Gold starting to run, and developing economies failing

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Hippophibia

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DrHenley

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Gold has met one milestone - staying above 1250 for two consecutive days, which happened Thursday and Friday. This supposedly is a signal for gold shorts to go long. The really odd thing is that all the other precious metals dropped while gold held steady. I can only assume that is because they are industrial metals, and the manufacturing outlook is weak.

There will be some volatility as the markets adjust, and some profit taking which will drive it back down a bit (looks like it already started)

The next few days will be crucial.

I can't help feeling that the global economy is on the edge of an abyss...and in the process of stumbling.

What is very instructive is that when the emerging markets like Turkey started faltering, their currencies fell against the dollar. That is supposed to be good for the dollar right? Then the dollar fell too. WHY? It has since rebounded. Now we have the curious situation in which the dollar and gold are going up, while everything else...including all the other precious metals...are going down.

Ancient Chinese Curse: "May you live in interesting times."
 
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DrHenley

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The Dow is Up!
The Dow is Down!
The Dow is Up!
The Dow is Down!

There is mass confusion in the markets right now.
DowRollerCoaster.png
 
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Hippophibia

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Mass confusion in Australia.
http://au.finance.yahoo.com/news/correction-catastrophe-shares-tumble-emerging-034047802.html

I think there will be some opportunity for investors that have been holding out of the market to look at buying up some cheaply valued stock," Mr Sebastian added.
Symptoms of a deeper disease
Financial analyst Satyajit Das disagrees, and sees what is happening on the markets as a symptom of problems plaguing the global economy since the beginning of the global financial crisis.
"The real issue is the emerging markets, to some extent, have been held up by a massive flow of money, which came out of the developed world - partly because of the fears of meltdown in developed markets, but also because of the policies, particularly the policy of quantitative easing, which led to abundant liquidity - much of which found its way into the emerging markets," he argued.
 

Hippophibia

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Gold starting a bit of a run, is the printing of money loosing its impact?



Not sure what's up with China, apparently they are fudging their figures! up to 70%, to enable more borrowing??

http://www.bloomberg.com/news/2014-02-11/china-s-exports-top-estimates.html

"China’s exports to Hong Kong in December exceeded the city’s reported imports from the mainland by about 70 percent, the biggest difference since April. The State Administration of Foreign Exchange said in December that it would boost scrutiny of trade financing and that banks should prevent companies from getting financing based on fabricated trade."
 

DrHenley

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It's hard to know exactly what's going on in China since they have a very tight control over information about their economy. We do know that individuals in China are on a gold buying spree at the moment.

What has been interesting to watch is the markets and gold both going up simultaneously for the last few days. And also interesting is the divergence of gold and silver which were tracking together pretty much all last year.
 

Hippophibia

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DrHenley- I appreciate your comments, finances is outside my area of expertise but I see gold now over 1300, but my biggest concern is massive job losses in most countries, the Australian economy has fallen flat, 18 months ago I had 3 job offers then got retrenched and it took me 5 months to find work (that is with 3 degrees in different fields) and in the US over 300,000 weekly new unemployment claims - if I read the data correctly. I am not seeing any magic bullet to get us out of this mess.

http://www.fool.com/investing/gener...today-flat-on-retail-sales-and-cisco-ear.aspx

Report Period Result Previous
Weekly new unemployment claims 2/1-2/8 339,000 331,000
Retail sales January -0.4% -0.1% (r)
Retail sales ex-autos January 0% 0.3%
Business inventories December 0.5% 0.4%
 

DrHenley

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What is ludicrous is that Janet Yellin, the new Fed Chairperson, talked about the "drop in unemployment" as if that 6.6% unemployment number the govt put out actually meant anything.

The government's own Labor Force Participation Rate is the lowest it has been since Jimmy Carter and the days of the misery index and double digit unemployment, interest rates, and inflation.

This chart comes directly from the Bureau of Labor Statistics' own web site:
LaborForceParticipation.png
 

Hippophibia

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Yip,hiding the reality - no wonder there is only like 10% approval rating for elected politicians in the US.
One would have to be blind or distracted not to see the reality. Like the Romans holding chariot and gladiator games in the Colosseum while the country fell apart.
 

Hippophibia

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Gold now up about $100/ounce to $1370 since last posting a month ago, and a host of bad indicators including copper price
Copper has slumped 8.6 per cent since Friday. Is there a way out of this economic downturn or is it all downhill from here??

Stocks Tumble; Dow Drops Over 200 Points http://online.wsj.com/news/articles/SB10001424052702304914904579436893883090378

Asia Stocks Fall While Bond Risk Climbs on China Concerns http://www.bloomberg.com/news/2014-...ures-pace-u-s-stock-drop-on-stronger-yen.html

 

tntboy13

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I agree, things seem to be looking worse the further we go...
 

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