Date: Thu Dec 09 2004 14:07
trotsky (permabear) ID#248269:
"is Mr. Bush a Keynesian?"
yes. more precisely, a Keynesian in drag.
Date: Thu Dec 09 2004 14:03
trotsky (Aurum, 12:40) ID#248269:
Copyright © 2002 trotsky/Kitco Inc. All rights reserved
"You have the metal or you don't have the metal. "
in that case it's even more difficult to decipher what the problem is. since i'm quite sure that the GLD trust 'has the metal'.
you can even view a list of the individual gold bars here:
click here ... streettracksgoldshares.com
all but 430 ounces are held in an allocated account - so the gold can neither be leased nor otherwise be encumbered.
the main difference between CEF and GLD is that CEF holds silver bullion in addition to gold bullion, and that it's a closed end fund, whereas GLD is an open ended fund. this latter feature is also the reason why GLD baskets can be created and redeemed.
Date: Thu Dec 09 2004 13:57
trotsky (Hambone, 12:37) ID#248269:
Copyright © 2002 trotsky/Kitco Inc. All rights reserved
"One is the power of the Fed to pump money in astonishing amounts and at great speed should deflation threaten."
this doesn't really worry me. the Fed's magic can only 'work' as long as there are willing borrowers. in a deflationary era, the pool of willing ( and able ) borrowers tends to shrink over time.
" The other is the sinking dollar and the possiblity of foreign dumping of US treasuries, thus driving interest rates skyward."
this is admittedly a wild card that could upset my expectations. a full-blown dollar crisis can't be good for treasury paper, so this is one potential problem for my outlook.
i promise to remain flexible - should fresh developments warrant it, i will adapt my forecast accordingly.
Date: Thu Dec 09 2004 13:21
trotsky (AU_NB@GLD redemptions) ID#248269:
Copyright © 2002 trotsky/Kitco Inc. All rights reserved
" Does anyone even know first had whether the "retail" shareholder has or obtains such right of redemption for bullion? "
the gold ETF works like ANY OTHER ETF. an issuer deposits gold backing 100,000 shares with the trustee, and then gets to issue those shares.
only authorized participants can create or redeem a GLD share basket. see page 51 ff.:
click here ... streettracksgoldshares.com
since any broker registered with the dct can be an authorized participant, a retail holder of a 100K share basket could presumably instruct his broker to redeem the basket on his behalf.
Date: Thu Dec 09 2004 12:52
trotsky (isure) ID#248269:
Copyright © 2002 trotsky/Kitco Inc. All rights reserved
"Where would one go to get 13 tonn so easily..."
about 900 tons are traded every day in London. so it really shouldn't be too difficult.
Date: Thu Dec 09 2004 12:47
trotsky (permabear, 10:47) ID#248269:
Copyright © 2002 trotsky/Kitco Inc. All rights reserved
i'm not surprised that Mr. Krugman ( an avowed Keynesian, read: socialist ) is in favor of a little 'taxing and spending'. in fact if it were up to him, we'd be in for a dose of Morgenthau 'tax and tax and spend and spend'.
the claim that the SS sytem is just fine is ludicrous. fact of the matter is that the only assets the 'lockbox' possesses are government I.O.U.s - all the cash has been taken out and spent. so in fact, it is already a bankrupt enterprise relying on future tax payers to come up with the money.
Date: Thu Dec 09 2004 12:34
trotsky (rijjj) ID#248269:
Copyright © 2002 trotsky/Kitco Inc. All rights reserved
"the ETF caused the fall"
i don't believe that's true. it was an 'explanation' put forward in the mainstream press, but that doesn't mean it's a reasonable explanation. in fact, the rationalizations put forward in the press to explain short term market moves rarely make sense. and so it is here. when an issuer of ETF shares claims the bullion backing the shares in a redemption, all that happens is that the bullion is delivered to the issuer and the shares are cancelled.
a much more sensible explanation for yesterday's rout is the fact that speculative long positions in COMEX gold futures became so stretched that it didn't take much to blow some of them out of the water - and the trigger for that was a fairly big bounce in the dollar.
Date: Thu Dec 09 2004 12:27
trotsky (Hambone@rates) ID#248269:
Copyright © 2002 trotsky/Kitco Inc. All rights reserved
i must point out that my convictions re. rates are based on a combination of fundamentals and technicals. the most important fundamentals are:
1. a huge private sector debt mountain in the US , a big slice of which i expect to become unserviceable in coming years.
2. huge industrial overcapacities worldwide as a result of capital having been malinvested on a grand scale in the course of the bubble period - with the result that no-one has any pricing power.
3. the fact that we're in the 'winter' portion of the K-wave.
the technicals are:
1. a hitherto unbroken long term down trend in rates.
2. a bond market infested with bears in spite of being barely off multi-year highs. this is actually the most important facet of the technical picture imo - large amounts have been invested betting on a fall in the bond market, while long exposure among big fund managers has declined by about 1/3 globally since early '03 ( according to a recent Merrill survey ) . this represents a vast pool of buying power, which is additionally reinforced by demographics ( the beginning retirement of the boomer generation which will require safe income ) .
Date: Thu Dec 09 2004 12:14
trotsky (strat@historical patterns) ID#248269:
Copyright © 2002 trotsky/Kitco Inc. All rights reserved
that is actually not entirely true. you have to look a bit further back in history to see why. it depends entirely on whether one is in an inflationary or a deflationary era. after FDR devalued the dollar by 70% in one fell swoop in 1933, interest rates kept falling for 15 years.
in the modern deflationary era we have e.g. seen a 50% fall in the Yen from '95 to '98 accompanied by a steepening in Japanese CPI deflation and the biggest collapse in long term interest rates in economic history.
in short,the 1970's are not an appropriate template.
Date: Thu Dec 09 2004 12:06
trotsky (rijjj) ID#248269:
Copyright © 2002 trotsky/Kitco Inc. All rights reserved
you think bulliondesk should be ashamed for writing this refutation of Turk's claims?
321gold.com
on what grounds? it looks to me like they did what journalists are supposed to do - i.e. they actually did some research into the issue to find out whether Turk's claims have a basis in fact. it appears they do not.
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