Comments on: The Fed leads a global rate cut by central banks http://www.creditwritedowns.com/2008/10/fed-leads-global-rate-cut-by-central.html a finance news and opinion site Sat, 20 Mar 2010 00:04:01 +0000 hourly 1 By: Wag the Doghttp://www.creditwritedowns.com/2008/10/fed-leads-global-rate-cut-by-central.html#comment-410 Wag the Dog Wed, 08 Oct 2008 15:28:00 +0000 http://www.creditwritedowns.com/2008/10/the-fed-leads-a-global-rate-cut-by-central-banks.html#comment-410 <i>Stevie b. said, ``looks like the world is putting it's "hope" in gold..''</i><br/><br/>I've read opinions on both sides. There are quite a few stories of <a HREF="http://www.telegraph.co.uk/finance/financetopics/financialcrisis/3123775/Financial-Crisis-Rush-for-gold-as-savers-queue-for-bullion.html" REL="nofollow">shortages of physical gold on the high street</a> and about how much of a premium people are paying for the stuff. This is taken to mean the paper contracts have been shorting gold depressing it's price, but will eventually be brought into line upon expiry. Other stories say the increased high street demand will have only a tiny impact on overall demand. Others say the interest rate cuts will boost gold. Yet others say, money "velocity" is more important when it comes to inflation, not money supply. A lot of goldbugs cite M3 a lot. Those in the deflation camp say gold will eventually succumb and shorting gold is prudent. Then there are the history buffs citing the FDR gold confiscation towards the end of the great depression.<br/><br/>Yup. There's a lot of "hope" riding on this. Stevie b. said, “looks like the world is putting it’s “hope” in gold..”

I’ve read opinions on both sides. There are quite a few stories of shortages of physical gold on the high street and about how much of a premium people are paying for the stuff. This is taken to mean the paper contracts have been shorting gold depressing it’s price, but will eventually be brought into line upon expiry. Other stories say the increased high street demand will have only a tiny impact on overall demand. Others say the interest rate cuts will boost gold. Yet others say, money “velocity” is more important when it comes to inflation, not money supply. A lot of goldbugs cite M3 a lot. Those in the deflation camp say gold will eventually succumb and shorting gold is prudent. Then there are the history buffs citing the FDR gold confiscation towards the end of the great depression.

Yup. There’s a lot of “hope” riding on this.

]]> By: Stevie b.http://www.creditwritedowns.com/2008/10/fed-leads-global-rate-cut-by-central.html#comment-411 Stevie b. Wed, 08 Oct 2008 14:53:00 +0000 http://www.creditwritedowns.com/2008/10/the-fed-leads-a-global-rate-cut-by-central-banks.html#comment-411 @ Wag the dog - & yet others say demand from the jewellery trade is tanking cos of the high price - & yet others say jewellery is being sold and melted at these prices - & yet & yet & yet...!<br/><br/>I read this food for thought somewhere recently:<br/>"We looked into the abyss if the gold price rose further. A further rise would have taken down one or several trading houses, which might have taken down all the rest in their wake. Therefore, at any price, at any cost, the central banks had to quell the gold price, manage it. It was very difficult to get the gold price under control but we have now succeeded. The U.S. Fed was very active in getting the gold price down. So was the U.K."<br/>Eddie George, Bank of England, September 1999<br/><br/>Personally think the technical stuff on gold looks like it's at a crossroads. Personally think politicians saying that "they'll do whatever it takes" is as dangerous as saying "this time it's different", in which case maybe...gulp...this time it is indeed different and -eventually- money will get trashed as politicians fulfill their promise. @ Wag the dog – & yet others say demand from the jewellery trade is tanking cos of the high price – & yet others say jewellery is being sold and melted at these prices – & yet & yet & yet…!

I read this food for thought somewhere recently:
"We looked into the abyss if the gold price rose further. A further rise would have taken down one or several trading houses, which might have taken down all the rest in their wake. Therefore, at any price, at any cost, the central banks had to quell the gold price, manage it. It was very difficult to get the gold price under control but we have now succeeded. The U.S. Fed was very active in getting the gold price down. So was the U.K."
Eddie George, Bank of England, September 1999

Personally think the technical stuff on gold looks like it's at a crossroads. Personally think politicians saying that "they'll do whatever it takes" is as dangerous as saying "this time it's different", in which case maybe…gulp…this time it is indeed different and -eventually- money will get trashed as politicians fulfill their promise.

]]> By: Stevie b.http://www.creditwritedowns.com/2008/10/fed-leads-global-rate-cut-by-central.html#comment-409 Stevie b. Wed, 08 Oct 2008 12:57:00 +0000 http://www.creditwritedowns.com/2008/10/the-fed-leads-a-global-rate-cut-by-central-banks.html#comment-409 Edward - looks like the world is putting it's "hope" in gold... Edward – looks like the world is putting it’s “hope” in gold…

]]> By: Edward Harrisonhttp://www.creditwritedowns.com/2008/10/fed-leads-global-rate-cut-by-central.html#comment-408 Edward Harrison Wed, 08 Oct 2008 12:36:00 +0000 http://www.creditwritedowns.com/2008/10/the-fed-leads-a-global-rate-cut-by-central-banks.html#comment-408 And I expanded it to 10 blogs so you can see more at once. Thanks for reminding me to do that!<br/><br/>Right now, I am looking back at my ten predictions and will post shortly.<br/><br/>Cheers Stevie. Keep hope alive! And I expanded it to 10 blogs so you can see more at once. Thanks for reminding me to do that!

Right now, I am looking back at my ten predictions and will post shortly.

Cheers Stevie. Keep hope alive!

]]> By: Stevie b.http://www.creditwritedowns.com/2008/10/fed-leads-global-rate-cut-by-central.html#comment-407 Stevie b. Wed, 08 Oct 2008 12:28:00 +0000 http://www.creditwritedowns.com/2008/10/the-fed-leads-a-global-rate-cut-by-central-banks.html#comment-407 Edward - they are indeed back - a big thank-you!<br/><br/>"Hope" in this whole fiasco may well be "plan B" & all we have left... Edward – they are indeed back – a big thank-you!

"Hope" in this whole fiasco may well be "plan B" & all we have left…

]]> By: Edward Harrisonhttp://www.creditwritedowns.com/2008/10/fed-leads-global-rate-cut-by-central.html#comment-406 Edward Harrison Wed, 08 Oct 2008 12:21:00 +0000 http://www.creditwritedowns.com/2008/10/the-fed-leads-a-global-rate-cut-by-central-banks.html#comment-406 they'll be back shortly. I was having site difficulties and had to re-create the sidebar last night.<br/><br/>Stevie, let's hope you're right about an intermediate bottom being in the cards. they’ll be back shortly. I was having site difficulties and had to re-create the sidebar last night.

Stevie, let’s hope you’re right about an intermediate bottom being in the cards.

]]> By: Stevie b.http://www.creditwritedowns.com/2008/10/fed-leads-global-rate-cut-by-central.html#comment-405 Stevie b. Wed, 08 Oct 2008 12:13:00 +0000 http://www.creditwritedowns.com/2008/10/the-fed-leads-a-global-rate-cut-by-central-banks.html#comment-405 Edward - the tide is indeed stemmed & I would hope today was definitely a climax bottom in the UK & hopefully elsewhere - we should see a multi-month relief rally. <br/><br/>Am sad that the day after I complimented you on the links to your favourite blogs, they disappear! Edward – the tide is indeed stemmed & I would hope today was definitely a climax bottom in the UK & hopefully elsewhere – we should see a multi-month relief rally.

Am sad that the day after I complimented you on the links to your favourite blogs, they disappear!

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