Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Pastimes : The Philosophical Porch -- Ignore unavailable to you. Want to Upgrade?

To: westpacific who wrote (5062)	12/1/2009 4:15:24 PM
From: Real Man	Respond to of 26251

That is true, and the fact that former financial derivative bankrupt players are now the government. Gold is a tiny market of roughly 80 billion. It cannot accommodate everyone seeking safety from sovereign debt crisis without an enormous increase in price. I guess a few folks get it by now, so the price keeps soaring. U.S. government is more bankrupt than the State of California. However, unlike the State of California, The Feds own the printing press. It cannot pay its debt without utilizing the printing press, even though this process is hidden now: The Fed monetizes the Mortgage market and Fannie/Freddie Even though Fannie/Freddie guarantee virtually all mortgages, the government pretends they don't own the mortgages, but Fannie and Freddie does. Yet, Fannie and Freddie are fully government agencies, so their debt is guaranteed by the government. A full circle to hide the poor state of sovereign liabilities, to avoid the inevitable dollar collapse. The Fed monetizes junky part of MBS, then banks sell them (at high price) and buy treasuries to clean up the balance sheets, since treasuries are "risk free". They now pretend no monetization of US government takes place, even though monetization of MBS going at full speed. This is nothing but sovereign default play, and the government is playing their games to mask the truth and avoid a complete panic, the currency crisis, which would be enormously bullish for gold and very bearish for T-bonds and stocks

To: westpacific who wrote (5062)	12/1/2009 4:29:50 PM
From: Real Man	Respond to of 26251

The next stage of the crisis is US sovereign default/printing, during which ... Gold goes up. IMHO. No clue about the market. In general, if they succeed printing enormous amounts without rates going to the sky (possible through using term carry trade and derivatives), there will just be a lot of inflation.

To: westpacific who wrote (5062)	12/2/2009 12:07:28 PM
From: Real Man	Read Replies (2) \| Respond to of 26251

This bubble is worth about as much as all gold investment demand since 2001 combined. Also driven by hedge funds. Take a look at market cap of GLD, it is 50% of total gold hoarded for investment, and GOOG bubble is triple the gold bubble. Don't forget, gold is a major market, not a stock. From that point of view, gold has much, much further to inflate in this mania stage. That said, I keep taking leveraged chips (stocks) off the table. -g- finance.yahoo.com