What Is It Going To Take (if anything)

I like many here are wondering - What Is It Going To Take - for PM's to "take off again" if anything.

We had Brexit :/

We had "The Donald"

We still have huge global debt with virtually 0% interest rates :| and prices are very soft seemingly getting softer at years end.

Yes we have Italy,France,Germany,etc but ??

Have we seen the very best of Pm's (other than for some insurance) in 2011 ??

I would be very interested in what potential scenarios that you see on the horizon that might push PM's higher and potentially keeping them there.

Thanks in advance for your comments


My wind bag index = 106 (have 2 non declared trades)

SteveS wind bag index = 856 and growing :lol:

 

IMO, the basic fact that this insanity cannot go on forever!

The whole damned thing is a house of cards, and all it will need is a.............

OC

 

Even with nuclear holucust the value of PM will behave much like any it does.
Likely go up for a while but will come back down.

 

It's going to need another sudden GFC, and bigger than last time. It needs news coverage of banks (plural) collapsing and bankers being marched out of the building building carry cardboard boxes on prime time news.
And then we might see a 10-20% rise. To double needs an alien invasion and general nuclear war.
Yes, I'm a tad pessimistic today...

 

I don't know how pessimistic that is. Are PMs worth multiples of their current price? No-one can say with any real authority. Maybe they're way overpriced now.

The people who make money out of them don't sit around waiting for the gold fairy to wave her magic wand. They trade the (already volatile) fluctuations in spot or play the collectibles game, which is a whole other black art.

If PMs were to go up even close to 50%, I think I'd be cashing out a good percentage. What goes up tends to come down.

 

All your points are valid and accurate. The problem is (as Ainslie are pointing out) all the measures generally accepted show an everything is great scenario. Jobless figures are back to 2007 levels. Interest is about to start going up. House prices have recovered.

But like you and Ainslie (and now Trump), everything is actually pretty bad.

How long until PMs go up? However long it takes for either another crash or people start waking up.

Yes you heard me right, I agree with you!

 

Basically pms are doing terrible because of low inflation expectations and the federal reserve pretending they can actually raise interest rate in a meaningful way, remember last year they forecasted 4 rate hikes this year, now come December, we are lucky to get 1.

I think if the economy tanks, pm will go down just like 2008/9. But when the fed launches QE4 (has to be big eg 2trillion plus) pms will breakout of this bear market. Or fed might even act before the economy crashes.

 

Have you factored in the profits of QE?

QE requires the bowrrow to pay it all back with interest

 

I think that's irrelevant because the "profits" are made by federal reserve, which they return a large portion of that back to the borrower (us government) as QE was basically the fed lending money to the treasury (by buying government bonds)

And since when does the us government pay back its debt plus interest? They just borrow more money.

Also fed's balance sheet isnt shrinking, as soon as they try to sell, the bond prices will collapse, erasing any "profit"

 

True gov likely spend it again but Feds still reported a $100 billion profit not bad.

in the end QE still needs to be paid back, will they do it who knows.

 

p.m.'s need just a bit more time....that's all.
No single event has caused a meaningful change in the trend as we have all seen after watching p.m.'s for the last 41/2 years.
It is like losing something at home. You will not find it by looking for it. More often than not, you will find it when you are not looking.
So it will be with p.m.'s. The turn will come and go. Some will pick it, most won't. Now we are inured to the retest of the low, we will simply expect more of the same.

 

Medium term for silver, collect nimi. silver could/likely to go into decade of doldrums.

 

Here are "my" scenarios in descending order of probability...

* a European government or bank filing for bankruptcy

* a(nother) European country leaving the EU

* inflation getting out of hand

* QE4 / US $ depreciating against other currencies

 

What's different now to before?

 

Sorry Joe Bloggs, you might be right with your 1st 2 points but if you think about it properly, such an event in Europe will push obscene amounts of money into the safest currency in the world at this point in time......( please note I wrote "at this point in time" ..)
The u.s. dollar is going to skyrocket.

 

I am thinking 5 years back to the last major high and then 5 years to the blow-off.......10 years still to come.

 

Isn't that self-evident?

Up until now the ECB has stepped in to rescue Spain, Portugal, Greece (here, most notably the German and French banks). What's different now is talk about bail-ins.

In case Italy or France elect their anti-European governments (Beppe Grillo, Marine Le Pen), there is likely to be that much financial instability with re-introducing the Lira/Francs, that Gold and Silver are likely to benefit.

As for the 0,sth. - 1,sth.% inflation across the Western world, I like to think it runs much higher. Adjust the ubiquitous inflation index (basket of goods) accordingly, i.e. housing expenditure is not properly reflected, and we'll be looking at approx. 4% p.a. And how does one measure all this money printing / devaluation of currencies / reduction of purchasing power??

In case there's QE4, go figure

 

Fair enough!

But still, how about obscene amounts of money looking for a safe haven (gold = safest currency)?

 

The gold market is tiny compared to the market for the u.s. dollar. The dollar is also capable of rapidly absorbing the kind of money we are talking about and is a very liquid market. The only other choices would be the bond market which is under pressure now due to imminent rate rises. This will also push money into the u.s. dollar and the sharemarket. In time, however, gold will also get some of the action.

 

My careful technical analysis says that when the lines cross below, there will be a shift that gets things rolling.