bitbigt

Or as Buffett suggested when he made a well-timed song and dance about how greenbacks were about to pollute the world economy as surely as greenhouse warming.

...but did Buffet predict oil at USD 80 in next few weeks?

That's my core argument. Not the dollar aspect.

Certainly will be interesting to see where the dollar goes. You would expect the dollar to strengthen when the markets look weak. Looks like everything including the dollar is weak.... hyper-deflation anyone?

Yes - when the masses see the SHTF then they'll buy the dollar. As they did in the two phases of the credit crunch. ...safe haven ...yeh, yeh, yeh

But recently, and now, I'd guess its the smart investors and early movers acting as I suggested in my last post.

The Yen has been strengthening which indicates deflation for me. I wonder if it would be more useful to price things in Yen.

No view on this - I don't think about it enough to be confident. ...and have to reserve some time in my day for my day job

Just some dollar weakness.

Yes - but rather than this dismissing the increase in the price of oil, this dollar weakness is a key part of the evolving scenario that argues for far higher oil prices soon.

People are simply taking money out of dollars and putting it into other things. Some will go into gold (but not much until we have tanglible , double-digit inflation) but lots is going right now into oil (commodities) and stocks.

There has been much recent debate about why oil is sustaining USD 70 (its even been called a bubble) - but its just the issues above: i.e., the weight of cash looking for a home, especially one that hedges against the dollar. Then we have a recent big drop in oil inventories. Then you look at the oil chart which has fought against a concrete USD 73 ceiling for many months.

Today it bust through! ...not "Just some dollar weakness"

...IMHO

- a quick rant: ...Oil s about to burst up to USD 80, and then I don't what to expect of gold and stocks

There she blows!!!!

Have you had too much beer again?

Yes - it makes me stutter, stutter, stutter, stutter, stutter, stutter, stutter, stutter

OK, I have a dilemma here - any advice appreciated.

 

I'm heavily invested in gold and silver + a little 'flirtation' position in platinum (total 85% of savings). Things look bullish for the months ahead in PMs and August is not the time to sell. However, I have a lot of life changes in the months ahead and need to liquidate some cash to pay for them all.

 

Am I best to use my remaining cash (£) savings (15%) to do this, or to sell off some PMs and keep my cash emergency fund?

I feel a little uncomfortable having all my eggs in one basket and being 100% PMs, even if only for a few months.

Balance and Diversitifaction. Balance and Diversitifaction. Balance and Diversitifaction. Balance and Diversitifaction. Balance and Diversitifaction. Balance and Diversitifaction. Balance and Diversitifaction. Balance and Diversitifaction. Balance and Diversitifaction. Balance and Diversitifaction. Balance and Diversitifaction. Balance and Diversitifaction. Balance and Diversitifaction. Balance and Diversitifaction. Balance and Diversitifaction. Balance and Diversitifaction. Balance and Diversitifaction. Balance and Diversitifaction.

10-20% if PM is healthy given the crazy world we no live in, 50% if you really expect armageddon soon, but 85%?????!!!

EDIT: my comments are referring to fractions of a persons total wealth, but if its your savings you're talking about and you have lots of other assets then just ignore me completely (...which is probably a good idea anyway!!)

I have to differ here, too. A logarithmic Dow:Gold ratio makes sense because changes in the lower ranges otherwise get overlooked too easily. A change in the ratio from 40:1 to 10:1 is as important (for an investor) as a change from 10:1 to 2.5:1. Hence logarithmic.

I don't care what type of chart one uses - as long as its clear what type it is, and its chosen to suit the data rather than to suit the argument.

My initial question instead related to whether we should draw some rather compelling interpretations (that DrB was helpfully flagging up) by using a straight line on a non-log graph. Clearly, there is no absolute answer to this - its just a thought to be pondered.

Anyhow:

- a quick rant: ...I hate the way the Americans tried to arrogantly interfere with the Scottish judicial system

- a quick rant: ...Oil s about to burst up to USD 80, and then I don't what to expect of gold and stocks

It's a long time since I did my GCSE maths. Can someone explain why the log versions make more sense and why straight lines on a non log chart may be invalid?

If something goes up a pound day after day then it will plot as an upward diagonal straight line on a non-log graph. But on a log graph it will plot as an upward sloping curved line that becomes more horizontal with higher values. This is because the spacing of the units on a log graph get more and more compressed on the axis at higher and higher values.

In contrast, if something increases by some factor day after day (e.g., doubles , triples) then it will plot as an exponentially increasing upward slope on a non-log graph, but as an increasing diagonal straight line on a log graph.

Since the stock market can't keeping dropping by the same X dollars every 6 months forever (as it would then hit zero and go negative), I was questioning the validity of drawing a straight line channel on a linear graph.

So gold gains a quicker rate than any stock gains from now on?

No. But everyone seems to be predicting the imminent recurrance of a collapse in the stock market and a reactive rise in gold as panic again grips the world.

Certainly the fundemantals all say this should happen, but I suspect the world will be happy to keep ignoring reality for quite some time longer. So stocks will hold their price or even rise further, whilst gold may slide.

But really its 50:50 ...so I topped up on my gold anyway, keeping some cash in reserve.

I will post this chart without comment - to me, it speaks very clearly!

 

US stocks (SPX) -to- Gold Ratio

 

It would be interesting to know what others here think of it

Looks good ...but can it really be that simple?

Oil inventories are down (so growth happenning!), economies coming out of recession every day, loads of cash burning holes in pockets looking for a home, etc

And you've plotted straight lines on a non-log chart.

In short - I still feel this bouyant stock market may not fall much or at all from here, and could even gain further.

Was gonna ask the same question - but you beat me to it

 

Must be something to with the Yanks getting out of bed.

 

Not sure that "US gold rises on technical buying" is the explanation, as gold is up in all currencies. So could be some general news. Or just the Americans reacting to BoE's doubts about UK recovery and amount of QE needed?

It coincided with a MASSIVE jump in the price of oil.

That may have raised fear of inflation, and hence prompted gold buying.

But I don't know what caused the jump in the oil price.

What just happenned ( well an hour ago ) ????

Was gonna ask the same question - but you beat me to it

Must be something to with the Yanks getting out of bed.

Not sure that "US gold rises on technical buying" is the explanation, as gold is up in all currencies. So could be some general news. Or just the Americans reacting to BoE's doubts about UK recovery and amount of QE needed?

Congrats... but was a little more information than was needed.

Unless of course you are keeping it at home, in which case would you please tell me your address, PM me for secrecy

Perhaps not quite enough information.

Sorry guys - its all physical, in a bank vault in Switzerland ...all in MrsBigT's name.

Same place and ownership for all our BTLs, and our spare cash.

And same place as my wife has been for the last month, while I stay here working.

Hmmm... (sound of penny dropping) ...I wonder if its a fall in PoG, or my wife leaving me, that I should be worried about ???

...Presently, I am getting the idea we could see a rather sharp drop in Gold and other commodities

setting up a good buying window perhaps as early as late August - ie the week after next...

I agree - but feel only 50% confident in this call.

Therefore, I today bought another kg (now own 3), whilst having cash in reserve to buy another 4-5 if the big drop does occur. [if it doesn't happen, and I miss the rocket, I'll just pay of a mortgage with the cash].

Now back to work...

Gold Watch - Commitment of Traders (COT) Report

Anticipating Gold's next move, using sentiment swings

 

/see: http://www.greenenergyinvestors.com/index.php?showtopic=7266

 

Comments please, on how clear the descriptions there are.

 

(I think the the Swing and Choke indicators could prove very useful to all Gold traders)

 

The latest Swing of $96.97 is not cheap, and the Choke of 430.0 is near a Bearish extreme

Great work, and very well explained.

Thanks!!!!!!!!!!!!!!!!!!!!!!!!!

Did gold just get nailed for ten bucks?!

yep - 1% of the 10% drop I anticipate

Alternatively it could just go up from here, talk of £450 gold seems wishful thinking to me. We have been in a year and half long battle to get through $1000, what makes you think that it will be still going down?[\b]

Hi Pixel8r: Please see previous post:

http://www.greenenergyinvestors.com/index....mp;#entry121707

My "Swing Indicator" suggests that Gold (GLD) is a dangerous buy now

 

/see:

http://www.greenenergyinvestors.com/index.php?showtopic=7266

 

The price action gets exaggerated if Commercials shorts vary from 68%.

They were last week at 71.1% which is definitely on the high end, indicating that

Commercials are more happy than usual to be short gold. They usually get it right

at extremes.

 

I am looking for reasons to buy Gold now, since the seasonal window has a limited number

of days left, but I find this to be off-putting.

Very interesting and useful.

Thanks!

Thanks for taking the time to reply. No stick from me just curious to hear how others are thinking.

When you say gold will be the place to be in 12 months time do you think it will get back above these current levels then? If so a buy and hold type investor would come out ok in the end?

I think that's a very reasonable point of view.

However, I must ask what you think the eventual price of gold is likely to be. IMO it's simply not worth the risk to get what IMO is only going to be a minuscule improvement.

I'll preface my response by pointing out that I believe economists were invented to make weather forecasters look good!

So on that basis, my own predictions are probably worth nothing!!!!

I'd currently guess that if gold falls...

- it'll start and complete somewhere between 1 month and 6 months from now. GBP 500 is my best guess of the bottom, but lower is not impossible.

- turn up will come 6 months - 2 years from now.

- peak will come 3 years - 8 years from now, at anywhere between GBP 900 - GBP 1500 (should be higher, but the manipulators will not let it reach a 'fair' value of GBP 2500)

Of course, in the fullness of time (years, decades, centuries), gold will pass any level one might set in any currency. So yes - the "buy and hold type investor would come out ok in the end". But I don't want to lock up all my wealth in scenarios that take decades to pay me back, or even longer than my lifetime - and never enjoy my wealth. Compared to that option, I'd rather spend it on having a fullfilling life (e.g., home, holidays, families...) or put it into other safe assets (e.g., rental properties) that also ultimately hold their value (if bought when not overpriced) whilst also yielding a monthly income that tracks inflation.

Its about balancing options and risk in the bigger picture, not just through the golden lens.

I was curious if your opinion had changed. The fundamental difference between our strategies is still there by the sounds of it. You seem to be describing more of a linear event and I feel certain it will be exponential when it comes. We'll see how it goes, but I feel the more intervention and the longer the system is prevented from returning to equilibrium, the more violent the correction will be when it happens. I certainly subscribe to the theory of unintended consequences.

Yes - I don't think the earthquake will be as soon or as sudden ('exponential') as you and many others here think.

Even back in the 70's where the intervention was less well orchestrated or devious, and where inflation was at 20%, it took 10 years for gold to peak.

Alternatively it could just go up from here, talk of £450 gold seems wishful thinking to me. We have been in a year and half long battle to get through $1000, what makes you think that it will be still going down?

 

None of the problems seem to be getting sorted, they actually just seem to be getting worse. Towards the end of the year inflation will get a boost as the old 17.5% VAT rate kicks back in. All the additional liquidity which is being created by QE has got to have an effect at some point, they won't be able to remove it as quick as they made it.

Well in my prediction of a drop below GBP 500, I'm in good company... Frizzers also sees a possible/probably drop of USD 100

http://www.moneyweek.com/investments/preci...gold-93306.aspx

"The dollar gold price could easily be taken down $100 from here, so be careful."

If you get it wrong with your calculated gamble you will not lose any money, barring banking default, but your money will be worth less.

No - because I have a cunning plan...

We've also still got outstanding mortgages (locked in for 5 years at 2.5%) on rental properties abroad for the same amount of money as we're considerring putting back into gold. So if we miss the boat with gold, we'll just use the money to pay off the mortgage.

Having debt is no bad thing in inflationary times.

So we can't really loose, other than not making a fortune on golds rising price (but as everyone here keeps insisting, they hold gold to break even in real terms, not to get wealthy)

But anyhow...: I still believe I will end up buying gold, and at a very good price.

When you say gold will be the place to be in 12 months time do you think it will get back above these current levels then? If so a buy and hold type investor would come out ok in the end?

I think gold will go down (450) in 12 months, and then double from there (900) over the subsequent 1-3 years. So if I'm right with that prediction, I'd ike to buy near the bottom, and double my money.

But buying and holding from here would only bring a 50% benefit.

Of course, we could all be wrong, and gold might only go down from here, and never get above 600 again for many, many years.

So I'm taking a calculated gamble... If I get it wrong I don't loose any money, but if I get it right I double my money.

Minor dollar strength off the back of the faked job numbers from Friday....

Oh shush ...let me fantasize

But seriously, I think this is more than just a USD strength. Gold and oil falling severely in all currencies.

How does the bond/gilt market factor in to your thinking?

...when I incorporate the bond/gilt market factor in to my thinking, my head hurts and smoke comes out of my ears.

But seriously, CBs will keep buying these things and keep rates low for another year. That won't be sustainable longer term, however, as the joke that is the USD will become clear to the masses, and the newly elected conservatives in the UK will start to act more responsibly with the country's finances. But this does not mean imminent hyper-inflation thereafter, just high inflation and weakened currencies - plus a decade of pain for UK and US citizens. I'd also suspect some blatant devaluation of both currencies, perhaps 30% each ....or even everyone moving over to the AMERO and the EURO. Naturally, as all this transpires, you don't want to be holding government debt.

I think that could be wishful think on your part. James Turk's latest commentary mentions how parabolic the GBP gold chart is starting to look, also DrBubb and others are looking for a dollar bounce, which has got to mean the pound getting weaker. Also remember September is historically a very strong month for gold. I see a breakout happening soon, target $1300 from the inverse head and shoulder formation.

http://goldmoney.com/commentary.html

Yep - and when all the signals are pointing in one direction, we know which way the market moves!!!