Posts by "stationdealer"

The further increase in volatility is bearish. We often see that right at the beginning of major bear markets. You get some single day rallies that really impress everyone. We had one of those after the August 2007 swoon for instance.

Yet, the DJIA has never - not once - rallied 400 points during a bull market. Every single 400 point or more rise was in the context of major bear markets.

oh i thought you were just giving me a hard time :)

never mind.........point taken!

EUR/USD Stopped In Its Tracks Again
Looks like the BIS is still lurking on the offer in the 1.2745/50 area as the single currency quickly backed off from another run at that level. A few fresh tidbits are crossing the wires. Fitch says there is no ratings impact on French banks from their exposure to Greece (Thanks EU/IMF/ECB!)
Also. Senator Shelby, the ranking Republican on the Senate Banking Committee says that Bernanke told the committee that the European debt crisis would have had ramifications for US banks if it were not dealt with

Moodys: New Fiscal Framework Postitive For European Credit As A Whole
But it is negative for the strong credits in Europe, like Germany. Lowest common denominator? Sounds like it too me. Moodys also discovers what the we saw on Saturday. That this crisis response is an important step toward a common European treasury, like it or not. Liquidity concerns have been alleviated by the package, Moodys says

I agree xaron and it will be happening soon you can only dump a certain amount of euro. Euro already gaining vs the Asiatic currencies. Where its been seen being bought rapidly during the morning session.
While im hedged euro so far iv'e been long gold and now going long on aussie and shorting swissie. and of gold decide to come down long copper. All in all there's more thoughtful trades and opportunity out there, also staying long with GBP till 15350.

@ month you naughty i choice to quote what i want to quote, mentioned what was worth while to mention. it was not to drive any assessment it was just some boring information that cud have been useful to someone. Thanks for the enlightenment .

The British economist Peter Millar speculated two years ago that a exponential rise in Gold prices might be necessary to prevent debt deflation:
While it is almost a year old, a study of the enduring importance of gold in the world economic system by R. Peter W. Millar, founder of Valu-Trac Investment Research Ltd. in Scotland (www.valu-trac.com), seems ever more compelling, and Millar graciously has agreed to let it be shared with you.

Millar stresses the periodic upward revaluation of gold as the mechanism for defeating a deflationary debt depression at the end of an economic cycle. Millar writes:

The first cycle unfolded as follows:
Phase 1: Stability under a gold standard until 1914.
Phase 2: Inflation until 1921, which resulted in a buildup of debt.
Phase 3: Disinflation, which brought stability and allowed asset inflation until 1929, but encouraged a further buildup of debt.
Phase 4: Instability after 1929 caused by deflation of assets from overpriced levels and exacerbated by excessive debt levels, leading to depression of economic activity.
Phase 5: Monetary reform enabled by a revaluation of gold to overcome deflationary debt depression.
In the second half of the 20th century we saw a repeat of the first three phases of the same cycle:
Phase 1: Stability from 1944 to 1968 under a gold standard.


Phase 2: Inflation from 1968 to 1981, which caused and justified another buildup of debt.
Phase 3: Disinflation from 1981 until the end of the 20th century, and maybe to the present.
However, it appears that Phase 4 (instability and ultimately deflation due to excessive debt) may have started. If so, Phase 5 (revaluation of the gold price to raise the monetary value of the world monetary base and hence reduce the burden of debt) becomes likely or inevitable. The extent of that revaluation would need to be major according to our calculations, probably by a factor of at least seven times, possibly up to 20 times the current price of gold.
The price of gold when Millar wrote his study, in May 2006, was about where it is tonight.

The full document can be read below:
PeterMillarGoldNoteMay06 http://www.scribd.com/doc/31183598/PeterMillarGoldNoteMay06

When Millar wrote that study gold in the visible market was trading at about $650 per ounce. Millar thus envisioned the necessity of a gold price of between $4,550 and $13,000. FOFOA puts golds current secret market price at around $6,000. On CNBC the other day, Rickards said he expected gold to reach $5,000 once the manipulation of the paper market was defeated.

It is observed by FOFA (USAGOLD)

that physical gold and contracts for gold are different things entirely. New contracts can be produced much faster than new physical gold can be mined. But when demand shifts from contracts to physical (which is happening), this puts great strain on the market that tries to price them as equals. And what must ultimately happen when this strain breaks the parity between physical gold and contract gold is that the membrane separating the Bank for International Settlements physical gold price from the ordinary market will break.
When this happens, all your debt problems will be reset to manageable and sustainable levels again. In fact, the entire monetary and financial order will be reset. This is going to happen. And the central bankers can make it happen whenever they want, when they finally feel the heat of the fire on their own butts.
The question though is when will the central bankers around the globe decide that the weight of debt has now reached beyond their manageable limits and let Gold take control.