17 September 2013

Gold Daily and Silver Weekly Charts - Begin the Beguine

It is all about the Fed tomorrow and what level of market intervention they will maintain in buying public and private (Treasury and mortgage) debt.

I think a mix of both with a total below $10 billion may be a likely expectation. I think the taper will be slow, and the unwind of the balance sheet even much slower. I think we are looking at quite a few years, and not months. We will know once the economy has actually improved and we are certainly not there yet. Not with a stagnant median wage which dampens consumer demand.

There is a serious risk of a market dislocation, either in the dollar or stocks or both. I have not quite gotten a better feel for which way it will roll as it depends on some exogenous variables that I am insufficiently connected to foresee.

Either way, we can keep reading the short term signs. Gold and silver are coiled and look explosive, but given time. Timing is everything which is why cautious diversity is not a bad idea.

I was rereading some of Roger Babson's writings today, and came across the Babson Boulders of Dogtown which I had not known about that I can remember.

It is seems odd that I had never even heard of them because I had taken frequent car rides past that area while at school along the coast from Boston to Ipswich to visit friends who lived near Crane's Beach.  I remember Rockport and Gloucester quite well, and the obligatory stop at Woodman's Tavern in Essex.

It wasn't like I did not get out on the weekends. I once made the trek to Thoreau's location on Walden Pond and left my own stone on the pile that commemorates it.  I even took the trip to the House of the Seven Gables at Halloween for the witches convention.  That was interesting. 

I am a big enough fan of Babson to have walked his trail if I had known of it when it was handy.  But I did not have an interest in financial things and Roger Babson until after an MBA sparked a keen interest in economics at 40.  Until then it was all gizmos, gadgets and coding.  And the classics, history and literature of course.  But that was due to youthful whimsy, which is why it is the best time for exploring your options, and walking a trail lined by scattered old boulders with carved sayings from a man who had also seen the consequence of human folly approaching.

Have a pleasant evening.