Personally, I think it's going to be bad, very bad. All the signs are there, we are headed for a MAJOR deflationary episode worse than 2008. In the first few months I think that: * The US dollar will rally BIG TIME - people will flood to US treasuries * Euro and European govt. bonds will be actively ATTACKED. Bond yields on countries in PIIGS and even France will hit record highs * The Aussie dollar will tank BIG TIME * The Aussie property market will begin to accelerate in its decline (but many won't be able to take advantage of it for lack of credit AND people don't want to catch the falling knife) * Silver will CRATER - it will fall below $20 and may touch $15 (this board will be in shock) * Gold will CRATER - slice straight down through $1400 (again, very tough for the posters here) * Other commodities will similarly crater, oil will be cheap(er) * Stock market will drop, but it will take slightly longer to do so than other asset classes and will be more volatile on the way down Nowhere will be safe. Several things could pan out for the PMs. The bull market may well be over. You need to consider this is possible. Gold's average price in its best month in 1980 was about $675. We saw an inflation adjusted equivalent this year at $1900, so gold has already made its 1980 high. If deflation is here to stay, then there are two hopes: 1) As the Aussie dollar tanks, holding PMs demoninated in $USD per ounce may offset this. 2) If the Euro is actively attacked, the USD may well follow soon after. If this happens, the PMs will be the last ones standing. However, if everyone flies to US dollars, it may not come to pass that people will want to attack their sole remaining fiat safe haven. We cannot automatically believe the USD will indeed be attacked. In fact, in a deflation scenario, this essentially means dollar destruction. Every USD becomes more valuable as time passes. That's BAD news for PMs. After the cratering of PMs, the Fed, ECB and IMF print. This is essentially what stackers have pinned their hopes on. We may not see hyperinflation, but political pressures that force printing will likely mean that the massive drop in PM prices will be met with a turnaround quicker than the other asset classes (as occurred in 2008). But will it be enough to stem the deflationary tidal wave? In the end, the world will DEFLATE - guaranteed. The only question is if the central banks are going to let it fall or will try to prop it up one last time with printing (after which it will deflate anyway). This is going to be a very difficult time for all of us, but I'm convinced a PM smackdown in 2012 is all but assured. Where the clouds are is what happens AFTER that? Do we go inflation or continue with the natural trend towards deflation? Even if things pan out well for the PMs and we see the price rise again (and there's no absolute guarantee it will), you may only have a very short window in which to sell before deflation kicks back in. If we hit hyperinflation and final dollar destruction, then obviously all bets are off on the PMs. All I know for near certain is: prepare for a massive 2012 shock downwards for the PMs.
Pretty much agree with everything you said being a possibility. My predictions: - Property prices in Australia will plumment in real terms (anywhere between 5-35% over the course of 2012), credit will dry up and unemployment will go to 7 or 8%. - Gold may drop to $1300 before quickly surpassing $2000 soon afterwards (before 2012 ends). - Silver will act in a similar fashion but at $20 and $45 instead of $1300 and $2000. - China implodes with debt and credit problems; growth stalls dragging down Australia with it. - Europe will continue to fail and they will either print or collapse or maybe legislate their way out of it (don't see it tho). - The US will continue to print behind the scenes but it no longer is physical printing, even the $$$s are virtual. - The ASX will drop below 3000. - AUD sub 0.8c & USDX rallies hard. My 'sources' from China tell me the Chinese are going nuts buying Gold bars at banks at the moment, inflation in China is VERY real and the demand is soaring. If Gold does get crushed it will be short lived imo.
I've been listening to people here and everywhere else talk about Silver and Gold growing rapidly when the economies/dollar tanks. Now people are losing their balls and saying it's going to drop down to $15-$20. The only way it will do that is if the US $ goes back up to $1.15-$1.20 crossed with the Ozzy. I'm not having a go at either of you as both of you have mentioned the dollar while some just say Silver/Gold will drop. Earlier this year i penciled in the Ozzy to be around 80c US in 2012, but I think this will now occur in 2013. 87.5c to 92.5cUS for 2012 I think. Unemployment rate to increase nationally to 6.5% ish. I'm so glad I have the most secure job going(We will never run out of customers) and can stay until retirement if I wish. Interest rates - When I spoke to the mortgage retention dept to ask for a further decrease a few weeks ago, the guy tried pretty hard to put me off pushing for it. He reckoned rates wouldnt drop again after November and that it wouldnt go below 6% in this cycle. PMSL. I said I know how you guys work. You suck as many as you can with an enticing fixed rate and bang the variable tumbles. My prediction is that many variable rates will be had at 5% to 5.5% next year and if the world economies/markets(especially Europe) tumble bigtime expect variable rates closer to 4.5%. I missed out fixing for 3yrs at 5.19% and 5yrs at 5.39% a few years back and if it touches this again, not only will I be fixing, I'll be getting another property fixed also. Hmm, the property market has been soft for a few years overall now so I cant see massive drops in the low/mid tier level. Expensive properties will get hit by a 10-15%+ drop, while cheaper properties might drop 5-10% in some areas. I'm not one that worries about what my property is worth as its a roof over my head. If its worth $100,000 or $1m its no difference to me. My salary never goes down so bring on lower property prices and interest rates. I'm busting to buy acreage down south within 18mths so I hope prices soften a little and rates drop another 1.25%. Scorp
So you are saying the last year of all of our lives is going to be shit anyways? sooo we should probs jump of a bridge now????
I am with fishy here on Gold. It'll drop quickly and sharply to its low of about $1300-$1400, but it will bounce back by the end of the year. Silver I am not too sold on bouncing back as quickly, although Gold might drag it along upwards. It's still not considered an investment metal to most, so Gold will be where everyone flocks. This re-enforces my view on Gold bouncing back and Silver being caught out.
Also, (doing a Yippee here with too many posts in a row) thanks to you EarthJade for making these topics lately, finally someone bringing some alternative views.
Reeve, I'm sure as hell not karking it next year and hope all of you here and your families have a fun and safe Xmas. I know it was tongue in cheek and I suspect we will all be around for many many more years. Ned i'm not an undertaker although that occupation was put to me many years ago.Pass on that. A couple here know what I do but I dont advertise it. Scorp
Yeah, no chance gold will crash in my opinion. I am expecting it to hover around $1700-$2000. Silver, I have no idea but short term I see nothing good. If we get it back in the 40s sometime mid to late next year i'm going to be converting it all to gold.
Europe - deflation will hit commodities hard, likely to see another 2008 event but worse. so gold silver down until the third leg of the bull market which wont be until they announce qe3 or that the fed will bail out europe. Calls for fiscal unity effectively ending sovereign identities and economies, huge riots) china - hard landing and growth will slow big time USA - gets a boost from europe imploding but attention will ultimately shift to it and its debt/frakked economy, police state worsens and push towards a unified north america (mexico/canada/usa), again huge riots, ron paul supporters cracked down on but people start to wake up Aus - housing bubble will start to fall more quickly (already down 5% this year on average), resources boom slows and aus in recession by 3rd quarter syria - nato will put in a no fly zone and bomb the sh*t out of syria similar to what happened in Libya Iran - who knows but something will go down involving the US more vague guesses really Merry Christmas!
I think there is still room for gold to fall to $1400. But if it does happen is a different story. But I also think gold will be going much higher long term. Could see gold drop in the first half year of 2012, definitely a good chance, I think the elites want to turn-off as many people away from PM's as possible. And what better way to bring the prices down after a bull run. No idea with silver, but I keep on buying the stuff.
Hope it will take gold longer time to fall to $1400 (if the prediction is right) so that I have more time to save a bit more fiat to buy some more
Maybe not next year but sooner or later something will happen: -euro will die in the ass after greece and the rest default -qe3 and qe4 -aus housing bubble has to burst some time -china has to stop building empty cities eventually, and once that happens -mining boom dies in the ass, unemployment goes through the roof and we go into recession no idea what interest rates would do though. apparently in the recession of the early 90's they shot through the roof so who knows if they'll go down or up. either way somethings gotta give eventually. all this is based off my own assumptions and general lack of knowledge about anything.
This is pretty much it at the moment. Something has got to give. And when it does, the game of dominoes begins.
