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Strategies & Market Trends : The coming US dollar crisis -- Ignore unavailable to you. Want to Upgrade?

To: Secret_Agent_Man who wrote (14648)	11/18/2008 6:42:45 PM
From: Real Man	Respond to of 71456

Nice stuff. jessescrossroadscafe.blogspot.com

To: Secret_Agent_Man who wrote (14648)	11/18/2008 6:48:47 PM
From: Real Man	Respond to of 71456

Volcker issues dire warning on slump telegraph.co.uk Treasury secretary-elect? If he comes, the country is saved... Not without pain - WS crooks will jump. But... the dollar is not going to zero. ....... Mr Volcker, an adviser to President-Elect Barack Obama and a short-list candidate for Treasury Secretary, warned that it is already too late to avoid a severe downturn even if the credit markets stabilise over coming months. "I don't think anybody thinks we're going to get through this recession in a hurry," he said. He advised Mr Obama to tread a fine line, embarking on bold action with a "compelling economic logic" rather than scattering fiscal stimulus or resorting to a wholesale bail- out of Detroit. "He can't just throw money at the auto industry." Mr Volcker is a towering figure in the US, praised for taming the great inflation of the late 1970s with unpopular monetary rigour. He is no friend of Alan Greenspan, who replaced him at the Fed and presided over credit excess that pushed private debt to 300pc of GDP. "There has been leveraging in the economy beyond imagination, and nobody was saying we need to do something," he said. "There are cycles in human nature and it is up to regulators to moderate these excesses. Alan was not a big regulator." Even so, he said the arch-culprit was the bonus system that allowed bankers to draw forward "tremendous rewards" before the disastrous consequences of their actions became clear, as well as the new means of credit alchemy that let them slice and dice mortgage debt into packages that disguised risk. ........... VERY disturbing news for the dollar ........... His comments come as the blizzard of dire data in the US continues to crush spirits. The Empire State index of manufacturing dropped to minus 24.6 in October, the lowest ever recorded. Paul Ashworth, US economist at Capital Economics, said business spending was now going into "meltdown", compounding the collapse in consumer spending that is already under way.

To: Secret_Agent_Man who wrote (14648)	11/18/2008 8:08:19 PM
From: orkrious	2 Recommendations Read Replies (1) \| Respond to of 71456

I sent these last two posts to Heinz for his comment. He responds: a delivery failure (such as just occurred on the Mumbai exchange for the gold coin contract) at COMEX remains highly unlikely for now. the last expiring contract i looked at (i don't recall exactly which month that was, but it was fairly recently) saw 77 contracts stand for delivery - that's 7,700 ounces. registered gold at the COMEX is about 2,4 million ounces. even if delivery demands were to rise 10 fold or even a 100-fold, there would still be enough deliverable gold. i don't believe it makes sense to compare total open interest to the amount of registered ounces in inventory. the bulk of speculative traders - who hold most of the long positions - do not want delivery, since this would mean ponying up the full contract value, as opposed to just posting margin. most of the commercial short positions otoh are not 'naked' positions at all - they either hedge physical inventory, or net out otc long positions which have been incurred in miner forward sales. it is true that if every speculative long in the front month were to demand delivery, there would be a delivery default. only, this is highly unlikely to happen. what i believe can happen though is that delivery demands will rise markedly, as there are indications of continued tightness in the physical gold market. the fall in GOFO is essentially saying that the tightness in markets for small bars and coins has migrated to the market for good delivery bars. since it's not exactly a transparent market, one has to infer things from such indicators.

To: Secret_Agent_Man who wrote (14648)	11/19/2008 6:46:11 PM
From: Real Man	2 Recommendations Respond to of 71456

Hey, that fizzy demand 18% difference is about all comex gold <G> Gold Demand Rose 18% in Quarter as Price Lured Buyers, WGC Says ... Global demand rose to 1,133.4 metric tons from 963.3 tons a year earlier, the council said today in a statement. So-called identifiable investment, which includes purchases through exchange-traded funds and of bars and coins, climbed 56 percent to 382.1 tons during the quarter. Jewelry demand gained 7.6 percent and sales to India, the world's largest gold consumer and jewelry buyer, advanced 29 percent. ... And supplies are still dwindling ... bloomberg.com