Gold prices- take a guess

It really all depends on your time line.

The macro environment is such that over an extended period of time, you will see gold at much higher prices than you see today. The only real question is how long that time line is.

Once the velocity of money improves, it will become obvious to all that the Fed can not withdraw the liquidity it created. Inflation will soar, and gold will soar with it.

It's really no longer a question of "if", it's simply a question of "when".
 
[quote author="novaseline"]"Winex does Grimm Fairy Tales" Other famous last words.


There's no way Volker beats inflation. He doesn't have the guts. He's screwed.
[/quote]

The last time I checked, Bernanke was head of the Fed, not Volker. Volker does have the guts to do the right thing. The present administration doesn't have the guts to listen to him.

Of the many disappointing things I have seen come out of Washington DC over the past 10 months, having someone like Volker on the team ready to help, but listening to Bernanke and Geithner instead is among the biggest disappointments.
 
WINEX is going to get that politics thread the hard way. Let's just see if no_vas gets sucked in <!-- s:p -->:p<!-- s:p -->
 
[quote author="winex"]
[quote author="novaseline"]"Winex does Grimm Fairy Tales" Other famous last words.

[/quote]

The last time I checked, Bernanke was head of the Fed, not Volker. Volker does have the guts to do the right thing. The present administration doesn't have the guts to listen to him. [/quote]

Speculation. Innuendo. Opinion. Spin. And zero facts to back it up. Welcome back Winex!

I'll assume for a second you're correct. Bernanke may not need to yank away the punch bowl. Banks are already doing it.

From Calculated Risk:

http://www.calculatedriskblog.com/2009/12/consumer-credit-declines-for-9th.html

This graph shows the year-over-year (YoY) change in consumer credit. Consumer credit is off 3.6% over the last 12 months - and falling fast. The previous record YoY decline was 1.9% in 1991.

Consumer credit has declined for a record 9 straight months - and declined for 12 of the last 13 months. It is difficult to get a robust recovery without an expansion of consumer credit - unless the recovery is built on business spending and exports (seems unlikely).


I got up at 4am on a lark and watched Meredith Whitney on CNBC from 5-6. She made a statement that credit extension over the past 25 years was reversing, and rolled out stat after stat to justify it - the opposite of the garbage Winex is spewing.

In any case, it's certainly more compelling than "that guy's a chicken, he doesn't have the guts", which is also Awgee's position.


[quote author="tmare"]WINEX is going to get that politics thread the hard way. Let's just see if no_vas gets sucked in <!-- s:p -->:p<!-- s:p -->[/quote]

Winex is free to have an opinion that Bernanke lacks "guts". One might have a baseless opinion that Winex molests Collies. Neither would be correct or have any facts to back them up, but if you want to join the Flat Earth Society you're certainly free to do so.

(If you don't get the whole Collies comment, go rent Caddyshack)
 
Meredith Whitney has been pretty much on target with her projections. Her and Bill Gross are my 2 "Must Listen" prognosticators.

The Dollar and Gold will stay in this same range for a prolonged period. We are going through a very "Japan" like time of stagflation. These cyclical bounces in commodities like gold are nothing to get all paranoid about. I think too many investors have been jumping all over gold and it will do what it always does. Goes back down below $ 1000.00 and hovers after the speculation is soaked out of the market with time.

At least Winex didn't quote Mark Steyn again.
 
http://www.cnbc.com/id/34325134

Government 'Out of Bullets'; Consumers in Trouble: Whitney

Primary among her concerns is the lack of credit access for consumers who she said are "getting kicked out of the financial system." She said that will be the prevailing trend in 2010.

Despite being able to borrow at near-zero percent interest, banks are not taking that money and putting it back into the marketplace. The Federal Reserve said Monday that consumer lending dropped 1.7 percent on an annualized basis in October, the ninth straight monthly decline.

With consumer spending making up about 70 percent of gross domestic product, the inability of even credit-worthy consumers being able to be able to borrow could put a severe crimp in future growth.

"What's so frustrating is you have an administration that is arguing such a populist (ideology) and not appreciating all the unintended consequences that the consumer and small businesses have far less credit," Whitney said.

Which is exactly what's happening and why (again) Winex doesn't know what he's talking about.
 
To bring this thread back on topic:

Last week, Japan injected some obscene amount of currency into their banking system. Gold rose (okay, maybe) and the dollar got pounded anyway (should of went the other way). Something else is afoot.

My speculation is countries running current account surpluses are running out of hiding places to put the surpluses. China was using derivatives and when they tanked, switched to hoarding commodities. India is doing the same thing (which explains the Gold purchase a couple of weeks ago). That pile of money has to go somewhere, and that somewhere is gold.

Today. Who knows tomorrow. If Winex is incorrect about Bernankes intestinal fortitude the Goldbugs are going to have a new one ripped for them. In my lifetime, I have seen it happen before in the period from '80-85. The same fear of being "priced out forever" in housing before is now all over metals. The tell tale sign is the stench of the sovereign nations wealth funds, who are all over metals at this minute.

JIMO.
 
[quote author="novaseline"]http://www.cnbc.com/id/34325134

Government 'Out of Bullets'; Consumers in Trouble: Whitney

Primary among her concerns is the lack of credit access for consumers who she said are "getting kicked out of the financial system." She said that will be the prevailing trend in 2010.

Despite being able to borrow at near-zero percent interest, banks are not taking that money and putting it back into the marketplace. The Federal Reserve said Monday that consumer lending dropped 1.7 percent on an annualized basis in October, the ninth straight monthly decline.

With consumer spending making up about 70 percent of gross domestic product, the inability of even credit-worthy consumers being able to be able to borrow could put a severe crimp in future growth.

"What's so frustrating is you have an administration that is arguing such a populist (ideology) and not appreciating all the unintended consequences that the consumer and small businesses have far less credit," Whitney said.

Which is exactly what's happening and why (again) Winex doesn't know what he's talking about.[/quote]

Actually I believe that all you proved is that you need to improve your reading comprehension. I did mention the velocity of money in my original post.

Most people who talk about gold soaring will look at M2 charts like the following:

jm091109image001_5F00_4746F409.jpg


But what they ignore is that the velocity of money to levels unseen even during the Great Depression:

jm091109image002_5F00_3491FA52.jpg


If you have someone read what I wrote to you, you will find that I am saying that long term we will have a problem with inflation. That belief is supported by observation of numerous programs coming out of the Fed that would have been inconceivable even a year and a half ago.

Granted, credit conditions are still tight. Banks are pulling in credit lines from both consumers and businesses. (I believe that Meridith Whitney said that consumer credit lines would be contracting by $2 trillion over the next 2 years) But at some point in time the credit crunch will end. The velocity of money will improve. And Bernanke (or whoever is Chairman of the Fed at that point in time) will have a massive problem on their hands.

If the economy is this weak with all of the trillions of dollars that Bernanke is throwing from helicopters everywhere, how do you think it will look when he starts trying to retract that money? How much of the money put into the economy can even be retracted? (How do you retract the $1.25 trillion in toxic mortgages that the Fed has purchased?)
 
Easy. Stop buying them. And you're wrong, they haven't bought 1.25 billion, they've only purchased 800 million. You are 450 billion off, but why let facts enter the discussion?

Just make it up as you go along and when you get called for making it up, throw down a personal attack.
 
[quote author="novaseline"]Easy. Stop buying them. And you're wrong, they haven't bought 1.25 billion, they've only purchased 800 million. You are 450 billion off, but why let facts enter the discussion?

Just make it up as you go along and when you get called for making it up, throw down a personal attack. [/quote]

More hypocrisy?

First of all, I assume that the reference to 800 million is a typo. I'm sure that had I made a similar error, you would be calling me a liar right about now, and would soon follow with heroic proclamations of how you are here to save the forum from my "lies".

But I'll let that slide.

Let's assume you meant $800 billion.

Well, I hate to break it to you, but you are wrong there too. This just happens to be the first link that I Googled, but according to http://www.mortgagenewsdaily.com/12032009_fed_mbs_purchase_program.asp

Since the inception of the program in January 2009, the Fed has spent $1.06 trillion in the agency MBS market, or 84.4 percent of the allocated $1.25 trillion, which is scheduled to run out in March 2010.

Looking at my original post, I did reference the $1.25 trillion number, and though I didn't explicitly state that it was an ongoing program, I already knew that.

But really, there is no need to argue over typos or your misstatement about how much the Fed has spent to date on MBS. The real error in your previous post is that you think that the Fed can withdraw that liquidity easily by simply stopping the purchase program. Did you even stop to think for a moment that the $1.25 trillion they will have spent on toxic paper is out there already and that stopping printing isn't enough? When the velocity of money recovers, that and various other programs in the alpha soup of Federal money that we have seen in the past year and a half will ignite inflationary fires.

And you wonder why people call you stupid...
 
[quote author="winex"]And you wonder why people call you stupid...[/quote]

I used an outdated cite $(800b), and made a typo. You just flat out lied, and to cover for it, you make more personal attacks.
 
[quote author="novaseline"]
[quote author="winex"]And you wonder why people call you stupid...[/quote]

I used an outdated cite $(800b), and made a typo. You just flat out lied, and to cover for it, you make more personal attacks.

[/quote]

And you wonder why everyone calls you an idiot and a hypocrite...
 
[quote author="winex"]
And you wonder why everyone calls you an idiot and a hypocrite...[/quote]

Baseless personal attack #4.
 
[quote author="novaseline"]
[quote author="winex"]
And you wonder why everyone calls you an idiot and a hypocrite...[/quote]

Baseless personal attack #4.[/quote]


If you don't want to be called a hypocrite, then change your actions.
 
Ah good, the thread is back on track:)
A friend just bought a few credit suisse one oz. bars. He was saying that there is an extra commission charged on gold purchases these days. Is it true at all the places? Never heard of it before. But I haven't bought after gold crossed 800. Lot of believers in gold to 2k. I hope it won't get that worse. For those who don't know, Indian marriages are heavily gold based. Just until ten-fifteen years ago, brides were burnt for not bringing enough gold. With the cheap gold that situation had calmed down. Hope it doesn't come back..
 
Looks like Gold is currently bouncing against the 1120 level, right now it's slightly below at 1117 or so. Lets see how it closes.
 
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