Replies to post #245095 on Zeev's Turnips Patch-No Politics (ZEEV)

[tonytuba]

Good read Dan, thanks

[TJ Parker]

dan, what was the source of that? unfortunately there's a flaw in the reasoning.

"The purchase of these gambling DERIVATIVES at a great loss have transformed each market crisis into a rally."

the fact that the futures-buying created a rally pretty much means that the loss turned to a profit and the strategy was successful. so really, the motive for doing this needn't really be anything other than profit, and that only requires someone with enough resources to pull it off ...

[longdong_63]

Great article Dan. Thanks.

[Must Be Patient]

The PPT may very well get involved, but could I propose an alternate scenario for these market bottoms? Here's just a theory:

During such market collapses (post 9/11, 9-10/2002, 2-3/2003), there are a lot of players that just wait, without putting in bids, because the longer they wait the cheaper things get. Then when these players see others start to jump in and pay short-term premiums to get in at such low prices, players suddenly realize they are out of time to wait, and this feeds on itself as more people decide that the wait is over.

Isn't this kind of what happens in the gold market too? I don't think the PPT is helping us gold bugs out in such instances. <G>

[mlsoft]

Dan...

Nice article on the PPT. Although I do not agree with all his assertions (such as where he apparently thinks all of this has been done at great loss, when most of it has probably ended up profitable to date), the gist of it is on the mark and it continues to amaze me that many either cannot see or refuse to admit the obvious. The monster which has been mostly slumbering for a while has recently awakened and the team has been considerably more active as the market threatens to break to the downside. A renewal of the bear market (which is what we are beginning to witness here) would be a disaster for the Greenspan Gambit as asset inflation would reverse and quickly drain the economy -- a reversal of what AG has worked so hard to accomplish for the past 18 months.

mlsoft

[Y worry Murray]

Thanks Dan, while I believe it is possible that the PPT helped the POG lower it is not probable they were the prime cause of the move. You will recall that in mid April there was still a large net long position held by small specs in gold. This is bearish as they are almost always wrong!

Steve Saville writes; "we doubt that gold is weak because it is being manipulated lower."

Taken out of context from;

"The only explanation that makes sense to us is that gold, gold stocks and all the other investments that are perceived to benefit from higher inflation got caught up in the leveraged trades that were entered on the basis that short-term interest rates were going to remain at generational lows for a long time to come. In other words, large amounts of US Dollars were borrowed at very low short-term rates and used to buy things -- including gold -- that were likely to appreciate as a result of the Fed's pro-inflation stance. The Fed's pro-inflation stance hasn't changed, but when it became clear that short-term rates were headed higher with or without the Fed the trades had to be unwound even though the inflation problem wasn't likely to diminish in the foreseeable future.

Further to the above, we doubt that gold is weak because it is being manipulated lower. Rather, the weakness is most likely the result of a lot of highly-leveraged speculators desperately trying to squeeze through a narrow doorway at the same time."

Part of;
http://www.mineralstox.com/info/street.asp?newsid=252

Murray