Topic: Gold: I smell a trap - page 9. (Read 90828 times)

I hope the banks fail all around the system but it's not going to happen under the watch of the government protectors. The governments and central banks will protect the bansters at any cost to the innocent civilians. I have far too much money in my bank account right now, I think I should buy some gold. 

Yes, it does and you did. That doesn't mean investing should be done recklessly, though.

The Euro situation is at a breaking point. What happens if bank failures start as they did in 2008? At first, deflation would overwhelm and markets fall. So many are expecting QE now that the Fed has been talking it up; a round of deflation would completely blindside them. After that... everything is set up for further monetary inflation.

Does that guarantee those mechanisms will be acted upon? No; it does provide a path of least resistance so the likelihood of it occurring is very high. Putting all of the systems in place and then not using them to save the system (even if temporarily) seems counter-productive.

foolish?  blah, blah, blah.

successful investing often involves taking risk when the odds are in you favor.  i first called this stock bounce here:

https://bitcointalksearch.org/topic/m.560220

and yes i've been piling on as the momentum has accelerated off of a failed double attempt to send us into a wave 3 down.  penetration of the upper end of the bear flag usually involves a huge spike up and thru as the short seller stops are triggered off the top.  this is what i was playing for and was rewarded but not after the market tried to make me dump my longs with a fake breakdown a couple of days prior.

Glad the trade turned positive for you. Still, it's unnecessarily dangerous to use leverage for trading now, and rather foolish to leave a margin call be for any length of time. If this is just play money, great - keep going for long enough and you will get burned again.


Are you sure about that? Leveraged positions could easily be at risk (just like those at Bitcoinica); non-leveraged ones have nothing to worry about.

stocks are now up and out of the bear flag.  it'll be clear sailing from here on out.

do you have any idea how hard it was to hold my long leveraged positions during the 251 -ish plunge 2d ago followed by another plunge early yesterday?

its called discipline and conviction to your principles and analysis.  i left not only a margin call open yesterday at the close but also an exchange call.  by all rights Fidelity could have liquidated me out of part of my triple lever longs etf's and TBT to fill those but they let me slide for some reason.  i didn't ask.

today i am rewarded with all sorts of green.

A distinct possibility; I think that's going to be a 2012 situation, after this year's continued turmoil has bled off.


The only point I question is investor influence in gold at this point. Entities that need real assets the most are major banks with excessive derivative exposure. Gold is the most effective of any asset, with a market that's always available and relatively liquid. Any central bank could start buying up gold (including contracts for future production) at current prices and before the general investment community realizes, none would be left.

Banks could be recapitalized, asset prices stabilized and the world's markets rescued. That would require a monstrous revaluation of gold, though - much more than a doubling from here and too disruptive for the global economy to survive without a lot of breakage. So typical investor sentiment is really supportive of financial institutions' efforts at self-preservation, including the Fed.


Since we agree on the end result of a deflationary crunch, it comes back again to the path taken. All of the listed factors are overwhelming, and you pointed out that most will interpret rising interest rates as bullish. That will amount to whistling past the graveyard and allow the illusion to persist. With an economy of such magnitude, that can last for many months, even years.

Yes, the private sector has been the recipient of all the crap while the banking and gov't sectors shuck off the dregs as they struggle to survive while still maintaining control. I'm assuming you're not in or associated directly with government. Private industry is subject to the rules imposed upon it by whatever jurisdiction it's under; government makes and enforces the rules (in collusion with banks). In a bad situation, government will be able to put on a show for much longer than the private sector.

But again, it's an illusion - just one that could last for a long time to come. The point is that gov't may pay lip service to austerity, but in reality will exempt itself from such measures while the private sector continues to be pummeled. There's the resumption of civil unrest.


I actually think the big powers that are playing the game can keep it going for some time to come; maybe another year or so. It'll require more drastic action at each stage, coming closer to complete failure each time. A lot of people will never fully grasp what's going on, which is part of what the banks & gov't rely on to maintain the illusion.


I don't think they ever stopped.


Agreed. Even then, it would only be perceived as a discrete acceleration - the "new normal" mentality. After a period marked by adjustment to the new normal, another crisis can hit and trigger further acceleration. Each individual inflexion point won't be significant enough to point at and claim "this is where hyperinflation starts".

It's a rough deal, that's for sure - I fully expect more false breakdowns/breakouts as we proceed, along with more exaggerated smoke & mirrors and insane legislation.


Agnico-Eagle closed one of their mines due to a safety issue, not something occurring in the market overall. The ~20% knee-jerk reaction is to be expected, especially considering sentiment. Personally, I think if management decided to close the mine, it means that the potential for loss of equipment/personnel/profit and subsequent bad press sufficiently outweighed whatever downtime may be necessary to assess what was compromised and in need of corrective action. A prudent business call.

On the flipside, AEM being down such a hefty amount is a mind-boggling buying opportunity, though I'd wait to see if it can dip lower on further news about the mine inspection. The company has numerous other production assets, even with the temporary shutdown of a major mine. Taking into account the fact that global production is around 125mm troy ounces per year and AEM production is nearly 1% of that, there will be further shortage of physical metal. When a crop of oranges is hit by frost damage, the price of orange juice rises. Basic supply & demand: decreased supply with increasing (or at least steady) demand leads to rising prices.

Where will the gold be sourced from to supply the COMEX when there are already procurement issues and a declining store of deliverable metal at all exchanges? This event will have short-term impact. The question is: how long will it take for most investors to take stock of the situation and realize that their panic is unwarranted? Probably too late to take advantage of it.

i've been warning about this for a while now.  pm's and the miners are getting smashed.

AEM down 18.27%.  Wow.

i've been thinking about this myself.  if it breaks below 73 you'd have to assume your HI scenario is near.  but it will depend what the chart looks like when it does so.  i'm always looking for false breakdowns and breakouts as you may have noticed with gold, UST's, and the miners.  quite a lesson, huh?

yes but my opinion is that we are looking at primary trend changes in most of these markets, not linear extrapolations of the same.  so these moves toward overbought for RSI DowGold can continue and persist in overbought for quite a while and the reverse for RSIGold.


Touche. Gold was my focus, but I admit silver is a more volatile animal and the price looks heavy. If we go to weekly or longer charts the uptrend is intact. Gold fell out of channel and is riding along the underside, but it's done that before and broken to the upside; it's set to do so again. The only class that's been defiant is treasuries, but we see the weakness there.

Consider this: if sentiment is such that the global economy is going to pick up, silver will benefit from its industrial use aspect. Equities will rise overall as well as mining operations - gold would have to fall off a cliff for that to change, not so much silver. Since silver will be buoyed by expectations of industrial demand, neither rising nor falling precipitously, silver miners will remain profitable as well.