Quote from gnode:
I am uncomfortable about central banks loading up on gold. That just seems irresponsible at these prices and will fuck their balance sheets when a crash does happen.
I hope you are right.Quote from m22au:
I doubt that central banks (thinking mainly Asian central banks) are "loading up". They probably have the majority of their reserves in USD, and are merely increasing their allocation to gold from a low amount to a figure closer to 10%.
If anything, I think it's irresponsible for them to hold a massive allocation of treasuries, and that's why in recent years they've been gradually diversifying out of USD and into other currencies, including gold.
-------------------------------------------------------------------------------Quote from Ghost of Cutten:
I suggest acquiring September expiry puts to exploit the forthcoming carnage. [/B]
Very true. I find the entire idea of 'parking cash' very awkward. I'd never park cash in any trading instrument assuming it's 'safe'. For instance I own a truck load of bonds of all maturities and it's been a great ride for the last couple weeks. I don't consider myself parking my money in bonds. I am merely speculating on further price appreciation.Quote from m22au:
Well I guess it's the theoretical question is "what is your definition of safe?"
Quote from Butterball:
Very true. I find the entire idea of 'parking cash' very awkward. I'd never park cash in any trading instrument assuming it's 'safe'. For instance I own a truck load of bonds of all maturities and it's been a great ride for the last couple weeks. I don't consider myself parking my money in bonds. I am merely speculating on further price appreciation.
Reminds me of... doesn't it all boil down to just one question:
'At the end of the day, your job is to buy what goes up and to sell what goes down.' -- Paul Tudor Jones
Quote from m22au:
Agree. Gold is not "safe" as such, but if real interest rates are negative, then over a period of months or years, it's likely it will go up.
Just like dot com and real estate.Quote from intradaybill:
As long as rates in the US remain below 1.5%, gold will rise. Unless central banks decide to sell to pay debts.
Quote from Ghost of Cutten:
One by one, the so-called 'safe havens' in the market, which are supposed to be secure, low-risk places to park cash, are going to get taken out and shot. CHF, ZB, GC, JPY - the usual suspects.
We saw it with the Swiss Franc, which dropped a ruinous (for longs) 8% in less than 48 hours. And we have just seen the beginning of it in US Treasuries, which gapped down >1 handle in 1 minute. Expect to see a ZB 130 print within the next few days or weeks.
Gold itself is off $50, but you ain't seen nothing yet. Expect a down $100 day fairly soon. And silver will get annihilated also. The Yen will follow, especially if the normally timid BoJ get some courage to intervene.
Anyone long these assets is going to get destroyed. They are all full of both leveraged momentum speculators, with lots of stop-loss orders below the market, which - if triggered - will set off a selling stampede; and longer-term 'investors' with no balls, who ran headlong into them in the last week due to fear and panic over mostly meaningless rumours over US and French solvency. When both the hot money and institutional dumb money are long up to the gills in ludicrously overpriced low-return assets that have run up massively in a short time, their inevitable liquidation will NOT be a pretty sight. A 1 1/2 handle T-bond gap, and a 8 handle CHF selloff, will be just the beginning.
I suggest acquiring September expiry puts to exploit the forthcoming carnage.