Massive rise in gold/silver price in next 30 days?

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Massive rise in gold/silver price in next 30 days?

Gold/Silver Manipulation Over in 30 Days?

If you’ve been a precious metals investor for more than six months you’ve heard about the rampant price manipulation on COMEX. (COMEX sets the cash price for gold and silver through its daily futures and options trading activity.)

Many of us have been waiting for the illegal manipulation (run primarily by Bear Stearns until March 2008, then JPMorgan Chase since then) to end for over two years.

Adrian Douglas thinks it may be over in as little as 30 days.

At lemetropolecafe.com he writes (edited for length, link):

BIG MONEY MOVING INTO COMEX GOLD & SILVER CALL OPTIONS

[Read rest of article here]

I conclude that smart money is being placed for a massive rise in the gold price in the next 30 days and silver in the next 60 days (which probably means within 30 days for both metals) and again by December.

Only sophisticated traders tend to be in the precious metals option market so when there is a huge build up betting on a particular direction that is typically a directional indicator as I have shown was the case for the last two big moves in the precious metal bull.

The flat contango in gold and silver suggests there is a shortage developing of precious metals for delivery. We know that two large banks hold almost 100% of the commercial net short position. They need desperately to cover their exposure if the market is about to make a big move.

It looks as if that is precisely what is happening.

Adrian Douglas
April 29, 2009

 

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Re: Massive rise in gold/silver price in next 30 days?

 The latest Financial Sense Newshour cites a reported investment of 3 Billion by John Palson's hedge fund in the GDX ETF.

 I still believe the big boys (aka the smart money) will try to flush out the little fish before any significant bull market in gold begins. After all, they cant allow any of us "dumb money" pions to get a free ride, not yet at least. And as I stated in the The Definitive GOLD's Near-Term Outlook Thread , the dumb money has significantly overbought the HUI index and there has been no pull-back as of yet.

Things are definitely getting interesting. We should be discussing these things more as a community. Thanks for the repost Sam, maybe we can get a good conversation going on this thread.

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Re: Massive rise in gold/silver price in next 30 days?

I, as the one-eyed man, representing my people, The Land of the Blind, would like a little more discssion on to this topic. In a recent post, JAG posted a chart that seemed to indicate a pull-back was in the cards. Now, a rise in in the future? I have finally scraped together a little money and and am ready to make my first bullion purchase. It's so little money, the "smart money" would consider it no more than a bucket is to the ocean. To me, though, it represents pretty serious money, and because this is new territory for me, Chris's advice to "trust yourself" is really tough. I'm second-guessing my every move.

Could someone please elaborate on whether a pull-back or a rally is more likely; How should I advise my people, The Blind-onians? And to make matters worse, they suffer from another malady: Terminal ignorance. So, please dumb this down enough that even my little blind, ignorant ones can understand.

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Re: Massive rise in gold/silver price in next 30 days?

to tx_floods:  If you're trying to protect wealth, I wouldn't worry about the latest price, or if there is going to be a slight pull back or not.  The percentage amount the $ can depreciate is infinite (it can never go 100% all at once until it is discontinued, but it can go down 20%, then 50%, then 90%, then 90% again - there is no end to it).  If you're short-term trading, on the other hand, that's not my department. 

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Re: Massive rise in gold/silver price in next 30 days?

TX..............I'd say the technical indicators [charts] are saying that precious metals are near overbought..........but, for me, the fundamentals come down to Patrick's line "Gold production is going down and dollar production is going up... isn't there only one thing that can happen?"

I know the uncomfortable sensations that arise when trying to get too cute w technicals and for fundamental reasons PM's keep going up w/o me.

Reckon "Trust Yourself" is about your fundamental reasons for owning gold.

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Re: Massive rise in gold/silver price in next 30 days?

A few cents worth.............
As one of the blind I have a simple plan for myself. Keep $10,000 on hand in gold coin, in possession (more or less if cash is available or not) and leave the trading/speculation to others. The market is entirely too volatile/unstable for the average person to risk getting hurt. A decision by one or more of the big players/countries has a profound effect that the little guy gets squashed in the middle.

I have some gold solely for the purpose of possible interim need during a crisis, however any "investments" that I have are in usable items and farm real estate/rental property. I don't view gold as an "investment", but rather a possible means of exchange under extraordinary conditions and a possible hedge against inflation

I know there are those that believe we may end up back on a gold standard, but I think the idea of tying our currency to an arbitrary precious metal was bogus to begin with (at least in modern times) and is unlikely to return. I agree that our current system needs to be replaced and not left in the hands of bankers and politicians because they obviously not competent to do anything except steal from us.

It seems to me that the currency system should be tied to a specific calculable value such as the (honest) GDP of the country and not allowed to be varied from a specific formula except by a national ballot or similar safeguard

Jim

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Re: Massive rise in gold/silver price in next 30 days?

Patrick - Wonder if you could provide some further elaboration on your point. I know that I want to buy some PM's (gold & silver bullion) as a hedge against inflation, as a way to preserve value and just a general safeguard for the uncertain future. I believe that we're going to see complete devaluation of the US dollar; A shift that the US dollar will no longer be the reserve currency of choice, and maybe hyper-inflation due to massive printing. These concepts I understand, more or less. All that to say: I am not interested in short-term trading.

Now, as to your statement about the percentage the dollar can depreciate: Can you help me to understand how this relates to the price of gold? If I thought the price was going to pull back to $800-900, wouldn't I kick myself for buying at $1000, plus? On the other hand, if I thought gold was going to rally, wouldn't I rather buy now, rather than wait?

Let's do some crude arithmetic: Let's say one US dollar: $1.00 = $1.00 (Crazy, I know!) If it depreciates 50%, then $1.00 = $0.50, right? Then, we can say that it falls to 50% of that = $0.25 on so on, forever, as you mentioned. How does that impact my purchase price of gold?

Thanks for any help you can offer.

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Re: Massive rise in gold/silver price in next 30 days?

tx:  All I'm saying is that the potential upside of owning gold is one hell of a lot larger than the potential downside.  If you wait around hoping to get in at $650, you might get left completely behind and not be able to get in until it gets to $1,200 or higher.  The way I see it, gold may dip a few hundred bucks, but that's a very big maybe.  On the other hand, I have zero - literally - zero doubt that the dollar is going to depreciate big time, and the extent of devaluation is theoretically infinite, so what difference does it really make if I buy at $650 or at $950?  Sure, it makes some difference, but I'm more interested in protecting what I have while gold is still cheap. 

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Re: Massive rise in gold/silver price in next 30 days?

Personally, I think Patrick is right - so if you think you want gold, then I wouldn't worry much about the price given that the downside appears limited -- just buy now. I don't think the objective for most of us is to necessarily buy at the lowest possible price as a trader might -- at least for me, it is more like insurance and it's some thing to have in reserve, and if it works out to be a good investment, then so much the better.

Times were different then, but it wasn't that long ago when gold was around the price where it is now and people were predicting $3,000 gold just around the corner and it dropped to under $300 - fortunately, I bought what little I have then and still have it and I don't care if it goes up or down, as I will only sell it if I have to

Jim

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Re: Massive rise in gold/silver price in next 30 days?

 TX Floods,

(By the way, I live in Texas, and I got flooded last year by Hurricane Ike, so we could be brothers!)

I'm sorry if my recent posts on the Gold markets have led to some confusion. By all means, if you have not purchased some bullion as an Emergency Fund, please do not hesitate to do so at any price. I was simply passing on some info that I thought might be of some interest to this community. I never intended for it to discourage anyone from making their necessary preparations.

I know its a big step to take, personally, to spend your hard earned money on bullion. And, I know I had my initial reservations, but once  I did it, I really did feel good about it.

Also, I would suggest that you take Dr. Martenson's advice and spread your initial buying out over time.

Thanks and sorry for the confusion.

 

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Re: Massive rise in gold/silver price in next 30 days?

 .....just a couple more cents to add.....from ex-texans, now living in, and loving, the Great NW.   I have a relatively small percentage of investments in gold, just as we have done some food stockpiling, etc.  I bought both gold and silver in denominations that I thought I could use to buy stuff I really needed, should that day arrive, and I'm fairly sure it will. Otherwise, my wife and I have lost all confidence in equities markets.....they're not even as honest as a casino.....so we have divided what we have left from the markets between gold, silver, food, some CD's in a bank I know a lot about, some survival equipment, a small piece of land that grows fantastic food, some bicycles, warm clothes, emergency radios & lighting, etc. Otherwise, we gave adequate time and effort to escape plans if bad things happen in our area.  On the rest of the currency, we're trying to enjoy our lives as much as we possibly can, just in case it all comes to an end.  We've built a great network of close friends, all of whom have something worthwhile they can offer each other.  But back to the gold.....our take is that its not an "investment" so much (trying to make a big gain on it, or even worrying much if we lose some on it) as it is a safety valve. Hope this was worth a little something to you.  Try to stay cool. :>)  We just couldn't, in Texas.  But we're comfort freaks. Ha.

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Re: Massive rise in gold/silver price in next 30 days?
jpitre wrote:

The market is entirely too volatile/unstable for the average person to risk getting hurt. A decision by one or more of the big players/countries has a profound effect that the little guy gets squashed in the middle.

Jim -

Market volatility and a little education is how the average person can make a fortune in the market under any conditions.  That's what financial managers, professional brokers and fund managers don't want you to know.

Lots of good info here:

http://www.peakprosperity.com/forum/traders-thread/14692

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Re: Massive rise in gold/silver price in next 30 days?

STEP RIGHT UP!   BE THE FIRST ON YOUR BLOCK TO GET YOUR NWO COINS RIGHT HERE!

http://www.goldenstatemint.com/products.htm

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Re: Massive rise in gold/silver price in next 30 days?

I look at it like this.  It's like buying earthquake insurance and buying emergency supplies if you live on the westcoast.  It's not a matter of if an earthquake is going to happen, it is a matter of when and how devastating will it be.  You don't live your live everyday looking at your insurance policy, but you sleep better at night knowing you're prepared.

 

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Re: Massive rise in gold/silver price in next 30 days?

If you look at the gold price now and compare to the 1970s which is an equivalent period when USA was last waging a very expensive war, then you would reasonably come to the conclusion that gold is near a top. Over the 20 years following the gold top back then the price dropped over 50%, which means that inflation adjusted it lost perhaps 80% of its value. So I would question the wisdom of buying gold now. If you had bought before the recent wars started, then you would have done very well. But now, you missed the boat.

 

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Re: Massive rise in gold/silver price in next 30 days?
RayTomes wrote:

If you look at the gold price now and compare to the 1970s which is an equivalent period when USA was last waging a very expensive war, then you would reasonably come to the conclusion that gold is near a top. Over the 20 years following the gold top back then the price dropped over 50%, which means that inflation adjusted it lost perhaps 80% of its value. So I would question the wisdom of buying gold now. If you had bought before the recent wars started, then you would have done very well. But now, you missed the boat.

This seems to assume that history's going to repeat itself or that broader conditions are similar now to what they were in the 70s.  Seems like an inaccurate assumption to me.  On top of 2 wars we have Peak Energy, preposterous levels of gov debt, QE, and a brutal deleveraging going on (among other things).  Doesn't that change the gold outlook?  Am I missing something?

Viva -- Sager

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Re: Massive rise in gold/silver price in next 30 days?

On last week's Financial Sense Newscast (Hour 3, 2nd segment) Jim Puplava and the other guy were talking about PM's; Gold, specifically. I like that show because for the most part, it is geared down to a simple level and they don't spend a whole lot of time talking technicals. It's common-sens-ical, geared for the everyman. (I mean, it's not "Two Beers With Steve, But then again, what is?!) They're not kooks or dogmatic partisan hacks, although they do have pretty strong feelings about the Obama Administration.

Anyway, back to gold. They said that a good strategy right now was to dollar-cost average gold and buy a little bit on a regular basis. They said that at long as gold is below $1,200 to $1,500 an oz (You'd better listen yourself to double-check me on those numbers.) to buy as much as you can afford. That one sentence really changed my perspective on buying. It's taken me a little while to get some bucks scraped together to make my first purchase. Every day, I watch the chart climb. Then, I let doubt and fear take over, and I wonder if I'm doing the right thing. I wonder if I'm preparing to buy at the peak. I had a very similar experience with buying tech stocks right before the bubble burst in 2000. But, with what Jim said, for the long term, gold is going to continue to be purchased en masse, until there, literally, was none available to purchase. He even pointed out that if a 1 oz piece is too rich for one's budget, the American Gold Eagle was available in 1/10 oz increments, too.

Now, none of is perfect, and none of us see the future. I posted a couple of times to try to clear up my confusion: One person is of the opinion that gold is due for a pullback. Another person is of the opinion that gold is set to break loose, and run like hell, like a runaway train. Both opinions can come from what appear to be respected, knowledgeable opinions. How is the average monkey to know what to do? We don't. Years ago, a friend told me something that sort of echos what CM says: You make the best decision you can at the time, you decide, you act, and you stick with your decision.

If anyone listens to the FSN newscast mentioned above, I'd appreciate it if you've got any feedback, or any opinion contrary to Puplava.

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Re: Massive rise in gold/silver price in next 30 days?

I think a lot of the gold debate comes down to the inflation / deflation debate. There are some compelling arguments for deflation, a lot of these focus on long term cycles and I actually think there's a lot of merit in them. But I can't think of a way that a determined central bank (yes, I consider the Fed to be 'determined') can't cause inflation if they really work at it. Further, there is at least one thing that "is different this time" and that is resource scarcity, combined with population expansion. If we want to look at, say, a 2,000 year cycle, we'd find that population is long overdue for a correction of sorts. Over the rest of my lifetime, I expect the value of gold to increase. I can't tell for certain what will happen the next year, but there will be some constant upward pressure.

I'm not an expert on cycles or commodities, but gold today is just barely above the nominal peak it reached in the '80s. There has been a lot of inflation in that time, and I just don't see how this can continue longer term. Our deleveraging process can continue for a while longer, but when it ends, gold prices will rise with avengence. It is no secret that the Fed desires inflation now (at least a little inflation). Inflation will show up in the gold price. Though there is evidence of manipulation, covering bogus shorts can be expensive, loaning or selling gold reserves will eventually deplete them, and recent history shows us that any gold manipulation was not extremely effective as it marched from $275 to over $1000 / oz. Further, when you look at the gold:oil ratio of the '70s, even after the oil shocks, the price of gold ran up to a level that pushed the ratio sky high. We're nowhere that level today.

If gold drops significantly in the next year or two, it should be the deal of a lifetime, because the subsequent leg up will be huge...assuming the politicians don't issue some sort of crackdown or controls first.

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Re: Massive rise in gold/silver price in next 30 days?

tx_floods: I listen to the FS Newshour religiously and I don't recall anything from that recent episode being out of line with the consistent message that the show promotes.

There have been so many false reasons for investing in gold that it's really shocking to see how far the MSM and the politicians have misled the public and culled them into a faith based system. If you are a "buy and holder" gold will work for you. If not, gold should be even more tradeable in the near to mid future than it is now. There is a lot of short term risk to gold, but in my opinion, the only mid to long term risk is political (confiscations, legal crackdowns, etc.). The biggest benefit of gold is that it doesn't require any leap of faith to understand its value. Gold is not the same as a human-run business that could have poor management, have cooked its books, and have its value manipulated through bailouts, insider trading, and the whole host of other wonderful activities we are now witnessing. In investing in gold, you are investing in something that bakes in a LOT of human labor and energy (i.e. 'value') and you are placing your faith in something that has been of recognized value for thousands of years. In long term investing in the stock market, you better hope that the other players are all being honest enough to give you a fair chance...I've got my doubts, just read Chris's reports, particularly the latest in-session.

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Re: Massive rise in gold/silver price in next 30 days?
Mike Pilat wrote:

Our deleveraging process can continue for a while longer, but when it ends, gold prices will rise with avengence. It is no secret that the Fed desires inflation now (at least a little inflation). 

That statement goes to the heart of the matter for me, personally. With an estimated 30 Trillion in debt deflation ( I looked for the source of that estimate, but it was a while back and I can't find it) expected, the Fed's QE looks like just a drop in the bucket to me. But the lack of information available, makes both the inflation and deflation arguments seem premature and incomplete at this point. Right now, IMO, its probably best to initially prepare for both scenarios, and prudently "sit on the fence" and await more information. I think Dr. Martenson would (and has) criticized me for this, but in the end I have to "trust myself" by questioning my expectations.

Thanks for your comments Mike, I always appreciate your perspective.

 

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Re: Massive rise in gold/silver price in next 30 days?
tx_floods wrote:

Now, none of is perfect, and none of us see the future. I posted a couple of times to try to clear up my confusion: One person is of the opinion that gold is due for a pullback. Another person is of the opinion that gold is set to break loose, and run like hell, like a runaway train. Both opinions can come from what appear to be respected, knowledgeable opinions. How is the average monkey to know what to do? We don't. Years ago, a friend told me something that sort of echos what CM says: You make the best decision you can at the time, you decide, you act, and you stick with your decision.

If anyone listens to the FSN newscast mentioned above, I'd appreciate it if you've got any feedback, or any opinion contrary to Puplava.

I think we are in strange times. Things could go wacky in almost any direction. My belief is that the markets are subject to great manipulation by a variety of sources on top of being in unprecedented times. So assuming you a have a little pile of cash, what do you do? You really need to research each alternative and decide what is best for you. I know that sounds a bit simplistic, but it makes you focus on you and not events. My worst financial decsions came from not doing basic research or being in a panic. I know my financial knowledge pales in comparison to many others, but I have to realize I'm way ahead of most everyone else. If you are unsure, learn more. I think FSN is an excellent resource as it's not just his opinion; he gets different experts in each week. But read elsewhere too.  No one knows the future - the trick is is to stay somewhere on the right track.

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Re: Massive rise in gold/silver price in next 30 days?

JAG: Just to illustrate a point that is not (yet) reality: Imagine that every American was mailed a piece of paper that said "Federal Reserve Note" and "$100,000" and "legal tender." Creating inflation is simply that easy. I'm not calling for that necessarily, but what I am saying is that capabilities are not standing in the way of ultimately creating the inflation they desire. They have a monopoly, and they will win the inflation battle unless the structure of the system is changed. So it's important to keep the $30 T in this perspective as well. The very fact that all of these numbers are incomprehensibly large gives me cause for concern. It seems that the stakes have been raised and that the consequences of a mistake are greatly elevated.

For everyone: This is a great article that just came out, discussing gold, inflation, and international currency trends of sorts. Please read when you get a chance: http://www.financialsense.com/fsu/editorials/willie/2009/0521.html

 

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Re: Massive rise in gold/silver price in next 30 days?

(Cross-posted from "The Definitive GOLD's Near-Term Outlook Thread" - looking for others thoughts)

pinecarr,

While I am a buyer of gold, seeing all that you have posted causes me some concern. If "everybody-and-their-brother" is jumping on the gold "bandwagon" (Gold ATM's! Good Grief!), is this not the sign of a bubble? Gold has already peaked today and looks like it wants to return to its highs for the past year (see chart below). We all know the signs of bubble-mania - when everybody is rushing to participate in "whatever it is", it's bound to crash soon. Anyone have any thoughts on this?

__________________

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Re: Massive rise in gold/silver price in next 30 days?

 Sam,

The real bubble is in dollar holdings.  The world is flooded with them and every day fewer people have any desire to hold them.  Gold, and all other hard assets will appreciate because of this.  I don't see a bubble in gold at all.  It may revisit the $700-$800 range, but in the near future, it's headed to $5,000 and up IMO.

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Re: Massive rise in gold/silver price in next 30 days?
Patrick Brown wrote:

 Sam,

The real bubble is in dollar holdings.  The world is flooded with them and every day fewer people have any desire to hold them.  Gold, and all other hard assets will appreciate because of this.  I don't see a bubble in gold at all.  It may revisit the $700-$800 range, but in the near future, it's headed to $5,000 and up IMO.

Thanks for the reassuring words, Patrick. I know you're basically right in the long term. I just get a little edgy when I see everyone jumping on the same bandwagon.

I'm a buy-and-hold, preserve wealth, type buyer, so I'm not too concerned about short-term moves. In fact, if it does revisit the $700-$800 range, I'll definitely be buying more. The same with Silver.

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Re: Massive rise in gold/silver price in next 30 days?
SagerXX wrote:
RayTomes wrote:

If you look at the gold price now and compare to the 1970s which is an equivalent period when USA was last waging a very expensive war, then you would reasonably come to the conclusion that gold is near a top. Over the 20 years following the gold top back then the price dropped over 50%, which means that inflation adjusted it lost perhaps 80% of its value. So I would question the wisdom of buying gold now. If you had bought before the recent wars started, then you would have done very well. But now, you missed the boat.

This seems to assume that history's going to repeat itself or that broader conditions are similar now to what they were in the 70s.  Seems like an inaccurate assumption to me.  On top of 2 wars we have Peak Energy, preposterous levels of gov debt, QE, and a brutal deleveraging going on (among other things).  Doesn't that change the gold outlook?  Am I missing something?

Viva -- Sager

Yes, I think that you are missing something:

How many countries was the USA waging war in SE Asia in the 1970s? Quite a few. The Viet Nam war was just as big a disaster as the Iraq war.

You might have also forgotten that the first and second "oil shocks" occurred in the 1970s. See http://en.wikipedia.org/wiki/Oil_shock

The debasement of the US currenecy is mainly a result of tthe war activities which have heavy expenditure and no corresponding income. The debasement leads to the increase in oil (and other commodity) prices as well as gold. The news of the causes has been pretty public for some time now and you can reasonably assume that the adjustments have been done.

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Re: Massive rise in gold/silver price in next 30 days?

 

Quote:

Yes, I think that you are missing something:

How many countries was the USA waging war in SE Asia in the 1970s? Quite a few. The Viet Nam war was just as big a disaster as the Iraq war.

You might have also forgotten that the first and second "oil shocks" occurred in the 1970s. Seehttp://en.wikipedia.org/wiki/Oil_shock

The debasement of the US currenecy is mainly a result of tthe war activities which have heavy expenditure and no corresponding income. The debasement leads to the increase in oil (and other commodity) prices as well as gold. The news of the causes has been pretty public for some time now and you can reasonably assume that the adjustments have been done.

The recent wars seem very cheap as a % of GDP when compared to past wars.  It took us 8 years in Iraq to spend $800 billion.  Then we turned around and spent 4X that in the last 9 months on bail-outs.  War spending doesn't really make it on my radar screen.  It's all the other unprecedented spending the government is involved in, plus already-existing and un-fundable entitlement programs that tell me $'s cannot continue to hold their value.  What was the bond situation in the 70's?  What was US debt to GDP?  What was the outlook for debt to GDP?  Would someone alive in the 70's have any reason to have faith in buying government bonds?  Therein lies the difference IMO.

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Re: Massive rise in gold/silver price in next 30 days?
RayTomes wrote:
SagerXX wrote:
RayTomes wrote:

If you look at the gold price now and compare to the 1970s which is an equivalent period when USA was last waging a very expensive war, then you would reasonably come to the conclusion that gold is near a top. Over the 20 years following the gold top back then the price dropped over 50%, which means that inflation adjusted it lost perhaps 80% of its value. So I would question the wisdom of buying gold now. If you had bought before the recent wars started, then you would have done very well. But now, you missed the boat.

This seems to assume that history's going to repeat itself or that broader conditions are similar now to what they were in the 70s.  Seems like an inaccurate assumption to me.  On top of 2 wars we have Peak Energy, preposterous levels of gov debt, QE, and a brutal deleveraging going on (among other things).  Doesn't that change the gold outlook?  Am I missing something?

Viva -- Sager

Yes, I think that you are missing something:

How many countries was the USA waging war in SE Asia in the 1970s? Quite a few. The Viet Nam war was just as big a disaster as the Iraq war.

You might have also forgotten that the first and second "oil shocks" occurred in the 1970s. See http://en.wikipedia.org/wiki/Oil_shock

The debasement of the US currenecy is mainly a result of tthe war activities which have heavy expenditure and no corresponding income. The debasement leads to the increase in oil (and other commodity) prices as well as gold. The news of the causes has been pretty public for some time now and you can reasonably assume that the adjustments have been done.

FWIW, and I admit I am no market-analysis genius (or even an informed novice, really) -- back in the 70s the USA still had real wealth and real assets, a real middle-class and a real manufacturing base.  These days, the US economy feels like a hollow shell.  How do you rebound on top of [next-to] nothing?  

Viva -- Sager

SamLinder's picture
SamLinder
Status: Diamond Member (Offline)
Joined: Jul 10 2008
Posts: 1499
Re: Massive rise in gold/silver price in next 30 days?
SagerXX wrote:
RayTomes wrote:
SagerXX wrote:
RayTomes wrote:

If you look at the gold price now and compare to the 1970s which is an equivalent period when USA was last waging a very expensive war, then you would reasonably come to the conclusion that gold is near a top. Over the 20 years following the gold top back then the price dropped over 50%, which means that inflation adjusted it lost perhaps 80% of its value. So I would question the wisdom of buying gold now. If you had bought before the recent wars started, then you would have done very well. But now, you missed the boat.

This seems to assume that history's going to repeat itself or that broader conditions are similar now to what they were in the 70s.  Seems like an inaccurate assumption to me.  On top of 2 wars we have Peak Energy, preposterous levels of gov debt, QE, and a brutal deleveraging going on (among other things).  Doesn't that change the gold outlook?  Am I missing something?

Viva -- Sager

Yes, I think that you are missing something:

How many countries was the USA waging war in SE Asia in the 1970s? Quite a few. The Viet Nam war was just as big a disaster as the Iraq war.

You might have also forgotten that the first and second "oil shocks" occurred in the 1970s. See http://en.wikipedia.org/wiki/Oil_shock

The debasement of the US currenecy is mainly a result of tthe war activities which have heavy expenditure and no corresponding income. The debasement leads to the increase in oil (and other commodity) prices as well as gold. The news of the causes has been pretty public for some time now and you can reasonably assume that the adjustments have been done.

FWIW, and I admit I am no market-analysis genius (or even an informed novice, really) -- back in the 70s the USA still had real wealth and real assets, a real middle-class and a real manufacturing base.  These days, the US economy feels like a hollow shell.  How do you rebound on top of [next-to] nothing?  

Viva -- Sager

Sager - your comments are dead on.

FWIW, I lived through the inflationary 1970's. In fact I've been muddling around on this earth since 1944. I can categorically state that I have not seen such a disaster in the making as I'm seeing now. TPTB have literally robbed us blind and continue to do so. I fear for our future more than I have ever done in my life.

Farmer Brown's picture
Farmer Brown
Status: Martenson Brigade Member (Offline)
Joined: Nov 23 2008
Posts: 1503
Re: Massive rise in gold/silver price in next 30 days?

I think Sager hit it on the head by pointing out the difference in production capacity now vs. 1970's, and our differences in debt.  They call it a trade deficit, but it's really a production deficit.  Once the world stops lending us back the money we used to buy their products, we will have to produce things in order to trade.  In the past, our #1 export was good ole American grade-A debt.  Since our debt will become grade B then C, and maybe even Z (for Zimbabwe), we'll have to replace debt with something else to export.  In order for our exports to be competitive, US wages and all the entitlement programs are going to have to take major hits.  In the meantime, the $ will devalue, making imports very expensive, even as wages and government services fall.  Not pretty.

tx_floods's picture
tx_floods
Status: Silver Member (Offline)
Joined: Feb 28 2009
Posts: 155
Re: Massive rise in gold/silver price in next 30 days?
Mike Pilat wrote:

tx_floods: I listen to the FS Newshour religiously and I don't recall anything from that recent episode being out of line with the consistent message that the show promotes.

My written word did not convey what I was trying to express. I really like FSN; I find them level-headed, down-to-earth, and not overly complicated. My overall point was that, previously, I had been worrying about whether I should buy at 950 or see if it would drop to 900. I was worried about the 50 bucks. When I heard the numbers they were using (ie, 1200-1500) it opened my eyes to the upside potential of gold. I wasn't point out any discrepancy or hypocrisy.

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