wren

A good essay. It sums up most of my opinions on the matter. It is a useful and entertaining introduction to the monetary aspects of gold for those who are new to it (most of the general public). You may know that in Finland in olden times squirrel skins were used as money (the Finnish word for money - "raha" is supposedly derived from a variant of the word for squirrel, "orava"). I read just recently that the skins were used in the clothing business so it was indeed a commodity currency. Red squirrels are now very common in Finland, but prior to a hundred years ago they were much rarer due to trapping. In the city suburb where I live there are plenty of cute little squirrels as there are plenty of trees, Scots pines especially, between the buildings as well as park areas.

This blog article (July 5, 2009) about the fractal analysis of the gold price suggest that a hyper-growth period may happen in July or soon after. It draws a comparison between now and the previous patterns in '06 and '07. http://goodstockinvesting.blogspot.com/200...tal-moment.html I've no idea whether this fractal method is very reliable - the article claims that it is. Does anybody know how the fractal dimension is actually calculated in these price analyses?

Korea needs more gold. http://english.donga.com/srv/service.php3?biid=2009070411578

Silver down again today. USD 13.24 and EUR 9.48 at the mo'. I caught today's low buying some at about EUR 9.38.

I reckon an average UK house will go to 120 oz - very likely - 100 oz fairly likely, and lower than that possible. The dow/gold will go to 2.0 - very likely - and 1.0 possible. There's a not so outside chance that those ratios will go to extremes never seen before: like house 60 oz and doe/gold well below 1.0. We need to be patient. The big ratios are going in the direction we expect but it takes some years of patience.

That would be really something. So many of the poor old Brits are stuck as basically debt slaves with 20 or more years largely working for the bank. I remember when I was about 15 I wondered about the total number of mortgages in the UK. I knew that some decades before (like 1950) most of the general population did not own their home. I also knew that many like my parents had "bought" a house and were paying off the mortgage. So at that time about 1980 I began to wonder whether in time most of the housing would be owned by ordinary people and why there were still so many with mortgages and not fully owning. I couldn't fathom out why. Of course, some who inherit would blow the money on booze, fast women and fast cars and probably waste the rest (RIP George Best) but most wouldn't. I still don't have a model clarified in my mind. But little did I then know the secrets of money and financial manias which are a great way to get much of the population massively in debt. And nowadays there are credit cards too. It's probably just as well that I had no understanding of the monetary and banking system otherwise I would have been tempted to become an evil bankster. Just me rambling on.

The following page has a nice little video (6 or 7 minutes) which summarizes in simple terms the essence of the Crisis of Credit (tech bust, subprime mortgages etc.). It doesn't really belong in this thread but anyway. http://www.tavex.fi/index.php?main=239&newsID=201

Silver is down quite a bit in the last couple of hours. USD 13.47, EUR 9.57 at the mo'. Including 4.25% fees it's less than EUR 10.00 per ounce at GM.

68.3 at the moment so it's edged up a bit. http://www.24hgold.com/english/gold_silver...aspx?money=Euro I'm still averaging in on silver (a small purchase most trading days). At my current rate of spending the cash will last until mid September. I'm trying to maintain self-discipline so I can benefit from any further correction.

After making my post I thought to myself: hang on 10 dollars isn't much compared to what we were seeing sometimes before like 20 or 30 plus moves in a day. I mostly watch the euro price which has been range-bound between EUR 650 and 700 for the last 3 months. I'm beginning to get worried that the euro price may not have a good further correction this summer, having gone through a long solid period over 650, and maybe the euro won't continue to hold up against USD (it's USD 1.4027 right now). Silver managed to get below EUR 10 yesterday but I'm still slowly averaging in over the summer.

Has there been any news to make gold jump up USD 10? Or just the normal volatility? USD 936.70 and EUR 667.06 at the mo'.

He's been long-term bullish gold but his short to medium term view varies with time.

After restricting it to one account is it possible to change it, e.g. change to one other account?

Just a reminder about what the history says gold does during periods of deflation (whatever happened to Magpie? ). Adrian Ash of BV has just published a gold article with this interesting table of the historical performance of gold and silver. As you see gold solidly does well in deflations (silver's performance is a bit mixed): Here's the article (I haven't read the whole article yet): http://www.gold-eagle.com/editorials_08/ash061709.html

Haha. I'd heard about tally sticks but didn't know they burnt down the parliament building. The wrath of the (money) gods. "The short end of the stick" makes sense now.

http://seekingalpha.com/article/143662-rus...ization-of-gold

Thanks. I'd never heard of it.

@ dooferdog Who's that bloke in your avatar?

The Royal Canadian Mint is scared of a run on gold "in their vaults": http://www.ottawacitizen.com/Business/Your...1879/story.html So if all the deposits are in the vaults why are they worried?

It's true that today about 2/3 of silver production is a by-product of the mining of base metals. However, the distribution is not an even 2/3 across all sites. The base metals are themselves present in limited quantities and subject to depletion although expected to "run out" later. As others mentioned, the fact that much silver production is a secondary by-product tends to support its price during economic recession as the demand for base metals is reduced so less silver is produced. The estimated number of years silver would last "at present rates of consumption" is, I believe, based on total known deposits in the earth's crust. By-product or not, the numbers are the numbers.

Silver is certainly very much an industrial metal, but for investment also which might become more significant. Remember that "at present rates of consumption" all known silver would be mined in about 11 years time (which of course won't actually happen either because of much increased price or rate of mining limitations). IMO silver is very much a precious metal and its longer term fundamentals are great. Although photographic demand is declining it has been claimed on this site that 70% of photographic silver is recycled which would tend to temper the drop in demand from that quarter. Also new applications in medicine and hygiene are increasing in addition to the electronics etc. demand. How much silver goes into a digital camera? Anybody know? Solar panels?

Over at kitco forums there seem to be more than a few who only started buying silver in the first half of last year so the poor so-and-so's have been nastily under water for months and I think some are just waiting to break even and get out. But there are plenty of long term "stackers" who just keep on stacking enjoying the lower prices.

As I said I'm hoping for a serious correction in silver. USD 11.50 seems quite possible but why do people think below 10 dollars is likely? On a technical basis or because of reduced industrial demand, or what? I reckon if it gets to USD 10 again there could be problems getting hold of coins and small bars as happened late last year.

Silver correcting a lot today although less so in EUR than USD. USD 14.07 and EUR 10.22. I'm still slowly averaging into silver hoping for further correction before the autumn.

Nice video. I might add it to my signature at HPC to complement the "buying food with gold in Zimbabwe" video.