WTF? Why is Gold dropping hard?

[steyr_m]

I don't have TV, and have been looking at some news sites.

Why has gold been dropping like a stone this week?

[LastResort]

I think the real question should be WTF do I stare at your avatar for 15 seconds before I read your posts?

Anyways, back to your question. Nothing has changed. Have patience......

[ximmy]

If you have the green... think of it as a buying op. We may well be seeing the last days of sub 1800's and 40's in the charts...

[steyr_m]

If you have the green... think of it as a buying op. We may well be seeing the last days of sub 1800's and 40's in the charts...

I'm selling my M/C, I'll have the green [also red, brown and blue -- our money comes in different colours] in two weeks. I plan on dropping everything on PM.

[steyr_m]

I agree with you, seems to be no rhyme nor reason for actual gyrations. Hope this helps.
beefsteak

It does. I was reading a bit more and China might be helping Italy, and of course, I think the Obamination spent a bunch of money on a "job creation programme".

[steyr_m]

I think the real question should be WTF do I stare at your avatar for 15 seconds before I read your posts?

I still find myself staring too ;-)

[Libertarian_Guard]

In a contraction…everything contracts. What do you expect? That’s what it’s all about. That’s how it works.

And when you have a consumer economy, what contracts most? Consumer spending, of course. Simple, huh?

And when consumer spending contracts, business sales go down. Eventually profits go down. And eventually investors realize that holding stocks is not going to be profitable. Then, stocks go down too.

And here’s another Bloomberg headline:

Wholesale Prices in US Are Little Changed as Energy, Vehicle Costs Drop

Surprise, surprise! The feds pump in trillions in cash and credit. Still, they can’t get prices to go up significantly

Contractions are deflationary.

That’s why we don’t expect the price of gold to rise.

And now that Germany and France have gotten together with China and all have agreed that they aren’t going to throw poor little Greece off the Euro-Bus…gold has nothing to do but go down. No crises on the horizon. No inflation either.

So who needs gold?

Well…. We all will. But maybe not just yet…

“Gold fulfills the functions for which money is used better than any other type of money,” wrote Lord Rees-Mogg in his introduction to “The Case for Gold” — a three volume tome rehearsing the history of the yellow metal.

But if gold is the best money, how come we don’t use it rather than dollars?

Lord Rees-Mogg explains: “The problem for gold is not that it doesn’t work, but that it works too well…it imposes limits on human behaviour, and those limits can be resented and rejected. Indeed, it can become impossible for a government to maintain the discipline of gold…”

Ah yes….

Limits. There are always limits. You can ignore limits. You can reject limits. You can pretend they don’t exist. But you can’t ignore the consequences of ignoring the limits.

Right now, the economy is in a major contraction. As long as this phase continues, you only need gold as insurance against a catastrophe. But what would cause a catastrophe? The feds, of course.

In a contraction, the market itself imposes limits. It forces asset prices down. It undermines businesses. And it drives debtors and creditors into bankruptcy.

The feds don’t like limits. And they don’t like contractions. Especially not when an election is coming up. Maybe they’ll keep their nerve. Maybe they won’t. They could do something reckless and desperate…in an effort to overcome natural limits. That’s when the merde will really hit the fan… That’s when you’ll need your gold.

http://dailyreckoning.com/catastrophe-insurance/

[joe_momma]

The world markets are trying to cover their positions in the case of either margin increases (likely) or Greek default (inevitable).

The Fed/ECB just dumped a ton of cash to prop up the stock markets (causing stocks to rise for a short period). People getting squeezed have to liquidate assets - either sovereign paper or PMs for the most part since stocks are being driven higher (fools). PMs took a huge drop since the total PM market is tiny (Au is tiny, Silver even smaller) compared to the paper world.

[osoab]

I put it on the stick save swap between major central banks. Risk off for a day or two. Au moved in the same direction as the bucky too.

Now I don't understand why the grains tanked. It's not going to be a stellar harvest this year.

[Glass]

We even had a front page story on "Commodities". Never seen that before but Gold is done as a safe haven I can tell you and $1702 is temp support and a strong bear signal because gold is in a bubble. But no mention of silver. It's not a PM apparently.