Silver is still in the midst of a massive consolidation (sideways) pattern that has persisted for more than a year. Im really not seeing much in the daily or weekly charts right now that leads me to believe this pattern will change anytime soon.
sorry guys, I just don't see how charts are an indicator of future movement. While they may indicate strong and weak benchmarks as well as trends, I fail to understand how they can be used forecast what buyers and sellers will be thinking later. Everything can change 180 degrees tomorrow with a change in fundamentals. Guess I need a good chart on fundamentals.
"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>sorry guys, I just don't see how charts are an indicator of future movement. While they may indicate strong and weak benchmarks as well as trends, I fail to understand how they can be used forecast what buyers and sellers will be thinking later. Everything can change 180 degrees tomorrow with a change in fundamentals. Guess I need a good chart on fundamentals. >>
You are not alone in that opinion is why the majority of people fail at investing. Charts are a picture of investor sentiment and of course sentiment can do a 180. But at any given time, sentiment--which is a direct opinion of fundamentals--is expressly and definatively represented by charts. Im not saying that you will fail in your silver investment--perhaps quite the opposite, but charts are a very clear indication of where investors put their money. If you want to only at fundamentals, then you most likely will have poor or average investment results. Fundamentals would not have prevented you from losing 40% on your money in silver if purchased 18 months ago, but the charts would have.
Fundamentals are HIGHLY affected by price. If you dont understand this relationship, then failure and loss of investment will be the result--ALWAYS.
charts tell me the history of sentiment. Price tells me current sentiment. Neither tell me tomorrow's sentiment or tomorrow's price.
<< <i>Fundamentals are HIGHLY affected by price. If you dont understand this relationship, then failure and loss of investment will be the result--ALWAYS >>
gotta throw the BS flag on that on that one. Price is affected by fundamentals (among other things), fundamentals are independent from price. This is what allows something to be over or underpriced.
the value I see in charts are (1) trend (direction of sentiment) (2) price reaction to specific events (what does price do when the dollar strengthens, when FED injects, when interest rates rise, etc.)
Here's a chart that tells me what I need to know. From this chart I can clearly see cause and affect - as the world prints, gold climbs. Note the gold price dips. Someone charting price alone could easily have said "uh oh, time to sell." The affect of continued money creation tells the fundamental investor to add to his position on those dips.
"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
Charts can provide you with enough information to give you a significant edge such that more or your trades are winners than losers. And that's about all you need to know. They can help you with timing for when to enter or leave a trade. That extra edge helps make your trading more profitable. So you don't have to believe in it, but these basic facts allow many to make good money in the markets.
Good luck with buying "quality" companies on fundamentals and wondering why the stock languishes when it "should" be going up.
<< <i>Good luck with buying "quality" companies on fundamentals and wondering why the stock languishes when it "should" be going up. >>
Why even toil looking for quality companies. Economic conditions and monetary policy have made commodities, bonds and indexes an easy, predictable play. Trading tools such as ETFs provide hedging and inverse opportunites and enable one to profit in either price direction.
Increased government interference in markets, finance, industry and labor now allows for too many unpredictable variables to reverse a company's "quality." The days of buying "quality" and holding will not be returning any time soon.
"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>Good luck with buying "quality" companies on fundamentals and wondering why the stock languishes when it "should" be going up. >>
Why even toil looking for quality companies. Economic conditions and monetary policy have made commodities, bonds and indexes an easy, predictable play. Trading tools such as ETFs provide hedging and inverse opportunites and enable one to profit in either price direction.
Increased government interference in markets, finance, industry and labor now allows for too many unpredictable variables to reverse a company's "quality." The days of buying "quality" and holding will not be returning any time soon. >>
This may or may not be true. Knowing how to read financial statements enables one to make sound investments in many companies. Study the methods W.Buffett employs to pick stocks.
"Poets are the unacknowledged legislators of the world." PBShelley
<< <i>Good luck with buying "quality" companies on fundamentals and wondering why the stock languishes when it "should" be going up. >>
Why even toil looking for quality companies. Economic conditions and monetary policy have made commodities, bonds and indexes an easy, predictable play. Trading tools such as ETFs provide hedging and inverse opportunites and enable one to profit in either price direction.
Increased government interference in markets, finance, industry and labor now allows for too many unpredictable variables to reverse a company's "quality." The days of buying "quality" and holding will not be returning any time soon. >>
This may or may not be true. Knowing how to read financial statements enables one to make sound investments in many companies. Study the methods W.Buffett employs to pick stocks. >>
I have an associates in accounting. Reading financial statements is no problem; trusting them is. Financial statements have become no more reliable than bank balance sheets. Buffett's methods of picking metals are much easier to study.
My whole point is FED policy and runaway deficits have made profiting with investments a whole lot easier. It's a simple matter of choosing non-corporate investments that benefit from these actions.
"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 may or may not be true. Knowing how to read financial statements enables one to make sound investments in many companies. Study the methods W.Buffett employs to pick stocks.
It is instructive to note that BH stock has lagged well behind the price of gold and silver the past 10 yrs. WB would have done much better holding gold. His ability to pick stocks (or metals) seems to have some gaping holes in it.
This chart may give you the warm fuzzy's, but it screams unsustainability to me. Of course it can go higher, but this increases the instability. In other words a bubble forms, and bubbles most always result in a 70% or greater loss of value. Are you deft enough to sell at the top? Will there be buyers at the top? Will you be able to get the price you want? Will you have time to get the price you want? Will your buyer be trustworthy?
Also note in your chart the time period from 1984 to 2000 when central bank reserves quadrupled while the price of gold traded sideways or declined. The same could easily happen again.
Cohodk, your logic fails a little on this one. If I had a chart of credit card debt, believe me the line could keep going and going until I could get no more credit cards. It is quite sustainable. At some point, I would probably become unable to pay off the credit cards and I would not be issued any more credit cards at which point the line would level off as it would increase only by the amount of interest charged. The ONLY way that chart capitulates is when I declare bankruptcy and the debt gets forgiven. IF that happens with the global monetary base, we're all in trouble, and gold will probably soar in the face of a global monetary system collapse.
This chart may give you the warm fuzzy's, but it screams unsustainability to me. Of course it can go higher, but this increases the instability. In other words a bubble forms, and bubbles most always result in a 70% or greater loss of value. Are you deft enough to sell at the top? Will there be buyers at the top? Will you be able to get the price you want? Will you have time to get the price you want? Will your buyer be trustworthy?
No warm fuzzies here as the chart (ie money supply, treasuries, and debt) rising exponentially for so long is clearly unsustainable. Eventually, the system has to break or be rebalanced. FDR found a way to start doing that by revaluing gold by 70% in 1934. Gold is simply mirroring the unsustainable debt. When the system blows up there will be a period when people will want anything but paper notes and IOU's. Our bubble now has 99 yrs under its belt. It appears that status quo will be maintained until breakage occurs.
Also note in your chart the time period from 1984 to 2000 when central bank reserves quadrupled while the price of gold traded sideways or declined. The same could easily happen again.
That was my point in an earlier post. That 16 years of monetary abuse during a commodities bear market was never re-balanced or adjusted out of the system. That rebalacing has been going on since 2001. Those rebalancings usually don't occur during stock market bulls. Who wants to pull away the punch bowl and not get re-elected? The full gold supression mode was instituted under Rubin, Summers, and Co. starting in the mid-1990's. The last thing they needed was gold starting to pick up steam during that 1995-2000 go-go era (strong dollar policy, gold carry trade, UK and other central bank gold sales, etc.). We won't have another period like 1984-2000 until we finish this current commodities bull/SM bear cycle in 3-7 years. And at that time I would agree that avoiding many commodities (ie PMs) will probably be a wise thing. It's also possible that during that time gold is selected as one part of a world currency basket such that it's price stays relatively high vs. it's future peak price (ie no 1980's 65% crash). And I suspect that steady state price will be higher than today's price.
<< <i>This chart may give you the warm fuzzy's, but it screams unsustainability to me. Of course it can go higher, but this increases the instability. In other words a bubble forms, and bubbles most always result in a 70% or greater loss of value. Are you deft enough to sell at the top? Will there be buyers at the top? Will you be able to get the price you want? Will you have time to get the price you want? Will your buyer be trustworthy?
No warm fuzzies here as the chart (ie money supply, treasuries, and debt) rising exponentially for so long is clearly unsustainable. Eventually, the system has to break or be rebalanced. FDR found a way to start doing that by revaluing gold by 70% in 1934. Gold is simply mirroring the unsustainable debt. When the system blows up there will be a period when people will want anything but paper notes and IOU's. Our bubble now has 99 yrs under its belt. It appears that status quo will be maintained until breakage occurs.
Also note in your chart the time period from 1984 to 2000 when central bank reserves quadrupled while the price of gold traded sideways or declined. The same could easily happen again.
>>
The chart is much too narrow. You can't get a fair depiction of price movement over 26 years in a 5 inch chart. If you widen it out, it doesn't look exponential. The key to me though is price escalation. The trend is your friend.
"Poets are the unacknowledged legislators of the world." PBShelley
<< <i>Cohodk, your logic fails a little on this one. If I had a chart of credit card debt, believe me the line could keep going and going until I could get no more credit cards. It is quite sustainable. At some point, I would probably become unable to pay off the credit cards and I would not be issued any more credit cards at which point the line would level off as it would increase only by the amount of interest charged. The ONLY way that chart capitulates is when I declare bankruptcy and the debt gets forgiven. IF that happens with the global monetary base, we're all in trouble, and gold will probably soar in the face of a global monetary system collapse. >>
Not quite. What if your credit card companies are monitoring your debt and decide to lower your credit limit before you max out? Or what if they demand an increase in monthly payment?
<< <i>This chart may give you the warm fuzzy's, but it screams unsustainability to me. Of course it can go higher, but this increases the instability. In other words a bubble forms, and bubbles most always result in a 70% or greater loss of value. Are you deft enough to sell at the top? Will there be buyers at the top? Will you be able to get the price you want? Will you have time to get the price you want? Will your buyer be trustworthy?
No warm fuzzies here as the chart (ie money supply, treasuries, and debt) rising exponentially for so long is clearly unsustainable. Eventually, the system has to break or be rebalanced. FDR found a way to start doing that by revaluing gold by 70% in 1934. Gold is simply mirroring the unsustainable debt. When the system blows up there will be a period when people will want anything but paper notes and IOU's. Our bubble now has 99 yrs under its belt. It appears that status quo will be maintained until breakage occurs.
Also note in your chart the time period from 1984 to 2000 when central bank reserves quadrupled while the price of gold traded sideways or declined. The same could easily happen again.
>>
The chart is much too narrow. You can't get a fair depiction of price movement over 26 years in a 5 inch chart. If you widen it out, it doesn't look exponential. The key to me though is price escalation. The trend is your friend. >>
Look has nothing to do with it. An 8 fold increase in 10 years is parabolic.
<< <i>Cohodk, your logic fails a little on this one. If I had a chart of credit card debt, believe me the line could keep going and going until I could get no more credit cards. It is quite sustainable. At some point, I would probably become unable to pay off the credit cards and I would not be issued any more credit cards at which point the line would level off as it would increase only by the amount of interest charged. The ONLY way that chart capitulates is when I declare bankruptcy and the debt gets forgiven. IF that happens with the global monetary base, we're all in trouble, and gold will probably soar in the face of a global monetary system collapse. >>
Not quite. What if your credit card companies are monitoring your debt and decide to lower your credit limit before you max out? Or what if they demand an increase in monthly payment?
ALL parabolas eventually break. ALL of them. >>
You reinforced my point. I can keep the chart going as long as I can borrow more money. The US can keep the chart going as long as it can borrow more money.
<< <i>I roughly agree with you Roadrunner, but think the revaluation will be closer to $1000. >>
Thanks. I also agree with you on the parabolic nature of the gold and debt charts. One can clearly see that every few years the slope of the curve steepens as a new intermediate trend takes it to a higher level. Don't agree in the $1,000 number as that only takes it back to about the 1980 high. I could see it coming back to an inflation adjusted 1980 level or something on the order of $2000. It currently costs around $1200-$1300 "all-in" to mine gold. And very few gold companies are making money hand over fist. There are hundreds, if not thousands of juniors that are being squeezed out of the markets because of lack of funding. Those guys are normally the supply chain to keep the big gold players restocked. The big boyz are now scaling back projects and questioning the expansions they tried from 2009-2011. This isn't going to help to bring supply to the market. The "all-in" price for now is keeping a floor under the price of gold. If it goes lower than that then production will fall off the cliff. The cost to mine hasn't been decreasing with the past 5 yrs of recession but increasing. Cash costs alone are 2X to 3X what they were 5 yrs ago and ore grades have fallen by 50% or more over the past 10 yrs. The easy gold is long gone, and very few jurisdictions want you mining gold in their back yard....unless you give them the majority of the profits but take on all the environmental costs yourself.
<< <i>You reinforced my point. I can keep the chart going as long as I can borrow more money. The US can keep the chart going as long as it can borrow more money. >>
It's line of credit with the FED will be as high as the US says it will be.
"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
Look has nothing to do with it. An 8 fold increase in 10 years is parabolic.
What the heck are "bank reserves" anyhow? They aren't really reserves (as if the bank itself actually put money aside). It's all creative accounting. Anyway, if bank reserves can increase 4X in 10 years, does that mean that economic activity has quadrupled in 10 years? Nope.
They can issue a new Rentenmark whenever the heck they feel like it. They can't issue a new ounce of gold quite as easily.
Q: Are You Printing Money? Bernanke: Not Literally
<< <i>You reinforced my point. I can keep the chart going as long as I can borrow more money. The US can keep the chart going as long as it can borrow more money. >>
It's line of credit with the FED will be as high as the US says it will be. >>
How does the Zimbabwe capital chart compare to this one? Or the Greek one? Our debt to asset ratio is staggeringly worse.
"Poets are the unacknowledged legislators of the world." PBShelley
<< <i>You reinforced my point. I can keep the chart going as long as I can borrow more money. The US can keep the chart going as long as it can borrow more money. >>
It's line of credit with the FED will be as high as the US says it will be. >>
How does the Zimbabwe capital chart compare to this one? Or the Greek one? Our debt to asset ratio is staggeringly worse. >>
<< <i>Cohodk, your logic fails a little on this one. If I had a chart of credit card debt, believe me the line could keep going and going until I could get no more credit cards. It is quite sustainable. At some point, I would probably become unable to pay off the credit cards and I would not be issued any more credit cards at which point the line would level off as it would increase only by the amount of interest charged. The ONLY way that chart capitulates is when I declare bankruptcy and the debt gets forgiven. IF that happens with the global monetary base, we're all in trouble, and gold will probably soar in the face of a global monetary system collapse. >>
Not quite. What if your credit card companies are monitoring your debt and decide to lower your credit limit before you max out? Or what if they demand an increase in monthly payment?
ALL parabolas eventually break. ALL of them. >>
You reinforced my point. I can keep the chart going as long as I can borrow more money. The US can keep the chart going as long as it can borrow more money. >>
<< <i>You reinforced my point. I can keep the chart going as long as I can borrow more money. The US can keep the chart going as long as it can borrow more money. >>
<< <i>As long as it can borrow cheap money. >>
when the US can no longer borrow cheap money selling bonds to the FED, it will resume printing cheap money itself without the aid of the FED. I'm surprised they haven't figured this out already.
"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>You reinforced my point. I can keep the chart going as long as I can borrow more money. The US can keep the chart going as long as it can borrow more money. >>
<< <i>As long as it can borrow cheap money. >>
when the US can no longer borrow cheap money selling bonds to the FED, it will resume printing cheap money itself without the aid of the FED. I'm surprised they haven't figured this out already. >>
They will sell bonds to YOU and I through our retirement plans, just as the Japanese did. Could go on for decades.
<< <i> when the US can no longer borrow cheap money selling bonds to the FED, it will resume printing cheap money itself without the aid of the FED. I'm surprised they haven't figured this out already. >>
I'm surprised about that too. The big banks figured out how to create their own money back in 2000. They've been at it ever since without regulation and w/o constraints.
<< <i>They will sell bonds to YOU and I through our retirement plans, just as the Japanese did. Could go on for decades. >>
they don't need to borrow from anyone if they crank up their own printing press. Might as well, current method is also destroying dollar value. They can print US notes as easy as they can print bonds.
"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
Comments
Knowledge is the enemy of fear
"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>sorry guys, I just don't see how charts are an indicator of future movement. While they may indicate strong and weak benchmarks as well as trends, I fail to understand how they can be used forecast what buyers and sellers will be thinking later. Everything can change 180 degrees tomorrow with a change in fundamentals. Guess I need a good chart on fundamentals. >>
You are not alone in that opinion is why the majority of people fail at investing. Charts are a picture of investor sentiment and of course sentiment can do a 180. But at any given time, sentiment--which is a direct opinion of fundamentals--is expressly and definatively represented by charts. Im not saying that you will fail in your silver investment--perhaps quite the opposite, but charts are a very clear indication of where investors put their money. If you want to only at fundamentals, then you most likely will have poor or average investment results. Fundamentals would not have prevented you from losing 40% on your money in silver if purchased 18 months ago, but the charts would have.
Fundamentals are HIGHLY affected by price. If you dont understand this relationship, then failure and loss of investment will be the result--ALWAYS.
Knowledge is the enemy of fear
<< <i>Fundamentals are HIGHLY affected by price. If you dont understand this relationship, then failure and loss of investment will be the result--ALWAYS >>
gotta throw the BS flag on that on that one. Price is affected by fundamentals (among other things), fundamentals are independent from price. This is what allows something to be over or underpriced.
the value I see in charts are
(1) trend (direction of sentiment)
(2) price reaction to specific events (what does price do when the dollar strengthens, when FED injects, when interest rates rise, etc.)
Here's a chart that tells me what I need to know. From this chart I can clearly see cause and affect - as the world prints, gold climbs. Note the gold price dips. Someone charting price alone could easily have said "uh oh, time to sell." The affect of continued money creation tells the fundamental investor to add to his position on those dips.
"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
Good luck with buying "quality" companies on fundamentals and wondering why the stock languishes when it "should" be going up.
<< <i>Good luck with buying "quality" companies on fundamentals and wondering why the stock languishes when it "should" be going up. >>
Why even toil looking for quality companies. Economic conditions and monetary policy have made commodities, bonds and indexes an easy, predictable play. Trading tools such as ETFs provide hedging and inverse opportunites and enable one to profit in either price direction.
Increased government interference in markets, finance, industry and labor now allows for too many unpredictable variables to reverse a company's "quality." The days of buying "quality" and holding will not be returning any time soon.
"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>Good luck with buying "quality" companies on fundamentals and wondering why the stock languishes when it "should" be going up. >>
Why even toil looking for quality companies. Economic conditions and monetary policy have made commodities, bonds and indexes an easy, predictable play. Trading tools such as ETFs provide hedging and inverse opportunites and enable one to profit in either price direction.
Increased government interference in markets, finance, industry and labor now allows for too many unpredictable variables to reverse a company's "quality." The days of buying "quality" and holding will not be returning any time soon. >>
This may or may not be true. Knowing how to read financial statements enables one to make sound investments in many companies. Study the methods W.Buffett employs to pick stocks.
<< <i>
<< <i>
<< <i>Good luck with buying "quality" companies on fundamentals and wondering why the stock languishes when it "should" be going up. >>
Why even toil looking for quality companies. Economic conditions and monetary policy have made commodities, bonds and indexes an easy, predictable play. Trading tools such as ETFs provide hedging and inverse opportunites and enable one to profit in either price direction.
Increased government interference in markets, finance, industry and labor now allows for too many unpredictable variables to reverse a company's "quality." The days of buying "quality" and holding will not be returning any time soon. >>
This may or may not be true. Knowing how to read financial statements enables one to make sound investments in many companies. Study the methods W.Buffett employs to pick stocks. >>
I have an associates in accounting. Reading financial statements is no problem; trusting them is. Financial statements have become no more reliable than bank balance sheets. Buffett's methods of picking metals are much easier to study.
My whole point is FED policy and runaway deficits have made profiting with investments a whole lot easier. It's a simple matter of choosing non-corporate investments that benefit from these actions.
"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 is instructive to note that BH stock has lagged well behind the price of gold and silver the past 10 yrs. WB would have done much better holding gold.
His ability to pick stocks (or metals) seems to have some gaping holes in it.
<< <i>
This chart may give you the warm fuzzy's, but it screams unsustainability to me. Of course it can go higher, but this increases the instability. In other words a bubble forms, and bubbles most always result in a 70% or greater loss of value. Are you deft enough to sell at the top? Will there be buyers at the top? Will you be able to get the price you want? Will you have time to get the price you want? Will your buyer be trustworthy?
Also note in your chart the time period from 1984 to 2000 when central bank reserves quadrupled while the price of gold traded sideways or declined. The same could easily happen again.
Knowledge is the enemy of fear
No warm fuzzies here as the chart (ie money supply, treasuries, and debt) rising exponentially for so long is clearly unsustainable. Eventually, the system has to break or be rebalanced. FDR found a way to start doing that by revaluing gold by 70% in 1934. Gold is simply mirroring the unsustainable debt. When the system blows up there will be a period when people will want anything but paper notes and IOU's. Our bubble now has 99 yrs under its belt. It appears that status quo will be maintained until breakage occurs.
Also note in your chart the time period from 1984 to 2000 when central bank reserves quadrupled while the price of gold traded sideways or declined. The same could easily happen again.
That was my point in an earlier post. That 16 years of monetary abuse during a commodities bear market was never re-balanced or adjusted out of the system. That rebalacing has
been going on since 2001. Those rebalancings usually don't occur during stock market bulls. Who wants to pull away the punch bowl and not get re-elected? The full gold supression mode was instituted under Rubin, Summers, and Co. starting in the mid-1990's. The last thing they needed was gold starting to pick up steam during that 1995-2000 go-go era (strong dollar policy, gold carry trade, UK and other central bank gold sales, etc.). We won't have another period like 1984-2000 until we finish this current commodities bull/SM bear cycle in 3-7 years. And at that time I would agree that avoiding many commodities (ie PMs) will probably be a wise thing. It's also possible that during that time gold is selected as one part of a world currency basket such that it's price stays relatively high vs. it's future peak price (ie no 1980's 65% crash). And I suspect that steady state price will be higher than today's price.
<< <i>This chart may give you the warm fuzzy's, but it screams unsustainability to me. Of course it can go higher, but this increases the instability. In other words a bubble forms, and bubbles most always result in a 70% or greater loss of value. Are you deft enough to sell at the top? Will there be buyers at the top? Will you be able to get the price you want? Will you have time to get the price you want? Will your buyer be trustworthy?
No warm fuzzies here as the chart (ie money supply, treasuries, and debt) rising exponentially for so long is clearly unsustainable. Eventually, the system has to break or be rebalanced. FDR found a way to start doing that by revaluing gold by 70% in 1934. Gold is simply mirroring the unsustainable debt. When the system blows up there will be a period when people will want anything but paper notes and IOU's. Our bubble now has 99 yrs under its belt. It appears that status quo will be maintained until breakage occurs.
Also note in your chart the time period from 1984 to 2000 when central bank reserves quadrupled while the price of gold traded sideways or declined. The same could easily happen again.
>>
The chart is much too narrow. You can't get a fair depiction of price movement over 26 years in a 5 inch chart. If you widen it out, it doesn't look exponential. The key to me though is price escalation. The trend is your friend.
<< <i>Cohodk, your logic fails a little on this one. If I had a chart of credit card debt, believe me the line could keep going and going until I could get no more credit cards. It is quite sustainable. At some point, I would probably become unable to pay off the credit cards and I would not be issued any more credit cards at which point the line would level off as it would increase only by the amount of interest charged. The ONLY way that chart capitulates is when I declare bankruptcy and the debt gets forgiven. IF that happens with the global monetary base, we're all in trouble, and gold will probably soar in the face of a global monetary system collapse. >>
Not quite. What if your credit card companies are monitoring your debt and decide to lower your credit limit before you max out? Or what if they demand an increase in monthly payment?
ALL parabolas eventually break. ALL of them.
Knowledge is the enemy of fear
<< <i>
<< <i>This chart may give you the warm fuzzy's, but it screams unsustainability to me. Of course it can go higher, but this increases the instability. In other words a bubble forms, and bubbles most always result in a 70% or greater loss of value. Are you deft enough to sell at the top? Will there be buyers at the top? Will you be able to get the price you want? Will you have time to get the price you want? Will your buyer be trustworthy?
No warm fuzzies here as the chart (ie money supply, treasuries, and debt) rising exponentially for so long is clearly unsustainable. Eventually, the system has to break or be rebalanced. FDR found a way to start doing that by revaluing gold by 70% in 1934. Gold is simply mirroring the unsustainable debt. When the system blows up there will be a period when people will want anything but paper notes and IOU's. Our bubble now has 99 yrs under its belt. It appears that status quo will be maintained until breakage occurs.
Also note in your chart the time period from 1984 to 2000 when central bank reserves quadrupled while the price of gold traded sideways or declined. The same could easily happen again.
>>
The chart is much too narrow. You can't get a fair depiction of price movement over 26 years in a 5 inch chart. If you widen it out, it doesn't look exponential. The key to me though is price escalation. The trend is your friend. >>
Look has nothing to do with it. An 8 fold increase in 10 years is parabolic.
Knowledge is the enemy of fear
Knowledge is the enemy of fear
<< <i>
<< <i>Cohodk, your logic fails a little on this one. If I had a chart of credit card debt, believe me the line could keep going and going until I could get no more credit cards. It is quite sustainable. At some point, I would probably become unable to pay off the credit cards and I would not be issued any more credit cards at which point the line would level off as it would increase only by the amount of interest charged. The ONLY way that chart capitulates is when I declare bankruptcy and the debt gets forgiven. IF that happens with the global monetary base, we're all in trouble, and gold will probably soar in the face of a global monetary system collapse. >>
Not quite. What if your credit card companies are monitoring your debt and decide to lower your credit limit before you max out? Or what if they demand an increase in monthly payment?
ALL parabolas eventually break. ALL of them. >>
You reinforced my point. I can keep the chart going as long as I can borrow more money. The US can keep the chart going as long as it can borrow more money.
<< <i>I roughly agree with you Roadrunner, but think the revaluation will be closer to $1000. >>
Thanks. I also agree with you on the parabolic nature of the gold and debt charts. One can clearly see that every few years the slope of the curve steepens as a new
intermediate trend takes it to a higher level. Don't agree in the $1,000 number as that only takes it back to about the 1980 high. I could see it coming back to an inflation
adjusted 1980 level or something on the order of $2000. It currently costs around $1200-$1300 "all-in" to mine gold. And very few gold companies are making money hand
over fist. There are hundreds, if not thousands of juniors that are being squeezed out of the markets because of lack of funding. Those guys are normally the supply chain to keep
the big gold players restocked. The big boyz are now scaling back projects and questioning the expansions they tried from 2009-2011. This isn't going to help to bring supply to the
market. The "all-in" price for now is keeping a floor under the price of gold. If it goes lower than that then production will fall off the cliff. The cost to mine hasn't been decreasing with
the past 5 yrs of recession but increasing. Cash costs alone are 2X to 3X what they were 5 yrs ago and ore grades have fallen by 50% or more over the past 10 yrs. The easy gold is
long gone, and very few jurisdictions want you mining gold in their back yard....unless you give them the majority of the profits but take on all the environmental costs yourself.
<< <i>Look has nothing to do with it. An 8 fold increase in 10 years is parabolic. >>
apple chart was quite nice for 10yrs...$3.50 to $700, 200 banger & still kickin...
<< <i>You reinforced my point. I can keep the chart going as long as I can borrow more money. The US can keep the chart going as long as it can borrow more money. >>
It's line of credit with the FED will be as high as the US says it will be.
"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
What the heck are "bank reserves" anyhow? They aren't really reserves (as if the bank itself actually put money aside). It's all creative accounting. Anyway, if bank reserves can increase 4X in 10 years, does that mean that economic activity has quadrupled in 10 years? Nope.
They can issue a new Rentenmark whenever the heck they feel like it. They can't issue a new ounce of gold quite as easily.
I knew it would happen.
<< <i>
<< <i>You reinforced my point. I can keep the chart going as long as I can borrow more money. The US can keep the chart going as long as it can borrow more money. >>
It's line of credit with the FED will be as high as the US says it will be. >>
How does the Zimbabwe capital chart compare to this one? Or the Greek one?
Our debt to asset ratio is staggeringly worse.
<< <i>
<< <i>
<< <i>You reinforced my point. I can keep the chart going as long as I can borrow more money. The US can keep the chart going as long as it can borrow more money. >>
It's line of credit with the FED will be as high as the US says it will be. >>
How does the Zimbabwe capital chart compare to this one? Or the Greek one?
Our debt to asset ratio is staggeringly worse. >>
Yep. Printing works until it doesn't.
<< <i>
<< <i>
<< <i>Cohodk, your logic fails a little on this one. If I had a chart of credit card debt, believe me the line could keep going and going until I could get no more credit cards. It is quite sustainable. At some point, I would probably become unable to pay off the credit cards and I would not be issued any more credit cards at which point the line would level off as it would increase only by the amount of interest charged. The ONLY way that chart capitulates is when I declare bankruptcy and the debt gets forgiven. IF that happens with the global monetary base, we're all in trouble, and gold will probably soar in the face of a global monetary system collapse. >>
Not quite. What if your credit card companies are monitoring your debt and decide to lower your credit limit before you max out? Or what if they demand an increase in monthly payment?
ALL parabolas eventually break. ALL of them. >>
You reinforced my point. I can keep the chart going as long as I can borrow more money. The US can keep the chart going as long as it can borrow more money. >>
As long as it can borrow cheap money.
Knowledge is the enemy of fear
<< <i>You reinforced my point. I can keep the chart going as long as I can borrow more money. The US can keep the chart going as long as it can borrow more money. >>
<< <i>As long as it can borrow cheap money. >>
when the US can no longer borrow cheap money selling bonds to the FED, it will resume printing cheap money itself without the aid of the FED. I'm surprised they haven't figured this out already.
"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>You reinforced my point. I can keep the chart going as long as I can borrow more money. The US can keep the chart going as long as it can borrow more money. >>
<< <i>As long as it can borrow cheap money. >>
when the US can no longer borrow cheap money selling bonds to the FED, it will resume printing cheap money itself without the aid of the FED. I'm surprised they haven't figured this out already. >>
They will sell bonds to YOU and I through our retirement plans, just as the Japanese did. Could go on for decades.
Knowledge is the enemy of fear
<< <i> when the US can no longer borrow cheap money selling bonds to the FED, it will resume printing cheap money itself without the aid of the FED.
I'm surprised they haven't figured this out already. >>
I'm surprised about that too. The big banks figured out how to create their own money back in 2000. They've been at it ever since without regulation and w/o constraints.
<< <i>They will sell bonds to YOU and I through our retirement plans, just as the Japanese did. Could go on for decades. >>
they don't need to borrow from anyone if they crank up their own printing press. Might as well, current method is also destroying dollar value. They can print US notes as easy as they can print bonds.
"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