Better yet, an offer of a wager: if gold rises above $2,000/oz, you will abandon the notion that physical gold is in a bubble and will follow my guidelines.
LOL. i offered you a wager near the beginning of this thread and you turned it down on "principle". fine, i'll take your wager but you have to offer me the symmetric wager that if gold drops below $1680 before it clears $2000 that you'll follow my guidelines. not even sure how we would enforce this.
The actual mechanism employed was gold futures being sold en masse, most likely by bullion banks and central banks.
what happened to the whale theory of diving deeply and ascending rapidly scooping of gold futures ala herring?
Then no bank of any kind would have gold reserves. The banks treat gold as money.
then why do you tx gold as an asset which would equate it to any other asset like RE, oil, commods subject to the whims of the USD?
Gold will go up regardless of either direction because both outcomes lead to instability in the structure of the financial system. The only stability is in gold.
i remind everyone here that another asset was thought to only go up as well in all situations. its name is real estate.
i think the waves of bad news for gold will keep coming. tomorrow we'll probably see the $DXY break out over 76.25. then 9/22 Fed meeting still won't announce any more QE. the question will be how long will you deny whats happening?
What bad news? Did CERN suddenly discover how to vaporize metric tonnes of gold in a nanosecond?
The dollar needs to close over 76. It still won't be out of the woods then. There are numerous levels beyond that which have to be breached in order to sustain a rally, 79 being a major one. I seriously doubt triple-digits for the dollar index are coming in the near future.
the fundamental argument for gold to go to the moon depends on the USD vaporizing. its latest upward moves shouldn't be ignored and i certainly don't see any tanking.
If "most investors" have moved to the USD instead of gold, that's exactly the type of positioning that you would trade against, by your own contrarian reasoning.
ok how about "most investors
starting yesterday". i think this will be a new trend.
Only when prices hit limit up day after day will gold's bull market finally end, certainly not while it is still being called a bubble.
this is a dangerous assumption. i caution all of you against this linear thinking. THIS is what will cause Armageddon worldwide. the central banks won't let it get this bad.
don't forget we appear to have had a double top. until gold moves to new highs thats how i'm playing it.
How does this work? The markets will collapse, unemployment will rise, prices will fall, tax revenue will drop, the Treasury will issue about a trillion new USTB at high discount rates and yields, and the Fed is going to do nothing? And in Europe?
The short answer is that all of the factors mentioned will force monetary authorities to act no matter what they might wish for. If they don't, they'll be replaced with people who
will act in accordance with the political sentiment of the region.
to repeat; the Fed won't destroy itself. it will act in self preservation mode and try to save the USD which is the worlds reserve currency for the financial system. lest you forget, who owns Congress? oh yeah, the banks. do they really care about what happens to the avg Joe? no. or would they act to preserve the value of their bailout money which they've already received and stashed in offshore accts? do you really think they'll allow The Greatest Transfer of Wealth in Human History to a bunch of gold bugs and foreign central banks who've been accumulating gold? would Warren Buffett really invest in BAC if he thought all his precious USD's and stocks were to be vaporized in a hyperinflation? or perhaps was he assured that the Fed will do what it takes to save the US financial system ala USD? do you really think we're headed for a one world currency backed by gold when we have a clear example of why it won't work in Europe? do you really think a one world currency will stop all international wars which are a longer part of human history than gold as money? if not, how do you propose those warring nations fund themselves? will we really have world peace forever? do you really think the US military will allow the Saudi's to reprice oil in terms of gold vs USD's? how do you think the US gov't will pay its military if they allow the USD to vaporize? gold? really? do you really think we let the Chinese and Russians equal seats at the table of a one world currency backed by gold? who will suffer most if we let deflation kick in? i say emerging mkts would take the brunt of the hit compared to the US which would certainly be acceptable to the Fed.
the deleveraging cycle to come will be brutal. 2008 was a warmup. deflation is the money supply plus outstanding credit. that credit is contracting mightily as we speak. credit makes up most of the USD's out there, i.e., virtual USD's by probably 27 times not even counting derivatives. its vaporing right now leading to a decrease in the total money supply which is why you're seeing the scramble for USD's. why are the foreign CB's begging for new swap lines in USD's? how long can the Greeks keep paying 97% on 1yr bonds? default is guaranteed which will vaporize credit of whatever denomination. liquidity is non existent right now. the Fed and banks are pushing on a string no matter ZIRP. no one will borrow nor lend out of fear. we are doing a Japan.
ask yourself how are you going to pay for a loaf of bread if the USD vaporizes with your gold or silver. are you gonna cut it up in small pieces or what? how do countries move gold around to fund balance of pmts worldwide?
most ppl i know are out of stocks or commods. a stock mkt crash won't effect us much. retail investors are out. most corporate insiders are out. a cleansing of the system is what we need and will clear out the bad debt which will be deflationary. the worst of it has already been unloaded to the Fed. the collapse of 1921 lasted a mere 2 yrs b/c the Fed refused to get involved which was a good thing. i myself have a large holding of cash just waiting for the selloff to complete itself so that i can buy at what i reasonably think is the bottom. lots of us are in that situation. i say bring it on and lets get this shit over with. i'll be fine. you'll be fine. the good news about this is that the USD will be stronger and we'll all benefit from that. the complexity of the world and its digital nature will never allow gold to become a standard again.
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In fact someone like you who feels it would be an easy task needs to be involved in these types of processes to help design a counterfeit proof product.
