Warning!

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Davos's picture
Davos
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Warning!

I would HIGHLY encourage everyone on this site to read the following article closely. 

Why QE2 + QE Lite Mean The Fed Will Purchase Almost $3 Trillion In Treasurys And Set The Stage For The Monetary Endgame

(and in fact we believe this is merely the first step to an outright monetary collapse also known in some textbooks as hyperinflation), but merely as a means of frontrunning Ben Bernanke, as the entire bond market goes offerless,

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Re: Warning!

Warnings all over the internet 

US Long Bonds Remain An "Enron-like" Train Wreck

http://edegrootinsights.blogspot.com/2010/09/us-long-bonds-remain-enron-like-train.html

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Re: Warning!

The 0 Hedge article talks of direct monetization by which the Fed stops using the Primary dealers as middlemen thereby removing the current restrictions imposed by SOMA guidelines, limiting holding to under 35% of any specific marketable CUSIP.

One of the main problems facing the Fed in indirectly monetizing US Treasurys (keep in mind the proper definition of monetization is the Fed buying bonds directly from the Treasury, as opposed to using Primary Dealer middlemen, which is how it operates currently), is that there simply are not enough bonds in circulation to be bid, under its current regime of operation! Readers will recall that as part of existing SOMA guidelines, the Fed is limited to holding at most 35% of any specific marketable CUSIP. Furthermore, applying the SOMA limit to the $2 trillion in upcoming next twelve month issuance, means that in the interplay of the prepayment feedback loop coupled with collapsing rates, the Fed will need to either change the cap on the SOMA 35% limit, or the Treasury will need to issue far more debt to keep up with the sudden expansion in the Fed's outright, and not just marginal, capacity for incremental debt. Priya Misra summarizes this conundrum facing the Fed best:

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Re: Warning!

This is a highly interesting article, but I think some of the assumptions may be extreme cases.

For starters, it's assumed that QE 2 is going to succeed at driving rates down. Why do people assume this, when the first $300 billion tranche of QE 1 'worked' for only six weeks before rates went higher? You can see the sequence on the T-note yield chart. In mid-March 2009 when the $300 billion Treasury purchase was announced, its yield dropped from 3.0% to 2.5%. But by mid-June 2009, it had popped all the way to 4.0%. Chart:

http://bigcharts.marketwatch.com/quickchart/quickchart.asp?symb=tnx&sid=0&o_symb=tnx&freq=1&time=9

If this pattern should occur again, even on a longer time scale, then the assumed 90% refinancing of mortgage securities held by the Fed wouldn't happen. But it's a very extreme assumption even if QE 2 does 'work.'. Not everyone is quick to jump on the refi bandwagon. And importantly, many homeowners CAN'T -- either because they no longer have enough equity thanks to falling prices, or because they no longer have the income they used to. I would guess that even with a 100-basis point yield drop, only 30 to 50% of the Fed's mortgage securities would be retired in the following year.

Finally, I don't understand why the pool of outstanding Treasuries eligible for purchase is so low. The Treasury says debt held by the public is approaching $9 trillion, so it seems that almost $3 trillion should be eligible for purchase, even with a 35% limit on any one issue. There may be additional constraints which limit eligible securities, but I don't know what they are.

Where the author is correct, I think, is in the Bubble implications. The Fed has no plan other than inducing a Bubble III, which is already evident in Treasuries. If investors believe (as the Zerohedge author does) that Treasuries are a government-sponsored, price-floored market, their prices could soar to very extreme levels ... and then proceed to crash, as the end of Fed purchases approaches. Because of the size of the Treasury market -- and the corporate and municipal markets which price off of Treasuries -- the popping of a debt Bubble could be very painful and destructive indeed.

 

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Re: Warning!

Thank you machinehead!

The ZH article had my head swimming. Your post cleared it up. Mostly.

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Re: Warning!

I am skeptical that they really intend to proceed with this.  As i know you recall, Bernanke has made a number of threats--his historical printing press in the basement speech for example;  that he would create additional money supply for the purposes of causing inflation.  Althouugh in fact, the fed has proceeded to monetize in limited amounts, the numbers so far have not been large enough to affect the interest rate markets.

Conditions today are quite different from historical situations where government creates additional spending power with a printing press--primarily because of the information flow--if the fed really proceeds, it will be common knowledge (in a very short period of time) what has transpired.  Among other expectable consequences, the price of alternative monetary assets will rise sharply--I suppose we could expect draconian efforts to control those markets.  But as the $3tril works it way through the system, other disconnects will appear which will be difficult to control through monetary and fiscal policy remedies. 

On balance, it is not likely they will do this without having in view methods of dealing with follow on conditions;  also recognizing that their ability to resolve the disconnects they create will be difficult. 

I recognize that anything is possible at this point;  further, none of us really knows enough about the driving plan that we can accurately predict where they are going;  but I tend to doubt this is likely to be the immedite direction. 

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Re: Warning!
seattlelaw wrote:

I am skeptical that they really intend to proceed with this.  As i know you recall, Bernanke has made a number of threats--his historical printing press in the basement speech for example;  that he would create additional money supply for the purposes of causing inflation.  Althouugh in fact, the fed has proceeded to monetize in limited amounts, the numbers so far have not been large enough to affect the interest rate markets.

Conditions today are quite different from historical situations where government creates additional spending power with a printing press--primarily because of the information flow--if the fed really proceeds, it will be common knowledge (in a very short period of time) what has transpired.  Among other expectable consequences, the price of alternative monetary assets will rise sharply--I suppose we could expect draconian efforts to control those markets.  But as the $3tril works it way through the system, other disconnects will appear which will be difficult to control through monetary and fiscal policy remedies. 

On balance, it is not likely they will do this without having in view methods of dealing with follow on conditions;  also recognizing that their ability to resolve the disconnects they create will be difficult. 

I recognize that anything is possible at this point;  further, none of us really knows enough about the driving plan that we can accurately predict where they are going;  but I tend to doubt this is likely to be the immedite direction. 

Here is what Eric Sprott said recently in an interview:

“Well it is. I’m debating whether it’s happening (quantitative easing II) while we speak, because the Fed’s balance sheet continues to grow, even though they said they are going to stop buying most instruments at the end of March. But every week it keeps growing by $10 billion. I mean $10 billion a week is half a trillion dollars a year.”

I don't know what you have to substantiate your warm-n-fuzzy take on things. While I certainly hope you are correct I'm quick to point out that all the recovery figures are based on growth - which just ins't there. I myself don't think they are going to act like a potted plant.

Time will of course tell.

One thing for certain, they have to print in order to avoid default.

 

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Re: Warning!

More on this from a second 0 Hedge article

Seventh, and most important, is Bullard's admission that even $100 billion of QE a month (and possibly up to $200 billion assuming prepays) is equivalent to outright monetization (as it adds up to $1.2 trillion a year) "Mr. Bullard says the idea of doing more than $1 trillion of purchases a year "gives me pause" because that is how much net debt the Treasury will issue this year, meaning the Fed would be financing it all." In other words, the Treasury will have to issue ever more debt to satisfy the open mandate for demand (possibly all the way up to double the $1 trillion per year in issuance). That should not be a problem. What is however, would be the implicit lie that Tim Geithner will have committed by swearing on live TV that the Fed will not monetize debt. Alas, as Bullard confirms, the Fed would be doing just that. Which incidentally is precisely what the Weimar government was doing before the hyperinflation train took off.


Country Year Old Dollars Needed To Buy New Dollars
Angola 1991-1999 1 New Kwanza = 1,000,000,000 1991 Kwanzas
Argentina 1975-1991 1 New Peso = 100,000,000,000 1983 Pesos
Belarus 1994-2002 50,000 = 100,000,000 2000 Rublei
Brazil 
1986-1994 1 Real = 2,700,000,000,000,000,000 1930 Reis
Bosnia-Herzegovina 1993 Massive hyperinflation
Bulgaria 1991-1997 Defaulted on its debt, food shortages, reduced the number of zeros that were added to its currency.
Chile 1971-1973 500%+ Inflation military overthrew the democracy.
China 1939-1950 1937 3.4 Yuan traded $1.00 USD. By May 1949, $1.00 USD = 23,280,000 Yuan
Ecuador 2000 Pegged to USD after 70-80% drop in its dollar
England 1100s
1455-1485
1543-1551
1100s silver in coins fell.
Coins were clipped.
Henry VIII debased the coins to raise money
Greece 1944-1953 1 1953 Drachma = 50,000,000,000,000 1944 Drachmai
France 1789-1797 Death sentence on anyone selling the notes at a discount to gold and silver livres. 1795 a new currency was issued, the mandat, which promptly lost 97% of its value. 1797, both paper currencies recalled new monetary system backed by gold.
Georgia 1995 1 new lari = 1,000,000 laris.
Germany 1923-1924
1945-1948
See chart above.
Hungary 1944-1946 Forint 400,000,000,000,000,000,000,000,000,000 = 4 × 1029 Pengõ
Israel 1979-1985 Price freezes
Japan 1944-1948 5,000%++ Inflation. Issued military currency, anyone caught with Honk Kong currency was tortured.
Krajina 1993 Country folded became part of Croatia.
Madagascar 2004 1 Ariary = Madagascan Francs - Riots persisted.
Mexico 1993-1994 Defaulted 1982. 1 Nuevo Peso = 1,000 Old Pesos.
Nicaragua 1987-1990 1 Gold Cordoba = 5,000,000,000 1987 Cordobas.
Peru 1984-1990 1 Nuevo Sol = 1,000,000,000 1985 Soles de Oro.
Poland 1990-1993 1 new Zloty.10,000 old Zlotych
Romania 2000-2005 1 new Leu = 10,000 old Lei
Ancient Rome 270AD +/- Took the Romans 300 years to do what the Fed did in 84 years - debase the currency by 95%. The Roman empire fell, they welcomed the Barbarians.
Russia 1992-1994 100 Rubels = 1 USD 1991 30,000 Rubels = 1 USD 1999.
Taiwan 1940-1950 1 New Taiwan Dollar = 40,000 old Taiwan yuan.
Turkey 1990-2005 1 New Turkish Lira;= 1,000,000 old Lira.
Ukraine 1993-1995 1 Hryvnya =100,000 Karbovantsivi
United States 1812-1814 Continental Currency - Failed
United States 1861-1865 Confederation Notes - Failed
Vietnam 1981-1988 Gold trading was outlawed.
Yugoslavia 1989-1994 1 Novi Dinar = 1,300,000,000,000,000,000,000,000,000 Dinars.
Zimbabwe 
1999 - 2010 Ongoing mess.


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Re: Warning!

"Mr. Bullard says the idea of doing more than $1 trillion of purchases a year 'gives me pause' because that is how much net debt the Treasury will issue this year, meaning the Fed would be financing it all."

It gives me pause too, when Bullard puts it that way.

Having a primary dealer stand in the middle between the Treasury and the Fed is of no economic substance. The end result of the back-to-back transactions is that the Fed buys debt from the Treasury, and the primary dealer earns a commission or a bid-ask spread on both legs of the transaction.

In substance, Ben Bernanke is proposing a new independent movie called The Year of Monetizing Dangerously -- coming soon to a theater near you. Admission is free, because the cost of the ticket will be added to everything you buy.

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Re: Warning!
machinehead wrote:

In substance, Ben Bernanke is proposing a new independent movie called The Year of Monetizing Dangerously -- coming soon to a theater near you. Admission is free, because the cost of the ticket will be added to everything you buy.

ROTFLM_O & Oh, our great, great grandkids will pay the movie. That'll be the title of my next trashy write: Intergenerational Tyranny

 

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Re: Warning!
machinehead wrote:

This is a highly interesting article, but I think some of the assumptions may be extreme cases.

For starters, it's assumed that QE 2 is going to succeed at driving rates down. Why do people assume this, when the first $300 billion tranche of QE 1 'worked' for only six weeks before rates went higher? You can see the sequence on the T-note yield chart. In mid-March 2009 when the $300 billion Treasury purchase was announced, its yield dropped from 3.0% to 2.5%. But by mid-June 2009, it had popped all the way to 4.0%. Chart:

http://bigcharts.marketwatch.com/quickchart/quickchart.asp?symb=tnx&sid=0&o_symb=tnx&freq=1&time=9

I basically agree with your post, but to be fair we're in a different situation now than in 2009. Bonds yields popped back up then mainly because of the Fed's injection of liquidity to banks, who used that money to buy some treasuries but also stocks and commodities. Institutional money managers saw this happening and jumped on board to share in gains from the mini stock bubble. Now, I think PDs and asset managers will be a lot more hesitant to stick all that cash into equities, as the global economic situation has significantly deteriorated. Bonds should definitely benefit, but like you said the refis may not happen anyway.

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Re: Warning!

Mortgage rates are approaching 4% - assuming you have at least 20% "equity", are a US Senator with an 800 Fico that hasn't declared bankruptcy in the last 10 years and you aren't under investigation for mauling an intern.  As MH states, the number of people who might qualify for refinancing based on appraisal values vs principal balance, income and credit score is declining. 

If you hold a better and bigger sale every day, you'll have an initial surge and even though the deal is better the next day sales will probably be less as demand is sated.   That is what happened with the "free" govt money home buying incentives.  Round 1 saw a surge in sales that trailed off.  Round 2's effect was almost nonexistent in comparison.  I suspect that most of those that are refinaceable have already done so.  The bottom of the barrel has been thoroughly scraped to the point of translucency.

Currently the "troubled" mortgages consist of a lot of negative amortization loans reaching their 5 year reset forcing the homoaner to suddenly pony up the full interest plus some principal as opposed to the phony partial interest only payment.  Naturally for the lest 6 years the principal balance has grown as the home price has cratered.  I'd guess that most of these end in "walk-aways".

On the way up, the appraisals fed on each other as comps supported price.  It will do the same on the way down as "distressed" properties are sold creating lower comps.  Anyone who thinks real estate has bottomed will be easy to spot - they'll be the ones with mouths agape.

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Re: Warning!

I think that is a great chart and a timely message although on a little different topic than we started.

Historically, government has controlled much of the economic activity of the country through manipulation of the monetary system--and the power to do that to its citizens is viewed as one of the entitlements of government service. 

However the combination of the law in the Federal Reserve Act of 1913 and the unlimited ability to convert the little green pieces of paper into gold coins effectively gives the citizenry an effective remedy with which the government really cannot live.  That chart demonstrates the historical lengths to which governments have gone to avoid giveing this much power to its citizens.  Something to bear in mind in the current environment. 

Assuming government control of the domestic economy continues and I am also skeptical that it will, we can look for legal action to make using gold in transactions unlawful;  an excise or property tax on gold;  other remedies of the kind demonstrated by your chart.

As to the original question of my view of the limitation on the fed's power to use the printing press, no I am not confident at all.  But the practical remedy is that if they do so in material quantities, collapse of the dollar reserve system is almost a sure thing.  The dollar is their primary franchise and although they may be willing to abandon it, I doubt they do so without some follow on plan. 

I have heard second hand of a comment by a senior aid to a US Senator that the government can't consider default on debt held by US Citizens--otherwise default would be on the table at this point. 

I am pretty well informed and fairly sophisticated in the monetary and tax policy areas and frankly I can't come up with very much in a politically practical program to address the current situation.  So I have to say I can't even speculate as to what they will or won't do. 

But we can see some of the obvious immediate consequences of increasing the fiat money supply that make us think that is not the likely immediate course of action although it cannot be ruled out.

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Will The Real Bubble Please Stand Up

Gee, another story about the great bond bubble, and the punch-line really came as a great surprise; buy gold.

Which brings us to gold. Needless to say, once the full "all in" realization of just what QE2 means for risk assets and capital markets sets in, gold (and other physical commodities) will promptly go from its current price of $1,300 to a number well in the five-digit range. We leave it up to our readers to provide the actual digits.

Which leads me to ask the question, what is the real bubble here?

The recent divergence between the yield on the 2-year with the S&P 500 is a two-way street..

Is that disparity in correlation over the last year a product of a bubble in treasuries or stocks (or both)?

But the real question is does gold deliver immunity to such concerns?

Hedge Funds Tap ETF For Gold Bets As Stock Correlation Rises

Hedge funds are tapping gold ETF

Recent public filings show hedge fund investors John Paulson and Eric Mindich have been stocking up on the biggest gold ETF, SPDR Gold Shares(GLD 126.45-0.27-0.21%). At the same time, its correlation with stocks is on the rise, putting gold's value as an alternate asset in jeopardy. 

....

"Gold and silver, traditionally delinked relative to equities, saw their correlations to stocks rise" in July from the previous month, says Nicholas Colas, ConvergEx Group chief market strategist.

Signs that more investors are flocking to gold and gold-backed ETFs raise the question of what could happen if stocks or gold -- or both -- crash. In a meltdown, investors could be forced to unwind winning bets like gold to meet margin calls on other falling assets, the theory goes.

'Dramatic shift'

Certainly, ETFs have changed the dynamics of buying and selling gold, Colas said in an interview.

"Gold has not been very correlated with financial asset prices, historically," he said.

In the past, gold would be bought from a dealer, perhaps in coins, and stored in a safety deposit box or home safe. Now, Colas pointed out, investors can easily buy or sell gold in their brokerage accounts with ETFs.

 

So here is the real "Warning!"; when the financial blogosphere is littered with pro-gold articles as a cure for every economic ailment under the sun: buyer beware, because your not just buying gold, your buying into the game. And you might want to check the specific gravity of your gold bullion, before you come to any conclusions about the color spectrum of the light being scattered by the "kettle". 

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Re: Warning!

 

JAG wrote:

So here is the real "Warning!"; when the financial blogosphere is littered with pro-gold articles as a cure for every economic ailment under the sun: buyer beware, because your not just buying gold, your buying into the game. And you might want to check the specific gravity of your gold bullion, before you come to any conclusions about the color spectrum of the light being scattered by the "kettle".

You might want to read the Shoeshine Boy article from FOFOA that I just posted as counter thought to this post.

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Re: Warning!

Jeff,

I see you searching for certainty in a shapeless landscape where the only rulers are made of rubber bands.

Is there a bubble in stocks or is it in bonds?  I say "both."  The recent departure you observe in the chart above is the very finest departure that official intervention can buy.  It reflects what the Fed certainly considers a policy coup; both stocks and bonds are at unnaturally high prices.  Yay!  Golf claps for the Fed.

Which means that neither are yielding correct price signals.  At the same time the currencies of the world are under attack by their own masters.  Lost in a maze of funhouse mirrors, many investors have gravitated to the mirror with the least amount of distortion: gold.

Can't blame 'em.

There will come a time when its appropriate to sell out of gold and back into other things, stocks and bonds and such, but that time is not now.  There needs to be real fear in the stock and bond markets which have almost none right now - everybody and their uncle knows they are being propped up by the authorities and, with such a backdrop, there can't be enough fear to generate the compelling prices that would cause me to shift.

The time will come, but it's not now.

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Re: Warning!

Here's an article by Jonathan Kosares that I found instructive on this issue:

http://financialsense.com/contributors/jonathan-kosares/%EF%BB%BFgold-a-bubble

Quote:

Two characteristics are consistently present in the formation of a bubble. The first is magnitude, and the second is velocity. Long-term advances in prices do not necessarily represent a bubble just because of the duration, and neither does volatility as long as it is within a reasonable range. However, when prices rise sharply in a short period of time, and then drop sharply in an equally short period of time, one can reasonably conclude a bubble formed, and then burst. In other words, when magnitude and velocity combine to cause extreme volatility, that market likely is in a bubble.

Kosares goes on to look at the technical characteristics of past bubbles and compared them to gold, specifically price vs. 200dma.  His conclusion is that the pattern followed by gold's movement is much more akin to the S&P secular bull market from '83-'00 than to any of the recent bubbles we've experienced. 

It wouldn't surprise me to see a pull back, perhaps a big pull back, in gold in the near future.  But, two aspects of the gold market separate it from bubble making assets.  1.  It's limited in quantity.  2. Last I heard, gold bullion is still owned by less than 1% of Americans.  Granted, in other cultures gold may be held by greater proportions of the populace, but in those cultures, I don't believe anyone is selling.  They hold it for cultural reasons, not playing the markets.  And, CBs and sovereign funds are buying, not selling.

Doug

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Gold Exit Strategy
cmartenson wrote:

There will come a time when its appropriate to sell out of gold and back into other things, stocks and bonds and such, but that time is not now.  There needs to be real fear in the stock and bond markets which have almost none right now - everybody and their uncle knows they are being propped up by the authorities and, with such a backdrop, there can't be enough fear to generate the compelling prices that would cause me to shift.

The time will come, but it's not now.

The McAlvany Weekly Commentary addressed this very issue last week in "Looking Ahead To An Exit Strategy" on podcast. One of their best IMO.

They pressed the idea that one must enter into gold and silver without emotion and be ready to exit without emotion. That part meant a lot to me because I entered into PMs in fear. I will not exit that way.

Their thought is the time to exit is when the price the Dow and the price of gold enter a 2:1 or 1:1 Dow:Gold ratio.

Hopefully silver will be 20:1 Silver:Gold at that time. Woooohoooo!! Oh, wait......no emotion......woo.

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Re: Warning!

The Fed's inflation madate?

At last week's meeting, the FOMC pointedly said that inflation is currently "somewhat below those the Committee judges most consistent, over the longer run, with its mandate to promote maximum employment and price stability." As a result, the panel added "it is prepared to provide additional accommodation if needed to support the economic recovery and to return inflation, over time, to levels consistent with its mandate."

That statement was widely inferred by market participants that the Fed could take further steps toward "quantitative easing" -- the academic term for central bank securities purchases -- at the next FOMC meeting on Nov. 2-3 (conveniently concluding the day after Election Day.)

A small-scale approach to purchasing, say, $100 billion or less per month, might bridge disagreements on the FOMC, some of whose members are reluctant to commit to a large-scale QE2 (as a second phase of quantitative easing is being dubbed) at this time.

Strategists at the Royal Bank of Scotland also suggest the Fed also could accomplish its aim of stimulating the economy by issuing what they dub as a "Bernanke Put," in which the central bank would peg the yield on longer-term Treasury securities.

http://finance.yahoo.com/banking-budgeting/article/110849/is-the-fed-mul...

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Re: Warning!

Here's another take on AU:

http://www.kitco.com/reports/KitcoNews20100928KN.html

 
Gold Prices Not In A Bubble – Deutsche Bank

28 September 2010, 4:02 p.m.
By Kitco News
http://www.kitco.com/

(Kitco News) - Until prices hit $2,000 an ounce, the gold market is still "some way" from displaying the characteristics of a bubble, according to major bank research note.

In its commodities quarterly report released Tuesday, Deutsche Bank said while "market concerns are focusing on the magnitude and duration of the gold price rally," values would need to move above $1,455 to be considered extreme in real terms. They said the accommodations the Federal Reserve may make to prop up the U.S. economy could mean more quantitative easing by the next Federal Open Market Committee meeting in November. Combine this with seasonal weakness for the U.S. dollar in the final four weeks of the year, and further gains for the precious metals complex are possible.

The bank slightly lowered its 2010 average price forecast for gold by 2.8% from its previous estimate to $1,211, but did not say why. It maintained its 2011 price target of $1,450.

For the other precious metals markets, the bank lifted its 2010, 2011 and 2012 average price estimate from previous calls for silver and palladium and lowered its price target for rhodium for the next five years. It slightly lowered its 2010 forecast for and platinum and left unchanged the 2011 outlook.

Deutsche Bank said the worries about gold being in a bubble are overblown and pointed to the rally in oil. From its 2001 low to its 2008 high – which surpassed its 1970s/early 1980s records – oil rallied over 730%. Comparatively, gold's rally from 2001 is just over 400%. To replicate oil's performance, it would need to rise to $1,455 an ounce (producer price index adjusted). "In addition, when valued against other financial and economic indicators, gold prices can also not be considered excessive, in our view," the bank said.

The bank said sluggish U.S. gross domestic product growth means a continued low-interest-rate environment and the chance for new lows for the U.S. dollar heading into 2011. Silver and the platinum group metals could outperform gold if "global growth remains resilient despite the downside risks to U.S. GDP growth," the bank said.

The bank lifted its current silver price estimate by 3.0% to $19.10 an ounce for 2010, raised its 2011 forecast by 10.2% to $24.25 and the 2012 forecast by 12% to $28. The platinum forecast for 2010 was cut by 1.7% to $1,601 an ounce and the 2011 forecast was left unchanged at $1,750.

The bank believes the global economy will avoid deflation, but the "relentless" decline in core inflation during the past two years has heightened market worries that the U.S. and Europe will be caught in the same trap as Japan. "While deflation would tend to indicate a rise in real interest rates and a potentially bearish environment for precious metals we doubt this would be appropriate given the implications deflation would pose for the US dollar and investor appetite for physically backed gold ETFs," the bank said.

Deutsche bank said the rally in gold prices is fundamental. "However, we believe the rally has the properties of turning into a speculative bubble given that investors seem to be eager to buy gold on inflation and deflation and gold's ability to rally in rising and falling US dollar environments," they said.

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Re: Warning!

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