Topic: Global Markets Are Tanking (Read 4946 times)

The current debt ceiling is $15.2T, and we're at $14.9T.  Still a few hundred billion to go. 

Trying to compare the Dow at any period of time without comparing fundamentals is a bad way to invest.  There's very little similarity between the 21st century and the roaring 20's.  A bit, but not much.  I do suggest shorting the dow - respectable investors need some people to take the wrong side of the long bet.

The chance of a guy kicking himself during the period of a 5 years is extremely high.

I've surely kicked myself a few times in this year alone.

why?

In five years, a lot of you guys are going to be kicking yourselves.

I suppose the fundamentals are that the US and world economies are in a dire condition and will be for some time. It is obvious how stock markets have been pumped into bubbles which have more to crash than in '08. Stimulus cant pump the markets up any more I don't think and any stimulus only delays and makes the inevitable even greater. It's the end of the game, soon if not very soon.

Thanks for the chart Matt, I know some people don't believe in technical analysis but the head and shoulders is so obvious you can see the Dow Jones bubble is going to pop soon.  It is so grossly overvalued it isn't even funny.

I can't remember what I was thinking then, sorry. 

I didn't say that central banks were selling gold, I said that they were an example of a different type of gold buyer than most commodities, as a support for the concept that gold doesn't act quite like other commodites.  Fund managers, and similar investment vehicles, are most likely who is selling gold right now.

Why would CBs want to sell gold if it would spark a panic? It would kill confidence because people will think governments are in major problems. Surely the CBs want to continue inflating away the debts and financial problems because that also has a contradictory effect of increasing confidence because people are stupid enough to believe money inflation is good for economies. It certainly increases stock market confidence. Selling gold would kill confidence I think. It's contradictory but its because people have been tricked.

Thanks for the explanation guys. That really cleared it up.

I only had gold bugs in mind and did not consider these large institutional investors.

Gold, and somewhat for silver, acts a bit differently than other commodities because of it's history as base money.  Obviously, some investors want to hold gold for reasons of capital preservation; but the largest gold holders (central banks, soverign wealth funds, etc) do so mostly as a liquid investment.  Intended to be sold in times of fiscal stress on other fronts.  For an example, mutual funds have to have some cash to buffer the many trades in and out of the fund on a daily basis; but some of the largest funds will also have a small percentage of the fund in physical gold.  They do this should there be a 'run' on the fund by spooked investors, but the managers don't want to sell equities assets in order to pay out to the panicing retirees heading for the exit.  Holding some small amount of gold allows the fund managers of actively managed funds the option of selling the fund's gold without being forced to sell the fund's equity assets into a falling market.  I think that this is what we have been seeing for the past two days with both gold & silver dropping so much.  I don't think that gold bugs are selling, nor individuals who hold gold as a personal 'insurance' against fiscal policy uncertainty.  This also implies that such fund managers don't believe that the drop in the stock market is more than a panic, otherwise some of them would be selling equities into the market and buying the gold sold by others, and thus there would be a tempered balance.

During good times, people use leverage.  During bad times, they have to sell whatever they are holding to pay things off.  Gold is always pretty liquid, so it is easy to turn it into cash quickly.

$1635/Oz right now 

Sorry for the stupid question, but why does gold go down in risky times? The same thing happened in Oct 2008 as well. That's really counterintuitive for me.

hooray... looking forward to a much better AUD/USD rate.

hope it gets back to 70-80 cents where it belongs.

FED is not giving QE3, which I take as a sign of hesitation of Ben. Even they want to quit the QE policy, they should do it gradualy, a 200 billion dollar QE3 will give them much more flexibility

Debt ceiling has not been hit!  It won't probably be hit again til after next election.

There will be a recession, if we are not in one already.  It is part of the crests and troughs of an economic cycle.  Maybe more severe a Big Recession, but it is during recessions that the imperfections correct itself.  Delaying one as what the USA had done through massive stimulus proved to be more harmful than helpful.   If there is a need for some pain, lets face it now rather than delay for more pain later on.

yeah, perfect time.

Oh, btw gold and silver are ON SALE!  Perfect time to load up