Silver and Gold ready to bust loose. : LUSENET : TimeBomb 2000 (Y2000) : One Thread

Hard to believe, I know. I'm on record on this day saying its up, up, up from now on out to 2000!! The shorts are done, can't hold out any longer. IMF won't sell. Have watched it go up consistently every day for last several. The investors getting in right now, in my opinion, will reap rewards unheard of in the past. This will make the explosive dow of 97 to present look like chump change. Gold to $thousands$ Silver to $hundreds$. Dow 8000 by October, 5000 by January 2000.


-- flierdude (, April 29, 1999


Keep your fingers crossed Mike, I'm betting right along with you.

-- Gordon (, April 29, 1999.

Silver in the $100s? Not unless we bring back hyperinflation ala 1920s Germany.


-- Mr. Decker (, April 29, 1999.

Oh Mr.Decker, I wish you hadn't said that. What about gold in the thousands? Same problem? Hyper-inflation? As if I didn't have enough to worry about already. Well, if that's what it takes, that's what it takes. I really can't say. When it comes to nailing down the details of such things I have to fall back to what a friend of mine used to say when confronted by such questions: Don't ask me, I'm only the piano player in this wh-rehouse.

-- Gordon (, April 29, 1999.

gold hasnt been going up up up lately (unless you mean 2 or 3 days)...I bought some a month ago at 312 and now can buy it at 297 today..i hope your right about the future...however I;m going with platinum for future purposes as its a better investment replacement for stocks than gold as far as potential to go up---based on russia and south africa produce 90% of worlds platinum, its scarity and uses in hi tech production field...frankly i think the old metals like gold and silver market are being manipulated by folks a lot smarter and richer than me at this time.

-- billyboy (, April 29, 1999.

No "world" economy such as the U.S. is in danger of hyperinflation...the danger is deflation. Gold and silver will at best preserve wealth, and then go up as money gets scarce. Will it? Just watch when the market implodes. And consider the fact that prices are not rising in an expanding economy. Why? Because serious deflationary forces are at work that are being masked by a stock market mania fueled because "there ain't no place else to go" Japan and the Pacific Rim's money is here, and so is Europe's. When the perception that the party is over is finally achieved as a concensus, and when most believe it's a bear's gonna sink faster than the titanic did. Then the flight to safety, But when? hmmm...can't say for sure

-- rick shade (, April 29, 1999.

Sorry, hun. You haven't been watching this market long enough (gold that is). Today was a banner day. Up $3.20 to $287.30. From here we can expect to top out around $297-300. It's not time yet for the price to go up. Hang in there, though.

-- Globe'r (, April 29, 1999.


I believe gold is going to go up for the same reason generator prices are going up...demand. Alot of people will be buying gold (not me), but I doubt they'll be able to use it as currency in a post Y2K environment. Why? Because we have no frame of reference for it. If you go to a post-Y2K supermarket, exactly how many dozen eggs is that gold coin going to be worth? You think the manager is going to be authorized to accept gold? People want cash. Something they're used to holding. Something they know how to evaluate in a transaction.

Gold may be a great investment vehicle, but don't count on using it as money.


-- TECH32 (TECH32@NOMAIL.COM), April 29, 1999.

Tech32, gold is definitely not going up due to demand. If that were the case it would have broken through 300 and been heading for 400 or better back last January, if not sooner. No, my friend, it will go up when the fed sez it wants gold to go up, or the shtf, which ever happens first.

-- Goldwatcher (, April 29, 1999.

What do you mean gold won't be used as money? All them American Eagle coins won't be accepted? Shoot, didn't you ever see one of those good old western movies where the cowpoke gives the bartender a gold coin and the bartender bites it to see if it's genuine. He seemed to know what that coin was worth. Saw him push a whole bottle of whiskey over to the customer. And I was looking forward to biting a bunch of gold coins. Oh heck, another gloomer forcast shot down. Dagnabit!

-- Gordon (, April 29, 1999.

Wow... just had a mercantilist flash back....

-- Mr. Decker (, April 29, 1999.

Uhhh, Mr.Decker,

Maybe that was a premonition you had. Care to share it with us?

-- Gordon (, April 29, 1999.

For the last ten years or more the gold bugs have been saying, "Buy gold! It's gonna break loose real soon now."

We're still waiting for that break. It's a market with expert wolves, and flocks of inexpert sheep.

-- Tom Carey (, April 30, 1999.

I don't know the answer either, however, I do think there is quite a demand for gold right now. That is documented fact. My economics teacher used to say that when demand goes up, the price goes up. Or do I have that backward. Anyway, due to some controlling factors, the price hasn't gone up yet. I don't think the IMF or Swiss sales scares will keep the price down for much longer. In the next six months, the price of gold will surely go up (Layman's Opinion). My goal is to make a few bucks on that rise. I will then put those bucks into greenbacks and then put those greenbacks into the stock market in January. How's that for a plan?

-- John Layman (, April 30, 1999.

Gold, silver aren't going to break out until the BIG Banks, Trading Houses, Hedge Funds, Central Banks, and Mines are unable to cover their shorts - for whatever reason. And that means the mechanism used to hold gold low broken, ie. several major players unable to come up with liquidity, or a purely physical shortage (very unlikely).

The Swiss sale, if it ever actually happens, will be at a slow rate over years. The IMF sale, if it happens, and the Swiss sale have both been factored into present prices & futures according to those who track.

Watch for the big lawsuit brought against the biggest gold players re gold price manipulation, should be plenty of fireworks. Watch out for Gold Mine Stock investors bringing fiduciary lawsuits against the mines because of the mines' part in holding down gold prices (if that puzzles you, do more research), hence mine profits and dividends.

China govt is buying a LOT of gold. Private people are buying a LOT of gold. Indian govt has re-emplaced import restrictions, meaning that a LOT of gold will now be smuggled into that country.

read the essays at Gold Eagle re inflation/deflation, gold standard, derivitives, etc - its isn't all just party line there, lots of views are posted.

-- Mitchell Barnes (, April 30, 1999.

RE:"Silver in the $100s? Not unless we bring back hyperinflation ala 1920s Germany. Regards, -- Mr. Decker"

I would just like to point out the price that silver got up to in the early 80's during the hangover from the Carter years. Now factor in inflation. Bingo! Silver has already been there.

Good example, go to your friendly Buick dealer (or whatever). Figure out how many ounces of silver Z(or gold) it would take to buy a top end car. With 1980 peak prices do the same with silver and car prices of that peak time. If you want more fun do the same with a 1914 Buick.

You know that Chicken crossing the road via Einstein joke? (the road in moving under the chicken) Well if an ounce of gold will buy you a nice middle grade handgun in 1999 or in 1899, which is moving in price? The gold or the dollar?

-- Ken Seger (, April 30, 1999.

Hyperinflation is already here. Look at equities prices (vs real value of the companies they represent).

-- David (C.D@I.N), April 30, 1999.

Inflation is broadly increasing prices. While I freely admit stocks are overvalued, we do not have inflation as measured by the CPI or other indices. In fact, lower prices in some commodities (like oil) have decreased inflationary pressures and increased consumer buying power.

The highs reached in the 80s were due mostly to market shenanigans. Since we have had modest inflation since the 80s, the price of silver should be higher... it is not. This is why economists are careful to measure in "real" dollars. Look at the price of silver in "real" dollars during the past 25 years.... Then, tell me again how it has reached "$100/oz."


-- Mr. Decker (, April 30, 1999.

I would just like to point out the price that silver got up to in the early 80's during the hangover from the Carter years.

Good one Kevin! Ever hear of someone called Bunker Hunt? Do you think his (failed) efforts to corner the silver market might have had just a teensy-weensy bit more to do with silver hitting $50/oz than "hangover from the Carter years"?

-- Still Laughing (, April 30, 1999.


Oil is up 60% from its lows.

M3 was recently seen increasing at an 11% annual rate.

The CPI is junk economics. It is grossly manipulated because it is used to index tax rates, entitlement payments, and other non-government cost of living adjustments. Through this manipulation, tax receipts are artificially higher than they would normally be while expenditures are artificially reduced. In fact, current cpi formulae are not even comparable to past cpi data because of this gross understatement. The "experts" would say the cpi is now "more accurate" -- bunk!

You are correct, though, in that inflation is broadly rising prices. The broadest measure of price levels would include everything -- durables, non-durables, all "asset" classes, including stocks, real estate, and commodities, services, and taxes -- not just the constantly shifting and self-serving substitutions of the cpi "components". Many of the areas I've listed are inflating quite nicely. It is pure folly to point to the CPI and claim there is no inflation, though the market seems to like looking at inflation this way (for now).

-- Nathan (, April 30, 1999.

Inflation is increase in money supply. No necessary correlation with CPI (Consumer Price Index) or COL (Cost of Living)

There has been tremendous inflation, lately. But all that money is in the stock market. If the stock market stumbles, that money will go into bonds and metals.

CPI is buncha crap. Government mandated additions to cost of consumer items (like smog crap) are considered "improvements" and so don't increase the CPI. Something finally gets out of range of the average person's ability to buy -- it's dropped and something cheaper substituted. Do they count cost of services, taxes, insurance, and the effect of regulations? No.

A COL index would be nice, but you can't trust the government to keep it honest even if there was one.

But you can get a handle on COL by asking and answering one simple questions: Why do BOTH husband and wife have to work to get a house, nowadays, as opposed to even during the depression when only husband was working (assuming he -- one member of family -- working?)

-- A (, April 30, 1999.

A, the answer can get quite complicated. Women work to improve the standard of living for their family, yes. But also to increase mental stimulation, to widen their social connections, to increase their feelings of self-worth and simply because it's the done thing (rather like it was the done thing in the 1950's for women to not work outside of the home). Also, the standard of living we expect is not the same in 1999 that it was in 1954 (e.g.). As well as having better quality of the same item, we have several high cost item "necessities" that were not even available (microwave, 2nd car or computer are just a few). Moreover, as a friend of mine pointed out, having the woman work leads to the requirement of some of these; a second car is often needed for both to have jobs. To compare COL now to COL then is like comparing apples to oranges, IMO. (And that doesn't even get into the taxes!)

-- Tricia the Canuck (, May 01, 1999.

I found the following purchases rather startling. Bought two ice cream cones, cost: $6.90. Bought two greeting cards, cost with tax: $9.65.

-- Watcher5 (, May 01, 1999.

The comment on M3 growth. -- This weeks Barons had a chart showing M3 GROWTH RATE dropping like a rock this year - now down to about 2%. The 11% growth rate was last year. The implications are bad for the financial markets and could be the results of people already stockpiling cash.

-- Rick (, May 01, 1999.


In the current environment, at least, past growth in M3 is the fuel for current speculative moves in the markets. The M3 growth rate will fall as this fuel is consumed, even as the Fed continually creates new debt its past rate. With the current market blowoff rate, the Fed would actually have to increase their debt creation in order to sustain an M3 growth date of 11%.

I agree that the fall-off in M3 is bad for the markets, for this excessive, non-economic monetary growth is what was "good" for the markets in the first place. There's certainly little else going on in the markets, aside from excessive debt creation, that can account for the explosion of equity prices at the same time earnings are stagnant or falling.

Stockpiling of currency likely has a negative effect on the money multiplier at the retail level, but the Fed could easily make up for this by adding more liquidity (loans) to the retail banks. And this they have done already, repeatedly. My take is that the Fed is finally doing something about the equity monster they have created. But since the Fed appears to be staffed with complete sleep-walking morons, I would expect whatever they do to turn out badly. While it's common enough to inflate the bubble gradually, letting the air out in a controlled fashion is more commonly not.

The question: is this pullback in M3 growth only a short term respite, or the beginning of a new trend?

-- Nathan (, May 01, 1999.

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