I don't have an interest in getting the last word in: I only thought it'd be a shame to throw away a response that was mostly finished before going to sleep several hours ago. It may also offer additional guidance to others following the thread.
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.
Yes, it does seem a little odd, but anyone can throw cash into a betting pool; this is a
gentleman's wager, and as such it relies upon personal integrity and strength of character. Instead of money, the stakes involve a reassessment of thought processeses to adopt what's proven.
Even Keynes acknowledged empirical evidence conflicting with his hypotheses and was making changes prior to his passing. For that fact, I respect the fellow and suspect his real mistake was with placing undue trust in human nature without applying equivalent caution.
We seem to be spinning our wheels for now and kicking up mud while waiting for the next major event to occur.
what happened to the whale theory of diving deeply and ascending rapidly scooping of gold futures ala herring?
Appropriate tactics are employed as resistance increases. If the pickings are slim, those moves take on a defensive nature instead of offensive: when the shock & awe drop of 30% or more cannot be repeated, a slow retreat works to keep the majority of investors wary and guessing while largely on the sidelines of a major move that benefits the perpetrators.
Consider two combatants encountering each other for the first time. There may be a display of force shown in an effort to intimidate the other side. Should that work, the mere existence of overwhelming force need not be exerted to gain ground. If it was a bluff that has been called, the tactics need to change in order to maintain the illusion that sufficient force still exists.
In other words, formerly dominant institutions (esp. pre-2008) such as the Fed are no longer being granted carte blanche deference. The isomorphisms abound with regard to
ancient stratagems and financial or gold warfare today.
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?
The assets listed are not reasonable for common exchange, unless you consider wheeling barrels of bio-toxic, consumable oil around as payment feasible. We discussed the fact that any asset may be used as money, depending upon circumstances.
When there is no alternative offering greater convenience (Bitcoin could serve this purpose if not for the high technical hurdles and currency exchange barriers), gold will act as a means of exchange. Otherwise, it remains a store of value to be held in reserves. The latter is just our typical understanding for the purpose of assets.
i remind everyone here that another asset was thought to only go up as well in all situations. its name is real estate.
That comparison is invalid; no suggestion has been made regarding gold rising in value indefinitely, but rather that gold is heavily undervalued relative to outstanding debt and even the current base money supply (very rough calculation of only the
existing base money supply of USD$2T against 280mm troy ounces of gold reserves puts gold over $7,000/oz).
Gold is fungible, divisible and portable while real estate is not (securitization is a whole 'nother ball of wax). Housing in many regions became highly overvalued and demand fatigue was readily apparent in later stages. Gold demand shows no sign of relenting.
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.
The fundamentals are resting on policy decisions that have already been made. Gold's continuing upward revaluation is locked in no matter what path is chosen now, and has been for over a year. Rising interest rates will signal failure to continue the charade as natural market forces override economic management and manipulation.
Until rates have risen sufficiently, systemic instability will continue for some time because of the same reasons. Gold's stability remains attractive while most other assets are extremely volatile; we don't ride rollercoasters when we're only trying to get from point A to point B.
The Canadian Dollar, Norwegian Krone and other currencies will eventually follow the same path as the Swiss Franc in competitive devaluation. Meanwhile, gold is remaining with $100 of its all-time high.
ok how about "most investors starting yesterday". i think this will be a new trend.
If you're able to pick a major turning point based on one or two days' activity, why were your short positions in danger of a margin call?
Margin trading is bad, especially forex. Use options if you want leverage.
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.
It's far more dangerous to ignore the signs and symptoms of a
myocardial infarction while attempting to differentially diagnose whether it's happening due to
arteriosclerosis or
atherosclerosis.
A dollar closing over 76 then has to face the recent peak of ~76.7 while it is being over-extended against Europe. There is also an issue of quantity over quality - the relative value of the dollar might be rising, but relative to what? Other currencies are being devalued as well. Gold is rising as the USD does because it is part of another dynamic that the dollar is no longer strongly associated with.
I am obliged to refer you to my mention of
numerous prior double-tops and a triple-top.
... the Fed won't destroy itself. it will act in self preservation mode and try to save the USD...
This is certain. The argument is not whether the Fed will act sacrificially; the actions being undertaken are like building a scaffolding to hold up
a collapsing building. What isn't known is exactly when or where structural integrity will fail, or whether enough scaffolding will be put in place before it finally gives way.
From a technical perspective, a monthly closing in gold below $1,550 would be very damaging to the long-term trend, but would not compromise it. For that kind of secular trend reversal to occur, causing large-scale money flows to shift elsewhere, there would have to be consecutive
monthly closings in gold below $1,080/oz.
being a lone voice out in the wilderness is a difficult position to take. this is the last thing i wanted to have happen.
so i am going to respectfully bow out here. i would like to thank everyone especially miscreanity for the spirited debate and very useful information he has provided. i wish you all the best of luck.
thank you.
You certainly aren't the only one out there. In fact, I think the majority share your opinion, just not with as powerfully deep an understanding as you've shown. That level of comprehension has been greatly appreciated. For the record, I do agree with the "great deflation", just not in the manner you propose.
I also agree that it would be best for now to be patient and wait for either $2,000 or $1,600 to be broken before resuming extensive discussion. In the event that I
am proven wrong, I'll gladly give your explanations a strong revisit.
Hold onto your physical!
Krugman may be right, aliens may be our liberators.
You never know...
