The vast majority of gold supply does not come from current production, it comes from vaults and drawers and boxes
Who is selling, who is buying ?
Should we consider the naked selling of gold contracts ???
Why did Germany ask for its gold back ?
Why did the USA say, it might take several years, to give it back ?
Then why did Germany, reverse course and decide to keep its gold in the USA ?
aapl - "Why is AU trading at $13 today, with gold at $1200"
The biggest problem in gold mining is reserve replacement. Once the rich veins are done, you have to mine for much more expensive gold. And spend sick amounts of money exploring for new ideas.
Peak Mining, the easy minerals have been mined. It's more expensive to mine deeper and accept low grade ore.
That would explain the increase in cost.
But for the sake of argument, if we have truly hit "Peek Gold"
the price of gold would / should reflect the shortage.
The real answer, might lay somewhere between, higher operating costs, and dilution, new stock offerings.
any other data points?
Gold was set at a fixed price, until Nixon took us off of the gold standard in 1971.
The data points of 1987 - 2000 - and 2008 speak for themselves.
What does the market tell me ?
Manipulation of ultra "low rates" to no higher than just a "low rate."
Normal rates are far far far far off into the future..........( a few years at least )
Before the next real bear market, crash,
there should be some type of a Lehman event. the Fed will NOT be able to rescue.
But for now, the Fed can and will prevent a derivative meltdown.
For now, the Fed has unlimited money to bail out anyone and everyone.
During the last credit crises, the Fed did a spectacular job, saving the global markets.
aapl - he fact that rates are historically low would not be much consolation to the deeply leveraged whose economic decisions are based on rock bottom rates
Yes and no. Yes the 10 year backed to 3% (last year)
No market crash, no upheaval. The Fed quickly lowered rates.
My point is, just like last year, rates can back up, and not cause any damage,
WHILE THE FED IS IN CONTROL.
Oh yeah, the deeply leveraged, banks and hedge funds, could cause a huge ripple effect,
and will happen someday.
But for now, the Fed has unlimited wealth to keep stable markets.
I say it again, rates will rise and fall, within a narrow band.
Go up, then quickly come back down. A traders nightmare, whipsaw.
But a few Wall Street houses, Goldman Sachs will make a bundle of money.
These rate increases will be few, and far between.
A calm steady market is the goal.
Even normal corrections will be few, and short lived.
Its difficult to predict / forecast the future with any accuracy
All I can share is my best guess, and limited knowledge of history.
History does not repeat exactly, but it does rhyme.
Crashes and wild bull markets will come and go over the next 4000 years.
As for the next few years ...... just more of the same, manipulation at its finest.
In 2008 when Hank Paulson said he need a bazooka, to fire trillion$ of dollars to fix dislocations in the market. Congress approved,
Congress will always approve. Those in power, want to remain in power.
I see no rate rise or the depression here worsens.
3 month - .02%
6 month - 04%
12 month - 08%
2 year - .55%
5 year - 1.8%
If all those rates doubled, it would still an ultra low rate enviornment.
I doubt, we will a double in rates.
Rates will rise, and fall back.
Wash Rinse Repeat
Why is AU trading at $13 today, with gold at $1200
AU traded in 2000 at $13 with gold at $300.
Might have something to do with dilution, new stock offerings.
Yes corporations can issue new stock.......just like printing or money creation.
dez buying AU......seeking a dead cat bounce.
No earning ?
AU traded for $13 in 2000 when gold was $300/oz
AU trades for $13 today, as gold is $1200/oz
Gold miners will have their day. The day will come and go, as it always does.
NEM was spectular in 1986 to 1987...........
Gold and Gold miners tend to peak, just prior a large market swoon.
During the swoon, gold and gold stocks fall just as hard.
If there is a dollar crises.....far off into the future, the US Government will outlaw gold ownership, again.
Dont get me wrong, I like gold, and the gold miners will have their day...someday
Id rather let the market, tell me when that time is, instead of trying to guess the bottom.
iPhone 6 - 4 Million preorders
aapl is not dead.........the growth rate slows, but the product is still very much in demand.
markets are not crashing, not even a little, long over due correction.
uvxy is also not crashing.
The USA holds 8000 tons of gold. Far more than anyone else.
Of course, the USA will not allow anyone to inspect the gold....at Fort Knox.
Gold is a very rare element.
Gold has been used as a store of wealth for 3000 years.
Fiat currencies seldom last more than 400 years.
Fiat currencies can be printed, and diluted.
Fiat currencies require its holders to have faith, the currency will NOT be diluted into monopoly money.
The US Dollar is the strongest by far. No other currency comes close.
The US Economy is not dead, and is still better than any other economy in the world.
The economy is not at the levels of the Go Go 1950's thru the 1990's but that was spectular 40 yr period.
You will never make a profit holding gold.
But, gold is a store of wealth.
China no longer wants to buy US Debt, that can be paid back in freshly printed dollars.
China would rather buy commodities and gold.
China will open its own gold exchange on Sept 22.
Its a little more than just throwing bombs into a sandpit.
Its getting a strong hold in Syria. Syria boarders Iran.
Iran is the Objective.
Just keep the crowd pacified
Im amazed, the American public is so willing to send troops back to Iraq.
Use of beheading news and videos, is powerful.
Important to dehumanize your enemy, then murder does not seem wrong ???
bj - gold is acting weak.
Any big price declines, will a benefit to those buying gold, China, India, and Russia.
Who are the 3 largest owners of gold ?
USA Germany and the IMF
The USA has enough gold to back 72 cents of every dollar.
Russia and China only 7 cents for each ruble or yan
There is a reason, the US Dollar is the Reserve Currency, and will be for a very long time.
Even if the Fed continues to print for the next 20 years.....
The US Dollar will still have 50 cents of gold backing it. Eight times more than either China or Russia.
Do not look for the printing to stop anytime soon.
Little normal market corrections will come and go.
Why would anyone expect the Fed to raise rates?
Because rates are artificially low, its only normal for rates to return to a historical norm.
(once the manipulation is over) a very long time from today.
Because bears holding uvxy, tvix, and sds are so far under-water, praying to break even someday.
due to Time-Decay of ETF's......break even is not possible.
The Fed wants people to believe a rate rise in coming, to defend the US Dollar
If the world believed the Fed would continue to print TRILLIONs every year, diluting the US Currency, there might be a dollar crash or crises. Countries and people would no longer hold dollars, or dollar based assets.
Reality is - the Fed can not raise rates back to normal levels.
A little rise to 3% would still be a low rate environment .
No other country, none, no one, in the world, invades other countries with the frequency of the USA.
America jailed Manuel Noriega.
Noriega is still in jail, never saw a judge or had a trial.
Saddam Hussain swings from the end of rope.
osama bin laden feeding the fishes.
What to discuss, the over due correction, or bombing muslims ??
Yeah, the market is over due for a correction.
Yeah, the Fed talks about a rate increase, but it is just talk.
The Fed can not raise rates.
The Fed can talk, but it is just talk to defend the dollar.
If rates go from 1/2 % to 3%, it is not a 6 fold increase, it is just a return to normal.
Also know, the Fed can lower rates back to 1/2% at will.
As rates rise, stocks and bonds will fall, but with a rise in rates, money will flow into fixed income.
How far will stocks fall ?
The massive manipulation should limit any fall to just normal corrections.
Time will tell......
Bomb Isis ? Why ? Is Isis a threat to American Freedom ?
Or is this just a good excuse to enter Syria ?
Syria boarders Iran.
The real fireworks begin in a few years.
Our suspicion has been that the "Working Group" established by law in 1988 to buy markets should declines get out of control has become far more interventionist than was originally intended under the law. This group has since been dubbed the Plunge Protection Team. There are no minutes of meetings, no recorded phone conversations, no reports of activities, no announcements of intentions. It is a secret group including the Chairman of the Federal Reserve, the Secretary of the Treasury, the Head of the SEC, and their surrogates which include some of the large Wall Street firms. The original objective was to prevent disastrous market crashes. Lately it seems, they buy markets when they decide markets need to be bought, including equity markets. Their main resource is the money the Fed prints. The money is injected into markets via the New York Fed’s Repo desk, which easily showed up in the M-3 numbers, warning intervention was nigh.
In the end, the market manipulation scenario is a win-win situation for the crisis control mentality of Washington D.C., and, it’s a huge moneymaker for the Wall Street Corporatocracy that seeks to separate you from your money while filling their own pockets. Thus with the current environment of asset bubbles popping, oncoming inflation, and Federal Reserve money supply manipulations, the Plunge Protection Team will be called upon to work lots of overtime.
The VIX remains in a trading range. The VIX is close to is lows, and could get closer.
Low oil prices, no terrorist attacks, and Ukraine peace deal, VIX could go lower.
Amazing - Bad news use to make markets go down.
Bad news. poor earning, market goes higher..............manipulation at its finest, and it will get better as time goes on......
Further more, the economy is not dead. Many are working, factories, airlines, hotels, at near capacity.
Yes a division of wealth, haves and have nots, but this is nothing new.
How to time the next correction ? You need inside info from Goldman and the Fed.
How to time the next global default - There will be signs, warnings, just as there were in 2000 and again in 2008. For now, those in power, have unlimited assets to keep this party going. Yes, those in power want to remain in power for a very long time.
tempted. We are tempted by many things.
Everyone knows, we are over due for a correction.
We also know, the Fed and the PPT will rescue the market as needed.
The Fed and PPT have unlimited amounts of money.
Europe - just started a new QE program ( again ) and there will be more QE to follow.
The game of printing is headed to full overdrive, Printing by governments is FREE......although the citizens pay by having their currency diluted. Printing will last for a very long time, 10, 20 , 50 years ?
Two thoughts from my limited brain.
1 Impossible to time the corrections
2 At some point, the weight of the debt will go exponential and default. ( the end game ) for this cycle of FIAT misbehavior. Yes there have been other global defaults through out history.
In a global default, debt will be forgiven, as there are insufficient assets to cover those debts.
Examples of sovereign default - ( Goggle this one )
In a global default, ETF's holders will not be paid. Leverage via derivatives. Those on the right side of the trade will feel smart, until they try to collect, because the wrong side of the trade will not have sufficient assets. Derivatives, Leverage, has always had. very little transparency for a simple reason.
aapl - While we're here, I had a hard time not joining the crowd that bought UVXY today. Down 7 days in a row, multiple VIX gaps above. Real potential there. What kept me out: the last time the VIX spiked to 17 back in April, UVXY went on to lose 65% pretty much straight down. If that happened again this time, UVXY would go to 13. The contango can be vicious. Between May 9 and July 10, when the VIX started at 12.60 and ended at 12.60, UVXY lost 44%.
aapl - your market thoughts are always good.
I believe you studied market history of UVXY and said, it's possible for UVXY to head towards $13.
The bull / bear numbers continue to show optimism. With the Fed and the PPT ready to save the market, combined with few alternatives, stocks should continue to advance.