Gold getting KILLED!!!!

[prezone]

Re: Gold getting KILLED!!!!

Buy Gold - You support Freedom, Liberty & True Patriotism.

Buy UST's - You support Kleptocracy.

[karim0028]

Re: Gold getting KILLED!!!!

It would be helpful if we had some reference place where the current iTulip position is summarized. It's hard for someone coming in to know, for example, whether iTulip still regards the debt deflation bear market as being in effect, or whether it is still bullish on gold. He wouldn't necessarily know whether it still has a near term bullish bias on long-dated UST or whether there's something he may have missed somewhere in its many pages. A reference area for the current iTulip position would rectify this as well as obviate most of the repetition.

Second that! A current itulip position Wiki that is up to date would be great... The info is just so much to try and find on the forum...

[Finster]

Re: Gold getting KILLED!!!!

Click on EJ's name....then all Threads started by him and you will see roughly what you are asking for....

Roughly like finding a needle in a haystack. That will get you hundreds of posts, many thousands of words ...

[Starving Steve]

Re: Gold getting KILLED!!!!

It's an interesting article, however that way of viewing it basically rules out that things as silver (1980(, sugar (early seventies) and even oil (2008) can become a bubble, and I happens to disagree with that.

$930 gold in 2009 compared to $35 per oz gold in 1971: since when has the cost of living in America gone up 27times since 1971? Most items are up 3 or 4 times, maybe 5 times, some items less than even 3 times.... And if the price has gone up 4 times or 5 times, the quality is so much better than 1971 quality that there is no comparison.

Yes, California real estate is way up, but look at that real estate now. That market is in correction. And look at the house you get now compared to 1971. Again, there is no comparison; the new house now is much better in quality, in dozens of ways.

Yes, fuel has gone up, especially gasoline and diesel. But cars now are much more fuel efficient than cars in 1971, so the cost of driving hasn't gone up as much. Also, vehicles are much more reliable now than in 1971, so the cost of driving has dropped, not risen.

Yes, postage has gone up a lot. But to-day we don't mail letters; we e-mail, and that is almost free.

Yes, gold is not only an inflation hedge; it is a hedge against other things like war. But even in the darkest days of WWII when the Hitlerite-filth ruled Europe, gold was still just $35 per ounce.

Make no mistake about it; gold is a bubble now. And the charts show it too: Gold only too eager to rally but then to die-on-the-vine. Over and over again, the same thing---- the toppy pattern unless one looks over the very long term.

So if gold is still a very good long-term investment, as the charts show, make gold pay for itself and buy when no-one wants gold. But right now, lots of people still are in love with gold, and the gold market is rather like a cult of believers, just like a religion.... That is no time to buy gold for the long-term, at least not in my opinion.

[ThePythonicCow]

Re: Gold getting KILLED!!!!

The reason you repeat yourself is because this blog has a poor index of main points or big calls.

Hey - I thought we had an excellent index. Goes by the name of Metalman ;).

I suspect that there may be a bit of inherent tension that is best less unresolved. Perhaps Eric is rather like a professor running a multi-year graduate seminar and research project, expecting not to have to repeat prior lessons all that much, whereas his "students" are a more feckless, varied and distracted lot, coming and going during class.

The other sites that I frequent publish on a regular weekly or monthly cycle, with each newsletter rather more self-contained. It's easy to get up to speed on these sites; just read their last major issue. But over time these other sites get boring and one by one, I drop their subscriptions.

[ThePythonicCow]

Re: Gold getting KILLED!!!!

Second that! A current itulip position Wiki that is up to date would be great... The info is just so much to try and find on the forum...

Wiki's intended to hold substantial content that are mostly read-only, updated only by one or a few persons, are a major time sink, and soon fall behind after their initial gargantuan birthing pains.

The only free form content Wiki's I have seen stay healthy for an extended period of time have both an active, usually paid, maintenance staff pruning stale content and cleaning up debris, as well as an energetic, dynamically varying and rather largish (for the subject) contributing audience.

The other healthy Wiki's I've seen are being used as low tech content management web hosting software by someone publishing a fairly routine data or information series driven by calendar events, such as project schedules and regular meeting notes.

[ASH]

Re: Gold getting KILLED!!!!

We define the next crash as the end of the First Bounce of the Debt Deflation Bear Market that we marked as over on June 17th.

I am not trying to be a wag by belaboring this point, so please bear with me.

If the end of the first bounce of the debt deflation bear market is what is meant by the "next crash of the financial system", then the phrasing of the original prediction isn't as clear as it could be.

Over the next six months, barring any fresh crashes to the financial system that send investors out of financial assets and into gold, we see gold trading much as in 2006, but at a higher level.

I think "financial markets" would be better usage than "financial system" if one is talking about falling stock prices rather than failing financial institutions. Also, the prediction is phrased as though gold trading much as in 2006 is the baseline scenario, whereas the word "barring" implies that a fresh crash of the financial system in a 6-month time frame is a possibility, but not the baseline assumption. Since iTulip called June 17th as the end of the first bounce -- as you point out -- I would have thought a fall in the markets within 6 months is the baseline iTulip scenario. That's why I thought EJ was talking about possible emergence of a fresh systemic threat rather than the expected fall in the markets.

[FRED]

Re: Gold getting KILLED!!!!

I am not trying to be a wag by belaboring this point, so please bear with me.

If the end of the first bounce of the debt deflation bear market is what is meant by the "next crash of the financial system", then the phrasing of the original prediction isn't as clear as it could be.

Over the next six months, barring any fresh crashes to the financial system that send investors out of financial assets and into gold, we see gold trading much as in 2006, but at a higher level.

I think "financial markets" would be better usage than "financial system" if one is talking about falling stock prices rather than failing financial institutions. Also, the prediction is phrased as though gold trading much as in 2006 is the baseline scenario, whereas the word "barring" implies that a fresh crash of the financial system in a 6-month time frame is a possibility, but not the baseline assumption. Since iTulip called June 17th as the end of the first bounce -- as you point out -- I would have thought a fall in the markets within 6 months is the baseline iTulip scenario. That's why I thought EJ was talking about possible emergence of a fresh systemic threat rather than the expected fall in the markets.

The cycle has changed from a bubble cycle noted here in 2005, and later identified as an outgrowth of the FIRE Economy that ended when the financial system collapsed in 2008, to a fiscal spending re-inflation cycle that started in the U.S. in 2009 ala Japan 1992. The transition was evidenced by a crash in financial markets 2007 to 2008. Wish the process was more simple to explain but it is not.

[karim0028]

Re: Gold getting KILLED!!!!

Wiki's intended to hold substantial content that are mostly read-only, updated only by one or a few persons, are a major time sink, and soon fall behind after their initial gargantuan birthing pains.

The only free form content Wiki's I have seen stay healthy for an extended period of time have both an active, usually paid, maintenance staff pruning stale content and cleaning up debris, as well as an energetic, dynamically varying and rather largish (for the subject) contributing audience.

The other healthy Wiki's I've seen are being used as low tech content management web hosting software by someone publishing a fairly routine data or information series driven by calendar events, such as project schedules and regular meeting notes.

Exactly Last i checked Itulip wasn't a non profit entity unless my last payment went to feed some hungry kids in africa ;)

I'm not taking about a member run Wiki, im talking about a moderator run wiki, just for official positions.... It shouldn't be that difficult to keep up data on official Itulip positions as they may change over time... Hell even a forum sticky on official positions on different things may solve that issue of searching for all the positions and topics discussed. OR perhaps somehow indexing the topics so that if you dont know what to search for you can go down the directory to see whats available....

Itulip has a treasure trove of information; but if you dont know what to look for you end up spending hours reading forum posts just to figure out if an official position has somehow changed.

[kartius919]

Re: Gold getting KILLED!!!!

You seem to think that 35$ gold was fair value in 1971, which if so, Nixon would not have taken us off the gold standard.

[wayiwalk]

Re: Gold getting KILLED!!!!

re: deflation discussed above - i will only offer anecdotal evidence in another bubble market - this being fine wine. Prices of items that actually sell (ie, sales within a week, not waiting longer) have fallen significantly, maybe resulting in price decreases up to 40%. Lots of retailers have stock that is just sitting.

I imagine there are many other retailers selling luxury goods also sitting on merchandise, maybe they're eating their way through cash reserves to pay the rent these days.

My evidence is based on wine I have consigned for sale in the last 9 months. Stuff that doesn't move in a month, i drop prices by 10 - 15 %. The last month or so, I've made even more drastic cuts.

In the last 2 weeks, I've received seen offers from major US retailers offering significant discounts for "the good stuff". They're finally feeling the pinch.

So, we're surely seeing deflation in prices of luxury goods, or perhaps goods that were actually bubbletized by cheap credit!

[thousandmilemargin]

Re: Gold getting KILLED!!!!

The 2008 slump in gold prices followed the peak of the oil bubble in July 2008. Gold followed oil down as oil slumped dramatically. This preceded the dramatic stock market falls of October 2008.

As the stock market made new lows in March 2009, gold was rising back towards all time highs, while the US dollar strengthened due to deleveraging and risk aversion. In March 2009 both gold and the US dollar benefited from a "flight to safety".

When the current bear market rally ends and stock markets make new lows, we are likely to see a strong dollar AND strong gold as the "flight to safety" theme gets repeated.

Once the downdraft from the oil bubble collapse ended, the dollar and gold moved together inversely to the stock market - this is most obvious during the first half of 2009.

I would not expect to see gold move inversely to the US dollar until the balance of deflationary and inflationary forces tips in favour of inflation.

At present, collapsing credit (tens of trillions) still outweighs the trillions in bailout and stimulus spending, as very little of the bailout money has flowed through to the real economy.

I know EJ keeps saying we will switch over to "Poom" any minute now - but I really can't see this happening until mid 2010. While the Fed is certainly capable of monetarizing a $100 trillion dollar debt, they are in no hurry to print on this scale as they don't want to admit the magnitude of the disaster. I expect printing to gradually be expanded bit by bit, and a third and fourth and fifth stimulus package to come along, and I don't think the scale of the intervention will prompt a dollar devaluation until next year. In the short term, the intervention isn't dramatic enough to outweigh the deleveraging effects brought on by falling stock markets and home prices.

I'm thinking the markets will find their own bottom, 1932 style, some time next year, and only once the deleveraging is over will the demand for dollars fall to the point where currency devaluation and cost push inflation becomes a factor. At this point I expect stocks and gold to rise together while the dollar declines - after a bottom is reached and widely called inflationary expectations will take over.

I expect gold to go sideways over the next 12 months. It may rise as people seek a safe haven. Gold can do well in non-inflationary periods if there is a fear of financial and social collapse. The "gold is money" position.

I think the calls for a return to 700 gold ignore that fact that the oil bubble and oil slump of 2008 was a special factor which no longer applies.
I think $70 oil is being priced optimistically, and I expect oil to head back to $50 during the next leg down of the stock market. This may create a downdraft on gold, but nothing like last years oil/gold crash.

I think EJ is essentially right, but underestimating the depth and duration of the "ka" phase. I believe deleveraging will hold up the US dollar until the stockmarket makes a bottom, and I don't think any intervention will stop the market finding its own bottom. I expect the stock market to fall for another 12 months and make a deep bottom similar to 1932, as intervention will be too little too late due to the level of denial and self-deception in Washington and Wall Street.

[jiimbergin]

Re: Gold getting KILLED!!!!

T
I know EJ keeps saying we will switch over to "Poom" any minute now - but I really can't see this happening until mid 2010. While the Fed is certainly capable of monetarizing a $100 trillion dollar debt, they are in no hurry to print on this scale as they don't want to admit the magnitude of the disaster. I expect printing to gradually be expanded bit by bit, and a third and fourth and fifth stimulus package to come along, and I don't think the scale of the intervention will prompt a dollar devaluation until next year. In the short term, the intervention isn't dramatic enough to outweigh the deleveraging effects brought on by falling stock markets and home prices.

I'm thinking the markets will find their own bottom, 1932 style, some time next year, and only once the deleveraging is over will the demand for dollars fall to the point where currency devaluation and cost push inflation becomes a factor. At this point I expect stocks and gold to rise together while the dollar declines - after a bottom is reached and widely called inflationary expectations will take over.

I expect gold to go sideways over the next 12 months. It may rise as people seek a safe haven. Gold can do well in non-inflationary periods if there is a fear of financial and social collapse. The "gold is money" position.

I do not remember EJ saying poom will happen any minute. He also has said (earlier in this thread) that Gold will move sideways for al least the rest of this year.

jim

[sunskyfan]

Re: Gold getting KILLED!!!!

Would anybody argue that the actions by the US government (and governments around the world) in the last 10 months have been nothing but extraordinary? Would anybody argue that without them that there would have been a monetary contraction of an extraordinary magnitude. The question is can governments continue do this? I don't think so and I think the current regime of thinking will collapse quicker than the liabilities come due. Obviously liabilities are coming due. This crisis is about the efficiencies of markets and validity of currency. Gold will drift up but there is not enough of it create and efficient market with it compared to the rest of the economy. It just isn't a big enough player for all the uncertainty of the world economy to be mapped to it.

People have to eat and they will trade in paper money.

I never mentioned deflation by-the-way. But it is implied. When you start to see shortage's of stuff is the sign that real inflation is here.

As for anecdotal data. I am self-employed and my income has dropped dramatically as the economy has contracted. Anybody want to send me their worthless paper money?

[sunskyfan]

Re: Gold getting KILLED!!!!

Your critiques are always worth the read.