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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: ild who wrote (25822)	2/3/2005 3:21:02 PM
From: Knighty Tin	Respond to of 110194

As The Talking Heads sing, "Stop Making Sense" and listen to the Prez. <G>

To: ild who wrote (25822)	2/3/2005 3:37:52 PM
From: ild	Read Replies (1) \| Respond to of 110194

Date: Thu Feb 03 2005 15:23 trotsky (art_vandila) ID#248269: Copyright © 2002 trotsky/Kitco Inc. All rights reserved i've only taken a quick glance at it, but the man has a point - if they keep hiking, a curve inversion will happen. only i don't think they'll go for that - too risky. but anyway, we're definitely where Japan was anno '93-'94. they had also begun to timidly hike in the belief that the post stock market bubble fall-out had been successfully contained, and promptly caused the dramatic collapse of their real estate bubble, which has left Japan's banking system essentially insolvent. i'm absolutely certain that exactly the same thing will happen in this case, in view of over 60% of US bank assets being tied to the mortgage credit bubble. Date: Thu Feb 03 2005 15:12 trotsky (mozel@Warburton) ID#248269: Copyright © 2002 trotsky/Kitco Inc. All rights reserved yes, it's money for free for the elite that has access to it - but this doesn't mean that it's really a 'free lunch'. because the central bank directed fiat money system sets off exchanges of something for nothing ( real goods and services for money created out of thin air ) , it continually weakens the pool of real funding. the game can continue until such time as the pool of real funding is exhausted ( i.e., the seed corns are all eaten ) . then comes what tends to happen in third world countries already at an earlier stage when they try to print themselves into prosperity - the systemic collapse. Date: Thu Feb 03 2005 14:52 trotsky (Bleuler) ID#248269: Copyright © 2002 trotsky/Kitco Inc. All rights reserved "Iraq, the war and the “quagmire” are gradually being factored out of the market " i actually don't believe Iraq to be a factor in gold pricing at all, except in indirect fashion. it is only relevant inasmuch as it tends to raise the US budget deficit ( this will continue unabated , so it's unlikely to be 'factored out' ) and also because it spurs Middle Eastern gold demand as investors from the region get cold feet regarding the safety of their US investments. the war as such, or the fact that it has turned into a quagmire isn't all that important. oh yes, it remains a quagmire. every editorial on Iraq over the past few weeks has charged that the violence was aimed at 'derailing the election'. oh well, over 20 people have been killed by the insurgency in the past 24 hours, and yet another oil pipeline has gone up in smoke. so what is it about now? i'm eagerly awaiting the new narrative. be that as it may, the gold price and more importantly, the gold stocks, need a steepening yield curve. it's true that speculator net long positions have shrunk to the point where a rally becomes likely if one looks at the positioning data that have accompanied the bull market to date. but one must consider that if the fundamental backdrop doesn't change, speculators may adjust their positions further. if they become convinced that prices are headed lower, they'll go net short... so the CoT report doesn't really tell us all that much when viewed in isolation. this is not to say that there aren't any positive developments to report. one is surely that sentiment has become very bleak, and the Rydex pm fund continues to level out at less than 50% of peak assets. also, speculative dollar net short positions have been vastly reduced in recent weeks. certainly looks like a good backdrop for at least a bounce, but then again i thought that before. Date: Thu Feb 03 2005 14:34 trotsky (goldfish) ID#248269: Copyright © 2002 trotsky/Kitco Inc. All rights reserved " I better sell more NOW! " that may be a good anecdotal contrarian buy signal. remember when you were going on about Fed rate hikes ensuring higher gold prices? say, up to $600/oz.? not to worry, gold will rise again - as soon as it becomes clear that the rate hike campaign is ending.