<< <i>they pull silver out of the ground for net $8 oz. even if you double that to $15, how much more demand do you need to sustain $30 or higher silver? >>
i highly recommend u read SrsRocco & some of his work he has done regarding EROI & actual producer's costs...
You may have less "money" at the moment, but you still have the same amount of silver
And if silver went to 20 and you bought at 40, would you really be content thinking you still have XXXX ounces? Maybe you would, but 93.7% of the newbie silver buyers (mostly young and older folks) wouldnt be. Where would the "salvation" be for those who at the age of 70 have lost half their money trying to save it, or for the 20 somethings who in their idealism can no longer make a down payment on a house?
Maybe silver will go to 100+ and the old will be able to pass on a legacy and the young afford a house of their dreams, but there are no guarantees as many on this board wish to extend.
I really don't know how much higher the stock market can go without a correction. Certainly as soon as interest rates start ticking up, I would take profits. After the crash and bottom in 2008' the Dow has finally passed the high in 2008. In other words it took 5 yrs to surpass 08' highs. Gold during that same period has had a 115% rise.
The big signal to watch for is consumer confidence. Once confidence is lost, hold on to your hat. Our town is having a 2nd amendment rally on March 23rd. We haven't seen a rally since the Tea Party in 08'. Is loss of confidence starting? Yes, it's starting.
Kuch, historically stocks rally while interest rates increase because rates increase due to higher demand for debt and strong economic conditions. At the present I see no rise in rates due to fear of currency debasement or inflation. I believe the 10yr yield will have to get above 4% to have a detrimental effect on the stock market or economy.
And if silver went to 20 and you bought at 40, would you really be content thinking you still have XXXX ounces? Maybe you would, but 93.7% of the newbie silver buyers (mostly young and older folks) wouldnt be. Where would the "salvation" be for those who at the age of 70 have lost half their money trying to save it, or for the 20 somethings who in their idealism can no longer make a down payment on a house?
Of course I wouldn't like it if silver went from $40 to $20, but that's not the point. And I'm no more responsible for a newbie silver investor losing money than you are for a newbie options player for losing money. But let's do talk about those 70 year olds who have lost their income because of zero interest rate policies being used to pump up housing and the stock market. Those 20-somethings have time, and they should be spending that time to improve their earnings through education & training. Those 70-year olds, who were "promised" stability in return for plunking down their life savings into Treasuries, are getting eaten alive, and that's only the beginning. When rates start to rise, they might as well pack it in. Oh, maybe that's the plan.
Q: Are You Printing Money? Bernanke: Not Literally
What you are missing us that as interest rates went down the prices of those bonds went up. What investors did not get in income they got in capital gain. Advisors have been promoting dividend paying stocks also. If one only bought CDs then that's the risk they assumed by taking no risk.
<< <i>Kuch, historically stocks rally while interest rates increase because rates increase due to higher demand for debt and strong economic conditions. At the present I see no rise in rates due to fear of currency debasement or inflation. I believe the 10yr yield will have to get above 4% to have a detrimental effect on the stock market or economy. >>
What you are missing us that as interest rates went down the prices of those bonds went up. What investors did not get in income they got in capital gain. Advisors have been promoting dividend paying stocks also. If one only bought CDs then that's the risk they assumed by taking no risk.
Which means that any maturing bonds will be replaced by bonds that cost more but don't pay as much. The capital gain you mention was distributed as a lump sum and taxed at a higher rate. If you are from that generation who believed in the security of buying US Treasuries, you have just been betrayed. Dividend paying stocks incorporate another risk component that older folks don't really need. There is no such thing as taking no risk, but when rates are held artificially low, people who don't want to accept risk are herded into higher risk vehicles.
why is everyone so hell bent on rates rising. History does not support this.
Correct - historically rates don't rise until the economy picks up and demand for loans increases. And the biggest problem right now is that the economy can't be stimulated by low rates, because loan rates are only a single cost component for businesses and the other cost components such as insurance, over-regulation, and an uncertain taxation environment have put the lid on any expansion plans. Those low rates come with a cost however - the $trillions of new debt that have to be issued in order to drive the rates down by creating false demand. I've never seen such a screwed-up mess for a financial system.
This stagnant economy is a significant problem for the government when it comes to tax revenues, which is why the government needs to shrink and it is why the insolvent banks need to fail instead of being supported by our taxes, and bailouts, and other illicit arrangements with the regulators within the court system. The system can't work right unless it gets fixed the right way, not just the way that favors elite bankers.
The reason that rates want to rise is to create incentive to invest. Holding rates artificially low by falsely buying new Treasury debt is simply ignorant.
Q: Are You Printing Money? Bernanke: Not Literally
<< <i>Easy question, the time was 1999/2000. Gold is up 5x since then, stocks about flat except for the dividends. If you are asking about the future no one knows.
I don't understand why anyone asks these "all-in" kind of questions. The odds of being correct are small, and the risks far out weigh any reward for going all in, vs. 50% in, or 80% in. Yes, a very few smart or lucky people get these timing calls mostly right, but they ain't asking these kinds of questions. They ain't answering either. Those that tend to answer have about the same odds of getting it mostly right as a roulette wheel.
As for Baley and his extreme stock picking skills, don't fall into the belief, that you the average reader, have much chance of duplicating that success. You have about the same odds of doing that, as duplicating the razor sharp short term trading that Cohodk does with success. They are both outliers most likely with extreme talent in their areas. They both sometimes advise others to try and follow them, thinking that with a little common sense, anyone can do similar with a little time and study. This advice ignores their own huge natural talents, because they don't see themselves that way. Unfortunately, for the vast majority of readers, attempts to do so, will tend to result in financial ruin.
As always, I tend to write about the experience of the average person, because for the most part, that is what I experience. It is also what 80%+ of those reading this post will experience. >>
Gotta agree with the big red cat , i was late to the party in 07 but never once regretted dumping everything into Silver and Gold. I'll admit to dumping some Silver when it was up near 50 but who wouldnt having paid 14. I put all that into Gold.
<< <i>the low interest rates are intened to combat the threat of deflation. >>
and to keep interest on sovereign debt to a minimum. The interest alone on US debt is astronomical.
If I were going to dump non metal equities for metal, I would consider purchasing GDXJ, but I wouldn't make it a round robin transaction. I would sell the equities as high as I could and sit on the cash looking for a low GDXJ entry point.
While it's difficult to rightfully call a bubble in any particular asset at the moment, given the near zero percent return on dollar accounts, one could argue that as a whole there is a bubble in investments and commodities. I think when that bubble pops we are going to see declines across the asset board as we did in 2009. Could be that the recent metal drop was the first shot across the bow and an indicator of things to come elsewhere. I'm currently stacking cash (right next to my silver) in preparation for bargains galore. I also realize that cash can be a risky investment that has to be monitored as closely, if not closer, than other investments. I still believe there is a good possibility of a planned major dollar devaluation event. I suspect Geither left the Treasury to specifically put it together out of the public eye and behind closed doors. If he becomes the next FED chairman in early 2014, I will consider this conspiracy thought to have had footing.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
<< <i>I prefer stocks & physical gold, not one vs. another. They are like instruments in an orchestra. Each has a part in the song. >>
I'm a heavy metal fan.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
<< <i>I heard that derryb, although I prefer classical, jazz, swing and big band to heavy metal.... it's good to appreciate all kinds. >>
Oh, you talkin' 'bout music! I'm a classic rock kinda guy.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
derryb, why do you believe the stock market is overvalued? Dont say because the FED or bankstes are pumping it up, but since you are a believer in fundamentals, please offer some fundamental reasons why equities are overvalued.
<< <i>derryb, why do you believe the stock market is overvalued? Dont say because the FED or bankstes are pumping it up, but since you are a believer in fundamentals, please offer some fundamental reasons why equities are overvalued.
"65.5% of all stocks are overvalued, which is just above the 65% threshold needed to issue such a warning. In addition, fifteen of sixteen sectors are overvalued, thirteen by double-digit percentages."
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
It's a cute cartoon that's been posted before. That Keynesian soap water is supposed to "inflate" all the assets, including physical things like land and builldings, lumps of metal such as gold, silver, copper, units of energy such as oil and natural gas, units of food such as corn and wheat and coffee and sugar, finished goods like electronics and clothing as well as "kinetic" assets such as units of somewhat skilled human labor which someone can provide (wages per hour and salary per year or task-based compensation). Stocks represent essentally a bet on the future earnings (profits) and also cash flow (revenues) and future expectations of growth.
If someone has some of each of those categories, it will balance out. If one of them performs unusually well (historically speaking) for 8 or 10 years, it's often due for a rest. It is during these times that some of the other asset classes might catch up. If someone is heavily overweighted or soley invested their capital in just one of these asset classes, IMO they take on more risk (in terms of relative risk or also known as opportunity cost) than if they spread it around somewhat in offsetting asset classes that make up for the "dead money" while the primary asset class corrects.
With the benefit of hindsight, it is easy to see that two years ago, we should have all sold our metals at their all time highs and bought stocks. Anyone who says different doesn't seem to understand math, or has emotional attachments to the metal. (maybe it's in the form of a "collection" of medals, or perhaps it's "insurance" against SHTF and/or hyperinflation or monetary or societal collapse, those are two of the reasons I didn't sell enough metal at $1800+ and $40+)
The question now is, what next? Some think that a local maximium in stocks is here or near, and it may very well be. Similarly, metals could go up, down, or sideways, like every other asset class and individual security there is.
My current prediction is a continued trading range for gold $1250-1550, silver $22-27, and for stocks to correct significantly going into the summer (10%+) and rally hard in Q4 finishing up the year as one of the leading asset class in terms of 2013 performance. Metals will probably be down over calendar 2013 IMO
<< <i>That Keynesian soap water is supposed to "inflate" all the assets >>
and it has. Pick your poison, but if it differs from mine, respect my freedom to choose.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
I sincerely hope no one found disrespect or insult in anything in this or any post. If so, please point it out so that I may be more sensitive in my future opinions. My intent is never to give offense, only to have interesting conversations on here.
So, does anyone think they will succeed in bubbling up housing again?
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
<< <i>derryb, why do you believe the stock market is overvalued? Dont say because the FED or bankstes are pumping it up, but since you are a believer in fundamentals, please offer some fundamental reasons why equities are overvalued.
"65.5% of all stocks are overvalued, which is just above the 65% threshold needed to issue such a warning. In addition, fifteen of sixteen sectors are overvalued, thirteen by double-digit percentages." >>
This is a link to a blog or editorial piece. It contains no fundamental analysis. This article is precisely what I was hoping you would not link.
And to "attack" the author , he is misusing the term overvalued. He should say overbought since he is uuing a technical indicator . Overbought and overvalued are nit the same and should not be used interchangeably.
So, does anyone think they will succeed in bubbling up housing again? >>
If you are hoping to sell your house at 2007 prices you will wait a long time. However, if you are looking to buy then housing is at its most affordable valuations in over a generation. Real estate in the USA is the cheapest on the planet.
<< <i>If you are hoping to sell your house at 2007 prices you will wait a long time. However, if you are looking to buy then housing is at its most affordable valuations in over a generation. Real estate in the USA is the cheapest on the planet. >>
But, is it going to get cheaper? This is what potential buyers need to determine.
<< <i>This is a link to a blog or editorial piece. It contains no fundamental analysis. This article is precisely what I was hoping you would not link. >>
Isn't analysis nothing more than opinion of what the charts or the data tell the person doing the analyzing? What makes one piece of analysis better than the other - the place of employment/credentials of the one giving the analysis? A lot of the bloggers you appear to take exception to are very educated in their field of analysis. I'm just trying to figure where you draw the line on determining valid analysis. Face it, most here are not qualified to read charts and sift through data - they turn to those trained to do so. Please, tell us who to trust.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
This is just a monster bull market in stocks. Probably the bull market of this generation and while it is already over 4 years old, this bull is getting stronger.
The stock market climbs a wall of worry, and there's plenty of hand-wringing right now. My main consideration if I were in the market to be a buyer of stocks is simply - how do the P/Es of each index and each stock compare to their historical averages?
If you don't consider earnings, and indeed the quality of those earnings - you are making a basic error.
Q: Are You Printing Money? Bernanke: Not Literally
<< <i>The stock market climbs a wall of worry, and there's plenty of hand-wringing right now. My main consideration if I were in the market to be a buyer of stocks is simply - how do the P/Es of each index and each stock compare to their historical averages?
If you don't consider earnings, and indeed the quality of those earnings - you are making a basic error. >>
This market has had mostly non-believers all the way. Either we were going to slip back into recession, earnings were going to fall back, inflation and interest rates were ready explode upward, etc. Here we are 50 months past the lows and the S&P is almost 250% of that low.
The Fed wants stocks higher and is keeping rates low to keep the wind at the market's back. The 10 year Treasury note yields less than 2%. Meanwhile, there are hundreds of solid companies with dividends higher than 2% and regularly increasing those dividends.
There have been two great bull markets since 1940. The first from 1940 to early 1973, the second from 1982 to 2000. Both markets saw the Dow Jones Industrial Average increase over 1000%.
We are not even to the middle of the bull market of this generation and there are few believers. This market is going much higher.
<< <i>If you are hoping to sell your house at 2007 prices you will wait a long time. However, if you are looking to buy then housing is at its most affordable valuations in over a generation. Real estate in the USA is the cheapest on the planet. >>
But, is it going to get cheaper? This is what potential buyers need to determine.
<< <i>This is a link to a blog or editorial piece. It contains no fundamental analysis. This article is precisely what I was hoping you would not link. >>
Isn't analysis nothing more than opinion of what the charts or the data tell the person doing the analyzing? What makes one piece of analysis better than the other - the place of employment/credentials of the one giving the analysis? A lot of the bloggers you appear to take exception to are very educated in their field of analysis. I'm just trying to figure where you draw the line on determining valid analysis. Face it, most here are not qualified to read charts and sift through data - they turn to those trained to do so. Please, tell us who to trust. >>
I was looking for original thought from you. An "opinion" from you.
I asked for fundamental analysis, and you provided technical analysis that was misapplied. Having a bunch of letters after your name doesnt make you knowledgeable nor does it entitle you to a more valued opinion. Believe me, i know lots of folks with "credentials", as im sure you do as well.
I trust those who know how to properly assimilate data. And to reasonably and logically analyze this data. All too often people look at data with preconceived notion and tend to see what they want to see. I will follow anyone who shows me fact and logically presents an opinion supported by such fact. Unfortunately, I usually see misinformation supported by assumption or supposition.
<<how do the P/Es of each index and each stock compare to their historical averages?>>
And what is your interpretation of the market currently?
I haven't considered getting into the market, so I haven't done that analysis. It's easy enough to do, but my objection to getting into the market is based on the problem that I have with easy money and the unsustainable level of debt.
I'm not a Ron Paul supporter, but I do believe that his assertion about mal-investment is accurate. There are so many distortions in the marketplace that what would normally be a straightforward financial analysis, is no longer either straightforward or analysis. It's anyone's guess, based on cronyism to the nth degree, and in my opinion it is highly unreliable.
In normal times, P/E vs. historical is a very reliable indicator based on actual company performance vs. the industry vs. other industries. Not so, anymore.
Q: Are You Printing Money? Bernanke: Not Literally
I think PEs are just as reliable today as 5 or 10 or 20 years ago. The problem I see is most investors misuse PE ratios. Usually they think low is good and high is bad. Oftentimes nothing could be further from the truth--but we've had this discussion before.
My opinion is that based on current PE ratios, the market is fairly valued. I also think PMs are fairly valued. Real estate in general is fairly valued--some areas very cheap. The current environment in my opinion offers few values. Thats why I keep stacking dollar bills. Gotta build a war chest if you're gonna fight in a war.
I think that the quality of earnings is important, and in this environment I am thinking that most company earnings are not quality earnings, but that they are earnings based not on efficiency of operations or great products per se' - but upon a "puffed up" currency that has less buying power.
Furthermore, companies have not yet felt the impact of the new tax structure forced by the unaffordable Obamacare Biometrics Inventory & Tax Act. When you couple the inevitable higher tax burden with the continued loss of full time jobs being replaced by 30 hr/per week part time jobs, I don't see much hope for growing our way out of the increasing debt load requirements.
Add to that any increase in interest rates and you have a major squeeze on individual and governmental budgets all the way up & down the line.
"Well Stanley, isn't that a fine kettle of fish!"
Q: Are You Printing Money? Bernanke: Not Literally
but upon a "puffed up" currency that has less buying power.
The indices are largely made up of huge multi-national corporations that sell more product in foreign countries than in the USA. A rising dollar would hurt income, not "puff it up".
<< <i>how do the P/Es of each index and each stock compare to their historical averages?
And what is your interpretation of the market currently? >>
Two indicators are blinking. The Schiller PE10 is at the high end of its range. Also the Value Line Appreciation Estimate is at the low end. By no means are these original thoughts. People far more educated than me or 99.99% of those reading or posting on this forum, and in the case of the Value Line estimates, people that have done a ton more work, are pointing to a stock market near the high range in terms of valuation, the low range in terms of potential future price appreciation. With all that, these are slow moving indicators. Glacial for those that trade options or futures.
Then there is QE, which is distorting all the markets, propping up metals, bonds, real estate, and stocks. All the smoke from QE makes for a more difficult to read market. Plenty of folks believe that the end of QE will be bearish for the stock market. They might be totally off, because on the recent news, U.S. stocks accelerated higher on the hint of the end.
The indices are largely made up of huge multi-national corporations that sell more product in foreign countries than in the USA. A rising dollar would hurt income, not "puff it up".
Don't they conduct overseas business in local currencies, and don't they all have currency hedging operations to keep from losing money due to currency fluctuations?
If a rising dollar hurts such income, that only exascerbates the tax shortfall problem, which further adds to the debt creation bubble. And as we know, there are no cuts in spending - only "reductions" in the rate of increased spending.
There will be a tipping point. There always is. I just can't tell you when it will be, or what the trigger will be. Too many liabilities and too many hidden triggers.
Q: Are You Printing Money? Bernanke: Not Literally
Anything is possible. A "New Federal Reserve Note" might be worth 1000 of the old Federal Reserve Notes any day now. In that case, gold might go to $50/oz.
(Which wouldn't necessarily be a windfall for gold stackers if the government decided to make gold a "national asset".) Aside from that, a currency re-valuation will cause no end of havoc in the tax code, along with every other type of financial analysis.
We have thousands of pages of new laws and tens of thousands of pages of new regulations that haven't even been implemented yet. And most of these new laws & regs are being written by 20-something staffers, fresh out of Law School with NO practical experience and NO idea what they are doing except to impress their new bosses and their ideologies.
"We can't say what's in the new law, until we pass it." Idiocy at the very highest levels. There's a whole lot of trouble coming down the pike, guys.
Q: Are You Printing Money? Bernanke: Not Literally
I've found that the best way to protect myself from all Risks is to wrap myself in bubble wrap, and sit perfectly still, alone, in a locked room all day and night.
Comments
<< <i>they pull silver out of the ground for net $8 oz. even if you double that to $15, how much more demand do you need to sustain $30 or higher silver? >>
i highly recommend u read SrsRocco & some of his work he has done regarding EROI & actual producer's costs...
And if silver went to 20 and you bought at 40, would you really be content thinking you still have XXXX ounces? Maybe you would, but 93.7% of the newbie silver buyers (mostly young and older folks) wouldnt be. Where would the "salvation" be for those who at the age of 70 have lost half their money trying to save it, or for the 20 somethings who in their idealism can no longer make a down payment on a house?
Maybe silver will go to 100+ and the old will be able to pass on a legacy and the young afford a house of their dreams, but there are no guarantees as many on this board wish to extend.
Knowledge is the enemy of fear
I really don't know how much higher the stock market can go without a correction. Certainly as soon as interest rates start ticking up, I would take profits. After the crash and bottom in 2008' the Dow has finally passed the high in 2008. In other words it took 5 yrs to surpass 08' highs. Gold during that same period has had a 115% rise.
The big signal to watch for is consumer confidence. Once confidence is lost, hold on to your hat. Our town is having a 2nd amendment rally on March 23rd. We haven't seen a rally since the Tea Party in 08'. Is loss of confidence starting? Yes, it's starting.
Knowledge is the enemy of fear
Of course I wouldn't like it if silver went from $40 to $20, but that's not the point. And I'm no more responsible for a newbie silver investor losing money than you are for a newbie options player for losing money. But let's do talk about those 70 year olds who have lost their income because of zero interest rate policies being used to pump up housing and the stock market. Those 20-somethings have time, and they should be spending that time to improve their earnings through education & training. Those 70-year olds, who were "promised" stability in return for plunking down their life savings into Treasuries, are getting eaten alive, and that's only the beginning. When rates start to rise, they might as well pack it in. Oh, maybe that's the plan.
I knew it would happen.
Knowledge is the enemy of fear
Knowledge is the enemy of fear
<< <i>Kuch, historically stocks rally while interest rates increase because rates increase due to higher demand for debt and strong economic conditions. At the present I see no rise in rates due to fear of currency debasement or inflation. I believe the 10yr yield will have to get above 4% to have a detrimental effect on the stock market or economy. >>
Thank you, I stand corrected.
Which means that any maturing bonds will be replaced by bonds that cost more but don't pay as much. The capital gain you mention was distributed as a lump sum and taxed at a higher rate. If you are from that generation who believed in the security of buying US Treasuries, you have just been betrayed. Dividend paying stocks incorporate another risk component that older folks don't really need. There is no such thing as taking no risk, but when rates are held artificially low, people who don't want to accept risk are herded into higher risk vehicles.
why is everyone so hell bent on rates rising. History does not support this.
Correct - historically rates don't rise until the economy picks up and demand for loans increases. And the biggest problem right now is that the economy can't be stimulated by low rates, because loan rates are only a single cost component for businesses and the other cost components such as insurance, over-regulation, and an uncertain taxation environment have put the lid on any expansion plans. Those low rates come with a cost however - the $trillions of new debt that have to be issued in order to drive the rates down by creating false demand. I've never seen such a screwed-up mess for a financial system.
This stagnant economy is a significant problem for the government when it comes to tax revenues, which is why the government needs to shrink and it is why the insolvent banks need to fail instead of being supported by our taxes, and bailouts, and other illicit arrangements with the regulators within the court system. The system can't work right unless it gets fixed the right way, not just the way that favors elite bankers.
The reason that rates want to rise is to create incentive to invest. Holding rates artificially low by falsely buying new Treasury debt is simply ignorant.
I knew it would happen.
Liberty: Parent of Science & Industry
<< <i>Easy question, the time was 1999/2000. Gold is up 5x since then, stocks about flat except for the dividends. If you are asking about the future no one knows.
I don't understand why anyone asks these "all-in" kind of questions. The odds of being correct are small, and the risks far out weigh any reward for going all in, vs. 50% in, or 80% in. Yes, a very few smart or lucky people get these timing calls mostly right, but they ain't asking these kinds of questions. They ain't answering either. Those that tend to answer have about the same odds of getting it mostly right as a roulette wheel.
As for Baley and his extreme stock picking skills, don't fall into the belief, that you the average reader, have much chance of duplicating that success. You have about the same odds of doing that, as duplicating the razor sharp short term trading that Cohodk does with success. They are both outliers most likely with extreme talent in their areas. They both sometimes advise others to try and follow them, thinking that with a little common sense, anyone can do similar with a little time and study. This advice ignores their own huge natural talents, because they don't see themselves that way. Unfortunately, for the vast majority of readers, attempts to do so, will tend to result in financial ruin.
As always, I tend to write about the experience of the average person, because for the most part, that is what I experience. It is also what 80%+ of those reading this post will experience. >>
Gotta agree with the big red cat , i was late to the party in 07 but never once regretted dumping everything into Silver and Gold. I'll admit to dumping some Silver when it was up near 50 but who wouldnt having paid 14. I put all that into Gold.
The Dow and S&P500 are at all-time highs
Liberty: Parent of Science & Industry
<< <i>the low interest rates are intened to combat the threat of deflation. >>
and to keep interest on sovereign debt to a minimum. The interest alone on US debt is astronomical.
If I were going to dump non metal equities for metal, I would consider purchasing GDXJ, but I wouldn't make it a round robin transaction. I would sell the equities as high as I could and sit on the cash looking for a low GDXJ entry point.
While it's difficult to rightfully call a bubble in any particular asset at the moment, given the near zero percent return on dollar accounts, one could argue that as a whole there is a bubble in investments and commodities. I think when that bubble pops we are going to see declines across the asset board as we did in 2009. Could be that the recent metal drop was the first shot across the bow and an indicator of things to come elsewhere. I'm currently stacking cash (right next to my silver) in preparation for bargains galore. I also realize that cash can be a risky investment that has to be monitored as closely, if not closer, than other investments. I still believe there is a good possibility of a planned major dollar devaluation event. I suspect Geither left the Treasury to specifically put it together out of the public eye and behind closed doors. If he becomes the next FED chairman in early 2014, I will consider this conspiracy thought to have had footing.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
Interests:
Pre-Jump Grade Project
Toned Commemoratives
<< <i>The Dow and S&P500 are at all-time highs >>
Technically and nominally speaking, yes.
In reality, due to the USDX depreciation from Feb 2000 to date, the 11,700 Dow peak in 2000 is roughly equivalent to today's 15,000.
<< <i>I prefer stocks & physical gold, not one vs. another. They are like instruments in an orchestra. Each has a part in the song. >>
I'm a heavy metal fan.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
<< <i>I heard that derryb, although I prefer classical, jazz, swing and big band to heavy metal.... it's good to appreciate all kinds. >>
Oh, you talkin' 'bout music! I'm a classic rock kinda guy.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
<< <i>
<< <i>I heard that derryb, although I prefer classical, jazz, swing and big band to heavy metal.... it's good to appreciate all kinds. >>
Oh, you talkin' 'bout music! I'm a classic rock kinda guy. >>
Is Metallica classic rock?
Dow 15000!!!
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
Thank you for your response.
Knowledge is the enemy of fear
Or, they could buy puts on a major index or ETF like the SPY.
Everybody has an opinion and the opportunity to profit from their own insights.
Whether stocks or gold or silver or bonds are higher because of the Fed is irrelevant.
The price is the price.
If the price is wrong and you are correct, you can profit from this incorrect pricing.
<< <i>derryb, why do you believe the stock market is overvalued? Dont say because the FED or bankstes are pumping it up, but since you are a believer in fundamentals, please offer some fundamental reasons why equities are overvalued.
Thank you for your response. >>
The FED has become the fundamental
"65.5% of all stocks are overvalued, which is just above the 65% threshold needed to issue such a warning. In addition, fifteen of sixteen sectors are overvalued, thirteen by double-digit percentages."
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
If someone has some of each of those categories, it will balance out. If one of them performs unusually well (historically speaking) for 8 or 10 years, it's often due for a rest. It is during these times that some of the other asset classes might catch up. If someone is heavily overweighted or soley invested their capital in just one of these asset classes, IMO they take on more risk (in terms of relative risk or also known as opportunity cost) than if they spread it around somewhat in offsetting asset classes that make up for the "dead money" while the primary asset class corrects.
With the benefit of hindsight, it is easy to see that two years ago, we should have all sold our metals at their all time highs and bought stocks. Anyone who says different doesn't seem to understand math, or has emotional attachments to the metal. (maybe it's in the form of a "collection" of medals, or perhaps it's "insurance" against SHTF and/or hyperinflation or monetary or societal collapse, those are two of the reasons I didn't sell enough metal at $1800+ and $40+)
The question now is, what next? Some think that a local maximium in stocks is here or near, and it may very well be. Similarly, metals could go up, down, or sideways, like every other asset class and individual security there is.
My current prediction is a continued trading range for gold $1250-1550, silver $22-27, and for stocks to correct significantly going into the summer (10%+) and rally hard in Q4 finishing up the year as one of the leading asset class in terms of 2013 performance. Metals will probably be down over calendar 2013 IMO
Liberty: Parent of Science & Industry
<< <i>That Keynesian soap water is supposed to "inflate" all the assets >>
and it has. Pick your poison, but if it differs from mine, respect my freedom to choose.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
My intent is never to give offense, only to have interesting conversations on here.
Liberty: Parent of Science & Industry
So, does anyone think they will succeed in bubbling up housing again?
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
<< <i>
<< <i>derryb, why do you believe the stock market is overvalued? Dont say because the FED or bankstes are pumping it up, but since you are a believer in fundamentals, please offer some fundamental reasons why equities are overvalued.
Thank you for your response. >>
The FED has become the fundamental
"65.5% of all stocks are overvalued, which is just above the 65% threshold needed to issue such a warning. In addition, fifteen of sixteen sectors are overvalued, thirteen by double-digit percentages." >>
This is a link to a blog or editorial piece. It contains no fundamental analysis. This article is precisely what I was hoping you would not link.
And to "attack" the author
Knowledge is the enemy of fear
<< <i>interesting conversations are a good thing.
So, does anyone think they will succeed in bubbling up housing again? >>
If you are hoping to sell your house at 2007 prices you will wait a long time. However, if you are looking to buy then housing is at its most affordable valuations in over a generation. Real estate in the USA is the cheapest on the planet.
Knowledge is the enemy of fear
<< <i>If you are hoping to sell your house at 2007 prices you will wait a long time. However, if you are looking to buy then housing is at its most affordable valuations in over a generation. Real estate in the USA is the cheapest on the planet. >>
But, is it going to get cheaper? This is what potential buyers need to determine.
<< <i>This is a link to a blog or editorial piece. It contains no fundamental analysis. This article is precisely what I was hoping you would not link. >>
Isn't analysis nothing more than opinion of what the charts or the data tell the person doing the analyzing? What makes one piece of analysis better than the other - the place of employment/credentials of the one giving the analysis? A lot of the bloggers you appear to take exception to are very educated in their field of analysis. I'm just trying to figure where you draw the line on determining valid analysis. Face it, most here are not qualified to read charts and sift through data - they turn to those trained to do so. Please, tell us who to trust.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
and while it is already over 4 years old, this bull is getting stronger.
If you don't consider earnings, and indeed the quality of those earnings - you are making a basic error.
I knew it would happen.
<< <i>The stock market climbs a wall of worry, and there's plenty of hand-wringing right now. My main consideration if I were in the market to be a buyer of stocks is simply - how do the P/Es of each index and each stock compare to their historical averages?
If you don't consider earnings, and indeed the quality of those earnings - you are making a basic error. >>
This market has had mostly non-believers all the way. Either we were going to slip back into recession, earnings were
going to fall back, inflation and interest rates were ready explode upward, etc. Here we are 50 months past the lows and the S&P is almost 250% of that low.
The Fed wants stocks higher and is keeping rates low to keep the wind at the market's back. The 10 year
Treasury note yields less than 2%. Meanwhile, there are hundreds of solid companies with dividends higher than
2% and regularly increasing those dividends.
There have been two great bull markets since 1940. The first from 1940 to early 1973, the second from
1982 to 2000. Both markets saw the Dow Jones Industrial Average increase over 1000%.
We are not even to the middle of the bull market of this generation and there are few believers. This market is going much higher.
<< <i>
<< <i>If you are hoping to sell your house at 2007 prices you will wait a long time. However, if you are looking to buy then housing is at its most affordable valuations in over a generation. Real estate in the USA is the cheapest on the planet. >>
But, is it going to get cheaper? This is what potential buyers need to determine.
<< <i>This is a link to a blog or editorial piece. It contains no fundamental analysis. This article is precisely what I was hoping you would not link. >>
Isn't analysis nothing more than opinion of what the charts or the data tell the person doing the analyzing? What makes one piece of analysis better than the other - the place of employment/credentials of the one giving the analysis? A lot of the bloggers you appear to take exception to are very educated in their field of analysis. I'm just trying to figure where you draw the line on determining valid analysis. Face it, most here are not qualified to read charts and sift through data - they turn to those trained to do so. Please, tell us who to trust. >>
I was looking for original thought from you. An "opinion" from you.
I asked for fundamental analysis, and you provided technical analysis that was misapplied. Having a bunch of letters after your name doesnt make you knowledgeable nor does it entitle you to a more valued opinion. Believe me, i know lots of folks with "credentials", as im sure you do as well.
I trust those who know how to properly assimilate data. And to reasonably and logically analyze this data. All too often people look at data with preconceived notion and tend to see what they want to see. I will follow anyone who shows me fact and logically presents an opinion supported by such fact. Unfortunately, I usually see misinformation supported by assumption or supposition.
Knowledge is the enemy of fear
And what is your interpretation of the market currently?
Knowledge is the enemy of fear
And what is your interpretation of the market currently?
I haven't considered getting into the market, so I haven't done that analysis. It's easy enough to do, but my objection to getting into the market is based on the problem that I have with easy money and the unsustainable level of debt.
I'm not a Ron Paul supporter, but I do believe that his assertion about mal-investment is accurate. There are so many distortions in the marketplace that what would normally be a straightforward financial analysis, is no longer either straightforward or analysis. It's anyone's guess, based on cronyism to the nth degree, and in my opinion it is highly unreliable.
In normal times, P/E vs. historical is a very reliable indicator based on actual company performance vs. the industry vs. other industries. Not so, anymore.
I knew it would happen.
My opinion is that based on current PE ratios, the market is fairly valued. I also think PMs are fairly valued. Real estate in general is fairly valued--some areas very cheap. The current environment in my opinion offers few values. Thats why I keep stacking dollar bills. Gotta build a war chest if you're gonna fight in a war.
Knowledge is the enemy of fear
Furthermore, companies have not yet felt the impact of the new tax structure forced by the unaffordable Obamacare Biometrics Inventory & Tax Act. When you couple the inevitable higher tax burden with the continued loss of full time jobs being replaced by 30 hr/per week part time jobs, I don't see much hope for growing our way out of the increasing debt load requirements.
Add to that any increase in interest rates and you have a major squeeze on individual and governmental budgets all the way up & down the line.
"Well Stanley, isn't that a fine kettle of fish!"
I knew it would happen.
The indices are largely made up of huge multi-national corporations that sell more product in foreign countries than in the USA. A rising dollar would hurt income, not "puff it up".
Knowledge is the enemy of fear
<< <i>how do the P/Es of each index and each stock compare to their historical averages?
And what is your interpretation of the market currently? >>
Two indicators are blinking. The Schiller PE10 is at the high end of its range. Also the Value Line Appreciation Estimate is at the low end. By no means are these original thoughts. People far more educated than me or 99.99% of those reading or posting on this forum, and in the case of the Value Line estimates, people that have done a ton more work, are pointing to a stock market near the high range in terms of valuation, the low range in terms of potential future price appreciation. With all that, these are slow moving indicators. Glacial for those that trade options or futures.
Then there is QE, which is distorting all the markets, propping up metals, bonds, real estate, and stocks. All the smoke from QE makes for a more difficult to read market. Plenty of folks believe that the end of QE will be bearish for the stock market. They might be totally off, because on the recent news, U.S. stocks accelerated higher on the hint of the end.
Don't they conduct overseas business in local currencies, and don't they all have currency hedging operations to keep from losing money due to currency fluctuations?
If a rising dollar hurts such income, that only exascerbates the tax shortfall problem, which further adds to the debt creation bubble. And as we know, there are no cuts in spending - only "reductions" in the rate of increased spending.
There will be a tipping point. There always is. I just can't tell you when it will be, or what the trigger will be. Too many liabilities and too many hidden triggers.
I knew it would happen.
That would still be 25 times its price 70 years ago.
(Which wouldn't necessarily be a windfall for gold stackers if the government decided to make gold a "national asset".) Aside from that, a currency re-valuation will cause no end of havoc in the tax code, along with every other type of financial analysis.
We have thousands of pages of new laws and tens of thousands of pages of new regulations that haven't even been implemented yet. And most of these new laws & regs are being written by 20-something staffers, fresh out of Law School with NO practical experience and NO idea what they are doing except to impress their new bosses and their ideologies.
"We can't say what's in the new law, until we pass it." Idiocy at the very highest levels. There's a whole lot of trouble coming down the pike, guys.
I knew it would happen.
Liberty: Parent of Science & Industry
I knew it would happen.