five big decisions every 24 hours
(i) times for breakfast, lunch, and dinner
(ii) what to eat
(iii) 2 or 4-hands massage
(iv) before or after nap, or before turning in for the night
(v) to swim in the ocean and / or in the pool
it would be a good place to hang out during a hanging revolution elsewhere everywhere.
:0)
just cleared from tray
From: H
Sent: 2011 10 1 12:03 PM
Subject: Re: Comments - Week of Sept. 26 - gold faith / too late to run and nowhere to hide
As far as I recall, it was Soros' fund manger's contention that he sold all the gold at $1350 or so 'because deflation had ended' (due to QE2). This was not too long before the 10 year treasury note yield embarked on its historic plunge to well below 2%.
How can the private sector credit deflation have ended, when total credit market debt has barely budged - in fact has reached new highs?
Moreover, while there was and continues to be private sector credit deflation (household driven in the US, but companies are very indebted as well, in spite of the - very unevenly distributed - cash hoard they hold, so many will join in), Bernanke has managed, in concert with the government issuing oodles of new debt, to grow the true money supply (TMS-2) by - wait for it - 51% since January 2008, from $5,300 billion to $ 8,003 billion as at end of August. The end result of all the interventions is so far:
Total credit market debt has grown from $ 50.8 trillion at the beginning of 2008 to $52.55 trillion as of April of 2011 (latest data point available), with government debt more than replacing the contraction in private sector debt, while money in the US economy has increased by $2.7 trillion, or 51%.
Plenty of reasons to hold gold, aside from the primary reason, the inevitable collapse of the current monetary system. It is neither knowable how long that will take , how exactly it will play out, nor what it will eventually be replaced with - but 'business as usual' has become impossible; the only way this system can survive is if the inflationary policy is continued without too long interruptions (this is evidently also the impression of various Fedheads, which is why they are now regaling us with speeches about their 'toolbox' again) . Any long interruptions will lead to a deflationary collapse of the debtberg - while continuing the inflationary policy may eventually lead to a tipping point where the growth in money supply finally exceeds the concomitant growth in the demand for money - this may well be masked for some time due to the fact that the system and the policies that sustain it are global (meaning, there won't be much advance warning from exchange rates ).
Also worth considering: although the money supply inflation of the past three years was not a classical credit inflation involving the banking system and the business sector, but a monetization of government debt, we were still able to observe many of the signs that indicate indirectly that capital was likely malinvested during this time.
This in turn means that the economy's ability to create wealth keeps diminishing. Should the economy become so structurally damaged that its ability to produce is severely hampered, then the above mentioned tipping point could arrive sooner rather than later.
Again, none of this says 'it's a good time to sell gold' (this is aside from tactical short term trading considerations - corrections, even big ones, are always possible).
Btw. regarding the recent volatility in gold, this is actually fairly normal. There was even more volatility in the 1970's, in fact the corrections were generally deeper in that bull market. E.g. no-one remembers the correction of November 1978 today, but gold fell by 23% in just a little over three weeks, and rallied all the way back up in the next four or five.
On Fri, Sep 30, 2011 at 3:58 PM, A wrote:
forbes.com
Investors can’t seem to get enough of stories talking about what this or that famous investor is doing with his or her portfolio. In the latest example, news that George Soros has liquidated his gold holdings has some investors and commentators wondering whether the markets are looking at the end of an impressive run in gold. Whether Soros is right or wrong with this latest move, investors ought to consider some of the reasons to reject or copy his move.
From: J
Sent: 30 September 2011 15:23
Subject: Re: Comments - Week of Sept. 26 - gold faith / too late to run and nowhere to hide
Thought you were already in the biggest debasement play Jay. The PBoC and the Chinese government makes Bernanke look like an amateur. Unfortunately, I suspect the game is up there more than anywhere now that property (and copper) is crashing ??
Sent from my iPad
On Sep 30, 2011, at 4:42 PM, J wrote:
:0) Doc Jim, At the moment I am in favor of debasement, because I like marking to higher highs but am enough of a sport to refrain from using the vietnam dong as base unit of account.
Best would be when a minor but easily pronounced country put an additional zero to its money, reminding all of the nature of the true game, and start the snow ball rolling.
I am taking the bernanke at his word, "no deflation" and plenty of debasement.
Just back in hk, the storm has passed, and sun flickered for a bit. The gold storm shall also pass.
M, did we manage to hold you off on panda hunt this day with gold @ 1k parity discourse???
Cheers, j
"Sent via Mobile"
From: W
Date: Fri, 30 Sep 2011 15:13:16 +0800
Subject: Re: Comments - Week of Sept. 26 - gold faith / too late to run and nowhere to hide
Yes, even he didn't understand the debasement efforts of The Bernanke. Fortunately, we did because we knew that debasement was very different from inflation. Which is why the one asset class that goes up in credit deflations is Treasuries. Wasn't it nice to have both?
Sent from my iPad
On Sep 30, 2011, at 11:47 AM, J wrote:
3 years ago? When gold was at 889?
"Sent via Mobile"
From: W
Date: Fri, 30 Sep 2011 10:39:41 +0800
Subject: RE: Comments - Week of Sept. 26 - gold faith / too late to run and nowhere to hide
One of the few things that I have ever heard George Soros spout that made sense was in reply to precisely this question more than three years ago:
“What is it you don’t get? In credit deflations asset prices go down.” o:p>
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From: C
Sent: Friday, September 30, 2011 10:09 AM
Subject: Re: Comments - Week of Sept. 26 - gold faith / too late to run and nowhere to hide
Consider this. They tell us, and some of this makes sense:
Commodities and china compromised for now;
Financials not to recover glory days;
Consumer in shitter;
Emerging mkts riskier when mkts sell off;
Stay away fro close to zero coupon us bonds...
SO, what class will go up then?
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