Already some crazy trading in the conventional markets this morning
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Good questions CFS. In the current environment that power that be is supporting the market and did say they will do whatever it takes to stop the system from collapsing, is it wise to expect a collapse as we know it is in FED (ECB) ‘s capability to print to infinity? The question is whether they are willing to do it. I think the bet is 50-50. Look back at 2000 and 2008, they only came very late. How about the next time? Are they going to back stop it at 10%, 20% or 50% crash? Since it will depends on the decision of very few people, statistics does not work for this sample size. Should we just gamble? I am sure this will make JPM and GS really happy since they can make huge profit by letting the market drop and buy it back in. FED works for them!
I also really suspect that China and Russian is going to short the gold market with paper at this stage since they are at the mercy of western exchanges to short the market and they have no control. The reason that Western CBs can short the market for many years is that they are willing to discharge some physical when the market is facing default as it happened many times. Are China and Russia willing to do it too. They are not only not willing to sell physical, they are buying. They are also betting on western exchanges to work with them 100%, which we know the relationship is very tense at present.
In addition, if they let the gold price dropping too much, the discontent among people who have invested in gold will be high and people will again go into the housing market which government tried all they can to squeeze the bubble from. At least China is trying to deflating housing market unlike in the West.
Trying? Ha Ha! Man you are out of touch. They let that bubble run until nobody could stop it from collapsing under its own weight. You are really a gem to suggest that this is some kind of controlled landing.
Thought provoking, Professor.
No doubt you are correct. Eventually they are going to want to see return on their investment and the only way to do that is to manipulate the physical and paper market higher.
omitted an “it” ….Russia is it appears….
hui 198 gap=almost there
hui 192 gap=most likely but its a very microscopic gap.
Small investors most optimistic since 2007
Hmm…
GDX has broken down exactly as anticipated. Chart is a wreck.
The conclusion that there may be a crash in the future is based on assumptions.
Every judgment we make is always based on experience and assumptions.
In these days of apparent manipulation in almost all markets, it is appropriate to examine those assumptions on which your logic is based.
Suppose the central banks were prepared to buy all the stocks in the world; could any market ever collapse?
I’m not saying that the central banks are going to buy all the stocks.
I am saying that in times where much of the economy is based on perception, and central banks are prepared to create as much money as needed out of thin air, what motivation do central banks have not support any market they choose?
Like wise, for precious metals, at a time when China and or Russia is appears attempting to acquire as much physical metal as possible, why would you expect them not to naked short the paper market, to drive the price down, while buying physical?
What penalty would you expect them to receive on failure to deliver on their paper shorts? Surely, they will simply settle in full in cash at the lower prices.