ozzy43

High Cash Stockpile Available for Buying Stocks to Fuel a Rally

"...Gross domestic product will contract in the first half of the year before growth resumes in the third quarter, according to a Bloomberg survey of economists."

These are, presumably, the same economists who insisted up until 3 months ago that the US would avoid a recession?

Given how wrong mainstream economists have been about EVERYTHING recently, it makes about as much sense to trust their predictions going forward as it does to listen to the Intel community's prattle about geopolitics. At least the latter don't constrain themselves via wholly artificial and proven-wrong econometric models.

The only economists worth listening to are those who correctly predicted what has happened - that would be one school and one school only: the Austrian economists.

As Good as Gold?

Anyone who relies upon the fraudulent CPI as an accurate indicator of inflation, and uses this metric as a basis for virtually any calculations which directly involve inlfation, can safely be ignored.

Why I Got Gold Wrong

"...the false, chimerical belief that somehow gold is money"

Musta been one of those people who whined 'I hate history - it's so boring!' Just because we are facing near term deflationary pressures does not mean that we are facing longer term net deflation. In fact, the lessons of history are utterly clear: empires at this stage, having exhausted their currency via monetary manipulation and fiscal abuse, who owe and cannot possibly pay, have only two choices: default or debase. Either scenario is a positive for gold.

Fiscally speaking, this nation owes, not $10T, or even $11T - $12T now, but anywhere from $60t - $90T, depending on assumptions. Boomers are starting to retire. This is imminent. Where will that money come from? The only *possible* answer: the printing presses.

Monetarily speaking, the size of the tsunami heading our way has barely registered yet - $700B for a "bailout" plan? Think that's 'real money'? Are you kidding? There are $60T in CDS's out there, and over $600T in derivatives of dubious value. This bailout is aptly named, however - it is intended to serve as an opportunity to the money elites to cash in for a few weeks, a few months, and then leave regular investors holding the bag when it all comes crashing down when the tsunami hits.

Trillions and trillions and trillions of dollars are coming due, both in private and public, and China, Russia, Japan, and the petroStates are almost done lending.

As Arthur Silber has put it: "How in the world does any adult -- any adult who is not suffering fatal impairment of his cognitive faculties -- convince himself that this kind of make-believe can continue indefinitely? The United States government is completely broke and drowning in debt that extends through the next three, five, ten, who knows how many generations. Finished. Washed up."

And Mike Whitney notes: "The system is at the breaking point, and despite Wall Street's elation from the proposed $1 trillion dollar bailout to remove toxic mortgage-backed debt from banks balance sheets, the market is still correcting in what has become a vicious downward cycle. This cycle will persist until the bad debts are accounted for and written off for or until the exhausted dollar-system collapses altogether. Either way, the volatility and violent dislocations will continue for the foreseeable future."

You got gold wrong not because gold bugs got lucky, which is essentially your assertion here (and a rather snide one at that). You got gold wrong because you are ignorant of both history and of the reality surrounding you at this moment in time. Your analysis is laughably limited, that's why you got gold wrong, and why you still have gold wrong for the longer term . For you to be right, the US govt and the financial sector would both have to be essentially solvent, such that there would be 'good places' to put 'money' once the current 'unpleasantness' is over and things return to 'normal'. Normal is over. Things may well 'look' more or less normal again, and this may persist for some time, but real 'normal' is ancient history.

Commodities Correction: Painful but Healthy

Maybe Paul is on to something - instead of charting and technical analysis, perhaps we should start praying to the animal spirits, building animistic totems in our living rooms, etc. Then again, probably not.

The Bedrock Case for the Return of the Gold Bull

rawprawn I am not sure, but I *think* the author meant something like this:

"When prices start to fall in earnest, people [i.e. consumers] lose their jobs, and get scared and start cutting back on all their purchases".

The Bedrock Case for the Return of the Gold Bull

"Gold will never be accepted as legal tender in the grocery store. It will always have to be converted into paper."

Tell that to the folks in Zimbabwe. The whole point here is that, when legal tender becomes worthless (wheelbarrows full), there will be plenty of folks willing to accept something of REAL value - gold, silver, and the like - in exchange for what they're trying to sell. At least, that's precisely what's happened the other gazillion times in history that fiat currencies have imploded, from 11th century China to 18th century France to 19th century America (ever heard of the Continental?) to 20th century Germany. Of course the poster who wrote the above may be right - maybe we are just so amazingly smart and special, we 21st century humans, with our central banks which simultaneously create AND fight inflation (neat trick, that), that for the very first time in thousands of years of recorded history, a fiat currency in the hands of a reckless government will not wind up causing a hyperinflationary environment to ensue engendering a collapse of the monetary system and a flight to whatever people perceive as 'things that hold value', with gold having historically topped the list.

Yeah. I'll expect that to happen just as soon as politicians learn to tell the truth.

Not all Metals are Created Equal (Part I)

This analysis seems to rely on the fundamental assumption that peak oil is a non-event. That is, it relies upon the presumption that we're not entering a completely new paradigm as regards global energy supplies. Perhaps this is accurate. But if the peakers are right - and I think an analysis which draws this conclusion is at the least plausible - then all of this analysis rests on flawed assumptions about the future state of the markets, and indeed the world.