[Charmin]

Will GFI go the way of Drooy or is this the end of supply? Demand shows up a tad right at support.

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[Charmin]

Day early for the new thread. Time to look at monthly charts.

[Ander]

Thank you Bernanke!

To me, what they are doing (inflating the money supply), makes sense, and is really the only thing they can do. The U.S. has tremendous debt, both the government and the average consumer, and thus inflation helps alleviate the debt while deflation would compound it.

They destroy the economy if they stop adding liquidity, so they must continue the course they are on. The ones they are screwing are the savers who are holding dollars that are declining in value. (And those holding bonds, etc). Savers who hold MONEY (gold and silver), will benefit. A large and growing percentage of the U.S. debt is held by foreigners, so from the U.S. perspective it makes sense to take the course of action that saves those at home (saving them from their debt by inflating it away so its easier to pay back), and screws the foreigners (reduces the value of their dollar denominated assets, that they are now holding a large amount of).

The U.S. has tricked China and other countries into accepting paper in exchange for goods, and now is making sure it doesnt have to pay back the same amount of value in the future, by reducing the value of that paper.

It will continue, and its good for gold. And eventually when China and the other countries get tired of losing purchasing power and move out of the dollar, thats even BETTER for gold.

The Fed will NOT allow deflation, it is their greatest fear. They would choose inflation over even the CHANCE of deflation.

Remember that their economic belief is that the great depression was caused by the fact that due to the gold standard, the money supply could not be increased sufficiently to ward off deflation. Now that they dont have the gold standard anymore, they attempt to avoid another depression by not allowing deflation to occur. They will inflate to any amount to prevent it. Their goal is to keep inflating while not allowing the inflation to get out of control. They may or may not succeed in this. But it seems they prefer even out of control inflation to deflation.



Remember who benefits from inflation and who from deflation:

Debtors want inflation
Holders of real estate and stocks want inflation

This describes most americans. Thus inflation is the popular option.

Savers (who hold money in dollars) and Bondholders want deflation, so their savings buy more stuff.

The portion of U.S. debt owned by foreigners is large and growing. Therefore the popular course of action in the U.S. would be to inflate, save the debtors and screw those in other countries that they owe.

Obviously I write this all from a U.S. persepctive. But knowing what those who are in charge of the U.S. economy want, is important for investors anywhere.


This is why we invest in precious metals: because the Fed is COMMITTED to a course of action which inflationary, and precious metals benefit more from inflation and the creation of more money than any other asset class.

[Ander]

That is the long term picture, and its the primary reason why we're now in a bull market.

In the shorter term, there will be times of large corrections and bull phases. It seems very clear to me that we bottomed in october, and are headed up. In a shorter time frame, after the december top, we were in a downtrend until early january. We have now broken out from that downtrend line, retested it, and bounced off it, going higher. The move is getting underway and will soon accelerate. This is a time to be fully long.

[traderfromhell]

Charmin, on Jan 31 2007, 01:55 PM, said:

Will GFI go the way of Drooy or is this the end of supply?  Demand shows up a tad right at support.

Massive base between 10-15. Actually backtesting the general area of the breakout. Might dip a bit underneath but of no concern to me.

[Charmin]

When corn rockets 80% in 5 months you know your right Ander.

Everything is fine and dandy according to the govt. though.

[Charmin]

Too nice

RIO
http://www.StockShar..._1170285023.png

[Charmin]

Just a heavenly incline

SSRI

http://www.StockShar..._1170285095.png

[Charmin]

Oct. 4.. may be the last time we see it

RNO moving up
http://www.StockShar..._1170285184.png

[Charmin]

Very soon all first day openers who held SLV will be winners

SLV
http://www.StockShar..._1170285264.png

[Metamucil]

Era of disinflation and paper stuff ended a few years ago...around 2000-ish, when gold bottomed.

This is inflation time. Play it to the end, imo.
Bond yields will confirm this secular change soon enough.

GLD 65 should signal the next leg up for the 'relic'.

Place your bets.

[Charmin]

PCU was very decisive at 50. support with trendline. Powerful spot

http://www.StockShar..._1170294132.png

[Charmin]

MFN

new all time high

http://www.StockShar..._1170295195.png

[Charmin]

MRB - lifetime new high
http://www.StockShar..._1170300006.png

[dharma]

ander, i am w/you. as long as there are wars, they will inflate by necessity. i am 100% long and probably will hold til the 80 highs are taken out. then i will reasses. 150 on the xau is formidable resistance but that too will ultimately be taken out. dharma