Never heard of Fibonacci referred to in economic terms, only as a mathmatical term as in the Fibonacci sequece.
1+1=2 2+1=3 3+2=5 5+3=8 8+5=13 13+8=21 etc... I am by no means a technical stock analyst, but the Fibonacci retracement refers to using this series backwards to predict the bottom of a downward move. There is no possible rational explanation for this but some math people long ago were able to correlate the progression with sojme major stock movements, up and down, so it has become one of the soft tools used by technical stock gurus to predict buying and selling points ahead of time.
I know, I know, makes no sense, but then you have the stock people who work from atrological charts, and some do remarkably well, publishing expensive news letters and the like. Rob
When you graph it on an xy axis, you get an ever expaning chambered nautalus type line. How does this sequence possibly fit into an economic analysis? >>
Modern dollars are like children - before you know it they'll be all grown up.....
2 of the Fib retracements I believe are at 38% and 61% of the previous gains. There are smaller and larger ones as well I believe. These are just formulae created by old Fib himself that somehow often describe where markets or events pull back too. Oddly enough, the Fib retracements seem to work in many cases, even gold retracements. It is just as hard to explain why Elliot Wave theory works well quite often, yet is describing the "actions of crowds" in a mathematical way.....which says that it is pre-destined. Interesting.
Interesting that gold has moved so strongly through $500 and now $515 in the face of the strongest dollar index since 2004 and weakend oil prices. Who'd a thunk it?
Sinclair predicted a bold move right to $529 that would confound all the "chartists" and gold nay-sayers. And so far he is looking awfully good.
Remember how many people were saying earlier this year that we'd be seeing $350 gold before we'd ever see $500?
I still expect the annual nosedive soon. Were are now in the period to expect it. PM's have traditionally crashed around Decemeber 15, give or take a week, for years and years now. I suppose when we break that cycle, all bets are off and we may really be seeing the next solid phase of this bull run.
I guess we'll know in a couple of weeks now, won't we?
"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
The debt can easily be repaid if we (actually, you, the voters - I'm a foreigner here, I just pay taxes) make that a priority, over things like social security,
To each his own. I want my check. I will collect every penny I can as soon as I can.
Gold has been strong throughout most of the past 4 FUN shows. I don't see why we can't continue right through FUN....and dump in mid-January. I recall peaks in 2003 at FUN at $375 and then 2004 pushing $425 or something. My memory may be a touch off here.
$520 is now taken out. Now on to $529. JSMineset suspects as high as $544 on this move.
$8.97 silver......ready to take out $9.00
Doug Gnazzo referenced this quote from Alan Greenspan's 1960's book, Economic Freedom. It says it all:
Deficit spending is simply a scheme for the 'hidden' confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights."
While I do not agree that Fed Chairman Harrison was the good guy in 1928 and thereafter and prior Fed Chairman Strong was strictly the bad guy prior to 1929, I do agree that Bernanke scares me.
I am beginning to think that the increases in prices of silver and gold reflects the world's opinion of incoming Chairman Bernanke and I think the world is right.
Yeah to keep printing money hoping that it will balance out in the end is crazy...Where have we found these people...and what happened to all the great men America once had...even an idiot like me can read the signs...I just shake my head in disgust.
That sounds like a very polemical piece by Shriff.
Are you aware of any other "hyperinflation" designs Bernane may have, beyond his opinion piece about the cause of the Great Depression? Do you have any other reason to believe, as Shriff evidently does, that Bernanke intends to simply crank up the monetary printing presses to battle illusory deflation? Could we really be having a Fed Chairman coming on board so utterly out of touch with Economics 101?
Taint no good to crank up presses if nobody has no job. Nor no factories. We is gettin DEE-flation. Sooner than anyone thinks. I know....everybody says otherwise. Makes it even surer.
No economic activity will surprise the whole country and start the GREATEST depression. THIS time we ain't got no "out." War would almost have to be refereed to be "manageable." So that leaves ...what...????
<< <i>Taint no good to crank up presses if nobody has no job. Nor no factories. We is gettin DEE-flation. Sooner than anyone thinks. >>
What is happening is very interesting...... The fed is printing more money to meet government obligations and raising the interest rates to keep the foreign creditors happy.
This leads to stagflation (inflation + recession), an excellent combination for disaster in the current world, where more major countries have inflated their currency.
A terrorist attack or a severe natural disaster for which we are not prepared, will lead to currency crisis.
The Fed interest rate has been unbelievably low during this recession and is even too low today in my estimation. When the rates are so low that there is no benefit in saving, everyone spends...this is what is driving the economy. With no savings and booming debt from the federal government down to family finances, it's just a matter of time before things go south. Personally I don't think that we'll be waiting long.
One account of the Great Depression I have read (Anatale Fekete?) attributes it to the FED maintaining price controls for many years, pumping the money supply, then immediately shifting control modes following the changes of the FED chief, to more a monetary restriction mode. By late 1929 the FED was withholding liquidity to member banks and continued to do so as the depression began.
All during this time the gold supplies were bulging as the FED had been hoarding gold for years. They had the answer all along but didn't want to release gold to improve market liquidity. By the time liquidity was finally being added it was too late. The other nails were delivered by the improper maneuvers of Hoover and FDR.
My understanding is were 2-3 points higher on our interest rates then the rest of the world but that said i do think the jig is almost up who in their right mind would lose as much as the dollar has lost in the last few years in real buying power look at the canada dollar to ours in the last few years amazing
<< <i>Doug Gnazzo referenced this quote from Alan Greenspan's 1960's book, Economic Freedom. It says it all:
Deficit spending is simply a scheme for the 'hidden' confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights." >>
Well you wouldn't even have to work if you had insight like this. This guy actually gets paid for this.
<< <i>
Gold trading in London closed at $515.70 an ounce after trading as high as $522.90/oz during the day — the highest level since April 1981. Some analysts are already predicting that gold could climb to $525/oz next year. The precious metal traded as high as $523.90/oz in New York last night.
>>
Wonder how many experts he had to interview to get that info.
Just a couple of comments on the last couple of days. First it appears that a couple of things are happening that gold bugs have been waiting for. The first is that the World demand for Gold is getting beyond the control of American bankers to control the price, and second the main stream media is waking the World up as to the U.S. debt problem and the need for World savers to diversify into hard assets.
“Gold fever rages, price tops $525/oz Friday December 9, 6:44 am ET LONDON (Reuters) - Gold fever took prices to $525.50 an ounce for the first time in nearly a quarter of a century on Friday as investors, particularly in Asia, rushed to buy an asset that has gained some 15 percent in the past month alone.
WASHINGTON (AFX) -- Americans increased their household debt at an annual rate of 11.6% in the third quarter, the fastest growth in 18 years, the Federal Reserve said Thursday in its quarterly flow of funds report
Total outstanding debt in the household sector rose to $11 trillion”
My thoughts on a quick deflation period hitting the U.S. by surprise is that this will just not happen until we go through a hyper inflation period.
At the time of the last depression there was simple no outlets to print money and give it to people to keep them going. All of those outlets are currently in place.
One third of the American public works for one government or another, and certainly they will all get printed money. An additional third already get government checks i.e. welfare, Social Security etc. 20 % are wealthy enough to ride most tides, and all others can be put to work in work programs. True there will not be many tax revenues to pay everyone, but we already know that our government prints what it needs. As long as Americans still continue to take dollars for payment of goods and services deflation is pretty much out of the picture.
Many moons ago on this thread I said that eventually the boys and girls in Washington would want a fall guy to blame the worthless money situation on, and the fact is that eventually we must begin to default on some of our debt. I said then, and still believe that the fall guy is going to be the Fed Chairman and the Fed itself.
Took out $520 and $525 in the same day? Once past $530 or so there is no more massive resistance until the previous high of $875 in 1980. Note that gold went from this same pt where we are now in early 1980, and set it's record in only a few weeks. All bets from here, up or down, or off. The volatility will start to become too great for many newbie gold investors.
I still think there will be a concerted effort to halt this advance near $600.
It will be much easier to stop at 600 than it was at 400. Ultimately it will fail unless the world governments get their printing presses under control which would require they get their spending under control. There will be no effort to stop silver at least in the short term and it will move to a 40:1 ratio to gold. We'll see $480 gold and $12 silver before $700 gold.
Gold seems to me to be the great equalizer in the international money arena. Whether it's kronen, marks, pesos, $us/cn/hk, what ever the currency may be. The price of gold in national currency mirrors currency exhange rates and therefore internationally adjusts all economies to each other regardless of the govt printing money or devaluation or any internal adjustments to money supply. So, if you have gold, it doesn't matter if the money is being vigorously printed...it will still take so much, in terms of gold, to get a sewing machine from China to Thailand, regardless of the health or status of the currency. International trade will and must take place and the price of gold is the foundation for that exchange, whether stated or not.
It seems to be just that simple, regardless of all the great prognostications and convoluted arguments that seem to be proliferating. So what's the big fuss...just get some gold and all's good, it's the great equalizer. I'm suprised that the governments still let individuals have gold because it gives everyone an equal play, regardless of the government ambitions or policies.
Forget the conventional wisdom. Gold will be at $3-$10,000/ounce within a few years.
.....GOD
"Ask, and it shall be given you; seek, and ye shall find; knock, and it shall be opened unto you." -Luke 11:9
"Hear, O Israel: The LORD our God is one LORD: And thou shalt love the LORD thy God with all thine heart, and with all thy soul, and with all thy might." -Deut. 6:4-5
"For the LORD is our judge, the LORD is our lawgiver, the LORD is our king; He will save us." -Isaiah 33:22
This is not going to make anyone rich, because the cost of a loaf of bread will be 30 or 40 dollars, if this happens. >>
You're probably right about that.
.....GOD
"Ask, and it shall be given you; seek, and ye shall find; knock, and it shall be opened unto you." -Luke 11:9
"Hear, O Israel: The LORD our God is one LORD: And thou shalt love the LORD thy God with all thine heart, and with all thy soul, and with all thy might." -Deut. 6:4-5
"For the LORD is our judge, the LORD is our lawgiver, the LORD is our king; He will save us." -Isaiah 33:22
<< <i>Just think what the Silver, Gold, and Platinum proofs and sets are going to be selling for in 2006. They were already high. >>
Yeah, especially the platinum eagles. The 2006 proof will be priced way out of most people's buying range. It could possibly turn out to be an even lower mintage than 2004.
From Jim's website, he has a very good track record.
Friday, December 09, 2005, 11:02:00 AM EST
Listen to the Market, Not the Talking Heads
Author: Jim Sinclair
What the talking head floor traders do not lack is EGO. This morning they have become past masters of weather forecasting. These geniuses like to tell us what the temperature will be for the next two weeks. When did they forget that their occupation is to know what the market will do in the next 30 seconds?
Listening to them prognosticate on economics, politics and other matters outside their area of expertise is a travesty against your mental health and your portfolio’s value. It always amazes me the selection of so-called experts that are available to say what financial TV wants to hear. They are equity bulls, oil bears and the occasional gold guy saying inaccurate things that make my skin crawl.
Gold this morning in the active February contract hit the $528.90 level before running into some general selling. That is a waste of good $$$$ for those selecting the short side as gold is going to and through $529 regardless of the fool hardy top callers who now look quite bad to say the least.
As far as gold shares are concerned, take a look at Lars’ chart this morning. He has a high probability of being correct. Above $529 on the continuous gold chart, we move into a runaway gold market that might well make my feelings expressed to you continually on gold much too conservative. A market that does more than expected earlier than expected can easily go higher than expected.
Some selling took place in gold shares this morning based on the approach to the $529 level. That will look stupid, IMO, when gold takes out $529 and moves into a run away stage.
Click here for gold, the US dollar, and the AMAX Gold Bug Index.
TO BAD I HAVE NO SPELL CHECK! THAN I MIGHT KNOW HOW TO SPELL.
my prediction as to the world and its finaNCIAL effect are simple. In america expect tax increases, and iNsurance fraud. expect a silver bail out due to at least 4 naked shorts. same thing happened in copper by a chinese short) he lost a couple hundred mill. gas taxes will increase. gambling and online betting will increase. the illusion of a strong dollar will fuel the dow jones for many years. spending will increase. americans will loose jobs. a larger war and the killing of millions of people will be a way to take the eye off finance, and put it on the war effort. China will continue growing. the yen will be stronger. imports will rise. exports will fall. africa and brazil will continue to be stripped of there natural resources. new gold and silver will be avalilable from the opening of over sea mines. gold prices will fall to pre 2005 levels. silver will rise to new highs. platinum will stay strong at the 1050 dollar level. oil prices per barrel will remain close to these levels for many years. i could go on and on but it is just my oppinion. governments will fall. anarchy will rule a sort of brand new world order. china will lead the world in science and nano tech.. other than that remain calm and stay in your homes the storm is coming.
my prediction as to the world and its finacial effect are simple. In america expect tax increases, and isurance fraud. expect a silver bail out due to at least 4 naked shorts. same thing happened in copper by a chineese short) he lost a couple hundred mill. gas taxes will increase. gambling and online betting will increase. the illussion of a strong dollar will fuel the dow jones for many years. spending will increase. americans will loose jobs. a larger war and the killing of millions of people will be a way to take the eye off finance, and put it on the war effort. China will continue growing. the yen will be stronger. imports will rise. exports will fall. africa and brazil will continue to be stripped of there natural resources. new gold and silver will be avalible from the opening of over sea mines. gold prices will fall to pre 2005 levels. silver will rise to new highs. plantinum will stay strong at the 1050 dollar leavel. oil prices per barrell will remain close to these levels for many years. i could go on and on but it is just my oppinion. goverments will fall. anarchy will ruel a sort of brand new world order. china will leade the world in science and nano tech.. other than that remain calm and stay in your homes the storm is coming.>>
This is not going to make anyone rich, because the cost of a loaf of bread will be 30 or 40 dollars, if this happens.
Possibly not. But for those who don't diversify properly, it will make then very poor vs. those who diversify accordingly. At least the guy holding the coin will not lose purchasing power. We're not gonna see a $40 loaf any time soon...but the $5-8 loaf may not be far off.
Note, because gold has been heavily "managed" the past 20 years, it has not been allowed to be a "great equalizer" with our money supply. M3 is up 4X since the early 1980's yet gold is at the same value as in 1981. Multiply the current price by 4X to come up with a money supply equalization value ($2000/oz). This is what gold is striving towards.
The gold infrastructure was allowed to decline in the 1990's. We have years to work just to catch up. It will take 3-5 years or longer to start significantly increasing gold production. Mines do not come into service that quick, not even recovering old mines. What we have now is what we have to work with for a while. Current gold production increases supply by 2-3% per year. That's a non-factor when gold is moving upwards. Even at +5-10% per year it would be a non-factor.
<< <i>Note, because gold has been heavily "managed" the past 20 years, it has not been allowed to be a "great equalizer" with our money supply. M3 is up 4X since the early 1980's yet gold is at the same value as in 1981. Multiply the current price by 4X to come up with a money supply equalization value ($2000/oz). This is what gold is striving towards. >>
Wasn't the price of gold ~$30-40 USD in 1975?
~$250 USD in 1999
Gold is up ~10x+ from where it used to be...
just a thought...
When it gets close to $600 (if it ever does), I think I will sell.
~
I listen to your voice like it was music, [ y o u ' r e ] the song I want to know.
I'd give you the world, just because...
Speak to me of loved ones, favorite places and things, loves lost and gained, tears shed for joy and sorrow, of when I see the sparkle in your eye ... and the blackness when the dream dies, of lovers, fools, adventurers and kings while I sip my wine and contemplate the Chi.
"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>When it gets close to $600 (if it ever does), I think I will sell.
~ >>
I don't think you will find any shortage of buyers at that price.
I recently added a bit of gold to my hoard at the $480 level.
If we reach solid footing at the $600 level, I will very likely continue buying.
"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>When it gets close to $600 (if it ever does), I think I will sell.
~ >>
I don't think you will find any shortage of buyers at that price.
I recently added a bit of gold to my hoard at the $480 level.
If we reach solid footing at the $600 level, I will very likely continue buying. >>
That sounds like a very reasonable plan, plus we're not that far.
It's kind of funny, it wasn't too long ago that we (me and a friend) were talking about putting down gold tiles in the kitchen (damn you heat conduction! - Ag isn't any better), heck at ~$250/oz it was practically free... another reason why the 3rd world hates us! (or as my friend says "because we can")
It should be an interesting ride...
I listen to your voice like it was music, [ y o u ' r e ] the song I want to know.
I'd give you the world, just because...
Speak to me of loved ones, favorite places and things, loves lost and gained, tears shed for joy and sorrow, of when I see the sparkle in your eye ... and the blackness when the dream dies, of lovers, fools, adventurers and kings while I sip my wine and contemplate the Chi.
Yes, but I think the vault in the gold price from 1971-1980 (from $35 to $875) factored in everything and then speculation to boot. It had to cover all the inflation that occurred from 1944-1980. That lots of 'flation.
I could use $875 as the starting point in 1980 but with the final frenzied blowoff, I'd say that the $525 is good starting point to assess money stock changes from 1980 to 2005. Using $35 or $875 is not fair imo. The money supply did not increase 15X (525/35) in those 36 years from 1944-1980. But then, again many investment grade US coins bought in 1944 (like Benson) would have increased 100X in that period.
It does appear that folks are looking for $600 to be the next level. Man, that rocket blew through $500 like it was just a cloud in the sky. Hummmmm...just where is that rocket going to land (the million dollar question)?
Then, due to higher costs which can't be passed on or "priced in" we will have a brief STAGflation.
Followed EXTREMELY closely by a full DEE-PRESSION!
America hasn't the slightest HINT of what the already happening housing collapse will mean.
Our entire economy for the past 12 year has been housing (and the ability to borrow against the house to make purchases)
That is about to not only STOP, but go completely away and cause irreparable damage to the average American. No one has even CONSIDERED the effect of construction jobs DISAPPEARING and all the ancillary homebuilding goods and services. Appliances, furniture, materials. All soon to STOP! New cars bought on "home equity loans" will be but a MEMORY!
Entirely too late will come HYPER-inflation. As futile efforts are made to rejuvenate an economy that has sold its jobs to Asia.
At ...that... point, gold may even be DANGEROUS to own. But non owners will perish and see misery beyond comprehension.
What will stop ........gold?
Not a damn thing.
FACT!
On the brighter side, grading fees may be reduced.
Oreville, I cannot say what the $529 number is based on, other than Sinclair has placed his hat on that number months ago as the next key battle point after $480. So far the man has not missed a beat. And as one of the few to make a killing in the 1980 market, then leave for decades because of the negative "gold" environment, he has earned the right to be listened to.
Even with a $250 increase in the price of gold over the past 4 years the production of gold has dropped every year. Even in the past year, gold production is down sharply once again. This would tend to blow the argument that higher gold prices would be reversed by natural market increases in production. Maybe it will happen at $600/oz? or $800/oz? Not necessarily since gold production is also based on local currency valuations as well as fuel and supplies pricing, not to mention what's actually in the ground. And don't forget that many producers are still hedged on their furture production (they already sold a % of their future prod. at lower prices and have to replace that gold at some point with gold bought at today's value). Hence higher gold prices will actually tend to force them out of business as long as significant hedges remain in place.
Deflation is sure to come...or a severe recession if you will. But only after the govt is done inflating the heck out of the money supply. Helo pilot Ben is not going to cave in that quickly to deflation. If he has to double the money supply in 4 years, he'll do it. There are ways of shifting this kind of liquidity to the Bank of Japan and others via electronic cash that does not show up as starkly as M1. Bernanke has already done this a few years back. And it is one of the main reasons for our current excess liquidity.
Then, due to higher costs which can't be passed on or "priced in" we will have a brief STAGflation.
Followed EXTREMELY closely by a full DEE-PRESSION!
America hasn't the slightest HINT of what the already happening housing collapse will mean.
Our entire economy for the past 12 year has been housing (and the ability to borrow against the house to make purchases)
That is about to not only STOP, but go completely away and cause irreparable damage to the average American. No one has even CONSIDERED the effect of construction jobs DISAPPEARING and all the ancillary homebuilding goods and services. Appliances, furniture, materials. All soon to STOP! New cars bought on "home equity loans" will be but a MEMORY!
Entirely too late will come HYPER-inflation. As futile efforts are made to rejuvenate an economy that has sold its jobs to Asia.
At ...that... point, gold may even be DANGEROUS to own. But non owners will perish and see misery beyond comprehension.
What will stop ........gold?
Not a damn thing.
FACT!
On the brighter side, grading fees may be reduced.
>>
you sound like you're alot of fun @ parties. lighten up.
Comments
<< <i>"Fibonacci retracement"
Never heard of Fibonacci referred to in economic terms, only as a mathmatical term as in the Fibonacci sequece.
1+1=2
2+1=3
3+2=5
5+3=8
8+5=13
13+8=21
etc...
I am by no means a technical stock analyst, but the Fibonacci retracement refers to using this series backwards to predict the bottom of a downward move. There is no possible rational explanation for this but some math people long ago were able to correlate the progression with sojme major stock movements, up and down, so it has become one of the soft tools used by technical stock gurus to predict buying and selling points ahead of time.
I know, I know, makes no sense, but then you have the stock people who work from atrological charts, and some do remarkably well, publishing expensive news letters and the like. Rob
When you graph it on an xy axis, you get an ever expaning chambered nautalus type line. How does this sequence possibly fit into an economic analysis? >>
Questions about Ikes? Go to The IKE GROUP WEB SITE
retracements seem to work in many cases, even gold retracements. It is just as hard to explain why Elliot Wave theory works
well quite often, yet is describing the "actions of crowds" in a mathematical way.....which says that it is pre-destined. Interesting.
Interesting that gold has moved so strongly through $500 and now $515 in the face of the strongest dollar index since 2004 and
weakend oil prices. Who'd a thunk it?
Sinclair predicted a bold move right to $529 that would confound all the "chartists" and gold nay-sayers.
And so far he is looking awfully good.
roadrunner
Remember how many people were saying earlier this year that we'd be seeing $350 gold before we'd ever see $500?
I still expect the annual nosedive soon. Were are now in the period to expect it. PM's have traditionally crashed around Decemeber 15, give or take a week, for years and years now. I suppose when we break that cycle, all bets are off and we may really be seeing the next solid phase of this bull run.
I guess we'll know in a couple of weeks now, won't we?
John Marnard Keynes, The Economic Consequences of the Peace, 1920, page 235ff
To each his own. I want my check. I will collect every penny I can as soon as I can.
Camelot
dump in mid-January. I recall peaks in 2003 at FUN at $375 and then 2004 pushing $425 or something. My memory may be a
touch off here.
$520 is now taken out. Now on to $529. JSMineset suspects as high as $544 on this move.
$8.97 silver......ready to take out $9.00
Doug Gnazzo referenced this quote from Alan Greenspan's 1960's book, Economic Freedom. It says it all:
Deficit spending is simply a scheme for the 'hidden' confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights."
roadrunner
Bernanke Confuses Depression Cure with Disease
While I do not agree that Fed Chairman Harrison was the good guy in 1928 and thereafter and prior Fed Chairman Strong was strictly the bad guy prior to 1929, I do agree that Bernanke scares me.
I am beginning to think that the increases in prices of silver and gold reflects the world's opinion of incoming Chairman Bernanke and I think the world is right.
Yeh, I know....PAPER PROFITS.
But I'll take it anyhow.
That sounds like a very polemical piece by Shriff.
Are you aware of any other "hyperinflation" designs Bernane may have, beyond his opinion piece about the cause of the Great Depression? Do you have any other reason to believe, as Shriff evidently does, that Bernanke intends to simply crank up the monetary printing presses to battle illusory deflation? Could we really be having a Fed Chairman coming on board so utterly out of touch with Economics 101?
Here's a warning parable for coin collectors...
I know....everybody says otherwise. Makes it even surer.
No economic activity will surprise the whole country and start the GREATEST depression. THIS time we ain't got no "out." War would almost have to be refereed to be "manageable." So that leaves ...what...????
Open to suggestions for an "engine of recovery."
???????????????????
<< <i>Taint no good to crank up presses if nobody has no job. Nor no factories. We is gettin DEE-flation. Sooner than anyone thinks. >>
What is happening is very interesting...... The fed is printing more money to meet government obligations and raising the interest rates to keep the foreign creditors happy.
This leads to stagflation (inflation + recession), an excellent combination for disaster in the current world, where more major countries have inflated their currency.
A terrorist attack or a severe natural disaster for which we are not prepared, will lead to currency crisis.
gold well it kinda old and no one needs it ya right !!
pumping the money supply, then immediately shifting control modes following the changes of the FED chief, to more a monetary restriction mode. By late 1929 the FED was withholding liquidity to member banks and continued to do so as the depression began.
All during this time the gold supplies were bulging as the FED had been hoarding gold for years. They had the answer all along but didn't want to release gold to improve market liquidity. By the time liquidity was finally being added it was too late. The other nails were delivered by the improper maneuvers of Hoover and FDR.
roadrunner
but that said i do think the jig is almost up who in their right mind would lose
as much as the dollar has lost in the last few years in real buying power
look at the canada dollar to ours in the last few years
amazing
<< <i>Doug Gnazzo referenced this quote from Alan Greenspan's 1960's book, Economic Freedom. It says it all:
Deficit spending is simply a scheme for the 'hidden' confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights." >>
It's not a book but an essay / chapter, part of the Ayn Rand collective's Capitalism: The Unknown Ideal
You can read the table of content here: Table of Content - Chapter 6 is the one you're looking for: "Gold and Economic Freedom".
Robert A. Heinlein
both sides of his mouth. It was he who
told President Bush that the tax cuts were fine
and that we should slow down on paying off the National
debt. He always calls the problem after it passes and by giving
cryptic statements, you can read what every you want
in his Delphinian utterences.
Camelot
Robert A. Heinlein
<< <i>
Gold trading in London closed at $515.70 an ounce after trading as high as $522.90/oz during the day — the highest level since April 1981. Some analysts are already predicting that gold could climb to $525/oz next year. The precious metal traded as high as $523.90/oz in New York last night.
>>
Wonder how many experts he had to interview to get that info.
Timesonline
First it appears that a couple of things are happening that gold bugs have been waiting for. The first is that the World demand for Gold is getting beyond the control of American bankers to control the price, and second the main stream media is waking the World up as to the U.S. debt problem and the need for World savers to diversify into hard assets.
“Gold fever rages, price tops $525/oz
Friday December 9, 6:44 am ET
LONDON (Reuters) - Gold fever took prices to $525.50 an ounce for the first time in nearly a quarter of a century on Friday as investors, particularly in Asia, rushed to buy an asset that has gained some 15 percent in the past month alone.
WASHINGTON (AFX) -- Americans increased their household debt at an annual rate of 11.6% in the third quarter, the fastest growth in 18 years, the Federal Reserve said Thursday in its quarterly flow of funds report
Total outstanding debt in the household sector rose to $11 trillion”
My thoughts on a quick deflation period hitting the U.S. by surprise is that this will just not happen until we go through a hyper inflation period.
At the time of the last depression there was simple no outlets to print money and give it to people to keep them going. All of those outlets are currently in place.
One third of the American public works for one government or another, and certainly they will all get printed money. An additional third already get government checks i.e. welfare, Social Security etc. 20 % are wealthy enough to ride most tides, and all others can be put to work in work programs. True there will not be many tax revenues to pay everyone, but we already know that our government prints what it needs. As long as Americans still continue to take dollars for payment of goods and services deflation is pretty much out of the picture.
Many moons ago on this thread I said that eventually the boys and girls in Washington would want a fall guy to blame the worthless money situation on, and the fact is that eventually we must begin to default on some of our debt. I said then, and still believe that the fall guy is going to be the Fed Chairman and the Fed itself.
previous high of $875 in 1980. Note that gold went from this same pt where we are now in early 1980, and
set it's record in only a few weeks. All bets from here, up or down, or off. The volatility will start to become
too great for many newbie gold investors.
roadrunner
It will be much easier to stop at 600 than it was at 400. Ultimately it will fail unless the
world governments get their printing presses under control which would require they get
their spending under control. There will be no effort to stop silver at least in the short term
and it will move to a 40:1 ratio to gold. We'll see $480 gold and $12 silver before $700 gold.
It seems to be just that simple, regardless of all the great prognostications and convoluted arguments that seem to be proliferating. So what's the big fuss...just get some gold and all's good, it's the great equalizer. I'm suprised that the governments still let individuals have gold because it gives everyone an equal play, regardless of the government ambitions or policies.
Got gold?
The soon to be discontinued M3 money supply shows an increase of 2.1 billion dollars for last month, to 10.12 trillion dollars
Bernanke is going to ramp it up.
<< <i>
Bernanke is going to ramp it up. >>
Deflating the money supply isn't in the Fed's DNA.
They absolutely must keep on inflating or the entire system will implode.
"Ask, and it shall be given you; seek, and ye shall find; knock, and it shall be opened unto you." -Luke 11:9
"Hear, O Israel: The LORD our God is one LORD: And thou shalt love the LORD thy God with all thine heart, and with all thy soul, and with all thy might." -Deut. 6:4-5
"For the LORD is our judge, the LORD is our lawgiver, the LORD is our king; He will save us." -Isaiah 33:22
<< <i>Gold will be $3-$10,000/ounce >>
This is not going to make anyone rich, because the cost of a loaf of bread will be 30 or 40 dollars, if this happens.
<< <i>
<< <i>Gold will be $3-$10,000/ounce >>
This is not going to make anyone rich, because the cost of a loaf of bread will be 30 or 40 dollars, if this happens. >>
You're probably right about that.
"Ask, and it shall be given you; seek, and ye shall find; knock, and it shall be opened unto you." -Luke 11:9
"Hear, O Israel: The LORD our God is one LORD: And thou shalt love the LORD thy God with all thine heart, and with all thy soul, and with all thy might." -Deut. 6:4-5
"For the LORD is our judge, the LORD is our lawgiver, the LORD is our king; He will save us." -Isaiah 33:22
<< <i>Just think what the Silver, Gold, and Platinum proofs and sets are going to be selling for in 2006. They were already high.
Yeah, especially the platinum eagles. The 2006 proof will be priced way out of most people's
buying range. It could possibly turn out to be an even lower mintage than 2004.
Best prediction I've seen. You can bank on it.
Friday, December 09, 2005, 11:02:00 AM EST
Listen to the Market, Not the Talking Heads
Author: Jim Sinclair
What the talking head floor traders do not lack is EGO. This morning they have become past masters of weather forecasting. These geniuses like to tell us what the temperature will be for the next two weeks. When did they forget that their occupation is to know what the market will do in the next 30 seconds?
Listening to them prognosticate on economics, politics and other matters outside their area of expertise is a travesty against your mental health and your portfolio’s value. It always amazes me the selection of so-called experts that are available to say what financial TV wants to hear. They are equity bulls, oil bears and the occasional gold guy saying inaccurate things that make my skin crawl.
Gold this morning in the active February contract hit the $528.90 level before running into some general selling. That is a waste of good $$$$ for those selecting the short side as gold is going to and through $529 regardless of the fool hardy top callers who now look quite bad to say the least.
As far as gold shares are concerned, take a look at Lars’ chart this morning. He has a high probability of being correct. Above $529 on the continuous gold chart, we move into a runaway gold market that might well make my feelings expressed to you continually on gold much too conservative. A market that does more than expected earlier than expected can easily go higher than expected.
Some selling took place in gold shares this morning based on the approach to the $529 level. That will look stupid, IMO, when gold takes out $529 and moves into a run away stage.
Click here for gold, the US dollar, and the AMAX Gold Bug Index.
<< <i>From CNBC - How gold could hit 600 by end of Jan '06 >>
Oh great, now CNBC is on the bandwagon. The top must be in.
THAN I MIGHT KNOW HOW TO SPELL.
my prediction as to the world and its finaNCIAL effect are simple.
In america expect tax increases, and iNsurance fraud.
expect a silver bail out due to at least 4 naked shorts.
same thing happened in copper by a chinese short) he lost a couple hundred mill. gas taxes will increase. gambling and online betting will increase. the illusion of a strong dollar will fuel the dow jones for many years. spending will increase. americans will loose jobs. a larger war and the killing of millions of people will be a way to take the eye off finance, and put it on the war effort.
China will continue growing. the yen will be stronger. imports will rise.
exports will fall. africa and brazil will continue to be stripped of there natural resources. new gold and silver will be avalilable from the opening of over sea mines.
gold prices will fall to pre 2005 levels.
silver will rise to new highs.
platinum will stay strong at the 1050 dollar level.
oil prices per barrel will remain close to these levels for many years.
i could go on and on but it is just my oppinion.
governments will fall. anarchy will rule a sort of brand new world order.
china will lead the world in science and nano tech..
other than that remain calm and stay in your homes the storm is coming.
my prediction as to the world and its finacial effect are simple.
In america expect tax increases, and isurance fraud.
expect a silver bail out due to at least 4 naked shorts.
same thing happened in copper by a chineese short) he lost a couple hundred mill. gas taxes will increase. gambling and online betting will increase. the illussion of a strong dollar will fuel the dow jones for many years. spending will increase. americans will loose jobs. a larger war and the killing of millions of people will be a way to take the eye off finance, and put it on the war effort.
China will continue growing. the yen will be stronger. imports will rise.
exports will fall. africa and brazil will continue to be stripped of there natural resources. new gold and silver will be avalible from the opening of over sea mines.
gold prices will fall to pre 2005 levels.
silver will rise to new highs.
plantinum will stay strong at the 1050 dollar leavel.
oil prices per barrell will remain close to these levels for many years.
i could go on and on but it is just my oppinion.
goverments will fall. anarchy will ruel a sort of brand new world order.
china will leade the world in science and nano tech..
other than that remain calm and stay in your homes the storm is coming.>>
HMMMM
Possibly not. But for those who don't diversify properly, it will make then very poor vs. those who diversify accordingly.
At least the guy holding the coin will not lose purchasing power. We're not gonna see a $40 loaf any time soon...but
the $5-8 loaf may not be far off.
Note, because gold has been heavily "managed" the past 20 years, it has not been allowed to be a "great equalizer" with
our money supply. M3 is up 4X since the early 1980's yet gold is at the same value as in 1981. Multiply the current price
by 4X to come up with a money supply equalization value ($2000/oz). This is what gold is striving towards.
The gold infrastructure was allowed to decline in the 1990's. We have years to work just to catch up. It will take 3-5 years
or longer to start significantly increasing gold production. Mines do not come into service that quick, not even recovering
old mines. What we have now is what we have to work with for a while. Current gold production increases supply by 2-3%
per year. That's a non-factor when gold is moving upwards. Even at +5-10% per year it would be a non-factor.
roadrunner
<< <i>Note, because gold has been heavily "managed" the past 20 years, it has not been allowed to be a "great equalizer" with
our money supply. M3 is up 4X since the early 1980's yet gold is at the same value as in 1981. Multiply the current price
by 4X to come up with a money supply equalization value ($2000/oz). This is what gold is striving towards. >>
Wasn't the price of gold ~$30-40 USD in 1975?
~$250 USD in 1999
Gold is up ~10x+ from where it used to be...
just a thought...
When it gets close to $600 (if it ever does), I think I will sell.
~
I'd give you the world, just because...
Speak to me of loved ones, favorite places and things, loves lost and gained, tears shed for joy and sorrow, of when I see the sparkle in your eye ...
and the blackness when the dream dies, of lovers, fools, adventurers and kings while I sip my wine and contemplate the Chi.
<< <i>HMMMM
My thougts exactly.
John Marnard Keynes, The Economic Consequences of the Peace, 1920, page 235ff
<< <i>When it gets close to $600 (if it ever does), I think I will sell.
~
I don't think you will find any shortage of buyers at that price.
I recently added a bit of gold to my hoard at the $480 level.
If we reach solid footing at the $600 level, I will very likely continue buying.
John Marnard Keynes, The Economic Consequences of the Peace, 1920, page 235ff
<< <i>
<< <i>When it gets close to $600 (if it ever does), I think I will sell.
~
I don't think you will find any shortage of buyers at that price.
I recently added a bit of gold to my hoard at the $480 level.
If we reach solid footing at the $600 level, I will very likely continue buying. >>
That sounds like a very reasonable plan, plus we're not that far.
It's kind of funny, it wasn't too long ago that we (me and a friend) were talking about putting down gold tiles in the kitchen (damn you heat conduction! - Ag isn't any better), heck at ~$250/oz it was practically free... another reason why the 3rd world hates us!
It should be an interesting ride...
I'd give you the world, just because...
Speak to me of loved ones, favorite places and things, loves lost and gained, tears shed for joy and sorrow, of when I see the sparkle in your eye ...
and the blackness when the dream dies, of lovers, fools, adventurers and kings while I sip my wine and contemplate the Chi.
Yes, but I think the vault in the gold price from 1971-1980 (from $35 to $875) factored in everything and
then speculation to boot. It had to cover all the inflation that occurred from 1944-1980. That lots of
'flation.
I could use $875 as the starting point in 1980 but with the final frenzied blowoff, I'd say that the $525 is
good starting point to assess money stock changes from 1980 to 2005. Using $35 or $875 is not fair imo.
The money supply did not increase 15X (525/35) in those 36 years from 1944-1980. But then, again
many investment grade US coins bought in 1944 (like Benson) would have increased 100X in that period.
roadrunner
My question; why at $530 and not at $600 or some other level for the signal?
I would like to see more discussion of this possibility.
THIS will stop inflation
Just from the inability to pay higher prices.
Then, due to higher costs which can't be passed on or "priced in" we will have a brief STAGflation.
Followed EXTREMELY closely by a full DEE-PRESSION!
America hasn't the slightest HINT of what the already happening housing collapse will mean.
Our entire economy for the past 12 year has been housing (and the ability to borrow against the house to make purchases)
That is about to not only STOP, but go completely away and cause irreparable damage to the average American. No one has even CONSIDERED the effect of construction jobs DISAPPEARING and all the ancillary homebuilding goods and services. Appliances, furniture, materials. All soon to STOP! New cars bought on "home equity loans" will be but a MEMORY!
Entirely too late will come HYPER-inflation. As futile efforts are made to rejuvenate an economy that has sold its jobs to Asia.
At ...that... point, gold may even be DANGEROUS to own. But non owners will perish and see misery beyond comprehension.
What will stop ........gold?
Not a damn thing.
FACT!
On the brighter side, grading fees may be reduced.
And as one of the few to make a killing in the 1980 market, then leave for decades because of the negative "gold" environment, he has earned the right to be listened to.
Even with a $250 increase in the price of gold over the past 4 years the production of gold has dropped every year. Even in the past year, gold production is down sharply once again. This would tend to blow the argument that higher gold prices would be reversed by natural market increases in production. Maybe it will happen at $600/oz? or $800/oz? Not necessarily since gold production is also based on local currency valuations as well as fuel and supplies pricing, not to mention what's actually in the ground. And don't forget that many producers are still hedged on their furture production (they already sold a % of their future prod. at lower prices and have to replace that gold at some point with gold bought at today's value). Hence higher gold prices will actually tend to force them out of business as long as significant hedges remain in place.
Deflation is sure to come...or a severe recession if you will. But only after the govt is done inflating the heck out of the money supply.
Helo pilot Ben is not going to cave in that quickly to deflation. If he has to double the money supply in 4 years, he'll do it. There are ways of shifting this kind of liquidity to the Bank of Japan and others via electronic cash that does not show up as starkly as M1.
Bernanke has already done this a few years back. And it is one of the main reasons for our current excess liquidity.
roadrunner
<< <i>What will stop .....inflation?
THIS will stop inflation
Just from the inability to pay higher prices.
Then, due to higher costs which can't be passed on or "priced in" we will have a brief STAGflation.
Followed EXTREMELY closely by a full DEE-PRESSION!
America hasn't the slightest HINT of what the already happening housing collapse will mean.
Our entire economy for the past 12 year has been housing (and the ability to borrow against the house to make purchases)
That is about to not only STOP, but go completely away and cause irreparable damage to the average American. No one has even CONSIDERED the effect of construction jobs DISAPPEARING and all the ancillary homebuilding goods and services. Appliances, furniture, materials. All soon to STOP! New cars bought on "home equity loans" will be but a MEMORY!
Entirely too late will come HYPER-inflation. As futile efforts are made to rejuvenate an economy that has sold its jobs to Asia.
At ...that... point, gold may even be DANGEROUS to own. But non owners will perish and see misery beyond comprehension.
What will stop ........gold?
Not a damn thing.
FACT!
On the brighter side, grading fees may be reduced.
you sound like you're alot of fun @ parties.
lighten up.