So what happens to the prices of precious metals when the Fed has to bail out China (after they get done with Fannie and Freddie)?
The FED likes these bail outs because it raises GDP and keeps "growth" above 0% (ie no "official" recession). Just look what the $600 rebate checks did for GDP last quarter....nice bump to the #'s and seemingly "positive" economic growth.
The bail out of China in F&F will be spun as dollar positive regardless of the true effects. But when the American people find out that their national debt ultimately rises from $9 TRILL to $14 TRILL, they might wake up.
Fed may loan the Big Three up to $50 billion......who will they NOT bail out?
The automakers pushed their "Statement" SUV's becaue it was easy money, selling to a whole hella lotta folks who were ATM'ing their home equity.
blue collar BK, i can see it now..... financial "disaster" loans at 3% over 100 years, step right on up...those who don't qualify will be taxed at an 80% net rate, until they, too, qualify as BK
"The automakers pushed their "Statement" SUV's becaue it was easy money, selling to a whole hella lotta folks who were ATM'ing their home equity."
There were voices that said US automakers could help with the upcoming energy crisis through new technology but they were ignored. Employee discounts for everyone, 0% financing, take 6 years to pay with payments as low as $300/month...hard to ignore that hype and the people didn't. As long as the banks were making money on the notes and the oil companies were making money on the volume and the automakers were hauling in money on these bus sized personal vehicles, life was good and certainly there was no need to mention the forbidden word..."downsizing" in a culture that is always asked if they want to "supersize" that order. Every body makes money...the banks got to triple dip; they got the refi, they got the credit card activity, and they got the car notes and life is good megabonuses for everyone on the job...good job!!! The oil companies were selling everything they could refine and the car makers were just trying to out maneuver Japan and Korea and Germany...it's like a game and they were certainly playing. No one had to try and be like the Joneses any more, they could BE THE JONESES! Now the banks are crying like a three month old that has been pulled off of mother's milk spigot. The car loans are going bad, the credit cards aren't being paid, the houses are reposessed with nothing coming in and taxes going out and for the Joneses...it's not good.
US automakers could have kept dominance in the market, they could have stayed competitive and it's not rocket science or extreem technology. What's so hard about getting off of oil...nothing. But we have an oil industry that needs protected, we have car makers that need protected, we have banks that needs protected, we have airlines that need protected but who is there to protect them...ah, that's the problem. The consumer turned consumee was the protector via their consumption; being the Joneses. So now that consumer has been consumed it's a new day and no one is going to protect no one or nothing, it's every man for themselves and if any fool thinks that oil, airlines, auto manufacturers, banks, or anyone that is starving with out the consumee's money...is going to do anything to help the consumee then they deserve what they get. Fools no more, once consumed twice wise.
So T. Boone's plan, yeah it's a player; use nat gas to get off of imported oil, switch to alternative energy within 10 years, let's do this differently. Car manufacturers...well, seems they got the message when no one would buy those huge vehicles so they sat on the lot...no money here so all of the sudden, they have new fuel efficient smaller size vehicle technology in the pipeline...amazing what power the consumer has; so all of the sudden the car companies just figured out how to make a fuel efficient car...HOGWASH. The banks, well they made their play and now they have no money to lend so it's surely going to be a slow, painful death for those banks that once handed out employee bonuses like they were Pez candy and don't look for the 20% interest on unpaid card balances consumee to come rushing to take out new loans and get new credit accounts at the bank; two problems, the banks won't lend and the consumee has no money for that nonsense.
If it weren't for the 401K's that are being held hostage by the soon to be retirees account managers, then the story would indeed be more dire but the fund managers have those accounts and the retirees can't get the money unless they take the severe penalty clause. Meanwhile, the DOW stays above 11,000...we'll see what happens here but what ever recovery is expected to happen better happen before the boomers get their their hands on their 401K accounts and convert them to cash/metal and take them completely out of the grasp of the people that have so malaigned them previously.
There's a new day coming for the US consumers. The ones that are tired of being tagged with the tax bill for all the programs and the bail outs and the great society BS and this new day is not about being the Joneses. It's about conserving money, resources, time, consumption. It's not Emeril Lagasse kicking it up a notch any more, it's not about supersizing anymore, it's about how do I keep what's mine and how can me and my family and loved ones be more comfortable with less. It's about taking it down a notch. It's about survival in a conspicuously predatory financial world and its about not getting caught up in some bank come on or refi magic or the 6 year note on a gas guzzler. Maybe it's about a backyard garden, maybe it's about going to the local park (albeit with a carry permit) instead of Disneyworld, maybe it's about driving to grandma's instead of flying to the Bahamas, maybe we'll have the family over instead of doing Vegas for the weekend, maybe I'll pay cash for a small one instead of using credit for a large one...it's certainly going to be different and methinks it's all good.
Now, if we could just get the government out of our pocket, we might stand a chance but not much reason for optimism here. Rather than be rewarded for conservation and smart consumerism like paying your house note on time, saving cash, etc., the middleclass worker is likely to be innudated by programs and taxes to fund havenots and bailouts. But, first things first; let's get this consumerism under control and let all that fall out occur then we can consider strategies for insulating ourselves from new programs and more taxes that should be paid for by commercial enterprises (notorious for not paying any taxes) and not by cube dwellers.
carry on
Edited to remove previous link to Brazilian ethanol; finally got time to finish reading it and decided it wasn't apolitical enough.
US automakers could have kept dominance in the market, they could have stayed competitive and it's not rocket science or extreem technology. Brazil Sugar Cane gasohol What's so hard about getting off of oil...nothing. But we have an oil industry that needs protected, we have car makers that need protected, we have banks that needs protected, we have airlines that need protected
Yes, and don't forget that we have a domestic ethanol industry that needs protection as well. Decades of corporate welfare for a fuel that's inefficient to produce, has little impact in reducing the cost of gasoline, and causes inflation in any product using corn (which is many products). We need leadership in Washington, and I don't see it in the current residents of the Capital or WH, or any on the horizon for that matter.
"has little impact in reducing the cost of gasoline"
I don't think the issue is so much the cost of the gasoline, it's more about where the oil comes from. It will and should cost $4/gal. but buying it from people that want to teach us how to be good muslims is what could be changed. The days of $2 gas is in the history books. Using food grains as fuel is dumb...yeah. Using sugarcane is good because, you get the sugar and you get the fuel and we can grow it here and we can expand our ag industry to the middle class/family farmers again. What ever fledgling gasohol industry protection that may be warranted is minisculine compared to US auto industry, airlines, banks, and the like already get in spades and have been for decades it's not even a like comparison. Let some new players have a chance and doing something different and better.
I soon hope to trade my cotton crop for sugarcane! As soon as the state of Alabama decides on wheather or not they are going to build processing plants I will make a decision, which I hear will cost me around 1K per acre to plant...I hope it will pay for itself in a couple of years! It comes back year after year and only has one harvest per year, I kinda like that.
By ERIC DASH and GERALDINE FABRIKANT Published: August 26, 2008 WASHINGTON — Sheila C. Bair anticipated the mortgage crisis long before most other regulators. But she never dreamed it would wreak so much havoc on so many banks.
More than a year after the credit crisis first flared, Ms. Bair, the chairwoman of the Federal Deposit Insurance Corporation, warned on Tuesday that the outlook for the ailing banking industry was bad — and getting worse.
Her downbeat outlook was underscored on Tuesday by the F.D.I.C’s latest quarterly assessment of the industry. The agency said the number of bad loans at banks ballooned to its highest level in 15 years during the second quarter. Industrywide, bank earnings plunged 86 percent from April to June, to $4.96 billion, from $36.8 billion a year earlier, the agency said.
Meanwhile, there are growing questions about the adequacy of F.D.I.C.’s insurance fund, which guarantees repayment on deposit accounts of up to $100,000 when banks collapse. The fund dwindled to $45.2 billion during the second quarter, from $53 billion in the first quarter.
The F.D.I.C., which guarantees savings and checking deposits, also raised the number of banks on its list of problem lenders to 117 this week.
>>>There's a new day coming for the US consumers. The ones that are tired of being tagged with the tax bill for all the programs and the bail outs and the great society BS and this new day is not about being the Joneses. It's about conserving money, resources, time, consumption<<<<
i am on board with that...and a lifestyle that is simpler and less stressful and can offer the opportunity for more joy and personal freedom.
many have come to this country have made the American Dream by hard, honest work and thrift and live so far inside of their means it's well anal, yet they are enjoying themsleves and their lives. they are NOT lovers of money, they are NOT consumption addicts which is what most of usa has become....
Thursday August 28, 1:56 pm ET By David Ellis, CNNMoney.com staff writer The government's latest assessment of the nation's financial system showed that many more small banks are in trouble. But what the report didn't say may speak volumes.
Typically, the FDIC list is published some 8 weeks after all of the nation's banks have reported their latest quarterly results.
Bank regulators - which in addition to the FDIC include the Office of the Comptroller of the Currency (OCC) and Office of Thrift Supervision (OTS) - then give the banks a report card, assigning a composite rating based on the bank's performance in each category. Those that receive a rating of 4 or 5 are put on the list.
Since the failure of IndyMac in mid-July, however, speculation has emerged that regulators may have exercised some discretion about which institutions they put on the confidential list.
The FDIC's first-quarter problem list, released at the end of May, clearly did not have IndyMac on it. That's because the FDIC reported that the 90 banks on the list had a combined $26.3 billion in assets - less than the size of IndyMac. That suggested that the only problem banks at the time were smaller community banks.
"It is telling that IndyMac was not on the problem list the quarter before," said Yeager. "Usually bank failures like that are pretty slow events - it is unlikely [federal regulators] were surprised by that."
Just because the manipulators have been moving the price of the PM’S downward does not mean that the physical supply of Gold and Silver will last. Not many are fooled by this paper manipulation. The central governments of the World truly believe we are all idiots.
Aug. 28 (Bloomberg) -- Rand Refinery Ltd., the world's largest gold refinery, ran out of South African Krugerrands after an ``unusually large'' order from a buyer in Switzerland.
The order was for 5,000 ounces and it will take until Sept. 3 for inventories to be replenished, said Johan Botha, a spokesman for Rand Refinery in Germiston, east of Johannesburg. He declined to identify the buyer.
Coins and bars of precious metals are attracting investors as a haven against a sliding dollar and conflict between Russia and its neighbor Georgia. The U.S. Mint suspended sales of one- ounce ``American Eagle'' gold coins, Johnson Matthey Plc stopped taking orders for 100-ounce silver bars at its Salt Lake City refinery and Heraeus Holding GmbH has a delivery waiting list of as long as two weeks for orders of gold bars in Europe.
<< <i>Just because the manipulators have been moving the price of the PM’S downward does not mean that the physical supply of Gold and Silver will last. Not many are fooled by this paper manipulation. The central governments of the World truly believe we are all idiots.
Aug. 28 (Bloomberg) -- Rand Refinery Ltd., the world's largest gold refinery, ran out of South African Krugerrands after an ``unusually large'' order from a buyer in Switzerland.
The order was for 5,000 ounces and it will take until Sept. 3 for inventories to be replenished, said Johan Botha, a spokesman for Rand Refinery in Germiston, east of Johannesburg. He declined to identify the buyer.
Coins and bars of precious metals are attracting investors as a haven against a sliding dollar and conflict between Russia and its neighbor Georgia. The U.S. Mint suspended sales of one- ounce ``American Eagle'' gold coins, Johnson Matthey Plc stopped taking orders for 100-ounce silver bars at its Salt Lake City refinery and Heraeus Holding GmbH has a delivery waiting list of as long as two weeks for orders of gold bars in Europe. >>
Sounds about right. The perfect storm is brewing.
What have we been talking about for years on this thread alone?
Yeah, sadly Americans are, for the most part, idiots when it comes to the financial world.
This play has been developing in front of us for years and yet the average person has no clue why.
All they know is that their dollar isn't lasting as long, they aren't getting any raises and some are finding themselves unemployed.
Time to whine to the Government. We aren't that far away from the Government not being there anymore as far as handouts.
The perfect storm indeed!
"Lenin is certainly right. There is no subtler or more severe means of overturning the existing basis of society(destroy capitalism) than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and it does it in a manner which not one man in a million is able to diagnose." John Marnard Keynes, The Economic Consequences of the Peace, 1920, page 235ff
U.S., Europe, Japan Devised Plan to Prop Up Dollar, Nikkei Says
By Timothy R. Homan
Aug. 27 (Bloomberg) -- Finance officials from the U.S., Japan and Europe in mid-March drew up plans to strengthen the U.S. dollar following troubles at Bear Stearns Cos., Nikkei English News reported, citing unnamed sources.
The intervention designed by the U.S. Treasury Department, Japan's Finance Ministry and the European Central Bank called for the central banks to purchase dollars and sell euros and yen, with Japan providing the yen needed for the currency swap if the greenback's value dropped significantly, the news service said.
The three groups, which considered making an emergency statement through the Group of Seven industrial nations, did not stipulate a specific exchange rate for the potential intervention, nor did they detail the amount of money to be used, Nikkei said.
ECB spokeswoman Eszter Miltenyi and Treasury spokeswoman Brookly McLaughlin declined to comment on the report.
To contact the reporter on this story: Timothy R. Homan in Washington at thoman1@bloomberg.net
<< <i>U.S., Europe, Japan Devised Plan to Prop Up Dollar, Nikkei Says
By Timothy R. Homan
Aug. 27 (Bloomberg) -- Finance officials from the U.S., Japan and Europe in mid-March drew up plans to strengthen the U.S. dollar following troubles at Bear Stearns Cos., Nikkei English News reported, citing unnamed sources.
The intervention designed by the U.S. Treasury Department, Japan's Finance Ministry and the European Central Bank called for the central banks to purchase dollars and sell euros and yen, with Japan providing the yen needed for the currency swap if the greenback's value dropped significantly, the news service said.
The three groups, which considered making an emergency statement through the Group of Seven industrial nations, did not stipulate a specific exchange rate for the potential intervention, nor did they detail the amount of money to be used, Nikkei said.
ECB spokeswoman Eszter Miltenyi and Treasury spokeswoman Brookly McLaughlin declined to comment on the report.
To contact the reporter on this story: Timothy R. Homan in Washington at thoman1@bloomberg.net
then a few shorted silver and gold to really do a whammy, also i'll bet that "Swiss buyer" is living elsewhere. and that the banks who shorted Ag will be riding a long road
<< <i>then a few shorted silver and gold to really do a whammy, also i'll bet that "Swiss buyer" is living elsewhere. and that the banks who shorted Ag will be riding a long road
everyone is out to get me!
>>
Oh, don't be such a wuss, you're safe for now. They're out to get me first!
I think Roadrunner is next behind me. But rest assured, I have good information that you ARE on the list as well.
Won't be long now, but I think you've got time for lunch yet.
"Lenin is certainly right. There is no subtler or more severe means of overturning the existing basis of society(destroy capitalism) than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and it does it in a manner which not one man in a million is able to diagnose." John Marnard Keynes, The Economic Consequences of the Peace, 1920, page 235ff
Man, wouldn't that be sweet! Smoke out the shorts with a big private purchase...that would be so sweet to get those manipulators on the ropes so good that they will never come back.
<< <i>Man, wouldn't that be sweet! Smoke out the shorts with a big private purchase...that would be so sweet to get those manipulators on the ropes so good that they will never come back. >>
Many of them were wiped out for good around 28 years ago.
The market is small enough and so loosely regulated that all sorts of shenanigans have gone on for years now.
Hell, the truth is it isn't regulated at all, unless you consider having the fox guard the hen house as tight security.
Rather than see them wiped out, I'd much rather see strict regulation. At least as tight as it is over banking regulations.
I mean, if those were the choices. Sure, it would be a big plus to see some of these guys taken out as an example to others. Not just financially, but see them spend a very long time as guests in a Federal "hotel" as well.
What really happened a few weeks ago seems fairly clear, but we really, really need to see the culprits exposed and see what, if any, connections they may have to SLV.
That alone would put them away and empty their pockets if what seems to be true actually is.
A drop from $19.40 to $12.70 in that short time frame is not within the bounds of a free trade market, particularly when the scarcity factor is coupled with the continued drop.
Many people are certain of the connection and I tend to agree, the problem is exposing the players. This was outright robbery on a scale never before seen.
Years of work and trillions of dollars were lost across the planet. How can you even figure what the penalties should be on something like that?
"Lenin is certainly right. There is no subtler or more severe means of overturning the existing basis of society(destroy capitalism) than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and it does it in a manner which not one man in a million is able to diagnose." John Marnard Keynes, The Economic Consequences of the Peace, 1920, page 235ff
<< <i>then a few shorted silver and gold to really do a whammy, also i'll bet that "Swiss buyer" is living elsewhere. and that the banks who shorted Ag will be riding a long road
everyone is out to get me!
>>
Oh, don't be such a wuss, you're safe for now. They're out to get me first!
I think Roadrunner is next behind me. But rest assured, I have good information that you ARE on the list as well.
Won't be long now, but I think you've got time for lunch yet. >>
just back form a long lunch in Carmel with a bunch of buddies, mostly just shot the breeze and talked about the kids....
Everyone who reads this thread on a regular basis was warned in early March that that the bloom was falling from the PM rose. Look back to around March 9.
Dont look at conspiracy theory to justify a good investment gone bad. Eventually the good time ALWAYS fades After a 7 year, 400%+ run, you should have taken what was given. Stop whining about conspiracy, figure out what you didnt see--and reason for your lack of action--and go on to the next trade.
The 50 and 200 day moving averages for silver are now turning lower--for the first time in 3+ years. The trend is now sideways to down. We probably get a rally of about $2, but that could be all.
Sorry to be possibly confrontational, but in nearly 20 years of investment advice, I see the same mistakes made over and over. Blind faith results in false hope. People get a good investment and ride it back into the ground.
The 50 and 200 day moving averages for silver are now turning lower--for the first time in 3+ years. The trend is now sideways to down. We probably get a rally of about $2, but that could be all.
Sorry to be possibly confrontational, but in nearly 20 years of investment advice, I see the same mistakes made over and over. Blind faith results in false hope. People get a good investment and ride it back into the ground.
I have absolute faith in the US Government. I am confident that they will continue to inflate the currency like there's no tomorrow.
Of course, that giant sucking sound you hear is asset deflation, caused by the "de-leveraging" of highly-leveraged kiting schemes devised by the international investment banks and hedge funds. Of course, the money is gone, taken by the bankers, and the lawyers and the hedge fund managements and salted away out of reach.
Which one will win, inflation or deflation? I dunno. But I do know that there are only two asset classes that I like right now - cash and precious metals. I'll buy all the stocks and bonds and real estate that I want, later.
Q: Are You Printing Money? Bernanke: Not Literally
<< <i>Everyone who reads this thread on a regular basis was warned in early March that that the bloom was falling from the PM rose. Look back to around March 9. >>
--The economy will slip into negative growth at least one quarter and potentially two quarters (i.e., a recession). The unemployment rate will rise to around 5.5%. World economic growth will also slow down measurably. We saw a negative growth quarter actually in Q4 2007. Unemployment is now up to 5.7%. World growth is also slowing dramatically.
--The dollar will strengthen to around 1.25 dollars per euro and around 1.8 dollars per UK pound. The pound is now at 1.82. The euro has declined about 10% recently but is still around 1.47.
--Gold will decline to $550 an ounce and silver to $10. Silver is now at $13, gold a little over $800.
--Oil will decline to $65 a barrel. We're more than half-way there
--Stock markets will decline with the Dow slipping back to around 11,000. We're in the 11,000 range again
The problem with the gold/commodities bull run is that is was driven by 2 facts that no longer hold true. First was the supposed massive inflationary printing of money by the government (which in fact, was largely a phenomenon of the creation of huge amounts of credit by banks during the pre-credit crunch period). That story is over and today we are seeing the destruction of huge amounts of credit and wealth. That may be a lot of things but inflationary it's not. Second is the supposed massive increase in demand from the rest of the world, especially China, for commodities. That seems to have also run its course for the time being. I believe, and I said so here last December and other times, that the commodities bull is dead for the foreseeable future.
"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)
"Dont look at conspiracy theory to justify a good investment gone bad. Eventually the good time ALWAYS fades After a 7 year, 400%+ run, you should have taken what was given. Stop whining about conspiracy, figure out what you didnt see--and reason for your lack of action--and go on to the next trade."
You know, cohodk, you're right but maybe you are ignoring the subtle psychology of the regular guy and his "accumulations". Speaking for myself, assuming that I'm not the only one like this, it is good to have some extra money now and then and it is even better when you can use it to pull off a piece of metal for yourself and put it in your cave. Accumulators we are, not really traders. That may be a contrarian approach considering investors that get into things and get out when it seems right. But there is a difference. If I can have a piece of gold in a box, I'm happy and feel a little more secure; the more gold, the more secure. If it goes up...man that's outstanding, makes me feel like the smartest guy in the room and if it goes down...well, I wasn't selling it right now anyway because I like having it in the box for now and for the near future and, I know it will go up again in the future and I can decide if I want to sell then, or not.
The problem I have with the type of "playing" we are seeing now is the guys that are new to this. They get hurt financially, they jeapordize their welfare, their family income, their bank accounts, their attitude, and a whole list of the bad things that happen with a quick investment gone bad. When the signals are all over the board and people are yelling "Bottom!!!" and the little fish swim into the net even when, for example, silver is trading at outrageous multiples of just a couple of years ago looks like a guaranteed winner at $14; and the fish swim in. I like a steady market that is based on supply and demand, that is based of above board fair trading practices, a market that is somewhat transparent. When people manipulate metal and screw the little or new guy by scaring him out of his little investment and they do it because that's how they get money, well, there is the problem.
Now for accumulators, it's not a big deal, we're holding and accumulating and watching what's going on. We don't stretch out and burn off our stock account to go buy a bunch of physical silver because we think it's near the bottom but we sure might reach into the current pay check and suck it up for a month to get a bar when the prices seem reasonable. Accumulators don't care but they do pay attention because they are a fully suited up playing member of the team. Maybe when the metal gets to some ridiculous price (like recently) we should let a few oz's go back into the wilderness just to pay for our accumulation habit but releasing the hoard to get back in at a lower price...nah, nah, and nah.
"Why?" is a fair question at this point and this brings us back to the subtle psychology of accumulators. They accumulate, that's what they are doing and that's the simple strategy, and that's the fun of it. The reward for this fun little adventure is to have a large enough pile at some point in time and have it at a high enough price at some point in time that you can get out and buy a house or pay for a college education for one of the children/grandchildren or pay for your wife's operation, or blow it all on one final naked run through the daisey fields...what ever the great reward is, the accumulator is working for that and his strategy is to rathole a little every now and then with money that can be taken out of the primary income stream without any consequence and divert that money to work on the dream. So gold and silver accumulators are dreamers, they are working on a dream, one ten oz bar at a time or two SAE's at a time, or a 1000 oz bar at a time, each according to his dreams and his abililty.
Now the counter for that strategy would obviously be..."Well why don't you put that $50 or $1,000 buks in a stock account or life insurance policy or save it for a roth ira...?" The answer is, nah, I like looking at my gold and knowing it's gold and knowing it's mine and holding it in my hand, because the reality of holding your gold in your hand is quite satisfying and the security it seems to impart is distinctive amongst the other forms of security in today's financial world. To help with visualizing what I'm talking about, think "Happiness is a warm gun".
<< <i>Everyone who reads this thread on a regular basis was warned in early March that that the bloom was falling from the PM rose. Look back to around March 9. >>
--The economy will slip into negative growth at least one quarter and potentially two quarters (i.e., a recession). The unemployment rate will rise to around 5.5%. World economic growth will also slow down measurably. We saw a negative growth quarter actually in Q4 2007. Unemployment is now up to 5.7%. World growth is also slowing dramatically.
--The dollar will strengthen to around 1.25 dollars per euro and around 1.8 dollars per UK pound. The pound is now at 1.82. The euro has declined about 10% recently but is still around 1.47.
--Gold will decline to $550 an ounce and silver to $10. Silver is now at $13, gold a little over $800.
--Oil will decline to $65 a barrel. We're more than half-way there
--Stock markets will decline with the Dow slipping back to around 11,000. We're in the 11,000 range again
The problem with the gold/commodities bull run is that is was driven by 2 facts that no longer hold true. First was the supposed massive inflationary printing of money by the government (which in fact, was largely a phenomenon of the creation of huge amounts of credit by banks during the pre-credit crunch period). That story is over and today we are seeing the destruction of huge amounts of credit and wealth. That may be a lot of things but inflationary it's not. Second is the supposed massive increase in demand from the rest of the world, especially China, for commodities. That seems to have also run its course for the time being. I believe, and I said so here last December and other times, that the commodities bull is dead for the foreseeable future. >>
those are very good arguments for your position.
though i still think the fiat monetary system isn't finished with it's growing pains (cycles)
but what is the rationale for the big silver/gold COMEX drop from July? other than it is really only a tool for trading and shorting on paper and big dawgs? sorry of the question seems naive. and the reasons for the dolar strengthening and Euro declining? isn't that part manipulation of the Fed and ECB working together? even if that is a yes, it probably reinforces your argument?...comments please from everybody....RR, Deadhorse, Storm, Cohodk, tincup, mrhammerman and all you guys.
the big debate here seems to be the markets are NOT acting rationally now...maybe they are given what has happened and what is happening.
I hear you and agree that there is a psychological element to holding PM's and even I hold a small position--just in case, but it is a VERY small amount relative to total assets.
My fear is that all this PPT and conspiracy thought is clouding rational judgement. Maybe I shouldnt be concerned as it isnt my money, but it still bothers me. Very intelligent and rational people have gone awry with investments in equities and real estate. I fear the same will happen with PM's.
I hear about all this money being created, but money is actually being destroyed much faster. Trillions have been destroyed in global real estate. Trillions have been destroyed in equities. The world produces 83 million barrels of oil everyday. It is $30 lower than 2 months ago. That is $2.5 billion less dollars being created on a daily basis. This is what I meant as monetary destruction.
I keep hearing that the bankers took all the money. This is so wrong. Money just disappears, just as it appeared when your house went from 400K to 600K. Where did that 200K come from? Yesterday stock in Dell Computer fell about 13%, after it gapped lower about 7%. That gap lower represented a loss of over $2 billion. Granted there may have been a few shorts that made money, but in reality that $2 billion just disappeared. It is not gone forever, but it is gone today. If the bankers took all the money, then why are they in such dire straights?
Everyone who reads this thread on a regular basis was warned in early March that that the bloom was falling from the PM rose. Look back to around March 9.
Dont look at conspiracy theory to justify a good investment gone bad. Eventually the good time ALWAYS fades After a 7 year, 400%+ run, you should have taken what was given. Stop whining about conspiracy, figure out what you didnt see--and reason for your lack of action--and go on to the next trade.
I know...the "warnings" came out every week or two since August 2007 as gold made intermediate moves upward. This is now the norm. The FED arranged for a take down the weekend of the BSC failure. They had Japan and others lined up to support the dollar as necessary. The well coordinated strike set up that weekend was the primary mover in the down turn....not just normal profit taking. What I didn't see was the extent the FED will go to manipulate. I won't underestimate them again. Their coordinated attack in July was almost as good by having 2 large banks increase their gold short positions by 11X over a 6 week period. That's normal "trading" policy for a bank? Imagine if those same banks took an 11X short on Fannie or Freddie, or bank stocks. You'd hear about it then.
John "Needler" of Kitco has declared a dead gold market because of a "written in stone-always signifies a bear market" 20% price correction. He forget to check his price history of gold to find that we've had several other 20%+ drops that did not kill the market. Look at Dec 1974 - Aug 1976 at 50% and even May-June 2006 where a 20%+ drop was also met. Nads has a short memory. The final run of gold from 1978 to 1980 also had some strong corrections near 20% as well. None of those big drops killed the gold move.
The problem with the gold/commodities bull run is that is was driven by 2 facts that no longer hold true. First was the supposed massive inflationary printing of money by the government (which in fact, was largely a phenomenon of the creation of huge amounts of credit by banks during the pre-credit crunch period).
Shadowstats.com is using the 1980 formula to calculate inflation which comes out to be 13-14%. Looks like inflation to me. The FED is still giving money hand over fist to banks and corporations. That hasn't ended nor will it end. It will get far worse as Fannie and Freddie will be bailed out to over $1 TRILLION and others follow. M3 and other indicators may have slowed somewhat as to be expected. They will start increasing again as sure as the sun rises. Shadowstats also calculates GDP as -2% using previous forumulae from past decades. Using the current set of forumula tweaked by Reagen, Clinton, and Bush 1, gets you numbers that will never look bad. And that's why they tweaked them.
That story is over and today we are seeing the destruction of huge amounts of credit and wealth. That may be a lot of things but inflationary it's not. Second is the supposed massive increase in demand from the rest of the world, especially China, for commodities. That seems to have also run its course for the time being. I believe, and I said so here last December and other times, that the commodities bull is dead for the foreseeable future.
It's inflationary as well as deflationary. As long as the FED is pumping out hundreds in billions in revolving credit, it's very inflationary to portions of the economy. The foreseeable future might be as a few weeks to a couple of months. In any event, the commodities bull has years left to run. That's about as sure a bet as saying that Fannie and Freddie are bankrupt. The $25 BILLION estimated "losses" will end up being 50X to 100X higher than that. Gold will perform far better than the USDollar during credit deleveraging.
Sure, money is being destroyed and that is killing the auto industry and other similar hard good industries (manufacturers, retailing, etc). But it will eventually force people back into something that will maintain their nest egg. And when they realize that stocks, bonds, and treasuries aren't cutting it, they'll gravitate back to metals and commodities again. While Trillions are being destroyed in housing and stocks, people will put the Trillions they have left in something else to protect themselves. Oil is down for the time being, but it will be back, and higher than before. The bankers took trillions in profits and bonuses along the way. As the credit destruction continues various entities will fail, others will be bailed out. The new credit has to go somewhere. Do you think it will get plopped back into housing or stocks? Not likely. The little guy that sees his house drop in value by $200K can do nothing. But when we fork over several hundred Billion in new credit/money to China when Fannie and Freddie go bust, that will be inflationary. The bankers still have $62 Trillion in credit derivatives to play with. After that they have hundreds of TRILLIONs in interest rate derivates/swaps to unwind. It will take years. There is a cost to unwinding those bets as the losers in the transaction close their doors for good and "winners" can't get paid (ie a major hit to the "off" balance sheet Figure on trillions more to be lost. That's why the banks are in such bad shape. They can't possibly cover these markers today and continue to drag their feet on FAS level 2,3 accounting standards. Their only hope is for the FED to string this along for months and keep paying the interest due on those bets (ie hundreds of billions). That's inflationary. Every major bank has been slurping from the FED trough which indicates none are in good shape.
Yeah, the banks bet their souls to make a few trillion in profits the past decade. Now they are on the hook for 10x to 50X that amount. The FED's recent activities amount to a reprieve, not a solution. They've apparently survived through 2008. The stakes get raised in 2009 with more "surprises" coming out of the woodwork. And 2010-2012 will be successively worse. They have their work cut out for them to keep it all afloat.
Also, while paper dollars are being printed by central banks, so is physical gold. The miners are working 24/7 creating gold out of dirt. There is no difference.
The average miner pulls gold out of the ground at about $450 yet sells it for $800. Where did the extra $350 come from? Talk about printing money!! Same could be said for the oil producers.
World economies are much too large to be backed by anything but "full faith and credit". Perhaps a commodity rich country could it, but never the USA, Europe, China, India or Japan. Possibly only Canada could pull it off.
We keep hearing the banking system will fail and PMs will go up. But since the first banking failure, BSC, PMs have only trended lower. Money spent on PM newsletters would be better spent on buying the PM itself.
Also, while paper dollars are being printed by central banks, so is physical gold. The miners are working 24/7 creating gold out of dirt. There is no difference.
Huge difference. Gold stocks have been increasing at 1.5-2.5% per year the last decade. Yet money stocks have increased 10-15% each year. Tell me that's not different? US Money supply has increased 13X since since 1982 yet above ground gold hasn't even doubled in that time.
The average miner pulls gold out of the ground at about $450 yet sells it for $800. Where did the extra $350 come from? Talk about printing money!! Same could be said for the oil producers.
OK. How about clothing retailers who mark up some 500% or jewelers who mark up 500-1000%? Where did the extra money come from?? Talk about printing money! The same could be said for many US businesses. I guess making a fair profit in today's harsh times should not be compensated for, esp in light of an industry that competes against the manipulated US dollar. There are some miners pulling it out of the ground at $700. If you count Barrick's $2 BILL in hedges, they ultimately don't even make a profit.
World economies are much too large to be backed by anything but "full faith and credit". Perhaps a commodity rich country could it, but never the USA, Europe, China, India or Japan. Possibly only Canada could pull it off. We keep hearing the banking system will fail and PMs will go up. But since the first banking failure, BSC, PMs have only trended lower. Money spent on PM newsletters would be better spent on buying the PM itself.
A 100% backing is not realistic. But why not a partial backing of some sort to prevent unlimited monetary "printing?"
Considering that S&P dividend reinvested futures show a negative return over the past 2 years, and gold is up 50%. I think I'd take the gold and pass on the stock/dividends play. If we go back 7 years the numbers don't change much. Stocks have basically been a terrible investment over the past 7 years. Money spent with stocks newsletters would be much better spent on physical PM's. Funny that before the BSC failure, PM's were trending up for 7 years. The economy and banks in general are far worse today than back in March. Yet metals have been pushed downward and the dollar has "recovered." Who would be the source of such wizardry? The same pundits called for the end of gold in August 1976 as well as June 2006. They were all wrong. Those calling the July 2008 drop as the end will be tossed on to that same heap of incorrect bottom callers.
<< <i>Everyone who reads this thread on a regular basis was warned in early March that that the bloom was falling from the PM rose. Look back to around March 9.
Dont look at conspiracy theory to justify a good investment gone bad. Eventually the good time ALWAYS fades After a 7 year, 400%+ run, you should have taken what was given. Stop whining about conspiracy, figure out what you didnt see--and reason for your lack of action--and go on to the next trade. >>
There have been "warnings" from many for a long time and while we have had drops over the years we have also had spikes that off set those and then some.
Not looking at a conspiracy theory, not even close. I am looking at absolute facts, you could too if you were to read the various articles that have been linked to or posted on this forum.
I don't consider it a bad investment at all. I'm still way up and I'm still active in the metals market.
No whining at all, though that's often a word used to deflect away from the facts when someone points out the obvious manipulation.
A better question should be; What are banks doing taking positions in metals and SLV in the first place? Is that even within allowed procedures? Is it even legal for them to do it with other people's money? When you see coordinated massive moves by a couple of banks at the same time, that is not an accident, that is collusion and likely quite bit more. When you see SLV then aquire all those short positions in conjunction, it's not a theory. It's fact!
Sorry, no theory, but most likely it was conspired beforehand. If it walks like a duck, etc.
Call me names all you want, it's been done before on this very thread and many others that preceeded it and I have come out just fine and generally ahead in the long run. It's not my nature to later to stick it in the face of those same people who took issue with my statements or actions. Most of them have faded away on their own anyway.
What I find terribly wrong with what recently transpired is the damage that was caused to the regular investors and worse, those just beginning that may have suffered greatly or been wiped out. While a few fat cats smiled and quietly stole well over hundreds of trillions of dollars and various other monetary echanges almost overnight, it's not my nature to just sit back and say something as foolish as; "well you were warned", "it's just the nature of the market', "it's just the end of the bull run", etc. NO! None of that is true. There are facts coming to the surface that dispute every one of those notions. I'm not known to wear blinders or just accept that such an incredible forced movement downward is "typical of the market".
There have been people people holdng signs warning us about the end of the world and to repent for years. They haven't been right yet and even if the Sun went Nova tomorrow, it woudn't be true that they had any advance knowledge. I know this isn't quite the same, but the naysayers in metals do remind of those folks and anyone follish enough to believe them.
"Lenin is certainly right. There is no subtler or more severe means of overturning the existing basis of society(destroy capitalism) than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and it does it in a manner which not one man in a million is able to diagnose." John Marnard Keynes, The Economic Consequences of the Peace, 1920, page 235ff
"A very few and very large banks seemed to have positioned very well ahead of the plunge in prices for gold and silver, but in the process they may have bought more than they bargained for – possible class-action lawsuits...
An internet firestorm erupted over an August 5 report issued by the Commodities Futures Trading Commission (CFTC) which report revealed an unprecedented exponential one-month spike higher in short positions in gold and silver futures reported by two U.S. banks in silver and three U.S. banks in gold. Investors and bullion dealers may band together to seek legal recourse against the thus far unnamed banks... "
<< <i>"A very few and very large banks seemed to have positioned very well ahead of the plunge in prices for gold and silver, but in the process they may have bought more than they bargained for – possible class-action lawsuits...
An internet firestorm erupted over an August 5 report issued by the Commodities Futures Trading Commission (CFTC) which report revealed an unprecedented exponential one-month spike higher in short positions in gold and silver futures reported by two U.S. banks in silver and three U.S. banks in gold. Investors and bullion dealers may band together to seek legal recourse against the thus far unnamed banks... "
A very interesting article... and makes me angry when I read it. A free market?? Yeh, right. Can manipulation get any more blatant? In bed with the FED with insider trading, to steal from the masses.....
They can't pull a Nathan on us anymore. We have our lookouts at Waterloo just like the Bankers.
They can spike it all they want, but thier action has just caused the physical to decouple from the paper. That is the WORST thing you can do to damage a market. When there is no faith in the Market, when it is percieved as fixed, people use a work-around and bypass it. These idiots forget what a grey/black market is. Its Called EBay, Dealer Networks, even BST....Its called the Internet and we have found it.
In the old days, such a drop would have a panic to unload. Not anymore! We called it a fix within hours of the drop and brought forth evidence from all over the world.
If they do it again, there wil;l be even more buying of the physical (if it can be found)
That doesn’t mean they can’t test even lower prices, they certainly can, especially if the few futures-playing giant banks stomp their leviathan boots on the neck of the paper-contract-dominated spot market again. We have to believe they won’t though. Not anytime soon anyway. Not unless they intend on feeding a different kind of bear. The grizzlies known as heavy-hitting class action lawyers.
Thanks to the Internet, information is indeed power~
<< <i>"Dont look at conspiracy theory to justify a good investment gone bad. Eventually the good time ALWAYS fades After a 7 year, 400%+ run, you should have taken what was given. Stop whining about conspiracy, figure out what you didnt see--and reason for your lack of action--and go on to the next trade."
You know, cohodk, you're right but maybe you are ignoring the subtle psychology of the regular guy and his "accumulations". Speaking for myself, assuming that I'm not the only one like this, it is good to have some extra money now and then and it is even better when you can use it to pull off a piece of metal for yourself and put it in your cave. Accumulators we are, not really traders. That may be a contrarian approach considering investors that get into things and get out when it seems right. But there is a difference. If I can have a piece of gold in a box, I'm happy and feel a little more secure; the more gold, the more secure. If it goes up...man that's outstanding, makes me feel like the smartest guy in the room and if it goes down...well, I wasn't selling it right now anyway because I like having it in the box for now and for the near future and, I know it will go up again in the future and I can decide if I want to sell then, or not.
The problem I have with the type of "playing" we are seeing now is the guys that are new to this. They get hurt financially, they jeapordize their welfare, their family income, their bank accounts, their attitude, and a whole list of the bad things that happen with a quick investment gone bad. When the signals are all over the board and people are yelling "Bottom!!!" and the little fish swim into the net even when, for example, silver is trading at outrageous multiples of just a couple of years ago looks like a guaranteed winner at $14; and the fish swim in. I like a steady market that is based on supply and demand, that is based of above board fair trading practices, a market that is somewhat transparent. When people manipulate metal and screw the little or new guy by scaring him out of his little investment and they do it because that's how they get money, well, there is the problem.
Now for accumulators, it's not a big deal, we're holding and accumulating and watching what's going on. We don't stretch out and burn off our stock account to go buy a bunch of physical silver because we think it's near the bottom but we sure might reach into the current pay check and suck it up for a month to get a bar when the prices seem reasonable. Accumulators don't care but they do pay attention because they are a fully suited up playing member of the team. Maybe when the metal gets to some ridiculous price (like recently) we should let a few oz's go back into the wilderness just to pay for our accumulation habit but releasing the hoard to get back in at a lower price...nah, nah, and nah.
"Why?" is a fair question at this point and this brings us back to the subtle psychology of accumulators. They accumulate, that's what they are doing and that's the simple strategy, and that's the fun of it. The reward for this fun little adventure is to have a large enough pile at some point in time and have it at a high enough price at some point in time that you can get out and buy a house or pay for a college education for one of the children/grandchildren or pay for your wife's operation, or blow it all on one final naked run through the daisey fields...what ever the great reward is, the accumulator is working for that and his strategy is to rathole a little every now and then with money that can be taken out of the primary income stream without any consequence and divert that money to work on the dream. So gold and silver accumulators are dreamers, they are working on a dream, one ten oz bar at a time or two SAE's at a time, or a 1000 oz bar at a time, each according to his dreams and his abililty.
Now the counter for that strategy would obviously be..."Well why don't you put that $50 or $1,000 buks in a stock account or life insurance policy or save it for a roth ira...?" The answer is, nah, I like looking at my gold and knowing it's gold and knowing it's mine and holding it in my hand, because the reality of holding your gold in your hand is quite satisfying and the security it seems to impart is distinctive amongst the other forms of security in today's financial world. To help with visualizing what I'm talking about, think "Happiness is a warm gun". >>
My candidate for POst of the month on this new board . Rationalises perfectly all my excuses for being an "accumulater"
<< <i>Also, while paper dollars are being printed by central banks, so is physical gold. The miners are working 24/7 creating gold out of dirt. There is no difference.
The average miner pulls gold out of the ground at about $450 yet sells it for $800. Where did the extra $350 come from? Talk about printing money!! Same could be said for the oil producers.
World economies are much too large to be backed by anything but "full faith and credit". Perhaps a commodity rich country could it, but never the USA, Europe, China, India or Japan. Possibly only Canada could pull it off.
We keep hearing the banking system will fail and PMs will go up. But since the first banking failure, BSC, PMs have only trended lower. Money spent on PM newsletters would be better spent on buying the PM itself. >>
I don't like silver because I think the banking system will fail or the economy will collapse. I buy silver because I believe we are at a un- ique point in human history where people will wake up and realize that silver is scarcer than gold and more necessary to the functioning of a healthy economy. I see the forces which delivered us to this point accelerating as human populations increase and silver becomes more difficult to find and more expensive to produce. Even if people refuse to see the light of day, in the long run there just isn't going to be e- nough silver to go around and the price move will be explosive; unprec- idented in human history.
Gold is insurance against inflation and might have some value in the case of collapse. But silver is a bet on the future not against it. Best of all silver might help protect against the inflation that world govern- ments and inept banking has assured will come to pass. Silver might be "good as gold" and much better too.
Well why don't you put that $50 or $1,000 buks in a stock account or life insurance policy or save it for a roth ira...?"
Been there. Done that. In fact, that's what I'd done for about 75% of my investing adult life. I admit to having a nice run in some tech stocks during 1998-1999, but besides that I've never experienced any magical rise in my level of wealth from a well-diversified portfolio of paper assets. A MicroSoft doesn't come along every day, but the paper pushers would sure like to have you think so. The hype in owning stocks is overblown imo, and stock gains are seldom expressed after discounting for inflation and after tax effects.
Roth IRAs are just a ploy to tie up money in paper assets. Inflation is responsible for most of the gains (especially in the recent bubble markets), not improved company economics or new product innovations (you can only get so far on umpteen new variations of an ipod or wireless text-messaging). But you can be sure that any gains will be fully-taxed when the gains are realized, regardless of how the gains were created.
IRAs and SEPs and 401Ks all carry a 10% penalty for early withdrawal. Why? These plans are a ploy to keep money tied up in paper assets, and they always have been.
Has anyone ever figured out why the rules for precious metal ownership in an IRA are prohibitively difficult, compared to owning stocks in an IRA? You can trade stocks in an IRA brokerage account with the click of a mouse, but you can't even hold PMs yourself in an IRA, so you have to pay for storage and set up the account through a third party besides. Clearly manipulative in favor of paper assets.
At 10% annualized inflation, that 10% IRA penalty for early withdrawal looks justifiable when faced with a yearly guaranteed loss of capital. Either way, you're gonna pay taxes on the gains - it's only a question of how much in taxes. If Obama gets in with a Democratic Congress, the tax rate on those gains might be alot higher in about 2 years.
And of course, there's Social Security - the only explanation for promoting Social Security instead of an alternate retirement plan - is that people who are smart enough to know the value of saving in the first place - simply cannot be trusted to be smart in handling their own money. That's the basic rationale you get from those socialists who oppose Bush's plan to allow young people to put a fraction of their earnings into a tax-sheltered personal tax savings account, apart from Social Security. Obviously, young people cannot be trusted to save money unless the government tells them how, and where to save it.
I keep hearing that the bankers took all the money. This is so wrong.
No, the bankers, brokers, financiers, lawyers, and other insiders didn't make off with ALL of the money, because it IS being destroyed. But, the bankers and their friends DID make off with high salaries and bonuses for years - at pay levels many times beyond their worth or training, and they DID do it at the public's expense. Not to worry though - they've got Bernake ready to create it as fast as it is destroyed - and to give more of it to the very same bunch of good old boys who were complicit in the initial schemes. Life is so grand, when you're on top.
The repeal of Glass-Steagall made it all possible. It's been more than an illicit boondoggle - it will be our undoing. Remember the names - Bill Clinton, Robert Rubin, and Hank Paulson - they made it all possible.
I hear you and agree that there is a psychological element to holding PM's and even I hold a small position--just in case, but it is a VERY small amount relative to total assets.
My fear is that all this PPT and conspiracy thought is clouding rational judgement. Maybe I shouldnt be concerned as it isnt my money, but it still bothers me. Very intelligent and rational people have gone awry with investments in equities and real estate. I fear the same will happen with PM's.
The main hazard in holding PMs is in not having enough of them when the paper currency is trashed. Secondary hazards include both security and that the government will try very hard to neutralize the value of PMs if they present a challenge to their standard ways of doing business. Cohodk, your nominal 5% or 10% portfolio weighting in precious metals won't save your paper portfolio from a major loss if your portfolio gets caught in the web of massive wealth destruction that you yourself refer to in your post. If you think that there is a risk of "loss of confidence" now, just wait until things get really hairy.
As revenue streams dry up due to the destruction of capital, huge losses of tax revenues will put the hurt on governments large and small. The upshot will be higher tax rates, major dislocations of families and a reformation of the monetary system. The US government will have to default on its obligations to US Treasury Bondholders, Social Program recipients, Social Security, Medicare obligations, and foreign holders of dollars.
That's going to make nearly everyone in the world "mad", as in "really ticked off". It's happening as we speak. If you think that holding a small portion of pms is the answer for diversification, then you aren't recognizing the systemic risk that is all around us. A "small portion" was the conventional wisdom when the financial system was more predictable - a crumb tossed to the precious metals crowd to keep them happy when diversification was accepted as the smartest way to go. We're in the "Alice in Wonderland" economy now. Nothing made of paper is real, and as Deadhorse mentions, they are running out of bullets and easy fixes.
Q: Are You Printing Money? Bernanke: Not Literally
I am not calling anyone names. I am just stating that I am seeing the same investor mentality in PM's as I have in equities. And in dealing with thousands of individuals over time,--in both bull and bear markets-- I think I am qualified to make an assessment on investor behavior. Take it for what you think it is worth.
Regarding the PM newsletters, in March and again in July, they said "this is it". Both marked tops in the PMs. I guess they meant "it" was really, "thats all she wrote"?
Brian,
Come on man, you're taking my thunder. I was not referring to the countless calls for a top, but rather MY OWN calls on the PMs over the past year. I nailed the breakout and the topping out. I'm just looking for a pat on the back. It is one thing to say 6 months in advance that things will change, but quite another to make that call with days of a change.
Current chart patterns are quite neutral for the metals. The dollar is overbought short term which should support metals in the very near term. Two months from now we will have to re evaluate the trends. If there is no improvement, then we may in fact have witnessed the beginning of a major trend change. All should be quite clear by January.
My point all along in this thread, it that PM's are good trading vehicles in which one can amass a great of money. They are not however, going to be a beacon on a stormy night. Play them for what they are, dont overstay your welcome, and have fun.
Cohodk, your nominal 5% or 10% portfolio weighting in precious metals won't save your paper portfolio from a major loss if your portfolio gets caught in the web of massive wealth destruction that you yourself refer to in your post. If you think that there is a risk of "loss of confidence" now, just wait until things get really hairy.
I do hear what you are saying, believe me I do, but given the recent 43% decline in silver and platinum and the 25% decline in gold, I honestly dont see how PMs have "saved or protected" me from anything. And that has been me assertion all along.
"Come on man, you're taking my thunder. I was not referring to the countless calls for a top, but rather MY OWN calls on the PMs over the past year. I nailed the breakout and the topping out. I'm just looking for a pat on the back."
I doubt that anyone questions either your exceptional prognostication abilities nor your depth of experience in your subject areas. Doubtful that any one is taking exception to your statements but just discussing for the sake of conversation. Over the years on this thread, you have nailed more trends and movements than one person should be able to claim and you're always well ahead of the news.
I do hear what you are saying, believe me I do, but given the recent 43% decline in silver and platinum and the 25% decline in gold, I honestly dont see how PMs have "saved or protected" me from anything. And that has been me assertion all along.
True enough, in terms of a trading strategy. Most people, myself included - aren't looking to beat the market day to day. That's a fulltime job and the odds are not good that an individual can beat the big boys with their trading tools. You might be the exception, but I'm talking in general, for hacks like myself who don't trade daily.
That's why my contention is that the best way to protect yourself is with a slow accumulation or a slow divestment strategy focused on precious metals. For someone who's been accumulating for years, through highs and lows - this recent market turbulence isn't significant.
There is one thing that is well-documented, especially in this thread - the government is going to continue to inflate, manipulate and tax people as much as it can get away with. As far as a peak in precious metals, it really depends on government policy. More and more, my investment strategy is directly tied to what I see the US government doing - economically, militarily, socially and politically. Right now, my intuition says to stand prepared with pms and cash, but not much else, well - except for a relatively safe place to hang out, too.
Q: Are You Printing Money? Bernanke: Not Literally
Yes RR it would be great to have some kinda standard to tie our fiat money to, but then woudn't that take all the fun away from wall street and the next "rape the economy" for a quick billion scheme?...oops seems a few banks managed that earlier this month.....
Comments
What will be the cost of this "bail out"? 1 trillion, 2, or more?
Who will bail out the Fed?
Scott
The FED likes these bail outs because it raises GDP and keeps "growth" above 0% (ie no "official" recession). Just look what the $600 rebate checks did for GDP last quarter....nice bump to the #'s and seemingly "positive" economic growth.
The bail out of China in F&F will be spun as dollar positive regardless of the true effects. But when the American people find out that their national debt ultimately rises from $9 TRILL to $14 TRILL, they might wake up.
roadrunner
to read
That no new taxes often means unfunded debt
that is crushing the life out of the Nation. There
is a clear need for an even lager military in view
of the growing international dangers such as Russia,
China, N. Korea, Iran, Syria, Muslim extremists, Iraq
Afghanistan ect ect. Folks seem to think that the
Government can just print all the money it needs and
and there is no need at all for taxes of any kind. I guess
that we can just have Government Workers pick up cans,
bottles and paper and turn them in, so that Uncle Sammy can
receive the refund deposits. The poor, middle class and the rich
all want services and perks and freebies without anyone ever
having to pay for anything. We live in a strange time indeed.
We want our Senators and Congressmen to win big government
grants for our states, but we are opposed to to such pork for any other
state but ours. We want, we need, we demand, we complain, we criticize
but we never seem to step up and do what is needed or what is right.
We have been given the most wonderful Nation on the face of the Earth by
our parent and yet, somehow it all seems to be slipping away. It is not only
acts of selfish commission that does us in, it is also selfish act of ommission
that may well cause us deep regret in the years to come.
At some point in time, our enemies will engage in economic as well
as cyber warfare in addition to military action. If people think that the
sacrifices can be born solely by the wonderful men and women who
volunteer for military service, then we are doomed to fall as hard as
the Roman Empire fell. The only thing we have not outsourced, is our
military and the government. I would not be surprised, if they were not
the next jobs to be sent to China, India, Pakistan and Bangladesh . If not
that, then maybe we can arm the Salvation Army and send them in
harm's way.
Camelot
Camelot
The automakers pushed their "Statement" SUV's becaue it was easy money, selling to a whole hella lotta folks who were ATM'ing their home equity.
blue collar BK, i can see it now..... financial "disaster" loans at 3% over 100 years, step right on up...those who don't qualify will be taxed at an 80% net rate, until they, too, qualify as BK
There were voices that said US automakers could help with the upcoming energy crisis through new technology but they were ignored. Employee discounts for everyone, 0% financing, take 6 years to pay with payments as low as $300/month...hard to ignore that hype and the people didn't. As long as the banks were making money on the notes and the oil companies were making money on the volume and the automakers were hauling in money on these bus sized personal vehicles, life was good and certainly there was no need to mention the forbidden word..."downsizing" in a culture that is always asked if they want to "supersize" that order. Every body makes money...the banks got to triple dip; they got the refi, they got the credit card activity, and they got the car notes and life is good megabonuses for everyone on the job...good job!!! The oil companies were selling everything they could refine and the car makers were just trying to out maneuver Japan and Korea and Germany...it's like a game and they were certainly playing. No one had to try and be like the Joneses any more, they could BE THE JONESES! Now the banks are crying like a three month old that has been pulled off of mother's milk spigot. The car loans are going bad, the credit cards aren't being paid, the houses are reposessed with nothing coming in and taxes going out and for the Joneses...it's not good.
US automakers could have kept dominance in the market, they could have stayed competitive and it's not rocket science or extreem technology. What's so hard about getting off of oil...nothing. But we have an oil industry that needs protected, we have car makers that need protected, we have banks that needs protected, we have airlines that need protected but who is there to protect them...ah, that's the problem. The consumer turned consumee was the protector via their consumption; being the Joneses. So now that consumer has been consumed it's a new day and no one is going to protect no one or nothing, it's every man for themselves and if any fool thinks that oil, airlines, auto manufacturers, banks, or anyone that is starving with out the consumee's money...is going to do anything to help the consumee then they deserve what they get. Fools no more, once consumed twice wise.
So T. Boone's plan, yeah it's a player; use nat gas to get off of imported oil, switch to alternative energy within 10 years, let's do this differently. Car manufacturers...well, seems they got the message when no one would buy those huge vehicles so they sat on the lot...no money here so all of the sudden, they have new fuel efficient smaller size vehicle technology in the pipeline...amazing what power the consumer has; so all of the sudden the car companies just figured out how to make a fuel efficient car...HOGWASH. The banks, well they made their play and now they have no money to lend so it's surely going to be a slow, painful death for those banks that once handed out employee bonuses like they were Pez candy and don't look for the 20% interest on unpaid card balances consumee to come rushing to take out new loans and get new credit accounts at the bank; two problems, the banks won't lend and the consumee has no money for that nonsense.
If it weren't for the 401K's that are being held hostage by the soon to be retirees account managers, then the story would indeed be more dire but the fund managers have those accounts and the retirees can't get the money unless they take the severe penalty clause. Meanwhile, the DOW stays above 11,000...we'll see what happens here but what ever recovery is expected to happen better happen before the boomers get their their hands on their 401K accounts and convert them to cash/metal and take them completely out of the grasp of the people that have so malaigned them previously.
There's a new day coming for the US consumers. The ones that are tired of being tagged with the tax bill for all the programs and the bail outs and the great society BS and this new day is not about being the Joneses. It's about conserving money, resources, time, consumption. It's not Emeril Lagasse kicking it up a notch any more, it's not about supersizing anymore, it's about how do I keep what's mine and how can me and my family and loved ones be more comfortable with less. It's about taking it down a notch. It's about survival in a conspicuously predatory financial world and its about not getting caught up in some bank come on or refi magic or the 6 year note on a gas guzzler. Maybe it's about a backyard garden, maybe it's about going to the local park (albeit with a carry permit) instead of Disneyworld, maybe it's about driving to grandma's instead of flying to the Bahamas, maybe we'll have the family over instead of doing Vegas for the weekend, maybe I'll pay cash for a small one instead of using credit for a large one...it's certainly going to be different and methinks it's all good.
Now, if we could just get the government out of our pocket, we might stand a chance but not much reason for optimism here. Rather than be rewarded for conservation and smart consumerism like paying your house note on time, saving cash, etc., the middleclass worker is likely to be innudated by programs and taxes to fund havenots and bailouts. But, first things first; let's get this consumerism under control and let all that fall out occur then we can consider strategies for insulating ourselves from new programs and more taxes that should be paid for by commercial enterprises (notorious for not paying any taxes) and not by cube dwellers.
carry on
Edited to remove previous link to Brazilian ethanol; finally got time to finish reading it and decided it wasn't apolitical enough.
Yes, and don't forget that we have a domestic ethanol industry that needs protection as well. Decades of corporate welfare for a fuel that's inefficient to produce, has little impact in reducing the cost of gasoline, and causes inflation in any product using corn (which is many products). We need leadership in Washington, and I don't see it in the current residents of the Capital or WH, or any on the horizon for that matter.
I don't think the issue is so much the cost of the gasoline, it's more about where the oil comes from. It will and should cost $4/gal. but buying it from people that want to teach us how to be good muslims is what could be changed. The days of $2 gas is in the history books. Using food grains as fuel is dumb...yeah. Using sugarcane is good because, you get the sugar and you get the fuel and we can grow it here and we can expand our ag industry to the middle class/family farmers again. What ever fledgling gasohol industry protection that may be warranted is minisculine compared to US auto industry, airlines, banks, and the like already get in spades and have been for decades it's not even a like comparison. Let some new players have a chance and doing something different and better.
By ERIC DASH and GERALDINE FABRIKANT
Published: August 26, 2008
WASHINGTON — Sheila C. Bair anticipated the mortgage crisis long before most other regulators. But she never dreamed it would wreak so much havoc on so many banks.
More than a year after the credit crisis first flared, Ms. Bair, the chairwoman of the Federal Deposit Insurance Corporation, warned on Tuesday that the outlook for the ailing banking industry was bad — and getting worse.
Her downbeat outlook was underscored on Tuesday by the F.D.I.C’s latest quarterly assessment of the industry. The agency said the number of bad loans at banks ballooned to its highest level in 15 years during the second quarter.
Industrywide, bank earnings plunged 86 percent from April to June, to $4.96 billion, from $36.8 billion a year earlier, the agency said.
Meanwhile, there are growing questions about the adequacy of F.D.I.C.’s insurance fund, which guarantees repayment on deposit accounts of up to $100,000 when banks collapse. The fund dwindled to $45.2 billion during the second quarter, from $53 billion in the first quarter.
The F.D.I.C., which guarantees savings and checking deposits, also raised the number of banks on its list of problem lenders to 117 this week.
i am on board with that...and a lifestyle that is simpler and less stressful and can offer the opportunity for more joy and personal freedom.
many have come to this country have made the American Dream by hard, honest work and thrift and live so far inside of their means it's well anal, yet they are enjoying themsleves and their lives. they are NOT lovers of money, they are NOT consumption addicts which is what most of usa has become....
Thursday August 28, 1:56 pm ET
By David Ellis, CNNMoney.com staff writer
The government's latest assessment of the nation's financial system showed that many more small banks are in trouble. But what the report didn't say may speak volumes.
Typically, the FDIC list is published some 8 weeks after all of the nation's banks have reported their latest quarterly results.
Bank regulators - which in addition to the FDIC include the Office of the Comptroller of the Currency (OCC) and Office of Thrift Supervision (OTS) - then give the banks a report card, assigning a composite rating based on the bank's performance in each category. Those that receive a rating of 4 or 5 are put on the list.
Since the failure of IndyMac in mid-July, however, speculation has emerged that regulators may have exercised some discretion about which institutions they put on the confidential list.
The FDIC's first-quarter problem list, released at the end of May, clearly did not have IndyMac on it. That's because the FDIC reported that the 90 banks on the list had a combined $26.3 billion in assets - less than the size of IndyMac. That suggested that the only problem banks at the time were smaller community banks.
"It is telling that IndyMac was not on the problem list the quarter before," said Yeager. "Usually bank failures like that are pretty slow events - it is unlikely [federal regulators] were surprised by that."
Aug. 28 (Bloomberg) --
Rand Refinery Ltd., the world's largest gold refinery, ran out of South African Krugerrands after an ``unusually large'' order from a buyer in Switzerland.
The order was for 5,000 ounces and it will take until Sept. 3 for inventories to be replenished, said Johan Botha, a spokesman for Rand Refinery in Germiston, east of Johannesburg. He declined to identify the buyer.
Coins and bars of precious metals are attracting investors as a haven against a sliding dollar and conflict between Russia and its neighbor Georgia. The U.S. Mint suspended sales of one- ounce ``American Eagle'' gold coins, Johnson Matthey Plc stopped taking orders for 100-ounce silver bars at its Salt Lake City refinery and Heraeus Holding GmbH has a delivery waiting list of as long as two weeks for orders of gold bars in Europe.
<< <i>Just because the manipulators have been moving the price of the PM’S downward does not mean that the physical supply of Gold and Silver will last. Not many are fooled by this paper manipulation. The central governments of the World truly believe we are all idiots.
Aug. 28 (Bloomberg) --
Rand Refinery Ltd., the world's largest gold refinery, ran out of South African Krugerrands after an ``unusually large'' order from a buyer in Switzerland.
The order was for 5,000 ounces and it will take until Sept. 3 for inventories to be replenished, said Johan Botha, a spokesman for Rand Refinery in Germiston, east of Johannesburg. He declined to identify the buyer.
Coins and bars of precious metals are attracting investors as a haven against a sliding dollar and conflict between Russia and its neighbor Georgia. The U.S. Mint suspended sales of one- ounce ``American Eagle'' gold coins, Johnson Matthey Plc stopped taking orders for 100-ounce silver bars at its Salt Lake City refinery and Heraeus Holding GmbH has a delivery waiting list of as long as two weeks for orders of gold bars in Europe. >>
Sounds about right. The perfect storm is brewing.
What have we been talking about for years on this thread alone?
Yeah, sadly Americans are, for the most part, idiots when it comes to the financial world.
This play has been developing in front of us for years and yet the average person has no clue why.
All they know is that their dollar isn't lasting as long, they aren't getting any raises and some are finding themselves unemployed.
Time to whine to the Government. We aren't that far away from the Government not being there anymore as far as handouts.
The perfect storm indeed!
John Marnard Keynes, The Economic Consequences of the Peace, 1920, page 235ff
By Timothy R. Homan
Aug. 27 (Bloomberg) -- Finance officials from the U.S., Japan and Europe in mid-March drew up plans to strengthen the U.S. dollar following troubles at Bear Stearns Cos., Nikkei English News reported, citing unnamed sources.
The intervention designed by the U.S. Treasury Department, Japan's Finance Ministry and the European Central Bank called for the central banks to purchase dollars and sell euros and yen, with Japan providing the yen needed for the currency swap if the greenback's value dropped significantly, the news service said.
The three groups, which considered making an emergency statement through the Group of Seven industrial nations, did not stipulate a specific exchange rate for the potential intervention, nor did they detail the amount of money to be used, Nikkei said.
ECB spokeswoman Eszter Miltenyi and Treasury spokeswoman Brookly McLaughlin declined to comment on the report.
To contact the reporter on this story: Timothy R. Homan in Washington at thoman1@bloomberg.net
Link to article
<< <i>U.S., Europe, Japan Devised Plan to Prop Up Dollar, Nikkei Says
By Timothy R. Homan
Aug. 27 (Bloomberg) -- Finance officials from the U.S., Japan and Europe in mid-March drew up plans to strengthen the U.S. dollar following troubles at Bear Stearns Cos., Nikkei English News reported, citing unnamed sources.
The intervention designed by the U.S. Treasury Department, Japan's Finance Ministry and the European Central Bank called for the central banks to purchase dollars and sell euros and yen, with Japan providing the yen needed for the currency swap if the greenback's value dropped significantly, the news service said.
The three groups, which considered making an emergency statement through the Group of Seven industrial nations, did not stipulate a specific exchange rate for the potential intervention, nor did they detail the amount of money to be used, Nikkei said.
ECB spokeswoman Eszter Miltenyi and Treasury spokeswoman Brookly McLaughlin declined to comment on the report.
To contact the reporter on this story: Timothy R. Homan in Washington at thoman1@bloomberg.net
Link to article >>
then a few shorted silver and gold to really do a whammy, also i'll bet that "Swiss buyer" is living elsewhere. and that the banks who shorted Ag will be riding a long road
everyone is out to get me!
<< <i>then a few shorted silver and gold to really do a whammy, also i'll bet that "Swiss buyer" is living elsewhere. and that the banks who shorted Ag will be riding a long road
everyone is out to get me!
Oh, don't be such a wuss, you're safe for now. They're out to get me first!
I think Roadrunner is next behind me. But rest assured, I have good information that you ARE on the list as well.
Won't be long now, but I think you've got time for lunch yet.
John Marnard Keynes, The Economic Consequences of the Peace, 1920, page 235ff
<< <i>Man, wouldn't that be sweet! Smoke out the shorts with a big private purchase...that would be so sweet to get those manipulators on the ropes so good that they will never come back. >>
Many of them were wiped out for good around 28 years ago.
The market is small enough and so loosely regulated that all sorts of shenanigans have gone on for years now.
Hell, the truth is it isn't regulated at all, unless you consider having the fox guard the hen house as tight security.
Rather than see them wiped out, I'd much rather see strict regulation. At least as tight as it is over banking regulations.
I mean, if those were the choices. Sure, it would be a big plus to see some of these guys taken out as an example to others. Not just financially, but see them spend a very long time as guests in a Federal "hotel" as well.
What really happened a few weeks ago seems fairly clear, but we really, really need to see the culprits exposed and see what, if any, connections they may have to SLV.
That alone would put them away and empty their pockets if what seems to be true actually is.
A drop from $19.40 to $12.70 in that short time frame is not within the bounds of a free trade market, particularly when the scarcity factor is coupled with the continued drop.
Many people are certain of the connection and I tend to agree, the problem is exposing the players. This was outright robbery on a scale never before seen.
Years of work and trillions of dollars were lost across the planet. How can you even figure what the penalties should be on something like that?
John Marnard Keynes, The Economic Consequences of the Peace, 1920, page 235ff
<< <i>
<< <i>then a few shorted silver and gold to really do a whammy, also i'll bet that "Swiss buyer" is living elsewhere. and that the banks who shorted Ag will be riding a long road
everyone is out to get me!
Oh, don't be such a wuss, you're safe for now. They're out to get me first!
I think Roadrunner is next behind me. But rest assured, I have good information that you ARE on the list as well.
Won't be long now, but I think you've got time for lunch yet.
just back form a long lunch in Carmel with a bunch of buddies, mostly just shot the breeze and talked about the kids....
Dont look at conspiracy theory to justify a good investment gone bad. Eventually the good time ALWAYS fades After a 7 year, 400%+ run, you should have taken what was given. Stop whining about conspiracy, figure out what you didnt see--and reason for your lack of action--and go on to the next trade.
The 50 and 200 day moving averages for silver are now turning lower--for the first time in 3+ years. The trend is now sideways to down. We probably get a rally of about $2, but that could be all.
Sorry to be possibly confrontational, but in nearly 20 years of investment advice, I see the same mistakes made over and over. Blind faith results in false hope. People get a good investment and ride it back into the ground.
Knowledge is the enemy of fear
Sorry to be possibly confrontational, but in nearly 20 years of investment advice, I see the same mistakes made over and over. Blind faith results in false hope. People get a good investment and ride it back into the ground.
I have absolute faith in the US Government. I am confident that they will continue to inflate the currency like there's no tomorrow.
Of course, that giant sucking sound you hear is asset deflation, caused by the "de-leveraging" of highly-leveraged kiting schemes devised by the international investment banks and hedge funds. Of course, the money is gone, taken by the bankers, and the lawyers and the hedge fund managements and salted away out of reach.
Which one will win, inflation or deflation? I dunno. But I do know that there are only two asset classes that I like right now - cash and precious metals. I'll buy all the stocks and bonds and real estate that I want, later.
I knew it would happen.
<< <i>Everyone who reads this thread on a regular basis was warned in early March that that the bloom was falling from the PM rose. Look back to around March 9. >>
There were warnings way back in December. On this thread back in December, I made the following economic predictions for 2008:
--The economy will slip into negative growth at least one quarter and potentially two quarters (i.e., a recession). The unemployment rate will rise to around 5.5%. World economic growth will also slow down measurably. We saw a negative growth quarter actually in Q4 2007. Unemployment is now up to 5.7%. World growth is also slowing dramatically.
--The dollar will strengthen to around 1.25 dollars per euro and around 1.8 dollars per UK pound. The pound is now at 1.82. The euro has declined about 10% recently but is still around 1.47.
--Gold will decline to $550 an ounce and silver to $10. Silver is now at $13, gold a little over $800.
--Oil will decline to $65 a barrel. We're more than half-way there
--Stock markets will decline with the Dow slipping back to around 11,000. We're in the 11,000 range again
The problem with the gold/commodities bull run is that is was driven by 2 facts that no longer hold true. First was the supposed massive inflationary printing of money by the government (which in fact, was largely a phenomenon of the creation of huge amounts of credit by banks during the pre-credit crunch period). That story is over and today we are seeing the destruction of huge amounts of credit and wealth. That may be a lot of things but inflationary it's not. Second is the supposed massive increase in demand from the rest of the world, especially China, for commodities. That seems to have also run its course for the time being. I believe, and I said so here last December and other times, that the commodities bull is dead for the foreseeable future.
You know, cohodk, you're right but maybe you are ignoring the subtle psychology of the regular guy and his "accumulations". Speaking for myself, assuming that I'm not the only one like this, it is good to have some extra money now and then and it is even better when you can use it to pull off a piece of metal for yourself and put it in your cave. Accumulators we are, not really traders. That may be a contrarian approach considering investors that get into things and get out when it seems right. But there is a difference. If I can have a piece of gold in a box, I'm happy and feel a little more secure; the more gold, the more secure. If it goes up...man that's outstanding, makes me feel like the smartest guy in the room and if it goes down...well, I wasn't selling it right now anyway because I like having it in the box for now and for the near future and, I know it will go up again in the future and I can decide if I want to sell then, or not.
The problem I have with the type of "playing" we are seeing now is the guys that are new to this. They get hurt financially, they jeapordize their welfare, their family income, their bank accounts, their attitude, and a whole list of the bad things that happen with a quick investment gone bad. When the signals are all over the board and people are yelling "Bottom!!!" and the little fish swim into the net even when, for example, silver is trading at outrageous multiples of just a couple of years ago looks like a guaranteed winner at $14; and the fish swim in. I like a steady market that is based on supply and demand, that is based of above board fair trading practices, a market that is somewhat transparent. When people manipulate metal and screw the little or new guy by scaring him out of his little investment and they do it because that's how they get money, well, there is the problem.
Now for accumulators, it's not a big deal, we're holding and accumulating and watching what's going on. We don't stretch out and burn off our stock account to go buy a bunch of physical silver because we think it's near the bottom but we sure might reach into the current pay check and suck it up for a month to get a bar when the prices seem reasonable. Accumulators don't care but they do pay attention because they are a fully suited up playing member of the team. Maybe when the metal gets to some ridiculous price (like recently) we should let a few oz's go back into the wilderness just to pay for our accumulation habit but releasing the hoard to get back in at a lower price...nah, nah, and nah.
"Why?" is a fair question at this point and this brings us back to the subtle psychology of accumulators. They accumulate, that's what they are doing and that's the simple strategy, and that's the fun of it. The reward for this fun little adventure is to have a large enough pile at some point in time and have it at a high enough price at some point in time that you can get out and buy a house or pay for a college education for one of the children/grandchildren or pay for your wife's operation, or blow it all on one final naked run through the daisey fields...what ever the great reward is, the accumulator is working for that and his strategy is to rathole a little every now and then with money that can be taken out of the primary income stream without any consequence and divert that money to work on the dream. So gold and silver accumulators are dreamers, they are working on a dream, one ten oz bar at a time or two SAE's at a time, or a 1000 oz bar at a time, each according to his dreams and his abililty.
Now the counter for that strategy would obviously be..."Well why don't you put that $50 or $1,000 buks in a stock account or life insurance policy or save it for a roth ira...?" The answer is, nah, I like looking at my gold and knowing it's gold and knowing it's mine and holding it in my hand, because the reality of holding your gold in your hand is quite satisfying and the security it seems to impart is distinctive amongst the other forms of security in today's financial world. To help with visualizing what I'm talking about, think "Happiness is a warm gun".
<< <i>
<< <i>Everyone who reads this thread on a regular basis was warned in early March that that the bloom was falling from the PM rose. Look back to around March 9. >>
There were warnings way back in December. On this thread back in December, I made the following economic predictions for 2008:
--The economy will slip into negative growth at least one quarter and potentially two quarters (i.e., a recession). The unemployment rate will rise to around 5.5%. World economic growth will also slow down measurably. We saw a negative growth quarter actually in Q4 2007. Unemployment is now up to 5.7%. World growth is also slowing dramatically.
--The dollar will strengthen to around 1.25 dollars per euro and around 1.8 dollars per UK pound. The pound is now at 1.82. The euro has declined about 10% recently but is still around 1.47.
--Gold will decline to $550 an ounce and silver to $10. Silver is now at $13, gold a little over $800.
--Oil will decline to $65 a barrel. We're more than half-way there
--Stock markets will decline with the Dow slipping back to around 11,000. We're in the 11,000 range again
The problem with the gold/commodities bull run is that is was driven by 2 facts that no longer hold true. First was the supposed massive inflationary printing of money by the government (which in fact, was largely a phenomenon of the creation of huge amounts of credit by banks during the pre-credit crunch period). That story is over and today we are seeing the destruction of huge amounts of credit and wealth. That may be a lot of things but inflationary it's not. Second is the supposed massive increase in demand from the rest of the world, especially China, for commodities. That seems to have also run its course for the time being. I believe, and I said so here last December and other times, that the commodities bull is dead for the foreseeable future. >>
those are very good arguments for your position.
though i still think the fiat monetary system isn't finished with it's growing pains (cycles)
but what is the rationale for the big silver/gold COMEX drop from July? other than it is really only a tool for trading and shorting on paper and big dawgs? sorry of the question seems naive. and the reasons for the dolar strengthening and Euro declining? isn't that part manipulation of the Fed and ECB working together? even if that is a yes, it probably reinforces your argument?...comments please from everybody....RR, Deadhorse, Storm, Cohodk, tincup, mrhammerman and all you guys.
the big debate here seems to be the markets are NOT acting rationally now...maybe they are given what has happened and what is happening.
I hear you and agree that there is a psychological element to holding PM's and even I hold a small position--just in case, but it is a VERY small amount relative to total assets.
My fear is that all this PPT and conspiracy thought is clouding rational judgement. Maybe I shouldnt be concerned as it isnt my money, but it still bothers me. Very intelligent and rational people have gone awry with investments in equities and real estate. I fear the same will happen with PM's.
I hear about all this money being created, but money is actually being destroyed much faster. Trillions have been destroyed in global real estate. Trillions have been destroyed in equities. The world produces 83 million barrels of oil everyday. It is $30 lower than 2 months ago. That is $2.5 billion less dollars being created on a daily basis. This is what I meant as monetary destruction.
I keep hearing that the bankers took all the money. This is so wrong. Money just disappears, just as it appeared when your house went from 400K to 600K. Where did that 200K come from? Yesterday stock in Dell Computer fell about 13%, after it gapped lower about 7%. That gap lower represented a loss of over $2 billion. Granted there may have been a few shorts that made money, but in reality that $2 billion just disappeared. It is not gone forever, but it is gone today. If the bankers took all the money, then why are they in such dire straights?
Knowledge is the enemy of fear
Dont look at conspiracy theory to justify a good investment gone bad. Eventually the good time ALWAYS fades After a 7 year, 400%+ run, you should have taken what was given. Stop whining about conspiracy, figure out what you didnt see--and reason for your lack of action--and go on to the next trade.
I know...the "warnings" came out every week or two since August 2007 as gold made intermediate moves upward. This is now the norm. The FED arranged for a take down the weekend of the BSC failure. They had Japan and others lined up to support the dollar as necessary. The well coordinated strike set up that weekend was the primary mover in the down turn....not just normal profit taking. What I didn't see was the extent the FED will go to manipulate. I won't underestimate them again. Their coordinated attack in July was almost as good by having 2 large banks increase their gold short positions by 11X over a 6 week period. That's normal "trading" policy for a bank? Imagine if those same banks took an 11X short on Fannie or Freddie, or bank stocks. You'd hear about it then.
John "Needler" of Kitco has declared a dead gold market because of a "written in stone-always signifies a bear market" 20% price correction. He forget to check his price history of gold to find that we've had several other 20%+ drops that did not kill the market. Look at Dec 1974 - Aug 1976 at 50% and even May-June 2006 where a 20%+ drop was also met. Nads has a short memory. The final run of gold from 1978 to 1980 also had some strong corrections near 20% as well. None of those big drops killed the gold move.
The problem with the gold/commodities bull run is that is was driven by 2 facts that no longer hold true. First was the supposed massive inflationary printing of money by the government (which in fact, was largely a phenomenon of the creation of huge amounts of credit by banks during the pre-credit crunch period).
Shadowstats.com is using the 1980 formula to calculate inflation which comes out to be 13-14%. Looks like inflation to me. The FED is still giving money hand over fist to banks and corporations. That hasn't ended nor will it end. It will get far worse as Fannie and Freddie will be bailed out to over $1 TRILLION and others follow. M3 and other indicators may have slowed somewhat as to be expected. They will start increasing again as sure as the sun rises. Shadowstats also calculates GDP as -2% using previous forumulae from past decades. Using the current set of forumula tweaked by Reagen, Clinton, and Bush 1, gets you numbers that will never look bad. And that's why they tweaked them.
That story is over and today we are seeing the destruction of huge amounts of credit and wealth. That may be a lot of things but inflationary it's not. Second is the supposed massive increase in demand from the rest of the world, especially China, for commodities. That seems to have also run its course for the time being. I believe, and I said so here last December and other times, that the commodities bull is dead for the foreseeable future.
It's inflationary as well as deflationary. As long as the FED is pumping out hundreds in billions in revolving credit, it's very inflationary to portions of the economy. The foreseeable future might be as a few weeks to a couple of months. In any event, the commodities bull has years left to run. That's about as sure a bet as saying that Fannie and Freddie are bankrupt. The $25 BILLION estimated "losses" will end up being 50X to 100X higher than that. Gold will perform far better than the USDollar during credit deleveraging.
Sure, money is being destroyed and that is killing the auto industry and other similar hard good industries (manufacturers, retailing, etc). But it will eventually force people back into something that will maintain their nest egg. And when they realize that stocks, bonds, and treasuries aren't cutting it, they'll gravitate back to metals and commodities again. While Trillions are being destroyed in housing and stocks, people will put the Trillions they have left in something else to protect themselves. Oil is down for the time being, but it will be back, and higher than before. The bankers took trillions in profits and bonuses along the way. As the credit destruction continues various entities will fail, others will be bailed out. The new credit has to go somewhere. Do you think it will get plopped back into housing or stocks? Not likely. The little guy that sees his house drop in value by $200K can do nothing. But when we fork over several hundred Billion in new credit/money to China when Fannie and Freddie go bust, that will be inflationary. The bankers still have $62 Trillion in credit derivatives to play with. After that they have hundreds of TRILLIONs in interest rate derivates/swaps to unwind. It will take years. There is a cost to unwinding those bets as the losers in the transaction close their doors for good and "winners" can't get paid (ie a major hit to the "off" balance sheet Figure on trillions more to be lost. That's why the banks are in such bad shape. They can't possibly cover these markers today and continue to drag their feet on FAS level 2,3 accounting standards. Their only hope is for the FED to string this along for months and keep paying the interest due on those bets (ie hundreds of billions). That's inflationary. Every major bank has been slurping from the FED trough which indicates none are in good shape.
Yeah, the banks bet their souls to make a few trillion in profits the past decade. Now they are on the hook for 10x to 50X that amount. The FED's recent activities amount to a reprieve, not a solution. They've apparently survived through 2008. The stakes get raised in 2009 with more "surprises" coming out of the woodwork. And 2010-2012 will be successively worse. They have their work cut out for them to keep it all afloat.
roadrunner
The average miner pulls gold out of the ground at about $450 yet sells it for $800. Where did the extra $350 come from? Talk about printing money!! Same could be said for the oil producers.
World economies are much too large to be backed by anything but "full faith and credit". Perhaps a commodity rich country could it, but never the USA, Europe, China, India or Japan. Possibly only Canada could pull it off.
We keep hearing the banking system will fail and PMs will go up. But since the first banking failure, BSC, PMs have only trended lower. Money spent on PM newsletters would be better spent on buying the PM itself.
Knowledge is the enemy of fear
You got dat rite.
Nixon Ends Bretton Woods International Monetary System Video
Coin's for sale/trade.
Tom Pilitowski
US Rare Coin Investments
800-624-1870
Huge difference. Gold stocks have been increasing at 1.5-2.5% per year the last decade. Yet money stocks have increased 10-15% each year. Tell me that's not different? US Money supply has increased 13X since since 1982 yet above ground gold hasn't even doubled in that time.
The average miner pulls gold out of the ground at about $450 yet sells it for $800. Where did the extra $350 come from? Talk about printing money!! Same could be said for the oil producers.
OK. How about clothing retailers who mark up some 500% or jewelers who mark up 500-1000%? Where did the extra money come from??
Talk about printing money! The same could be said for many US businesses. I guess making a fair profit in today's harsh times should not be compensated for, esp in light of an industry that competes against the manipulated US dollar. There are some miners pulling it out of the ground at $700. If you count Barrick's $2 BILL in hedges, they ultimately don't even make a profit.
World economies are much too large to be backed by anything but "full faith and credit". Perhaps a commodity rich country could it, but never the USA, Europe, China, India or Japan. Possibly only Canada could pull it off. We keep hearing the banking system will fail and PMs will go up. But since the first banking failure, BSC, PMs have only trended lower. Money spent on PM newsletters would be better spent on buying the PM itself.
A 100% backing is not realistic. But why not a partial backing of some sort to prevent unlimited monetary "printing?"
Considering that S&P dividend reinvested futures show a negative return over the past 2 years, and gold is up 50%. I think I'd take the gold and pass on the stock/dividends play. If we go back 7 years the numbers don't change much. Stocks have basically been a terrible investment over the past 7 years. Money spent with stocks newsletters would be much better spent on physical PM's. Funny that before the BSC failure, PM's were trending up for 7 years. The economy and banks in general are far worse today than back in March. Yet metals have been pushed downward and the dollar has "recovered." Who would be the source of such wizardry? The same pundits called for the end of gold in August 1976 as well as June 2006. They were all wrong. Those calling the July 2008 drop as the end will be tossed on to that same heap of incorrect bottom callers.
roadrunner
<< <i>Everyone who reads this thread on a regular basis was warned in early March that that the bloom was falling from the PM rose. Look back to around March 9.
Dont look at conspiracy theory to justify a good investment gone bad. Eventually the good time ALWAYS fades After a 7 year, 400%+ run, you should have taken what was given. Stop whining about conspiracy, figure out what you didnt see--and reason for your lack of action--and go on to the next trade.
>>
There have been "warnings" from many for a long time and while we have had drops over the years we have also had spikes that off set those and then some.
Not looking at a conspiracy theory, not even close. I am looking at absolute facts, you could too if you were to read the various articles that have been linked to or posted on this forum.
I don't consider it a bad investment at all. I'm still way up and I'm still active in the metals market.
No whining at all, though that's often a word used to deflect away from the facts when someone points out the obvious manipulation.
A better question should be; What are banks doing taking positions in metals and SLV in the first place? Is that even within allowed procedures? Is it even legal for them to do it with other people's money? When you see coordinated massive moves by a couple of banks at the same time, that is not an accident, that is collusion and likely quite bit more. When you see SLV then aquire all those short positions in conjunction, it's not a theory. It's fact!
Sorry, no theory, but most likely it was conspired beforehand. If it walks like a duck, etc.
Call me names all you want, it's been done before on this very thread and many others that preceeded it and I have come out just fine and generally ahead in the long run. It's not my nature to later to stick it in the face of those same people who took issue with my statements or actions. Most of them have faded away on their own anyway.
What I find terribly wrong with what recently transpired is the damage that was caused to the regular investors and worse, those just beginning that may have suffered greatly or been wiped out. While a few fat cats smiled and quietly stole well over hundreds of trillions of dollars and various other monetary echanges almost overnight, it's not my nature to just sit back and say something as foolish as; "well you were warned", "it's just the nature of the market', "it's just the end of the bull run", etc. NO! None of that is true. There are facts coming to the surface that dispute every one of those notions. I'm not known to wear blinders or just accept that such an incredible forced movement downward is "typical of the market".
There have been people people holdng signs warning us about the end of the world and to repent for years. They haven't been right yet and even if the Sun went Nova tomorrow, it woudn't be true that they had any advance knowledge. I know this isn't quite the same, but the naysayers in metals do remind of those folks and anyone follish enough to believe them.
John Marnard Keynes, The Economic Consequences of the Peace, 1920, page 235ff
An internet firestorm erupted over an August 5 report issued by the Commodities Futures Trading Commission (CFTC) which report revealed an unprecedented exponential one-month spike higher in short positions in gold and silver futures reported by two U.S. banks in silver and three U.S. banks in gold. Investors and bullion dealers may band together to seek legal recourse against the thus far unnamed banks... "
Firestorm Erupts Over U.S. Banks' Gold, Silver Shorting
<< <i>"A very few and very large banks seemed to have positioned very well ahead of the plunge in prices for gold and silver, but in the process they may have bought more than they bargained for – possible class-action lawsuits...
An internet firestorm erupted over an August 5 report issued by the Commodities Futures Trading Commission (CFTC) which report revealed an unprecedented exponential one-month spike higher in short positions in gold and silver futures reported by two U.S. banks in silver and three U.S. banks in gold. Investors and bullion dealers may band together to seek legal recourse against the thus far unnamed banks... "
Firestorm Erupts Over U.S. Banks' Gold, Silver Shorting >>
A very interesting article... and makes me angry when I read it. A free market?? Yeh, right. Can manipulation get any more blatant? In bed with the FED with insider trading, to steal from the masses.....
Remember:
FED = ESF = JPM
3 separate fronts.....but 1 common entity working towards a single goal.
roadrunner
The Internet.
They can't pull a Nathan on us anymore. We have our lookouts at Waterloo just like the Bankers.
They can spike it all they want, but thier action has just caused the physical to decouple from the paper. That is the WORST thing you can do to damage a market. When there is no faith in the Market, when it is percieved as fixed, people use a work-around and bypass it. These idiots forget what a grey/black market is. Its Called EBay, Dealer Networks, even BST....Its called the Internet and we have found it.
In the old days, such a drop would have a panic to unload. Not anymore! We called it a fix within hours of the drop and brought forth evidence from all over the world.
If they do it again, there wil;l be even more buying of the physical (if it can be found)
Thanks to the Internet, information is indeed power~
<< <i>"Dont look at conspiracy theory to justify a good investment gone bad. Eventually the good time ALWAYS fades After a 7 year, 400%+ run, you should have taken what was given. Stop whining about conspiracy, figure out what you didnt see--and reason for your lack of action--and go on to the next trade."
You know, cohodk, you're right but maybe you are ignoring the subtle psychology of the regular guy and his "accumulations". Speaking for myself, assuming that I'm not the only one like this, it is good to have some extra money now and then and it is even better when you can use it to pull off a piece of metal for yourself and put it in your cave. Accumulators we are, not really traders. That may be a contrarian approach considering investors that get into things and get out when it seems right. But there is a difference. If I can have a piece of gold in a box, I'm happy and feel a little more secure; the more gold, the more secure. If it goes up...man that's outstanding, makes me feel like the smartest guy in the room and if it goes down...well, I wasn't selling it right now anyway because I like having it in the box for now and for the near future and, I know it will go up again in the future and I can decide if I want to sell then, or not.
The problem I have with the type of "playing" we are seeing now is the guys that are new to this. They get hurt financially, they jeapordize their welfare, their family income, their bank accounts, their attitude, and a whole list of the bad things that happen with a quick investment gone bad. When the signals are all over the board and people are yelling "Bottom!!!" and the little fish swim into the net even when, for example, silver is trading at outrageous multiples of just a couple of years ago looks like a guaranteed winner at $14; and the fish swim in. I like a steady market that is based on supply and demand, that is based of above board fair trading practices, a market that is somewhat transparent. When people manipulate metal and screw the little or new guy by scaring him out of his little investment and they do it because that's how they get money, well, there is the problem.
Now for accumulators, it's not a big deal, we're holding and accumulating and watching what's going on. We don't stretch out and burn off our stock account to go buy a bunch of physical silver because we think it's near the bottom but we sure might reach into the current pay check and suck it up for a month to get a bar when the prices seem reasonable. Accumulators don't care but they do pay attention because they are a fully suited up playing member of the team. Maybe when the metal gets to some ridiculous price (like recently) we should let a few oz's go back into the wilderness just to pay for our accumulation habit but releasing the hoard to get back in at a lower price...nah, nah, and nah.
"Why?" is a fair question at this point and this brings us back to the subtle psychology of accumulators. They accumulate, that's what they are doing and that's the simple strategy, and that's the fun of it. The reward for this fun little adventure is to have a large enough pile at some point in time and have it at a high enough price at some point in time that you can get out and buy a house or pay for a college education for one of the children/grandchildren or pay for your wife's operation, or blow it all on one final naked run through the daisey fields...what ever the great reward is, the accumulator is working for that and his strategy is to rathole a little every now and then with money that can be taken out of the primary income stream without any consequence and divert that money to work on the dream. So gold and silver accumulators are dreamers, they are working on a dream, one ten oz bar at a time or two SAE's at a time, or a 1000 oz bar at a time, each according to his dreams and his abililty.
Now the counter for that strategy would obviously be..."Well why don't you put that $50 or $1,000 buks in a stock account or life insurance policy or save it for a roth ira...?" The answer is, nah, I like looking at my gold and knowing it's gold and knowing it's mine and holding it in my hand, because the reality of holding your gold in your hand is quite satisfying and the security it seems to impart is distinctive amongst the other forms of security in today's financial world. To help with visualizing what I'm talking about, think "Happiness is a warm gun". >>
My candidate for POst of the month on this new board . Rationalises perfectly all my excuses for being an "accumulater"
<< <i>Also, while paper dollars are being printed by central banks, so is physical gold. The miners are working 24/7 creating gold out of dirt. There is no difference.
The average miner pulls gold out of the ground at about $450 yet sells it for $800. Where did the extra $350 come from? Talk about printing money!! Same could be said for the oil producers.
World economies are much too large to be backed by anything but "full faith and credit". Perhaps a commodity rich country could it, but never the USA, Europe, China, India or Japan. Possibly only Canada could pull it off.
We keep hearing the banking system will fail and PMs will go up. But since the first banking failure, BSC, PMs have only trended lower. Money spent on PM newsletters would be better spent on buying the PM itself. >>
I don't like silver because I think the banking system will fail or the
economy will collapse. I buy silver because I believe we are at a un-
ique point in human history where people will wake up and realize
that silver is scarcer than gold and more necessary to the functioning
of a healthy economy. I see the forces which delivered us to this point
accelerating as human populations increase and silver becomes more
difficult to find and more expensive to produce. Even if people refuse
to see the light of day, in the long run there just isn't going to be e-
nough silver to go around and the price move will be explosive; unprec-
idented in human history.
Gold is insurance against inflation and might have some value in the
case of collapse. But silver is a bet on the future not against it. Best
of all silver might help protect against the inflation that world govern-
ments and inept banking has assured will come to pass. Silver might
be "good as gold" and much better too.
Been there. Done that. In fact, that's what I'd done for about 75% of my investing adult life. I admit to having a nice run in some tech stocks during 1998-1999, but besides that I've never experienced any magical rise in my level of wealth from a well-diversified portfolio of paper assets. A MicroSoft doesn't come along every day, but the paper pushers would sure like to have you think so. The hype in owning stocks is overblown imo, and stock gains are seldom expressed after discounting for inflation and after tax effects.
Roth IRAs are just a ploy to tie up money in paper assets. Inflation is responsible for most of the gains (especially in the recent bubble markets), not improved company economics or new product innovations (you can only get so far on umpteen new variations of an ipod or wireless text-messaging). But you can be sure that any gains will be fully-taxed when the gains are realized, regardless of how the gains were created.
IRAs and SEPs and 401Ks all carry a 10% penalty for early withdrawal. Why? These plans are a ploy to keep money tied up in paper assets, and they always have been.
Has anyone ever figured out why the rules for precious metal ownership in an IRA are prohibitively difficult, compared to owning stocks in an IRA? You can trade stocks in an IRA brokerage account with the click of a mouse, but you can't even hold PMs yourself in an IRA, so you have to pay for storage and set up the account through a third party besides. Clearly manipulative in favor of paper assets.
At 10% annualized inflation, that 10% IRA penalty for early withdrawal looks justifiable when faced with a yearly guaranteed loss of capital. Either way, you're gonna pay taxes on the gains - it's only a question of how much in taxes. If Obama gets in with a Democratic Congress, the tax rate on those gains might be alot higher in about 2 years.
And of course, there's Social Security - the only explanation for promoting Social Security instead of an alternate retirement plan - is that people who are smart enough to know the value of saving in the first place - simply cannot be trusted to be smart in handling their own money. That's the basic rationale you get from those socialists who oppose Bush's plan to allow young people to put a fraction of their earnings into a tax-sheltered personal tax savings account, apart from Social Security. Obviously, young people cannot be trusted to save money unless the government tells them how, and where to save it.
I keep hearing that the bankers took all the money. This is so wrong.
No, the bankers, brokers, financiers, lawyers, and other insiders didn't make off with ALL of the money, because it IS being destroyed. But, the bankers and their friends DID make off with high salaries and bonuses for years - at pay levels many times beyond their worth or training, and they DID do it at the public's expense. Not to worry though - they've got Bernake ready to create it as fast as it is destroyed - and to give more of it to the very same bunch of good old boys who were complicit in the initial schemes. Life is so grand, when you're on top.
The repeal of Glass-Steagall made it all possible. It's been more than an illicit boondoggle - it will be our undoing. Remember the names - Bill Clinton, Robert Rubin, and Hank Paulson - they made it all possible.
Repeal of Glass Steagall
I hear you and agree that there is a psychological element to holding PM's and even I hold a small position--just in case, but it is a VERY small amount relative to total assets.
My fear is that all this PPT and conspiracy thought is clouding rational judgement. Maybe I shouldnt be concerned as it isnt my money, but it still bothers me. Very intelligent and rational people have gone awry with investments in equities and real estate. I fear the same will happen with PM's.
The main hazard in holding PMs is in not having enough of them when the paper currency is trashed. Secondary hazards include both security and that the government will try very hard to neutralize the value of PMs if they present a challenge to their standard ways of doing business. Cohodk, your nominal 5% or 10% portfolio weighting in precious metals won't save your paper portfolio from a major loss if your portfolio gets caught in the web of massive wealth destruction that you yourself refer to in your post. If you think that there is a risk of "loss of confidence" now, just wait until things get really hairy.
As revenue streams dry up due to the destruction of capital, huge losses of tax revenues will put the hurt on governments large and small. The upshot will be higher tax rates, major dislocations of families and a reformation of the monetary system. The US government will have to default on its obligations to US Treasury Bondholders, Social Program recipients, Social Security, Medicare obligations, and foreign holders of dollars.
That's going to make nearly everyone in the world "mad", as in "really ticked off". It's happening as we speak. If you think that holding a small portion of pms is the answer for diversification, then you aren't recognizing the systemic risk that is all around us. A "small portion" was the conventional wisdom when the financial system was more predictable - a crumb tossed to the precious metals crowd to keep them happy when diversification was accepted as the smartest way to go. We're in the "Alice in Wonderland" economy now. Nothing made of paper is real, and as Deadhorse mentions, they are running out of bullets and easy fixes.
I knew it would happen.
I am not calling anyone names. I am just stating that I am seeing the same investor mentality in PM's as I have in equities. And in dealing with thousands of individuals over time,--in both bull and bear markets-- I think I am qualified to make an assessment on investor behavior. Take it for what you think it is worth.
Regarding the PM newsletters, in March and again in July, they said "this is it". Both marked tops in the PMs. I guess they meant "it" was really, "thats all she wrote"?
Brian,
Come on man, you're taking my thunder.
Current chart patterns are quite neutral for the metals. The dollar is overbought short term which should support metals in the very near term. Two months from now we will have to re evaluate the trends. If there is no improvement, then we may in fact have witnessed the beginning of a major trend change. All should be quite clear by January.
My point all along in this thread, it that PM's are good trading vehicles in which one can amass a great of money. They are not however, going to be a beacon on a stormy night. Play them for what they are, dont overstay your welcome, and have fun.
Knowledge is the enemy of fear
Cohodk, your nominal 5% or 10% portfolio weighting in precious metals won't save your paper portfolio from a major loss if your portfolio gets caught in the web of massive wealth destruction that you yourself refer to in your post. If you think that there is a risk of "loss of confidence" now, just wait until things get really hairy.
I do hear what you are saying, believe me I do, but given the recent 43% decline in silver and platinum and the 25% decline in gold, I honestly dont see how PMs have "saved or protected" me from anything. And that has been me assertion all along.
Knowledge is the enemy of fear
I doubt that anyone questions either your exceptional prognostication abilities nor your depth of experience in your subject areas. Doubtful that any one is taking exception to your statements but just discussing for the sake of conversation. Over the years on this thread, you have nailed more trends and movements than one person should be able to claim and you're always well ahead of the news.
Consider yourself patted.
True enough, in terms of a trading strategy. Most people, myself included - aren't looking to beat the market day to day. That's a fulltime job and the odds are not good that an individual can beat the big boys with their trading tools. You might be the exception, but I'm talking in general, for hacks like myself who don't trade daily.
That's why my contention is that the best way to protect yourself is with a slow accumulation or a slow divestment strategy focused on precious metals. For someone who's been accumulating for years, through highs and lows - this recent market turbulence isn't significant.
There is one thing that is well-documented, especially in this thread - the government is going to continue to inflate, manipulate and tax people as much as it can get away with. As far as a peak in precious metals, it really depends on government policy. More and more, my investment strategy is directly tied to what I see the US government doing - economically, militarily, socially and politically. Right now, my intuition says to stand prepared with pms and cash, but not much else, well - except for a relatively safe place to hang out, too.
I knew it would happen.