Where will it fall end?

[Tomcat]

I was watching Newsnight yesterday on BBC , a panel of Economists and bankers gave candid opinons on the future. No wonder its on after 11 pm it should be X rated ..( there were a few High St retail managers as well and some fund guys)

Did these guys paint a bleak picture or what. Yes, the UK Banks will come out of recession but the average guy will not.. he is fucked and unemployment will hit new heights never been seen before. For the next gen is it very bleak....

Seeing how the UK relies on the City of London for its daily bread it is very hard to see what we have to offer the world now

Its not going back to how it was before...

[pacman]

There is only one safe haven against financial Armageddon, gold.

Gold is inflation proof, it's role as a store of wealth has been consistent down through time.

An ounce of gold today buys the same as it did 100 years ago, &, if you believe the historians, the same as it did 1000 years ago.

This has been thrown completely out of balance over the past 10 years or more, with the interference of the Plunge Protection Team intervening into the market place with unlimited money to keep the gold price suppressed.

A high gold price is the enemy of the US dollar, as gold goes up, down comes the dollar. In other words, as trust in the banking system disappears, so the smart money floods into gold to avoid the inevitable loss of purchasing power that follows with a weak currency.

The interest in gold has intensified over the past few months, with every rally in the gold price being beaten back by the PPT who manipulate the sell price with their huge war chest.

Since gold broke through the $1000 US barrier, there has been much speculation as to how long they can keep it up. Eventually the tide of money looking for a safe haven must overwhelm even the determination of the Fed's PPT.

I thought the corner may have turned last week when gold surged $12 in a session to stop at $1008/ounce. It quickly fell back but there was a feeling that this was pivotal. That once the thousand dollar mark was breached, there was no telling where it would end.

This morning I saw the price was 997, things appeared stable, this evening, the price was nearly 1018. The NY exchange opens in an hour & I would love to be a fly on the wall in the offices of dealers.

The phones would be running hot. Are they holding massive buy orders? Would anyone be a seller when records have been set in the Asian region? Will gold put on $50 an ounce today? (US time)

I will be checking the gold price right up to my bedtime. Damn, this is far more interesting than anything on the forum right now...          

[pacman]

To balance the comments above, it is important to note that price rises (and falls) in the gold price don't necessarily follow if you are using any other currency than the US dollar.

By way of example, despite the $20 rise in price (just checked - now $21), the increase in the Australian dollar was only about $8 AUD as our currency appreciated against the US dollar.

It is altogether possible that as the price of gold increases in US dollars, it could go down in AUD.

Which is great news for any Aussies travelling to LOS, the baht is tied to the US dollar & will inevitably fall against any of the commodity currencies.

[manarak]

one of the problems is that experts are not agreeing on the direction we are taking: inflation or deflation.

Now... IF you are interested... I might come up next week with a very interesting fund product that protects against inflation and deflation.
The fund would be an ideal addition to any bond or balanced portfolio.

Please PM if you are interested.

P.S.
It is not a shady product at all, it is a regulator-controlled, transparent fund.

[bigmick22]

Put me down for 4 of your magic beans

[bigmick22]

Just been talking to my old chum Warren Buffet and he wants in too

[sev7en]

(bigmick22 @ Sep. 16 2009,20:56) Just been talking to my old chum Warren Buffet and he wants in too

[manarak]

ah, shut the feck up, gobshites! (the forum is really great for learning some english!)

...

BTW, today

LYC 0.82 AUD
PRU 1.30 AUD

I can't believe I finally make money over that dreaded 2008!

[bigmick22]

shitehawk!

[Torurot]

Will Anything Change?
Recession, Recovery and Reform
http://counterpunch.org/weisbrot09182009.html
By MARK WEISBROT Weekened Edition September 18-20, 2009 This column was originally published by The Guardian. http://www.guardian.co.uk/

Corruption takes many forms in different countries and locations. Here in the United States it may not be as common to pay off a judge or a customs official as it is in most low and middle income countries, but we do have quite a bit of legalized bribery, especially in the form of electoral campaign contributions. The most obvious current case is that of health care reform, where the powerful insurance, pharmaceutical and other lobbies are in the process of vetoing some of the most important parts of the health care reform that most Americans want and need. For example, the vast majority of Americans favor a public option €“ insurance offered by the government, as we have for senior citizens in the Medicare program €“ yet these powerful interests are blocking it in the Senate.....

Sorry, But It's Still Doom and Gloom All the Way to the Horizon
The Post-Bubble Malaise
http://counterpunch.org/whitney09182009.html
By MIKE WHITNEY Weekened Edition September 18-20, 2009

We keep hearing that "The worst is behind us", but the spin doesn't square with the facts. Sure the stock market has done well, but scratch the surface and you'll find that things are not as what they seem. Zero hedge--which is quickly becoming the "go-to" market-update spot on the Internet--recently posted an eye-popping chart which traces the Fed's monetization programs (Quantitative Easing) with the 6-month surge in the S&P 500. The $917 billion increase in securities held outright equals the Fed's $1 trillion increase to its balance sheet. In other words, the liquidity from the Fed is following the exact same trajectory as stocks, a sure sign that the market is being manipulated.....

[azza33]

The $917 billion increase in securities held outright equals the Fed's $1 trillion increase to its balance sheet. In other words, the liquidity from the Fed is following the exact same trajectory as stocks, a sure sign that the market is being manipulated.....

Another great conspiracy theory unveiled... total crock of shit.



The share market is a forward looking indicator that overshoots due to both fear and euphoria.
At the worst point of the cycle, fear was so high it was severely oversold and led to some great profit profit opportunities
We are at the other end just now... its overshot by a long way and due to correct shortly...be interesting to see if its Dow 10,000 as the reversal point or what.. but one thing for sure we will correct and probably by 10-20% too.

The improving profit have been driven by cost cuts and not sales expansion - as such, after the next round or two of reporting season in the US, we should see a confirmation sales are stagnant or falling and that the current P/E multiples are unsustainable in the near term.

With unemployment still increasing in the US and elsewhere, its very hard to see sales growth and the only way companies can grow market shares is through price cuts (hence the fear of a deflationary cycle).
Remember the bullshit term of the moment that seems to be applauded - the rate of losses is slowing ... ummm that actually means the losses of jobs are getting worse and 10% unemployment and 20% REAL unemployment will likely be achieved in good old USA in the very near short term.

Good luck to anyone who believes the current shares prices can be sustained with those type of unemployment numbers.

There is only reason to be in the stock market just now -- selling and taking your profits, or realising your improved loss from this current rally.

[pacman]

(azza33 @ Sep. 19 2009,07:56) Another great conspiracy theory unveiled... total crock of shit.

There is nothing theoretical about what is going on in the US. There are 100's of commentators all agreeing that the "recovery" has been paid for with dollars that have been created out of thin air.

This quote I took from Torurot's article:

"By buying U.S. Treasuries and mortgages to increase the monetary base by $1 trillion, Fed Chairman Ben Bernanke didn't put money directly into the stock market but he didn't have to. With nowhere else to go, except maybe commodities, inflows into the stock market have been on a tear. Stock and bond funds saw net inflows of close to $150 billion since January. The dollars he cranked out didn't go into the hard economy, but instead into tradable assets. In other words, Ben Bernanke has been the market."

I don't think that it is the stockmarket that will bring this house of cards down, I think the real danger is in the potential for the US dollar to lose all value.

Throughout history, everytime a ruler created excess money, that currency crashed & burned. It bought down the Roman Empire. This century, the two most famous examples are the Weimar Republic in Germany in the 1920's & most recently, Zimbabwe.

I do agree with the rest of your post, but good luck to all those brave souls flirting with a sharemarket that we know is overbought & is due for a correction.

[azza33]

(pacman @ Sep. 19 2009,08:47)

(azza33 @ Sep. 19 2009,07:56) Another great conspiracy theory unveiled... total crock of shit.

There is nothing theoretical about what is going on in the US. There are 100's of commentators all agreeing that the "recovery" has been paid for with dollars that have been created out of thin air.

It is basic economics in play IMHO.

The world learned from Japan efforts and basic economic premise that fiscal stimulus in a near zero rate economic environment is ineffectual.

The only way they kicked started their economy was through fiscal easing - the printing of money. It's a risky strategy with dire consequences if the inflation gene gets out of control - but one of the few tools at the disposal of the powers to be to try and tackle the current crisis.

And you are correct - it will put downward pressure on the US dollar.

The US has an important advantage - the natural hedge created by the many commodities being priced in the USD - for now at least.

However the current depreciation of the USD is not all bad - it will make US exports cheaper and more competitive and provide a positive drive for the US manufacturing industry.
A cheap USD dollar will make investment in the worlds largest economy relatively cheap for foreign countries - it will promote investment and capital inflow to the US.
So in short, you can't focus and outline a negative aspect of current policy without consideration of the positive effects of the "negative aspect".

The thing about economics which makes it so hard to control is that simply changing one variable has an effect over 100 others. So the eventual outcome is only really a discussion of probabilities rather than certainty.

[azza33]

(pacman @ Sep. 16 2009,18:32) It is altogether possible that as the price of gold increases in US dollars, it could go down in AUD.

Well yes gold is in a strong bull market unless one classes a 25% loss in the past six month as in fact a bear market.  

As an aussie i wouldn't really advocate gold based on any chart.

So it begs the question, is gold really a safe haven metal or is that really just a matter of perspective?


Gold priced in AUD (1/10 oz )

[azza33]

Gold (AUD) and relative perfomance of ASX

From an aussie standpoint... we should have owned gold long ago and sold out 6 months ago at the height of market fear
and reinvested our funds back into the share market ... oh the power of hindsight.