Is this The Cliff

I just read an article from this morning is this the cliff or Correction on PM's they have been talking about? How low do you think they will go?

 

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I was waiting for the plunge and just bought some silver on the drop at noon. TC

 

Weird how the PM market is decoupling from financial markets. My stock portfolio is up over 2% today, and my silver is down 2%. Usually they are fairly close in the same direction.

 

Ya, huge inversion there. El Cliffo!

We breached my short term bearish guess of ~1,685 by 12/31/2012 and we're racing towards 1,660. two weeks early.
http://www.cointalk.com/t217473-6/#post1586199

This is some heavy-duty portfolio rebalancing by hedgies, eh?

 

For whatever reason, it appears there is more confidence in the market, and money is flowing into equities, if it continues, who knows, but it sure looks like some rotation to me. This was not the first day of equities up and Ag is down. It looks like it started at the end of NOV

http://finance.yahoo.com/q/bc?t=1m&s=^GSPC&l=on&z=l&q=l&c=slv&ql=1

 

Yeah, that was my take too. Such a thing could be more pronounced if the market gets better. I simply do not understand why so much confidence in equities all of the sudden. Maybe its more year end window dressing.

I do see Greece just just a huge increase in its credit rating. That has to help Europe.

 

The SLV MACD is all over the place, I don't know what to make of it...

 

Look at Forbes' reasons why Gold should correct in the short term. Especially Reason #4.

http://www.forbes.com/sites/panosmourdoukoutas/2012/12/18/is-a-big-correction-for-gold-and-silver-coming/
"Forth, anxiety over Abe’s promise to print yen until it creates 2 percent inflation in the land of the rising sun."

Why should Japan's PRINTING MONEY be 'bearish for Gold'?
Wouldn't 'tackling deflation' by printing more fiatscos be BULLISH for Gold?
(And shouldn't conservative Yen holders BUY Au and other monetary alternatives for value, to preserve wealth - assuming no better interest rates at home?)

 

Just a quick guess, but a trade imbalance?

edit: Now, reading the forbes link and some others I've seen on the recent developments in the Nikkei equities, I think this was either a quasi-simple mistake, or the writer does not understand the things he is writing about.

 

Why would inducing inflation in the world's 3rd largest economy be bearish for gold? If I were to make that argument, (not saying I am, but if), I would say by producing inflation it would spur the economy, increasing equity and bond returns. If equities and bonds are not currently returning yields, then a lot of money that would normally be invested there is probably ALREADY in gold. If the economy would start moving, and bonds yield more, many holders of gold might SELL their gold to invest their money in other investments.

I do not consider such an argument to be so disagreeable. There is a ton of money out there looking for returns, and my suspicion is some of it is already in PM. If other areas start generating better returns, I believe some of this money would sell the PM positions.

 

I'm hoping for sub-$30 after the first of the year. I sold off 25 ozs of generic bullion and some of the weird ASEs (hologrammed, painted) yesterday to fund an AR purchase and if we go below $30, I'll buy the 25 ozs back.

 

There is wide spread belief DJIA would go over 14K once deal is reached, that is why in spite of year end sell off there is large amount of $$$ flowing into equities.

 

All i hear is BUY BUY BUY BUY BUY....silver of course

 

I think this close to year end, a lot of the fluctuations are motivated by either tax reasons or window dressing portfolios.

 

As someone who is living in Japan, I will say that printing more yen is NOT going to raise bond rates. There is plenty of money just sitting in Japanese banks as it is now. If more money is coming, there is no incentive to increase interest rates on savings because the money is going to be coming in anyway.

Inflation is not going to spur the Japanese economy. It's just going to make it tougher on people who have fixed incomes or are having to take pay cuts.

 

That is my take on it. Some small direction on the fiscal cliff outcome, they make their moves, liquidating paper metals for equities. With QE4 on the way and gold returning to a tier 1 asset I am optimistic about metals for 2013, but then I would probably be anyway If the market blinks though, could be a great buying opportunity on the horizon as well.

 

Just like the deflation there is making life miserable on young people who need to borrow?

Sorry man, either is bad, and I would lean towards mild inflation due to the good it does an economy versus deflation if I had to choose. I understand savers would be hurt versus today, but right now borrowers are hurting badly there. Either way someone will be disadvantaged, no getting around it.

 

I could understand portfolio rebalancing, but not by hedge funds. Why would they? I would say more likely by mutual funds getting money into the market like they were supposed to have done, changing investments as to avoid public disclosure of real holdings, etc etc. Lots of reasons why mutuals need to window dress, very few why hedge funds need to do so.

 

Having lived through the inflation of the '70s, and the deflation of Japan, I'll take deflation. I don't know where you get this idea that borrowers are hurting in Japan, but that's just not the case. I see ads all the time from Japanese banks that are dying to loan money. If someone wants to buy a house or a car and they have a job, it's relatively easy to get a loan.

Really, inflation is not going to spur the Japanese economy. A lower yen that benefits exporters might, though.

 

If you have deflation, it means every year prices go down. Therefor, if I buy a car for 1 million yen today, it will only cost me 900,000 yen in a few years. However, I have to PAY 1 million plus interest. Effectively, deflation is additional interest that must be paid. If a loan is nominally 4% interest, but deflation is running at 5%, the REAL interest I must pay is 9%. The worst part is governments ignore this, so I do not get to deduct as a business expense the 5% extra interest due to deflation I must pay, so it hits me even harder.

I have lived through inflation in the 70's as well sir, I am just saying for an economy I would take that over a deflationary spiral overall. Yes, if I am retired I want deflation, but that is just my selfish self interest talking.