Stacy Summary: The dollar has taken one foot out of the grave and is up and dancing this morning. Woohoo. A big ol’ 76. Carry trade unwinding? Return of the US economic might? The last blip on the heart monitor?
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Most recent: 
@ Stacey Careful, Max gave Obama the benefit of the doubt for several months after the Prez election. Now Max thinks Carbon credits (like Obama has all along) will save the world. Wake up your honey. World (Carbon)Tax to replace the (World) Dollar Tax .
Uruguay joins Brazil and Argentina – dumps the FRN (a.k.a. dollar). The South American nations will no longer use the fiat currency for mutual trade transactions.
http://www.rian.ru/world/20091208/197749296.html
Isn’t carry trade the same as Arbitrage?
Myth:
From that link that you supplied, I could not find what “Obama signed” ……. what?
@ mother…
Its okay, possibly admirable to hold onto a belief no matter what – But you have to accept (dont you?) that there is a very real stink at the heart of climate change science.
Good Science: You start with a guess (Hypothesis) then you research data to see if that hypothesis holds up. You keep going, finding more data and seeing if that still matches the hypothesis. If you find evidence that the original hypothesis might not be correct – You stop, take stock, change your hypothesis and begin the evidence hunt again.
Bad Science: You have your hypothesis, find information to support it, continue your research, find evidence which doesnt fit your hypothesis, chose to deliberately ignore that evidence, change the figures, alter your computer programs and try to get voices of dissent fired from their jobs and silence them.
(Yes, I have read the emails)
Which of these two methods have the scientists involved in Climategate been using?
Just trying to use logic here. Calling people who disagree with you mentally deficient just wont wash anymore.
I wont try and convince you to see thing ‘our’ way, but at least understand why we are convinced of what we believe.
Science is fact based on best data, not faith – Why would anyone need to fabricate data? Surely truth would be bulletproof?
@ mother earth….
Oh my god….get a live… and get real
bear in mind that India bought that Gold from the IMF because it was already custodied in Delhi – hence all they had to do was switch the post-it note on the cage from IMF-member designate reserves to ‘INDIA’ without taking delivery – class.
http://worldreports.org/news/250_signs_of_an_end_game_showdown_with_washington
THIS IS ALL COMPLETE MAKE-BELIEVE AND BALONEY. That’s not WHY the dollar rose. The dollar rose AFTER THE PRESIDENT SIGNED OFF because, as a consequence, the necessary previously blocked funding TOOK PLACE [see above]. But of course, the ‘mainstream’, HAVING FAILED TO FOLLOW THIS STORY ALL ALONG, has absolutely NO CLUE WHAT’S HAPPENED.
Bubble bubble the dollars in trouble
Grin of Greenspan Beard of Bernanke
Giethner is panicking
It’s the end of the Yankees
Gold has just hit the upper band of the trend channel it is trading in, it will make a swing low above the old resistance at 1000 and then start up again probably in a few months. Its had a good run up.
The real drama is yet to come when the US stock market starts down again once everyone realizes that they have been had again. By my calculations reality should set in around mid January the 15th or 16th if I am not mistaken
Chinese want 1065 an ounze. Before their next big purchase. Buying opportunity. Dollar is near dead. Reviving now for the final theatrical fall which will come some time in the New Year.
http://soundcloud.com/speirsy/thnkng-allwd-021209-karen-ho
Thinking allowed Radio 4 UK 021209
Anthropology in an unusual setting: Wall Street. Laurie Taylor talks to anthropologist, Karen Ho, who gave up her academic life for over a year to become an investment banker in order to study life on Wall Street. She explains why she immersed herself in the culture of high finance, high risk and high reward and why she thinks it was the culture of Wall Streeters which brought the world’s financial system to the edge of catastrophe.
“Ok, but how does this affect gold. If anything the chaos will only strengthen gold..imho.”
Mother Earth –
You’re right. Gold goes higher on two forces: 1) Inflation, 2) Uncertainty.
The carry trade ending essentially does away with #1 above, but increases global instability because it threatens world equity markets.
Which is why gold went up during the Great Depression which was the greatest deflationary collapse in US history.
It’s also why there are gold bugs on both sides of the inflation/deflation debate.
Personally I think most inflationists have a good grasp of monetary policy, but have a very poor grasp of the bond market.
I’m solidly in the deflation camp, and I still like gold — to an extent. I hold a moderate amount….
Last blip of the American Imperialist hart monitor … albeit the ticker is irregular.
Eventually, the carry trade becomes ridiculously popular. Those who were among the original participants in the trade, along with others who recognize the dangerous imbalance, suddenly shift to the opposite side. This causes the asset which is being borrowed to suddenly move adversely for those who are borrowing it. The adverse move forces those who were borrowing this asset to close their positions; this closing forces the price to become even more adverse. Simultaneously, as losses mount, the long positions have to be closed out; as they are being closed, this causes an accelerated collapse in these assets which can exceed 80% or even 90%. Inevitably, all participants in the trade, with the sole exception of the very few who got in early and got out early, lose a huge percentage of their capital.
This guy knows his stuff…
James Hansen, Ex NASA.
I’m just watching him on Lateline in Australia.
He says ‘Cap and Trade’ is good for bankers, no one else.
http://wattsupwiththat.com/2009/01/27/james-hansens-former-nasa-supervisor-declares-himself-a-skeptic-says-hansen-embarrassed-nasa-was-never-muzzled/
Maybe some believe the US has China by the cochones because of the Green movement and the Afgan surge.
http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/6645697/Chinese-credit-tightening-chills-Asian-markets.html
Chinese banks are set to comply with Basel in January: capital is not flowing.
Why would the carry trade unwind? Is it because confirmation of Bernanke is less likely?
Why is not one looking to central bank manipulations?
@Mongo:
Did you see this?
“• When the new income model was endorsed by the Executive Board in April 2008, the price assumed for the purpose of making medium-term income projections was $850 per ounce, which was based on current and historical developments in gold prices at that time. However, in practice, the price realized for the proposed sales may be above or below this assumption depending on market developments.”
http://www.imf.org/External/NP/EXR/faq/goldfaqs.htm
IMF dirty deals need gold at 850.
The level of the U.S. dollar index is often imagined by many to be far below where it was, say, three decades ago–and yet it is only slightly lower over that period of time.
@carry trade unwind
– Wouldn’t an unwind be more strategic to occur during an American only holiday? Like MLK day, that would give the world 2 full days of market trading while Americans are stuck in their positions.
@Max
– Do you see water being commodified any time soon? How about insect protein? Humans, both labor and sex categories? With the gulag state, maybe even a prisoner category. Soylent green would be a good business, generates carbon credits as is ‘green’ in many ways.
@Stacy :
You and Max have never talked about this on the air, but did you ask yourselves how did the IMF sell 200 tones of gold while they have been lying about their 400 tones for many years?
Something is wrong.
@Mother Earth and Stacey
I was at last year’s Israeli business exhibition in Tel Aviv (great hotels…so long as you dont get trapped in a Shabbat lift) and sat thru presentations by diplomatic teams from many countries, notably Brazil and India, who were desperate to invest in Israeli alternative tech. I dont remember China tho that could be because the wine was rather good. I missed Israel’s Watec this year but know there was a lot more foreign delegations.
@stacy. the answer is goldylockssachs. bye youall.
Ebedibedi..
http://www.youtube.com/watch?v=UnHqT8s82Mg
@Stacy
There is different competing forces at work at the same time. Whatever wealth Israel amasses with its innovation they have to translate into defence at some time, because the region hates Israel so much it is almost tangible. Innovations from Isreal are brilliant but they lack investment backing, I have been to conferences and never met one Israelite, the ones I know I contacted myself. Remember Israel was made possible / pushed through by Churchill who knew the region well..The writer I refer to Leon the Winter, that claims Isreal is there to keep Islam in check. I think he is right, but just replace Islam with oil merchants.
@stacy. i had no idea israel had these technologies. with there high unemployment and low tax base, where do they get the seed money.
@Mother Earth – Yes I disagree with your theory. Doesn’t make any sense. Too elaborate. Furthermore, not only in any country will you be able to find people on either side of the AGW debate; but, in terms of your argument about strategic interests, Israel is one of the leading innovators in alternative technologies and they would stand to gain substantially from a global shift away from oil and other carbon rich fuels.
i sleep in the dark.
@Stacy
You disagree with my Israel theory ?
@stacey. the gold window seemed to open during my sleep and will shut while i’m awake.
@ronron – they do? like what?
@stacyherbert. thanks. strange things happen in the middle of night.
@Stacy
..get great headaches?
@ronron – well, you know what they say about great minds . . .
@popo99
Ok, but how does this affect gold. If anything the chaos will only strengthen gold..imho.
@stacyherbert. so your thinking what i’m thinking.
@ronron – it will be interesting to learn who got the remaining 200 tonnes of IMF gold and at what price . . .
@staceyherbert. me thinks the gold window was opened up for the chinese but will slam shut in the north american morning.
@Stacy
The way I see it Isreal is the local sentinel for the US, It ensures ready response to any threat to the US oil supply. It poses a direct threat to Iran, making it an unreliable source for China. If the world shifts away from oil (which it will have to do sometime anyway) who will need Israel for that. If it was all about the palestinians there has been enough provocation to rout the israelis out by now. Ergo AGW is anti Israel.
By the way, reading about what the French, Turks, locals and English did in Egypt and Palestinia there is no historic reason why Isreal would not enter Gaza and kill all. That would be the norm. By modern standards that would be wildly immoral and having been there myself (Isreal and Gaza) I would simply evacuate that bellicose artificial state asap, just make them leave.
Also nobody seriously believes the Jemen rebel problem is accidental?
AGW Anthropogenic Global Warming
m earth
is global warming part of the
kosher nostra?
@ stacey
look like you in the pic its just yellow in the comments
the
RODFL
Mother Earth — The carry trade is predicated on low interest rates. Bernanke is going to experience a very (very) serious problem in the coming weeks, which is that he cannot keep rates low.
With Kuwait unloading Treasuries, and other nations threatening to do the same unless Ben defends the dollar — Ben is being forced into a situation that will be an utter nightmare for him. He is caught between the need for low rates on one hand (to save the banking system — and inflate the money supply through new debt creation) and the need to keep the buyers of US debt happy (otherwise they’ll dump treasuries).
For a little while, Bernanke can pay lip service to a strong dollar policy. But it has become painfully clear, that his intent is to debase the dollar through inflation.
The problem of course is that his plan is running into a brick wall of pissed off foreign-central banks who will dump treasuries as this becomes clear.
The only way to prevent this from happening will be to raise rates.
Raising rates = the end of the carry trade.
(And it also equals the end of the bull run in equity markets).
This is the Kobyashi Maru.
There is no way to win for poor old Ben.
m earth what is agw?
Art Gallery of Windsor!
You can tell the sad state of AJ from his rants. Pathetic. There is enough real stuff to worry about..
@Mongo – gold drop to $700 / $800 – are you in China? I know the Chinese, who are looking to buy 9,000 more tonnes would appreciate that . . . but I doubt very much they will get that . . .
@Mother – I fail to see relevance of being pro-Israel and anti-man made global warming . . . strange connection to make
@Chenjeshu – we’ve been promising the end of the world!
@Mongo
How is the carry trade linked to gold?
Stunning: The most respected newspaper in Holland (NRC) pulished an article by a jewish writer (the fact he is pro israel seems relevant somehow) stating the AGW is a hoax.
Why would the carry trade unwind? Is it because confirmation of Bernanke is less likely?
If you look at Ebay prices you would not say gold is getting killed, nor silver. The Comex may be abandoned/flushed out in order to pump up the dollar and make the treasury bills more appealing.
Maybe some believe the US has China by the cochones because of the Green movement and the Afgan surge.
This is going to be interresting… if this is the beginning of the unwind… gold will drop to 700-800!!!
Did max start singing to it?
Mike
“I be your long haired lover from Liverpool”
BANG!
Mike
Everything Max and Stacy said was wrong. Its the end of the world!
LOL why did i type Copen hagen
first
wow what caused this ?
Hopen hagen /Copenhagen ?
First?
Gold is getting KILLED!!!!!!
Mike