inflation was 4.0%. In this case the price of goods and services is still increasing, however, it is increasing at a slower rate, 0.4%-points less in the second month than in the first month.

 

Disinflation is proof of success in the battle against inflation. However, the rate of inflation should not decrease until it's negative, which is deflation, which is an overall decrease in prices, since deflation is always regarded as a negative state of the economy no matter how high it is.

 

[wrongmove]

Beginning of article by Nouriel Roubini (I don't have subscription for the rest)

 

If Lehman collapses expect a run on all of the other broker dealers and the collapse of the shadow banking system

 

"It is now clear that we are again – as we were in mid- March at the time of the Bear Stearns collapse – an epsilon away from a generalized run on most of the shadow banking system, especially the other major independent broker dealers (Lehman, Merrill Lynch, Morgan Stanley, Goldman Sachs). If Lehman does not find a buyer over the weekend and the counterparties of Lehman withdraw their credit lines on Monday (as they all will in the absence of a deal) you will have not only a collapse of Lehman but also the beginning of a run on the other independent broker dealers (Merrill Lynch first but also in sequence Goldman Sachs and Morgan Stanley and possibly even those broker dealers that are part of a larger commercial bank, I.e. JP Morgan and Citigroup). Then this run would lead to a massive systemic meltdown of the financial system. That is the reason why the Fed has convened in emergency meetings the heads of all major Wall Street firms on Friday and again today to convince them not to pull the plug on Lehman and maintain their exposure to this distressed broker dealer.

 

Let me elaborate in much detail on these issues…"

 

 

So any announcement on Lehman today or early tomorrow may be crucial. Will confidence be restored or shattered? Looks like markets may respond sharply either way, and st leger's day was this weekend, so the "silly season" is officially over.....

 

Should be "interesting"............

 

 

 

[id5]

I wonder whether you would like to contribute a little (if only a copy of your post) to this thread:

I have already add a few posts to that thread but I will add a post as requested and put in a few more things

...the misinformation out there is terrible concerning the humble origins of our currency!

Due to lots of well meaning 18th & 19th century ‘amateur historians’. It takes a long time to remove disinformation, just ask the Flat Earth Society!

A little off-topic, but the Aureus is basically a Sovereign.

Oh! Very good fact! but did you know that Roman coin was also subject to debasement, even at that time government was playing with the value of money and now I just feel like I am a clone of Stephen Fry

 

[Magpie]

Beginning of article by Nouriel Roubini (I don't have subscription for the rest)

 

Tom's posted it here:

 

http://forum.globalhousepricecrash.com/ind...showtopic=40570

 

Quite alarming really.

 

[sylvester]

Read the term on wikipedia a while back, this is how it is defined there

 

http://en.wikipedia.org/wiki/Disinflation

 

Damn it, I thought I'd invented something there. Still, no change for me, every time I thought I'd invented something new in research electronics I always found out IBM had done it in the 60's.

Blast them all!

 

[HPCsoYESTERDAY]

So any announcement on Lehman today or early tomorrow may be crucial. Will confidence be restored or shattered? Looks like markets may respond sharply either way, and st leger's day was this weekend, so the "silly season" is officially over.....

 

Should be "interesting"............

 

 

 

Tom's posted it here:

 

http://forum.globalhousepricecrash.com/ind...showtopic=40570

 

Quite alarming really.

 

Time to load up you two?

[Magpie]

Time to load up you two?

 

Ready for the deflationary collapse?

 

I'm too broke anyway, so it's fairly notional at this stage. If it goes hyperinflationary I'll have to find other ways to ride the storm. This looks like a key moment to me though - if the government has to rescue Lehman we're a step closer to massive inflation. If they let them collapse we're a step closer to a chain of banking collapses, at which stage all the money printing in the world might not save the situation.

 

[drbubb]

BIG FREEZE coming?

 

I reckon that there is a real chance that they will Freeze all of Lehman's derivatives trades tomorrow,

and let the rest of the market continue.

 

They they will look for a way to unfreeze trades as they are booked out. They will only do so, if a majority of banks have agreed to this solution

[romans holiday]

Ready for the deflationary collapse?

 

I'm too broke anyway, so it's fairly notional at this stage. If it goes hyperinflationary I'll have to find other ways to ride the storm. This looks like a key moment to me though - if the government has to rescue Lehman we're a step closer to massive inflation. If they let them collapse we're a step closer to a chain of banking collapses, at which stage all the money printing in the world might not save the situation.

 

Hmmm... let me guess... fishing and the growing of vegetables?

 

Edit to add: Will be one of my strategies.

[romans holiday]

BIG FREEZE coming?

 

I reckon that there is a real chance that they will Freeze all of Lehman's derivatives trades tomorrow,

and let the rest of the market continue.

 

They they will look for a way to unfreeze trades as they are booked out. They will only do so, if a majority of banks have agreed to this solution

 

Tim Wood was talking of a K Wave Winter on Howe Street. To be frank, I used to think he was a bit of a wally but now have some newfound respect for him.

 

http://howestreet.com/audiovideo/index.php...mediaplayer/956

[Justin Thyme]

I was most encouraged to see gold rising while oil was flirting with $100 late on Friday. If this is the beginning of the deterioration of the tie between their price correlation, it's got to be good news, right ?

 

 

[Magpie]

Hmmm... let me guess... fishing and the growing of vegetables?

 

Edit to add: Will be one of my strategies.

 

Not a lot of fishing in the North London suburbs, but the vegetable patch could always be expanded a bit. Might be room for a few hens out there as well.

 

[G0ldfinger]

...If they let them collapse we're a step closer to a chain of banking collapses, at which stage all the money printing in the world might not save the situation.

In the first case, you want to hold gold.

 

In the second case, you want to hold gold, too.

[Errol]

You should always want to hold gold.

[Magpie]

You should always want to hold gold.

 

So I hear.