knapper@ Buffett's stupid gold comment -- trotsky, 15:12:12 09/29/06 Fri
oh yes, it was a stupid comment. it's like saying 'a money commodity has no utility'. obviously that is nonsense.
why would Buffett make such a comment? his father was a conservative, and a strong advocate of honest money. Buffett otoh is politically a strong supporter of the socialist welfare state, and that automatically engenders a bit of hostility toward gold. why would the richest investor of them all espouse such ideas? my guess is it has to do with his father - iow, this is a case for a psychologist.
ellix et. al, @ Japan's monetary base -- trotsky, 14:45:52 09/29/06 Fri
i'm still in catch-up mode reading the posts of the past few days, thus the delay in replies.
as far as i'm aware the recent plunge in Japan's money base is entirely due to the end of 'quantitative easing' and the related mop-up of excess liquidity.
mmontagne: you are right, if the drop is temporary, so should its effects be. however, there are leads and lags involved, i.e. the effect of such changes in monetary policy are usually lagged.
canary in the gold mine? -- trotsky, 13:29:51 09/29/06 Fri
look at this 1-year chart of MRB. this strikes me as a classic consolidation pattern, one that implies a big move is coming (due to the length of the consolidation). of course there's no confirmation yet of an upside break-out, but if/when it occurs i assume it will be concomitant with sector-wide strength. sometimes a pattern such as this one leads to a break DOWN, but the probabilities clearly favor a bullish resolution:
MRB, 1 year
stockcharts.com
@central banks and gold -- trotsky, 12:53:19 09/29/06 Fri
thanks to the excellent work of Julian Philips regarding CB gold dispositions it has become clear that there is waning enthusiasm among central bankers to sell what's left of their gold (there are some notable exceptions like e.g. the imo bitten by the idiot bug Netherlands CB).
imagine for a moment that you are a decision maker in the upper echelons of the CB hierarchy, pondering what to do. on the one hand, you and your colleagues from other CBs have discussed the need to 'keep gold in check' to avert a loss of confidence in the fiat system and everything that hinges on its continued existence.
on the other hand, you are well aware that the system may fail anyway, in spite of your ministrations. well, what happens then? he who HAS the gold will smell like a rose, while all the others will be revealed as the fools they are.
decisions, decisions....
@pms -- trotsky, 12:46:33 09/29/06 Fri
in case it wasn't obvious earlier, i think one should buy this pullback - especially in the still depressed SA stocks. well, that's what i'm doing anyway. in addition to the earlier observations about the quantitative sentiment data, note also that money flows look good lately, both on up AND down days. that makes a tradable short term rally increasingly likely.
@pm sentiment, the Rand -- trotsky (), 10:50:32 09/29/06 Fri
yesterday was notable in terms of XAU options activity: the volume p/c ratio clocked in at a very high 1.74 (174 puts traded for every 100 calls), which pushed the p/c OI ratio up to 1.44 - another new record high for 2006, and higher than 88% of all readings over the past 52 weeks.
meanwhile $3.31 m. flowed out of the Rydex pm fund again yesterday, partially reversing the inflow that occurred on Wednesday. in short, Rydex traders seem to be very skittish here, every small drop scares them out again.
all of this continues to point to strong resistance to additional downside materializing in the short term (short term defined as 'weeks').
as mentioned before, in order to get a rally going we need more than that - namely an unwinding of this bearish sentiment.
also noteworthy, the Rand continues its recent free-fall antics and has now pushed decisively above monthly resistance (in Rand/dollar terms) that was established back in 2003/2004. the Rand is now at a fresh 3 year low, so this appears to definitely be a change in its primary trend.
this in turn means that gold priced in Rand continues to make considerable headway. it sits now at an impressive ZAR 4,650 /oz.
curiously , the SA mining shares have so far failed to react to this happy state of affairs. i continue to believe that this spells opportunity, a pretty obvious example of market inefficiency, provided it is not a bad omen for the PoG.
@the torture law -- trotsky, 10:26:29 09/29/06 Fri
yes, it's torture legislation, not as civilized people would tend to expect, anti-torture legislation.
it ostensibly 'bans torture' - but then goes on to allow the 'president' to define what constitutes torture.
contrary to the new army field manual (umpteenth revised edition), which explicitly lists well-worn techniques like water-boarding, mock executions, etc. as no-nos, the new law makes no such mention of the allegedly 'fine line' that separates torture from humane treatement, and thus fails to list specifics. no, it's 'trust us' once again - the 'president' 'knows best' what is and what isn't torture.
does having to listen to one of his bumbling speeches count as torture? that's what i would like to know.
anyway, just to be clear on this, the main aim of this appalling piece of legislation appears to be to retroactively change provisions of the War Crimes Act in order to shield the 'war-on-turr' principals from legal accountability in the future.
from the Washington Post online edition comes this comment:
"The legislation before the Senate today would ban torture, but let Bush define it; would allow the president to imprison indefinitely anyone he decides falls under a wide-ranging new definition of unlawful combatant; would suspend the Great Writ of habeas corpus; would immunize retroactively those who may have engaged in torture. And that's just for starters."
land of the free? you tell me. |
