Morris Hubbarts technical analysis of gold prices

[Atash Hagmahani]

http://www.lewrockwell.com/spl2/gold-in-2011.html

I honestly hope there is a correction for the purpose of a buying opportunity.

This gold bull has been good to me. It has already lasted a long time and fundamentals are good for now.

[offdalip]

waiting here too

altho I don't think we'll see 1260

1350 if lucky\\

silver already above 31, happening faster than I thought

[Eddie]

I have a couple of thoughts about the price of Gold even though Im long and bought the majority of my stash years ago. But I wonder what kind of impact the markets could have if say there is a major stock market correction for whatever reason.

Would the big players make a sell off to buy cheap stocks causing the price to plunge to say $350 an ounce cause it to stay there?

I know it would create a buying opportunity for some, probably even for myself but the collateral damage might be a bit much.

How do you all see it?

[Eddie]

Or maybe this is a likely scenario.

http://www.youtube.com/watch?v=2N8gJSMoOJc&feature=player_embedded#!

Rather then the big players dumping their Gold holdings to buy cheap stocks, the feds will inject the markets with more manopoly money.

[offdalip]

if the economy does good, inflation will go UP


if the economy does bad, we get QE3, QE4, QE5.................

either way, gold goes up

[Eddie]

if the economy does good, inflation will go UP


if the economy does bad, we get QE3, QE4, QE5.................

either way, gold goes up

Sounds logical to me. So the Dollar will either hyperinflate to zero or deflate to zero.

Which one?

[Atash Hagmahani]

Even though it inevitably will happen, we don't like to use the word "hyperinflation" too loosely. For one thing it might take a long time.

Or it might not. Once inflation hits the double digits, stay prepared for high and possibly worsening inflation for the indefinite future.

Last time we were rescued from the bring, Paul Volker raised interest rates to something over 20%, while Kissinger was cutting deals with the House of Saud. I have difficulty imagining what kind of deus ex machina solution remains possible, while petroleum is depleting and we have diminishing capital to allocate to lower-energy restructuring. It looks bad.

If a miracle does happen and we start disinflating, pay attention I suppose.

Food, energy, and clothing prices are due to rise imminently. One thing to keep aware of tho is that the Bank of China has been raising interest rates, and any time now might trigger a major global recession. Don't buy the deflationary spiral nonsense, but don't speculate on commodities either. Always maintain positions you can hold no matter what. Volatility is how the big boys shake all the weak hands out of the tree.

[tigger]

Nice explanation.  That sounds pretty sensible to me.

[offdalip]

Guys, we will not go into a deflationary spiral nor will we hyperinflate.

the most likely scenario is , IMHO down the middle, i.e. strong inflation a la 10-20% per year like Argentina or Brazil.

the reason : the dollar is the reserve currency and will remain there for many reasons. In a room full of Looney bin people,
there is always someone that seems sane, yet he is as looney as the rest despite appearances. 

[Beeherder]

buying opportunities in silver today?

sometimes i read this fella's ramblings:

http://harveyorgan.blogspot.com/

20% inflation rates?? That means a price doubling every 3.5 years, and that makes ANY commodity a value retainer. Seems like we have been in that 10 - 20% range for awhile now (maybe since August 2010, imho). I started buying 25 pound bags of rice three years ago for around $6, now they are over $9 and most of that appreciation in in the past 6 months.

[offdalip]

20% inflation rates?? That means a price doubling every 3.5 years

yes, exactly that.

remember back to the 70's what specific things cost?

the dollar has lost 70-80% of it's purchasing power since then.

remember back to 1999-2000 what specific things cost?

the dollar has lost 20-30% of its purchasing power since then.

You gotta have a real memory, I remember.

Things are likely to speed up a bit now............

and if you think Au / Ag are high priced now, just wait a few more years.

I don't care what govnmt says cpi is, I go to the store and milk bread etc etc are up almost
50% from 2-3 years ago across all brands, if not more

[Eddie]

re: the dollar is the reserve currency and will remain there for many reasons

This may be wishful thinking and I hope your right, but it seems China does not like the game that's being played and there are way to many variables that dictate an alternative outcome. Namely war.
 http://online.wsj.com/article/SB10001424052748703551604576085803801776090.html?mod=WSJ_hp_LEADNewsCollection

[offdalip]

I doubt China wants to fight any kind of foot war. but they would win if they did.

Mr. Hu called attention to China's accelerating effort to expand the role of its own currency, describing recent moves to allow greater use of the yuan in cross-border trade and investment—while acknowledging that making it a fully fledged international currency "will be a fairly long process."

it'll be many many years before they are able to ramp up currency exchange and bond trading functions.

their window of opportunity is maybe 20 years and then the the consequences of their one child per couple
policy will come back and bite them hard in the ass as their demographic changes suddenly from a worker
class to a retired class

[Eddie]

I doubt China wants to fight any kind of foot war. but they would win if they did.

I was implying that they are merely trying to defend themselves from a potential war, but not a foot war, that's old school these days. The US has over 970 military bases around the world. China has none. What's going to happen if or when China decides not to hold anymore Dollar reserves?

I think things are starting to get a little dicey that's all.

[Beeherder]

looks to me like China is planning to use those dollars they already hold to purchase as much of the world as the world will sell. And that they plan to purchase only enough more phoney money to keep its value up long enough to spend what they already have. just one opinion here