Tipping Point for Gold

November 15, 2003

Gold still hovering around the mid to high 390's - I think in the grand scheme of things the $400 mark will be considered from an historical perspective as the Tipping Point for the POG.

I've not written off a total collapse in commidity prices yet - ANYTHING CAN HAPPEN - but I am detecting inflation starting to really make a difference. A friend of mine in construction said lumber and other products are rising astronomically right now and he's being told to expect more of the same by his suppliers. I think the monetary stimulus is really kicking in for good and bad - the veneer will come off completely over time but for now no one is putting it all together in the mainstream. We're living off the rarified exhaust given off by the super heated monetary engine - called the US$.


Posted by rlancaster at November 15, 2003 02:53 AM

Here's some insight for your readers from someone in the trenches. I'm a carpenter for the second largest framer in the San Diego area. We build the million plus homes mainly. It's been a whirlwind the last 3 years of non-stop hurry hurry hurry. Get it up, get it roofed, and get over there on the next slab. But...I just finished 6 weeks sitting at home waiting for the next job to start and trading online (fun and made money, too). We don't have that many jobs in the pipeline. Two of our current projects backed by major nationwide builders I won't name, have delayed our starts twice now. It's now feeling just like 1989, which you may recall was the beginning of the end of the last construction boom. It was almost like panic buying back then. Several of us old timers have been commenting on how this latest boom has gone on long past anything we had expected. Of course, I have explained to them about the interest rate manipulations and the credit expansion at the root of it all, along with a little tulip mania. All of us guys have been through the 60's bust, as well as the 70's and 80's, so we know what we know. I just threw away several hundred on puts on CTX because I didn't read the candlesticks correctly. I won't miss the next ones...and I will come back to your site a lot for your timely info, especially on all things asian.

Posted by: allan evans at November 28, 2003 01:51 AM

Thanks for the input Allan. It'd be interesting to know if more builders both in So. Cal and around the country are experiencing the same delays and potential cancellations.

Seems to me we're in the middle - to end, of a mini bull market run inside the massive super bear market that is going to last another decade or so.

Consequently the game for me is trying to time the top of this mini bull and therefore looking for indications that the shine is coming off the facade of "economic recovery" is something important.

A friend just sent me this: "On page C3 of Monday's Wall Street Journal, it says that, in the month of October, insiders sold $59 dollars worth of stock for every $1 they bought. Generally, the article says, a level of $20 or more is bearish. And it's been over $20 for six straight months."

Locally here in Seattle, there is little to no evidence of economic recovery, although psychologically everyone around me appears to believe we are at the beginning of another Super Bull Market. The power of the media is just too much for most folks' cranium I guess.

Anyway, good luck with the online trading, Michael and I are very happy that you and other readers find this site useful - we have fun doing it even though the content is sometimes DEPRESSING!! Hehe!

Cheers Rich

Posted by: Rich Lancaster at November 29, 2003 01:24 AM
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