Quote " I really do think we'll have a huge correction, particularly in the silver market. I'm a major silver bull, and I believe silver is inherently worth $120 an ounce already and it's going higher. But markets just don't go straight up the way silver has in the last couple of months. So I'm concerned that my subscribers may think that we can buy agriculture and energy with impunity and that we can buy as much silver and leverage it as much as we want without getting destroyed by the market volatility, just because we're in the middle of an inflationary crisis. I think we're going to see some of that volatility next year. I don't have a crystal ball, but it seems as if there needs to be a shakeout in the market because the investors have gotten so bullish on these ideas about sound money and energy and agriculture. TGR: You expect it to be tougher to make money 2011 because the government will strike back. What tools do they have to strike back at investors? PS: They have all the tools in the world. They could do all kinds of things. They could pass huge new withholding taxes on any kind of investment in bullion, for example. They could change the rules on the commodity exchanges. They could make rules about prices and windfall profit taxes. There's any number of things they can do to distort the markets and punish speculators, and there's no doubt in my mind that they will do some of them. There's no doubt in my mind that at some point next year Obama is going to come out, point the finger at the camera and say, "An international group of speculators is destroying our bond markets. We're going to stop them." ................................................ PS: It certainly is, and right now we have a situation where the muni bond market in the U.S. is crashing. Muni bonds are falling 2% or 3% every week. These bonds shouldn't decline at all. People have long thought of the muni bond market as the safest place in the bond market for retirees' money. Well, now it's in freefall. Normally, if you took money out of the muni bond market, you'd put it in the Treasury bond market. That's the only thing that's even safer. But both markets now are in decline. People are selling both muni bonds and Treasury bonds at the same time. That's a sign of a major problem in the fixed income markets. And, because the U.S. bond markets are the largest securities markets in the world, that means we're in the midst of a major, major financial crisis. I don't really think people realize it yet. http://www.kitco.com/ind/GoldReport/dec282010.html
I agree with the P.S. point.. the interesting thing is where will that money go? I think alot of the traditional places to park money are either looking higher risk or low yield for the assumed risk... Oh the joys of investing money...You know if you dont have money to allocate it makes the decisions easier... I really do think the municiple bonds in the states will cause the big stir this 2011 year..Lots of people will loose alot more money there.
Even at $120/ounce it doesn't really constitute a 'precious' anything! What can you buy with $120?! half a trolley of groceries!? Silver's INHERENT 'worth' is in the $600/ounce range!
PMs have gone mostly sideways for the better part of a month. Hardly straight up. I expect gold to break out to the upside late Jan/Feb and march higher. Could it correct? Sure but the probability is for higher prices in my opinion.
Treasury yields are going up and normally that makes the USD stronger because the USD "safe haven" status, but not this time around. This is a red alert signal.
I assume they are saying that the treasury must offer higher rates to attract investment money in spite of the US$ being a "safe haven". If bond investors (and there is much more money in the bond market than the share market) are reluctant to buy "America" the issuers must offer a higher rate.
http://www.the-privateer.com/gold6.html Preposterously, many mainstream US economic commentators welcomed this sudden surge in Treasury yields as a signal that the markets were factoring in a new burst of "economic growth" and were therefore finding it less necessary to buy the "risk free" end of the market - Treasuries and Gold. That view was not universal, not even inside the US. Many other commentators pointed out that the combination of Mr Bernanke's 60 Minutes appearance and the deal between Mr Obama and the Republicans had finally led bond investors to the realisation that the US government is doing NOTHING to bring their deficits under control. What should never be forgotten is that the decision to embark on QE2 on November 3 was for the express purpose of pulling down longer-term US interest rates. What should now be clear to everyone is that what has actually been accomplished is the precise OPPOSITE of that aim. The surge in Treasury bond yields on December 7-8 was the biggest two day jump since the days of the Lehman collapse in September 2008. And longer-term yields surged higher still on Friday, December 10. Conventional wisdom would have it that one of the major contributors to the surge in $US Gold prices since the start of the GFC has been the global central bank panic lowering of interest rates. That same "wisdom" states that Gold prices are vulnerable to any surge in interest rates, simply because Gold does NOT offer a rate of return as debt instruments do. There are two major points entirely overlooked in this argument. First, as bond yields rise, bond prices FALL. The worst decade for US Treasuries since WW II was the 1970s, when bond yields rose almost throughout the decade. The 1970s also happened to be the best decade for the $US Gold price. Why was that? This brings us to the second overlooked point. Rising interest rates are invariably a sign of greater RISK being taken by holders of the debt instruments where the rates are rising. This is freely granted in regards to the soaring yields of European nations caught up in the European sovereign debt crisis. It is fiercely denied in the case of US government debt paper.
The management at PIMCO, the world's largest bond fund, sent out a report to their clients telling them that the dollar will remain the reserve currency in 2011 I bet you they did not do had to that 10 years ago.
His main argument is that gold going up makes the dollar look bad and makes most people lose confidence in the US dollar.And so the government will attack gold. .............. quote PS: True, you're just treading water. But in periods of a crisis just treading water is actually a very good return. It's easy to say, "Oh, I'll just go all to gold." But the government can't allow gold prices to continue to escalate without losing credibility for their paper, so what if the government decides to shake up the gold market? ................. But i wonder if this is true or just the viewpoint of someone who works with gold every day. I'm sure professional window washers are very conscious of dirty windows and think everyone else is.But most people don't even notice dirty windows. I think that most people don't think about gold at all and dont associate it with money or fiat. Gold going up in price is like plane engines going up in price,what's that to do with currencies?Gold going up in price ,to them,doesn't undermine their belief in the dollar. So why would the government bother attacking gold.
