Prechter throws in towel on Gold

[gasull]

Re: Prechter throws in towel on Gold

it's not a 'eye of the hurricane' notion. it's 100 accurate forecasts over > 10 yrs here of a process... how the fed prevents deflation spirals and the side effects of those policies.

Correlation doesn't mean causation.

Are the Fed's policies the cause of such side effects, o are the Fed's policies effects themselves of something else?

Interest Rates: Think Central Banks in Control? Think Again.

Central banks are no more in control of interest rates than they are of the weather. [...]

Bond yields change daily, and central banks don’t control them: Yields (and prices) are set by the bond market. And if you observe the timing of central banks’ interest rates decisions, you will notice that usually, bankers don't lead the bond market -- they only react to what it dictates.

[Starving Steve]

Re: Prechter throws in towel on Gold

Whilst groceries are ever-increasing in price in California, I just bought approximately 200 or 300 small tortillas from the Watsonville local tortilla factory for $2. This is no more than ONE CENT per tortilla, and the tortillas are made from corn and fat-free. No trans-fats, no fillers, no hydrogenated anything, no chemistry, no corn syrup, and no bullshit.

So, who knows what is going on now? Everything is a mess, economically. We have both hyper-inflation and hyper-deflation going on at the same time.

In general shopping, everything is going up in price, but the sale prices of the odd item, here and there, are getting better-and-better.... This economic situation is strange.

Pennies still count, here and there, at least in Watsonville.

[gasull]

Re: Prechter throws in towel on Gold

Agreed.

If you consider an aggregate of monetary inflation by the Fed and debt deflation (a Mish-defined deflation), then you can actually ignore the monetary inflation altogether, because the debt deflation is so huge right now that it doesn't matter. And looking at M2 or any other data won't help:

http://globaleconomicanalysis.blogsp...ey-supply.html

credit marked to market is plunging and that is the way things need to be looked at. Unfortunately, there is no accurate measure of the plunge in credit because financial institutions are not marking credit to market.

Once debt deflation has gone all the way, years from now, high inflation or hyperinflation will kick in (Ka-Poom).

[ThePythonicCow]

Re: Prechter throws in towel on Gold

I think we have experienced a Shock event. The past informs us and itulip's record is impressive however the arrogance of the "pin head" picture pretty much speaks for itself.

Good point. I too sense an arrogance in that picture and find such unsettling. The dismissal of those who don't correctly state the "inflation vs. deflation" controversy also worries me a bit.

It is one thing to laugh easily with disrespect at the foolishness of others, as Marc Faber does. It is another thing to find the stupidity of others beneath ones dignity to discuss further, but still a continuing annoyance that deserves comment. It pays to notice what one finds annoying, as therein usually lies further opportunity for learning.

I do not think we have yet experienced the main Shock events. Rather we have experienced a preliminary shock, prior to the main events, if such will come to be.

[P.S. -- that I find myself annoyed at the arrogance I allege above means I too have more opportunities for learning ;).]

[touchring]

Re: Prechter throws in towel on Gold

Whilst groceries are ever-increasing in price in California, I just bought approximately 200 or 300 small tortillas from the Watsonville local tortilla factory for $2. This is no more than ONE CENT per tortilla, and the tortillas are made from corn and fat-free. No trans-fats, no fillers, no hydrogenated anything, no chemistry, no corn syrup, and no bullshit.

Prices of everything is going up even when America is in deep recession because Asia's buying up everything and pushing up the prices of anything that can be imported and stored with all the free dollars thrown to us.

The more you print, the more free money we got to buy stuff.

[Starving Steve]

Re: Prechter throws in towel on Gold

Just trying to be a detached observer of the gold market, I would guess that gold is setting itself up for a bullish break-out. A new high will be coming.

The bear side of the gold story is that the gold canoe is very over-loaded and in very deep, icy cold Lake Superior kind-of-water now.

If you like gambling, bet the long side of the gold market for a new high well above the old high of $1027 per oz. The reason is purely technical: a trend in motion stays in motion, until convincingly reversed. So the over-loaded canoe will go out further into Lake Superior.

The fundamentals of the gold market are that Ben Bernanke and the other central bankers are sold on the approach of printing their way out of any deflation-spiral risk. They are pro-inflation to the core. All they know is inflation as the Saviour. They love John Maynard Keynes..... So this is the blow-off of Keynsian economics, come what may.

[metalman]

Re: Prechter throws in towel on Gold

Just trying to be a detached observer of the gold market, I would guess that gold is setting itself up for a bullish break-out. A new high will be coming.

The bear side of the gold story is that the gold canoe is very over-loaded and in very deep, icy cold Lake Superior kind-of-water now.

If you like gambling, bet the long side of the gold market for a new high well above the old high of $1027 per oz. The reason is purely technical: a trend in motion stays in motion, until convincingly reversed. So the over-loaded canoe will go out further into Lake Superior.

The fundamentals of the gold market are that Ben Bernanke and the other central bankers are sold on the approach of printing their way out of any deflation-spiral risk. They are pro-inflation to the core. All they know is inflation as the Saviour. They love John Maynard Keynes..... So this is the blow-off of Keynsian economics, come what may.

it's healthy for us to have this discussion at least twice a year. from feb. 2008 Shayne McGuire: The Early Innings of a Gold Boom...

Editor's Note: The gold market our readers entered in 2001 was like the abandoned sports stadium of a baseball team – team Gold – that had seen better days. The field was overgrown, the bench paint peeled, and the bleachers empty but for a few hearty fans, the loyal gold bugs who'd come to every game for 20 years only to see team Gold lose every year. They hoped and prayed for team Gold's former glory to return. They never lost faith.

Then, in 2001, gradually team Gold started to win again. At first the victories were modest but soon team Gold handed defeat to team Stocks year after year, pummeling Stocks in 2002 and 2003 and every year since 2004. Look at the scoreboard below.

No wonder mainstream money managers are getting on board. Who doesn't want to be on the side of a winning team? But it raises the obvious questions: How many more fans can the Gold stadium hold? Does the growing popularity of team Gold mean its fortunes are reaching a peak as it scores every higher, in nominal terms, above its previous record?

Long time iTulip readers who recall our original argument for buying gold in 2001 (See Questioning Fashionable Financial Advice: Gold - September 2001) will recognize the arguments McGuire makes here. We have interviewed a half dozen hedge fund managers for a piece we're working on called "Doomer Hedgies" wherein managers who run huge funds lay out ominous forecasts for the future of the US economy and its currency. They are piling into gold.

As contrarians we like our markets nearly empty with lots of room to grow as the gold market was when we entered. Gold prices have nearly quadrupled since our 2001 analysis. Gold prices may double and triple from here but it's a different kind of growth. It's the easy growth of a winning team with heaps of money and marketing behind it versus the hard earned wins of the underdog struggling against the popular and well funded competitor. Can those of us who entered in 2001 make the emotional shift? Can we welcome all the new team Gold fans with open arms?

I say, Welcome new team Gold fans. Bring your checkbooks and keep your eyes open for the next of Paul Volcker. - Eric Janszen

'keep your eyes open for the next of Paul Volcker'.

neg real interest rates... wherefore thou art you?

[karim0028]

Re: Prechter throws in towel on Gold

It amazes me how people don't see that the main difference between EJ and Mish is semantics. EJ says we have monetary inflation and debt deflation. Mish combines both things together and says that, all things considered, we have deflation. So they are both right using their own definitions, but obviously they're both going to be wrong if we read them using each other's definitions.

It's like those discussions you can see on the Internets about how bad or great capitalism/free-market/socialism/etc. is. You realize different groups use different definitions for these conceps, so they are talking about different things, but using the same words.

+1, i agree Both EJ and Mish seem to be saying things along the same lines but keep redefining things... The end result seems to be the same.... Asset price deflation and general price inflation...

Mish says buy gold (wether he defines it as itulip does or not), im assuming bc it goes up when printing goes up.... He also says stocks and housing going down...

Same concept different wording... But, itulip definitely is alot clearer and more reasoned....

[metalman]

Re: Prechter throws in towel on Gold

It amazes me how people don't see that the main difference between EJ and Mish is semantics. EJ says we have monetary inflation and debt deflation. Mish combines both things together and says that, all things considered, we have deflation. So they are both right using their own definitions, but obviously they're both going to be wrong if we read them using each other's definitions.

It's like those discussions you can see on the Internets about how bad or great capitalism/free-market/socialism/etc. is. You realize different groups use different definitions for these conceps, so they are talking about different things, but using the same words.

it amazes me that anyone ever makes any comparison at all between ej & mishmash.

ej vs mish...

bio.

ej...

More than twenty years in executive management roles in product marketing, product management, sales, CEO and Venture Capital management roles in the high tech industry.

Currently Founder and President of iTulip, Inc., the global online economics and financial markets community founded in 1998 with more than ten million visitors from 78 countries that Gill Griffeth of CNBC calls "...the place to go for a contrary view of the markets" and The New York Times credits for accurate forecasts of future economic developments.

Previously President and CEO of RF control technology company AutoCell Laboratories, Inc., Entrepreneur in Residence at $1.6B venture capital firm Trident Capital, President and CEO of Bluesocket, Inc. and Managing Director of seed stage investment firm Osborn Capital. Between 1998 and 2003, Osborn Capital saw six successful exits out of 20 portfolio companies, including two IPOs and four acquisitions (Cisco, Microsoft, EMC and Nortel).

As CEO, raised more than $30M in venture capital between 2001 and 2004.

Previously held executive operating roles in system software engineering, product management, product marketing and sales for Boston area high technology companies, including two that went public, Media 100 and Stratus Computer.

Serves and has served on on more than a dozen boards of directors as board observer or board director and several advisory boards.

Board Director Member of Massachusetts Networking and Communications Council.
Board of Advisors: Twin Focus Capital Partners, Progress Partners, and Fotki.

Writes for several online and printed publications and newspaper, including Bankrate.com 1999-2001, AlwaysOn Network 2004-2005, Harper's Magazine, The Independent, New Zealand, Sitz der Gesellschaft: Manchen Germany, Harvard Business Review and iTulip.com.

Co-Author of "America's Bubble Economy" by John Wiley & Sons. 2006.

Author of printed Harper's Magazine Feb. 2008 cover article "The Next Bubble" and Nov. 2008 article "Reindustrialize".

Speaker at dozens of industry events, including: The Money's Back - Stanford (2005), Trends in Capital Markets - MIT (2004), Finding Hope in the Tech Rubble - Harvard (2003), Keynote Speaker at Hard Assets Conference (2007), panelist at HedgeWorld conference in NYC April 2008, Speaker at Nantucket Conference (2009), and Innovators Summit of Mass. Networking & Communications Council (June, 2009).

Frequently interviewed and quoted on CNBC, NPR, Wall Street Journal, Barron's, USA Today, BBC, Reuters, Al Jazeera, Italian, German, Australian, CBCNews.CA, and other international media.

Eric holds a B.S. in Resource Economics from the University of Massachusetts, Amherst.

mish...

Michael Shedlock (Mish) is a representative of Sitka Pacific Capital Management, and runs one the most popular economic blogs in the country.

He is also a regular contributor to HoweStreet, and has been a guest on Air America, CSPAN, the George Noory Show and the Charles Goyette show.

on deflation...

mish...

broken record... called for deflation as oil prices went to $147...



ej...

calls cycles of asset price inflation, asset price deflation & commodity price inflation.




ej thinks the sun appears to rise in the east and set in the west because the earth revolves around the sun.

mish has 23454 inside out argument to 'prove' the sun revolves around the earth.

suppose the thinking of those who can't tell the difference is... same result... eventually... so who cares?

ann hit the nail on the head once... mish is to economics as a creationist is to science. ej is a darwinist. take your pick. they are unrelated.

[ST]

Re: Prechter throws in towel on Gold

it amazes me that anyone ever makes any comparison at all between ej & mishmash.

ej vs mish...

bio.
....
mish...

Michael Shedlock (Mish) is a representative of Sitka Pacific Capital Management, and runs one the most popular economic blogs in the country.

He is also a regular contributor to HoweStreet, and has been a guest on Air America, CSPAN, the George Noory Show and the Charles Goyette show.

here's a better bio: