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Gold, oil, and US dollar commentary

June 26, 2014

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Discussion
23 Comments
    Jun 26, 2014 26:40 AM
      Jun 26, 2014 26:55 PM

      Doc has some long term projections for the Dow/Gold ratio. He thinks we could get much, much lower as time progresses.

        Jun 26, 2014 26:52 PM

        Cory, I am glad to hear that.

    Jun 26, 2014 26:55 AM

    Gary,
    I don’t know how you keep all that stuff in you head, must be the fresh Nevada air..

      Jun 26, 2014 26:21 AM

      The air is crisp and fresh on top of the Mandarin in a penthouse
      suite. Its the ultimate lifestyle.

    CFS
    Jun 26, 2014 26:35 AM

    We had a manipulation in Dollar price up at about 10 am today ET.

    It was allowed to fall back. Inasmuch as we are losing dollar reserve status over the next few years, it will tend to its true value. It is fiat, but it’s value is not zero, as people like to say. It depends on trade flow and is probably around mid sixties on the dollar index; and should be expected to achieve that status over a few years.
    ((Americans should be grateful the Euro is very weak)

      Jun 26, 2014 26:12 PM

      CFS….You are on the same page as me, some weeks ago I stated that I thought it would drop to about ..65…..I would go as far as to give it a couple of years rather than a few.

      GH
      Jun 26, 2014 26:01 PM

      What do you guys think of the possibility of short-term (up to a couple years, say) of a strengthening US dollar, if chaos elsewhere in the world scares people into it?

        Jun 26, 2014 26:15 PM

        A very good likelihood in my opinion, GH. I am not in the camp that believes the dollar is going to collapse anytime soon and that is for sure. On the contrary, it is far more probable that the war cycle and increasingly difficult economic conditions in many countries leading to both gold and the dollar appreciating together. Bets against the dollar are ill advised at this time.

          GH
          Jun 26, 2014 26:26 PM

          I’m not dollar bullish, but the ‘safe haven’ trade does seem possible. The US dollar index seems fairly meaningless to me, as it’s relative to other currencies also being printed to oblivion. ‘Collapse’ is a strong word, and also relative, but I expect a sharp decline in its purchasing power of tangible things of value over the mid- to long-term. We’re already seeing it. But as gold has shown us, even if gold is still in a secular bull (I believe it is), strong counter-trend moves do happen. So if the dollar is in a secular bear, it could still move up, even strongly, for a while.

          Jun 26, 2014 26:00 PM

          Great comments Bird and GH. If no other country can show to be the strong hand and sort their own issues out in the short term then I don’t see the dollar collapsing. Long term it will happen but right now no country is showing me the strong move that it will take.

        DF
        Jun 26, 2014 26:31 PM

        The dollar will collapse sooner than two years because it will loose it’s petrodollar status. Today Russia announced that it officially will not be trading in dollars for oil. When Russia’s partners get on board, dollars will be dumped by the hundreds of billions and all those dollars will come home to roost. Even if some in the world think of it as a safe haven, it won’t be enough to save it.

      GH
      Jun 26, 2014 26:01 PM

      And how do you settle on the figure of mid-60s?

      Jun 26, 2014 26:42 PM

      CFS,

      Dollar index is based on other fiat currencies. Its up and down does not reflect the strenght of the dollar. It only measures the speed of devaluation relative to other bad choices. I think this game is coming to an end soon. Some change to the world currency system is unavoidable and may come sooner than we think.

    Jun 26, 2014 26:12 PM

    Interesting comments Gary. Enjoyed the show. The Euro looks set tot turn down in my view so that will lend considerable weight to a upturn in the dollar. We should watch for that early next week. Crude is also set to decline and will (hopefully) do so in conjunction with a healthy correction in both gold and silver.

      Jun 26, 2014 26:03 PM

      That all seems to be the consensus Bird. Gold and silver along with oil have a short correction in the next couple weeks that will set them up for a much healthier move up. It does seem like we have been saying that a number of times this year but hopefully this time it happens and we see a nice sustained move up. I personally think the move up will come at the tail end of summer or the beginning of fall.

        Jun 26, 2014 26:13 PM

        Well now we have a consensus we are sure to get beat. Damn!

          Jun 26, 2014 26:26 PM

          Its comforting to have company and those who appease others.

          Amateur Hour. Ha….the donkey love fest.

          Wheat longs right now has no company.

          Cattle short has no company.

          Not investment advise and no donkey love fest in either one.

        Jun 26, 2014 26:32 PM

        I think it will come before we all expect it – unless it was 2 weeks ago, in which case Gary got it and we all missed it 🙂

        Looking forward to the next dip.

    Jun 26, 2014 26:53 PM

    On our way to $1224! The “b”-wave has completed with a textbook-perfect fifth-wave failure in a textbook-perfect ascending triangle. It just doesn’t get any better than this! Now comes the killer “c”-wave that will have every last gold bull screaming for their Mommies and promising their Deity Of Choice they’ll never buy an ounce of gold ( or silver ) ever again in this life or their next one or their next tne lives after that one. Almost every last bull, anyway.

      Jun 26, 2014 26:36 PM

      MAD……RUBBISH.

    Jun 26, 2014 26:35 PM

    Like to see oil and gold fall with ISIS taking Iraq’s oil fields and headed to the US house of Fiat:
    King Abdullah calls up Saudi armed forces on high preparedness. Egyptian troops ready to fly to kingdom
    DEBKAfile Exclusive Report June 26, 2014, 6:49 PM (IDT)

    Thursday, June 26, the day before US Secretary of State John Kerry was due in Riyadh, King Abdullah summoned a National Security Council meeting “upon the current security events in the region, especially in Iraq,” and ordered “all necessary measures to protect the kingdom against terrorist threats.” This meant a general call-up of military units for a high level of preparedness.

    debkafile’s military sources disclose that Egypt is assembling an expeditionary commando force to fly to Saudi Arabia and bolster its border defenses.
    This flurry of Saudi-Egyptian military steps comes in the wake of intelligence gathered by Saudi reconnaissance planes showing Iraqi Al Qaeda-linked Sunni fighters (ISIS) heading for the Saudi border and aiming to seize control of the Iraqi-Saudi crossing at Ar Ar (pop: 200,000).

    Jun 26, 2014 26:44 PM

    One of the best days today with twitter up 5%. Have a major position in that from 32.