gold to $650, silver to $9.80

[Jim Nickerson]

Re: gold to $650, silver to $9.80

What about the USD? Does it bust out past 80? I say yes, it does.

Here's a 10-year chart on US$.
http://stockcharts.com/h-sc/ui?s=$US...31&a=132940973

The move up from the 70.70 low, most of which has been off the secondary low of 71.31 in mid-July, has been powerful, and because 80 is almost within spitting distance, I expect the odds favor it reaching 80.

The move has been mostly uncorrected, so it may take some time before it continues up. Even 78 would take it above the highs back to December 2006.
Below is a one-year chart.

http://stockcharts.com/h-sc/ui?s=$US...76&a=132940973

[GRG55]

Re: gold to $650, silver to $9.80

What about the USD? Does it bust out past 80? I say yes, it does.

Doesn't that depend on how long before the next credit "event" hits critical mass?

Re: gold to $650, silver to $9.80

What about the USD? Does it bust out past 80? I say yes, it does.

[vcif]

Re: gold to $650, silver to $9.80

Does anyone have any comments about short positions in gold relative to the price? This gets mentioned a lot by the GATA folks, but I haven't seen anyone here mention it.

EJ's call is consistent with the fact that Goldman Sachs' net short position is currently at an "all-time low".

[Jim Nickerson]

Re: gold to $650, silver to $9.80

ah, c'mon, jim. it'll be fun having luke in the back room behind the main room of the itulip bar and grill. too stuffy in there anyway... we can use the levity.

I can tolerate his levity and look forward to it, it is the unending creative writing with unending use of metaphors that wear me out. I think Lukester is a genius, or near that, while at the same time he has no respect for other people's times.

So far from having omitted reading much of what he has posted in recent times, I am doing well with making money, so I don't guess I have missed anything important.

[metalman]

Re: gold to $650, silver to $9.80

AAAAAAAAAAAAAAAAAAAGGGGGGGGGGGGGGGGGHHHHHHHHHHHHHH!!!

Apologies for this useless one liner.

ah, c'mon, jim. it'll be fun having luke in the back room behind the main room of the itulip bar and grill. too stuffy in there anyway... we can use the levity.

Re: gold to $650, silver to $9.80

I knew it would get a laugh out of you. Oh well, it was nice having the run of the premium pages without me for so long Jim. All good things must come to an end, eh?

[Jim Nickerson]

Re: gold to $650, silver to $9.80

EJ - I'm sincerely hoping and wishing your call here is correct. But I think it can go a fair bit lower. I've read more than one call for this. I say on Thursday / Friday in the afternoon sessions this gets ugly all over again. Hope to Betsy I am flat wrong. May I inquire also, what your best guess is as to when the dollar's apparent breakout will top out? Before 80 on the USD index, or can it go up as far as 85? I know, this sort of intel is for premium members only - but throw a bone here to the public on this juncture maybe? I think it's going to cruise right up past 80. Hope I'm wrong! Anyway, I'm going to fold up my tent as a public member and "sign up" with the lime green card-carrying cohorts this week! (groans of disapproval, from numerous members here, at the prospect of the noisy and interminably lengthy posting Lukester moving over to clog up the premium pages with redundant comments). Can't do without the iTulip guidance in the next few years! Meanwhile I can only commend the overwhelmingly super-accurate calls on your part EJ. This one ain't gonna work out though, I'm guessing!

AAAAAAAAAAAAAAAAAAAGGGGGGGGGGGGGGGGGHHHHHHHHHHHHHH!!!

Apologies for this useless one liner.

Re: gold to $650, silver to $9.80

EJ - I'm sincerely hoping and wishing your call here is correct. But I think it can go a fair bit lower. I've read more than one call for this. I say on Thursday / Friday in the afternoon sessions this gets ugly all over again. Hope to Betsy I am flat wrong. May I inquire also, what your best guess is as to when the dollar's apparent breakout will top out? Before 80 on the USD index, or can it go up as far as 85? I know, this sort of intel is for premium members only - but throw a bone here to the public on this juncture maybe? I think it's going to cruise right up past 80. Hope I'm wrong! Anyway, I'm going to fold up my tent as a public member and "sign up" with the lime green card-carrying cohorts this week! (groans of disapproval, from numerous members here, at the prospect of the noisy and interminably lengthy posting Lukester moving over to clog up the premium pages with redundant comments). Can't do without the iTulip guidance in the next few years! Meanwhile I can only commend the overwhelmingly super-accurate calls on your part EJ. This one ain't gonna work out though, I'm guessing!

[EJ]

Re: gold to $650, silver to $9.80

Agree with Eric. I think we just passed the bottom on gold. Like EJ, can't say exactly why other than it just feels like time.

Other factors are the recent bear market rally is now faltering and we just passed the 4 month mark since gold peaked which is about how long the 2006 correction lasted.

That's not exactly what I said. After being around gold since 1973 when I was 16 years old, spending 1000s of hours over 30 years researching and writing about it and doing careful analysis, buying and selling it, and coming up with the theory of the Dollar Ratchet to explain the current pricing environment, and talking to dozens of hedge fund managers and gold experts and hard assets fund managers over many years, I have a way of figuring out the price that appears to work, at least for now. If I were to add up all the long term costs of developing this pricing system, it'd surely run into the millions of dollars.

[BiscayneSunrise]

Re: gold to $650, silver to $9.80

Agree with Eric. I think we just passed the bottom on gold. Like EJ, can't say exactly why other than it just feels like time.

Other factors are the recent bear market rally is now faltering and we just passed the 4 month mark since gold peaked which is about how long the 2006 correction lasted.

[phirang]

Re: gold to $650, silver to $9.80

it's an odd fact that spreads on gse bonds have widened since their guarantee became explicit, compared with what they were when the federal guarantee was merely implicit. it looks like a [market driven implicit] downgrade of the u.s. treasury itself.

maybe the market is being cautious, assuming that all seniority of creditors could get wiped out, since the US will have to raise a lot of debt to bailout the mortgages themselves, leaving nothing even for most seniro debt holders.

[jk]

Re: gold to $650, silver to $9.80

I see where Hugh is coming from: upon nationalizing mbs', the risk for default amongst american banks goes to zero as bad loans become zombie loans (ahem japan ahem ahem). With US taxpayer backstopping MBS' and essentially the nations banks, credit is preserved without lowering interest rates and you can now lend again: hooray, the dollar is saved.

There's ONE big problem with his hypothesis: he totally neglects how US creditors will react to this. He assumes, and this is dangerous, that foreign cb's and swf's will remain tractable, i.e. famous line, "deficits don't matter".

The US Empire is literally at stake: without the ability to export inflation, we cant finance it.

it's an odd fact that spreads on gse bonds have widened since their guarantee became explicit, compared with what they were when the federal guarantee was merely implicit. it looks like a [market driven implicit] downgrade of the u.s. treasury itself.

[Slimprofits]

Re: gold to $650, silver to $9.80

babbittd, it seems you think I wrote something exclusionary to your contribution? I don't think so, but if I did it was not intended to be negative.

Nope, just wanted to be clear with where my contribution is coming from.

[phirang]

Re: gold to $650, silver to $9.80

Hendry also thinks the banking sector is insolvent, can't tell how low those stocks will go, and that FRE and FNM are likely to be put under the control of the Treasury "in a matter of months."

I see where Hugh is coming from: upon nationalizing mbs', the risk for default amongst american banks goes to zero as bad loans become zombie loans (ahem japan ahem ahem). With US taxpayer backstopping MBS' and essentially the nations banks, credit is preserved without lowering interest rates and you can now lend again: hooray, the dollar is saved.

There's ONE big problem with his hypothesis: he totally neglects how US creditors will react to this. He assumes, and this is dangerous, that foreign cb's and swf's will remain tractable, i.e. famous line, "deficits don't matter".

The US Empire is literally at stake: without the ability to export inflation, we cant finance it.