Many people, myself included, have suggested we will see some sharp sell-offs as hedge funds are forced to meet margin calls. I still think the trend is upwards.

Many people, myself included, have suggested we will see some sharp sell-offs as hedge funds are forced to meet margin calls. I still think the trend is upwards.

The gold and silver markets are very subject to manipulation but in this case I think that it was the result of profit-taking. After the bailout of Bear Stearns the big institutional investors that had gotten into gold defensively last year took their profit and put it back into stocks, cash, etc… The thinking is probably that the fed will bail out anything that’s big so that limits their investment risk. Just guessing.

Who knows what gold will do? I do know that when we see things in the news, the Maja Playaz know that we’re reading them and that we will get scared/confident/etc… and they use this to fleece unsophisticated investors (like yours truly!) You can watch “Wall Street Warriors” to see this in action. One of the guys on that show is a 25-year-old who runs a hedge fund out of his apartment. His whole strategy is this:

* Look for bad news about a company in papers/on the web
* Assume that lots of people will short the stock
* Buy big quantities of the stock to drive up the price
* Squeeze those little shorters until they scream

He makes tons of money doing this and he can get away with it because he has an enormous amount of money to invest. There are probably thousands of guys like him, all of them making millions a year by moving the market in ways that are not expected. Gold and silver are manipulated in the same way, and with the addition of the ETFs for these the manipulation will probably get more extreme.

One thing to remember is that manipulation like this is generally short-term. If you truly believe that the price of something will go up in the long term and you have the stomach to handle the volatility, then the investment might be a good idea. Shorting and trading on margin are of course very dangerous here because time comes into play, but a conventional long position might still work out in your favor.

It’s all so confusing. I miss the Beanie Baby market where all I had to do was buy 10 Larry the Lobsters, wait a couple of months and sell them for a big profit 🙁

The gold and silver markets are very subject to manipulation but in this case I think that it was the result of profit-taking. After the bailout of Bear Stearns the big institutional investors that had gotten into gold defensively last year took their profit and put it back into stocks, cash, etc… The thinking is probably that the fed will bail out anything that’s big so that limits their investment risk. Just guessing.

Who knows what gold will do? I do know that when we see things in the news, the Maja Playaz know that we’re reading them and that we will get scared/confident/etc… and they use this to fleece unsophisticated investors (like yours truly!) You can watch “Wall Street Warriors” to see this in action. One of the guys on that show is a 25-year-old who runs a hedge fund out of his apartment. His whole strategy is this:

* Look for bad news about a company in papers/on the web
* Assume that lots of people will short the stock
* Buy big quantities of the stock to drive up the price
* Squeeze those little shorters until they scream

He makes tons of money doing this and he can get away with it because he has an enormous amount of money to invest. There are probably thousands of guys like him, all of them making millions a year by moving the market in ways that are not expected. Gold and silver are manipulated in the same way, and with the addition of the ETFs for these the manipulation will probably get more extreme.

One thing to remember is that manipulation like this is generally short-term. If you truly believe that the price of something will go up in the long term and you have the stomach to handle the volatility, then the investment might be a good idea. Shorting and trading on margin are of course very dangerous here because time comes into play, but a conventional long position might still work out in your favor.

It’s all so confusing. I miss the Beanie Baby market where all I had to do was buy 10 Larry the Lobsters, wait a couple of months and sell them for a big profit 🙁

The gold and silver markets are very subject to manipulation but in this case I think that it was the result of profit-taking. After the bailout of Bear Stearns the big institutional investors that had gotten into gold defensively last year took their profit and put it back into stocks, cash, etc… The thinking is probably that the fed will bail out anything that’s big so that limits their investment risk. Just guessing.

Who knows what gold will do? I do know that when we see things in the news, the Maja Playaz know that we’re reading them and that we will get scared/confident/etc… and they use this to fleece unsophisticated investors (like yours truly!) You can watch “Wall Street Warriors” to see this in action. One of the guys on that show is a 25-year-old who runs a hedge fund out of his apartment. His whole strategy is this:

* Look for bad news about a company in papers/on the web
* Assume that lots of people will short the stock
* Buy big quantities of the stock to drive up the price
* Squeeze those little shorters until they scream

He makes tons of money doing this and he can get away with it because he has an enormous amount of money to invest. There are probably thousands of guys like him, all of them making millions a year by moving the market in ways that are not expected. Gold and silver are manipulated in the same way, and with the addition of the ETFs for these the manipulation will probably get more extreme.

One thing to remember is that manipulation like this is generally short-term. If you truly believe that the price of something will go up in the long term and you have the stomach to handle the volatility, then the investment might be a good idea. Shorting and trading on margin are of course very dangerous here because time comes into play, but a conventional long position might still work out in your favor.

It’s all so confusing. I miss the Beanie Baby market where all I had to do was buy 10 Larry the Lobsters, wait a couple of months and sell them for a big profit 🙁

I see that there are billions of dollars of losses for investors in the MBS market. This may run into the trillions soon. Even though Uncle Ben has been printing $300B, this doesn’t come close to America feeling a few trillion poorer. Spending will be reined in, and margin calls will continue, leading to sell offs in everything that holds value. This includes oil, gold, and other commodities which has been a “safe haven”. But before a deflationary trend, commodities spike up, as people get out of cash and into “hard assets”. But when firms and funds need cash because of scared investors wanting their cash back, they will tend to sell their biggest gainers. YTD, this is in commodities.

I expect gold to spike up again as the fed continues to cut, but as they run out of bullets, there will be a mad dash for cash, and I believe many firms and funds will be a bit afraid to borrow even at 1%. They will sell their assets before they “lose even more money”.

I see that there are billions of dollars of losses for investors in the MBS market. This may run into the trillions soon. Even though Uncle Ben has been printing $300B, this doesn’t come close to America feeling a few trillion poorer. Spending will be reined in, and margin calls will continue, leading to sell offs in everything that holds value. This includes oil, gold, and other commodities which has been a “safe haven”. But before a deflationary trend, commodities spike up, as people get out of cash and into “hard assets”. But when firms and funds need cash because of scared investors wanting their cash back, they will tend to sell their biggest gainers. YTD, this is in commodities.

I expect gold to spike up again as the fed continues to cut, but as they run out of bullets, there will be a mad dash for cash, and I believe many firms and funds will be a bit afraid to borrow even at 1%. They will sell their assets before they “lose even more money”.