Well Topstuff, actually it's the ignorance which has permitted the government to grow so large that even former communists from Russia are envious. These are the same folks who have made it almost impossible to compete, and so from a standpoint of survival, business people and companies have no choice but to outsource or be crushed as the regulations and taxes we have to put up with and pay in this country make it impossible to stay. Then you have such favorable "free trade" agreements with communist countries where average labor is hired to the tune of 30-50 bucks a MONTH for 48 hour work weeks mind you and what do you expect?
Far as the politicians who are the real traitors, on both sides of the aisle, who are almost "cheered for growing government so as to give SOMEONE a deal at someone elses expense and it becomes the snake that eats itself, round and round.
Pathetic really. I put the national debt clock on my website almost a year ago and to date I have not seen it on any other coin dealers website. But I guess that makes me one of them there "extemists".
From the "whatever you want to take from this department":
I was watching Fox News and they had an economic astrologer on the air. Yeah, I know... Anyway his prediction was that gold would go down through summer as the dollar goes up and then gold would go way up next year.
The spoiled wealthy in this country, and particularly the business owner who moves his/her company to a third world country, are traitors to the US. In the constant search for an ever greater bank account, they have turned their backs on the very system and workers who have allowed them to thrive. If an average person caused the financial collapse of a town, they would be hung...these people do it and call it the American way. It is not the American way, in many if not most cases, it is the way of second or more generation business families turning their backs on their country. The US is going to continue it's spin down the commode unless people wake up and stop the deficit run-up and movement of jobs. As the biggest consumer nation, now that most manufacturing jobs have moved out of the US we have little to lose by putting 100% tariffs on the merchandise manufactured overseas. I could live without new geegaws and gadgets for a couple years until things were straightened out.
<< <i>From the "whatever you want to take from this department":
I was watching Fox News and they had an economic astrologer on the air. Yeah, I know... Anyway his prediction was that gold would go down through summer as the dollar goes up and then gold would go way up next year. >>
Actually my work points to the same conclusion. My indicators have not yet given me a buy signal on gold shares.
manufacturing jobs have moved out of the US we have little to lose by putting 100% tariffs on the merchandise manufactured overseas. I could live without new geegaws and gadgets for a couple years until things were straightened
At first glance tariffs seem reasonable until one realizes that higher prices of goods coming in mean that there is even less for us to buy for our dollar. This is the same scenario that occurred to help worsen the great depression. If raw materials coming in cost more, more of our businesses go down the toilet as the cost of doing business rises and profit margins fall. The spiral just continues. No one wins.
I've read articles from the early 1980's that said the same things about oil and gold, except the dates are different. Oil was projected to be over $100/bbl by 1990.
Wonder why the author did not mention Nixon's ruling about Gold?
So, all this cryin and moanin about the US not being the manufacturer/capitalist headquarters of the world into infinity...so what. It is simply societal/economic evolution on a global scale, as it should be...everything must evolve or be run over by those that do. I mean when are we going to give up the industrial age mentality that we have to "make something" and move into a new era? We are the ulitmate consumer society...goods and services! Can't we just handle the paper and software, why do we have to make anything, certainly there are people much more able at that than we are. And, the US paper is not worthless as those here might try and persuade us...it certainly buys oil and plenty of goods from china and we all know...it's only worth what people say it's worth, so the dollar is good, best I can see. The bank with my mortgage seems to like US dollars just fine. We are exporting McJobs outta here as fast as the CFO's and COO's can set it up. So why fight it, go into the future. It's not like we are unprotected babes in the woods, unable to defend or make a way for ourselves. There is more brain power, education, motivation, will, and riteousness in the U.S. than all the rest of the world combined...we couldn't be denied even if anyone wanted to try and keep us from success.
The newspaper restated my previous statement that saudi could cover us in oil, we could be swimming in it on main street USA. We can't do any more refining than we do now...we're at as close to 100% refining capacity now and there are still pressures on the supply side of gasoline. We can drill for oil in california, alaska, freakin the coast of michigan at the great lakes...but we can't refine any more of it. Not likely that we will get any more refineries...and they are 5 years out once you get the epa and other agencies to allow it and that is a minimum of 10 years so don't look for cheaper gas...it ain't gonna happen, and $2.00 is a bargan!
So, gold and silver, coins, financial instruments...it's still a game, any prediction or prognostication you make is just that a guess. Put your goodies where you are comfortable but just like my banker told me when I set out for my journey in life...I asked him if he had any advice for me. He replied "Don't get into anything that you can't see your way out of." Words to live by.
What has really changed the past 60 plus years is the attitude of Americans toward, government, credit, spending etc. Our grad parents hated government interference in their lives. They hated to be beholding to business via credit, if they could not afford the luxuries of life they just did without, and replaced the ownership of things with human relations i.e. friends. They knew that once you invite the government into your life there would come a time that that would rule everything. You could no longer even discipline your own children. In those days democrats were conservative and republicans were more conservative, and now democrats are communists, and republicans are socialists. They did not allow their public servants to house themselves in mega office buildings surrounded with luxury, or build schools with football stadiums like superdomes.
What changed the attitude of our parents and us, who knows, I guess the historians will someday figure that out?
One thing I think we all now know at this point is that buying into the lies that governments can take care of your every need was a disastrous mistake, and the means they proposed was a ponzie scheme.
It would be interesting for some of the folks here to do a little research on what amount of salary and benefits their companies were actually paying on their behalf. I think they would be amazed at what they would be earning if they just received a check for the entire amount. So how much does your company pay for you on matching S.C. Medicare, medicade, school taxes, local taxes, safety requirements, pension benefits, company medical, vacations, sick leave, pregnancy leave, day care, workman’s comp. etc. etc. etc.
Looks like the sky is falling! The houses are starting to fall down, people are fighting each other for food, there is much bloodshed on the streets, the terrorists have taken over 3 states so far.
Better kiss your wife, kids and loved ones. They won't be here tomorrow because the earth is going to be pulled into a black hole.
Seriously folks When the stock market is doing well, we see nutty people. When the stock market is dropping, we see nutty people. When we were heading to Y2K, we saw nutty people. The economy is doing well, we see nutty people. The economy is doing bad and well, please see the previous pages here and make up your own mind.
Can their be any light the end of the tunnel? is there anything positive that can come out of this or is it all negative?
Can their be any light the end of the tunnel? is there anything positive that can come out of this or is it all negative? >>
No. There can be no light and no salvation. In all probability we'll continue to do at least a little longer exactly what we have done for centuries; muddle through.
We are very short sighted but sometimes we know our mistakes even as we are making them. It is not only human to err, it is inevitable.
<< <i>in that case, i will just sit back, relax and enjoy life. i will work, save my money. no need to worry. >>
Your right history never repeats itself, we could never have another boom like the 20's leading to a GREAT depression. I'm sure most of us are making a big mistake in saving any money at all. Uncle Sam wants to take your social security and give it to those that are spending every dime and have nothing to retire on. What a country with all the new age economics and monetary policies, I'm sure are kids will look back on all the past generations and tell us how we showed them the way
i'm sure in my lifetime i will see good times and bad. i've been through some tough times but have always pulled out fine. ditto for my parents who saved their money. ditto for my grandparents who saved their money. all of which made it through the 'great depression'.
<< <i>i'm sure in my lifetime i will see good times and bad. i've been through some tough times but have always pulled out fine. ditto for my parents who saved their money. ditto for my grandparents who saved their money. all of which made it through the 'great depression'.
Did you guys also worry your heads off about Y2k? >>
Your right, I'm sorry Comrade. 50% in taxes, 8 trillion in debt, a dollar that is no longer respected, accepted in many countries and valued and nowhere near what it once was must be ok.
But then agai, your CSCoin, the unidentified posted.
Well I guess we've been fools all the years we purchased goods with backed money. We should have brought a roll of paper and printed up money to buy all of the purchases in the past. This isn't like the 30's when all money was backed by gold or silver and there was a real shortage of money, it the opsite now we have tons of the stuff on the market. The money today is an IOU note and nothing more, it's not backed by anything just like the dot coms that went boom in the crash. JMO
It's a whole new world and far removed from our parents disciplined lifestyles. The "ME" hippies are in power now and to he11 with the establishment by the time it all falls apart they'll be dead......they hope.
the hippie generation, my generation or as you so eloquently put it *the me generation*. general comments like those come from people who want to blame everyone but themselves, always pointing the finger. no wonder why your trying to spread so much doom and gloom.
Great info. Prediction .... as imports continue to rise, tariffs and taxes will be placed on these goods driving prices up, Americans will then reestablish their manufacturing strength. 1. Buy American, as much as you can. 2. Constantly contact govn. representatives and tell them to stop spending and lower taxes. 3. Get out of debt 5. Invest in land and coins 6. Invest in our young adults, give them jobs. 7. Tighten up borders, who says Americans won't work at minimun wage jobs? We're one of the hardest working countries out there. 8. Get people off welfare who don't need it, they will have to work. 9. Stop dumping money into education and make them accountable. 10. Finally..... "In God We Trust" say a prayer every day.
I don’t think of this thread as spreading doom and gloom and in fact that is not possible, but if some of the ideas here, or reports from various sectors, help someone to be a little more cautious, then what can it hurt.
When you really get down to it we are only travelers through the creation, no body owns anything, GOD owns it all, and as far as I can tell no human has ever taken anything off the planet when they left. GEE 70% of the folks on the planet believe that everything is Karma and your life is set in stone before you arrive.
On the other hand, for those of us that have time, it is interesting to be observers of history in the making, to use the minds we have to exercise our mental capacities.
As our friend Cladking pointed out, “It is not only human to err, it is inevitable.”
As far as the reality of our current financial situation goes, very little can be done to change what many will look at as a disastrous time, and that time is on the way. Can we as a Nation make any real changes that would stave off what is coming, my opinion is NO. Can individuals be a little better prepared, I think they can. Were their people in the Great depression that just thought everyone was nuts to buy stocks on credit, yes. Were there people that did things to protect their families seeing that there was disaster ahead, I am sure there were. Who was is that said, LUCK FAVORS THE PREPARED MIND?
We'll get through, just like we always have... by sticking together.
-g
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.
Hays Morning Market Comment This is Your Life April 27, 2005 10-Day Arms Index Hits Critical 1.30 Level
by Don R. Hays
Summary: My hypothesis is and has been for several years that the best economic example we have comes from the 1990-1996 example. The beginning points in these two examples would be from August 1990, and September 2001. Greenspan is facing the same pressure and economic conditions as he experienced in 1994. The “herd” is hearing similar economic headlines, i.e. stagflation and inflation, and the stock market is acting amazingly similar. It befuddles me that the herd is not buying this. I would have expected a lot more attention to our theme, but the media phones are relatively silent. That, of course, still gives it a lot better chance of continuing to provide valuable insights.
So despite boring you again, we show that pattern today and suggest that this will be YOUR INVESTMENT LIFE in 2005, and that is going to take a LOT of PATIENCE and FAITH. The market is going to try to run you off, as it prepares at year-end to dramatically reward the brave and faithful.
The 10-day Arms index has been a hold-out, but it did yesterday fulfill the minimum expectation. The OEX put/call ratio is also getting to that first level to show these “smart” investors are starting to become bullish.
We believe the first significant buying juncture has just been activated, and that some indices (probably the S&P 500) have made their last low for the year. But this year will be an important year to add performance value by pruning and planting. Prune on the overbought, and replant those seeds on the oversold. It worked like a charm in 2004, and we believe it will reward the faithful in 2005.
The price of gold will be a VERY IMPORTANT indicator to Greenspan, as the very tepid Money Supply Growth rate of today has ALWAYS produced either a recession or a significant slowdown.
For many years in the 1990’s I was an extreme critic of Alan Greenspan and his monetary policy. His history of calling economic trends had been abysmal, and he was seeing inflation bogeymen at every shadow behind every tree. Finally in 1996, he began to understand the new deflationary and high productivity theme, and his recent history has been very invaluable at navigating the world through some extreme volatility. He didn’t do a lot of take away the speculative juices in 1999-2000 by considering changes in the margin requirements, but his action post 9/11 was fantastic. It is truly amazing that there have been NO major financial collapses in the massive bear market and volatility experienced in the 2000-2002 market collapse.
So that’s my critique and praise for the Chairman. But now he is about to go through a new test, and I have to admit that my prior memories make me a little nervous. There is no doubt in my mind, that even with my criticisms Greenspan and the U.S. Federal Reserve is the most informed and effective monetary body in the world.
Why am I bringing this up? I have been saying for the last two months that the evidence is telling me that the Federal Reserve needs to take break from raising the fed funds rate further and let the markets and the economy settle in. Let’s give the market a chance to tell us what IS THE NORMAL healthy fed funds rate in a deflationary environment.
Before you shoot me that e-mail, let me once again say that in my opinion I still consider the yield curve as the ONLY great monetary indicator. It measures supply AND demand. And as of now the yield curve is almost picture perfect. I’ll include it again here.
History tells me that a yield curve that produces a slope anywhere between 1.25 and 1.50 is great for promoting non-inflationary (or deflationary) growth. As you can see, the basket-case slope above 2.0, that is only appropriate when the world’s economy needs massive economic help, is no longer appropriate. The Fed has actually been acting to correct that glut of money since early last year.
Remember as I include this next chart, the above observation balances out supply AND demand. The long-bond yield is a very effective measure of inflation expectations, with a little input given by the economic needs for capital. Since the Fed’s primary goal is to keep inflation under control, the action of the market-based yield on the 10-year T-Note is a major input to the Fed’s posture. We all know that the yield of the 10-year T-Note bottomed out in June 2003 at 3.1%, and then followed that up with a panic rise to 4.88% in June 2004. Since then it has been remaining very well contained despite HUGE expectations by the herd of a dramatic increase in rates. Even Greenspan has been vocal in his belief that today’s yields on long bonds can not remain so docile. But the market is loudly telling him different.
Now let’s turn to the money supply itself. Admittedly, this is only supply, but it is something that cannot be totally written off as a non-event.
The above graph shows the year over year growth rate of MZM, the money supply growth rate that the Fed itself has said has the best record of all money supply statistics at predicting growth IN THE NEXT 12 MONTHS. Since the money supply growth was so historically high in the wake of 9-11, I have been trying to stay focused by averaging the year over year with a 3-year moving average.
You can see that the huge glut of money has now had sufficient time to be eaten up in the economic activity of the last couple years. Now, here’s the kicker. If you look back into the record of the last 50 years, you will see that in EVERY case that the year over year growth of MZM has dropped to today’s ultra low rate, the economy has ALWAYS experienced either a significant slow-down OR a RECESSION. By the way, this same thing happened in 1994 which caused a significant economic slow-down in 1995.
We also have just experienced another piece of evidence from the leading economic indicators. I don’t have a lot of confidence in the “leading” economic indicators, but it is a matter of historical evidence that in every case that the year-over-year LEI has shown a decline as it has just done, the economy has had that same economic slow-down in the next 12 months.
So I’ve given you two stories here, one from the yield curve saying that everything is hunky dory, and the other from the slow growth of money supply and the leading economic indicators saying that a significant slow-down is about to occur.
Greenspan knows this!! So I look for him also to be walking very slowly as he massages public opinion. I expect him to watching EXTREMELY close the price action of the market based barometers. I believe the price of gold will be the MOST watched item on his screen. As you know, we plot the price of gold in dollars, in euros, and in yen, but today the price of gold in dollars will be the key barometer since it does take in not only inflation expectations, but also the effects of currency.
I consider this Greenspan’s missing link. My temptation is to say that today’s fed funds rate is “just right.” The series of lower highs and higher lows has been measuring monetary policy in a stable sideways action since November of last year. But I do not believe that Greenspan will stop his “gradual” fed funds rate increases based on the above. But I do believe he will if the price of gold drops under that $411 low made in February of this year.
But the yield curve is saying “just right” and the price of gold is saying “just right,” so I’m saying WHOA Greenspan, give today’s rate a chance to work its way through the economy.
Okay, now back to the stock market. I have to keep repeating myself to make sure you hear me. I believe the low of last week will prove to be the first buying juncture for this year in a series of 2 or 3 more. I suspect that this low will be the final low for a few indices, but many (most) will make two more lower lows driving ALL of the psychological indicators into their perfect stage for this phase of the 8-year cyclical bull market. My best insights are still coming from the pattern of the 1994 bull market, and yes I’m going to bore you with this 1994 chart one more time.
It is my guess that the low of last week will prove to be that low in 1994 made as marked by the arrow on the above graph. That is not an absolute certainty, but conditions and our indicators certainly did give their signal that it was time to buy that juncture. If the above pattern continues EXACTLY, it would mean that the next 13 weeks is going to toss you around like a yo-yo. That is the next 3 months, and would bring us right back to this week when 2nd quarter earnings are coming out into the open at a rabid pace. The 1994 pattern says that the news being presented to the herd is going to start the worry juices flowing even more profusely, and even though I don’t expect a lower low (in those critical indices—probably the S&P 500) I do expect the panic emotions to be even more acute in the third week of June. That’s the nature of second bottoms. Before I close this out for today, I do want to show the action of the 10-day Arms index. Yesterday’s weak market did push that important indicator of panic selling to its first level that I would consider minimally fulfilled at important market buy junctures—1.30.
This is obviously one more missing piece to the resumption of the bull market. But there are still a few other pieces that I do expect to get activated fully before a strong and lasting upsurge is reignited.
One tiny missing link is the action of the Smart Money Index. I consider this one of our least dependable psychological indicators, so please don’t overdose on this, but so far it has shown no hints of giving a bullish message. Remember, this indicator is a cumulative plot of the Dow Jones Industrial average, but only for its action in two short time spans. The cumulative index subtracts the action of the first 30 minutes of trading which is much more emotionally induced and thus is considered dumb money. The action of the last one hour is considered smart more-rationally-supported, thus it is added to the cumulative Smart Money Index. Here’s the plot of this indicator.
As I said above, with emphasis, I never use this indicator as a primary indicator. If anything, at best it is anecdotal evidence. But the message has been since October of last year that the smart money was using that strength to become more negative. Now let’s dissect this and show you the two individual components.
If you remember, as the S&P 500 was making that fake-out new high in March, I did this illustration and entitled the report, “Beware of the Alligator.” I have been surprised that the red line has absolutely not shown any characteristics yet of turning upward as it did in the 2004 market beginning in that significant May bottom.
So yes, I am watching it, but the other psychological indicators are far more dependable and they are saying that the risk at this juncture is very low, and the risk/reward potential in the next 6-30 months has now moved decisively on the side of reward.
One last chart from a geo-political view. Something has been happening in the last few months that I have no idea as to why it is occurring but find it very intriguing. As I look at 100’s of different charts each day covering the waterfront, I occasionally pick up some amazing sneak preview of a new theme that gives special clues about our future success and failure. I’m not saying this is significant, but it certainly is strange, and if one of you has an opinion as to why, I would like to know, but the Indian Rupee has been in a perfect sideways pattern against the dollar, and no other currency has this same pattern except the frozen Chinese Yuan.
I just am wondering, maybe India is growing a little tired of getting second-rate attention in their economic attractiveness. Are they manipulating their Rupee now to hold it constant against the dollar? Are they playing China’s game? Are they trying to put a little more pressure on China to quit pegging their currency to the dollar? I don’t know, but take a look at this. If you have any clues or insights, let me know. Here’s the chart.
That’s it my friends, I’ll see you on Friday morning. Bright and early. Well……early anyway.
Kaytsok, Thanks for your update! Perhaps you can tell us why Mr. hays makes this statement?
“I believe the price of gold will be the MOST watched item on his screen (Greenspan ). As you know, we plot the price of gold in dollars, in euros, and in yen, but today the price of gold in dollars will be the key barometer since it does take in not only inflation expectations, but also the effects of currency.”
Since most of us that have been watching this market for many years, and have not a shred of a doubt the Gold market is heavily manipulated, Why would Greenspan or Mr. Hays give any credence to the movements in this market?
Below are a few statements from “The Coming Collapse of the Dollar and How to Profit from It” released a few months ago, who knows where these gentlemen got there intel but most hard metals people can make an overwhelming case that current metals prices are not where they should be.
" the most intriguing speculation, in our opinion - was a deal struck between the US and Chinese governments, in which the US would keep a lid on gold's exchange rate while China did the same for silver?"
“The fact that China's central bank still has substanital reserves of silver to dump on the market while the Federal Reserve and USA at least pretend to have substantial reserves of gold to dump is an interesting connection.”
Turk & Rubino expect an inflationary death spiral, perhaps as early as 2006
“Will the dollar collapse? The case made in The Coming Collapse is quite thorough. Debt levels are at an unmanageable high level. Consumer debt, mortgage debt, corporate debt, federal debt, unfunded federal mandates, federal obligations to the coming tidal wave of retirees.”
You are welcome for his comments from this morning. I'm not sure what he meant with the Greenspan comments (Also, I don't feel qualified to interpret his comments. They are often more complex than I can handle) That said, it just seems to me that if inflation is a problem, gold will recognize it. But a technical breakdown of under $411 short term (next few weeks/months), would indicate that inflation is not a problem, and Greenspan will not hike rates aggressively. I'll keep the Hays comments coming when I feel they will be interesting to the readers of this board.
i feel that america peaked during the 40s. everything is downhill from here.
I used to laugh at people who bought gold for an investment. Now I think differently. Most americans still think lowly of gold.
The stock market is so absurdly overpriced. The only stocks that meet my criteria are banks :-/. The folks I do not trust worth a squat with their lending practices.
I am finally old enough where even I can see the erosion of our buying power.
The topic being discussed in this thread is so big. It takes weeks of reading history and current events to even begin to comprehend the crap going on.
I have come to the realization that the USA is nothing special anymore. The original values that founded this country are gone. A currency backed by silver,gold,basket of metals being one of them.
I am rambling. I just feel the need to pipe in the fact I agree with most people posting here. I am currently buying gold. I think I would rather have a big pile of gold then trust my government to be stable over the next 10-50 years.
I wish there was a better method to contain the info in all these posts.
The PHL Gold/Silver index broke its uptrend today. This index is comprised of primarily gold/silver mining companies however there are copper concerns as well.
Since stocks usually lead their underlying market I would expect a downturn in the price of gold over the coming months and if you asked me for a target price I would say somewhere to the $380 area. The drop could also be quite fast.
I feel like responding again. I am quite glad others feel this way. But it makes sense in a way. Coin collectors always have been quite educated in my imaginary stereotype.
I am sitting here realizing I have nothing inciteful to add. I really have no original thought to impress my peers with.
I make a modest income. I shun those extra things in life that cost money that have no real use anymore. For example, cable tv or eating out at fancy places. My job supplies the 2mb/s sdsl and all my telephone needs. One sort of expects that when you work in the telecommunication/clec/isp business.
I have been shaping my whole life the last few decade to live with less. I was spoiled as a child and this pretty much broke me of my need to be a consumer. I got sick of it.
The one perk I allowed myself after so many years was to own a cat. I knew a major rule to becoming wealthly was not to feed extra mouths.
I recently moved to a better apt that costs me less per month. I make an effort to spend less and save more. Even my last two cars were given to me because nobody wants to drive a 15 yr old car anymore. To me it is precious and easy to fix.
I guess the point I am trying to make is that there are a lot of others out there like me. The twenty somethings that have woken up.
I have no debt. I never had a credit card. I paid cash for my college/uni education. Even that I realized was a stupid waste of money. I like what I do. Companies are eager to pay a person who is willing to learn and picks things up fast.
I feel we are preparing for the day we all know is coming. After reading so much history, one gets a sense things are not quite right. There will be a collapse when we least expect it. I am unsure of what wil happen.
The unsureness can be felt when the trillion number is brought up. What in the crap are we doing trillion of dollars in debt? Is that not enough to wake up the sheep? What more needs to be said?
It is like a snowball rolling downhill. It has reached a point where nothing will stop it. How do you fix so much debt?
You default. You cause a war. Might makes right. America simply will not pay.
The whole digital aspect to it, is plain creepy. trillions and trillions sitting in computers, able to move around so quickly. Once it starts, it will happen very fast.
I just do not see it happening right away. Too many world events need to be played out. Like what you ask? How about china hosting the olympics. Oh boy, they will make a show of that.
After they demonstrate their power, i expect things to be quite interesting. Totally unknown territory for us.
Sorry for rambling insane comments in your thread.
t3rr0r1sm: You sound more like the Greatest Generation (those who were born a generation before the Baby Boomers) in your thought pattern and way of living. You do not sound like the z generation (I believe it is?) that was born since 1975. Your z generation are some of the most prolific consumers, even more so than the baby boomers and the x generation before you.
Indeed, the baby boomers have been among the most reckless generation we have ever seen in this country. Quite frankly, I am ashamed to be part of such generation in an economic sense. Spending and more spending. Now our country is run by baby boomers who know nothing better than to spend. But I have heard that we baby boomers have so spoiled the x and z generation that it is even worse than ever before.
Example: The tremendous waste in the American consumer in buying small bottled water each time they wanted water. What ever happened to the Great American concept of reusing those bottles? The Greatest Generation used to and still buys gallon sized bottled water and fills the small bottles on a daily or other basis as needed. No buying individual bottles when another bottle of water is desired. Everytime I do this I am laughed at by my baby boomer friends. What waste!!
This is the crux of what is wrong in America. We do not save; we consume down to the last frickin bottle of plastic. On top of it, hardly any state requires a 5c/10c deposit on those non-carbonated bottles.
<< <i>i feel that america peaked during the 40s. everything is downhill from here.... >>
The US is the only hyper-power in the world now; no other country even comes close to our level of wealth.
An article in the WSJ the other day was discussing a new mine in S. America, 750k ounces of new gold per year starting in 2006.
Other that the past couple of years, gold has been a stinker of an investment, it's heavy and seriously how many local outfits will buy a (large) gold bar? If you want an excellent, portable store of value, buy diamonds.
The price of silver was so low a couple of years ago, that I considered tiling the kitchen in silver tiles; unfortunately the plates are excellent heat conductors, so your feet would be cold.
Gold $375 USD Aug 05.
It should drop a noticeable amount in the next few months since interest rates have risen and many of the carry trades need to be undone.
It's hard to get excited on an asset class that requires the demise of the US for growth... I bet on the US.
PS Everything will be just fine, the world isn't going to end anytime soon, we'll have potato salad this weekend, concerts in the summer.
-g
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.
<< <i>t3rr0r1sm: You sound more like the Greatest Generation (those who were born a generation before the Baby Boomers) in your thought pattern and way of living. You do not sound like the z generation (I believe it is?) that was born since 1975. Your z generation are some of the most prolific consumers, even more so than the baby boomers and the x generation before you.
Indeed, the baby boomers have been among the most reckless generation we have ever seen in this country. Quite frankly, I am ashamed to be part of such generation in an economic sense. Spending and more spending. Now our country is run by baby boomers who know nothing better than to spend. But I have heard that we baby boomers have so spoiled the x and z generation that it is even worse than ever before. >>
Up to recently, there have been some very hard feeling between x-er's & the boomers, but to call the x-er's spoiled is ridiculous, x-er's inherited the US after the 60's & 70's, lousy products, lousy environment, a broken military & a weak government. I'm proud to say, that with the help of the WWII crowd, we have rebuilt this country into the powerhouse it is today, the US has never been such a great power ever. The very word the US is upset can destabilize countries now. I've heard the generations called: x, Next, Y... the z is new to me though. I will admit, y is spoiled rotten, but they are very cute... almost like a business hippie.
<< <i>Example: The tremendous waste in the American consumer in buying small bottled water each time they wanted water. What ever happened to the Great American concept of reusing those bottles? The Greatest Generation used to and still buys gallon sized bottled water and fills the small bottles on a daily or other basis as needed. No buying individual bottles when another bottle of water is desired. Everytime I do this I am laughed at by my baby boomer friends. What waste!! >>
Why save it? Something 10x better at 1/2 the cost will be available in a month. You can get 2 hand-tossed large cheese crust filled supreme pizzas for half the cost you could get a plain pepperoni pizza in the later 70's. Die broke, you should of transfered your assets to your kids when the really needed them, when they were young.
-g
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.
Hi Oreville i may have to stop this fight LOL!! but i think he ment gold and i think it's because oil is down just my guess [i will be reading Oreville] LOL!!!
Indeed, the baby boomers have been among the most reckless generation we have ever seen in this country. Quite frankly, I am ashamed to be part of such generation in an economic sense. Spending and more spending. Now our country is run by baby boomers who know nothing better than to spend.
Your thoughts on this? >>
Do you mean like the roosevelt generation or reagan generation? I mean in terms of selfish socialist spenders roosevelt and reagan make lenin blush.
<< <i>XAU getting hammered for the second day in a row. Why? >>
$431.50 is hammered? What's it dropped 5 or 6 bucks, I really don't follow the day to day stuff. Now take my IBM stock I sold right at the first of the year, it was a tad over $99 dollars and thank GOD I sold it because the last month it reached a low of about $72. Now that's hammered, but lucky for me since it way over sold at this point I'm buying. A very good company with a great model for the future IMO.
My oil stocks have been treating me right but if the market goes way down I'll be in cash on those too because they will certainly follow with a downturn in the economies of the world. Real materials are the place to be at this point, it's called timing and you have to ride the waves, if your going with the crowd your on the sucker side of the equation.
Coins are high right now it maybe time to consider taking profits to buy them latter unless your a collector and it really doesn't matter does it?
It should drop a noticeable amount in the next few months since interest rates have risen and many of the carry trades need to be undone.
You are not the first to say this, but I challenge you to tell me when interest rates have risen. Attached is a 5 year chart of the 30yr bond. The peak in JUN 04 represents a yield of 5.597%. Today we are at a yield of 4.505%. That doesnt look like rising rate to me. Maybe it is just a pet peave but people better start to open their eyes and stop listening to the blowhards on CNBC. The fed has raised the fed funds rates 175 basis points in the last 2 years. But that only applies to banks lending to other banks. Does your bank pay you more in your checking or savings account than it did 2 years ago? I dont think so.
Also you can still buy a car for 0% interest. No raise there. Mortgages rates are the same as 2 years ago. No raise there. Interest on credit cards can be found for 6-8%. That is much lower than 5 years ago. WHERE HAVE RATES RISEN?
<< <i>XAU getting hammered for the second day in a row. Why? >>
$431.50 is hammered? What's it dropped 5 or 6 bucks, I really don't follow the day to day stuff. Now take my IBM stock I sold right at the first of the year, it was a tad over $99 dollars and thank GOD I sold it because the last month it reached a low of about $72. Now that's hammered, but lucky for me since it way over sold at this point I'm buying. A very good company with a great model for the future IMO.
My oil stocks have been treating me right but if the market goes way down I'll be in cash on those too because they will certainly follow with a downturn in the economies of the world. Real materials are the place to be at this point, it's called timing and you have to ride the waves, if your going with the crowd your on the sucker side of the equation.
Coins are high right now it maybe time to consider taking profits to buy them latter unless your a collector and it really doesn't matter does it? >>
The XAU is not gold. It is an index based on gold/silver/copper/ and other precious metals mining companies stocks. As I stated earlier many use the XAU as an indicator of things to come. Generally a declining XAU means that the stock of gold mining companies is declining. And why would they be declining? Because profits are declining. And why are they declining? Primarily because the value of their end product is declining. Stocks always react to events that are 6+ months in the future. They do not look backwards. They couldnt care less about yesterday. Tomorrow is all that is important. Today the profits are also coming under pressure because of high energy costs, so there may be some disconnect between the XAU and gold spot prices. However in the end the corrolation is very high.
The XAU has fallen about 27% in the last few months and is within 5-10% of a potential support area. We will need to see if it can hold. If it does then that may mean 2 things.
1. That profits may increase because the value of the end product is increasing faster tha the costs associated with mining,
or
2. That the cost associated with mining have declined and hence profits rise.
<< <i>XAU getting hammered for the second day in a row. Why? >>
$431.50 is hammered? What's it dropped 5 or 6 bucks, I really don't follow the day to day stuff. Now take my IBM stock I sold right at the first of the year, it was a tad over $99 dollars and thank GOD I sold it because the last month it reached a low of about $72. Now that's hammered, but lucky for me since it way over sold at this point I'm buying. A very good company with a great model for the future IMO.
My oil stocks have been treating me right but if the market goes way down I'll be in cash on those too because they will certainly follow with a downturn in the economies of the world. Real materials are the place to be at this point, it's called timing and you have to ride the waves, if your going with the crowd your on the sucker side of the equation.
Coins are high right now it maybe time to consider taking profits to buy them latter unless your a collector and it really doesn't matter does it? >>
The XAU is not gold. It is an index based on gold/silver/copper/ and other precious metals mining companies stocks. As I stated earlier many use the XAU as an indicator of things to come. Generally a declining XAU means that the stock of gold mining companies is declining. And why would they be declining? Because profits are declining. And why are they declining? Primarily because the value of their end product is declining. Stocks always react to events that are 6+ months in the future. They do not look backwards. They couldnt care less about yesterday. Tomorrow is all that is important. Today the profits are also coming under pressure because of high energy costs, so there may be some disconnect between the XAU and gold spot prices. However in the end the corrolation is very high.
The XAU has fallen about 27% in the last few months and is within 5-10% of a potential support area. We will need to see if it can hold. If it does then that may mean 2 things.
1. That profits may increase because the value of the end product is increasing faster tha the costs associated with mining,
or
2. That the cost associated with mining have declined and hence profits rise. >>
Well that's certainly one point of view and would be the view of most brokers. Could it be that material reserves aren't being replaced? I can tell you now they aren't. And yes oil will IMO be the downfall of the world ecomoncy it will increase the cost of everything we buy and will have a bigger impact than mining stocks on gold. This is the time to take a defensive positon IMO and like the crash of 2000 where I lost about 18%, most of my friends took advice from all the experts and lost 40 to 50+ percent of thier hard earned income. This is a world ecomony and if Uncle Sam can't get Europe, China, and others to play thier game were in big trouble. Jim Sinclair seems to take a different view but of course like all those selling a product you have consider all sides not just a few charts. Read the common people and their trust in the US ecomony. I hope your right because either way I'm okay, I never put all my eggs in one basket. I just won't make those big 40 to 50 percent increases like those in the tech stocks in the laste 90's. Was I a fool for only settling for around 15%?
BTW: I think you've answered your own question. Oil is causing hardship on the mining stocks and it won't be going down with all the demand of two counties going through their "Industial Age" (China and India) and they have over a billion people each. Look for all products produced to jump in price and have a hard time making targets. This has nothing to do with products already on the market (gold in this case). As I said several months ago oil isn't going below $40, but I think I was wrong it would shock me to see it drop below $50. BP is one of the only companies close to replacing their reserves at their present levels but their in risky areas of the world to do it.
Jim's latest comments:
All you are watching in the USDX at the moment is speculation relating to whether or not the French will kill Europe with a vote against the Euroland constitution.
Gold of course eased in its inverse relationship to the USDX as the trading crowd seeks to understand nothing except the rise and fall in the volume at the open outcry which gives them direction to jump on the freight train. Fellows like our pal, Frank, bewildered by the action, abandon ship daily.
The Aden sisters sound the warning and their followers all jump overboard, throwing in the towel on what will, IMO, be in time a “Billion Dollar Sure Thing.”
As the Euro gets the willies from Paris, the Cando shows muscle. There is no question in my mind about what is happening. It is NOT dollar strength but the Euro running scared in front of the French onslaught.
Read last night’s missive on the action of the USDX as a result of its over-weighting in the Euro. Think about the central banks that are up to their ears in dollars and are diversifying into Euros. They aren’t going to be selling gold. The guy in the street is now thinking about gold as a hedge mechanism of the new hot stock on the street – currencies.
I am posting for you this evening the USDX, Euro, Swiss Franc, Cando daily, and Cando 72 minutes and gold. You will see the story told there. So please look, understand and relax.
For an explanation of the US Dollar Index please click here!
The implication here is primarily the US Federal Budget as tax income is going to CRATER! As a result, the US Federal Deficit is more likely to double by 2009 than be cut in half. That will take the dollar into a black hole.
Economy Grows at Softest Pace in 2 Years April 28, 2005 08:34:00 AM ET
WASHINGTON (Reuters) - The U.S. economy grew at its softest pace in two years during the first quarter this year, slowing to a 3.1 percent annual rate of expansion as consumers and businesses curbed spending in the face of rising prices, the Commerce Department said on Thursday.
The expansion in gross domestic product, which measures total output within U.S. borders, was the weakest since a 1.9 percent pace during the first quarter of 2003 and was a surprisingly sharp deceleration from the 3.8 percent rate registered in the fourth quarter of 2004.
Wall Street economists had forecast first-quarter GDP would grow at a relatively more robust 3.6 percent rate.
Comments
Far as the politicians who are the real traitors, on both sides of the aisle, who are almost "cheered for growing government so as to give SOMEONE a deal at someone elses expense and it becomes the snake that eats itself, round and round.
Pathetic really. I put the national debt clock on my website almost a year ago and to date I have not seen it on any other coin dealers website. But I guess that makes me one of them there "extemists".
Tom
Coin's for sale/trade.
Tom Pilitowski
US Rare Coin Investments
800-624-1870
Now we can add our current President to the list of Presidents who has been giving away the "store" to China.
The sad thing; I happen to be a Republican and voted for our current President, twice.
will itself go into default in 2006.
Bankruptcy laws will not be effective, as folks with no equity in their homes
and no assets will just walk away.
Inflation will rise, the dollar will continue to weaken, GM goes into Chapter 7 reorganization.
Jobs shrink in 2006 , GNP stalls out, shortages in all types of goods. Gas shortages as China and
India scarfup all available supplies. Shortage of refineries in the US will limit US supply regardless
of world oil supply.
Inflation will favor people with large debt, as long as they have jobs and are receiving increases in wages.
People on fixed incomes will be hammered.
Camelot
roadrunner
I was watching Fox News and they had an economic astrologer on the air. Yeah, I know... Anyway his prediction was that gold would go down through summer as the dollar goes up and then gold would go way up next year.
Although Free Market Network is real good.
Tom
Coin's for sale/trade.
Tom Pilitowski
US Rare Coin Investments
800-624-1870
<< <i>From the "whatever you want to take from this department":
I was watching Fox News and they had an economic astrologer on the air. Yeah, I know... Anyway his prediction was that gold would go down through summer as the dollar goes up and then gold would go way up next year. >>
Actually my work points to the same conclusion. My indicators have not yet given me a buy signal on gold shares.
Not my chart but you get the idea.
null
Knowledge is the enemy of fear
Liberty: Parent of Science & Industry
At first glance tariffs seem reasonable until one realizes that higher prices of goods coming in mean that there is even less for us to buy for our dollar. This is the same scenario that occurred to help worsen the great depression. If raw materials coming in cost more, more of our businesses go down the toilet as the cost of doing business rises and profit margins fall. The spiral just continues.
No one wins.
roadrunner
I've read articles from the early 1980's that said the same things about oil and gold, except the dates are different. Oil was projected to be over $100/bbl by 1990.
Wonder why the author did not mention Nixon's ruling about Gold?
People have been predicting the demise of the US since July of 1776.
So, all this cryin and moanin about the US not being the manufacturer/capitalist headquarters of the world into infinity...so what. It is simply societal/economic evolution on a global scale, as it should be...everything must evolve or be run over by those that do. I mean when are we going to give up the industrial age mentality that we have to "make something" and move into a new era? We are the ulitmate consumer society...goods and services! Can't we just handle the paper and software, why do we have to make anything, certainly there are people much more able at that than we are. And, the US paper is not worthless as those here might try and persuade us...it certainly buys oil and plenty of goods from china and we all know...it's only worth what people say it's worth, so the dollar is good, best I can see. The bank with my mortgage seems to like US dollars just fine. We are exporting McJobs outta here as fast as the CFO's and COO's can set it up. So why fight it, go into the future. It's not like we are unprotected babes in the woods, unable to defend or make a way for ourselves. There is more brain power, education, motivation, will, and riteousness in the U.S. than all the rest of the world combined...we couldn't be denied even if anyone wanted to try and keep us from success.
The newspaper restated my previous statement that saudi could cover us in oil, we could be swimming in it on main street USA. We can't do any more refining than we do now...we're at as close to 100% refining capacity now and there are still pressures on the supply side of gasoline. We can drill for oil in california, alaska, freakin the coast of michigan at the great lakes...but we can't refine any more of it. Not likely that we will get any more refineries...and they are 5 years out once you get the epa and other agencies to allow it and that is a minimum of 10 years so don't look for cheaper gas...it ain't gonna happen, and $2.00 is a bargan!
So, gold and silver, coins, financial instruments...it's still a game, any prediction or prognostication you make is just that a guess. Put your goodies where you are comfortable but just like my banker told me when I set out for my journey in life...I asked him if he had any advice for me. He replied "Don't get into anything that you can't see your way out of." Words to live by.
Enjoy
What changed the attitude of our parents and us, who knows, I guess the historians will someday figure that out?
One thing I think we all now know at this point is that buying into the lies that governments can take care of your every need was a disastrous mistake, and the means they proposed was a ponzie scheme.
It would be interesting for some of the folks here to do a little research on what amount of salary and benefits their companies were actually paying on their behalf. I think they would be amazed at what they would be earning if they just received a check for the entire amount. So how much does your company pay for you on matching S.C. Medicare, medicade, school taxes, local taxes, safety requirements, pension benefits, company medical, vacations, sick leave, pregnancy leave, day care, workman’s comp. etc. etc. etc.
Better kiss your wife, kids and loved ones. They won't be here tomorrow because the earth is going to be pulled into a black hole.
Seriously folks
When the stock market is doing well, we see nutty people.
When the stock market is dropping, we see nutty people.
When we were heading to Y2K, we saw nutty people.
The economy is doing well, we see nutty people.
The economy is doing bad and well, please see the previous pages here and make up your own mind.
Can their be any light the end of the tunnel? is there anything positive that can come out of this or is it all negative?
<< <i>
Can their be any light the end of the tunnel? is there anything positive that can come out of this or is it all negative? >>
No. There can be no light and no salvation. In all probability we'll continue to do
at least a little longer exactly what we have done for centuries; muddle through.
We are very short sighted but sometimes we know our mistakes even as we are
making them. It is not only human to err, it is inevitable.
<< <i>in that case, i will just sit back, relax and enjoy life. i will work, save my money. no need to worry. >>
Your right history never repeats itself, we could never have another boom like the 20's leading to a GREAT depression. I'm sure most of us are making a big mistake in saving any money at all. Uncle Sam wants to take your social security and give it to those that are spending every dime and have nothing to retire on. What a country with all the new age economics and monetary policies, I'm sure are kids will look back on all the past generations and tell us how we showed them the way
ditto for my parents who saved their money.
ditto for my grandparents who saved their money.
all of which made it through the 'great depression'.
Did you guys also worry your heads off about Y2k?
<< <i>i'm sure in my lifetime i will see good times and bad. i've been through some tough times but have always pulled out fine.
ditto for my parents who saved their money.
ditto for my grandparents who saved their money.
all of which made it through the 'great depression'.
Did you guys also worry your heads off about Y2k? >>
Your right, I'm sorry Comrade. 50% in taxes, 8 trillion in debt, a dollar that is no longer respected, accepted in many countries and valued and nowhere near what it once was must be ok.
But then agai, your CSCoin, the unidentified posted.
Pretty funny
Coin's for sale/trade.
Tom Pilitowski
US Rare Coin Investments
800-624-1870
It's a whole new world and far removed from our parents disciplined lifestyles. The "ME" hippies are in power now and to he11 with the establishment by the time it all falls apart they'll be dead......they hope.
1. Buy American, as much as you can.
2. Constantly contact govn. representatives and tell them to stop spending and lower taxes.
3. Get out of debt
5. Invest in land and coins
6. Invest in our young adults, give them jobs.
7. Tighten up borders, who says Americans won't work at minimun wage jobs? We're one of the
hardest working countries out there.
8. Get people off welfare who don't need it, they will have to work.
9. Stop dumping money into education and make them accountable.
10. Finally..... "In God We Trust" say a prayer every day.
I don’t think of this thread as spreading doom and gloom and in fact that is not possible, but if some of the ideas here, or reports from various sectors, help someone to be a little more cautious, then what can it hurt.
When you really get down to it we are only travelers through the creation, no body owns anything, GOD owns it all, and as far as I can tell no human has ever taken anything off the planet when they left. GEE 70% of the folks on the planet believe that everything is Karma and your life is set in stone before you arrive.
On the other hand, for those of us that have time, it is interesting to be observers of history in the making, to use the minds we have to exercise our mental capacities.
As our friend Cladking pointed out, “It is not only human to err, it is inevitable.”
As far as the reality of our current financial situation goes, very little can be done to change what many will look at as a disastrous time, and that time is on the way. Can we as a Nation make any real changes that would stave off what is coming, my opinion is NO. Can individuals be a little better prepared, I think they can. Were their people in the Great depression that just thought everyone was nuts to buy stocks on credit, yes. Were there people that did things to protect their families seeing that there was disaster ahead, I am sure there were. Who was is that said, LUCK FAVORS THE PREPARED MIND?
-g
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.
This is Your Life
April 27, 2005
10-Day Arms Index Hits Critical 1.30 Level
by Don R. Hays
Summary: My hypothesis is and has been for several years that the best economic example we have comes from the 1990-1996 example. The beginning points in these two examples would be from August 1990, and September 2001. Greenspan is facing the same pressure and economic conditions as he experienced in 1994. The “herd” is hearing similar economic headlines, i.e. stagflation and inflation, and the stock market is acting amazingly similar. It befuddles me that the herd is not buying this. I would have expected a lot more attention to our theme, but the media phones are relatively silent. That, of course, still gives it a lot better chance of continuing to provide valuable insights.
So despite boring you again, we show that pattern today and suggest that this will be YOUR INVESTMENT LIFE in 2005, and that is going to take a LOT of PATIENCE and FAITH. The market is going to try to run you off, as it prepares at year-end to dramatically reward the brave and faithful.
The 10-day Arms index has been a hold-out, but it did yesterday fulfill the minimum expectation. The OEX put/call ratio is also getting to that first level to show these “smart” investors are starting to become bullish.
We believe the first significant buying juncture has just been activated, and that some indices (probably the S&P 500) have made their last low for the year. But this year will be an important year to add performance value by pruning and planting. Prune on the overbought, and replant those seeds on the oversold. It worked like a charm in 2004, and we believe it will reward the faithful in 2005.
The price of gold will be a VERY IMPORTANT indicator to Greenspan, as the very tepid Money Supply Growth rate of today has ALWAYS produced either a recession or a significant slowdown.
For many years in the 1990’s I was an extreme critic of Alan Greenspan and his monetary policy. His history of calling economic trends had been abysmal, and he was seeing inflation bogeymen at every shadow behind every tree. Finally in 1996, he began to understand the new deflationary and high productivity theme, and his recent history has been very invaluable at navigating the world through some extreme volatility. He didn’t do a lot of take away the speculative juices in 1999-2000 by considering changes in the margin requirements, but his action post 9/11 was fantastic. It is truly amazing that there have been NO major financial collapses in the massive bear market and volatility experienced in the 2000-2002 market collapse.
So that’s my critique and praise for the Chairman. But now he is about to go through a new test, and I have to admit that my prior memories make me a little nervous. There is no doubt in my mind, that even with my criticisms Greenspan and the U.S. Federal Reserve is the most informed and effective monetary body in the world.
Why am I bringing this up? I have been saying for the last two months that the evidence is telling me that the Federal Reserve needs to take break from raising the fed funds rate further and let the markets and the economy settle in. Let’s give the market a chance to tell us what IS THE NORMAL healthy fed funds rate in a deflationary environment.
Before you shoot me that e-mail, let me once again say that in my opinion I still consider the yield curve as the ONLY great monetary indicator. It measures supply AND demand. And as of now the yield curve is almost picture perfect. I’ll include it again here.
History tells me that a yield curve that produces a slope anywhere between 1.25 and 1.50 is great for promoting non-inflationary (or deflationary) growth. As you can see, the basket-case slope above 2.0, that is only appropriate when the world’s economy needs massive economic help, is no longer appropriate. The Fed has actually been acting to correct that glut of money since early last year.
Remember as I include this next chart, the above observation balances out supply AND demand. The long-bond yield is a very effective measure of inflation expectations, with a little input given by the economic needs for capital. Since the Fed’s primary goal is to keep inflation under control, the action of the market-based yield on the 10-year T-Note is a major input to the Fed’s posture. We all know that the yield of the 10-year T-Note bottomed out in June 2003 at 3.1%, and then followed that up with a panic rise to 4.88% in June 2004. Since then it has been remaining very well contained despite HUGE expectations by the herd of a dramatic increase in rates. Even Greenspan has been vocal in his belief that today’s yields on long bonds can not remain so docile. But the market is loudly telling him different.
Now let’s turn to the money supply itself. Admittedly, this is only supply, but it is something that cannot be totally written off as a non-event.
The above graph shows the year over year growth rate of MZM, the money supply growth rate that the Fed itself has said has the best record of all money supply statistics at predicting growth IN THE NEXT 12 MONTHS. Since the money supply growth was so historically high in the wake of 9-11, I have been trying to stay focused by averaging the year over year with a 3-year moving average.
You can see that the huge glut of money has now had sufficient time to be eaten up in the economic activity of the last couple years. Now, here’s the kicker. If you look back into the record of the last 50 years, you will see that in EVERY case that the year over year growth of MZM has dropped to today’s ultra low rate, the economy has ALWAYS experienced either a significant slow-down OR a RECESSION. By the way, this same thing happened in 1994 which caused a significant economic slow-down in 1995.
We also have just experienced another piece of evidence from the leading economic indicators. I don’t have a lot of confidence in the “leading” economic indicators, but it is a matter of historical evidence that in every case that the year-over-year LEI has shown a decline as it has just done, the economy has had that same economic slow-down in the next 12 months.
So I’ve given you two stories here, one from the yield curve saying that everything is hunky dory, and the other from the slow growth of money supply and the leading economic indicators saying that a significant slow-down is about to occur.
Greenspan knows this!! So I look for him also to be walking very slowly as he massages public opinion. I expect him to watching EXTREMELY close the price action of the market based barometers. I believe the price of gold will be the MOST watched item on his screen. As you know, we plot the price of gold in dollars, in euros, and in yen, but today the price of gold in dollars will be the key barometer since it does take in not only inflation expectations, but also the effects of currency.
I consider this Greenspan’s missing link. My temptation is to say that today’s fed funds rate is “just right.” The series of lower highs and higher lows has been measuring monetary policy in a stable sideways action since November of last year. But I do not believe that Greenspan will stop his “gradual” fed funds rate increases based on the above. But I do believe he will if the price of gold drops under that $411 low made in February of this year.
But the yield curve is saying “just right” and the price of gold is saying “just right,” so I’m saying WHOA Greenspan, give today’s rate a chance to work its way through the economy.
Okay, now back to the stock market. I have to keep repeating myself to make sure you hear me. I believe the low of last week will prove to be the first buying juncture for this year in a series of 2 or 3 more. I suspect that this low will be the final low for a few indices, but many (most) will make two more lower lows driving ALL of the psychological indicators into their perfect stage for this phase of the 8-year cyclical bull market. My best insights are still coming from the pattern of the 1994 bull market, and yes I’m going to bore you with this 1994 chart one more time.
It is my guess that the low of last week will prove to be that low in 1994 made as marked by the arrow on the above graph. That is not an absolute certainty, but conditions and our indicators certainly did give their signal that it was time to buy that juncture. If the above pattern continues EXACTLY, it would mean that the next 13 weeks is going to toss you around like a yo-yo. That is the next 3 months, and would bring us right back to this week when 2nd quarter earnings are coming out into the open at a rabid pace. The 1994 pattern says that the news being presented to the herd is going to start the worry juices flowing even more profusely, and even though I don’t expect a lower low (in those critical indices—probably the S&P 500) I do expect the panic emotions to be even more acute in the third week of June. That’s the nature of second bottoms.
Before I close this out for today, I do want to show the action of the 10-day Arms index. Yesterday’s weak market did push that important indicator of panic selling to its first level that I would consider minimally fulfilled at important market buy junctures—1.30.
This is obviously one more missing piece to the resumption of the bull market. But there are still a few other pieces that I do expect to get activated fully before a strong and lasting upsurge is reignited.
One tiny missing link is the action of the Smart Money Index. I consider this one of our least dependable psychological indicators, so please don’t overdose on this, but so far it has shown no hints of giving a bullish message. Remember, this indicator is a cumulative plot of the Dow Jones Industrial average, but only for its action in two short time spans. The cumulative index subtracts the action of the first 30 minutes of trading which is much more emotionally induced and thus is considered dumb money. The action of the last one hour is considered smart more-rationally-supported, thus it is added to the cumulative Smart Money Index. Here’s the plot of this indicator.
As I said above, with emphasis, I never use this indicator as a primary indicator. If anything, at best it is anecdotal evidence. But the message has been since October of last year that the smart money was using that strength to become more negative. Now let’s dissect this and show you the two individual components.
If you remember, as the S&P 500 was making that fake-out new high in March, I did this illustration and entitled the report, “Beware of the Alligator.” I have been surprised that the red line has absolutely not shown any characteristics yet of turning upward as it did in the 2004 market beginning in that significant May bottom.
So yes, I am watching it, but the other psychological indicators are far more dependable and they are saying that the risk at this juncture is very low, and the risk/reward potential in the next 6-30 months has now moved decisively on the side of reward.
One last chart from a geo-political view. Something has been happening in the last few months that I have no idea as to why it is occurring but find it very intriguing. As I look at 100’s of different charts each day covering the waterfront, I occasionally pick up some amazing sneak preview of a new theme that gives special clues about our future success and failure. I’m not saying this is significant, but it certainly is strange, and if one of you has an opinion as to why, I would like to know, but the Indian Rupee has been in a perfect sideways pattern against the dollar, and no other currency has this same pattern except the frozen Chinese Yuan.
I just am wondering, maybe India is growing a little tired of getting second-rate attention in their economic attractiveness. Are they manipulating their Rupee now to hold it constant against the dollar? Are they playing China’s game? Are they trying to put a little more pressure on China to quit pegging their currency to the dollar? I don’t know, but take a look at this. If you have any clues or insights, let me know. Here’s the chart.
That’s it my friends, I’ll see you on Friday morning. Bright and early. Well……early anyway.
Thanks for your update!
Perhaps you can tell us why Mr. hays makes this statement?
“I believe the price of gold will be the MOST watched item on his screen (Greenspan ). As you know, we plot the price of gold in dollars, in euros, and in yen, but today the price of gold in dollars will be the key barometer since it does take in not only inflation expectations, but also the effects of currency.”
Since most of us that have been watching this market for many years, and have not a shred of a doubt the Gold market is heavily manipulated, Why would Greenspan or Mr. Hays give any credence to the movements in this market?
Below are a few statements from “The Coming Collapse of the Dollar and How to Profit from It” released a few months ago, who knows where these gentlemen got there intel but most hard metals people can make an overwhelming case that current metals prices are not where they should be.
" the most intriguing speculation, in our opinion - was a deal struck between the US and Chinese governments, in which the US would keep a lid on gold's exchange rate while China did the same for silver?"
“The fact that China's central bank still has substanital reserves of silver to dump on the market while the Federal Reserve and USA at least pretend to have substantial reserves of gold to dump is an interesting connection.”
Turk & Rubino expect an inflationary death spiral, perhaps as early as 2006
“Will the dollar collapse? The case made in The Coming Collapse is quite thorough. Debt levels are at an unmanageable high level. Consumer debt, mortgage debt, corporate debt, federal debt, unfunded federal mandates, federal obligations to the coming tidal wave of retirees.”
You are welcome for his comments from this morning. I'm not sure what he meant with the Greenspan comments (Also, I don't feel qualified to interpret his comments. They are often more complex than I can handle) That said, it just seems to me that if inflation is a problem, gold will recognize it. But a technical breakdown of under $411 short term (next few weeks/months), would indicate that inflation is not a problem, and Greenspan will not hike rates aggressively. I'll keep the Hays comments coming when I feel they will be interesting to the readers of this board.
<< <i>a dollar that is no longer respected, accepted in many countries and valued and nowhere near what it once was must be ok. >>
I respect the dollar just fine, and personally don't give a crap what some stupid European or Asian country thinks about it.
<< <i>Can their be any light the end of the tunnel? is there anything positive that can come out of this or is it all negative? >>
Nope. The martians just landed in New York. The world has come to an end.
If you want to buy stuff made overseas, you should consider their opinions of your currency.
everything is downhill from here.
I used to laugh at people who bought gold for an investment.
Now I think differently. Most americans still think lowly of gold.
The stock market is so absurdly overpriced. The only stocks
that meet my criteria are banks :-/. The folks I do not trust
worth a squat with their lending practices.
I am finally old enough where even I can see the erosion of our
buying power.
The topic being discussed in this thread is so big. It takes weeks of reading
history and current events to even begin to comprehend the crap going on.
I have come to the realization that the USA is nothing special anymore.
The original values that founded this country are gone. A currency backed
by silver,gold,basket of metals being one of them.
I am rambling. I just feel the need to pipe in the fact I agree with most
people posting here. I am currently buying gold. I think I would rather
have a big pile of gold then trust my government to be stable over the
next 10-50 years.
I wish there was a better method to contain the info in all these posts.
The original values that founded this country are gone.
So true and the majority can't even differentiate freedom from socialism so how could it retain those values?
Coin's for sale/trade.
Tom Pilitowski
US Rare Coin Investments
800-624-1870
Since stocks usually lead their underlying market I would expect a downturn in the price of gold over the coming months and if you asked me for a target price I would say somewhere to the $380 area. The drop could also be quite fast.
Knowledge is the enemy of fear
But it makes sense in a way. Coin collectors always have been
quite educated in my imaginary stereotype.
I am sitting here realizing I have nothing inciteful to add.
I really have no original thought to impress my peers with.
I make a modest income. I shun those extra things in life that
cost money that have no real use anymore. For example, cable tv
or eating out at fancy places. My job supplies the 2mb/s sdsl and
all my telephone needs. One sort of expects that when you work
in the telecommunication/clec/isp business.
I have been shaping my whole life the last few decade to live
with less. I was spoiled as a child and this pretty much broke
me of my need to be a consumer. I got sick of it.
The one perk I allowed myself after so many years was to own a cat.
I knew a major rule to becoming wealthly was not to feed extra mouths.
I recently moved to a better apt that costs me less per month. I make
an effort to spend less and save more. Even my last two cars were given
to me because nobody wants to drive a 15 yr old car anymore. To me it is
precious and easy to fix.
I guess the point I am trying to make is that there are a lot of others
out there like me. The twenty somethings that have woken up.
I have no debt. I never had a credit card. I paid cash for my college/uni
education. Even that I realized was a stupid waste of money. I like what I do.
Companies are eager to pay a person who is willing to learn and picks
things up fast.
I feel we are preparing for the day we all know is coming. After reading
so much history, one gets a sense things are not quite right. There will
be a collapse when we least expect it. I am unsure of what wil happen.
The unsureness can be felt when the trillion number is brought up. What
in the crap are we doing trillion of dollars in debt? Is that not enough
to wake up the sheep? What more needs to be said?
It is like a snowball rolling downhill. It has reached a point
where nothing will stop it. How do you fix so much debt?
You default. You cause a war. Might makes right. America
simply will not pay.
The whole digital aspect to it, is plain creepy. trillions and trillions
sitting in computers, able to move around so quickly. Once it starts,
it will happen very fast.
I just do not see it happening right away. Too many world events
need to be played out. Like what you ask? How about china hosting
the olympics. Oh boy, they will make a show of that.
After they demonstrate their power, i expect things to be quite interesting.
Totally unknown territory for us.
Sorry for rambling insane comments in your thread.
Indeed, the baby boomers have been among the most reckless generation we have ever seen in this country. Quite frankly, I am ashamed to be part of such generation in an economic sense. Spending and more spending. Now our country is run by baby boomers who know nothing better than to spend. But I have heard that we baby boomers have so spoiled the x and z generation that it is even worse than ever before.
Example: The tremendous waste in the American consumer in buying small bottled water each time they wanted water. What ever happened to the Great American concept of reusing those bottles? The Greatest Generation used to and still buys gallon sized bottled water and fills the small bottles on a daily or other basis as needed. No buying individual bottles when another bottle of water is desired.
Everytime I do this I am laughed at by my baby boomer friends. What waste!!
This is the crux of what is wrong in America. We do not save; we consume down to the last frickin bottle of plastic. On top of it, hardly any state requires a 5c/10c deposit on those non-carbonated bottles.
Your thoughts on this?
<< <i>i feel that america peaked during the 40s.
everything is downhill from here.... >>
The US is the only hyper-power in the world now; no other country even comes close to our level of wealth.
An article in the WSJ the other day was discussing a new mine in S. America, 750k ounces of new gold per year starting in 2006.
Other that the past couple of years, gold has been a stinker of an investment, it's heavy and seriously how many local outfits will buy a (large) gold bar? If you want an excellent, portable store of value, buy diamonds.
The price of silver was so low a couple of years ago, that I considered tiling the kitchen in silver tiles; unfortunately the plates are excellent heat conductors, so your feet would be cold.
Gold $375 USD Aug 05.
It should drop a noticeable amount in the next few months since interest rates have risen and many of the carry trades need to be undone.
It's hard to get excited on an asset class that requires the demise of the US for growth... I bet on the US.
PS Everything will be just fine, the world isn't going to end anytime soon, we'll have potato salad this weekend, concerts in the summer.
-g
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>t3rr0r1sm: You sound more like the Greatest Generation (those who were born a generation before the Baby Boomers) in your thought pattern and way of living. You do not sound like the z generation (I believe it is?) that was born since 1975. Your z generation are some of the most prolific consumers, even more so than the baby boomers and the x generation before you.
Indeed, the baby boomers have been among the most reckless generation we have ever seen in this country. Quite frankly, I am ashamed to be part of such generation in an economic sense. Spending and more spending. Now our country is run by baby boomers who know nothing better than to spend. But I have heard that we baby boomers have so spoiled the x and z generation that it is even worse than ever before. >>
Up to recently, there have been some very hard feeling between x-er's & the boomers, but to call the x-er's spoiled is ridiculous, x-er's inherited the US after the 60's & 70's, lousy products, lousy environment, a broken military & a weak government. I'm proud to say, that with the help of the WWII crowd, we have rebuilt this country into the powerhouse it is today, the US has never been such a great power ever. The very word the US is upset can destabilize countries now. I've heard the generations called: x, Next, Y... the z is new to me though. I will admit, y is spoiled rotten, but they are very cute... almost like a business hippie.
<< <i>Example: The tremendous waste in the American consumer in buying small bottled water each time they wanted water. What ever happened to the Great American concept of reusing those bottles? The Greatest Generation used to and still buys gallon sized bottled water and fills the small bottles on a daily or other basis as needed. No buying individual bottles when another bottle of water is desired.
Everytime I do this I am laughed at by my baby boomer friends. What waste!! >>
Why save it? Something 10x better at 1/2 the cost will be available in a month. You can get 2 hand-tossed large cheese crust filled supreme pizzas for half the cost you could get a plain pepperoni pizza in the later 70's. Die broke, you should of transfered your assets to your kids when the really needed them, when they were young.
-g
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.
XAU getting hammered for the second day in a row. Why?
i may have to stop this fight LOL!!
but i think he ment gold and i think it's because oil is down just my guess
[i will be reading Oreville] LOL!!!
With all branches of government dominated by a single party, any party,
is a very scary thing indeed. It tends to limit the seperation of powers.
Camelot
Your thoughts on this? >>
Do you mean like the roosevelt generation or reagan generation? I mean in terms of selfish socialist spenders roosevelt and reagan make lenin blush.
Coin's for sale/trade.
Tom Pilitowski
US Rare Coin Investments
800-624-1870
<< <i>XAU getting hammered for the second day in a row. Why? >>
$431.50 is hammered? What's it dropped 5 or 6 bucks, I really don't follow the day to day stuff. Now take my IBM stock I sold right at the first of the year, it was a tad over $99 dollars and thank GOD I sold it because the last month it reached a low of about $72. Now that's hammered, but lucky for me since it way over sold at this point I'm buying. A very good company with a great model for the future IMO.
My oil stocks have been treating me right but if the market goes way down I'll be in cash on those too because they will certainly follow with a downturn in the economies of the world. Real materials are the place to be at this point, it's called timing and you have to ride the waves, if your going with the crowd your on the sucker side of the equation.
Coins are high right now it maybe time to consider taking profits to buy them latter unless your a collector and it really doesn't matter does it?
You are not the first to say this, but I challenge you to tell me when interest rates have risen. Attached is a 5 year chart of the 30yr bond. The peak in JUN 04 represents a yield of 5.597%. Today we are at a yield of 4.505%. That doesnt look like rising rate to me. Maybe it is just a pet peave but people better start to open their eyes and stop listening to the blowhards on CNBC. The fed has raised the fed funds rates 175 basis points in the last 2 years. But that only applies to banks lending to other banks. Does your bank pay you more in your checking or savings account than it did 2 years ago? I dont think so.
Also you can still buy a car for 0% interest. No raise there. Mortgages rates are the same as 2 years ago. No raise there. Interest on credit cards can be found for 6-8%. That is much lower than 5 years ago. WHERE HAVE RATES RISEN?
Knowledge is the enemy of fear
<< <i>
<< <i>XAU getting hammered for the second day in a row. Why? >>
$431.50 is hammered? What's it dropped 5 or 6 bucks, I really don't follow the day to day stuff. Now take my IBM stock I sold right at the first of the year, it was a tad over $99 dollars and thank GOD I sold it because the last month it reached a low of about $72. Now that's hammered, but lucky for me since it way over sold at this point I'm buying. A very good company with a great model for the future IMO.
My oil stocks have been treating me right but if the market goes way down I'll be in cash on those too because they will certainly follow with a downturn in the economies of the world. Real materials are the place to be at this point, it's called timing and you have to ride the waves, if your going with the crowd your on the sucker side of the equation.
Coins are high right now it maybe time to consider taking profits to buy them latter unless your a collector and it really doesn't matter does it? >>
The XAU is not gold. It is an index based on gold/silver/copper/ and other precious metals mining companies stocks. As I stated earlier many use the XAU as an indicator of things to come. Generally a declining XAU means that the stock of gold mining companies is declining. And why would they be declining? Because profits are declining. And why are they declining? Primarily because the value of their end product is declining. Stocks always react to events that are 6+ months in the future. They do not look backwards. They couldnt care less about yesterday. Tomorrow is all that is important. Today the profits are also coming under pressure because of high energy costs, so there may be some disconnect between the XAU and gold spot prices. However in the end the corrolation is very high.
The XAU has fallen about 27% in the last few months and is within 5-10% of a potential support area. We will need to see if it can hold. If it does then that may mean 2 things.
1. That profits may increase because the value of the end product is increasing faster tha the costs associated with mining,
or
2. That the cost associated with mining have declined and hence profits rise.
Knowledge is the enemy of fear
WHO are you and why do you know so much!!!
just a board watcher
<< <i>
<< <i>
<< <i>XAU getting hammered for the second day in a row. Why? >>
$431.50 is hammered? What's it dropped 5 or 6 bucks, I really don't follow the day to day stuff. Now take my IBM stock I sold right at the first of the year, it was a tad over $99 dollars and thank GOD I sold it because the last month it reached a low of about $72. Now that's hammered, but lucky for me since it way over sold at this point I'm buying. A very good company with a great model for the future IMO.
My oil stocks have been treating me right but if the market goes way down I'll be in cash on those too because they will certainly follow with a downturn in the economies of the world. Real materials are the place to be at this point, it's called timing and you have to ride the waves, if your going with the crowd your on the sucker side of the equation.
Coins are high right now it maybe time to consider taking profits to buy them latter unless your a collector and it really doesn't matter does it? >>
The XAU is not gold. It is an index based on gold/silver/copper/ and other precious metals mining companies stocks. As I stated earlier many use the XAU as an indicator of things to come. Generally a declining XAU means that the stock of gold mining companies is declining. And why would they be declining? Because profits are declining. And why are they declining? Primarily because the value of their end product is declining. Stocks always react to events that are 6+ months in the future. They do not look backwards. They couldnt care less about yesterday. Tomorrow is all that is important. Today the profits are also coming under pressure because of high energy costs, so there may be some disconnect between the XAU and gold spot prices. However in the end the corrolation is very high.
The XAU has fallen about 27% in the last few months and is within 5-10% of a potential support area. We will need to see if it can hold. If it does then that may mean 2 things.
1. That profits may increase because the value of the end product is increasing faster tha the costs associated with mining,
or
2. That the cost associated with mining have declined and hence profits rise. >>
Well that's certainly one point of view and would be the view of most brokers. Could it be that material reserves aren't being replaced? I can tell you now they aren't. And yes oil will IMO be the downfall of the world ecomoncy it will increase the cost of everything we buy and will have a bigger impact than mining stocks on gold. This is the time to take a defensive positon IMO and like the crash of 2000 where I lost about 18%, most of my friends took advice from all the experts and lost 40 to 50+ percent of thier hard earned income. This is a world ecomony and if Uncle Sam can't get Europe, China, and others to play thier game were in big trouble. Jim Sinclair seems to take a different view but of course like all those selling a product you have consider all sides not just a few charts. Read the common people and their trust in the US ecomony. I hope your right because either way I'm okay, I never put all my eggs in one basket. I just won't make those big 40 to 50 percent increases like those in the tech stocks in the laste 90's. Was I a fool for only settling for around 15%?
BTW: I think you've answered your own question. Oil is causing hardship on the mining stocks and it won't be going down with all the demand of two counties going through their "Industial Age" (China and India) and they have over a billion people each. Look for all products produced to jump in price and have a hard time making targets. This has nothing to do with products already on the market (gold in this case). As I said several months ago oil isn't going below $40, but I think I was wrong it would shock me to see it drop below $50. BP is one of the only companies close to replacing their reserves at their present levels but their in risky areas of the world to do it.
Jim's latest comments:
All you are watching in the USDX at the moment is speculation relating to whether or not the French will kill Europe with a vote against the Euroland constitution.
Gold of course eased in its inverse relationship to the USDX as the trading crowd seeks to understand nothing except the rise and fall in the volume at the open outcry which gives them direction to jump on the freight train. Fellows like our pal, Frank, bewildered by the action, abandon ship daily.
The Aden sisters sound the warning and their followers all jump overboard, throwing in the towel on what will, IMO, be in time a “Billion Dollar Sure Thing.”
As the Euro gets the willies from Paris, the Cando shows muscle. There is no question in my mind about what is happening. It is NOT dollar strength but the Euro running scared in front of the French onslaught.
Read last night’s missive on the action of the USDX as a result of its over-weighting in the Euro. Think about the central banks that are up to their ears in dollars and are diversifying into Euros. They aren’t going to be selling gold. The guy in the street is now thinking about gold as a hedge mechanism of the new hot stock on the street – currencies.
I am posting for you this evening the USDX, Euro, Swiss Franc, Cando daily, and Cando 72 minutes and gold. You will see the story told there. So please look, understand and relax.
For an explanation of the US Dollar Index please click here!
The implication here is primarily the US Federal Budget as tax income is going to CRATER! As a result, the US Federal Deficit is more likely to double by 2009 than be cut in half. That will take the dollar into a black hole.
Economy Grows at Softest Pace in 2 Years
April 28, 2005 08:34:00 AM ET
WASHINGTON (Reuters) - The U.S. economy grew at its softest pace in two years during the first quarter this year, slowing to a 3.1 percent annual rate of expansion as consumers and businesses curbed spending in the face of rising prices, the Commerce Department said on Thursday.
The expansion in gross domestic product, which measures total output within U.S. borders, was the weakest since a 1.9 percent pace during the first quarter of 2003 and was a surprisingly sharp deceleration from the 3.8 percent rate registered in the fourth quarter of 2004.
Wall Street economists had forecast first-quarter GDP would grow at a relatively more robust 3.6 percent rate.
-10% in 2 days is a hammering in my book. To each his own.