Hawk talk going to lead to a drop in gold?

[GRG55]

Re: Hawk talk going to lead to a drop in gold?

You put your finger on a main point I think brucec42. When TSHTF, or for that matter when any secular trend nears it's "working out point" events do not proceed in a linear fashion. Does anyone notice how they tend to proceed in exponential curves instead? According to this notion, when dollar / gold / fiat dysfunction / goosed commodities markets / global shortages / dollar repudiation / peak cheap oil etc. etc. all get towards a nexus point, trends beging to "curl up and away" from linear progressions...

One needs to be careful.

This can be a function of the chart type one is using. For example if you draw an equal percentage change chart on a linear scale, it's not a straight line. As I am sure you know Luke, it begins to "curl up and away".

I am no chartist when it comes to investing, but this phenomena is something that we engineers have to deal with in industrial systems, as one example. Sometimes people not charting variables on log scales mistake the non-linear behaviour as a problem, when in actual fact there's been no change in the rate-of-change.

[Guest]

Re: Hawk talk going to lead to a drop in gold?

...when in actual fact there's been no change in the rate-of-change.

Logarithmic charting or not, it's a measuring methodology. You acknowledge "runaway" numbers can emerge, and that's the point. Why does a population chart go vertical when the rate of change remains fairly constant? Rate of change is misleading. A constant rate of change is perfectly capable of producing an exponential progression. This is not charting grammar we are referring to, it is the nature of compounding trends in the real world, no? Or is that "doomer logic" being hinted at here? (Fie! Get the hence, Malthusian logic! This is a Malthusian POX, not a logic!).

[phirang]

Re: Hawk talk going to lead to a drop in gold?

Gold is no "screaming buy" at $900, give or take, and neither are gold mining stox, especially NOT gold mining stox. If you have to have gold, then buy GOLD, not stox.

Furthermore, IF President Obama appoints Paul Volker to the Fed and IF he gets rid of Helicopter Ben, gold could really tumble--- like to $600 or even less. So, this is a huge risk.

Another problem for gold would be the possible appointment of Robert Ruben to the U.S. Treasury.

Another problem for gold would be a correction in the oil price back to double digits after Obama wins in November.

Finally, the whole thesis of gold going up because of inflation doesn't quite mesh with hugely discounted groceries now available at Wal Mart and Costco. Also, house prices are going down, and that fact doesn't quite reckon with the hyper-inflation logic for buying gold.

No-one here is more of a gold bug than I am, but I should warn everyone that gold is not oil. I can NOT survive even one day without oil, nor can you. But I can do quite well without my gold hoard, thank you.

My advice to goldbugs just starting out is to buy gold, little by little over time, especially on major dips to support on the gold chart. And my second piece of advice is say "NO" to gold stox because their track record has been rather p-poor.

The theory is that a doubling in gold would bring gold stox up by the square in their price ( like four-fold ), but how many gold stox have done that since gold was $450? Sad to say, few gold stox have even been able to do as well as gold itself, so why own them?

If you have to have gold to sleep with, buy GOLD and take delivery of it.

I'm not so sure about the Volker deal... Obama will drive up deficit spending like crazy, and with the economy in recession, increasing taxes will prove rather difficult: he could end up driving a lot more money offshore.

There are several things about Obama to note:

1) He isn't that impressive, really. Who was he a year ago???
2) He has 0 experience compared to say Bill Richardson, a seasoned diplomat.
3) He went from obscurity to inevitability in about 6 months. You think this is because of his inane blandishments and platitudes? No: he's very ambitious, and he cut a deal with very rich and very powerful devils to get where he is.
4) Has Obama mentioned Volker since?
5) Who is his #1 donor? Hint: it's a broker-dealer!
6) Letting the dollar rip will be the coup de grace for our exports, especially given how crappy they are in comparison to japanese stuff.
6a) We will still be in Iraq a year from now.
6b) We still have SS overhang... trillions of it.
6c) The FIRE economy will utterly collapse if the government doesn't ultimately subsidize the american debtor. This isn't a practical option in the short-term.

[WDCRob]

Re: Hawk talk going to lead to a drop in gold?

{{Outside: Unemployment rate spikes 10% in one month. Foreclosures continue to increase. Monoline insurers closing in on insolvency. FDIC suggests bigger banks preparing to fail. General election kicking into high gear.}}

[Board showing Ac, 9d, 9h]

Bernake [holding 7c 2d]: I've got a great hand. I may go all in with a big 'raise.' You should probably give me all your gold chips right now - they're worthless.

Economy [with As Ah]: staring straight ahead.

Bernake: I don't think you believe me. I'm serious this time!

Economy: motionless.

Bernake: don't push your luck. I just might do it. I'm not messing around anymore - you think these pots are too big for me?!

Economy: pushes all chips into the middle of the table.

Bernake: pukes.

[jdv]

Re: Hawk talk going to lead to a drop in gold?

I'm not so sure about the Volker deal... Obama will drive up deficit spending like crazy, and with the economy in recession, increasing taxes will prove rather difficult: he could end up driving a lot more money offshore.

This is actually rather ignorant of history. (at least short term)
Republicans have been the deficit party for the most part, mostly due to military spending which is far more expensive than the soft stuff.

50 billion increase in food stamp funding (for example) is chump change to the pentagon.

In the long term, you could argue that medicare & social security, those type of programs are extremely expensive. But the prescription drug give away increased those liabilities just as much, and those were purely a republican invention (or mutation).

Every republican president since Nixon has deficit spent.
Every Democratic president has done better, though it would be fair to say Clinton was just lucky in his timing rather than his policies. But still...

[moonshot]

Re: Hawk talk going to lead to a drop in gold?

While I agree that Democrats have a better recent history with regards to deficit spending than Republicans, I think the situation is such that neither candidate will be willing to force on America the bitter medicine it so desperately needs. Drastic cutbacks in spending and much higher interest rates are a tough sell to the public, especially now.

This is actually rather ignorant of history. (at least short term)
Republicans have been the deficit party for the most part, mostly due to military spending which is far more expensive than the soft stuff.

50 billion increase in food stamp funding (for example) is chump change to the pentagon.

In the long term, you could argue that medicare & social security, those type of programs are extremely expensive. But the prescription drug give away increased those liabilities just as much, and those were purely a republican invention (or mutation).

Every republican president since Nixon has deficit spent.
Every Democratic president has done better, though it would be fair to say Clinton was just lucky in his timing rather than his policies. But still...

[phirang]

Re: Hawk talk going to lead to a drop in gold?

While I agree that Democrats have a better recent history with regards to deficit spending than Republicans, I think the situation is such that neither candidate will be willing to force on America the bitter medicine it so desperately needs. Drastic cutbacks in spending and much higher interest rates are a tough sell to the public, especially now.

Too bad civic society has been almost totally eroded... we could almost get something done, otherwise!

There's a car chase on CNN: brb.

[GRG55]

Re: Hawk talk going to lead to a drop in gold?

Looks like Bernanke, Trichet, et al. are starting to get on the hawk bandwagon.

If we have a globally concentrated effort to stem inflation, we may see precipitous drops in gold prices.

http://www.bloomberg.com/apps/news?p...Olk&refer=home

Today gold up $29 at $904.50 and WTI oil up $11 at $138.90. And this on a day when the employment numbers confirm the US economy is shedding net jobs.

It would appear that the half-life of results of high-volume Central Bank jawboning might also be contracting. Now down to about a day and a half? That's a hell of a decay rate, non?

This is actually rather ignorant of history. (at least short term)
Republicans have been the deficit party for the most part, mostly due to military spending which is far more expensive than the soft stuff.

50 billion increase in food stamp funding (for example) is chump change to the pentagon.

In the long term, you could argue that medicare & social security, those type of programs are extremely expensive. But the prescription drug give away increased those liabilities just as much, and those were purely a republican invention (or mutation).

Every republican president since Nixon has deficit spent.
Every Democratic president has done better, though it would be fair to say Clinton was just lucky in his timing rather than his policies. But still...

There is a theory that Democrat governments "know" the voters expect them to be tax and spenders, and therefore they tend to counter that by actually behaving more prudently than Republicans, who the voters [mistakenly] believe to be the party that will control spending and support the economy/business.

However, as an outsider it's hard not to note that the Dems took control of the Congress and Senate 3+ years ago, and don't appear to have done anything they promised in the mid-term elections. Which raises the question, that in these unusual times what might the world expect of them when they have the White House too?

[phirang]

Re: Hawk talk going to lead to a drop in gold?

god damn it, bernake, get back to work! i hardly have time to build a position while you drive the herd back!

[LabMonkey]

Re: Hawk talk going to lead to a drop in gold?

Can you recommend a place to buy gold from? Is it better to get them in coins (if coins, what type? Buffalo's, maples or eagles) or bars?

I've been a lurker to this site for some time now, but finally went and registered. Big thanks to everyone for their effort and sharing of information.

[metalman]

Re: Hawk talk going to lead to a drop in gold?

Can you recommend a place to buy gold from? Is it better to get them in coins (if coins, what type? Buffalo's, maples or eagles) or bars?

I've been a lurker to this site for some time now, but finally went and registered. Big thanks to everyone for their effort and sharing of information.

metalman likes physical from scpm.com and and bullionvault for offshore holdings.

[grapejelly]

Re: Hawk talk going to lead to a drop in gold?

I like apmex.com for buying. Don't believe in bullionvault or goldmoney. I think that people who use them are fooling themselves. Those firms in a split second will cooperate with the "authorities" any time they need to (and they already have) and you'll never know about it unless it's because they take your stuff away...ugh.

[krakknisse]

Re: Hawk talk going to lead to a drop in gold?

I like apmex.com for buying. Don't believe in bullionvault or goldmoney. I think that people who use them are fooling themselves. Those firms in a split second will cooperate with the "authorities" any time they need to (and they already have) and you'll never know about it unless it's because they take your stuff away...ugh.

Grapejelly: I appreciate your insights. Purely theoretically, with recent events in mind (bnk saf depst ra*d - f*ck off NSA), how would you advise handling your PM allocation?

[Guest]

Re: Hawk talk going to lead to a drop in gold?

Grapejelly: I appreciate your insights. Purely theoretically, with recent events in mind (bnk saf depst ra*d - f*ck off NSA), how would you advise handling your PM allocation?

Here, this ought to improve Krakknisse's mood. A picture from Sinclair's website, of a policeman ( country unnamed, but looks vaguely Northern European ) using a hand grinder to "open and audit" safety deposit boxes. Enjoy!

58199_PoliceGrind.jpg

[GRG55]

Re: Hawk talk going to lead to a drop in gold?

Here, this ought to improve Krakknisse's mood. A picture from Sinclair's website, of a policeman ( country unnamed, but looks vaguely Northern European ) using a hand grinder to "open and audit" safety deposit boxes. Enjoy!

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No wonder Switzerland doesn't want to join the EU...