The Gold Bubble and Wiemar-style Trillion-percent Inflation.

Originally posted by Rockpuck
I really, really, really hope the Dollar does not fall further then it has (14 year low) ..

Hi RP. That's a 14 year low against the Yen (USD/JPY). Bucky still has 3 handles to bust before reaching the 2008 March low - $USDX 70.69. After 74ish....nothin' but net to 72..


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**Watch this coming Monday , or Tuesday for a renewed assault on the dollar...upward pressure on Gold.**

Originally posted by Rockpuck
Supply is the ONLY thing that can effect the true value of Gold. Both ways, more Gold it's worth less, less gold it's worth more.

Very little Gold is discarded , or wasted via industrial use. 99.999% of the Gold ever produced remains in one form or another...above ground...somewhere.

So available supply is always increasing , but year after year , supply continues to lag demand....

Based on data provided by the WGC, Gold Fields Mineral Services Ltd. (GFMS), and the US Geological Survey, the world gold supply is expected to be approximately 2,400 tonnes in 2009. Gold demand is expected to exceed supply by roughly 1032 metric tonnes (1 metric tonne is the equivalent of 32,150.7466 troy ounces), a large shortfall equal to 43% of the gold supply.

Full Text

Market supply comes from annual mine production (new supply) , and/or from annual sales of existing above ground supply...scrap sales , hedging , official sector sales/leasing , and when sentiment runs negative...investor dis-hoarding (bear market).....but supply is only half of the equation.

Demand driven market.

Increased investment demand spurred by loose , reckless monetary policies weighed against dwindling physical supply , and underpinned by official sector buying is becoming the primary price driver.

And it isn't just dollar Gold. Gold is at , or near record nominal price levels in most major currencies. The trade-weighted dollar has lost approx 10% YOY against the other majors , while the dollar price of gold has risen 56%...ie , the price of gold is gaining in terms of all major currencies.

Low interest rates in the money markets , both in the US and the Euro Zone = negative inflation adjusted returns on short-term investments....


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More than simply an inflation play , in low interest rate environments , Gold functioning as currency becomes the investment of choice for major funds.

As evidenced....

The USD:Gold inverse remains the fundamental backbone of this bull market , but the relationship is no longer tick for tick...intra , nor at the close. In the past month the dollar had 9 up days , and Gold advanced on 7 of them. This divergence represents overwhelming demand from the physical market...regardless of dollar strength.

reply to post by loam


Saudi and Iran would never, ever go to war.. And Yemen would hardly be the spark that did it. Iran would love to see Yemen cause problems for Saudi, because after Iraq fell Saudi and Iran filled the power vacuum. However, Saudi Arabia has NOT been pushing on the US to assist in destabilizing Iran .. all America would have to do is formalize a small portion of Kurdistan, and all the Northern oil fields in Iran would be in serious jeopardy, scoring one for Saudi. Simple fact is, I don't see Yemen as being as important as others tend to.

reply to post by OBE1


So available supply is always increasing , but year after year , supply continues to lag demand....

Supply in commodities is, as I am sure you know, relevant only to consumer growth. If consumers outpace supply growth, supply of that commodity is down, thus prices go up. That is, imo, the only true value increase for any commodity. The rest is simply inflation/deflation.

And it isn't just dollar Gold. Gold is at , or near record nominal price levels in most major currencies

For some, I posted some graphs on page 2 of the US Dollar and the Yen comparing Gold pricing. If you follow the link it shows the relevant graphs for the Euro and GBP as well. All are different, as all follow the currency. And not all have the same dips and rises either, Japan for instance had a massive spike, and then completely leveled off. The Yen would have the strongest buying power per historical reference of any other currency as of right now, because of any other currency it has been strengthening the most (which is actually bad for Japan)

More than simply an inflation play , in low interest rate environments , Gold functioning as currency becomes the investment of choice for major funds.

But if a country's central bank lowers interest rates, this signals what?

Inflation.

You deteriorate the value of the currency .. which is what we see happening to the USD.

Thus Gold prices go up.

And the only reason Gold has not been following exactly the trend with the Dollar is simply because the economic environment welcomes fear, which in turn leads to a move towards more secure investments like Gold. More people buying Gold with a weaker dollar = Gold following both inflation AND supply and Demand, causing the prices to swing in a more volatile way.

Still comes down to Inflation/Deflation and Supply. IMO of course.

I apologize RP...to be honest , I'm not sure what you just said

How 'bout them candles though ?

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The $53 waterfall to 1137.75 filled the small gap left on Monday , and already bounced back as high as 1153+. I remember just a few years ago when trade was confined to a narrow band....throughout an entire COMEX session...$7 up , or $7 down...max.

New paradigm

In my second attempt to decode your post RP , I think it may help if you employ the more commonly used term demand in lieu of consumption/consumers , especially when referring to Gold. Unlike most other "commodities" such as coffee , sugar , oil , coal , even silver with it's strong industrial usage...Gold isn't consumed...it accrues in an ever increasing above ground stockpile , always available to come back into the market at the right price. For this reason , Gold isn't subject to supply shock , shortages , or backwardation like most commodities.

The flattening futures curve and rumors of potential backwardation only serve to underscore the fact that unprecedented demand is the key fundamental driving this market. Slowly but surely , year by year...weak hands get flushed....selling drys-up....prices rise.

Still trying to decifer the remainder of your post...wish me luck

**Watch this coming Monday , or Tuesday for a renewed assault on the dollar...upward pressure on Gold.**

Post

Gold took off just after midnight NYT...and printed a new all time high (1199.88) around 4am. Looks like somebody made a panic phone call to JP Morgan/NY Cartel right at the London open. No rest for the wicked.

$USD

The usual top-callers , Moriarty, Nadler, Gartman were going full-bore this weekend. Just yesterday Moriarty wrote that recent rumors of a Commercial Signal Failure represented a "rock solid guaranteed no risk opportunity to short gold and silver".

Another great call Bob!

You really have to wonder if these so called "Gold experts" ever make any $.

UPDATE:

Gold hit record highs at $1,216.75 an ounce in Europe on Wednesday as investors bet on higher prices, with funds lengthening positions due to expectations of a fresh leg of dollar weakness and more central bank buying.

Link.

Heres what's really happening.

Everyone who owns gold is saying to buy gold. Just like everyone who was making tons of money in the stock market or real estate wants you to buy their product.

Golds bubble will burst, and the common man who is holding the bag and bought at the highs will lose their shirt. Just like every other manipulation in our history. Is that now? $2k an ouch? $3k? $1500?

Now is the time to sell and buy other things on the cheap. Including US dollars.

Originally posted by brocket99
Now is the time to sell and buy other things on the cheap. Including US dollars.

Rumor-mill says Japan may be dumping US Treasuries.

Japan is arranging to sell $100 billion Treasuries to the U.S

From the Desk of Lou Brien:

World Market Media is hearing from its various trading desks that Japan is arranging with the US to sell $100 billion
Treasuries in order to finance domestic programs there.

This move will no doubt shift the value of the dollar, stocks, bonds and equities.

More detailed information to follow the near future.

Text

Related: Japan Planning US Treasuries Sale

You might want to hold-off on that dollar purchase until this scuttlebutt is either confirmed..or..dispelled.

I've watched this phenomenon occur like clockwork for 9yrs. With every new high, we get an influx "saviors" warning us of the bubble that's about to burst. Oddly, this sage advice comes from the segment of the investment community that somehow missed grabbing a berth in the best performing asset class of the decade

Hopefully this visual will add some perspective for those that were left standing on the platform so to speak.


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[edit on 17-5-2010 by OBE1]

the surge in Gold-Silver-Platinum prices is real--- but the JP Morgans' of the Paper Contracts are holding back on 'shorting' or suppressing the Price of PMs ---in the wake of Last Week's BREXIT upset

So these sudden HIGHS in gold/silver/platinum metals... are designed to LURE the once patient stackers, who for years accumulated small purchases of PM ounces or bars

What is being played out here is the TBTF banks & paper spoilers of metals are enticing the people to 'Sell' at this arranged price increase...

myself, I will sit on my small holdings--- as the eventual price of gold/silver will surpass the $1335. & $19.80 surge of today (July 1st 2016)


Sit Tight on your holdings... don't react in buying at this temporary top... just sit tight as the cartel of metals manipulators drive down the prices all of the week after July 4th holiday week

buy on that dip ! then sit back and see the exact same ploy be replayed two more times in the nest few weeks===

the Shanghai fix is gonna be the Quintessential game-changer fellow stackers

live-long & prosper my friends

The federal reserve raised interests rates in the middle of a recession

Great thinking

a reply to: OBE1

Moving into the dollar would be insanity right now the dollar is high buy into the pound while its low it'll be recovering while the fed is printing money by the end of the year and then buy back into the dollar when the fed stops printing money

a reply to: St Udio

I think the fed made a mistake raising interests on false data and now they are regretting it.

They need to make our market more attractive to foreign markets by making the dollar cheaper which means they are going to have to start printing money again.

Unless of course we're ok with entire cities moving their manufacturing plants to Mexico

Still

Still happening every week.

a reply to: brocket99

The gold bubble?

What?

Gold... Is a bubble?

Since when?

You mean everyone short selling gold to keep the prices artificially low?

Just listen to what Goldman Sachs is saying
Short sell gold

originally posted by: St Udio
the surge in Gold-Silver-Platinum prices is real--- but the JP Morgans' of the Paper Contracts are holding back on 'shorting' or suppressing the Price of PMs ---in the wake of Last Week's BREXIT upset

So these sudden HIGHS in gold/silver/platinum metals... are designed to LURE the once patient stackers, who for years accumulated small purchases of PM ounces or bars

What is being played out here is the TBTF banks & paper spoilers of metals are enticing the people to 'Sell' at this arranged price increase...

myself, I will sit on my small holdings--- as the eventual price of gold/silver will surpass the $1335. & $19.80 surge of today (July 1st 2016)


Sit Tight on your holdings... don't react in buying at this temporary top... just sit tight as the cartel of metals manipulators drive down the prices all of the week after July 4th holiday week

buy on that dip ! then sit back and see the exact same ploy be replayed two more times in the nest few weeks===

the Shanghai fix is gonna be the Quintessential game-changer fellow stackers

live-long & prosper my friends

Oh just wait you'll be glad you held onto that glad when The Fed drops interests rates again on 4 consecutive months of bad economic data.

the main stream PM pumpers are touting Silver (Ag) like this is the exponential Rise phase...

I warn youse guys that there will be a couple head-fakes of price declines to pull the Silver from 'weak hands'...i.e.: those who are afraid to miss a sudden & short price upswing


glad at least ONE member posts wise council, thanks


I am disappointed at the rosy sky report from this otherwise good web site: srsroccoreport.com...


all they seem to 'see' is blue sky & rainbows for Silver but ignore the manipulators & their schemes






Where-as this report seem to fit my worldview & the likely developments of the situation:
kingworldnews.com...

a reply to: St Udio

It was reported that the shorts lost 4 billion shorting gold during brexit and now have to cover their positions which helps explains why gold has risen above the $1324 barrier. Both POG and USD increased when European wealth started to stampede into safer havens which is likely to be the norm in future months as banks like deutsche bank become insolvent from debt that can never be paid back.

Where I am (australia), gold has already reached AUD$1780. If EU wealth continues to pour into gold and USD, australian miners might perform better than many others. My self managed superannuation has increased by 250% investing in gold miner (asx.evn) in just the last 12 month, I am expecting a higher return in the next 12 months.

Like anything, people need do their own research, don't trust the research done from others.

a reply to: St Udio

Oh trust me Goldman Sachs is saying to short sell gold because they want to buy it

I'll buy in at 1500

The price is going back up when they start Qe and the Fed sops short selling to make the economy look good for Obama

They can't keep lying and pretending the economy is growIng when thousands of jobs are getting shipped to Mexico

Remember for every manufacturing job lost we lose a residual five jobs

This is why entire towns die

a reply to: glend

Gold is going up A because of inflation and B because people are moving into it as a hedge against inflation on consecutive months of ha economic data and a sharp decline in the labor forc

When the Fed announced that they aren't raising interest rates in June that was the red herring for everyone honestly looking at the data and wondering why aren't these numbers adding up.

Now the Fed will drop interests rates because they have to because they shouldn't have raised them in the first place

I hope your not a boomer or gen x with a big stock portfolio because the second half of the housing is going to hit

They are going to have to start printing money

There is a reason why Wells Fargo is moving back into credit default swaps and people are looking at the student loan bubble that's currently bursting

Brace for impact and buy more gold or buy into the pound or another currency like the yen while the dollar is still strong because it's about to get devalued in an attempt to slow down the bubble nursing right now

Thank Janet yellen and the Obama admin for pretending that the economy is doing good

a reply to: onequestion

Great points one question but don't fear the fed threatening to raise interest rates because it matters not to gold. POG increased during the early 2000's when interest rates were 2-5% because they were diluting fiat (printing) at a higher rate than the return given by interest rates so wealth stampeded into gold to try to preserve its purchasing power.

I believe brexit was done on purpose by the elite (cameron didn't have to bring in a referendum) to collapse the European banks which will ultimately result in a new world currency link controlled by the banking elite. It would not surprize me if Nigel Farage, the clown in the EU circus, is actually their king.