Gebb

Here's a very interesting item from the Ticker Forum: Indiana considering a bill requiring gold accounts for state.

Here's the bill.

Synopsis: Use of gold by the state and local government. Requires the treasurer of state to designate one or more electronic gold currency payment providers to be a payment provider for the state and political subdivisions. Requires the treasurer of state and fiscal officers of political subdivisions to: (1) maintain one or more electronic gold currency accounts with a designated electronic gold currency payment provider; and (2) conduct all monetary transactions of the state or political subdivisions through electronic gold currency accounts. Provides that an electronic gold currency payment provider must use an electronic gold currency unit that constitutes a monetary unit of account and represents a claim of title to and ownership of a specifically defined, fixed weight of gold held by an independent specie vault. Specifies that a specie exchange with which an electronic gold currency payment provider associates must conduct the business of exchanging gold and silver coin, legal tender of the United States, and the electronic gold currency of the electronic gold currency payment provider. Provides that after December 31, 2009, the state and political subdivisions may not compel or require any person to recognize, receive, pay out, deliver, promise to pay, or otherwise use or employ anything but gold and silver coin (in that form or in the form of a designated electronic gold currency) as media of exchange with respect to certain payments. Provides that after December 31, 2009, a person receiving certain payments from the state or a political subdivision has the option of accepting payment in either legal tender of the United States or in electronic gold currency...

Zero chance of it being enacted, I would have thought.

Nice one.

I think the big money last year was to be made shorting stocks (mainly banks), but that's not so easy to show in a graph.

From the Ticker Forum: Gold NY Spot and Market Prices Diverging Wildly

Apmex:

 

Spot

872.70

 

1Oz non collectible St. Gaudens

1129.34

 

Delta:

256.34

 

Premium:

29.37%

What about silver? Do you have any data on that? Thanks.

Silver's worse. Even Kitco is advertising on their main page paying $1.35 (still low balling) above spot. For Kitco to do that, shows how desperate they are to get some. Sooner or later the paper market, home to den of thieves, has to re-connect to show physical shortage. The market is currently broken. All it would take is for one large order long to take delivery. Yes, the COMEX would force a cash settlement since they could not deliver but just news of this cash settlement would send the price orbital as it would confirm COMEX short supply.

Rocket alert!

New use for gold: clothing.

Italian fashion house Fendi has patented golden fur, as detailed in Vogue’s September US issue. The process has something to do with pulverising gold particles in a vacuum chamber, allowing them to be absorbed into the material. The effect is permanent but diffuses in outer space (Seriously, this was a big enough caveat for Vogue to print. There’s a legion of space-shuttling stylistas we aren’t aware of somewhere).

As an alternative to stashing your gold coins/bars in the wardrobe (or in addition to).

I had thought that the Chinese were postponing a lot of things until after the Olympics, but now I see that it starts tomorrow on 8/8/08 which seems particularly auspicious (8 is lucky in China, I think?).

Hmm, Wikipedia says that for the Chinese 8 is associated with "sudden fortune, prosperity" and that 888 is "three times the prosperity". I guess there are a few people here who might think that buying a lot of gold would help with that.

TIMING QUESTION:

 

If you were China, and you wanted to strengthen your currency

- by switching some reserves OUT OF DOLLARS and INTO GOLD.

 

When would you do it?:

 

+ Before the Beijing Olympics?

+ After the Beijing Olympics?

 

No prizes for the right answer

 

Benefit: you can lower commodity price inflation

Cost: less exports to the US- but they are fading anyway

 

Didn't really expect to see it below $950, but here it is.

 

Relief rallies so far have been pitiful. Keep 'em peeled chaps.

Looks as though they may have been selling gold in order to buy up Visa.

Another HPC refugee here. To be honest, the house price crash is underway, and the macroeconomic stuff (including gold price) is much more interesting now. On the subject of which, I came across this on FT Alphaville:

Short View: Things are very bad, or very exaggerated

What if gold, close to $1,000 per ounce, is the only true global currency? If we believe that, then it says something interesting about the price of US houses - another asset that can claim to be a store of value.

 

In gold terms, US houses have never been as expensive as they were at the beginning of the 1970s when the median house cost more than 700oz gold, according to Tim Lee, of Pi Economics. But they nearly regained that peak in 2001. Their decline since then - even as their prices in dollar terms have gone through the roof - has been precipitous. A US house would now cost you only 220oz of gold. Over history, this price has tended to revert to an mean of about 350oz.

While I still see gold going up further (on speculation and as a hedge against inflation), has it now gone above its long term price (in dollars)?