Gold: Past, Present, and Future

It’s nonsense—you all seem to see conspiracies and manipulation in everything...😬

analogharbor44 said:Why even sweat a little correction or "market manipulation"? Honestly, the world's ending the day after tomorrow anyway, so you might as well sell off all your metals and dump every cent into one epic, legendary blowout!🙂

To be honest—I’m less concerned about the actual end of the world than I am about whatever comes after it.😂

It’ll be interesting to see if Moody's considers reducing the deficit by $2 trillion over the next decade—roughly $200 billion annually, or about twenty percent—to be enough.

We all remember what happened last time the USA lost its rating. Maybe this massive downgrade is just a tactical move to set a lower baseline, ensuring any future increases don't look quite so dramatic.

Robert Vaughn10 said:It’ll be interesting to see if Moody's considers reducing the deficit by $2 trillion over the next decade—roughly $200 billion annually, or about twenty percent—to be enough.

We all remember what happened last time the USA lost its rating. Maybe this massive downgrade is just a tactical move to set a lower baseline, ensuring any future increases don't look quite so dramatic.

Sounds like a minor cut... but you always have to look at debt relative to GDP. Since their debt is sitting at 100% of GDP right now, if they follow through on this plan with an average GDP growth rate of 1.64% (looking back at those 2002-2011 numbers), the debt would drop to 65% of GDP in ten years.
...obviously, they’re banking on growth higher than 1.64%. Whether they pull it off? We'll see.

I just stumbled upon some data suggesting that if we hadn't reached an agreement on fiscal policy, the deficit would be about $700 billion lower. That would effectively wipe out two-thirds of the current deficit. In theory, of course... because cutting spending naturally drags down tax revenue. That could easily tip the country into a recession since consumer spending is what drives our GDP. So, basically, Moody's is likely implying that if you don't cut enough—and instead raise the debt ceiling—you keep your rating. But if you slash the deficit too aggressively, you trigger a recession and lose the rating anyway.
Meanwhile, looking at the first two months of the 2013 fiscal year—October and November 2012—the deficit is already higher, or at least roughly equal, to the same period last year. Our reliance on consumption is only increasing, leading to a wider deficit regardless of any rise in tax revenue.

http://news.yahoo.com/us-budget-defi...XBhZ2U-;_ylv=3

If the deficit stays stuck around a trillion dollars a year, the Federal Reserve is going to have to step in and bail us out.

Patrick Moore3 said:Sounds like a minor cut... but you always have to look at debt relative to GDP. Since their debt is sitting at 100% of GDP right now, if they follow through on this plan with an average GDP growth rate of 1.64% (looking back at those 2002-2011 numbers), the debt would drop to 65% of GDP in ten years.
...obviously, they’re banking on growth higher than 1.64%. Whether they pull it off? We'll see.

Which plan are you talking about?
Debt is growing faster than GDP (at least for now), so I don't see how you expect it to shrink to 65% of GDP. Not to mention that actual inflation is hovering around 6% based on Fedov's 1980 measurement method. By the way, Obama is suggesting that inflation be calculated even more "liberally" moving forward. For instance, if pork prices spike, they could adjust the consumer basket for retirees by assuming people will just switch to cheaper options like chicken. It’s just another way to mask inflation. That’s a fast track to impoverishing the population—that much is obvious. Summa cum laude: their economy is essentially just consumption. If they stopped or reduced borrowing, everything would just stall. And the idea that GDP will significantly grow while consumption remains the dominant driver is highly unlikely. Especially considering they've gained mostly government jobs over the last few years while losing manufacturing ones.

Robert Vaughn10 said:Which plan are you talking about?
Debt is growing faster than GDP (at least for now), so I don't see how you expect it to shrink to 65% of GDP. Not to mention that actual inflation is hovering around 6% based on Fedov's 1980 measurement method. By the way, Obama is suggesting that inflation be calculated even more "liberally" moving forward. For instance, if pork prices spike, they could adjust the consumer basket for retirees by assuming people will just switch to cheaper options like chicken. It’s just another way to mask inflation. That’s a fast track to impoverishing the population—that much is obvious. Summa cum laude: their economy is essentially just consumption. If they stopped or reduced borrowing, everything would just stall. And the idea that GDP will significantly grow while consumption remains the dominant driver is highly unlikely. Especially considering they've gained mostly government jobs over the last few years while losing manufacturing ones.

I'm referring to that plan you mentioned above about cutting debt by $200 billion annually... On the other hand, in this current setup, inflation would actually serve them well. I bet they'd much rather use that 1980s method anyway, especially since both GDP and debt are calculated in dollars...

Gold market reactions tell me they've already reached an agreement on this, unless some sudden changes pop up out of nowhere... I'd say this whole thing is settled.

Patrick Moore3 said:I'm referring to that plan you mentioned above about cutting debt by $200 billion annually... On the other hand, in this current setup, inflation would actually serve them well. I bet they'd much rather use that 1980s method anyway, especially since both GDP and debt are calculated in dollars...

Gold market reactions tell me they've already reached an agreement on this, unless some sudden changes pop up out of nowhere... I'd say this whole thing is settled.

Seems that way for now:
http://www.ibtimes.com/gold-price-re...ptimism-948714

Patrick Moore3 said:I'm referring to that plan you mentioned above about cutting debt by $200 billion annually... On the other hand, in this current setup, inflation would actually serve them well. I bet they'd much rather use that 1980s method anyway, especially since both GDP and debt are calculated in dollars...

Gold market reactions tell me they've already reached an agreement on this, unless some sudden changes pop up out of nowhere... I'd say this whole thing is settled.

I honestly don't follow your logic. If the deficit is only cut by a fifth—leaving it at roughly a trillion dollars—debt won't drop to 65% of GDP unless you assume they won't borrow another cent. That is impossible. How else would they fund the deficit? As for GDP...
There is a distinction between real GDP and nominal GDP. Nominal GDP, or even the figure adjusted for US CPI, can be whatever they want it to be, but that doesn't change the reality of a contraction once you account for true inflation. The actual inflation rate—factoring in food and energy—is closer to 6%. To find the real GDP, you have to deflate the nominal figures by that number. Since the US CPI sits around 2%, similar to the growth rate, the math implies we are already in a recession; the real inflation isn't 2%, it's 6%. Money has lost 4% more value than the reported growth rate accounts for. We are shrinking.
They certainly aren't looking for the calculation I described regarding Obama's proposal. While higher inflation might help manage the debt, it does absolutely nothing for real GDP or the actual standard of living.
Not to mention that over four years, debt jumped from 75% of GDP to 100%. That kind of trajectory is unsustainable. If they persist with stimulus and massive deficits, the debt-to-GDP ratio continues to climb. If they stop borrowing, the economy collapses, causing the ratio to spike even further. Living standards will plummet, and they'll face a default because there simply won't be the revenue to cover it.
I won't even get started on interest rates in this scenario.
In short...
All these maneuvers and political theater will eventually act as high-octane fuel for gold prices. Physical gold—not the paper stuff—remains reliable money. You can't just print it into existence. In an environment where paper loses 5% or even 10% of its value annually, calling paper a "safe store of value" is a stretch.

Robert Vaughn10 said:I honestly don't follow your logic. If the deficit is only cut by a fifth—leaving it at roughly a trillion dollars—debt won't drop to 65% of GDP unless you assume they won't borrow another cent. That is impossible. How else would they fund the deficit? As for GDP...
There is a distinction between real GDP and nominal GDP. Nominal GDP, or even the figure adjusted for US CPI, can be whatever they want it to be, but that doesn't change the reality of a contraction once you account for true inflation. The actual inflation rate—factoring in food and energy—is closer to 6%. To find the real GDP, you have to deflate the nominal figures by that number. Since the US CPI sits around 2%, similar to the growth rate, the math implies we are already in a recession; the real inflation isn't 2%, it's 6%. Money has lost 4% more value than the reported growth rate accounts for. We are shrinking.
They certainly aren't looking for the calculation I described regarding Obama's proposal. While higher inflation might help manage the debt, it does absolutely nothing for real GDP or the actual standard of living.
Not to mention that over four years, debt jumped from 75% of GDP to 100%. That kind of trajectory is unsustainable. If they persist with stimulus and massive deficits, the debt-to-GDP ratio continues to climb. If they stop borrowing, the economy collapses, causing the ratio to spike even further. Living standards will plummet, and they'll face a default because there simply won't be the revenue to cover it.
I won't even get started on interest rates in this scenario.
In short...
All these maneuvers and political theater will eventually act as high-octane fuel for gold prices. Physical gold—not the paper stuff—remains reliable money. You can't just print it into existence. In an environment where paper loses 5% or even 10% of its value annually, calling paper a "safe store of value" is a stretch.

Not gonna work... totally botched the math. Forgot about the deficit. 😬

Robert Vaughn10 said:I honestly don't follow your logic. If the deficit is only cut by a fifth—leaving it at roughly a trillion dollars—debt won't drop to 65% of GDP unless you assume they won't borrow another cent. That is impossible. How else would they fund the deficit? As for GDP...
There is a distinction between real GDP and nominal GDP. Nominal GDP, or even the figure adjusted for US CPI, can be whatever they want it to be, but that doesn't change the reality of a contraction once you account for true inflation. The actual inflation rate—factoring in food and energy—is closer to 6%. To find the real GDP, you have to deflate the nominal figures by that number. Since the US CPI sits around 2%, similar to the growth rate, the math implies we are already in a recession; the real inflation isn't 2%, it's 6%. Money has lost 4% more value than the reported growth rate accounts for. We are shrinking.
They certainly aren't looking for the calculation I described regarding Obama's proposal. While higher inflation might help manage the debt, it does absolutely nothing for real GDP or the actual standard of living.
Not to mention that over four years, debt jumped from 75% of GDP to 100%. That kind of trajectory is unsustainable. If they persist with stimulus and massive deficits, the debt-to-GDP ratio continues to climb. If they stop borrowing, the economy collapses, causing the ratio to spike even further. Living standards will plummet, and they'll face a default because there simply won't be the revenue to cover it.
I won't even get started on interest rates in this scenario.
In short...
All these maneuvers and political theater will eventually act as high-octane fuel for gold prices. Physical gold—not the paper stuff—remains reliable money. You can't just print it into existence. In an environment where paper loses 5% or even 10% of its value annually, calling paper a "safe store of value" is a stretch.

I mean, I guess I partially agree... but the real question is: how far off are we from a total meltdown?

Picked up some more gold at 2,580 and silver at 31.75... just gotta keep stacking

lonehawk5 said:Picked up some more gold at 2,580 and silver at 31.75... just gotta keep stacking

You've been loading up big time lately! I noticed you're strictly playing long. You expecting a massive rally?

Nice work—that’s what I respect about your approach. You aren't afraid to double down on a losing position... that takes real backbone. Only certain people have that kind of grit.

Someone’s gotta act as the liquidity provider... that's just how the game works.

analogharbor44 said:You've been loading up big time lately! I noticed you're strictly playing long. You expecting a massive rally?

Look, my initial entries are always small. Just testing the waters. Maybe I'll add a bit more on the first or second buy, but once I actually see some upward momentum—real movement—then I'll swing in with a heavier position to fix my average. Any profit I grab while scaling in just gives me more breathing room... more wiggle room to stay in the game.
I'm just looking to make money, plain and simple.😁

Gold should move up about $15-$20
Silver maybe another buck

http://www.marketoracle.co.uk/images...s_image014.gif

🤣🤣🤣

lonehawk5 said:Look, my initial entries are always small. Just testing the waters. Maybe I'll add a bit more on the first or second buy, but once I actually see some upward momentum—real movement—then I'll swing in with a heavier position to fix my average. Any profit I grab while scaling in just gives me more breathing room... more wiggle room to stay in the game.
I'm just looking to make money, plain and simple.😁

Gold should move up about $15-$20
Silver maybe another buck

You're the only one I actually trust. Everyone else is just playing amateur hour, honestly—just like me! 😂

quiettrucker12 said:We'll see. Breaking below the 75 WMA isn't great news—it complicates the whole picture. It means that on May 5th, we either hit rock bottom or the price tanked instead of rallying (which is the worst-case scenario, though maybe unlikely). There’s a chance this is more than just some quick manipulation or hunting for stops. Right now, it looks like we won't even hold the 200 DMA. By dropping below that 75 WMA, a ton of new scenarios have opened up. If the 200 DMA gives way, we might see buyers stepping in at the stops set just below it, around $1655. Honestly, that feels like one of the more optimistic paths right now. Sentiment is incredibly low, so strictly speaking, it shouldn't go much lower; our final line of defense remains the 100 WMA at $1631.

Hey zvrk... 200-day is busted and we're staring down that 100-day.
What are the actual scenarios here? And how likely are they?

Patrick Moore3 said:Hey zvrk... 200-day is busted and we're staring down that 100-day.
What are the actual scenarios here? And how likely are they?

Nothing happens until the selling pressure lets up. This is a weird setup because everything is playing out against the backdrop of an expected Dollar slide. I’m guessing we see 1600-1625 at the earliest. There’s a slim chance it drops harder tomorrow only to claw back above the 100WMA by the close—that would be huge—but honestly, I doubt it's realistic.

Technically speaking, watching that 1526 floor hold (or fail) is interesting. Hypothetically, if that support snaps, the whole narrative shifts. It would mean the massive correction we've been recovering from actually isn't over yet. In that case, things could stall out somewhere below 1500.

The silver lining? Even the worst-case scenario shouldn't drag on forever. In my book, maybe 2-3 weeks tops.

I'm more interested in the "why." Maybe central banks (China...) decided to load up on gold following Obama's reelection and once it became crystal clear what the Federal Reserve was planning. Or maybe there's news floating around that hasn't hit the wires yet, but they already know.

Edit: Gold has an ace up its sleeve: physical demand. During dips like this, people buy in, and that demand eventually puts a floor under the price. It happens every single time as long as the bull market is alive.

quiettrucker12 said:The DXY is carving out a double bottom and bouncing hard

That’s just a dead cat bounce. We won't see a real bottom until it dips below those September lows back in early January—and even then, I wouldn't expect much upward movement. This is all part of a downward trend toward roughly 77.