Gloom Doom & Boom (not the boom you were thinking)

drinks anyone?

In the case of the U.S. this hasn't played out. At the end the U.S. prints its way out of the budget deficit. In this scenario you will want to own real estate.

@MMafia

I'm thinking about buying a Powerball ticket tonight. Y'got any numbers for me?! ;)

RS totally agree but trade war or real war with China is the boogyman.

ieb.

In my book the real risk the market faces is an all out currency war between the Western Europe, China and the U.S. We can't all depreciate our currencies to boost exports at the same time. My own view is this was a contributor to Thursday's 500 points down. The Swiss are very unhappy with the current exchange rate which is hurting their exports.

Yup, currency war most likely but when things get dicey you never know what could happen.

The original gloom, doom and boom prognosticator, Marc Faber is siding with old fashioned war. Seems improbable to me -- if China really had imperialistic tendencies, they could engineer a take over simply by dumping bonds. Faber thinks war will be over oil. That also seems improbable to me since the developed countries cannot afford war and are way, way past the cultural imperative of sending out doughboys to do the dirty work. It is a drone, drone world. Plus, there is a surplus supply of oil, especially if we have a global recession.

http://www.cnbc.com/id/44031717

gold could go nuts

We're in a window where China could be militarily defeated but that won't last for long. A few nukes in Bejing, shanghai, hong kong and set up provisional gov problem over?

yeah. urban. after dennis gartman sold half his positionin gold this week, he turned around and went overweight gold. crazy times.

Gold is silly. Hoard crickets. They're edible.

Uh huh. Gold is silly. It's not an investment. It's speculative. blah blah blah. It's also up over 100% in three years.

I don't care about good investments. I only care about good trades. The bottom line and the only line is 'did I make money, and how much.'

Mr. Warren Berkshire Hathaway Gold Is Dumb I don't Get It Investments Only Buffet has returned an annual ROR of 4% over the past 13 years. Gold has returned an annual ROR of 14% over the past 13 years.

I'm sure all those 'investors' like you take great pride and are very sanguine about your returns, justifying them in the rationale that crickets are edible, or some such other sarcastic observations.

Talk is very cheap. The bottom line is the only thing that matters. 100% in three years. That's the trade. And there's the money.

Might be a "flash in the pan" matsonjones. You should hold out for more time series data.

i sold my gold bar, about 1/3 of my holdings about 8 weeks ago. the gains paid for half of a new deck to get built. i tried to sell my crickets, nobody would buy them. so I might have to eat them

Ok I'll play along.... What do we need to do be prepared?

Well get ready for Italy...Makes the U.S. downgrade seem like a runny nose..
--------------------

FRANKFURT -(Dow Jones)- Germany's government thinks Italy is too big for Europe's rescue fund to save, Der Spiegel magazine reports in a preview of an article to be published Monday.

The government doubts whether even tripling the size of the rescue fund, known as the European Financial Stability Facility, would enable it to save Italy because the country's financing needs are so enormous, the magazine reports without naming the source of its information.

http://www.nasdaq.com/aspx/stock-market-news-story.aspx?storyid=201108061248dowjonesdjonline000231&title=german-government-thinks-italy-too-big-for-efsf-to-save--spiegel

Riversider: There is No WAY gold keeps going up. No way. Not even remotely suggesting that. But it's not a sell, either - yet!

MMAfia
OK, you're the GURU.
What's the big finish?
How do we prepare?
How will it 'the main course' effect on island RE $?

matsonjones, nothing goes straight up and forever and gold could easily pull back $200 from here... but the worst case scenario for Europe and the U.S seems more and more likely so an eventual move above $2000 an ounce would not be out of the question. Gold is still not at an inflation adjusted high either..

Urban: When gold doubles you can brag that you have the most expensive deck in the county. :) I just got a call from Goldline-- they are in the office on saturday afternoon calling up people to let them know about the downgrade, spread some fear, and get more money committed. American enterprise is still alive and well.

RS- that is very similar to a Der spiegel story that Graffitti posted several months ago. The story has not changed. The ECB doesn't have the funds to buy enough bonds to make a difference, the banks are woefully under capitalized due to sovereign debt holding rules, there is no political impetus to bail out the Euro. On Monday morning, you will be able to hear the bears sigh "Ah, I love the smell of apocalypse in the morning" ---(apologies to Robert Duvall)

Ulimately, if the euro survives, it may well be because of greater and greater intervention, coordination, central control of finances, etc. , in short, exactly what some euro politicians have wanted all along.

I am reminded of the Margaret Thatcher quote where she was railing against centralized European control and then said something to the effect that if she were Italian she might prefer it.

I don't see how Euro survives unless Europe takes the additional step of Fiscal Union.

Riversider: Yes, of course to either $200 or $2000 ounce. Who knows? Not me! The point is, that in either case, I really don't think it will happen overnight. There will be plenty of time to make a (reasonably) informed decision as to when to sell. What's the biggest one day drop in gold ever? 10% or so? So if that happens, I'm back down to $1,500/ounce in one day? And if I panic and sell, gee, I'm only up 85% in three years :-((( Same for an increase - if gold suddenly overnight goes up 10% to $1,825, well, then we're up 125% in three years. So I don't really see a downside to the trade. Shares of serious invsetors BRK.A, on the other hand, I am not so sure about....

>I just got a call from Goldline

and since marketers can't just cold call you, you must have called them first.

I can't imagine buying gold through goldline, which is hawked on talk radio.

"I don't see how Euro survives unless Europe takes the additional step of Fiscal Union."

They may not call it that but yes that is the direction they will have to go in. So perversely, by ending up with this big mess, the one-europe dreamers will be getting closer to what they always wanted.

The other possibility is the some weaker southern countries exit. The German citizen can only take so much bailing out. If the southern Euro states had the option of devaluation they'd be able to get out of this. So far the bail outs have been more about protecting French banks than anything else.

Riversider: This is why I don't completely understand the rush to Swiss francs....

I think you do.
Investors rush to buy the swiss franc as a flight to safety. The swiss hate this and lower interest rates or enter the currency markets in an attempt to reverse this. Usually the market wins...

apt123 - that comments was in response to the 'gold is silly, hoard crickets' comment. Im not bragging about anything, my stance on these issues are public and have been known for years either here or on UD. I was right about some things and wrong about others, like the reflation in 2009.

On a similar note, look how wrong the collective wisdom of the market has been on rates. Forward curve has not been validated in the least.

apt23, urbandigs got your name wrong. Quick, call the police. The sky is falling. The sky is falling apt23. Move to Miami and avoid your tax obligations in NY.

urbandigs: She specializes in ergos.

Truth, I have to admit the site's been a lot better these last few days. Much more civil.

Are the people on here buying gold actually using goldline, which someone mentioned above. I use GLD (i know the doomsayers warn that it's not a real holding of gold), or PRPFX, the permanent portfolio which is 30% gold/silver.

hey riversider, hows this for civility?

Truth
about 2 hours ago
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falcogold: The bully gang is defunct.
Your attempts to annoy me only show that you can't drop the bully behavior.

And aboutready knows your real name and has your email address.

"falcogold
yo you got mail."

Go try to get some balls, coward.

I think before this is all done, the Euro will collapse, as will many of the socialist, welfare state countries of europe with little offer the world's economy. German, with its incredible productivity, will be fine, and the resource-rich countries will be fine. But Spain, Greece, Italy etc will be decimated.

The fallout of this will hit another fat, slow, socialist-leaning country - the USA. Real estate in New York, which is down 15% but which avoided the more painful corrections that hit Miami, Phoenix, Las Vegas, & California, will see an outsized impact.

It's not civil and Truth there is no need for you to tell UD about people on this board who have been posting here a lot longer than since you have invaded this site with your ridiculous time stamps. Why don't you just keep to RE speak and stop the nonsense? It's destroying the integrity of the entire board. Can't we have one thread that keeps to the topic at hand?

>columbiacounty
about 2 hours ago
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hey riversider, hows this for civility?

A few days ago, columbiacounty was seeking approval from bjw. Now he's seeking approval from Riversider.
Hysterical.

my grandma survived the WW2 and she saying that gold is good only till food supply is uninterapted, otherwise dry goods is king

shit. i wonder if there is time for me to dig a hole in my parents backyard and stock it with sleeping bags and canned goods.

or are we just talking about some money changing hands as opposed to armmagedon?

NO more borker money.

columbiacounty, you've lost your family, your pride, your health, your career ended in shambles, you sold equities at the bottom in March 2009, your housing can basically be summed up as having a window in the shower. The least you have are your educational credentials, but if you continue to misspell things, that becomes questionable too.

starting when cc? or is it really no more banker money?

or is it really that some bankers will be replaced by some other bankers than back to business as usual?

No worries. Rick Perry held a big prayer meeting in Texas today. It's all good.

Urban: I follow and value your opinion -- and your site. No, I was referring to your decision to sell gold and put the money into a new deck. I had a friend who sold some of his stock options to put in a new driveway. The day after he sold, his company was on the receiving end of a hostile takeover and the stock doubled. So, his driveway was suddenly considerably more expensive. He used to brag his driveway was worth more than many homes in the neighborhood -- with obvious regret. So, I was wondering what your deck will be worth if gold spikes tomorrow. :)

luckily I have 2/3rds of the position left in gold...you cant time everything, and you never ever buy the exact bottom and sell the exact top. These positions Ive had for 4+ yrs. Unfortunately, Ive been selling along the way in pieces, not knowing if there might be a 10-20% correction after 175% move in 4yrs. A good trade is a good trade and hindsight is 20/20. Ive made plenty of bad trades before where i wish I did sell equity or options and buy something tangible. Im sure all of us did. But for me, i have no problems with lost potential capital gains on a trade that worked so well for years. Just me.

As my Uncle Leo always told me; "Keith, you can't lose money taking a profit". (;

Yes, UB, wise counsel that I learned the hard way. I once didn't sell a position because I wanted to defer the tax benefit till the next year. But the tax problem was solved when the market fell and I no longer had a profit. In fact I was underwater in the position for months until I sold at a loss. And that was a solid large cap stock, not the uber volatile gold mkt.

What is this crazy talk about war with China? For what? We can't blame China for our own mistakes. US companies and citizens have thrived on cheap goods from China. They need us to keep their economy running just as much as we need them to keep our economy running. We needed them to buy our dept. One of the reasons China's economy has been so strong is that they have kept out of war and concentrated on their economy and infrastructure instead. We have wasted billions in senseless wars. China didn't force us into Iraq.

ieb said: "RS totally agree but trade war or real war with China is the boogyman."

I totally agree. We THINK that we're getting a good enough bargain for Chinese goods and labor, when in fact we've been actually paying too much, all these years, to really discount in the damage to our economic and manufacturing infrastructure.

Keep trading gold - go for it! No other bubble on the face of the earth has ever long lasted, and not only are tulips pretty - the bulbs are edible!

YOu can have teeth made out of gold. You can't have teeth made out of tulips.

But leave it to apt23 to tell more negative stories. She spins selling as a bad decision, and then in the next breath points out that holding can be a bad decision. You can't win with her.

Those Chinese products were up until recently contributing to low inflation here. It's because the Yuan will now rise and Chinese workers getting higher wages that Bernanke is off his rocker when he thinks we'll continue to see low prices. Furthermore Fed is looking at QE3, despite the fact that QE2 was a total failure(Those freed up treasury bonds drove up the price of Commodities and did not create jobs)

its simply unwinding an in the money position, stevejhx.

the thing about China, is that there is a balance of trade thing going on between the US and china. China is forced to buy us bonds to maintain is trade policy. If China, or any foreign entity for that matter, buys less US govt bonds, by definition, out deficit will be reduced - a good thing. If our account deficits fall, China is buying less bonds, and balance of trade likely will mean an appreciation of the yuan and that is the last thing china wants. sometimes I get confused myself about all these interwoven connections..stevejhx or someone, is my thinking right here?

You are correct. And that's why apt23's statement yesterday, "Seems improbable to me -- if China really had imperialistic tendencies, they could engineer a take over simply by dumping bonds." is absurd (though not out of character for apt23).

They'd dump bonds into weakness (in exchange for what??), see their currency appreciate on a relative basis, be less able to sell goods to the United States which then translates into unemployment and potential social unrest targeting their leadership. So to "take over" the U.S.,, the leadership risks their own jobs.

steve: you and Bsexposer are the same person? As I wrote on the gold thread you started -

Everything - equities, commodities, real estate, art, crickets, tulips, anything you can name - goes up and down in price, investment OR speculation. The ONLY question that matters is "Were you smart enough to buy and sell, within reason, the right thing at the right time?" Whether it was an investment, or speculation, or whatever.

Since I bought gold in 2008 at just a wee bit under $800/oz, it's returned over 100% in about three years. The ONLY thing that matters to me is the trade's bottom line.

Your talk is cheap.

Noah, Spot on.
China will continue to buy Treasuries and keep their exchange rate as favorable as possible to keep their work force employed. The not so best kept secret is that Chinese companies produce at very low profit margins and a rise in the Yuan could be make many marginal companies operate in the red(hey that's a pun!). The Chinese are very sensitive to high unemployment knowing full well that an out of work population is prone to changing governments.

what people need to know is that rising US treasury rates can be a function of many things, outside of whether or not china continues to buy our treasuries. We just made an argument for why they will continue and one might interpret that to mean the threat of rising rates should not exist, as its all about china buying huge loads of US govt debt.

What really amazed me is hearing Erin Burnett on Fox news late friday night saying how US treasuries priced in a potential downgrade to our credit rating, and this fear of a downgrade = surging rates is artifically produced. Really Erin? Usually she knows her shit. At 2.55%, the 10yr treasury yield is very near all time record lows. How can this possibly be a treasury market that priced in a potential downgrade? To me, treasuries were pricing in economic weakness, not a US default or a credit downgrade. Id be very surprised, given the rally in treasuries this past month, if we do not see a selloff at the open on this news. They do have one thing in their favor though for Mondays open, and that is global markets are already selling off, and if our futures are hit hard come 6pm tonight, will investors continue to flock to US treasuries after such a rally and yields at 2.55% on the heels of US credit downgrade? My biggest fear, one that I stated on UD a few times ove rthe past few weeks, is what happens when a) equities, b) corporate bonds and c) US treasuries all selloff at the same time for a sustained period? What if the Dow breaks 10,000 as US 10yr yields rise past 4%? Imagine an economy exposed to negative wealth effect, higher commodity prices and higher rates all at the same time? Where is the balance in that?

Simply speaking our Trading partners are stuck with dollars regardless. The 2.55% is the rate that keeps them from spending. The interest rate in a manner of speaking is a monetary tool.

Lets make some predictions, all in fun. Ill start a new thread and maybe all of us can see how close our hunches are for where the markets open Monday morning

Noah: Yes!! A 'Monday hunch' thread! Do it! :-)))

When do I buy that 1 BR condo in West Chelsea?....been waiting....and waiting....

"you and Bsexposer are the same person?"

Yuck.