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Monday, January 31, 2011

SUNDAY NIGHT WEBINAR

If you'd like to learn more about trading, gold and the secular bull market… here's an invitation to a private event Sunday night, after the super bowl.

A long time SMT subscriber has convinced me to go on a live call and answer your questions about gold, cycles, the stock market and the economy…

Here's what you need to do.. Go here:
http://www.AskAboutGold.info

Enter your name, email address and whatever question you have for me.


There are less than 150 seats left so register now to get all the details. We will be looking at massive gains from the gold bull in the next few months so don't miss out: http://www.AskAboutGold.info

91 comments:

  1. "Orlando is a dump if you ask me, but isn't next door to every country going up in flames lately. "
    Shalom
    Read my last comment, previous post.
    It's comments like that that betray a total lack of understanding of the world outside America.
    But from the looks of things, you are clueless about America as well.

    ReplyDelete
  2. Oh no Gary, have we entered the 3rd speculative phase, LOL!

    ReplyDelete
  3. Once we see lines outside the local coin dealer we will have about 1 year left.

    ReplyDelete
  4. bottom trolls? I used to hang around here but now I don't trolls? painful day here.

    ReplyDelete
  5. DXB-

    You sound like you are a big shooter. Are you that Anon1 guy who has his own hedge fund?

    Maybe you should start a blog and give us your calls in real time, I'd be interested in hearing about what you think is a good sector investment.

    Or, just post a few of your calls for 2011, We'd love to track them.


    I know not everyone here is only invested in the miners. Many are looking into other commodity plays in AGs, Nat Gas, Uranium, Rare Earths, etc.

    ReplyDelete
  6. IMO despite a massive march in Cairo tomorrow, I think the markets will sell of early, but crawl back strongly and close up towards the recent high's of 1,295-1,300.

    That should convince enough that Friday was meaningless, that middle eastern geopolitical concerns are overblown or manageable and the bull rally is strongly in play.

    By Wednesday we should get busy breaking down and by jobs Friday the dam will have broken. Let's hope.

    ReplyDelete
  7. Gary-That looks like a couple adds that keep ending up in my spam folder. :) I'd love to listen-only 250 get to listen? I'm not sure I've got any questions, having bugged the crap out of you here and via email over the past few years.

    ReplyDelete
  8. Jay,
    If I understand it right 250 can get on the conference call but another thousand or so can listen to the recorded program later.

    ReplyDelete
  9. OK, I'll listen to the replay. If I don't know those answers by now, I'd better hang em up. You have hammered home most of this over the past years.

    ReplyDelete
  10. Poly you still think the market will head down and not force thrue 1300?

    We dont have a lot of days left accordning to Garys cycle..5-10 days..

    Gary wrote that the dollar weakness due to the happenings i Egypt is a weak call for the dollar.

    ReplyDelete
  11. DXB

    I read the link, but it says nothing about my questions about what the Fed will do when faced with the dilema of high interest rates and high debt.

    Please answer the question.

    ReplyDelete
  12. Honestly, my "guess" is as good as yours :)

    But I strongly believe so. I've thought all along this is a retracemet to the 50dma (we could do that in 2-3 days) and off we go again. That's fits the idea of just a daily and not intermiadate cycle.

    ReplyDelete
  13. Poly I think so to. But the market is tough. But I cant see it go thrue 1300 without some kind of correction. But you never know..:-)

    The dollar is so weak and i thought that the Egypt mess would force a correction and a rally in the dollar..But today the dollar was so weak.

    ReplyDelete
  14. repost from old thread:

    I added gold at the low this morning.

    Now 7x gold. No silver.

    (Had some silver during day, but got stopped out on whipsaw. Much harder to establish posotion than gold. I'll have to pick it up higher when I have a profit buffer for stability.)

    My stops still at approx 1-2% net worth loss if hit (my increase this morning had a stop less than $2).

    I maintain the bottom was thurs/fri and today was just a pullback to blow out people who chased on friday. Soon enough I think the direction becomes clear.

    ReplyDelete
  15. FYI, you should change "2,000" to "2000", which is excluding the comma. It is confusing to some to represent years with a comma, and is semi-unprofessional.

    ReplyDelete
  16. Patrick,

    It has no business breaching 1,300 and new highs here!

    If the S&P makes new highs above 1,300 I will be getting out of my Puts quickly, at a healthy loss too :)

    ReplyDelete
  17. How does MMT work in a Nation besieged by taxes and debt (California), bereft of jobs (shipped overseas), with minimal hopes of future work (all they know is service and scams/poker/RE) and about to be swamped with inflation (food/gas)?

    Do you create more money (debt) and saddle your voters with increased taxes (they must be paid in dollars after all)?

    Higher interest rates worked in the '70's, why won't that work now? Because there is too much debt already and Banks and tax-payers will be crushed (Egypt redux).

    Money is debt. You enslave a Nation with it until they finally wise up to your ruse.

    Debt. Inflation. Taxes. The American Dream.

    The timing of this 'raid' with two experts simultaneously appearing out of the woodwork reeks of manipulation.

    Its a distraction. I don't buy it.

    ReplyDelete
  18. Tim and Jeanene,

    Bummer I had to be out of the house today so I missed all the fun.

    Here's a question for you: Let's assume MMT has it right. However, let's also assume that the politicians don't know Jack about MMT or economics. (Okay I know, not an assumptions, a fact...).

    If MMT has it right, but all the politicians (and most of the citizens of the country) look at the US deficit as some horror that will consume us and our grandchildren, then those politicians will end up shooting us all in the foot, no? If everyone (or say 99 percent of the people and the politicians) believe we need to balance the budget, we need to run the country like a well run household, then MMT will never be correctly applied, right? Instead, we will likely do the very opposite of what we need to be doing to reduce unemployment and increase our collective wealth, right?

    And one final question: If MMT is correct, what does it say about the gold bull? Or more direct: What are your thoughts about the gold bull, what has caused it, what drives it, and what will cause it to end?

    ReplyDelete
  19. Aha you shorted the market.:-)

    Me too..I dont want the market to go further than 1300. Actually i want it down to Ma50..And then it can turn back up.

    Gary Warned us to short the market but we arent always listen to him..:-)

    But if the market dont go down when there is trouble in Egypt and the dollar cant surge on that kind of crisis. When will it then happen?

    How old is this site?

    ReplyDelete
  20. This comment has been removed by a blog administrator.

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  21. Not that it's a big deal to me - I'd much rather hear Gary talk about investing - but the webinar is scheduled during the second half of the Super Bowl.

    Just thought I'd mention that...

    ReplyDelete
  22. blammo,


    I agree with you. That is why Volker took a walk.

    I have asked DXB and T & J to answer my question but they have failed to do so.

    James

    ReplyDelete
  23. You can't compare California with the US government. California is screwed because they do not have control of the currency that is used there. The US government controls its currency and can print as much as it damn well pleases.

    California is like a household, it must balance spending with income. The US government does not need to do that. Apples and Oranges.

    ReplyDelete
  24. TZ,

    I value your posts. Please keep them coming. I ignore the rest & go to yours & Gary's.

    Posted this in old thread, but want to make sure you get it :-)

    ReplyDelete
  25. Gary: You used to post your PM positions at the end of the nightly report. If memory serves you are 35%. Good to post, though, IMO

    ReplyDelete
  26. Has anyone here ever shorted ZSL instead of going long AGQ? Seems a good way to get rid of the rangebound erosion if AGQ isn't trending up, as long as there are shares to short.

    ReplyDelete
  27. Not only would it get rid of the leveraged ETF erosion, but it would be your gain.

    ReplyDelete
  28. Good luck getting shares to short ZSL.

    You could retire off shorting any leveraged fund, because over time, they all approach zero and then reverse split due to decay.

    Anyone here ever have any luck getting shares to short any of the double or triple funds?

    ReplyDelete
  29. I completely forgot about the super bowl. I'll see if we can move this back to 7pm PST.

    ReplyDelete
  30. VU,
    You won't be allowed to short ZSL. I tried just with a few shares to see if it could be done and my broker wouldn't let the trade go through.

    DG,
    I always post positions at the end of the weekend report.

    ReplyDelete
  31. The odds are high that the oil cycle has topped.

    not yet :)

    ReplyDelete
  32. Actually it looks more like it may have just bottomed. Not a good sign if oil is on day 2 and already $92.

    ReplyDelete
  33. This comment has been removed by the author.

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  34. FWIW, I think there is a strong chance the daily equity cycle bottomed on the 20th. We would then be on Day 7 of a new cycle, and a move below SPX 1270 would produce a failed cycle, opening the door to 5-8 weeks of downtrend into the yearly low.

    ReplyDelete
  35. TZ: You a futures guy, or what? What's your weapon of choice?

    ReplyDelete
  36. JOSH,

    Gold silver futures lately. (CME/Globex).

    I used to do more stocks, but the overnight gap risks and inability to get in/out large amounts quickly is a disadvantage. So is the tax treatment (unless you hold 1yr...which rarely seemed to happen for me).

    At best you might be able to go 1.75x using stocks on margin. I like more. And the company specific risk (unless you use the ETF's or maybe SLW) means you have to diversify if you don't want a nasty surprise.

    I'm open to getting more stock specific at the end of the next D wave. I *do* think the futures exchanges will change the rules or go cash only or limit positions in the future. Not yet though. But before that time comes I will diversify more.

    ReplyDelete
  37. You guys looked at copper today?



    Oh my!

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  38. Anybody noticed the inverted head and shoulder on gold?

    ReplyDelete
  39. If you go to kitco.com it is more apparent.

    ReplyDelete
  40. Alex and Jay the chartdoctors, MGH on any 5 year chart of your choosing. I have owned this for awhile. It has the potential to enter the NOR area soon. Volume is text book, and it actually has a good fundamental story behind it.

    ReplyDelete
  41. Thanks, TZ.

    Yeah, I am pretty green, but learning. I seem to be wired kinda like you in that I like to take big shots with tight stops and wait for one that really hits.

    Sounds like futures maybe lends itself to that syle a bit more than equities.

    I don't like holding more than two or three positions at a time, my brain is too feeble to stay on top of it. That means the ETFs, but they always underperform the top individual names (Jay's done the homework on this).

    Taxes are vicious on short-term cap gains, particularly for us unlucky enough to live in California. I'm way too impatient to hold anything for a year. And I hear you on the overnight risk.

    I know a lot of the vets around here (full respect to Shalom, DG, and others) are into scaling in and limiting position sizes. Not sure I have the patience for it.

    I'll have to learn to trade futures so I can accelerate the process of blowing out my account. :-)

    ReplyDelete
  42. My question for the futures traders. Can you place an order. Set your stop and head out to breakfast or lunch, or do you sit there glassy eyed wondering if it is going to be all right? Do you continually look to re-enter a trade that failed and if so why? No smack, just trying to get the program.

    ReplyDelete
  43. Supposedly there are Quant Spider Bots that scour the web and build stats off of investor's blog comments. Supposedly Google blogs (blogger is owned by Google), allows this and I'm sure, if this allegation is true, then perpetuates it and obviously profits immensely off of it.

    As the old saying goes, "Loose lips sink ships!"

    Believe it or not, but anyone with half a brain knows this is easily technologically possible, and anyone with half a brain also knows that if it is possible most likely it is being implemented, and/or tested, and trying to be improved upon.

    To comment on its effectiveness is useless, no one can possibly know that at this stage unless you were on the inside implementing one of these bots.

    Just more food for thought.

    Hey Bot, how about BUY SILVER, LEVERAGED SILVER, SILVER OPTIONS, LONG SILVER, ALL-IN SILVER, BOUGHT SILVER SHARES . take that (obviously these things play a g a i n s t y 0 u )

    ReplyDelete
  44. pimaCanyon at 5:15....

    pimaCanyon -

    You ask very good and logical questions that show you are grasping what it is you are reading.

    Yes the politicians are shooting us in the foot. I used to love Ron Paul and actually voted for him, but now am thankful he is not the President. If you want an look into what austerity measures will look like - look no further than the UK who is on an austerity war path and just reported a negative GDP number.

    The problem is both dems and repubs get it half right and half wrong. We need something in the middle: more regulation on financial companies, more government spending, and less taxes. The dems want more spending and more taxes and the repubs want less spending and lower taxes....... won't work.

    As far as the gold bull - I have not idea. If you are buying because of the trend - great. If you are buying because you are certain America will collapse - I think those investors will hold on too long. Someone stated on Gary's blog that they wondered what my returns were compared to Gary's who made 100% last year. Making 100% somehow proved that his thesis was right. Well - I could have had the wrong idea about Netflix and the economy and said "hey, I think the government is printing too much, and Netflix has a ton of physical assets in plastic DVD's with content on them. As the dollar crashes, I think the value of those CD's would skyrocket, and may end up being the new currency. There fore I will buy Netflix." Doing that I would have made 250% returns. Does that therefore make my understanding of the economy correct?

    Of course not.

    When will the gold bull end? No idea. But I would buy it based on the trend and trade it with solid rules. I wouldn't though buy it and forget about it until my grand kids inherited it.

    Hope that helps.

    (haha - and no, this is not some coordinated raid for MMT as a poster noted. MMT is not a "new" concept, and I really have nothing to gain whether you choose to learn it or not. Just want to be helpful. You will live less stressed out waiting for the end. I have a new article coming out on the subject and will post it here to help you grasp the concept better.)

    ReplyDelete
  45. My above points are not to encourage less talk on this blog! This isn't to stimulate paranoia either.

    This is just a topic that hasn't been brought up here before and I think deserves some focus.

    That said if one were to start piling evidence AGAINST this possibility, in advance, I'm sure there is MORE evidence pointing to the likelihood this technology is in action than otherwise.

    ReplyDelete
  46. James said: "I have asked DXB and T & J to answer my question but they have failed to do so."

    James - it is because the foundation for your question is rooted in the wrong understanding of the monetary system. Before answering your question, let me ask you, what will make rates rise that high first, and second, why is does US debt concern you so much?

    Your answers will reveal a lot about your fundamental understanding of the monetary system, which will help me address your concerns. You want me to answer a hypothetical, but I prefer to stick to reality of what is actually going on in the monetary system.

    ReplyDelete
  47. pima: "You can't compare California with the US government. California is screwed because they do not have control of the currency that is used there. The US government controls its currency and can print as much as it damn well pleases.

    California is like a household, it must balance spending with income. The US government does not need to do that. Apples and Oranges."

    BINGO!!!!

    ReplyDelete
  48. Wow..reading all today's post, that took a while.

    MMT is not new by the way. Just dressed up in the Emperor's new clothes. Been around in many forms over the years..continentals, greenbacks, confederate money; many similar theories, Historical School, Chartalists, Social Credit, greenbackers. Make no mistake, first and foremost these are theories of THE STATE as supreme organ. we know this because everything revolves around....Taxes! Clearly incompatible with anyone who holds that the individual is Sovereign first and foremost. Of course they won't tell you that.

    Blammo, Keys, you have it right.

    For the MMT'ers..why don't you go read Mises and Mengers critiques of the German Historical School? See what they predict would happen if European governments followed that theory, which of course they did Hyperinflation was not the main critique. please don't use Faber, Rogers, Schiff and any others as representatives of Austrian economics.

    Anyway, you have a front row seat, again, as to the effects of Statism and monopoly control of money. whether you MMT'ers understand it or not, the Plan is to move to exactly the system you advocate, except it will be world wide, administered by a central SCREWtinizer, because well as you all admit.."these things are above me".."who am I to Judge a Presidents Job or a FED Job". And you call your critics brainwashed? Soylent Green is good for you. Who are you to question that? You're just looking at it the wrong way..it gives you all your protein, carbohydrates and other nutrients to allow you to function in your full employment economy so you can pay taxes and not go to jail because well, without FORCE or the THREAT of FORCES you actually wouldn't want our soylent green...you might want a steak...but we can't give you that impression, because well...that would be bad...if only we could convince everyone that Soylent green was good for you we could finally feed the people of the planet...silly humans. HAHA.
    Watch the resistance...cause you will have to choose sides. Or your kids will. History say's so. Human Nature says so.

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  49. Nat -

    You bring up great points and I would agree with them. I am not saying whether MMT is good or bad - just saying it is. It is the reality in which we live. I have a new article out that will state in fact the coerced dollar usage means that we are not truly free men. Free men barter or find ways to make a living. If you truly feel a revolution will start, then it needs to start with you. I would ask, have you done away completely with the currency of the slave state?

    If not - why not? Are you too afraid of going to jail?

    ReplyDelete
  50. Tim-

    No, I pointed out that Gary is not a world is ending guy at all. He's advised his subs not to buy physical gold and bunker down waiting for the end of the world. He skillfully plays this gold/silver bull like a master, getting in at the exact bottom last July and exited in December. I've watched this guy do this over the past three years...His underlying fundamental underpinnings have to do with a weak dollar and poor decisions made by our monetary leaders.

    He does make some bearish calls from time to time about the stock market, but never advises to short it. Gary is no perma-bear, just a guy who knows how to read the times and interpret charts/bull market behavior. I have full faith that he will exit the bull in time and will not be hanging on in some desperate Austrian economists doomsday scenario of how the world is ending.

    I bring up his returns because you show up on his blog and rip his understanding of monetary functions. I think he's navigating things pretty well. Just curious how you did last year is all.

    ReplyDelete
  51. Tim and Jean. I thought you said you were done posting here in the last thread. Can you give us a break. If not, explain why you and DXD attacked this blog (never seen you before and you have no blog identifier, so you hide as a troll), and what are your intentions? You obviously want to get people to read you Alpha piece (yet that must be a fake since you are not identifiable) to show readership numbers, but your arguments here are weak. Calling folks here weak of mind has not really helped your cause.

    Stating your real intentions might help, but I think I already know them.

    ReplyDelete
  52. Gary made good returns because he found a bull market and used strict trading rules that are time tested. HE went with the direction of the trend and used stops. Doesn't matter what instrument you trade if you do that, you will do well. It could have been Netflix stock as I mentioned, and you could have gotten better returns. Don't assume that because he is a good trader, that his premise for getting the trade right is correct. The reason for the trend really doesn't matter if you trade it right, which it sounds like he has. So he can continue to be wrong about the way the economy functions, yet still make a ton of money trading the gold or netflix trend for that matter. Most great traders don't care about the fundamentals of the vehicle they choose to trade. They just stick to their rules. So you are probably in good hands as long as he doesn't start making trading decisions based on his economic thesis. :)

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  53. Because Brian - I wanted to give the courtesy of an answer to those who were asking me questions. I stopped hijacking the thread with posting new information, but won't stop showing people the respect they deserve when they ask a question. Just like I am giving you here.

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  54. HAHA - and if you think I am here to gain readership on SeekingAlpha, you must not be thinking that through. Why would I come to a gold bug blog and stick my neck out knowing that most won't want to hear it. I just know what understanding MMT did for me and how it allowed me to live much less stress free from worrying about impending doom always. If one person reads about it and is freed from the slavery of fear and gloom, it is well worth the daggers I have to take doing so.

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  55. TJean, I think Nat has called you out for what you are...... Give it up.

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  56. Brian - I laughed out loud at that response, then I realized you were serious.

    Don't be so angry dude. Sorry if I am shaking your faith and seeming desire for impending doom.

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  57. The whole webinar invite / ad looks very tacky, Gary - much like spam. But, that's just you I guess. No offense, but you may need to consult someone to improve the quality and enrich the appeal of your promotions. I understand if it's not your thing. Again, don't mean to offend - but do want to be honest with you.

    Anyway, is it true that your trading in precious metals is what you allowed you to retire early? I thought you had sold your real estate or some such?

    ReplyDelete
  58. TJeanie,

    No worries or malice here. You are what folks on this blog use as a proxy. Every pullback in PM's brings out folks like you. It's always the same, you hide behind blogger anonymity, but we are fine with that, as it helps us identify bottoms in the market. The best thing about the situation is that once we hit the bottom and head up, Gary shuts off the anonymous postings, and we no longer deal with you. Should you really feel relevant, identify yourself and join the group.

    Cheers

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  59. Because I am out preaching the end of the gold bull market?

    Huh?

    Why is me coming out some sort of barometer. You totally lost me there. I have said nothing about where gold is going.

    You are sounding like you are repeating the mantra of what you are supposed to say on this blog when you don't agree with something someone says, regardless if you are missing the point.

    ReplyDelete
  60. Oh wait - I get it. Because I am not calling for the end of America - I must be a gold bear?

    So we can be friends: America is doomed and going to hell in a handbasket. Buy guns and ammo and gold, it is all we will have left!!!

    Now can I be a part of your group?

    Or maybe if I say - Gold will go higher even though America will be fine!

    Does that still qualify? Or is that too optimistic? Sorry for bringing a meeage of optimism that America is not doomed today. I will try to stick more with the doom and gloom.

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  61. pimaCanyon if he chooses to could verify that I in fact am the guy on Seeking Alpha. I answered his same question there on a message he sent me that I took the time to answer on this blog as well.

    How can I find out more about you Brian?

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  62. The US is unique:
    1. It has a strong military-industrial base.
    2. It has vast natural resources which remain largely untapped.
    3. It has huge amount of land and a very productive farming sector.
    4. It attracts hard working people from all over the world. Demographic decay is not an issue.

    #2 and #3 make it different from the UK.
    #2, #3 and #4 make it different from Japan and even UK (the quality is not comparable to the US).

    So the US is not only the lord of the paper world, she also sits on a ton of stuff. And also possesses enough military force (and the willingness to use it) to get stuff from other parts of the world.

    The USD is not collapsing simply because there is no other paper alternative. Apart from Gold the USD is the only true global currency. All that varies is the ratio between paper assets (USD) and hard assets (Gold).

    As Gary has noted these happen in cycles, and the cycles will repeat themselves. Gold prices follow growth in money supply with very strong correlation (so I have heard). Even Gary in all his unhappiness is just predicting a 3 year cycle low this spring; not the end of the USD denominated world.

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  63. My profile is out in the open on here. You are what is know as a troll. Check the definition if you like. Here we consider somebody like you who spouts theories, but hides their identity a troll. You have to understand that we don't believe you are anything other than blather if you refuse to ID yourself. All your posts mean nothing if you have nothing to put behind them, and that would be your name. I doubt we will see it, so the confirmation we are looking for grows.

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  64. T&J

    Answer to your question is: no I have not given up using the States money. But I am continually working toward that end. Unfortunately, Yes, I do pay tax's as required, because yes, I do not have any intention of going to jail. So yes I am accepting of that slavery but it doesn't mean I have to like it. But that of course is besides the point. The time always comes for every State. Personally, I am not too worried about doom and gloom..for it would only be a temporary condition. You realize that the Power of Taxation, is the most vital function of the State for it to survive.

    You say you feel "much less stressed". You realize, again, that is the point of MMT, or State Monopoly of Money. It is of course the States desire that the population not be stressed. That's why we have distractions all around us. bread and circuses. So who do you like in the Super Bowl? How about that Squiggy on Jersey Shore? Or better yet lets argue over heads or tails..heads can be republicans and tails can be Democrats..that should keep us all numbed and dumbed...

    "The State, unlike society, is a discrete organism. If it should be destroyed tomorrow, individuals would still continue to exist. Production, exchange, and association would go on as before, but much more freely, and all those social functions upon which the individual is dependent would operate in his behalf more usefully than ever. The individual is not related to the State as the tiger's paw is related to the tiger. Kill the tiger, and the tiger's paw no longer performs its office; kill the State, and the individual still lives and satisfies his wants. "

    Benjamin Tucker, Individual Liberty, NY 1926

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  65. TJeanie, Your 10:18 post is beyond belief. You could not have seriously posted all the things you did earlier today, and the come out with this. I guarantee you lost everybody on this blog.

    ReplyDelete
  66. There we go Nat - you admit that you too are a slave of the state. I agree I am not happy either that is the way it is, we truly are not free men because of it. Unfortunately though, governments are needed to some degree because human nature is not inherently good. History is littered with leaderless countries who are ravaged and pillaged by other nations whose dictator brought on the destruction of the leaderless. Left up to greedy humans, the wealth will still end up in the hands of a few. Government, by not doing their job, exacerbates that problem, and thus it ends up in the hands of the banks. We should have told the government what currency we will choose if we were truly free. Unfortunately, evil men take office and point guns at us and our kids and tell us what we will use as currency. If we choose to not accept - we can flee. If we choose to submit as slaves and stay here, it's best to understand the system as it is, and currently we are a very long way from revolution or collapse.

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  67. USD just made a lower low of 74.44. Still looking for the daily cycle bottom it seems.

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  68. Tim,

    We had high interest rates in the 70's. So my question is not that all hypothetical. We had high interest rates due to a stagnant economy (high unemployement) and the money supply being expanded. Which is what we have now, but with the exception of the Fed suppressing the rates by buying our bonds on the cheap.

    What do you think will happen when the Fed stops buying our bonds?

    Right now we are in a squeeze.

    The Fed is trying to create jobs by keeping the interest rates low so people could spend, but at the same time is creating inflation (you now see higher commodities prices). This inflation will get worse once credit is loosened.

    Now with higher inflation what follows is higher interest rates (assuming the Fed at one point will stop buying our bonds) just like in the 70's. But unlike the 70's we have high debt to GDP ratio. Therefore we were able to kill inflation and yet still pay the interest on our debt.

    Now if and when this scenario plays out what is going to happen?

    Remember back in the 70's we had a couple of things going for us

    1. We owe our debt to ourselves.

    2. We could export our inflation through goods and services to other countries.

    Now things are a bit different.

    We have much greater debt and we have a trade inbalance.


    Oops!

    ReplyDelete
  69. Tim and J,

    I just read your article at seeking alpha and I wondered if you could comment on this portion of it." 400% more in real disposable income during this time"We really have 400% more in real disposable income since the 1950's? Why do most families these days have to have both spouses working, when that was not the norm in the 1950's?Why are retirees forced to go back to work?Why are there record #'s of foreclosures?Why were there less new homes built last yearthan any other year on record even though the population has grown? I see tremendous stress on the middle class now financially that is just not consistant with that remark.

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  70. Funny how these "theories" claim that because the government can print money we have nothing to worry about.

    Yet it is exactly because governments always do end up debasing their currency that empires eventually wane and die. Just because we are "America" and just because we invent some nutty theory that "proves" we can do what every other empire in the history of the world has done ... and failed, that this time is going to be different.

    I can assure you the laws of the universe will apply to America just like they have with every other country & empire in history.

    If we follow the same path that has destroyed every other country and empire in history I guarantee we will not get a different result no matter how many flimsy theories we invent that say different.

    It's certainly not going to happen overnight, but it always happens. No empire ever lasts forever. Because human nature never changes.

    People always try to get something for nothing. Empires invariably grow too large. They take on too much debt. The military invariably expands to the point where it drains the country. And invariably the debasement of the currency begins in the futile attempt to keep the Ponzi scheme alive as long as possible.

    Debasing of the currency is always the first sign of a nation or empire in decline.

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  71. Tim, BTW, I did enjoy your article/writing style.It's very good.

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  72. Gary, we started debasing our coinage in 1965 when 1/2 dollars,quarters, and dimes went from 90% silver to 40% and then to no silver by the late 1960's, and continues today as the penny has been recompromised.Very similar to the Roman Empire using less and less silver and gold in their coinage as their empire waned. I actually have a coin from the latter days of the Roman Empire that I had tested for silver content and it is very low, to the point that the numismatic dealer at first actually thought it may be a fake.

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  73. Brian:

    I think T&J's 10:18PM post is RIGHT on the mark. If there is one thing Gary has been preaching is the framework to trade bull markets. Gary uses multiple time frames as defined by different kind of cycles, inter-market correlations and great money management (remember his warnings about how to use leverage).

    Why something is going up or down is at best a conjecture. What it doing is right in the chart. The two most important arrows in a trader's quiver are (a) the framework of expectations, (b) and the discipline to react to unexpected market behavior. Gary does that very well as T&J has stated.

    I tend to agree with T&J that all this doom and gloom talk about the USD is perhaps unwarranted. The USD might certainly lose value, and Gold might go much higher. But at the end of the day there are only two global currencies. It is only their relative valuation that changes.

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  74. Gary:

    Unless and until some other power emerges which can invade mainland US, I see no reason why just money printing can destroy the US. All the other empires in history did not have the Pacific Ocean and the Atlantic Ocean guarding them.

    The money printing will probably debase the buying power of the USD. The ratio of USDs spent on wages (services) versus those we spend on commodities (stuff) might shift towards the commodities. That ratio is so dramatically skewed towards services that it might actually be a good thing, if Americans start using less stuff.

    The lower buying power of the USD is not the end of the US. It might mean a shift in our lifestyle (people drive cars which give 50mpg instead of 15); it also might mean a smaller overseas military presence. But as long as we have a lot of land and two oceans guarding us, those trillions will not destroy the US. After all we are all looking for the multi-Year cyclical low in the USD, aren't we?

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  75. Aviat,
    You're right in the fact that the USD will always be around in one form or other, but the real implications to our society as we know it today will be if the USD loses it's standing as the world's reserve currency.

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  76. Gary,

    History never repeats itself. If it did, historians would be the wealthiest people around and would not be teaching history to high school kids.

    By the way, human nature has changed a lot in the last 200,000 years or so that we´ve been around.

    The reason we see societies falling apart is because they are a highly complex system and keeping a society in a stable equilibrium is not so trivial as you might think.

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  77. Tim (I assume you are the author of that linked article).
    I take huge exception to the fact that you attribute monetary policy to our improved standard of living over time. Please tell me you do not actually believe that economic policy, MMT or otherwise, had anything to do with our standard of living.
    Innovation, productivity, medicine, technology ... are you actually saying that somehow economic policy enabled the invention of the automobile, the computer, the internet?
    As far as your point regarding disposable income ... here are my personal statistics.
    I live in Toronto, Canada ... I bought my first house in 1983 for $80,000 (I was single ... 1 income) at the time I was earning $30,000 (about an average salary at the time). I was 23 years old.
    Today that same house (I do not own it anymore but I know what it's worth) is worth about $400,000. Today's average salary is about $60,000 (I doubt there are very many 23 year olds even earning this much). My son is now 25 and he earns approximately $40,000.
    There is no chance in hell he would be able to afford that house on his salary.
    When I bought it it was less then 3x my salary ... it is now 10x my sons salary and even over 6x the average.

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  78. reverse H&S pattern on gold (look at an intraday chart covering the last 6-7 days or so).

    The line to break is about 1348 and it projects $40 higher if so.

    Each shoulder has taken about 2 days and today is the second day of this last shoulder.

    We have a good chance of seeing some action today and a resolution of "is it a bottom or not".

    Note that if we proceed higher not only does the H&S pan out, but we also:
    a) make a swing low for gary
    b) break then daily downtrend on gold for last month.

    So it's looking good to me and I'm heavily long.

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  79. Aviat,
    I can tell you exactly why we can't debase our way out of this. Because the bond market will break.

    We are the largest debtor nation the world has ever seen. If we try to continually debase away our debt eventually the bond market will just say no.

    Interest rates will soar and that will be the end of the Ponzi scheme.

    People as much as we would like it to, magic just doesn't work in the real world.

    And David human nature most definitely has not changed in the last 5000 years because we keep making the same mistakes we've made in the past. Why do you think the world suffers a depression on average about every 80 years?

    Because once the generation that created the last credit bubble is gone, then a new generation eventually creates another one.

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  80. What the hell ... let's throw in the cost of an automobile while we're at it.
    My first car ... $8,000 ... about 25% of my salary.
    Today ... $20,000 about 50% of my sons salary.
    Salaries have not even come close to keeping up with inflation ... I think your numbers are skewed because you go back to 1950 ... try starting at 1980!

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  81. The T&J and DXB stuff is garbage as I've said before. I again caution anybody into falling for it.

    I might take the time later to actually explain why CLEARLY and PLAINLY (which is what you should always request before you get suckered into something - and something which *they* are not doing) instead of the contortions you hear from them.

    The little voice in your head says they sound wrong because **they ARE**. But the mental gymnastics fail because many of you simply don't have the full logical constructs necessary to counteract what they are spewing. (No fault of yours - you have lives to lead.)

    The mental war they are waging is very subtile, but powerful. That's why finance runs things - cause they know how to deceive and convince lesser minds.

    Don't be a victim of it. I see quite a few of you that I respect going against your better judgement cause you can't identify the attack point. You are meekly backing off and saying "umm..well...I guess I think I see it now...sorta".

    Don't do it.

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  82. Can we move on and back to Gold, Silver and the miners?

    I will get my dose of MMt and Pragcap later today, but let's leave this blog for the PM's and a little sprinkle of an equity collapse :)

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  83. GARY,

    The webinar brings up something I meant to mention a while ago.

    You said how creating the newsletter each night was slow and cumbersome (and you also didn't type well).
    Furthermore you said the chart copy/paste process was a slogg too.

    It occurred to me that you could simply dispense with a written page each night and RECORD the update as a 5-15min VIDEO SCREENCAST instead (video of your screen, not you).

    You would just sit down at your machine with a headphone. You would start the recording software. You would start bringing up charts on Stockcharts, draw lines, move the pointer, and JUST TALK. You wouldn't have to do anything special. And the act of creating your newsletter would be LITTLE MORE than simply *recording* the normal nightly act of reviewing charts and thinking to yourself. The only difference is you would just speak outloud.

    Might be much more suitable to your style and easier.

    A perfect example by Thomson who does something similar:

    https://www.gracelandupdates.com/video/2011jan30burning2/2011jan30burning2.html

    thoughts?

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  84. Thomson's video there starts a little slow. Please skip forward a bit so you can see how he brings up charts and talks.

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  85. Well...the specific video I linked to doesn't have him drawing much and the screen is too small with lots of scrolling. I could have found a better example, but you get the idea. I think we've all seen similar from other places.

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  86. Looking at your gold vs dollar index chart...since beginning of 2011 to about beginning of Feb, USD went down AND gold went down...then a small rally in both....

    Nothing is certain...but possible that falling dollar - falling gold? deflation v inflation?

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  87. Looking at your gold vs dollar index chart...since beginning of 2011 to about beginning of Feb, USD went down AND gold went down...then a small rally in both....

    Nothing is certain...but possible that falling dollar = falling gold? deflation v inflation?

    ReplyDelete

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