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Thread: Inflation: Understanding the Current Economic Crisis and How to Protect Yourself

  1. #41
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    [QUOTE=JetsCrazey;2563686]When gold is over $1100 later this year will you admit that you were wrong?[/QUOTE]

    If gold gets anywhere near $1100 I will be extremely surprised - and yes, if it hits $1100 I will admit I was wrong.

  2. #42
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    For what it's worth, here's the current situation in the gold market, chart goes back to the middle of March 08 when gold made it first run at $1000, peaked at 1030, and came back down. Each mark on the x axis is 7 days apart.
    Note that a definite coiling pattern has formed. My guess is, in the next 3-4 weeks the up and down trends will do battle and we will find out whether gold will remain a stagnant market through the early summer, or make another run at $1000 and beyond. Once the fall gets here it will go up with with its usual late-year run, as Asian buying will become very significant.

    [IMG]http://jsmineset.com/cwsimages/inventory/58159_June0208Gold1230pmCDT.jpg[/IMG]
    Last edited by JetsCrazey; 06-02-2008 at 10:14 PM.

  3. #43
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    Assume that's the 60 day chart? Don't have my charting software with me as I quit trading some time ago.

    Agree with your reading of the chart the red lines show an upwardly angled support line (not drawn in) that should hit the blue line at some stage - in other words the blue line *could* indicate a future support level.

    Looks like an interesting formation - looks to me like a great little gartley being set up - just with the naked eye I think I can see at least one gartley butterfly alread completed in that chart and another being formed now. The last major downswing completed the last gartley, and another gartley looks as if it is being formed - would have to go down a little bit around this stage, and then have a largish upswing past the $930 level to complete the gartley. Then I would predict a downswing of some magnitude - as I said, this is just a naked eye reading with no charting software with me.

  4. #44
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    Well, there is that 'down a little bit' from here I was talking about - Bernanke's comments have torpedoed gold today - futures are down almost $20 and the spot price is down around $10. The Gartley looks something like a W in the chart - you get the 'wings' of the butterfly by connecting the middle of the W with the outer ends of it.

    It has a failure rate, but as a charting formation it is mostly very successful.

    Of course, there is also the other type of Gartley, which I can also see in this chart at least once - looks like an M - obviously I don't have my charting software to check Fib levels.

    Generally, you jump on for a trade when the formation is 3/4's formed - getting that final up or down swing. Mucho money to be made with a Gartley.

  5. #45
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    gold is so volatile that short term trading is only for true professionals (or the big 6-8 banks that collude to control the market), for the average investor its much smarter to make longer-term fundamental investments with gold.

    The short-term uptrend held today just barely- by about 5 bucks.
    Last edited by JetsCrazey; 06-03-2008 at 03:48 PM.

  6. #46
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    [QUOTE=Conkboy;2545009]That must be why a GM car costs over $7000 in benefits and salary dollars right off the assembly line. Nothing to do with those monopolies known as unions.[/QUOTE]you should be kissing unions A$$E$ for every single benefit you ever had. Educate yourself

  7. #47
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    [QUOTE=JetsCrazey;2567444]gold is so volatile that short term trading is only for true professionals
    [/QUOTE]

    ;)

  8. #48
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    Bob Prechter (elliotician) on silver - very interesting read.

    [URL="http://elliott.vo.llnwd.net/o18/pdf/0803EWTsilverxx.pdf"]link[/URL]

  9. #49
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    [QUOTE=Black Death;2574973]Bob Prechter (elliotician) on silver - very interesting read.

    [URL="http://elliott.vo.llnwd.net/o18/pdf/0803EWTsilverxx.pdf"]link[/URL][/QUOTE]
    This guy is a technical analysis geek just like everyone else who thinks deflation is on the way.
    These people need to wake up and smell the underlying fundamentals. Inflation is everywhere. This isn't 1929-1933. This is 1970-80.

  10. #50
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    [QUOTE=JetsCrazey;2576027]This guy is a technical analysis geek just like everyone else who thinks deflation is on the way.
    These people need to wake up and smell the underlying fundamentals. Inflation is everywhere. This isn't 1929-1933. This is 1970-80.[/QUOTE]

    I agree.

    We'll have a period of stagnation as during the period 1976-82. However, it won't be coupled with inflation as those in government have recognized the validity of controlling inflation as a [I]sine qua non[/I] to mitigating the effects of economic downturns.

    The developing nations such as China and Brazil will probably get hit hard as the surging developing economies met their reckoning the early 80's.

    Our domestic economic policy will reach a tipping point however. Either the Federal government reduces spending or the supply of dollars or an increase in taxes will be neccesary to cover our deficits.

  11. #51
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    [QUOTE=JetsCrazey;2576027]This guy is a technical analysis geek just like everyone else who thinks deflation is on the way.
    These people need to wake up and smell the underlying fundamentals. Inflation is everywhere. This isn't 1929-1933. This is 1970-80.[/QUOTE]

    I am TA myself - though have to say my skills are a trifle limited compared to someone like Prechter.

    Obviously my reading of things is different to yours.

  12. #52
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    [QUOTE=Black Death;2577008]I am TA myself - though have to say my skills are a trifle limited compared to someone like Prechter.

    Obviously my reading of things is different to yours.[/QUOTE]

    Our difference of opinion lies in whether or not temporary deflation will occur as a result of liquidity shortage.

    My belief is that the Fed has already shown that they will provide liqudity where it is needed, thus a sudden deflation is averted by the public PERCEPTION that the Fed will be there to provide emergency liquidity when it is needed. In 1929-33, this luxury wasn't available and thus prices went into a freefall, however nowadays we have different mechanisms which make for different public perceptions. All prices are are reflections of these perceptions.

    This can (and will in my opinion) avert deflation, but the consequence will be rapidly rising inflation once it works its way into the system. More money must come into the system to make the banking system solvent.

    Debt deflation in the credit markets has been occurring all of 2008, yet there has been no deflation in the general economy because these are goods that are imported from abroad where inflation is en vogue. If price deflation were to occur it would've happened already I believe.
    Last edited by JetsCrazey; 06-10-2008 at 11:19 AM.

  13. #53
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    [QUOTE=JetsCrazey;2577491]Our difference of opinion lies in whether or not temporary deflation will occur as a result of liquidity shortage.

    My belief is that the Fed has already shown that they will provide liqudity where it is needed, thus a sudden deflation is averted by the public PERCEPTION that the Fed will be there to provide emergency liquidity when it is needed. In 1929-33, this luxury wasn't available and thus prices went into a freefall, however nowadays we have different mechanisms which make for different public perceptions. All prices are are reflections of these perceptions.

    This can (and will in my opinion) avert deflation, but the consequence will be rapidly rising inflation once it works its way into the system. More money must come into the system to make the banking system solvent.

    Debt deflation in the credit markets has been occurring all of 2008, yet there has been no deflation in the general economy because these are goods that are imported from abroad where inflation is en vogue. If price deflation were to occur it would've happened already I believe.[/QUOTE]

    You can't assume that there won't be structural changes via the Fed or government regulation, taxes or spending that will change the need for additional liquidity. Gold is already decoupeling from Oil prices which means either gold will either spike or oil will go down significantly. You also can't discount productivity gains through technology that could significantly alter the playing field.
    Last edited by Winstonbiggs; 06-10-2008 at 02:32 PM.

  14. #54
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    I'm loading up on US $: due a 12 month rally I believe. 2010/11 will be the next time to load up on gold/silver/PM's - though I'll know more about that the closer we get there.

  15. #55
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    [QUOTE=Winstonbiggs;2577752]You can't assume that there won't be structural changes via the Fed or government regulation, taxes or spending that will change the need for additional liquidity. Gold is already decoupeling from Oil prices which means either gold will either spike or [B]oil will go down significantly[/B]. You also can't discount productivity gains through technology that could significantly alter the playing field.[/QUOTE]

    Oil may well spike to $150 a barrel or even higher, but it is all speculation - absolutely no fundamental factors at the level it is at right now. It's a bubble, and like any other bubble, will explode at some stage.

    A rise in oil of $10 a barrell the other night? An absurd situation - those old enough can remember when oil [B][I]was [/I][/B]$10 a barrell, and when it rose 10 cents it was a cause for concern. The current situation is insanity and not sustainable - demand is weakening and there is a goodly amount of supply.

    Bubble, bubble, oil and trouble
    Oil is going down twice a double

  16. #56
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    [QUOTE=Black Death;2577924]Oil may well spike to $150 a barrel or even higher, but it is all speculation - absolutely no fundamental factors at the level it is at right now. It's a bubble, and like any other bubble, will explode at some stage.

    A rise in oil of $10 a barrell the other night? An absurd situation - those old enough can remember when oil [B][I]was [/I][/B]$10 a barrell, and when it rose 10 cents it was a cause for concern. The current situation is insanity and not sustainable - demand is weakening and there is a goodly amount of supply.

    Bubble, bubble, oil and trouble
    Oil is going down twice a double[/QUOTE]

    It'll only happen when hedge funds find a better fundamental sector to invest in other than oil.
    With billions of new emerging market oil consumers in the pipeline you'd be hard pressed to find a better fundamentla industry right now. America has no industry other than the military-industrial complex, we're just a machine that spits out paper money for the rest of the world to use.

  17. #57
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    [QUOTE=JetsCrazey;2578412]It'll only happen when hedge funds find a better fundamental sector to invest in other than oil.
    With billions of new emerging market oil consumers in the pipeline you'd be hard pressed to find a better fundamentla industry right now. America has no industry other than the military-industrial complex, we're just a machine that spits out paper money for the rest of the world to use.[/QUOTE]

    Oil is in blow off mode - if my hedge fund was 'investing' in it I would withdraw my funds from it as quickly as possible.

  18. #58
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    [QUOTE=Black Death;2577924]Oil may well spike to $150 a barrel or even higher, but it is all speculation - absolutely no fundamental factors at the level it is at right now. It's a bubble, and like any other bubble, will explode at some stage.

    A rise in oil of $10 a barrell the other night? An absurd situation - those old enough can remember when oil [B][I]was [/I][/B]$10 a barrell, and when it rose 10 cents it was a cause for concern. The current situation is insanity and not sustainable - demand is weakening and there is a goodly amount of supply.

    Bubble, bubble, oil and trouble
    Oil is going down twice a double[/QUOTE]

    I agree it's a bubble but like the tech bubble and housing these things can last longer and be more painful than anyone can imagine. You also can't discount the huge subsidies governments around the world are putting on oil which keeps demand artificially high. As the price goes up the pressure for more subsidies goes up increasing the artificial upward demand. Hard to tell when the bubble bursts? Democrats are actually talking about releasing oil from the stratigic oil reserves simply to create a short term increase in demand to eat it up.

    If the bubble does burst it will kill the alternate energy business.

  19. #59
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    [QUOTE=Black Death;2578479]Oil is in blow off mode - if my hedge fund was 'investing' in it I would withdraw my funds from it as quickly as possible.[/QUOTE]

    and put your money in what???

  20. #60
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    [QUOTE=JetsCrazey;2578831]and put your money in what???[/QUOTE]

    US $ and yen, TBH.

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