The "experts" are idiots
timcoin
Posts: 674 ✭
More propaganda... This time in the form of the current leading headline on money.com: How low can gold go?
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They're just experts in their opinion. Everybody's good at that.
Too many positive BST transactions with too many members to list.
Edited to add: All the while, the DOW is down another 100pts.
<< <i>Makes about as much sense as $3000 or $5000 gold in the same time frame.
Absolutely.
Human psychology is incredibly fascinating.
Knowledge is the enemy of fear
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Box of 20
<< <i>Personally, I share that sentiment. I think gold is terribly overpriced currently, jewelry demand is in the dumpster, and every mom and pop is cashing in and selling. As soon as the "fear" of the markets, the dollar, Obama, etc. falter, gold will drop and those that have been speculating will be looking for a way out as well. All of that will result in a price much under that of today. >>
I understand your point here, but I still believe we will see an upward trend in the value of gold for a while still. I have to believe that even though we are in a somewhat deflationary period with the USD, that that will not last forever.
Personally, I share that sentiment. I think gold is terribly overpriced currently, jewelry demand is in the dumpster, and every mom and pop is cashing in and selling. As soon as the "fear" of the markets, the dollar, Obama, etc. falter, gold will drop and those that have been speculating will be looking for a way out as well. All of that will result in a price much under that of today.
Gold has been "overpriced" for 9 years in a row now...following being underpriced for close to 20 years. Remember when the Dow was overpriced after 9 years in a row back in the 1980's and early 90's? It continued to be overpriced until it had racked up 17-18 years of being overpriced. The "fear" in the markets will subside once there is a successful resolution of the $200 TRILL in otc derivatives that the top 5 banks carry....and....a resolution to long term debt and long term obligations (ss, health care, etc.). In other words, the dollar (or its replacement) has to return to being a strong monetary unit. It's no longer good enough to be the strongest of a basket of world currencies. Any idea what the time line is for these resolutions? I don't think it's going to come any sooner than before the major banks/funds get a chance to burn down every major currency out there....including their own. They really don't care how they make their money, as long as they make it.
roadrunner
10% of my future in a medal that I enjoy very much. That along with knowing that Gold will never end up like Enron is a good reason to hold it.
<< <i>Gold has been "overpriced" for 9 years in a row now...following being underpriced for close to 20 years. Remember when the Dow was overpriced after 9 years in a row back in the 1980's and early 90's? It continued to be overpriced until it had racked up 17-18 years of being overpriced. The "fear" in the markets will subside once there is a successful resolution of the $200 TRILL in otc derivatives that the top 5 banks carry....and....a resolution to long term debt and long term obligations (ss, health care, etc.). In other words, the dollar (or its replacement) has to return to being a strong monetary unit. It's no longer good enough to be the strongest of a basket of world currencies. Any idea what the time line is for these resolutions? I don't think it's going to come any sooner than before the major banks/funds get a chance to burn down every major currency out there....including their own. They really don't care how they make their money, as long as they make it.
roadrunner >>
I respectfully disagree. I think you underestimate the American people, or the world for that matter, to simply continue on. Those derivatives will be tired old news sooner than you think, and faith will return, right or wrong, to the currencies. The bubble that is forming in gold, though, is not an insignificant one either. I stand behind my statements on the direction gold is going to take. When EVERYONE is wanting to flip gold and everyone else is selling to the flippers, it's only a matter of time before the investors keeping demand high begin to slacken. So went the housing market, so goes gold. People tend to repeat their mistakes, be it in whatever form of investing it is, from real estate to stocks to gold to ostrich eggs.
It has nothing to do with the American people as a whole because they have no clue as to what is going on behind the scenes in the financial world of the top 5 banks, USTreasury, FED, and congress. I don't underestimate those specific entities to somehow contrive a solution and present it to J6P as the "answer." We're now 3 years past the point when the rumblings in the derivatives world were starting to break down the housing sector. The 10X larger interest rate problem has yet to be touched (ie $180 TRILL notional in US bank IR Swaps). And frankly they can't touch it because it's a bomb waiting to explode. The only viable option they've come up with over the past few years is to stash the "bombs" in a locked closet and relabel them as "happy meals." But the problem is still there. If someone has a solution to these they sure aren't offering up anything as nation by nation (or state by state, company by company) gets incinerated by "happy meals" (LTCM, Enron, WorldCom, Bear Stearns, Lehman, Fannie/Freddie, AIG, GM, Walmu, Iceland, Dubai, Greece, .......etc.). With Portugal, Spain, UK, Italy, etc next in the sights I don't see anyone running for the "happy meal" firehose to put out the flames. Surely, if there were a real solution of any sorts it would have been presented. Surely the solution is not to create $1 trillion in currency just as each nation is ready to go ka-boom?
No, I hold little hope for our key players above to solve the problem with American "ingenuity." It was their ingenuity in changing laws and regulations that invented these devices and opened a Pandora's box. Most of their efforts continue to be directed towards being re-elected or staying in current power positions/advancement. There is really no way of stuffing the derivatives back inside to make the world as it was. No, it's just going to end badly when the deck of stacked cards finally runs out. And as long as JPM, GS, Citi and BoA are making money on deals they sold to incinerated nations, they'll keep on trucking. By the way, the big banks have increased their total of otc derivatives over the past 2 years....now at $213 TRILLION. It seems the answer to fixing them is creating more of them. No doubt the public is tired of hearing about derivatives but it doesn't make them go away. The American public has no clue as to what the real risk is in existing derivatives. Probably all of us continue to underestimate the potential end-damage.
We have vastly underestimated our nation's financial and political leaders as to how far they would bring us on a path to destroy the world's finanical system. And I think most Americans far overestimate the ability of these guys to extricate themselves from this mess. Unlike all financial problems before this, this is truly unchartered new territory. There are no blue prints.
Gold is not the bubble per se. Gold merely reflects the quality of currencies and confidence in govt actions. Currencies are in a 39 year bubble that began in 1971 when the gold standard was tossed. Or you can even trace it back to the FED's creation in 1913 considering the gold standard was diluted starting in 1914. Most of the world's currencies have lost 95-100% of their value in that period. Poor, misunderstood gold is just reflecting reality. When currencies/govts are financially sound, and when $1.14 QUAD in otc notional derivatives are effectively resolved/unwound, then the problem ends and gold can safely hibernate for another 20 yrs. If the solution was just as simple as swapping/canceling all the derivatives it would have been done already. Obviously such methods, if even suggested, didn't help the nations that have already blown up....nor do they appear to be helping California, NY, Illinois, Florida, etc. The banks have created a problem that is 20X the GDP of the entire world. It's not going away with an FASB rule change.
These derivative packages were meant to default to 100% notional value when the counter party goes belly-up. It's in the originator's best interest to push/force a default on the counter-party through any means possible. It's simply a game to the big banks and funds. That's called "finance" today. But if no bailout occurs to pay off the winning party due to the bankruptcy of the counter-party, a daisy chain of losses begins beginning with the "winner's" once-expected profits/optimistic valuations. So to keep that chain of bunker bombs from going off, the Boyz have been siphoning funds off to the winners via a number of methods such as currency swaps, bond auctions, agency funds, etc. Hence.....no solution yet other than continuing the payouts as each potential company/state/national default comes up.
The big banks hold all the strings on the puppets they control and are calling the shots. Apparently the banks like where they are right now....insolvent at best, bankrupt at worse, and making obscene paychecks and bonuses regardless of anything they do. Why would they give that up if the govt is giving it to them? Who is going to turn down hundreds of billions in zero rate FED loans to flash trade the stock market and pocket billions at taxpayer expense? So far, this is about the best solution that the PTB have come up with (ie pay ransom money....and lots of it). Everyone on that original list is still making their comforatable salaries if not more than before. Only J6P is left out of the bonanza since someone has to be the ultimate bagholder/accountability officer. Meanwhile, more layers of govt and financial/health care control are being created as we speak. And more is coming, all to supposedly help J6P pay off his increasing liabilities. Those Joes and Janes who receive more from the system than they pay into it are probably all for maintaining the current financial/derivative/fiat/fractional reserve/shadow banking system. Afterall, a freebie is a freebie no matter how it was gotten or who pays for it.
roadrunner
<< <i>I respectfully disagree. I think you underestimate the American people, or the world for that matter, to simply continue on. Those derivatives will be tired old news sooner than you think, and faith will return, right or wrong, to the currencies. The bubble that is forming in gold, though, is not an insignificant one either. I stand behind my statements on the direction gold is going to take. When EVERYONE is wanting to flip gold and everyone else is selling to the flippers, it's only a matter of time before the investors keeping demand high begin to slacken. So went the housing market, so goes gold. People tend to repeat their mistakes, be it in whatever form of investing it is, from real estate to stocks to gold to ostrich eggs.
It has nothing to do with the American people as a whole because they have no clue as to what is going on behind the scenes in the financial world of the top 5 banks, USTreasury, FED, and congress. I don't underestimate those specific entities to somehow contrive a solution and present it to J6P as the "answer." We're now 3 years past the point when the rumblings in the derivatives world were starting to break down the housing sector. The interest problem has yet to be touched (ie $180 TRILL notional in US bank IR Swaps). And frankly they can't touch it because it's a bomb waiting to explode. The only viable option they've come up with over the past few years is to stash the "bombs" in a locked closet and relabel them as "happy meals." But the problem is still there. If someone has a solution to these they sure aren't offering up anything as nation by nation (or state by state, company by company) gets incinerated by "happy meals" (LTCM, Enron, WorldCom, Bear Stearns, Lehman, Fannie/Freddie, AIG, Iceland, Dubai, Greece, .......etc.). With Portugal, Spain, UK, Italy, etc next in the sights I don't see anyone running for the "happy meal" firehose to put out the flames. Surely, if there were a real solution of any sorts it would have been presented. Surely the solution is not to print $1 trillion in currency just as each nation is ready to go boom?
No, I hold little hope for our key players above to solve the problem with American ingenuity. It was their ingenuity in changing lawas and regulations that invented these devices. And as long as JPM, GS and BoC are making money on incinerated nations, they'll keep doing it. By the way, they've only increased their total of otc derivatives over the past 2 years....now at $213 TRILLION. It seems the answer to fixing them is creating more of them. No doubt the public is tired of hearing about derivatives but it doesn't make them go away.
We have vastly underestimated our nation's financial and political leaders as to how far they would bring us on a path to destroy the world's finanical system. And I think most Americans far overestimate the ability of these guys to extricate themselves from this mess.
Gold is not the bubble per se. Gold merely reflects the quality of currencies and confidence in govt actions. Currencies are in a 39 year bubble that began in 1971 when the gold standard was tossed. Poor old gold is just reflecting reality. When currencies/govts are financially sound, and when $1.14 QUAD in otc notional derivatives are effectively resolved, then the problem ends and gold can hibernate for another 20 yrs. If the solution was just as simple as swapping / canceling all the derivatives out it would have been done already. Obviously such methods didn't help the nations that have already blown up....nor do they appear to be helping California, NY, Illinois, Florida, etc. The banks have created a problem that is 20X the GDP of the entire world. It's not going away with an FASB rule change.
roadrunner >>
Bravo.
The only question I guess is when confidence falls enough to set off the bomb(s). I see guys trading in and out of the gold/silver markets to grab a short-term edge and it concerns me.
It could come down to a game of musical chairs. I have my chair, and I'm happy.
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The derivative story has yet to be told. Remember FASB was forced to go to a Fantasy mark instead of a marked to market as the latter number was one that one could not comprehend and in theory could have brought down EVERY bank. These roosters will return home to roost soon enough I fear. You can not make them just go away.
At the end of the day do whatever makes you sleep better at night. If believing all is well and all is going to be better does it for you then fantastic. I prefer to sleep with a pillow case full of gold rather then a mattress stuffed with currency.
I've said this several times in previous threads but the gyrations and volatility in gold will be FIERCE in the weeks and months to come and weak hands will be shook out. That's the way it works, the last train has the fewest on board. When you own gold as weath insurance and not as speculation or an investment then none of this matters. If gold goes down then wealth insurance only gets cheaper.
Brian I found your retort mesmerizing and chock full of fact and extrapolation. Good stuff..................MJ
Fellas, leave the tight pants to the ladies. If I can count the coins in your pockets you better use them to call a tailor. Stay thirsty my friends......
I guess they must feel gold is going to be strong for awhile.
<< <i>When we find the fella's that start predicting ALL the markets correctly, I'll start to pay attention.
It always amazes me, after a "fortune fella" made the wrong prediction, inevitably, through a twist of words, it turnes out to be the correct prediction.
<< <i>The "experts" are idiots >>
My Dad used to say an expert was defined as this; "X is the unknown and a spurt is a drip under pressure."
<< <i>How can physical gold be remotely close to a bubble when only like 3% of Americans actually own even an ounce? Let me know when 97% own it and then you will have your bubble. >>
The statistic number makes perfect sense for the gold bubble. Little demand, yet a small number of wealthy investors/ government agency keep manipulating the price of gold, hence creating the gold bubble! Make sense?
<< <i>Gold is a reserve currency and my currency of choice. Gold allows you to be your own Central Bank. >>
The human species is very lucky because people like you and I, who still have faith in precious metal as the "currency of choice", are only the minority. Let's say that 97% of Americans would only consider gold or precious metal as currency and nothing else; I think we are doomed! We can't grow because we don't have enough currency to support our economy. The government can't print gold to pay for public services, financing development projects or simply paying its debt. No wonder when asked if any countries would switch back to the gold standard, the answer will always be NO.
Camelot
Small US demand does not equate to small world demand. This should be obvious since Asia owns something like 75% of the world's total gold. Most of that gold is in the hands of the common man. To nations like India which is far populous than the US, gold is a religion. The USDollar price of gold isn't priced in a vacuum. It there were zero demand for gold in the US (hence $0/oz) it would all flow overseas where demand was much stronger. Therefore gold could never be $0 in the US when there is demand elsewhere in the world. It would be like saying that diamonds are worthless around world because a remote village in the deep Amazon don't need them. They couldn't find a use for FRN's either other than kindling for their camp fires.
Wealthy investors, banks, govts are manipulating the price of the USDollar as well as Treasuries....not just gold. Gold is not in a bubble just because it is reacting to mismanagement of the US dollar, budget, defit, etc. The media has to blame someone for the ills of the economy. Oil companies, banks, and gold bugs just happen to be 3 of the easiest to target. This will never change.
Dollar bubble = gold "bubble"
roadrunner