Philman

Marc Faber Is Conflicted About the Price of Gold

I think the price of gold is going to go to about $6,000 per ounce within 3 years.

However, current price has been artificially and prematurely elevated by an upward manipulation on the part of PPT banks, who are also the most influential clearing members of COMEX. That's right...gold is not only manipulated on the downside. The recent upward manipulation is a break with the recent past, but it is by no means an isolated incident. Whenever it creates higher profits for the PPT banks, they forget about the needs of the Federal Reserve, and gold is manipulated upwards also. Remember, volatility is the mother of profit on Wall Street.

This most recent upward manipulation was done 1) to sell the Barrick gold mining public offering shares quickly, 2) to help the IMF get a better price on its gold from India/China, and, most importantly, 3) to draw in new leveraged long players, in order to harvest their cash deposits (margin) in the near future.

The upward manipulation has been applied to both gold and silver. I suspect that they wanted to make sure that silver moved in tandem with gold. Silver charts look ominous right now, with a narrowing wedge and head and shoulders top having formed in classical fashion. It is ripe for a huge fall according to all understanding of classical technical analysis. The only thing that might save it is a massive change in sentiment arising out of a war, or big terrorist attack. But, I think the silver chart probably applies to gold, also, although we are not seeing it because of the current enthusiasm over central bank buying. As soon as that changes, however, the gold chart will revert to the same ominous patterns as we see in silver.

At any rate, current CB interest in gold, and Barrick's ongoing buying back of its hedges, is bolstering the gold chart. Once the dollar starts rising, however, Asian CBs are going to temporarily lose interest in gold, and the gold chart will probably start looking just as ominous as the silver chart and the chart of the DJIA/S&P500. All asset classes, including precious metals, are currently overpriced, because the Fed has been injecting so much cash into the financial system.

All assets, but especially silver, are going to experience a DEEP collapse within the next 3-6 months. Gold could go as low as $800, again, and silver to about $8 per troy ounce in the short run. This will happen as PPT artificially props up the dollar to, perhaps, 93 on the DX. They are sure to do this in order to stop Asian CBs from abandoning the U.S. currency, prior to the time that the U.S. is finished selling its worthless bonds.

Manipulations are quite effective in the short to medium term. However, in the longer run, the dollar is doomed, and this will support gold, causing it to rise, eventually, to $6,000 +. It won't be a "real" rise, because all that will really be happening is that the dollar and other paper currencies will be collapsing, but it will seem quite real, for those who have rid themselves of the paper. I'll be waiting and watching, and when the time is right, I'll buy more of both!

'First-Time Homebuyer' Credit May Cost Government up to $96,000 Per Home

Where did you learn math, Paul168? The math here is not fuzzy. It is perfectly in accord with the principles of arithmetic. You, apparently, cannot add, multiply or divide. I wonder how bad you are at algebra?

The real question posed by this article is the efficient vs. inefficient spending of money by the government. Obviously, the people's taxes, past, present and future, should not be spend in the interest of helping particular lobbies, like that of banks, real estate brokers, and home builders. The People's money ought not to find its way, preferentially, into their greedy pockets, and out of the pockets of the rest of us, just because they have managed to hoodwink or control our politicians.

This nation has a crumbling infrastructure - roads, bridges, tunnels, etc., that all need to be fixed. The education system is very poor quality compared to other countries also. We should be spending our money on things like that, if on anything, to help everyone, not just the selfish interests of narrow minded people like you, Paul, and others who I strongly suspect work in either the banking, brokerage, or home building industries.

Why didn't the realtors and home builders save up money for bad times, while they were making money hand over fist, during the boom? Why didn't the banks do the same? They didn't, because the economically incompetent people in those industries didn't think about tomorrow, only about today, and, now, with their lobbyists hard at work, in Washington, stealing money from the rest of us, they are going to transfer the suffering that comes from such incompetence away from themselves, and onto the rest of us.

Let those who deserve to go bankrupt, go bankrupt, and be done with it! That is the best way to recover, according to Jim Rogers. These bad debts need to be written off, not as a result of the bankruptcy of the United States of America, as a nation, 3 years from now, but by the bankruptcy of all the incompetents who caused this Crisis, and the banks, brokerage houses, real estate firms, and home builders that they work for. Don't steal from good people and give the money to bad people. That is what this article is really all about!

Hong Kong's Gold Move Means Nothing

Hmmm...I take some of what I wrote back. I just read your other articles. It seems that you don't have blinders on. You just needed a bit of education on how the futures markets are manipulated. You seem to have gotten that, and added it to your existing knowledge of the cash market for gold. Bravo. You are now joining the ranks of the enlightened! I'll be following your articles...

Hong Kong's Gold Move Means Nothing

Bron, I remember when you were very critical of articles concerning gold futures market based manipulation, written by James Conrad. You claimed, in what you wrote in the first article, that he didn't know anything, because he referred to the London Bullion Market as the London Metals Market, or something like that. Then, although you toned down your rhetoric as he proved himself more and more knowledgeable than you could have imagined, you continued to write skeptical comments each time a new article appeared.

That was back when gold was in the low $700s, and he was telling people that in a few months, it would soar. He was right and you were wrong. Doesn't that say something to you? Perhaps, that you either have blinders on, or are in denial...

That being said, I think that you are right about gold not going substantially over $1,000 per ounce, quite yet.

Is It a Stock Market Rally or a Dollar Devaluation?

Goldman's analysis is on the right track, but isn't 100% correct.

The scheme being carried out is very sophisticated. Right now, strangely enough, because we are still very much inside a depression, the "dash for cash" that started last summer, around mid-July, and got really severe after the Lehman Brothers collapse, is still ongoing. There is still an intense, though temporary, demand for dollars, in world markets. The demand exists because dollar based real estate oriented asset prices are collapsing, and European banks have a lot of dollar denominated assets, which they obtained using leverage, or borrowed dollars. An example is RBS, which has some $40 billion in structured notes.

The Fed and the corrupt cabal of banksters who control it used this dollar demand to create an artificial rally. The Fed provides money to the PPT banks to buy stock index futures, which are purchased, in all probability, using programs similar to the manipulative Goldman Sachs proprietary trading software that the U.S. attorney's office warned "could be used to unfairly manipulate markets if it gets in the wrong hands." The program buys the index futures timed in a way that jibes with the technicals of the market, persistently pumping prices up in the futures markets. Meanwhile, arbitragers in the real cash market will even out the difference between the cash value of the market and the futures. In this way, the Fed can pump up the market using the least capital, since futures can be purchased at high leverage.

The main problem is that the newly printed cash (or cash from sequestered reserves printed in September, 2008) is eventually released into the money markets after the futures are purchased. That means more dollar supply for the same demand. Because they have pumped tens of billions of dollars into this program, over the course of this rally, they have overwhelmed the increased dollar demand in Europe, and the dollar has fallen substantially. If they had done the same thing, at almost any other time in history, the U.S. dollar would have utterly collapsed, and we would already be suffering from hyperinflation. However, they are getting away with a relatively small fall in the dollar, because of the temporary conditions that now prevail.

Now, you know the rest of the story about why the dollar has gone down only 18% while the markets are up by 52%.

Proposal for Fed to Become the Next AIG

Why do you believe that the referenced document reflects Federal Reserve holdings? The guide to these numbers describes them as follows:

"The Treasury International Capital (TIC) reporting system collects data for the United States on cross-border portfolio investment flows and positions between U.S. residents (including U.S.-based branches of firms headquartered in other countries) and foreign residents (including offshore branches of U.S. firms)."

How does that convert to the Federal Reserve creating derivatives? If I am not seeing something here, please advise.

Taylor Rule Estimate: Fed Fund Rate Differential at a Whopping 6.8%

The idea that we are going to face deflation is ridiculous. Inflation is already very evident so long as you avoid the government statistics which are massaged to show otherwise. Using the more honest 1980's inflation formula, shadowstats.com calculates the current inflation rate to be a little less than 6%, down from over 12% last year. That is reality.

Oh, but you're not including housing, you might claim. So what? Housing wasn't included on the upside, either. If we did include housing, we would have had a 20%+ inflation rate for the last 9 years. It was the Fed's policy not to mess with bubbles. Now, it is their policy to reflate them?

Taking rates down below zero by quantitative easing is punishment for the careful honest savers, and a free gift to the prolifigate spenders and wasters, who caused the worldwide economic Crisis. It shouldn't be done. It MUST NOT BE DONE! If it continues to be done, a point of no return will come, like in Weimar Germany 1919-23. I'm sure that if you run your ridiculous "Taylor formula" you would have claimed that the Germans, back in that era needed to print money, also. Well, they did, and, a few years later, people had lost so much faith in the German mark had devalued to 1 trillion to 1 compared to the pre-WW I value of the paper mark.

Will the Market Crash?

In other words, very good timing...although, today, the market is up. Interesting and strange that one day should be so much the opposite of another...but, I suppose that, after a fall like yesterday, there is bound to be a bounce of some kind...

Will the Market Crash?

Hey, Bud, maybe a lot of bears are now out and growling, but this particular article must have been written over the last weekend or on Friday last week, because it was published by S.A. and readable by me at about 4:30 AM eastern time, on the morning of the 17th, before any triple digit falls on the DOW!

On Aug 18 01:08 AM Mad Hedge Fund Trader wrote:

> rtyu. Wow! One triple digit move down in the Dow, and all of a sudden, everyone is bearish.

Will the Market Crash?

Looks like everything is playing out, today, just as predicted by this author. We shall see what the next few weeks bring.

Cash for Clunkers May Cost Up to $45,354 Per Vehicle

Laughing, I don't doubt that you are laughing all the way to the bank.

Where the heck do you think this money is coming from? The sky? Every dollar that your father was given by Cash for Clunkers, and Chrysler, was stolen from the pockets of our children and children's children. We are irresponsibly building up a national debt that cannot be paid back. That will result in complete dollar collapse and economic collapse eventually.

The first $4,500 came from the "Cash for Clunkers" program, the second $4,500 came from the Chrysler bailout money. You people are so selfish and self interested, it disgusts me! Obviously, you are okay with stealing from other taxpayers. I'm not!


On Aug 02 01:36 PM Laughing wrote:

> who cares its called helping out the poor people by giving them a
> little extra cash, what a lame article. I talked my father into
> buying a new car, he traded in his 1981 station wagon, rust and all,
> got $4500 plus $4500 more for buying a Crystler, wound up paying
> 18k. I gave him the money to do it, I didn't need a second car either
> but was worried ever since he told me about how the brakes went out
> while he was driving it and he had to downshift and use parking brake
> just to stop!!! You tell me where else anyone could have got 9k
> for a car worth $400 (and who would have even bought it, trust me!)?
> Its a great program, he would never have bought a car otherwise and
> now I have a ride next time I'm in town visiting.

Cash for Clunkers May Cost Up to $45,354 Per Vehicle

Your blog name is fitting, Mr. Machavelli, as it appears that you believe "anything that benefits me is good economics". The article describes the true cost of foolish programs like this. One thing left out, however, is the adverse economic impact upon used car dealers and their customers.

The "Cash for Clunkers" program is yet more welfare for the well-to-do. People who aren't rich enough to qualify for the hefty loans needed to buy a brand new car (and the cost of a new car is hefty, even with government giveaway money) are sh-t of of luck! They pay taxes, and their money gets given away to richer folks who just need a little incentive to buy new cars.

Meanwhile, a lot of quality used cars are going to be junked, driving up the price of used cars for the rest of us! Fat cats, like Machiavelli, obviously don't give a damn about anyone less fortunate than you. So, just like his namesake, he does whatever is good for him, without concern over the consequences for others. This article is excellent in bringing out, at least in part, some the consequences of government waste and overspending.

Cash for Clunkers is bad economics and bad for America!


On Aug 02 12:25 AM Machiavelli999 wrote:

> This guy, like most people on this site, has no clue about how economies
> work.
>
> I won't even go into the details. HORRIBLE ARTICLE!

Cash for Clunkers May Cost Up to $45,354 Per Vehicle

Sorry, my friend. You obviously didn't read this article or the Edmunds.com article. Let me quote from Edmunds:

"Edmunds.com's research shows that typically 200,000 vehicles worth less than $4,500 are traded in for new vehicles every three months."

Accordingly, Edmunds is talking about ONLY the type of vehicles which would qualify for cash for clunkers. Anyone who has even a passing knowledge of the car market knows that far more than 200,000 used car trade-ins happen every month, let alone every quarter. The used car market is far larger than the new car market, and, even now, the car makers will sell about 10 million vehicles in this depression year.

You should read things before you launch your claims of authors throwing BS. Because if you don't, you will be throwing BS yourself, which it what you've done here.

Cash for Clunkers May Cost Up to $45,354 Per Vehicle

You are slinging BS by taking the words out of context. I am sure you know, just as I do, that when he says "low mileage" he means low miles per gallon. Everyone knows that all the clunkers are old cars with high mileage. That is a given. They would not qualify for the program if they weren't.

Also, the article states that the 200,000 car figure data comes from Edmunds.com, which, apparently, has indicated (and they are about the most expert source of such data that exists) that this is the normal number of "low mileage" (or "low miles per gallon" old cars) that are traded in for new "high mileage" (or "high miles per gallon" new cars) every 3 months.


On Jul 31 01:43 PM dancingdad wrote:

> Avery must be a republican because he does math like one. His arguments
> are like the ones Bush made going into Iraq. First note he said
> 200,000 low mileage cars are traded in a normal 3 month period. (
> I'm willing to bet a large percentage of the clunkers coming in are
> high mileage ones.) He then assumes that all the clunker cars replace
> all the normal trades (bad assumption). His faulty logic leads him
> to conclude that 222,000 clunkers - 200,000 normal trades so we get
> 22,000 additional trade activity for $1B. All wrong, all worst case
> assumptions, typical republican BS.

Cash for Clunkers May Cost Up to $45,354 Per Vehicle

You guys need to learn economics. You either didn't read the article or can't understand the concept being discussed.

The math is absolutely correct. The idea is that a certain number of cars/trucks would have been sold anyway - Edmunds says 200,000 clunkers are traded in for fuel efficient vehicles EVEN WITHOUT GOVERNMENT SUBSIDIES!

The cost to the government of a "stimulus" is NOT $3,500 - $4,500 per car, because many buyers are getting the money even though they WOULD HAVE BOUGHT ANYWAY, without the program.

At $4,500 per extra car, the program costs the government $45,354 for each extra sale, above those that are normally sold anyway, exactly as the article states.