# depressionbaby@Bernanke -- trotsky, 10:57:47 09/19/07 Wed
i for one think he's a monetary crank. i've read some of his papers, and listened closely to his speeches. his 'analysis' of the Great Depression - allegedly his 'specialty' - is wrong from A to Z. he seems to have missed Rothbard's book on it, not to mention that he is actually misrepresenting the facts about the Fed's pumping efforts in the post 1929 period. either he's not aware of these facts or he is deliberately misleading about them, either way his conclusions sound like a major disaster-in-the-making.
meanwhile, the Weimar episode brought us Hitler, and in his wake one of the biggest slaughter-fests the world has ever seen. even though i despise the New Dealer commie FDR, he sure didn't do as much harm as the National Socialists.
SI - reply.aspx replytoid=23895859&replytype=Pub&OrigType=Pub
# meanwhile on the political/ police state front -- trotsky, 10:48:54 09/19/07 Wed
the 'simian currently defiling the White House' as W. Grigg so fittingly calls him, wants to make 'federal eaves-dropping rules' 'permanent'. as if their had ever been any rules he respected in the first place.
this outrage rates barely a mention in the press of the land of the already-unfree-even-if-they-haven't-realized-it-yet.
i'm not sure what historians will call this period one day - maybe 'the age of Goering's last laugh'?
# @ Barrick, etc. -- trotsky, 10:37:16 09/19/07 Wed
i am no big fan of the ueber-hedger, and never have been. i think their hedging policy has always been a major strategic mistake, and it sure has cost them more to get out from much of it than they ever made with it in the first place (and they still have about 10m. oz. of gold hedged at nonsense prices, plus umpteen tons of silver - so it will ultimately cost them even more).
however, what Fekete recently wrote about that is imo nonsense pure. ABX has incurred vast opportunity costs, has taken on foolish risks and so forth, but to argue that their dip-in-the-bucket hedge sales could influence the gold market in any way shape or form sort of lays bare that the author knows very little about the gold market.
if ABX decided to sell short 10m. oz. tomorrow , the London bullion market alone could absorb this kind of volume in about three to four trading days.
it is of course true that ABX's and others hedging policies in the late 90's helped to intensify the bearish psychology in the gold market at the time. however, they sure didn't cause it - they were just swept up in the same bearish mood as everybody else. it was always clear that one day, this would cost them dearly, as it indeed has.
the days of gold forward sales serving as a funding source for carry trade purposes have been over for years now. it's no use anymore to obsess over this.
here's the chart that shows what a 'great job' (not) the alleged manipulators have done:
and still the Sinclairs and Murphies of this world are going on and on about it every time the market as much as twitches (i.e. falls by a few bucks). isn't it time to move on to more rewarding topics? admittedly the governments of this world manipulate their currencies, and it stands to reason that they don't like to see the indictment a higher gold price brings. they may well time their central bank sales in a vain attempt to 'slow it down', but what can they really do? they already tried this openly in the 60's and 70's and failed miserably. the market is bigger than any purported manipulator - always has been, always will be.
@Fed's move -- trotsky, 10:17:49 09/19/07 Wed
well, yesterday Bernanke has given us incontrovertible proof that he's not a 'second Volcker' (as some people had begun to aver in various places) - but rather Greenspan on steroids. the message: it's o.k. to speculate folks - we will always err on the side of inflating even more.
rarely have Fed rate cut campaigns begun with a 50 bip bang. it's usually a bad sign (the two previous occasions over the past 20 yrs. were precursors to recession).
from our perspective, this has confirmed gold's long term bull market status. the crises shaking up the fractional reserves system will likely increase in both frequency and severity as the global mountain of debt grows ever more , and we have once again proof that the central banks will 'paper over' every problem. what they say is irrelevant (see the BoE's Mervin King, who argues that CBs shouldn't bail anyone out one day, and then bails out Northern Rock the next - plus agreeing to a blanket guarantee for ALL bank depositors in the entire UK system! next time a monetary bureaucrat yammers on about 'moral hazard' , remember this shameful episode).
meanwhile, Congress has passed a huge bail-out bill for underwater sub-prime borrowers, once again underscoring that financial prudence will be punished, and recklessness rewarded by the State. tax payer sheep should be up in arms, alas, they will keep quiet as usual.
it is anyway already too late - folly has been rewarded so many times, it's already a nation of fools (not that the rest of the world is any better, mind you).
back to our topic, gold: it's ok to speculate. at least we have a way of protecting ourselves a bit against all these depredations from the bureaucrats.