Gold getting KILLED!!!!

[ASH]

Re: Gold getting KILLED!!!!

the ride from $250 to $1000... fun & easy!

from $1000 to $2k or $3k or $30k etc?

depends on this, non?

The point I am wondering about is whether gold will dip again, a la 2008, if we get (a) a sharp stock market drop, or (b) a sovereign debt crisis outside the USA.

Itulip has said pretty clearly that gold ought not to fall as far as it did in 2008 in the event of a stock market correction, and that even if it does fall, it will recover faster than last time. That could be true, but I'm thinking that if the DJIA goes down by more than 1000 points in the span of a week or two, we will see enough price movement in gold to be worth the trade. (Itulip's gold position is oriented toward multi-year trends, so probably from that perspective, this would be 'noise'.)

I'm also thinking that politically, the "recovery" needs to sputter before significant new stimulus can be applied. The things that I'm watching are knock-on effects from the end of the Fed's MBS monetization program, the much vaunted ARM reset, and the lack of an elegant solution to Greece's debt problem. In other words, I still buy the basic model of a stock market (and economy) driven by government stimulus, and a downturn to follow when stimulus peters out. I'm also looking for a semi-predictable 'crisis' to trigger a flight to 'safety' that lifts the dollar.

I burned my fingers last year betting on the timing of said downturn, and I'm not game for a rematch, so I've no speculative money in play anymore. However, I did take a large part of my portfolio to cash last month, and will likely stay there until I better understand the timescale on which the above issues will resolve themselves.

[swannmex]

Re: Gold getting KILLED!!!!

Focus on the forest, not the trees.

http://www.the-privateer.com/g-bottom/gold98-l.html

This is a long term secular bull market. Relax, enjoy.

[jpatter666]

Re: Gold getting KILLED!!!!

The point I am wondering about is whether gold will dip again, a la 2008, if we get (a) a sharp stock market drop, or (b) a sovereign debt crisis outside the USA.

Itulip has said pretty clearly that gold ought not to fall as far as it did in 2008 in the event of a stock market correction, and that even if it does fall, it will recover faster than last time. That could be true, but I'm thinking that if the DJIA goes down by more than 1000 points in the span of a week or two, we will see enough price movement in gold to be worth the trade. (Itulip's gold position is oriented toward multi-year trends, so probably from that perspective, this would be 'noise'.)

I'm also thinking that politically, the "recovery" needs to sputter before significant new stimulus can be applied. The things that I'm watching are knock-on effects from the end of the Fed's MBS monetization program, the much vaunted ARM reset, and the lack of an elegant solution to Greece's debt problem. In other words, I still buy the basic model of a stock market (and economy) driven by government stimulus, and a downturn to follow when stimulus peters out. I'm also looking for a semi-predictable 'crisis' to trigger a flight to 'safety' that lifts the dollar.

I burned my fingers last year betting on the timing of said downturn, and I'm not game for a rematch, so I've no speculative money in play anymore. However, I did take a large part of my portfolio to cash last month, and will likely stay there until I better understand the timescale on which the above issues will resolve themselves.

I agree.

It seems that there is no better Pavlovian button to push for the iTulip management and associated cheerleaders than to say "deflation" or post an article referring to it. I understand EJ is working on the final "deflation no, never, no more" posting.

But I'd imagine the majority of iTulip subscribers don't really need convincing -- when we say "deflation" we (well at least I have, and most of the postings I've seen imply the same) mean a temporary drop in pricing brought about by a massive de-leveraging. I think this is very much in the cards, especially since IMO we never saw true capitulation in the markets.

I think most people understand that in a true fiat monetary environment, inflation is a political decision, and TPTB have shown they will certainly take what they perceive as the easier way out of the mess.

[metalman]

Re: Gold getting KILLED!!!!

The point I am wondering about is whether gold will dip again, a la 2008, if we get (a) a sharp stock market drop, or (b) a sovereign debt crisis outside the USA.

ej said... can't remember where.. the line of investors waiting for another "ka" is 9 million long.. & mr market hates long lines.

Itulip has said pretty clearly that gold ought not to fall as far as it did in 2008 in the event of a stock market correction, and that even if it does fall, it will recover faster than last time. That could be true, but I'm thinking that if the DJIA goes down by more than 1000 points in the span of a week or two, we will see enough price movement in gold to be worth the trade. (Itulip's gold position is oriented toward multi-year trends, so probably from that perspective, this would be 'noise'.)

35458 articles here in 2006 & 2007 said gold will not fall as far as stocks in 2008. whaddaya know?



another lucky guess!
one of 3468 lucky guesses to not sell since 2001...



who coulda known?

I'm also thinking that politically, the "recovery" needs to sputter before significant new stimulus can be applied. The things that I'm watching are knock-on effects from the end of the Fed's MBS monetization program, the much vaunted ARM reset, and the lack of an elegant solution to Greece's debt problem. In other words, I still buy the basic model of a stock market (and economy) driven by government stimulus, and a downturn to follow when stimulus peters out. I'm also looking for a semi-predictable 'crisis' to trigger a flight to 'safety' that lifts the dollar.

yeh, but this is the thing, ain't it? when gov't runs markets the money waits. itulip equates 'safe' with 'cheap' & notes nothing is cheap... nothing is safe! nothing! hey, but at least no deflation crash, eh?

I burned my fingers last year betting on the timing of said downturn, and I'm not game for a rematch, so I've no speculative money in play anymore. However, I did take a large part of my portfolio to cash last month, and will likely stay there until I better understand the timescale on which the above issues will resolve themselves.

if you sold in dec. 2007 & bought stocks in mar 2009 & get out before the next shitshow you're a genius.

[jpatter666]

Re: Gold getting KILLED!!!!

ej said... can't remember where.. the line of investors waiting for another "ka" is 9 million long.. & mr market hates long lines.

Very, very true and I think one of the primary reasons the rally has run as long as it has. Lots of people thinking it was a fake rally, shorting the market, getting killed, wash, rinse, repeat.

I know, because I was one of the bear corpses on the way....

But we've been bouncing along at this level for many months, the hedge funds and money markets are as "all in" as they were in 2007. In ways, we are *right back where we started* but now all the financial bullets are shot and we've sovereign defaults on the table. I'll bet that nine-million person line has declined somewhat.....

And was not sovereign defaults one of the reasons EJ was calling for a fall in the first place? Nearly EVERY nation is overextending in some form. It's like every nation *knows* the game is up and they are trying to manipulate the system each to their advantage as best they can before it all blows up....

[LargoWinch]

Re: Gold getting KILLED!!!!

if you sold in dec. 2007 & bought stocks in mar 2009 & get out before the next shitshow you're a genius.

The question remains: who on earth can time oil?

[GRG55]

Re: Gold getting KILLED!!!!

The question remains: who on earth can time oil?

I've never seen anybody, inside or outside the industry, do it consistently. Nobody...

[LargoWinch]

Re: Gold getting KILLED!!!!

I've never seen anybody, inside or outside the industry, do it consistently. Nobody...

My original post (edited) included yourself sir GRG55 as a prime example of "if He cannot do it; don't even try it".

Where is Jim N. when you need it?

[jk]

Re: Gold getting KILLED!!!!

the end of the fed's mbs program may not mean much with fannie and freddie federalized and ready to take up the slack. otoh, what may mean something is the end of the flow of stimulus money to states and municipalities. e.g. newly elected gov christie in nj is cutting state education spending [including subsidies to localities] by $800million. last year n.j. had $1bil in federal stimulus money earmarked for education. there are going to be lots of layoffs. i think this process will repeat in other states. there will be 37 gubernatorial elections next year.

[unlucky]

Re: Gold getting KILLED!!!!

For those of us who earn money in euros, it's worth pointing out on this thread that during the last quarter, while gold has held its value in dollars, in euros it has "plunged" from the 760-770/oz range to the 810-820/oz range.

Of course we euro-earners could have made more by buying dollars at exactly the right time in late 2009. But if the timing had not been exactly right, we could also have lost a packet. It was much easier to simply hold gold.

This quarter it has been the euro's turn to get beaten up. Next quarter we may be back to beating up the dollar. Who knows? Either way, gold has proven its worth as a reliable way of avoiding collapsing currency risk - to me, at any rate.

[ASH]

Re: Gold getting KILLED!!!!

the end of the fed's mbs program may not mean much with fannie and freddie federalized and ready to take up the slack.

I don't think Fannie and Freddie are actually ready to take up the slack. They continue to take losses on their existing portfolios, and "unlimited" credit with the US Treasury is actually limited by Treasury's ability to borrow (or - ha! - collect tax revenue). The Fed generated $1.2T of extra demand for MBS over the span of about a year. I'm doubtful that Fannie/Freddie can increase the size of their portfolios at the same rate. That said, I'm not positive that my assumption $1T in demand is required to keep mortgage rates low is correct.

[jk]

Re: Gold getting KILLED!!!!

I don't think Fannie and Freddie are actually ready to take up the slack. They continue to take losses on their existing portfolios, and "unlimited" credit with the US Treasury is actually limited by Treasury's ability to borrow (or - ha! - collect tax revenue). The Fed generated $1.2T of extra demand for MBS over the span of about a year. I'm doubtful that Fannie/Freddie can increase the size of their portfolios at the same rate. That said, I'm not positive that my assumption $1T in demand is required to keep mortgage rates low is correct.

the fed soaked up a lot of impaired mbs inventory that had been generated over a period of years. as long as the fed doesn't dump that portfolio, fannie and freddie just need to soak up new production.

[Mega]

Gold getting KILLED!!!!!

I assume MEGA demand for $ ?????
Mike

[thriftyandboringinohio]

Re: Gold getting KILLED!!!!

the fed soaked up a lot of ... fannie and freddie just need to soak up ...

When will we get to the inevitable point that soaking ends because saturation is achieved?

[thriftyandboringinohio]

Re: Gold getting KILLED!!!!

My gold is having a tough day today.