It's time for gold and silver to retreat 40% over the next year or two.
oldcameoproofsguy
Posts: 3,174 ✭
During the whole time that everyone has been bullish on PM's, my position has always been that it will retreat to levels that make sense.
Gold should be in the neighborhood of $550 and silver should be in the neighborhood of $9.
PM's spiked, plain and simple.
I am not selling my position in PM's, but I am not buying either.
The state of our economy, the mortgage crisis, and the declining dollar have artificially driven the prices of PM's higher than they should be.
For gold to be at $900 or higher right now would suggest some period of Weimer hyperinflation occured. I don't recall this happening.
Granted the price of fuel has risen quickly, that still would only reflect a price of gold in the neighborhood of $500/oz.
The only thing that will drive gold in the next year or two will be some unforseen disaster like a blatant terrorist action or California falling
into the ocean.
I have taken some ridicule for my position in PM's and I still will, but that's what makes it fun; I am standing firm.
Gold should be in the neighborhood of $550 and silver should be in the neighborhood of $9.
PM's spiked, plain and simple.
I am not selling my position in PM's, but I am not buying either.
The state of our economy, the mortgage crisis, and the declining dollar have artificially driven the prices of PM's higher than they should be.
For gold to be at $900 or higher right now would suggest some period of Weimer hyperinflation occured. I don't recall this happening.
Granted the price of fuel has risen quickly, that still would only reflect a price of gold in the neighborhood of $500/oz.
The only thing that will drive gold in the next year or two will be some unforseen disaster like a blatant terrorist action or California falling
into the ocean.
I have taken some ridicule for my position in PM's and I still will, but that's what makes it fun; I am standing firm.
0
Comments
The market is being controlled by the Central Banks but not for much longer. People everywhere now know "The King has no clothes". Gold's going down today so I expected something like this and then when it's surges it's going to 2 grand. If you've been in this very long at all you know how this market always has worked.
Maybe you should keep your money in an FDIC backed account
How Safe is My FDIC-Insured Bank Account?
<< <i>Dream on my friend......the dollar will continue to tank... >>
There are good reasons for the dollar to be very weak, but the markets have overconcentrated on pounding the dollar. The Euro is ridiculously overvalued now. They have many of the same systemic problems facing them as the U.S. currency did, and in many cases their pending entitlement liabilities are far greater than even Social Security, Medicare and federal pensions. When the momentum players and hot money get out of the Euro, it will crash and the dollar will likely recover somewhat. That would still leave the dollar low, but probably closer to fair value compared to the Euro -- the Euro may wind up around $1.20 or $1.30.
It's easy to bash the dollar, but I believe the damage there is mostly overdone by hedge funds and momentum players going long on oil, the Euro and (to a lesser degree) PMs, and shorting the dollar where possible. This is a "greater fool theory" which will reverse sharply, to some degree, when hedgies start sensing a short-term to intermediate-term "top" and bail out of the Euro and other bets against the dollar.
Some here think the dollar is going to zero. I would simply say that even if it remains weak, other currencies have so much harder to fall relative to the dollar, but the momentum and "hot money" guys in the market are going where the action is -- long oil, long the Euro, short the dollar.
Long term oil and PMs remain great plays...other currencies, not so much.
I agree.
Keep your Gold and Silver. Prices of PM's will naturally increase in the future due to the excessive printing of paper currency.
In the past, I use to get 'panicky' over these price drops, but no more. I'm Mister Cool now because I'm convinced they are the only item that is of value anymore.
"“Those who sacrifice liberty for security/safety deserve neither.“(Benjamin Franklin)
"I only golf on days that end in 'Y'" (DE59)
If US paper money is being shunned and inflation is runniing out of control, only something like Gold will go up relative to the paper money that is losing value.
Germany is in shock as subprime gets worse
<< <i>No one is exempt since we've packaged and sold our debt to everyone. >>
Exactly. This is part of the reason why I think that in the nearer term, anyone betting against the dollar might be sticking their necks out. Frankly, this means that long term, virtually ALL currency will fall relative to PMs, but that an oversold rally may occur in the dollar as people bail out of the Euro and other grossly overvalued currencies in droves. Once a little air comes out of the Euro and others, watch the hedgies stampede for the exits. That could result in the price of PMs (in dollars) to fall a little bit for a while, even as the price of PMs in terms of Euros reach for the sky.
But in the end -- longer term -- I think just about any fiat currency with an open-ended printing press will suffer the same fate as the dollar, and in some cases, perhaps worse. Long-term bets against the dollar in terms of PMs and commodities still make sense. Long-term bets in terms of other currency, IMO, does not.
<< <i>Now if only we could talk oil down 40%, too... >>
Cheney will be leaving office soon enough, maybe then Big Oil will see that the gravy train has left the station
The fuel panic begins
Oil rises to record in New York, London on supply fears, Chinese demand UPDATE
<< <i>With the demand from China and India don't expect anything but up. >>
The problem with this expectation is that the markets are already pricing in almost infinite 10% growth in demand in India and China. Even if their demand continues to grow sharply, if it doesn't grow as sharply as the market is expecting, it could go soft for a while.
Frankly, the track record of people predicting financial/economic armageddon is terrible. Some day they will be right, but I'm not particularly insipred by their history.
<< <i>Gold is down $18.20 to below $900. >>
Gold is now down $24 to below $900.
I believe Gold will stable at $700-$750 range
Deep water finds take a decade and tons of money to bring it to shore so the oil companies have to make what they can while they still control it. Back in the 80's all R&D was shutdown since it was cheaper to buy companies to replenish reserves than to find it.
Exxon in Venezuela asset freeze
http://ProofCollection.Net
<< <i>What makes you think the dollar is going to get stronger? >>
Stronger relative to other overvalued currencies. Not stronger long-term against PMs and commodities. In the near term, I think just about every asset that bets against the dollar is overvalued and way overbought.
siliconvalleycoins.com
Inflation of the third kind
<< <i>Now if only we could talk oil down 40%, too... >>
$60 oil by year-end 2009 -- you heard it here first.
FDIC beefs up bank failure unit
null
<< <i>Interesting TTown, does the FDIC list what 76 institutions are on its "problem" list somewhere? >>
True. If it's "Fred's Bank" (to borrow from an old Steve Martin skit), it's not so worrisome -- they fail all the time, but they are on a small enough scale that it scarcely creates even a ripple in the water. If it's a huge bank, that's a different story.
Do you seriously believe that China or India can afford higher gas prices? No way, even in subsidized markets like China, the price is too high for the demand to hold. It is the speculators that are driving the price up, plain and simple and I hope they all get burned big time.
<< <i>If you think that is going to happen, why in the world would you keep your PM's. Time to sell if that is your conviction. >>
You make a VERY good point!
I'm going for the ride!
Gardnerville, NV
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<< <i>Interesting TTown, does the FDIC list what 76 institutions are on its "problem" list somewhere? >>
You noticed that too huh? No and if there small banks like in 1991 then it would be okay but don't count on it. The FDIC has 1.22 cents in reserve for bank failures and one good middle size bank would wipe this out.
Here's the FDIC spin if you want to believe it:
Managing the Crisis: The FDIC and RTC Experience
<< <i><<<Didn't know the US could control oil prices. It seems to me we're getting most of it from Canada and Venezuela. With the demand from China and India don't expect anything but up>>>
Do you seriously believe that China or India can afford higher gas prices? No way, even in subsidized markets like China, the price is too high for the demand to hold. It is the speculators that are driving the price up, plain and simple and I hope they all get burned big time. >>
Yes they can but we can't they are sitting on trillions of US dollars that are being used to buy REAL companies and PM's. The are buying natural resources compaines if you do a little research on your own.
This is China's and India Industrial age with over 2 billion customers. Those factories need power and they are building their infrastructure consuming tons of natural resources. This is their 1870's with a whole lot more people my friend and you can see where we are right now. It's a global fight to control these resources.
India — GDP: $4.156 trillion (2006 est.)
China — GDP: $10.17 trillion (2006 est.)
United States — GDP: $13.13 trillion (2006 est.)
where do you do your research?
WORLD FACING HUGE NEW CHALLENGE ON FOOD FRONT
Here's what Hilary has to say: Sen. Hillary Clinton told CNBC last week she sees “a slow erosion of our economic sovereignty,” and she singled out China’s big holdings of Treasury debt as an example.
Foreign investment in the U.S. – in U.S. stocks, bonds, real estate and businesses – isn’t necessarily a bad thing. Some observers point out that strong demand for U.S. investment is a sign that the U.S. is still the best place in the world to invest. What matters most is the ongoing strength of the U.S. economy and the federal government’s financial health. To the extent that Congress can control spending, eliminate the federal budget deficit and keep the economy growing, we should be fine.
<< <i><<<Yes they can but we can't they are sitting on trillions of US dollars that are being used to buy REAL companies and PM's. The are buying natural resources compaines if you do a little research on your own. >>>
India — GDP: $4.156 trillion (2006 est.)
China — GDP: $10.17 trillion (2006 est.)
United States — GDP: $13.13 trillion (2006 est.)
where do you do your research? >>
No links?
GDP growth rates by country and region 1970-2007
List of countries by GDP (real) growth rate
yes links
<< <i>All the drinkers of Hilary and Osama's kool-aid that the economic sky is falling are making things worse because as you may or may not know the value of the dollar is only the price of the paper and ink used to print it, it is backed only by the faith we have in it, nothing else. The naysayers have a definite effect on that intrinsic value.
Here's what Hilary has to say: Sen. Hillary Clinton told CNBC last week she sees “a slow erosion of our economic sovereignty,” and she singled out China’s big holdings of Treasury debt as an example.
Foreign investment in the U.S. – in U.S. stocks, bonds, real estate and businesses – isn’t necessarily a bad thing. Some observers point out that strong demand for U.S. investment is a sign that the U.S. is still the best place in the world to invest. What matters most is the ongoing strength of the U.S. economy and the federal government’s financial health. To the extent that Congress can control spending, eliminate the federal budget deficit and keep the economy growing, we should be fine. >>
People on both sides have demonstrated they can't control spending so huge deficits and the falling US dollar will continue. China's inflation will be helped by the fact they are letting their currency appreciate against the dollar. The high oil prices in the US are more of a function of the collapsing US dollar than anything else.
One big advantage Europe has is that they have wisely gotten out of the Empire game while the US is stuck in 2 endless wars that will cost trillions the US has to borrow from China. China has over half their exports going outside the US and has interests in Iran. When Bush or McCain bombs Iran (if you think gas prices are high now, you ain't seen nothing yet) China will really pull the plug on the dollar and US treasuries. China can handle economic crisis much better than the US since their leaders don't have to run for election and they have no problem killing people to maintain stability.
This article includes a list of countries of the world sorted by their gross domestic product (real) growth rate, the increase in value of all final goods and services produced within a nation in a given year -- not taking into account Purchasing power parity and taking into account the inflation. it is a measure of economic development.
China #9
India #15
US #179
Oil
<< <i>Here is a link to Bloomberg stating that speculation is the cause for the major run ups in the oil market.
Oil >>
I guess you didn't read the part about "THE WEAKNESS OF THE DOLLAR IS THE DRIVER HERE" which is exactlywhat I had stated before. Huge deficits=dollar goes down
China oil
<< <i>
<< <i>All the drinkers of Hilary and Osama's kool-aid that the economic sky is falling are making things worse because as you may or may not know the value of the dollar is only the price of the paper and ink used to print it, it is backed only by the faith we have in it, nothing else. The naysayers have a definite effect on that intrinsic value.
Here's what Hilary has to say: Sen. Hillary Clinton told CNBC last week she sees “a slow erosion of our economic sovereignty,” and she singled out China’s big holdings of Treasury debt as an example.
Foreign investment in the U.S. – in U.S. stocks, bonds, real estate and businesses – isn’t necessarily a bad thing. Some observers point out that strong demand for U.S. investment is a sign that the U.S. is still the best place in the world to invest. What matters most is the ongoing strength of the U.S. economy and the federal government’s financial health. To the extent that Congress can control spending, eliminate the federal budget deficit and keep the economy growing, we should be fine. >>
People on both sides have demonstrated they can't control spending so huge deficits and the falling US dollar will continue. China's inflation will be helped by the fact they are letting their currency appreciate against the dollar. The high oil prices in the US are more of a function of the collapsing US dollar than anything else.
One big advantage Europe has is that they have wisely gotten out of the Empire game while the US is stuck in 2 endless wars that will cost trillions the US has to borrow from China. China has over half their exports going outside the US and has interests in Iran. When Bush or McCain bombs Iran (if you think gas prices are high now, you ain't seen nothing yet) China will really pull the plug on the dollar and US treasuries. China can handle economic crisis much better than the US since their leaders don't have to run for election and they have no problem killing people to maintain stability. >>
I think China knows that if they collapse the US economy then they will be hit the hardest. They would have to kill a lot of people and risk revolution. Of course if the US economy goes down then the whole world will also feel it and China cannot just simply sell elsewhere. JMO
Where do you think that money is coming from? You missed the point entirely.
China's oil sands role tests U.S.
China oil firm buys into Nigeria
Big Shift in China's Oil Policy
Wars will be fought over this..............for self protection IMO. At the present we're fighting all the wars we can handle but China isn't is it?
<< <i><<<I guess you didn't read the part about "THE WEAKNESS OF THE DOLLAR IS THE DRIVER HERE" which is exactlywhat I had stated before. Huge deficits=dollar goes down >>>
Where do you think that money is coming from? You missed the point entirely. >>
The money is from people that buy oil to hedge against the falling dollar. When you have a falling currency, you buy commodities to stay ahead of or equal to inflation. This is Economics 101. People buying commodities now are following basic economic principles, not speculating.
As far as China not being able to control unrest, I guess people have never heard of Chairman Mao. He controlled China for a long time. China has a long term plan unlike our leaders whose only goal is to say whatever necessary to get re-elected.