marketboy

;-) Ok, well I can see this is a black hole of productivity! (that'll teach me to get all opinionated!) 1920 we went into a recession... and 1945, end of WWII,,,, also short recession with the decrease in Govt spending. Hmmm.. I was thinking more of what helps during the recession... So, Govt intervention in the economy.... 2008, too small tax cuts and spending in US, at least stopped the bleeding but not enough. (Obama stimulus, 30% tax, other State help, and @$150B per year in stimulus for three years - some economist like Krugman called for $1.5T in stimulus) 2008, big spending in China, huge GDP growth 2008, spending in Australia, (did this work? maybe a good place for vacation?) 2001, 1981, 1975, 1964, various spending, tax cuts, and monetary policy I'm not exactly Keynesian, more MMT, and I see a Tax Cut and Govt Spending as having the exact same affect. Both increase the money supply. So, in a down economy, Govt can make a difference and help citizens by increasing the Money supply, (Oh i mean national Debt). 'cause, in the long run, we're all dead. So let's Spend More and Lower Taxes! I'm not saying we need a bigger govt,, just big enough, (certainly bigger than the largest corporation, since I want to live in a democracy not a plutocracy). What would you guys do? Just fire a lot of teachers, policeman, firemen, etc.? (all the recent job declines in US have been public sector, Private sector continues to see gains). Would you cut a bloated military (US military spending = the next 29 largest nations combined, oh, and 28 are allies)? would you cut social programs like welfare ( a whopping 1.5% of budget)? Increase taxes? (look out Grover we are headed over the cliff!) Reduce regulations on the financial sector? Maybe PFG could start back up! Again, there isn't a federal Debt crisis in the US. No one is trying to foreclose on the US. US debt is not causing the economy to stall. US debt is not crowding out private sector borrowing. There is no real inflation. There are no bond vigilantes. So if the problem is unemployment,,, then how about a Job Guarantee program? We could put those 3m people to work, all that non-productive labor back into the economy, no more minimum wage laws, and no more unemployment insurance, what do ya think? cheers!

Back to the thread topic Gold used to correlate to the US Dollar, and a proxy for that is Inflation, or the CPI. But look at the chart below and what happened around 10 years ago. And then look at China recently... China and India are top buyers. When their economies slow, will they buy more or less?

Hi SunTrader... sorry if I confused ya... Government spending did not cause the recession/depression. In fact, the US deficit spending and the national debt are not anywhere near crisis level. Check out the US CIA world factbook.... I think this a great list to show how silly this fear mongering about the debt is: https://www.cia.gov/library/publications/the-world-factbook/rankorder/2186rank.html So,,,, the US is worse off than Singapore? Japan? Canada? No, we're just fine. I think the problems spawned more from something like 26 trillion in PRIVATE SECTOR debt... which first became apparent in the US housing market but quickly showed itself in collateralized securities and credit default spreads. There are 100's of recent examples of Keynesian types of economic stimulus that have been very successful in moving stalled economies back into growth. There are ZERO examples of AUSTERITY helping a nation move from deep debt and deficit spending back to growth. (Except maybe Sweden, but they had oil exports which pretty much changed the equation). The US isn't overweight, it is pretty darn slim, and a diet would be a disaster. Yes, I think we need to eat more!! Great you've hear of Adam Smith. Indeed when I referred to "the invisible hand of the market", I fully intended to bash the conservative myth of the "free market". Economies do not obey the laws of Newtonian Physics, there is no mechanism to move things to equilibrium. Economies are complex adaptive systems, and complexity theory offers a much more scientific assessment than archaic economic schools of thought that, unfortunately, are still part of the national political dialog. Let's have a real discussion, and you and I can move beyond the nonsense we get from Washington and get the world back on track, (oh and maybe figure out how we can make some $$ in this crazy market!) Speaking of the market... I think this thread was about gold... Apologies to all that we've gotten so off topic, I'm digging up some charts to post now

The US should be spending way more to get the economy going... not less. The Teaparty may have started out as well meaning, but was quickly highjacked by Corporatism driven SuperPacs and Dominionist groups. When the Teapublicans stated number one goal "is to get Obama out of office", then you can understand why Congress does nothing to help and everything they can to crash the global economy. "Our biggest priority is jobs", so let's vote on abortion.... S&P downgraded US Bonds to AA+ because of the potential for default. How can that be? If US Bonds only obligation is to repay in US Dollars, and the US Government via the Fed, can create as many US Dollars as needed, then how is it possible for the US to default? One way is for the Congress to be taken over by terrorists whose "number one priority is to get Obama out of office". Even if it means we don't pay our bonds and crash the global economy. Austrian economics is founded on dis-proven hypothesis and now based solely on ideological wishes. There is no Invisible Hand; God is not going to fix this. Oh by the way.... the Bubble in Gold is being driven by China and India. As their economy's turn down, Gold will follow.

The best analysis i've seen was by Cullen Roche at pragcap.com Lots of folks still think many governments are printing to much money and somehow gold would be safer... (not sure why gold has more value than anything else if it is armagedden ;-). There used to be a strong correlation of gold to US inflation, but not so much the past decade or so. Money creation doesn't necessarily lead to hyperinflation, and the US has been more in deflation, but gold still goes up. it is because the demand for gold is from India and China. Watch the CPI in China and you'll see the most curent influence on gold prices.

Ha.... I wish I had an airplane, Sometimes I think I'm just driving a tractor or golfcart or something! For other newbies, beware that MA is just univariet time series analysis. The next tick can't be predicted. The market is a complex system that can't be predicted based on past action. So time series analysis is a method that doesn't fit the model. MA are only useful if others make decisions based on them. So a system using MA might work, but only until it stops working... Look instead for ways to understand other traders, buyers and sellers, supply and demand. The price history is their footprints. Are they running ahead or are they trapped? Good luck to everyone in 2012!

A fixed currency is DEFLATIONARY. Using a fixed currency causes Depressions! GB and US moved off Gold standards starting during the great depression. But even before there were problems. The US had a deep depression in the 1890's and Gold was a major contributor. The farmers couldn't get enough cash to operate. The bankers had insisted on a Gold Standard and stopped the US from using Green Backs, (Lincoln had started printing Green backs to pay for the US Civil War). The bankers wanted control over the creation of money and the interest premiums, as opposed to a central government doing so. The farmers and working class wanted the government to return to a dual metal currency so there would be enough in circulation. 16 Oz of Silver would equal 1 Oz of Gold. (Ahhh.... the Wizard of Oz!). That didn't happen. The bankers won, and now the world pays the interest. In New Guinea they once used Dogs Teeth as currency..... yep! So think of it... Dogs Teeth, Gold, BitCoin (electronic currency), how are these different from a fiat currency? They aren't. It's all based on belief in value. This is a great thread! I think with the current nonsense over raising the US Debt limit, discussions on money creation are vital to our understanding and formulation of solutions to the global economic problems. (If only the extreme right wing teaparty fools would read a history book, sigh...) Speaking of money creation and the Fractional Reserve Banking system: Is the US National Debt really a store of value as the monetary BASE for the global money supply? If we were to cut the US National Debt, would the monetary base shrink and in turn shrink global money supply causing another depression? 'Cause that is what has happened every time the US government ran a surplus, (Except once... Clinton had a surplus and it wasn't followed by a depression.......... or was it?) ;-)

thanks for the great article on Onions and Oil! Imagine a market with only really big players... the price would be crazy volatile. - only block trades between a Mutual Fund and a multinational corporation - only big quantity trades of Oil between oil companies and airlines - only annual purchases of a farming community's grain by a cereal company The market needs players of all sizes, and derivatives, to smooth prices and be effective. Speculators make life better for everyone.

Managed futures as part of a diverse portfolio makes sense, and some funds do very well with these. I guess it all depends on how you define "long term". For me month is pretty long term! ;-)