For the Love of GOD, When Oh WHEN will GOLD....

[grapejelly]

Re: For the Love of GOD, When Oh WHEN will GOLD....

couple of things encouraging...silver didn't lose ground recently. And mining stocks seem to be outperforming bullion. But it will all turn to crap again I am sure before long. We gold bugs are a beaten down, disappointed bunch right now. Just the conditions for a huge rally.

What else is there to invest in?

[GRG55]

Re: For the Love of GOD, When Oh WHEN will GOLD....

couple of things encouraging...silver didn't lose ground recently. And mining stocks seem to be outperforming bullion. But it will all turn to crap again I am sure before long. We gold bugs are a beaten down, disappointed bunch right now. Just the conditions for a huge rally.

What else is there to invest in?

The rally can't happen until Mega posts that he's so pissed he sold it all.

Then...

[bungee]

Re: For the Love of GOD, When Oh WHEN will GOLD....

And as Phirang says, gold may go to $10,000 an ounce, but you will also probably pay $100 for a quart of milk (in the UK probably £200 for a pint). That's not getting "rich" now is it?

From my perspective 'rich' is simply being able to afford things other people can't.

Consider the following senario for before and after a currency crash / gold price rise

                 Now    After Crash
Mr Debt       -$750    -$10000
Mr Prudent     $750         $0
Mr Goldbug   1oz gold    $10000

Given that Mr Debt is represented by > 50% of the population and Mr Goldbug < 5% then it is fair to say that over half the population will see a dramatic fall in wealth and a small percentage will see a large boost.

Yes the price of milk will go up, but also the wealth of the majority will go down. Hence should a currency crash occur then people who have prepared for it will appear rich to those who did not.

[jrowl]

Re: For the Love of GOD, When Oh WHEN will GOLD....

Right now I don't think higher gold prices can be justified mainly because of the commodity crash and depending on the view gold is a commodity. Nickel high of 24 now under 5, other base metals have not fared as badly with copper probably being the least affected only 1/2ing from it's high, I think lead is still in a bubble even though it's down over 66% from it's high. I'm bullish on gold and then again bearish, I wonder if this is simply gold running the cycle on the opposite end, back when the world wide boom began, copper was at .6 and other base metals were at lows, they started to move up alot but gold was a great laggard, alot of base metals had risen 100% before gold was even up 25% from it's lows. I have a feeling that this is simply playing in reverse and Gold is lagging on the downside slope. Rising commodity prices was one of the foundational reasons for support in the gold price and was a indicator for inflation, now that great leg has been cut off, what great substance is there to push gold higher? The Middle class are going to sell any gold jewlery they have to keep themselves above water, the ones buying it off them have been investors and investors have done very poorly of late. The main driver of gold demand became investor demand and lots of investors are still long gold hoping to sell it to another investor later down the track or perhaps The Middle Class after they sold off there gold jewlery will come into the gold market like a hoard to buy gold coins which would be the top but I don't know, I think after the blows the public are going to face, I don't think they will be buying anything.

[metalman]

Re: For the Love of GOD, When Oh WHEN will GOLD....

Right now I don't think higher gold prices can be justified mainly because of the commodity crash and depending on the view gold is a commodity. Nickel high of 24 now under 5, other base metals have not fared as badly with copper probably being the least affected only 1/2ing from it's high, I think lead is still in a bubble even though it's down over 66% from it's high. I'm bullish on gold and then again bearish, I wonder if this is simply gold running the cycle on the opposite end, back when the world wide boom began, copper was at .6 and other base metals were at lows, they started to move up alot but gold was a great laggard, alot of base metals had risen 100% before gold was even up 25% from it's lows. I have a feeling that this is simply playing in reverse and Gold is lagging on the downside slope. Rising commodity prices was one of the foundational reasons for support in the gold price and was a indicator for inflation, now that great leg has been cut off, what great substance is there to push gold higher? The Middle class are going to sell any gold jewlery they have to keep themselves above water, the ones buying it off them have been investors and investors have done very poorly of late. The main driver of gold demand became investor demand and lots of investors are still long gold hoping to sell it to another investor later down the track or perhaps The Middle Class after they sold off there gold jewlery will come into the gold market like a hoard to buy gold coins which would be the top but I don't know, I think after the blows the public are going to face, I don't think they will be buying anything.

theory on gold here since 2001 is that gold is different from other commodities because central banks own it. that's not your typical goldbuggy position.

Do you know of any commodity that the world's central banks hold in such large amounts? The world's central banks have had over 30 years since gold was disconnected from currencies to sell their gold. But they haven't. According to the International Monetary Fund, "Total official holdings have been reduced by 3,000 tons, or less than 10%, over the past 30 years." (Source -- World Gold Council) The question is, if they don't think they need it, why haven't they sold it? The standard answer is that they have too much of it to sell without negatively impacting the price of the remaining gold they possess and hurting economically allied nations that produce gold. The problem with this argument is that the world's central banks have had 30 years since the demise of the Breton Woods system to sell their gold. Methods for selling gold without significantly impacting price or hurting gold producing countries are well documented (see Can Government Gold Be Put to Better Use? Qualitative and Quantitative Effects of Alternative Policies). It's hard to imagine that sales of an average of 3.3% of holdings per year over 30 years, an amount that represents a small percentage of annual gold mining output, will have had a significant impact on the gold price.

hold gold until the cb's sell it. after that it really is just like any other other metal priced by markets. until then they are hanging onto it to hedge the risk that their lunatic money scheme will blow up and confidence is lost in it, then all of the 'money' value goes pffffft.

the deflationistas don't get this. they think 'prices will go down because no one will have any money'.

news flash... all of the value in our money today is derived from a system of checks and balances and claims and contracts that makes the money worth something. if the system breaks down, the money becomes worthless. the money in your pocket. the printing happens later. deflationistas have the order of events backwards. its...

1. system breaks down
2. money loses purchasing power
3. purchasing power of tax receipts plummets
4. gov't prints money to cover expenses

game over.

[xela]

Re: For the Love of GOD, When Oh WHEN will GOLD....

...recover?

Am getting pissed now, yesterday i thought we were on to something............& today it crashed back.

For F*cks sake!!!!
Mike

Maybe.. just slightly.. related news http://news.silverseek.com/TedButler/1226344970.php :rolleyes:

[metalman]

Re: For the Love of GOD, When Oh WHEN will GOLD....

Maybe.. just slightly.. related news http://news.silverseek.com/TedButler/1226344970.php :rolleyes:

uh, oh. seeing a bit of red in metalman's patented sure fire, manipulation-proof secondary gold market indicator...

[ST]

Re: For the Love of GOD, When Oh WHEN will GOLD....

You own gold as an insurance

The big problem is that if one really reads EJ's take on things, he does not think that the chances of the USD going down VERY sharply is a low likelihood event, in fact quite the opposite, he seems to think that the USD almost assuredly has to go down and that will be reflected in gold.

Logic dictates if the likelihood of the USD sharply decreasing against gold is thought to be very high, then gold is clearly NOT insurance - rather it is much more than that - a prudent investment.

Logic also implies that if you are holding 85% of your money in USD treasuries and you think that the dollar is going to dive, then you are in the wrong investment since safety must be sought elsewhere unless you are supremely confident that you can time your exit very accurately.

So, the question remains, when EJ/FRED time the shift in strategy because POOM is impending what do they buy? Only alt energy/infrastructure? My argument is that you must have commodities/commodity based equities at that point since their inflation hedge appeal will cause them to balloon in valuation far more than only the theoretical offset iTulip expects.

No matter how you slice it, if the POOM comes early and you are caught with 85% US treasuries, what have you done? It seems to me far better to be in Canadian treasuries for safety at this point, in addition to gold.

Anyone agree/disagree?

[grapejelly]

Re: For the Love of GOD, When Oh WHEN will GOLD....

The big problem is that if one really reads EJ's take on things, he does not think that the chances of the USD going down VERY sharply is a low likelihood event, in fact quite the opposite, he seems to think that the USD almost assuredly has to go down and that will be reflected in gold.

Logic dictates if the likelihood of the USD sharply decreasing against gold is thought to be very high, then gold is clearly NOT insurance - rather it is much more than that - a prudent investment.

Logic also implies that if you are holding 85% of your money in USD treasuries and you think that the dollar is going to dive, then you are in the wrong investment since safety must be sought elsewhere unless you are supremely confident that you can time your exit very accurately.

So, the question remains, when EJ/FRED time the shift in strategy because POOM is impending what do they buy? Only alt energy/infrastructure? My argument is that you must have commodities/commodity based equities at that point since their inflation hedge appeal will cause them to balloon in valuation far more than only the theoretical offset iTulip expects.

No matter how you slice it, if the POOM comes early and you are caught with 85% US treasuries, what have you done? It seems to me far better to be in Canadian treasuries for safety at this point, in addition to gold.

Anyone agree/disagree?

I agree. You are spot on.

Except.

I'm not sure the USD is "going down" in relation to other currencies. In fact, I think the Euro is going down against the USD.

The USD may be relatively STRONG against other currencies as we have a race for the bottom against tangible assets that I expect to come after long bonds collapse.

Short term treasurys are just "same as cash" and you don't want to be in cash during POOM time.

[ST]

Re: For the Love of GOD, When Oh WHEN will GOLD....

I agree. You are spot on.

Except.

I'm not sure the USD is "going down" in relation to other currencies. In fact, I think the Euro is going down against the USD.

The USD may be relatively STRONG against other currencies as we have a race for the bottom against tangible assets that I expect to come after long bonds collapse.

Short term treasurys are just "same as cash" and you don't want to be in cash during POOM time.

Thanks. Yeah, I agree that the USD doesn't have to go down by a huge margin against some other currencies. But, you seem to be of the same mindset as me - if tangibles rise significantly then by defacto that means that commodity based currencies like the Canadian dollar will experience extreme pressure to rise.

In that event, the monetary authority could try to stem it but I think the likeliest result is that they cannot stem it enough. So the most probable outcome would be that the G-7 currency which is in the best fiscal shape due to prudent gov't fiscality plus the commodity pressure qualifies it as a probable safe haven and likely also a prudent investment compared to the USD.

[tastymannatees]

Re: For the Love of GOD, When Oh WHEN will GOLD....

Maybe when the hedge funds stop selling?

Hedge fund Review

Gold Demand Rose 18% in Quarter as Price Lured Buyers, WGC Says

111 TONNE INFLOW IN 5 DAYS

U.S. demand falls 9%

[jtabeb]

Re: For the Love of GOD, When Oh WHEN will GOLD....

...recover?

Am getting pissed now, yesterday i thought we were on to something............& today it crashed back.

For F*cks sake!!!!
Mike

TODAY MEGA, Today