Asia takes gold vertical to $953, $13.85 silver, 87.25 dollar, world currency problems....now at $9

roadrunner

......USD flying while Euro falling. Looks to be an interesting set up for Tuesday in the markets. Platinum and Paladium not moving yet. What will the S&P/Dow do now? Dow futures down 150.

Very surprising move up in Asia which over the past few sessions languished on the flat side. It does have the scent of taking out the $953 resistance rather easily. Watch out as those stops are being hit on the short side. This leg could be short and sweet though.

roadrunner

CaptHenway

Crazy, man! Crazy!

roadrunner

From the GIM site which was attributed to Denninger:

Someone, apparently someone in Asia, wants dollars. A LOT of dollars. There is a forced-liquidation event underway that is massive, it is against all asset classes and it is spreading.

It originated at approximately 7:15 CT this evening and originated out of Asia somewhere. All of the primary currency crosses got hit at once - Euro, Pound, Yen - all weakened dramatically against the dollar and it is still going on. The Asian stock markets got walloped at the same time in coordinated waves of forced selling.

At the same time the US futures markets got nailed as well, down some six handles on the /ES in a near-vertical drop. While this sounds "not that big" to move these markets in a coordinated fashion like this is a trillion-dollar enterprise - this is not some small company that went bankrupt, or even a large company.

There is no news coverage at the present time identifying the source of this but it is not small and contrary to some reports it is not "automatic selling"; this is forced liquidation............more

From JS, another upgrade to:...... It has hit the fan

To underscore my statement that "It has hit the fan," please review the following:

Forex failure continues in Poland
Posted by Izabella Kaminska on Feb 16 21:43.

It's getting bleaker by the minute in Eastern Europe. In case you didn't catch the latest from the Telegraph's Ambrose Evans-Pritchard, he warned at the weekend how a growing crisis in Eastern Europe could cause nothing less than a total collapse in the West, or as he put it: "If one spark jumps across the euro zone line, we will have global systemic crisis within days." . Others are also pointing at South Korean banks doing what is needed to prevent a collapse. Well on Friday JS did upgrade things to "it is out of control."

Another tid bit from JS. Looks like the BIS has changed how they calculate total derivatives. Sort of amazing at this particular time.

The BIS (Bank for International Settlements) publicly altered the manner by which they determine the total nominal value of derivatives outstanding. This has actually backfired badly now that it is assumed every entity is lying. The BIS was all that was left for somewhat legitimate economic statistics.

You probably noticed the amount of outstanding OTC derivative nominal value dropped 80% from the BIS figure of one quadrillion one thousand and one hundred forty four trillion dollars as the BIS moved to the computer modeling of value to maturity, another foolishly glib cartoon. ......this would bring total world derivatives to "only" $229 TRILLION. So I guess JPM's total derivatives just dropped from $88 TRILL to $18 TRILL? Guess that's one way to make an insolvent bank more sound.

roadrunner

Peaceman

Nice move here....

notwilight

So is there a real potential for a short squeeze here?

Boom

This is just the beginning.

It's going to go much vertical

Bear

Where is a good asset bomb shelter, when you need one.

MoneyLA

gold has now held above the 940 resistance level for several days, and this is positive. we might actually see a run for 1000 or higher. the breakout through the declining tops line (that 940 mark) is indeed convincing. good luck to you gold longs. payday may be coming for you.

oreville

Gold and silver is normally strongest in Jan-March months, so this is normal?

All other things remaining equal, we could see a 6 month consolidation after March 2009?

fc

from what i have been reading Indian and Middle Eastern buyers are not there at all.
Basically normal people in those areas stopped buying as the price went up again.

So this is all fear induced buying? A flight to a sounder place to put your money? speculation
on what will hold up the best?

I have to admit, i did not expect gold to go past 1000 this year. Good luck to all the people here
who have money in the game.

mhammerman

I recall that last week on the Kitco site that people were shorting gold at 945. It hoovered around 942 for a few days at the end of the week so I guess most of them could have got out OK but if they kept playing at that level they were crushed yesterday and today and since yesterday was a banking holiday, they probably let it ride. Suprise! Hopefully because of the bank holiday the bank shorters were all out of the office and the bank shorts were crushed into oblivion during their absence. Now maybe they will stop playing with our metal and try and earn a living instead of working their scams. Hey, just where is the PPT.

Now...the question: Would you really sell your stash into a 1K/oz market or would you just disregard the appreciation in price and bank on the soundness of the asset in a very uncertain market place? I guess if you have a bunch of 400-600 metal it would be tempting to let some go back into the great continuum at these levels but methinks keeping most of the stash in place is not a bad thing but hey, who could refuse a little 500-600 bonus for your foresight and sacrifice? It's a lot of work being long or physical, not as easy as people might think it should be.

jmski52

The only things that aren't smoke & mirrors here, in terms of financial assets - are what you can physically see and hold in your own hands.

I don't know if pms are going higher, or lower. I do know that I'd much rather have pms than not.

Let's talk about money. How much does it cost to fly Air Force One to Denver to sign a "stimulus package?" Money is no object, so - no biggie. Onward...................

So, I'm watching CNBC interviewing a "gold advocate" who says that "gold is not for getting rich, it is to keep from becoming poor." He advocates 5% in gold to "balance" declines in other assets, and then to make sure that the portfolio is re-balanced regularly as the pog goes up. In other words, as your total assets go down, down, down, be sure to remove gold from your portfolio and put the money back into something else, in order to keep the ratio at around 5% gold.

Hmmmmmmm. Back to Portfolio Theory, like I studied when I got my MBA. Firstly, a 5% weighting in anything, yeah anything - is pretty much worthless. Might as well not have it. Yeah, a well-diversified portfolio (of stocks and bonds) in this market is kinda like shooting goldfish in a bucket. They have nowhere to go. Trapped in the "System". Good luck with that.

Hmmmmmmmmmm..........rebalancing. Keeping the one performing asset in the 5% range is the one sure way to keep yourself poor. End of story.

fishcooker

Well, it used to be 3%, but yes I agree and I don't have 5% of anything. If any idea is good, it's worth 10%.

jmski52

My opinion is that 10% is about as ineffectual as 3%. Do the math, sensitivity analysis. A portfolio with 10% gold and 90% stocks on a day like today will still loose plenty of money.

$1,000 in gold gains $30, while $9,000 in the stock market loses about $300.00. Duh.

Higashiyama

When people advocate putting 10 % in gold, I don't think they are thinking in terms of impact on total portfolio return, but rather making sure that even in the event of catastrophe, you will still have some chunk of value left. Different people may want a different "chunk" level. Given that in most times the risk of catastrophe is small, and the real yield of gold should be zero, 10 % seems like a plausible level to me.

jmski52

Given that in most times the risk of catastrophe is small, and the real yield of gold should be zero, 10 % seems like a plausible level to me.

It seems to me that a 30% to 40% decline in one's stock holdings in one year is somewhat catastrophic. My point is to dispell the notion that putting money into gold in significant amounts is somehow weird while leaving the bulk of one's assets blindly devoted to an economy that is being gamed by the banks & politicians is somehow wise.

Higashiyama

I wouldn't strongly disagree with your definition of catastrophy , though I think people advocating the 10 % approach are thinking more in terms of stocking up your house with food and ammunition.

My primary concern with allocating 30 - 40 % to gold would be that gold itself has a history of large declines and stagnant periods. That level of allocation from 1980 - 2000 would have resulted in a highly underperforming portfolio.

If you adjusted the allocation to reflect the price of gold relative to historical norms, I think I would feel comfortable. This would have you getting out of gold in 1980, and into gold in 2000.

jmski52

I think people advocating the 10 % approach are thinking more in terms of stocking up your house with food and ammunition.

I didn't start stocking up the house with food & ammunition until I hit about 60%.

My primary concern with allocating 30 - 40 % to gold would be that gold itself has a history of large declines and stagnant periods. That level of allocation from 1980 - 2000 would have resulted in a highly underperforming portfolio.

If you adjusted the allocation to reflect the price of gold relative to historical norms, I think I would feel comfortable. This would have you getting out of gold in 1980, and into gold in 2000.

No one suggested buying & holding one asset forever. It's also not a good idea to invest in a vacuum of information. Of course, you have to see what's going on around you and make some qualitative judgements. Of course. Anyone **blindly** buying one thing or another and hoping things will turn out is simply naive.

roadrunner

That level of allocation from 1980 - 2000 would have resulted in a highly underperforming portfolio.

As unbelievable as it might be to say that gold outperformed the S&P or Dow over the last 20 years....we may actually yet see that. The 10 year chart is already bagged.

I for one was waiting for one last leg up to $960+ and got that today. I decided to lighten up miners a bit at $970-$972. This may have been too early but I don't feel that we're ready to bash $1000 yet....plus the miners seemed to be weaker on each step up. MS65 Saints now at $2100 with $20 Libs in 63 at $2000+, MS63 Saints at $1550....seems like a new era. I suspect the telemarketers are busy sending those out. CAC premiums have shrunk to almost nothing on the MS 64/65 saints.

Some of the bigger miners report 4th qtr earnings this week (it will be good news too) plus Friday is options expirations. But by mid-March gold should be ready to go again if gold has taken a breather. But it doesn't seem that physical gold (ie other than 100-400 oz bars) has gotten any easier to come by.

Maybe the main stocket will finally take off in the meantime. Oil seems riper than ever.

roadrunner

57loaded

Japan did promise up to 100billion to the IMF if that has anything to do with it

link to IMF release

Japan did NOT buy the 400 tonnes of gold for 100b which would work out to $7500 an ounce (we wish...or maybe we don't)

am i a thread killer?

jmski52

If you adjusted the allocation to reflect the price of gold relative to historical norms, I think I would feel comfortable. This would have you getting out of gold in 1980, and into gold in 2000.

Okay, as a matter of fact, I did get out of gold & silver in 1980 and into silver and platinum in 1999.

But the real point isn't how you'd do by timing your transactions only at the absolute best times. The real point in buying pms is that there is currently a crisis of confidence in currencies, stock & commodity exchanges, mortgage bonds, insurance policies, ETFs, pension plans and the future of social security benefits.

Did I leave anything out?