<< <i>Certainly a sobering report. Thanks for taking the time to share your experiences and observations. Seventy percent taxes on income is stunning. >>
Maybe we will get to sample some more of those taxes after our next election........
Because of the lack of health screening and control of immigrants in many places the health officials are absolutely paranoid. In the train and subway stations there were restrooms, which all cost about $1.30 U.S. to use. You put you money in and the door opens and only one person can go in as the door locks. After you leave a big door slams behind you, and water sprayers and disinfectants spray the entire room for several minutes before the next customer is allowed in.
On April 19 I wrote to expect a rebound in the dollar. The dollar index that day was 81.51. Unfortunately I missed the bottom by about a week as the index eventually fell to 81.26. The dollar then rallied to 82.60. That doesnt sound like a big deal but during that time gold fell about $40.
Today I am writing that the dollar has seen its lows for the forseeable future. I believe the index will rally to 100. In other words I am looking for at least a 25% appreciation in the dollar. This will not happen overnight, but rather the next few years. I am only making a prediction on the dollar, not the price of gold. There have been some major development over the past week that lead me to make this prediction. Here is one supporting piece of evidence.
No offense to ya cohodk, but the chart just doesn't mean anything to me... (meaning I have no idea what I'm looking at).
Can you give an 'overview' on what you see in the trends that would make you give the prediction that you have?
So I take it that... if the dollar is to have a trend of becoming stronger.... generally..... the price of gold will be trending down? (given past trends and behaviors?)
I purposely put that chart up without discussion to see what you and others see. I am not going to try to make a prediction on the price of gold because in the scheme of things it is a very thin market and subject to emotion and whim. Contrary to popular opinion I believe gold is more closely corrolated to something other than the dollar.
Numismatist. 50 year member ANA. Winner of four ANA Heath Literary Awards; three Wayte and Olga Raymond Literary Awards; Numismatist of the Year Award 2009, and Lifetime Achievement Award 2020. Winner numerous NLG Literary Awards.
I purposely put that chart up without discussion to see what you and others see. I am not going to try to make a prediction on the price of gold because in the scheme of things it is a very thin market and subject to emotion and whim. Contrary to popular opinion I believe gold is more closely corrolated to something other than the dollar. >>
Guess I'd better take another look at the charts and see what I can see....
I believe that the Chinese are moving money into Europe, and into mostly hard corporate assets, in addition I think the Japanese are following suit. My recent traveling experience tells me two things, first that much of Europe has as many serious social and economic problems as we do, perhaps more, but the World media continually plays those down. Second I think from what I could see of the huge number of businesses in Europe with Chinese and Japanese’s names that the Europeans seem to have no problems with these investments, as we do from time to time.
I think that when the dollar is weak, Euro money pours into the stock markets here creating significant rallies, and when the Euro is weak some of that money pulls out or stops coming.
In addition this seems to be the same reaction in the gold markets, when the Euro is moving up so is Gold, and when it is moving down so is Gold.
In addition I think we will not only see no interest rate decreases this year, but perhaps increases, because I believe that the Chinese and the Japanese, are sick of buying our dollar debt, and must have more inducement i.e. interest.
On the other hand they might also be induced to buy our debt if the Fed, or the powers that be, create an artificial upward move in the dollar against the Euro.
If the dollar index heads back to 1.00 over the next few years, then the gold market is already dead and over. Cash in your chips and go home. I don't believe this is the case at all though. A rally up a few points is one thing. A major strengthening in the US dollar hints at lowering interest rates, economic recovery, and lots of other good things......all while the G8 and G16 countries are printing money at 10%-45% yoy. It just doesn't fit.
Cohodk, what is your premise, besides a chart, what are the fundamentals behind a prediction for a much higher dollar?
Not sure how the dollar could rebound significantly without more asian intervention, which I don't think will be provided going forward.
I have read that more and more countries are either talking about or have started trading oil in Euros, which is one of the main pillars of support for the dollar.
Another pillar is the yen carry trade, which becomes weaker with the reduction in the variance between us and other countries treasury rates. The US can't raise interest rates without cutting our own throats on the debt. To make it worse, European central banks and other countries are beginning to raise their interest rates.
China doesn't want to accumilate our bonds anymore, which is why they are looking to diversify out of the dollar. They are looking to accumilate real assets like mines and utilities. This has or will remove a huge underpinning for the dollar.
I'm not a dollar expert, this is just what I have read, but I believe dollar prices follow the buying and selling of the dollar, as well as the supply. Since we are not going to reduce our money supply anytime soon, the reasons above point to a lower dollar, aside from a technical dead cat bounce.
Just my opinion however, I'm not a currency trader.
If I am not understanding something I would like to know because all my retirement money is overseas and if I could get a 25% pop by bringing it to dow stocks that would be great!
Longshot -- I think your observations are on target, but with regard to the Chinese losing their appetite for US bonds, it is important to reflect on their alternatives:
(a) Try to continue the status quo with respect to trade and domestic consumption, and try to sell the accumulating dollars to others. Given the magnitude of the numbers, this is not likely to be viable.
(b) Promote an increase in domestic consumption. This will happen, but slowly.
(c) Buy other US dollar assets, e.g. real estate or US companies. This will support the US dollar.
(d) Buy more from the US. We have a lot of high value added products and services that the Chinese will ultimately want - such as pollution control, biotech, pharmaceuticals, software, entertainment.
Over the next ten years, we will see some of all of the above; items (c) and (d) are generally positive for the US economy and the US dollar. Item (b) is positive for the stability of the global economy. I believe this provides fundamental support to the message underlying cohodk's charts.
(I am personally reasonably diversified in overseas assets, but am not in a hurry to further decrease my dollar exposure.)
Contrary to popular opinion I believe gold is more closely corrolated to something other than the dollar.
Since we live in the USA, the price of gold is inextricably related to what our government does with the money supply, I think. And that does corrolate with the dollar. Liquidity and emotion might influence the short term pricing, but the link with money supply will out.
GoldSaint - thank you very much for reminding me why the United States of America must succeed at all costs.
cohodk - the charts are intriguing. They appear to indicate that the economy is healthy and stable - either that or the patient is still alive, anyways. Are you going to make us do the research, or are you going to enlighten us?
Q: Are You Printing Money? Bernanke: Not Literally
Well, as I said about 100 pages back, diversification is your friend and choice of asset classes for your savings determines more about the outcome than individual choices within the classes.
my philosophy is stay balanced, have some stocks and bonds and real estate and precious metals and rare coins and other assets, and rebalance if something is under- or over-performing or conditions change.
be ready for opportunities to speculate but realize that the best analysis and predictions can be rendered null and void if the market changes direction for an entirely different reason
I believe the incredible 25 yr bull market in bonds in over. I dont say this because Bill Gross of Pimco says so--he has been quite wrong on the direction of the bond market recently. I say this because I am a chart reader. Charts are relatively good predictors of future events, however they can not predict the unpredictable such as a 9-11 event.
The chart I posted is of the 30 yr US Treasury Bond. Yields have been trending down since the early 1980's finally bottoming with the recession caused by the stock market bubble burst and 9-11. These extremely low yields in the US, Europe and especially Japan, as well as the fall of communism in the Eastern Europe have laid the foundation for tremendous economic growth. The disinflationary pressures that have been coming from Japan since the 1980's are also abating and may actually be gone. Global acceptance of free economies and capitalism are now well rooted across the globe.
I believe interest rates are now about to climb in a more steady fashion. The world is booming and prosperity is common. Remember rising interest rates occur in good economic times.
The US dollar has taken a beating vs almost every currency. I am very familiar with the Polish economy and currency as my wife id from Poland and I have spent considerable time there. The Polish Zloty has appreciated from about 24c in 2001 to 36c in 2007--a 50% increase which is simply incredible given that the Polish economy is smaller than Wal-Mart. Granted in 2006 they were the second fastest growing economy behind only China, but I hardly think such a currency appreciation is warranted. The point I am trying to make is that I believe the dollar has been held to artifically low levels.
Now what happened this week that makes me think the dollar is about to trend appreciable higher? First Europe raised rates, and for a few hours the dollar suffered. The next day New Zealand raised rates and the dollar exploded. Normally the dollar would have sold off but not this time. When the expected does not happen, one must really take notice. The final nail in the coffin of the dollar's demise may be the reaction of gold this week, but I place less emphasis on this action.
As this is a fairly long post by my standards I will take a break. Actually I have to go to bed as I am going to Pocono tomorrow for the Nascar race.
<< <i> The US dollar has taken a beating vs almost every currency. I am very familiar with the Polish economy and currency as my wife id from Poland and I have spent considerable time there. The Polish Zloty has appreciated from about 24c in 2001 to 36c in 2007--a 50% increase which is simply incredible given that the Polish economy is smaller than Wal-Mart. Granted in 2006 they were the second fastest growing economy behind only China, but I hardly think such a currency appreciation is warranted. The point I am trying to make is that I believe the dollar has been held to artifically low levels.
>>
Interesting point about the zloty, but it is more or less exactly where it was vis-a-vis the dollar 10 years ago.
.....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>BERN, Switzerland (AP) - The Swiss National Bank said Thursday it will sell 276 US tons of gold reserves over the next two years. >>
<< <i>The share of gold in Switzerland's currency reserves has risen to 42 percent from 33 percent since mid-2005 due to the increase in gold prices. Jordan said the sale would return the share of gold in the currency reserves to their previous level. >>
Robert Scot: Engraving Liberty - biography of US Mint's first chief engraver
The Swiss are unhappy about out-earning the equities markets with their gold. Going forward they want to sell some and earn less like everyone else. Makes sense to me. Wonder who has them in their back pocket? (lol)
Is there any way to put this thread out of it's misery, or is the whole point to get to 1000 responses? I'm sorry, I didn't understand. Still don't get it.
<< <i>Is there any way to put this thread out of it's misery, or is the whole point to get to 1000 responses? I'm sorry, I didn't understand. Still don't get it.
Randy >>
Thats too bad. There was a nice $3 move in oil you could have taken advantage of.
The thread deserves a bump today given the recent action in metals.
Earlier I wrote that I do not believe gold is as closely corrolated to the dollar as most think. Recent action bears this out. The dollar has been down the last 3 days and gold is down about $20. Half of the problem can be found in the USA and the other half overseas, particularly Japan.
Everyone seems very quite about the derivative market, and these hedge funds that are going down the tubes. No comments about Bear Sterns not even trying to save its second fund? And what about Blackstone dropping below the offering price. Is the debt Castle startting to crumble?
June 27 (Bloomberg) -- The most stunning aspect of the demise of two hedge funds belonging to Bear Stearns Cos. is the almost total absence of transparency surrounding the bailout.
The debacle may finally provoke regulators, who have long suspected that buying derivatives is akin to running through a fireworks factory with a lighted blowtorch in each hand.
Their focus is likely to fall on how to assign prices to complex derivatives, created by cooking together different flavors of securities whose values are driven by other assets such as stocks, bonds or mortgages.
The efforts by Bear Stearns's creditors to extricate themselves from their investments have laid bare one of the derivatives market's dirty little secrets -- prices are mostly generated by a confidence trick.
As long as all of the participants keep a straight face when agreeing on a particular value for a security, that's the price. As soon as someone starts giggling, however, the jig is up, and the bookkeepers might have to confess to a new, lower price.
The sheer size of the derivatives arena gives regulators nightmares, with trading volumes dwarfing the value of the underlying securities that the derivatives are based on. A record $251 billion of new CDOs sold in the first quarter, according to the Bank for International Settlements.
Well, no financial guru am I but there there are observations to note...
I read an interesting article earlier this week about financial planning. The jist of the article was that everybody is so anxious to get money into stock plans and funds for retirement but the returns are microscopic compared to what the managers for the funds are getting. Essentially, the article stated that the only ones making any money in the fund/plan business are the managers and that the investors were providing the fodder and receiving little in return while bearing all of the risk. Eventually, folks will wonder why it is like this. My response...duh?
I sold about 70% of my stocks over the last two weeks, cash for me. Stashing cash and metal for the forseeable future and placing the money in raw land (dirt). But...what about coins.
Coin prices/availability seem to lag behind economic conditions, as observed in the run up over the last couple of years, and the fall of '95, excepting of course the high end rare coins (they seem to have their own good market). Check out the segments of the CU 3000 to see the trends across various niches. At some point in time Bear-Sterns and like ilk, along with the go-go subprime and mass low end retail guys are going to disappoint the investors and financial backers and they are all going to be heading down the river on a big raft.
At some point, coins and other descretionary income outlays must suffer and coins are descretionary outlays for most folk. You wanna see descretionary outlays wilt on the vine, wait for $5 gas and 10% mortgage interest. Hook these things up with the 29% credit card balance interest rates and it will be "deja vu all over again".
Point being...we should watch what we spend on investment grade coins for the near future and watch what we're holding in high end coins. This is a very good time to watch the coin market closely and pay attention and be in the conservative mode. The market does not always go up. Once the line has formed, it's too late.
We will now return with your regularly scheduled program.
Ted Butler has some interesting thoughts in his most recent essay.
As he well knows and frequently says the problem with silver is physical. It's simply impossible to continually use more of something than is produced. This isn't the same world it was in 1978 when the Hunt's started the attempt to corner the market. Silver doesn't come from silver mines anymore and there is increasing consumption nearly every year. Even if we weren't going to run out of silver in the foreseeable future (and we are), speculators will at some point jump in the market to buy. There is probably already not enough physi- cal silver in the world to cover all the longs. If everyone who thought he owned silver actually had it in his possession there would be none left for industry.
My sense is that everytime there's a blowoff in the market that there is an in- crease in physical demand. This works to speed the day of reckoning. There is so little silver in the world that a fraction of an ounce represents each person's share. And that share drops every year which encourages more longs and more buying.
I have taken physical delivery of my silver and I suspect we will one day see the same episode on the COMEX as we saw with Palladium back in 2001 and nickel on the LME last year. When the shorts default they will be given more time to deliver......
“The Bank for International Settlements (BIS) has reported that the total clot of global derivatives in existence is now $415.2 trillion, which comes out to 789% of global GDP.”
Perhaps this is all meaningless, just a way as mhammerman pointed out, for managers to pump up the financial statements to get huge fees. Perhaps this can go on forever and no one will loss a dime?
Perhaps we can hit $1,000 trillion in the near future, what do we call $1,000 trillion anyway?
Perhaps when all the baby boomers around the world come to get their money to retire, all of these funds will create a new kind of ELECTRONIC currency that can be used to pay off mortgages, credit cards and buy a gallon of milk for $8.00 or a gallon of gas at $7.00. $7.00 is about what they are paying in Europe now anyway.
Perhaps I am just confused and need to go back to business school. The financial writers say that if you buy a million dollars worth of subprime mortgages and package them all up into a CDO package you can value them at 30 million, borrow against them, and then show 30 million on the books of your hedge fund, then collect a million dollar fee as a manager for all of this creative bookkeeping.
I can certainly see why there are lots of new billionaires create each year.
The main criticism levelled against precious metals is that they just "sit there" and don't pay dividends. Yet looking at the stock market, it's also uncommon these days to find a stock that actually pays a dividend.
"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)
Apart from utilities and such, you would of course expect equities to yield has than bank CDs. Both earn more than gold. Gold and equities both involve principal risk, but have potential for appreciation. Bank CDs in essence do not.
<< <i>C'mon now guys I just renewed a C.D. at 5.25% !! >>
In 1981 when CD's were paying 12% the average yield of the market was 7%. 5 years later when those CD's came due you had to renew at 6%. In the meantime stocks were up 150%. Who made more money after those 5 years?
Cohodk my friend if we start pulling out little pieces of time to make comparisons of the past we can make all investments look good, Ha Ha.
If we can just get to one quadrillion in derivatives then the stock market can go to 26,000 and perhaps gold will go to $1,300. Which do we think is likely to happen first?
Comments
<< <i>Certainly a sobering report. Thanks for taking the time to share your experiences and observations. Seventy percent taxes on income is stunning. >>
Maybe we will get to sample some more of those taxes after our next election........
Now, that's my kind of restroom!
Gold Coins, Bullion Bring Balance
Gold $666.00
(-3.60)
06-06 8:14 AM PST
Today I am writing that the dollar has seen its lows for the forseeable future. I believe the index will rally to 100. In other words I am looking for at least a 25% appreciation in the dollar. This will not happen overnight, but rather the next few years. I am only making a prediction on the dollar, not the price of gold. There have been some major development over the past week that lead me to make this prediction. Here is one supporting piece of evidence.
Knowledge is the enemy of fear
Can you give an 'overview' on what you see in the trends that would make you give the prediction that you have?
So I take it that... if the dollar is to have a trend of becoming stronger.... generally..... the price of gold will be trending down? (given past trends and behaviors?)
I purposely put that chart up without discussion to see what you and others see. I am not going to try to make a prediction on the price of gold because in the scheme of things it is a very thin market and subject to emotion and whim. Contrary to popular opinion I believe gold is more closely corrolated to something other than the dollar.
Knowledge is the enemy of fear
Interesting information GOLDSAINT, I'll stay here in the USA on that news.
<< <i>Tincup,
I purposely put that chart up without discussion to see what you and others see. I am not going to try to make a prediction on the price of gold because in the scheme of things it is a very thin market and subject to emotion and whim. Contrary to popular opinion I believe gold is more closely corrolated to something other than the dollar. >>
Guess I'd better take another look at the charts and see what I can see....
Newbie trying to figue things out.
Here is my two cents worth:
I believe that the Chinese are moving money into Europe, and into mostly hard corporate assets, in addition I think the Japanese are following suit. My recent traveling experience tells me two things, first that much of Europe has as many serious social and economic problems as we do, perhaps more, but the World media continually plays those down. Second I think from what I could see of the huge number of businesses in Europe with Chinese and Japanese’s names that the Europeans seem to have no problems with these investments, as we do from time to time.
I think that when the dollar is weak, Euro money pours into the stock markets here creating significant rallies, and when the Euro is weak some of that money pulls out or stops coming.
In addition this seems to be the same reaction in the gold markets, when the Euro is moving up so is Gold, and when it is moving down so is Gold.
In addition I think we will not only see no interest rate decreases this year, but perhaps increases, because I believe that the Chinese and the Japanese, are sick of buying our dollar debt, and must have more inducement i.e. interest.
On the other hand they might also be induced to buy our debt if the Fed, or the powers that be, create an artificial upward move in the dollar against the Euro.
roadrunner
Not sure how the dollar could rebound significantly without more asian intervention, which I don't think will be provided going forward.
I have read that more and more countries are either talking about or have started trading oil in Euros, which is one of the main pillars of support for the dollar.
Another pillar is the yen carry trade, which becomes weaker with the reduction in the variance between us and other countries treasury rates. The US can't raise interest rates without cutting our own throats on the debt. To make it worse, European central banks and other countries are beginning to raise their interest rates.
China doesn't want to accumilate our bonds anymore, which is why they are looking to diversify out of the dollar. They are looking to accumilate real assets like mines and utilities. This has or will remove a huge underpinning for the dollar.
I'm not a dollar expert, this is just what I have read, but I believe dollar prices follow the buying and selling of the dollar, as well as the supply. Since we are not going to reduce our money supply anytime soon, the reasons above point to a lower dollar, aside from a technical dead cat bounce.
Just my opinion however, I'm not a currency trader.
If I am not understanding something I would like to know because all my retirement money is overseas and if I could get a 25% pop by bringing it to dow stocks that would be great!
It is an extremely volotile market.
A lot of games being played by the 'big boys'. How are we little people supposed to predict the outcome?
I still put a lot of faith in the one true 'store of wealth' that the world has known for the last 5000 years.
"“Those who sacrifice liberty for security/safety deserve neither.“(Benjamin Franklin)
"I only golf on days that end in 'Y'" (DE59)
(a) Try to continue the status quo with respect to trade and domestic consumption, and try to sell the accumulating dollars to others. Given the magnitude of the numbers, this is not likely to be viable.
(b) Promote an increase in domestic consumption. This will happen, but slowly.
(c) Buy other US dollar assets, e.g. real estate or US companies. This will support the US dollar.
(d) Buy more from the US. We have a lot of high value added products and services that the Chinese will ultimately want - such as pollution control, biotech, pharmaceuticals, software, entertainment.
Over the next ten years, we will see some of all of the above; items (c) and (d) are generally positive for the US economy and the US dollar. Item (b) is positive for the stability of the global economy. I believe this provides fundamental support to the message underlying cohodk's charts.
(I am personally reasonably diversified in overseas assets, but am not in a hurry to further decrease my dollar exposure.)
Since we live in the USA, the price of gold is inextricably related to what our government does with the money supply, I think. And that does corrolate with the dollar. Liquidity and emotion might influence the short term pricing, but the link with money supply will out.
GoldSaint - thank you very much for reminding me why the United States of America must succeed at all costs.
cohodk - the charts are intriguing. They appear to indicate that the economy is healthy and stable - either that or the patient is still alive, anyways. Are you going to make us do the research, or are you going to enlighten us?
I knew it would happen.
my philosophy is stay balanced, have some stocks and bonds and real estate and precious metals and rare coins and other assets, and rebalance if something is under- or over-performing or conditions change.
be ready for opportunities to speculate but realize that the best analysis and predictions can be rendered null and void if the market changes direction for an entirely different reason
Liberty: Parent of Science & Industry
I believe the incredible 25 yr bull market in bonds in over. I dont say this because Bill Gross of Pimco says so--he has been quite wrong on the direction of the bond market recently. I say this because I am a chart reader. Charts are relatively good predictors of future events, however they can not predict the unpredictable such as a 9-11 event.
The chart I posted is of the 30 yr US Treasury Bond. Yields have been trending down since the early 1980's finally bottoming with the recession caused by the stock market bubble burst and 9-11. These extremely low yields in the US, Europe and especially Japan, as well as the fall of communism in the Eastern Europe have laid the foundation for tremendous economic growth. The disinflationary pressures that have been coming from Japan since the 1980's are also abating and may actually be gone. Global acceptance of free economies and capitalism are now well rooted across the globe.
I believe interest rates are now about to climb in a more steady fashion. The world is booming and prosperity is common. Remember rising interest rates occur in good economic times.
The US dollar has taken a beating vs almost every currency. I am very familiar with the Polish economy and currency as my wife id from Poland and I have spent considerable time there. The Polish Zloty has appreciated from about 24c in 2001 to 36c in 2007--a 50% increase which is simply incredible given that the Polish economy is smaller than Wal-Mart. Granted in 2006 they were the second fastest growing economy behind only China, but I hardly think such a currency appreciation is warranted. The point I am trying to make is that I believe the dollar has been held to artifically low levels.
Now what happened this week that makes me think the dollar is about to trend appreciable higher? First Europe raised rates, and for a few hours the dollar suffered. The next day New Zealand raised rates and the dollar exploded. Normally the dollar would have sold off but not this time. When the expected does not happen, one must really take notice. The final nail in the coffin of the dollar's demise may be the reaction of gold this week, but I place less emphasis on this action.
As this is a fairly long post by my standards
Knowledge is the enemy of fear
<< <i>
The US dollar has taken a beating vs almost every currency. I am very familiar with the Polish economy and currency as my wife id from Poland and I have spent considerable time there. The Polish Zloty has appreciated from about 24c in 2001 to 36c in 2007--a 50% increase which is simply incredible given that the Polish economy is smaller than Wal-Mart. Granted in 2006 they were the second fastest growing economy behind only China, but I hardly think such a currency appreciation is warranted. The point I am trying to make is that I believe the dollar has been held to artifically low levels.
>>
Interesting point about the zloty, but it is more or less exactly where it was vis-a-vis the dollar 10 years ago.
"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
Watch for an oil breakout over $67.50.
Knowledge is the enemy of fear
<< <i>BERN, Switzerland (AP) - The Swiss National Bank said Thursday it will sell 276 US tons of gold reserves over the next two years. >>
<< <i>The share of gold in Switzerland's currency reserves has risen to 42 percent from 33 percent since mid-2005 due to the increase in gold prices. Jordan said the sale would return the share of gold in the currency reserves to their previous level. >>
Proud recipient of two "You Suck" awards
roadrunner
Randy
<< <i>Is there any way to put this thread out of it's misery, or is the whole point to get to 1000 responses? I'm sorry, I didn't understand. Still don't get it.
Randy >>
Thats too bad. There was a nice $3 move in oil you could have taken advantage of.
Knowledge is the enemy of fear
Knowledge is the enemy of fear
Earlier I wrote that I do not believe gold is as closely corrolated to the dollar as most think. Recent action bears this out. The dollar has been down the last 3 days and gold is down about $20. Half of the problem can be found in the USA and the other half overseas, particularly Japan.
Knowledge is the enemy of fear
By Mark Gilbert
June 27 (Bloomberg) -- The most stunning aspect of the demise of two hedge funds belonging to Bear Stearns Cos. is the almost total absence of transparency surrounding the bailout.
The debacle may finally provoke regulators, who have long suspected that buying derivatives is akin to running through a fireworks factory with a lighted blowtorch in each hand.
Their focus is likely to fall on how to assign prices to complex derivatives, created by cooking together different flavors of securities whose values are driven by other assets such as stocks, bonds or mortgages.
The efforts by Bear Stearns's creditors to extricate themselves from their investments have laid bare one of the derivatives market's dirty little secrets -- prices are mostly generated by a confidence trick.
As long as all of the participants keep a straight face when agreeing on a particular value for a security, that's the price. As soon as someone starts giggling, however, the jig is up, and the bookkeepers might have to confess to a new, lower price.
The sheer size of the derivatives arena gives regulators nightmares, with trading volumes dwarfing the value of the underlying securities that the derivatives are based on. A record $251 billion of new CDOs sold in the first quarter, according to the Bank
for International Settlements.
Money for nuthin..............
I knew it would happen.
I read an interesting article earlier this week about financial planning. The jist of the article was that everybody is so anxious to get money into stock plans and funds for retirement but the returns are microscopic compared to what the managers for the funds are getting. Essentially, the article stated that the only ones making any money in the fund/plan business are the managers and that the investors were providing the fodder and receiving little in return while bearing all of the risk. Eventually, folks will wonder why it is like this. My response...duh?
I sold about 70% of my stocks over the last two weeks, cash for me. Stashing cash and metal for the forseeable future and placing the money in raw land (dirt). But...what about coins.
Coin prices/availability seem to lag behind economic conditions, as observed in the run up over the last couple of years, and the fall of '95, excepting of course the high end rare coins (they seem to have their own good market). Check out the segments of the CU 3000 to see the trends across various niches. At some point in time Bear-Sterns and like ilk, along with the go-go subprime and mass low end retail guys are going to disappoint the investors and financial backers and they are all going to be heading down the river on a big raft.
At some point, coins and other descretionary income outlays must suffer and coins are descretionary outlays for most folk. You wanna see descretionary outlays wilt on the vine, wait for $5 gas and 10% mortgage interest. Hook these things up with the 29% credit card balance interest rates and it will be "deja vu all over again".
Point being...we should watch what we spend on investment grade coins for the near future and watch what we're holding in high end coins. This is a very good time to watch the coin market closely and pay attention and be in the conservative mode. The market does not always go up. Once the line has formed, it's too late.
We will now return with your regularly scheduled program.
Coin ON!
As he well knows and frequently says the problem with silver is physical. It's
simply impossible to continually use more of something than is produced. This
isn't the same world it was in 1978 when the Hunt's started the attempt to
corner the market. Silver doesn't come from silver mines anymore and there
is increasing consumption nearly every year. Even if we weren't going to run
out of silver in the foreseeable future (and we are), speculators will at some
point jump in the market to buy. There is probably already not enough physi-
cal silver in the world to cover all the longs. If everyone who thought he owned
silver actually had it in his possession there would be none left for industry.
My sense is that everytime there's a blowoff in the market that there is an in-
crease in physical demand. This works to speed the day of reckoning. There
is so little silver in the world that a fraction of an ounce represents each person's
share. And that share drops every year which encourages more longs and more
buying.
$20 Saint Gaudens Registry Set
Perhaps this is all meaningless, just a way as mhammerman pointed out, for managers to pump up the financial statements to get huge fees. Perhaps this can go on forever and no one will loss a dime?
Perhaps we can hit $1,000 trillion in the near future, what do we call $1,000 trillion anyway?
Perhaps when all the baby boomers around the world come to get their money to retire, all of these funds will create a new kind of ELECTRONIC currency that can be used to pay off mortgages, credit cards and buy a gallon of milk for $8.00 or a gallon of gas at $7.00. $7.00 is about what they are paying in Europe now anyway.
Perhaps I am just confused and need to go back to business school. The financial writers say that if you buy a million dollars worth of subprime mortgages and package them all up into a CDO package you can value them at 30 million, borrow against them, and then show 30 million on the books of your hedge fund, then collect a million dollar fee as a manager for all of this creative bookkeeping.
I can certainly see why there are lots of new billionaires create each year.
I knew it would happen.
Microsoft -- 1.4 %
Walmart -- 2.0 %
Johnson & Johnson - 2.8 %
General Electric - 3.2 %
Citigroup -- 4.3 %
Knowledge is the enemy of fear
I have one at 5.38 with a 0 risk factor...
<< <i>C'mon now guys I just renewed a C.D. at 5.25% !! >>
In 1981 when CD's were paying 12% the average yield of the market was 7%. 5 years later when those CD's came due you had to renew at 6%. In the meantime stocks were up 150%. Who made more money after those 5 years?
Knowledge is the enemy of fear
If we can just get to one quadrillion in derivatives then the stock market can go to 26,000 and perhaps gold will go to $1,300. Which do we think is likely to happen first?