johndaniels123

Gold's Divergence Between the Paper and Physical Markets

One final point: IMHO the recent dollar strength is a marketwide deflation...And signals the collapse of the financial markets. As stated before, wall street gamblers don't know what will happen, the DOW price is insignificant; especially when considering the immense volatility. Housing is not getting better: there is a significantly lower willingness to speculate, Far less qualified buyers, more damaged credit reports, high real interest rates at 6.5%, dampened enthusiasm amidst the realization that there can be losses in housing, and the realization the housing without equitable appreciation is a loser; too many fingeris in the pie with real estate commissions, government taxes, post forclosure expenses, maintenance, insurance, HOA's, etc. Now the banks have to pay these fee's, out of pocket, as their debt money supply disapears. No housing recovery, no financials recovery.

Gold's Divergence Between the Paper and Physical Markets

I should add there are REAL supply demand issues as gold prices have dropped, even now. Physical supplies are being bought and sought after with greater urgency as the prices drop further. Meanwhile, sellers begin to hold back supply as the drops become worse.

True fundamentals will possibly create an artificially low price; where the price of gold is low but there is no supply. This cannot last.

Gold's Divergence Between the Paper and Physical Markets

How can gold go to below 600 in a hyperinflationary environment? What about base production costs for gold, wont supply be held as the price drops? Gold at 500 means a super strong dollar; possible with a defaltionary trend. I agree there is some inflationary mask, and deflation symptome are apparent. Gold could drop temporariliy during htis trend. An I agree with the hyper inflatioanry overcompensation by the fed...Don't see gold dropping in the hyperinflationary trend.

An Open Letter to the Plunge Protection Team

money is what someone will take for a service or item.

one of the legs of possible recovery, tech, had failed...as we see earnings misses here in Q2. Meanwhile, these tv pundits are slapping each other on the back because citi only lost 2b this Q. merrill missed HUGE.

You can forget about an interest rate hike. There is no economic recovery, and we havent even hit the recession yet! they like to say we're getting throgh it, but it aint even started yet!

this is why the metals deflation over the last few days ammuses me. I suppose this is real dollar strength? sure feels like a manipulation by etf's or something, and not true dollar strength. besides, i'm not going to list the reasons why the dollar will weaken; we all know them.

the the only way the dollar can strengthen is ....it can't. there is too much debt, and no menas of creating more 'debt money" to keep the systme going.

so the dollar rally over the past couple days is flash in the pan...much like the rally just after the bear stearns fall...

i think the street is working on 2 very outdated, 'baby boomesque' premises:

1. the market will always go up; i.e. a general sense of optimism and forward thinking towards investments like stocks and real estate.

2. entitlements that will weigh down the system, and they actually expect the 'me' and the 'x' generations to support them?


lol.

Common Misconceptions About the Fed and Gold

the New Wrold Order is 'cracking'.

The system is failing because debt is money now: and these 'masters of the universe' are finding out if people trade debt for precious metals, and should the populace (the people: middle and poor classes) realize that by hoarding prec metals and going deeper into debt, they can disrupt and perhaps bring down the entire system. sure it is possible for these men to manipulate gold prices downward, and even attempt to make gold a non currency or without value: but this would fail because over the centuries the common man has regarded prec metals as the primary source of trading currency: and no amount of spin or 'reeducation will change this.

now the New World Order is more exposed than it ever has been; the banking system is on the brink of ruin because people simply stop paying their debts. the valuation of a promise to pay over true value was the (greedy) mistake in the first place.

when the system crashes, its back to the gold standard. Because thats all that will have credibility.

Oil Replaces Gold as the New Inflation Hedge

i would like to add, however: and ironically, that the dollar is stronger than ever now with regards to assets: such as stocks and real estate. However, the true valuation of real estate is in the ability to finance, or the value can be brought into question. Its not immediately liquid and without buyers will decrease in value. This is solely a result of the deflation due to banking finace mismanagement: i.e real estate loan speculation and creating bogus derivative assets. The failure of our leadership is entirely apparent: from the fed to the generals in the field to Bush to Bernake. They all failed. I am sure part of the reason is external government forces working against them; but the lack of forthought and need for for self preservation will, again ironically, be their (and our) undoing.

where can we run? nowhere is safe. at least gold cannot be taken or frozen. put it in a safe deposit box. buy it by the oz. it at least holds value internationally, where dollars will eventually not. There is the question of whether gold is indeed an inflation hedge, but in a hard and sudden dollar crash, gold will be.

Oil Replaces Gold as the New Inflation Hedge

David Lentz:

We saw the markets tank along with the fall of bear stearns in march: then the fed injected capital and later the stimulus package was inacted. Now look what happened. Immediately after that injection, the markets rallied past DOW 13k...only to test new lows now as those funds have been depleted. This stimulus package is close to its conclusion. Now the fed is stuck: they cannot raise rates; and they wont this year. They have committed to the economic growth premise: and it has failed. Europe and Japan are set to increase rates. The spread against the dollar will worsen. The housing problem is not going to improve because of the pressure on the consumer and the press. Even fixed rate loans with 20% downpayments way underwater: so bad in fact that people who can afford payments will walk away. BAC is buy CFC's worthless loan portfolio; thinking it is an act of genious but is reflective of a overtly speculative maneuver that housing will recover to the 2005 levels.

Bear stears showed us the investment houses like LEH and MER are comprised entirely of paper asset equity and have no hard value: if clients abort these conglamorates, they will surely fall. Foreign countries like Russia, China, and the middle east are working to undermine our economy, and americans themselves depend on their entitlements like social security and medicare; and will continue to lobby that they remain as they are. Americans have become fat, lazy, greedy and incompetent, and maladaptive. Obama will surely enact record socialist 'people pleasin' initiatives from the gov't. Mcain represents the failure of our judeo-christain economic philosophies; and the Bush stigmata will remain with us for years.

How can you imply there is any hope for the dollar to recover? If there was ever a time to not have faith in the financial system, it is now.