How do you explain the free-fall in gold, Cotton?
Remember our little discussion re inflation versus
recession and deflation? Enter Scene 2.
Remember our little discussion re inflation versus
recession and deflation? Enter Scene 2.
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Most wonder why it took so long for the correction to
occur.
Non of the factors to own gold have changed.
Everything sold in the past 2 days,was also bought.
The only thing to worry about is,where's bottom,when
should i buy.
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Good article here by Paul Craig Roberts on the reason for gold's decline:
http://www.paulcraigroberts.org/2013/04/04/the-assault-on-gold-paul-craig-roberts/
I saw one Bloomberg item which claimed that the price of gold was falling because of the strengthening U.S. economy which will in turn decrease the need for Fed quantitative easing. If so, why is the rest of the market so badly in the red as well? Oil had a big drop in price as did most commodities. Everyone who is celebrating the "demise" of gold should be careful what they wish for.
It's quite possible that I will get a chance to load up some more precious metals at a price not far off $1000 an ounce, something I never thought I would see in my lifetime.
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I am not very Bullish on precious metals, mainly
because the government has a vested reason to
manipulate it. I was there in 1980 and witnessed
the freefall. People using margin to speculate,
precipitate the mayhem. Did value of precious
metals recover quickly from 1980? no, it took
untol 2004-2005 to wake up the bulls. I am sorry,
I dont foresee $2500 gold because I saw the
hoopla in 1980 and paid the price. There was no
stopping the slide, and I wish not for that to
happen again because a lot of people around me
are heavily invested and I have some, but I am
on the same page as Warren Buffet. Do you
wonder why the government hasn't stopped the
short side? I hope it levels out soon or the
carnage will hurt a lot of people.
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SDG you should take a look at a gold chart from
1970-1980 and notice that in 1975 gold fell 50%
and yet the run continued on the following year.
Imagine if gold did a 50% retracement from its
2011 highs,that would be a fall down to the 950
range. Which is roughly the marginal cost of
production for most of these minors. The moral of
the story is that gold can fall hard and still be in a
long term uptrend along with inflation.
I don't invest in Gold because I would sooner own
business's that generate earnings.
This would be a good time for Errol to explain to
us all how unprecedented global monitary
stimulus will lead to deflation. We know what you
think will happen but can you be specific on how it
will happen. ( basically Kodiaks question from an
earlier thread).
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rhoff . . . just ask Japan.
Japan has been battling deflation for years. Their policies of stimulus has done little to trigger inflation. The U.S. (IMO) is now entering a similar phase of their debt cycle.
Keynesian economics (again in my opinion) works in mild recessions. This is not a mild recession and QE3's impact to create an inflationary environment is clearly not working.
The Fed must now be quite uneasy. Printing money has become less and less effective and their balance sheet bulges to absurd levels.
Just ask post-war Germany that question. Excessive money printing took years to repair.
My fear is that the fed has now created is a very dangerous and unstainable bubble. And today's meltdown is no accident. This artificial bubble is showing cracks that will and has already started to impact Western Cdn agriculture. These fed policies (designed to buy time) has created a larger economic problem (IMO) that is basically unfixable without a changing of the guard in global wealth. Cash is king.
To me, we are now at the entrance of that change, which will create financial pain and then gain throughout all sectors of the economy. In other words, the economy is going to get a lot worse (over the next 2 to 3 years) before green buds will eventually appear.
This sucks because all of us will be affected. But that's the damage of kicking-the-can-down-the-road policies with excessive government overspending and lack of government accountability and blind optimism that we can simply inflate ourselves out of these mess.
For growers and feeders, risk management business and marketing skills are now needed more than ever. Not complacency . . . .
Errol
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We are told by the MSM that the sale of $650
million worth of Cypriot Gold has just caused a
3 % drop in the price of Gold (and more than 5%
in Silver). Is this credible?
The Fed is creating $85 billion per month or close
to $3 billion per day, 24/7. The Cypriot Gold at is
only 1/5th of what our Fed prints EVERY day!
The U.S. Treasury borrows some $4 billion per
day to keep our well oiled economic engine
running, ALL of the Cypriot Gold is about 1/7th of
what the U.S. borrows each and EVERY day.
Last month, China imported from Hong Kong
alone some 97 tons or roughly 7 times the amount
of Cyprus’s total Gold holdings, the Cypriot Gold
is a mere 4 days worth of imports. One other way
to look at this is that 14 tons is about 6 tenths of 1
percent of the global production of Gold for 1
year…it is nothing. No, $650 million in today’s
world is LESS THAN NOTHING!
2013 Silver Eagles
(Available For Now) at SDBullion!
By Bill Holter, Miles Franklin Ltd,:
I had not planned any commentary this weekend
but with Gold “down” $65 per ounce I will put my 2
cents in. As you know, I called “bottom” about 5
weeks ago the first time we hit $1,550 then again
about 2 weeks ago on the retest of those levels.
They were broken decisively Friday. The “reason”
for Wednesdays sell off of $25? And the reason
given for today’s $65 by the CNBC know
nothings? ……..Cyprus!
Yep, Cyprus may sell ALL of their Gold and
swamp the market! This weeks price action is
merely “front running” these sales in order to get
out before the price is CRUSHED! But wait,
Cyprus has less than 14 tons of Gold…this is
worth some $650 million (yes, with an “M”) yet
they have an updated shortfall of some $23 billion
(with a “b”) so how does selling their Gold fix their
problems? Well obviously it does not even
amount to a drop in the bucket as it is only 3% or
so of what capital they will need to raise!
Let me put this into perspective for you in a
couple of different ways. The Fed is creating $85
billion per month or close to $3 billion per day,
24/7. The Cypriot Gold is only 1/5th of what our
Fed prints EVERY day! The U.S. Treasury
borrows some $4 billion per day to keep our well
oiled economic engine running, ALL of the Cypriot
Gold is about 1/7th of what the U.S. borrows each
and EVERY day. Last month, China imported
from Hong Kong alone some 97 tons or roughly 7
times the amount of Cyprus’s total Gold holdings,
the Cypriot Gold is a mere 4 days worth of
imports. One other way to look at this is that 14
tons is about 6 tenths of 1 percent of the global
production of Gold for 1 year…it is nothing. No,
$650 million in today’s world is LESS THAN
NOTHING!
So, we are told that the sale of $650 million worth
of Gold has just caused a 3 % drop in the price of
Gold (and more than 5% in Silver). Is this
credible? And if it had any credibility at all, this is
Gold being sold, not Silver so why would Silver,
platinum, palladium and even copper be sold off?
I will leave you with a few questions that I won’t
answer because the answers are too obvious. Do
you really believe that holders of physical metal
would part with their metal if they knew something
bad like a system wide banking failure was
imminent? Or a (another) sovereign was going to
default? Or some whackos were going to start
lobbing nuclear weapons up in the air? Would
physical holders sell (in panic fashion no less)
because a “treasure” was found or some new
mine opened that had 14 tons of Gold?
Do you see the lack of logic here? Literally $
trillions in paper monies are being put into the
system and Gold is not only finite, it is scarce to
begin with. More physical has been purchased
than produced over the last at least 20 years so
we know that “inventories” are shrinking. Do you
not think that the Chinese would like to take an
extra 14 tons into their hoard? How about the
Indians? There are reports of shortages of Gold
in south India, wouldn’t they like this 14 tons to
alleviate the shortage?
Or, maybe I’m reading this thing the wrong way.
Maybe investors are selling their paper Gold
because they suddenly realized that it has no
backing. Maybe they will sell it all the way down
to its intrinsic value…ZERO! All I can say is that
in the past whenever Gold was sold off in violent
fashion, we soon found out about another BIG
problem that was brewing behind the scenes.
This is my bet, something big, REALLY BIG is
collapsing out of sight of the public’s eye and we
will only learn of it after the fact.
By the way, when the markets close there will be
a period of time where no one has a clue about
what the “price of Gold” is. The only thing you will
know is whether you have it or not.
Regards, Bill H.
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$2500 gold will be in the same boat as $15 corn, $20 beans, $150 oil. - la la land for many years. Everytime retarded highs get mantioned the market collapsess. It's how very few make alot and many loose.
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agree parsley . . . the Cypriot gold sale
is a drop in the bucket and a bunch of BS
when blamed for the impact of the gold
price drop. This was a broad-based global
deflationary commodity market sell-off.
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