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Doug Eberhardt  

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  • Data Is Dead, All Hail The Fed! [View article]
    "The dominoes can fall quite quickly after the initial reaction begins."

    Yes, but when?

    Not looking for an answer from you, and I can tell you read a lot also, but hopefully the indicators I follow will tell me.

    Either way, the gold that I sell for a living I view more as insurance. While I do expect lower prices to come, gold's purchasing power is overall doing ok and the objective now is trying to get a good price for your buys.

    It's like buying stocks in 2009. Should you buy because the stock market already fell to 7400 or wait because it might go lower (which it did to 6443)? Sitting at 18,000 today, neither investor cares.

    The same will play out for gold in the future where the hardest decision will be; when to sell?
    Mar 23, 2015. 08:48 AM | Likes Like |Link to Comment
  • Data Is Dead, All Hail The Fed! [View article]
    Thanks alan!
    Mar 23, 2015. 08:22 AM | Likes Like |Link to Comment
  • Data Is Dead, All Hail The Fed! [View article]
    "Interesting how the Fed or government haven't explored financial structure improvements or business loan requirements, in order to direct where QE ends up."

    I know that Europe was trying at one point to force banks to use this liquidity in this manner, probably because they saw the results of QE here. Doesn't look like it came to fruition.

    My guess is European banks are doing what U.S. banks did; shore up their balance sheets, especially in light of the new rules that passed Jan. 1st where banks had to get their derivative affairs in order.

    Somehow things just get worse. But banks don't care (moral hazard).

    It's the repercussions of these issues that concern me the most. How really interconnected is the system? That's what I'm trying to answer.

    "The stock market illusion is becoming problematic now too, especially with stock buybacks trumping CapEx."

    In time. Right now, price action trumps everything.
    Mar 23, 2015. 08:21 AM | Likes Like |Link to Comment
  • Data Is Dead, All Hail The Fed! [View article]
    thanks insightful. All I can say is I read a lot and form my own opinions. Hopefully they make those aware of that for which they do not see.
    Mar 23, 2015. 08:10 AM | 1 Like Like |Link to Comment
  • Data Is Dead, All Hail The Fed! [View article]
    Great question Wave. Definitions are where one can distinguish if on the same page or not. I have had disagreements with the likes of Lew Rockwell and his crowd over this and feel, as much as I love them on many other areas, that only looking at the money supply distorts the truth. Some Austrians though include "credit" in their definition and that is where I fit in. "Money + Credit" and the contraction of that number combined is what's creating an overall deflation. Within that, the "money" side is inflating, but it is dwarfed by the credit side. Fed interference in the equation only helps those in that government "kingdom" you speak of, at the expense of all others. This is the distortion I think we both can agree on. I also think this will continue as necessary and many will wonder when Mises "crack up boom" will even occur. My next book will deal with that.

    My view on the dollar confidence globally is summed up in the demand for U.S. Treasuries. We are the best of a spoiled bunch, of course, but perception is we have the ability to work things out. Just look at what the Fed and Congress did collectively in 2007-2009 and through today. But the real data I see and have been seeing paints a different picture (like U-6 still at 11% for example).

    While some think we can produce ourselves out of the mess and the Fed balance sheet will magically become what it was again, I have to say the jury is still out. I know current data doesn't fit this and I know the Fed sees this. But what problems will develop abroad that will improve Europe, Japan and China? If you have an opinion on what will improve their situations, I'm all ears.

    Hope that answers your questions or points. And remember, this is just economic analysis. It has nothing to do with what the stock market and gold will do right now. Just two people discussing things. Thank you.
    Mar 22, 2015. 06:05 PM | 2 Likes Like |Link to Comment
  • Data Is Dead, All Hail The Fed! [View article]
    Coming from you Avi, that means something. Thank you!

    And I will vouch for what Avi and his group offers for traders as well with his Elliott Wave Trader wave analysis. I suggest everyone try the generous 15 day free trial you can find here:
    Mar 22, 2015. 11:55 AM | 1 Like Like |Link to Comment
  • Data Is Dead, All Hail The Fed! [View article]
    Wave, toll increases may be government related or private enterprises who can charge whatever the market in their area dictates (affordability). If government related, it is the "govflation" I was referring to, which is not the same as most people's definition of inflation (higher prices which is not my definition by the way).

    Rentals can be local as well based on supply and demand. If more and more people can't afford to buy a home or don't have the credit to qualify, it increases the demand for rentals.

    As for food, there has been a drought that has caused higher prices for some food, but all in all grains are mired in deep deflation and it will get worse. Whether or not those who use the grains pass this savings to the consumer is a different story.

    Wages falling is deflationary. So if there is an increase for certain items, then sure, things will cost more. Technology is making it so things cost less though which can be construed as deflationary. Robots taking over where humans once performed the task is another issue. This may address some your separation of class. If an industrialist job is taken over by a robot or automation, what skills do they have that would qualify them for any other job that pays well?

    I do agree there is a separation of class, which is a different issue and one I am addressing in a future book called "We the Serfs!"

    As far as the "American Dream," if you are referring to buying a home, then I can't say it needs to be a dream this day and age. The government may want it to be the case to keep their Fannie and Freddie disaster going, but it doesn't have to be an American's dream to own a home, and I don't really consider a home an asset either.

    When you say "there is no deflation, there is a traditional financials system distortion occurring," I don't discount this view. QE has helped the banks shore up their balance sheets. The banking system is thriving here in the U.S. But the entire banking system has changed from one of "loaning" to one of making a profit anywhere they can. If you owned a bank would you lock in a 30 year fixed at today's low rates?

    Banks today are still playing the derivatives game as Congress extended the time that they have to get their affairs in order via the Volcker Rule. And banks are mired in in other businesses like giving homeowners free solar with homeowners giving up certain rights to their property along the way without even knowing it (still researching this). Banks aren't stupid. They know about moral hazard and will do what they want. But the Fed does see deflation and they have fought it with QE and will continue to fight it.

    Thanks for the comments.
    Mar 22, 2015. 07:04 AM | Likes Like |Link to Comment
  • Will The Fed Spike The Gold Price? [View article]
    rogro, it's a 14% to 27% drop in gold I am expecting as I said ($1,000 - $850), and I will write my all in article between those prices no matter what anyone else says or writes. I have my reasons why I will become bullish then and I'll explain them at that time. I have said this several times here and in my articles.

    I gave you my 8 indicators I follow. Here they are again; - The biggest of these is the dollar rise which I have been warning my readers about since 2011/2012 in that it may have an affect on the price of gold. It has.

    I also told you about the articles on my site by looking for the words "gold" and "deflation" written years ago where I explain this dollar rise and gold. My advice then, as now, is to dollar cost average into a position.

    I gave you an example with oil of lower prices for gold during deflation and its increase in purchasing power. I also gave you the article regarding if we are following in Japan's deflationary footsteps I wrote in 2010. We have been.

    I really don't have the time to write out Chapter 4 of my book with the 100 sources for my reasoning for deflation here. If you'd like, shoot me an email and I'll send you a free copy. info(at)buygoldandsilv... - This book was written in 2010 and since I was giving reasons to be cautious with gold since that time as we enter deflation, technically it protected some of them from going all in at much higher prices, so it's not just about this last 14% to 27% drop that I think is forthcoming.

    Can I be wrong? Sure. But at least I present a good case for it, and my indicators haven't let me down so far.

    Most people I debate on this only provide words, no details or links for their case. It's a tactic that I call people out on when I see it. The Fed is good at it too, and I called them out on it in my last article; "Do they not have a clue or is the Fed really good at keeping the truth from us with neuro-linguistic presuppositions?"

    I will not give you more than the above as I have nothing more to give you. Thanks for the conversation.

    Gold to the moon!
    Mar 20, 2015. 02:45 PM | 3 Likes Like |Link to Comment
  • Will The Fed Spike The Gold Price? [View article]
    All good rogro, I like talking with you. I get into these discussion on purpose, not to tell everyone what I know, but challenge anyone who I see has a good perspective on things to see what I am missing (that's a compliment sir). The definition of ignorance is "you don't know what you don't know," and I don't know a lot.

    Regarding Japan, yes, I would have let companies fail and the same with the U.S. in 2009. The government pick and chose who they wanted to survive here. Japan simply poured money into them. Japan would have rebounded nicely as they were a net exporter and had an overall strong balance sheet. Now they have the worst Debt to GDP ratio of the G20. I first wrote about Japan and the U.S. back in July of 2010 Is the U.S. Following in Japan’s Deflationary Footsteps? (charts and graphs are missing because Google docs changed things on me a few years back).

    The only solution governments know including ours is summed up by Bernanke's 2002 speech Deflation: Making Sure "It" Doesn't Happen Here

    I find all this action fascinating personally, waiting to see what Central Banks do next (and hopefully predicting correctly).

    I think down the road the Fed here will be forced to do something and maybe instead of calling it QE 4, call it some other name to keep the illusion game going and save face.

    Regarding gold, if you read Roy Jastram's book, The Golden Constant, he made one mistake in his analysis in that he didn't show the reasoning of why gold did well during the deflation of the 30's. It's because the price of gold was fixed and the dollar devalued. The truth lies in the fact that gold's purchasing power increases in deflation. Take the following example which I discussed in my latest article on my site the day before the Fed announcement;

    "When oil was $114.33 a barrel in April of 2011, gold was $1,473 an ounce and could buy you 12.88 barrels. When oil was $91.74 in August of 2011, gold was $1,895 and could buy you 20.65 barrels. Today oil is 44.84 a barrel and gold is $1,160 an ounce and can buy you 25.86 barrels of oil. Gold’s purchasing power, at least for oil (and I could do this with many other commodities of late like wheat, corn, natural gas, copper, etc.), hasn’t been too bad. I do realize it’s not all black and white too. Of course anything with our government involvement simply moves higher in price; health care, college tuition, postage, salaries of government employees, Washington D.C. real estate. You get the picture. This is NOT inflation but rather govflation.

    All in all, gold and silver have a place in your portfolio and no matter how the market views the data today; the cream rises to the top. Always has and always will. This isn’t 1980 when Volcker can come in and raise rates to help the system. Raising rates will kill the system, especially when the data is what it is. The Fed knows this. They won’t raise rates tomorrow but they may give the market something to cheer about; the stock market that is."
    Mar 20, 2015. 09:01 AM | 2 Likes Like |Link to Comment
  • Data Is Dead, All Hail The Fed! [View article]
    Thanks Bob!
    Mar 20, 2015. 08:36 AM | Likes Like |Link to Comment
  • Gold on the move behind dovish Fed [View news story]
    622, I bought 300 of those a few years back for $1 each. Sold them for $10 each. Is that inflation? lol

    But seriously, people can't compare one of the top economies in the world to that of Zimbabwe. Their move to the U.S. dollar has actually improved their economic monetary freedom.

    "After near economic collapse in the late 2000s, Zimbabwe has experienced five consecutive years of improvements in economic freedom. Over the past five years, economic freedom in Zimbabwe has improved by 15.5 points, the largest improvement of any nation. The biggest score gains have been in monetary freedom and the control of government spending. A move to dollarize the economy has brought the hyperinflation of 2008 and 2009 under control."
    Mar 20, 2015. 07:56 AM | Likes Like |Link to Comment
  • Data Is Dead, All Hail The Fed! [View article]
    Thanks VB!
    Mar 20, 2015. 07:52 AM | Likes Like |Link to Comment
  • Will The Fed Spike The Gold Price? [View article]
    Academics typically advise (good or bad economics) politicians.

    I have written much on gold and deflation over the years. If you put both words into the Google search bar you can read the various articles.

    During a credit contraction deflationary event, demand for items decreases. During inflation, increases (hoarding) as people buy before prices go higher.

    It's not "as bad" for gold as the dollar increases in value but people think they have lost money because of the lower price. Purchasing power of gold isn't too bad today though. You can buy more barrels of oil today with an ounce of gold than you could when gold was $1,900 an ounce.
    Mar 19, 2015. 09:08 PM | 4 Likes Like |Link to Comment
  • Will The Fed Spike The Gold Price? [View article]
    "I'm no PhD but deflation is not understood well by ANYBODY"

    Rogro, I'm not sure why you put this onus on others. I understand deflation quite well. But the problem with most is their definition of deflation. Most, including many brilliant Austrian economists, leave out the contraction of credit that dwarfs M2 increases. I take issue with leaving this out and it has fit my predictions quite well.

    But I had to have 100 footnotes to explain it in Chapter 4 of my book.

    I think where we might agree that over time, it will take more currency from any country to buy more gold. This is true in deflation or inflation which is the side debate that keeps economists busy debating while governments spend us all to hell.
    Mar 19, 2015. 07:10 PM | Likes Like |Link to Comment
  • Data Is Dead, All Hail The Fed! [View article]
    That about sums it up gel. Thanks for the comment. There will be more sellers who "give up" and that's the same mentality of those who said in 2009 "sell all my stocks."
    Mar 19, 2015. 06:46 PM | 1 Like Like |Link to Comment