cobran20

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Sorry for the slow response, but I've been a deep hole in Kambalda. A gold mine actually. With an alleged cost per ounce of $AUD938.

Anyway, your response made me realise (I think) something I should have understood before - we are talking notes in circulation, not notes in existence, right? So when you say that the RBA isn't "printing" much lately, you don't mean that in a physical sense, but rather in terms of cash released into circulation?

Yes, well it means the net quantity of notes out in the financial system. They withdraw old currency to be destroyed. There has to be some form of international agreement regulated by the BIS on how much new cash be created. It appears they spent this Xmases cash last year, so the level of cash creation is being limited to last years level.

Because the financial system has a built in dollar short in its pricing structure. The lack of cash has become obvious with the banks scrambling for it.

The RBA reports the amount of cash in circulation weekly. The only real money is the banknotes and coin, everything else is an IOU.

Originally the legal tender money was coin, specifically precious metal coin. And Banknotes were a transferable cheque that could be paid in coin. Today's banknotes are legal tender and therefore treated as if they were gold. Unfortunately banknotes are not gold and unlike gold have no resideral value if they don't make it as money.

In the gold system if there was too little cash then jewelery was turned into coin. Too much cash then coin was turned into jewelery. This was a natural market balance that can only be induced artificially with fiat.

Bad money drives out good.

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Your weekly update

Well that's my theory that all the AUD shorting fat cats who are expecting an average increase in AUD of 7.2% are now going into shock, that the food bowl hasn't got their expected ration of pizza with extra toppings. And they got the ethics of Garfield.

I'd expect the AUD to head for 110 cents at some point early mid year simply due to the perceived shortage. And expect that should be a good gold buying moment.

As for ASX it's already had its bottom spanking. That only leaves property.

Whether somebody wants to stay with the ASX next year is up to them. But personally I'd get into more cash. If you have property however, run don't walk to the exit.

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IMO, the All Ords is getting close to showing its hand. I'm expecting for the indice to break below its support. The market breadth as seen by the All Ords A/D line, plainly stinks!

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IMO, the All Ords is getting close to showing its hand. I'm expecting for the indice to break below its support. The market breadth as seen by the All Ords A/D line, plainly stinks!

It looks a plunge protection scheme.

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If mortgages in the US are based on the 30 year bond yields, then I expect that mortgages rates will rise substantially next year.

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USD index keeps bouncing and US market keeps making new highs - even if only by a small %

If this continues onto early next year then a bear like me will be really confused

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USD index keeps bouncing and US market keeps making new highs - even if only by a small %

If this continues onto early next year then a bear like me will be really confused

Right now, I think the big capital ship, the USS Dollar is now turning around and going South again.

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Right now, I think the big capital ship, the USS Dollar is now turning around and going South again.

Here comes the re-test of the lows!

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IMO, the All Ords is getting close to showing its hand. I'm expecting for the indice to break below its support. The market breadth as seen by the All Ords A/D line, plainly stinks!

Perhaps I should have read the notes on symmetrical triangles a bit more closely- they're continuation patterns! wacko.gif

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Right now, I think the big capital ship, the USS Dollar is now turning around and going South again.

Here comes the re-test of the lows!

Well if the USD carry trade relationship holds then its off to new highs for the world stock markets, just keep buying dips

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The almost parabolic rise in the US' MZM seems to be over by looking at the '% Change' graph. The RBA's Assets & Liabilities bottom line is also down. Looks like the central bankers are reducing their QE?

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Ghosts of 1987...

Here is Joe Saluzzi's excellent explanation for the 'odd' market behaviour which many traders have noted to me in the past few weeks.

But it was not until today that it 'clicked' in my mind that this is setting up like the market crash of 1987, for purely technical reasons. The volumes are so hugely dominated by 'high frequency systems trading' that if and when a dislocation occurs, and it may only take something trivial to set it off when the time comes, the market will gain a moementum to the downside that the government may not view so favorably and dismissively.

And in response to such a meltdown, one of the first things the Poseur-in-Chief might consider doing is replacing the current head of the SEC, Mary Schapiro, who has managed to become almost as useless as Christopher Cox, the SEC head under Bush. Granted, the SEC is an awful place to work, rubbing shoulders with the wealthy on a meager government salary while every swinging Congressman cuts your funding when not making personal calls to protect their campaign contributors. But really, the people of the US deserve much better from their government than franchised looting and organized mispricing of risk. It really is becoming that blatant.

Video embedded in link:

http://jessescrossroadscafe.blogspot.com/2009/12/ghosts-of-1987.html

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http://www.bloomberg...5k1XdhVlg&pos=5

Sprott Says S&P 500 Index Will Plunge Below March Low (Update3) By Matt Walcoff

Dec. 29 (Bloomberg) -- The Standard & Poor’s 500 Index will collapse below its March lows as an expected rebound in economic growth fails to materialize, according to hedge fund manager Eric Sprott.

The Toronto-based money manager, whose Sprott Hedge Fund returned about 496 percent in the past nine years as the S&P 500 lost 32 percent in Canadian dollar terms, said the index’s 66 percent rally since March 9 reflects investors misinterpreting economic data. He’s predicting the gauge will fall 40 percent to below 676.53, the 12-year low reached on March 9.

“We’re in a bear market that will last 15 or 20 years, and we’ve had nine of them,” Sprott, chief executive officer of Sprott Asset Management LP, which oversees C$4.3 billion ($4.09 billion), said in an interview Dec. 18.

Investors in Sprott’s funds have been rewarded by his holdings in gold, which has climbed 48 percent since the S&P 500 peaked in October 2007. The stock has since fallen 28 percent and declined 0.1 percent to 1,126.20 today for its first loss in seven sessions.

Sprott said the Federal Reserve has kept bond yields and interest rates artificially low through its program to buy agency debt and mortgage-backed securities. The central bank expects the securities purchase program to finish by the end of March.

Expiration of the program would reduce demand for fixed- income securities, forcing up bond yields and interest rates and hurting economic growth, Sprott said.

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The All Ords is about to hit the 50% retracement of the bear market, which is the 'classic' retracement for major turns. If it clearly breaks above 5000, then the next target is around 5400. Above that, the whole notion that we're in a bear market rally comes into question.

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I don't know about everyone else but every market metric I am looking at is showing perfectly V-shaped charts under manipulation.

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Anyone here care to comment on why IPL share price is doing nicely these last six weeks?

I'm assuming the big fall in IPL share price was due to at least two factors: a) big fall in fertiliser prices, b ) debt or funding of dyno-nobel acquisition

I've seen graphs which suggest fertiliser prices may have bottomed, but no serious upward movement in fertiliser prices unless I am not seeing recent enough data. Is the market pricing in a sharp rise in fertiliser price to come?

During a recent shareholder address, they stated that explosives account for more than half of their revenues now. A number of mineral prices are sharply up these last few weeks looking at these. and apparently the Dyno-Nobel side of the business did well last year (but that's past performance).

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Anyone here care to comment on why IPL share price is doing nicely these last six weeks?

I'm assuming the big fall in IPL share price was due to at least two factors: a) big fall in fertiliser prices, b ) debt or funding of dyno-nobel acquisition

I've seen graphs which suggest fertiliser prices may have bottomed, but no serious upward movement in fertiliser prices unless I am not seeing recent enough data. Is the market pricing in a sharp rise in fertiliser price to come?

During a recent shareholder address, they stated that explosives account for more than half of their revenues now. A number of mineral prices are sharply up these last few weeks looking at these. and apparently the Dyno-Nobel side of the business did well last year (but that's past performance).

IPL is a beneficiary of the commodities sector, which overall seems to be rising.

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I don't know which way the wind blows on commodities but I have a fact to report.

Coles just dropped the REGULAR price of 1kg cheese from $7.43 to $6.99 at my store.

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The chart of the price of wheat, which I first posted on GHPC a couple of months ago continues to rise from a very long term oversold level. The chart of the CRB Index is also bullish. Our $A seems to have finished its correction and parity could be the next stop.

If correct, resource rich countries like Canada and Australia would be major beneficiaries of such boom. Unemployment should drop this year. IMO, unless the RBA raises interest rates fast enough, a bust in RE is not likely to be on the cards for 2010 at least.

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