Precious Metals

[onlooker]

Here are some buzz words and sentences written in the media that are stuck on my mind:

[i

]In  the 1997 Asian Financial Crisis, the devaluation caused debt to be even more difficult to repay and countries started to default.

Real estate bubble burst

Subprime Mortgage Crisis

Quadrillion derivatives plus in the global financial system

Trillion dollars bailouts

Silent SEC

Iceland’s financial collapse and CDS

Chrysler into bankruptcy

Military Corruption Trillions Missing at Defence Department

Brazil and Argentina are ready to stop using U.S. dollars to trade goods between them

China has signed deals with six countries, including South Korea, Malaysia and most recently Argentina, for currency swaps that would inject Chinese money into foreign banking systems.  That would allow foreign companies to pay for goods they import from China in yuan bypassing the US dollar..

Of the top nineteen (19) banks in the US, sixteen (16) are already technically insolvent. 

Of the 16 banks that are already technically insolvent, not even one can withstand any disruption of cash flow at all or any further deterioration in non-paying loans.     

If any two of the 16 insolvent banks go under, they will totally wipe out all remaining FDIC insurance funding. 
 
Five large U.S. banks have credit exposure related to their derivatives trading that exceeds their capital, with four in particular - JPMorgan Chase, Goldman Sachs, HSBC Bank America and Citibank - taking especially large risks. 

The debt crisis is much greater than the government has reported. The FDIC`s "Problem List" of troubled banks includes 252 institutions with assets of $159 billion. 1,816 banks and thrifts are at risk of failure, with total assets of $4.67 trillion, compared to 1,568 institutions, with $2.32 trillion in total assets in prior quarter. 

US auditors of a US$700-billion bank-bailout program said yesterday they had launched nearly 20 fraud probes

The true US National Debt is $65.5 trillion - effectively placing the U.S. government in bankruptcy. Mar 27, 2009.

Because of the abovementioned never ending bad news items, I am long gold. 

I am guessing that gold will float up when the propped up US financial system suddenly fails with the devaluation of the US dollar.  That there will be no easing of the current deflation into another type of “flation”.

However, there are technical reports on when gold is predicted to gradually swing upwards and downwards, such as[/i]   http://news.goldseek.com/AlfField/

If there are other such technical reports, I would like to look at them.  Anyone?

[sidewinder]

Wow onlooker, about three quarters of the way through that list I pulled  an E-Trade baby. 

Nothing has really changed either has it?  We have a market going up on Hopium.   

[sidewinder]

This is a pretty good article about gold. 

http://www.gold-eagle.com/editorials_04/wallenwein022104.html

Barring the end of the world, this crisis is simply another of a long line of "bubbles", "economic turmoil", and other social disruptions brought to you by dumb ass politicians and bankers.  History is full of examples of exactly what we are going through now and reading about it would amaze the uninformed.  I view Gold and other PMs simply as a store of value and as the article says, if you obtain gold what do you get for it in exchange but trash currency.  Granted you may get more of the dollars or euros in exchange at some point but you may also get fewer of those curriencies if you need to sell it.  A guy that bought gold at the top needing help now would suffer a loss. On the other hand who know what price we may see next year?  We may see $1500 gold just like we may see $600 gold.  I look at a gold chart and it looks just like any of the other futures charts.  IMHO as an investment it sucks.  reason is it is so manipulated by central bank and others.  As a store of value, that I can put into a sack and travel to any point on the globe and  exchange it into the local currency it's great.  Buy some on a regular basis put it away and forget about it until you need it.  But have a good hidy hole because governments have been know to confiscate it. 

Currencies are in a downward spiral; even the "strong ones" will eventually follow. The dollar is no longer as pivotal to the world monetary system as it once was only a few years ago. Because of that, gold is no longer as "repressed" as it once was. It is still being "managed", to be sure, but the direction is now slowly upwards. It is no longer being suppressed at all costs.

That's why gold is not an "investment". It needs to be held for its own sake, not to make a stash of trash.

A suggestion: if your fingers are itchy, and you just have to trade something because it's so exciting, trade stocks. That way, at least you won't play into the hands of the bullion and central banks in their attempts to make gold look like trash - for the time being.

Then, if you're lucky and win in the stock-trading casino, take your winnings off the table and put them into gold. Physical gold, that is. But, when it comes to gold itself, the best advice is:

Don't trade it.

Don't "invest" in it.

Just buy it!

[jjj000]

However, there are technical reports on when gold is predicted to gradually swing upwards and downwards, such as[/i]   http://news.goldseek.com/AlfField/

I had been watching Alf Field closely... oh within the last year or so ago... and he got his Elliot Wave charting predictions for gold completely wrong.  Maybe that's why he quit doing them... 

He sure did sound convincing, though... but I would go back at least a year with him and do your own comparisons before placing any value in what his TA predicts.

Just a guess, but I think gold should retest around 880 one more time, and then we'll see how it reacts from there.  It could go either way, just by looking at the chart, but that seems to hold some support.  If it bounces up, it would be a matter of testing resistance then at 915.  If it falls below... then it could easily drop down to 840, if not 805.  In the grand scheme of things, though, that's only what... 10% from current prices...

[onlooker]

SS:

Your article is correct.  People who brought high in the 1970’s and / or krugerrands would whole heartily agree with this article.  That gold should not be counted as a solid investment.  Gold can be just a piece of metal, and can fossilise. 

The following e-mail to an investment advisor says it best.

Mr. Kim,

It has been 40 years that I have invested in global markets, and I have seen much that would be material for booklets and "Investing For Dummies" that I wish I had chronicled as it happened. Nearly all of the worst and unpredictable impacts on global financial and monetary markets have occurred because of government interference, acts of insanity, and acts of violence. I have seen them all. This last few years, and the last few months, have combined all of the worst ideas and fantasies of so-called leaders. Their actions may literally destroy the entire wealth system for everyone. Well, nearly everyone.

So, what to do? If you sit on your assets, they devalue with inflation. If you invest in gold, you have gold, but what do you do with it? If you buy land, and move there, how do you support it? If you buy bonds, you can live off a diminishing value cash stream, and lower your standard of living. Of all these, you say gold. I sat on gold Krugerrands for nearly thirty years to see them recover only a third of the present value cost to me in the late '70s. They sit in a safe deposit box, gathering dust.

So, what's left? If you buy stocks, you play the game in the casino. The dies fall as luck would have them. They go up, and down. I play the game, and win sometimes, and lose the rest.

I am no pundit, and no great purveyor of wisdom. I can only tell you this:
You may be right today, and wrong tomorrow. Investing is a gamble. The psychology of the markets drives the price fluctuations. The only way to win is to have the right measure of psychological forces, and flow with the direction. If that sounds profound, it isn't. It's merely an observation.

So, for small investors, it is best not to put only gold into one financial basket because you may not see a return from gold in years to come.

However, it is now 2009.  In comparison to the 1970’s and 1980’s, new factors related to gold are now in play and made known to the public through the internet.

One is that gold is manipulated and in an unbeatable way.  Gold is manipulated using gold derivatives.  Google Casey’s Daily Resources Plus, April 2, 2009 for article on gold and silver derivatives and table of numbers.

One caption says”The same report [Page 30, Table 9...pdf link below] shows that U.S. bank JPMorgan Chase holds $82.4 billion in gold derivatives...77.1% of the entire U.S. banking system total. HSBC USA carries $19.2 billion in gold derivatives...18.0% of the entire U.S. banking system total. Citibank has an inconsequential 4.4%. The Bank of America has the other 0.5%. And in silver...the numbers are an even bigger surprise. JPMorgan holds about $3.5 billion in silver derivatives...46.3% of the U.S. banking system total...and HSBC USA holds around $3.9 billion in silver derivatives...52.2% of the U.S. banking system total. Bank of America and Citibank hold $500 million in silver derivatives between them. No other U.S. bank has any gold or silver derivatives at all...zero, none, nada, zip, zilch, squat!!! Any questions? JPMorgan is the custodian of the silver ETF...SLV; and HSCBC USA is the custodian of the ETF...GLD. The link to the lastest [and all prior] quarterly reports of the OCC is here.”

So, with massive usage of gold and silver derivatives in play, I suspect JP Morgan and HSBC can turn a lifeless metal into an investment.

Please google the following 4/29 Adrian Douglas - BIG MONEY MOVING INTO COMEX GOLD & SILVER CALL OPTIONS:
PFV1
Adrian Douglas. April 29, 2009. www.marketforceanalysis.com. Market Force Analysis is a unique analysis method which provides reliable indications of market ...
www.lemetropolecafe.com/Pfv1.cfm?pfvID=7787&SearchParam=Adrian%20Douglas - 13k -

Does this mean that JP Morgan and HSBC are finally making gold a bull market?

Is this article to believeable?



jjj000:

I am still quite new to the markets, and all its technical jargon.   I have not been to a 101 technical charting class.  So, thanks for your comments on Alf Field’s charts, and have a look at Adrian Douglas’ article mentioned above.

[onlooker]

Typo error.

HSBC should be replaced with bankster Goldman Sachs.

[onlooker]

John Perkins, a self-described "economic hit man" published in 2004 a book with the title: Confessions of an Economic Hit Man.  He describes the role of an economic hit men (EHMs) as:

Economic hit men (EHMs) are highly paid professionals who cheat countries around the globe out of trillions of dollars. They funnel money from the World Bank, the U.S. Agency for International Development (USAID), and other foreign "aid" organizations into the coffers of huge corporations and the pockets of a few wealthy families who control the planet's natural resources. Their tools included fraudulent financial reports, rigged elections, payoffs, extortion, sex, and murder. They play a game as old as empire, but one that has taken on new and terrifying dimensions during this time of globalization.

and he writes:

I was initially recruited while I was in business school back in the late sixties by the National Security Agency, the nation’s largest and least understood spy organization; but ultimately I worked for private corporations. The first real economic hit man was back in the early 1950’s, Kermit Roosevelt, the grandson of Teddy, who overthrew of government of Iran, a democratically elected government, Mossadegh’s government who was Time‘s magazine person of the year; and he was so successful at doing this without any bloodshed—well, there was a little bloodshed, but no military intervention, just spending millions of dollars and replaced Mossadegh with the Shah of Iran. At that point, we understood that this idea of economic hit man was an extremely good one. We didn’t have to worry about the threat of war with Russia when we did it this way. The problem with that was that Roosevelt was a C.I.A. agent. He was a government employee. Had he been caught, we would have been in a lot of trouble. It would have been very embarrassing. So, at that point, the decision was made to use organizations like the C.I.A. and the N.S.A. to recruit potential economic hit men like me and then send us to work for private consulting companies, engineering firms, construction companies, so that if we were caught, there would be no connection with the government.

See:  http://en.wikipedia.org/wiki/Confessions_of_an_Economic_Hit_Man

Back on March 22, 2008, Yellowcaked introduced the following well researched intriguing video:

http://vimeo.com/3722293

It is about Wall Street way of doing big business.  It shows the killing of Bear Stearns stocks through illegal naked short selling.

On May 29, 2009, Jim Willie presents presented his article, titled Hitmen Contracts to Bust Comex.

See:  http://www.kitco.com/ind/willie/may292009.html

He writes about other countries’ ways of doing global big business.  He writes about revenge killing of the Comex through the excessive and legal demanding of gold deliveries.  The major players are China, Russia, Germany, and the United Arab Emirates versus United States and United Kingdom.

The practice of killing something is never taught in Big Business 101, but it certainly practiced in real life.  Only time will tell if Jim Willie’s article is correct.

[sidewinder]

Great read from Jim Willie and of course the weekend cruise of Kitco is always fun.  Same thread as usually found at the Tri-ad (Kitco, GATA, anything from Doug Casey).  Boy these guys know how to get a guy all fired up.  Some of the best writers in the business IMO.  They present the reader with such mind boggling information on the world conspirisy with deep implications.  But never quite tell the source or the entire story.  That leaves the reader thirsty for more of the juicy “secret information” available only to subscribers… They are good I will say that.  He goes………..

MUTLIPLE HIRED HITMEN HAVE ASSIGNMENTS TO KILL THE COMEX GOLD MARKET

quietly and without fanfare, surely without publicity….The executions will be sudden. The missing US-UK levers will be immediate.

Now he’s got me really fired up.  Who are they. Oh I see I gotta get the letter… where’s my paypal number.
 
A short list of banks facing the firing squad is already known, details for Hat Trick Letter members….
Rumor was thick that death threats had been delivered to certain Wall Street executives, such as Paulson….

for passage of T.A.R.P. funds. The disbursement of those funds have not been made public partly because Wall Street (read Goldman Sachs) does not want the US people to be aware of payoffs for bond fraud under death threats.

I just knew GS was involved … now where did I put the paypal information……

Some detailed speculation will be devoted to the June HTL reports, since too controversial.
Oh more details in the June report, If I join now I will be just in time to make a fortune with this information.   lol

Of course at the bottom of the article are several offers of books that will explain all this to the unwashed and a relocation service to Costa Rica in case one becomes duly afraid of the future in the so to be executed US of A.

[onlooker]

When I first read Jim Willie articles, I thought that he was way over the top in his thinking...O.K. I thought he was paranoid.

But, when I examine the core issues given in his current article (exclude such items as RELOCATION IN SPECTACULAR COSTA RICA) together with some past financial and political events; I believe that he is not really writing about anything unordinary new, or inventive or controversial or conspiratory.

That what he writes about is actually very possible.

I note that back in 2004 to the London Bullion Market Association, Oleg Moshaiskov, deputy chairman of the Russian Central Bank gave a speech at the London Bullion Market Association.  He acknowledged that GATA is correct in stating that the gold price is manipulated and that suppression of the gold price is allowing the US government the great privilege of being able to spend much more that it should be allowed to spend.

Since then, there was the August 2008 war between Georgia and South Ossetia. In Tom Fenton’s October 6, 2008 article with the title Angry Bear, he wrote that
 

Putin (a Russian financial oligarch) told an invited group of foreign academics and journalists that the Georgian invasion of South Ossetia, in which a number of Russian citizens were killed or displaced, was Russia’s “9/11,” and said the West had let him down. He blamed the United States for encouraging – or at least failing to prevent – the Georgian attack. He felt that America was no longer a partner that Russia could trust. Putin was angry. His message to the West was blunt: “We don’t want another Cold War, but if you want one, we are ready.”

See:  http://www.theworld.org/taxonomy/term/28?page=2

And I have Simon Duke, 23 December 2008 article the title Russian Oligarchs Facing Financial Ruin.  The title itself is self-explanatory about what is written in this article.

And I have January 28, 2009 text transcript of Russian Prime Minister Vladimir Putin’s speech at the opening ceremony of the World Economic Forum in Davos, Switzerland.  Putin, correctly or not, diplomatically blames Wall Street for the global financial crisis with his following statement:

In the last few months, virtually every speech on this subject started with criticism of the United States. But I will do nothing of the kind.

I just want to remind you that, just a year ago, American delegates speaking from this rostrum emphasised the US economy's fundamental stability and its cloudless prospects. Today, investment banks, the pride of Wall Street, have virtually ceased to exist. In just 12 months, they have posted losses exceeding the profits they made in the last 25 years. This example alone reflects the real situation better than any criticism.

And

The entire economic growth system, where one regional centre prints money without respite and consumes material wealth, while another regional centre manufactures inexpensive goods and saves money printed by other governments, has suffered a major setback.

I would like to add that this system has left entire regions, including Europe, on the outskirts of global economic processes and has prevented them from adopting key economic and financial decisions.

See:   http://online.wsj.com/article/SB123317069332125243.html

These three articles lead me to think that the Russian Oligarchs are in deep financial trouble; they blame Wall Street and they know that the gold price is manipulated.   So, I conclude that if the Russian Oligarchs see a way out of their financial woes, and bring down the US government; they are going to take it.

Back in the 1997 Asian Financial Crisis, Tim Geithner (tax cheater) was the Treasury line officer who wrote the IMF (International Monetary Fund) program for Indonesia.  Contrary to Obama’s high praise for Geithner, he was a disaster at handling the crisis.

See March 6, 2009 article at the Sydney Morning Herald with the title Former Australian Prime Minister Savages Geithner’s Performance in the Asian Crisis.

It is written: 

Paul Keating, former Australian Prime Minister, gave an assessment of Timothy Geithners’ performance in the Asian crisis that is sharply at odds with US reports. According to Keating, Geither completely misread the nature of the crisis, that it was the result of hot money flight (caused by currency speculators), but reverted to the standard IMF “country facing currency crisis” playbook, and made a bad situation worse.

And:

The former deputy governor of the Reserve Bank of Australia, Stephen Grenville, doesn’t think so: “After the Asian crisis, the countries of east Asia decided that they would never go to the IMF again. The IMF is taboo in east Asia. Look at the evidence. The revealed preference of the region is that no one has gone to the IMF since, even when they needed the money.”

And:

As for The New York Post’s claim that Geithner was the hero who cajoled those quarrelsome Asians into agreeing to a $US200 billion rescue, the key fact burned into the minds of Asian elites is that the US was deaf to requests for funds. Washington did not contribute a cent of its own money to any of the emergency packages. Japan and Australia were the only nations that made loans to all three of the stricken Asian countries.

Keating went on to argue that, by frightening the Chinese into building their vast $US2 trillion foreign reserves, Geithner was responsible for the build-up of tremendous imbalance in the world financial system. This imbalance, in turn, according to Keating, contributed to the global financial crisis which has since devastated the world economy

See:  http://www.nakedcapitalism.com/2009/03/former-australian-prime-minister.html

And who were the currency speculators who started the 1997 Asian Financial Crisis? 

They were American hedge-fund operators such as George Soros and Julian Robertson who had multibillion-dollar war chests to draw from.  George Soros was born in Budapest, Hungary, but his victims still considers him to be American.

Back to 2009, China is now moving to make the Yuan fully convertible, such that it can be exchanged freely both inside and outside China.  China already has bilateral currency agreements with South Korea, Hong Kong, Malaysia, and Indonesia.   Other countries include Belarus and Argentina.

See:  www.forexblog.org/2009/04/chinese-yuan-vies-for-reserve-status.html

So, it is now understandable as to why it was so easy for some Asian countries to quickly agree to have bilateral currency agreements with China, and that they see the Obama’s administrative with Timothy Geithner as a foe.

Now, what does Germany has to do with the U.S. Financial Crisis?  Well, please see William Boston’s article dated April 9, 2009 with the title German Cities Suffer in the U.S. Financial Crisis.

It states: 

When the nearly bankrupt city of Berlin was looking for a way to finance its public-transportation system a decade ago, some American investors had an idea that seemed too good to be true. Unfortunately for Berlin, it was.

The scheme seemed a bit convoluted from the start, but it offered oodles of money to the participants. An American investor agreed to lease tram and subway cars from BVG, Berlin's mass-transit company. And BVG, in turn, leased them back for terms ranging from 12 to 30 years. Under U.S. tax law at the time, the American investor was able to take a depreciation tax benefit on the equipment because it was held on a long-term lease — a financial benefit the investor shared with BVG.

Between 1997 and 2004, Berlin's public transportation company entered into 22 such lease and lease-back deals, covering a total of 511 tram cars and 647 subway cars, with various American investors.

And: 

In more than two-thirds of the deals, German cities insured their assets with AIG or Lehman Brothers. So after those two pillars of U.S. finance crumbled, German cities suddenly faced the risk of having to make huge payments — taken together, as much as €30 billion ($40 billion), according to some estimates — to their American investors.   "The contracts are incredibly complicated, a thousand pages and more, and all in English," says Franz-Reinhard Habbel, spokesman for the Federation of German Cities and Municipalities. "Many cities were just out of their depth and unable to understand them."

In the case of BVG (Berlin’s Public Transport Company), the insurance was provided by Hypo-Vereinsbank, the Landesbank Berlin (LBB) and Credit Suisse. The LBB was privatized in 2007. Expecting that LBB would be downgraded by ratings agencies, BVG was planning to insure its assets through another state-owned bank in Germany, the Landesbank Baden-Wuerttemberg. But city officials say BVG's advisor, J.P. Morgan, suggested the transit company spread the risk by insuring the deal through a collateralized debt obligation, or CDO, backed by a consortium of some 150 banks and insurers that included AIG and Lehman Brothers.

With the collapse of Lehman Brothers and the uncertain future of AIG, BVG fears that the U.S. investors could demand as much as $200 million in additional collateral. As a precaution, the transit company has taken a risk provision of €157 million ($208 million) on its balance sheet. BVG says that when the deal was done, J.P. Morgan assured that it would not be liable unless the majority of its CDO backers became insolvent. "But they misled us," says Reetz. "It now appears that we could be made liable even if just one of the backers becomes insolvent, as has happened." J.P. Morgan declined to comment.

J.P. Morgan has yet to demand payment from BVG, but in October the bank filed with a London court to ensure that London would be the jurisdiction for any court proceedings with BVG. That move possibly suggests that J.P. Morgan is preparing a claim against BVG. Reetz, the BVG spokeswoman, says the transportation company learned of the J.P. Morgan filing last week when BVG filed to have a trial in Berlin should there be one. "So far, no one has come forward with any demands for payment. But if they do, we will fight them in court. And we want to do that in Berlin, in our own language." says Reetz.

See:  http://www.time.com/time/business/article/0,8599,1890418,00.html

So, after reading this article, I can conclude that if the Germans can think of a way to kill off the American investment bankster, J.P. Morgan, they will do it.

According to Noah Barkin’s article dated May 28, 2009 A return of “ignore Germany” under Obama? there is no great chemistry between Obama and the current Chancellor of Germany, Angela Merket.  Therefore, relations between Washington and Berlin is very poor. 

Is it possible for the Germans to have reasons for demanding that gold bullion held in US custodial accounts be shipped back to Germany?  Why not?

And what about all the gold of Dubai that is held in the vaults of various banks in London?  Well, according to Commodity Online article dated May 26, 2009, with the title Dubai to get back gold reserves from London banks.   


It states: 

All the gold of Dubai that is held in the vaults of various banks in London is coming back to the City of Gold.

The Dubai Multi Commodities Centre (DMCC) has opened new vaults to store the gold reserves in Dubai, currently being looked after by central banks in London.

DMCC officials disclosed that DMCC vaults will be a home to the gold allocated to the Dubai Gold Securities (DGS) Exchange Traded Funds (ETFs). The vault may also become a natural choice for storage of gold reserves by central banks in the Middle East bullion market.

At present, gold allocated to DGS is kept at HSBC’s vaults in London and gold reserves held by GCC’s central banks are held by various other vaults in London. London has been home to safe and secure gold vaults for more than a century.

The new gold vaults at DMCC became operational in April. DMCC officials said that the gold held under DGS ETFs at the HSBC vaults in London will be bought to Dubai soon.

Jim Willie did not make any false claim about Dubai wanting their gold back in their hands.

In summary, the US government and Wall Street banksters (not the American people) have made many enemies abroad. 

Now, after reading all the above mentioned articles, Jim Willie’s article Hitmen Contracts to Bust Comex should be read again.  All the points made in his article may then appear to be possible.  That there is a financial war going on in the current global financial crisis. 

He states that a hit may occur in June or September or December, 2009.  I assume that if gold zooms up, then the US dollar may go into a freefall.  Only time will tell if Jim Willie’s article is correct or not.

[onlooker]

A smacked down in COMEX precious metal prices coming, as according to Gene Arensberg’s article Raise the caution flags for gold, silver dated June 1, 2009.

Sound the klaxons and raise the “caution flags.” Commercial traders really piled on the short side. As gold rose $26.44, or 2.9%, COT reporting Tues/Tues, from $925.70 to $952.14, the COMEX commercials added a whopping 25,071 contracts (13.7%) to show a very high 208,136 contracts net short. This, as the open interest for gold rose 29,034 to 396,965 contracts open.

This past week saw the largest one-week increase in the net short positioning by the commercials since the December 16, 2008, report, when they clobbered the gold market with an increase of 28,239 net short contracts as gold was in the $850s. That action did result in a (modest) pullback for gold, but not really for all that long a time, by the way.

This is also the first time that the COMEX commercial net short positioning has been over 200,000 contracts since the infamous July Massacre, as BMO’s Donald Coxe dubbed it, in 2008.

See:  http://www.stockhouse.com/Columnists/2009/June/1/Raise-the-caution-flags-for-gold,-silver--Got-Gold

[Bottomfeeder]

onlooker....I see no reason to be in it until it breaks through resistance.  I would much rather pay a little more and have the top opened up, with a floor just underneath, vs. having a ceiling 2% higher, with multiple failed tests,  and the floor 30% lower.

Just looks like poor risk reward, and frankly greedy.

[Beginner]

Bfeeder:  see you are allergic to gold in any form.  I envy your confidence in a world in crisis with no end in sight.  Not that gold is a guaranteed safe haven either.  I share your doubts.

So far only ten per cent unemployed.  Good.  So far only a few big banks and some smaller banks have failed.  So far so good.  What if this is only the beginning of the derivative crisis and trillions more have to be cleaned up? 

Like you, I hope we are coming out of the crisis, that no more banks will go under, that the dollar will hold, that the pension funds will not go under, that the remaining banks will survive, that the stock markets will remain intact, that our savings will remain safe, and that there are no world wars on the horizon. 

We live in a world crisis and there are no certainties.  It may be a question of greed or it may be a question of consternation about what to do next, before our savings turn to dust.  And nobody has an answer and nobody knows anything for sure except we may win the stock market lottery or we may lose everything.

I had my savings in euros and changed them into dollars because of someone’s sayso and the euro straightaway went from $1.30 to $1.41.  My own intuition told me to remain with the euro but I listened to those who were speaking with complete certainty.  But even those who speak with utter and complete and convincing certainty and have all the facts to back them up are usually wrong.  The moral is: follow your own judgement and don’t blame anyone.  And you may still lose.  And indeed the euro may still go down as prophesied and the dollar along with it. 

Whatever I do, I cannot do it with any certainty.  I envy those who speak with certainty.

We live in a world of control and manipulation and it is outside our control.   Just some stray thoughts.

[Bottomfeeder]

Its all about trying to have good timing on things and see where they are going.  Timing not just being about entry but your time horizons and where things are probably going.

I think it was me btw on the dollar call vs euros, and I still stand by that, looking for the EURO to settle out here pretty soon at 1.15-1.23.   The ECB is still behind the US in cutting, with more to come as the US is beginning discussions about raising rates, which is dollar bullish and just around the corner.  I think today the odds for an increase by November were at 100%. 

Today the UUP did break out of its downtrend.  One day does not make a trend so we will have to see if it holds up or falls back down.  Should it hold, I am a metals seller.  BTW if you bought the USD 2 years ago your about even, if you bought it a year ago your up 10%.  Read any newsletters promoting that trade last year?  IF so, might want to check up on that guy.

As far as living in a world of fear IDK.  Not me really.  Because fear is paralyzing, and as a result just as dangerous as greed, both based on emotion.  Fear made many people just miss a huge run up, (denying its existance all the way) fear had sellers selling at bottoms, fear had people running to dollars at tops, and now more want to enter gold from fear of inflation.

My opinions on gold are based purely on technicals.  Wait for the break thats all.   There was an entry available around 4/17 where you could enter just above the 200DMA and if it failed, exit without harm.  If you hit it perfect your up 8%, right in line wiht the Snp performance for the same period.  Oil up about 25% for the same period.

If you got in there  and want to be an investor let it run, great.  But to enter here.  Why?

The issue I have with gold just following all those who seem to love the investment is that there are always complaints about "the government manipulating to hold the price down".  Why would you want to fight the government.  IF so, why before a breakout. 

If the government has been holding the price down in the past, do you think that they are just going to let it and inflation run wild in the future?  THAT would be a reversal of trend, right?  Ben has been pretty good too right?

I place my bets with the understanding and expectation that I will be wrong not right, but that I can enter or exit quickly IF wrong, with little damage.  A valuable lesson from the U debacle. That is what this is all about.

What do you think is going to happen to gold if/when the Fed starts raising interest rates?  Did you see what happened today with just a sniff of that ?  Well it will be coming probably pretty soon I think.

Nonetheless, doesnt' really matter at this point, because there is no hurry to jump in front of resistance.  I would rather buy at 1050 than 950, again betting that I would be wrong.  Just $50 downside.   

I would buy the UUP tomorrow before buying the GLD and would sleep much much better.  As a matter of fact it is something that I have been watching and thinking about, as a commodity hedge. 

If it is the beginning of a big huge bad worse than ever crisis.  Hit the sell button and buy gold  then.  IF it is such a great play why worry about a few percent if its going to 3000 or 2000 or 1500, whats 100?

But don't listen to me any more than any newletter pumper of precious metals.  Even though I only have about 3% exposure and no subscribers.  I have ZERO need to be right so I would call myself agnostic not allergic, and not in any big hurry to be a believer. 

I tell you I would much rather trust Ben will be right, more than you, me, or anybody else out there from a fundamental perspective, because he knows what he is going to do and frankly nobdoy else really does.

Keep your eye on the trends which are shaping things.  Check the SnP downtrend line from 1440, broke downtrend line last week.   Look at the VIX downtrend line, getting ready to break up?  Look at the UUP just broke up today.  Then look at what happens to everything around those reversals should they hold....

Hey too each his own I just try and LOOK and not OVERTHINK it.  If you got into GLD a year ago then you made nothing and your wealth was preserved from a horrendous market.  You should be congratulated by your choice it served you well and served its purpose.

It may continue to do so, or it may be correction time IDK.  I just don't need to be standing in front of it because being wrong and in, is far worse than the benefits of being in and being right .  Entering here is either real early or real late, I have no idea which one.  At this point I see nothing compelling.  Does't mean that there isn't anything there just not for me, not now. 

I will go DGP though on a breakout to get my leverage on gold.

[Beginner]

BF:  I see your point:  Follow Bernanke because he has to be right since he is supposed to know what he is doing and he is the leader.  But supposing Bernanke thinks it is time to have an international currency, then what?  Following Bernanke doesn’t necessarily mean he is always supporting the dollar.  Of course, I do not believe Bernanke thinks it is time to have an international currency because that would take world currency leadership away from the US – or would it ?

The US economy may be worth nearly 350 trilllion as some would say, and no other three economies come close to the US economy as the same authorities say.  So the US is still the world leader in interntional finance, even if Obama spends a mere three or four trillion here and there.  And China and Japan and Russia and whoever just have to follow the US lead for their own survival, even if they have managed to get themselves a little into the bartering business to avoid the US dollar. 

But what if the remaining US derivatives, not yet taken into account, (credit cards and so on) are worth over 400 trillion as some assert?  I hope that assertion is untrue.

Appreciate your explicit point of view and thanks again for your frank exposition.  Much appreciated.  We are all in the dark more or less.

DGP?  Not sure what that is.

[Bottomfeeder]

Beginner...DGP is double leverage gold play.  Basically 2x the play of the GLD.

As far as the world goes and derivitives go, who knows.  When you see it you will know it, but you can't worry about it, because it may not be right either.  Much like a burglar in the neighborhood.  Sure derivitives are out there but it doesn't mean that they are going to blow up.  Not like your trying to go long on them or anything like that.

There are alot of people who just play or prey on creating fear.  It doesn't mean that you cant be defensive around it, because that is just prudent, but there are always things out there that can blow up at anytime and just knock you down.

Just like Black Monday and the 911 attacks or getting hit by a bus.  Sure they can happen and probably will all happen again.  Just have to pay attention to whats going on around you I think, recognize the geo-political risks, and have mental stops on your investments at the least, regardless of what your involved with.  That is about all you can do.

I will tell you on the USD vs. other currencies, I think that most other currencies have heavy counterparty risk to the USD, especially as it relates to derivitives,CDS, mortgage backed securites etc....

Have you looked at the risk in Briitan with the real estate exposure relative to GDP?  Somthing like 40%!  Absolutely staggering.  Seen whats going on in Hungary, Iceland and the like?  Croatia real estate?  Austrias refusal to fund Hungary's banks.  The Euro is really a mess IMO, and going to get worse with all the member countries having their own interests etc....hard to really "have it together" when it is so fragmented, that would scare me.

Sorry you are on the wrong side of that trade right now.  But my opinions on it aren't or weren't really meant to be taken as "the time is now".   You could have bought the EUro at 1.60 and been down big.  I do think you are about to see the dollar rise back up.  It is or has held support from 2 years back.  Maybe you should think about diversifying your holdings into some Aussie or Canadian curencies WHEN THE TIME IS RIGHT.  Right now the Aussie looks a bit high to me.  Do you homework on the charts and spread it around some maybe.   I do like Canada.

Maybe JDH can chime in on that one for you.

Anyway good luck, and keep being a student of what you are doing.  That is the best thing to help you trust yourself and have conviction in your postions.  FWIW I put about 60 hours a week into developing my belief system, which is in perpetual motion.  It doesn't just stay the same.  It has to be fluid in times such as these especially.

Good luck and thanks for sharing.