Quote from: cypherdoc on October 06, 2011, 12:44:35 PM

where is the evidence that they're being forced to monetize on a large scale that anyway resembles the magnitude of the outstanding bad debt worldwide? Ben has only pumped a mere $2T. add up the $54T in private debt plus the quadrillion or so of derivatives overhang? they haven't, they aren't, and they won't.

You've already made the deflation case. That's more than enough evidence. As to the monetization, is USD$8 billion per day not a good enough start?

Quote from: cypherdoc on October 06, 2011, 12:44:35 PM

speculation on your part. right; the avg Joe is about to explode his debt overhang by going out to borrow to open a trading acct? are you dreaming? proprietary desks are NOT all the rage. they have been cut back severely and their trading profits as evidenced in the primary dealers quarterly reports have been hurt badly. why do you think they're having to finally cut bonuses and fire employees just now? right; just kick leverage higher. they can't.

Why the rising incidence of advertisement for trading platforms, then? Ads are cut when they don't garner interest. That's a simple fact of supply and demand.

Many of the human traders may have been let go, but the algo systems have been growing.

From the link in my first rebuttal above, bonds are being purchased on the cheap and resold for a tidy profit. That squeezes the remaining wealth from the end buyers, allowing the banks to expand their investment activity.

Quote from: cypherdoc on October 06, 2011, 12:44:35 PM

i told you this thread is moving away from speculation as to what you think the Fed/gov't is going to do. what are they doing.

My apologies, dictator. (As I monitor my own megalomaniacal tendencies...)

Quote from: cypherdoc on October 06, 2011, 12:44:35 PM

take look at this from the FRBNY's summary report. look at bottom right chart. see just how little fiscal support is coming into the economy. in fact its gone negative:

Those are charts of relative percentage changes, not absolute capital flows. If we chart the percentage deltas, this emerges:

It's now much easier to see that government expenditures have merely slowed, yet PCE is even higher than it was before 2008. Gov't expenditures are also above levels prior to the first QE. You are correct in pointing out that expenditure has been slowing.

For giggles, a comparison including S&P 500:

Both business investment and the S&P have crested and deflationary forces are threatening to drag them down. To recap, that deflationary force is the evidence necessary for the Fed to take action in order to prevent another wave of uncontrolled defaults.

Quote from: cypherdoc on October 06, 2011, 12:44:35 PM

don't you have any imagination as to where that upward spike may be headed?

Dictator just said not to speculate.

Quote from: cypherdoc on October 06, 2011, 12:44:35 PM

i told you this thread is moving away from speculation as to what you think the Fed/gov't is going to do. what are they doing.

Operation Twist. A maneuver designed to keep debt payments low, but it locks in a longer range of debt, putting the problem off yet again (hopefully).

Quote from: cypherdoc on October 06, 2011, 12:44:35 PM

Quote from: miscreanity on October 06, 2011, 07:29:14 AM

Quote from: cypherdoc on October 06, 2011, 02:36:02 AM

is money moving thru the economy normally? or is all of it going to magically go into gold?

It must be kept in mind that the gold market is tiny compared to most others. Bonds, currencies and equities all dwarf the gold cap. Thus only a very small amount of flow needs to find its way to gold in order for major price moves to occur. There is also an entire world outside the borders of the US.

2007: "the lines of ppl around every new home model tract waiting to put down a deposit to secure a home scheduled for delivery 6 mo from now is a sure sign that home prices will continue up. God only made so much land you know."

Your argument is a fallacy, and repeating it does not make it true.

Gold is money, not real estate. The participation rate in gold is still marginal as compared to its market size as a whole. This is the opposite of a saturated market as real estate was in the mid-2000s.

A penny stock (e.g. CYPW ~$0.30) rising by 50% is not the same as another that is orders of magnitude greater (e.g. AAPL ~$380.00) rising by 50%.

Quote from: cypherdoc on October 06, 2011, 12:44:35 PM

Quote

Quote from: cypherdoc on October 06, 2011, 03:10:48 AM

here is a 10 yr gold chart with a hook at the end. now i ask you, how much different is this price graph than the economic data graphs i just showed you? gold is just a reflection of whats going on in the economy with speculation added in i submit.

Pay attention to the increasing volume at the bottom of the chart. Either HFT has progressively gone haywire, or rising amounts of capital are flowing into the sector. I will point out again that a $300 drop from $1,000/oz to $700/oz in 2008 was a 30% correction while the same $300 drop from $1,900/oz to $1,600/oz last month was only a 15% correction.

glad you brought this up. a more sophisticated analysis of the volume show an increasing volume on the days of selloffs. this means there are more interested sellers.

I'm sure you won't mind sharing the methodology for this "more sophisticated" analysis.

Perhaps there was a misunderstanding as to what I mean by declining volume. The following two charts are for gold and silver. Data is from Kitco for the PM London price fix; open interest and volume numbers are from CME Group's data. Percentage differences in movement were calculated from each day versus the prior day's numbers. It is evident that the volume for the selected duration peaked on 09/23 for silver and 09/26 for gold. Since then, daily volume has been falling with price remaining range-bound. The spike on 10/04 was the near-$100 and $2.50 hit gold and silver took.

The red lines for open interest are of particular interest. They should've declined sharply along with the prices, but didn't. Instead, they have only continued a gradual descent - in silver's case, it has even begun to rise again.

The arrow shows the declining volume with the price drop. Remember that all data points are relative to the origin, not absolutes.

Quote from: cypherdoc on October 06, 2011, 12:44:35 PM

you've got to stop dissing the "price". after all, how do you measure your wins vs losses? certainly not by volume. this is a classic excuse when fighting the tape. its for amateurs. i believe the price action is setting up for the next leg DOWN. silver 2nd leg down recently is telling you what gold is going to do very soon.

Ok, gangsta dictator.

I'm pointing out that reliance on price charts and the patterns formed from them alone is folly. Bear trap setups in gold and silver are in place and their trigger is imminent. Refusal to incorporate data beyond the price is akin to judging a book by its cover.

The tenuous connections being applied to market sectors are misinterpreting the interplay between volume, open interest and price. This dynamic is critical to grasp, in combination with supply and demand in the precious metals industry itself. Things are not so complex as the financial wizards have made them seem, even though their deceit and trickery are.

Quote from: cypherdoc on October 06, 2011, 12:44:35 PM

you also need to read Nicole Foss's post completely where she explains bubble dynamics which you completely ignore:

It was addressed elsewhere and not worth a direct reply. See below.

Quote from: miscreanity on October 05, 2011, 07:31:29 PM

As the supply/demand fundamental line rises, capital becomes increasingly attracted to it. The price swings will revolve around that [fundamental] line, growing more violent the more capital flows in.

Price can only diverge so far from the fundamental before it completely decouples into its own abstract exchange, the financial instrument related to the underlying component only being associated by name - not function (i.e. the "price" of gold fell to $1,535, but the actual item couldn't be bought for less than $1,650 - take that to extremes; an official price of $1,000 - dealer sale price to you of $10,000 or more).

Quote from: cypherdoc on October 06, 2011, 12:44:35 PM

why do you think i call you misreality?

Because name-calling is juvenile and avoids engaging in actual discussion; I assumed you to be a 40-year old virgin with a lot of financial knowledge and an inferiority complex.

You asked.

Quote from: cypherdoc on October 06, 2011, 12:44:35 PM

Occam's Razor

Deflation will trigger additional defaults. Assuming there will be nothing done, it is reasonable to expect increasing social turmoil and a self-reinforcing downward spiral of declining business activity. That outcome is bad for everyone. Government's entire purpose is to protect its constituents. If government does nothing, it receives the brunt of backlash.

The chances of inactivity are negligible. Reductio ad absurdum. Pain avoidance is the simplest path, except for masochists.

Quote from: cypherdoc on October 06, 2011, 12:44:35 PM

Quote

When it came to the price charts, there was no real explanation for why the price action in gold and silver are occurring aside from deriving meaning from the price actions themselves. Circular reasoning is a fallacy.

you can't ignore price. thats called denial.

I'm pointing out that reliance on price charts and the patterns formed from them alone is folly. Bear trap setups in gold and silver are in place and their trigger is imminent. Refusal to incorporate data beyond the price is akin to claiming the dollar is a glittering jewel.

Deja vu?

Quote from: cypherdoc on October 06, 2011, 12:44:35 PM

and yet you throw up a series of price charts to prove a point?

I see the point was lost in the imagery. Alright, a written explanation:

By posting and examining only price charts among various industries, completely different conclusions might be drawn as to where the economy is headed. Looking at lumber, there is fear. With AT&T, stability. In Genesco, it would be easy to assume nothing is wrong and the world is doing fine.

This is the danger of looking only at the price charts. Assuming that all of the information is present in price movement is no different from presuming that all Asians know Karate or Kung-Fu just because they look like they fit a stereotype.

Quote from: cypherdoc on October 06, 2011, 12:44:35 PM

i have commented on the first two which i think are bearish and i keep track of warehouse inventories which is supportive of dwindling supply. i don't keep track of the other categories largely b/c i think they're irrelevant b/c they are so opaque. but i know that on the face of it they're suportive of tight supply. i'm not arguing that they are not supportive of your argument but i see enough other data to think we've topped and close to beginning the next leg down in the metals. we could get a small bounce here but its looking pretty weak, esp silver, and i suspect we get another plunge very soon.

The first two are open to interpretation, so disagreement is fine. On the other hand, the CoT and especially the delivery reports suggest high demand. Since you agree that supply is tight, where will sufficient supply come from to alleviate the rising demand?

How does this equation not apply?
(Decreasing Supply) + (Rising Demand) == (Rising Prices)

What data other than price chart patterns implies a continued decline in the precious metals? Not to exclude the possibility of another sharp drop, but there hasn't been anything else offered which points to gold and silver going down for the count. Instead, there's ample evidence that the PMs are due to rise very powerfully.

Quote from: cypherdoc on October 06, 2011, 01:07:18 PM

this means that these markets are not based on fundamentals but purely on speculation of further liquidity injections (criminality) from the world's central banks. in other words, these f*ckers allowing you to be raped. as a result of this i actually think that price means everything. in other words the techinicals trump the fundamentals in this particular situation. you almost cannnot reason what the markets will do. you have to follow what they are doing. otherwise, you will get raped. and what they are doing is going down.

In the short-term, you've got it right. I don't play the short game because of the fact that it's where you will get raped; your initial capital wiped out because of leverage. Buy-and-hold isn't dead: it's the best way to sustain and prosper through this crisis, so long as you either pick the right sector and/or diversify properly.

If you can make the short-game work, wonderful. The big issue is that most of the ideas put forth have been based on price charts and patterns without much solid explanation behind the analysis. My position is such that the remaining days of summer in the northern hemisphere are meant to be spent outside rather than running numbers.

Quote from: cypherdoc on October 06, 2011, 02:08:22 PM

those 69% of Americans (peak housing participation rate) that bought anywhere btwn 1999 or so and 2007 are screwed into the biggest debt instrument of their lives. they won't be coming to the gold or HI party.

And that precludes upward gold revaluation how?

Quote from: cypherdoc on October 06, 2011, 04:17:20 PM

my cycle work forced me to take profits on my pm shorts this am. i think we get a relatively large stock bounce here with the pm's.

Quote from: cypherdoc on October 06, 2011, 09:07:29 PM

we may be in for a multi month run up before the final fall. this is golds last chance to clear its previous highs. lets see if it can get there.

Ok... why?