one is the antithesis of the other. both can't go up together for very long. which one cracks first?
Treasuries, gold can easily touch 2000 if this "fear" goes on enough. What we have seen during this crisis until now is that in moments of fear people goes to cash, specially because there is people that leverages a lot to go into gold and silver and when things go south they need to cash out of gold and silver. Historically gold and the stock market are inversally correlated, but during this crisis they have started going (more or less) correlated. This is because during this crisis is not about risky investment/safe investment, its about if the dollar will survive or not. So gold and the stock market are acting as a way to get out of the dollar and they tank when people go back to cash. This is how it has been during this crisis until now. It could change. But keep in mind that if at some point you see the stock market crashing and gold going up for a sustained period of time, it means the dollar is in great danger. When the stock market crashes and people prefers to go into gold than into dollars... that could be the final blow for the dollar. the only thing i'd add here is that relationships can change btwn asset classes in unpredicatable ways. for instance, its possible for everything to decline incl. gold and bitcoin to rise from the ashes. this is my bet. in fact i think the relationships are hinting at a shift. the USD should have rallied hard but is stuck in a consolidation pattern. for these reasons i also like to look at each individual asset and try to assess whether it over/undervalued, in a bubble or not, and also what part of the cycle we're in. for instance, some think that gold has a 9 yr cycle which obviously has extended at this point. another factor is that even if the above relationships may hold, they may not all move at the same time. for instance gold topped 4-5 mo after the Dow back in 2008 as did the miners. i think this is a phenomenon of short seller/sellers rotating in and out of sectors selling them off one by one. this is my concern for gold right now. we're about 3 mo post Dow rollover. gold is going parabolic into a blowoff maybe. then crash. |
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I think gold is overpriced right now due to the share market and debt fear factor. Platinum is much rarer and a more industrially useful metal. It's also used as a financial instrument yet gold was at parity with platinum earlier today. Either gold is overpriced or platinum is too cheap. I wager on the former.
you platinum, me bitcoin. |
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one is the antithesis of the other. both can't go up together for very long. which one cracks first?
Treasuries, gold can easily touch 2000 if this "fear" goes on enough. What we have seen during this crisis until now is that in moments of fear people goes to cash, specially because there is people that leverages a lot to go into gold and silver and when things go south they need to cash out of gold and silver. Historically gold and the stock market are inversally correlated, but during this crisis they have started going (more or less) correlated. This is because during this crisis is not about risky investment/safe investment, its about if the dollar will survive or not. So gold and the stock market are acting as a way to get out of the dollar and they tank when people go back to cash. This is how it has been during this crisis until now. It could change. But keep in mind that if at some point you see the stock market crashing and gold going up for a sustained period of time, it means the dollar is in great danger. When the stock market crashes and people prefers to go into gold than into dollars... that could be the final blow for the dollar. +1 clear thinking |
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Dow futures point to a 150-200 point drop in the dow at the opening bell. Over the next 3 months, though, expect U.S. markets to appreciate in value 25%, just like with Japan's 1998 debt downgrade from AAA to AA resulting in the Nikkei jumping 25-30%.
you're quickly losing credibility. stocks continue to crash and bitcoin rising. sorry. Yeah stocks are on unsure footing right now, however bitcoin is not exactly rising. You say that but he's the one who's credibility is suspect? define your time frame. |
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one is the antithesis of the other. both can't go up together for very long. which one cracks first?
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ironically, if the set back in the btc economy ends up being temporary, every btc that could have been received in exchange for goods or services will be worth much more tomorrow than today. this is not the time to get squeamish.
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gold AND Treasuries going up in value is a contradiction. one is due to break down. which one?
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a CNBC analyst made a great point. if the debt downgrade really meant we were going into a hyperinflationary phase then UST yields would be going UP. instead they are going DOWN which means people are fleeing into UST's despite the downgrade. this means investors are MORE fearful of another economic downturn and are fleeing stocks and risky assets.
The ironic thing is that treasuries going from AAA -> AA+ means the average rating of portfolios has lowered. As funds try to adjust weightings to move their average back upward, they will most likely have to ditch BBB- bonds and buy more treasuries (by far the largest high rated bond available). Treasuries being downgraded could mean that more funds will be buying them. watch out Russell. |
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a CNBC analyst made a great point. if the debt downgrade really meant we were going into a hyperinflationary phase then UST yields would be going UP. instead they are going DOWN which means people are fleeing into UST's despite the downgrade. this means investors are MORE fearful of another economic downturn and are fleeing stocks and risky assets.
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Dow futures point to a 150-200 point drop in the dow at the opening bell. Over the next 3 months, though, expect U.S. markets to appreciate in value 25%, just like with Japan's 1998 debt downgrade from AAA to AA resulting in the Nikkei jumping 25-30%.
you're quickly losing credibility. stocks continue to crash and bitcoin rising. sorry. |
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for you to look at that Employment Recession chart and cheer that it is somehow evidence that all is good and we need more of that is beyond me. as if this is supposed to be a positive when all the evidence indicates its a negative. i mean the whole world is up in arms about whats happening b/c of the status quo and you're happy about it.
Well, I'm happy because I think I found the fact that really match my theory: we do not need more people to work. As my other post indicated, from 10 years ago I have been asking this question around all the economic forums: "If robots are use widely, will almost everyone lost their job?" And even today there are few can give a systematic approach to this problem I heard in one of the minority economy theories, they think high jobless rate is a natual part of mordern society, so it is not a problem as long as social wellfare system is strong enough. I don't recall the name of that guy... well we agree to disagree. i think the large inflationary ramp we've had since 1971 when going off the gold std for good has contributed to massive population increases based on debt. yes we've had more technological improvements which has helped compensate for this but we've hit the ceiling. masses of ppl are now being left behind and the unemployment rate and labor non par rates are net negative indicators IMO. |
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great investments are never seen by the masses. poor ones are often too obvious.
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Great chart, just showed how high our productivity is: No need to get new worker for 40 weeks or more. Maybe cut some more during this period
i've decided you're a shill plant. you promote the status quo at every opportunity. you've not changed my mind one bit. in fact, thank you for extending my favorite threads in the Economics section to view my opinions and outlook. Serious?  I am always enjoyed reading your threads anyway  I'm not speculating, more an investor and hope the economy will find a way out of this mess, but first I have to list all the facts for you to look at that Employment Recession chart and cheer that it is somehow evidence that all is good and we need more of that is beyond me. as if this is supposed to be a positive when all the evidence indicates its a negative. i mean the whole world is up in arms about whats happening b/c of the status quo and you're happy about it. |
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Although I have some gold short position, I hope gold not going down, otherwise we really could not find the next bubble to save the world  why couldn't that new bubble be Bitcoin? |
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Yeah why in the world would metal prices fall after this debt downgrade??
And how exactly does the Fed keep metal prices down in any meaningful way?
severe deflation, the end of QE, the end of an 11 yr bull mkt and....Bitcoin? |
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not any more. |
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I knew it as soon as the debt bill passed
why did u sell all your Bitcoins? |
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Great chart, just showed how high our productivity is: No need to get new worker for 40 weeks or more. Maybe cut some more during this period
i've decided you're a shill plant. you promote the status quo at every opportunity. you've not changed my mind one bit. in fact, thank you for extending my favorite threads in the Economics section to view my opinions and outlook. |
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so smart ass OP. why is Bitcoin ramping right now in response to a plunging stock mkt and USD?
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how many quadrillion of CDS do we have? and don't tell me net net its much smaller and therefore insignificant. Jim Rickards disputes this argument quite nicely.
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