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

To: russwinter who wrote (63604)	6/13/2006 8:53:50 PM
From: UncleBigs	Respond to of 110194

You would think a $40+ down move in gold has somebody in trouble. With all of the leverage in the hedge community, somebody must be levered long the commodities and suffering big time. If so, we may (already?) see a forced liquidation of large positions.

To: russwinter who wrote (63604)	6/13/2006 9:35:51 PM
From: gregor_us	Respond to of 110194

Hi Russ. The Precious Metals Move This Year was a blood in the water trade, originally fed off the sugar of the US fiscal situation. So to answer your question wrt to commods: "Is it only a fifteen second dunking is the question?", I would say the FED looks like it has panicked because the blood is theirs. Or more specifically, the US Govt's. I'm now more convinced there are myriad quid pro quos between Bernanke and the administration. This is merely the fist of many shots fired from the US Govt, russ. So in that context it will seem in retrospect like 15 mins. One Wonders: One wonders that Greenspan was trotted out to offer his view that Oil was going to stay stuck at higher levels, because the FED feels that's the one commodity that's not coming down. And they want to have cover for a pause, even with stubborn oil. One also wonders the FED is very wrapped up in hyper-rational, textbook models that show them winning against inflation via higher interest rates, but, do not even contain as inputs the public and private debt. One wonders they are like the cheerleaders on the radio: highly educated (Many former FED govs), over confident, and saying the FED is doing exactly the right thing to Whip Inflation Now. To the man and woman, not one mentions the debt. One wonders how long before the macro data and news gets back in people's attention, like skyrocketing imports of oil to china, continued crashing of coal exports from china, robust prices still for coal, met coal, iron ore, softs, etc. One wonders that CU has difficulty staying below 2.50-3.00 per pound. It's gonna be more than a 15 second dunking because of the widespread carnage that's already taken place. But does it really matter if you bought BHP 3 years ago at 15.00, sold some at 41, watched the rest of it go to 50.00, sold a little more at 45.00, then comes down to 36.00--washes out maybe to 33.00, then finds itself back above 40.00 this Autumn? Final thought: have you noticed it has generally been the Fed Govs from the western offices that have sounded most cautious? Yellen? It's pretty obvious what Yellen is looking at from her perch in SF, yes? Best, LP Disclosure: I am long GOLD.AX on the ASX (australian gold etf) at 497.74 USD, 569.24 USD, and 598.00 USD. This is a hedge at a conservative % of cash holdings, and I have no intention of letting any of it go. I did get the Peter Bernstein book you mentioned last year--but I have not read it. There's going to be a TON of heavy lifting and more than several years, minimum, before one will favor USD cash once the real problems begin.