Replies to post #1900 on Zeev's Turnips Patch-No Politics (ZEEV)

[deuce bigalow]

Zeev, the markets have been trading in a range since june 25th, a lot of people got bullish for a rally (me too )in the last week, however today we took out some important dow supports, the financials are now the largest component of the SPX.

AXP looks like it is breaking down out of a triangle, a lot of people have noticed FNM has broken a 1.5 year triangle to the downside recently.

here is a chart the the financial spyders.

http://stockcharts.com/def/servlet/SC.web?c=xlf,uu[r,a]dbclyiay[dd][pb50!b200][vc60][iUb14!Ld20]&....

there is a lot of contrary sentiment going here, all three network nightly news opened with a story on the stock market slide, as did MS-NBC.com, which would indicate a heavy amount of bearish sentiment.

however, given that we broke some important supports today, unless the bulls take back control convingly tommorrow and recapture 9000, the dow seems to have that vacant space down to 8200 at the sept. lows.

[gotmilk]

[Gold] a commodity, and the central bankers have decided
a long time ago that gold will never again act as a currency
of last resort.[stop.]
Yes, they spent the last 5 -10 -20 years keeping the equation
of Supply & Demand to result in price of gold to be US$250
using their huge reserves of physical gold being sent into
the markets needing physical.
But what if after 20 years they have little left?
If so then they can not keep gold's price lower any longer,
and also, if the central banks of nations have in effect transfered
their physical gold into private hands, then they could not,
even if wanted, have a gold standard attached to any fiat
currency since they would need first to buy back that gold
they sold into the markets these past 20 years, and if they
tried the price using supply/demand would make it too expensive.
So yes, a gold standard good or bad can not be done.
But the central banks heavy hand to keep gold from becoming
a safe haven or store of value has failed now that they have not
that huge physical supply to flood the markets. Gold as paper
or derivatives today is huge and sick and will only make holding
the physical extra desirable. Gold will always be expressed
in US dollars, and since exchanged rates between currencies
of all nations exclude any having a gold standard or backing
it makes no matter if price of gold is US$250 or US$2,500
as exchanging one nation's paper for another is based not
on the price of gold but it seems the random thoughts of
political leaders and Powers that Be.





gotmilk
Si's Doug AK

[pstuartb]

Zeev - interesting post back there where you said:

we keep a balance of payment that grows and soon will reach 5% of GDP. Once that happens, a major readjustment of currencies will be unavoidable, and that will involve pain, not so much to us (a little inflation) but to the countries that export to us, because will have to cut our imports drastically, plunging the world into a "readjusting recession". I had the beginning of that happening in the second half, but it quite possible that the market have anticipated and are already readjusting the dollar, and the 10 to 15% decline we had in the last quarter are just the first "serving".

Saville makes the same argument here regarding the current account deficit at 5% of GDP: http://www.gold-eagle.com/editorials_02/milhouse121802.html
but I gather he anticipates a deep and sustained decline in the dollar as a result. If so, I would think the repatriation of foreign assets and reduction of imports would take the naz at least to your 950 level, perhaps that's part of what you have in mind.