Ask yourself this, why would the government want to bring the Middle Class down to the level of the Poor? Remember this was the rebellious generation the hippies of the 60's, don't trust anyone over 30! Many of them made good of their lives...I guess... and lived to eat their words...If it is the largest generation ever in America what is it that they have that the government might want...and why might this generation be a burden? What would the government gain by the majority of all Americans being Poor? There are so many laws now regarding estate taxes, inheritance taxes and gifting taxes that it has become hard for people to retain wealth passed from one generation to the next....2011 is going to be a big year I hear, are you prepared?
As the world turns it is stated that there will not be enough workers to cover those taxes that will be needed...The generations have gotten smaller since the BabyBoomers ..they say they will have to import workers.
That is if our jobs get sent back accross the pond!
To answer your question you must realize that the government is the hippie generation. Clinton and Bush and the vast majority of representatives and senators are baby boomers.
Ask not what the govt wants of them, but what they want of the govt. Then you may find your answer.
"Ask Not what your Country can do for you, but what you can do for your Country" You sound like Kennedy!
Yes the last two have been from the BabyBoomer generation, but only one lived on the poor side of the tracks...the other lived a very plush life and does not have to worry about his future or his assets!
I would ask of my country to serve its people before all others! Then if there is left overs then they were free to donate!
People work all their lives and pay taxes so this nation will remain strong...People do not mind paying taxes, it is only when people are taken advantage of and lied to and betrayed as being stupid...It is the backs of the American people who have made this country what it is or was! Working and paying taxes is what it is all about and when it comes time to serve most people do and have and have given the ultimate sacrifice...I just want the Government to see its people as number one priority...not to be sold down the river~
I would also like our Constitution reestablished as our forefathers wrote it! there are times for amendments but not the amendments that have been amended!
No matter the position in Government all should be held accountable for their actions! To make a mistake is one thing but to cover it up and compounded with deceit is another issue!
As far as the United States becoming the Banking Mecca of the world! I wouldn't want them to be keeping my money!
So I say where do we go from here...do we start fresh from scratch, what are our choices...how do we go forward from here. People are saying the market has hit the bottom...I say no way, not even close...to much compounding to get over this easily!
I remember back in the 80's, all the banks and Savings and Loans in Texas had gone bankrupt just like today, except it is the Nation this time...I would like to know why the people of Texas did not scream with anger!
Seems like no one learns from their mistakes, so at some point they are no longer mistakes but intent!
But why? Insanity, no! But to us it is insane to even think of such...
World commodity markets have entered a sudden free-fall. This information is important enough that I want both subscribers and registered members of the site to be aware of it. Please feel free to distribute this report. My strong advice is to hold off on pre-purchasing your winter heating oil and do not lock in any contracts for natural gas. Ditto for pre-purchases of food, all metals, and gasoline/diesel. If you were thinking of buying into gold or silver, better prices would seem to lie in the future, although the charts are a little less clear here. This is all consistent with my advice from the last Martenson Report for subscribers (sent 8/2/08), where I said: “I have my concerns about commodity prices over the remaining portion of 2008, and even more so for 2009. The reason is that extra supply from mines and newly planted acreage should be coming online right as the recession (depression?) is hitting full force in 2009.” Here are the charts of the commodity damage:
Below is a chart of heating oil, the price of which is falling rapidly. After the price (the blue line) broke through the 50-day moving average (red line), the price declines have been relentless. Because of this, I am personally waiting to lock in my winter oil. I will keep a close eye on the price of heating oil and alert you if or when I think it is ready to climb back up.
Next is natural gas. Wow. Just wow. This price decline is staggering enough that I suspect there was some heavily leveraged hedge fund on the wrong side of this trade that has now blown up. Somebody is losing a lot of money and somebody is gaining a lot of money. If it turns out that Goldman Sachs was, again, on the right side of a destroyed hedge fund, I will be ready to call “foul.” At any rate, based on this chart you should not lock into any long-term natural gas prices right now, because what you will be sold is natural gas that was bought by your provider a few months ago.
And here’s crude oil. This chart also speaks of severe weakness that could see oil return to $100/barrel in pretty short order. At that point I’ll want to re-evaluate where it might head next. For now, expect cheaper energy prices in the near future.
And here’s the chart for gold. It’s much less clear what’s going on here, although there is certainly price weakness. Should that weakness continue, my next downside target is $850, where I see strong support. If it gets there, I would be a modest buyer of gold while I evaluated its next probable moves.
The next two charts of Corn and Wheat speak to enormous cash-flow difficulties for farmers. Since farm debt and land prices are in all-time record territory, lots of farms are going to go broke on these declines. But the outfits most affected by such wild price gyrations will be the grain elevators, who have to use grain futures to hedge their operations. These price declines will translate into huge swings in the margin positions of their futures accounts, and quite a few are going to find their profits entirely eaten up by interest payments on bank loans to cover their margin calls. Many will go bankrupt as a result. Given that the bankrupt grain elevators will get bought out by well-positioned financial and private equity firms, we are witnessing one of the largest transfers ever seen of physical wealth due to a paper crisis.
I am still not quite sure what has happened to commodities, though I suspect that a major hedge fund or two has “blown up.” But it’s going to take awhile for this dust to settle. I speculate that world governments started pushing on these markets to help bring commodity prices down in order to allow them more political room to re-liquefy a stricken world banking system. I worry that the governments have actually triggered a destabilizing price crash that will bring its own issues of insolvency to farmers, grain elevators, energy companies, and pension and hedge funds. I fear that the law of unintended consequences will strike, and that ham-fisted government attempts to create the appearance of stability in the larger markets (by interfering with the commodity markets) will actually create the very thing they fear – a series of cascading cross-defaults within the financial system. We shall see. What do I mean when I say “governments interfere with the markets?” One form of interference is words. Recently the European Central Bank, in concert with the G7 ministers, has made public statements about the dollar being too weak. Bingo! Next thing you know, the dollar turns around and starts going the other way. Since commodities are priced in dollars, the effect of this is to put downward pressure on the commodities. In the US, Congress held meetings and proposed new rules to reign in the impact of speculators on oil prices. There is nothing quite like the threat of government-enforced rule revisions to change the way people think about and act within targeted markets. I have no specific evidence that the government has been directly selling into the commodity markets, but this would not surprise me in the least, especially if done via a proxy, such as a well-connected Wall Street firm or two. Which is why, if it turns out that Goldman Sachs is, once again, on the right side of this commodity rout (and we’ll know this by their trading profits), I will be more than suspicious - I will be pretty certain that they had implicit or even explicit Federal backing. Which is why, if it turns out that Goldman Sachs is, once again, on the right side of this commodity rout (and we’ll know this by their trading profits), I will be more than suspicious - I will be pretty certain that they had implicit or even explicit Federal backing. I am not against cheaper heating oil. But I am dead set against official interventions in markets because I don’t trust central planning, especially if done by the current crop of “leaders” in DC, who seem to have neither a sense of the risks and challenges we face nor any plan for the future. Worse, such “band-aid” approaches only serve to mask the underlying issues and can even exacerbate them by creating the illusion that everything is returning to ‘normal,’ thereby nurturing a prompt return to the same imbalances that are the source of our current ills. What we need is to wring out the excess borrowing, lending, and spending that marks the past 25 years and eliminate government-dictated pricing designed to hide the impacts of additional monetary and fiscal excess. Your faithful information scout,
Chris Martenson
All the charts are here but you must register (free):
<< <i>The author admits that he doesnt know why commodities fell. So as is typical behavior, he tries to develop a conspiracy theory.
Here's the story, and it is very simple.
The dollar was grossly oversold and commodities grossly over bought. Now were are trying to approach an equilibrium. >>
So your admit you know? I think every reply is a thory and this is as good as any. Certainly nothing wrong with examining all sides. If you don't think the world goverments are behind this to a large degree than I think they've got you right where they intended the public to be. I don't see any good news that would make the dollar go up except the world has brought our sub-prime and they're lagging our currency. Ther maybe a time soon when all fiat currencies fall in comparsion to gold. Like most this is all top secret as usual and everyone has to wait until the end game now don't they?
In todays economic envitonment, it would seem that
folks must prepare for one of the following:
Inflation, recession, stagflation and depression. Thus one
must use the basket approach to survival. This would include
1. Paying off short term debt
2. Holding a ready cash reserve
3. Holding rare coins or precious metals
4. Dividend paying stock
5. Increasing ones saving rate as best as you can by reducing unnecessary spending.
Were we certain of exactly what we were preparing for one could maximize some of the above, but prudence dictates that we cover all bases as best we can.
If anyone will survive the coming economic tsunami, it will probably be the members of this Forum. In general, you folks are the most savvy and prudent people I know. More power to you all.
PS...For people that say they can not save, the truth is you can. However, it will take some measure of sacrifice to be able to do it. Deferred gratification is one of the requirements of building wealth.
I will not even pretend to know. However, I will say that prices go up when there are more buyers than sellers and visa versa. It really is that simple. Now what makes more buyers or more sellers is much more complicated. But if you look at everything as a conspiracy, and I am not saying YOU, but people in general, they will often miss the forest for the trees.
As I have said numerous times, currencies trade on a relative basis. It doesnt have to be good here, just worse somewhere else, for the dollar to appreciate. Our economy may suck, but Europe's sucks more, and they are at least a year behind us in hopes for a recovery. It is very possible that conditions will get better sooner in the US, than in Europe, and perhaps that is what is causing short covering and buying in the dollar.
Real estate values and banks are collapsing all around the globe, not just here. But you wont see it unless you look. I have been trying to provide links to global economic conditions since January to make this easier. I provided graphs of both gold and silver just a few days ago and warned of their impending breakdown. I also posted a graph of the dollar about 2 weeks ago and warned that something big was imminent.
I like gold and silver just like everyone else in this thread. I am also concerned of our systemic economic, social and fiscal problem, just like everyone else. But there will be many calms in this turbulent sea so dont be suprised when they occur and enjoy the sunshine whenever possible.
<< <i>The author admits that he doesnt know why commodities fell. So as is typical behavior, he tries to develop a conspiracy theory.
Here's the story, and it is very simple.
The dollar was grossly oversold and commodities grossly over bought. Now were are trying to approach an equilibrium. >>
C'mon now codhok, we all know the treasury and the fed pushed the dollar down and oil up as well as other commodoties. For some reason that became unpopular and they transpired with their friends and decided to push the dollar up and kill commodities. It is all so easy they have always been able to move currencies at a whim, in any direction they want. Just like the Geico commercial, so easy a caveman can do it!
what is james sinclair saying about these recent events in the PM markets?
my guess is that he is stating sometime in the future gold will be 1500 so please hold tight.
"Dear Comrades In Golden Arms,
The information and opinions contained herein have been compiled or arrived at from sources believed reliable but no representation or warranty, express or implied, is made as to their accuracy or completeness. Neither jsmineset.com, its employees or agents accepts any liability whatsoever for any loss arising from the use of this report or its contents. All articles posted on jsmineset.com are strictly for informational purposes only. No statement or expression of any opinions contained in this publication constitutes an offer to buy or sell the securities or commodities mentioned herein. Readers are encouraged to conduct their own research and due diligence and/or obtain professional advice before making any investment decision."
This is great. Sorry folks, but dropping commodities is a good thing. I'll be just as selfish in my comments as some goldbugs are, a few of which act like they want our country to go down the toilet for their profit. I have a 457 tied into stocks. My wife has a 401k that she's been contributing to since she was 21 and contributes about $400/mo with an avg company match of about $150/mo. In most cases, when gols is up so is oil. What good is having gold surging when everything you buy being tied to the price of oil. Any gains you get from gold(if you treat it as a long term investment) will only be offset by inflation as shown by historic numbers. Hey, if you do the continual "by low, sell high" thing and are good at it then great, but wishing gold to skyrocket eternally will not be good for anyone including the owner of gold. Sure, celebrate $1500 gold, but be ready for $6 gas at the same time.
Not only is JS expecting $1500 in the near future, he has bet $1 MILLION of his own money on it. If you wish to get in on a similar bet, feel free to contact him. I'm sure he'd be happy to line up another MIL.
I will not even pretend to know. However, I will say that prices go up when there are more buyers than sellers and visa versa. It really is that simple. Now what makes more buyers or more sellers is much more complicated. But if you look at everything as a conspiracy, and I am not saying YOU, but people in general, they will often miss the forest for the trees.
It only takes one seller to start cascading the market (ie the FED/PPT/US Treasury connection). One call from them to their banker/broker minions (JPM, GS, Merrill, Citi, even other Central Banks such as England, Germany, etc) gets the ball rolling. The hedge funds stop-loss points take it from there. By the end of the cascade, there were more sellers than buyers. But it was the first seller (naked short at that) that got the market cascading. No doubt some hedge funds and investment groups buying on margin or other leveraged vehicles have been toasted. Those in the ETF's x 2 have been doubly whacked. There will be less speculative hands around for the next up cycle. But Sinclair is right in that nothing has changed. The march to $1500 will continue and it will likely be here by 2011 as he has stated. This breather will be of benefit to US Rare Coins imo. Inflation has not gone away and buyers of rare coins are well aware of this.
When will commodities and oil be back again? Could be as soon as this winter's peak oil heating season or sometime in the first half of 2009. Commodity prices in general will go higher than their present highs. In the past several years gold has come back strong in August/September, that would be my guess going forward. Any number of geo-political shattering events could easily kill the dollar rally and tip things the other way once again. As before, nothing has been fixed or improved in the dollar and/or financial markets. It's all been hot air so far. I can take the current disappointing trend knowing that it's another fake-out to get rid of weak hands in the gold bull. The biggest wave up will follow this current correction.
I too am very skeptical of the conspiracy theory that many people throw out and many do throw it out when they least understand the fundamentals of what is going on.
That being said, after a ton of reading on both sides of the isle, I think that the below article and writer has taken a fairly unbiased, objective and fact based look into the grandest of consipracy theories, the gold cartel.
Motive is certainly established and credible as is the ability of central banks to manipulate markets. That is of course their very function in an overt sense, but I believe that covertly more is going on behind the scenes.
Read the below and past links carefully, I would like to know what you think about the thesis and arguement.
Key Strategies for Profit Today Gold, Silver, Equities, Crude Oil and U.S. Treasuries by DeepCaster LLC, deepcaster.com |August 8, 2008 Print Investors and Traders seeking profits in today’s markets have an extraordinarily difficult task.
That is because some of the challenges are unprecedented.
In order to understand how to profit and to avoid losses in spite of these challenges, it is important to understand those challenges which are unique today.
Manipulation of Share Prices and Earnings Per Share: Skilled Financial and Public Relations Officers and Outside Analysts have long been able to manipulate and/or just plain misjudge Earnings Per Share. In polite circles this problem is referred to as lack of “earnings transparency.” But the scope and magnitude, and vehicles available, to achieve such manipulation or misjudgment are particularly diverse today. The case of “Crocs” is an excellent example, courtesy of Marc Faber.
“…Take Crocs, a manufacturer and designer of fashionable shoes. After its stock had declined from a high of $75 last October to $9 the company recently announced that it now expects earnings per share of 3 cents to 7 cents for the second quarter, significantly lower than the 42 cents to 47 cents per share previously expected. The brilliant stocks analysts had according to Thomson Financial projected EPS of 41 cents for the second quarter…The stock subsequently fell another 50% and trades now at $4.50! As I often said before, the stock market is a far better forecaster than some financial analyst who just listens to and reports in thick research reports the lies management dishes out periodically in order to boost a company’s share price…” Dr. Marc Faber, Market Commentary, August 1, 2008, www.gloomboomdoom.com
The fact is that “Real Earnings” and justifiable Share Prices are especially difficult to determine today, especially in light of the following:
Off the books liabilities: Arcane and complicated accounting rules leave “loopholes” for certain Off the Books Actual or Contingent Liabilities, which can thus be left unrecognized at the discretion of Financial Officers.
Toxic OTC derivatives: Often appearing where one would least expect them. Deepcaster and a few others have extensively documented the dangers of OTC Derivatives (now, about $600 TRILLION! In toto) which Warren Buffet has called “toxic.” But part of the problem is that they show up in the most unlikely places. For example, earlier this year we called attention to Bristol Myers Squibb which had to take a multi-million dollar writedown due to their Toxic OTC Derivatives. How many responsible investors would, or could, have known in advance that a leading company in the Pharmaceutical Sector would be vulnerable to, and suffer losses from, the Toxic Derivatives Disease? See Deepcaster’s July 2008 Letter entitled “Market Intervention, Data Manipulation Still Accelerating, Increasing Risks, The Cartel End Game and Latest Forecasts for Gold, Silver, Equities, Crude, U.S. Dollar and Treasuries” at www.deepcaster.com.
Dark Liquidity: Estimates are that over 10% of all Market Transactions by Value occur privately -- i.e. outside of public markets in Dark Liquidity Pools. That means that few, if any, know (apart from the parties to a particular transaction) what the transactions are, the strength of the parties and counterparties, and many other essential factors affecting the values of the assets involved. How does one properly value such assets or, for that matter, the companies engaged in such transactions -- see Deepcaster's Alerts "Derivatives, Dark Liquidity and Increasing Systemic Risk" and "Protecting Profit From 'Dark Liquidity' & Other Systemic Risks" contained in the Alerts Cache at www.deepcaster.com
The Dark Liquidity issue has serious implications for Investors, Traders and Markets. Consider:
As increasing volume moves to the so-called "Dark Liquidity in Dark Pools" the very concept of "public pricing" becomes suspect. How do we know that the so-called public price is the "real price" if we are seeing only half of the pricing. To what extent, if at all, will regulators be drawn to and act regarding private “dark pools,” which by their very nature defeat the idea of a fair and level playing field in markets with transparent pricing. Particularly with regard to small cap stocks where "big money" can move the stocks dramatically, how can the investor who does not have access to dark pools not be seriously disadvantaged because he does not know where, and when, buying, and or selling in very large amounts, is coming from? Many large institutions, which employ “Dark Pools,” now use Order Execution Algorithms to mask their trading and/or to optimize trades at the "best price." Order Execution Algorithms used in Public Market Trading in conjunction with Dark Liquidity Pools in Private “Market” trading can be lethally disadvantageous for the average investor. Fed & U.S. Government Establishments Favor Wall Street and The International Bankers
It is clear that the Fed and U.S. Government Establishments favor Wall Street and the International Bankers. Consider this statement from Eric Hermann, President of FH International Assets Management.
“…the Fed’s “loose” monetary policy…extends artificially low cost funding in artificially large quantities to certain lucky beneficiaries (banks, investment banks). These happy few beneficiaries are not passing on their subsidized cost and availability of funds to their customers. We American taxpayers are instead facing expensive cost of borrowing and restricted amounts of available credit from these same financial institutions. In other words, the Fed is writing a massive check to the shareholders of the commercial and investment banks. This subsidy would produce an uproar if the government were transparent about its existence and size, but the Washington politicians cleverly characterize the transfer of wealth from the taxpayer to the shareholders of Fed supported financial institutions as “saving the financial system.”
Buy and hold increasingly fails: There are many reasons Buy and Hold increasingly fails, not the least of which is that in 2008, for the first time in thirty four years, the Equities Markets in the United States and in many markets elsewhere, have actually moved from being in a technical long-term Bull Trend to a long-term Bear Trend. Simple logic dictates that buying and holding in a downtrending market will not result in profits, but rather losses. But, more than that, there are other reasons 'Buy and Hold' increasingly fails, including horrible Fundamentals, Data Manipulation and Market Intervention.
Market Intervention: One example of the effects of Intervention is the recent takedowns of Gold and Silver. In recent years sagacious organizations and individuals have developed convincing evidence that a U.S. Fed-led Cartel* of Central Bankers and Allies and Factota regularly intervenes in all major Markets, including but not limited to Precious Metals, Equities, Crude Oil and other Strategic Commodities and, in many instances, actually controls Market Price.
*We encourage those who doubt the scope and power of Intervention by a Fed-led Cartel of Central Bankers and Allies to read Deepcaster’s January, 2008 Letter containing a summary overview of Intervention entitled “Market Intervention, Data Manipulation - - Increasing Risks, The Cartel End Game, and Latest Forecast” at www.deepcaster.com>LatestLetter. Also consider the substantial evidence collected by the Gold AntiTrust Action Committee at www.gata.org for information on precious metals price manipulation. Virtually all of the evidence for Intervention has been gleaned from publicly available records. Deepcaster’s profitable recommendations displayed at www.deepcaster.com have been facilitated by attention to these “Interventionals.”
Regarding The Motivation for the ongoing Cartel Market Interventions, consider that because the “Mortal Enemies” of The Central Bankers Fiat Currencies and Treasury Securities are The Monetary Metals Gold and Silver because the Monetary Metals are rivals for the Treasury Securities and Fiat Currencies for being the Ultimate Store and Measure of Value. Thus The Cartel expends considerable effort to periodically take them down.
For example, that traditional Safe Haven from inflation and risk, Gold, was, during the period of extreme Financial Market Turmoil in March, 2008, taken down in price from over $1000/oz to below $900/0z. Of course, the Marketplace Fundamentals at that time dictated that it should explode in price. In a non-manipulated market it surely would have.
Deepcaster and others, including the Gold AntiTrust Action Committee, have offered considerable evidence that the Cartel* of Central Bankers is the culprit behind these dramatic and devastating Takedowns. See Deepcaster’s July, 2008 Letter and Alert of December 25, 2007 in the Latest Letter and Alerts Caches at www.deepcaster.com.
Data Manipulation: Not only are the markets regularly intervened in, but also the typical "Official Data” on which long-time investors and traders have traditionally relied is just simply no longer reliable. It is generally acknowledged that the Official Figures for annual Consumer Price Inflation of 4-5% typically issued recently by Official Sources simply cannot be correct.
Our intuition that key Official Data are Bogus is correct. In fact, Real U.S. Consumer Price Inflation is running at about 12% annualized, Real Unemployment at about 14% annualized, and Real GPD dropping at a –2% annualized, all according to the very credible calculations of shadowstats.com.
Thus, monitoring the Interventionals and the Real Data, as well as the Fundamentals and Technicals, is essential today.
In sum, it is clear that since a Fed-led Cartel* of Central Bankers has been regularly intervening in all of the major markets including, but not limited to, Gold, Silver, Equities and Crude Oil, failing to take account of the “Interventionals” and the Real Data can be lethal to profitable investing and trading.
Therefore, Strategies for Profiting and Protecting Wealth today should include:
Taking account of Interventionals and Real Data as well as Fundamentals and Technicals. Avoiding the trap of investing in companies whose Earnings Per Share have been manipulated and/or which are vulnerable to “Off the Books Liabilities,” and/or Toxic Derivatives. Of course, this is very hard to know. Therefore, consider using Exchange Traded Funds (ETFs) and Exchange Traded Notes (ETNs). Fortunately, today there are increasing numbers, indeed a few hundred, of ETFs and ETNs, which provide opportunities to “play” Sectors on both the Short and the Long side. Some of these funds even offer double leverage.
The advantage of using Sector ETFs is that they tend to minimize the worst company performances. Deepcaster has recommended several Exchange Traded Funds in the past and expects to do so again very soon. Recognizing that the “Buy and Hold” strategy increasing fails, as explained above. The Eminence Grise of Newsletter writers, Harry Schultz perhaps put it the best when he recently stated that “buy and hold no longer works anymore, even with Gold.” Therefore, "long-term" Investors must adopt some of the strategies of Traders. For example, take profits when you have them. Educating yourself about the realities of the marketplace using Alternative Data Sources such as Deepcaster, Gold Anti-Trust Committee (www.gata.com), and shadowstats.com, for example. Gathering and staying attuned to Authentic Information regarding the marketplace can save one much financial grief and position one for profit. Tracking the Interventionals daily, as Deepcaster does, as well as the Technicals and Fundamentals. Tracking the Interventionals daily can often, but not always, give one excellent clues about The Cartel’s next likely Interventional Moves. Such clues which are essential to preserving wealth and making profits. Deepcaster’s recent tracking of The Interventionals, for example, has facilitated his making several profitable recommendations listed at www.deepcaster.com. Being prepared to go both long and short Major Market Sectors - - long near the bottoms of Interim Takedowns and short near Sector Tops. The Interventionals are essential in helping identify these approximate tops and bottoms. Being aware of the overall Geopolitical Landscape in order to gain an adequate understanding of how that Landscape might affect the present and future direction of the markets and the Interventionals by the Cartel. The Cartel is a "political animal" as well as a financial one as Deepcaster describes in his July Letter "Market Intervention, Data Manipulation Still Accelerating, Cartel End Game Threatening" found at www.deepcaster.com. It is essential that one understand the motivations of the major players in the market and the resources at their disposal.
For example, a Major Motivation of the U.S. Federal Reserve and other Central Banks is the protection and enhancement of the legitimacy of their Treasury Securities and Fiat Currencies as Measures and Stores and Value. Therefore, one can understand that one of their Major Goals is to de-legitimize Gold, Silver and the Strategic Commodities, including especially Crude Oil, as Stores and Measures of Value. With this in mind, the periodic attempted takedowns of Gold and Silver become understandable. Such an insight applied daily to the market can result in a tremendous edge in understanding market performance, present and future. Moreover, regarding the Assets at The Cartel’s disposal, if one tracks the Repurchase Agreement Pool daily, as Deepcaster does, and is aware of deployment of OTC Derivatives contracts outstanding as well as being aware of the other Interventional tools which The Cartel has at its disposal, then one gains a considerable edge. Indeed, Deepcaster’s profitable recommendations displayed at www.deepcaster.com and its Forecasts have all been facilitated by attention to the Interventionals.
Consider just one example. If one visits the Bank for International Settlements (the Central Bankers Bank) website (www.bis.org) and follows the path Statistics>Derivatives>Table 19 and following, one can see the entire range of trillions of dollars worth of OTC Dark Liquid Derivatives (nearly $600 Trillion as of December, 2007) available for use in Market Manipulation.
For example, over $9 trillion in OTC Derivatives was available for Commodities price manipulation alone as of December, 2007 - - a large chunk of these are available to manipulate the Crude Oil price. Also, as of December 2007, something in excess of $56 trillion in OTC Derivatives were available for Foreign Exchange Price Manipulation, and a whopping $393 trillion in OTC Interest Rate Contracts were available for Interest Rate Manipulation all along the Yield Curve and not just at the short end.
Of course, Fundamentals and Technicals still do matter, since The Cartel would lose considerable clout and effectiveness if its machinations were broadly exposed, or if they flew directly in the face of overwhelming Fundamentals. Therefore, it makes sense that The Cartel would create and/or use Fundamental and Technical Patterns as “cover” and as occasions for Market Intervention (or as "lures" to get savvy investors and traders "offside") and would also use or create geopolitical events to achieve the same ends.
Indeed, the actions of The Cartel must be fairly plausible in order to maintain "Plausible Deniability.”
Even so, there are times when other Cartel Concerns trump plausibility and these are manifested in market anomalies. For example, consider the period when a Financial Crisis came to a head in the Bear Stearns collapse and “buyout” in mid-March, 2008. In this period of Great Financial Stress in the markets, Gold and Silver, instead of reflecting this crisis by skyrocketing up (which would have happened in a normal non-manipulated market) was taken down substantially.
Such developments should be a lesson to the wise and open-minded that something more is going on in the Major Markets than Normal Market Action. If that recognition is reflected in attention paid to the aforementioned principles, it can result in achieving a Profitable Refuge from Data Manipulation and Market Intervention.
As is readily evident, the US$ has staged an incredible rally. That rally is one of the strongest to occur without some underlying causal event. In short, nothing readily apparent is happening around the world to cause such a move. Now, consider the weekly purchases of U.S. debt by official institutions, essentially central banks around the world. These numbers are reported weekly by the Federal Reserve, the depository for these bond holdings. In the week ending Wednesday, official institutions made the largest net purchase of U.S. debt ever recorded. They bought the annualized equivalent of $1.457 trillion. Those purchases created a shortage of dollars which created a massive short covering rally in the dollar. That buying pushed the dollar up almost 3% in the past week, or at a 320% annual rate."
The big drop in the Euro today was on technical factors. As I mentioned earlier in the week, watch for a break of 155. Traders all across the globe are looking at the same info. It doesnt take GS or MS to start selling, selling just happens.
The dollar still has not broken its 6 year downtrend and bear market rallies are usually very violent. Only time will tell if the dollar rally continues. In the meantime be prepared for much more volatility in currencies which should lead to increased volatility in PMs. Sounds like it could be a lot of fun to me.
"There will be less speculative hands around for the next up cycle."
Well, when you think about it, a couple of weeks ago there was a congressional hearing on manipulation in the oil bidness and commodities and maybe they got to talking and got with their BS, JPM, etc buddies and maybe they said "Hey, lets toast all the USD shorts, all the commodity paper longs on margin, and let's just toast anybody that's leaning out too far. There are way too many hacks out there with this mortgage stuff an all; it looks bad when this happens, too many paper heros, we really need to tighten this game up a lot." (The sound of a couple of phone calls followed by a flushing sound.)
Canada Lost 55,200 Jobs in July China Trade Surplus Likely to Narrow for Fourth Month Faltering Baltic Economies Start to Slow EU's Fastest Inflation Putin Says `War Has Started,' Georgia Claims Invasion RBS Cuts $208 Billion of Assets; Bank Got `Too Big' European Central Bank council member Nout Wellink said the euro-region economy ``deteriorated pretty quickly in the second quarter'' and growth ``won't look that good Italy's Economy Unexpectedly Shrinks; Nears Recession Japan Bankruptcies Climb to 5-Year High as Developers Collapse Japan Economy Probably Shrank as Recession Looms Moody's Investors Service said it may reduce Argentina's debt rating outlook from positive because the government's underreporting of inflation ``raises serious questions about their willingness to pay.''
Yup, and there's a similar negative-dollar list that could be published every day as well. None of those items would have possibly accounted for the massive dollar rise. Since when does our dollar move so drastically to relatively minor foreign news? It doesn't even fall much on major US news....such as a BSC failure (lol). More than likely the PPT orchestrated a move the week to prop up the dollar and take down gold. The dollar moves when the PPT wants it to move. It's that simple. It must be getting very serious on the derivatives and mortgage side if they needed to turn the dollar up. There was no positive news imo unless Fannie and Freddie falling 20% or more and losing billions is good news. You remember them, they were "rescued" recently and everything was back to normal. The US is losing 100,000-200,000 jobs a month if you extract the bogus birth death model inputs. As it is, the model forecasts ave monthly losses of 50K-75K.
That being said, after a ton of reading on both sides of the isle, I think that the below article and writer has taken a fairly unbiased, objective and fact based look into the grandest of consipracy theories, the gold cartel.
One could simply call the gold cartel the finanical backers of the FED. Their goal is to make all the money. It's no secret that gold is the anti-fiat money. Whether conspiracy or not, the manipulation of the currency, metals, and stock markets is pretty hard to ignore.
The dollar rose huge today because of the massive support break of the Euro. The list of negative global news today is not the reason for todays dollar rise, but the culmination of months worth of negative news finally broke the Euro's back. Bear market rallies are always very violent. This, and the technical support break is the reason for the dollars sharp rise. It is not the PPT or DDT or any other mythical entity. The failure of gold to break new highs with the "insolvency" of FRE and FNM, when all the newsletter writers were saying "this is it, this is the big one", should have been a warning that gold had lost some luster. It may shine again, but for the time being--perhaps several months or quarters, gold is dead. It will however make a great trading vehicle, but the buy and hold type will most likely be very disappointed.
Perhaps nothing has improved the dollars fundamentals, but many cracks(canyons) have opened in other currencies. And no matter how much supermodels despise the dollar, when the $hit hits the global fan, the world still knows the USA is the greatest country and they will seek out its dollars.
The Euro's contribution to the USDollar index is 57%. So the crazed buying of TRILLIONS in dollars this past week had nothing to do with the rise in the dollar?
Still, nothing was fixed in the Euro, Dollar, or other fiat currency. The end result is still going to be the same. I can't see gold languishing for quarters considering the depth of financial problems out there. May 2006 to August 2007 had relatively little "bad" news to push gold along. August 2008 to May 2009 is going to look like a train wreck in comparison. With all the FED bailouts of the past 5 months, it would be hard to convince any one in the world of future strength in the dollar. I could however see the major banks and brokerages, as well as FED-connected money, buying into a rally they helped create. That makes sense.
This chart depicts the massive slide the US dollar has taken over the last 6 years. It may finally be breaking the downtrend. We need a few more weeks for confirmation. The scribble of lines at the top of the chart is a momentum indicator. Notice how the green line consistantly broke below 10, indicating extreme weakness. Today, that green line broke above 40, for the first time in 7 years, indicating extreme strength. Perhaps a new trend is emerging?
<< <i>The Euro's contribution to the USDollar index is 57%. So the crazed buying of TRILLIONS in dollars this past week had nothing to do with the rise in the dollar?
Still, nothing was fixed in the Euro, Dollar, or other fiat currency. The end result is still going to be the same. I can't see gold languishing for quarters considering the depth of financial problems out there. May 2006 to August 2007 had relatively little "bad" news to push gold along. August 2008 to May 2009 is going to look like a train wreck in comparison.
roadrunner >>
Perhaps gold is a forward looking indicator. We, ourselves, wrote of the impending crisis looming in the US real estate market in 2006. And gold responded as it should have. Perhaps the worst is over for the US real estate market and gold is responding accordingly.
It's clear to me that the worst in the mortgage market is still down the road. With all the re-adjusted mortgages still to come to market and TRILLIONS in OTC mortgage-backed securities to wade through, we have a few years left. Even the FED doesn't think this will be over until at least 2010-2011. What housing market (since king fiat came to be in 1971) has recovered in 2 years? The late 1980's market fell all the way to 1995-1996 here in the northeast.....literally 6 to 7 years. And so with far worse fundamentals than any time since the Great Depression we've fixed it this time in 2 yrs? Not likely.
Again, I can buy the PPT driving their own "dollar recovery" over the long term trend line, but on what fundamentals will it stay "recovered?" Who will pay for the emperor's new clothes? How has the debt situation improved? Are banks going to stop failing now?
It could also be that this was the final dollar blowout to touch the trend line prior to resuming a downward course. Fundamentals would point to that as would the past 6-7 years. But I must admit that the dollar was loathe to give up the 0.80 level a while back and continued to muster rally after rally back towards 0.90. But it seems like ages since that kind of strength/manipulation was shown. This time the FED is loath to give up 0.70 or anything too close to it. The trend line you posted was heavily broken to the upside in 2005 and 2006, yet only represented reprieves on the way down. Calling what we have now a recovery or a new dollar bull is a tad premature.
The dollar rose huge today because of the massive support break of the Euro. The list of negative global news today is not the reason for todays dollar rise, but the culmination of months worth of negative news finally broke the Euro's back. Bear market rallies are always very violent. This, and the technical support break is the reason for the dollars sharp rise. It is not the PPT or DDT or any other mythical entity. The failure of gold to break new highs with the "insolvency" of FRE and FNM, when all the newsletter writers were saying "this is it, this is the big one", should have been a warning that gold had lost some luster. It may shine again, but for the time being--perhaps several months or quarters, gold is dead. It will however make a great trading vehicle, but the buy and hold type will most likely be very disappointed.
Perhaps nothing has improved the dollars fundamentals, but many cracks(canyons) have opened in other currencies. And no matter how much supermodels despise the dollar, when the $hit hits the global fan, the world still knows the USA is the greatest country and they will seek out its dollars. >>
Well said. It's very early in this dollar rally, but it appears that WW investors have reached the conclusion that the slowdown is global, and not an isolated US problem due to the mortgage bailout, credit crunch, bank problems, etc. And that makes the dollar the safe haven once again. If this trend holds, the USD will continue to strengthen, hurting commodity prices across the board, at least in the short term.
it appears that WW investors have reached the conclusion that the slowdown is global, and not an isolated US problem due to the mortgage bailout, credit crunch, bank problems, etc. And that makes the dollar the safe haven once again. If this trend holds, the USD will continue to strengthen, hurting commodity prices across the board, at least in the short term.
While the dollar might have rallied strongly against the euro, I don't see a fundamental reason for the dollar to have rallied against gold.
Do you?
Q: Are You Printing Money? Bernanke: Not Literally
<< <i>it appears that WW investors have reached the conclusion that the slowdown is global, and not an isolated US problem due to the mortgage bailout, credit crunch, bank problems, etc. And that makes the dollar the safe haven once again. If this trend holds, the USD will continue to strengthen, hurting commodity prices across the board, at least in the short term.
While the dollar might have rallied strongly against the euro, I don't see a fundamental reason for the dollar to have rallied against gold.
Do you? >>
Gold, like most commodities is priced in dollars. So there's an inverse relationship, and a rally in the dollar will cause a decline in the price of gold.
One thing about markets, any market for that matter, be it commodoties, equities, bonds, etc. All of these markets, in theory, are forward looking. So they always seem to turn before any of the data or news supports the change in trend. The market will chew up and spit out literalists. I am not prescient, just like most people I know, but I am facinated by markets, primarily from the technical psychology/sentiment side of the market. If you go back and look at any major market turn it is usually at the point of extreme pessimism or optimism, which of course happens for a reason.... people have always had seemingly great and justifiable reasons for exteme pessimism or optimism...Of course when that happens the investors in that market, which are by definition a majority, are boyoued by the great conviction that seems so justifiable by the current and foreseeable trends so available to us in news or other media.
Now of course all of these investors with this great and seemingly so justifiable conviction, will act and usually with gusto. Can you say dot com, quit your job day trader?, or genius house fliiper, that bought not one but five houses at the top..... and once they act the die is cast. Once fully sold a seller can only become a buyer and and once fully commited a buyer can only become a seller. I have no idea if the recent C change in the markets is a short or long term phenomena, but the market sentiment definitely foreshadowed a change in direction
So yes, I do think markets are manipulated, but primarily by the us not the them
BTW, I think this is great thread with a lot of great point counter point, with many bright people.
RR. do you know what time frame JS is calling short term? I don't have an extra million lying around but, he has the deck stacked against him if he is expecting $1500 gold in the near term. Wasn't much of his premise based on the dollar tanking?
As we have many times in this thread when something drastic happens, we must ask ourselves, just exactly what has permanently changed?
This week nothing was permanently changed; there was just more bad news away from our shores.
A couple of years ago I posted an email discussion I was having with Peter Schiff. My point to him at that time was I believed that many of the stronger currencies including the Euro would have many of the problems the dollar was having, since most of the worlds “strongest” currencies were also from socialist countries with large baby boom populations.
Although I do like to have some investments in companies outside of the U.S., I believe this paper, and electronic money, system we have developed is a worldwide problem, and still believe that paid for, hard assets, in ones possession is the only safety during the coming years.
We are entering a period in all markets where the speculators and the manipulators will move markets on a weekly, or even daily basis, in extreme swings. The large banks, hedge funds, insurance companies, and government players are desperate for profits and will be hunting heads in any market they feel they can make quick money.
All of the global markets are moving down and there will be some good bargains to be had, but day trading is going to get even more dangerous, since markets will not move on fundamentals, but strictly on profit potentials in short term swings.
I think long term is now 24 months, and those that want to invest should buy distressed investments with good fundamentals and not fall in the trap of worrying about short term drops.
In the next two years for example we might see oil $90 and then back to $150.
Over the next few months the dollar will drop once again as much of the profits American companies are making come from overseas now, and these profits disappear with a strong dollar.
Forget what comes out of the mouths of politicians, the only way we can pay our debts is to inflate the money supply, and sell goods to foreigners, and that means a cheap dollar!
Comments
<< <i>When you become a burden on the system, things tend to change.
You don't think Insurance Comapnies control the care you get...THINK AGAIN!
Hospitals are BIG BUSINESS! They like profits. >>
the total health care system is sc-a-rewed.....top to bottom, soup to nutz
<< <i>And so is anyone who gets sick! >>
actually the taxpayers who wind up paying the bill either from the unisured, underinsured or picks up after medicare.
If you are sick for more then two
weeks, you receive a get well card
from the president. That should be
enough to cure whatever ails you.
Camelot
Camelot
That is if our jobs get sent back accross the pond!
To answer your question you must realize that the government is the hippie generation. Clinton and Bush and the vast majority of representatives and senators are baby boomers.
Ask not what the govt wants of them, but what they want of the govt. Then you may find your answer.
Knowledge is the enemy of fear
Camelot
age to 100.this is known as the lay away plan. You will work
until you are laid away. as for prior retirees offer them a choice
of free euthanasia or elimination of pensions until they are 100.
Old people have to learn to be tough like the pioneers of old. They
must learn to grow their own food and depend on their children for
support. This will free up untold trillions of dollars that the Government
can waste on nonsense.
Camelot
Yes the last two have been from the BabyBoomer generation, but only one lived on the poor side of the tracks...the other lived a very plush life and does not have to worry about his future or his assets!
I would ask of my country to serve its people before all others! Then if there is left overs then they were free to donate!
People work all their lives and pay taxes so this nation will remain strong...People do not mind paying taxes, it is only when people are taken advantage of and lied to and betrayed as being stupid...It is the backs of the American people who have made this country what it is or was! Working and paying taxes is what it is all about and when it comes time to serve most people do and have and have given the ultimate sacrifice...I just want the Government to see its people as number one priority...not to be sold down the river~
I would also like our Constitution reestablished as our forefathers wrote it! there are times for amendments but not the amendments that have been amended!
No matter the position in Government all should be held accountable for their actions! To make a mistake is one thing but to cover it up and compounded with deceit is another issue!
So I say where do we go from here...do we start fresh from scratch, what are our choices...how do we go forward from here. People are saying the market has hit the bottom...I say no way, not even close...to much compounding to get over this easily!
Seems like no one learns from their mistakes, so at some point they are no longer mistakes but intent!
But why? Insanity, no! But to us it is insane to even think of such...
I coulda made $100.
Knowledge is the enemy of fear
In your opinionw what makes it worth buying ? vs other mining companys
Any info would be appreciated
PM me if you would like. Thanks
<< <i>Baley- Give us an assesment of the fundamentals of CA:HLO
In your opinionw what makes it worth buying ? vs other mining companys
Any info would be appreciated
PM me if you would like. Thanks >>
...Not sure if this is it?
Halo Resources Ltd. (HLO:TSXV
My strong advice is to hold off on pre-purchasing your winter heating oil and do not lock in any contracts for natural gas. Ditto for pre-purchases of food, all metals, and gasoline/diesel.
If you were thinking of buying into gold or silver, better prices would seem to lie in the future, although the charts are a little less clear here.
This is all consistent with my advice from the last Martenson Report for subscribers (sent 8/2/08), where I said:
“I have my concerns about commodity prices over the remaining portion of 2008, and even more so for 2009. The reason is that extra supply from mines and newly planted acreage should be coming online right as the recession (depression?) is hitting full force in 2009.”
Here are the charts of the commodity damage:
Below is a chart of heating oil, the price of which is falling rapidly. After the price (the blue line) broke through the 50-day moving average (red line), the price declines have been relentless. Because of this, I am personally waiting to lock in my winter oil. I will keep a close eye on the price of heating oil and alert you if or when I think it is ready to climb back up.
Next is natural gas. Wow. Just wow. This price decline is staggering enough that I suspect there was some heavily leveraged hedge fund on the wrong side of this trade that has now blown up. Somebody is losing a lot of money and somebody is gaining a lot of money. If it turns out that Goldman Sachs was, again, on the right side of a destroyed hedge fund, I will be ready to call “foul.” At any rate, based on this chart you should not lock into any long-term natural gas prices right now, because what you will be sold is natural gas that was bought by your provider a few months ago.
And here’s crude oil. This chart also speaks of severe weakness that could see oil return to $100/barrel in pretty short order. At that point I’ll want to re-evaluate where it might head next. For now, expect cheaper energy prices in the near future.
And here’s the chart for gold. It’s much less clear what’s going on here, although there is certainly price weakness. Should that weakness continue, my next downside target is $850, where I see strong support. If it gets there, I would be a modest buyer of gold while I evaluated its next probable moves.
The next two charts of Corn and Wheat speak to enormous cash-flow difficulties for farmers. Since farm debt and land prices are in all-time record territory, lots of farms are going to go broke on these declines. But the outfits most affected by such wild price gyrations will be the grain elevators, who have to use grain futures to hedge their operations. These price declines will translate into huge swings in the margin positions of their futures accounts, and quite a few are going to find their profits entirely eaten up by interest payments on bank loans to cover their margin calls. Many will go bankrupt as a result. Given that the bankrupt grain elevators will get bought out by well-positioned financial and private equity firms, we are witnessing one of the largest transfers ever seen of physical wealth due to a paper crisis.
I am still not quite sure what has happened to commodities, though I suspect that a major hedge fund or two has “blown up.” But it’s going to take awhile for this dust to settle. I speculate that world governments started pushing on these markets to help bring commodity prices down in order to allow them more political room to re-liquefy a stricken world banking system. I worry that the governments have actually triggered a destabilizing price crash that will bring its own issues of insolvency to farmers, grain elevators, energy companies, and pension and hedge funds. I fear that the law of unintended consequences will strike, and that ham-fisted government attempts to create the appearance of stability in the larger markets (by interfering with the commodity markets) will actually create the very thing they fear – a series of cascading cross-defaults within the financial system. We shall see.
What do I mean when I say “governments interfere with the markets?” One form of interference is words. Recently the European Central Bank, in concert with the G7 ministers, has made public statements about the dollar being too weak. Bingo! Next thing you know, the dollar turns around and starts going the other way. Since commodities are priced in dollars, the effect of this is to put downward pressure on the commodities. In the US, Congress held meetings and proposed new rules to reign in the impact of speculators on oil prices. There is nothing quite like the threat of government-enforced rule revisions to change the way people think about and act within targeted markets. I have no specific evidence that the government has been directly selling into the commodity markets, but this would not surprise me in the least, especially if done via a proxy, such as a well-connected Wall Street firm or two.
Which is why, if it turns out that Goldman Sachs is, once again, on the right side of this commodity rout (and we’ll know this by their trading profits), I will be more than suspicious - I will be pretty certain that they had implicit or even explicit Federal backing.
Which is why, if it turns out that Goldman Sachs is, once again, on the right side of this commodity rout (and we’ll know this by their trading profits), I will be more than suspicious - I will be pretty certain that they had implicit or even explicit Federal backing.
I am not against cheaper heating oil. But I am dead set against official interventions in markets because I don’t trust central planning, especially if done by the current crop of “leaders” in DC, who seem to have neither a sense of the risks and challenges we face nor any plan for the future. Worse, such “band-aid” approaches only serve to mask the underlying issues and can even exacerbate them by creating the illusion that everything is returning to ‘normal,’ thereby nurturing a prompt return to the same imbalances that are the source of our current ills. What we need is to wring out the excess borrowing, lending, and spending that marks the past 25 years and eliminate government-dictated pricing designed to hide the impacts of additional monetary and fiscal excess.
Your faithful information scout,
Chris Martenson
All the charts are here but you must register (free):
LINK
Here's the story, and it is very simple.
The dollar was grossly oversold and commodities grossly over bought. Now were are trying to approach an equilibrium.
Knowledge is the enemy of fear
<< <i>The author admits that he doesn't know why commodities fell. So as is typical behavior, he tries to develop a conspiracy theory.
Here's the story, and it is very simple.
The dollar was grossly oversold and commodities grossly over bought. Now were are trying to approach an equilibrium. >>
The commodity bubble has popped! I'm guessing the "equilibrium" will be short-lived as oil speculators rush into USD.
<< <i>The author admits that he doesnt know why commodities fell. So as is typical behavior, he tries to develop a conspiracy theory.
Here's the story, and it is very simple.
The dollar was grossly oversold and commodities grossly over bought. Now were are trying to approach an equilibrium. >>
So your admit you know? I think every reply is a thory and this is as good as any. Certainly nothing wrong with examining all sides. If you don't think the world goverments are behind this to a large degree than I think they've got you right where they intended the public to be.
I don't see any good news that would make the dollar go up except the world has brought our sub-prime and they're lagging our currency. Ther maybe a time soon when all fiat currencies fall in comparsion to gold. Like most this is all top secret as usual and everyone has to wait until the end game now don't they?
folks must prepare for one of the following:
Inflation, recession, stagflation and depression. Thus one
must use the basket approach to survival. This would include
1. Paying off short term debt
2. Holding a ready cash reserve
3. Holding rare coins or precious metals
4. Dividend paying stock
5. Increasing ones saving rate as best as you can
by reducing unnecessary spending.
Were we certain of exactly what we were preparing for
one could maximize some of the above, but prudence
dictates that we cover all bases as best we can.
If anyone will survive the coming economic tsunami, it will
probably be the members of this Forum. In general, you folks
are the most savvy and prudent people I know. More power to you all.
PS...For people that say they can not save, the truth is you can. However,
it will take some measure of sacrifice to be able to do it. Deferred gratification
is one of the requirements of building wealth.
Camelot
I will not even pretend to know. However, I will say that prices go up when there are more buyers than sellers and visa versa. It really is that simple. Now what makes more buyers or more sellers is much more complicated. But if you look at everything as a conspiracy, and I am not saying YOU, but people in general, they will often miss the forest for the trees.
As I have said numerous times, currencies trade on a relative basis. It doesnt have to be good here, just worse somewhere else, for the dollar to appreciate. Our economy may suck, but Europe's sucks more, and they are at least a year behind us in hopes for a recovery. It is very possible that conditions will get better sooner in the US, than in Europe, and perhaps that is what is causing short covering and buying in the dollar.
Real estate values and banks are collapsing all around the globe, not just here. But you wont see it unless you look. I have been trying to provide links to global economic conditions since January to make this easier. I provided graphs of both gold and silver just a few days ago and warned of their impending breakdown. I also posted a graph of the dollar about 2 weeks ago and warned that something big was imminent.
I like gold and silver just like everyone else in this thread. I am also concerned of our systemic economic, social and fiscal problem, just like everyone else. But there will be many calms in this turbulent sea so dont be suprised when they occur and enjoy the sunshine whenever possible.
Knowledge is the enemy of fear
<< <i>The author admits that he doesnt know why commodities fell. So as is typical behavior, he tries to develop a conspiracy theory.
Here's the story, and it is very simple.
The dollar was grossly oversold and commodities grossly over bought. Now were are trying to approach an equilibrium. >>
C'mon now codhok, we all know the treasury and the fed pushed the dollar down and oil up as well as other commodoties. For some reason that became unpopular and they transpired with their friends and decided to push the dollar up and kill commodities. It is all so easy they have always been able to move currencies at a whim, in any direction they want. Just like the Geico commercial, so easy a caveman can do it!
markets?
my guess is that he is stating sometime in the future gold will be
1500 so please hold tight.
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;-)
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I will not even pretend to know. However, I will say that prices go up when there are more buyers than sellers and visa versa. It really is that simple. Now what makes more buyers or more sellers is much more complicated. But if you look at everything as a conspiracy, and I am not saying YOU, but people in general, they will often miss the forest for the trees.
It only takes one seller to start cascading the market (ie the FED/PPT/US Treasury connection). One call from them to their banker/broker minions (JPM, GS, Merrill, Citi, even other Central Banks such as England, Germany, etc) gets the ball rolling. The hedge funds stop-loss points take it from there. By the end of the cascade, there were more sellers than buyers. But it was the first seller (naked short at that) that got the market cascading. No doubt some hedge funds and investment groups buying on margin or other leveraged vehicles have been toasted. Those in the ETF's x 2 have been doubly whacked. There will be less speculative hands around for the next up cycle. But Sinclair is right in that nothing has changed. The march to $1500 will continue and it will likely be here by 2011 as he has stated. This breather will be of benefit to US Rare Coins imo. Inflation has not gone away and buyers of rare coins are well aware of this.
When will commodities and oil be back again? Could be as soon as this winter's peak oil heating season or sometime in the first half of 2009. Commodity prices in general will go higher than their present highs. In the past several years gold has come back strong in August/September, that would be my guess going forward. Any number of geo-political shattering events could easily kill the dollar rally and tip things the other way once again. As before, nothing has been fixed or improved in the dollar and/or financial markets. It's all been hot air so far. I can take the current disappointing trend knowing that it's another fake-out to get rid of weak hands in the gold bull. The biggest wave up will follow this current correction.
roadrunner
I too am very skeptical of the conspiracy theory that many people throw out and many do throw it out when they least understand the fundamentals of what is going on.
That being said, after a ton of reading on both sides of the isle, I think that the below article and writer has taken a fairly unbiased, objective and fact based look into the grandest of consipracy theories, the gold cartel.
Motive is certainly established and credible as is the ability of central banks to manipulate markets. That is of course their very function in an overt sense, but I believe that covertly more is going on behind the scenes.
Read the below and past links carefully, I would like to know what you think about the thesis and arguement.
John
************************************************************************************************************************
Key Strategies for Profit Today
Gold, Silver, Equities, Crude Oil and U.S. Treasuries
by DeepCaster LLC, deepcaster.com |August 8, 2008
Print
Investors and Traders seeking profits in today’s markets have an extraordinarily difficult task.
That is because some of the challenges are unprecedented.
In order to understand how to profit and to avoid losses in spite of these challenges, it is important to understand those challenges which are unique today.
Manipulation of Share Prices and Earnings Per Share: Skilled Financial and Public Relations Officers and Outside Analysts have long been able to manipulate and/or just plain misjudge Earnings Per Share. In polite circles this problem is referred to as lack of “earnings transparency.” But the scope and magnitude, and vehicles available, to achieve such manipulation or misjudgment are particularly diverse today. The case of “Crocs” is an excellent example, courtesy of Marc Faber.
“…Take Crocs, a manufacturer and designer of fashionable shoes. After its stock had declined from a high of $75 last October to $9 the company recently announced that it now expects earnings per share of 3 cents to 7 cents for the second quarter, significantly lower than the 42 cents to 47 cents per share previously expected. The brilliant stocks analysts had according to Thomson Financial projected EPS of 41 cents for the second quarter…The stock subsequently fell another 50% and trades now at $4.50! As I often said before, the stock market is a far better forecaster than some financial analyst who just listens to and reports in thick research reports the lies management dishes out periodically in order to boost a company’s share price…” Dr. Marc Faber, Market Commentary, August 1, 2008, www.gloomboomdoom.com
The fact is that “Real Earnings” and justifiable Share Prices are especially difficult to determine today, especially in light of the following:
Off the books liabilities: Arcane and complicated accounting rules leave “loopholes” for certain Off the Books Actual or Contingent Liabilities, which can thus be left unrecognized at the discretion of Financial Officers.
Toxic OTC derivatives: Often appearing where one would least expect them. Deepcaster and a few others have extensively documented the dangers of OTC Derivatives (now, about $600 TRILLION! In toto) which Warren Buffet has called “toxic.” But part of the problem is that they show up in the most unlikely places. For example, earlier this year we called attention to Bristol Myers Squibb which had to take a multi-million dollar writedown due to their Toxic OTC Derivatives. How many responsible investors would, or could, have known in advance that a leading company in the Pharmaceutical Sector would be vulnerable to, and suffer losses from, the Toxic Derivatives Disease? See Deepcaster’s July 2008 Letter entitled “Market Intervention, Data Manipulation Still Accelerating, Increasing Risks, The Cartel End Game and Latest Forecasts for Gold, Silver, Equities, Crude, U.S. Dollar and Treasuries” at www.deepcaster.com.
Dark Liquidity: Estimates are that over 10% of all Market Transactions by Value occur privately -- i.e. outside of public markets in Dark Liquidity Pools. That means that few, if any, know (apart from the parties to a particular transaction) what the transactions are, the strength of the parties and counterparties, and many other essential factors affecting the values of the assets involved. How does one properly value such assets or, for that matter, the companies engaged in such transactions -- see Deepcaster's Alerts "Derivatives, Dark Liquidity and Increasing Systemic Risk" and "Protecting Profit From 'Dark Liquidity' & Other Systemic Risks" contained in the Alerts Cache at www.deepcaster.com
The Dark Liquidity issue has serious implications for Investors, Traders and Markets. Consider:
As increasing volume moves to the so-called "Dark Liquidity in Dark Pools" the very concept of "public pricing" becomes suspect. How do we know that the so-called public price is the "real price" if we are seeing only half of the pricing.
To what extent, if at all, will regulators be drawn to and act regarding private “dark pools,” which by their very nature defeat the idea of a fair and level playing field in markets with transparent pricing.
Particularly with regard to small cap stocks where "big money" can move the stocks dramatically, how can the investor who does not have access to dark pools not be seriously disadvantaged because he does not know where, and when, buying, and or selling in very large amounts, is coming from?
Many large institutions, which employ “Dark Pools,” now use Order Execution Algorithms to mask their trading and/or to optimize trades at the "best price." Order Execution Algorithms used in Public Market Trading in conjunction with Dark Liquidity Pools in Private “Market” trading can be lethally disadvantageous for the average investor.
Fed & U.S. Government Establishments Favor Wall Street and
The International Bankers
It is clear that the Fed and U.S. Government Establishments favor Wall Street and the International Bankers. Consider this statement from Eric Hermann, President of FH International Assets Management.
“…the Fed’s “loose” monetary policy…extends artificially low cost funding in artificially large quantities to certain lucky beneficiaries (banks, investment banks). These happy few beneficiaries are not passing on their subsidized cost and availability of funds to their customers. We American taxpayers are instead facing expensive cost of borrowing and restricted amounts of available credit from these same financial institutions. In other words, the Fed is writing a massive check to the shareholders of the commercial and investment banks. This subsidy would produce an uproar if the government were transparent about its existence and size, but the Washington politicians cleverly characterize the transfer of wealth from the taxpayer to the shareholders of Fed supported financial institutions as “saving the financial system.”
Buy and hold increasingly fails: There are many reasons Buy and Hold increasingly fails, not the least of which is that in 2008, for the first time in thirty four years, the Equities Markets in the United States and in many markets elsewhere, have actually moved from being in a technical long-term Bull Trend to a long-term Bear Trend. Simple logic dictates that buying and holding in a downtrending market will not result in profits, but rather losses. But, more than that, there are other reasons 'Buy and Hold' increasingly fails, including horrible Fundamentals, Data Manipulation and Market Intervention.
Market Intervention: One example of the effects of Intervention is the recent takedowns of Gold and Silver. In recent years sagacious organizations and individuals have developed convincing evidence that a U.S. Fed-led Cartel* of Central Bankers and Allies and Factota regularly intervenes in all major Markets, including but not limited to Precious Metals, Equities, Crude Oil and other Strategic Commodities and, in many instances, actually controls Market Price.
*We encourage those who doubt the scope and power of Intervention by a Fed-led Cartel of Central Bankers and Allies to read Deepcaster’s January, 2008 Letter containing a summary overview of Intervention entitled “Market Intervention, Data Manipulation - - Increasing Risks, The Cartel End Game, and Latest Forecast” at www.deepcaster.com>LatestLetter. Also consider the substantial evidence collected by the Gold AntiTrust Action Committee at www.gata.org for information on precious metals price manipulation. Virtually all of the evidence for Intervention has been gleaned from publicly available records. Deepcaster’s profitable recommendations displayed at www.deepcaster.com have been facilitated by attention to these “Interventionals.”
Regarding The Motivation for the ongoing Cartel Market Interventions, consider that because the “Mortal Enemies” of The Central Bankers Fiat Currencies and Treasury Securities are The Monetary Metals Gold and Silver because the Monetary Metals are rivals for the Treasury Securities and Fiat Currencies for being the Ultimate Store and Measure of Value. Thus The Cartel expends considerable effort to periodically take them down.
For example, that traditional Safe Haven from inflation and risk, Gold, was, during the period of extreme Financial Market Turmoil in March, 2008, taken down in price from over $1000/oz to below $900/0z. Of course, the Marketplace Fundamentals at that time dictated that it should explode in price. In a non-manipulated market it surely would have.
Deepcaster and others, including the Gold AntiTrust Action Committee, have offered considerable evidence that the Cartel* of Central Bankers is the culprit behind these dramatic and devastating Takedowns. See Deepcaster’s July, 2008 Letter and Alert of December 25, 2007 in the Latest Letter and Alerts Caches at www.deepcaster.com.
Data Manipulation: Not only are the markets regularly intervened in, but also the typical "Official Data” on which long-time investors and traders have traditionally relied is just simply no longer reliable. It is generally acknowledged that the Official Figures for annual Consumer Price Inflation of 4-5% typically issued recently by Official Sources simply cannot be correct.
Our intuition that key Official Data are Bogus is correct. In fact, Real U.S. Consumer Price Inflation is running at about 12% annualized, Real Unemployment at about 14% annualized, and Real GPD dropping at a –2% annualized, all according to the very credible calculations of shadowstats.com.
Thus, monitoring the Interventionals and the Real Data, as well as the Fundamentals and Technicals, is essential today.
In sum, it is clear that since a Fed-led Cartel* of Central Bankers has been regularly intervening in all of the major markets including, but not limited to, Gold, Silver, Equities and Crude Oil, failing to take account of the “Interventionals” and the Real Data can be lethal to profitable investing and trading.
Therefore, Strategies for Profiting and Protecting Wealth today should include:
Taking account of Interventionals and Real Data as well as Fundamentals and Technicals.
Avoiding the trap of investing in companies whose Earnings Per Share have been manipulated and/or which are vulnerable to “Off the Books Liabilities,” and/or Toxic Derivatives. Of course, this is very hard to know. Therefore, consider using Exchange Traded Funds (ETFs) and Exchange Traded Notes (ETNs). Fortunately, today there are increasing numbers, indeed a few hundred, of ETFs and ETNs, which provide opportunities to “play” Sectors on both the Short and the Long side. Some of these funds even offer double leverage.
The advantage of using Sector ETFs is that they tend to minimize the worst company performances. Deepcaster has recommended several Exchange Traded Funds in the past and expects to do so again very soon.
Recognizing that the “Buy and Hold” strategy increasing fails, as explained above. The Eminence Grise of Newsletter writers, Harry Schultz perhaps put it the best when he recently stated that “buy and hold no longer works anymore, even with Gold.” Therefore, "long-term" Investors must adopt some of the strategies of Traders. For example, take profits when you have them.
Educating yourself about the realities of the marketplace using Alternative Data Sources such as Deepcaster, Gold Anti-Trust Committee (www.gata.com), and shadowstats.com, for example. Gathering and staying attuned to Authentic Information regarding the marketplace can save one much financial grief and position one for profit.
Tracking the Interventionals daily, as Deepcaster does, as well as the Technicals and Fundamentals. Tracking the Interventionals daily can often, but not always, give one excellent clues about The Cartel’s next likely Interventional Moves. Such clues which are essential to preserving wealth and making profits. Deepcaster’s recent tracking of The Interventionals, for example, has facilitated his making several profitable recommendations listed at www.deepcaster.com.
Being prepared to go both long and short Major Market Sectors - - long near the bottoms of Interim Takedowns and short near Sector Tops. The Interventionals are essential in helping identify these approximate tops and bottoms.
Being aware of the overall Geopolitical Landscape in order to gain an adequate understanding of how that Landscape might affect the present and future direction of the markets and the Interventionals by the Cartel. The Cartel is a "political animal" as well as a financial one as Deepcaster describes in his July Letter "Market Intervention, Data Manipulation Still Accelerating, Cartel End Game Threatening" found at www.deepcaster.com. It is essential that one understand the motivations of the major players in the market and the resources at their disposal.
For example, a Major Motivation of the U.S. Federal Reserve and other Central Banks is the protection and enhancement of the legitimacy of their Treasury Securities and Fiat Currencies as Measures and Stores and Value. Therefore, one can understand that one of their Major Goals is to de-legitimize Gold, Silver and the Strategic Commodities, including especially Crude Oil, as Stores and Measures of Value. With this in mind, the periodic attempted takedowns of Gold and Silver become understandable. Such an insight applied daily to the market can result in a tremendous edge in understanding market performance, present and future.
Moreover, regarding the Assets at The Cartel’s disposal, if one tracks the Repurchase Agreement Pool daily, as Deepcaster does, and is aware of deployment of OTC Derivatives contracts outstanding as well as being aware of the other Interventional tools which The Cartel has at its disposal, then one gains a considerable edge. Indeed, Deepcaster’s profitable recommendations displayed at www.deepcaster.com and its Forecasts have all been facilitated by attention to the Interventionals.
Consider just one example. If one visits the Bank for International Settlements (the Central Bankers Bank) website (www.bis.org) and follows the path Statistics>Derivatives>Table 19 and following, one can see the entire range of trillions of dollars worth of OTC Dark Liquid Derivatives (nearly $600 Trillion as of December, 2007) available for use in Market Manipulation.
For example, over $9 trillion in OTC Derivatives was available for Commodities price manipulation alone as of December, 2007 - - a large chunk of these are available to manipulate the Crude Oil price. Also, as of December 2007, something in excess of $56 trillion in OTC Derivatives were available for Foreign Exchange Price Manipulation, and a whopping $393 trillion in OTC Interest Rate Contracts were available for Interest Rate Manipulation all along the Yield Curve and not just at the short end.
Of course, Fundamentals and Technicals still do matter, since The Cartel would lose considerable clout and effectiveness if its machinations were broadly exposed, or if they flew directly in the face of overwhelming Fundamentals. Therefore, it makes sense that The Cartel would create and/or use Fundamental and Technical Patterns as “cover” and as occasions for Market Intervention (or as "lures" to get savvy investors and traders "offside") and would also use or create geopolitical events to achieve the same ends.
Indeed, the actions of The Cartel must be fairly plausible in order to maintain "Plausible Deniability.”
Even so, there are times when other Cartel Concerns trump plausibility and these are manifested in market anomalies. For example, consider the period when a Financial Crisis came to a head in the Bear Stearns collapse and “buyout” in mid-March, 2008. In this period of Great Financial Stress in the markets, Gold and Silver, instead of reflecting this crisis by skyrocketing up (which would have happened in a normal non-manipulated market) was taken down substantially.
Such developments should be a lesson to the wise and open-minded that something more is going on in the Major Markets than Normal Market Action. If that recognition is reflected in attention paid to the aforementioned principles, it can result in achieving a Profitable Refuge from Data Manipulation and Market Intervention.
siliconvalleycoins.com
Ned Schmidt
food for thought...and ample window dressing.
roadrunner
Here are a few reasons just for today...
Canada Lost 55,200 Jobs in July
China Trade Surplus Likely to Narrow for Fourth Month
Faltering Baltic Economies Start to Slow EU's Fastest Inflation
Putin Says `War Has Started,' Georgia Claims Invasion
RBS Cuts $208 Billion of Assets; Bank Got `Too Big'
European Central Bank council member Nout Wellink said the euro-region economy ``deteriorated pretty quickly in the second quarter'' and growth ``won't look that good
Italy's Economy Unexpectedly Shrinks; Nears Recession
Japan Bankruptcies Climb to 5-Year High as Developers Collapse
Japan Economy Probably Shrank as Recession Looms
Moody's Investors Service said it may reduce Argentina's debt rating outlook from positive because the government's underreporting of inflation ``raises serious questions about their willingness to pay.''
The big drop in the Euro today was on technical factors. As I mentioned earlier in the week, watch for a break of 155. Traders all across the globe are looking at the same info. It doesnt take GS or MS to start selling, selling just happens.
The dollar still has not broken its 6 year downtrend and bear market rallies are usually very violent. Only time will tell if the dollar rally continues. In the meantime be prepared for much more volatility in currencies which should lead to increased volatility in PMs. Sounds like it could be a lot of fun to me.
Knowledge is the enemy of fear
"There will be less speculative hands around for the next up cycle."
Well, when you think about it, a couple of weeks ago there was a congressional hearing on manipulation in the oil bidness and commodities and maybe they got to talking and got with their BS, JPM, etc buddies and maybe they said "Hey, lets toast all the USD shorts, all the commodity paper longs on margin, and let's just toast anybody that's leaning out too far. There are way too many hacks out there with this mortgage stuff an all; it looks bad when this happens, too many paper heros, we really need to tighten this game up a lot." (The sound of a couple of phone calls followed by a flushing sound.)
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Canada Lost 55,200 Jobs in July
China Trade Surplus Likely to Narrow for Fourth Month
Faltering Baltic Economies Start to Slow EU's Fastest Inflation
Putin Says `War Has Started,' Georgia Claims Invasion
RBS Cuts $208 Billion of Assets; Bank Got `Too Big'
European Central Bank council member Nout Wellink said the euro-region economy ``deteriorated pretty quickly in the second quarter'' and growth ``won't look that good
Italy's Economy Unexpectedly Shrinks; Nears Recession
Japan Bankruptcies Climb to 5-Year High as Developers Collapse
Japan Economy Probably Shrank as Recession Looms
Moody's Investors Service said it may reduce Argentina's debt rating outlook from positive because the government's underreporting of inflation ``raises serious questions about their willingness to pay.''
Yup, and there's a similar negative-dollar list that could be published every day as well. None of those items would have possibly accounted for the massive dollar rise. Since when does our dollar move so drastically to relatively minor foreign news? It doesn't even fall much on major US news....such as a BSC failure (lol). More than likely the PPT orchestrated a move the week to prop up the dollar and take down gold. The dollar moves when the PPT wants it to move. It's that simple. It must be getting very serious on the derivatives and mortgage side if they needed to turn the dollar up. There was no positive news imo unless Fannie and Freddie falling 20% or more and losing billions is good news. You remember them, they were "rescued" recently and everything was back to normal.
The US is losing 100,000-200,000 jobs a month if you extract the bogus birth death model inputs. As it is, the model forecasts ave monthly losses of 50K-75K.
That being said, after a ton of reading on both sides of the isle, I think that the below article and writer has taken a fairly unbiased, objective and fact based look into the grandest of consipracy theories, the gold cartel.
One could simply call the gold cartel the finanical backers of the FED. Their goal is to make all the money. It's no secret that gold is the anti-fiat money. Whether conspiracy or not, the manipulation of the currency, metals, and stock markets is pretty hard to ignore.
roadrunner
increase in the value of the dollar and the drop in gold
are all connected and involved with the upcoming National
Elections. Can you say MANIPULATION, on a world wide scale?
Nothing seems normal, nothing seems to be following the rules.
Camelot
The dollar rose huge today because of the massive support break of the Euro. The list of negative global news today is not the reason for todays dollar rise, but the culmination of months worth of negative news finally broke the Euro's back. Bear market rallies are always very violent. This, and the technical support break is the reason for the dollars sharp rise. It is not the PPT or DDT or any other mythical entity. The failure of gold to break new highs with the "insolvency" of FRE and FNM, when all the newsletter writers were saying "this is it, this is the big one", should have been a warning that gold had lost some luster. It may shine again, but for the time being--perhaps several months or quarters, gold is dead. It will however make a great trading vehicle, but the buy and hold type will most likely be very disappointed.
Perhaps nothing has improved the dollars fundamentals, but many cracks(canyons) have opened in other currencies. And no matter how much supermodels despise the dollar, when the $hit hits the global fan, the world still knows the USA is the greatest country and they will seek out its dollars.
Knowledge is the enemy of fear
Still, nothing was fixed in the Euro, Dollar, or other fiat currency. The end result is still going to be the same. I can't see gold languishing for quarters considering the depth of financial problems out there. May 2006 to August 2007 had relatively little "bad" news to push gold along. August 2008 to May 2009 is going to look like a train wreck in comparison. With all the FED bailouts of the past 5 months, it would be hard to convince any one in the world of future strength in the dollar. I could however see the major banks and brokerages, as well as FED-connected money, buying into a rally they helped create. That makes sense.
roadrunner
Knowledge is the enemy of fear
<< <i>The Euro's contribution to the USDollar index is 57%. So the crazed buying of TRILLIONS in dollars this past week had nothing to do with the rise in the dollar?
Still, nothing was fixed in the Euro, Dollar, or other fiat currency. The end result is still going to be the same. I can't see gold languishing for quarters considering the depth of financial problems out there. May 2006 to August 2007 had relatively little "bad" news to push gold along. August 2008 to May 2009 is going to look like a train wreck in comparison.
roadrunner >>
Perhaps gold is a forward looking indicator. We, ourselves, wrote of the impending crisis looming in the US real estate market in 2006. And gold responded as it should have. Perhaps the worst is over for the US real estate market and gold is responding accordingly.
Knowledge is the enemy of fear
6 to 7 years. And so with far worse fundamentals than any time since the Great Depression we've fixed it this time in 2 yrs? Not likely.
Again, I can buy the PPT driving their own "dollar recovery" over the long term trend line, but on what fundamentals will it stay "recovered?" Who will pay for the emperor's new clothes? How has the debt situation improved? Are banks going to stop failing now?
It could also be that this was the final dollar blowout to touch the trend line prior to resuming a downward course. Fundamentals would point to that as would the past 6-7 years. But I must admit that the dollar was loathe to give up the 0.80 level a while back and continued to muster rally after rally back towards 0.90. But it seems like ages since that kind of strength/manipulation was shown. This time the FED is loath to give up 0.70 or anything too close to it. The trend line you posted was heavily broken to the upside in 2005 and 2006, yet only represented reprieves on the way down. Calling what we have now a recovery or a new dollar bull is a tad premature.
roadrunner
<< <i>Brian,
The dollar rose huge today because of the massive support break of the Euro. The list of negative global news today is not the reason for todays dollar rise, but the culmination of months worth of negative news finally broke the Euro's back. Bear market rallies are always very violent. This, and the technical support break is the reason for the dollars sharp rise. It is not the PPT or DDT or any other mythical entity. The failure of gold to break new highs with the "insolvency" of FRE and FNM, when all the newsletter writers were saying "this is it, this is the big one", should have been a warning that gold had lost some luster. It may shine again, but for the time being--perhaps several months or quarters, gold is dead. It will however make a great trading vehicle, but the buy and hold type will most likely be very disappointed.
Perhaps nothing has improved the dollars fundamentals, but many cracks(canyons) have opened in other currencies. And no matter how much supermodels despise the dollar, when the $hit hits the global fan, the world still knows the USA is the greatest country and they will seek out its dollars. >>
Well said. It's very early in this dollar rally, but it appears that WW investors have reached the conclusion that the slowdown is global, and not an isolated US problem due to the mortgage bailout, credit crunch, bank problems, etc. And that makes the dollar the safe haven once again. If this trend holds, the USD will continue to strengthen, hurting commodity prices across the board, at least in the short term.
While the dollar might have rallied strongly against the euro, I don't see a fundamental reason for the dollar to have rallied against gold.
Do you?
I knew it would happen.
<< <i>it appears that WW investors have reached the conclusion that the slowdown is global, and not an isolated US problem due to the mortgage bailout, credit crunch, bank problems, etc. And that makes the dollar the safe haven once again. If this trend holds, the USD will continue to strengthen, hurting commodity prices across the board, at least in the short term.
While the dollar might have rallied strongly against the euro, I don't see a fundamental reason for the dollar to have rallied against gold.
Do you? >>
Gold, like most commodities is priced in dollars. So there's an inverse relationship, and a rally in the dollar will cause a decline in the price of gold.
Now of course all of these investors with this great and seemingly so justifiable conviction, will act and usually with gusto. Can you say dot com, quit your job day trader?, or genius house fliiper, that bought not one but five houses at the top..... and once they act the die is cast. Once fully sold a seller can only become a buyer and and once fully commited a buyer can only become a seller. I have no idea if the recent C change in the markets is a short or long term phenomena, but the market sentiment definitely foreshadowed a change in direction
So yes, I do think markets are manipulated, but primarily by the us not the them
BTW, I think this is great thread with a lot of great point counter point, with many bright people.
RR. do you know what time frame JS is calling short term? I don't have an extra million lying around
As we have many times in this thread when something drastic happens, we must ask ourselves, just exactly what has permanently changed?
This week nothing was permanently changed; there was just more bad news away from our shores.
A couple of years ago I posted an email discussion I was having with Peter Schiff. My point to him at that time was I believed that many of the stronger currencies including the Euro would have many of the problems the dollar was having, since most of the worlds “strongest” currencies were also from socialist countries with large baby boom populations.
Although I do like to have some investments in companies outside of the U.S., I believe this paper, and electronic money, system we have developed is a worldwide problem, and still believe that paid for, hard assets, in ones possession is the only safety during the coming years.
We are entering a period in all markets where the speculators and the manipulators will move markets on a weekly, or even daily basis, in extreme swings. The large banks, hedge funds, insurance companies, and government players are desperate for profits and will be hunting heads in any market they feel they can make quick money.
All of the global markets are moving down and there will be some good bargains to be had, but day trading is going to get even more dangerous, since markets will not move on fundamentals, but strictly on profit potentials in short term swings.
I think long term is now 24 months, and those that want to invest should buy distressed investments with good fundamentals and not fall in the trap of worrying about short term drops.
In the next two years for example we might see oil $90 and then back to $150.
Over the next few months the dollar will drop once again as much of the profits American companies are making come from overseas now, and these profits disappear with a strong dollar.
Forget what comes out of the mouths of politicians, the only way we can pay our debts is to inflate the money supply, and sell goods to foreigners, and that means a cheap dollar!