Pre-Fedline Open Thread

176
Wed, Dec 18, 2013 - 10:06am

With just fours hours to go until "the most important FOMC headlines in years", here's a thread to enter your predictions and discuss the consequences.

Of course, ole Turd is on the record stating that a BLT (Bernank Legacy Taper) is about a 50/50 probability. What I'm 100% certain of is a rally once it's all said and done. Why? There are just two scenarios:

  1. A BLT. Something like $10B/month, dropping ongoing QE∞ all the way back to just $75B/month or $900B/year. The pre-programmed algos will SELL at 1:59:55 and gold will puke back down to $1210-1215 before immediately reversing and squeezing the shorts.
  2. No taper. Price immediately soars through $1250 and on toward $1260. Rallying further this evening and into tomorrow.

Hmmm. Looks like, either way, prices head higher from here, not lower. Again, when everyone is on the same side of the trade, everyone is bound to be wrong. In this instance, everyone is short, expecting a taper and expecting gold to drop through $1180. You should expect the opposite.

TF

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  176 Comments

tyberious
Dec 18, 2013 - 1:08pm

816 tons left in gld

Good point! But I think the panic started on Germany's request January.

rl999
Dec 18, 2013 - 1:10pm

and now th emarket shifts the other way

stocks still down / moving lower

gold and silver up, VIX up, miners up.

CNBC says- FHA is lowering loan threshold - less people will qualify for the 3.5% rate. (that seems wrong but that is how she said it.)

Dec 18, 2013 - 1:14pm

Hmmmm.....

This late day rally is IDENTICAL to the action from the last time everyone expected a Fedline taper, back on September 18:

why do I even bothertyberious
Dec 18, 2013 - 1:14pm

Reply to 'How many ounces should you have'

If you divide the estimated above-ground Gold inventory by the global population, it works out at about 24 grammes per head; assume that at least half of that is held in places you can never get it, and so just under half an ounce is your 'fair share'

but life isn't fair.....

so let's imagine that the 3 threshold values which might motivate you to make discretionary move into Gold are

a. buy a new car with the profit ($50,000)

b. buy a new house with the profit ($500,000)

c. retire in idle luxury ($5 million)

and let's imagine that the dream outcome is around $5,000 per ounce, then you are going to need either 10 ounces, 100 ounces or a whole shedload of Krugerrands, Maples, Eagles, Pandas or whatever you think will be well bid in your local market when the shit hits the fan

I have just north of 30kg of the stuff, and only a vanishingly small proportion of that is in coins; mostly its 250g bars, which can be stashed quite discretely across a number of conveniently accessible but distinct locations https://goldline.co.uk/gold-bars.jsp?goldBarIdx=12&yp=0 The only silver I hold is some commemorative £20 coins from the Royal Mint https://www.royalmint.com/shop/UK_2013_20_pound_for_20_pound_Fine_Silver_Coin_George_and_the_Dragon and about $500 of junk silver dimes, quarters, halves and a couple of Canadian Maple Leaves

rl999
Dec 18, 2013 - 1:15pm

how many ounces?

How many can you afford?

what is your discretionary income? / what can you eliminate to devote more to savings & investing?

what are you other allocations, savings, debt, investments, etc?

what will you be comfortable with?

Obviously those are not to be answered here, but for you to make an informed decision that you can be happy about. Even if there were a "rule" we stackers would not follow it if it caused us to be unbalanced or to worry. I allocate 50% of my savings to physical, 30% to cash (USD 25%, yuan 2-3, rupee 2-3), the rest is to GAMBLE in the casino (stocks).

I have almost no debt, am on the low end of the 30-40 year range, and have a good dependable monthly income.

rl999
Dec 18, 2013 - 1:16pm

Copper?

do we break the green streak today? any news?

Levon
Dec 18, 2013 - 1:18pm

WTF

Did they leak accidentally intentionally extra early this time?

why do I even botherTF
Dec 18, 2013 - 1:23pm

Reply to Hmmmm

that's just JPM climbing up the diving board before the main event.......

this is like watching a car crash - we all know the sane thing to do is just go home, forget about it and tomorrow is another day. There is nothing we can do about it, but its strangely compulsive viewing...

s1lverbullet
Dec 18, 2013 - 1:25pm

Looks like

Someone got the news early again. Criminal fuckers. I expect no taper, the 10Y bond is already pushing 3, there is no way they can and not have it break 3. This will get ugly quick if it does.

silver66
Dec 18, 2013 - 1:27pm

Before last Fed meeting

I was thinking along the lines of Jim Rickards, that there would be no taper. He had the conviction of his thought to state it and I was in agreement with his thinking said it verbally but not in writing.

So...as a matter of public record.

There will be no taper

Silver66

And yes, I know crow is best served warm

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