GOLD

[marmite]

POG slipping to low $850s as London opens. I hope it drops a little more, temporarily you understand, to give us ETF refugees a chance to clamber aboard the starship Gold Bull.

 

If your not in the market I really wouldn't bother to much about the $50 saving you might make if the price drops to $800 or $750 at this stage. This bull is angry and wants to charge

 

Buy your insurance while you still can. Insurance always costs a lot of money and you should always hope that this money is wasted, but you will be damm glad if you ever need to use it

 

[Johan van der Smut]

Springing up again. Oh, the timing, the timing. The thing is, I've just put a large CHAPS payment through to BV. (They don't call me Smut for nothing, you know.)

[Gatesy]

ETFS Conference Call - 'Commodity Securities Limited - trading status'

Speaker: Graham Tuckwell, Chairman, ETF Securities Ltd

 

Date: 18th September, Time: 11:00am London Time

Date: 19th September, Time: 11:00am London Time

 

Go to homepage to register (you have to be 'institutional')...

[Johan van der Smut]

If your not in the market I really wouldn't bother to much about the $50 saving you might make if the price drops to $800 or $750 at this stage. This bull is angry and wants to charge

 

Buy your insurance while you still can. Insurance always costs a lot of money and you should always hope that this money is wasted, but you will be damm glad if you ever need to use it

 

I'm getting there, but it takes days for the money to come through and days to transfer it to a bank account (and then days to transfer it to BV, if that's the way I choose to go, although I suppose I could always use CHAPS again.)

 

Depending on which way the wind's blowing, I might reluctantly risk moving back into ETFs for several days until prices stabilise.

[Gatesy]

What's the chances of a "retest of the lows" from here then?

 

ps. I agree with many here, what a day yesterday. I found I had goose pimples for much of the day...

[wrongmove]

You do not need to understand gold fundamentals.

Just understand that the financial world in unravelling... which is easy enough when it is slapping you in the face.

 

 

This is not a secret or a surprise to me. I'm actually more bearish than most here!

 

Many here think everything is going down except gold. I suspect absolutely everything may go down!

 

 

Sorry if I'm not all champagne smileys and hats in the air - as I have said many times, I am in the "buy 10% and hope it does badly" camp.

 

 

We clearly need a probably long, and certainly painful, period of "rebalancing" (paying off debt), so bad times are inevitable IMHO. This has been self evident for years now. I just cannot see any upside to the collapse scenario, whether you have a few sovs under the matress of not.

[wrongmove]

If US lose AAA, then yes, that would be bullish for gold, in quite a big way. Certainly in dollar terms. No real movement on the dollar. Anyone heard any more on this?

 

I'm away for a couple of weeks soon. I'm not going to miss a currency collapse am I?

 

 

More on this from Ambrose Evans-Pritchard

 

Global credit system suffers cardiac arrest on US crash

 

".................The Federal Deposit Insurance Corporation FDIC has already exhausted half its capital cleaning up after the collapse of IndyMac. It may need half a trillion dollars of fresh money to cope with the 120-odd lenders on its sick list. Professor Nouriel Roubini from New York University warns that several hundred banks will go under before this hurricane has exhausted its fury.

 

John Chambers, head of sovereign ratings at Standard & Poor's, said America's AAA grade is safe for now. The Fannie/Freddie bail-out is not comparable to ordinary state debt. It is backed by housing collateral, mostly based on prime mortgages.

 

"In the worst case scenario, the losses from Fannie and Freddie will be 2.5pc of GDP. This is not to belittle the unprecedented actions of the last two weeks.

 

"For the US to lose its AAA we would have to see the sort of financial distress that occurred in the Nordic countries. It could get that bad. There's no God-given gift of a AAA rating. The US has to earn it like everyone else," he said.

 

Charles Dumas from Lombard Street Research said America's dependency on foreign money would carry a high price. "The ultimate test will be whether this seriously jeopardizes the reserve currency role of the US dollar. China finances the US government. So as long as the Chinese are willing to accept an annual loss of 15pc on their holdings of US bonds in real yuan terms, this can go on, but the decision lies in Beijing. What is clear is that it will take the US decades to pay this off," he said.

 

Hans Redeker, currency chief at BNP Paribas, says the US debt scare is vastly overblown. America's total government debt is 48pc of GDP on IMF measures, compared to 57pc for Germany, 94pc for Japan and 108pc for Italy.

 

"The debt levels are nothing compared to Europe, even after Fannie and Freddie. America still has great leeway," he said.

 

"We think the next phase of this crisis is going to be a repatriation story as American investors bring their money back from frontier markets. The US broker dealers were 60 times leveraged and now they need to take assets back onto dollar balance sheets."..................................."

 

 

 

[stevecook172001]

ermmm...

 

My feeling for some time is that deflation was absoloutely on the cards

 

I may have been wrong

[Justin Thyme]

Is anyone waiting to take advantage of when the Treasury market tanks ? Shorting the Ishares Lehman 20yr ETF was mentioned somewhere not so long ago but any more suggestions would be welcome

[Bobsta]

In trying to understand if the "no more naked shorts" announcement had a role to play in yesterday's events, it'd be good to get figures on COT open orders.

 

Does anyone have access to that data? Was there a significant reduction in short positions just before the price took off?

[paulypaul]

In trying to understand if the "no more naked shorts" announcement had a role to play in yesterday's events, it'd be good to get figures on COT open orders.

 

Does anyone have access to that data? Was there a significant reduction in short positions just before the price took off?

 

 

It heard it something to do with Russian bond stopping trading. Herd on yesterdays yorba.tv

 

 

 

 

[Steve Netwriter]

This is quite some read, with very interesting charts.

 

 

Why the Fed can’t lower rates

http://www.itulip.com/forums/showthread.ph...48133#post48133

 

Wondering why the Lehman failure and Monday's 500 point DOW drop didn’t move the Fed to cut on Tuesday? Short term, a cut won’t help. Long term, cuts shrink an already very short runway to zero interest rate hell.

[Gatesy]

Is anyone waiting to take advantage of when the Treasury market tanks ? Shorting the Ishares Lehman 20yr ETF was mentioned somewhere not so long ago but any more suggestions would be welcome

 

I certainly am looking for such opportunities. True to crooked form IG have removed all US treasury instruments from their platform and you can only day trade and roll over TLT. Rediculous but predictable. Must tell you somehting about where they think bonds are going.

 

edit: Oh, and TLT is Unborrowable

[Steve Netwriter]

Hints of the end of the US$ as reserve currency.

 

China paper urges new currency order after "financial tsunami"

http://news.yahoo.com/s/nm/20080917/bs_nm/...al_china_usa_dc

 

BEIJING (Reuters) - Threatened by a "financial tsunami," the world must consider building a financial order no longer dependent on the United States, a leading Chinese state newspaper said on Wednesday.

ADVERTISEMENT

 

The commentary in the overseas edition of the People's Daily said the collapse of Lehman Brothers Holdings Inc (LEH.P) "may augur an even larger impending global 'financial tsunami'."

 

from here:

 

http://www.itulip.com/forums/showthread.ph...48351#post48351

 

AntiSpin: We had inside information two months ago that China was in discussions with other central banks to develop an alternative currency regime in the face of the ongoing dissolution of the dollar-based system. This is the first trial balloon, floated at arm's length from officialdom by a Chinese government sanctioned academic, much the way sanctioned academics in the US are brought out to propose policies that are poplar with the ruling party. It may be followed by a statement by a government official directly connected to the Chinese government.

 

[romans holiday]

Nouriel Roubini on CNBC

 

http://www.cnbc.com/id/15840232?video=859660172&play=1

 

http://www.cnbc.com/id/15840232?video=859660187&play=1

[G0ldfinger]

Do you feel the "lack of Dollars" as well?

 

http://www.bloomberg.com/apps/news?pid=206...&refer=home

``The lack of dollars has been making the financial crisis worse around the world, which is why we now have this coordinated response,'' Barrie said.

There is really not all that many. So, let's print more.

[rgleeson]

This is not a secret or a surprise to me. I'm actually more bearish than most here!

 

Many here think everything is going down except gold. I suspect absolutely everything may go down!

 

 

Sorry if I'm not all champagne smileys and hats in the air - as I have said many times, I am in the "buy 10% and hope it does badly" camp.

 

 

We clearly need a probably long, and certainly painful, period of "rebalancing" (paying off debt), so bad times are inevitable IMHO. This has been self evident for years now. I just cannot see any upside to the collapse scenario, whether you have a few sovs under the matress of not.

 

It's all relative right, as long as gold goes down much less than everything else, the net result will be the same

[bitbigt]

ermmm...

My feeling for some time is that deflation was absoloutely on the cards

I may have been wrong

Certainly, the picture has been very confusing these last few months. My analysis of it all has never waned from an overall inflationary view when it comes to cost of living items. ...but at times I really felt concerned that I might be missing something.

 

Only time will tell what actually happens, and if it is inflation then its best to fall into that camp sooner (i.e., now, as you are) rather than when its to late

[romans holiday]

It's all relative right, as long as gold goes down much less than everything else, the net result will be the same

 

I see it this way.

 

We are heading into a deflationary depression [of the economy]. This will also involve a hyper inflation [of the currency].

 

If you really feel the need to reduce this to one idea, we are heading into a hyper-"deflation". Why the term hyper-"deflation"? Because the big picture is depression and deflation, widely considered. Why hyper? Because everything, all paper assets including the dollar will deflate. Why "interrogate" deflation? Because it also involves an inflation of the currency [numerically conceived, as the Government monetizes] which is in effect the same as deflation of the dollar and its purchasing power.

 

Just the way I see it. The old printing money/inflation/gold good story with the converse of asset deflation/go to cash/gold bad story frankly did not cut the mustard. A lot of gold holders were shaken out recently as assets deflated, and hedge funds deleveraged out of commodities because they perceived deflation to be negative for POG. I think this is a crying shame [but fortunately POG is still relatively low].

 

In a hyper-"deflation" [clumsy word I know] gold will go parabolic when the currency crisis strikes.

[Mr Pipples]

...as assets deflated, and hedge funds deleveraged out of commodities...

 

I think you may have commented on this before RH but how do you see things for energy, ag', water, e.m. commodities?

 

Edit - sorry, not the right section for this question really.

[drbubb]

I see it this way.

 

We are heading into a deflationary depression [of the economy]. This will also involve a hyper inflation [of the currency].

In a hyper-"deflation" [clumsy word I know] gold will go parabolic when the currency crisis strikes.

 

Makes sense.

This is even worse than stagflation- because at least in Stagflation, Incomes are rising,

albeit in only nominal terms. Presently they are falling in the US, bringing about a drop in absolute wealth

 

[gwizzie]

Makes sense.

This is even worse than stagflation- because at least in Stagflation, Incomes are rising,

albeit in only nominal terms. Presently they are falling in the US, bringing about a drop in absolute wealth

 

Someone coined the phrase "dragflation"

I cant recall where i read it but it seemed to make sense at the time

 

edit: found it here

I have read so much stuff over the past while that i think i am at the same place before i started reading

[romans holiday]

I think you may have commented on this before RH but how do you see things for energy, ag', water, e.m. commodities?

 

Edit - sorry, not the right section for this question really.

 

All real stuff would have to become more valuable as all paper assets deflate. A secular bull market in commodities is still on but I think things will become really confusing for investors once the currency gets into trouble.

 

With the "liquidity" crisis, we already see the beginnings of a currency crisis [even though the pundits only see a banking crisis] in so far as one of the functions of money is to be a medium of exchange. Money is freezing now, losing velocity, and in becoming illiquid is, at a certain level, losing its function as a medium of exchange.

 

I think the currency crisis will fully arrive when another function of money is lost; that of being a measure of value. This is where it will be extremely difficult for the market to give a measure of value to something in dollar prices. Until the market becomes fully aware of the currency crisis, I imagine market prices will be chaotic. This could lead once again to a huge round of deleveraging, leaving many to doubt the commodity bull. Those who clearly see instead a currency crisis will just ride it through.

 

Edit: I am not an economist... and consider that an advantage.

[rgleeson]

I’ve enjoyed the many debates on here and HPC on deflation/inflation, especially when they have been heated. The ancients Greeks and Victorians understood the value of a good debate in advancement of human knowledge and understanding. There are many inflationary and deflationary pressures and how they affect the price of any given asset is not obvious, and ultimately the wider impact depends upon how our politicians act daily in their attempts to contain the crisis.

 

Before I invested in gold 16 months ago, I read articles by economists who predicted gold would rise with commodities, fall with them, and then rise again as its monetary properties reasserted itself. I've found this thinking persuasive and it’s why I didn’t sell out in the last 2 months. But what makes this really interesting, is the underlying causes which drive that prediction, which is happening all around us, which is really making the end deflation/inflation result irrelevant to the price of gold.

 

[romans holiday]

Makes sense.

This is even worse than stagflation- because at least in Stagflation, Incomes are rising,

albeit in only nominal terms. Presently they are falling in the US, bringing about a drop in absolute wealth

 

Exactly! Stagflation .... thinking garden variety!