This is it Kids, Gold in the danger zone!

[Mega]

If it falls below $1050 then its all the way to $1,000........though that & Gods knows.............BTW Why IS the $ flying????
Mike

[Rajiv]

Re: This is it Kids, Gold in the danger zone!

BTW Why IS the $ flying????

Next leg of the credit crunch -- set of dominos ready to collapse -- debts are denominated in dollars -- so sell assets - get dollars - CYA

[charliebrown]

Re: This is it Kids, Gold in the danger zone!

I think you are right Rajiv. However does this mean gold will moon shot? If you have Euros now you're gripping. So what do you buy, Yen, Lb, US$? I think we have tried all of the options in the list before and they didn't work out so good. What's left oil? gold? If we do have another econ pull back oil demand is going to fall.

[Slimprofits]

Re: This is it Kids, Gold in the danger zone!

It's high time for another round of announcements about CBs buying bullion from the IMF.

[GRG55]

Re: This is it Kids, Gold in the danger zone!

It's high time for another round of announcements about CBs buying bullion from the IMF.

Wouldn't that depend on whether the IMF is going to bail out the PIIGS, or the ECB bails them out instead?

[Rajiv]

Re: This is it Kids, Gold in the danger zone!

Sell all assets -- to get the dollars -- gold, oil, stocks -- everything down - dollar up-- Remember Finsters deflation chart



Another big deflationary leg coming up -- just my opinion.

[gnk]

Re: This is it Kids, Gold in the danger zone!

It's high time for another round of announcements about CBs buying bullion from the IMF.

That's my take as well. The emerging world's central banks, particularly the BRIC nations, still have rather low gold reserves in proportion to total reserves compared to Western nations. This will be another opportunity for wealth to shift east. They will use this temporary strength in the dollar to diversify once again.

Markets focus on one major crisis at a time. Now they are focusing on Euroland. Within 3-6 months, it will be on the individual states of the US, and the trend will reverse. It's tax season in the US, we'll see what state income tax revenues look like from the states. How will California and other states pay the refunds? How much will they collect from those that owe? What will they net?

[Slimprofits]

Re: This is it Kids, Gold in the danger zone!

.BTW Why IS the $ flying????
Mike

http://www.reuters.com/article/idUSLDE61411520100205

The cost of insuring Greek, Portuguese and Spanish government debt against default rose to record highs according to monitor CMA DataVision, as fears about the fiscal health of peripheral euro zone economies mounted.

[..]

Analysts said market movements were being driven by a combination of euro weakness and dollar strength as investors also awaited U.S. payrolls due later in the day, while the yen was also benefiting from risk aversion.

"Widening euro zone CDS and bond spreads over German Bunds are making investors less confident, which is weighing on the euro and putting pressure on equity markets," said Jeremy Stretch, strategist at Rabobank in London.

"That is leading to the risk-aversion trade which means the dollar is in favour."

****

the IMF and probably others before them have issued many warnings about this:

European Banks haven't faced the music

[Slimprofits]

Re: This is it Kids, Gold in the danger zone!

Wouldn't that depend on whether the IMF is going to bail out the PIIGS, or the ECB bails them out instead?

IMF announced it would sell 403 tonnes. India CB bought or committed to buying 200. What about the other 203?

The Sri Lankan CB and another relatively small CB bought a few tonnes, but that still leaves around 195 if not more.

[jtabeb]

Re: This is it Kids, Gold in the danger zone!

If it falls below $1050 then its all the way to $1,000........though that & Gods knows.............BTW Why IS the $ flying????
Mike

It's KA with the big KA. Anyone know what happens next???

Oh yeah, POOOOOOOOOOOM.

You might want to wait this one out (see my post to metal below). If the trajectory is similar to Argentina, we are really REALLY close to a sudden stop event. Don't think I'd be very happy about unloading my insurance on the cheap, only to not have it available when I really needed it during a POOM event.

Just My humble 1 ounce of advice.

I think it's more the unlimited leverage used in spiking it down (Silver, EVEN more so). Could be wrong, but that's my guess.

BTW, if you all missed it. I WOULD NOT BE GOING LONG DOLLARS RIGHT NOW, Esp. BY SELLING Physical precious metals to do so.

WE ARE "HEADED FOR A SUDDEN STOP" as EJ said earlier, esp in light of this market behavior. If you jump in to the rallying dollar, you may just find yourself PERFECTLY ADVANTAGED to be exposed 100% to currency risk.


I think these charts says it all. That's my call folks, make up your own minds.

(From EJ's "Does the US 2009 = Argentina 2001" article)

Figures below are for Argentina during their crisis. Watch and heed.

[Slimprofits]

Re: This is it Kids, Gold in the danger zone!

American demand for finished gasoline hasn't been at levels this low since January of 2004.

http://tonto.eia.doe.gov/dnav/pet/hi...s=wgfupus2&f=W

[GRG55]

Re: This is it Kids, Gold in the danger zone!

...the IMF and probably others before them have issued many warnings about this:

European Banks haven't faced the music

Neither have the TBTF Wall Street banks...

[Rajiv]

The Margin-Call Market Rout

More on this - The Margin-Call Market Rout

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Yet, most significant was the one asset that didn't respond as expected. It is historically the ultimate insurance policy against the collapse of financial assets and political upheavals, a store of wealth since ancient times. That is, of course, gold.

Not only did it fail to maintain its value during the market maelstrom Thursday, gold's price plunged nearly $50 an ounce, or almost 5%. That dumping of the precious metal -- whose only true function is as adornment and as a store of value -- indicates a scramble for liquidity.

By all indications, that rush was to unwind so-called carry trades, which consist of borrowing dollars to fund purchases of other, presumably higher-returning assets. And with U.S. interest rates near zero, the allure of the carry trade is well nigh irresistible.

That means carry traders effectively are short the dollars they borrowed to buy commodities, emerging-market stocks, junk bonds, which beckoned with higher-potential returns. When those positions start to go against the carry traders, the leverage turns painful.

As they scramble to unwind the positions, they not only dump those risk assets, they also have to cover what is effectively a short-dollar sale to pay off that liability. With so many carry traders all making for the exit, there's a squeeze, sending the dollar still higher and exacerbating the pain.

Even as the U.S. Dollar Index (DXY) -- a measure of the greenback against a basket of six currencies -- extended its rally by gaining 0.76% (to just short of 80, a key technical level), the Japanese yen rose even more strongly. That's important because the yen has been the other main funding currency in carry trades, so its rise also suggests a similar short-covering.

The exchange-traded fund that tracks the currency, the CurrencyShares Japanese Yen Trust (FXY), surged 2.35% on nearly triple the average volume. By contrast, the CurrencyShares Euro Trust (FXE), the ETF that tracks the common currency, plunged 1.1%, on similarly heavy turnover as investors fled.
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[e_goldstein]

Re: This is it Kids, Gold in the danger zone!

I purchased silver yesterday. The coin store was busy and I saw people buying, selling and trading. I asked if there were any one ounce gold bars or scratched Canadian Maple Leafs, and the sales clerk told me that the only gold that the store had in stock was in the display case. There were only about 20 coins. I think that if the paper "gold" price keeps dropping, then we are going to see a shortage situation in the physical market.

[Tybee Island]

Re: This is it Kids, Gold in the danger zone!

I couldn't agree more, I bought a significant order of gold from Tulving middle of last week, and was told that they were working 24 hours around the clock to keep up with shipping orders out. I know Hannes from placing orders with him over the years and he rarely speaks about the briskness of sales.

The divergence between paper gold and physical is about to become ever more acute in my opinion. I believe Jim Willie's latest piece is accurately sniffing around the fringes of this event.

"Got Gold?"