GOLD

[Magpie]

If the writer of the article stopped to consider what he was saying, he would realise that ultimately all those contracts must at some point be closed, resulting in the mother of all price collapses. The only thing which cannot be predicted with accuracy is the timing of the collapse, but I would guess it will be when there is actual as opposed to verbal monetary tightening. Could be huge.

 

It does feel like they are running out of bubbles.

 

The thing about oil and food is that, unlike some of the previous bubbles, it has a very direct effect on most of the world population. Which might mean it feeds into price and wage inflation, causing some of the deflation to be real rather than monetary. That seems to be the effect so far in the Far Eastern economies, at least.

 

However the imbalance might just be too big for that to sort things out.

 

[MattFC]

If the writer of the article stopped to consider what he was saying, he would realise that ultimately all those contracts must at some point be closed, resulting in the mother of all price collapses. The only thing which cannot be predicted with accuracy is the timing of the collapse, but I would guess it will be when there is actual as opposed to verbal monetary tightening. Could be huge.

 

Underlying it all (from my understanding).. yes there are the physical shipments and deliveries, but the speculations is in effect derivatives of the physicals movements (e.g. $ for x amount delivered in Sept).. therefore these sold and resold in the intervening period many times over.. also depend whether its options trading (e.g. you don’t have to excercise) or futures.. you do.

 

Its just like other derivatives (e.g. analogy of a £1m house where 10 people insure it.. fine till it burns down)

 

Have a look at Wiki Futures for some info

[wren]

It does feel like they are running out of bubbles.

 

The thing about oil and food is that, unlike some of the previous bubbles, it has a very direct effect on most of the world population. Which might mean it feeds into price and wage inflation, causing some of the deflation to be real rather than monetary. That seems to be the effect so far in the Far Eastern economies, at least.

 

However the imbalance might just be too big for that to sort things out.

? Did you mean "some of the inflation to be real" there?

 

If you did, and by that mean a real drop in standard of living, the signs are that the First World is not immune.

 

I believe the energy price problems are partly supply-demand and partly monetary inflation. The former is the killer.

[Magpie]

? Did you mean "some of the inflation to be real" there?

 

If you did, and by that mean a real drop in standard of living, the signs are that the First World is not immune.

 

I believe the energy price problems are partly supply-demand and partly monetary inflation. The former is the killer.

 

No I mean deflation. There's too much money out there and some of it will end up being destroyed so either way there has to be a real deflation (IMO), but that can take the form of an actual deflation or inflation in prices (so that the monetary value stays stable, but real value falls).

 

A lot of the monetary inflation already happened - it's the root cause - but the problem now is too much money sloshing round the world. The only solution is real money destruction, but that could play out a few different ways (in which I'd also include the possibility of hyperinflation).

 

 

 

[Magpie]

? Did you mean "some of the inflation to be real" there?

 

If you did, and by that mean a real drop in standard of living, the signs are that the First World is not immune.

 

I believe the energy price problems are partly supply-demand and partly monetary inflation. The former is the killer.

 

And yes I think a drop in the standard of living in the first world is unavoidable not just possible.

 

I agree with you on the causes of the price rises, it's just that I see the monetary inflation as the root cause, which is being expressed in money being being available to speculators, who become the immediate cause.

 

[sossij]

Underlying it all (from my understanding).. yes there are the physical shipments and deliveries, but the speculations is in effect derivatives of the physicals movements (e.g. $ for x amount delivered in Sept).. therefore these sold and resold in the intervening period many times over.. also depend whether its options trading (e.g. you don’t have to excercise) or futures.. you do.

 

Its just like other derivatives (e.g. analogy of a £1m house where 10 people insure it.. fine till it burns down)

 

Have a look at Wiki Futures for some info

 

Thanks matt, I'm afraid I still don't really understand... think I need to go and do some reading Cheers!

[romans holiday]

No I mean deflation. There's too much money out there and some of it will end up being destroyed so either way there has to be a real deflation (IMO), but that can take the form of an actual deflation or inflation in prices (so that the monetary value stays stable, but real value falls).

 

A lot of the monetary inflation already happened - it's the root cause - but the problem now is too much money sloshing round the world. The only solution is real money destruction, but that could play out a few different ways (in which I'd also include the possibility of hyperinflation).

 

Deflation would seem the likely outcome after a period of chronic inflation, but I can not see how the deflationary option is open to the dollar these days. Given the astronomical debt this would be a disaster. Do you think America may default on its international debt??

[Magpie]

Deflation would seem the likely outcome after a period of chronic inflation, but I can not see how the deflationary option is open to the dollar these days. Given the astronomical debt this would be a disaster. Do you think America may default on its international debt??

 

I just posted some ramblings about inflation/deflation on the other thread.

 

I think it's fairly unlikely that the money supply will actually fall, but I think you can talk about deflation in relative terms as well as absolute terms. If the amount of money stays fairly stable while some major bubbles burst, a lot of wealth is effectively destroyed. If people, funds, governments etc choose to sit on cash reserves in the expectation of falling prices, you can end up with deflationary effects in some respects.

 

I think the truth is we'll see something that is a messy readjustment of relative prices in which living standards fall, but a lot of assets also lose a lot of value. The money supply might keep growing, but it's the relative adjustments within economies that will be felt.

[MattFC]

Thanks matt, I'm afraid I still don't really understand... think I need to go and do some reading Cheers!

 

Part of the answer may be found with items such as this:

 

Last year, the Vitol Group, a large oil-trading firm based in the Netherlands and Switzerland, paid $170 million to buy an oil-terminal complex in Amsterdam. Wall Street investment bank Morgan Stanley bought TransMontaigne Inc., an oil-products transportation and distribution company; it also bought a European company that manages oil tankers. In Singapore, trading firms are among the port city's largest storage providers

 

Some of those dabbling also do take delivery!

 

full link Where has all the oil gone

 

[G0ldfinger]

The Great Oil Swindle

How much did the Fed really know?

 

By Mike Whitney

...

I think I'd rather go with what T. Boone Pickens, Matt Simmons, and Jim Puplava tell me about oil.

 

EDIT: Besides that, yes, since everything but commodities is now toast, this bull has a few years left. Say, a decade at least.

[G0ldfinger]

EDIted to add link: http://business.timesonline.co.uk/tol/busi...icle4204998.ece

Bank of Ireland also announced the sudden withdrawal of its entire mortgage range today. It will introduce new rates of up to 8.09 per cent tomorrow.

No reason to panic like this, eh?

[tinecu]

No reason to panic like this, eh?

Blimey! Where did your find that news?

 

[G0ldfinger]

Three bedroom house (edit: with garden) in Liverpool for £55,000. We're getting closer to reasonable prices in this country.

http://www.housepricecrash.co.uk/forum/ind...t&p=1180203

[G0ldfinger]

That's also a good one (from the article above):

 

Experts said that the Woolwich had been inundated with demand from borrowers with nowhere else to turn and was responding by decreasing its loan-to-value limit from 90 per cent to 80 per cent on some fixed rate deals.

 

A borrower with a property worth £200,000 would now need at least £40,000 worth of equity to be eligible for the rates.

 

The move will cut off about half of all mortgage borrowers, as the median loan-to-value is 80 per cent , according to the Council of Mortgage Lenders.

Property is complete toast.

 

EDIT: IMO, this almost guarantees nominal falls of +50%.

[marceau]

That's also a good one (from the article above):

 

 

Property is complete toast.

 

EDIT: IMO, this almost guarantees nominal falls of +50%.

 

 

Hilarious, anyone who could not see this coming was, let's be fair here, a complete gimp.

 

I'm leaning towards 50% nominal too. But if someone decides to pull the plug on inflation (very unlikely for a long time yet), then all bets are off for property.

[GTG]

Part of the answer may be found with items such as this:

 

Last year, the Vitol Group, a large oil-trading firm based in the Netherlands and Switzerland, paid $170 million to buy an oil-terminal complex in Amsterdam. Wall Street investment bank Morgan Stanley bought TransMontaigne Inc., an oil-products transportation and distribution company; it also bought a European company that manages oil tankers. In Singapore, trading firms are among the port city's largest storage providers

 

Some of those dabbling also do take delivery!

 

full link Where has all the oil gone

 

He who holds the oil makes the rules.

 

 

 

[tinecu]

That's also a good one (from the article above):

 

 

Property is complete toast.

 

EDIT: IMO, this almost guarantees nominal falls of +50%.

 

Agreed.

Have you updated your gold vs. house price graph recently?

[Bobsta]

I used GoldMoney. By weight, the silver/gold ratio of my holding is about 55 to 1!

 

I wonder if I'm overdoing silver...

So I suspect you're also a little disappointed in Silver's lackluster performance since yesterday's drop. Gold is making a reasonable recovery but Silver's performance is less than inspiring.

[kernull]

tomorrow is very important day, first Trichet speaks (4:30 am) and he will talk euro so gold & silver will go up at night.

On the morning stocks will continue the rally because they are pricing a lot of "liquidity" in advance. Gold & silver probably will not move.

Then we have crude inventories (10:35) which will drive crude up. If crude is at 138 at that time, this +2 bucks it always spikes on inventories may take crude to 140 , and if that happend it may trigger a break in to 140 area and again, gold & silver go even higher.

As 14:15 will approach for Bernanke speech, stocks rally will top, and gold & silver will go lower, as dollar will be also toping.

Then , after high volatility we will have dollar to plummet after no rate cut announcement and gold & siller begin its big rally to 1200 & 25.00, because probably many investors are waiting for this day to put their money in PMs.

Thats my strategy for tomorrow.

[Steve Netwriter]

That's also a good one (from the article above):

 

 

Property is complete toast.

 

EDIT: IMO, this almost guarantees nominal falls of +50%.

 

What's interesting is that I thought this was going to happen in 2003 when the BBC did a programme on "liar loans".

I distinctly remember thinking at the time "oh crikey, this is going to hit prices hard".

It's taken all this time for it to hit, and now it's just going to be a lot worse than is would have been if they'd sorted it out back then

 

[njpurser]

That's also a good one (from the article above):

 

 

Property is complete toast.

 

EDIT: IMO, this almost guarantees nominal falls of +50%.

 

Scumbags aren't they. Pretending they are decreasing LTVs as a result of demand i.e. blaming the borrower. What they are really saying is

 

HOUSE PRICE CRASH IN FULL SWING WE ARE GETTING OUT !

[UpTheKhyber]

Scumbags aren't they. Pretending they are decreasing LTVs as a result of demand i.e. blaming the borrower. What they are really saying is

 

HOUSE PRICE CRASH IN FULL SWING WE ARE GETTING OUT !

Not so much getting out as ensuring they have enough collateral in case the borrower defaults. It's just the reverse of 125% loans now we're going down the otherside of the rollercoaster. But scumbags they are.

[romans holiday]

He who holds the oil makes the rules.

[Steve Netwriter]

From Jim:

 

You know that I do not read other blog sites so if I go off the mark you will have only one person to blame - me. Here is an exception, thanks to the CIGAs that demanded I listen. It was good advice.

 

I suggest you make the time to do the same.

 

Well, if Jim's going to break the habit of a lifetime, I guess it must be worth a listen !!!!

 

http://netcastdaily.com/broadcast/fsn2008-0621-3b.mp3

 

 

from: http://www.jsmineset.com/ARhome.asp?VAfg=1...amp;T_ARID=6345

 

[ologhai]

So I suspect you're also a little disappointed in Silver's lackluster performance since yesterday's drop. Gold is making a reasonable recovery but Silver's performance is less than inspiring.

 

Yes and no.

 

I mean, yes -- I'm always disappointed on any day I don't double my money! ... but, on the other hand, I would suspect that most of us are not into PMs for what they happen to do over only a couple of days, so...