When (will) Gold recover?

[Mega]

Your thoughts Gents?
Mike

[phirang]

Re: When (will) Gold recover?

When Lukester and EJ have sold their stash at a loss.

Seriously, the story is the same: gold will recover once the government provides the debt for the markets to re-lever. Until this happens, gold could go to $200/oz.

[icm63]

Re: When (will) Gold recover?

Every once under $550 is a steal.

See the old charts at www.chartsrus.com for gold performance in the last bull run. A 50% drop is normal.

[grapejelly]

Re: When (will) Gold recover?

and in terms of buying power against anything BUT the USD, gold isn't doing too bad!

[ASH]

Re: When (will) Gold recover?

When Lukester and EJ have sold their stash at a loss.

Seriously, the story is the same: gold will recover once the government provides the debt for the markets to re-lever. Until this happens, gold could go to $200/oz.

I like you, Phirang, because you're not at all afraid to champion an unpopular viewpoint in a (mildly) hostile forum. At the same time, you owned up to sitting on "huge unrealized losses" on base metals, which puts a human face on your trading calls -- no delusions of infallibility (even if you're right, and the base metals come back).

It seems almost tautological that gold will come back when either (a) fears of systemic failure become widespread again, or (b) the long-term impact of currency devaluation is felt, rather than the short-term demand for dollars to pay off dollar-denominated loans. My impression is that the majority think government intervention has effectively put a stop to failure of major financial institutions -- or at least the potential to lose supposedly "safe" investments as the result of such a failure. I don't think it's a foregone conclusion that further spectacular ructions such as a CDS-related disaster must happen, but I think such a thing is still possible. If that happens, then we could see (a) as soon as tomorrow -- but I don't know any way to predict the timing of an accident like that. Although I don't even know if (a) will happen, I think that (b) is a near certainty. Thus, at these price levels, I'm sitting on some modest unrealized losses, and I plan to stick it out. I need insurance against (a), and I can afford to wait for (b).

[phirang]

Re: When (will) Gold recover?

I like you, Phirang, because you're not at all afraid to champion an unpopular viewpoint in a (mildly) hostile forum. At the same time, you owned up to sitting on "huge unrealized losses" on base metals, which puts a human face on your trading calls -- no delusions of infallibility (even if you're right, and the base metals come back).

It seems almost tautological that gold will come back when either (a) fears of systemic failure become widespread again, or (b) the long-term impact of currency devaluation is felt, rather than the short-term demand for dollars to pay off dollar-denominated loans. My impression is that the majority think government intervention has effectively put a stop to failure of major financial institutions -- or at least the potential to lose supposedly "safe" investments as the result of such a failure. I don't think it's a foregone conclusion that further spectacular ructions such as a CDS-related disaster must happen, but I think such a thing is still possible. If that happens, then we could see (a) as soon as tomorrow -- but I don't know any way to predict the timing of an accident like that. Although I don't even know if (a) will happen, I think that (b) is a near certainty. Thus, at these price levels, I'm sitting on some modest unrealized losses, and I plan to stick it out. I need insurance against (a), and I can afford to wait for (b).

Thankee, Ash. I wish I didn't have to be humble, but my limitations compel me to act so...

The thing to be careful with gold is that once the gov reflates(and I'm being vague about how this happens: I think EJ is obligated to provide color here, not me, and so ask him EXACTLY who will pay FOR WHAT and HOW, not vague bullshit: this is very, very important), it should be ok, however, there may be higher-yielding assets that'll kill gold's appeal in a reflated market.

Also, M. Faber likes "cheap" gold, and while he's a rabid anti-American snob(although he still takes our money), I do agree that he's generally spot-on in his calls.

[hellstan]

Re: When (will) Gold recover?

Also, M. Faber likes "cheap" gold, and while he's a rabid anti-American snob(although he still takes our money), I do agree that he's generally spot-on in his calls.

I voutt atmit, my tear phirang, that I snub the US a little pit, ja, aber,
you must atmit the US is now like an addict who neets more crack (or
is it krach) and the Fed is the trug tealer here, isn't it ?
Besites, I'm nott Dr. Stranchelov, you know, and still think we joult be avraid
of the bomp (or is it the poom, in your iTulip languatche ?).
Yours with wit,
Marc F. :cool:

[j4f2h0]

Re: When (will) Gold recover?

When Lukester and EJ have sold their stash at a loss.

Seriously, the story is the same: gold will recover once the government provides the debt for the markets to re-lever. Until this happens, gold could go to $200/oz.

Personally, i think phirang is hilarious a is just trying to see how insecure all these gold bugs are! U are joking right? i see ur post and just start laughing at how anyone could even begin to take u seriously! ROFLMAO Cheers

[Starving Steve]

Re: When (will) Gold recover?

Your thoughts Gents?
Mike

Gold has many long loooooooooong bear markets, so play any counter-trend rally.

The hallmarks of a counter-trend rally is a real fast price increase, as if there is no more gold left to buy and as if everything has changed..... These are SELLING opportunities.

As I said in an earlier post on itulip, if Obama appoints Paul Volcker to head the Fed, gold could fall to $600 or even lower. "House of pain."

[phirang]

Re: When (will) Gold recover?

Gold has many long loooooooooong bear markets, so play any counter-trend rally.

The hallmarks of a counter-trend rally is a real fast price increase, as if there is no more gold left to buy and as if everything has changed..... These are SELLING opportunities.

As I said in an earlier post on itulip, if Obama appoints Paul Volcker to head the Fed, gold could fall to $600 or even lower. "House of pain."

Obama is so pro-union... how will volker squeeze the wage-price spiral out the equation?

[Guest]

Re: When (will) Gold recover?

Steve -

You have missed the core premise of America's predicament in the 2010's. A dose of serious (not just window dressing) monetary austerity - really, truly - will kill this patient. Think 50 Trillion USD in unfunded liabilities. It's political also ... (national hara-kiri, seppukku?) I guess you don't see it. You are thinking that Obama / Volcker and monetary stringency are a "real act" that could even get as far as flying a trial balloon in today's America.

This was a template viable in the 1970's inflationary era and the aftermath of that, but not remotely viable today. You've been reading here a while, so you might recall that this entire topic was picked apart and discarded quite convincingly. Your entire skeptical stance in fact, is predicated on the *last* gold bull market. Regarding 21st Century version of this age-old inflation / deflation presumed "paradox" in a non-gold-backed-world, we have only witnessed the first act for GOLD. Now "FIAT PAPER" is strutting it's stuff. This is the intermission. Next act is the "main program". ;)

USD has an interesting trajectory ahead of it. Like a cherry bomb. Fly high, burn bright, shock and awe, etc.

Phirang -

And a question here also for Phirang, who is a smart guy but also a little reluctant to back his propensity for flippant assertions with substantive arguments. Perhaps you consider arguing a point with me redundant, given your vaulting insights, but I do remain curious whether substantive arguments are there (they are almost never trotted out).

A couple of "pertinent" questions:

YESTERDAY:

Finster sez: "Commodities boom and commodities bull market were 100% a monetary illusion, brought about by the vast shrinkage of the USD, as unit of measure". Oil's been up anywhere from 600% - 1200% (take your pick) in a half dozen years, but this in reality was no more than the shrinkage of the US dollar. In other words, Finster meant: "you are getting fooled by the USD inflation into believing anything at all has really happened to the oil price. In fact, the oil price has gone nowhere in real terms". This was delivered with the admonishment that anyone who disagreed with this thesis would be a hopeless ingenue.

TODAY:

Phirang sez: "Global deflation is a real and present danger". Gold is an illusion built like a "roach motel" for ingenuous gold bugs to enter at one end, and then be trapped by the mighty king DOLLAR (who works like flypaper trapping silly goldbugs). Global deflation is here, and it is very real. Anyone can see this in an instant, as measured by comparing the collapse of all global valuations against the king DOLLAR".

QUESTION:

How do you launch a self-respecting global deflation as verified against a fiat yardstick (the US B0nar) which only brief weeks ago was being strenuously argued by the likes of you and the Finster, as putting the lie to any real rise in the oil price? What? Suddenly this previously maligned US dollar is a reliable unit of measure?

Your US Bonar is revealing itself to be a remarkably versatile creature Phirang! On the one hand it is a hopeless benchmark for gauging oil's price rise (glittering Dubai built out of oil money notwithstanding - the reality (Finster argues) is that they built Dubai out of the proceeds of many helium balloons which had a cleverly devised USD emblem printed on them) yet on the other hand this acrobatic and versatile USD is TODAY, suddenly a "reliable benchmark" by which to gauge the horrific GLOBAL DEFLATION which you bear witness to? (as measured in the USD).

Is it possible in this mundane and pedestrian world, that you can't have it both ways? Either the USD is a reliable unit of measure in all instances, or it is a wretched unit of measure in all instances. Oh, and BTW:

_________ G . O . L . D______ is______ S . O . A . R . I . N . G______

in all currencies and in all assets as measured outside of this remarkably acrobatic and versatile yardstick, the US dollar. Now how are you going to put on a respectable GLOBAL DEFLATION with gold soaring everywhere, eh? :rolleyes:

Remember, EJ may have his shortcomings (As you flippantly have noted, he totally flubbed the call that everyone should GET THE HELL OUT OF GOLD [ :eek: ], because gold was so totally "yesterday" when the USD started rising), but he HAS accomplished one rustic and rudimentary bit of instruction here among us. That was to point out that it is exceedingly poor logic to postulate that GOLD CAN SOAR in a genuine global deflation, when it is not institutionalized or formalized as MONEY anywhere in the world. What the heck kind of DEFLATION would that be, eh?

Translation: You can't have a global deflation, in an all-fiat world, when gold, as the latter day "anti-money" is soaring. If you postulate this, you are sliding into "MISHIAN FUZZY LOGIC", a fearsome morasse from which none escape. :eek: ;)

Gold has many long loooooooooong bear markets, so play any counter-trend rally. The hallmarks of a counter-trend rally is a real fast price increase, as if there is no more gold left to buy and as if everything has changed..... These are SELLING opportunities. As I said in an earlier post on itulip, if Obama appoints Paul Volcker to head the Fed, gold could fall to $600 or even lower. "House of pain."

[Starving Steve]

Re: When (will) Gold recover?

I hope, Luke, that you are wrong and that this is not an intermission in the gold bull market. If it is, then we are likely headed for a hyper-inflation--- which means we all will starve.

I keep thinking of the post-WWI years in Germany--- the years of the Weimar Republic. People would burn paper money in order to keep warm in their apartments. The economic tragedy brought Adolf Hitler to power.

Hopefully, the Fed will not repeat the tragedy in America.

[Guest]

Re: When (will) Gold recover?

Heck no Steve. We already had our mini-authoritarian president. We got Obama now, remember? Can't happen under his watch! I'd sure like to get some simple, straightforward, down to business answers from Phirang on that "global deflation" thing. Just imagine - the whole world, all it's prodigious productive capacity - brought to kneel before the purchasing power of the mighty US DOLLAH!

I hope, Luke, that you are wrong and that this is not an intermission in the gold bull market. If it is, then we are likely headed for a hyper-inflation--- which means we all will starve. I keep thinking of the post-WWI years in Germany--- the years of the Weimar Republic. People would burn paper money in order to keep warm in their apartments. The economic tragedy brought Adolf Hitler to power. Hopefully, the Fed will not repeat the tragedy in America.

[Nicolasd]

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:

[vinoveri]

Re: When (will) Gold recover?

Steve -


_________ G . O . L . D______ is______ S . O . A . R . I . N . G______

in all currencies and in all assets as measured outside of this remarkably acrobatic and versatile yardstick, the US dollar. Now how are you going to put on a respectable GLOBAL DEFLATION with gold soaring everywhere, eh? :rolleyes:

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.