Dollar Dropping

[partypup]

[quote=MountainBound]PartyPup,

Ok, here’s my problem. I happen to agree with your forecast of upcoming doom, however so far the US Fed has been able to ward off the fundamentals and continue with the Wall Street corruption. It seems like with the MSM propaganda machine they can continue the ruse forever.

Now, tell me in simple terms, how does one go abouit protecting their cash? Doesn’t seem like 100% metals is a sure bet.

Give it to me straight.

Thanks[/quote]

Mountain, I hate to break it to you, but there are NO sure bets to protect your assets from what is coming. Metals are not 100% protection. But I firmly believe they are hands-down the best protection because all things paper are going to go *poof*! If you haven’t detected it, there is a rapidly-growing fear of paper financial instruments around the world. The fear is more palpable in foreign countries now, and that stems primarily from the impending dollar collapse that many now expect. The dollar’s collapse will literally drag down anything fiat.

While it may appear that the MSM can spin good news forever, that isn’t the case. We are now coming to the end of denial and the end of metals manipulation. The Plunge Protection Team has worked tirelessly over the past few decades to suppress the price of metals. And yet they are rising in spite of their efforts. Do you really think the PPT wants gold at $1000? Absolutely not. But from what I have been hearing, COMEX is in grave danger of failing very soon because there simply isn’t enough physical metal to back the amounts that have been sold. So as soon as the first hint of serious dollar trouble begins, the flight to the exit will be on. Huge calls for physical delivery will be made, and they cannot possibly be met. Metals have been leveraged by firms and investors in much the same way that derivative products were. So at the end of the day, the price must rise to reflect the absence of inventory.

For your own protection, why not at least put a portion (say 1/4) of your portfolio in metals? If Eugene is right (and I seriously doubt it), you will only have a minority of your assets at risk. But if I’m right and the dollar is devalued 50-75%, gold and silver will rise accordingly.

[partypup]

[quote=Eugene]FYI, 100% metals is a 100% losing bet. Precious metals are in a bubble that has yet to deflate. I expect a 50% decline in the value of gold and a 30% decline in the value of silver by the end of 2010.
[/quote]

Eugene:

I’m not sure we have the same definition of bubbles.

This, for example, is a bubble:

http://www.lesjones.com/2008/11/25/inflation-adjusted-us-house-prices-1975-2008/

And then we have this:

http://www.kitco.com/scripts/hist_charts/yearly_graphs.plx

Does this really look like a bubble to you? Looks more like a slow but inexorable creep upwards to me.

Also, can you please tell me what factors would lead to a decline in the price of precious metals? Since they are dollar-denominated, it would seem to me that a fall in the price of metals would require a corresponding rise in the dollar’s value. Do you really see that happening?

I just get the sense that you keep saying that metals are in a bubble because you believe that, not because you are relying on any facts or fundamentals. And if that’s what you believe, that’s fine. But we need to be clear about what is fact and what is belief.

[partypup]

[quote=Eugene]FYI, 100% metals is a 100% losing bet. Precious metals are in a bubble that has yet to deflate. I expect a 50% decline in the value of gold and a 30% decline in the value of silver by the end of 2010.
[/quote]

Eugene:

I’m not sure we have the same definition of bubbles.

This, for example, is a bubble:

http://www.lesjones.com/2008/11/25/inflation-adjusted-us-house-prices-1975-2008/

And then we have this:

http://www.kitco.com/scripts/hist_charts/yearly_graphs.plx

Does this really look like a bubble to you? Looks more like a slow but inexorable creep upwards to me.

Also, can you please tell me what factors would lead to a decline in the price of precious metals? Since they are dollar-denominated, it would seem to me that a fall in the price of metals would require a corresponding rise in the dollar’s value. Do you really see that happening?

I just get the sense that you keep saying that metals are in a bubble because you believe that, not because you are relying on any facts or fundamentals. And if that’s what you believe, that’s fine. But we need to be clear about what is fact and what is belief.

[partypup]

[quote=Eugene]FYI, 100% metals is a 100% losing bet. Precious metals are in a bubble that has yet to deflate. I expect a 50% decline in the value of gold and a 30% decline in the value of silver by the end of 2010.
[/quote]

Eugene:

I’m not sure we have the same definition of bubbles.

This, for example, is a bubble:

http://www.lesjones.com/2008/11/25/inflation-adjusted-us-house-prices-1975-2008/

And then we have this:

http://www.kitco.com/scripts/hist_charts/yearly_graphs.plx

Does this really look like a bubble to you? Looks more like a slow but inexorable creep upwards to me.

Also, can you please tell me what factors would lead to a decline in the price of precious metals? Since they are dollar-denominated, it would seem to me that a fall in the price of metals would require a corresponding rise in the dollar’s value. Do you really see that happening?

I just get the sense that you keep saying that metals are in a bubble because you believe that, not because you are relying on any facts or fundamentals. And if that’s what you believe, that’s fine. But we need to be clear about what is fact and what is belief.

[partypup]

[quote=Eugene]FYI, 100% metals is a 100% losing bet. Precious metals are in a bubble that has yet to deflate. I expect a 50% decline in the value of gold and a 30% decline in the value of silver by the end of 2010.
[/quote]

Eugene:

I’m not sure we have the same definition of bubbles.

This, for example, is a bubble:

http://www.lesjones.com/2008/11/25/inflation-adjusted-us-house-prices-1975-2008/

And then we have this:

http://www.kitco.com/scripts/hist_charts/yearly_graphs.plx

Does this really look like a bubble to you? Looks more like a slow but inexorable creep upwards to me.

Also, can you please tell me what factors would lead to a decline in the price of precious metals? Since they are dollar-denominated, it would seem to me that a fall in the price of metals would require a corresponding rise in the dollar’s value. Do you really see that happening?

I just get the sense that you keep saying that metals are in a bubble because you believe that, not because you are relying on any facts or fundamentals. And if that’s what you believe, that’s fine. But we need to be clear about what is fact and what is belief.

[partypup]

[quote=Eugene]FYI, 100% metals is a 100% losing bet. Precious metals are in a bubble that has yet to deflate. I expect a 50% decline in the value of gold and a 30% decline in the value of silver by the end of 2010.
[/quote]

Eugene:

I’m not sure we have the same definition of bubbles.

This, for example, is a bubble:

http://www.lesjones.com/2008/11/25/inflation-adjusted-us-house-prices-1975-2008/

And then we have this:

http://www.kitco.com/scripts/hist_charts/yearly_graphs.plx

Does this really look like a bubble to you? Looks more like a slow but inexorable creep upwards to me.

Also, can you please tell me what factors would lead to a decline in the price of precious metals? Since they are dollar-denominated, it would seem to me that a fall in the price of metals would require a corresponding rise in the dollar’s value. Do you really see that happening?

I just get the sense that you keep saying that metals are in a bubble because you believe that, not because you are relying on any facts or fundamentals. And if that’s what you believe, that’s fine. But we need to be clear about what is fact and what is belief.

[Eugene]

[quote=partypup]
This, for example, is a bubble:

http://www.lesjones.com/2008/11/25/inflation-adjusted-us-house-prices-1975-2008/

And then we have this:

http://www.kitco.com/scripts/hist_charts/yearly_graphs.plx

Does this really look like a bubble to you? Looks more like a slow but inexorable creep upwards to me.
[/quote]

Here’s a chart that portrays three metals. Two went through the bubble phase and then completely deflated, one is still “stuck”.

http://charts.infomine.com/multivariantcharts/showchart.aspx?mv=1&f=f&r=5y&c=cgold.xusd.uoz,czinc.xusd.ulb,cpalladium.xusd.uoz

Gold should have crashed below $600 last winter, in proportion with other metals, but the fact that there’s virtually no industrial demand for the metal, and the fact that the existence of GLD allowed gold bugs to scoop up the excess gold on the market (absorbing 500 tons in 6 months), postponed the inevitable crash.

[quote]Also, can you please tell me what factors would lead to a decline in the price of precious metals? Since they are dollar-denominated, it would seem to me that a fall in the price of metals would require a corresponding rise in the dollar’s value. [/quote]

No, deflation of the bubble can occur without a corresponding rise in the currency value. Precious metals will be falling in all currencies simultaneously. Gold is up 100% wrt euro in 5 years.

[quote]care to take a bet on where the price of metals will be by the end of 2010? I say gold holds above $1000 and silver holds above $16.[/quote]

I think I’ll just short GLD and that will have the same effect as betting with you directly.

[Eugene]

[quote=partypup]
This, for example, is a bubble:

http://www.lesjones.com/2008/11/25/inflation-adjusted-us-house-prices-1975-2008/

And then we have this:

http://www.kitco.com/scripts/hist_charts/yearly_graphs.plx

Does this really look like a bubble to you? Looks more like a slow but inexorable creep upwards to me.
[/quote]

Here’s a chart that portrays three metals. Two went through the bubble phase and then completely deflated, one is still “stuck”.

http://charts.infomine.com/multivariantcharts/showchart.aspx?mv=1&f=f&r=5y&c=cgold.xusd.uoz,czinc.xusd.ulb,cpalladium.xusd.uoz

Gold should have crashed below $600 last winter, in proportion with other metals, but the fact that there’s virtually no industrial demand for the metal, and the fact that the existence of GLD allowed gold bugs to scoop up the excess gold on the market (absorbing 500 tons in 6 months), postponed the inevitable crash.

[quote]Also, can you please tell me what factors would lead to a decline in the price of precious metals? Since they are dollar-denominated, it would seem to me that a fall in the price of metals would require a corresponding rise in the dollar’s value. [/quote]

No, deflation of the bubble can occur without a corresponding rise in the currency value. Precious metals will be falling in all currencies simultaneously. Gold is up 100% wrt euro in 5 years.

[quote]care to take a bet on where the price of metals will be by the end of 2010? I say gold holds above $1000 and silver holds above $16.[/quote]

I think I’ll just short GLD and that will have the same effect as betting with you directly.

[Eugene]

[quote=partypup]
This, for example, is a bubble:

http://www.lesjones.com/2008/11/25/inflation-adjusted-us-house-prices-1975-2008/

And then we have this:

http://www.kitco.com/scripts/hist_charts/yearly_graphs.plx

Does this really look like a bubble to you? Looks more like a slow but inexorable creep upwards to me.
[/quote]

Here’s a chart that portrays three metals. Two went through the bubble phase and then completely deflated, one is still “stuck”.

http://charts.infomine.com/multivariantcharts/showchart.aspx?mv=1&f=f&r=5y&c=cgold.xusd.uoz,czinc.xusd.ulb,cpalladium.xusd.uoz

Gold should have crashed below $600 last winter, in proportion with other metals, but the fact that there’s virtually no industrial demand for the metal, and the fact that the existence of GLD allowed gold bugs to scoop up the excess gold on the market (absorbing 500 tons in 6 months), postponed the inevitable crash.

[quote]Also, can you please tell me what factors would lead to a decline in the price of precious metals? Since they are dollar-denominated, it would seem to me that a fall in the price of metals would require a corresponding rise in the dollar’s value. [/quote]

No, deflation of the bubble can occur without a corresponding rise in the currency value. Precious metals will be falling in all currencies simultaneously. Gold is up 100% wrt euro in 5 years.

[quote]care to take a bet on where the price of metals will be by the end of 2010? I say gold holds above $1000 and silver holds above $16.[/quote]

I think I’ll just short GLD and that will have the same effect as betting with you directly.

[Eugene]

[quote=partypup]
This, for example, is a bubble:

http://www.lesjones.com/2008/11/25/inflation-adjusted-us-house-prices-1975-2008/

And then we have this:

http://www.kitco.com/scripts/hist_charts/yearly_graphs.plx

Does this really look like a bubble to you? Looks more like a slow but inexorable creep upwards to me.
[/quote]

Here’s a chart that portrays three metals. Two went through the bubble phase and then completely deflated, one is still “stuck”.

http://charts.infomine.com/multivariantcharts/showchart.aspx?mv=1&f=f&r=5y&c=cgold.xusd.uoz,czinc.xusd.ulb,cpalladium.xusd.uoz

Gold should have crashed below $600 last winter, in proportion with other metals, but the fact that there’s virtually no industrial demand for the metal, and the fact that the existence of GLD allowed gold bugs to scoop up the excess gold on the market (absorbing 500 tons in 6 months), postponed the inevitable crash.

[quote]Also, can you please tell me what factors would lead to a decline in the price of precious metals? Since they are dollar-denominated, it would seem to me that a fall in the price of metals would require a corresponding rise in the dollar’s value. [/quote]

No, deflation of the bubble can occur without a corresponding rise in the currency value. Precious metals will be falling in all currencies simultaneously. Gold is up 100% wrt euro in 5 years.

[quote]care to take a bet on where the price of metals will be by the end of 2010? I say gold holds above $1000 and silver holds above $16.[/quote]

I think I’ll just short GLD and that will have the same effect as betting with you directly.

[Eugene]

[quote=partypup]
This, for example, is a bubble:

http://www.lesjones.com/2008/11/25/inflation-adjusted-us-house-prices-1975-2008/

And then we have this:

http://www.kitco.com/scripts/hist_charts/yearly_graphs.plx

Does this really look like a bubble to you? Looks more like a slow but inexorable creep upwards to me.
[/quote]

Here’s a chart that portrays three metals. Two went through the bubble phase and then completely deflated, one is still “stuck”.

http://charts.infomine.com/multivariantcharts/showchart.aspx?mv=1&f=f&r=5y&c=cgold.xusd.uoz,czinc.xusd.ulb,cpalladium.xusd.uoz

Gold should have crashed below $600 last winter, in proportion with other metals, but the fact that there’s virtually no industrial demand for the metal, and the fact that the existence of GLD allowed gold bugs to scoop up the excess gold on the market (absorbing 500 tons in 6 months), postponed the inevitable crash.

[quote]Also, can you please tell me what factors would lead to a decline in the price of precious metals? Since they are dollar-denominated, it would seem to me that a fall in the price of metals would require a corresponding rise in the dollar’s value. [/quote]

No, deflation of the bubble can occur without a corresponding rise in the currency value. Precious metals will be falling in all currencies simultaneously. Gold is up 100% wrt euro in 5 years.

[quote]care to take a bet on where the price of metals will be by the end of 2010? I say gold holds above $1000 and silver holds above $16.[/quote]

I think I’ll just short GLD and that will have the same effect as betting with you directly.

[blahblahblah]

Also, can you please tell me what factors would lead to a decline in the price of precious metals? Since they are dollar-denominated, it would seem to me that a fall in the price of metals would require a corresponding rise in the dollar’s value.

Oil is dollar-denominated yet it fell dramatically last year without a corresponding dramatic rise in the dollar (the dollar rose a bit but not nearly as much as oil fell).

[blahblahblah]

Also, can you please tell me what factors would lead to a decline in the price of precious metals? Since they are dollar-denominated, it would seem to me that a fall in the price of metals would require a corresponding rise in the dollar’s value.

Oil is dollar-denominated yet it fell dramatically last year without a corresponding dramatic rise in the dollar (the dollar rose a bit but not nearly as much as oil fell).

[blahblahblah]

Also, can you please tell me what factors would lead to a decline in the price of precious metals? Since they are dollar-denominated, it would seem to me that a fall in the price of metals would require a corresponding rise in the dollar’s value.

Oil is dollar-denominated yet it fell dramatically last year without a corresponding dramatic rise in the dollar (the dollar rose a bit but not nearly as much as oil fell).

[blahblahblah]

Also, can you please tell me what factors would lead to a decline in the price of precious metals? Since they are dollar-denominated, it would seem to me that a fall in the price of metals would require a corresponding rise in the dollar’s value.

Oil is dollar-denominated yet it fell dramatically last year without a corresponding dramatic rise in the dollar (the dollar rose a bit but not nearly as much as oil fell).

[Author]

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