When (will) Gold recover?

[Guest]

Re: When (will) Gold recover?

Would you provide the pertinent charts of this soaring against currencies, please. Gold doesn't appear to be deflating against other currencies as it is vs the $, but "soaring"?. Bart? thanks.

From GOLDMONEY

[bam]

Re: When (will) Gold recover?

Just wondering Lukester...
What event is going to cause USDs to come rushing back home to the US? And why would you assume that Fed doesn't know how to mop up excess liquidity?

[Techdread]

Re: When (will) Gold recover?

I don't think EJ would 'lower himself' to a trader status hence the lack of direction regarding a possible sell gold recommendation in the current deflationary environement .

Then , there is the tax thing regarding collectible assets when selling....
How much should gold go down to cover the 28% tax then make a profitable trade from there ? It all depends on the entry point.From EJ's entry point , he would barely break even now if he had sold around 900.

I just think we need to sit tigth until Ka is over and fasten the seat belts for the formidable Poom to come.If the size of Ka is any indication of the Poom to come , then Poom should be of cosmic proportion :eek:

Sit Tight I feel like a Kid in a Candy store.

Buy Buy Buy!

[GRG55]

Re: When (will) Gold recover?

Just wondering Lukester...
What event is going to cause USDs to come rushing back home to the US? And why would you assume that Fed doesn't know how to mop up excess liquidity?

There is no question that the Fed knows how to mop up excess liquidity. The issue is whether the Fed will be able to mop it up when it should.

Recall how long the Fed had to keep rates at 1% in the last "emergency" just a few short years ago. And recall also how gingerly they raised rates 25 bips at a time, telegraphing to the market well in advance every single time they did it [at that time the Fed's favourite word in its press releases and speeches was "measured"...until it was superceded by "contained" :rolleyes: ].

The Fed is in the early stages of running a ZIRP & Quantitative Easing policy much like the BoJ was forced to. If it continues to follow the BoJ pattern soon it will be making interventions against the rising US$, and these are likely to be unsterilized [money supply will increase].

Anyone expecting the Fed to aggressively raise rates to "fight inflation" once the credit markets finally come alive again, is likely to be very disappointed. This time the Fed won't be able to raise rates very far at all, nor will it be able to contract the monetary base in any material way. The only way the Fed will be able to pursue a strong anti-inflation policy without sending the credit markets and the economy back into a tailspin is if the banking system starts to expand and starts to lever itself up again. An unlikely outcome in a world with much greater government ownership and government regulation of the banks, imo.

[phirang]

Re: When (will) Gold recover?

There is no question that the Fed knows how to mop up excess liquidity. The issue is whether the Fed will be able to mop it up when it should.

Recall how long the Fed had to keep rates at 1% in the last "emergency" just a few short years ago. And recall also how gingerly they raised rates 25 bips at a time, telegraphing to the market well in advance every single time they did it [at that time the Fed's favourite word in its press releases and speeches was "measured"...until it was superceded by "contained" :rolleyes: ].

The Fed is in the early stages of running a ZIRP & Quantitative Easing policy much like the BoJ was forced to. If it continues to follow the BoJ pattern soon it will be making interventions against the rising US$, and these are likely to be unsterilized [money supply will increase].

Anyone expecting the Fed to aggressively raise rates to "fight inflation" once the credit markets finally come alive again, is likely to be very disappointed. This time the Fed won't be able to raise rates very far at all, nor will it be able to contract the monetary base in any material way. The only way the Fed will be able to pursue a strong anti-inflation policy without sending the credit markets and the economy back into a tailspin is if the banking system starts to expand and starts to lever itself up again. An unlikely outcome in a world with much greater government ownership and government regulation of the banks, imo.

Once the "crisis" is over(i.e. China cries, "uncle!"), the HUGE amount of private equity will then flow into the US and buy up the backstopped assets from the government and further consolidate the US economy into fewer hands.

It would not suit these interests for the credit freeze to persist through 2009.

Therefore, I find these calls for decade-long recession to be just as stupid as the calls for a dollar crash etc: more amateurs who frankly don't get it.

And B'nake has shown that he OWNS inflation: he can BURY it if he desires, and he has DESTROYED Jimmy Rogers: remember Jimmy's b.s. about the END OF THE WORLD for the USD? What's his P&L now? He was buy australian and new zealand dollars at their peak this summer... what a retard!

[lurker]

Re: When (will) Gold recover?

As a long time lurker and newbie poster with no formal economics training (perhaps that's a good thing) take this input with a pinch of salt: It seems to me that the core difference between Lukester's position and Phirang's position is this:

Lukester describes a scenario where the authorities have somewhat lost control of the US "economy" and are throwing the kitchen sink at it in the hopes of reviving it. Likely this will have unintended consequences and significant inflationary overshoot as did the response to dot-com and 9/11. In the short term, however, everything is liquidated to raise cash to stay alive. Gold stocks are included.

Phirang seems to describe a situation where recent market turmoil has been carefully managed in order to consolidate wealth further into fewer hands. The current disinflation has been carefully managed as part of this dastardly plan.

For this reason I can't buy Phirang's arguments, although I have great admiration for his candour. I'm always reluctant to ascribe to malice that which can more logically be ascribed to incompetence. Bernanke has looked like a deer caught in headlights whenever I've seen him recently. Paulson certainly doesn't appear to be a "man in control" as he presides over looting of the country.

It looks to me like the wheels finally came off the FIRE sector and those "in charge" are throwing other peoples' money at the problem. Thus I like EJs assertion that sooner or later (months, years at the outside) we'll see a significant POOM. Combined with the continued westernization of Asia this should bode well for commodities in the longer term.

[phirang]

Re: When (will) Gold recover?

As a long time lurker and newbie poster with no formal economics training (perhaps that's a good thing) take this input with a pinch of salt: It seems to me that the core difference between Lukester's position and Phirang's position is this:

Lukester describes a scenario where the authorities have somewhat lost control of the US "economy" and are throwing the kitchen sink at it in the hopes of reviving it. Likely this will have unintended consequences and significant inflationary overshoot as did the response to dot-com and 9/11. In the short term, however, everything is liquidated to raise cash to stay alive. Gold stocks are included.

Phirang seems to describe a situation where recent market turmoil has been carefully managed in order to consolidate wealth further into fewer hands. The current disinflation has been carefully managed as part of this dastardly plan.

For this reason I can't buy Phirang's arguments, although I have great admiration for his candour. I'm always reluctant to ascribe to malice that which can more logically be ascribed to incompetence. Bernanke has looked like a deer caught in headlights whenever I've seen him recently. Paulson certainly doesn't appear to be a "man in control" as he presides over looting of the country.

It looks to me like the wheels finally came off the FIRE sector and those "in charge" are throwing other peoples' money at the problem. Thus I like EJs assertion that sooner or later (months, years at the outside) we'll see a significant POOM. Combined with the continued westernization of Asia this should bode well for commodities in the longer term.

I would agree with you, but I know from personal experience that private equity firms have literally hundreds of billions of dollars on the sidelines, waiting to scoop shit up cheap.

I'm involved now in an infrastructure project in western africa with a capex of $500M: ALL DONE IN EQUITY: 0 DEBT.

There is NO shortage of capital, but a few catalyst remain before the money returns.

[Tulpen]

Re: When (will) Gold recover?

Your thoughts Gents?
Mike

Just my thoughts:

The January - February timeframe.

After the irrational 'armageddon fear' we will get a period of hope that the government interventions actually improve things. The market will rise and this will create a reinforcement of that premise. That should take a couple of months until reality sets in again. Gold prices will go in the opposite direction so perhaps around late December would be a good time to buy, shall we say $580?

Let me know if you want to know next week's winning lottery numbers as well. ;)

[lurker]

Re: When (will) Gold recover?

I would agree with you, but I know from personal experience that private equity firms have literally hundreds of billions of dollars on the sidelines, waiting to scoop shit up cheap.

I'm involved now in an infrastructure project in western africa with a capex of $500M: ALL DONE IN EQUITY: 0 DEBT.

There is NO shortage of capital, but a few catalyst remain before the money returns.

Thanks for the response.

The question remains as to whether this was a managed event (private equity dumped to cash in advance, causing the collapse) or whether private equity bailed from positions following the crash.

The answer to this is probably not important from an investment point of view, only if you need to narrow down who to be mad at for the current fiasco. I'll not lose sleep over it.

The money will be made (or at least purchasing power preserved) by predicting where and when that money will flow. I must admit that energy stocks are starting to look quite tempting.

[phirang]

Re: When (will) Gold recover?

Thanks for the response.

The question remains as to whether this was a managed event (private equity dumped to cash in advance, causing the collapse) or whether private equity bailed from positions following the crash.

The answer to this is probably not important from an investment point of view, only if you need to narrow down who to be mad at for the current fiasco. I'll not lose sleep over it.

The money will be made (or at least purchasing power preserved) by predicting where and when that money will flow. I must admit that energy stocks are starting to look quite tempting.

My advice: all booms and busts are done with the help of governments. I suggest waiting till the election and riding whatever wave Obama intends to create.

You will make 50% returns easy in 2009 if you do that. I intend to do that, myself.

[c1ue]

Re: When (will) Gold recover?

For every story about PE firms with XXX billions spending YYY millions on blah blah blah, keep in mind the amounts of money being thrown around by governments is already orders of magnitude larger.

If PE firms are so powerful, how then are the markets being allowed to spin out of control?

Volatility on both up and down side is bad for everyone in the financial industry; money leaves to go to safe havens, is destroyed as securities and commodities fall in value, is withdrawn for living purposes as jobs are lost.

And again - since the US had 80% of the money already at the end of WW II, and the succession of Presidents since then were hardly in the category of FDR and TR, why then was this virtual monopoly on money broken?

It could be argued that the whole gold standard thing was taken out so that the US could have the US$ as a reserve currency, which in turn allows spending of other nation's capital, but even the most moronic can see that this is not a sustainable situation.

Then there's the Area 51 version of the Fermi paradox: given that there is a vast government conspiracy to conceal the presence of aliens, why is it not a single instance of credible proof nor a number of credible witnesses ever come forward? If patricides and other heinous criminals have death bed confessions, where are the Saucer ones? And thus where are the Bilderberg confessions?

Certainly there are groups working towards self-enrichment/empowerment, but there's a huge leap from that to control.

Much more likely these groups operate as bankers do: Heads they win, tails you lose, but never do they have control.

[SJ]

Re: When (will) Gold recover?

very, very funny. Please keep talking ...

[jtabeb]

Re: When (will) Gold recover?

Just my thoughts:

The January - February timeframe.

After the irrational 'armageddon fear' we will get a period of hope that the government interventions actually improve things. The market will rise and this will create a reinforcement of that premise. That should take a couple of months until reality sets in again. Gold prices will go in the opposite direction so perhaps around late December would be a good time to buy, shall we say $580?

Let me know if you want to know next week's winning lottery numbers as well. ;)

Well SOME ONE IS BUYING!

Bullion direct is now officialy SOLD OUT of MAPLES, they were in stock YESTERDAY.

So no GOLD, SILVER, Plat, Palladium COINAGE AVAILABLE ANYWHERE.

SOME ONE is EITHER incredibly smart or increadibly stupid.

Guess we will see soon.

[Tulpen]

Re: When (will) Gold recover?

Well SOME ONE IS BUYING!

Bullion direct is now officialy SOLD OUT of MAPLES, they were in stock YESTERDAY.

So no GOLD, SILVER, Plat, Palladium COINAGE AVAILABLE ANYWHERE.

SOME ONE is EITHER incredibly smart or increadibly stupid.

Guess we will see soon.

Typical case of the odd lot v.s the big traders. Joe sixpack reads about armageddon in the stock market, catches a phrase or two from gold bugs, perhaps he even entertains conspiracy theories and decides he should purchase a coin or two.

[Guest]

Re: When (will) Gold recover?

That must be it. The collective is always infinitely more stupid than the individual, right?