Recession Imminent

[johnyj]

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

[cypherdoc]

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?

[johnyj]

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?

I have read such a rule and agreed with it:

Any kind of bubble, if it want to be very successful, must have 2 criteria:

1. It should be very simple outside that everyone on the street can immediately understand and accept it
2. It should have enough complex pricing model, and most of the scholars can not prove it is a bubble

Just like someone posted, anyone on the planet, from a chinese factory worker to an indian farmer will all accept a gold bar, not a usb flash drive with a wallet.dat stored 

[cypherdoc]

great investments are never seen by the masses.  poor ones are often too obvious.

[johnyj]

great investments are never seen by the masses.  poor ones are often too obvious.

I also joined this game with such kind of hope, BTC have the potential, the bubble could be 100 times bigger than real world economy bubble, who knows

[cypherdoc]

the stock mkt crash convinces me the Fed is trying desperately to get gold /silver down.

[netrin]

the stock mkt crash convinces me the Fed is trying desperately to get gold /silver down.

I'm properly convinced now that private bank debt is clean the Fed can and must deflate the dollar. However, I don't see how the Fed can bring gold down without taking everything else down first. And to what end, to save that same everything else?

Or perhaps they only need to shake the pm market?

[cypherdoc]

the stock mkt crash convinces me the Fed is trying desperately to get gold /silver down.

I'm properly convinced now that private bank debt is clean the Fed can and must deflate the dollar. However, I don't see how the Fed can bring gold down without taking everything else down first. And to what end, to save that same everything else?

Or perhaps they only need to shake the pm market?

you're right.  before your very eyes they are letting equities crash and its now starting to drag silver down with it just like the mining stocks that already have been killed.   i truly think gold has to follow soon after they get as many ppl into it before the takedown.  oil and soft commods already have been hit too.  its just a matter of time.

why would the Fed give up its reserve currency which is its only franchise?  tomorrow if the FOMC doesn't say anything about further QE, gold should tank.

[cypherdoc]

I'm properly convinced now that private bank debt is clean the Fed can and must deflate the dollar.

what do you mean by this?  get the USD to rise?

[CurbsideProphet]

An interesting analysis (not mine):

When the money supply grows faster than real GDP, the extra money causes inflation.

John Williams (at Shadow Government Statistics) posts M1 and M2 (both published by the Federal Reserve).

More important, Mr. Williams recalculates and publishes two critical numbers that the government no longer does: M3 (the money supply including large institutional investors) and the original Consumer Price Index, before the government suppressed it with "hedonic adjustments."

http://www.shadowstats.com/alternate_data

Mr. Williams shows that the annual growth of M1, M2 and M3 are all higher than real (inflation-adjusted) GDP growth. This is inflationary. Mr. Williams calculates real inflation far above the government-massaged inflation rate.

The government reports the real GDP growth rate as 1.9% but Mr. Williams calculates it as negative 2.5%. This is because real GDP is adjusted by inflation.

Any growth in M1, M2 or M3 in excess of GDP growth is excess.

The excess money supply came from the Federal Reserve lending money --- money that it creates out of thin air (contrary to Mr. Bernanke's explicit denial that this is what the Fed does).

Bernanke is of the opinion that the Great Depression was mainly caused by monetary contraction, the consequence of poor policymaking by the American Federal Reserve System and continued crisis in the banking system.  In this view, the Federal Reserve, by not acting, allowed the money supply as measured by the M2 to shrink by one-third from 1929–1933, thereby transforming a normal recession into the Great Depression. 

Bernanke is staying true to his word by increasing the money supply while GDP contracts.  We will see more QE even if thinly veiled under another name.

[cypherdoc]

An interesting analysis (not mine):

When the money supply grows faster than real GDP, the extra money causes inflation.

John Williams (at Shadow Government Statistics) posts M1 and M2 (both published by the Federal Reserve).

More important, Mr. Williams recalculates and publishes two critical numbers that the government no longer does: M3 (the money supply including large institutional investors) and the original Consumer Price Index, before the government suppressed it with "hedonic adjustments."

http://www.shadowstats.com/alternate_data

Mr. Williams shows that the annual growth of M1, M2 and M3 are all higher than real (inflation-adjusted) GDP growth. This is inflationary. Mr. Williams calculates real inflation far above the government-massaged inflation rate.

The government reports the real GDP growth rate as 1.9% but Mr. Williams calculates it as negative 2.5%. This is because real GDP is adjusted by inflation.

Any growth in M1, M2 or M3 in excess of GDP growth is excess.

The excess money supply came from the Federal Reserve lending money --- money that it creates out of thin air (contrary to Mr. Bernanke's explicit denial that this is what the Fed does).

Bernanke is of the opinion that the Great Depression was mainly caused by monetary contraction, the consequence of poor policymaking by the American Federal Reserve System and continued crisis in the banking system.  In this view, the Federal Reserve, by not acting, allowed the money supply as measured by the M2 to shrink by one-third from 1929–1933, thereby transforming a normal recession into the Great Depression. 

Bernanke is staying true to his word by increasing the money supply while GDP contracts.  We will see more QE even if thinly veiled under another name.

hi Curb.  you're right about Berspankme and i've read his paper from 2002.  i would only say that ppl change their minds with time too and in the face of contradictory evidence.

yes, i used to subscribe to John Williams a few yrs ago and used his theories to take a stagflationary approach to what happened in 2008 which turned out to be only half right meaning i only broke even in the end going into 2009.  disappointed, i researched heavily as to why mining and energy stocks and somewhat gold bullion got smacked and realized Prechter, Mish, and Shilling were the only ones who got it right. 

now to extrapolate their theories to this upcoming crisis is dangerous i know.  but we never washed out the bad debt in 2008 and its even grown larger depending on what you measure so i'm arguing that perhaps the Fed will lose total control and have market discipline enforced upon it.  if the stock mkt is forming a head and shoulders top since 2000 and we do an Elliott Wave phase 2 wave down this could take the Dow to the sub 4000 level.  i doubt gold could withstand that type of drawdown in liquidity. 

there are lots of theories out there and we all have to choose our own paths.  i wish all of us luck.

[lemonginger]

the stock mkt crash convinces me the Fed is trying desperately to get gold /silver down.

Wat?

Gld up yesterday, gld up tomorrow, where the hell do you think people are going to run to?

[cypherdoc]

the stock mkt crash convinces me the Fed is trying desperately to get gold /silver down.

Wat?

Gld up yesterday, gld up tomorrow, where the hell do you think people are going to run to?

Cash.  

i'm just expressing my opinion and not shilling about it.  i could be wrong.  these things can go on longer than one anticipates.  my short on silver looks good right now.  gold not so good.  we'll see.

edit:  the bulls are definitely trying to take this thing into a parabola though.  can they do it?

[netrin]

I'm properly convinced now that private bank debt is clean the Fed can and must deflate the dollar.

what do you mean by this?  get the USD to rise?

Well, yes. The market's response today couldn't have surprised Ben and the banks are strapped in and cleared for the plunge. It looks to me like we just shaved 11 years of gains in one day. If we repeat the fun tomorrow, we'll have shaved off a right shoulder and confirmed a reversal that'll make 1929 look like a holiday.

If Bernanke declares QE3 (by any name) then gold is cheap at any price, otherwise, paper dollars are king.

[cypherdoc]

if the USD breaks down out of its consolidation pattern then mea culpa.

[cypherdoc]

I'm properly convinced now that private bank debt is clean the Fed can and must deflate the dollar.

what do you mean by this?  get the USD to rise?

Well, yes. The market's response today couldn't have surprised Ben and the banks are strapped in and cleared for the plunge. It looks to me like we just shaved 11 years of gains in one day. If we repeat the fun tomorrow, we'll have shaved off a right shoulder and confirmed a reversal that'll make 1929 look like a holiday.

If Bernanke declares QE3 (by any name) then gold is cheap at any price, otherwise, paper dollars are king.

yeah, no PPT here.  just straight down.  damn, i covered too many shorts too soon.  to me the signal is "let it go down" b/c they have an objective.

[CurbsideProphet]

yeah, no PPT here.  just straight down.  damn, i covered too many shorts too soon.  to me the signal is "let it go down" b/c they have an objective.

Yup looking at the futures and the Asian markets it looks like I may have covered too soon as well.  I'm not going to beat myself up over it though, anyone short over the last week or two made out like bandits.  I'm content with picking the low hanging fruit.

[cypherdoc]

this market plunge just confirms every negative thought i've had over the last 6 years about the Fed and the banking system. 

these punks "know" when the liquidity spigot is going to be shut off and on and they constantly front run.  a plunge like this isn't a natural phenomenon in this day and age.  the triple or quadruple top we had was orchestrated IMO to suck as many ppl into stocks so they could be raped. 

this is why i'm so pessimistic on the parabola that gold is now forming.  they are after it and if you buy now you're gonna get squicked.

[cypherdoc]

whoa, you guys just see the BTC ramp?

[netrin]

BTC: $150K buy couldn't wait for $5

EDIT: And TH immediately matched with a $3.5K buy. Maybe the PPT are buying BTC!


Cypherdoc: Why should the Fed want to fuck Americans? Ben has a neck and the guillotine is rusty.