I think this will turn into a full scale rout. Still considering what Short/Put position would give the best risk adjusted return in this environment. I think the declines will be quite strong, regardless of the current belief that Gold is decoupling from the US dollar.
There are many graphs comparing the Gold bull market to the NASDAQ bull market of the 1990's.
Gold's bull seems small in comparison. However there are markets that topped at much earlier levels. Take the US housing market. Overall we got a 100% gain in US real estate , which in relation to wage growth made US housing a bubble. Here we have a 400% plus appreciation from the bottom, certainly enough to make an argument that the bull run is over.
For now I am in the intermediate decline camp.
12 comments:
I think you got this call wrong. China and Russia ditch US Dollar for Bilateral Trade (http://www.theblaze.com/stories/russia-and-china-ditch-u-s-dollar-for-bilateral-trade/)
This wasn't reported in any US media outlet for obvious reasons. The members in the Shanghai Cooperation Organization (SCO) have been heavily buying gold and I suspect gold having a part in some new basket of currencies to act as the new reserve currency for the world. Why else would Sri Lanka, India, China, Iran and Russia be buying gold unless it was going to serve a purpose in the future?
Check out the change in Russia's gold reserves over the last several years http://4.bp.blogspot.com/_J8L-e47yFE0/TOfsMn-j82I/AAAAAAAAAqM/xPGnQxoM-Ys/s1600/Russian-October-Gold-enlarge.gif
There's a huge shift going underway in the currency markets and Western bankers experiment with fiat currencies is going to end.
Of course it is possible I am getting this wrong.
Citing Countries making changes in their reserves is not the best way to get me convinced though. If I remember correctly a lot of countries diversified out of USD into Euros right near the 1.55-16.0 peak for the Euro.
But seriously dude, did you just cite Sri Lanka as an example.
I have changed my position on Hyperinflation based on what is happening with the Federal Reserve.
For now. It is awesome that I was able to do it while the trade was working for me.
Rather than take huge losses and then change my stance.
Hope your right. Silver is to rich for my blood at the moment. Any thought on the when and how much? Thanks! Glad to see you commenting again. Robert
Oh Robert, you know the saying about markets being irrational longer than... :)
So I make it a point usually to short these only with put spreads with a defined risk, or to stay in cash.
At present IMO about 80% of the Gold holders are in the USD hyperinflation camp. About 5% see it doing well in ANY SCENARIO.
Around 10% see Gold rising in Deflation. Yeah right see Gold in Yen during the 90's.
Less than 5% are buying it for the their specific country's devaluation (in the Euro zone).
As we see a shift (USD no longer going to collapse now.....but Drachmas may be back)I think the selling will overwhelm any Euro zone buying.
Plain Default events for countries while staying within the Euro might be very Gold bearish.
Are you still looking at coswf. Down 10% today.
Yes picked up my first few at 25.50 today. Also picked up a few CHK at 21.40 the other day.
I would go slow on COS. I am looking to buy more around 24 and I am ready for the possibility of even $20.
It is worth far more than that, but in the short run anything is possible.
I bought some today too. $20? I don't see that happening. I would back the truck up at $20
From 2004 to Mid 2008 I could make the comment of what would and what would not happen.
Now I say anything is possible.
If we see good weakness in the market coupled with $65/barrel or lower oil it could go there
True enough. It still seemed like a good deal buyig coswf 10% cheaper than the day before with oil up over $1.
I am still bullish on commodities esp agriculture. I'e been thinkig about playing it through dry bulk shippers. Been looking at BALT.
My sense is that either the stock market is wrong or the NG market has go up a lot.
We cannot have $4.00 NG in a "recovery"
I bought CSCO for the first time in my life!
At 9 times ex-cash it is not incredibly expensive. It may not be cheap still so I plan on selling the 2012 Jan 20 strike calls for 2.12 each.
I think the odds are high that I make 15% on this in a year.
Also I have a decent plain short on the SPY and AMZN.
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