bowman711

100 Comments

    • ON: Sun Oct 12th 14:12 PM
      Commented on:
      Is Gold A Sucker's Bet?
      There are few couple of points I'd like to add to this discussion. The first is that there are TWO golds - one is the NYMEX/GLOBEX 'paper gold' and the second is the 'street price' physical gold. On Friday, while the 'paper gold' was plunging $107 from its Hong Kong high to the GLOBEX low, people were lined up out the door of London physical gold dealers. They weren't selling; they were buying. To get a more accurate picture of the free market gold price, I'd like to see GATA or some similar group set up a 'street price' gold index. Then every day - or hour - gold dealers from New York to London to Johannesburg, to Hong Kong to Rio de Janeiro could report their price they are selling gold for, where it would be tabulated for a current 'street price' of gold. I have a feeling that would soon become the preferred barometer of the gold price.

      The huge drop in gold on Friday was due to a 'perfect storm' affecting gold. The first was the liquidation of gold by the mutual and hedge funds trying to raise cash to meet the redemption requests of thousands of investors. The second leg was those same funds selling their foreign investments and then trying to convert the foreign currency into dollars. This, of course, made the dollar spike up from demand for dollar being greater than the demand for the currencies they were trying to convert. Since gold is priced in dollars, this was reflected in the price of gold.

      Finally, free market gold is a safe store of value whether there is inflation or deflation. If the currency is inflated gold will eventually find the same level when priced in that currency. Or, if the currency is deflated X%, then free market gold will eventually find the same $X level in the deflated currency. The main wild card is how much governments meddle in or intervene in the gold market.

      [The same could be said for oil, and that is why oil and gold have such a close proportional relationship. It doesn't matter if oil is priced in inflated dollars or deflated dollars. One barrel of oil will produce the same number of miles traveled, or pieces of plastic, no matter how it is priced. So, owning stocks in companies where the vast majority of their value consists of oil reserves in the ground will eventually find its same free market price relative to the rest of the economy no matter whether it is priced in inflated or deflated dollars. This is assuming that the demand in terms of petroleum for those miles traveled or pieces of plastic remains constant. ]

      Since the jury is still out as to whether governments will be able to inflate our way out of the current economic crisis, or if deflation will win over, or, for that matter, the total breakdown of the current monetary system which is then replaced by a new system, gold will eventually settle at relatively the same value in the new system as it was in the old one. There may some minor variations in the relative value of gold, but sooner or later it will once again settle back to its historic value.

      The only question now is just exactly where is gold priced today in comparison to its historic value in relation to the rest of the economy. If it is lower, then sooner or later it will shoot up to find its historic value. If gold is priced higher than its historic value, then it will go down. It is up to each investor to determine where he or she thinks gold is price when compared to its historic value, and act accordingly.
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    • ON: Sat Oct 11th 12:31 PM
      Commented on:
      What are McDonald's and Wal-Mart Telling Us?
      Talking about mutual and hedge fund redemptions, I think that explains the jump in the dollar as well. Logic would suggest that a melt-down of the U.S. stock market, and the unprecedented inflating of the dollar would send investers fleeing the carnage. But, these large funds have a large part of their investments in foreign companies. With so many people demanding their money - what's left of it - out of these funds, the funds have had to sell their foreign stocks. Then, they have to convert the foreign currencies into dollars so they can meet the demands of their customers. With so much demand for converting foreign currencies to dollars, there has been a spike in the dollar.

      At least, mutual and hedge fund redemptions is the only way I can logically explain why the dollar, with its recent fundamentals is rising, at least short term, and not plunging like the drop in the stock market. . . . And it applies just as well to explain the drop in WMT and MCD.
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    • ON: Fri Oct 10th 15:45 PM
      Commented on:
      Examining the "Unprecedented Demand" for Gold Eagle Coins
      Don't forget that gold started the day at $912.40 and went up to $933.60. As of 3:40 EDT gold was down $67 from yesterday's close, but down $88.30 from this morning's high. The vast bulk of the drop came after New York opened this morning.

      I would like to know any possible logical explaination for such a drop in this uncertain of a market.
      View article »
    • ON: Fri Oct 10th 13:45 PM
      Commented on:
      A Chart From Our Anxiety Closet
      'Oil, of course, is a bellwether of industrial and consumer expansionism. Falling oil prices reflect waning fuel demand . . '

      Since oil is the 'lifeblood' of the world's economies, it truly is a bellwether of economic contraction and EXPANSIONn. Don't forget that no matter where the current situation takes us, at some point the economies will have to start producing new goods to replace those that have worn out during the downturn. It will take oil to get industry running again. Even getting raw materials to the factories will take oil. So, I think a better store of value than dollars, Treauries, etc. would be to own the stock of oil companies whose assets are oil in the ground.

      No matter what oil is priced at, or in what currency, it still will produce the same number of miles traveled, pieces of plastic, etc.
      View article »
    • ON: Fri Oct 10th 13:20 PM
      Commented on:
      Examining the "Unprecedented Demand" for Gold Eagle Coins
      It looks to me like 'the bullion bank boyz' are really at it again; gold, after drifting down in London subsequent to reaching a Hong Kong high of $933.60, then gold started dropping like a rock as soon as NYMEX opened. It doesn't make human nature or economic sense that investors are fleeing into dollars that are being inflated into oblivion. With gold going virtually nowhere during a 22% crash of the DOW this week, the only thing I can think of is that 'the Select,' those behind 'the boyz' at the bullion banks, are planning to default on U. S. dollar debts (or something of similar magnitude) which would result in a complete breakdown of the monetary system, leaving those holding dollars with virtually nothing. I would not be surprised to see that sometime between the election and the inauguration in January.

      I learned today that the major countries are talking about suspending all equity trading for however long it takes for them to develop new 'trading rules.' It would take just such an international meeting for the current monetary system to be replaced with something else. Something absolutely stunning will cause people to try to get out of their dollars, euros, pounds, yens, etc., leaving them worthless.

      It looks like 'the Select' are driving as many people out of gold (and silver) as possible, which they are buying at fire sale prices. No matter what form the new currencies take, they will sooner or later have a price in gold. Then, they can convert to the new money and buy up the stock market at salvage, fire sale prices.

      Right now, I'd say that it is absolutely essential for one to have their house (& cottage) completely paid off so they own it outright. In fact, later today, I am going to call my county to see if I can even pre-pay my property taxes for the next couple of years. [During the Great Depression, most people lost their homes to tax delinquencies.] Then, I'd get everything else you can into gold or silver. Best would be the actual gold coins or bullion, but that is virtually impossible to find now, so the next best is to get the gold and silver ETF.

      Any group evil enough to crash the monetary system, and steal the wealth of virtually everyone in society, is evil enough to outlaw gold for anyone except 'the Select,' but I can see no other option but to try to survive with the only store of monetary value that could be counted on for the last six thousand years.

      I see a situation that is unprecedented in its seriousness - and in its evil. I can't think of any other scenario to explain why gold would go down during a financial panic, can you?
      View article »
    • ON: Fri Oct 10th 13:18 PM
      Commented on:
      Stocks, Gold, and the U.S. Dollar
      It looks to me like 'the bullion bank boyz' are really at it again; gold, after drifting down in London subsequent to reaching a Hong Kong high of $933.60, then gold started dropping like a rock as soon as NYMEX opened. It doesn't make human nature or economic sense that investors are fleeing into dollars that are being inflated into oblivion. With gold going virtually nowhere during a 22% crash of the DOW this week, the only thing I can think of is that 'the Select,' those behind 'the boyz' at the bullion banks, are planning to default on U. S. dollar debts (or something of similar magnitude) which would result in a complete breakdown of the monetary system, leaving those holding dollars with virtually nothing. I would not be surprised to see that sometime between the election and the inauguration in January.

      I learned today that the major countries are talking about suspending all equity trading for however long it takes for them to develop new 'trading rules.' It would take just such an international meeting for the current monetary system to be replaced with something else. Something absolutely stunning will cause people to try to get out of their dollars, euros, pounds, yens, etc., leaving them worthless.

      It looks like 'the Select' are driving as many people out of gold (and silver) as possible, which they are buying at fire sale prices. No matter what form the new currencies take, they will sooner or later have a price in gold. Then, they can convert to the new money and buy up the stock market at salvage, fire sale prices.

      Right now, I'd say that it is absolutely essential for one to have their house (& cottage) completely paid off so they own it outright. In fact, later today, I am going to call my county to see if I can even pre-pay my property taxes for the next couple of years. [During the Great Depression, most people lost their homes to tax delinquencies.] Then, I'd get everything else you can into gold or silver. Best would be the actual gold coins or bullion, but that is virtually impossible to find now, so the next best is to get the gold and silver ETF.

      Any group evil enough to crash the monetary system, and steal the wealth of virtually everyone in society, is evil enough to outlaw gold for anyone except 'the Select,' but I can see no other option but to try to survive with the only store of monetary value that could be counted on for the last six thousand years.

      I see a situation that is unprecedented in its seriousness - and in its evil. I can't think of any other scenario to explain why gold would go down during a financial panic, can you?
      View article »
    • ON: Tue Oct 7th 15:59 PM
      Commented on:
      Too Soon to Move From Equities to Gold
      But the big thing right now is inflation. While the whole world was watching Congress' antics with the $700-B bailout bill, behind the scenes the Fed pumped another $502 billion of new liquidity to the banking system with 'nobody' noticing. On top of that -

      'Actions by the Federal Reserve include: (1) an increase in the size of the 84-day maturity Term Auction Facility (TAF) auctions to $75 billion per auction from $25 billion beginning with the October 6 auction, (2) two forward TAF auctions totaling $150 billion that will be conducted in November to provide term funding over year-end, and (3) an increase in swap authorization limits with the Bank of Canada, Bank of England, Bank of Japan, Danmark’s Nationalbank (National Bank of Denmark), European Central Bank (ECB), Norges Bank (Bank of Norway), Reserve Bank of Australia, Sveriges Riksbank (Bank of Sweden), and Swiss National Bank to a total of $620 billion, from $290 billion previously.'

      All this means that they are scheduled to add $330-B to the already scheduled $290-B over the rest of the year. Added together, Uncle Sam, in the last two weeks, issued or is scheduled to issue $1,890-trillion newly 'printed' dollars to the system. This can only result in inflation, which will translate into increased prices for commodities - like gold.

      On top of that, our (U.S.) Government is now pleading with other central banks around the world to participate in a co-ordinated issue of huge amounts of new monies. If this comes about, it will be even more inflationary. The question is, how long will it take for all this inflation to work its way into commodities? Answering that question (and each person will have to judge for him or herself) will tell you if it is too soon to buy gold.
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    • ON: Fri Oct 3rd 09:30 AM
      Commented on:
      The 20-Month Gold Puzzle
      Of course they don't have any gold for ordinary people - what gold there is now is all going to the super-rich at (manipulated) low prices inconsistant with every economic theory or law.
      View article »
    • ON: Thu Oct 2nd 16:05 PM
      Commented on:
      Gold Bulls: Beware
      As long as the Government-backed bullion banks can print up 'fiat gold contracts' to sell on the COMEX OR NYMEX gold will continue to decline in value. The only way that gold spot price could even remain level, much less decline, is if the Government is printing up as many 'fiat' gold contracts as they are printing up 'fiat' dollars. Economically, it impossible for eggs to go from 66-cents/dozen to $1.80/dozen, and the same inflation for practically everything for sale in the supermarket, without gold contracts inflating to the somewhat the same degree. That is, unless the Government is flooding the gold market with paper gold as worthless as the dollars they are printing.
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    • ON: Thu Oct 2nd 09:25 AM
      Commented on:
      Even Asset Managers Run For Cover to Gold ETFs
      Also: Yesturday (Wed.) there was a gap UP by $6-7 in the COMEX spot gold price right at noon, then it was beaten down by the bullion banks. Anybody have any ideas why it gapped UP intraday?
      View article »
    • ON: Thu Oct 2nd 09:24 AM
      Commented on:
      Gold Bulls: Beware
      Yesturday (Wed.) there was a gap UP by $6-7 in the COMEX spot gold price right at noon, then it was beaten down by the bullion banks. Anybody have any ideas why it gapped UP?
      View article »
    • ON: Thu Oct 2nd 09:15 AM
      Commented on:
      Even Asset Managers Run For Cover to Gold ETFs
      philly jim - read: Gold Bulls: Beware - seekingalpha.com/artic... - to see why gold is not behaving according to the laws of economics
      View article »
    • ON: Wed Oct 1st 23:35 PM
      Commented on:
      Dollar Soars
      Smarty-Pants - How can the dollar possibly hold its value under those conditions?

      By the ECU, China, and other countries printing their money faster than Uncle Sam does his.
      View article »
    • ON: Wed Oct 1st 12:38 PM
      Commented on:
      5 Reasons Why the $700B Bailout Could Translate to $250 Oil
      If a bailout is passed, and it is anywhere near as inflationary as some people think, then 'depressed' oil stocks should be a good investment. It is important, however, to limit purchase of oil stock to those whose bulk of their value is oil in place in the ground. T

      he oil income trusts specialize in buying oil fields, and replacing the ones that start to run dry with new fields. On top of any capital gain, they pay great dividends. One I have, PGH, is paying $255/1,000 shares for October. That is a rate of 20.55%/year at the current share price of $14.89.

      Canadian oil sands stocks would be a good choice since most of them are valued according to oil they have in place, ready to be produced when the spot price of oil is right. My favorite is Oilsands Quest (BQI).
      View article »
    • ON: Tue Sep 30th 13:10 PM
      Commented on:
      Market Safe Havens Rapidly Dwindling
      (cont.)
      The only reason for the CFTC to announce such an investigation is because it is a total sham, and both they and the bullion banks know it. The announcement has nothing to do with starting an investigation - it is to quiet those who are lobbying for one.
      View article »
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