Even with the big "move" in the dollar up to $1.50 against the Euro, the dollar is still much weaker than it was just one year ago ($1.37). Link.
We'll see if the trend persists... it was only six years ago that the dollar was above parity with the euro. Nothing is forever, not even dollar weakness. Though the euro economies are weakening, let's not forget the political aspects. With a presidential election in 3 months and the likelihood of a better US image abroad after January 2009 - no matter who wins - the elements are in place for a dollar rally. If Obama gets in, I would expect a big dollar rally initially combined with a lot of rah-rah news stories about how "America is back," blah blah blah.
"Men who had never shown any ability to make or increase fortunes for themselves abounded in brilliant plans for creating and increasing wealth for the country at large." Fiat Money Inflation in France, Andrew Dickson White (1912)
...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.
What the WW investors don't appear to be buying into is the stagflation thing. Hard assets will continue to perform long term in this environment. Of course they will have mini-correctional waves along the way. Let's not forget the 50% correction in gold that occurred from 1974-1976 that fueled the final cycle to an 8X increase in the pog. As long as the FED is pumping and bailing out $TRILLIONS, stagflation will continue (ie deflation and inflation of various assets simulataneously).
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?
He's still hanging on to making $1200 by years end, though suggests that a 90 day delay just occurred. He hasn't changed his $1500 prognosis by January 2011. I don't think he ever expected $1500 in the near term and never publically stated that....even if he secretly believed otherwise. His bet was for $1200 this year with a strong pull back (even back under $1000). $1500 was always a multi-year projection. In fact I think the blog postings of JS and other gold bulls now hinder the rise in gold. TPTB are adept at reading what is being talked about on these blogs and no doubt take advantage of the bullishness to crack them right across the face at the most opportune time. I think the cartel loves to slam it in Sinclair's face just as he appears to be taking a stance on gold. 2 weeks ago he said he was placing buy orders staggered down to $940 and expected not to be able to buy until $940. Well if he loaded up at $940 he took a whacking and telegraphed his moves directly to the cartel. It would be no different that CU Forum members posting publically about the coins they are going after, what they will pay, and what they think it will be worth in a few months or years. You don't see that happening and for good reason. The blogs would be best served if they kept their plays under wraps. It's to the point that when the blogs see no "logical" downside, that a run is just completing. Cliff Droke called it right once again. All the other writers on Kitco that were calling a bottom 2-4 weeks ago got their butts kicked. Maybe they work for Kitco.
most of you guys know more than i have forgotten, yet
a step onto a (very) small soapbox................it is one thing to say the sky should be falling and another to look up and see it still there.
Au "should be trading at $2k compared to 1980" (a common proclamation) is probably good enough reason to begin to doubt some of the extreme bullish views. when Sincliar backed away from his '$1200 in late 08' prediction and added another 90 days to it...he truly must not be taking some market force into account, or ignoring it's influence, ie no matter how much you (third person) "hate" the "PPT" or the naked shorts or whatever...their influences on the markets seem to trump all the points in his (Sincliar) latest email blog. RR---i agree he telegraphed his thoughts on what he was doing---- something i was a wee bit surprised at, if he is one of the forward thinkers of gold....--
also (still on the soapbox) the drop in gold does not mean that the world economy problems are over and the birds are chirping and all is rosy. we all still sit in a precarious postion. our world 'experiment' with fiat money has gone through some cycles and this is one that has not truned, yet.
it's also possible that all the dollar propping will come crashing down---and the euro drops---and oil prices rise----and inflation goes bonkers---then gold will be precious.
if you have the physical stuff all paid for and tucked away somewhere this news this week is kind of an eyebrow raiser. the ones who went long recently got killed.
stepping off the box
now some coffee, the dog is snoring next to me after her morning breakfast...time for mine.
Welllllllll, did you see the Opening Ceremony for the Olympics last night? Something changed; Welcome, China! Sleep no more you giant.
On other fronts, this is a nice time to not prognosticate and to just lick your wounds if you have any, count your profits if you have any, put away your books, and pick your weapons for future battles. All God's children need to rest every now and then. Even chaos will appear quite rational after the fact, after you can track what happened and how it happened but during periods of chaos, cause and effect are not even imaginable. No doubt everyone has an opinion of what and why but we will not actually know the real reasons until later. As mentioned in this thread, future assumptions are already factored into the markets and what folly those assumptions may well be with the 300 pt swings we are seeing almost daily in the DJIA. I have a small 50 cent stock that I have been buying piecemeal over the last year or so. It has been within a few cents of 50 cents for most of the year. Wednesday it jumped to $2.81 and half got sold from my little pile, then it dropped to $1.60 over the next two days. Chaos...? Moving averages would be the sideline to be watching from, prognostication is futile for the moment with the exception that current circumstances have not changed; keep your eye on the object ball, do not be distracted from your game, be ready to take advantage of good situations but not anxious to rush into the storm.
I remain very optimistic for the folk in this thread, prosper...
<<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.
dac, the inverse coorelation between the dollar and the price of gold is not a fundamental reason for anything. I am referring to classical market analysis in which a fundamental variable is a basic influence on the price of the asset, such as market demand, or supply.
it's also possible that all the dollar propping will come crashing down---and the euro drops---and oil prices rise----and inflation goes bonkers---then gold will be precious.
if you have the physical stuff all paid for and tucked away somewhere this news this week is kind of an eyebrow raiser. the ones who went long recently got killed.
57loaded, for most Americans, a strong dollar is absolutely needed to maintain a standard of living that we've worked hard to achieve. There's nothing I would've wanted more than a strong dollar - it's STILL in my best interest to have that.
But out-of-control government spending on expensive military, social and foreign policy programs works against the average wage earner who diligently saves. Monetary inflation, which the government uses to fund all that stuff, and to bail out bankers - is killing every savings plan that doesn't include a counterbalance. In other words, the government is working against honest citizens.
We couldn't afford all that stuff, even if we did want it. The government doesn't produce anything - it only takes and spends. When it takes more, you are supporting more stuff that you have no say in how it is spent, even to the point of spending your money on things that you vehemently disagree with.
But I digress. First, it was only the government creating money out of thin air. Now, they've let all the huge banks do the same thing, and when the "assets" were revealed to have no value, the government has now PAID THEM BACK for their "losses". All of those companies - JP Morgan, Morgan Stanley, Goldman Sachs, IndyMac, Fannie Mae, Freddie Mac et al - and next it will be the automotive manufacturers - all of them ARE PRIVATE FIRMS - they make the big bucks when they take the risk and win; they should lose their money if they take the risk and lose - that's how capitalism works. That's what gives people incentive to achieve and innovate.
Our dear old politicians are giving public tax money to support private FOR PROFIT firms who have been caught in their own kiting schemes for billions, and have mismanaged the mortgage industry loan system so badly that it's going into multiple trillions. Guess who ultimately loses, bigtime? (Hint, it ain't Hank Paulson, aka Goldman Sachs). All of that newly-created money will ultimately destroy the dollar. If they are doing the same thing in other countries, the dollar might look ok in comparison to the zloty or pound or franc, but it will be worth-less anyway. Such is the sleight-of-hand that Paulson and his buds are accomplishing with your tax money.
This is MUCH bigger than Enron, WorldCom or Global Crossing. And you ask me why I don't trust the dollar? Or the banks? Or the politicians? Let me count the ways. Ok, enough ranting for now - it really does get repetitive.
Q: Are You Printing Money? Bernanke: Not Literally
small 50 cent stock that I have been buying piecemeal over the last year or so. It has been within a few cents of 50 cents for most of the year. Wednesday it jumped to $2.81
Now THATS what we be talkin' 'bout!! Schweet!!!
for most Americans, a strong dollar is absolutely needed to maintain a standard of living that we've worked hard to achieve. There's nothing I would've wanted more than a strong dollar - it's STILL in my best interest to have that.
The strong dollar we had during the 90's is exactly the reason why so many jobs went overseas.
An article from Market-watch.....
Investors watching the dollar's dramatic rally at the end of this week could be forgiven for skeptically wondering, is it for real, and is it sustainable? The good news for greenback holders (and anyone mulling that long-postponed European vacation) is that the answer to both questions is affirmative, analysts said. "Yes, it's for real," said Marc Chandler, global head of currency strategy at Brown Brothers Harriman. "The U.S. multi-year down trend is over. The process we described as 'carving out a bottom' has been completed."
The dollar hit a bottom last November against the British pound sterling and the Canadian dollar, as the U.S. Federal Reserve expanded its lending facilities and the central banks of England and Canada prepared to cut their respective interest rates. It reached its nadir against the Japanese yen and the Swiss franc in March, when the Fed responded to Bear Stearns with an emergency discount rate cut. It has now bottomed out against the euro as well, Chandler said. "Since reaching an all-time low against the major currencies in mid-March, the U.S. dollar has climbed 6%," wrote Sal Guatieri, economist at BMO Capital Markets, in a note to clients Friday. "The currency has seen several larger, temporary gains during its 38% slide since 2002, but this one could have legs." It seems like only yesterday - and in fact, it was only July 15 -- that the euro hit a new record high of $1.6036 -- its loftiest level since the single European currency began trading in January 1999. The euro's spike followed news of a possible bailout of U.S. mortgage giants Freddie Mac (FRE:Freddie Mac
on Friday, Europe's single currency, already under pressure following comments made Thursday by European Central Bank chief Jean-Claude Trichet, sharply extended losses, first in Asian trading and then in European dealings. Then in late North American trading, it broke below the $1.5000 level for the first time since February. See Currencies. "The euro, looking at a daily chart, looks a lot like a cliff diver. The only difference is that cliff divers eventually hit water," said Dale F. Doelling, chief market technician at Trends In Commodities. "This market has gone into a freefall after breaking its 200-day moving average yesterday and there seems to be no bottom to the euro," he said in emailed comments. The next support level, according to several currencies analysts, is at $1.4920.
Resilient after 'staggering body blows' Some analysts say the dollar's lackluster performance in July actually belied the strength of dollar fundamentals. The dollar "suffered staggering body blows in July with the collapse of IndyMac, the third-largest banking failure in U.S. history, and a near-death experience by mortgage giants Fannie Mae and Freddie Mac," David Watt, senior currency strategist at RBC Capital Markets, wrote in a note to clients earlier this week. But while the greenback "wobbled," he said, its resiliency lends support to the view that the dollar did in fact bottom in the first quarter of 2008. Indeed, the "body blows" weren't enough to make the U.S. Federal Reserve flinch. On Tuesday, the central bank's Federal Open Market Committee held its target for overnight loans at 2% and declared that the risks to the economy are now evenly balanced between a recession on one hand and higher prices on the other.
"The FOMC statement and the end to the Fed's recent rate cut cycle have played a major role in ending the dollar's decline," wrote Tony Crescenzi, chief bond market strategist for Miller Tabak & Co. On Thursday, the Bank of England and the European Central Bank also held pat on policy, but a string of dismal data in those regions suggests that growth fears might have the upper hand over inflation.
Other factors supporting the dollar include the narrowing yield spread between foreign government bonds and U.S. Treasuries, in response to signs of weaker growth abroad, Crescenzi said. "For example, the yield spread between Germany's 10-year note and the U.S. 10-year is today [Friday] at 33 basis points, a 36 basis-point drop from early July," he said. "Interest rate parity, which posits that interest rate spreads impact capital flows, has been an important influence on exchange rates over the past few years." He also cited the massive unwind of dollar-denominated commodity-linked trades, a factor which further fueled the dollar's rise.
On Friday, crude-oil futures closed at a three-month low of $115.20 per barrel on the New York Mercantile Exchange, down $4.82, or 4%, for the session, and 7.9% for the week. The Reuters/Jefferies CRB Index a benchmark gauging the prices of major commodities, fell 3% Friday, and 6.9% for the week. That put more downward pressure on the currencies of countries whose exports are heavily weighted in commodities, such as Canada and Australia. The commodity drop also gave the dollar buoyancy, because it is good for U.S. consumers, said Crescenzi. " The U.S. economic outlook has improved as a result of the drop in commodity prices and anything that helps U.S. consumers has the potential to help the housing sector and hence, U.S. financial companies," he said.
Welllllllll, did you see the Opening Ceremony for the Olympics last night? Something changed; Welcome, China! Sleep no more you giant
I couldn't believe it when they said it cost $300 million(10 times the amount of any previous Olympic ceremonies) for the ceremonies. Totally shameless. I have no interest or desire to watch these Olympics.
But out-of-control government spending on expensive military, social and foreign policy programs works against the average wage earner who diligently saves. Monetary inflation, which the government uses to fund all that stuff, and to bail out bankers - is killing every savings plan that doesn't include a counterbalance. In other words, the government is working against honest citizens.
Perhaps one of the reasons why Americans don't even bother to save anymore or at least in traditional savings accounts.
Yes, it's for real," said Marc Chandler, global head of currency strategy at Brown Brothers Harriman. "The U.S. multi-year down trend is over. The process we described as 'carving out a bottom' has been completed."
I'll take a flyer and take the counter bet. Just a hunch we've seen no bottom yet in the dollar trend. The charts show no such "carving" but merely a single blip upwards.
Some analysts say the dollar's lackluster performance in July actually belied the strength of dollar fundamentals.
What dollar fundamental strengths? Monstrous losses from Fannie, Freddie, GM, mono-line insurers, large Banks, insurers (AIG), etc. Those are the wrong kinds of "strengths" and those are just the early birds to the $62 TRILLION credit default swaps "party." Wait until the entire crowd shows up over the next 3-24 months. And then we have to deal with the other $400 TRILLION in OTC interest rate swaps. That will keep the party going into 2011. For now J6P is confusing the massive FED injections as some kind of "strength" that doesn't affect him.
"Perhaps one of the reasons why Americans don't even bother to save anymore or at least in traditional savings accounts."
Well, one thing I have noticed is that while one can characterize our dire straights nationally regarding personal savings, that does not apply across the board. Many people, mostly working stiffs I suspect, notice when their bank savings account is sucking and most of their tax money is going for BS instead of infrastructure and governance. Kind of like the guy that goes to the doctor's office and complains that "It hurts when I do that" and the doctor replies, "Don't do that, please see the lady on your way out".Those same people adjust and I suspect that many are using some type of alternate savings other than the 3% CD's or managed stock plans, I mean, those poor folk (me included) have been bleeding for a while now and you can only lose so much blood before you start feelin' weak. Look for these people to be saving fast and furious right now but it might be doubtful that they are putting their personal savings out where everyone can get a good look at it or the bank can just take it as part of an insolvency situation. Look for those people to carry only a house note and maybe a car note at a very cheap rate and other than that, they aren't really participating in the credit/banking markets. Fear not for the people that are paying attention and paying their own way, they will figure out how they can do the best and they will do that and I'm sure there are a lot of them (us). The financially competitive portion of the middle class is certainly under soime pressure but stupid they ain't. Maybe Sealey will start start making matresses with zippers, just for convenience. Noted...most of these people must be turning away from traditional savings accounts. Gold is good, cash is king, some things never change.
Kind of like the guy that goes to the doctor's office and complains that "It hurts when I do that" and the doctor replies, "Don't do that, please see the lady on your way out".
Don't laugh Hammerman, my primary care physician has done this to me more than once. One time I was complaining of getting light headed and dizzy when bending over or coming out of crouch. He told me to "stop doing that." Another time when I was experiencing chest pains for a week he told me he would set up a stress test in 2-3 weeks. When leaving his office that time I asked him if he should check my blood pressure before I leave (I kid you not).
<< <i>Kind of like the guy that goes to the doctor's office and complains that "It hurts when I do that" and the doctor replies, "Don't do that, please see the lady on your way out".
Don't laugh Hammerman, my primary care physician has done this to me more than once. One time I was complaining of getting light headed and dizzy when bending over or coming out of crouch. He told me to "stop doing that." Another time when I had chest pains for a week he told me he would set up a stress test in 2-3 weeks. When leaving his office that time I asked him if he should check my blood pressure before I leave (I kid you not). He took it and found it quite elevated. His comments: "well I guess it's time to get you on some BP meds."
“I couldn't believe it when they said it cost $300 million(10 times the amount of any previous Olympic ceremonies) for the ceremonies. Totally shameless. I have no interest or desire to watch these Olympics.”
Not to worry, pf70collector
America is paying for it! You did not think the Chinese were paying for all this show?
Oh and by the way they did a fabulous job spending our money!
Aug. 9 (Bloomberg) -- The Beijing Games opening ceremonies on NBC were watched by an average of 34.2 million people, the biggest U.S. NBC paid $894 million for U.S. rights to the Beijing Games.
<< <i> NBC paid $894 million for U.S. rights to the Beijing Games. >>
Most sporting events are paid for by those who buy cars in the US.
The networks act in collusion with the car companies to advertise during sporting events. There are no new cars available for sale in this country that aren't advertising so the first $4000 is what you pay whether you watch or not.
I don't watch the olympics either so don't know for a fact that the car companies advertise here but it's a pretty safe bet it will affect some product. Even if they don't we still know where NBC sports got their budget.
<< <i>Kind of like the guy that goes to the doctor's office and complains that "It hurts when I do that" and the doctor replies, "Don't do that, please see the lady on your way out".
Don't laugh Hammerman, my primary care physician has done this to me more than once. One time I was complaining of getting light headed and dizzy when bending over or coming out of crouch. He told me to "stop doing that." Another time when I was experiencing chest pains for a week he told me he would set up a stress test in 2-3 weeks. When leaving his office that time I asked him if he should check my blood pressure before I leave (I kid you not).
roadrunner >>
Those are good doctor stories, especially the one about the chest pains and hope you don't mind I add mine. I was told after my open heart surgery in 2005 that I also needed ( asap ) a right carotid endartectomy, a right femoral bypass, a left common illiac stent. ASAP mind you and also that the chelation I was considering doing was "quackery".
Several years have gone by, I've had about 75 intravenous "quackery" chelation sessions and the results? Well the open heart surgery was a FAILURE, yes yes even the illustrious cardiologist admits that the bypass was a failure, but because of the chelation "or something", my heart is fine, and "somehow" the blockage in the right carotic has gotten considerably less ( 30% ) and so there's "no surgery even considered", and the blockages down in the legs which did cause excrutiating agony after about a 1/10 mile? Well now I speed walk a couple miles at an incline on the treadmill, so while there's still plaque in there no doubt, "somethings" changed and it sure as heck ain't from any surgeries. Lastly I have not done ANY of the statins, beta blockers or any of the crap the cardiologist gave me in a little bag several times. Just the quitting of that evil legal drug, dietary changes, excercise ( which I admit brought considerable agony to get to the level I'm at but now is not agonizing at all and frankly pretty cool to walk around the neighborhood with my Wife at a brisk enough pace to where she says "slow down a little"! ), vitamins , and chelation.
Let the foreigners come and buy the debt! Let them buy every housing project out there...It is good for us that they do....it is theirs on paper but if problems arise...It really is always ours! I would like to see them come and fight for it!
The banks will be putting these auctuion rate securities on their books at about 93-94c on the dollar. After a little negotiation with the underlying municipalities, which will generate fees for the banks, there will be little to no financial impact.
In a way it will free up cash for people to buy gold.
They're buiding SIDEWALKS along the Tamiami Trail here in Port Charlotte. Sidewalks. They say they are doing this so "we" can walk along the fricking highway and shop.
Walk along a 45-60 MPH highway to shop.
They still haven't cleaned up the "Murdock Village" fiasco that's put this little place in debt for 100 Million dollars. They had to evict many people from their homes in order to create this fiasco.
Maybe spending more and more of what we don't have is the answer?
<< <i>I wonder if Hank Paulson's "pre-signation" is a harbinger that this whole mess is going to get alot messier?
Get out while the gettin's good........... >>
I dont believe Paulson is buddy-buddy with McCain, and he ceratinly would never work with Obama. I see no reason for him to continue either. IMHO, he's done a great job considering what he was handed.
<< <i>PM bulls do not want to see gold and silver close at their current levels. Both are under their 200dma and momentum is turning sharply lower. Possible double top in gold if it breaks $850, which would imply a target of $700. Strong support at $800 would have to be taken out first.
>>
There goes $850. Lets see where it closes today. And we already saw what happened when silver broke the $16 support area.
That's amazing. Hurricanes, unrest in the Caucasus, inflation, and nothing seems to slow the slide of commodities. The obvious question is whether it's the end of the bull, or just a monster correction.
<< <i>That's amazing. Hurricanes, unrest in the Caucasus, inflation, and nothing seems to slow the slide of commodities. The obvious question is whether it's the end of the bull, or just a monster correction. >>
I'll vote for the "monster correction" along with the end of the bull. Just remember, the pendelum has a tendency to swing back & forth. It b a swingin back, but in time, will swing forward again.
"Bongo drive 1984 Lincoln that looks like old coin dug from ground."
<< <i>That's amazing. Hurricanes, unrest in the Caucasus, inflation, and nothing seems to slow the slide of commodities. The obvious question is whether it's the end of the bull, or just a monster correction. >>
There was so much momentum playing, margin investing and speculative froth that even events that should be bullish for hard assets can't stop the slide. I suppose it may limit how far the slide may go, but as recently as late June most commodities were so far ahead of themselves that a sharp correction at some point was inevitable even if the longer-term fundamentals remain strong.
Please assist with information. When was it posted on this Thread, in the last 2 monts, that Gold would drop to $825 or lower and the reasons why? I can't seem to find it. Respectfully, John Curlis
<< <i>That's amazing. Hurricanes, unrest in the Caucasus, inflation, and nothing seems to slow the slide of commodities. The obvious question is whether it's the end of the bull, or just a monster correction. >>
$14 is very strong support in silver. 16.50 is (was) very weak support and we'll probably go back to it before it makes an attempt to get under 14.
There has been talk of as low as $700 but that may be an uninformed opinion because I saw an article that stated that it costs $800 today to get 1 oz out of the ground and assayed. So one would not think that it could go lower than $800 plus what ever it takes to get it to market? Plenty of predictions of lower commodities have been all over the news and here over the last couple of weeks but I don't think anyone is brave enough to put up a number. It seems that $835 was the number everyone was looking at for a bottom but it's a little below that now @ $827. Good luck all!
I think it is the Govt's best interest to talk down gold/oil speculation while maintaining a weak dollar policy. The Europeans are learning to do the same. They recently said they are going to a weak Euro policy, so now the Dollar/euro will appear to strengthen, but it is only because the euro is weakening.
<< <i>Please assist with information. When was it posted on this Thread, in the last 2 monts, that Gold would drop to $825 or lower and the reasons why? I can't seem to find it. Respectfully, John Curlis >>
About two years ago in this thread I suggested that silver would have a hard time taking out $14 on the way up and probably would never get back lower.
1. Gold was at 675 this time last year. That's a 21% increase to today. 2. Silly to talk about a bubble bursting after one month of data but some do it anyway.
<< <i>There has been talk of as low as $700 but that may be an uninformed opinion because I saw an article that stated that it costs $800 today to get 1 oz out of the ground and assayed. So one would not think that it could go lower than $800 plus what ever it takes to get it to market? Plenty of predictions of lower commodities have been all over the news and here over the last couple of weeks but I don't think anyone is brave enough to put up a number. It seems that $835 was the number everyone was looking at for a bottom but it's a little below that now @ $827. Good luck all! >>
I'm not sure that the cost of production necessarily determines the price. If the price stays below cost for some length of time, that would discourage production eventually depressing supply. But in the interim, the market will determine how low (or high) it goes.
1. Gold was at 675 this time last year. That's a 21% increase to today. 2. Silly to talk about a bubble bursting after one month of data but some do it anyway.
Carry on. >>
Some people prefer to sell at tops, rather than after 20% drops.
1. Gold was at 675 this time last year. That's a 21% increase to today. 2. Silly to talk about a bubble bursting after one month of data but some do it anyway.
Carry on. >>
Some people prefer to sell at tops, rather than after 20% drops.
Hope you dumped your ND$ at .80 >>
Some people realize a top can't be determined based on one month of data. I bought NZD years ago and am far ahead (especially considering the nice interest rate) but thanks for your concern.
A number of people here (such as MoneyLA) called for a descent to $810 or lower back in the April-June time frame. It appears they will get their chance to buy gold at those levels. While gold has fallen considerably, some of the prized gold miners like Yamana, AEG, Goldcorp, Barrick, Freeport, and Newmont have been hammered by as much as 50% since the March peak. That is some serious hammering. Some of these companies are now selling for a fraction of their stated reserves.
One option from here is to liquidate some regular issue US coins that have done very well the past 6-12 months and consider buying back into gold/silver as the rout gets nearer the end.
<< <i>One option from here is to liquidate some regular issue US coins that have done very well the past 6-12 months and consider buying back into gold/silver as the rout gets nearer the end. >>
I've tried that before and end up missing the big surge.
I don't care what the price of "paper" metals is. It only matters if you need to buy or sell.
Comments
We'll see if the trend persists... it was only six years ago that the dollar was above parity with the euro. Nothing is forever, not even dollar weakness. Though the euro economies are weakening, let's not forget the political aspects. With a presidential election in 3 months and the likelihood of a better US image abroad after January 2009 - no matter who wins - the elements are in place for a dollar rally. If Obama gets in, I would expect a big dollar rally initially combined with a lot of rah-rah news stories about how "America is back," blah blah blah.
What the WW investors don't appear to be buying into is the stagflation thing. Hard assets will continue to perform long term in this environment. Of course they will have mini-correctional waves along the way. Let's not forget the 50% correction in gold that occurred from 1974-1976 that fueled the final cycle to an 8X increase in the pog. As long as the FED is pumping and bailing out $TRILLIONS, stagflation will continue (ie deflation and inflation of various assets simulataneously).
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?
He's still hanging on to making $1200 by years end, though suggests that a 90 day delay just occurred. He hasn't changed his $1500 prognosis by January 2011. I don't think he ever expected $1500 in the near term and never publically stated that....even if he secretly believed otherwise. His bet was for $1200 this year with a strong pull back (even back under $1000). $1500 was always a multi-year projection. In fact I think the blog postings of JS and other gold bulls now hinder the rise in gold. TPTB are adept at reading what is being talked about on these blogs and no doubt take advantage of the bullishness to crack them right across the face at the most opportune time. I think the cartel loves to slam it in Sinclair's face just as he appears to be taking a stance on gold. 2 weeks ago he said he was placing buy orders staggered down to $940 and expected not to be able to buy until $940. Well if he loaded up at $940 he took a whacking and telegraphed his moves directly to the cartel. It would be no different that CU Forum members posting publically about the coins they are going after, what they will pay, and what they think it will be worth in a few months or years. You don't see that happening and for good reason. The blogs would be best served if they kept their plays under wraps. It's to the point that when the blogs see no "logical" downside, that a run is just completing. Cliff Droke called it right once again. All the other writers on Kitco that were calling a bottom 2-4 weeks ago got their butts kicked. Maybe they work for Kitco.
roadrunner
*8102
a step onto a (very) small soapbox................it is one thing to say the sky should be falling and another to look up and see it still there.
Au "should be trading at $2k compared to 1980" (a common proclamation) is probably good enough reason to begin to doubt some of the extreme bullish views. when Sincliar backed away from his '$1200 in late 08' prediction and added another 90 days to it...he truly must not be taking some market force into account, or ignoring it's influence, ie no matter how much you (third person) "hate" the "PPT" or the naked shorts or whatever...their influences on the markets seem to trump all the points in his (Sincliar) latest email blog. RR---i agree he telegraphed his thoughts on what he was doing---- something i was a wee bit surprised at, if he is one of the forward thinkers of gold....--
also (still on the soapbox) the drop in gold does not mean that the world economy problems are over and the birds are chirping and all is rosy. we all still sit in a precarious postion. our world 'experiment' with fiat money has gone through some cycles and this is one that has not truned, yet.
it's also possible that all the dollar propping will come crashing down---and the euro drops---and oil prices rise----and inflation goes bonkers---then gold will be precious.
if you have the physical stuff all paid for and tucked away somewhere this news this week is kind of an eyebrow raiser. the ones who went long recently got killed.
stepping off the box
now some coffee, the dog is snoring next to me after her morning breakfast...time for mine.
Welllllllll, did you see the Opening Ceremony for the Olympics last night? Something changed; Welcome, China! Sleep no more you giant.
On other fronts, this is a nice time to not prognosticate and to just lick your wounds if you have any, count your profits if you have any, put away your books, and pick your weapons for future battles. All God's children need to rest every now and then. Even chaos will appear quite rational after the fact, after you can track what happened and how it happened but during periods of chaos, cause and effect are not even imaginable. No doubt everyone has an opinion of what and why but we will not actually know the real reasons until later. As mentioned in this thread, future assumptions are already factored into the markets and what folly those assumptions may well be with the 300 pt swings we are seeing almost daily in the DJIA. I have a small 50 cent stock that I have been buying piecemeal over the last year or so. It has been within a few cents of 50 cents for most of the year. Wednesday it jumped to $2.81 and half got sold from my little pile, then it dropped to $1.60 over the next two days. Chaos...? Moving averages would be the sideline to be watching from, prognostication is futile for the moment with the exception that current circumstances have not changed; keep your eye on the object ball, do not be distracted from your game, be ready to take advantage of good situations but not anxious to rush into the storm.
I remain very optimistic for the folk in this thread, prosper...
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.
dac, the inverse coorelation between the dollar and the price of gold is not a fundamental reason for anything. I am referring to classical market analysis in which a fundamental variable is a basic influence on the price of the asset, such as market demand, or supply.
it's also possible that all the dollar propping will come crashing down---and the euro drops---and oil prices rise----and inflation goes bonkers---then gold will be precious.
if you have the physical stuff all paid for and tucked away somewhere this news this week is kind of an eyebrow raiser. the ones who went long recently got killed.
57loaded, for most Americans, a strong dollar is absolutely needed to maintain a standard of living that we've worked hard to achieve. There's nothing I would've wanted more than a strong dollar - it's STILL in my best interest to have that.
But out-of-control government spending on expensive military, social and foreign policy programs works against the average wage earner who diligently saves. Monetary inflation, which the government uses to fund all that stuff, and to bail out bankers - is killing every savings plan that doesn't include a counterbalance. In other words, the government is working against honest citizens.
We couldn't afford all that stuff, even if we did want it. The government doesn't produce anything - it only takes and spends. When it takes more, you are supporting more stuff that you have no say in how it is spent, even to the point of spending your money on things that you vehemently disagree with.
But I digress. First, it was only the government creating money out of thin air. Now, they've let all the huge banks do the same thing, and when the "assets" were revealed to have no value, the government has now PAID THEM BACK for their "losses". All of those companies - JP Morgan, Morgan Stanley, Goldman Sachs, IndyMac, Fannie Mae, Freddie Mac et al - and next it will be the automotive manufacturers - all of them ARE PRIVATE FIRMS - they make the big bucks when they take the risk and win; they should lose their money if they take the risk and lose - that's how capitalism works. That's what gives people incentive to achieve and innovate.
Our dear old politicians are giving public tax money to support private FOR PROFIT firms who have been caught in their own kiting schemes for billions, and have mismanaged the mortgage industry loan system so badly that it's going into multiple trillions. Guess who ultimately loses, bigtime? (Hint, it ain't Hank Paulson, aka Goldman Sachs). All of that newly-created money will ultimately destroy the dollar. If they are doing the same thing in other countries, the dollar might look ok in comparison to the zloty or pound or franc, but it will be worth-less anyway. Such is the sleight-of-hand that Paulson and his buds are accomplishing with your tax money.
This is MUCH bigger than Enron, WorldCom or Global Crossing. And you ask me why I don't trust the dollar? Or the banks? Or the politicians? Let me count the ways. Ok, enough ranting for now - it really does get repetitive.
I knew it would happen.
Now THATS what we be talkin' 'bout!! Schweet!!!
for most Americans, a strong dollar is absolutely needed to maintain a standard of living that we've worked hard to achieve. There's nothing I would've wanted more than a strong dollar - it's STILL in my best interest to have that.
The strong dollar we had during the 90's is exactly the reason why so many jobs went overseas.
An article from Market-watch.....
Investors watching the dollar's dramatic rally at the end of this week could be forgiven for skeptically wondering, is it for real, and is it sustainable?
The good news for greenback holders (and anyone mulling that long-postponed European vacation) is that the answer to both questions is affirmative, analysts said.
"Yes, it's for real," said Marc Chandler, global head of currency strategy at Brown Brothers Harriman. "The U.S. multi-year down trend is over. The process we described as 'carving out a bottom' has been completed."
The dollar hit a bottom last November against the British pound sterling and the Canadian dollar, as the U.S. Federal Reserve expanded its lending facilities and the central banks of England and Canada prepared to cut their respective interest rates. It reached its nadir against the Japanese yen and the Swiss franc in March, when the Fed responded to Bear Stearns with an emergency discount rate cut. It has now bottomed out against the euro as well, Chandler said.
"Since reaching an all-time low against the major currencies in mid-March, the U.S. dollar has climbed 6%," wrote Sal Guatieri, economist at BMO Capital Markets, in a note to clients Friday. "The currency has seen several larger, temporary gains during its 38% slide since 2002, but this one could have legs."
It seems like only yesterday - and in fact, it was only July 15 -- that the euro hit a new record high of $1.6036 -- its loftiest level since the single European currency began trading in January 1999. The euro's spike followed news of a possible bailout of U.S. mortgage giants Freddie Mac (FRE:Freddie Mac
on Friday, Europe's single currency, already under pressure following comments made Thursday by European Central Bank chief Jean-Claude Trichet, sharply extended losses, first in Asian trading and then in European dealings. Then in late North American trading, it broke below the $1.5000 level for the first time since February. See Currencies.
"The euro, looking at a daily chart, looks a lot like a cliff diver. The only difference is that cliff divers eventually hit water," said Dale F. Doelling, chief market technician at Trends In Commodities.
"This market has gone into a freefall after breaking its 200-day moving average yesterday and there seems to be no bottom to the euro," he said in emailed comments.
The next support level, according to several currencies analysts, is at $1.4920.
Resilient after 'staggering body blows'
Some analysts say the dollar's lackluster performance in July actually belied the strength of dollar fundamentals.
The dollar "suffered staggering body blows in July with the collapse of IndyMac, the third-largest banking failure in U.S. history, and a near-death experience by mortgage giants Fannie Mae and Freddie Mac," David Watt, senior currency strategist at RBC Capital Markets, wrote in a note to clients earlier this week.
But while the greenback "wobbled," he said, its resiliency lends support to the view that the dollar did in fact bottom in the first quarter of 2008.
Indeed, the "body blows" weren't enough to make the U.S. Federal Reserve flinch.
On Tuesday, the central bank's Federal Open Market Committee held its target for overnight loans at 2% and declared that the risks to the economy are now evenly balanced between a recession on one hand and higher prices on the other.
"The FOMC statement and the end to the Fed's recent rate cut cycle have played a major role in ending the dollar's decline," wrote Tony Crescenzi, chief bond market strategist for Miller Tabak & Co.
On Thursday, the Bank of England and the European Central Bank also held pat on policy, but a string of dismal data in those regions suggests that growth fears might have the upper hand over inflation.
Other factors supporting the dollar include the narrowing yield spread between foreign government bonds and U.S. Treasuries, in response to signs of weaker growth abroad, Crescenzi said.
"For example, the yield spread between Germany's 10-year note and the U.S. 10-year is today [Friday] at 33 basis points, a 36 basis-point drop from early July," he said. "Interest rate parity, which posits that interest rate spreads impact capital flows, has been an important influence on exchange rates over the past few years."
He also cited the massive unwind of dollar-denominated commodity-linked trades, a factor which further fueled the dollar's rise.
On Friday, crude-oil futures closed at a three-month low of $115.20 per barrel on the New York Mercantile Exchange, down $4.82, or 4%, for the session, and 7.9% for the week. The Reuters/Jefferies CRB Index a benchmark gauging the prices of major commodities, fell 3% Friday, and 6.9% for the week.
That put more downward pressure on the currencies of countries whose exports are heavily weighted in commodities, such as Canada and Australia.
The commodity drop also gave the dollar buoyancy, because it is good for U.S. consumers, said Crescenzi.
" The U.S. economic outlook has improved as a result of the drop in commodity prices and anything that helps U.S. consumers has the potential to help the housing sector and hence, U.S. financial companies," he said.
Knowledge is the enemy of fear
I couldn't believe it when they said it cost $300 million(10 times the amount of any previous Olympic ceremonies) for the ceremonies. Totally shameless. I have no interest or desire to watch these Olympics.
But out-of-control government spending on expensive military, social and foreign policy programs works against the average wage earner who diligently saves. Monetary inflation, which the government uses to fund all that stuff, and to bail out bankers - is killing every savings plan that doesn't include a counterbalance. In other words, the government is working against honest citizens.
Perhaps one of the reasons why Americans don't even bother to save anymore or at least in traditional savings accounts.
Box of 20
I'll take a flyer and take the counter bet. Just a hunch we've seen no bottom yet in the dollar trend. The charts show no such "carving" but merely a single blip upwards.
Some analysts say the dollar's lackluster performance in July actually belied the strength of dollar fundamentals.
What dollar fundamental strengths? Monstrous losses from Fannie, Freddie, GM, mono-line insurers, large Banks, insurers (AIG), etc. Those are the wrong kinds of "strengths" and those are just the early birds to the $62 TRILLION credit default swaps "party." Wait until the entire crowd shows up over the next 3-24 months. And then we have to deal with the other $400 TRILLION in OTC interest rate swaps. That will keep the party going into 2011. For now J6P is confusing the massive FED injections as some kind of "strength" that doesn't affect him.
roadrunner
Spending remains out of control. The trade deficit is a joke and remains unsustainable. Total debt continues to grow.
Well, one thing I have noticed is that while one can characterize our dire straights nationally regarding personal savings, that does not apply across the board. Many people, mostly working stiffs I suspect, notice when their bank savings account is sucking and most of their tax money is going for BS instead of infrastructure and governance. Kind of like the guy that goes to the doctor's office and complains that "It hurts when I do that" and the doctor replies, "Don't do that, please see the lady on your way out".Those same people adjust and I suspect that many are using some type of alternate savings other than the 3% CD's or managed stock plans, I mean, those poor folk (me included) have been bleeding for a while now and you can only lose so much blood before you start feelin' weak. Look for these people to be saving fast and furious right now but it might be doubtful that they are putting their personal savings out where everyone can get a good look at it or the bank can just take it as part of an insolvency situation. Look for those people to carry only a house note and maybe a car note at a very cheap rate and other than that, they aren't really participating in the credit/banking markets. Fear not for the people that are paying attention and paying their own way, they will figure out how they can do the best and they will do that and I'm sure there are a lot of them (us). The financially competitive portion of the middle class is certainly under soime pressure but stupid they ain't. Maybe Sealey will start start making matresses with zippers, just for convenience. Noted...most of these people must be turning away from traditional savings accounts. Gold is good, cash is king, some things never change.
Don't laugh Hammerman, my primary care physician has done this to me more than once. One time I was complaining of getting light headed and dizzy when bending over or coming out of crouch. He told me to "stop doing that." Another time when I was experiencing chest pains for a week he told me he would set up a stress test in 2-3 weeks. When leaving his office that time I asked him if he should check my blood pressure before I leave (I kid you not).
roadrunner
<< <i>Kind of like the guy that goes to the doctor's office and complains that "It hurts when I do that" and the doctor replies, "Don't do that, please see the lady on your way out".
Don't laugh Hammerman, my primary care physician has done this to me more than once. One time I was complaining of getting light headed and dizzy when bending over or coming out of crouch. He told me to "stop doing that." Another time when I had chest pains for a week he told me he would set up a stress test in 2-3 weeks.
When leaving his office that time I asked him if he should check my blood pressure before I leave (I kid you not). He took it and found it quite elevated. His comments: "well I guess it's time to get you on some BP meds."
roadrunner >>
Yikes, rr, time for a new pcp!
Not to worry,
pf70collector
America is paying for it! You did not think the Chinese were paying for all this show?
Oh and by the way they did a fabulous job spending our money!
Aug. 9 (Bloomberg) -- The Beijing Games opening ceremonies on NBC were watched by an average of 34.2 million people, the biggest U.S.
NBC paid $894 million for U.S. rights to the Beijing Games.
Bulk purchase of US foreclosed properties
<< <i>
NBC paid $894 million for U.S. rights to the Beijing Games. >>
Most sporting events are paid for by those who buy cars in the US.
The networks act in collusion with the car companies to advertise
during sporting events. There are no new cars available for sale in
this country that aren't advertising so the first $4000 is what you
pay whether you watch or not.
I don't watch the olympics either so don't know for a fact that the
car companies advertise here but it's a pretty safe bet it will affect
some product. Even if they don't we still know where NBC sports
got their budget.
<< <i>Kind of like the guy that goes to the doctor's office and complains that "It hurts when I do that" and the doctor replies, "Don't do that, please see the lady on your way out".
Don't laugh Hammerman, my primary care physician has done this to me more than once. One time I was complaining of getting light headed and dizzy when bending over or coming out of crouch. He told me to "stop doing that." Another time when I was experiencing chest pains for a week he told me he would set up a stress test in 2-3 weeks. When leaving his office that time I asked him if he should check my blood pressure before I leave (I kid you not).
roadrunner >>
Those are good doctor stories, especially the one about the chest pains and hope you don't mind I add mine. I was told after my open heart surgery in 2005 that I also needed ( asap ) a right carotid endartectomy, a right femoral bypass, a left common illiac stent. ASAP mind you and also that the chelation I was considering doing was "quackery".
Several years have gone by, I've had about 75 intravenous "quackery" chelation sessions and the results? Well the open heart surgery was a FAILURE, yes yes even the illustrious cardiologist admits that the bypass was a failure, but because of the chelation "or something", my heart is fine, and "somehow" the blockage in the right carotic has gotten considerably less ( 30% ) and so there's "no surgery even considered", and the blockages down in the legs which did cause excrutiating agony after about a 1/10 mile? Well now I speed walk a couple miles at an incline on the treadmill, so while there's still plaque in there no doubt, "somethings" changed and it sure as heck ain't from any surgeries
Coin's for sale/trade.
Tom Pilitowski
US Rare Coin Investments
800-624-1870
<< <i>"Perhaps one of the reasons why Americans don't even bother to save anymore or at least in traditional savings accounts."
. >>
Sad really............
Coin's for sale/trade.
Tom Pilitowski
US Rare Coin Investments
800-624-1870
I liked it better when there were just "amateurs" which where closet professionals instead of this blatant professionalism.
There was a time when getting an Olympic medal opened a door into your professional sport. Now it's the other way around.
I still like watching Olympics.
I just wish our "dignitaries" would look more dignified.
Ren
Good Report!
In a way it will free up cash for people to buy gold.
Knowledge is the enemy of fear
Get out while the gettin's good...........
I knew it would happen.
Walk along a 45-60 MPH highway to shop.
They still haven't cleaned up the "Murdock Village" fiasco that's put this little place in debt for 100 Million dollars. They had to evict many people from their homes in order to create this fiasco.
Maybe spending more and more of what we don't have is the answer?
Coin's for sale/trade.
Tom Pilitowski
US Rare Coin Investments
800-624-1870
<< <i>I wonder if Hank Paulson's "pre-signation" is a harbinger that this whole mess is going to get alot messier?
Get out while the gettin's good...........
I dont believe Paulson is buddy-buddy with McCain, and he ceratinly would never work with Obama. I see no reason for him to continue either. IMHO, he's done a great job considering what he was handed.
Knowledge is the enemy of fear
<< <i>PM bulls do not want to see gold and silver close at their current levels. Both are under their 200dma and momentum is turning sharply lower. Possible double top in gold if it breaks $850, which would imply a target of $700. Strong support at $800 would have to be taken out first.
There goes $850. Lets see where it closes today. And we already saw what happened when silver broke the $16 support area.
Knowledge is the enemy of fear
<< <i>That's amazing. Hurricanes, unrest in the Caucasus, inflation, and nothing seems to slow the slide of commodities. The obvious question is whether it's the end of the bull, or just a monster correction. >>
I'll vote for the "monster correction" along with the end of the bull. Just remember, the pendelum has a tendency to swing back & forth. It b a swingin back, but in time, will swing forward again.
<< <i>That's amazing. Hurricanes, unrest in the Caucasus, inflation, and nothing seems to slow the slide of commodities. The obvious question is whether it's the end of the bull, or just a monster correction. >>
There was so much momentum playing, margin investing and speculative froth that even events that should be bullish for hard assets can't stop the slide. I suppose it may limit how far the slide may go, but as recently as late June most commodities were so far ahead of themselves that a sharp correction at some point was inevitable even if the longer-term fundamentals remain strong.
Knowledge is the enemy of fear
<< <i>That's amazing. Hurricanes, unrest in the Caucasus, inflation, and nothing seems to slow the slide of commodities. The obvious question is whether it's the end of the bull, or just a monster correction. >>
$14 is very strong support in silver. 16.50 is (was) very weak support and we'll probably go back to it before it makes an attempt to get under 14.
<< <i>Please assist with information. When was it posted on this Thread, in the last 2 monts, that Gold would drop to $825 or lower and the reasons why? I can't seem to find it. Respectfully, John Curlis >>
About two years ago in this thread I suggested that
silver would have a hard time taking out $14 on the
way up and probably would never get back lower.
If oil closes lower today, I believe it will be the end of the rally, barring international conflict. These prices are unsustainable
Oil topped on July 11.
Knowledge is the enemy of fear
1. Gold was at 675 this time last year. That's a 21% increase to today.
2. Silly to talk about a bubble bursting after one month of data but some do it anyway.
Carry on.
the printing of another trillion dollars worth of greenbacks.
However, this action is a secret, so please don't tell anyone.
Camelot
Camelot
<< <i>There has been talk of as low as $700 but that may be an uninformed opinion because I saw an article that stated that it costs $800 today to get 1 oz out of the ground and assayed. So one would not think that it could go lower than $800 plus what ever it takes to get it to market? Plenty of predictions of lower commodities have been all over the news and here over the last couple of weeks but I don't think anyone is brave enough to put up a number. It seems that $835 was the number everyone was looking at for a bottom but it's a little below that now @ $827. Good luck all! >>
I'm not sure that the cost of production necessarily determines the price. If the price stays below cost for some length of time, that would discourage production eventually depressing supply. But in the interim, the market will determine how low (or high) it goes.
<< <i>Some perspective:
1. Gold was at 675 this time last year. That's a 21% increase to today.
2. Silly to talk about a bubble bursting after one month of data but some do it anyway.
Carry on. >>
Some people prefer to sell at tops, rather than after 20% drops.
Hope you dumped your ND$ at .80
Knowledge is the enemy of fear
Knowledge is the enemy of fear
<< <i>
<< <i>Some perspective:
1. Gold was at 675 this time last year. That's a 21% increase to today.
2. Silly to talk about a bubble bursting after one month of data but some do it anyway.
Carry on. >>
Some people prefer to sell at tops, rather than after 20% drops.
Hope you dumped your ND$ at .80 >>
Some people realize a top can't be determined based on one month of data. I bought NZD years ago and am far ahead (especially considering the nice interest rate) but thanks for your concern.
One option from here is to liquidate some regular issue US coins that have done very well the past 6-12 months and consider buying back into gold/silver as the rout gets nearer the end.
roadrunner
<< <i>One option from here is to liquidate some regular issue US coins that have done very well the past 6-12 months and consider buying back into gold/silver as the rout gets nearer the end. >>
I've tried that before and end up missing the big surge.
I don't care what the price of "paper" metals is. It only matters if you need to buy or sell.