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Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: gpowell who wrote (35763)	8/23/2005 4:14:27 PM
From: sciAticA errAticA	Read Replies (1) \| Respond to of 116555

re: [ So what is your point? ] I'm in utter awe of your confidence in the fed... and its notes (read IOUs)... What was it that you posted earlier? "One must realize the real cost of producing (printing) bank notes is the costs related to ensuring it stays in circulation.." LOL! ... the Fed prints on the cheap... without paying your perceived costs... By the way - does Weimar ring a bell? ========== re: [ I'm fairly sure you use federal reserve notes ] ... yes - but I wash my hands afterward...

To: gpowell who wrote (35763)	8/23/2005 4:48:08 PM
From: mishedlo	Respond to of 116555

Heinz on the housing bubble Compiled by Ork: Date: Tue Aug 23 2005 15:21 trotsky (Bizarro@banks) ID#248269: Copyright © 2002 trotsky/Kitco Inc. All rights reserved since 63% of US bank assets are tied to real estate, with a considerable amount of those loans in highly dubious categories ( option ARM's and the like, in which the debtors simply aren't creditworthy ) , even a slow deflation of the RE bubble could prove deadly to the entire financial intermediation enchilada. note that RE also deflated slowly in Japan...prices going down between 5-6% year in year out...that was enough to bring the banks to their knees. it is not at all obvious why the US and RoW RE bubble should have a different effect once it deflates. in fact, since this bubble already looks to be bigger than Japan's was, its demise promises interesting times for sure. Date: Tue Aug 23 2005 15:03 trotsky (Yorkie@Fed) ID#248269: Copyright © 2002 trotsky/Kitco Inc. All rights reserved if it works as well as previous attempts by the Fed to 'soft-land' bubbles it has created, we know what to expect. in any event, all markets mean-revert over time, and in fact, the most likely outcome in the case of bubble markets is a reversion to an extreme - the other extreme ( from over- to undervaluation ) . that's what's in store for the global RE bubble, pretty much regardless of what the Fed does at this stage ( its actions come too late because a bubble has already formed; by 'treading softly' it has actually only ensured that the bubble became even bigger, with all the negative consequences that entails. it's a huge misallocation of capital, one of the most egregious ever ) . Date: Tue Aug 23 2005 14:36 trotsky (AU_NB@CoTs) ID#248269: Copyright © 2002 trotsky/Kitco Inc. All rights reserved i believe you are forgetting something here. even though the medium to long term negative correlation between the dollar and gold is well established, the players in the two markets are not identical. thus it is not necessarily true that positioning data from the currency futures markets can be used to gauge what's going to happen in the gold market over the near term. it's certainly useful to be aware of them, but one shouldn't jump to conclusions. imo if the gold market is really set to take off as some suggest ( remains to be seen ) , we should see commercial shorts covered quickly even on small pullbacks ( similar to e.g. in the copper CoT chart you recently presented ) - as those in the physical trade would certainly be the first to know whether physical markets are getting tight. the whole premise of the current speculative long position is apparently that the combination of a cessation of CB selling with increasing seasonal demand will exert pressure on prices - i.e., it's a speculation centered on near term developments in the physical markets ( as opposed to e.g. speculation on future interest rate policy ) .