QE3 Announced

I wanted to but I couldn't. I've been trying to get into a position where I can and finally I'm able to.

 

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It's cool, I always liked poor mans gold "silver" more so than gold, It's a less risky investment IMO. But there's no shame in working within a budget, I do the same.

Looks like a pull back before the end of the day even. Alot of people love news like this to sell into!

 

Gold and Silver are up not because of fear of the future, but expectations of a continuing decrease in the strength of the USD, especially the ratio of the USD to the Euro. Upon the announcement of the action the Eur/USD ratio reached a high of 1.300 and the price of gold in USD rose to 1775. To expect maintenance or future increase in the Price of gold/silver, is to expect the Euro to grow stronger than it was this morning before the announcement. If you do expect all is well with the Euro, then buy gold. If you have doubts then hold or sell. My belief is that the Eur has some trials in the near future.IMO.

Jim

 

How much is QE3 going to affect the dollar if any and if so how soon?

 

It is also possible that both the USD and Euro are falling in value and a comparison of the two will give off a misleading signal.

 

Yes, a very logical thought, but The USdollar DX is down ( -.66%) and the EuroFX( +.009%), Canadian Dollar futures( +.0084%), and Yen Futures ( +.00006%), Swiss Franc ( +.0023%), Mexico Peso ( +.0012%) are all up.

Jim

 

If six guys jump off the roof of a tall building, the five falling the slowest will look like they are rising compared to the one falling the fastest. But it is an illusion. I'm not saying that is what is happening here because I don't know. But I would never rule it out either.

 

I don't disagree with your example, I have often used a similar one, but I do think that the price of gold and silver is currently being driven by the relative value of fiat currency. Might it change in the future with world wars, uncontrollable worldwide disease or natural disaster, YES, of course. But I really can't see any thing affecting the PM prices today other than relative currency valuation. Even the latest diplomacy problem in the middle east caused only a minor blip. My thought is that if anyone is buying or selling PM now, it should be based on possible effects of political actions ( not to be discussed) within the country's currency. IMO.

I realize that many will just look at the price of PM and decide they better jump in as tomorrow might be another $30-50 jump in gold. It might if the currencies react as today, but if not, many big holders will jump back out, and the price will decline. If it does enough, I may be a buyer, as my long term vision is for a higher price as I suspect the Euro and Middle east problems will continue, and the USD was relatively stable before QE3.

I agree with your Graham quote.

Jim

 

I congratulate all of you who hold PM. The Fed. Chairman has proven yet again that he must do what the fiat system in it's death throes forces him to do while he gives us that smile of the flying monkeys and tells us it's all OK. History is repeated and the math won't be ignored, only denied.

We know better. Most likely we are seeing the last days that you will ever be able to buy an ounce of Au for 1800 of his Federal Reserve confetti Notes.

A video for your edification & entertainment.

[video=youtube;UJOjTNuuEVw]https://www.youtube.com/watch?v=UJOjTNuuEVw[/video]

 

I know Warren Buffett is all the rage, but the two guys that I think have the most to teach the average person about investing are John Templeton and Ben Graham. I wish John Templeton had written a book about investing. I can't buy entire insurance companies to invest the float, so Buffett has less to teach, especially when what he does doesn't even agree with what he says. There is also a free study at the link below on the Tweedy Browne website, "What Has Worked in Investing." In fact the whole Tweedy Browne site is a wealth of investment information.

http://www.tweedy.com/resources/library_docs/papers/What Has Worked in Investing Fund Version.pdf

 

O wow look at platinum glad i had a chance to buy some at it 2012 lows, is it going back upto 1900?

 

Thanks for the link.

 

I say that if you want it, and can afford it, go buy it. Sure it is $75 over melt, but the bullion version is $35 over also. So if you would enjoy the proof finish and the fancy packaging for your extra $40- go for it.

 

Bernanke is our friend!

 

Stockholm Syndrome strikes again.

 

Is this the reason silver shot up over $1 yesterday?

 

I would probably wait. Gold and silver just shot up yesterday and have been going up steadily for about the past week and a half to two weeks.
I would just wait a little while and see what happens.

 

The Fed only injected $40 billion in new QE. The key is that they promised to continue to do so until jobs pick up. Prices rise not just because of the injection, but more so from expectations of future injections. The market now knows that the Fed will continue to do so endlessly, and that they will choose hyperinflation over deflation, so the free market longs come in. For those who want real money, not inflatable monopoly money, gold and silver are a great buy at any price. For those who want monopoly money profits, good luck trying to figure out what the market will do in the short term. Margins can be raised to knock the price down for a long while still. There is still the fiscal cliff looming, the debt ceiling, and potential Moody's downgrade of US credit rating which is now on negative watch. There is plenty of deflationary pressure to warrant another dip later this year, but the physical market in silver is as tight as it's ever been so I anticipate decoupling from the paper price before the end of 2013. Any knock downs in price will only accelerate that eventuality. As long as you buy before that happens it is my opinion that you will be in a good position.

 

I'm not sure this will cause hyperinflation, or that the Fed can stop the deflation in any practicable manner. When they buy the mortgage backed securities, the funds go to investment institutions who will reinvest it or hold it which further decreases the velocity of money. It won't go to individuals who will spend it and drive up consumer prices. And a half trillion a year isn't enough to even inflate when the federal government in running up debt three times that every year. The specter if default and deflation is still out there and won't go away until a significant amout of debt is liquidated.

 

The Federal Reserve will try to change the Earth's orbit before it will accept deleveraging. Deleveraging is a death sentence to the TBTF banking industry and they will protect it above anything else.

I've said for years on this forum the Fed has no choice but to continue to create money at an ever accelerating pace because of the inherent flaws in fiat money and here is bernanke proving it yet again. Remember this money creating is in addition to, the money the Federal Government is borrowing. Combined it's a whole pile of not good if you hold $s.

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Three years ago I was buying AGEs for ~$975. Today those coins will cost ~$1875. 3 years ago is when Bernanke started QE. The results speak for themselves.