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Push For Higher I R May Trigger Gold Sell Off

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http://news.yahoo.com/s/ap/20100628/ap_on_bi_ge/us_commodities_review_2

Gold prices fall as deficit cuts could hurt demand
By STEPHEN BERNARD, AP Business Writer – 2 hrs 32 mins ago
NEW YORK – Gold prices retreated Monday after investors interpreted a pledge by world leaders to slash budget deficits as a sign interest rates could rise and hurt demand for the metal.
The G20, a group of rich and developing nations including the U.S., agreed over the weekend that industrialized nations would aim to slash deficits in half by 2013.
Jon Nadler, an analyst at Kitco Bullion Dealers, said there is a shifting philosophy among many governments to cut spending and raise taxes to control deficits. That move could push interest rates higher and eat into demand for gold.
Higher interest rates would also make some other investments like bonds more attractive and competitive with gold, particularly for investors looking for safer options that stocks, Nadler said.
Gold for August delivery fell $17.60 to settle at $1,238.60 an ounce.
The gold market could also be suffering from
waning momentum
, even though it reached new highs just last week, Nadler said.

It has had a good innings and even gold is subject to the cyclical nature of all markets. Kitco seem a bit bearish against their on VI.

____________________________________

http://www.thestreet.com/story/10793260/1/gold-prices-down-double-digits.html?puc=_tscrss

NEW YORK (TheStreet ) -- Gold prices ended lower Monday after a volatile trading day as jittery investors debated between the safety of gold and the risk of stocks.

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Since the dramatic cuts in IRs my local council have seen a massive increase in Rent and Council tax rebates for both Council Tenants and Owner Occupiers.

Why, they have a very large percentage of retired people. ;)

Next year IMHO inflation will start to hit the roof.

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They ain't going to raise rates for years IMPO RB nad if they do it will be so little that loads of savers will still see gold as an alternative.... and you know I am not a gold-bug.

Agreed.

The "natural" rate for the BoE or the Fed is something like inflation plus 2%. The current rate is something like inflation - 3%.

The economy would implode if administered rates rose by 500 bps. Until the economy is healthy enough to sustain positive real rates, gold will be in demand as a hedge against monetary authorities losing control over inflation.

Gold prices are being driven by both fear and greed at the moment. Until the fear of inflation is removed, gold prices will remain very high. The fear of inflation is rational based on monetary conditions which are the direct result of the policy response to this is a balance sheet recession. Adverse monetary conditions will persist until balance sheets are sufficiently repaired for us to emerge from this recession.

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They ain't going to raise rates for years IMPO RB nad if they do it will be so little that loads of savers will still see gold as an alternative.... and you know I am not a gold-bug.

http://uk.finance.yahoo.com/news/uk-has-a-one-in-three-chance-of-being-forced-to-raise-rates-this-year-tele-e455952a92fd.html?x=0

UK has a one-in-three chance of being forced to raise rates this year
Philip Aldrick, Banking Editor, 22:37, Monday 28 June 2010
Britain has a one-in-three chance of being forced into an unplanned interest rate rise this year, a veteran private equity manager has warned.
Jon Moulton, chairman of Finncap, said the UK has been put at risk due to the scale of public debt and that rising rates threaten to derail the recovery.

If sterling starts to slip once post-election euphoria ends higher ir may be a reality this side of crimbo 2010.

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http://uk.finance.yahoo.com/news/uk-has-a-one-in-three-chance-of-being-forced-to-raise-rates-this-year-tele-e455952a92fd.html?x=0

UK has a one-in-three chance of being forced to raise rates this year
Philip Aldrick, Banking Editor, 22:37, Monday 28 June 2010
Britain has a one-in-three chance of being forced into an unplanned interest rate rise this year, a veteran private equity manager has warned.
Jon Moulton, chairman of Finncap, said the UK has been put at risk due to the scale of public debt and that rising rates threaten to derail the recovery.

If sterling starts to slip once post-election euphoria ends higher ir may be a reality this side of crimbo 2010.

But Sterling is climbing because the markets like the Govt cuts with more to come. Sterling is beginning to look a good currency again.

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Jon Nadler, an analyst at Kitco Bullion Dealers, said there is a shifting philosophy among many governments to cut spending and raise taxes to control deficits. That move could push interest rates higher and eat into demand for gold.

Whoever Jon Nadler he has it ass backwards. The whole point of the so-called 'austerity' programs is to be able to keep interest rates low.

Now gold is again looking shaky but Nadler's 'analysis' isn't it.

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During the 1970's you had both high rates & climbing Gold prices..........

Mike

That's because even t6hough nominal rates rose, real rates were still negative. Negative real rates tend to support gold prices.

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What an idiot that guy is.

The government is cutting so that rates can stay low.

If cuts caused high rates what would the point be? Any money saved would be eaten up with higher interest rates.

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http://uk.finance.ya...2a92fd.html?x=0

UK has a one-in-three chance of being forced to raise rates this year
Philip Aldrick, Banking Editor, 22:37, Monday 28 June 2010
Britain has a one-in-three chance of being forced into an unplanned interest rate rise this year, a veteran private equity manager has warned.
Jon Moulton, chairman of Finncap, said the UK has been put at risk due to the scale of public debt and that rising rates threaten to derail the recovery.

If sterling starts to slip once post-election euphoria ends higher ir may be a reality this side of crimbo 2010.

Yes One in three....... Could also read

"veteran private equity manager publically states he has no idea at all if the UK will be forced into unplanned interest rate rises"

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Agreed.

The "natural" rate for the BoE or the Fed is something like inflation plus 2%. The current rate is something like inflation - 3%.

The economy would implode if administered rates rose by 500 bps. Until the economy is healthy enough to sustain positive real rates, gold will be in demand as a hedge against monetary authorities losing control over inflation.

Gold prices are being driven by both fear and greed at the moment. Until the fear of inflation is removed, gold prices will remain very high. The fear of inflation is rational based on monetary conditions which are the direct result of the policy response to this is a balance sheet recession. Adverse monetary conditions will persist until balance sheets are sufficiently repaired for us to emerge from this recession.

This gold bull market is not being driven by fear of normal inflation now. It's being driven by the ongoing deflation of a hyper-leveraged financial system based on exponential growth and unlimited energy, which can only end in the contraction, then eventual destruction of fiat assets, derivatives and digital currency. All this, or we hyperinflate. This, is why people are slowly but surely turning to gold.

As a great man once said:

"The wavelike movement affecting the economic system, the recurrence of periods of boom which are followed by periods of depression, is the unavoidable outcome of the attempts, repeated again and again, to lower the gross market rate of interest by means of credit expansion. There is no means of avoiding the final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as the result of a voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved."

Edited by 50sQuiff

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You remind me of kids playing that game, when they're trying to predict when something will happen.... "3... 2.... 1..... Now!... no now!... now!.... now!.... no wait.. now!.... now!.......... now!..." ... You've been going on like this for at least months. Every time you have a different reason, and every time you post after a pullback, not before. Simpleton.

Sooner or later, you will be right, and it will go down, and that is certain to occur shortly after you've posted since you post this so often. You can then claim you foretold it.....

Fraccy's amazing prediction: It will not go up forever. One day it will go down. [insert random crappy link as "reasoning"]

I will now just bide my time :ph34r: Be sure to worship me when it falls.

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  • 149 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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