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.

Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum -- Ignore unavailable to you. Want to Upgrade?

To: 2MAR$ who wrote (100163)	4/19/2013 5:17:09 AM
From: TobagoJack	Respond to of 219167

:0) 2mar$, i sleep hk time 8:30/9:00pm - 3:30/4:00am, and again ~1/2:00pm - ~ 2:30/3:00pm i cannot catch much of anything to do w/ a top or bottom, and so i remain a player but not real time, at least not usually

To: 2MAR$ who wrote (100163)	4/19/2013 5:26:10 AM
From: TobagoJack	1 Recommendation Respond to of 219167

just in From: M Sent: Friday, April 19, 2013 5:19 PM Subject: Re: Comments - Week of April 15 - don't understand gold I'm beginning to think that Russell Napier is "spot on." In his view, it is only a question of time - but that time is "not yet." M Gold is confused. Historically its price rose when real interest rates declined, and declined when real interest rates rose. However, structural changes can also have an impact. These changes are usually slow-moving and rare, as they relate to governments’ need to seize their citizens’ wealth. When that happens, small mobile forms of wealth such as gold tend to rise in price. Such a change is clearly upon us, as governments will be bankrupt unless they can take more from their citizens. However, weighing up these conflicting forces is not easy. Already the real yield on US Treasuries is rising sharply as nominal Treasury yields rise and inflation falls. This has been bad for gold and this analyst expects inflation to fall more rapidly than bond yields as the EM deflation shock unfolds. The complication is that such a shock would lead to more repression. With the current extreme monetary policy failing to create inflation, it is highly likely that the authorities will take much more aggressive steps to nationalise the financial system and force it to extend credit if deflation looms again. This will be incredibly bad for savers, whose funds would move to mandated rather than chosen assets. Thus while a deflationary shock would hurt gold prices, at some stage the move to gold by those seeking to avoid repression would begin to outweigh the negatives of higher real interest rates. At some stage repression will start to work and the force-feeding of credit into the system, particularly by banks, will create the money and inflation that the central banks crave. At that point the gold price would have both cyclical and structural forces going in its favour and thus would be the standout asset to protect wealth in what could be a few difficult decades. So with a deflationary shock and the accompanying strong dollar already brewing, investors should reduce their weightings in gold. However, low weightings should be increased dramatically at the first sign of repression. When that occurs, a very long and profitable gold bull market will follow. Given the difficulties in timing this shift, it would be dangerous to come out of gold completely even with a strong dollar and a deflationary shock.