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A Monetary Low Point, Even By Recent Standards

February 19, 2014

This article has some interesting comments on the whole QE premise and how Japan’s actions only further show how out to lunch everyone is.

Click here for the full article.

Discussion
70 Comments
    CFS
    Feb 19, 2014 19:37 PM
    CFS
    Feb 19, 2014 19:40 PM

    Had you forgotten about Greece? Tut-tut.

    http://www.bbc.co.uk/news/business-26171213

    CFS
    Feb 19, 2014 19:45 PM

    I still cannot believe it will not be inflation….i.e. by things.

    But more and more commentators say deflation! i.e. keep cash, currency.
    http://www.bbc.co.uk/news/business-26171213

    I hate being out of step……unless I’m out front.

      Feb 19, 2014 19:29 PM

      Stagflation

    CFS
    Feb 19, 2014 19:33 PM

    15 minutes of Jim Rogers, sagacious as usual. (Although I wish he would not get on his exercise bike during interviews.)
    http://radio.goldseek.com/nuggets/rogers.02.18.14.mp3

      Feb 19, 2014 19:13 PM

      me too. CFS, when I first saw him do that – I didnt see the bike and i thought he has some sort of heart ailment or disease – it looked awkward and he looked sickly on that bike..

        Jimmy quotes…………”not going to SELL HIS GOLD”….would be a wise suggestion to some of the traders……………

          Feb 19, 2014 19:50 PM

          No, no Jerry….listen to it again. Jim will most certainly sell his gold when the time is right. The trade is not “buy and hold until you die” or anything like that. Metals and resources run in cycles. You shift in and out as time progresses. It is a major flaw in the thnking of most goldbugs that precious metals are just a buy and hold for life. That is a costly and foolish philosophy.

            UNTIL THE BUBBLE…….I think he said……….

            there is a cycle to every investment………….and one needs to be aware of where a particular investment is in the cycle………….being aware of that major cycle, allows for the greatest return……….without, a bunch of headaches…….and sleepless nites.

            bird………I agree with you………….major flaw…”buy and hold until you die”………
            I agree you shift in and out ,,,over one’s lifetime….get in early,,and don’t be the last one out………..

            Feb 20, 2014 20:11 AM

            Exactly Jerry. There is a season for all things. This may be another for gold but there will be a day to move on to something else. As much as some may not like to hear it, dollars themselves may be the better trade down the road should a serious deflation erupt. News of the death of the dollar is greatly exaggerated. I would advise anyone to seriously reconsider the view that dollar denominated assets are a poor choice. You will want to keep some physical though or risk losing all.

            I think you could be correct on the “death of the dollar”……they are going to keep this printing going until we go over the cliff………
            America is in a pickle…….even MCDONALDS IS NOT AMERICAN ANYMORE., there are more MCD outside of USA,,,than inside USA…

        Feb 19, 2014 19:17 PM

        All the huffing and puffing and wheezing is good. Adds to the urgency and seriousness of the financial situation and the message.

        Maybe we can get Al to do his broadcasts while running or riding a bike or on a treadmill! 🙂

      Feb 19, 2014 19:11 PM

      Hey, all the huffing and puffing and wheezing is good. Adds to the urgency and seriousness of the financial situation and the message.

      Feb 19, 2014 19:02 PM

      I always enjoy listening to Jim. His programme cynicism is blinding him to better analysis though. I think he will be proven wrong that the Fed will reverse on stimulus as he will be wrong that they will rush to introduce more QE as an expected recession finally arrives. Lets think like the bankers for just a minute. The Federal Reserve has some 4 trillion of assets that will need to be removed from their books over the coming years. They will be loathe to add more especially at a time when the MBS are marked so low. Rather they will seek ways to introduce inflationary pressures such that the economy will catch up to prices at which they need to sell those assets back into the market. This is not at all the same as just engaging in another bond buying programme in a panic to save the economy but rather a strategy that allows them a graceful exit. Instead we are going to see expanded lending in the US and a concomittant increase in the pickup in velocty that will be an outcome of an inflation sentiment that will eventually push wages. That is desirable. If they can succeed in pushing up inflation at a time when rates remain low (in other words, quickly and before 4th quarter 2015) then we will have what appears to be the signs of an economic recovery shaping up even as stock markets flatten and decline.

        Feb 19, 2014 19:08 PM

        By the way….pay close attention to Jim rogers on a very important point he makes. He has not sold his gold yet. He states he will not sell any of his gold either.Then he qualifies the statement beautifully with exactly the words we all should expect from a great investor…..he won’t sell UNTIL gold has bubbled and peaked.

        In other words, Jim WILL sell when the time is right. So much for buy and hold until the end of time!

      Feb 19, 2014 19:28 PM

      3 years ago, Rogers fell in love with the Yen.

      I thought he was crazy then although it is difficult to argue with all of overall successes

        Feb 19, 2014 19:52 PM

        Jim is smart. He folows the major trends and takes some knocks along the way due to the rise and fall but his philosophy is sound. Stick with the theme in motion while it is still running even if it can be volatile from time to time.

    CFS
    Feb 19, 2014 19:37 PM

    Gold still moving in backwardation:

    i) One Month: -.048000% vs yesterday: -.05200000% (in backwardation)
    ii Two Months: -.03000%. vs yesterday: -.0340000% (in backwardation)
    iii) Three Months:-.01000000% vs yesterday: -.014000% (in backwardation)
    iv) Six months: +.0340000% vs yesterday: +.038000%

    CFS
    Feb 19, 2014 19:44 PM

    Note what Jim Rogers says at about 9 minutes.
    (Fed will confiscate IRAs 401Ks)

    The following is interesting:
    http://www.goldcore.com/goldcore_blog/Celente_Warns_On_Dollar_And_Euro_Which_One_Is_Going_To_Go_First

      Feb 19, 2014 19:24 PM

      I would not call pension confiscation a certainty, CFS, although we should bear in mind it is being considered as a last option should all other options fail. Really, from the perspective of domestic debt and the level of foreign holdings of our debt instruments, the pension system in the US (as in Europe) can easily accomodate ALL of the outstanding liabilities thus allowing the system as we know it to continue to function while sovereign risks are minimized. A nationalization of pensions only means that the payment system itself will be socialized and that greater equity will be introduced to the retired portion of society. It is an easy sell actually. Only the wealthiest will oppose it.

    CFS
    Feb 19, 2014 19:53 PM

    The Gata WGC/CPM group debate heats up:
    http://www.coinweek.com/bullion-report/massive-discrepancy-2013-china-gold-demand/
    I side on Gata’s numbers.

    CFS
    Feb 19, 2014 19:59 PM

    http://blog.milesfranklin.com/risk-vs-reward

    No one is agreeing with anyone….!

      Feb 19, 2014 19:46 PM

      Absolutely!

      There is a lot of marketing going on right now!

        Feb 19, 2014 19:04 PM

        Don’t fall for Bill’s gold investing reasoning. It is far too emotional and fear based and therefore must be discounted. This , like all other times, is when we need to keep our rational hats on and take a cold look at the market that interest us. All those assumptions Bill makes about the music stopping, the confiscation of bank savings and assets etcetera are not facts. They are suppositions about unknown events in the future that are by no means certain. Work with what you know as facts in the here and now and you will be better off and less likley to become a victim (again) of bad thinking where precious metals are concerned.

          Feb 19, 2014 19:08 PM

          It really grates on my nerves that the same kind of hype that was so typical of the last years when gold was falling has again reemerged in force. Such bullshit knows no bounds. Listening to these guys led a lot of people astray. They are oh-so convincing as you buy into all the Mothers Milk ideas right up until you lose your shirt and start thinking for yourself. Mathew pulls the same rah-rah stunts here day after day. Now we have Eric doing the same thing. You must buy and hold or you won’t be a man maybe!. All bullshit.

            Feb 20, 2014 20:04 AM

            Birdman;
            There are only two guys I listen to on an almost daily basis, for their take on gold.

            The first is Jay Gallemore (ChartingYourFutures.com). My take on him is that if he has an opinion about gold, he would be anti-gold bug; some gold bug must have pissed in his cornflakes at some point because he slams the rah-rah types every chance he gets. Jay’s bias doesn’t stop him from trading gold though, although his favourite commods are the S’s – soybeans, sugar, silver. If I was allowed, I’d open an account with him today.

            The second is Tiger Tom (TFNN.com). He’s been in and out of PM equities three times since June 2013, making a tidy bundle each time. Yesterday he disclosed that he sold all miners within the last few days and is waiting for the next pull-back to get long again. He expects the correction will be severe, but as a swing trader, could change his mind in a heart beat.

            The hyper-ventilating gold astronauts are almost as annoying as the “world is ending” gang, however, I do find them useful as a gauge of sentiment.

            Feb 20, 2014 20:41 AM

            Many thanks Irwin! I have not heard of either of those guys. Actually, I don’t follow anyone anymore because I almost always can figure it out better myself. I might just look those two up for a bit of relief from the endless and mindless cheerleading though that is steeped in bias and invariably wrong. Tom clearly made a good call on selling positions. Doc had said he was doing the same yesterday and he got out just under the wire (which I was pretty pleased to hear because I really like the guy). You know, I want to hear more success stories anyway…..from the guys who see profits…..not the ones who keep losing their shirts and crying a sob story.

            Feb 20, 2014 20:34 AM

            Bird Manure, you’re the biggest ass this site has seen. Do you think that grates on any nerves? You’re always sick and tired of someone and constantly declaring others wrong when they give their opinion about that which you can’t know for certain either —the future.
            I give my honest opinion here and act accordingly with my own money, and this is “bullshit?” You, on the other hand, grossly overestimate your own competence in a variety of subjects (btw, I think there’s medicine for that) and offer no actionable investment ideas…. wait, I take that back, you DID declare chickens to be a better safe haven than gold.
            Fools like you are the reason my contrarian approach has worked so well for me over the years.
            Now here’s to GDXJ going back to $38 —you sell, I’ll buy, rah rah! Got it?!

    GREAT LISTEN TO …….USAWATCHDOG……..Karl Denninger talks market……….

    Feb 19, 2014 19:07 PM

    Most people like certain periods in history my favorite is The US in the 1920’s, a go-go time, if I could pick a time to raise a family and live anywhere it would be The United States Of America in the 1950’s, but only if you were white and then it would be a dream come true. DT

      Feb 19, 2014 19:21 PM

      My dad, GOD bless his gentle soul – got married to a beautiful woman (mom) in 1952 and started the family immediately – nine years later and six pregnancies – yours truly showed up. Looking back at the pictures of the early days – Mom and Dad looked like Movie Stars and had a high morality and work ethic to match their looks…what happened to later generations??..who knows..but it aint good! Sorry guys..its just the truth. And IF YOU WANT CONFIRMATION: Compare the innocence and gentleness of the SIT COMS back then – to the dark, sex infested, vulgar crap that is on them now….hey, I aint perfect – but I KNOW SH___ TV when I see SH___TV!! The fall of this great country is being played out on network TV!!

      Feb 19, 2014 19:43 PM

      Good times bad times you know I’ve had my share, as the old song goes. In the 50’s in the US the black folks certainly had their share of the bad times and that was definitely not fair.

    CFS
    Feb 19, 2014 19:09 PM

    Brazil is a major supplier of food to the western world.
    I thought we were having a problem with drought in California, not Brazil!
    http://endoftheamericandream.com/archives/the-drought-in-brazil-has-gotten-so-bad-that-142-cities-are-now-rationing-water

    Agricultural commodities HAVE to be a wise buy!

      Feb 19, 2014 19:36 PM

      Oh my God, please save the wine!

      Feb 19, 2014 19:38 PM

      Cannot be true because I did not read about it in The Seattle Times!

      Feb 19, 2014 19:34 PM

      Drought is nothing….just watch what a civil war in Ukraine will do to grain supplies.

        Feb 19, 2014 19:26 PM

        Long corn, long wheat, long BARLEY! ….you know, its really all about beer!

    CFS
    Feb 19, 2014 19:16 PM

    And just when you think Keystone will go ahead!

    http://www.mail.com/news/politics/2662340-nebraska-law-that-allowed-keystone-xl-struck.html#.7518-stage-hero1-2

    Although I don’t wish more derailments, it would serve them right if there were.

      Feb 19, 2014 19:32 PM

      Trust me CFS there probably will be. I mean common man, it is AmErican. Who do those Canucks think they are anyway? My guess it is a conspiracy to take over the US of A.

      Feb 19, 2014 19:44 PM

      The talk is about Keystone today but it will be about water pipelines tomorrow. Canada will almost certainly be asked to take part in a continental water sharing programme that sees the surplusses of the North distributed to where needs are extreme in the South. Furthermore, there will be growing pressures to divert Columbia River waters (amongst others) to California by pipeline. There is a huge export market for water of course and Canadians stand to see substantial benefits if they warm to the idea. The environmentalist will FREAK out as usual but then again….they always freak out. We can almost ask aloud if the Keystone is not better used to distribute water than oil. Just make the pipe bigger and change the terminus and entry points a little. Crazy?…..I don’t think so.

        Feb 20, 2014 20:15 AM

        I still don’t think The Keystone pipeline is good for America, it will greatly benefit Canada, but if Harper can survive Justin Trudeau in the next election water will be his bargaining chip and XL will be built. DT

      Feb 19, 2014 19:22 PM

      Thanks.

      Bob is an interesting guy as are most graduates of Reed College. Boy could I tell you stories!

    CFS
    Feb 19, 2014 19:10 PM
    CFS
    Feb 19, 2014 19:18 PM

    Tesla and Apple get-together? That’s nothing:
    http://www.youtube.com/watch?feature=player_detailpage&v=Vk7DxyzpE2Y
    Look Ma No, hands!

    But you’ve really got to love a cup of Jo!

      Feb 19, 2014 19:26 PM

      I looked at a Tesla and it is a beautiful car. I mean really beautiful!

      Call me crazy, but I love our too aging BMWs

        Feb 19, 2014 19:56 PM

        Al, I’ve got an old standard gold colored Honda Accord, a rare bird indeed but my all time favorite was a two tone1953 Chrysler New Yorker Deluxe Newport with a 1956 353 semi-hemi engine. DT

          best antique car I ever owned was……..1936 BOATTAILED SPEEDSTER AUBURN.,red with black and white interior…19000 org. miles……..Supercharged with original paint.

    CFS
    Feb 20, 2014 20:11 AM

    President orders another Assassination by drone.
    A dozen innocents killed on way to wedding in Yemen.
    Howcan this not be a War Crime?

    CFS
    Feb 20, 2014 20:25 AM

    Lease Rates
    LDN 1M 3N 6M 12M
    Gold 2014-02-19 0.203 0.244 0.295 0.443
    Silver 2012-11-02 -0.411 -0.305 -0.074 0.307
    Platinum 2013-09-25 -0.171 -0.102 0.019 0.183
    Palladium 2013-09-25 -0.171 -0.102 0.019 0.183

    CFS
    Feb 20, 2014 20:02 AM

    I said a few days ago to expect electric problems in US due to new EPA rules.

    I missed this report earlier:
    http://www.commdiginews.com/health-science/u-s-coal-fired-electric-power-dying-faster-than-expected-new-forecasts-expected-8894/

    I was planning on installing solar on one of my houses next year…….I am now wondering if I should have it done this year.
    I have been reading up on which house to install it.
    Interestingly, the obvious choice might be in California, but strangely, although it gets the most sunshine, heating of the panels, because of sunshine actually reduces electrical output. Since UV radiation penetrates clouds, a cloudy day in California is better for generation than a sunny day! Maybe a non-standard, electric plus water-heating combo is better. hmm!