Financial thread

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Looks very much like it to me, and I am being very cautious with regard to positioning. In the case of the FANGs it is reminiscent of the dot com bubble, a combination of FOMO, overconfidence, and an "everything is rosy in the economy" sentiment. Although Amazon is a great solid company, fundamentals go completely out of the window as the Tech feeding frenzy takes hold.

In the case of Tesla, much of the parabolic rise seems to be a combination of FOMO and and a big short squeeze. It is a self feeding beast. All parabolic moves are. This is what concerns me with the recent parabolic rise in Silver. There are some big short positions in Silver going back years, and this could easily be the engine, along with FOMO to propel Silver to parabolic levels in the near term, as the short positions end up being taken out due to margin calls etc.

The problem with parabolic price patterns is that they always come to an end, and what goes up always comes down (bitcoin etc). Although I am long term bullish on Gold and Silver, I for one will resist FOMO, and will not chase the current rise in the price of either metal. I much prefer to take a little profit here and there, and wait for a good strong consolidation pattern to develop before adding to positions. With the way things are looking at the mo with regard to the price pattern being set up in the NASDAQ chart, a big reversal looks very overdue, and the consolidation patterns for precious metals could be at much lower levels then current prices.

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I think the end is near, as Kodak have become relevant for the first time in 30+ years. They have been handed $765m from the Orange one,to produce chemicals for generic drugs. What ever is next? Hey can't make money on cryptocurrency?, try pharmaceuticals.

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It's what lobbying can do for you.

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Interesting analysis here.

www.youtube.com/watch?time_continue=2543&v=D6DQtbn5nos&feature=emb_logo

On this basis, I do hope that Gold does not go to $5000 an ounce. What a lovely world it will be to live in.

Looking on the bright side, the only good thing about our future will be that the recent blatant nepotistic action by Boris Johnson will result in the value of his brother's £48,000 per annum House of Lords pension deteriorating dramatically in real terms. Then again the Lords will probably just give themselves pay rises as required. We are all in this together. Not.

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Gold could go higher than $5000.

Much higher.

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I think your prediction will probably turn out to be right.

Now that we've had a nice sell off in precious metals, it's going to be interesting to see what kind of price pattern sets up for Gold. Personally I am expecting a bit more downwards action that will eventually form a sloping bull flag over time. We shall see. Off course, what the Fed does next with regard to stimulus will have a strong influence on precious metal prices, and the ever growing asset bubble.

Here is an interesting post.

realinvestmentadvice.com/macroview-why-soros-just-called-the-market-a-bubble/

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Thanks - Ties in with other things I have seen.

When will the punch bowl be removed from the party?

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This is a great interview.

www.youtube.com/watch?time_continue=2254&v=QHrNGmxLCpo&feature=emb_logo

Worth a gamble? Who knows, but in my view the prospect of imminent yield curve control is a very strong possibility.

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Aug 15, 2020 7:53:22 GMT sennockian69 said:

Thanks - Ties in with other things I have seen.

When will the punch bowl be removed from the party?

Looks like Warren Buffett may have taken charge of the punch bowl, and filled it with coffee.

Berkshire Hathaway invested $565 million in Barrick Gold back in August (13F filing just released), and that was before the pandemic. Granted it is not much when you consider Buffett's overall investments, but he has not been exactly a fan of physical Gold in the past as it is of a low productive value, and does not provide a dividend. Although Barrick will, of course provide the dividend he likes. Since then Berkshire Hathaway has also offloaded a lot of banking stock.

This little purchase could speak volumes.  I just wonder how much the company has invested in Gold related stocks since August 2019.

Correction 19/08/20 - Berkshire Hathaway's purchase of Barrick stock did not take place in August 2019, but must have taken place within the last few weeks or months, I assume anytime from mid February onward. 13F forms must be filed within 45 days of the end of the calendar quarter. 

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FFS. Talk about closing the stable doors 16 years or so after the horse has bolted. Still I suppose it gives them something to do. Perhaps they will consult Mr Greenspan for his viewpoint. In my view it will likely be too little, too late, and In the end poor old Covid will be blamed for what the future holds for us.

www.freedomworks.org/content/sound-money-caucus-looks-bring-needed-attention-monetary-policy

On a seperate issue, it is possible that, as we approach the upcoming US election, some fear will start to come into the markets, and a more safe haven approach will be taken by investors. With this in mind, the US dollar, which has been on the slide for the last few weeks, might start to become more attractive as a safe haven, particularly for foreign investors. This might put pressure on the price of Gold for a short time, hopefully to pull back to a level where it starts to look attractive, particularly if it forms a nice bull flag. In addition, as the price of Silver is more volatile than Gold, I would expect it to fall further in percentage terms before consolidating. In my view, the strength to which these consolidation patterns form in both metals, and to the S&P 500 for that matter, will probably determine what the next leg up will look like.

If of course, the Fed exercises yield curve control between now and the election, the above scenario will probably be void, or at least disrupted. I still see September as the most likely time a decision will be made about this.

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Didn't the States give up on sound money in August 1971?

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Aug 19, 2020 19:24:53 GMT sennockian69 said:

Didn't the States give up on sound money in August 1971?

So true. It's just that I cannot understand how, post the Japanese experience, the dot com crash, and the financial crisis, intelligent economists cannot learn with the benefit of hindsight, and somehow project effective policy into the future without messing up.

Yesterday's release of the Fed's July meeting gave no indication of yield curve control being applied going forward. Although I am not entirely convinced that they will not change their minds on this, money printing has 'solved' the repo problem, or at least put a bandage on it by bailing the Banks out yet again, thereby allowing the Fed to continue to kick the can down the road, maybe the Fed see this as an opportunity to create inflation to a level somewhere above their 2% target, while also keeping interest rates low. If so this could easily result in stagflation and not inflation. It could be the 1970s all over again.

By the way, the UK is trying to put up a bit of a fight to look independent, and not follow the US and the EU to the same degree, but I think resistance will be futile, and we will be assimilated if the populace does not accept extreme austerity. I just wish the politicians in the know (on both sides) would let us in on where they have placed their offshore investments. Just to give us a little bit of a chance.

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Aug 20, 2020 9:11:04 GMT @cgr said:

Aug 19, 2020 19:24:53 GMT sennockian69 said:

Didn't the States give up on sound money in August 1971?

So true. It's just that I cannot understand how, post the Japanese experience, the dot com crash, and the financial crisis, intelligent economists cannot learn with the benefit of hindsight, and somehow project effective policy into the future without messing up.

Yesterday's release of the Fed's July meeting gave no indication of yield curve control being applied going forward. Although I am not entirely convinced that they will not change their minds on this, money printing has 'solved' the repo problem, or at least put a bandage on it by bailing the Banks out yet again, thereby allowing the Fed to continue to kick the can down the road, maybe the Fed see this as an opportunity to create inflation to a level somewhere above their 2% target, while also keeping interest rates low. If so this could easily result in stagflation and not inflation. It could be the 1970s all over again.

By the way, the UK is trying to put up a bit of a fight to look independent, and not follow the US and the EU to the same degree, but I think resistance will be futile, and we will be assimilated if the populace does not accept extreme austerity. I just wish the politicians in the know (on both sides) would let us in on where they have placed their offshore investments. Just to give us a little bit of a chance.

You've been watching to much Star Trek matey🤣

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Too late, I was assimilated many years ago, and locked up with some green alien bitch. Don't knock it until you've tried it.

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There have been rumblings over the last week or so that the Fed are about to make a policy change. Rumour? Fed chair Jerome Powell is due to speak tomorrow, and I would suspect that the markets will be quite nervous with regard to what he says about Fed policy going forward. If there is any indication that an attempt will be made to try to artificially create an inflationary environment in order to reduce government debt, the markets could sell off dramatically, along with precious metals. Depending on market sentiment, and the reaction of the $US, if this inflationary tactic is implied without indicating that interest rates would also rise in tandem, Gold may not fall as far as Silver, and indeed may well rise.

Overall an inflationary stance could be a big risk for the Fed as, up to now, they have been actively supporting asset prices. Maybe the thinking is that they could do both, by overtly buying shares directly. Who knows, but it could be the next step after buying all those Corporate Bonds. Mass nationalisation of companies? McCarthy is spinning.

Should the status quo remain the same, i.e. QE to infinity and beyond, then maybe the Fed is happy to stay under their 2% inflation target, having come to realise that money printing to stimulate growth just does not work, despite the fact that they will continue printing. It just increases the gap between the haves and have nots. If so, then maybe this is the policy change, and any future threat of inflation is dealt with appropriately.