Generational Dynamics Forum - New Site

RDRUNR wrote:I noticed silver and gold tumbled in price yesterday

I suspect that the Dow is going to tumble between now and the end of the year; the global financial situation is now very serious.

Gold is starting to show genuine 'safe haven' properties and considerable increases can be expected unless there is a defalionery implosion.

Your arguement seems to be based upon a repetition of the 1981 situation but the economic fundamentals are completely different today. Remember that gold was only traded from the early 70's; before that it was fixed at $ 35 per ounce. And ten years later it was still being understood from many points of view. It now has about 40 years of trading.

richard5za wrote:

RDRUNR wrote:I noticed silver and gold tumbled in price yesterday

I suspect that the Dow is going to tumble between now and the end of the year; the global financial situation is now very serious.

Gold is starting to show genuine 'safe haven' properties and considerable increases can be expected unless there is a defalionery implosion.

Your arguement seems to be based upon a repetition of the 1981 situation but the economic fundamentals are completely different today. Remember that gold was only traded from the early 70's; before that it was fixed at $ 35 per ounce. And ten years later it was still being understood from many points of view. It now has about 40 years of trading.

Actually, no, my debate is based on after the 1970's when gold was traded actively and created a massive bubble in the early 80's before crashing more then 300% in less than 1 year.

My debate is also based on the fact we ARE in a deflationary sprial today and have been since the collapse of the credit bubble a few years ago.

Deflation = Lower commodity prices.

If you are expecting inflation, get in line with the "experts" on CNBC. Also read John's post today:

The credit bubble of the mid-2000s decade created huge amounts of liquidity. With the collapse of that bubble, there is less money in the world every day, because of deleveraging. As liquidity becomes more scarce, meaning that the supply of liquidity goes down, the "price" of liquidity, as measured in interest rates (bond yields) goes up, particularly in Europe, by the law of supply and demand. This is causing a deflationary spiral that cannot be stopped by any politicians.

I have to be up front, John is the smartest man I've ever read in today's era.

Guesses for gold, silver, Dow and dollar for week beginning 8 August 2011

Its very difficult to predict the week ahead, we are in uncharted waters, but for New York close on Friday 12 August here are my (guesses) predictions:

Gold well up, probably by $ 50 or more to $ 1714 or higher. Reason is the safe haven properties demonstrated last week
Silver, up to over $ 42. Reason is riding in gold's bosom
Dow, down by at least 3% for the week to 11100 or lower, could be a real sharp drop of 8% to test 10 500, or even break down below this level. Reason is that reality is dawning upon the investing community.
Dollar index was 74.6 last Friday close which is down 5.6% year to date. I am forecasting a 2% to 3% drop this week. Reason: Read the S&P statement.

Any other views?

Have an exciting week, everyone!
Richard

The S&P said, "On Monday, we will issue separate releases concerning affected ratings in
the funds, government-related entities, financial institutions, insurance,
public finance, and structured finance sectors."

I think Monday will be a down day for the stock market.

richard5za wrote:Any other views?

This weekend I see a lot of people trying to predict.

I have no position in any investment. Through my entire life, that's only been the case off and on for the past 3 months. That's a way of saying I don't have a prediction.

It comes to mind that OLD1953 said it best on the other thread. "The effect of the debt downgrade is not predictable, there are too many loose ends. It's very much a chaotic situation, events will simply have to play out over time. The downgrade is not a black swan, but the RESULTS of the downgrade are." Outstanding.

The best approach in my view is to lay out all the scenarios and then decide how you would respond.

OK, I'll take a guess.

A watched pot never boils, so I'll guess that nothing much
will happen on Monday, and everyone will declare victory.

But as bad news from Europe and America piles up, I'll guess
that things will get worse during the week, with the DJIA
falling at least a few percent. In the worst case scenario,
there will be a full scale panic, and the DJIA will gyrate
violently during a 10-20% range, ending the week down
significantly.

This is NOT a Generational Dynamics prediction.

John

Most Popular

Republican Perry offers prayer for America at rally
Copter downing in Afghanistan kills 30 Americans
Copter shot down, killing 30 US troops, 7 Afghans
White House adviser blames tea party for downgrade
GOP candidates slam Obama in reaction to S&P downgrade

Glancing at the most popular headlines I'll make a fun prediction. Rick Perry will be the next US President.

Tel Aviv exchange halts trade after 6% fall
http://news.yahoo.com/tel-aviv-exchange ... 39508.html

richard5za wrote:Guesses for gold, silver, Dow and dollar for week beginning 8 August 2011

I have no positions the US stock market.

Gold to $1750 before flash crashing on Friday as fear and greed run their course.

Silver to $43 before flash crashing early next week (after gold crashes).

DOW down 700 points by friday. (Say, 400 points on Monday)

Dollar index UP by Friday to 78 as the world realises the US Dolar IS the reserve currency and the currency of safety and international trade. There is no where else to go.

It will be an interesting week ahead, one I wouldn't want to be in oil, stocks, gold or silver. (Interesting as in not good).

Just contemplating today's Asian market declines before Europe opens, this thought occurrred to me

The May peak of the Dow was 12 810. Last Friday's close was 11 444 which is a 10.7% decline on the May ppeak

Historically an 18% decline (roughly) on a previous peak has been an important psychological trigger to unleash a substantial sell off

The support point 10 500 represents an 18% decline so if the Dow breaks down through this level the next stop could be 9000?

Vince is making money today boys!

sy