Could The Dollar Be In A New Bull Market?

[flying]

A change of tune ?

Central Bankers Support Dollar Reserve

http://online.wsj.com/article/SB1000142405...=googlenews_wsj

Separately, the RBI's move to buy a large chunk of gold from the IMF was to diversify its reserve portfolio and not a comment on the U.S. dollar, Mr. Subbarao said.

Yes.........I too diversify

It is the best scenario to let the chips fall where they may.

Free gold will do much better when compared against the bloated.

[losworld]

I'd say bullish in the short term. I still think there will be a commodities correction in the next six months or so however Bernanke and the Fed will likely do everything they can to keep the dollar weak and the stock market up as the housing market will be dead for years to come.

[Orion76]

I was just thinking today that it seems every time a treasury auction approaches....

The week before the USD will magically strengthen & PM's take a hit.

It is getting pretty predictable....so perhaps not that unusual?

You hit an extremely important point here....

Why do PM's take such a hit, predictable to the exact day, to coincide with treasury auctions, FOMC day and options expiration days?

Have you done any research on this?

[sokal]

I was just thinking today that it seems every time a treasury auction approaches....

The week before the USD will magically strengthen & PM's take a hit.

It is getting pretty predictable....so perhaps not that unusual?

You hit an extremely important point here....

Why do PM's take such a hit, predictable to the exact day, to coincide with treasury auctions, FOMC day and options expiration days?

Have you done any research on this?

Because the Fed wants to scare short term money into treasuries. Nobody is buying UST for the long run

[flying]

I was just thinking today that it seems every time a treasury auction approaches....

The week before the USD will magically strengthen & PM's take a hit.

It is getting pretty predictable....so perhaps not that unusual?

You hit an extremely important point here....

Why do PM's take such a hit, predictable to the exact day, to coincide with treasury auctions, FOMC day and options expiration days?

Have you done any research on this?

Yes I have said so many times & mostly in the where is gold going thread.

Research....No just something that is as you say very predictable.

If you were inclined to be a paper trader of gold ( I am not ) I am sure you could do well with it.

As for reason...It seems obvious that the Fiat needs to look strong before auctions. So in turn PM's need to look weak.

So to that end I guess you could pick from a few possible causes of control.

Some call it PPT or plunge protection team.

It is a big reason I would really like to see...although I probably never will...an independent audit of Fort Knox.

I would bet a gold eagle,maple or krug that they do not hold the 8000 tons they claim.

The control of price does not come free.

But I will say that I have thought for a long time that there is a disconnect soon to occur between paper traded gold & physical.

When it comes it will be a late rush to physical. Now is the time to gather not then.

I am positive it will happen in the not too distant future....all IMO of course

[Orion76]

The fed and treasury don't trade Comex gold AFAIK, although they may be friendly with guys big enough to move the markets.

The metals markets are too large for any one trading entity to suppress a strong uptrend for any sustained period of time, but there are trading entities who are certainly big enough to knock the price down for a day or two.

Why would the biggest players in the market keep knocking the price down?

Who benefits besides the government?

[flying]

The fed and treasury don't trade Comex gold AFAIK, although they may be friendly with guys big enough to move the markets.

The metals markets are too large for any one trading entity to suppress a strong uptrend for any sustained period of time, but there are trading entities who are certainly big enough to knock the price down for a day or two.

Why would the biggest players in the market keep knocking the price down?

Who benefits besides the government?

While they do not trade it...I would think it is not a stretch to think they control it.

The metals market is not as large as you think. In fact Silver being so small makes it very volatile. Also why the Hunt brothers were at one time able to control it.

As for the biggest players controlling & the govt benefiting.. You have answered your own question.

[sokal]

The fed and treasury don't trade Comex gold AFAIK, although they may be friendly with guys big enough to move the markets.

The metals markets are too large for any one trading entity to suppress a strong uptrend for any sustained period of time, but there are trading entities who are certainly big enough to knock the price down for a day or two.

Why would the biggest players in the market keep knocking the price down?

Who benefits besides the government?

Its a fact that JP Morgan and the big US banks hold most of the short positions on the COMEX. The only reason the big banks are not bankrupt is because of the government. If the government cant sell treasures then the banks cant get bailed out.

[Orion76]

While they do not trade it...I would think it is not a stretch to think they control it.

Or at least, Dimon and the White House wouldn't be above exchanging mutually beneficial favors.

The metals market is not as large as you think. In fact Silver being so small makes it very volatile. Also why the Hunt brothers were at one time able to control it.

The knock downs happen in silver first, after that gold is easier because the short term traders see it coming and either get out of the way or get short.

As for the biggest players controlling & the govt benefiting.. You have answered your own question.

CFTC regulated position limits on the horizon with "bona-fide" hedgers being excempt.

At what price do you think the biggest "bona-fide" hedgers will be satisfied enough to stop knocking the market down?

Edited February 15, 2010 by Orion76

[Naam]

The fed and treasury don't trade Comex gold AFAIK, although they may be friendly with guys big enough to move the markets.

The metals markets are too large for any one trading entity to suppress a strong uptrend for any sustained period of time, but there are trading entities who are certainly big enough to knock the price down for a day or two.

Why would the biggest players in the market keep knocking the price down? Who benefits besides the government?

perhaps because they don't like goldbugs?

[Orion76]

The fed and treasury don't trade Comex gold AFAIK, although they may be friendly with guys big enough to move the markets.

The metals markets are too large for any one trading entity to suppress a strong uptrend for any sustained period of time, but there are trading entities who are certainly big enough to knock the price down for a day or two.

Why would the biggest players in the market keep knocking the price down? Who benefits besides the government?

perhaps because they don't like goldbugs?

If you went short more metals than currently exists above ground, at about half the current market value, a few years before the subprime crash then you'd probably not be too fond of the goldbugs either

[Naam]

The fed and treasury don't trade Comex gold AFAIK, although they may be friendly with guys big enough to move the markets.

The metals markets are too large for any one trading entity to suppress a strong uptrend for any sustained period of time, but there are trading entities who are certainly big enough to knock the price down for a day or two.

Why would the biggest players in the market keep knocking the price down? Who benefits besides the government?

perhaps because they don't like goldbugs?

If you went short more metals than currently exists above ground, at about half the current market value, a few years before the subprime crash then you'd probably not be too fond of the goldbugs either

the game is not an infinite one. eventually you have to cover your shorts. perhaps i am too naïve... but -in the case you mentioned- shouldn't these shorts come up as specific losses in the balance sheets?

[Orion76]

The fed and treasury don't trade Comex gold AFAIK, although they may be friendly with guys big enough to move the markets.

The metals markets are too large for any one trading entity to suppress a strong uptrend for any sustained period of time, but there are trading entities who are certainly big enough to knock the price down for a day or two.

Why would the biggest players in the market keep knocking the price down? Who benefits besides the government?

perhaps because they don't like goldbugs?

If you went short more metals than currently exists above ground, at about half the current market value, a few years before the subprime crash then you'd probably not be too fond of the goldbugs either

the game is not an infinite one. eventually you have to cover your shorts. perhaps i am too naïve... but -in the case you mentioned- shouldn't these shorts come up as specific losses in the balance sheets?

I haven't been combing through balance sheets, but I'd imagine they'd be burried somewhere under the "other liabilities" category. It's not a loss until the short is covered. Keep in mind a lot of these positions are toxic assets from Bear Stearns etc.

I doubt they are going to cover these positions at the current price, but if they default the CME would probably collapse. I suppose that makes the exchange another party with an interest in lower metals prices.

[lannarebirth]

The fed and treasury don't trade Comex gold AFAIK, although they may be friendly with guys big enough to move the markets.

The metals markets are too large for any one trading entity to suppress a strong uptrend for any sustained period of time, but there are trading entities who are certainly big enough to knock the price down for a day or two.

Why would the biggest players in the market keep knocking the price down?

Who benefits besides the government?

Of course they do. If you need any evidence look to see what happened to the price of gold on the Day AIG got their bailout. They're daytrading the US Treasury to rebuild balance sheets. If it weren't true it would make for great fiction.

[lannarebirth]

The fed and treasury don't trade Comex gold AFAIK, although they may be friendly with guys big enough to move the markets.

The metals markets are too large for any one trading entity to suppress a strong uptrend for any sustained period of time, but there are trading entities who are certainly big enough to knock the price down for a day or two.

Why would the biggest players in the market keep knocking the price down?

Who benefits besides the government?

While they do not trade it...I would think it is not a stretch to think they control it.

The metals market is not as large as you think. In fact Silver being so small makes it very volatile. Also why the Hunt brothers were at one time able to control it.

As for the biggest players controlling & the govt benefiting.. You have answered your own question.

Of course they control it, but not in the way you think. They control those agencies that can quell speculation or let it run. They can freeze trading in it if they like. They could set a set price if they want. Mostly, I think they're happy to see a bunch of money go somewhere that is unproductive, unless it gets so high that it challenges the idea of what is the nature of currency.

Edited February 15, 2010 by lannarebirth

[flying]

The knock downs happen in silver first, after that gold is easier because the short term traders see it coming and either get out of the way or get short.

I agree but we are really talking about two different things.

I agree that most often Silver is the canary in the coal mine but again I am

always talking about physical.

Treasury instruments & paper metals can be shorted till the cows come home.

They can play with the price all the want it would not change my reasons in fact quite the opposite

This just came out 2/12/10 good read as always on FOFOA

Except for my pal Naam He does not like anything called blog

Greece is the Word

[sokal]

The fed and treasury don't trade Comex gold AFAIK, although they may be friendly with guys big enough to move the markets.

The metals markets are too large for any one trading entity to suppress a strong uptrend for any sustained period of time, but there are trading entities who are certainly big enough to knock the price down for a day or two.

Why would the biggest players in the market keep knocking the price down? Who benefits besides the government?

perhaps because they don't like goldbugs?

If you went short more metals than currently exists above ground, at about half the current market value, a few years before the subprime crash then you'd probably not be too fond of the goldbugs either

the game is not an infinite one. eventually you have to cover your shorts. perhaps i am too naïve... but -in the case you mentioned- shouldn't these shorts come up as specific losses in the balance sheets?

yeah until the banks go broke on these deals, then they can mark to myth on their balance sheets.

[flying]

The Approaching US Dollar Reserve Crisis

"US government debt is a safe haven the way Pearl Harbor was a safe haven in 1941."

No matter how they wrap it, spin it, try to hide it, we have seen an epic expansion in the US monetary base not seen since 1932.

This monetary expansion has not yet reached into the broader money supply figures because it is not reaching the public, despite the chant from the "Yes We Can" Kid. Bernanke has most of that liquidity bottled up in a few big banks collecting an easy riskless spread, with some of it chasing beta in the speculative markets.

Ben can talk a tough game, and jawbone rates with his plans to someday return to normalcy. But at the end of the day, the US is playing out a well worn script that is highly predictable.

There are three choices the Sith Lords at the Fed and their western central bank apprentices have at this point: inflation, inflation, and inflation.

The only question is how and when it will become obvious even to the most stubborn believers in the Dollar Über Alles. Ben will seek to control it, to unleash it from its cage very slowly, spread the pain to the US trading partners overseas.

The US dollar reserve currency status is faltering, but not yet under a serious assault. The monied elite will try to eliminate any serious competition, such as the euro or precious metals, by any and all means possible.

Greece is roughly 2.6% of the Eurozone GDP. California is 13% of the US.

How long they can continue this is anyone's guess. These things tend to play out slowly, over years. I do not expect the US dollar to fail precipitously in the manner of the Zimbabwe dollar or with Weimar Reichsmark, but rather to be devalued in a step-staggered manner, over time, until it stabilizes and the debts are liquidated.

When the US starts closing the greater portion of its 700+ overseas military bases, we will know that it has become serious about financial reform and balancing its books. Until then, all is posturing, self-interest, demagoguery, and deception.

Edited February 15, 2010 by flying

[sokal]

The knock downs happen in silver first, after that gold is easier because the short term traders see it coming and either get out of the way or get short.

I agree but we are really talking about two different things.

I agree that most often Silver is the canary in the coal mine but again I am

always talking about physical.

Treasury instruments & paper metals can be shorted till the cows come home.

They can play with the price all the want it would not change my reasons in fact quite the opposite

This just came out 2/12/10 good read as always on FOFOA

Except for my pal Naam He does not like anything called blog

Greece is the Word

Am I ever glad to have discovered this blog

[Orion76]

The knock downs happen in silver first, after that gold is easier because the short term traders see it coming and either get out of the way or get short.

I agree but we are really talking about two different things.

I agree that most often Silver is the canary in the coal mine but again I am

always talking about physical.

Treasury instruments & paper metals can be shorted till the cows come home.

They can play with the price all the want it would not change my reasons in fact quite the opposite

Not until the cows come home, just to around $700 so they can get these toxic assets off the books. When these positions get unloaded a major bull run is highly probable though.

That's not a prediction, it's just a probability and something that I would take into consideration if I were investing in metals. A huge mistake many investors make is to only be receptive to information which reinforces their beliefs.

[Orion76]

Of course they control it, but not in the way you think. They control those agencies that can quell speculation or let it run. They can freeze trading in it if they like. They could set a set price if they want. Mostly, I think they're happy to see a bunch of money go somewhere that is unproductive, unless it gets so high that it challenges the idea of what is the nature of currency.

New CFTC regulations on metals trading are in the pipeline.

It is likely to impose position limits on speculators with excemptions for bona fide hedgers.

The majority of bona fide hedgers are already short IMO.

[flying]

Not until the cows come home, just to around $700 so they can get these toxic assets off the books. When these positions get unloaded a major bull run is highly probable though.

That's not a prediction, it's just a probability and something that I would take into consideration if I were investing in metals. A huge mistake many investors make is to only be receptive to information which reinforces their beliefs.

If you were investing in metals & truly believed your premise you would be gathering now. Because at 700 there will be zero available Not to mention premiums for physical if found at that time will be through the roof.

[Orion76]

Not until the cows come home, just to around $700 so they can get these toxic assets off the books. When these positions get unloaded a major bull run is highly probable though.

That's not a prediction, it's just a probability and something that I would take into consideration if I were investing in metals. A huge mistake many investors make is to only be receptive to information which reinforces their beliefs.

If you were investing in metals & truly believed your premise you would be gathering now. Because at 700 there will be zero available Not to mention premiums for physical if found at that time will be through the roof.

Those two are mutually exclusive.

Truly believing rather than thinking in probabilities is the quickest way to the poor house.

"A huge mistake many investors make is to only be receptive to information that reinforces their beliefs."

[flying]

Not until the cows come home, just to around $700 so they can get these toxic assets off the books. When these positions get unloaded a major bull run is highly probable though.

That's not a prediction, it's just a probability and something that I would take into consideration if I were investing in metals. A huge mistake many investors make is to only be receptive to information which reinforces their beliefs.

If you were investing in metals & truly believed your premise you would be gathering now. Because at 700 there will be zero available Not to mention premiums for physical if found at that time will be through the roof.

Those two are mutually exclusive.

Truly believing rather than thinking in probabilities is the quickest way to the poor house.

"A huge mistake many investors make is to only be receptive to information that reinforces their beliefs."

Oh no not the word minutia/literalistic thing

Ok if your an investor waiting for $700/oz beware of likely low availability & high premiums.

A huge mistake many make when a storm is approaching is to take the wait & see approach.

Only to get to the stores as the storm hits & find empty shelves or very high premiums on whats left

But back to your premise that investing & believing in your premise are mutually exclusive...........

You must or should have a premise at the start of any scenario & yes you do figure in the probabilities from as many angles as possible/available to you.

But at the end of the day I would still comfortably say...You at that point believe your premise to be as correct as is possible for you. Not that I am implying blind faith.

Edited February 16, 2010 by flying

[Orion76]

flying... is this leading into a discussion about timing the gold market?

I'm certainly not suggesting anyone hold out for $700, merely suggesting that there are forces at work that would like to get it down there. If they will be successful or not is one for the history books.

There is nothing wrong with having confidence in your own thesis and backing it up with your money. IMO your own thesis is the only one you should have confidence in, as long as you remain receptive to information that disproves your thesis and are flexible enough to admit to yourself when you are wrong, and change your opinion as new information comes available.

Now you better agree or I'm going to bust out the Wikipedia links

[flying]

There is nothing wrong with having confidence in your own thesis and backing it up with your money. IMO your own thesis is the only one you should have confidence in, as long as you remain receptive to information that disproves your thesis and are flexible enough to admit to yourself when you are wrong, and change your opinion as new information comes available.

Now you better agree or I'm going to bust out the Wikipedia links

:D

No need for wikipedia

Yes I agree not one to time markets. Although I do see entry points based on where it has been. Also yes I also agree that a person needs to realize when they have been proven wrong & the sooner the better

[churchill]

Fed Raises Discount Rate by Quarter-Point to 0.75%

http://www.bloomberg.com/apps/news?pid=206...uLUc4&pos=1

[greendog]

Low 60's next year

Unless a miracle War occurs

Of course a rally or two between now & then would be expected.

Everything jumps once or twice when its head is cut off

I would not be surprised at all by a big jerk

Proceeded by the market losing 300 points one day & a 1000+ soon after.

3rd week of Nov. ?

But low 60's next year is my guess as all the kings horses & all the kings men cannot put it together again

Not on hope & BS alone anyway.

PS: I dont hate dollars at all.

Wish they were what they once were & sorry

our govt has seen fit to allow its demise.

I hate to say it but I’ve got to agree here that the government just doesn’t care. Obama, Bernanke, the senate and congress seem to think it is okay vote each month to raise the national debt. Each time they do, they dilute the value of the dollar more and more. With nothing to back up the value of the dollar, it just keeps getting watered down in value. I can’t see any good coming with the USD unless all of them get voted out.

[churchill]

"Some argue the dollar's recent rally against the euro and yen (it's up almost 6 percent against the Japanese currency since December) is less a vote of confidence than a realization that it's simply the best of a bad bunch.

Per Rasmussen, a retired currency trader who worked at Chase in the late 1970s in London, called it a "reverse beauty pageant" in which investors pick the "least ugly" contestant."

How long can the US dollar defy gravity?

http://www.moneycontrol.com/news/commoditi...ity_443460.html

[flying]

"Some argue the dollar's recent rally against the euro and yen (it's up almost 6 percent against the Japanese currency since December) is less a vote of confidence than a realization that it's simply the best of a bad bunch.

Interesting & I think the same.

They scurry now back to the USD but for how long?

I expect to see gold & USD go up in together shortly as many will not run full speed to the USD.

The Greek debt crisis, which has sent investors stampeding back into the U.S. currency, has provided a reprieve.

Also what about AIG? Are they not involved with Greece? I thought I read something recently ?

This is not it but I will see if I can find it.

http://www.creditwritedowns.com/2010/02/is...nment-debt.html

I say next week a slight low (1080?) in gold may be a last opportunity to top up for awhile. ....or not

Edited February 24, 2010 by flying