Long Position on Silver and Gold?

[Skip]

Anyone know what’s up with gold the last week or so?

Spontaneous run up?

[MrPrena]

"They" are getting ready.

Let's review:
stock market-over priced
bond- too damn low % and about to get higher %. No good.
From low % avg joe are getting huge ass car/house/student loan thinking they are so rich by getting mil mortgage, 1/4m AstonMartin, 1/2m in mba/law/dental/med school. (it will slow down soon and it will be lower eps).

oil-sucks
too much inflation. I think worse than W and Obummer era. (as bad as higher tax rate)
tariff and quota bullshits.

Precious metal is one of the thing that was steady for years.

[roberth]

Anyone know what?s up with gold the last week or so?

Spontaneous run up?

I think some groups see alot of uncertainty in the fiat paper markets, ECB just said they'd continue stimulus / QE which lowers the value of fiat currency. OTOH is gold up b/c people are buying fiat gold or because they're actually buying and taking possession of the actual metal.

The other thing to consider is that these bankers, Iranians, and Sauds HATE President Trump because he cannot be bought like they bought the clintons, obamas, and bushes.

Draining the swamp means these groups will lose their substantial influence (meddling) over the US gov't.

[Skip]

Thanks for your thoughts guys. I was wondering if it was insurance policy buying because I couldn't find anything explaining this very well.

I don't watch it closely anymore either so I'm not that informed. I'm probably like a lot of people and bought my insurance in the Obama years so I don't think there's a lot of "little guy" (like me) buying.

Don't see silver moving much either which is more accessible to the little guys.

DOW is 26.5K.

Fed spending is out of control. Maybe more people are realizing we are flat broke?

[Skip]

The Fed kept its benchmark rate — which influences many consumer and business loans — in a range of 2.25% to 2.5%, where it's been since December.

https://www.thedenverchannel.com/new...of-future-cuts

Combined with...

https://www.foxnews.com/politics/def...-seems-to-care


Could explain why money is moving.

The Fed won't cut for the same political reason they gave Obama 0% rates. Debt service costs will increase as neither party has the ability to reign in spending which will eventually force their hand.

Checked some CD offerings this morning after posting. Not a lot of banks looking for capital. Rates are down and Fidelity gave me less than dozen options on the 1-year which is weird for them (it's usually pages).

Something is afoot!

[MrPrena]

Thanks for your thoughts guys. I was wondering if it was insurance policy buying because I couldn't find anything explaining this very well.

I don't watch it closely anymore either so I'm not that informed. I'm probably like a lot of people and bought my insurance in the Obama years so I don't think there's a lot of "little guy" (like me) buying.

Don't see silver moving much either which is more accessible to the little guys.

DOW is 26.5K.

Fed spending is out of control. Maybe more people are realizing we are flat broke?

https://www.thedenverchannel.com/new...of-future-cuts

Combined with...

https://www.foxnews.com/politics/def...-seems-to-care


Could explain why money is moving.

The Fed won't cut for the same political reason they gave Obama 0% rates. Debt service costs will increase as neither party has the ability to reign in spending which will eventually force their hand.

Checked some CD offerings this morning after posting. Not a lot of banks looking for capital. Rates are down and Fidelity gave me less than dozen options on the 1-year which is weird for them (it's usually pages).

Something is afoot!

Basically during to easy money w/low loan %, fixed income investors hands are tied to securities or other investments.
When inflation rate is greater than the interest paid to bond holder, it makes no sense to put $ on bonds.
Looks to be shift in investment.

This is why this bull market is the longest.
If interest rate goes back up to when 1999 were, there will be less loans, less buying cars and durables. That leads to lower earnings [per shares]. That will drive the market lower.

I do not think we will see rate like 99' but short terms should be at high 4 to 5ish.

Now if you also factor in the international finance, what I just wrote are dampened down a little.

[Skip]

Basically during to easy money w/low loan %, fixed income investors hands are tied to securities or other investments.
When inflation rate is greater than the interest paid to bond holder, it makes no sense to put $ on bonds.
Looks to be shift in investment.

This is why this bull market is the longest.
If interest rate goes back up to when 1999 were, there will be less loans, less buying cars and durables. That leads to lower earnings [per shares]. That will drive the market lower.

I do not think we will see rate like 99' but short terms should be at high 4 to 5ish.

Now if you also factor in the international finance, what I just wrote are dampened down a little.

I'm surprised it's close to 2.5%. IMHO, had Hillary won, we'd still have ~0% (give or take 25-50 bps).

There were very smart people predicting the economy could never be "normal" after the Obama years. I'm still not sure they weren't wrong. A lot of things are going to be tough in an adjustment period. Those low rates created asset bubbles and subsidized businesses/models that would have failed under market-based conditions.

5% Fed rate would wreck housing. The market would slow, prices soften, and we'd see massive sell off like 2007-08. You'd have the CA mindset of people "walking away" from underwater mortgages. Then the cascading waves of failures from increased inventory > foreclosures > falling prices > repeat.

[MrPrena]

I'm surprised it's close to 2.5%. IMHO, had Hillary won, we'd still have ~0% (give or take 25-50 bps).

There were very smart people predicting the economy could never be "normal" after the Obama years. I'm still not sure they weren't wrong. A lot of things are going to be tough in an adjustment period. Those low rates created asset bubbles and subsidized businesses/models that would have failed under market-based conditions.

5% Fed rate would wreck housing. The market would slow, prices soften, and we'd see massive sell off like 2007-08. You'd have the CA mindset of people "walking away" from underwater mortgages. Then the cascading waves of failures from increased inventory > foreclosures > falling prices > repeat.

I agree. High 4 and 5 will do that.
Biggest loser off of all this is retired with fixed income.
Their safer side of investment is yielding maybe 3% , but even cheap senior dinner buffet probably went up 5% ish.

I know a family friend who bought a house on year 1989 and their mortgage was at mid 10%. Yikes.

As for fun historical %

http://www.fedprimerate.com/mortgage_rates.htm

[Irving]

I think my parents mortgage rates in the early 80's were in the teens.

According to that chart (awesome link, thanks for posting!), I bought at a historic low point as far as interest rates and should stop patting myself on the back so hard.

[Skip]

I think my parents mortgage rates in the early 80's were in the teens.

According to that chart (awesome link, thanks for posting!), I bought at a historic low point as far as interest rates and should stop patting myself on the back so hard.

My parents closed on our Aurora house in '78 (I think) and got to pay rates like that too. It stalled the housing market for nearly 15 years. The amortization on those loans must have been insane.

I agree. High 4 and 5 will do that.
Biggest loser off of all this is retired with fixed income.
Their safer side of investment is yielding maybe 3% , but even cheap senior dinner buffet probably went up 5% ish.

[snip]

Yeah, I didn't even think of how bad it would suck to be retiring right now. I'd kill for 3% but my life doesn't depend on it.