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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 (68470)	8/18/2006 12:20:34 PM
From: ild	Read Replies (2) \| Respond to of 110194

ellix@central bank selling -- trotsky, 11:52:26 08/18/06 Fri generally, CB selling of gold is a bullish indicator - since the numbnut bureaucrats in charge are excellent contrary indicators. however, it also usually pressures prices in the short term, as the more sophisticated traders try to create conditions that force the CBs to disgorge their gold at the lowest possible prices (see the BoE's scandalous bungle of gold auctions in '99). this seems to be the situation right now - traders know that there are still 160 tons of sales to come according to the WAG agreement, and they try to buy this gold for as little as they can get away with. this of course coils the spring in case those sales fail to materialize. note also, once the CBs start BUYING gold (instead of just talking about it), it will be time to batten down the hatches - as gold will then be in the distribution phase. @Tony Snow's comments -- trotsky, 21:43:39 08/17/06 Thu "The White House has made light of reports alleging that John Prescott said George Bush had been "crap" on the Middle East peace process. Tony Snow, a White House spokesman, said: "The president has been called a lot worse and I suspect will be." " well, that's exactly as it should be. he should be called 'a lot worse'. that this warmongering mental midget (i'm still surprised how he ever managed to resonate with the sheeple, but let's leave that for another time) has reached a position in his life where he actually has an influence on what is laughably referred to as a 'peace process' in the Middle East is terrible enough. it's really hard to imagine anyone less qualified for that role...if you plucked someone from a loonie bin at random to replace him the chances for peace would probably improve immeasurably (as would likely the presidential syntax). so what is G. Dubya really good for? i personally think that he could prove to be of service to science...haven't evolutionary biologists long been looking for the missing link? they probably never thought it was possible to encounter a live one. smythe @ 1930's -- trotsky, 16:29:15 08/17/06 Thu imo the money supply (which DID in fact shrink for about 2 years in the early 30's, as banks defaulted en masse) wasn't really the problem - at least not in the terms in which you framed it (note that the decline in money supply happened BEFORE FDR confiscated the gold). there certainly was a great effort on the part of the Fed to counteract the deflation (contrary to popular lore). free reserves in the banking system were expanded by over 400% (!) from late 1929 to mid 1932, and interest rates were slashed to the bone in no time at all (safe for a brief cosmetic hike in '31, soon taken back again, which was ostensibly designed to stem an outflow of gold. note that said gold outflow had nothing to do with interest rates, but rather with the alcohol mafia realizing that FDR would move to confiscate gold - as related in a recent piece by Gary North). from the nadir in 1932 onward, FDR type statism took over to completely shred every attempt of the economy to recover - in the name of 'creating' just such a recovery! imo the by far best explanation of what led to the depression and how it evolved is found in Rothbard's book 'America's Great Depression', which is archived in pdf format here - it's downloadable for free: Rothbard's treatise on the Great Depression mises.org @gold and pm shares -- trotsky, 15:19:37 08/17/06 Thu well, it sure looks now as if gold is about to test the lateral support that lies just below current levels (note that the reasoning behind the recent weakness, namely falling jewellery demand and fear of central bank sales makes very little sense. as discussed previously, the gold market is different from other commodity markets, insofar as both the above ground inventory as well as the trading volumes are far in excess of annual primary supply/demand. the remaining WAG sales are a drop in the ocean compared to how much gold will trade worldwide between now and late September.). meanwhile, pm shares are merely to-and-froing in a relatively tight range lately. there is a connection between this action and the sentiment picture - with virtually all short term bullish bets taken off the table, selling pressure can only be light, just as buying pressure on up days remains light due to continuing disinterest. at worst it's a dull, directionless market right now. however, chances of negative sentiment eventually unwinding remain very good, due to the extreme disconnect between sentiment and actual performance.