Financial topics

[Higgenbotham]

Silver hit $26 overnight. This is the first place I think silver can bottom. If this is just a washout and hyperinflation is coming then I think silver will bottom at $26 (from the late April high near $50). I don't think that's the case but you never know. I haven't bought any of my silver back but would be a small buyer now at $26 if the market were there this morning instead of overnight. Also, I believe if silver goes below $26 (and I expect it to happen this week or next) then there will not be hyperinflation in the immediate future (say starting next year). Just a guess.

[vincecate]

Silver hit $26 overnight. This is the first place I think silver can bottom. If this is just a washout and hyperinflation is coming then I think silver will bottom at $26 (from the late April high near $50). I don't think that's the case but you never know. I haven't bought any of my silver back but would be a small buyer now at $26 if the market were there this morning instead of overnight. Also, I believe if silver goes below $26 (and I expect it to happen this week or next) then there will not be hyperinflation in the immediate future (say starting next year). Just a guess.

One thing for sure, silver is a wild ride. It was down like 12% early this morning before the market opened and is now up 2%.

I just don't see any way that the US can print less than about half the money they spend, and that historically leads to hyperinflation. I don't see how it can be avoided. The people fleeing the Euro make the dollar look good for awhile, but it is not really good. At some point I still think people will flee the Yen, Pound, and Dollar also.

[jcsok]

Although many people believe that hyperinflation will occur because of printing digital dollars, this will not be the case. First the dollar is the world reserve currency. Second, there is more debt denominated in dollars than is available in the money supply. Next, no other currency is viable to move to from dollars. Not the Euro, peso, swiss franc,.......who wants the chinese rembi (sp), or ruble? No other country has stable enough currency and government to move the worlds assets into. Therefore, the dollar will strengthen as the toilet swirls.

[richard5za]

The lack of posts on this weblog suggests that people are trying to work out what is happening? Well, even today I have sell signals for general equities and buy signals for gold miner stocks. If you believe my charts gold miners represent a bargain!
My feeling is that general equities will decline; their PE ratio will now head below 10, in not 6, but what about gold miners? My charts suggest a profit of 100% in the medium term. But am I brave enough to follow my charts?
Richard

[Higgenbotham]

Shorting a stock rally into the first half of October still looks like the best trade to me (if it sets up right). I've spent many hours studying the daily stock charts going back to the 1800s and last weeks action indicated that shorting a move higher that may last as long as 3 weeks could present a good risk to reward. Any rally, if it does materialize, could go much higher than most seem to think, which would probably ignite a short covering panic.

Other than that, I see no good trade.

I will accumulate a small amount of silver if there's another flush toward October 5. I don't anticipate that will be the bottom but am not opposed to starting to take out some hyperinflation insurance on my 100% US dollar position at lower silver prices (say in the $20 range on average). I see no hyperinflation in the immediate future but I don't always position for what I see (said the blind man).

[richard5za]

Any rally, if it does materialize, could go much higher than most seem to think, which would probably ignite a short covering panic.

Well, I'll be watching with interest, Higgie. I still don't think the S&P 500 will make a decisive break up through the 1215 resistance point. But charts can be wrong. Shorting the S&P could indeed reap handsome rewards, but I don't short anything. Always long. I'm not a trader like you Higgie.

I still reckon gold miners are a very good bet - very tempted to place a large order. I haven't made any good money since 2007 when I went into cash except 5% into gold and miners. That's more than doubled now but on the rest I have been earning interest and with low interest rates I don't view that as good money. I am looking at putting an additional 25% of my savings into miners. The up count on my charts is 100% gain but if I make only 20% that will be great.
Richard

[richard5za]

I still reckon gold miners are a very good bet

I took my courage by both hands today and put a lot of money into South African gold miners. I don't buy on margin or borrowing of any sort - I pay for the shares. My charts have an upcount of 100% but lets see what happens. As I write I'm up 1.3% after brokerage

Also as I write gold is back up to $ 1670. I find the massive dumping of metals onto the Asian markets on Monday very interesting. If someone was genuinely selling they would have waited for both London and New York markets to be open and thus maximise their price. To dump large quantities of metals onto the Monday Asian market and drive the price down to $ 1550 is for another purpose, whatever it may be.

I am told that there is a Chinese curse "May you live in interesting times". Well, we must be cursed OK

[aedens]

http://www.merriam-webster.com/dictionary/schadenfreude
It is like this all over. Noted in the Whitehall study is that stress follows rank.
http://www.zerohedge.com/news/bbc-speec ... ules-world
Nothing is an accident, just deluded design it is said at times. I found this compelling to read and will leave it for thought.

"India has also been active member of "synchronous soap drop in public toilet" experiment that US has propagated. The concept is simple to understand, if all the soverigns drop the soap in the public toilet at the same time, then there is nobody to f&*^ them. US started with huge financial ponzi and they evangelized this solution through G20 nations and other coordination whereby they have encouraged all soverign nations to print, devalue, take on more debt, bailout, and stimulus at the same time under the pretext that it was necessary to save the world. Suprisingly it has worked so far, however, the moment the experiment gets put of phase you can imagine the results and the nations start to find those dropping soap attractively positioned. India/Chine and others have been very willing participants in this experiment."

I must admit I found it interesting and the current investing sentiment the Fed is now contracted to collecting you will see soon.
Also in the forums we forwarded descript natures we trend here also in GD. Also I convey a story from Isaac Newton, which may be true and, in any case, is a great story from Jeremy Grantham
Newton had the great good luck to get into the South Sea Bubble early. He made a really decent investment and a very quick killing, which mattered to him. It was enough to count. He then got out, and suffered the most painful experience that can happen in investing: he watched all of his friends getting disgustingly rich. He lost his cool and got back in, but to make up for lost time, he got back in with a whole lot more (some of it borrowed), nicely caught the decline, and was totally wiped out. And he is reported to have said something like, “I can calculate the movement of heavenly bodies but not the madness of men.”

"It is not that government has lacked information needed to fix the problem. It is institutionally incapable of bringing about the desired result, since the principles of profit and loss, private property and contract, enterprise and entrepreneurship, do not exist in government. Any Government operates with an eye to its own short-term survival, and those of its connected interest groups, and nothing else." Mises

I think Tiberius said it best.....
"Governing Rome is like holding a wolf by it's ears...."

[jcsok]

:

I think Tiberius said it best.....
"Governing Rome is like holding a wolf by it's ears...."

Along a similar vein, a friend and I were discussing the state of the world ponzi scheme, and he used an analogy that Bernanke had a bear by the tail and was swinging it in circles above his head, but he's getting tired, and when he can't swing the bear anymore, its going to eat him (us).

[vincecate]

Shorting a stock rally into the first half of October still looks like the best trade to me (if it sets up right).

I will sleep better once I have some S&P puts again. I may buy a bit today. The silver calls I got Friday are doing well. Would be nice if the market had a big rally and then I got a bunch of S&P puts. I feel like I have a nice balanced and diversified portfolio when I have silver calls and S&P puts and not so good to only have one of these.