Bought $20k each of Gold, Silver and COP today
Everyone's selling, I'm buying. Everyone's buying, I'm selling. They all may go down more from today, but get ready for the bounce... Flame away haters, but at least I take a stand and put my money where my mouth is.
Gold Gains as Investors Bet 8.1% Drop in 5 Sessions Is Overdone
Sept. 13 (Bloomberg) -- Gold in New York rebounded from a 10- week low as some investors bet the 8.1 percent drop in prices in the past five sessions was overdone.
Gold's seven-day relative-strength index fell below 30 for a third straight day, a signal prices may rise. Before today, the metal was down 19 percent from a 26-year high of $732 an ounce in mid-May.
``The market is now so severely oversold that a bounce is inevitable,'' said Dennis Gartman, gold trader, economist and editor of the Suffolk, Virginia-based Gartman Letter
September 14, 2006
The contrarian play - buying gold, silver and oil today
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39 comments:
Nothing goes straight down, there should be a bounce. That said I purchased a gold stock yesterday. Am hoping to unload it pretty quick though
I would say it's a good play.
Everyone worth their salt thinks gold, silver, and oil are in the midst of secular bull markets. I haven't seen anything that points to signs of those bull markets coming to an end. A worldwide deflationary depression might bring an end to these secular bull markets, but there are still many economists not sure if we will even slip into a recession, so trading in fear of a deflationary depression right now is a little too forward thinking.
Besides, gold, silver, and oil have only been in the midst of long term bull markets for a few years now, and historically speaking, long term bull markets usually last for at least a decade.
I think the only mistake you've made has been to get an itchy trigger finger and sell your positions when you did. A safer way to take advantage of a long term bull market trend is to dollar cost average and accumulate a little each month, no matter what the price is. Precious metals and oil prices have alot of variables involved that can cause extreme short term volatility, which can easily burn somebody trying to do too much market timing.
My 2 cents, whatever it's worth.
EXACTLY my play- this is an excellent buying opportunity. The Fundamentals have not changed.
Oil is still scarce in supply relative to demand (even in the event of an IMF world slowdown and taking into consideration the find in the Gulf). Just do the math of how much we consume every day in the world and compare that to how much we have "found" in the world (let's just assume 100% extraction, even in the Gulf find, which really is like what, 4 months supply of US consumption).
then hop on over to Gold and you will see that we are definitely in an inflationary/debt growing phase. there is no other alternative except for a massive collapse of the fiat system, which would be even better for gold. deflation will not happen. the central banks will not let the Depression ever happen again. bernanke is a scholar of the Depression. and as we all know, he is called helicopter ben. we joke about it, but don't underestimate how he earned that nickname.
good luck!
good call.
IMF, World Bank going down the drain
From the Folks over at
"THE TRUTH WILL SET YOU FREE"
IMF, World Bank going down the drain
After decades of siphoning the life-blood out of nation after nation's economies, the IMF and World Bank's golden days of collecting boatloads of interest from developing countries are over.
Not surprisingly, no one wants to do business with them anymore. They've lost their legitimacy; they've lost their income stream; and they're soon to be out of business.
[T]he IMF Executive Board [is] trying to steer through two reforms intended to "safeguard and enhance the Fund's credibility."
The first involve[s] reallocating the voting power of IMF member countries according to the current size of their gross domestic product [ostensibly] intended to increase the voting power of a selected number of big developing countries -- Korea, Turkey, China, and Mexico -- while laying the ground for eventually expanding the decision-making power of other developing countries.
The other initiative [would] give the Fund the new role of solving "global macroeconomic imbalances" -- a euphemism for disciplining countries with large trade surpluses like China.
They won't get away with either.
A bloc of about 50 developing countries objects to the proposed GDP-based formula. These countries see the move as dividing developing countries while producing only one real winner: the United States, which would increase its voting power under the new system. The second initiative has generated opposition for attempting to get the Fund to do Washington's dirty work of pressuring China to revalue its currency to reduce the massive U.S. trade deficit with Beijing.
Meanwhile . . .
[A] string of crises [plagues] the two agencies, also known as the "Bretton Woods institutions" after the site of the July 1944 conference where they were founded. The Fund, in particular, is in a state of demoralization. "Ten years ago, the IMF was flying high, arrogant in its belief that it knew what was the best for developing countries," notes one civil society policy paper. "Today, it is an institution under siege, hiding behind its four walls in Washington, DC, unable to mount an effective response to its growing numbers of critics."
* * *
The IMF's equivalent of Stalingrad -- where the defeat of the German Sixth Army marked the turning point of World War II -- was the 1997 Asian financial crisis, where it "lost its legitimacy and never recovered it," said to Dennis de Tray, a former IMF and World Bank official who is now vice president of the Washington-based Center for Global Development.
The Fund was blamed for pushing policies of capital account liberalization that made the Asian economies vulnerable to the volatile movements of speculative capital; assembling multibillion dollar rescue programs that rescued creditors at the expense of the debtors; imposing expenditure-cutting programs that merely worsened the downspin of the economy; and opposing the formation of an Asian Monetary Fund that could have provided the crisis countries with financial reserves to save their currencies from speculative attacks.
Sound familiar? It should.
Standard operating procedure - (1) deregulate financial markets, allowing banks and brokerages to seize control over economies; (2) bail them both out when things go sour; (3) insist that governments cut social programs and starve their people to make up the difference; and (4) maintain control over their brutal monopoly.
Too bad, it's a recipe for disaster and governments around the world are waking up.
The Fund went from one financial disaster to another. The Russian financial collapse in 1998 was attributed to its policies, as was Argentina's economic unraveling in 2002.
Resistance was not long in coming. In the midst of the Asian financial crisis, Prime Minister Mohamad Mahathir of Malaysia broke with the IMF approach and imposed capital controls, saving the country from the worst effects of the crisis.
Mahathir's defiance of the IMF was not lost on Thaksin Shinawatra, who ran for prime minister of Thailand on an anti-IMF platform and won. He went on to push for large government expenditures, which stimulated the consumer demand that brought Thailand out of recession.
Nestor Kirchner completed the humbling of the IMF when, upon being elected president of Argentina in 2003, he declared that his government would pay its private creditors only 25 cents for every dollar owed. Enraged creditors told the IMF to discipline Kirchner. But with its reputation in tatters and its leverage eroded, the Fund backed off from confronting the Argentine president, who got away with the radical debt-write down. [AWESOME!]
By 2006, underscoring the crisis of legitimacy of the institution, the governor of the Bank of England described the IMF as having "lost its way."
But, legitimacy isn't all they lost. They lost the money, honey.
The crisis of legitimacy has had financial consequences. In 2003, the Thai government declared it had paid off most of its debt to the IMF and would soon be financially independent of the organization. Indonesia ended its loan agreement with the Fund in 2003 and recently announced its intention to repay its multibillion-dollar debt in two years. A number of other big borrowers in Asia, mindful of the devastating consequences of IMF-imposed policies, have refrained from new borrowings from the Fund. These include the Philippines, India, and China. Now, this trend has been reinforced by the move of Brazil and Argentina earlier this year to pay off all their debts to the Fund and declare financial sovereignty.
What is, in effect, a boycott by its biggest borrowers is translating into a budget crisis for the IMF. Over the last two decades, IMF operations have been increasingly funded from the loan repayments of its developing country clients rather than from the contributions of wealthy Northern governments. The burden of sustaining the institution has shifted to the borrowers. The upshot of these developments is that payments of charges and interests, according to Fund projections, will be cut by more than half, from $3.19 billion in 2005 to $1.39 billion in 2006 and again by half, to $635 million in 2009. These reductions have created what Ngaire Woods, an Oxford University specialist on the Fund, describes as "a huge squeeze on the budget of the organization."
And now, they have nowhere to go.
Boo-hoo. What's a poor vampire - I mean, banker - to do?
The erosion of the Fund's role as a disciplinarian of debt-ridden countries and an enforcer of structural adjustment has been accompanied by a futile search to find a new role.
The Group of Seven tried to make the Fund a central piece of a new "global financial architecture" by putting it in charge of a "contingency credit line" to which countries about to enter a financial crisis would have access if they fulfilled IMF-approved macroeconomic conditions. But the prospect of a government seeking access a credit line that could trigger the very financial panic that it sought to avert doomed the project.
Another proposal envisioned an IMF-managed "Sovereign Debt Restructuring Mechanism" -- an international version of a Chapter 11 bankruptcy mechanism that would provide countries protection from creditors while they came out with a restructuring plan. But when South countries objected that the mechanism was too weak and the United States opposed the proposal for fear it would curtail the freedom of operations of U.S. banks, this new prospect also collapsed.
The role of righting "global macroeconomic imbalances" assigned to the Fund during the spring meetings of the IMF leadership earlier this year is part of this increasingly desperate effort by the G 7 governments to find a task for an international economic bureaucracy that had become obsolete and irrelevant.
But, hey - they're not alone. Equally despised all over the world for their financial plundering, the World Bank is in the same boat.
A budget crisis is also overtaking the Bank, according to Ngaire Woods. Income from borrowers' fees and charges dropped from $8.1 billion in 2001 to $4.4 billion in 2004, while income from the Bank's investments fell from $1.5 billion in 2001 to $304 million in 2004. China, Indonesia, Mexico, Brazil, and many of the more advanced developing countries are going elsewhere for their loans.
The budgetary crisis is, however, only one aspect of overall crisis of the institution. The policy prescriptions offered by Bank economists are increasingly seen as irrelevant to the problems faced by developing countries, says de Tray, who served as the IMF resident officer in Hanoi and the World Bank representative in Jakarta.
The problem, he says, lies in the emphasis at the Bank's research department on producing "cutting-edge" technical economic work geared to the western academic world rather than coming out with knowledge to support practical policy prescriptions.
The Bank is currently staffed by some 10,000 professionals, most of them economists, [OMG!] and de Tray claims that "there is nothing wrong at the World Bank that a 40 per cent staff reduction would not fix."
American University Professor Robin Broad, an expert on the Bank, claims that the Bank is, in fact, in more of a crisis than the IMF but that this is less visible to the public. "The IMF's response has been to withdraw behind its four walls, thus reinforcing the public perception of its being besieged," she notes. "The Bank's response, however, has been to engage the world to hide its mounting crisis."
Broad identifies three elements in the Bank's offensive. "First, it goes out and tells donors that it is the institution best positioned to do lending to end poverty, for the environment, for addressing HIV-AIDS, you name it . when in fact its record proves that it's not.
Second, it has the world's largest 'development' research department -- funded to the tune of about $50 million -- whose raison d'etre is to produce research to back up predetermined conclusions.
Third, it has this huge external affairs department, with a budget of some $30 million -- a PR unit that feeds these so-called objective research findings to the press and fosters the image of an all-knowing Bank." But, she concludes, "This can't last. Inside the Bank, they know they're in crisis and are scrambling. And sooner or later, if we do our work, the truth will come out."
As it always does.
What is troubling for [some], however, offers an opportunity for [others] who have long regarded the current multilateral system of global economic governance as mainly concerned with ensuring the hegemony of the developed countries, particularly the United States. Proposals for alternative institutions for global finance have been circulating for some time.
The current crisis may be the break in the system that will make governments, especially those in the South, willing to seriously consider the alternatives.
It's only a matter of time before the whole thing comes crashing down. And when it does, those two hucksters will find themselves out on the curb.
http://tinyurl.com/hjf4g
HAHAHAH~
Everyone's selling, I'm buying. Everyone's buying, I'm selling. Screw the naysayer. This is a good play. If it don't pay off it was a good risk based on solid fundamental strategy. I have noticed that lows coincide with the national Long Beach Coin Show. I guess the market makers want to take physical possession.
The IMF & World Bank were stupid ideas to begin with. Developing countries should pay higher interest rates for loans than mature countries and in turn, they should be able to default on those loans sometimes. The less they default, the better their credit rating, the less that have to pay in interest. If you just try to flood developing countries with loans and cheap money then do whatever you can to make sure the creditors never get defaulted on, you're just inviting corruption and embezzlement, and negating the incentive for the developing countries to use the loans they have been given wisely.
Good riddance.
"Everyone's selling, I'm buying. "
So go out and by a few condos and houses. You cannot loose.
http://tinyurl.com/olqr5
Manipulation of gold is obvious
loose or lose?
OH MY GOD. I HAD A SUDDEN
REVALTION!!
BORKA = MOGAMBO
Why didn't I see it before...
And yeah, I bought gold and silver
today too. And mining stocks.
Up the friggen wazoo.
Thanks Borka/Mogambo!
-Maha
"One market was driven up by artificially low interest rates, exotic loans, and speculative fever. Now supply far exceeds demand and sellers are screwed.
The other market has been intentionally SUPPRESSED by government and private entities in collusion."
And you're the guy whose gonna beat them.
you seriously are the biggest tool there is. "I'm buying/selling" ok Gordon Geckko!
hey, what can I say, I sold my condo at probably the very tippy top - motivated to sell when inventory totally dried up in phoenix and there was a buying panic
now I'm buying gold, silver and more oil when nobody it seems wants to own it, all the hacks on cnbc saying how commodities are dead
being a contrarian is fun, it can make you very unpopular with the masses but appreciated by the folks in the know, and it does appear to be a profitable way to live
cheers to all the contrarians out there. stay strong
Even the hacks on CNBC sometimes get it right. That sounds like a lot of money to let ride on such a volatile sector. My money is simply too hard earned for me to expose it to such risk. You can say what you want about the pending doom of fiat currency; I believe the dollar is here to stay for at least the next 100 years or so. Too many powerful people simply have too much at stake to let the currency slip too far. You think that there is a global conspiracy to keep down the price of gold? Well lets go along with that for now, what makes you think that conspiracy will come undone in the next few years? What if there is no conspiracy?
Gold was the world’s currency for a while, and at that time its value was artificially high. Gold IS fiat currency because you cannot eat it. Its value is only high because we all agree that it should be.
Keith, I'm glad you're buying today - I added some physical gold a couple of days ago and its dropped about 14 bucks since my purchase. Too bad for me.
Isn't "fiat money" money that is valuable by decree? I thought gold was "commodity money" - kind of like copper and silver.
I guess whatever is considered money is only as valuable as the willingnes of other people to trade goods for it. If you look at the track record of precious metals vs. paper money, having some gold and/or silver may not be such a bad idea. Having a stash of some of the things you really need to live might be a good idea too.
I have a fair amount of metals, but again, I've got a fair amount of cash as well, the cash will work nicely if a nasty deflation occurs. If its hyperinflation, the metals may preserve some wealth, but who knows?
Do not buy gold until after Sept 23rd. Until this date central banks will keep dumping putting pressure on the price.
The best time to buy into gold & oil again is between Sept 23rd and the November election.
If the Republicans retain congress the USA is going to bomb Iran, I'm voting republican because of this great opportunity to make money.
The more corrupt the US government is the more opportunity for people like me to make money at others expense, making money is a zero sum game as someone has to lose.
Bernanke's got the pumps flying overtime again. They simply won't allow the economy to deflate.
Don't be surprised if Oil and Gold don't start flying up again around Halloween.
Check this out, Suzanne researched it. Gold never goes down...BUY! BUY! BUY!
"Auto FXs Holy Grail Of Investing!"
gold and commodities collapsing is the most obvious signal that the US is heading toward recession fast
"Gold was the world’s currency for a while, and at that time its value was artificially high. Gold IS fiat currency because you cannot eat it. Its value is only high because we all agree that it should be."
Gold has about 5000 years of history on its side. Also, you can't print gold.
Larry Elliott in Singapore
Thursday September 14, 2006
The Guardian
Britain will withhold £50m of funding for the World Bank unless the Washington-based institution stops forcing poor countries to liberalise markets and sell off public services, Hilary Benn, the international development secretary, said last night.
Mr Benn has told the bank's president, Paul Wolfowitz, this week that Britain is unhappy about the lack of progress in removing conditions that tie onerous strings to financial help for developing nations.
Britain provided the bank with £1.3bn last year to help poor countries, with the promise of an extra £50m next spring, provided it softened its hardline approach on economic conditions.
"We will hold the World Bank and International Monetary Fund to the commitments they've made to work closely with governments to ensure their conditions are drawn from national strategies and reflect national priorities," Mr Benn said last night. "My decision on the release of the [extra] £50m payment [to the bank] will depend on satisfactory progress."
In a speech in London tonight, meanwhile, he will also be critical of Mr Wolfowitz's blueprint for reforming the way poor nations are governed. This document will [be] presented to the bank's annual meeting in Singapore this weekend.
Addressing the anti-sleaze pressure group Transparency International, Mr Benn will outline three criticisms of the bank's proposals: that Mr Wolfowitz is too focused on corruption rather than the broader issue of governance; that the paper does not sufficiently address how to continue to help poor people in countries where corruption is a problem; and that there should be better coordination between donors to prevent duplication.
Mr Wolfowitz has put the fight against corruption at the heart of his presidency, but Mr Benn will say the focus is too narrow. "Our job, and the job of [the bank], is to help eliminate poverty. This means that we ... should not walk away from our responsibilities to poor people, whatever the behaviour of public officials and politicians in countries where they live."
He continued: "We must recognise that better governance is the solution to corruption. And therefore we must also make a much greater effort to help build more capable, responsive and accountable states." Mr Benn will argue that rich countries must share the blame for corruption in poor countries. Britain wanted to root out wrongdoing among the companies "who provide the bribes or offer opportunities to hide stolen assets".
In a speech in Jakarta today, Ed Balls, economic secretary to the Treasury, will call on the IMF to switch emphasis from crisis resolution in developing nations to crisis prevention in richer ones. "With the source of global imbalances lying primarily with the fund's creditors rather than debtors, the key to [crisis prevention] is continued strengthening and reform of the IMF's surveillance, matched by reforms to enhance the accountability and transparency of the fund itself."
"now I'm buying gold, silver and more oil when nobody it seems wants to own it,"
Keith nice to see that you are learning something here.
Real interest rates (e.g., on T-Bills) are negative, so gold would seem to be a good long term bet. Throw in trillions of dollars (and yen, and euros) worth of unfunded liabilities for various retirement programs and it sure makes NOT owning some gold (as well as mining company and oil company stock) look foolhardy.
i deployed 35% of my available capital to gold today.
65% left. i think there is a good chance gold sees <500.
Gold is off this morning, and I read Gartman too; he is not bullish gold at all. He is bullish the dollar, however.
Buy alchemy.com. I've heard they figured out a way to make gold from lead.
Here's the deal.
The housing crash is proceeding EXACTLY as we all pretty much expected. Why? Because there is little manipulation possible. It's sane, logical and predictable. It will play out pretty much as we expect, a diaster, recession possibly depression.
The Stock Market is out of whack with reality big time. That equals manipulation more or less by the big players who have to make money at all costs. It's a big pump and dump going on right now.
I see gold bottoms at $540, OIL at $ 60 and composite index going up to 2275 in next few weeks.
I bought silver Eagles Monday for $13.50 (.25 under Kitco's eell price) at the local cash dealer. Todday Kitco has them listed at $13.10 and the gold coins are also cheap.
I like gold and silver but hate to buy in a dropping price environment when they are cheaper a few days later.
BubbleShanker said...
Hmmm, brave, I see the downward spiral of commodities as the first signs of a worldwide recession, no need for crap boxes, cement, copper, or even oil. If you want to go into these waters I would at least put in a stop loss, the main advantage of buying stocks over crap boxes.
Friday, September 15, 2006 12:06:25 AM "
Stop losses are a target for money makers. You have to set a stop loss REALLY low to keep money makers from moving things down just to pick up your shares and then move things higher again. Best to keep an eye on your stocks.
GLD, the gold fund, is the worst for stop losses as it trades on the spot market for gold so you could go to sleep thinking all is well and then the global market trades gold down $20-$30 an ounce. Your GLD stock opens down that $20-$30, your stop loss triggers before the New York (US) market puts in its 2 cents. This happened often in 2006 with the New York market seeing gold go up after a big fall in the global market. So.. gold plunges on the Global markets, your shares get sold on the stop at the US market open and then gold recovers in New York trading. Your shares are gone as you watch gold go up, sucks!
Last couple of weeks we saw NASDAQ rally...But looks like a Suckers thing..
Check this numbers from yesterday:
Close Below 50-day EMA 318 Stocks
Close Above 50-day EMA 286 Stocks
Close Below 13-day EMA 657 Stocks
Close Above 13-day EMA 454 Stocks
This is not bullish at all,correction is coming.
Can someone please explain why buying industrial metals (2-4 times 2001 prices) makes any sense when entering a global recession? Sounds like a recipe to lose a lot of money. I don't see how it's any safer than buying real estate.
"Can someone please explain why buying industrial metals (2-4 times 2001 prices) makes any sense when entering a global recession? Sounds like a recipe to lose a lot of money. I don't see how it's any safer than buying real estate."
Gold is not an "industrial metal." Gold is money, money that can't be mass produced on a printing press in the basement of the Federal Reserve building. When Helicopter Ben cranks up the printing presses to inflate us out of the housing recession, what do you think will happen to the value of gold? You can buy now at $575, or buy later at $2000+.
I'm sort of new to this world of gold thing, so maybe someone could explain something to me. Why should gold be considered the ultimate store of wealth by so many. What can you do with it besides make fancy jewelery? Why not put your money in oil or land or something of some real use. Yeah gold is rare, but so what? Why not at least buy platinum or silver which actually have more industrial uses as well as being rare? It sort of feels like people use it as a store of value, because people have always used it as such. I just think there are better "stores of value" that have better practical uses as well. Am I wrong?
"...What can you do with it besides make fancy jewelery?..."
Gold is highly useful in electronics and dentistry.
"I'm sort of new to this world of gold thing, so maybe someone could explain something to me. Why should gold be considered the ultimate store of wealth by so many."
Via a process of elimination spanning over 5000 years of history, gold (and silver) have emerged as particularly suitable forms of money. Grain used to be used but that has a problem with spoiling and being eaten by rats. Precious metals are relatively easy to store and transport.
"What can you do with it besides make fancy jewelery?"
It's used in dentistry and electronics, but the primary uses are in jewelry, decoration, and, of course, as money. What can you do with a Federal Reserve Note? It doesn't even make good toilet paper.
"Why not put your money in oil or land or something of some real use."
Nothing wrong with investing in real estate, if you buy at reasonable prices. Some good buying opportunities may be available in 3-7 years. The problem with oil is that it's kind of hard to have a Strategic Petroleum Reserve in one's backyard. The US has one, but that doesn't work too well on an individual scale. Owning some oil company shares is not a bad idea, though, provided they are purchased at a reasonable price.
"Yeah gold is rare, but so what? Why not at least buy platinum or silver which actually have more industrial uses as well as being rare?"
Silver has also historically been used as money (a tier down from gold). Platinum is a relatively recent discovery. Gold is far rarer than silver, though platinum is rarer than gold. Having lots of industrial applications does not necessarily make something more suitable to be money. Demand for industrial materials tends to fall in an economic downturn, so your 'rainy day fund' would buy less when you might need it the most.
"It sort of feels like people use it as a store of value, because people have always used it as such."
Don't underestimate the power of 5000 years of tradition. The cultures of the emerging superpowers (China and India) place great value on gold. When all those Chinese and Indians become wealthier, don't you think they'll be buying more gold? Or will they use green pieces of paper with numbers on them as a store of value?
"I just think there are better "stores of value" that have better practical uses as well. Am I wrong?"
Well, some cultures have used grain, or cattle, but these have many obvious drawbacks. Industrial metals (i.e., metals for which the demand is primarily for industrial, not monetary, uses) also have drawbacks - they would tend to NOT hold their value in an economic downturn. Fiat currencies like the Federal Reserve Note (a.k.a. the US peso) have the drawback that the money supply can be inflated far too easily by a corrupt and incompetent government (like the one that's no longer reporting M3). On the other hand, the quantity of gold is strictly limited by what can be mined at a profit. Gold comes from supernova explosions, not government printing presses.
If civilization were to collapse completely, small arms ammunition and canned food would probably be the "money" of the day, but it would only take a modest recovery for gold to reassert itself. It was, after all, still money in the Dark Ages.
I don't think the Fed will allow deflation. If necessary the interest rates will be dropped again to 1%.
That makes money cheap, and commodities valuable.
I'm loading up on things of real value. If land weren't so overpriced I'd be buying that, but Gold, Silver and Oil will have to suffice.
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