Baby boomers will move the industry's main client goal from one from accumulation -- investing in assets that create the most value over time -- to one of "decumulation," said Frank Porcelli, who heads U.S. retail for BlackRock, at the Reuters Global Wealth Management Summit in Boston.
Anyone follow that story I linked last thread? The guy states that banking has yet to see it's peak losses, and that the FDIC will have to come up with upwards of $400B to cover them.
dude. i just watched Sean Hannity's interview with Michael Moore (don't ask). I'm sure this is the fault of the Community Reinvestment Act. The government, Fannie, and Freddie MADE banks lend to these poor corporations (who often have limited liability).
If I am slow to pay my income taxes, the government kicks my butt. If banks are slow to recognize losses, the government raises my income taxes, thereby again kicking my butt. I like the consistent treatment.
Ahh but with the "damned if you don't" option you can always fall back on that lame excuse of limited and circumscribed powers as defined in the Constitution.
Anyone follow that story I linked last thread? The guy states that banking has yet to see it's peak losses, and that the FDIC will have to come up with upwards of $400B to cover them.
$400B is probably optimistic. Treasury is gonna own FDIC too.
That one comes after being hit by lightening... they know who controls the vote & the chances of them facing a real audit are less than getting hit by lightening.
I worked for a bank the was sued for red lining practices. To settle they agreed to provide lending in the aggrieved sections of town.
Less than five years later they were sued again for predatory lending by the same organizations.
There are plenty of tent cities all over the place. Homeless missions are full to capacity around here. Plenty of them living in the parks, behind bars and grocery stores. I have also seen an influx of drifters just looking for work wherever they stop, living out of cars or cheap motels.
i agree that the CRA is a political nightmare and often benefitted its advocates more than its intended targets, but IMO, attributing the CAUSE of the financial crisis to it may be a little far-fetched.
It looks a lot like nova's tree people from where I am sitting. The meth problem has exploded as well, literally. Two babies burned in the past month in meth explosions.
The public acceptance of actual job losses in small businesses by both the BLS and the Fed in the last week are huge.
The Vanity Fair and New Yorker pieces I linked yesterday were great reads. Definitely will affect the way I think about the prominent actors. If there is another breakdown in the financial system, despite programs in place that can help absorb any shocks, I take it they would step up their response instead of just repeating their last rescues (eg Summers considered a bank holiday/cleanup as the ultimate show of force)
In happy news, I'm looking for positive NFP around February or March (would make it 25 consecutive months of losses) and the end of the recession to be declared by about June. Global trade and economy permitting. My reasoning is rough, but I don't think I'll have time to play with some numbers. Where we go from next spring on depends on actions that probably will be defensive of domestic economies. Economic activity will be too low for there to be stable peace among the unemployed within existing systems.
If you really liked the oysters here I could fix you up in a nice three bedroom ranch with a detached in-law apartment, inground pool and stone fireplace in the sunken living room . Think of it....oysters year round and fresh from the sea!
I can't imagine what there is to like about this area to be honest. What you see at the beach is a facade. An illusion created for visitors. Life here is about the same as living in the middle of nowhere in Alabama. There is absolutely no culture here unless you count spitting tobacco and gigging flounder as culture.
dryfly,
Basic idea is that overt intervention is net negative for investor/counterparty trust. While you can get away with minor interventions, it's is worth it to do so even if it is fiscally more expensive. At the very least you get to convert the market's trust into putting money, at best you can get lucky and the problem goes away for a politically-long time.
In happy news, I'm looking for positive NFP around February or March (would make it 25 consecutive months of losses) and the end of the recession to be declared by about June.
After a hunkin' humongous 850k adjustment it will be an easy hurdle eh? By June i expect a barely positive Q3 '09 to be engineered and provide the technical white stripe in the middle of the eventual blue bar.
Basel Too, i can't speak for that area but never in my life have I seen so many pill heads or meth heads. I lived in the City of St. Louis for 20 years prior to moving down here and I was shocked at what I saw. I have also never seen so many people that ride bikes and have no license or car in my life and that includes the inner city.
Some of the banks with especially low levels of loan-loss reserves are teetering. Capmark Bank, based in Midvale, Utah, and owned by commercial real-estate finance firm Capmark Financial Group Inc., had 11 cents in reserves for every $1 in bad loans it reported in the quarter ended June 30, the Journal analysis shows.
A Capmark spokeswoman said in a statement that the amount of loans written off by the bank, totaling $357 million as of June 30, "should be taken into account when evaluating possible future losses."
Capmark's parent company, owned by investors led by private-equity firm Kohlberg Kravis Roberts & Co., warned last month that a bankruptcy filing could be imminent and said regulators intend to order Capmark Bank to raise capital and improve its liquidity. Capmark Bank got a $600 million capital infusion from its parent company in late September.
From the WSJ article CR linked to -- KKR mixed up in this one too. Pirate Equity everywhere.
The beach isn't considered "town". Across the bridge is town, where the locals live. The ones that clean the condos and sling cheeseburgers for the tourists. The area the tourists needn't worry their heads over...
From the WSJ article CR linked to -- KKR mixed up in this one too. Pirate Equity everywhere.
I don't get the WSJ online. Was that 'interest reserves' discussion CR mentioned any good? Let me know if it's worth digging up and I'll send you an IOU.
"U.S. Treasury Secretary Timothy Geithner called on the IMF to provide rigorous surveillance to spot new asset bubbles and keep country foreign exchange policies in line with the rebalancing goal.
"The IMF will need to be a truth-teller," Geithner said in remarks a deputy delivered to the meeting."
I hear he's a secret muslim too. Did you know that he's mentioned in the book of revelations?
The great empire will be torn from limb,
The all-powerful one for more than four hundred years:
Great power given to the dark one from slaves come,
The Aryana will not be satisfied thereby.
-Nostradamus
I don't get WSJ either - I go to google news & keep clicking until I find a back door. Got in there right away.
As for the interest reserves part - nothing new really - same stuff CR's covered over & over.
Regulators are zeroing in on banks that use interest reserves to mask bad construction loans. When such loans are made, banks typically calculate interest that would be paid and set that money aside, basically paying themselves until the loan becomes due or the property generates cash flow.
Regulators want to make sure banks don't have a false sense of security only because the interest reserve is paying the loan. Banks need to look at "the sources of repayment" to determine whether the loan will get repaid, says Darryle Rude, supervisor of industrial banks at the Utah Department of Financial Institutions.
Cali surely is in deepest doo-doo. Thank God I don't live there anymore. And here's to Bill's continued success-- I've got a chunk of change in Total Return, and a couple of others. (Crosses fingers.)
TJ and the Bear,
If the economy isn't going to run under its own steam for the next 600 days, and I'm right that there is another wave of cuts to bring employment into line with revenues -- then there will one damper on the markets/economy. A lot of Federal support programs now have decelerating spending. RE should be going down at the very least because of seasonal factors. USD is likely to rise as other countries try to shift the economic adjustment off their own countries (and they are in a fiscal position to do so), or capitalize on the biggest quarter of the year for GDP and trade. Oil and gas storage is full, and will have to come down no matter what happens in terms of weather or economy. There's a prevailing view of performance anxiety and the crowd is willing to meander up to SP500 1100-1200, but that doesn't sound like a conviction that will hold in the face of earnings. Remember, expectations now require growth, not just less losses.
January will be bad, because January is that way for a few reasons. February will have January NFP that will knock off ~900k jobs. From then on in a variety of seasonal factors go from a headwind to a tailwind. It's an election year, so expect something like a payroll tax holiday up to $xx,000. Markets will have been in the dumps. YoY comparisons will stabilize. Any forex interventions will have worn out. A bunch of people will run out of unemployment benefits and drop off the labor pool. After 1-2 years, there is less denial and the cuts will have been made. Things have been getting better (a lot of people expect(ed) positive Job growth for this October), but I think that timing just needs to be shifted out because it didn't happen before going through some of the roughest months. There is truth to the fact the more jobs you cut, the more hiring you can do and the fewer jobs left to cut. If Ford will go through bankruptcy, I'd imagine they want to get that done before March if at all. Same could be said for certain countries
Rob Dawg,
The March 2009-Feburary 2010 revisions announced for the January 2011 report will be bigger than 850k. I thought I was crazy for a bit, because everything I saw was telling me small business cuts were almost proportional to their size of employment this year. People are dismissing that 850k because they think of it as from last year, and wow did we start off from a deep hole. I look at it and think about the unannounced job losses from this year which would be spread out throughout the year and thus altering the shape of the current employment chart. Production has leveled out, but its not at an economic level without rapid growth or further cuts. The stock and credit markets' performance is irrelevant when not tied to lending growth, it's nothing more than circular logic. Analysts' bottom up estimates for 40% earnings growth by March are predicated on their lack of macroeconomic knowledge, and the implied assumption total market activity will revert to its prior size. More circular reasoning. Then you have the X factor of the USD shifting economic pain on to other economies that are able to and increasingly willing to push back and escalate the tense situation. For there to be money made in the market, it's price change x volume. We have little of both currently, and it won't take much to break that deadlock one way or the other.
Then you have the X factor of the USD shifting economic pain on to other economies that are able to and increasingly willing to push back and escalate the tense situation.
So how do they 'push back'? I'm all ears when I see stuff like that - in light of dollar monetization & US CADs.
EHP, as is often the case, your last two comments are filled with solid macro analysis and your opinions of where that analysis should conclude.
Yet I am continually struck by your belief that the USD should soon rise against other currencies, so I have selected this one sentence from those posts:
USD is likely to rise as other countries try to shift the economic adjustment off their own countries (and they are in a fiscal position to do so), or capitalize on the biggest quarter of the year for GDP and trade.
How is it that all the macro economic factors affecting the dollar and the U.S. economy can be so negative, yet the dollar will rise in value relative to other currencies?
I just don't get it. Even if other countries should try to devalue to maintain whatever trade balance they hope to have, isn't it true that the U.S. can easily out-devalue all of them simply by continuing the course they (meaning the Fed and Treasury) are on today?
Also, won't the current course continue well into halftime of 2010?
For there to be money made in the market, it's price change x volume.
Actually, it's neither, especially not volume. Trading volume is just churn. For every buyer, there's a seller and sometimes it's two black boxes trading back and forth.
It's really money flowing into stocks vs. money flowing out. In today's market, that means margin debt (or equivalent) extended vs. margin debt withdrawn. Maybe small business can't borrow money, but for whatever reason, stock market speculators still can.
All margin/liquidity driven market rallies eventually crash, usually on heavy volume as margin dries up. It's the surest thing in the stock market. But timing is uncertain.
The U.S. dollar is in a long, choppy downward slide for a simple reason.
For many years, giant entities have accumulated dollars for reasons other than the dollar's real economic value. Now, all that has to slowly unwind and the dollar has to find it's real value level.
The euro is weak no doubt. It could fluctuate vs. the dollar. But you don't measure the real value of the dollar in euros. You measure it in gold or else oil.
I've read a thousand posts on this board about gold being weak, gold going down, taking profits in gold, etc.
Explains at least part of the subject matter at your bar.
Also explains why it was #4 on the list because if it was #1 - they'd be down the street at 'the other' establishment. Classic case of 'survivor bias'.
Interesting post & discussion at ZH about this NOT being the time for PMs. IOW, although this breakout is interesting, the circumstances for PMs to really launch are still not there yet.
Of course, that means (as we've both stated numerous times) that the fun hasn't even really started yet. Got ?
People are being almost herded into a gold bull market bubble the way they were herded into 'investing' in housing. The fear of the declining value of the dollar is the reason for buying gold. The fear of rising interest rates and being priced out forever was the reason many jumped into housing. If gold is the last refuge to safeguard one's savings, a cycle or engineered crash in that commodity will be devastating after all the losses that have come from the last bubble.
OT, but it's nice to see how fast the forest recovers from a fire:
Goodbye fire, hello snow
Mountain High begins making snow
October 06, 2009 3:42 PM
WRIGHTWOOD • As crews battled a wildfire that burned up to the edge of town, staff at Mountain High have started blanketing the mountain in snow.
It’s the earliest Mountain High has made snow in its history, and officials said it’s only possible due to recent advancements in snowmaking technology.
For the latest information on opening day, snow conditions and more, visit MtHigh.com.
Of course RD may end up with an iced-over canary in the process.
dryfly,
They push back by burning the money they have saved up. It's not sustainable by any means. Think of it as Europe resisting appreciation and then China reacting by pulling the USD up. It's worth it for everyone because the amount of trade at stake will be high, and the move is a bargain politically if it helps domestic employment and breaks even over the short term. Nobody 'wins', but it's about inflicting losses or stealing walletshare at this point. I'm not changing my position, this is just a temporary thing I'm expecting.
Longer term we'll see countries settle more transactions without passing through the USD. Such transactions may only account for the money to be 'dead' for 1/10,000th of a year, but we're talking trillions of dollars. That will be an effective expansion of the monetary supply, but the real loss would be:
a) less opportunity to collect fees
b) tightening of credit
But the exporting countries will lose export market share. After the temporary alterations from the credit bubble are stripped away, this is just a global reallocation of work/growth.
EHP,
I'm in agreement with everything except "money to be made in this market." Sure there will be 10% who have both the time and the place right but as a general rule a whole bunch of people are about to lose a whole lot of money. It's one of the few places left worth looting.
I too believe the USD is weak but a weak reserve currency. That's a class of one. My dollars are buying more car, more house, more of lots of things that matter. Why wouldn't I want dollars? Sometimes people get too wrapped up esoteric international intrigue when there are simple explanations.
Notice how the FDIC allowed a 2:1 debt-equity ratio?
PPIP allows for 4:1 and 6:1 ratios. In fact the first purchase was under a 6:1 debt-equity ratio.
Why is PPIP not immediately suspended and investigated when the FDIC itself won't even go for more than 2:1 on these assets? Are the PPIP assets twice or thrice as good as Corus'?
The amount of websites and commercial television that run 'doom' stories and then the punchline is 'buy gold' or 'sell gold' is unbelievable. This reeks of manipulation. Weren't there any lessons in the housing bubble?
"The amount of websites and commercial television that run 'doom' stories and then the punchline is 'buy gold' or 'sell gold' is unbelievable. This reeks of manipulation. Weren't there any lessons in the housing bubble?"
When every cable tv channel has a gold-pr0n show on with evry second advert from gold line, I'll start to get a titch edgy...
Of course RD may end up with an iced-over canary in the process.
Looks to be a muddy mess this winter. This fire denuded 60 yr growth. But, yes, I got the email alert this morning about the snowmaking. On an economic note; MTHigh sells a limited number of full access passes. In past years sold out by Labor Day. this year, still selling with the note; "until Oct 31st or sold out." It's an interesting economic juggle for recreational skiers like me. Buy the tix or wait for discount coupons.
Overall deflation with transient bubbles in various assets. Stocks, gold, fish fingers, whatever. And continuing weakness in the dollar. Not the worst of all possible worlds, actually.
They push back by burning the money they have saved up
That is what I wanted to hear because that is he only way they do it -- work for less than they think they are working for by propping up the USD or unilaterally killing their own currency.
As for temporary -- it can go on as long as they want to do it to themselves. Which was why you could securitize dogshit & some central bank would buy it so long as it was USD denominated & they wanted to export to the good ol'USA. Amazing really.
. . .this year, still selling with the note; "until Oct 31st or sold out." It's an interesting economic juggle for recreational skiers like me. Buy the tix or wait for discount coupons.
Would seem to depend on how much you enjoy having full access.
EA-6B Prowler - Wikipedia, the free encyclopedia
The canopy has a shading of gold to protect the crew against the radio emissions that the electronic warfare equipment produces.
You don't want to know how they found out that was necessary.
I heard more than a few comments over the past few months of the OTC ordering banks to increase reserves against loans that were performing. It's all a little confusing to me. It isn't my gig though, so I suppose it should be. It appears to me at least that regulators (and auditors) are overly ambitious on write-downs and sleeping on the job. Again, just doesn't make sense to me.
The amount of websites and commercial television that run 'doom' stories and then the punchline is 'buy gold' or 'sell gold' is unbelievable.
Depends on what they are "buying". If people are charging into ETFs or other instruments that represent PMs, then they are charging off the ledge with other lemmings. I see much more "sell gold" than I see "buy gold", but I also think that the current movement of PMs is more USD-related than demand for the actual metal. Now "USD-related" could be interpreted as currency devaluation or inflation protection. Two-sides of the same fiat coin.
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As for the current moves, I'm still expecting another decline in PMs before we will be ready for the PM Blast of 20xx, but as other people have written, it is the timing that is the problem.
"There is no investment potion for this new environment other than steady income-producing bond and equity investments in companies with strong balance sheets and high dividend yields, as well as selectively chosen emerging market commitments where nominal GDP growth prospects are tilted upward as opposed to gravitating to new lower norms."
re: US dollar. I was talking to my brother about the yen appreciating and we can't figure out why it's so strong. They did have a defenestration of the ruling party and all the major mfgs are losing money (think toyota) -- so whats the story? Japan has one of the highest debt per gdp ratios.
sportsfan,
Think of it as balancing the equations for GDP globally.
In the US, imports have declined more than exports.
That means somewhere else, exports have declined more than imports. On top of whatever natural decline in GDP from a recession.
I don't have a good comparison chart handy, but if you find one, you'll see that the drop in GDP/increase in unemployment was much larger in the countries that ought to have had the strongest balance sheets going into this. It will be a natural reaction to oppose absorbing 'more than their fair share' of any decline. Without growth on the horizon to keep everyone in line, and if there is a drop in the price of commodities there will be little hold everyone back. It might not be a conscious collective decision to raise the USD, but that should be the sum of it.
You can ever think of it as countries collectively trying to grab the surplus from oil countries and distribute it amongst themselves. No matter how carefully you squeeze a sponge, you won't keep the water in there because it is incompressible and there are not enough air pockets to keep it all in.
If the global economy wasn't all the way in the gutter, I would be more likely to see a less fussy transition. It's been a calm number of months, but there are countries out there just waiting to default and I would expect to go 3 for 3 seeing the USD spike up during panicky moments. The more the Euro, or any other currency, rises the greater the marginal pain from loss of trade/tax revenues or gain of unemployment/deficit.
As for the current moves, I'm still expecting another decline in PMs before we will be ready for the PM Blast of 20xx, but as other people have written, it is the timing that is the problem.
Yep. That's why you buy and hold and ignore the volatility. Besides, given the right circumstances we could very well go straight to the PM Blast and anyone not on board will be left behind.
re: US dollar. I was talking to my brother about the yen appreciating and we can't figure out why it's so strong. They did have a defenestration of the ruling party and all the major mfgs are losing money (think toyota) -- so whats the story? Japan has one of the highest debt per gdp ratios.
Ah the Yen, my favorite fiat sans my own.
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The Yen is appreciating for multiple reasons, and one of the important ones is that the BoJ isn't actively weakening it like they did in the past. Many people have posted here why they think or speculate why it is happening, but I haven't read anything definitive that supports most of what has been written. I think a big reason is that the Japanese are unsure if USA F*CK YEAH! is worth supporting in this environment. While it kills one of their export markets, they have diversified enough to see if other markets can fill in the void. Also since commodities are priced in USDs, they are enjoying cheaper inputs.
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EHP and I discussed that the new government would try to hold the line through the end of this year and through the first quarter or two of next year simply because they have a lot of bureaucratic gridlock to overcome and have a cushion that today's problems is tied to yesterday's ruling party. As things get hotter on them domestically next year, you may start seeing some real "begging" or seeing them take a position that they are willing to let the US flounder and steal wallet share--as EHP covered above.
Warnings from the FED about gold manipulation...
*Fed Reserve disclosed to GATA that it has gold swap arrangements with foreign banks that it doesn't want the public to know about.
*A declassified 1975 Fed memo explaining the need for gold price manipulation released by Zero Hedge.
These examples would seem to be an effort to suppress gold prices but could gold prices be driven up?
scone,
I've been of a similar mind since late last year. I don't see there being enough economic growth to fuel earnings growth, nor credit growth to fuel M&A that could save equities from being priced lower than bonds. That is a major reason why I feel that we have not seen the bottom. Equities traded at a discount to credit until 1952 when they flipped. We haven't even seen dividends come back yet, let alone at a rate above bond yields.
yen is strengthening because BoJ has temporarily stopped intervening in attempt to spur domestic consumption. but unfortunately, the notoriously stingy japanese aren't going to spend willy nilly based on 10% currency moves, especially given the historical and structural (e.g. no safety net) factors. now that the squeezed exporters are starting to grumble, there has been some talk of reviving intervention to keep yen between 95-100.
TJ and the Bear,
No, China for one managed to cut its imports faster than its exports. US + China is greater than 1/3 of global GDP right there.
Spain is another. Maybe France too.
Then consider all the countries that kept their net exports flat. The pain is concentrated enough for it to be front of mind (see comments at G20 from Germany)
I look forward to being a coupon-clipping old geezer. I've got a bunch of dividends percolating in the old 401k. Plus some "emerging markets" action for extra fizz. And GOLDX just because peeps are batshit crazy about gold, right or wrong. So far, it's working rather well.
yagij,
The 'cash for gold' ads buy 'junk' gold in jewelry, watches, etc. and I don't think they pay much per ounce. As I mentioned before, there's a big profit spread if gold 'bullion' sellers can switch buyers from bullion to numismatic gold collectible rare coins. The pitch is the govt. can seize gold bullion but not collectible gold coins. So I'm refering to the buying and selling of physical gold. Not paper gold investments backed by 'fractional' gold.
It's appreciating because debt is blowing up. In credit based fiat systems, money dies and cash is king.
Again, the BoJ isn't adding their own debt to the pile when compared to other country's debt (See USD). The fact that the BoJ hasn't been acting their "usual" selves is rather interesting when considering how they defended their past beach heads. Right now, I'm waiting for them to let the USD charge past 87.95 (it's lowest low), but over the past few weeks, whenever it got that bad, it found a way to make it up to 90 again.
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85 JPY/USD may be back-breaking for their MFG in this environment, and currently 88.50 seems to be the point in which it shows resistance.
admittedly gaijin thinking here: Isn't japan a bunch of old people these days? How do you spur them to spend w/o some kind of medical spending card that goes right to the drug companies?
What most people are ignoring about gold is that low interest rates make it very attractive. Gold pays no interest and therefore is usually in a disadvantaged position to most alternatives.
However, at present this is not the case. The stock market is clearly overvalued. So if you are concerned about capital preservation, the primary focus is on bonds or gold. Bonds at these rates come, medium to long-term, with significant downside risk. Combine this with (somewhat irrational IMO) inflation fears by the monied classes and you have the ingredients for an "unexpected" bull market.
They seem to let the kids spend for them. I see a lot of Japanese kids in the malls, both here in Oregon and in Australia. I'll bet they are in Hawaii, too. These kids seem massively spoiled to me, like the "little emperors" in China.
EHP, no doubt but that there is a lot of pain spreading around the globe.
Though U.S. imports are down, it's not entirely clear to me that exporting countries' exports are down a similar amount or as a direct result. I'm more inclined to believe there is a refocusing of exports to countries other than the U.S. Asia in particular seems to have folks focusing on Asian markets.
Clearly everyone cannot export more than they import. Somebody has to be a net importer. Similarly, it's obvious the recession is affecting all exporting countries. Yet the general trend outside the U.S. and Europe has been increasing living standards. I'm inclined to believe those increasing standards will cause more countries to import more goods than they would have, say, a decade ago.
So, while it would be good for any exporter to the U.S. to have a stronger dollar and while there will always be that sort of pressure to prop up the dollar by those exporters, I think they have other alternatives to look at these days. I also think they're inclined to pursue other options since some (e.g., Hong Kong) seem to be convinced the U.S. is headed for a double dip early next year.
Thus, no doubt the USD spikes when things are 'panicky,' but, absent any major dislocations, I see the dollar continuing its current downward trend, probably to 70 or a little lower before it reaches a plateau for a while.
there has been some talk of reviving intervention to keep yen between 95-100.
Last Fall, I had heard that they were willing to draw the line in the sand at 90-95, but seeing them move it back up to 100 doesn't surprise me in the least. They don't like the 8 handle at all.
Basel Too wrote:
disclosure: i bought opened up ycs today
Holy crap! I didn't know that was an option. Could YCS and its ultralong brother, YCL, be this year's/next year's SRS, NAZ, et al?
Gold is a "don't fight the tape" situation. It's just another bullshit commodity bubble, but you can ride that horse to market just as well as a donkey. And get out when you need to. Getting out before a crash is key, IMO.
REBear,
The 2 negative things I have to say about gold are that JPM + HSBC control all the gold market trading, and I suspect a lot of people who have money invested in gold also have money in oil & gas, which must go down because of logistical limits. If everything that has gone up in concert with gold goes down for their own individual reasons, I would expect gold to suffer liquidity harvesting
If everything that has gone up in concert with gold goes down for their own individual reasons, I would expect gold to suffer liquidity harvesting
EHP:
You are harshing my Gold/Energy -fueled buzz. I know you are giving solid, logical insight in this situation, but can't a Bear get some on the O/N thread.
yagij
I remember calling and then seeing a Yen intervention at 88-89 late last year. Maybe they'll just play dead this time and bluff everyone into unwinding their carry trades.
I don't think so. Gold acts very much as money and much less as a commodity. In fact, I think we will see a net increase in central bank gold reserves likely this or for certain next year. Central banks don't buy commodities.
The fact that it is considered as part of the basket here shows you how much perceptions have changed:
Or, gold stays high because peeps are mistaking asset bubbles for real inflation and think gold is a hedge. Or, they're just plain scared shitless. Or, they are getting back into the stock market and think gold "balances the portfolio." These are just memes, but I think they are driving the thing now.
sportsfan,
Those are a lot of questions we don't have answers to yet. The risk is that the increase in living standards was a result of the phenomenal growth that could only come by gaining market share, and that that strategy has hit its limits given the global contraction. We'll have to see what happens when policies that discourage domestic consumption are removed, and if there is enough internal demand to take up enough slack such that everyone can get along internationally.
I remember calling and then seeing a Yen intervention at 88-89 late last year. Maybe they'll just play dead this time and bluff everyone into unwinding their carry trades.
If I remember anything from playing Go in Japan, it is to remember that the Japanese do not approach problems of time, space, and logistics in the same manner that we do. Marketshare or walletshare are bigger concerns for the Japanese than short-term profits. My Hail-Mary call is that they let it break through 88 and see people raise the JPY for them. I'm not sure how far under 88 is that point, but I think there are more carry trade folks sweating it than Japanese folks.
Gold has been above $800/oz for less 4 years of the last 30 years.
And the biggest US credit bubble, which lasted for the past 30 years, started popping last year, and we all saw how the players responded to it. Using Gold's 30 year track record as an argument against it isn't that much of a slamdunk.
RE, you've hot the essence of glod. There's nothing special about it. It's just a natural form of cash. Consider it just another currency in the FOREX world. One that doesn't have the QE risk. When interest rates finally rise, the herd will rush back out.
scone, your fading Indian restaurant wasn't India House was it? - EE
Yep. It's sad, really.
Gold acts very much as money and much less as a commodity. - RE
That's what a lot of people believe. And as long as the belief pertains, and the fear sticks around, it should do o.k. But it's not real. It's not driving growth or producing anything or getting unemployment down. Apart from jewelry and industrial applications, it's basically just an anxiety medication in metal form. But I'm happy to make money off other people's fear.
But it's not real. It's not driving growth or producing anything or getting unemployment down. Apart from jewelry and industrial applications, it's basically just an anxiety medication in metal form. -Scone
So many people harshing my PM-induced buzz tonight! What did my PMs ever do to you guys? I'm almost ready to put PMs on the same list as Religion and Abortion as "We can only agree to disagree, and I hope you won't try to kill me for what I believe" areas of conversation.
.
Besides when there is no growth or need to produce anything sans basics for the modern life, why hate the holders? I feel like the PM topic is like therapy: Let's not talk about PMs. Let's talk about what is really bothering you...
I'm not sure a weaker dollar is inevitably evil. And the dollar permeates almost everything, all over the world. How many mutual funds have dollar denominated stuff, and/or cash, just for example? Just because the dollar isn't dominant, doesn't mean it's dead. It's not all or nothing, here.
Unsubstantiated news reports from questionable sources notwithstanding, the devaluation of the dollar is underway...Russian ruble was crashed in 1998 by a speculative attack...
Now if only my love would make either of us money. Personally I'd go with heroin if I wanted to feel the ups and downs of precious metals. There will certainly be plenty of fortunes made (and lost) with gold.
badger, you're going to get wiped out. It isn't about gold, it's about the dollar. Gold is just a lump of metal which is relatively static (it's strong point). The dollar is the ruler it's value is measured with. Unfortunately, the dollar is made of rubber.
it's basically just an anxiety medication in metal form.
It's not "an" anxiety medication, it's "THE" anxiety medication -- sovereign strength -- and the world's anxiety is climbing.
As to the totally misplaced "commodity" designation, well, you won't convince me until every major government divests itself entirely.
Don't misunderstand me... PMs will be a monster bubble, but we're not even partway into it. That bubble will burst when the world's politics and economics are trending towards stability, and anyone thinking that's now is smoking some serious .
Well, I could generate a line of argument for gold that goes like this: weaker dollar stimulates American exports in high tech and engineering, which requires gold and other metals. A variation on "technology will save us," admittedly.
How many mutual funds have dollar denominated stuff, and/or cash, just for example?
OT Question for this area: Is anyone looking into mutual funds that either offer hard currency positions (e.g. Templeton Hard Currency Fund) or foreign bond positions? Do they provide some currency hedge against a fluctuating USD?
That's what a lot of people believe. And as long as the belief pertains, and the fear sticks around, it should do o.k. But it's not real.
I am always amused by these statements. Tell me how more real a dollar is? Do you actually believe that a dollar is more real than gold? Is gold less real than a share in a company that can be inflated at will by the issuer? What is real???
I'm not your standard issue gold bug but one thing is absolutely certain, gold is much more "real" than a dollar ever was and will be.
Gold over the medium-long term will depend on what happens to any shifts of supply or demand. Investment in gold did surge 70 tonnes more YoY, but jewelery demand declined 110 tonnes YoY. excerpts of World Gold Council report, Gold demand hit as jewellery sales slide - Telegraph
If Indians aren't buying gold, I would make sure to think through my reasons twice
I bought me some ESICX, PEBIX, the aforementioned GOLDX. And some good old-fashioned PTTRX. It's like oatmeal, good for you and undemanding. I'm not a wild and crazy girl, what can I say.
Google...A Case Study of a Currency Crisis: The Russian Default of 1998 by Abbigail J. Chiodo and Michael T. Owyang
'...investors fear that the government will finance its prospective deficit through seigniorage(printing money)...'
(Couldn't make the link work...)
Some point I'm going to have find a nice paper on the historical reason for using gold reserves, and then I can link to it. Bald face assertion will have to do in the meantime. It is like our oil reserves. We have oil reserves, because a supply disruption can make life miserable. Gold had a lot of properties that couldn't be replicated, and that is why it was reserved.
I suspect a lot of people who have money invested in gold also have money in oil & gas, which must go down because of logistical limits.
EHP, you also said this earlier (when you said storage was full). Again, I have a different take, specifically one that says "must go down" doesn't make sense to me.
Natty gas storage is full at the moment, no doubt, but it's that time of year. That hasn't stopped gas prices from rising for a week or more. Oil storage is not full in the U.S. so far as I can see, but prices seem stable around $70 for now. Both sources of energy are affected by the recession, of course, but natty gas is domestically produced while oil is mostly imported. The apparent Btu diversion in their current prices tells me that the dollar doesn't buy on the world market what it buys on the domestic market. That's another stake in the heart of the dollar as I look forward.
Clearly gold and silver tend to move up and down with oil and gas in a pretty consistent pattern, so I'll agree that, if any of them are going down, they probably all are going down in price at the same time. I just don't see a lot of 'going down' in the future, consistent with my belief the dollar is more vulnerable than any of them.
I like the term "liquidity harvesting." I'll try to remember that one next time I feel that things can only go up.
Got a hot, young female friend who won't mind coming over for a few minutes every day? If she shares your "nothing is real" line, she won't mind spending her time with me and enjoying what I have planned 'cause her time isn't real and the effects of our actions won't be either.
Traders never kill their own currency. Look at past experience of British pound. There is a significant home-side bias in investing.
I would be astonished if the USD was routed. First there are other countries that are more vulnerable, second Central Banks would do a joint intervention, third you are betting against the large majority of Wall St wealth (which is the majority of financial industry wealth). We're not at that point now
excerpts of World Gold Council report, Gold demand hit as jewellery sales slide - Telegraph
If Indians aren't buying gold, I would make sure to think through my reasons twice
Monetary demand for gold historically trumps any jewelery demand by miles. During crisis and therefore gold bull markets, jewelery demand has always declined but gold went up in purchasing power sometimes significantly. It will NEVER be jewelery demand that creates a gold bull!
Gold has been above $800/oz for less 4 years of the last 30 years. Gold has been below $400/oz for over 20 of the last 30 years.
The US dollar and/or US-empire-status-quo has been in doubt for all of those times when gold was above $800, no? So where to from here for the US dollar and US empire?
My comment that "when interest rates finally rise, the herd will rush back out" (of gold) is a reference to Volcker jacking up interest rates to crush inflation. In today's world it will be when there arises a new reserve currency that is a stable store of value (purchasing power). What that is, or how it is implemented, is beyond my abilities to predict.
Ease of manipulation as far as forming things. Connectivity. Resistance to corrosion.
Why does Friar tucks put a carrot and a celery stick next to their burger? People expect a vegetable with their plate, otherwise they are just buying a burger.
Add: People expect their currency to be backed by gold reserves, so it is.
Now you're dreaming. That's a gold bug trait, it seems.
No, I had no expectation or even delusion that it would happen. I don't even smoke the when it comes to women. Not enough on the planet to think I'll ever understand them.
I'm not your standard issue gold bug but one thing is absolutely certain, gold is much more "real" than a dollar ever was and will be.
At the risk of falling behind further by posting more, I have to say I agree completely with your statement, RE.
I also don't see any inflation on the horizon, but I do see continued devaluation of the dollar (which, by the way, has been happening for my entire life) and that's good enough for me.
sportsfan
That storage is in the USA (well the storage is full globally if it matters). Producers won't cut production to zero. There is no longer room to shift stocks into storage of refined products. Ergo, price must drop, inside the US market. I'm expecting the momentum to be large enough to start the positive feedback loop until there is enough room in storage to enable control of prices to be reasserted.
As for not believing storage is full. The page cannot be found
Oil was only increasing when the amount in storage as growing. It stopped increasing when crude oil storage was literally above capacity (referring to storage in tankers. On-shore storage of crude oil has come down, but only by increasing the stocks of refined products) which are now full enough that you could shut down half the refineries and make it through the winter with product to spare. It is ridiculous. Don't forget that you can use cheaper/dirtier gasoline for winter blends which naturally decreases the price. It is the same all around the world. I recommend you seek out Phillip Verleger from U of Alberta.
and finally, not that it matters much but gasoline for the first time in a looong time gas went below $1 per litre in Vancouver. There is collusion in the local pricing, so take that as a leading indicator if you want.
Baby boomers will move the industry's main client goal from one from accumulation -- investing in assets that create the most value over time -- to one of "decumulation," said Frank Porcelli, who heads U.S. retail for BlackRock, at the Reuters Global Wealth Management Summit in Boston.
I'm shocked the Fed has worries...
Fed's worries grow, but the bankers lose no sleep
Anyone follow that story I linked last thread? The guy states that banking has yet to see it's peak losses, and that the FDIC will have to come up with upwards of $400B to cover them.
dude. i just watched Sean Hannity's interview with Michael Moore (don't ask). I'm sure this is the fault of the Community Reinvestment Act. The government, Fannie, and Freddie MADE banks lend to these poor corporations (who often have limited liability).
What? You mean they finally bought a bigger rear view mirror?
There ought to be tent-cities with 10,000 people, but where are they?
Let's start a tally of the things the Fed is worried about:
1) The reticense of banks to realize CRE loan losses.
2) The inability of the small business sector to lead the employment recovery
Others?
The Community Reinvestment Act = Damned if you do, damned if you don't.
If I am slow to pay my income taxes, the government kicks my butt. If banks are slow to recognize losses, the government raises my income taxes, thereby again kicking my butt. I like the consistent treatment.
Being audited.
Ahh but with the "damned if you don't" option you can always fall back on that lame excuse of limited and circumscribed powers as defined in the Constitution.
Tell that to our Community Activist in Chief.
I'm pretty sure Constitutional limits only apply to US citizens. [ducks]
TJ and The Bear wrote:
$400B is probably optimistic. Treasury is gonna own FDIC too.
yes, the Air Force is unconstitutional. I think Article I only mentions a Navy and Army...
Juvenal Delinquent wrote:
In living rooms and dens all across America.
Yeah and according to the original my husband is only 3/5ths human and neither of us can vote.
Juvenal Delinquent wrote:
Renting driveways for their camper-trailers.
sporkfed wrote:
That one comes after being hit by lightening... they know who controls the vote & the chances of them facing a real audit are less than getting hit by lightening.
I worked for a bank the was sued for red lining practices. To settle they agreed to provide lending in the aggrieved sections of town.
Less than five years later they were sued again for predatory lending by the same organizations.
Comrade Kristina wrote:
Voting's overrated. The only people that really have a say all work for Goldman Sachs.
There are plenty of tent cities all over the place. Homeless missions are full to capacity around here. Plenty of them living in the parks, behind bars and grocery stores. I have also seen an influx of drifters just looking for work wherever they stop, living out of cars or cheap motels.
Comrade Kristina wrote:
Sounds a lot like nova's "Tree People".
CK +1
i agree that the CRA is a political nightmare and often benefitted its advocates more than its intended targets, but IMO, attributing the CAUSE of the financial crisis to it may be a little far-fetched.
but that's just me...
It looks a lot like nova's tree people from where I am sitting. The meth problem has exploded as well, literally. Two babies burned in the past month in meth explosions.
By the way, I was in Panama City Beach last month. Had some great oysters.
True enough but I don't think I can talk hubby into the 3/5th human thing.
This was interesting. Nothing directly said about USD, but sure infered.
China: IMF Should Fix World's Monetary "Defects" - General * Asia * News * Story - CNBC.com
Kristina,
What's the chatter around the bar these days?
You probably could have picked up a condo for about the same price while you were here
The public acceptance of actual job losses in small businesses by both the BLS and the Fed in the last week are huge.
The Vanity Fair and New Yorker pieces I linked yesterday were great reads. Definitely will affect the way I think about the prominent actors. If there is another breakdown in the financial system, despite programs in place that can help absorb any shocks, I take it they would step up their response instead of just repeating their last rescues (eg Summers considered a bank holiday/cleanup as the ultimate show of force)
In happy news, I'm looking for positive NFP around February or March (would make it 25 consecutive months of losses) and the end of the recession to be declared by about June. Global trade and economy permitting. My reasoning is rough, but I don't think I'll have time to play with some numbers. Where we go from next spring on depends on actions that probably will be defensive of domestic economies. Economic activity will be too low for there to be stable peace among the unemployed within existing systems.
Civil war, guns, flounder fishing and tits. In that order.
I maybe a little slow...
EvilHenryPaulson wrote:
Please elaborate...
If you really liked the oysters here I could fix you up in a nice three bedroom ranch with a detached in-law apartment, inground pool and stone fireplace in the sunken living room
. Think of it....oysters year round and fresh from the sea!
Wow, sounds almost normal, especially in consideration of everything else you just relayed. Then again, some things never change, right?
EvilHenryPaulson wrote:
People might actually support that IF it doesn't turn into another AIG [conduit to GS & JPM].
Well no, usually they are discussing the last Civil war....
EHP,
Gotta run out for a 1/2 hour, but I am seriously interested in your thoughts. Catch you when I get back.
rumors of layoffs at eBay. Bottom 5% of performers, no severance. eBay denies the 5% figure
OH, okay --
-- I get it.
I'm looking for positive NFP around February or March
I've been looking for positive NFP for more than a year, but unfortunately could not find any
I like the area although it is way over built. Much prefer Apalachicola or Dauphin Island. Much quieter.
I kid but it's scary down here...honestly.
mad max, any thoughts?>
I can't imagine what there is to like about this area to be honest. What you see at the beach is a facade. An illusion created for visitors. Life here is about the same as living in the middle of nowhere in Alabama. There is absolutely no culture here unless you count spitting tobacco and gigging flounder as culture.
dryfly,
Basic idea is that overt intervention is net negative for investor/counterparty trust. While you can get away with minor interventions, it's is worth it to do so even if it is fiscally more expensive. At the very least you get to convert the market's trust into putting money, at best you can get lucky and the problem goes away for a politically-long time.
sort of like Myrtle Beach, SC...
EvilHenryPaulson wrote:
After a hunkin' humongous 850k adjustment it will be an easy hurdle eh? By June i expect a barely positive Q3 '09 to be engineered and provide the technical white stripe in the middle of the eventual blue bar.
I'm sure this has been posted here already, but this is an interesting read on the financial crisis from Arnold Kling.
Not What They Had in Mind: A History of Policies that Produced the Financial Crisis of 2008
| Mercatus
Basel Too, i can't speak for that area but never in my life have I seen so many pill heads or meth heads. I lived in the City of St. Louis for 20 years prior to moving down here and I was shocked at what I saw. I have also never seen so many people that ride bikes and have no license or car in my life and that includes the inner city.
like liz, I know it can be difficult to draw out new member comments.
madmax, you registered for a reason. your voice needs to be heard.
The beach and food are great. I prefer small towns though. Small university towns are the best. Oxford, MS for example.
There ought to be tent-cities with 10,000 people, but where are they? - JD
Camped out in trailers. On farms and in driveways.
From the WSJ article CR linked to -- KKR mixed up in this one too. Pirate Equity everywhere.
"More than half of the $3.4 trillion in outstanding commercial real-estate debt is held by banks."
Remember when that seemed like a lot....ah memories.
The beach isn't considered "town". Across the bridge is town, where the locals live. The ones that clean the condos and sling cheeseburgers for the tourists. The area the tourists needn't worry their heads over...
There ought to be tent-cities with 10,000 people, but where are they?
Visited your local state forest lately? You might be surprised by what you find.
Tell that to our Community Activist in Chief.
I hear he's a secret muslim too. Did you know that he's mentioned in the book of revelations?
Hey, Bond Girl! I've become a Bill Gross fan, and it's all because of you!
dryfly wrote:
I don't get the WSJ online. Was that 'interest reserves' discussion CR mentioned any good? Let me know if it's worth digging up and I'll send you an IOU.
We ate oysters at a little dive across from a topless bar and a huge newer restaurant on the water. Shrimp Factory maybe ?
"U.S. Treasury Secretary Timothy Geithner called on the IMF to provide rigorous surveillance to spot new asset bubbles and keep country foreign exchange policies in line with the rebalancing goal.
"The IMF will need to be a truth-teller," Geithner said in remarks a deputy delivered to the meeting."
Knee-slapping stuff.
I've become a Bill Gross fan
with the stache?
http://money.cnn.com/2005/08/11/markets/bondcenter/bond_shortage/gross_bill.03.jpg
or without?
http://www.bloomberg.com/apps/data?pid=avimage&iid=iTFn3yLRjnFU
Hoopajoops LTD wrote:
The great empire will be torn from limb,
The all-powerful one for more than four hundred years:
Great power given to the dark one from slaves come,
The Aryana will not be satisfied thereby.
-Nostradamus
Yeah, heard that on Fox News.
The truth is relitive.
Facts howerver will get you every time.
One has to love a grown man that can use the word "doo-doo" in the title of his investment commentary...
gotta go..
I've never known you to be such a cut up rich.
with the stache?
Definitely without. That sucker's a real flavor saver. I mean, how clean can it be?
I don't get the WSJ online.
Read the Wall Street Journal Online for Free | Epicenter | Wired.com
I don't get WSJ either - I go to google news & keep clicking until I find a back door. Got in there right away.
As for the interest reserves part - nothing new really - same stuff CR's covered over & over.
It may not be clean but it has culture,several cultures...Staph?
Cali surely is in deepest doo-doo. Thank God I don't live there anymore. And here's to Bill's continued success-- I've got a chunk of change in Total Return, and a couple of others. (Crosses fingers.)
sporkfed wrote:
That narrows it down in PC FL right?
Of course, he can't really top McCulley's conversation with his rabbit some months ago.
dryfly wrote:
Excellent, thanks dryfly.
I just thought the topless part would keep you interested.
Of course, he can't really top McCulley's conversation with his rabbit some months ago.- BG
I missed that one! And they say bonds are boring!
TJ and the Bear,
If the economy isn't going to run under its own steam for the next 600 days, and I'm right that there is another wave of cuts to bring employment into line with revenues -- then there will one damper on the markets/economy. A lot of Federal support programs now have decelerating spending. RE should be going down at the very least because of seasonal factors. USD is likely to rise as other countries try to shift the economic adjustment off their own countries (and they are in a fiscal position to do so), or capitalize on the biggest quarter of the year for GDP and trade. Oil and gas storage is full, and will have to come down no matter what happens in terms of weather or economy. There's a prevailing view of performance anxiety and the crowd is willing to meander up to SP500 1100-1200, but that doesn't sound like a conviction that will hold in the face of earnings. Remember, expectations now require growth, not just less losses.
January will be bad, because January is that way for a few reasons. February will have January NFP that will knock off ~900k jobs. From then on in a variety of seasonal factors go from a headwind to a tailwind. It's an election year, so expect something like a payroll tax holiday up to $xx,000. Markets will have been in the dumps. YoY comparisons will stabilize. Any forex interventions will have worn out. A bunch of people will run out of unemployment benefits and drop off the labor pool. After 1-2 years, there is less denial and the cuts will have been made. Things have been getting better (a lot of people expect(ed) positive Job growth for this October), but I think that timing just needs to be shifted out because it didn't happen before going through some of the roughest months. There is truth to the fact the more jobs you cut, the more hiring you can do and the fewer jobs left to cut. If Ford will go through bankruptcy, I'd imagine they want to get that done before March if at all. Same could be said for certain countries
Noob, check your email.
Ah, memory lane: Bun Bun (Why do I remember this stuff?)
PIMCO - GCB December 2008 McCulley All In
For those of you worried about the swine flu vaccine, I went in today and got inoculated with five different vaccines, and boy are my arms tired.
EvilHenryPaulson wrote:
I googled it, but all i got was a link to natural family planning. despite the discussion of oysters, i don't think that's right
Natural Family Planning, NFP
I suspect Bun Bun is a disapproving rabbit:
Disapproving Rabbits
non-farm payroll
Rob Dawg,
The March 2009-Feburary 2010 revisions announced for the January 2011 report will be bigger than 850k. I thought I was crazy for a bit, because everything I saw was telling me small business cuts were almost proportional to their size of employment this year. People are dismissing that 850k because they think of it as from last year, and wow did we start off from a deep hole. I look at it and think about the unannounced job losses from this year which would be spread out throughout the year and thus altering the shape of the current employment chart. Production has leveled out, but its not at an economic level without rapid growth or further cuts. The stock and credit markets' performance is irrelevant when not tied to lending growth, it's nothing more than circular logic. Analysts' bottom up estimates for 40% earnings growth by March are predicated on their lack of macroeconomic knowledge, and the implied assumption total market activity will revert to its prior size. More circular reasoning. Then you have the X factor of the USD shifting economic pain on to other economies that are able to and increasingly willing to push back and escalate the tense situation. For there to be money made in the market, it's price change x volume. We have little of both currently, and it won't take much to break that deadlock one way or the other.
Hmmm, where's YTL?
LOL, scone. Goodnight, everyone.
EvilHenryPaulson wrote:
So how do they 'push back'? I'm all ears when I see stuff like that - in light of dollar monetization & US CADs.
The Shrimp Boat and that is "in town". There are no topless clubs on the beach anymore. You were about two blocks from my saloon...
http://www.last.fm/music/Creed/_/Inside+Us+All?autostart
EHP, as is often the case, your last two comments are filled with solid macro analysis and your opinions of where that analysis should conclude.
Yet I am continually struck by your belief that the USD should soon rise against other currencies, so I have selected this one sentence from those posts:
How is it that all the macro economic factors affecting the dollar and the U.S. economy can be so negative, yet the dollar will rise in value relative to other currencies?
I just don't get it. Even if other countries should try to devalue to maintain whatever trade balance they hope to have, isn't it true that the U.S. can easily out-devalue all of them simply by continuing the course they (meaning the Fed and Treasury) are on today?
Also, won't the current course continue well into halftime of 2010?
Actually, it's neither, especially not volume. Trading volume is just churn. For every buyer, there's a seller and sometimes it's two black boxes trading back and forth.
It's really money flowing into stocks vs. money flowing out. In today's market, that means margin debt (or equivalent) extended vs. margin debt withdrawn. Maybe small business can't borrow money, but for whatever reason, stock market speculators still can.
All margin/liquidity driven market rallies eventually crash, usually on heavy volume as margin dries up. It's the surest thing in the stock market. But timing is uncertain.
Comrade Kristina wrote:
Explains at least part of the subject matter at your bar.
The U.S. dollar is in a long, choppy downward slide for a simple reason.
For many years, giant entities have accumulated dollars for reasons other than the dollar's real economic value. Now, all that has to slowly unwind and the dollar has to find it's real value level.
The euro is weak no doubt. It could fluctuate vs. the dollar. But you don't measure the real value of the dollar in euros. You measure it in gold or else oil.
I've read a thousand posts on this board about gold being weak, gold going down, taking profits in gold, etc.
Gold is $1,039 per ounce.
Also explains why it was #4 on the list because if it was #1 - they'd be down the street at 'the other' establishment. Classic case of 'survivor bias'.
rich wrote:
Interesting post & discussion at ZH about this NOT being the time for PMs. IOW, although this breakout is interesting, the circumstances for PMs to really launch are still not there yet.
Of course, that means (as we've both stated numerous times) that the fun hasn't even really started yet. Got
?
People are being almost herded into a gold bull market bubble the way they were herded into 'investing' in housing. The fear of the declining value of the dollar is the reason for buying gold. The fear of rising interest rates and being priced out forever was the reason many jumped into housing. If gold is the last refuge to safeguard one's savings, a cycle or engineered crash in that commodity will be devastating after all the losses that have come from the last bubble.
OT, but it's nice to see how fast the forest recovers from a fire:
Goodbye fire, hello snow
Mountain High begins making snow
October 06, 2009 3:42 PM
WRIGHTWOOD • As crews battled a wildfire that burned up to the edge of town, staff at Mountain High have started blanketing the mountain in snow.
It’s the earliest Mountain High has made snow in its history, and officials said it’s only possible due to recent advancements in snowmaking technology.
For the latest information on opening day, snow conditions and more, visit MtHigh.com.
Of course RD may end up with an iced-over canary in the process.
dryfly,
They push back by burning the money they have saved up. It's not sustainable by any means. Think of it as Europe resisting appreciation and then China reacting by pulling the USD up. It's worth it for everyone because the amount of trade at stake will be high, and the move is a bargain politically if it helps domestic employment and breaks even over the short term. Nobody 'wins', but it's about inflicting losses or stealing walletshare at this point. I'm not changing my position, this is just a temporary thing I'm expecting.
Longer term we'll see countries settle more transactions without passing through the USD. Such transactions may only account for the money to be 'dead' for 1/10,000th of a year, but we're talking trillions of dollars. That will be an effective expansion of the monetary supply, but the real loss would be:
a) less opportunity to collect fees
b) tightening of credit
But the exporting countries will lose export market share. After the temporary alterations from the credit bubble are stripped away, this is just a global reallocation of work/growth.
EHP,
I'm in agreement with everything except "money to be made in this market." Sure there will be 10% who have both the time and the place right but as a general rule a whole bunch of people are about to lose a whole lot of money. It's one of the few places left worth looting.
I too believe the USD is weak but a weak reserve currency. That's a class of one. My dollars are buying more car, more house, more of lots of things that matter. Why wouldn't I want dollars? Sometimes people get too wrapped up esoteric international intrigue when there are simple explanations.
Disappointed no one ran the numbers on the Starwood purchase. It was easy to do once someone mentioned the bid was $2.77B.
Starwood equity: $554M
FDIC equity: $831M
Bid amount: $2770M
FDIC guaranteed debt that will be issued: $1385M
Notice how the FDIC allowed a 2:1 debt-equity ratio?
PPIP allows for 4:1 and 6:1 ratios. In fact the first purchase was under a 6:1 debt-equity ratio.
Why is PPIP not immediately suspended and investigated when the FDIC itself won't even go for more than 2:1 on these assets? Are the PPIP assets twice or thrice as good as Corus'?
merchants of fear wrote:
ROFLMAO!!!
The amount of websites and commercial television that run 'doom' stories and then the punchline is 'buy gold' or 'sell gold' is unbelievable. This reeks of manipulation. Weren't there any lessons in the housing bubble?
Also on the PPIP/PPIF front. US Treasury press release from today... five initial closings of the PPIF...
The total amount of PPIF money sloshing around in the next 6 months will be $12.27B!
"The amount of websites and commercial television that run 'doom' stories and then the punchline is 'buy gold' or 'sell gold' is unbelievable. This reeks of manipulation. Weren't there any lessons in the housing bubble?"
When every cable tv channel has a gold-pr0n show on with evry second advert from gold line, I'll start to get a titch edgy...
Of course RD may end up with an iced-over canary in the process.
Looks to be a muddy mess this winter. This fire denuded 60 yr growth. But, yes, I got the email alert this morning about the snowmaking. On an economic note; MTHigh sells a limited number of full access passes. In past years sold out by Labor Day. this year, still selling with the note; "until Oct 31st or sold out." It's an interesting economic juggle for recreational skiers like me. Buy the tix or wait for discount coupons.
Overall deflation with transient bubbles in various assets. Stocks, gold, fish fingers, whatever. And continuing weakness in the dollar. Not the worst of all possible worlds, actually.
EvilHenryPaulson wrote:
That is what I wanted to hear because that is he only way they do it -- work for less than they think they are working for by propping up the USD or unilaterally killing their own currency.
As for temporary -- it can go on as long as they want to do it to themselves. Which was why you could securitize dogshit & some central bank would buy it so long as it was USD denominated & they wanted to export to the good ol'USA. Amazing really.
Will a gold tin foil hat work? Might be a good (and real expensive) novelty product.
. . .this year, still selling with the note; "until Oct 31st or sold out." It's an interesting economic juggle for recreational skiers like me. Buy the tix or wait for discount coupons.
Would seem to depend on how much you enjoy having full access.
I call this ass-covering. Banks are slow to recognize losses at the direction and encouragement of the Fed and Treasury.
'Not the worst of all possible worlds...'
$1(American dollar) minus deflation minus devaluation plus inflation equals __ .
EA-6B Prowler - Wikipedia, the free encyclopedia
The canopy has a shading of gold to protect the crew against the radio emissions that the electronic warfare equipment produces.
plus speculation
TJ and The Bear wrote:
You don't want to know how they found out that was necessary.
I heard more than a few comments over the past few months of the OTC ordering banks to increase reserves against loans that were performing. It's all a little confusing to me. It isn't my gig though, so I suppose it should be. It appears to me at least that regulators (and auditors) are overly ambitious on write-downs and sleeping on the job. Again, just doesn't make sense to me.
merchants of fear wrote:
Depends on what they are "buying". If people are charging into ETFs or other instruments that represent PMs, then they are charging off the ledge with other lemmings. I see much more "sell gold" than I see "buy gold", but I also think that the current movement of PMs is more USD-related than demand for the actual metal. Now "USD-related" could be interpreted as currency devaluation or inflation protection. Two-sides of the same fiat coin.
.
As for the current moves, I'm still expecting another decline in PMs before we will be ready for the PM Blast of 20xx, but as other people have written, it is the timing that is the problem.
"There is no investment potion for this new environment other than steady income-producing bond and equity investments in companies with strong balance sheets and high dividend yields, as well as selectively chosen emerging market commitments where nominal GDP growth prospects are tilted upward as opposed to gravitating to new lower norms."
PIMCO - Investment Outlook August 2009 Gross Investment Potion
Dividends are back! Also, Brazil (ironically enough) and maybe Australia. There is money to be made, but America is in for slow growth...
re: US dollar. I was talking to my brother about the yen appreciating and we can't figure out why it's so strong. They did have a defenestration of the ruling party and all the major mfgs are losing money (think toyota) -- so whats the story? Japan has one of the highest debt per gdp ratios.
Is it beggar thy neighbor time or what?
"You don't want to know how they found out that was necessary."
em no tceffe on dah sah yrevocsid ehT
sportsfan,
Think of it as balancing the equations for GDP globally.
In the US, imports have declined more than exports.
That means somewhere else, exports have declined more than imports. On top of whatever natural decline in GDP from a recession.
I don't have a good comparison chart handy, but if you find one, you'll see that the drop in GDP/increase in unemployment was much larger in the countries that ought to have had the strongest balance sheets going into this. It will be a natural reaction to oppose absorbing 'more than their fair share' of any decline. Without growth on the horizon to keep everyone in line, and if there is a drop in the price of commodities there will be little hold everyone back. It might not be a conscious collective decision to raise the USD, but that should be the sum of it.
You can ever think of it as countries collectively trying to grab the surplus from oil countries and distribute it amongst themselves. No matter how carefully you squeeze a sponge, you won't keep the water in there because it is incompressible and there are not enough air pockets to keep it all in.
If the global economy wasn't all the way in the gutter, I would be more likely to see a less fussy transition. It's been a calm number of months, but there are countries out there just waiting to default and I would expect to go 3 for 3 seeing the USD spike up during panicky moments. The more the Euro, or any other currency, rises the greater the marginal pain from loss of trade/tax revenues or gain of unemployment/deficit.
yagij wrote:
Yep. That's why you buy and hold and ignore the volatility. Besides, given the right circumstances we could very well go straight to the PM Blast and anyone not on board will be left behind.
Japan has one of the highest debt per gdp ratios. - B
Japan doesn't have to borrow from gaijin barbarians -- they can get it from their own people, with their huge savings rate. Think pension funds.
blinkered wrote:
Ah the Yen, my favorite fiat sans my own.
.
The Yen is appreciating for multiple reasons, and one of the important ones is that the BoJ isn't actively weakening it like they did in the past. Many people have posted here why they think or speculate why it is happening, but I haven't read anything definitive that supports most of what has been written. I think a big reason is that the Japanese are unsure if USA F*CK YEAH! is worth supporting in this environment. While it kills one of their export markets, they have diversified enough to see if other markets can fill in the void. Also since commodities are priced in USDs, they are enjoying cheaper inputs.
.
EHP and I discussed that the new government would try to hold the line through the end of this year and through the first quarter or two of next year simply because they have a lot of bureaucratic gridlock to overcome and have a cushion that today's problems is tied to yesterday's ruling party. As things get hotter on them domestically next year, you may start seeing some real "begging" or seeing them take a position that they are willing to let the US flounder and steal wallet share--as EHP covered above.
EvilHenryPaulson wrote:
Don't you mean everywhere else? That means the change is spread around and thus the individual impact is not nearly as pronounced.
Warnings from the FED about gold manipulation...
*Fed Reserve disclosed to GATA that it has gold swap arrangements with foreign banks that it doesn't want the public to know about.
*A declassified 1975 Fed memo explaining the need for gold price manipulation released by Zero Hedge.
These examples would seem to be an effort to suppress gold prices but could gold prices be driven up?
scone,
I've been of a similar mind since late last year. I don't see there being enough economic growth to fuel earnings growth, nor credit growth to fuel M&A that could save equities from being priced lower than bonds. That is a major reason why I feel that we have not seen the bottom. Equities traded at a discount to credit until 1952 when they flipped. We haven't even seen dividends come back yet, let alone at a rate above bond yields.
Job opportunity!
UC Berkeley Events Calendar:
The National Security Agency
"The Yen is appreciating for multiple reasons..."
It's appreciating because debt is blowing up. In credit based fiat systems, money dies and cash is king.
yen is strengthening because BoJ has temporarily stopped intervening in attempt to spur domestic consumption. but unfortunately, the notoriously stingy japanese aren't going to spend willy nilly based on 10% currency moves, especially given the historical and structural (e.g. no safety net) factors. now that the squeezed exporters are starting to grumble, there has been some talk of reviving intervention to keep yen between 95-100.
disclosure: i bought opened up ycs today
yagij wrote:
nice reference. Is there a puking (and puking and puking ....) icon?
TJ and the Bear,
No, China for one managed to cut its imports faster than its exports. US + China is greater than 1/3 of global GDP right there.
Spain is another. Maybe France too.
Then consider all the countries that kept their net exports flat. The pain is concentrated enough for it to be front of mind (see comments at G20 from Germany)
@ EHP
I look forward to being a coupon-clipping old geezer. I've got a bunch of dividends percolating in the old 401k. Plus some "emerging markets" action for extra fizz. And GOLDX just because peeps are batshit crazy about gold, right or wrong. So far, it's working rather well.
Basel Too wrote:
DING DING DING... we have a winner!
yagij,
The 'cash for gold' ads buy 'junk' gold in jewelry, watches, etc. and I don't think they pay much per ounce. As I mentioned before, there's a big profit spread if gold 'bullion' sellers can switch buyers from bullion to numismatic gold collectible rare coins. The pitch is the govt. can seize gold bullion but not collectible gold coins. So I'm refering to the buying and selling of physical gold. Not paper gold investments backed by 'fractional' gold.
Comrade Misean is Dope wrote:
Again, the BoJ isn't adding their own debt to the pile when compared to other country's debt (See USD). The fact that the BoJ hasn't been acting their "usual" selves is rather interesting when considering how they defended their past beach heads. Right now, I'm waiting for them to let the USD charge past 87.95 (it's lowest low), but over the past few weeks, whenever it got that bad, it found a way to make it up to 90 again.
.
85 JPY/USD may be back-breaking for their MFG in this environment, and currently 88.50 seems to be the point in which it shows resistance.
blinkered wrote:
This one?
I thought I was reading something serious until I saw "rapid response program" then realized once again the jokes on me.
admittedly gaijin thinking here: Isn't japan a bunch of old people these days? How do you spur them to spend w/o some kind of medical spending card that goes right to the drug companies?
Maybe robots to wipe?
Well said, sir. I completely agree.
What most people are ignoring about gold is that low interest rates make it very attractive. Gold pays no interest and therefore is usually in a disadvantaged position to most alternatives.
However, at present this is not the case. The stock market is clearly overvalued. So if you are concerned about capital preservation, the primary focus is on bonds or gold. Bonds at these rates come, medium to long-term, with significant downside risk. Combine this with (somewhat irrational IMO) inflation fears by the monied classes and you have the ingredients for an "unexpected" bull market.
If you are going to look at savings, stop looking at people. Or if you are, look at the top 5%. They are the one's that drive savings rate.
merchants of fear wrote:
Someone did a "sting" on C4G and found that they offered 30% less than pawn shops.
How do you spur them to spend... - b
They seem to let the kids spend for them. I see a lot of Japanese kids in the malls, both here in Oregon and in Australia. I'll bet they are in Hawaii, too. These kids seem massively spoiled to me, like the "little emperors" in China.
EHP, no doubt but that there is a lot of pain spreading around the globe.
Though U.S. imports are down, it's not entirely clear to me that exporting countries' exports are down a similar amount or as a direct result. I'm more inclined to believe there is a refocusing of exports to countries other than the U.S. Asia in particular seems to have folks focusing on Asian markets.
Clearly everyone cannot export more than they import. Somebody has to be a net importer. Similarly, it's obvious the recession is affecting all exporting countries. Yet the general trend outside the U.S. and Europe has been increasing living standards. I'm inclined to believe those increasing standards will cause more countries to import more goods than they would have, say, a decade ago.
So, while it would be good for any exporter to the U.S. to have a stronger dollar and while there will always be that sort of pressure to prop up the dollar by those exporters, I think they have other alternatives to look at these days. I also think they're inclined to pursue other options since some (e.g., Hong Kong) seem to be convinced the U.S. is headed for a double dip early next year.
Thus, no doubt the USD spikes when things are 'panicky,' but, absent any major dislocations, I see the dollar continuing its current downward trend, probably to 70 or a little lower before it reaches a plateau for a while.
I speak anglo american is that good.
My gold calculation is simple: the odds of gold going to $200/oz are greater than the odds of gold going to $1800/oz.
Basel Too wrote:
Last Fall, I had heard that they were willing to draw the line in the sand at 90-95, but seeing them move it back up to 100 doesn't surprise me in the least. They don't like the 8 handle at all.
Basel Too wrote:
Holy crap! I didn't know that was an option. Could YCS and its ultralong brother, YCL, be this year's/next year's SRS, NAZ, et al?
That's some kind of funky arithmetic. How do you figure? (Yes, always interested in alternative views.)
Gold is a "don't fight the tape" situation. It's just another bullshit commodity bubble, but you can ride that horse to market just as well as a donkey. And get out when you need to. Getting out before a crash is key, IMO.
RE wrote:
I always forget that. That (artificial?) rate kinda makes P/E values irrelevant, no?
REBear,
The 2 negative things I have to say about gold are that JPM + HSBC control all the gold market trading, and I suspect a lot of people who have money invested in gold also have money in oil & gas, which must go down because of logistical limits. If everything that has gone up in concert with gold goes down for their own individual reasons, I would expect gold to suffer liquidity harvesting
EvilHenryPaulson wrote:
EHP:
-fueled buzz. I know you are giving solid, logical insight in this situation, but can't a Bear get some 
on the O/N thread.
You are harshing my Gold/Energy
yagij
I remember calling and then seeing a Yen intervention at 88-89 late last year. Maybe they'll just play dead this time and bluff everyone into unwinding their carry trades.
Gold has been above $800/oz for less 4 years of the last 30 years. Gold has been below $400/oz for over 20 of the last 30 years.
scone, your fading Indian restaurant wasn't India House was it?
(Gold) is just another bullshit commodity bubble
I don't think so. Gold acts very much as money and much less as a commodity. In fact, I think we will see a net increase in central bank gold reserves likely this or for certain next year. Central banks don't buy commodities.
The fact that it is considered as part of the basket here shows you how much perceptions have changed:
Gulf moots replacing oil trade currency, India interested - Business News - News - MSN India
...
The basket includes the Japanese yen and Chinese yuan, the euro, gold and a new, unified currency planned for members of the Gulf Cooperation Council (GCC), The Independent reported.
...
Or, gold stays high because peeps are mistaking asset bubbles for real inflation and think gold is a hedge. Or, they're just plain scared shitless. Or, they are getting back into the stock market and think gold "balances the portfolio." These are just memes, but I think they are driving the thing now.
EvilHenryPaulson wrote:
pavel would be proud
or maybe, I want to believe, since I'm long dto (double short oil).
sportsfan,
Those are a lot of questions we don't have answers to yet. The risk is that the increase in living standards was a result of the phenomenal growth that could only come by gaining market share, and that that strategy has hit its limits given the global contraction. We'll have to see what happens when policies that discourage domestic consumption are removed, and if there is enough internal demand to take up enough slack such that everyone can get along internationally.
EvilHenryPaulson wrote:
If I remember anything from playing Go in Japan, it is to remember that the Japanese do not approach problems of time, space, and logistics in the same manner that we do. Marketshare or walletshare are bigger concerns for the Japanese than short-term profits. My Hail-Mary call is that they let it break through 88 and see people raise the JPY for them. I'm not sure how far under 88 is that point, but I think there are more carry trade folks sweating it than Japanese folks.
badger wrote:
And the biggest US credit bubble, which lasted for the past 30 years, started popping last year, and we all saw how the players responded to it. Using Gold's 30 year track record as an argument against it isn't that much of a slamdunk.
RE, you've hot the essence of glod. There's nothing special about it. It's just a natural form of cash. Consider it just another currency in the FOREX world. One that doesn't have the QE risk. When interest rates finally rise, the herd will rush back out.
EEngineer wrote:
Besides Australia, where can I get me some rising interest rates with a hint of currency risk?
scone, your fading Indian restaurant wasn't India House was it? - EE
Yep. It's sad, really.
Gold acts very much as money and much less as a commodity. - RE
That's what a lot of people believe. And as long as the belief pertains, and the fear sticks around, it should do o.k. But it's not real. It's not driving growth or producing anything or getting unemployment down. Apart from jewelry and industrial applications, it's basically just an anxiety medication in metal form. But I'm happy to make money off other people's fear.
Bingo
EEngineer wrote:
On what currency? Not the dollar.
badger wrote:
So many people harshing my PM-induced
buzz tonight! What did my PMs ever do to you guys? I'm almost ready to put PMs on the same list as Religion and Abortion as "We can only agree to disagree, and I hope you won't try to kill me for what I believe" areas of conversation.
holders? I feel like the PM topic is like therapy: Let's not talk about PMs. Let's talk about what is really bothering you... 
.
Besides when there is no growth or need to produce anything sans basics for the modern life, why hate the
I'm not sure a weaker dollar is inevitably evil. And the dollar permeates almost everything, all over the world. How many mutual funds have dollar denominated stuff, and/or cash, just for example? Just because the dollar isn't dominant, doesn't mean it's dead. It's not all or nothing, here.
Unsubstantiated news reports from questionable sources notwithstanding, the devaluation of the dollar is underway...Russian ruble was crashed in 1998 by a speculative attack...
yagij,
Feel the love.
Now if only my love would make either of us money. Personally I'd go with heroin if I wanted to feel the ups and downs of precious metals. There will certainly be plenty of fortunes made (and lost) with gold.
badger, you're going to get wiped out. It isn't about gold, it's about the dollar. Gold is just a lump of metal which is relatively static (it's strong point). The dollar is the ruler it's value is measured with. Unfortunately, the dollar is made of rubber.
Instead of glod, I've got another commodity that would be great as a currency: zippers.
No, really. They actually have a purpose and try as I might, I can't really figure out how they work -- so it's another faith based material.
and people make fun of fiat.
scone wrote:
It's not "an" anxiety medication, it's "THE" anxiety medication -- sovereign strength -- and the world's anxiety is climbing.
As to the totally misplaced "commodity" designation, well, you won't convince me until every major government divests itself entirely.
Don't misunderstand me... PMs will be a monster bubble, but we're not even partway into it. That bubble will burst when the world's politics and economics are trending towards stability, and anyone thinking that's now is smoking some serious
.
Well, I could generate a line of argument for gold that goes like this: weaker dollar stimulates American exports in high tech and engineering, which requires gold and other metals. A variation on "technology will save us," admittedly.
scone wrote:
OT Question for this area: Is anyone looking into mutual funds that either offer hard currency positions (e.g. Templeton Hard Currency Fund) or foreign bond positions? Do they provide some currency hedge against a fluctuating USD?
scone wrote:
Weak argument. Gold has never been a serious industrial metal. Now silver...
TJ and The Bear wrote:
I
that line. When governments and mega-financial corporations start treating it like pennies, then I will stop thinking about PM positions.
Scotia Mocatta does some gold trading as well.
That's what a lot of people believe. And as long as the belief pertains, and the fear sticks around, it should do o.k. But it's not real.
I am always amused by these statements. Tell me how more real a dollar is? Do you actually believe that a dollar is more real than gold? Is gold less real than a share in a company that can be inflated at will by the issuer? What is real???
I'm not your standard issue gold bug but one thing is absolutely certain, gold is much more "real" than a dollar ever was and will be.
Gold over the medium-long term will depend on what happens to any shifts of supply or demand. Investment in gold did surge 70 tonnes more YoY, but jewelery demand declined 110 tonnes YoY. excerpts of World Gold Council report, Gold demand hit as jewellery sales slide - Telegraph
If Indians aren't buying gold, I would make sure to think through my reasons twice
TJ and The Bear wrote:
Et tu, TJ? I'm gonna have to smoke my
in solitude if you all keep piling on! 
@ yagij
I bought me some ESICX, PEBIX, the aforementioned GOLDX. And some good old-fashioned PTTRX. It's like oatmeal, good for you and undemanding. I'm not a wild and crazy girl, what can I say.
silver zippers, that's the ticket.
Tell me how more real a dollar is? - RE
You misunderstand. Nothing is real. And nothing to get hung about.
Google...A Case Study of a Currency Crisis: The Russian Default of 1998 by Abbigail J. Chiodo and Michael T. Owyang
'...investors fear that the government will finance its prospective deficit through seigniorage(printing money)...'
(Couldn't make the link work...)
Some point I'm going to have find a nice paper on the historical reason for using gold reserves, and then I can link to it. Bald face assertion will have to do in the meantime. It is like our oil reserves. We have oil reserves, because a supply disruption can make life miserable. Gold had a lot of properties that couldn't be replicated, and that is why it was reserved.
EHP, you also said this earlier (when you said storage was full). Again, I have a different take, specifically one that says "must go down" doesn't make sense to me.
Natty gas storage is full at the moment, no doubt, but it's that time of year. That hasn't stopped gas prices from rising for a week or more. Oil storage is not full in the U.S. so far as I can see, but prices seem stable around $70 for now. Both sources of energy are affected by the recession, of course, but natty gas is domestically produced while oil is mostly imported. The apparent Btu diversion in their current prices tells me that the dollar doesn't buy on the world market what it buys on the domestic market. That's another stake in the heart of the dollar as I look forward.
Clearly gold and silver tend to move up and down with oil and gas in a pretty consistent pattern, so I'll agree that, if any of them are going down, they probably all are going down in price at the same time. I just don't see a lot of 'going down' in the future, consistent with my belief the dollar is more vulnerable than any of them.
I like the term "liquidity harvesting." I'll try to remember that one next time I feel that things can only go up.
parden me hoops, but howsabout some silver zipper backed hoopajoops?
Gotta have gold for electronics. Out here they actually "mine" old circuit boards for the stuff. That's what I mean by high-tech.
yagij,
You misunderstand. I'm overweight in silver, since it has both the currency and commodity things going for it. It's a "win win".
scone wrote:
Got a hot, young female friend who won't mind coming over for a few minutes every day? If she shares your "nothing is real" line, she won't mind spending her time with me and enjoying what I have planned 'cause her time isn't real and the effects of our actions won't be either.
Traders never kill their own currency. Look at past experience of British pound. There is a significant home-side bias in investing.
I would be astonished if the USD was routed. First there are other countries that are more vulnerable, second Central Banks would do a joint intervention, third you are betting against the large majority of Wall St wealth (which is the majority of financial industry wealth). We're not at that point now
badger wrote:
You state "was" reserved. So, what's the excuse now? Why don't they just give it all away???
Oh, and what are those properties that couldn't be replicated?
EvilHenryPaulson wrote:
Monetary demand for gold historically trumps any jewelery demand by miles. During crisis and therefore gold bull markets, jewelery demand has always declined but gold went up in purchasing power sometimes significantly. It will NEVER be jewelery demand that creates a gold bull!
Not picking on you. Just saying that industrial demand has never been a significant factor in gold prices.
badger wrote:
The US dollar and/or US-empire-status-quo has been in doubt for all of those times when gold was above $800, no? So where to from here for the US dollar and US empire?
@ Yagij
Now you're dreaming. That's a gold bug trait, it seems.
My comment that "when interest rates finally rise, the herd will rush back out" (of gold) is a reference to Volcker jacking up interest rates to crush inflation. In today's world it will be when there arises a new reserve currency that is a stable store of value (purchasing power). What that is, or how it is implemented, is beyond my abilities to predict.
Ease of manipulation as far as forming things. Connectivity. Resistance to corrosion.
Why does Friar tucks put a carrot and a celery stick next to their burger? People expect a vegetable with their plate, otherwise they are just buying a burger.
Add: People expect their currency to be backed by gold reserves, so it is.
scone wrote:
No, I had no expectation or even delusion that it would happen. I don't even smoke the
when it comes to women. Not enough 
on the planet to think I'll ever understand them. 
I'm not your standard issue gold bug but one thing is absolutely certain, gold is much more "real" than a dollar ever was and will be.
At the risk of falling behind further by posting more, I have to say I agree completely with your statement, RE.
I also don't see any inflation on the horizon, but I do see continued devaluation of the dollar (which, by the way, has been happening for my entire life) and that's good enough for me.
*Gold has been above $800/oz for less 4 years of the last 30 years. Gold has been below $400/oz for over 20 of the last 30 years. *
Now please adjust to 1979 dollars to account for inflation.
sportsfan
That storage is in the USA (well the storage is full globally if it matters). Producers won't cut production to zero. There is no longer room to shift stocks into storage of refined products. Ergo, price must drop, inside the US market. I'm expecting the momentum to be large enough to start the positive feedback loop until there is enough room in storage to enable control of prices to be reasserted.
As for not believing storage is full. The page cannot be found
Oil was only increasing when the amount in storage as growing. It stopped increasing when crude oil storage was literally above capacity (referring to storage in tankers. On-shore storage of crude oil has come down, but only by increasing the stocks of refined products) which are now full enough that you could shut down half the refineries and make it through the winter with product to spare. It is ridiculous. Don't forget that you can use cheaper/dirtier gasoline for winter blends which naturally decreases the price. It is the same all around the world. I recommend you seek out Phillip Verleger from U of Alberta.
and finally, not that it matters much but gasoline for the first time in a looong time gas went below $1 per litre in Vancouver. There is collusion in the local pricing, so take that as a leading indicator if you want.