sorgmot

Two Short-Term Scenarios for Gold

The great insight in the above exposition is the phrase "asset values fall while consumables prices rise".

Yes, in USA $'s, USA real estate, USA common stocks, and US $ denominated bonds all fall in USA $ prices.

Yes, in USA $'s, foreign currencies, all commodities, foreign stocks and bonds and real estate all rise in USA $ prices.

Get these ideas working for you.

The masterminds of the USA Democratic Party, now in power since the end of 2006, have accomplished an ongoing and accelerating fall in USA lining standards.

The masterminds of the USA Republican Party are chasing soul mates around the world.

Good luck.

Gold Falls, But Still Outperforming

As of the moment house prices are down 19$ in the last 12 months which means that many people who were leveraged at 80% or more on their house's value have lost 100 per cent of their investments.

Meanwhile, In the last year gold lost zero %

Since late 2007 the DJIA lost 50%. Investors who were leveraged could have lost 100%.

If a flood comes and washes everything and everyone away except you because you were standing on the high ground, you are very fortunate.

USA Infantry and Marine Corp rules say keep to the high ground and good luck.

U.K. Toxic Bank Plan: More Gains For Gold

This (internet) changes everything. There is no here nor there. There is no future nor past. Everything is here now.

A fool is someone who can not relate to where he or she is in time or space. A fool makes irrational (not well-being increasing) decisions and consequently his or her well being declines. A fool needs help in order to function and survive.

Political parties in the USA are collections of fools who are conditioned to obey their keepers and serve them. The keepers are cartels and monopolies which include governments and for profit and charitable corporations.

Under current conditions in the USA (and many foreign countries) the redirection of citizen earnings and wealth by governments to their supporters (keepers) is not conducive to nation wealth increases in the general population.

Thus, the planned funds redirection by the new 2008 to 2012 president of the USA is incorrect in that it will bring a decline in the national wealth and well being of it's general population. In fact direct and tax free payment to anyone willing to dig holes and refile them would be better.

The USA is where it is due to foolish USA governments' past bad decisions encouraged by payoffs to government agents. This has occurred under the disguise of socialism which has been embraced by both USA parties.

From 1980 to 2000 USA interest rates declined by 3 quarters and USA bonds rose in buying power as a result. This encouraged both foreign and domestic holders of USA bonds to keep holding their holdings and buy more of them. This, in turn, kept the US $ strong relative to other currencies even as USA inflation ran upward causing many USA citizens to buy long lived assets like houses before their prices roses even more.

The bubble popped in 2005 for houses and in 2007 for common stocks.That is when we got out of those asset classes and entered US Government bonds of short duration and short positions in common stocks.

However, one must look at the Obama plan for government spending in 2009 and declare that is (like the Bush loans to big bad banks spending plan in 2008) is foolish and miss directed.

Big banks are and were a bad cartel type idea thanks to internet. And, also

thanks to internet, fewer roads are needed, not more, and fewer government employees, too.

The USA $ will fall against the currencies of successful nations in eastern Europe and Asia and Central America and South America. Gold will stay with the winners.

Good luck.

Gold's Big Picture

Thanks for the comments.

We and our financial data base suppliers are like a giant team of mental giants. We have lots of different sexes of humanoids (noids) and and computing robots (boots) here. We are into simulation as well as linear programming. And, we still practice the arcane art of business cycle analysis.

Thanks for the feedback. You are correct to note that there are lots of wave 4's of differing degrees floating around in the stew. Our comments were focused on a USA $ for gold wave up that began in 2003 and is (we think) still unfolding as a large scale up wave that will last to 2011 at which time an appropriate scale down wave will take its place based on our reading of its progress to now through waves 1,2,3,and 4 of the same scale. This up wave follows a 20 year A-B-C down wave from 1980 to 2002.

Please do not knock Bob P. or Wesley Clair Mitchell. They both help us look ahead for the most likely outcomes of data series in future time Periods.

Of course, there is always the through the dart system.

And, yes, we are all visually impaired and poor typists.

Good luck.

Gold's Big Picture

Talking our read based on Gold in SA $ Elliott Wave charts as interperated by us.

From 1980 a big A-B-C wave lasted to 2002.
Then, (we believe), a 1-2-3-4-5 wave took over in 2002 and rolled gold up from 300 in 2002 to 1030 in 2008 (in a 1-2-3 pattern). which is to be followed by legs 4 and 5. We believe leg 4 is completed now as of Nov 2008 and look for wave five to reach 1450 in 2011.

Check with your financial adviser before making changes to your portfolio.

Good Luck

The Always Precarious Dollar (and Its Impact on Gold)

The index discussed above falls for 40 years and ends at 30 in 2048.

Commodities triple in US $ terms by then. The bear takes over the US stock and bond markets.


Study England history fo the 1930 to 1980 period for the model.

Gold: An Interesting Dynamic at Play

Consider patterns of gold/oz and gold stock prices in previous business cycles before jumping to any conclusions about their patterns in this business cycle. Also, look at your graph in terms of Elliott wave patterns.

Our read of the business cycle is that we are now (2008) in a replay of 2001 with the big cut in interest rates behind us in the USA. If we repeat the last cycle, the Fed Funds rate will hit bottom in 2 years, or in 2010 at 1%. Now, May 2008, it is very inexpensive to own gold at 2% interest. USA debt held by foreigners is yielding less than the USA inflation rate (4%) in USA dollar prices. Interest rates on USA debt are in mid 2008 is rising and the value of the debt is falling in USA dollars. Why not switch to gold from USA debt as did occur in 2002 and 209?

If one looks at your graph, above, one sees an upward 1(up), 2(down), 3(up), 4(down a little extended but not unusual) pattern unfolding. This is within a huge I, II, so far pattern from 2001 to 2008.

Be careful with your bet and the amount of money you risk on a down bet for gold or gold stocks as May 2008 progresses.

Bullish on All Metals

Business cycle years in which USA dollar interest rates are falling have been supportive of gold price upswings as well as increases in gold mining stocks and also mutual funds such as the Fidelity Select Gold Funs which holds gold mining stocks. For example, in the 2001 through 2003 period, gold rose from $280.00 to $400.00 per ounce and in the same period the Fidelity Select Good Fund shares rose from $10.00 to $31.00 each by the end of 2003.

Who knows what will happen as the Fed cuts rates starting in late 2007. History could repeat.

To check this data, you can go to financialtrax.googlepa...
and click on Commodities and then click on the Moore site click and then look at short term interest rate history and then look at gold prices.

Gold mining stocks per cent change amplify the gold bullion because in the short their costs per unit of gold extracted stays constant while the whole increase in the revenue from the unit of gold sold passes through to profits.