G0ldfinger

I really think silver is just getting started here. Gold $2,000 will catapult silver through $50 so fast that certain fund managers in Hong Kong will not believe their eyes. http://gold.approximity.com/since1930/Gold-Silver_Scatter.png

For those who think that there is no leaning against the gold price... There is a LOT of leaning in the London PM market. The chart below how much you lost holding from the AM Fixing to the PM Fixing since 2006, when the price was $600! http://gold.approximity.com/since2006/Gold_USD_AMPM.html

Silver has become quite cheap again. I haven't bought more metal recently and was focusing on the miners, but I am somewhat tempted. It seems the massive downward trend in the G:S-ratio since 1990 is still intact. (I still can't believe how I nailed this chart a few years ago... ) http://gold.approximity.com/gold-silver_watch.html

I know that there is still this funny notion of the USD as a 'safe' haven out there. But I think it's wearing off quickly.

Two other measures of gold expensiveness. http://gold.approximity.com/since1970/Gold_Price_to_External_Debt_Equilibrium_Price.html http://gold.approximity.com/since1959/Gold_Price_to_MZM_Equilibrium_Price.png

It's like religion or philosophy: you can only discuss so much before you better stop (because there is no point). Hedging gold and silver is IMO less clever than some people like e.g. Jim Puplava propose (BTW, he is also the typical fund manager type of victim of weak hand clients, because IMO he himself would never hedge gold because he knows it's going to go much higher, so why spend the money?). Options cost money and they come with counterparty risk.

Someone who thinks that 'safehaven' status can change on a daily basis IMO does not understand or appreciate the real meaning of the word.

Maybe comfortable, but what about "safe"? Most of these hedge fund types only get lucky because the PTB keep the paper spiel going by pumping gazillions. One day this might simply stop working.

Exactly that's what we have in gold & silver.

That one is also correct IMO using government CPI-inflation. The reason is the same, the average in those years was much lower (around the spot prices of today, I guess) than the singular spike. See also the chart below for an illustration. Naturally, the same caution applies: this is one singular measure for relative value, which is also skewed because of the use of hedonistic government adjustments to CPI - similarly the property:gold chart is somewhat skewed because of the extent of the US housing crisis (there was no such crisis in 1980). On a government CPI-adjusted base, and on a house price base, taken as is with no other information, it looks as if a top in gold was close, but if I look at the corresponding monetary data I can just laugh at that idea. http://gold.approximity.com/1979-1980/Gold_USD_CPI-adj.html

The majority of the population is on some sort of monthy income, be is salary men/women, pensioners or even people on the dole. Even if you're financially independent, you might still have put money into a pension scheme or an annuity some time ago bringing in steady income. I think it's a very small percentage of the population who has all their assets in liquid assets (I include property here, but even property bought at the right time might bring a steady monthly cash flow).

And next year he's gonna lose 95% in some kind of MF II/Madoff/... desaster, or simply by betting wrong, while Sprott's silver will still be there and be worth a lot. How many years has Sprott been bullish on silver (and at what annual return?), and how many years has this hedge fund type made 60% a year? Let's not be myopic. BTW, I bet the poor hedge fund type only can't invest in silver because he has headless TA chickens/manic traders/weak hands with no fundamental clue as clients. I pity him.

DOUBLE POST. I believe this chart is correct, especially since the 1980 top of over $800 lasted only a couple of days or so, while we have been north of $1,600 for a long time now, so the average annual price of gold in 1979-80 was much lower (than $800). Do I think it's time to get out? No, not really yet. I've always said that the former lows are places to watch out for, but as well that this financial crisis is so much larger and that we need to look at other indicators as well. I see no reason why the average U.S. house built in the middle of nowhere in the hope for cheap oil/energy, good employment, a stable dollar, and lots of cheap debt for property speculation should not lose much more value compared to gold. Watch out for sub-50-oz prices.

I believe this chart is correct, especially since the 1980 top of over $800 lasted only a couple of days or so, while we have been north of $1,600 for a long time now, so the average annual price of gold in 1979-80 was much lower (than $800). Do I think it's time to get out? No, not really yet. I've always said that the former lows are places to watch out for, but as well that this financial crisis is so much larger and that we need to look at other indicators as well. I see no reason why the average U.S. house built in the middle of nowhere in the hope for cheap oil/energy, good employment, a stable dollar, and lots of cheap debt for property speculation should not lose much more value compared to gold. Watch out for sub-50-oz prices.

Oho, very interesting. I am definitely interested in hearing more.

Interesting stuff, thanks. It really is no wonder the royalty companies have fared best. This sector simply needs to show how they want to return money (or, even better: gold) to their investors.

But then, some people enjoy just this.

There might be a certain "self-fulfilling prophecy"* effect. However, put to a statistical test, I would believe, none of the EWT stuff etc. would work - it's simply too unspecific, too rubbery. Also, usually, if there is a way to make easy money and everyone knows about it, the "way" or the "easiness" will pretty soon disappear. Fundamentals will always rule in the end. * Funnily enough, this notion ("self-fulfilling prophecy") was invented by sociologist Robert K. Merton who is the actual father of one of the 'founding fathers' of modern financial mathematics: Nobel laureate Robert C. Merton (Black-Merton-Scholes Formula, Ito calculus in Fin.Math.)!

My main forecast for the past years has been: "gold & silver will go up a lot". I was 100% correct with that. Don't you think there is a reason that "technical analysis" is not a discipline of financial mathematics as a science? That should be a strong indication to you that it is just hokuspokus that does not hold up to any rigorous analysis (other such examples are the "Most Haunted" shows and similar). On another note, allowing myself a little superstition, I do see James Turk's MASSIVE 30+ years cup & handle in silver. He is going to be right on that one.

Silver bears, you better listen to the latest interview with Stephen Leeb on the Financial Sense Newshour. Solar energy production is essentially just a "rounding error" in world energy production, BUT already it uses up 11% of annual silver supply. Now imagine there's really going to be a crunch in oil, nuclear and so on, and they want to step up alternatives. And this is just one single factor influencing silver prices.

Monthly income from work, for example. On the other hand, if you bought gold sub-$1,000 then just don't worry anyway and just hold on to it if you can't buy any additional. No need to panic-trade all the time. It's going to go up on average.

I think this will happen again. But let's face it, 400 tonnes a quarter is nothing. I would expect, before it's all said and done, that the CBs will print gazillions just to buy 1000s and 1000s of tonnes of gold (before they Chinese do it out in the open) and be able to create some sense of "stability" in the currency. They actually do: by inflation. Unfortunately, they do the same to everyone else, even to those, who cringed at Gordo dumping the gold first place.

Time to buy? Is there value in it? I haven't really read anything about them yet.

Maybe we go back to the pre-Christmas pressie bargain basement price of $1,650. Thinking back, only a while ago people where called "pipers" and stuff for predicting that the price would one day be higher than that value. $1,650 today will look like an absolute no-brainer bargain price in a few years time. Retrospectively, the experts will all come out of the woodwork and claim that the impending hyper-inflation catastrophe was more than obvious back then. But I will say: show me your profits.

The plane wouldn't get off ground because the gold was so heavy. Well, I like the general bearishness. It feels right to be in gold. We'll re-assess this statement in 5 years. I'd bet you'll be very embarrassed. In Germany almost everyone seems to have a great-great-grandfather who sold the house just before the hyper-inflation took off. Sad stories.