littledavesab

Unless there are fireworks in the heavens above, I think this will be another tedious slooooow week for gold. I wonder if it will continue to grind down slower for the next few weeks until it hits around 800 or 750. If it wasn't for the QE event I imagine we would get there a lot quicker. Good buying opps coming up.

Is it fair to say that as long as the stock market rally continues then gold will continue to do nothing/grind down?

I think thats a fair bet

Just when you think gold is looking rosy (or shiny and yellow)

http://www.reuters.com/article/bondsNews/idUSLT8846420090329

LONDON, March 29 (Reuters) - G20 leaders are expected to discuss using proceeds from planned gold sales by the International Monetary Fund (IMF) to double funding available for poor countries which need help dealing with the global economic crisis, a source familiar with the plan said on Sunday.

The source said there was not unanimous support for the idea, including within the IMF, because the IMF's low-interest lending to poor countries does not generate enough return to fund further lending.

Regardless of any possible gold sales, IMF Managing Director Dominique Strauss-Kahn has already asked the G20 group of the world's 20 biggest economies to provide additional funding to double resources for IMF low-income programmes.

According to a draft G20 communique obtained by the Financial Times, the IMF will be asked to "bring forward, by the spring meetings, proposals to use the proceeds of agreed gold sales to support low-income countries".

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What do you think the odds are on a gold sale?

Personally, I cant think of who has the $$$ to provide IMF with the kind of funds it needs?

The trouble is, gold stocks aren't just a simple leveraged play on the gold price.

I didnt think a lot of that article, sorry!

Rather obviously when considering the market value of shares, its forward looking, a judgement on earnings for the next 12 months plus. Therefore besides the mining operation itself/project risk, company debt/finances, management etc etc there is also the future cost of gold to consider.

Where as the current price of gold is the current price. It would be silly to even expect gold stocks to track the current gold price - thats what the ETF (or Goldmoney etc) is for

Its not that I disagree. Its just that these points are rather basic and he left off those rather important points!

What else would Japan have gotten in return for the funds?

Would make sense for Japan to have bought the IMF gold

1. Japan is a great friend of the US and wants to support it still - as its exports depend on the US market still. IMF needs money and is running out. If it bought the gold it got something in return. If it donated to the IMF it gets nowt.

2. it was for sale - selected extract although the while article is good

http://www.business24-7.ae/articles/2009/2...af288efb75.aspx

"There is a selling pressure from IMF. There is news that IMF may sell gold at any point of time," said Sajith Kumar PK, Vice-President, JRG Metals and Commodities, UAE.

According to IMF, the official gold reserves (including those of IMF and BIS) amounted to around 35,580 tonnes at the end of 1990. By mid-2008, this had reduced to around 29,780 tonnes, a 16 per cent fall. The vast majority of the 5,800 tonnes reduction was due to sales by European central banks, notably signatories to the two central bank gold agreements (CBGA 1 and CBGA 2) whose reported holdings reduced by over 5,500 tonnes.

---------------------------------

Ps has anyone else noticed how the price of gold and commodities in general have increased since the 1980's - I do not believe this is solely due to the China factor. I do believe the western world writing down some of Africa's debt which dates back to the 1970's is a contributory factor. Has anyone else here looked at the IMF's reports to see where its gold came from - was taken from African countries as repayment of previous IMF bail outs. Would this not have contributed towards keeping the gold price low?

Errh, excuse me? Basically ALL the big banks in the US, Europe and the UK are insolvent. This is UNPRECEDENTED.

 

IMO, only a fool would give gold away at the moment.

 

Catflap, some of your arguments sound reasonable every now and then. But don't delude yourself into thinking that we have been here before. Because one thing is for sure: we haven't.

For once I agree with GF. We havent been here before - at least as far as the UK is concerned I dont think that we have been this close to the edge of the cliff since the banking crisis of the 1800's

Question is what stage are we at? Somewhere near the end of the beginning?

The Euro situation is starting to look perilous

Just sticking a link accross to Dr B's recent comments on UK gold producers

http://www.greenenergyinvestors.com/index....amp;#entry95146

Forget investing in gold mines, Im investing in sewage.

 

http://www.reuters.com/article/oddlyEnough...E50T56120090130

Do you want to extract it

But seriously Japans rubbish dumps are apparently full of PM's, they have specialist dumps for hi tech waste, apparently

Unlike UK which has warehouses full of household recycling sacks which are full of old paper and cr*p which is useless right now with the low oil price

Interesting piece on gold backwardation - Is in depth !

http://www.professorfekete.com/articles/AEFRedAlert.pdf

Could have been written by someone on here (but I assume it wasnt)!!!

Now the truth is out: you can no longer coax gold out of hiding with paper profits.

+

This is a

financial earthquake measuring ten on the Greenspan scale, with epicenter at the

Comex in New York, where the Twin Towers of the World Trade Center once

stood. It is no exaggeration to say that this event will trigger a tsunami wiping out the prosperity of the world.

Hugh Hendry will be buying a safe and packing it with gold bars in 18 months time. Right now though he likes 4.5% on German Bond yields.

 

http://www.cnbc.com/id/27835645

I do wonder what Cg & Goldfinger make of his stratergy !

Ps I dont think anyone here would bet against HH on this - "All financials will be owned by the U.S. government in a year," Hendry said. "I bet you."

I feel sorry for people who don’t have any silver.

 

I feel sorry for people who don’t have any food too, but less so

Erm should you not be FEELING MORE SORRY FOR THOSE WITHOUT FOOD ??

i think you are right, i shouldn't be telling everybody when to buy or sell, i take my words back, if someone wants to buy, buy it, or sell it. i could be wrong also, i am not the whole market.

Ker I understand the sentiment behind your disclaimer and making predictions is a responsibility etc

BUT a contary view if intelligently expressed is important. Say it as you see it. If you think someone is going astray tell them.

So keep going !

what I have read so far, is that GBP is going to plunge, so, rather than base purchases on the gold chart, people who live in UK should analyze GBP/USD . I am in Mexico and I got out of my pesos long time ago.

I just saw the chart of GBP/USD and i it broke 1.5200 , this was major support , this means GBP is going to 1.1000 on a long term (next 6 months could be?) , and on a short term it could stop at 1.3500 in 2-3 weeks. Then it should make a pull back to 1.4900 and then a final move to 1.1000 (but maybe it could not reach 1.49 and exhaust earlier). So, on a long term, in GBPs you will have price close to 1,000, the entry point right now is ok.

Im going to add my thanks also

Ker if you do find the time to slip some GBP vs USD/Gold feedback in now and again it is very much appreciated

Eric King is such a good motivational mentoring coach. What a great speaker.

Yep it was a good interview. Watch Silver basically

I am starting to like Eric King as well - I preferred FSN when JP & JL were on holiday and Eric was standing in it was a much better show !!

That chart looks a lot like one of cgnao's am downloading podcast now

I wonder how many of you Gold Bugs know this: The tale of THE WHIZZARD OF OZ is actually the story of the gold standard - whow! Nursery Rhymes will never be the same again - and I have a little one (20 months)

Hugh Hendry's interview is a bit old 2006 - but is interesting still - includes other stuff also and shows you how aware he was back then

http://www.resourceinvestor.com/pebble.asp?relid=17287

HUGH HENDRY: Sure. The Wizard of Oz was actually written as a political commentary - an allegory of an event which happened to the U.S. economy in 1873. Back then America came off of what’s called the buying metallic exchange - it used to be that money supply was regulated by the central bank owning both gold and silver. After that date it was just gold - so the central bank dumped silver, and had to buy gold. That occurred just after the Civil War - the U.S. economy was bouncing back, and needed a lot of liquidity that the gold standard couldn’t provide. So there was deflation - prices fell 1.5% per annum for about 25 years. That’s captured by the Wizard of Oz - in the movie they complicate things because Dorothy wears ruby slippers. In the book it’s silver slippers - buying metallic is the silver slippers. The yellow brick road is the gold standard - the idea was to follow the yellow brick road. The monetary discipline of the gold standard was diluted by Dorothy’s slippers - of course the wicked witches were the banks, with deflation banks are not terribly popular because it’s very hard to pay back your loan. The scarecrow is the farmer - we’ve got falling agricultural prices, and he is about to lose his farm. The tin man is I guess the proletariat - with the high interest rates you’ve got factories closing down, being shuttered. Every time he swings his axe he’d chop part of his body off - that’s not terribly nice. Lastly there’s the lion with no courage - in 1896 and in 1900 there were U.S. presidential elections where the Democrats fought a campaign for easy money. They failed remarkably - so the toothless lion represents the politician with no power. It’s quite intriguing - the book was published just after the depression of the period I mentioned. The movie was released in 1939 - after the 1930s depression. I fear if they were to have a remake of the movie today it would be a touch more Faustian - you would have an apprentice printer called Bernanke who would toil away all night printing dollar bills under the instruction of a wizard called Greenspan only to discover that those dollar bills lose their value in relation to God’s assets such as gold and oil.

 

LINDSAY WILLIAMS: The Oz of course is gold’s asset value in terms of ounces?

 

HUGH HENDRY: That’s right - the Kingdom of Oz is the ounces of gold and silver. Remember the Kingdom of Oz was disbanded by the wizard called Nixon - President Nixon in 1971 abolished the right of foreigners to redeem the U.S. dollars into gold at $35 an ounce, so the Kingdom of Oz died in 1971.

Now I can really annoy my wife by bringing this into the Whiz of Oz when we next sit down with baby

Or for the standard history see - http://en.wikipedia.org/wiki/The_Wonderful_Wizard_of_Oz

What next, will you be telling me that Little Red Riding Hood was a communist? I've checked apparently not

Whats your view on this Dr B - is this for conversation - or are you taking this seriously ?

Dr B - are you coming out as a deflationist?

For my in-hand, I’m buying coins because I think they will be easier to offload on ebay at £250 each.

Also, if TSHTF, small coins will be easier to trade with.

If lots of people are thinking like this - could this be a partial reason for the disconnect between paper and physical - especially in the smaller coinage type stuff which is partly collectable and partly of use in the end of the world ecenario ?

Sorry, not had time to answer before

Thanks Steve, appreciated

Thanks to Steve and all for the great stuff

Questions from a UK Investors point of view:

I understand why if I was a US Citizen gold would make a good diversification away from the $ which is the worlds reserve currency and the US Gov has abused that position

BUT as gold is priced in $$ wont US hyperinflation counteract the gain?

- if anyone knows the answer to this would be interested.

Have you come accross any articles as to why Gold would benefit a UK investor?

- links greatly appreciated

- most stuff seems to be US investor related

If the shit really does hit the fan and all currencies go to pot, banks go belly up and lawlessness takes over....THEN Who actually guarantees that you will be able to get hold of /withdraw (phsically or otherwise) your gold held in goldmoney's vaults etc. Will goldmoney/goldbullion/whatever actually survive such a crash. If you have a gold bar at home better not advertise it or the local gangsta will come and take it from you.

SO I guess typing this I can partly answer my final question - a gold investment would be good if the financial systems crash or if there is a large drop in confidence. But might not be of much practical use in the event of a complete breakdown in society/the financial system?

Maybe only Russian Oligarch's know the answer !

I remembered the other day that when I used to play SIM City the best way of keeping my SIMS happy was to have Microwave energy where the energy was created up in space somewhere and beamed down to a satellite dish. Now if only BSB could come up with that!

I like - Motley Fool discussion boards

iii.co.uk is similar to AVDN - but I prefer iii as is less cluttered in style

And recently I have discovered google finance and igoogle as a home page

what you can do with a igoogle account is create a personalised home page that constatly updates so mine has bbc football results, my google finance portfolio - now in £Sterling apart from my US stocks, a brain trainer, Reuters business news, and for fun a brain trainer and quotes of the day plus a heck of a lot more. I did have ft.com but got fed up with their log in/pay policy.

The great thing is that whenever you go to home page it updates itself you you get instant breaking news

If you link your google finance portfolio you can watch its progress - sounds sad maybe but beats my insurance job! Anyway google finance gives you instant news stories on your stocks. Quite a simple way to keep up to date.

Ps GEI is OK also - maybe I shpuld link that also!

Only 25.

 

 

just joking

 

 

none, actually.

But that doesnt mean that I am encouraging such letters.

The friction here is slight. I think my posting reputation on HPC and GHPC tends to frighten off,

some of the more extreme trolls. And perhaps they see GEI as too specialised to even bother.

--------------------------------

Hey Dr Blubb

I was so intrigued to learn that you posted on HPC I had to register and log on there myself to take a look. I first came accross the HPC brigade from their posts on http://www.economicsuk.com/discussion/ - which is the website run by David Smith the UK economics writer for the Sunday times.

Being a 37 year old guy living in London UK I have every sympathy with those complaining about house prices - if I hadnt had a small inheritance and the wit to buy in Stratford in 2001 (I originate from SW London) I would probably have missed the boat but that is another story

Is it me or are these HPC guys posting more in hope rather than fact! Getting so vigerous over the housing market cannot be good for their blood pressure. Nutters in other words.

Ps. They seem to have annoyed/taken up so much of David Smiths time that he has restricted his website to approved users only - its probably a good thing that they have not found their way here.

PPs Keep up the good work on commodity watch radio - is a very enjoyable listen. If you were not right so damn often I would probably have written you off as one of the left of centre doomsters. BUT as you are right so often ............................

Question - how do you find time for so much blogging and to get your investments right?

Dave