Steve Netwriter

"When is the liklihood of houses being 1-5oz's?" - my guess, not reliable, is less than 10 years.'' Well that answers my question of whether to continue or not...even in the face of gold fallling/manipulated/sold off in another round of deleveraging, temporarily-it would seem stupid not to continue buying whenever possible.

Jake,

Much to my surprise, as a result of my conversation with FOFOA, I got two charts, one for GoldHouses and one for GoldOil, giving FOFOA's probability for a range of rates.

I think that's a pretty sensible way to present it. It's here:

http://www.neuralnetwriter.cylo42.com/node...=1#comment-4056

This avoids the problem of predicting in US$ terms, since one cannot know the true value of the US$ at that time.

As you can see, the predictions I tend to quote are at the bottom of the bell curve, so plausible according to FOFOA, but unlikely, because they are too low.

You may also wish to consider my catastrophe theory point. As is often the case, I don't think one can reliably predict when.

A Warning About my Gold Predictions and Catastrophe Theory by Steve Netwriter

http://www.neuralnetwriter.cylo42.com/node/2956

GF why is that 2nd chart now heading down? Taking a breather? Or...

 

Also can you post the link to JS explanation or was it yours or Dominic's explanation of the theory. I'd like to run it with FOFOA's theory. Was JS going on known gold reserves in the US or estimated reserves? Will anyone be able to audit the gold in the US? If so, who?

Jake,

I'll answer for GF as I've just been there

Jim Sinclair's Model: The Federal External Debt Equilibrium Gold Price

http://gold.approximity.com/gold_price_models_sinclair.html

The APPROXIMITY Gold Price Model: The MZM Equilibrium Gold Price

http://gold.approximity.com/gold_price_model.html

The quote, as best I can find, is from...actually, here's my explanation: http://neuralnetwriter.cylo42.com/node/2925

Humf, gotta go read something else !!!!

Hey Steve! I am struggling to understand/follow your threads with Captain and fofoa on your forum. Suffice it to be said with the prospects of houses being anything between 1 and 5 oz's, then I should just keep buying while I can for the bargain 'prices' currently/while available?

 

It's all a bit of a mind bender. I just need telling to continue or not to continue. I think I know the answer but am unable to get on top of the reasons, kids screaming etc...

 

Gold for Dummies would be a great addition to the Aristotle/FOFOA stuff.

 

Best, Jake.

 

PS When is the liklihood of houses being 1-5oz's? Just hoping my parents are still alive...

Hi Jake,

I'm rushing to write this, dinner is calling

1st read FOFOA's article: http://fofoa.blogspot.com/2010/05/reflection.html

The problem is, unless you've read a fair few of his articles you may find it hard to fully grasp.

I have and I'm still trying to fully understand it.

I think there is this subtle snap that occurs when you realise what he's talking about.

Let's see if I can explain in a sentence!

Paradigm one, gold is a commodity, so as money it's worth what the commodity is worth, look at supply and demand, extraction costs etc and calculate.

That's not it!

Imagine gold has no use AT ALL. But it is rare, and indestructible.

Imagine it makes a really good money. It can't be "printed". It's got a long track record.

Now it has value because it's got a job to do, and because people need/want it, because it is money.

I think what FOFOA is saying is this. The currencies will collapse. It's the debt that is the issue, not the money supply.

The debt has to be partly repaid, reduced to a reasonable level.

What will happen when the currencies collapse?

There will be a flight to gold, as always. The market, will act, and gold will gain purchasing power until half the US gold reserves will pay off the debt (or somewhere around that sort of idea).

I may have got some things wrong, so for what FOFOA thinks, please read what he says.

"I just need telling to continue or not to continue" - sorry, only you can do that.

"Gold for Dummies would be a great addition to the Aristotle/FOFOA stuff." - Hmm, I was toying with trying to pull it all together. FOFOA does an amazing job, but his posts are quite long. I might get the courage to attempt it...not sure.

"When is the liklihood of houses being 1-5oz's?" - my guess, not reliable, is less than 10 years.

I'd really like to hear what GF thinks of the FOFOA article

I also had problems since there was no link. It seems to be a blogger who made a very interesting post recently, that also debunks the whole 'taxation will create enough demand for [inser any fiat currency here]' that seems to be having more lives than a cat.

Hi GF,

That HUGE blue REFLECTION at the top is the link. That's Capt Goodvibes' style of posting.

I've added a link at the bottom of his post for those who missed the top one.

FOFOAs article is here:

http://fofoa.blogspot.com/2010/05/reflection.html

Thanks GF. Are you at all concerned about the fact that the last time we were in this price territory (in the late 1970s) there followed a 20 year bear market for gold?

 

I have spent the last year or so researching gold and am happy to have bought some and watch in grow rapidly in value . I understand the fundamental reasons underpinning the rising price of gold. However, I still have a few nagging concerns, the main one being that at the end of the day gold is about faith. Because it has no real practicial value, you have to take that leap of faith that gold is money (I know its legal tender but in the real world people don't buy their bread with grams of AU). I am not sure that the numbers of people who make that leap of faith will ever grow beyond a small minority. We are a long time past the gold standard - wiill the average Joe still turn to gold in times of crisis?

I'd just like to say thanks to GF for all his posts. I don't say so for each, but they are appreciated, specially the log ones

Ret45,

I think I'm gaining another pet topic. Analysing the use of words, and paradigms re money/currency/gold etc.

"I have spent the last year or so researching gold and am happy to have bought some and watch in grow rapidly in value"

Interesting, "value" is a subjective term, the value people place on something. Like "I value your friendship". People value gold for its characteristics, especially in relation to fiat paper currencies.

"I understand the fundamental reasons underpinning the rising price of gold"

Ahh, now this gets interesting. This brings up the two paradigms re gold:

1. Gold is a commodity, and has a price measured in a fiat currency - the "new paradigm"

2. Gold is money, and so can't have a "price", because it can only be "priced" by itself. In fact it buys other things, it being money, including fiat currencies.

I know it's common these days to talk in terms of price, but that can lead to misleading ways of thinking. I prefer to TRY and avoid the new paradigm.

How about referring to the falling price of the fiat currencies?

"However, I still have a few nagging concerns, the main one being that at the end of the day gold is about faith"

Concerns are good

"Faith", hmm interesting word. Is there any monetary system that does not rely on sentiment? Gold has a 6000 year history of being chosen as money, the result of an evolutionary process, the more reliable options surviving most, the worst ideas failing fastest. Each involved "faith", and went in and out of fashion, but there must be something more than just faith affecting the 6000 year history of money.

What is it about gold and silver that gave them such a long track record of being involved as money? That question surely needs answering.

"Because it has no real practical value, you have to take that leap of faith that gold is money (I know its legal tender but in the real world people don't buy their bread with grams of AU)."

Hmm, it does appear to have a number of "real practical values":

1. It is used by industry, but is that actually an important aspect?

2. It is used as a store of value, and has been used as money historically for much of the time since its discovery.

I think the east/west paradigms come into play here. Indian farmers get currency for their harvest and then go and buy gold as a store of value.

Is there a fundamental reason why gold has to be money, why it must continue to be valued for its good monetary aspects? No. But for that to stop something better would have to replace it. What is there?

No, they may not buy bread with gold, but they do buy the local currency with it, and then go buy bread. You can't buy bread in NZ with UK Pounds either. But you can buy NZ$ with a gold coin.

"I am not sure that the numbers of people who make that leap of faith will ever grow beyond a small minority"

It may not be a matter of a "leap of faith". It may be forced upon them. Consider the situation where you see your wealth in your local fiat currency declining rapidly. The purchasing power going down as prices rise. You look around for rescue, for a solution. You see the exchange rate between gold and your currency rising, year after year, you fear a dramatic currency devaluation, or collapse.

But this is on the Human level. One of the best quotes I've read is:

"Gold is the money of kings; silver is the money of gentlemen; barter is the money of peasants; but debt is the money of slaves."

This is not just about individuals. This is also about countries. What are the central banks doing, selling or buying gold? And who are the big buyers.

"We are a long time past the gold standard"

Hmm, I guess that depends upon your timescale. Long if your view is limited to 100 years. Very very short if viewed over 6,000 years.

The gold standard was itself just a short-term system. Before that was...gold and silver coins!

I think the "new paradigm" has coloured all our thinking. It's difficult to break free and view things as someone from 200 years ago would.

I like the writings of FOFOA, who follows on the FOA and Another, and Aristotle. All famous names to those interested in this subject.

I had a very interesting discussion with FOFOA recently. I think it offers an insight into a different way of thinking about this.

http://neuralnetwriter.cylo42.com/node/2921

Just visited the local for my monthly purchase and did something entirely unlike me. I bought a piece of jewellry. Yes Jewellry.

I mean this thing took my eye like no other. I can only describe it as a piece of art. It's an antique french brooch sculpted to a bird of paradise. 18ct, set with emeralds across it's back and emeralds and rubies in the tail. In fact, I think i'm going to add a photo so you can see what i mean.

 

It weighs nearly an ounce but it's good to remind yourself occasionally of the beautiful things man can make when he puts hs mind to it. Every time I look at it, it takes my breath away. God knows what the OH will think of it!

Wow beautiful

=================

Has anyone heard of FOFOA (as in ANOTHER and FOA) ?

Anyone interested in some deep thinking about prospects, you may find this unexpected discussion of interest:

http://www.neuralnetwriter.cylo42.com/node/2921

It's caused me a certain amount of thinking.

FOFOA mentions Goldfinger in passing

Awesome chart Steve. I like the idea of a proper index of currencies. Is that a linear chart?

 

Still I wonder if only a few central currencies now are worth taking seriously in regards to gold price. US dollar, Yen.....

"Pricing in" weaker currencies will show the gold price higher than what it would against the stronger currencies. Is it possible to do one in just US Dollar and Yen?

You'd have to ask the WGC

I think they've picked a pretty good basket of currencies.

Yes linear...slinks away in shame.....

Another way of trying to measure the peakiness and troughiness of gold occurred to me yesterday.

 

I thought it might be interesting to plot the increase in the price of gold as steady growth over the top of its actual price movements. Assuming that this has any validity at all, then peakiness could be seen by most/all of the price of gold plot being below the steady growth plot, and the other way around for troughiness.

 

In retrospect, I'm not sure this approach really adds much information that the idea of plotting the ratio of the price of gold over the 200 DMA, but I thought it might be worth a try.

 

Here is a chart of the PoG from the start of 2007 to yesterday (blue), with steady growth (red), 200 DMA (green) and the PoG/200 DMA ratio (white):

 

 

As you can see from the chart, if my interpretation of the steady growth line (as explained above) is true, there is still some addition upside yet to come as the steady growth line comes in below the three previous extremes of peakiness.

 

I would be interested to hear any comments, particularly on whether plotting this actually adds any information (or even a perspective) on the movements of the PoG.

I guess you call that synchronisity

Guess what I've just done, with a surprising result?

Analysis of Gold Movements Using the New G5 Index (inspired by and for shuttle) by Steve Netwriter 27 May 2010

http://www.neuralnetwriter.cylo42.com/node/2920

Pick your trend

Hi guys,

This is a MUST LISTEN IMO.

World Gold Council (WGC) President Shishmanian says "gold will never go below $1,000 again"

http://neuralnetwriter.cylo42.com/node/2915

I've typed up a transcript of most of it (I'm not a fast typer!)

There are lots of very good points IMO

If you like gold you'll love this, if you hate it.....read it and weep

I like this chart, it says it all IMO. Good to see you posting here again Steve.

Hi warpig,

I'm just trying to maximise efficiency at the moment, and for me that means maximum time thinking/researching/learning and time for writing articles, and minimum time participating in forum discussions.

I do pop in now and again, but I try hard to resist the urge to post replies.

I'm currently doing a bit of reading about the history of gold (and silver etc). id5's great reply on one of my threads has been a great help (many thanks id5).

My interest in history has increased since then. I just need more time!

RH, you keep plotting with a linear scale over many years.

You could get away with that with very low % increases, but you're making severe errors with gold at 20%+ per year.

Click the log option and look again. I think you'll see a different picture

It's a pain Netdania doesn't offer the drawing option on log plots I know, but it's got to be done.

PS I've posted both versions here: http://neuralnetwriter.cylo42.com/node/2883

Who has listened to this?

 

It's explosive.

 

Would it be wise to add to your gold holdings on the basis of this information?

I have and all the other interviews by Eric recently. He's doing a fantastic job. I thought the GATA interview was the best one.

All this talk of trading/investing ...

 

Don't trade or invest (gold isn't an investment). BUY PHYSICAL.

 

Good buying op coming up (hopefully).

I noticed you say this a while back, and I did not understand your reasoning at the time.

I suspect (please correct me if I am wrong) that you also say "gold is money".

I also suspect you would say "gold is not a commodity".

My views have been evolving, and I think I now understand why you say that.

It is an aspect that is quite fascinating, and I am trying to fully grasp the details of that world view.

I do believe it is the correct one, and my reading so far suggests that VERY few people understand it.

Search.

More Search Options.

More Options.

Show results as posts.

 

How's that for you.

Brilliant, thank you

That explains it

Pity you can't specify the thread as well. (unless you know otherwise )

See post 552.

Maybe a bit long

How about just AU ?

Maybe someone can help me out. I noticed someone say it was easier to search with just one thread.

How do you find the right page?

When I've searched I just get the thread, so the more pages there are the more impossible it is to find the right page.

i don't so mind the monthly installments but don't like the spin in the titles; here's a thought why not have a thread called....

 

The GOLD Thread

 

and just leave it at that

 

pro and negative viewpoints can then be exchanged under a neutral setting

I like that.

But GF might complain about "The"

Steve will restore the all important word in next month's thread no doubt

I've always just repeated how DrBubb started this thread, trying to add some relevant/witty sideline, and maybe something relevant in the first post if I have time.

I have no idea what to do now, and haven't done anything.

Now with armour, sophisticated weoponary, communications, tanks, aircover, healthcare, sanitation etc.......... the number of soldiers needed per war campaign is less so each can be paid a bit more in absolute value as they have 'added value' to the battlefield effort. I could suggest perhaps circa 4 times more.

I think you just need to add the cost of energy to that

Peak oil, peak fiat

Another option that is not electrical, and has the advantage that it uses material either that is already there, or is in plentiful supply.

Did you know you can store enough energy in a reasonable size cube (one that would fit under many gardens) to heat a house all winter.

So you can just collect solar energy through the summer (when you get most solar energy/day), store it in an insulated container, and retrieve the energy through the rest of the year.

A seasonal thermal store.

Obvious materials are: water, soil, sand.

It could be used for heating the house, heating water, and even cooking.

A heat to electricity converter could also add other output options.

Gold rising vertically again - strange time of the day for this though....

G&S rising as the US$ Index went up, and then falling as the US$ Index went down

- Noncommercial net longs rose to an all-time high 239,668 lots in the week ending October 9

Adam Hamilton:

This shatters a common OI myth from the CoT priesthood, that record-high gold OI is always bearish for gold. In its mild form, analysts claim record gold OI levels warn of an imminent pullback or correction. This is certainly true at times. But in its extreme form, I’ve heard analysts claim some particular OI record means this secular gold bull is coming to an end. That is just nonsense. Check out the OI records above compared with gold itself.

http://www.zealllc.com/2009/goldcot3.htm

Checkout the chart.

I think the issue is being a little narrowed here.

 

I do not consider myself a gold bug [too emotional] so could be called a non gold-bug. Yet, I think you are getting at something else as I also like gold and invest accordingly. I consider myself a gold bull [a middle way??? ].

 

Maybe the term anti gold bug is useful to refer to a prejudice against gold as money.

 

It seems a lot of discussion, whether political, economic or whatever, is reduced to a binary logic and then partisan positions are taken where the twain never meet. I am much more interested in using a logic which can bridge the gap between a thesis and its anti-thesis. I think this kind of logic, though less "certain", reflects more accurately the real world we live in. Binary logic [rationalist] is ideological and more often than not completely divorced from reality.

 

A gold bull can happily think of gold as once again functioning as money [perhaps even formally with the re-institution of an exchange gold standard] without subscribing to some of the less well-thought through ideas of gold bugism.. such as the imminent destruction of the dollar and all fiat.

I agree.

Have you noticed the differing views of various article writers?

I can't instantly come up with the constituents, so here's an example.

Bill Murphy: Believes A, B, C

Adam Hamilton: Believes A, not B, C

xxxx: Believes not A, not B, C

So both Bill and Adam are bullish on gold, but they have totally different views on the COT reports, and I think therefore also manipulation.

xxxx will be bearish on gold etc.

I find it a fascinating mix of 'micro' views. Each person has a certain combination of 'micro' views giving them one 'macro' view.

Actually, (not wishing to go off topic into religion), but it's a little like the mix of views within a particular religion.

A sort of pick-n-mix of components.

Therefore there can be no one type of 'goldbug', in the same way all Christians do not believe exactly the same thing.

I agree, but 'bugs' still like to use trading signals etc. to time buys; which is why i am so disappointed we have split into what seems two communities on two threads. Once again, at the risk of getting repetitive I'd prefer it if we can just have one gold thread, pinned and there for all.

Chris,

I'm not sure how to help you.

Threads on here tend to either prosper or whither depending on there popularity.

I can see both points of view. But it's a matter of freedom to allow people to start whatever thread they want to.

I guess we'll just have to see how things evolve naturally.

I wish I had the time to participate in this discussion.

There is an obvious divide between "goldbug" and non "goldbug".

IMO there are two aspects to this:

1. Do the facts support one view or the other, or is there some subjectivity involved?

2. I am interested in the reason why people tend to one view or the other.

As a "goldbug" I am interested in what I think is an incredibly subtle difference in the way non "goldbugs" think.

It seems to me that the divide means that some view gold as speculation, while others view gold as a haven (and fiat as speculation).

As always when there is disagreement, I am interested in the worldview that led each side to that view.

I say this because IMO if there are clear facts to support one of the views, the other view would fall, unless someone's world view enables them to maintain an irrational view.

Maybe the most important question is: Has any fiat system ever lasted?

And if not, what happens when they fall?

Or is this time different?

Pixel,

Great post with James Turk

I've collected loads of manipulation articles which I've posted on here.

Maybe the most important point James made was "it's not a conspiracy, it's policy".

Also, you beat me to those sharelynx charts

I was prompted to look on there following the question on the other thread.

Excellent charts, which I think should be the main charts that people refer to

(I'm not sure about copyright)

Sharelynx has loads of charts, and the charge is quite low, so IMO it looks like a good investment

http://www.sharelynx.com

Wanderer,

I think maybe you'd benefit from listening to this:

The Dollar Decline: Sudden or Gradual

http://www.netcastdaily.com/broadcast/fsn2009-1010-3a.mp3

---------

I haven't got there yet, but Jim mentions "why 5% to 10% gold is not enough".

I haven't changed any thread titles. I'm not sure what's best, and won't do anything without some sort of consensus view.