Yea but the bandwagon of RE rolled on for a long time with everyone aware of it and jumping on before the wheels fell off. You could have jumped on well into the bubble and still made the £££££ that is along as you jumped off again at the right point.

But the first step is admitting you're on a bandwagon and trading accordingly.

thats what you took away from my post? pick 1 line and ignore context to say something obvious...why? i never said anybody invested in gold will lose money or that the correction is at hand (as i've clearly stated my opinion thoroughly). just that this ONE signal was interesting...

Barron

Yo, sorry for not giving your very important post on the interwebs the full force of my concentration, and not replying via essay with source notes.

FYI, see what happens to the quality of your posts when you have a 6 week old baby in the house.

BTW: I have never advised anyone to buy gold. Indeed I am in the deflationist camp, so I think cash will be king soon enough.

[quote]QUICK, CALL THE LONDON MEDICS AND KEEP ALL SHARP OBJECTS OUT OF JOHN KANE'S HANDS!!![/quotes]

lols i am still very calm. worryingly so given i have lost over my annual salary in the last 3 days. im still up $40k from my spreadbetting (not the $100k i was at it's peak).

i've just closed halfed my gold position (trigger massive rise back up) and will move it into a gold and precious metals fund (probs gold and general fund).

agriculture has taken a pounding last week or so, down to now below the 100MA. i bought in today and willl be adding over the next few weeks.

sure this sucks, but i guess i knew this was coming at some point.

ill read ove the thread properly when i get home. at work atm.

john

[QUOTE=john kane;3248149]
John

I have NEVER EVER seen such a chaotic trading strategy in all my years.It seems every 15 seconds you switch positions from long/short/long/short with mindless decision making?

You just lost $100k in spreadbetting gold/commodities.Dont you think it is time to drop back ten.....and PUNT?

GL

i probably won't be posting tbh...

i dunno about that ...
Barron

Babies turn you Japanese or at least I think so.

Gold's long term uptrend is intact. I'll continue to hold it (coins and gold stocks) until the market suggests otherwise.

I don't care about its intrinsic value, semantics, or whether or not its edible. If it's giving me a better return than other alternatives I'll hold. When other alternatives have proven to me by their price that they are a better investment, then I'll sell gold and buy that other market.

I neither know nor care about gold's VALUE - all i care about is gold's PRICE.

Past prices can't prove anything. At best there are occasional patterns. What you're really saying is that you're willing to bet that certain past relationships between prices over time will hold into the future.

Massive bull markets always include big downside corrections that in retrospect look like blips.

Just a guess of course, but FWIW I think that we're no where near to top of the gold/silver boom. I'm old enough to remember the gold/silver peak of 1979/1980. Huge numbers of people were involved. Fly-by-night precious metals traders were renting temporary space in hotels and such with literally lines of people a half a block long waiting to get in to buy or sell physical metal. We've seen nothing like that yet this time around.

[QUOTE=john kane;3248149] you like risk ?

yeah, people thought so too when mindlessly buying in times of the new economy bubble or the housing bubble.
if you somehow know you re one of the first getting out when the bubble bursts, ok.

I am still holding my gold because I think the dollar is going to continue to plummet for a while. The U.S. is turning to the printing press to deal with current problems. Gold goes up when people fear inflation, and now is a good time to fear inflation. Central banks are afraid of rising gold prices, but they don't have the same power to fight against it that they had in the '80s. They are not going to let interest rates climb to double digits. Large portions of central bank gold have already been "leased" out, and more drastic measures to fight rising gold prices could spark a panic and run on the dollar. I am holding my gold because I think the dollar is going to lose more value before it recovers. But, I only have about 20% of my portfolio in gold, because I could be wrong.

for the dollar to continue to fall or to stay at this level (compared to the euro at least), the inflation in the us has to rise way above the level in europe as regarding purchasing power it is heavily undervalued already. i think the dollar decline wont continue much further (towards the euro) and we will rather see a reversion in the next few years.

Oh reaallly?

Loan Type Today Last Week
1 Year ARM 5.42% 4.85%
30 Year Fixed Jumbo 7.12% 7.03%
5/1 ARM 5.81% 5.71%
3/1 ARM 5.59% 5.52%

Probably should have been more specific. I think the recent "liquidity injections" http://www.salon.com/tech/htww/2008/...ion/index.html are the equivalent of printing money, and I think there are more to come. The housing mess hasn't bottomed out yet and the Fed will probably eat many more bad mortgage-backed securities before it does. Does anyone think the Fed is actually going to make anyone pay these back?

If it doesn't, it is building intrinsic weakness into the US banking system, by encouraging risk-taking behaviour.

Yes but these injections of liquidity are being absorbed by the banking system which are using them to restock their own capital bases.

The cost of money to the consumer has risen and markets in commercial debt have frozen up if not collapsed completely. That is the credit crunch.

Debt is the primary means by which the money supply is inflated, and the mechanism by which new debt is created are in a very poor shape compared to 6 months ago.

This is why I think eventual deflation is the probable outcome.

It seems strange to me that everyone is afeared of inflation when all the bad news recently is caused by the opposite. Deflation in the housing market and deflation in securitised debt and all the consequent operations in debt markets e.g. the credit CRUNCH. Not the credit kerboom (we already had that).

IMO all the inflations we see is money leaving what ever bubble is being deflated to jump on the next bandwagon, but with each jump money is destroyed not to be replaced. I think we will see an ever decreasing cycle of Bubble/pop bubble/pop etc. The Cycle started with the Kerboom of the last few years and the crunch is the playing out of that cycle.

In Britain banks are increasingly offering very very generous saving rates whilst massively cutting credit lines and increasing the cost of debt once lent. Once it has all played through cash will be king.

I am a cash bug. If I knew how Id be betting on the spread between the base rate set by the CB and the rate set by actual commercial markets in money widening alot more.

where did i mention anything about the USD/EUR trade?

i've stated clearly before that the "next leg" of the dollar decline will be against emerging markets and commodity producers (BRL, AUD)

Barron

Barron, my friend. I'd like to discuss the two points you make.

"Strong" assets will be attractive buys, sure. (Of course.) But I'm not seeing what will be so strong about most of the US economy's assets.

Is Japan really a good analogy to the US? Japan, first of all, did not lose its industrial base. They still have the infrastructure to be efficient producers, so those assets do give them something of a floor. Their worth is based on their ability to make things to sell. I don't know how valuable shopping malls and department stores will be to foreign investors, in the instance where the average American has lost most of his purchasing power.

So (like we already talked about, briefly) I'm not really understanding why foreigners buying things up will be a sort of panacea here. There'd have to be incentive to buy. Sure, there will be some assets that have value (like a waterfront condo in Miami Beach, or maybe certain exporters, as you say... maybe the American entertainment industry will remain strong, or at least fall out of favor more gradually), but I think the problem is, simply, that most assets will *not* maintain "strong" value.

Most of the value of American assets is that they are located in an economy with a lot of purchasing power. That's what makes a house in Washington worth more than a house in Bolivia (I doubt it's the weather). But if you take away the purchasing power of the dollar, why will people necessarily be diving to buy up American assets? Why will their value not fall to reflect economic circumstance? Can you explain this a little further?

But is sacrificing for the sake of the dollar really to those countries' best long-term interest?

Sure, foreigners holding dollars don't want to see the dollar fall. But if the dollar wants to fall there isn't a whole lot any central bank can do about it, and I don't see why they do themselves any long-term favors by trying desperately to hold the pieces together. They got themselves into a jam. They made a bad investment. They should sell them. Do you think propping up the dollar is a viable long-term solution?

Maybe I'm not understanding the point you're trying to make. But it seems to me you're saying that, basically, these people have these bills that they don't want, so their solution is to try to convince people they have value? It seems to me that the more efficient response would be to accept the loss, deal with it, sell before you lose more, and devote your energy and resources to sound future investment.

It will be a rocky adjustment, but I don't believe for a second that the rest of the world won't be better off when they stop propping up our consumption. Right now, I guess, things aren't so bad that the other governments and central banks are willing to deal with the short-term turmoil (they don't want to be shortsightedly blamed for problems in the same way our leaders try to avoid blame). But don't you fret. When propping up the dollar becomes too costly and no longer worth the attempt, the rest of the world will have no choice but to let us fall.

I mean, if I have 1000 stones and thought I was going to be rich, but then realized everyone in my forest already has 100 stones, maybe I can convince people for a little while that they need elaborate stone walls and that rocks are important to have anyways or whatever. I'm better off bull****ting than producing something constructive, because the village leader has my back and everyone listens to him, so selling rocks is still viable. But there comes a point (as information and reality grudgingly present themselves) where my energy is best spent eating the loss of my rock expedition and gathering sticks or honey or meat to trade. Convincing people they need rocks when they don't is not viable forever.

I see what you're saying (I think). I just don't think it has any long-term viability, since convincing people to want things that they don't naturally desire is not the type of behavior that wins in a market.

I agree that maybe this will lengthen the decline. But even if such is the case, it just exacerbates the problem and prolongs the agony imo. (If those people just accepted their losses and stopped buying more rocks, they could have begun to pick up the pieces sooner, but instead now there is a bigger hole.)

Wanna BET!?

http://finance.google.com/finance?ch...=INDEXDJX:.DJI

Good chart.

Gold bugs right since 1998 imo.

There's plenty of productive capacity in the United States - imports account for a very small percentage of the US's economy and largely come from foreign subsidiaries of US multinationals. Meanwhile, exports do not account for the full extent of the US productive capacity due to accounting reasons. In short, if you're a US multinational and you have a foreign subsidiary that produces things for you, you can make the cost basis for the product to be whatever you like in order to assign income to a more favorable tax jurisdiction. The converse is true as well. All of this has been explained to you before. Even before considering this, the US is the largest manufacturing economy in the world and it's not that close. The competitiveness of US-based multinationals in foreign markets is rather striking (Microsoft, Intel, IBM, Google, Yahoo, Nike, McDonald's, etc, etc) - globally, the US multinationals dominate most major industries, more so than you'd expect from their share of the GDP (remember EU > US right now in terms of totaly GDP). Would you argue that these companies mean very little to the global economy and don't produce anything?

The GOLD BUGS are the spin doctors of the investment community