Submitted by scaredycat on November 3, 2009 - 11:23pm.
makes sense, although, it's very hard to tell how these issues play out. i am suspicious of anything too authoritative. when thinking on trends, ya gotta keep in mind that there a lot of people thinking the same way on trends, and people make money betting against trends. So his pessimistic thoughts on gold and optimism on the dollar as a safe haven seems kinda like middle-of-the-road thinking to me. but then again, i don't know. i could be way wrong. I see gold as becoming a safe haven in the maelstrom as governments try to sort through the wreckage.
Submitted by CA renter on November 4, 2009 - 3:05am.
My crystal ball is as foggy as its ever been, but think they (at TAE) might be right.
I might have made a very foolish mistake, but have gotten out of most of my foreign currencies/sovereign bonds this past week. Will probably sell the rest within the next week or two. Not that I think the dollar has long-term fundamental strength, but because everyone is short the dollar right now, and the "anti-dollar" run-up (in stocks, commodities, real estate, etc.) looks like it might be coming to an end for now.
Stoneleigh, is one of the best and brightest. I've been following her writing for three years and she by far one of the most astute analysts out there, and I read a lot.
With that said, I think there is a greater risk for a "systemic" reconfiguration than she does.
Here predictions could come to pass unless the global financial community decides to change the way the global financial system works. Not that it would be better, just different.
Money, banking and credit has changed very, very little over the past several decades and the outcome of an epochal credit collapse should not be that much different.
The way things add up now, it's strong deflation leading to hypeinflation as the US will not be about to pay it's debt or entitlements.
Submitted by scaredycat on November 4, 2009 - 6:41am.
i follow gold every day. I keep fully expecting a major pullback. I don't buy on dips, I've been dollar cost averaging for years through automatic payments because I do not believe I have any power whatsoever to predict the future, except to predict erroneously. Still, that said, i was confident over the last couple months that gold had to retrace somewhat. Based on that confidence, I figured that my confidence was false and I had to be wrong, and there would be no retracement. But then I couldn't figure out which was my gut instinct, my initial gut instinct or my subsequent analysis of my gut instinct and my secondary gut instinct. I then began a tertiary analysis of my combined first and second gut instincts. The tertiary analysis was found to be unfounded and dumb. It's this kind of thinking that is the reason i don't do anything but dollar cost average into CEF, SLW, GDX, DBA, and DBO. Because even if gold "collapses down to 600 or 700 or 800 an ounce, I'd still rather be there than in the dollar, particularly at that unknown point in the future where maybe there is some kind of crazed inflationary spiral upward. And in spite of all my meaningless mental contortion, and meaningless "following" of gold price and news, big picture, I know the trend is (probably) on the side of gold. As evidenced by India buying up a truckload of the barbarous relic.
Submitted by scaredycat on November 4, 2009 - 7:28am.
"fair valued" at a specific range kinda assumes the dollar is fair valued. id say nothing is "fair valued". if you think that's true, there could be a bit of rush for the exits to some kind of real money.
Submitted by scaredycat on November 4, 2009 - 7:30am.
also, the "current situation" isn't like just the situation this weekend, it's been unfolding over the last decade. I'd agree, a few months or even years can be just noise...but there does at least seem to be a definite trend up....steady and not particularly hyperbolic...
Submitted by Nor-LA-SD-guy on November 4, 2009 - 2:03pm.
This may cast some light on it.
It's 2005 all over again I guess unless you live in Temecula at least it seems (OK unless you live in the U.S.A).
Gee I guess we are creating bubbles everywhere but where they were attempting to (here in the U.S.A.)
The World Bank warned Tuesday that the sudden reappearance of billions of dollars in investment capital in East Asia is "raising concerns about asset price bubbles" in equity markets across Asia and in real estate in China, Hong Kong, Singapore and Vietnam. Also Tuesday, the International Monetary Fund cited "a risk" that surging Hong Kong asset prices are being driven by a flood of capital "divorced from fundamental forces of supply and demand."
The symptoms of a frenzy are most evident in Asia and the Pacific, where economies are recovering most quickly. In Hong Kong, high-end real-estate prices are soaring. A luxury flat in the tony Midlevels district is expected to sell for US$55.6 million, or $9,200 a square foot, said developer Henderson Land Development Co. Elsewhere, a bidder at a city-run auction to operate food stands at February's Lunar New Year celebration recently paid a record US$63,225 for the right to occupy a 400-square-foot stall to sell fish balls and other snacks. Prices in the auction of 180 stalls were up 33% from 2008.
Over the summer, a Singapore condominium developer raised prices 5% the day before units went on sale. After dozens of would-be buyers lined up on a steamy night, the developer -- a joint venture of Hong Leong Group and Japan's Mitsui Fudosan -- held a lottery for a chance to bid on the units. Singapore home prices rose 15.8% in the third quarter, the fastest rate in 28 years.
Australian real-estate markets also have heated up. After a Melbourne property-research firm recently predicted that average home prices will double over the next 12 years, a news report in Australia's Herald Sun said: "The staggering prediction shows the importance of buying a home as soon as you can afford it because the longer buyers delay, the more chance there is that their dream will slip out of their reach."
The Australian dollar has jumped about 35% over the past 12 months as investors borrow in U.S. dollars to purchase Australian currency. The practice is propelling stock and bond markets faster than in the U.S. and Europe. Currency traders are betting that the Australian central bank, which raised interest rates by 0.25% on Tuesday, the second rise in two months, will continue tightening.
Asian stock prices are shooting up, in part due to low interest rates in the U.S. Investors looking for higher yields are borrowing in U.S. dollars and then pouring that money "into countries that are growing more rapidly," said Stephen Cecchetti, chief economist at the Bank for International Settlements, the central banks' central bank, which warned early of the last asset bubble and is beginning to do so again. "That runs the risk of creating property and equity booms in those countries."
About $53 billion has gone into emerging-market stock funds this year, according to data collector EPFR Global. Through Monday's trading, the broad MSCI Barra Emerging Markets Index this year was up 60.7%. Brazil was up 100%, and Indonesia had gains of 102.7%. Over the same period, the Dow Jones Industrial Average was up 11.5%.
Discerning a bubble is as difficult as preventing one. Rapidly rising prices aren't definitive proof. Stocks in Asian emerging markets currently trade at about two times book value, about average for the past 20 years, according to UBS. From 2004 to 2008, the price-to-book-value average was about three times. "This doesn't feel like a bubble," said Hugh Simon, chief executive of Hamon Investment Group, which manages Asia-investment funds. "There's too much skepticism" among investors.
To battle bubbles, policy makers are turning first to regulation. Singapore's authorities tightened mortgage requirements, ended real-estate stimulus policies and pledged to make more land available for development. South Korea regulators tightened real-estate lending requirements in seven districts around Seoul where prices have jumped.
"Even those who say we should respond directly [and deflate bubbles] have no idea how to do it," said Laurence Meyer, a former Fed governor. "It is easy to take a philosophical position, but hard to become operational and practical about it."
Money, banking and credit has changed very, very little over the past several decades and the outcome of an epochal credit collapse should not be that much different.
The way things add up now, it's strong deflation leading to hypeinflation as the US will not be about to pay it's debt or entitlements.
Arraya, I learn a lot from your posts. I also been watching credit issue, however, my take is that they have been surely improved. The situation is not back at the pre crisis level, but it is now in a much less imminently dangerous situation, even when it rests on much government supports for its sustainability.
Unlike the great depression, this time the govt has diagnosed the problem correctly and has poured money from the beginning. Yes, by itself, all the printing may not be enough. But I see more and more signs that it has created an environment where capital could be attracted back into the new environment. IMHO, it may be that deflation will not be able to show up "strong" as you said, before we see inflation or hyper inflation. We may not see deflation before the tsunami of inflation coming ashore.
Submitted by bsrsharma on November 5, 2009 - 11:16pm.
Gold seems about fair valued here between 700 and 1000 USD an OZ so I think it will stay around this range for a good while.
Gold is a well known commodity and hence its value as "money" is an invariant; a bit like velocity of light in physics. It is the paper currencies that rise and fall based on a bunch of factors. So what you are saying is that USD is already depreciated beyond reason so far and hence has no room to fall. That is simply not true based on just one fact: US government will have large (multiple hundreds of billions $) budget deficits and increasing national debts as far as the eye can see; just that alone can assure a falling USD based on unwillingness of foreigners to finance our expanding deficits. (every creditor will some day start to wonder if he will get his money back and if so how)
Submitted by threadkiller on November 6, 2009 - 2:30pm.
"It's the end of the world,as we know it", I mean isn't Costco taking food stamps now. My big fear is down the road when China realizes the dollar is going to fall and fall hard, They don't get all pissed off and start some kind of feud with us,there I didn't say the "W" word.
How will the US be able to keep rates down, when other countries start raising theirs?
I think China already realizes the dollar is going to fall and hard.
I think that's why they are spewing cash out their wazoo on "stimulus" spending over there-- blow all their dollars on fixed infrastructure and other useful, physical things, before the dollars evaporate.
makes sense, although, it's very hard to tell how these issues play out. i am suspicious of anything too authoritative. when thinking on trends, ya gotta keep in mind that there a lot of people thinking the same way on trends, and people make money betting against trends. So his pessimistic thoughts on gold and optimism on the dollar as a safe haven seems kinda like middle-of-the-road thinking to me. but then again, i don't know. i could be way wrong. I see gold as becoming a safe haven in the maelstrom as governments try to sort through the wreckage.
My crystal ball is as foggy as its ever been, but think they (at TAE) might be right.
I might have made a very foolish mistake, but have gotten out of most of my foreign currencies/sovereign bonds this past week. Will probably sell the rest within the next week or two. Not that I think the dollar has long-term fundamental strength, but because everyone is short the dollar right now, and the "anti-dollar" run-up (in stocks, commodities, real estate, etc.) looks like it might be coming to an end for now.
Stoneleigh, is one of the best and brightest. I've been following her writing for three years and she by far one of the most astute analysts out there, and I read a lot.
With that said, I think there is a greater risk for a "systemic" reconfiguration than she does.
Here predictions could come to pass unless the global financial community decides to change the way the global financial system works. Not that it would be better, just different.
Money, banking and credit has changed very, very little over the past several decades and the outcome of an epochal credit collapse should not be that much different.
The way things add up now, it's strong deflation leading to hypeinflation as the US will not be about to pay it's debt or entitlements.
IMO, It's the Debtocalpse.
Scaredy-You watching gold?
i follow gold every day. I keep fully expecting a major pullback. I don't buy on dips, I've been dollar cost averaging for years through automatic payments because I do not believe I have any power whatsoever to predict the future, except to predict erroneously. Still, that said, i was confident over the last couple months that gold had to retrace somewhat. Based on that confidence, I figured that my confidence was false and I had to be wrong, and there would be no retracement. But then I couldn't figure out which was my gut instinct, my initial gut instinct or my subsequent analysis of my gut instinct and my secondary gut instinct. I then began a tertiary analysis of my combined first and second gut instincts. The tertiary analysis was found to be unfounded and dumb. It's this kind of thinking that is the reason i don't do anything but dollar cost average into CEF, SLW, GDX, DBA, and DBO. Because even if gold "collapses down to 600 or 700 or 800 an ounce, I'd still rather be there than in the dollar, particularly at that unknown point in the future where maybe there is some kind of crazed inflationary spiral upward. And in spite of all my meaningless mental contortion, and meaningless "following" of gold price and news, big picture, I know the trend is (probably) on the side of gold. As evidenced by India buying up a truckload of the barbarous relic.
bullpucky,
Takes the current situation and extrapolates it into the absurd.
To Me Gold seems about fair valued here between 700 and 1000 USD an OZ so I think it will stay around this range for a good while.
But these are just my thoughts.
"fair valued" at a specific range kinda assumes the dollar is fair valued. id say nothing is "fair valued". if you think that's true, there could be a bit of rush for the exits to some kind of real money.
also, the "current situation" isn't like just the situation this weekend, it's been unfolding over the last decade. I'd agree, a few months or even years can be just noise...but there does at least seem to be a definite trend up....steady and not particularly hyperbolic...
This may cast some light on it.
It's 2005 all over again I guess unless you live in Temecula at least it seems (OK unless you live in the U.S.A).
Gee I guess we are creating bubbles everywhere but where they were attempting to (here in the U.S.A.)
The World Bank warned Tuesday that the sudden reappearance of billions of dollars in investment capital in East Asia is "raising concerns about asset price bubbles" in equity markets across Asia and in real estate in China, Hong Kong, Singapore and Vietnam. Also Tuesday, the International Monetary Fund cited "a risk" that surging Hong Kong asset prices are being driven by a flood of capital "divorced from fundamental forces of supply and demand."
The symptoms of a frenzy are most evident in Asia and the Pacific, where economies are recovering most quickly. In Hong Kong, high-end real-estate prices are soaring. A luxury flat in the tony Midlevels district is expected to sell for US$55.6 million, or $9,200 a square foot, said developer Henderson Land Development Co. Elsewhere, a bidder at a city-run auction to operate food stands at February's Lunar New Year celebration recently paid a record US$63,225 for the right to occupy a 400-square-foot stall to sell fish balls and other snacks. Prices in the auction of 180 stalls were up 33% from 2008.
Over the summer, a Singapore condominium developer raised prices 5% the day before units went on sale. After dozens of would-be buyers lined up on a steamy night, the developer -- a joint venture of Hong Leong Group and Japan's Mitsui Fudosan -- held a lottery for a chance to bid on the units. Singapore home prices rose 15.8% in the third quarter, the fastest rate in 28 years.
Australian real-estate markets also have heated up. After a Melbourne property-research firm recently predicted that average home prices will double over the next 12 years, a news report in Australia's Herald Sun said: "The staggering prediction shows the importance of buying a home as soon as you can afford it because the longer buyers delay, the more chance there is that their dream will slip out of their reach."
The Australian dollar has jumped about 35% over the past 12 months as investors borrow in U.S. dollars to purchase Australian currency. The practice is propelling stock and bond markets faster than in the U.S. and Europe. Currency traders are betting that the Australian central bank, which raised interest rates by 0.25% on Tuesday, the second rise in two months, will continue tightening.
Asian stock prices are shooting up, in part due to low interest rates in the U.S. Investors looking for higher yields are borrowing in U.S. dollars and then pouring that money "into countries that are growing more rapidly," said Stephen Cecchetti, chief economist at the Bank for International Settlements, the central banks' central bank, which warned early of the last asset bubble and is beginning to do so again. "That runs the risk of creating property and equity booms in those countries."
About $53 billion has gone into emerging-market stock funds this year, according to data collector EPFR Global. Through Monday's trading, the broad MSCI Barra Emerging Markets Index this year was up 60.7%. Brazil was up 100%, and Indonesia had gains of 102.7%. Over the same period, the Dow Jones Industrial Average was up 11.5%.
Discerning a bubble is as difficult as preventing one. Rapidly rising prices aren't definitive proof. Stocks in Asian emerging markets currently trade at about two times book value, about average for the past 20 years, according to UBS. From 2004 to 2008, the price-to-book-value average was about three times. "This doesn't feel like a bubble," said Hugh Simon, chief executive of Hamon Investment Group, which manages Asia-investment funds. "There's too much skepticism" among investors.
To battle bubbles, policy makers are turning first to regulation. Singapore's authorities tightened mortgage requirements, ended real-estate stimulus policies and pledged to make more land available for development. South Korea regulators tightened real-estate lending requirements in seven districts around Seoul where prices have jumped.
"Even those who say we should respond directly [and deflate bubbles] have no idea how to do it," said Laurence Meyer, a former Fed governor. "It is easy to take a philosophical position, but hard to become operational and practical about it."
I guess Asia is where all that credit ended up.
Peter Schiff yesterday: Buy Gold!!!
http://www.youtube.com/watch?v=Aicc3siQiHQ
And, while this is OT - if you sell your jewelry remember diamonds essentially have NO value whatsoever.
The way things add up now, it's strong deflation leading to hypeinflation as the US will not be about to pay it's debt or entitlements.
Arraya, I learn a lot from your posts. I also been watching credit issue, however, my take is that they have been surely improved. The situation is not back at the pre crisis level, but it is now in a much less imminently dangerous situation, even when it rests on much government supports for its sustainability.
Unlike the great depression, this time the govt has diagnosed the problem correctly and has poured money from the beginning. Yes, by itself, all the printing may not be enough. But I see more and more signs that it has created an environment where capital could be attracted back into the new environment. IMHO, it may be that deflation will not be able to show up "strong" as you said, before we see inflation or hyper inflation. We may not see deflation before the tsunami of inflation coming ashore.
http://www.bloomberg.com/apps/news?pid=2...
Gold seems about fair valued here between 700 and 1000 USD an OZ so I think it will stay around this range for a good while.
Gold is a well known commodity and hence its value as "money" is an invariant; a bit like velocity of light in physics. It is the paper currencies that rise and fall based on a bunch of factors. So what you are saying is that USD is already depreciated beyond reason so far and hence has no room to fall. That is simply not true based on just one fact: US government will have large (multiple hundreds of billions $) budget deficits and increasing national debts as far as the eye can see; just that alone can assure a falling USD based on unwillingness of foreigners to finance our expanding deficits. (every creditor will some day start to wonder if he will get his money back and if so how)
Now it's not just Asia, I hear Canada is starting to have a housing bubble as well.
I tell you it's just us man !!
"It's the end of the world,as we know it", I mean isn't Costco taking food stamps now. My big fear is down the road when China realizes the dollar is going to fall and fall hard, They don't get all pissed off and start some kind of feud with us,there I didn't say the "W" word.
How will the US be able to keep rates down, when other countries start raising theirs?
I think China already realizes the dollar is going to fall and hard.
I think that's why they are spewing cash out their wazoo on "stimulus" spending over there-- blow all their dollars on fixed infrastructure and other useful, physical things, before the dollars evaporate.