Brace for a 'perfect storm' in gold

[lektrode]

Re: Brace for a 'perfect storm' in gold

metalman starts this off with:
Originally Posted by metalman View Post
ej made the argument to buy gold in 2001... warned us about the housing bubble in 2002... credit risk posed by the housing bubble in 2006... came up with the idea of peak cheap oil & the sovereign debt risk pco poses years ago...

he said peak cheap oil = more government debt... for food stamps & other govt subsidies for growing ranks of poor folks... recession stimulus... etc.

got my bias as an ituliper oldtimer... i'll put my faith in the guy with the track record & $$$ where his mouth is vs the new guys on the block like martenson. /metalman

I respect your acknowledgment of your iTulip bias.

EJ certainly got it right big time on recommending:
exiting the equity bubble in 1999
buying gold at the bottom on 2001
predicting the collapse and fall out of the housing bubble
shorting equities at the end of 2007

Furthermore, his macro economic analyses are quite in depth, and extremely valuable in figuring out what is and will go on.

dunno about you, but thats precisely the layout for why i'm parting with 300/year of MY money (and dumped my subscripts to the wsj) - to be here - and one of the best things about this forum is the willingness of the members to call out/take-on The Boss and question his version of the facts (which appear unassailable) - its even more enlightening to see the jousting tween the members (nero3 & c1ue for instance) when either they dont seem to get what EJ means or jump to the wrong conclusions?

However, iTulip has gotten the timing wrong and had been flat out wrong on a number of recent calls:
-S&P down 40% in 2009
-S&P down 20% in 2010

seems to me trying to 'crystal ball' the S&P500 (or nasdaq) is a fools errand with all the bernankebux distorting the piss out of everything - why i'm still 90% cash (and sweatin) as eye try to come up with a plan - tho my cash position is barely enuf to payoff my mortgage and cover living exp for a year or so, and so i really dont have that much to _gamble_ with in the markets (and how anybody could call this an 'investors market' is beyond my little lektrician brain...) - but my basic premise is to 'keep my powder dry' for either the ultimate bottom (in context of 2011 forward) in the PM's/miners or simply have enuf cash to get into a new line of work/biz, as i'm simply getting to old to crawl around in the bilge anymore... ;)

- short China in Aug 2009.

seems to me he got that one right, albeit a bit early (see below), as in how does one predict/time whats happnin when they flood the markets with _trillions_ in 'funny money' ? (other than buy real stuff vs paper 'assets')
and after reading nearly every phreakin word all you guys have typed (never mind the rest of the apocalyp$e universe/blogosphere) the past few years, i'd say The Boss = The Best of em all....

.... and even though he was right about the Fed pulling out all the stops and engaging in unprecedented actions to reflate the economy, I don't think anyone understands how this will play out IN THE SHORT TO MEDIUM TERM. ... We have had a Fed funds at 0% for the past 2 years with no end in sight and a tripling of balance sheet. What does everyone think is going to happen? Stocks going down?

seems like it, at least for china - see below - the question then becomes: is this 'good news' for The US, in the 'shorter term' merely because their sitch looks worse (in the medium term) then ours does due to 'monetary imbalances'
and...
has all the 'easy money' been made, so the oligarchs are in the process of cashing out? (cuz most of em are getting ready to get out/retire, so why would they care anymore??? - i mean, when guys like stockman are saying it, whats a 50something to think?)

So while acknowledging the excellent and ongoing work of iTulip, facts are facts, and unknowns, unknowns until they are not.

and then theres this:

• JANUARY 20, 2011, 9:53 A.M. ET

Inflation News Hammers Chinese Stocks


http://online.wsj.com/article/SB1000...946388550.html
By ALEX FRANGOS And ESTHER FUNG

Chinese investors sure don't like too-strong economic growth.


Stocks in mainland China dove nearly 3% Thursday after Beijing announced the economy accelerated in the fourth quarter. Investors worried that strong growth would exacerbate inflation, and prompt new tightening measures that would be unfavorable for stocks.


The Shanghai Composite Index fell 2.9% to 2677.65, near a four-month low and down 4.6% so far this year. The latest decline leaves China's stocks in solid "bear" territory, down 23% since the post-crisis high in August 2009. Over the same period, the Standard & Poor's 500-stock index has risen 27.5%.


The better-than-expected numbers, which include growth in gross domestic product of 9.8% for the fourth quarter and 10.3% for all of 2010, contrast sharply with weakness in the developed world. But they also mean the world's second-largest economy is overheating.



Inflation came in at 4.6% in December compared with a year earlier, higher than the government would prefer, as food prices rose. Excluding food prices, inflation accelerated from the month before.


"Inflation is the major cue for investors," says Oscar Leung, senior investment manager for ING Investment Management in Hong Kong. A turnaround in the market won't come, he says, until we see "more concrete signals of the peaking of inflation," especially for food and commodity prices.


Mainland Chinese stocks, which foreign investors are mostly banned from trading, were the first to rebound after the financial crisis. After bottoming out in October 2008. Chinese markets rose quickly through the first half of 2009 as the government implemented a massive stimulus program, much of which was delivered through permissive bank lending.


The market peaked in August 2009, the same time that investors in China sensed the government would begin to pull back on the lending spree. Since then, China has implemented a slew of anti-inflation measures, including seven increases to reserve requirements for banks, which govern the amount of money banks have to keep aside relative to their loans.


Other actions include restrictions on real-estate borrowing; a 3.7% appreciation in the Chinese currency against the dollar; tightening of some capital inflows and loosening of capital outflows; price controls on food; and two interest- rate increases.
Thursday's economic news raised expectations for more tightening than previously thought.


"Given this stronger-than-expected inflation trend, we see a growing likelihood of more aggressive policy responses," says Jun Ma, China chief economist for Deutsche Bank in Hong Kong. He figures the government will be under pressure to extend price controls to energy products and raw materials.


Fears of price controls pushed shares of coal miners lower Thursday. Earlier expectations that coal would be scarcer due to floods in Australia failed to boost coal prices, Shanghai Securities analyst Peng Yunliang said. Shanxi Xishan Coal & Electricity Power ended 5.5% lower at 25.10 yuan after rising 6.5% in the previous 12 sessions, and China Shenhua Energy fell 3.9% to 23.15 yuan, after rising 0.4% during the same period.


Property developers, who bear the brunt of the tighter bank-l lending environment, fell as well. China Vanke, the country's largest property developer by market share, fell 4.7% to 8.14 yuan, and Poly Real Estate Group declined 6.3% to 13.03 yuan.
Valuations for Chinese companies are relatively attractive, at roughly 12 times 2011 forecast earnings. But investors seem unwilling to commit until the inflation warning sirens stop blaring.


"You can't wait for the inflation to come down to below 4%," says ING's Mr. Leung. "Once we see commodity, energy and food prices peak out, then the market correction will stabilize, and then probably we can start to think about some quality stocks to accumulate."
Write to Alex Frangos at alex.frangos@wsj.com

[lektrode]

Re: Brace for a 'perfect storm' in gold

I don't have much exposure to MSM news, but I've heard a fair bit about gold on the "right wing" talk shows. I think it was Savage himself in one ad. I don't know what to make of it, but real estate was being pimped for a long, long time before it finally blew out and then the bust has been slower than I expected too.

methinks it appears 'slower than.. expected' for you due to the observation that the rocky mtn region appears to have missed most of it - until just recently my observation (in the wsj anyway) was there's been very little sell-off in the region (havent seen much in the way of auctions advertised in the area, as i've been watching for an opportunity in SLC, since its about the only major metro area that's a bus ride to the lifts/skiing, which is about all i'll be able to afford, as eye watch vail's tkts go to 108/day?? "but this isnt inflationary" as i can still afford UT, but maybe only if i can take the bus to alta....

Isn't gold getting pimped by the govt in China? Unlike real estate which is "local" isn't gold more global like oil?

whooo HAAAAA!!!
"pimped" eye luv it!
sho nuff seems that way - maybe because they figger even 'the party' cant afford enuf gold to cover their butts in UST's but maybe if they can stampede the herd into gold, one way or another, the bottom line = the gold goes to china, they dump the dollar/UST's and at the end of The Game, he who has the most gold, WINS the game?

Maybe what's going on in the US isn't so important for gold as it was for stocks and real estate.

maybe "what's going on in the US" = _still_ goin on (down) since/then theres this:

http://www.denverpost.com/business/c...et#adPosition2

Foreclosures in Colo. mountains scaling record heights

By Jason Blevins
The Denver Post

Posted: 01/12/2011 01:00:00 AM MST
Updated: 01/12/2011 10:25:46 AM MST

Terrill Counterman, 63, of Carbondale, could lose the homehe has lived in for 30 years to foreclosure. (Special to the Denver Post | Heather Rousseau)


Terry Counterman, 63, is in danger of losing his home in Carbondale. He is one of an unprecedented number of homeowners in Colorado's high country who are battling foreclosure. (Heather Rousseau, Special to The Denver Post)



Seven bedridden years after tumbling from a rooftop, Terry Counterman can walk again but could soon lose his Carbondale home in a foreclosure sale.
"I've been sending them paperwork and forms for two years. Someone from the bank calls five, six times a day, telling me to send them more forms. I'm sending them all the money I have, and they say it's not enough," said the 63-year-old former roofing inspector, whose lender plans to sell his home of 30 years next month. "I didn't buy this place as an investment. I bought it as my home."
On Garfield County's tally of foreclosures, Counterman's bank reports he owes about $67,000 on his loan. He's one of an unprecedented number of homeowners in Colorado's high country who are battling foreclosure.
The crush of foreclosure filings in mountain communities continued through 2010, eclipsing not just the records from the previous year but the fallout from the formidable crash of the mid-1980s.
While 2009 foreclosures elevated as struggling owners of second homes jettisoned deflated properties and timeshares, foreclosures in local worker bedroom communities fueled new records in 2010. Towns such as Gypsum, Eagle, Glenwood Springs, Carbondale and Rifle — all of which relished a robust real estate boom in the "roaring aughts" — last year endured soaring foreclosures as the dominant construction industry withered and real estate prices plummeted.
"When the economy and construction slowed down starting in 2008, many of the residents lost jobs, had little or no other income, and could no longer afford their mortgage payments," said Gypsum-area broker Laurie Slaughter, who has seen home values in some parts of Eagle County drop as much as 50 percent in the last year. "Because they also were upside down on their home values, . . . they had no choice but to short sale their home or walk away."
Darker days in 2010
Prior to the 2009 surge in foreclosures, many resort-area communities had not endured any real estate declines since the mid- to late 1980s, when the state's oil-dependent economy collapsed, triggering a real estate crash. But 2010 surpassed those dark days.
• Eagle County, home to Vail and Beaver Creek ski areas, saw 599 foreclosure filings in 1987, a record many thought would never fall. Last year, the county logged 618 foreclosure filings.
• Routt County saw its record 234 filings from 1985 overtaken by 2010's 303 foreclosures.
• Garfield County public trustee Bob Slade fielded 644 foreclosure filings in 2010, an 825 percent increase over the county's 25-year average and 400 more than the county's foreclosures in 1985.
Foreclosures in Pitkin and San Miguel counties also climbed beyond previous high marks set during the economic turmoil of the mid-1980s.
It's not just the number of foreclosure filings that is climbing in the state's high country. As big commercial properties fell into default, public trustees logged foreclosures in amounts previously unseen.
In Pitkin County, for example, banks foreclosed on the sprawling base project at Snowmass Village and Aspen's slopeside Dancing Bear fractional ownership project, totaling more than $570 million.
Routt County in November saw lenders foreclose on a $100 million construction loan at the luxury One Steamboat Place project at the base of the Steamboat ski area, marking the largest of the county's 19 commercial foreclosures. San Miguel County recorded foreclosure filings on two hotels in Telluride's Mountain Village worth $153 million.
"We are certainly seeing our biggest dollar volume in county history as well as the largest number of foreclosures," said Janice Stout, San Miguel County's public trustee.
Summit County recorded 350 foreclosure filings last year, falling short of the filing records of more than 400 set back in the 1980s.
And unlike other resort communities, Summit logged a spike in high-dollar foreclosures last year, with many filings for homes worth more than $1 million.
"We had an increase in our high end," said Summit County public trustee Bill Wallace. "Reality is setting in, I guess."
Counties likely to fill top 10
The Colorado Division of Housing is still compiling its 2010 foreclosure report for the Western Slope. But the division's community relations director, Ryan McMaken, expects to see resort counties — which for decades ranked at the very bottom among state foreclosures — filling the top 10 list for 2010.
"The top 10 used to always be the Front Range. Now it's all mountain counties," he said. "Clearly, the market was really overheated up there in '07 and they had nowhere to go but down. I think we still may be looking for the bottom up there."
Counterman's two years of haggling with lenders is typical of the process, say foreclosure experts. It has taken a toll, he said.
"I swear it's making me sicker," he said.
Public trustees across the Western Slope do not see relief on the horizon, either. Traditional slowdowns in foreclosure filings toward the end of the year, especially over the holidays, did not happen last year.
And already in the first week of the new year, many trustees have been inundated with foreclosure filings. In Summit County, Wallace received 13 foreclosure filings by Jan. 5.
"I don't know if we've reached the bottom of the hole yet," said Routt County trustee Jeanne Whiddon. "But as a politician-economist recently said, we will be at or near the bottom for a long time. The recovery, if in fact we are in one, will probably be a slow, gradual one."
Jason Blevins: 303-954-1374 or jblevins@denverpost.com

[flintlock]

Re: Brace for a 'perfect storm' in gold

I've only heard gold talk on the radio ads, not the news. Ever.

We are early in the game still I think. Steve Jobs coughs and Apple drops 3-4%. But where is the talk of a bubble there? Oh, that's right, Nero3 vs c1ue.

[bpr]

Re: Brace for a 'perfect storm' in gold

seems to me he got that one right, albeit a bit early (see below), as in how does one predict/time whats happnin when they flood the markets with _trillions_ in 'funny money' ?

The problem is, early is wrong. Especially when you're dealing with taking short positions. Ask anyone who was shorting real estate in 2006.

I think everyone, myself included, expects this stuff to happen in a timely, or reasonably quick fashion: when you get a glimpse of the emperor's bare buttocks, it's only reasonable to assume that everyone else will see the same thing and the jig is up. Fact is, it takes far longer for this stuff to unravel than we may think.

When EJ says, "this is a process, not an event," I think he's spot on. The question is, is it a ten-year process? or a forty-year process? or a hundred-year process?

[nero3]

Re: Brace for a 'perfect storm' in gold

To be clear, my intent of posting that was not to impugn iTulip or EJ at all. I try to filter out noise so that I am getting inputs into my thinking from smart, well-informed people with fantastic critical thinking skills. EJ & Martenson are both among a very limited # of them, & their work dovetails nicely with each others' actually.

My intent/point was that there is nobody except for a few guys on the "fringe" of the American media machine that are even willing to use the words "Peak" & "Oil" in the same sentence. You simply can't in the MSM b/c it is still the refuge of survivalists & doomers. And besides, if oil has peaked, & oil underpins the US dollar & US Empire...the corporate media owners simply can't be talking about Peak Cheap Oil..

It could also be a fad. Shale oil was popular in the seventies, faded, and is once again popular. The US can reduce demand a lot through becoming more energy efficient, oil is a very low expenditure now. Through the reserve currency, it's also possible to reduce the demand in other countries that are subsidizing fuel costs, they can't get away with that when the dollar is hard, because then they need more serious gov budgets. Oil can get a lot more expensive without becoming to much of a problem. So far I don't think there is any peak oil effects into the oil price.