Gold is Manipulated.....

[Master Shake]

And You Should Buy It Anyway.

http://www.contrarianprofits.com/art...t-anyway/15756

Good, re-inforcing read.

[Joy]

Re: Gold is Manipulated.....

The flaw in this argument is that Gold forecasts forward inflation. In 1980 Gold was forecasting double digit inflation. When that rate of inflation didn't materialize POG drifted lower over the next two decades as actual inflation and forward inflation expectations drifted lower.

In 1980 long term bond yields were close to 14%. Obviously the bond market got future inflation wrong also.

[nero3]

Re: Gold is Manipulated.....

If you ask me, there are more conspiracy on gold, than more or less anything else. I think a lot of the worst gold bugs, that never got out in 80, started to suffer mental delusions from a 21 year long bear market. I think there is a way to play gold, but it's very dangerous, to get caught in the spell.

[FRED]

Re: Gold is Manipulated.....

The flaw in this argument is that Gold forecasts forward inflation. In 1980 Gold was forecasting double digit inflation. When that rate of inflation didn't materialize POG drifted lower over the next two decades as actual inflation and forward inflation expectations drifted lower.

In 1980 long term bond yields were close to 14%. Obviously the bond market got future inflation wrong also.

Thank you, Joy.

Reminder of the official iTulip position on gold since 2001:

• Short term gold prices may or may not be manipulated by central banks, but from an investment position the question is irrelevant. We do not trade gold.
• Since 2001 when we took a 15% position (increased to 30% in 2009) we have viewed gold as insurance against the future debasement of those currencies that are the units of debt -- chief among them dollars, euros, pounds, and yen -- of the world's most over-indebted countries because monetary inflation has historically been the chosen means of debt deflation by governments unconstrained by a gold standard since time immemorial.
• Since then, the governments have relentlessly pursued currency deprecatory inflationary policies while gold has increased nearly 400% in nominal terms.
• Gold has worked effectively as a hedge against currency depreciation and will continue to to do so as long as currency depreciation is pursued as a policy to manage debt deflation.
• Ultimately, we hold gold for the same reason central banks have since 1971 when the international gold standard was abrogated by the U.S., to hedge the risk that the entire dollar based global monetary system as currently structured may eventually fail.

[jimmygu3]

Re: Gold is Manipulated.....

• Since then, the governments have relentlessly pursued currency deprecatory inflationary policies while gold has increased nearly 400% in nominal terms.

Fred,

Gold at $882 today is up exactly 250% from its '01 bottom of $252.

Just keeping it real.

Jimmy

[medved]

Re: Gold is Manipulated.....

And You Should Buy It Anyway.

http://www.contrarianprofits.com/art...t-anyway/15756

Good, re-inforcing read.

I would not say, you should buy gold in spite of manipulation. You should buy *because of* manipulation, just like it made sense to short banks and housing *because of* manipulation. It may end up the same way the housing bubble ended (is ending?).

In terms of “manipulation” I just don’t see the need for a special term. No fraudulent activity is any surprise anymore. We did have some episodes of commodities’ naked shorts failure. From speculators’ POV gold is just another speculative commodity. I don’t think, the CBs are involved in it directly as far as “planning” this manipulation. They just don’t let the speculators fail, and they do have tons of ammo for this. Of course, you need to have close connection to CBs to be able to speculate in gold, just like you need to have the same connection to get the bailout. Madoff case shows, no attempt to get the manipulators is going to work. Just let them self-destruct.

Eventually, the whole arrangement will fail, just like the phony credit system did. The gazillion dollar questions are when and how. I don't think simple buy and hold will work, finding a turning point to sell will be important. In my case, I just have difficulty selling gold (have never done it). So, I use gold mining stocks for speculation. So far, so good, I would be much worse off without it.

[cjppjc]

Re: Gold is Manipulated.....

Thank you, Joy.

Reminder of the official iTulip position on gold since 2001:

• Short term gold prices may or may not be manipulated by central banks, but from an investment position the question is irrelevant. We do not trade gold.
• Since 2001 when we took a 15% position (increased to 30% in 2009) we have viewed gold as insurance against the future debasement of those currencies that are the units of debt -- chief among them dollars, euros, pounds, and yen -- of the world's most over-indebted countries because monetary inflation has historically been the chosen means of debt deflation by governments unconstrained by a gold standard since time immemorial.
• Since then, the governments have relentlessly pursued currency deprecatory inflationary policies while gold has increased nearly 400% in nominal terms.
• Gold has worked effectively as a hedge against currency depreciation and will continue to to do so as long as currency depreciation is pursued as a policy to manage debt deflation.
• Ultimately, we hold gold for the same reason central banks have since 1971 when the international gold standard was abrogated by the U.S., to hedge the risk that the entire dollar based global monetary system as currently structured may eventually fail.

But they don't hold as much as they did in 71. I think as lot of iTulipers are better hedged.

[pwcmba]

Re: Gold is Manipulated.....

At this point why is market manipulation even questioned? Of course it is manipulated; they tell you they do it. They have also told you they manipulate agricultural prices, energy prices, short and now long term interest rates, mortgaged rates, currency exchange rates, insurance company valuations, auto maker valuations, auto supplier valuations, money market values, mortgage backed securities, collaterized debt obligations, and I am sure many more that just escape me at this moment.

[oddlots]

Re: Gold is Manipulated.....

I agree that the possibility that the gold price is manipulated is an argument to buy it (at the right - i.e., low or suppressed - price in whatever time-frame you individually choose.) Since we all have a limited amount of capital to sock away over any given time-frame any government-corporate efforts to maintain a low gold price will give you more traction or leverage as an individual saver / investor. In this way the problem is actually turned into a solution: I hope gold is manipulated down. Think of it as a low velocity car chase.

Now of course I am open to the charge of being a gold bug: I take this to mean someone who thinks there is something intrinsic to gold that makes it money in some intemporal, objective sense. In contrast I think it is a purely ironic asset whose only pertinent attributes - money-like but not debt-based - are in contrast to the gross mis-management of our current monetary regimes, responsibility for which I think can be fairly equally spread over governments and the people at large.

I'm agnostic about the manipulation because while a) if I were running a fiat system this far extended I would try and manipulate gold down (I've believed this from the start) b) it's psychologically damaging as a trader / investor to give yourself an easy out for being wrong by believing in the manipulation. The problem is the belief inoculates you against learning anything about the market. So I think it's better to assume otherwise and try and learn about the market from those who have watched it much longer than yourself.

Just my two cents...

[vpage]

Re: Gold is Manipulated.....

Hey - is that a W shaped double bottom on the gold chart?

[cjppjc]

Re: Gold is Manipulated.....

Hey - is that a W shaped double bottom on the gold chart?

1 post in 6 months. It better be.