Gold

[skid]

There's only one house of cards that's collapsing and that's the shonky gold get-rich-quick scheme, pushed by scamsters like Mike Maloney, Rick Rule, Jim Sinclair, Jim Rickards, Peter Schiff ad infinitum.

Not that they care, they've got rich selling snake oil while their customers go broke.

Now there's a bitcoin bubble, which will be quite a spectacle when it crashes, lots more suckers learning about herd behaviour the hard way. One bitcoin exchange has gone broke in China leaving investors with Y25m in losses, looks like a classic pyramid scheme.

There's always a bubble somewhere.

and the biggest one is right in front of your nose--the sharemarket

[skid]

You're forgetting something corran. Stocks represent companies that make and do things.

You think that will stop them from getting hammered when the bubble pops?

[Skol]

Dow vs Gold.jpg

and the biggest one is right in front of your nose--the sharemarket

Here's a problem for you to solve skid.

Spot the bubble.

[blackcap]

It makes perfect sense if you think the stimulus generated by QE is being funneled into the equity markets. Bernanke stated on many occasions that is what he was trying to achieve with QE. A very inefficient way to stimulate the economy if you ask me.

Still does not make sense. The fact that tapering may happen will be factored into the prices of both equities and commodities. Why would commodity traders know something (tapering coming up) that equity traders did not. Or vice versa.

[skid]

Tapering will hit Gold simply because everyone expects it to--but in the last six months alot have either gotten tired of the bad news ,or truly believe that things are on the mend(even though the elephant is still in the room) and because there has been easy money around,it has gone into the share market and IMO has become very overbought. There are starting to be more who are uncomfortable with the warning signs,but not the mainstream.
I believe the fear will return when the right catalyst comes along as there are alot of things wrong out there.
Theres not much ''back up''--the structure that holds the whole thing up is got some serious rot.
Id rather see gold tank and my other assets keep motoring on,but Im concerned enough to keep physical gold as insurance.
so back to your question--the simple answer is the masses are thinking that things are ''sweet'' so why bother with gold, and as long as things stay ''sweet''(on the surface) they will be right....but will things stay sweet when there is no more prop ups?(QE)
And when some economic crises (or political) comes along (or just no more QE3)and the basic economic structure is not strong enough to keep it stable, then that fear may come back with a vengeance.----or we may cruise for another x years and our kids will have the nightmare.-----thays my take at least

[Bobcat.]

I'm not seeing any incentive for the US Fed to taper - why would they? The downside for the Big Banks and other Corporate boys far outweighs any upside. They've tapered twice before (down to zero!) and look where that led - to a much larger QE (i.e. buying back $85b of US bonds per month via QE3 - i.e. money printing).

Like cocaine, those making it very rich are too addicted to cheap credit and the corporate profits it brings to let Bernanke, Yellen or anyone else blow away the smokescreen. Even if real inflation starts to become a problem (not yet since purchasing power and consumer demand is barely rising) or employment dramatically improves (not likely short-term), the Fed and other power brokers will find it very difficult (i.e. it will be a career limiting move) to stop digging our economies into the very large black hole that's gaping wider each month with an uncertain future, many surprises and unforseen effects (this hasn't successfully been done before - massive borrowing and bond buying - it runs against tried and true economic practice).

Don't be swept up by the rhetoric, where's the evidence that this is fiscally sustainable?

in my view, as we get more and more accepting of QE, a more likely scenario is that QE is increased in size beyond the current $85b/month. If some is good, more is better - yes?

Yeah, right.

[skid]

I dont think any sane economist really believes its fiscally sustainable (some probably prefer to just look the other way)
Most know it will eventually hit the fan(but those in control know better than to talk about it)
Its really more an issue of WHEN--So far they have decided its better to postpone it as long as possible and let the kids pay.(Not their kids of course-The everyday workers Kids)

[skid]

Dow vs Gold.jpg

Here's a problem for you to solve skid.

Spot the bubble.

Interesting you say that Skol--Have a look at the gold chart---Have a look at the share market chart--which looks more like a bubble to you?

[Bobcat.]

Here's an interesting article re why the Germans and others demanding physical gold, and the Americans scurrying around to find it has not led to higher PoG. Fort Knox I would say has very little bullion that is still owned by Americans.

http://www.mineweb.com/mineweb/conte...0618&sn=Detail

Short-dominated Gold Futures, the convenience of ETFs (since traders no longer have to analyse the fair value of various PM stocks), lazyness, gullibility of the masses thanks to mainstream media promoting the political rhetoric of vested interests (in taking the price of PMs lower for future profit) and over confidence in world peace and economic improvement are all factors. We have been misled. Last night's spike to 1250USD is a sign that people are starting to get wind of this.

It will be interesting with the AUD 5% lower over the past 10 days to see how Aussie digger stock prices lift today.

BC

[Daytr]

Hi from Sydney all,

Blackcap, I think you are missing the point. (perhaps not) With QE commodities were the first to benefit & then the share market started to bubble. Gold has been flogged because shares have gone ballistic. So the same punters that are driving equities higher through the shift in QE stimulus are either selling their ETF holdings or shorting gold. Hence in my view tapering will mean less stimulus will be available to be directed into shares & the current trade of long equities / short gold will come to an end. If the share market suffers gold will benefit imo.

Nice bounce overnight, be great to see gold back over 1250 to trigger some more short covering.

Still does not make sense. The fact that tapering may happen will be factored into the prices of both equities and commodities. Why would commodity traders know something (tapering coming up) that equity traders did not. Or vice versa.