Gold seems to rise slowly and fall quickly

Steve27

DrBuster

Isn't today the end of the London fix? Or is that just silver?

edit: whoops, August 14 is it.

MGLICKER

Except whit it rises quickly and falls slowly.

All markets are controlled now by fewer and larger hands, so the moves become much more dramatic.

derryb

slow methodical buying, quick big player dump. Wash, rinse, repeat.

Some days peanuts, some days empty shells.

derryb

While gold futures saw today's biggest drop in 2014 (2% for the day) the ETF GLD saw it's largest inflow since Aug. 2011. This is very positive for those who hold gold or the ETF GLD. Anything positive for gold is also positive for other PMs and for PM miners. The fact that PMs are among the very few assets that benefit from a worldwide zero interest policy, results in them being among the most desired when ZIRP's chickens come home to roost.

David Stockman Sees "Signs Of The Bubble's Last Days:

" At the end of the day, the Fed and its fellow traveling central banks have systematically dismantled the natural stability mechanisms of financial markets. Accordingly, financial markets have now become dangerous casinos in which speculative bubbles are guaranteed to build to dangerous extremes as the central bank driven financial inflation gathers force. That’s where we are now. Again."

TwoSides2aCoin

The only constant is the melting point. The interesting question is: Who can predict the cost of energy to maintain it's liquid state ? In a solid state it just sits there; technically speaking.

Money often works harder on the same platform from which it comes: On paper. Wealth shifts and money grows. It always takes advantage of easy money.

jmski52

That's a great little classical analysis and summation by Stockman.

Question for cohodk: what makes you think that gold is a buy now, and that a major deflation isn't just around the corner? In my mind, a major deflation is about to scare the pants off the Fed, resulting in a massive injection.

Which then sets up a potential hyper event.

If we get to that point, will they exercise capital controls and/or put restrictions on precious metals? If that does happen, what's the next best safety valve?

cohodk

: what makes you think that gold is a buy now, and that a major deflation isn't just around the corner? In my mind, a major deflation is about to scare the pants off the Fed, resulting in a massive injection.

Which then sets up a potential hyper event.


Maybe. Deflation as well as inflation is a concern. Deflation and rising gold prices may not be mutually exclusive. Wait till you see my pic in this weeks porn thread. How many times have i said "the best cure for high prices is high prices"? According to this forum prices are getting to the point where no one will be able to afford anything.

Historically Govts have printed money to combat rising prices, so it will be interesting to see what the printing of money will do to falling prices. All previous hyperinflationary events have been caused by supply/demand constraints and the printing of money was a consequence. We have not witnessed inflation where there have not been such constraints. Do we have too few factories, not enough workers, insufficient infrastructure? Not really. So it will be interesting to see if inflation can arise from the lack of imbalances from which it has always been created in the past.

derryb

If nothing else, the FED has proven the last five years that liquidity injections do not correct what is a fundamental debt problem. Until debt is satisfied (the opposite is occuring) the only thing that will work is to give the new cash directly to the debtors to be used only to extinguish debt. Of course that will free them up to incur new debt and we will be right back where we started. Moral of the story is to let the markets determine who profits, loses or goes bankrupt and under no circumstances let politicans (with offers of financial aid) or economic "planners" (with interest rate and money supply control) fiddle with a recipe that has worked for centuries.

jmski52

All previous hyperinflationary events have been caused by supply/demand constraints and the printing of money was a consequence. We have not witnessed inflation where there have not been such constraints. Do we have too few factories, not enough workers, insufficient infrastructure? Not really. So it will be interesting to see if inflation can arise from the lack of imbalances from which it has always been created in the past.

The imbalances are happening on various levels. We have too much debt and way too many unfunded liabilities, both of which will represent a drain on any future business expansion, and a shrinking tax base which also implies an aggressively increasing tax structure across the board in the not-too-distant future. Business can't operate if the profitability isn't there, and that is the ultimate supply logjam. We haven't had such a hostile environment towards business and personal savings since the late '70s, and the trends haven't even begun to reverse direction. Obamacare is another tax on the economy that was presented as a benefit but which has already turned out to be a job-killer.

On the demand side, we have fewer wage earners in the higher tiers of various professions as many of the manufacturing operations have been farmed out to India and China. We have part timers who are so brilliant that they should be running huge conglomerates instead of making eight bucks an hour at the age of 23, and welfare recipients who are being incentivized by the ease of getting freebies from the government. None of this is positive for demand.

Lastly, I'm getting a sneaking suspicion that we are grossly overpaying not just for military hardware & contracts, but also for medical technology and consumer high tech. All of these products & services with extremely high built-in cost structures are vulnerable to a financial collapse if the financial pyramid isn't sustainable. We're paying for military-style police vehicles but for some reason, some of the most effective antibiotics have become a scarce commodity at any price. An i-phone doesn't contain several hundred bucks worth of materials, but the salaries & bonuses for Apple's infrastructure have to be supported by the high prices. The infrastructure for cable or satellite is well-amortized by now, but the prices keep going up while the quality of the programming continues to deteriorate.

Lots of mis-allocation of resources. It gets expensive after awhile. I wonder just how long a finance-based paradigm can last without real productivity and real efficiencies.

cohodk

We have part timers who are so brilliant that they should be running huge conglomerates instead of making eight bucks an hour at the age of 23,

LMAO!!!


Otherwise, you are making a strong argument for deflation.