<< <i>Gold has been an easy trade the last 10 years. The next 10 wont be so easy. For the last 10 years, gold was hated, now it is loved. This change in perception, will lead to a change in rate of return. >>
Just to add to your comment, real estate was REALLY loved 2004-2006 and prices skyrocketed... The challenge is to identify whether we're at early 2004 or late 2006. I think we're still at early to mid 2004. >>
Real estate was more than loved, it was worshipped, cult like for a lot longer than 2004-06. More like 1995-2008. There are many cult adherents still today. I missed that bandwagon, only owning 1 house and 1 business in a not-so-bubbly area. I am NOT gonna miss this gold bandwagon. >>
Indeed. Gold is worshipped. I really hope this move does not prove to be parabolic. For if it does, there will be many, many disgruntled gold investors 5 years from now. However, right now, after a 10 yr 5-fold run, a parabolic move is entirely possible. So the question you must ask yourself is this, "If gold hits $2300 in the next 6 months, will I sell?" I've never seen a parabolic move that didnt end very badly. Never.
Why do I use $2300? Because that would be golds inflation adjusted high. Finally it would ahve lived up to its promise.. And it would represent a nearly 10-fold increase. 10x is about as far as any asset can rally without collapsing upon itself. Nasdaq, China, Oil, Gold in the 70's, real estate (as you mention above), ect. And 10 years is about as long as a rally can remain intact with collapse. See previous examples. There are many more cases of assets failing in this approximate time frame and magnitude.
<< <i>If you stand up close to a parabola, you can't tell it's rate of change very well. If you step back a bit, you can see where you really are. Step back, cohodk - we aren't breaking into a meteoric rise for awhile. It will however, be volatile - maybe more volatile than we've seen in our lives. Too many black swans floating amidst the debt bombs. It's gonna be touch'n go. Don't dump that gold or silver - you'll need it to compete with the Chinese and Arabs when you want to buy that US real estate. >>
If you compare the current move to past parabolas, the last 9-12 monthly candles of this move will be $100 or greater, some maybe even $200 or $300. The last few monthly candles have been ~$40, ~$65, and this month is at ~$40 at the moment. That monthly chart looks great, I don't see how you can discount the possibility of going "meteoric" in the next month or two. >>
I am not discounting a "meteoric" move. Typically, a breakout--which hasnt happened yet--leads to a 10-15% move. If it does go meteoric, be prepared to to see gold on the cover of TIME magazine.
<< <i>Indeed. Gold is worshipped. I really hope this move does not prove to be parabolic. For if it does, there will be many, many disgruntled gold investors 5 years from now. However, right now, after a 10 yr 5-fold run, a parabolic move is entirely possible. So the question you must ask yourself is this, "If gold hits $2300 in the next 6 months, will I sell?" I've never seen a parabolic move that didnt end very badly. Never. >>
Gold is NOT worshipped currently, in my opinion. When NASDAQ was on fire, everyone was talking about stocks. When RE was on fire, EVERYONE was talking about RE, down to the minimum wage ilk. We are not there with gold yet. When my non-coin non-PM friends start talking gold, then we'll be getting there, but it's not happening yet. When we start getting those $100+ monthly candles, the headlines will suck in the uninformed investor herd which will fuel the fire even more. I'm not convinced the top will be only $2300 as the market for gold is small and it won't take much money to drive prices up, but that is my projection was well... maybe up to $2500. Picking a price level at this point is difficult, I will gauge when it is time to sell by the chart action and timing. I still stand by next March/April as being about the time that the parabolic move will end if it continues to follow the timing of other parabolic moves.
Yes, it will end badly. Investors will be stung by PMs just as they were by .com stocks and real estate. And I intend to make a killing playing both directions.
Indeed. Gold is worshipped. I really hope this move does not prove to be parabolic. For if it does, there will be many, many disgruntled gold investors 5 years from now. However, right now, after a 10 yr 5-fold run, a parabolic move is entirely possible. So the question you must ask yourself is this, "If gold hits $2300 in the next 6 months, will I sell?" I've never seen a parabolic move that didnt end very badly. Never.
I'll certainly be a seller of a portion of my holdings on the next a parabolic rise....and a buyer on the pullback as well. I subscribe to Alf Field's wave analysis where a possible outcome for gold is first to run to the $2100-$3500 range in major wave 3 (A Fib of 3X to 5X the previous $699 low), correct back 20-30% to eliminate all newbies, then move up another 5X to the $5K to $10K level in major wave 5. Note that Fields first came up with this analysis in 2003. It seems logical that gold's momentum will carry it past a 1980 inflation adjusted price. Commodities tend to overshoot a lot on parabolic moves. Since Sinclair has accurately called each financial/monetary and gold milestone for the past 8 years, I side with his forecast to a return to a gold certificate ratio of some sort (ie modified gold backing). This will not allow gold to fall back to a pure commodity price as it did from 1981 to 2001.
Why can this be the first time that a parabolic move during the past 40 years hasn't ended in a collapse? For one, the entire world's fiat/debt system of the 20th century wasn't under fear of collapse back in the 1980's, but it is this time around. Gold is the only other traded commodity/product that has satisfactorily functioned as world money before. There just are no other assets which both can go parabolic and have functioned as money in the past, present, and future. It's hard to envision gold's price falling back to a mere commodity in light of the past 100 yrs where our currencies were essentially non-backed (ie backed in "name" only from 1913-1971).
The gold run can survive as long as the fiat-puppets continue to supply unlimited QE to the system in the hopes of saving it or at least prolonging the day of reckoning until they comfortably leave office with their golden parachutes properly packed. If policy-makers have the will to do that for another 5-10 yrs, then that's at least how long gold will remain as alternative money. And if gold is part of the next monetary system, it's price will not fall all the way back to commodity status. A min. starting price for a continued partial-gold backed system would still have to be the 1980 inflation adjusted price of $2300.
<< <i>Why can this be the first time that a parabolic move during the past 40 years hasn't ended in a collapse? For one, the world's fiat/debt system of the 20th century wasn't under fear of collapse back in the 1980's, but it is this time around. Gold is the only other traded commodity/product that has satisfactorily functioned as world money before. There just are no other assets which both can go parabolic and have functioned as money in the past, present, and future. >>
Good points. If gold doesn't crash after going parabolic, then the options are what? a leveling off to flat for a while, or maybe just a slow up or down trend? I just don't see that happening, and it is highly unlikely to happen if you understand what causes the hyperbolic moves to begin with. The scenario you discussed with the 20-30% retracement is plausible, but the psychology in the subsequent crash is probably hard to overcome. I see something happening like what happened with oil though... it was $20-30 for the longest time, then it moved up to $60 or so, then it went parabolic and hit $150, then crashed back to $35, and not it's already back up to the 70's. And IMO, it's headed back to $150 in the next year or two, if not sooner.
It seems that most of the reports I keep hearing talk about an ongoing credit crunch. Compare the current situation to 1979-1980 when a credit crunch was being applied, sending interest rates all the way to 20%, which then helped to cause an economic downturn in 1981.
Consider that gold in 1979 was rising along with interest rates, while gold is now rising while interest rates are being held artificially low so as not to cause a double dip recession. Consider that this credit crunch is happening during an economic downturn with interest rates at historic lows. Good grief! What happens to the economy this time when interest rates rise?
The analyst on CNBC this morning wouldn't commit to anything more than a 1% chance of having a double dip recession, all the while she was listing the various economic metrics that are falling into the crapper. When the stock people have such a grasp on the information industry as to prohibit an analyst from calling a spade a spade while on live tv, you know there is a problem and we haven't seen the half of it yet.
Not only do we have a serious sovereign debt problem worldwide, but we have an economic mess that isn't responding to low interest rates. To me this does portend a parabolic move in physical assets at some point, and distinct possibility of some serious inflation followed by a currency revaluation.
The problem with selling during a parabolic move is that you really don't know what you will end up holding if you sell before the parabolic move is over. Yes, you maybe sold gold at $2,500 on the way up to $4,000 for a nice profit. But a profit of what? What happens to those "dollars" after the parabolic move is done? Are they worth a dollar, or are they worth nothing? It kinda depends, doesn't it?
Q: Are You Printing Money? Bernanke: Not Literally
Not only do we have a serious sovereign debt problem worldwide, but we have an economic mess that isn't responding to low interest rates. To me this does portend a parabolic move in physical assets at some point, and distinct possibility of some serious inflation followed by a currency revaluation.
Sounds deflationary to me. The world, by showing its disdain for debt, is saying it has enough money floating around. It doesnt want any more. All this debt creation over the past 25 years has already been inflationary. Higher prices will not rejuvenate global economies. Why does everyone hate to buy low? Come on Central Banks, let deflation work off the excess of the last 2 decades. We will all be better off after a few years.
Gold giving back Fridays (and most of Thursdays) gains. Its a tug-o-war at resistance. Still no breakout.
Sounds deflationary to me. The world, by showing its disdain for debt, is saying it has enough money floating around. It doesnt want any more. All this debt creation over the past 25 years has already been inflationary. Higher prices will not rejuvenate global economies. Why does everyone hate to buy low? Come on Central Banks, let deflation work off the excess of the last 2 decades. We will all be better off after a few years.
Guy on CNBC notes that by 2012, the interest on US Debt will be 28% of GDP, based on today's interest rates. He noted that even a small change in interest rates impacts the debt load in a serious way to the upside. The expected result will be more cutbacks in programs and higher taxes. Now THAT does sound deflationary.
You are correct that the world doesn't want any more debt, but the current administration is spending more not less, and the economy has virtually no chance of growing its way out of debt. Low interest rates have had very little stimulative effect, unemployment benefits have been extended, the homebuying incentives are expiring with little effect, and the bulk of deadbeat "homeowners" are already back in the red with no hope of paying their mortgages now than they did 2 years ago. The problem is that the economy won't generate enough in taxes and cutbacks in government programs will be politically difficult. That makes a very strong case for monetary inflation.
The banks can't let deflation take hold or they would go out of business. Their portfolios have already been marked down, and then back up courtesy of FASB. For every bailout, you can expect a tax increase at some point, and people have that figured out. The only way that banks and the federal budget's outstanding financial obligations can be met is through inflating the currency. Our politicians are just the ones to come to the rescue once again with new piles of cash, and it is getting harder inside the Treasury to disguise where that cash is coming from. Inflation is coming.
Q: Are You Printing Money? Bernanke: Not Literally
Same old story of lowering prices in some things, and rising prices in others. The world will continue to have a growing demand for energy and food, as long as world populations keep growing and demanding more than they had before. Deflation and inflation can co-exist.
I see something happening like what happened with oil though... it was $20-30 for the longest time, then it moved up to $60 or so, then it went parabolic and hit $150, then crashed back to $35, and not it's already back up to the 70's. And IMO, it's headed back to $150 in the next year or two, if not sooner.
What's missing in this example is that oil was not selected to be part of a new world currency. If gold is selected to be part of some new asset basket of goods/currencies, then it will experience a moderate fall back in price at some point and level out to what the "basket" dictates. If gold is not selected for such a role, then its price could retreat to essentially commodity status.
Gold has retreated back to the current lower channel line. It's support for now. Gold stocks taking a moderate whalloping as well. But it's only Monday during bond week. Tuesday and Wed. tend to be worse. Options expire on Thursday and gold futures contracts Friday. I half expected today to be an up-day with some pullback Tuesday and Wed.
<< <i>Sounds deflationary to me. The world, by showing its disdain for debt, is saying it has enough money floating around. It doesnt want any more. All this debt creation over the past 25 years has already been inflationary. Higher prices will not rejuvenate global economies. Why does everyone hate to buy low? Come on Central Banks, let deflation work off the excess of the last 2 decades. We will all be better off after a few years.
Guy on CNBC notes that by 2012, the interest on US Debt will be 28% of GDP, based on today's interest rates. He noted that even a small change in interest rates impacts the debt load in a serious way to the upside. The expected result will be more cutbacks in programs and higher taxes. Now THAT does sound deflationary.
You are correct that the world doesn't want any more debt, but the current administration is spending more not less, and the economy has virtually no chance of growing its way out of debt. Low interest rates have had very little stimulative effect, unemployment benefits have been extended, the homebuying incentives are expiring with little effect, and the bulk of deadbeat "homeowners" are already back in the red with no hope of paying their mortgages now than they did 2 years ago. The problem is that the economy won't generate enough in taxes and cutbacks in government programs will be politically difficult. That makes a very strong case for monetary inflation.
The banks can't let deflation take hold or they would go out of business. Their portfolios have already been marked down, and then back up courtesy of FASB. For every bailout, you can expect a tax increase at some point, and people have that figured out. The only way that banks and the federal budget's outstanding financial obligations can be met is through inflating the currency. Our politicians are just the ones to come to the rescue once again with new piles of cash, and it is getting harder inside the Treasury to disguise where that cash is coming from. Inflation is coming. >>
Why cant the banks just bet that everything will go lower? Didnt several hedge funds do just that with mortgages? I agree with most of what you wrote, the economy has massive problems, but you can also bet that there will not be a repeat of the massive "stimulus" programs that were recently passed. The people have and are continuing to speak. Americans are taking back America!!
The dollar amount of interest the USA pays today is actually less than it was during the Clinton years.
There are both deflationary and inflationary forces at work. The law of gravity can be repealed for just so long. And that law can not be controlled by politicians.
Roadrunner, the chart pattern of gold--at least GLD--looks very similar to Mar 08, July 08, Feb 09, Dec 09. Could be another evening star formation. The previous examples all resulted in 15-20% corrections. $110 GLD is very possible as that would be the 200dma and the primary uptrend line from Jan 09.
Why cant the banks just bet that everything will go lower? Didnt several hedge funds do just that with mortgages?
They can, and I didn't know that but it doesn't surprise me.
The people have and are continuing to speak. Americans are taking back America!!
We had better! There was a Joni Mitchell song back in the 60's, Big Yellow Taxi, "you don't know what you've got till it's gone" and that is where we are today. I've not appreciated the USA more than I do now, and the Constitution is now the battleground.
There are both deflationary and inflationary forces at work. The law of gravity can be repealed for just so long. And that law can not be controlled by politicians.
Yes, matter and anti-matter. An immovable object vs. an irresistable force. That is what we are seeing. We live in interesting times.
Q: Are You Printing Money? Bernanke: Not Literally
The gold and gold stock action started to look toppy last week once those double gap ups occured. It just felt like a correction was needed. The move down today closed a lot of the gaps in the gold stocks but not all. Newmont and Barrick for example still have some big gaps a bit further down. I wouldn't expect a 15-20% gold correction from here but am certainly prepared if that should happen. Gold just didn't have that explosive and higher volume top that those other time frames offered up. Volume has been generally falling off since the April top. It may be safer just to sit out the remainder of June and July from here.
I wouldn't count gold out yet. This is just the sentiment gold needs to spring off upward. I don't see an evening star formation, but I do see a bearish engulfing candle on the futures. The only other thing that concerns me is the fairly low volume.
But the move up Friday wasn't finished, and this move is not a new trend. I'm adding to positions here.
Interesting news I'm hearing over here in Europe... France and Germany want "2-tier" Euro... just a rumor anyway: article In talking with the locals it seems there are two groups... One might be the tea party equivalent that doesn't want to bail out the other countries, and the other group wants to see and make the Euro succeed.
With respect to the deflation arguments, there may be a flaw in the whole analysis because the comments assume that gold is currently appropriately valued. I'm not saying it isn't, but I'd also say that there's a good case to be made that gold has been and remains lower than it "should" be. So theoretically you could have gold rising or staying flat at a time when it would otherwise be declining... just food for thought.
Support is at 1221.6, resistance at 1244.1 and 1257.
<< <i>Roadrunner, the chart pattern of gold--at least GLD--looks very similar to Mar 08, July 08, Feb 09, Dec 09. Could be another evening star formation. The previous examples all resulted in 15-20% corrections. $110 GLD is very possible as that would be the 200dma and the primary uptrend line from Jan 09. >>
This is good to know. At what price level would you start scaling into a long postion?
"Poets are the unacknowledged legislators of the world." PBShelley
<< <i>Why can this be the first time that a parabolic move during the past 40 years hasn't ended in a collapse? For one, the world's fiat/debt system of the 20th century wasn't under fear of collapse back in the 1980's, but it is this time around. Gold is the only other traded commodity/product that has satisfactorily functioned as world money before. There just are no other assets which both can go parabolic and have functioned as money in the past, present, and future. >>
Good points. If gold doesn't crash after going parabolic, then the options are what? a leveling off to flat for a while, or maybe just a slow up or down trend? I just don't see that happening, and it is highly unlikely to happen if you understand what causes the hyperbolic moves to begin with. The scenario you discussed with the 20-30% retracement is plausible, but the psychology in the subsequent crash is probably hard to overcome. I see something happening like what happened with oil though... it was $20-30 for the longest time, then it moved up to $60 or so, then it went parabolic and hit $150, then crashed back to $35, and not it's already back up to the 70's. And IMO, it's headed back to $150 in the next year or two, if not sooner. >>
Parabolic moves do not come back and retest within just a few years. Japan and Nasdaq havent hit thier bubble highs in 20 and 10 years respectively. It took gold 28 years to hit its high. Oil will not go back to $150 for another decade--minimum. Look at its action in the last 2 months. The greatest oil spill in the history of mankind and oil is DOWN. If there were real demand for oil it would be $20 higher, maybe more. Two years ago I said oil may not hit $150 for another generation. Im sticking to that. And one big reason why---this very oil spill. There will be incredible pressure to find alternative energy sources going forward.
Gold could do well in a deflation. I never said it couldnt. It will not however have an inflation tailwind to push it. Thats been my point of contention all along. There will be no hyperinflation.
<< <i> Parabolic moves do not come back and retest within just a few years. Japan and Nasdaq havent hit thier bubble highs in 20 and 10 years respectively. It took gold 28 years to hit its high. Oil will not go back to $150 for another decade--minimum. Look at its action in the last 2 months. The greatest oil spill in the history of mankind and oil is DOWN. If there were real demand for oil it would be $20 higher, maybe more. Two years ago I said oil may not hit $150 for another generation. Im sticking to that. And one big reason why---this very oil spill. There will be incredible pressure to find alternative energy sources going forward.
Gold could do well in a deflation. I never said it couldnt. It will not however have an inflation tailwind to push it. Thats been my point of contention all along. There will be no hyperinflation. >>
What's frightening about the price of oil at $70 a barrell is that we're in the midst of a depression. When the economy gets legs, I'd imagine much higher prices for a barrell of oil. But I admit, this is mere speculation.
"Poets are the unacknowledged legislators of the world." PBShelley
Gold could do well in a deflation. I never said it couldn't. It will not however have an inflation tailwind to push it. Thats been my point of contention all along. There will be no hyperinflation.
Hyperinflation is a relatively quick and massive loss of confidence in a currency. There's really no way to predict if or when it happens. And it only happens during times of very poor business conditions....like today. I would agree that moderate inflation caused by improving business conditions might at best slowly push gold along. The odds of that seem more remote right now than a currency failure/collapse. I certainly can't rule out sequential collapsing currencies around the world.....US dollar included at some point.
My point about gold maintaining most of a parabolic rise has to do with it maintaining/re-establishing its status as a constituent of a new US or World currency. This is what separates it from the Dow, Oil, etc. None of those will likely become currencies.
I've been sitting on the sidelines for awhile. Is anyone expecting a small gold correction? I don't believe the G20 Summit will have any effect on the spot price because no major policies will be changed. They'll sit at a round table, point some fingers, raise some voices all for naught. We've got to fight against a world fiat currency unless it's backed by gold.
There will be hyperinflation. It will be a currency event obviously. Only question.....which currency(s). MJ
Walker Proof Digital Album 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>I've been sitting on the sidelines for awhile. Is anyone expecting a small gold correction? I don't believe the G20 Summit will have any effect on the spot price because no major policies will be changed. They'll sit at a round table, point some fingers, raise some voices all for naught. We've got to fight against a world fiat currency unless it's backed by gold. >>
I do expect gold to "correct" into the 1190 level. I expect the stock market to have one last failed attempt to try to get close to 11,000 before we see it move back down to the 9,000 level, along with gold going to 1350 oz. I believe the G-20 summit will have some discussion about reducing deficits. This may prop up world markets only momentarily, until it's business as usual and promises are not kept.
Gold and silver continue to confound. Just when it is "expected" that they are falling off.........back they come. Everyone is so confident of a correction "back to somewhere," it just never comes. Gold stocks are particularly confounding. A few of them have once again made new 52 week highs. Buying any brief bout of weakness has been a winning play since April because the darn things just keep coming back after every slight knockdown.
<Buying any brief bout of weakness has been a winning play since April because the darn things just keep coming back after every slight knockdown>
Rule number 1
Keep doing it til it doesn't work anymore
MJ
Walker Proof Digital Album 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>Parabolic moves do not come back and retest within just a few years. Japan and Nasdaq havent hit thier bubble highs in 20 and 10 years respectively. It took gold 28 years to hit its high. Oil will not go back to $150 for another decade--minimum. Look at its action in the last 2 months. The greatest oil spill in the history of mankind and oil is DOWN. If there were real demand for oil it would be $20 higher, maybe more. Two years ago I said oil may not hit $150 for another generation. Im sticking to that. And one big reason why---this very oil spill. There will be incredible pressure to find alternative energy sources going forward. >>
But there are other fundamentals at play with oil. Supply side, we're at peak oil and Obama's doing his best to stop or curb domestic devlopment. And even if the US' economy stays bad, the developing nations are buying cars at a record pace and their consumption is going up by leaps and bounds. When I was in China 2 years ago, our tour leader was remarking about how in a particular neighborhood there used to be very few cars just 5-8 years ago, and now the tiny residential streets are lined with them.
You are very optimistic about alternative energy sources. The reality is there's always been a push for alternative engergy and private industry has been working on solutions for years and we have made only minor progress. The free market will ultimately develop the solutions because there is billions to be made by the company that makes the breakthroughs that really pull us away from oil. What makes you think that they will identify the solutions AND more importantly, make them commercially viable AND widespread in the next decade? Best case scenario, we are 2 or more decades away from any serious transition to alternative energy solutions.
<< <i>I've been sitting on the sidelines for awhile. Is anyone expecting a small gold correction? I don't believe the G20 Summit will have any effect on the spot price because no major policies will be changed. They'll sit at a round table, point some fingers, raise some voices all for naught. We've got to fight against a world fiat currency unless it's backed by gold. >>
I don't expect any correction, just look at this weekly gold chart! Last week we made a new all time high, and had the second highest weekly close ever. We've retested and made plenty of 38.2% retracements lately, so gold pretty much has to be done with this consolidation on the weekly time frame. The patterns are all energized and ready for the next move. Tuesday is looking like a likely candidate for a move based on timing patterns. I know I've said this before, but by now gold almost has to be done with this price level.
I'm back from France but I'll be in Jamaica for the next week.
Clive Maunde expects a breakdown in gold coming soon, but more importantly the stock market is looking very toppy and that is the primary reason that he thinks gold might be vulnerable (within the context of a continuing gold bull market). If the stock market breaks sharply, some of that liquidity is going to come out of gold as well.
More deflationary pressure for you, cohodk. And the more the stock market falls, the more jobs that are lost, the fewer taxes that get paid - you can BET good money that the government will be trundling piles of money into one aspect of the economy or the other. We won't see it much because it goes to the bankers' pockets as reward for their troubles in keeping the world from falling into the abyss - God's work and all, you know.
At the close of G-20, the president promised that in November, they will be setting up a debt reduction commission in all seriousness. I have no doubt that he's serious, but it's not going to be about debt.
Q: Are You Printing Money? Bernanke: Not Literally
<< <i>Parabolic moves do not come back and retest within just a few years. Japan and Nasdaq havent hit thier bubble highs in 20 and 10 years respectively. It took gold 28 years to hit its high. Oil will not go back to $150 for another decade--minimum. Look at its action in the last 2 months. The greatest oil spill in the history of mankind and oil is DOWN. If there were real demand for oil it would be $20 higher, maybe more. Two years ago I said oil may not hit $150 for another generation. Im sticking to that. And one big reason why---this very oil spill. There will be incredible pressure to find alternative energy sources going forward. >>
But there are other fundamentals at play with oil. Supply side, we're at peak oil and Obama's doing his best to stop or curb domestic devlopment. And even if the US' economy stays bad, the developing nations are buying cars at a record pace and their consumption is going up by leaps and bounds. When I was in China 2 years ago, our tour leader was remarking about how in a particular neighborhood there used to be very few cars just 5-8 years ago, and now the tiny residential streets are lined with them.
You are very optimistic about alternative energy sources. The reality is there's always been a push for alternative engergy and private industry has been working on solutions for years and we have made only minor progress. The free market will ultimately develop the solutions because there is billions to be made by the company that makes the breakthroughs that really pull us away from oil. What makes you think that they will identify the solutions AND more importantly, make them commercially viable AND widespread in the next decade? Best case scenario, we are 2 or more decades away from any serious transition to alternative energy solutions. >>
We already have the solutions. The reason we dont utilize them is to keep relative peace in the Middle East. Also, the baby boomer generation will return to their ideals of their youth. That a very large demographic pushing for alternative energy. They pushed for it 40 years ago and after seeing nothing done, they will push for it again--for their grandchildrens sake. I also dont buy into the Peak Oil theory. Been hearing that for decades.
You mention the Chinese. Either the streets are already packed---no more room for another car on my street, so I'll keep riding my bicycle, or the Chinese will be forced to pay $200 oil. If we dont push for alternative energy, then the Chinese will.
MJ, the currency that collapses may just be the one nobody expects.
I predict some very entertaining trading in the next week or two. Many stocks sit on the edge of a cliff. Will they pulled back from the brink, or pushed over?
<< <i> Many stocks sit on the edge of a cliff. Will they pulled back from the brink, or pushed over? >>
Do you mean in terms of upcoming earnings? Which stocks? >>
Watch the Shanghai market. It has held 2500--after dropping from 3000, which I said to watch for in April,--for the past 2 months. Bollinger bands are the tightest in 4 years. I expect considerable volatility in China in the next few weeks. For having such a supposedly strong economy, it has had a definately terrible stock market. Somethings gotta give.
<< <i> Many stocks sit on the edge of a cliff. Will they pulled back from the brink, or pushed over? >>
Do you mean in terms of upcoming earnings? Which stocks? >>
The use of these types of metaphors certainly creates fear but doesn't offer any intelligent analysis of any company's business. It's obvious they can't name a stock or speak about earnings.
"Poets are the unacknowledged legislators of the world." PBShelley
Actually I dont really care what a company's business is. I care about its stock price. It makes no difference whether it makes computer chips, potato chips or cow chips. I, and you, make money trading stocks, not businesses.
I've given many stock/industry specific ideas over the years.
If you want to see what I see, look at a chart of GE, CSCO, MS and the 10 yr Treasury. Add in the FTSE, Bovespa, Shanghai and a pinch of JJC.
I think gold closed right on the accelerated uptrend line off the March lows. Maybe PC can confirm. Seems everytime gold is on the verge of breakout, it collapses. The PPT? LOL Anyway, I think this time the pullback could be more substantial. The main uptrendline is about $100 lower.
These are the charts Cohodk mentioned. I see mainly topping or turning over action in most of th W%R's.....but bottoming signs on a couple stocks. What do you see?
Huge deflationary flush like 2008 and then followed by the giant printing press opening up to full throttle.
The problem is the two events are spaced out from one another. You get the huge asset sale to get out of any debt to raise cash that is further devalued by the giant printing press that starts up within weeks.
Pay attention to the LACK OF a Federal BUDGET being passed for Oct. 1, 2010. This is a calculated delay by House and Senate Leadership in order to allow a Lame-Duck Congress to arrive back after November 3 to pass ANYTHING THEY WANT BEFORE House and Senate TERMS EXPIRE! It is diabolical and could make the Socialist takeover complete.
When you read this stuff, below, the Clown running the show becomes more evil than you can imagine because of his ineptitude. Impeachment in January 2011 becomes the ONLY option because no one can wait another 2 years. ----------------------------------
WSJ BUSINESS
JUNE 26, 2010.Bucyrus International Fears Loss of India Order .
By JAMES R. HAGERTY Bucyrus International Inc. said it may lose a $310 million order for mining machinery from a subsidiary of Reliance Power Ltd. of India because of a decision by the U.S. Export-Import Bank against providing loan guarantees for the project.
The decision is equivalent to "throwing 1,000 jobs in the ditch," Tim Sullivan, chief executive of the South Milwaukee, Wis., maker of mining equipment, said in an interview Friday. Bucyrus has estimated that the order would create or protect 984 jobs in 13 U.S. states.
The board of the Ex-Im Bank voted 2-1 Thursday against supporting the project, a senior bank official said. The bank is required to consider the environmental effects of projects it backs, the official said. The mining equipment would be used for a coal mine that is to supply a new power plant in Madhya Pradesh, India.
Mr. Sullivan said that the order from Reliance was contingent on the guarantees and that he feared Reliance would turn to rival suppliers from China or Belarus.
The bank board split along party lines. Two Democratic members—Fred Hochberg, chairman, and Diane Farrell—voted against supporting the project, while a Republican, Bijan R. Kian, voted in favor.
In a statement, Mr. Hochberg said: "President Obama has made clear this administration's commitment to transition away from high-carbon investments and toward a cleaner energy future." He said he voted against the guarantees, which would lower the cost of financing for Reliance, because of the "projected adverse environmental impact."
The decision could put President Barack Obama in an awkward spot during a planned visit to Wisconsin Tuesday and Wednesday. "This was a very bad decision," Tom Barrett, the Democratic nominee for governor of Wisconsin, said in a statement. Mr. Barrett, currently mayor of Milwaukee, added: "We have to focus on creating jobs." He pledged to "explore avenues to reverse the outcome." That is likely to be difficult as there is no appeals process for votes by the Ex-Im Bank board.
How is it that the U.S. Export-Import Bank is willing assist the Brazilian oil company Petrobras with a $2 Billion loan deal in exchange for US produced off-shore drilling and mining goods that seemingly buck current energy policy as well? Environmental considerations...really?
COINBOY...FWIW i did see my first "impeachment" stand outside of a post office today.
do you think that gold and silver will drop with this? i am inclined to think that this erosion will only strengthen gold and silver while, yes, eroding other tangible assets. i respect your analysis so go further if you think my skull is thick for this stuff.
i do see a scenario to get outta debt, but that is already in-place with many blue chip companies, today having billions of cash.
These are the charts Cohodk mentioned. I see mainly topping or turning over action in most of th W%R's.....but bottoming signs on a couple stocks. What do you see?
roadrunner >>
Thanks Roadrunner. But you included the gold chart. I didnt mention gold.
But anyway, if you want to get a better view of those charts, you must change the time frame. 2 months is too short. Better to look at a 2 yr time frame.
GE maybe breaking under $15 support. CSCO maybe breaking under $22.50 support. MS maybe breaking $25 support.
I mentioned those 3--there are many more similar--because they are mega-cap, important companies in their respective industries with a global scope.
$ftse---Head and shoulders top? $bvsp---double top? $tnx--10yr yield--breaking under MAJOR 3% support? $ssec---gonna move 10-20% either up or down in the next few weeks. JJC--Bounced off important support just under 37, and up against the downward sloping 50dma. A break under 36.50--which I expect, projects to 30-32. Thats a nice trade from 41.
Now of course these markets dont have to break down, but all the pieces are in place.
<Now of course these markets dont have to break down, but all the pieces are in place>
Couldn't have said it any better. MJ
Walker Proof Digital Album 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......
It exists. Reagan established it after the 1987and it's no secret that it's part of the playing field. They do most of their bidding in the thin air of the futures markets where they get the most bang for the buck. However, too many blame the wet blanket of the PPT everytime gold gets turned back at key resistance or the equities market is help up by what appears to be the hand of God aka PPT. They call it resistance and support for a reason. JMHO. MJ
Walker Proof Digital Album 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 adjusted the chart link to 1 yr....the longest stockcharts offers. Since you mentioned gold in your comments I figured why not associate it with the other 9 charts to see if correlations could be made.
It exists. Reagan established it after the 1987and it's no secret that it's part of the playing field. They do most of their bidding in the thin air of the futures markets where they get the most bang for the buck. However, too many blame the wet blanket of the PPT everytime gold gets turned back at key resistance or the equities market is help up by what appears to be the hand of God aka PPT. They call it resistance and support for a reason. JMHO. MJ >>
I know and this is exactly why I make fun......."However, too many blame the wet blanket of the PPT everytime gold gets turned back at key resistance or the equities market is help up by what appears to be the hand of God aka PPT"
Take a look at F (Ford) on a three month daily and a three year weekly.................It's on the precipice. Others will say it's a buying opportunity. MJ
Walker Proof Digital Album 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>Take a look at F (Ford) on a three month daily and a three year weekly.................It's on the precipice. Others will say it's a buying opportunity. MJ >>
It has it all going for it. A double top and H&S. The double top has already been proven. Will it hold $10 and validate the H&S. I've been looking at autoparts companies.
JJC indicating down 3%.
Aussie $ being taken to the Outback-- down 1.7%
$ssec---gonna move 10-20% either up or down in the next few weeks
<< <i> Watch the Shanghai market. It has held 2500--after dropping from 3000, which I said to watch for in April,--for the past 2 months. Bollinger bands are the tightest in 4 years. I expect considerable volatility in China in the next few weeks. For having such a supposedly strong economy, it has had a definately terrible stock market. Somethings gotta give. >>
<< <i>I think gold closed right on the accelerated uptrend line off the March lows. Maybe PC can confirm. Seems everytime gold is on the verge of breakout, it collapses. The PPT? LOL Anyway, I think this time the pullback could be more substantial. The main uptrendline is about $100 lower. >>
I am not a big believer in the PPT consipiracy.
calling these $20-40 retracements and pull backs from an all time high "collapses" is a bit over-dramatic. Gold sputtered around $1000 for a long time before it finally broke through, I don't see this being any different. BTW, these pullbacks are shallower and shallower... The breakout is imminent. Maybe today.
Comments
<< <i>
<< <i>
<< <i>Gold has been an easy trade the last 10 years. The next 10 wont be so easy. For the last 10 years, gold was hated, now it is loved. This change in perception, will lead to a change in rate of return. >>
Just to add to your comment, real estate was REALLY loved 2004-2006 and prices skyrocketed... The challenge is to identify whether we're at early 2004 or late 2006. I think we're still at early to mid 2004. >>
Real estate was more than loved, it was worshipped, cult like for a lot longer than 2004-06. More like 1995-2008. There are many cult adherents still today. I missed that bandwagon, only owning 1 house and 1 business in a not-so-bubbly area. I am NOT gonna miss this gold bandwagon. >>
Indeed. Gold is worshipped. I really hope this move does not prove to be parabolic. For if it does, there will be many, many disgruntled gold investors 5 years from now. However, right now, after a 10 yr 5-fold run, a parabolic move is entirely possible. So the question you must ask yourself is this, "If gold hits $2300 in the next 6 months, will I sell?" I've never seen a parabolic move that didnt end very badly. Never.
Why do I use $2300? Because that would be golds inflation adjusted high. Finally it would ahve lived up to its promise.
Knowledge is the enemy of fear
<< <i>
<< <i>If you stand up close to a parabola, you can't tell it's rate of change very well. If you step back a bit, you can see where you really are. Step back, cohodk - we aren't breaking into a meteoric rise for awhile. It will however, be volatile - maybe more volatile than we've seen in our lives. Too many black swans floating amidst the debt bombs. It's gonna be touch'n go. Don't dump that gold or silver - you'll need it to compete with the Chinese and Arabs when you want to buy that US real estate. >>
If you compare the current move to past parabolas, the last 9-12 monthly candles of this move will be $100 or greater, some maybe even $200 or $300. The last few monthly candles have been ~$40, ~$65, and this month is at ~$40 at the moment. That monthly chart looks great, I don't see how you can discount the possibility of going "meteoric" in the next month or two. >>
I am not discounting a "meteoric" move. Typically, a breakout--which hasnt happened yet--leads to a 10-15% move. If it does go meteoric, be prepared to to see gold on the cover of TIME magazine.
Knowledge is the enemy of fear
<< <i>Indeed. Gold is worshipped. I really hope this move does not prove to be parabolic. For if it does, there will be many, many disgruntled gold investors 5 years from now. However, right now, after a 10 yr 5-fold run, a parabolic move is entirely possible. So the question you must ask yourself is this, "If gold hits $2300 in the next 6 months, will I sell?" I've never seen a parabolic move that didnt end very badly. Never. >>
Gold is NOT worshipped currently, in my opinion. When NASDAQ was on fire, everyone was talking about stocks. When RE was on fire, EVERYONE was talking about RE, down to the minimum wage ilk. We are not there with gold yet. When my non-coin non-PM friends start talking gold, then we'll be getting there, but it's not happening yet. When we start getting those $100+ monthly candles, the headlines will suck in the uninformed investor herd which will fuel the fire even more. I'm not convinced the top will be only $2300 as the market for gold is small and it won't take much money to drive prices up, but that is my projection was well... maybe up to $2500. Picking a price level at this point is difficult, I will gauge when it is time to sell by the chart action and timing. I still stand by next March/April as being about the time that the parabolic move will end if it continues to follow the timing of other parabolic moves.
Yes, it will end badly. Investors will be stung by PMs just as they were by .com stocks and real estate. And I intend to make a killing playing both directions.
I'll certainly be a seller of a portion of my holdings on the next
a parabolic rise....and a buyer on the pullback as well. I subscribe to Alf Field's wave analysis where a possible outcome for gold is first to run to the $2100-$3500 range in major wave 3 (A Fib of 3X to 5X the previous $699 low), correct back 20-30% to eliminate all newbies, then move up another 5X to the $5K to $10K level in major wave 5. Note that Fields first came up with this analysis in 2003. It seems logical that gold's momentum will carry it past a 1980 inflation adjusted price. Commodities tend to overshoot a lot on parabolic moves. Since Sinclair has accurately called each financial/monetary and gold milestone for the past 8 years, I side with his forecast to a return to a gold certificate ratio of some sort (ie modified gold backing). This will not allow gold to fall back to a pure commodity price as it did from 1981 to 2001.
Why can this be the first time that a parabolic move during the past 40 years hasn't ended in a collapse? For one, the entire world's fiat/debt system of the 20th century wasn't under fear of collapse back in the 1980's, but it is this time around. Gold is the only other traded commodity/product that has satisfactorily functioned as world money before. There just are no other assets which both can go parabolic and have functioned as money in the past, present, and future. It's hard to envision gold's price falling back to a mere commodity in light of the past 100 yrs where our currencies were essentially non-backed (ie backed in "name" only from 1913-1971).
The gold run can survive as long as the fiat-puppets continue to supply unlimited QE to the system in the hopes of saving it or at least prolonging the day of reckoning until they comfortably leave office with their golden parachutes properly packed. If policy-makers have the will to do that for another 5-10 yrs, then that's at least how long gold will remain as alternative money. And if gold is part of the next monetary system, it's price will not fall all the way back to commodity status. A min. starting price for a continued partial-gold backed system would still have to be the 1980 inflation adjusted price of $2300.
roadrunner
<< <i>Why can this be the first time that a parabolic move during the past 40 years hasn't ended in a collapse? For one, the world's fiat/debt system of the 20th century wasn't under fear of collapse back in the 1980's, but it is this time around. Gold is the only other traded commodity/product that has satisfactorily functioned as world money before. There just are no other assets which both can go parabolic and have functioned as money in the past, present, and future. >>
Good points. If gold doesn't crash after going parabolic, then the options are what? a leveling off to flat for a while, or maybe just a slow up or down trend? I just don't see that happening, and it is highly unlikely to happen if you understand what causes the hyperbolic moves to begin with. The scenario you discussed with the 20-30% retracement is plausible, but the psychology in the subsequent crash is probably hard to overcome. I see something happening like what happened with oil though... it was $20-30 for the longest time, then it moved up to $60 or so, then it went parabolic and hit $150, then crashed back to $35, and not it's already back up to the 70's. And IMO, it's headed back to $150 in the next year or two, if not sooner.
Consider that gold in 1979 was rising along with interest rates, while gold is now rising while interest rates are being held artificially low so as not to cause a double dip recession. Consider that this credit crunch is happening during an economic downturn with interest rates at historic lows. Good grief! What happens to the economy this time when interest rates rise?
The analyst on CNBC this morning wouldn't commit to anything more than a 1% chance of having a double dip recession, all the while she was listing the various economic metrics that are falling into the crapper. When the stock people have such a grasp on the information industry as to prohibit an analyst from calling a spade a spade while on live tv, you know there is a problem and we haven't seen the half of it yet.
Not only do we have a serious sovereign debt problem worldwide, but we have an economic mess that isn't responding to low interest rates. To me this does portend a parabolic move in physical assets at some point, and distinct possibility of some serious inflation followed by a currency revaluation.
The problem with selling during a parabolic move is that you really don't know what you will end up holding if you sell before the parabolic move is over. Yes, you maybe sold gold at $2,500 on the way up to $4,000 for a nice profit. But a profit of what? What happens to those "dollars" after the parabolic move is done? Are they worth a dollar, or are they worth nothing? It kinda depends, doesn't it?
I knew it would happen.
It's been a trading sell up here for a trade back down under $18.
I keep writing options (once the old ones expire) against my long position everytime it rises this high.
Sounds deflationary to me. The world, by showing its disdain for debt, is saying it has enough money floating around. It doesnt want any more. All this debt creation over the past 25 years has already been inflationary. Higher prices will not rejuvenate global economies. Why does everyone hate to buy low? Come on Central Banks, let deflation work off the excess of the last 2 decades. We will all be better off after a few years.
Gold giving back Fridays (and most of Thursdays) gains. Its a tug-o-war at resistance. Still no breakout.
Knowledge is the enemy of fear
<< <i>Is silver back at the top of the trading range over $19?
It's been a trading sell up here for a trade back down under $18.
I keep writing options (once the old ones expire) against my long position everytime it rises this high. >>
My guess, today's move so far has answered your question.
Guy on CNBC notes that by 2012, the interest on US Debt will be 28% of GDP, based on today's interest rates. He noted that even a small change in interest rates impacts the debt load in a serious way to the upside. The expected result will be more cutbacks in programs and higher taxes. Now THAT does sound deflationary.
You are correct that the world doesn't want any more debt, but the current administration is spending more not less, and the economy has virtually no chance of growing its way out of debt. Low interest rates have had very little stimulative effect, unemployment benefits have been extended, the homebuying incentives are expiring with little effect, and the bulk of deadbeat "homeowners" are already back in the red with no hope of paying their mortgages now than they did 2 years ago. The problem is that the economy won't generate enough in taxes and cutbacks in government programs will be politically difficult. That makes a very strong case for monetary inflation.
The banks can't let deflation take hold or they would go out of business. Their portfolios have already been marked down, and then back up courtesy of FASB. For every bailout, you can expect a tax increase at some point, and people have that figured out. The only way that banks and the federal budget's outstanding financial obligations can be met is through inflating the currency. Our politicians are just the ones to come to the rescue once again with new piles of cash, and it is getting harder inside the Treasury to disguise where that cash is coming from. Inflation is coming.
I knew it would happen.
I see something happening like what happened with oil though... it was $20-30 for the longest time, then it moved up to $60 or so, then it went parabolic and hit $150, then crashed back to $35, and not it's already back up to the 70's. And IMO, it's headed back to $150 in the next year or two, if not sooner.
What's missing in this example is that oil was not selected to be part of a new world currency. If gold is selected to be part of some new asset basket of goods/currencies, then it will experience a moderate fall back in price at some point and level out to what the "basket" dictates. If gold is not selected for such a role, then its price could retreat to essentially commodity status.
Gold has retreated back to the current lower channel line. It's support for now. Gold stocks taking a moderate whalloping as well. But it's only Monday during bond week. Tuesday and Wed. tend to be worse. Options expire on Thursday and gold futures contracts Friday. I half expected today to be an up-day with some pullback Tuesday and Wed.
roadrunner
<< <i>Sounds deflationary to me. The world, by showing its disdain for debt, is saying it has enough money floating around. It doesnt want any more. All this debt creation over the past 25 years has already been inflationary. Higher prices will not rejuvenate global economies. Why does everyone hate to buy low? Come on Central Banks, let deflation work off the excess of the last 2 decades. We will all be better off after a few years.
Guy on CNBC notes that by 2012, the interest on US Debt will be 28% of GDP, based on today's interest rates. He noted that even a small change in interest rates impacts the debt load in a serious way to the upside. The expected result will be more cutbacks in programs and higher taxes. Now THAT does sound deflationary.
You are correct that the world doesn't want any more debt, but the current administration is spending more not less, and the economy has virtually no chance of growing its way out of debt. Low interest rates have had very little stimulative effect, unemployment benefits have been extended, the homebuying incentives are expiring with little effect, and the bulk of deadbeat "homeowners" are already back in the red with no hope of paying their mortgages now than they did 2 years ago. The problem is that the economy won't generate enough in taxes and cutbacks in government programs will be politically difficult. That makes a very strong case for monetary inflation.
The banks can't let deflation take hold or they would go out of business. Their portfolios have already been marked down, and then back up courtesy of FASB. For every bailout, you can expect a tax increase at some point, and people have that figured out. The only way that banks and the federal budget's outstanding financial obligations can be met is through inflating the currency. Our politicians are just the ones to come to the rescue once again with new piles of cash, and it is getting harder inside the Treasury to disguise where that cash is coming from. Inflation is coming. >>
Why cant the banks just bet that everything will go lower? Didnt several hedge funds do just that with mortgages? I agree with most of what you wrote, the economy has massive problems, but you can also bet that there will not be a repeat of the massive "stimulus" programs that were recently passed. The people have and are continuing to speak. Americans are taking back America!!
The dollar amount of interest the USA pays today is actually less than it was during the Clinton years.
There are both deflationary and inflationary forces at work. The law of gravity can be repealed for just so long. And that law can not be controlled by politicians.
Knowledge is the enemy of fear
Knowledge is the enemy of fear
They can, and I didn't know that but it doesn't surprise me.
The people have and are continuing to speak. Americans are taking back America!!
We had better! There was a Joni Mitchell song back in the 60's, Big Yellow Taxi, "you don't know what you've got till it's gone" and that is where we are today. I've not appreciated the USA more than I do now, and the Constitution is now the battleground.
There are both deflationary and inflationary forces at work. The law of gravity can be repealed for just so long. And that law can not be controlled by politicians.
Yes, matter and anti-matter. An immovable object vs. an irresistable force. That is what we are seeing. We live in interesting times.
I knew it would happen.
roadrunner
But the move up Friday wasn't finished, and this move is not a new trend. I'm adding to positions here.
Interesting news I'm hearing over here in Europe... France and Germany want "2-tier" Euro... just a rumor anyway: article
In talking with the locals it seems there are two groups... One might be the tea party equivalent that doesn't want to bail out the other countries, and the other group wants to see and make the Euro succeed.
With respect to the deflation arguments, there may be a flaw in the whole analysis because the comments assume that gold is currently appropriately valued. I'm not saying it isn't, but I'd also say that there's a good case to be made that gold has been and remains lower than it "should" be. So theoretically you could have gold rising or staying flat at a time when it would otherwise be declining... just food for thought.
Support is at 1221.6, resistance at 1244.1 and 1257.
<< <i>Roadrunner, the chart pattern of gold--at least GLD--looks very similar to Mar 08, July 08, Feb 09, Dec 09. Could be another evening star formation. The previous examples all resulted in 15-20% corrections. $110 GLD is very possible as that would be the 200dma and the primary uptrend line from Jan 09. >>
This is good to know. At what price level would you start scaling into a long postion?
<< <i>
<< <i>Is silver back at the top of the trading range over $19?
It's been a trading sell up here for a trade back down under $18.
I keep writing options (once the old ones expire) against my long position everytime it rises this high. >>
My guess, today's move so far has answered your question. >>
Hi OP,
Yes. It seems like 19-20 is strong resistance, yet the trend in silver is clearly to the upside.
<< <i>
<< <i>Why can this be the first time that a parabolic move during the past 40 years hasn't ended in a collapse? For one, the world's fiat/debt system of the 20th century wasn't under fear of collapse back in the 1980's, but it is this time around. Gold is the only other traded commodity/product that has satisfactorily functioned as world money before. There just are no other assets which both can go parabolic and have functioned as money in the past, present, and future. >>
Good points. If gold doesn't crash after going parabolic, then the options are what? a leveling off to flat for a while, or maybe just a slow up or down trend? I just don't see that happening, and it is highly unlikely to happen if you understand what causes the hyperbolic moves to begin with. The scenario you discussed with the 20-30% retracement is plausible, but the psychology in the subsequent crash is probably hard to overcome. I see something happening like what happened with oil though... it was $20-30 for the longest time, then it moved up to $60 or so, then it went parabolic and hit $150, then crashed back to $35, and not it's already back up to the 70's. And IMO, it's headed back to $150 in the next year or two, if not sooner. >>
Parabolic moves do not come back and retest within just a few years. Japan and Nasdaq havent hit thier bubble highs in 20 and 10 years respectively. It took gold 28 years to hit its high. Oil will not go back to $150 for another decade--minimum. Look at its action in the last 2 months. The greatest oil spill in the history of mankind and oil is DOWN. If there were real demand for oil it would be $20 higher, maybe more. Two years ago I said oil may not hit $150 for another generation. Im sticking to that. And one big reason why---this very oil spill. There will be incredible pressure to find alternative energy sources going forward.
Gold could do well in a deflation. I never said it couldnt. It will not however have an inflation tailwind to push it. Thats been my point of contention all along. There will be no hyperinflation.
Knowledge is the enemy of fear
<< <i>
Parabolic moves do not come back and retest within just a few years. Japan and Nasdaq havent hit thier bubble highs in 20 and 10 years respectively. It took gold 28 years to hit its high. Oil will not go back to $150 for another decade--minimum. Look at its action in the last 2 months. The greatest oil spill in the history of mankind and oil is DOWN. If there were real demand for oil it would be $20 higher, maybe more. Two years ago I said oil may not hit $150 for another generation. Im sticking to that. And one big reason why---this very oil spill. There will be incredible pressure to find alternative energy sources going forward.
Gold could do well in a deflation. I never said it couldnt. It will not however have an inflation tailwind to push it. Thats been my point of contention all along. There will be no hyperinflation. >>
What's frightening about the price of oil at $70 a barrell is that we're in the midst of a depression. When the economy gets legs, I'd imagine much higher prices for a barrell of oil. But I admit, this is mere speculation.
>
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Hyperinflation is a relatively quick and massive loss of confidence in a currency. There's really no way to predict if or when it happens. And it only happens during times of very poor business conditions....like today. I would agree that moderate inflation caused by improving business conditions might at best slowly push gold along. The odds of that seem more remote right now than a currency failure/collapse. I certainly can't rule out sequential collapsing currencies around the world.....US dollar included at some point.
My point about gold maintaining most of a parabolic rise has to do with it maintaining/re-establishing its status as a constituent of a new US or World currency. This is what separates it from the Dow, Oil, etc. None of those will likely become currencies.
roadrunner
There will be hyperinflation. It will be a currency event obviously. Only question.....which currency(s). 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>I've been sitting on the sidelines for awhile. Is anyone expecting a small gold correction? I don't believe the G20 Summit will have any effect on the spot price because no major policies will be changed. They'll sit at a round table, point some fingers, raise some voices all for naught. We've got to fight against a world fiat currency unless it's backed by gold. >>
I do expect gold to "correct" into the 1190 level. I expect the stock market to have one last failed attempt to try to get close
to 11,000 before we see it move back down to the 9,000 level, along with gold going to 1350 oz.
I believe the G-20 summit will have some discussion about reducing deficits. This may prop up world markets only momentarily,
until it's business as usual and promises are not kept.
roadrunner
Rule number 1
Keep doing it til it doesn't work anymore
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>Parabolic moves do not come back and retest within just a few years. Japan and Nasdaq havent hit thier bubble highs in 20 and 10 years respectively. It took gold 28 years to hit its high. Oil will not go back to $150 for another decade--minimum. Look at its action in the last 2 months. The greatest oil spill in the history of mankind and oil is DOWN. If there were real demand for oil it would be $20 higher, maybe more. Two years ago I said oil may not hit $150 for another generation. Im sticking to that. And one big reason why---this very oil spill. There will be incredible pressure to find alternative energy sources going forward. >>
But there are other fundamentals at play with oil. Supply side, we're at peak oil and Obama's doing his best to stop or curb domestic devlopment. And even if the US' economy stays bad, the developing nations are buying cars at a record pace and their consumption is going up by leaps and bounds. When I was in China 2 years ago, our tour leader was remarking about how in a particular neighborhood there used to be very few cars just 5-8 years ago, and now the tiny residential streets are lined with them.
You are very optimistic about alternative energy sources. The reality is there's always been a push for alternative engergy and private industry has been working on solutions for years and we have made only minor progress. The free market will ultimately develop the solutions because there is billions to be made by the company that makes the breakthroughs that really pull us away from oil. What makes you think that they will identify the solutions AND more importantly, make them commercially viable AND widespread in the next decade? Best case scenario, we are 2 or more decades away from any serious transition to alternative energy solutions.
<< <i>I've been sitting on the sidelines for awhile. Is anyone expecting a small gold correction? I don't believe the G20 Summit will have any effect on the spot price because no major policies will be changed. They'll sit at a round table, point some fingers, raise some voices all for naught. We've got to fight against a world fiat currency unless it's backed by gold. >>
I don't expect any correction, just look at this weekly gold chart! Last week we made a new all time high, and had the second highest weekly close ever. We've retested and made plenty of 38.2% retracements lately, so gold pretty much has to be done with this consolidation on the weekly time frame. The patterns are all energized and ready for the next move. Tuesday is looking like a likely candidate for a move based on timing patterns. I know I've said this before, but by now gold almost has to be done with this price level.
I'm back from France but I'll be in Jamaica for the next week.
More deflationary pressure for you, cohodk. And the more the stock market falls, the more jobs that are lost, the fewer taxes that get paid - you can BET good money that the government will be trundling piles of money into one aspect of the economy or the other. We won't see it much because it goes to the bankers' pockets as reward for their troubles in keeping the world from falling into the abyss - God's work and all, you know.
At the close of G-20, the president promised that in November, they will be setting up a debt reduction commission in all seriousness. I have no doubt that he's serious, but it's not going to be about debt.
I knew it would happen.
<< <i>
<< <i>Parabolic moves do not come back and retest within just a few years. Japan and Nasdaq havent hit thier bubble highs in 20 and 10 years respectively. It took gold 28 years to hit its high. Oil will not go back to $150 for another decade--minimum. Look at its action in the last 2 months. The greatest oil spill in the history of mankind and oil is DOWN. If there were real demand for oil it would be $20 higher, maybe more. Two years ago I said oil may not hit $150 for another generation. Im sticking to that. And one big reason why---this very oil spill. There will be incredible pressure to find alternative energy sources going forward. >>
But there are other fundamentals at play with oil. Supply side, we're at peak oil and Obama's doing his best to stop or curb domestic devlopment. And even if the US' economy stays bad, the developing nations are buying cars at a record pace and their consumption is going up by leaps and bounds. When I was in China 2 years ago, our tour leader was remarking about how in a particular neighborhood there used to be very few cars just 5-8 years ago, and now the tiny residential streets are lined with them.
You are very optimistic about alternative energy sources. The reality is there's always been a push for alternative engergy and private industry has been working on solutions for years and we have made only minor progress. The free market will ultimately develop the solutions because there is billions to be made by the company that makes the breakthroughs that really pull us away from oil. What makes you think that they will identify the solutions AND more importantly, make them commercially viable AND widespread in the next decade? Best case scenario, we are 2 or more decades away from any serious transition to alternative energy solutions. >>
We already have the solutions. The reason we dont utilize them is to keep relative peace in the Middle East. Also, the baby boomer generation will return to their ideals of their youth. That a very large demographic pushing for alternative energy. They pushed for it 40 years ago and after seeing nothing done, they will push for it again--for their grandchildrens sake. I also dont buy into the Peak Oil theory. Been hearing that for decades.
You mention the Chinese. Either the streets are already packed---no more room for another car on my street, so I'll keep riding my bicycle, or the Chinese will be forced to pay $200 oil. If we dont push for alternative energy, then the Chinese will.
MJ, the currency that collapses may just be the one nobody expects.
I predict some very entertaining trading in the next week or two. Many stocks sit on the edge of a cliff. Will they pulled back from the brink, or pushed over?
Knowledge is the enemy of fear
<< <i>
Many stocks sit on the edge of a cliff. Will they pulled back from the brink, or pushed over? >>
Do you mean in terms of upcoming earnings? Which stocks?
<< <i>
<< <i>
Many stocks sit on the edge of a cliff. Will they pulled back from the brink, or pushed over? >>
Do you mean in terms of upcoming earnings? Which stocks? >>
Recon he means all of them. Take your choice!
<< <i>
<< <i>
Many stocks sit on the edge of a cliff. Will they pulled back from the brink, or pushed over? >>
Do you mean in terms of upcoming earnings? Which stocks? >>
Watch the Shanghai market. It has held 2500--after dropping from 3000, which I said to watch for in April,--for the past 2 months. Bollinger bands are the tightest in 4 years. I expect considerable volatility in China in the next few weeks. For having such a supposedly strong economy, it has had a definately terrible stock market. Somethings gotta give.
Knowledge is the enemy of fear
<< <i>
<< <i>
Many stocks sit on the edge of a cliff. Will they pulled back from the brink, or pushed over? >>
Do you mean in terms of upcoming earnings? Which stocks? >>
The use of these types of metaphors certainly creates fear but doesn't offer any intelligent analysis of any company's business. It's obvious they can't name a stock or speak about earnings.
I've given many stock/industry specific ideas over the years.
If you want to see what I see, look at a chart of GE, CSCO, MS and the 10 yr Treasury. Add in the FTSE, Bovespa, Shanghai and a pinch of JJC.
I think gold closed right on the accelerated uptrend line off the March lows. Maybe PC can confirm. Seems everytime gold is on the verge of breakout, it collapses. The PPT? LOL
Knowledge is the enemy of fear
1 yr charts
roadrunner
Huge deflationary flush like 2008 and then followed by the giant printing press opening up to full throttle.
The problem is the two events are spaced out from one another. You get the huge asset sale to get out of any debt to raise cash that is further devalued by the giant printing press that starts up within weeks.
Sell Gold & Silver now,? Buy after the collapse?
TheScenario
THE DEFLATION SCRIPT
Pay attention to the LACK OF a Federal BUDGET being passed for Oct. 1, 2010. This is a calculated delay by House and Senate Leadership in order to allow a Lame-Duck Congress to arrive back after November 3 to pass ANYTHING THEY WANT BEFORE House and Senate TERMS EXPIRE! It is diabolical and could make the Socialist takeover complete.
When you read this stuff, below, the Clown running the show becomes more evil than you can imagine because of his ineptitude. Impeachment in January 2011 becomes the ONLY option because no one can wait another 2 years.
----------------------------------
WSJ BUSINESS
JUNE 26, 2010.Bucyrus International Fears Loss of India Order .
By JAMES R. HAGERTY
Bucyrus International Inc. said it may lose a $310 million order for mining machinery from a subsidiary of Reliance Power Ltd. of India because of a decision by the U.S. Export-Import Bank against providing loan guarantees for the project.
The decision is equivalent to "throwing 1,000 jobs in the ditch," Tim Sullivan, chief executive of the South Milwaukee, Wis., maker of mining equipment, said in an interview Friday. Bucyrus has estimated that the order would create or protect 984 jobs in 13 U.S. states.
The board of the Ex-Im Bank voted 2-1 Thursday against supporting the project, a senior bank official said. The bank is required to consider the environmental effects of projects it backs, the official said. The mining equipment would be used for a coal mine that is to supply a new power plant in Madhya Pradesh, India.
Mr. Sullivan said that the order from Reliance was contingent on the guarantees and that he feared Reliance would turn to rival suppliers from China or Belarus.
The bank board split along party lines. Two Democratic members—Fred Hochberg, chairman, and Diane Farrell—voted against supporting the project, while a Republican, Bijan R. Kian, voted in favor.
In a statement, Mr. Hochberg said: "President Obama has made clear this administration's commitment to transition away from high-carbon investments and toward a cleaner energy future." He said he voted against the guarantees, which would lower the cost of financing for Reliance, because of the "projected adverse environmental impact."
The decision could put President Barack Obama in an awkward spot during a planned visit to Wisconsin Tuesday and Wednesday. "This was a very bad decision," Tom Barrett, the Democratic nominee for governor of Wisconsin, said in a statement. Mr. Barrett, currently mayor of Milwaukee, added: "We have to focus on creating jobs." He pledged to "explore avenues to reverse the outcome." That is likely to be difficult as there is no appeals process for votes by the Ex-Im Bank board.
How is it that the U.S. Export-Import Bank is willing assist the Brazilian oil company Petrobras with a $2 Billion loan deal in exchange for US produced off-shore drilling and mining goods that seemingly buck current energy policy as well? Environmental considerations...really?
SOROS GETS OUR MONEY
Maybe because Obama puppet master George Soros bought 900 Million worth of shares in February 2009?
do you think that gold and silver will drop with this? i am inclined to think that this erosion will only strengthen gold and silver while, yes, eroding other tangible assets. i respect your analysis so go further if you think my skull is thick for this stuff.
i do see a scenario to get outta debt, but that is already in-place with many blue chip companies, today having billions of cash.
<< <i>The charts
These are the charts Cohodk mentioned. I see mainly topping or turning over action in most of th W%R's.....but bottoming signs on a couple stocks. What do you see?
roadrunner >>
Thanks Roadrunner. But you included the gold chart. I didnt mention gold.
But anyway, if you want to get a better view of those charts, you must change the time frame. 2 months is too short. Better to look at a 2 yr time frame.
GE maybe breaking under $15 support.
CSCO maybe breaking under $22.50 support.
MS maybe breaking $25 support.
I mentioned those 3--there are many more similar--because they are mega-cap, important companies in their respective industries with a global scope.
$ftse---Head and shoulders top?
$bvsp---double top?
$tnx--10yr yield--breaking under MAJOR 3% support?
$ssec---gonna move 10-20% either up or down in the next few weeks.
JJC--Bounced off important support just under 37, and up against the downward sloping 50dma. A break under 36.50--which I expect, projects to 30-32. Thats a nice trade from 41.
Now of course these markets dont have to break down, but all the pieces are in place.
Knowledge is the enemy of fear
Couldn't have said it any better. 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......
It exists. Reagan established it after the 1987and it's no secret that it's part of the playing field. They do most of their bidding in the thin air of the futures markets where they get the most bang for the buck. However, too many blame the wet blanket of the PPT everytime gold gets turned back at key resistance or the equities market is help up by what appears to be the hand of God aka PPT. They call it resistance and support for a reason. JMHO. 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......
9 charts to see if correlations could be made.
In any case, there is always room for gold.
roadrunner
<< <i><The PPT? LOL >
It exists. Reagan established it after the 1987and it's no secret that it's part of the playing field. They do most of their bidding in the thin air of the futures markets where they get the most bang for the buck. However, too many blame the wet blanket of the PPT everytime gold gets turned back at key resistance or the equities market is help up by what appears to be the hand of God aka PPT. They call it resistance and support for a reason. JMHO. MJ >>
I know and this is exactly why I make fun......."However, too many blame the wet blanket of the PPT everytime gold gets turned back at key resistance or the equities market is help up by what appears to be the hand of God aka PPT"
There is always room for gold.
Knowledge is the enemy of fear
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......
Baltic Dry Index
I can't get it linked, but check out the 3 year chart.
I knew it would happen.
<< <i>A worrisome little indicator: Baltic Dry Index I can't get it linked, but check out the 3 year chart. >>
This is a better look at Baltic Dry Index Chart Compares
<< <i>Take a look at F (Ford) on a three month daily and a three year weekly.................It's on the precipice. Others will say it's a buying opportunity. MJ >>
It has it all going for it. A double top and H&S. The double top has already been proven. Will it hold $10 and validate the H&S. I've been looking at autoparts companies.
JJC indicating down 3%.
Aussie $ being taken to the Outback-- down 1.7%
$ssec---gonna move 10-20% either up or down in the next few weeks
Down 4.3% overnight.
Knowledge is the enemy of fear
<< <i>
Watch the Shanghai market. It has held 2500--after dropping from 3000, which I said to watch for in April,--for the past 2 months. Bollinger bands are the tightest in 4 years. I expect considerable volatility in China in the next few weeks. For having such a supposedly strong economy, it has had a definately terrible stock market. Somethings gotta give. >>
China Leading Index Revised to Show Smallest Gain in 5 Months Somethings gotta give
Knowledge is the enemy of fear
<< <i>I think gold closed right on the accelerated uptrend line off the March lows. Maybe PC can confirm. Seems everytime gold is on the verge of breakout, it collapses. The PPT? LOL
I am not a big believer in the PPT consipiracy.
calling these $20-40 retracements and pull backs from an all time high "collapses" is a bit over-dramatic. Gold sputtered around $1000 for a long time before it finally broke through, I don't see this being any different. BTW, these pullbacks are shallower and shallower... The breakout is imminent. Maybe today.