bitbigt
-
Posts
1,212 -
Joined
-
Last visited
Content Type
Profiles
Forums
Events
Posts posted by bitbigt
-
-
Just been talking to a woman who now lives in Oz but is back in the UK to sell her house and get free medical treatment. She complained about the stress of selling her house, which she doesn't want or use and is paid for. She is 61.
"Have you not had any offers?"
"Yes, buy a hundred grand under what it really worth, well, was a couple of years ago. I mean where am I going to make up that hundred grand at my age?"
Pause.....
"I thought you said it was paid for and you live in Oz?"
"Yes."
"Well how much have you got it up for?"
"479"
Longer pause!.......
Doctor again: "Look, you don't come from a rich family, isn't 379 grand to spend at 61 more than you could have hoped for in your wildest dreams when you first got married?"
" Yes but it's not fair. They have to get the housing market going again. If it's not sold by November I'm renting it out. Sod it"
Nick
LOL :-)
Sad thing is, this is EXACTLY how people are approaching their house sales
-
Where you looking Bit bit T?
East side of Leicester, countryside
-
You still think golds going down from here? I have a gut feeling it will unless there is some news that panics the market. You bought a house yet?
No - but been looking. People are still asking for prices they would ahve got 1-2 years ago. Reality will have to dawn on them in time, so I think we've got another years of price falls (at least) ...so not rushing into buying.
-
Brace yourselves for...
...phew!
I was suspecting there'd be a 2nd day of US smackdown, as the US markets openned.
If gold keeps refusing to go below the 880s these next several weeks I'll start to, maybe, think its not going to 750
-
Brace yourselves for...
-
So what do we think the gold market has in store for us this week... ?
A big drop, is my guess
-
...So after selling up at start of March, I'm now quite happy to sit back, save some new fiat, and wait for the chance to buy back in to the market in 3-6 months time.
Could work, or could not. If Iran or Pakistan finally blow up, all bets are off.
Agreed - black swans could occur, but...
- If I do get in dirt cheap it will work wonderfully
- If I don't get a chance to get in at all, I've already doubled my significant original investment, so I'll not be shedding any tears
If I were still holding, and didn't need the money, I'd probably just sit tight and be pi55ed off if/while the fall to USD 700 occurs, and happy as Larry as it rises again during the next decade. Unlike stocks, it will not fall to zero!
-
Hi All. Just got back to my 'puta after being away for the last week, and wanted to post some ramblings...
Whilst away, I had no idea what had happened to the price, and imagined anything from USD 850 - 940. Having now found it to be in the lower half of this range, and from the chart pattern plus sentiment, I suspect we'll see a big drop next week or two - down to USD 800. Over next few months, I even suspect we may see USD 700 (or even lower).
Longer term however (several years), I have never been more sure that we've got inflation and stagnation in the pipeline. I don't think there will be a new global reserve currency, or gold backing for any currency, until the dollar basically starts to collapse - perhaps 10 years from now. The world will refuse to accept the USA is bankrupt until they are forced to accept this reality by very painful economic evidence (inflationary based, and more disruptive than anything we've seen these last 2 years). Only then will the failure of fiat currencies be evident in the price of gold.
So after selling up at start of March, I'm now quite happy to sit back, save some new fiat, and wait for the chance to buy back in to the market in 3-6 months time.
-
Here you go for Gold$ Vs VIX
Excellent!
Even with the artificially high USD price of gold during 2008 (due to the transiently weak dollar) a pattern emerges..
...to see it, go to http://stockcharts.com/h-sc/ui on two webpages, view both as weekly periods and non-log scale, and set one page to $VIX and one to $GOLD
In April 2007 and in October 2008 the VIX (a 'fear' scale) suddenly shot up (look at the RSI chart), and on both occasons this triggered the start of a major bull run in gold. Then, in May/June 2008 and also this last month or two the VIX has fallen, promting a steady sell off in gold. In short, in the recent past at least, gold's rise has been catalyzed by a spell of economic panick, and as that fear subsides gold starts to fall again. I personally think the main panick phases of the credit crunch are behind us, and its now just long and painful road to recovery, so gold will continue to ease from here.
Frizzers seems to generally agree with this, in that he's just written for MoneyWeek saying gold is driven by collapsing government (which I take to mean a state of disaster emerging):
http://www.moneyweek.com/investments/preci...over-14714.aspx
But he goes on to claim that gold does not rise in response to consumer inflation. He's correct over short time periods and during mildly high inflation (e.g., autumn of 2008, when gold was falling even though high inflation was always in the news), but I'd strongly disagree with him about this relationship over longer time periods. For example, see here;
http://www.sharelynx.com/chartstemp/FreeGoldSilverCPI.php
So short term it is fear that drives gold up and down, but longer term gold holds its value against fiats depreciation (i.e., reacts to inflation).
And so if we get the tidal wave of inflation many of us are expecting in the next 5-10 years, which will be accompanied by good deal of fear, then it should be a perfect storm for promoting the gold price skywards
-
Can someone please pull together a chart comarison of the VIX versus gold price in several currencies (I'm travelling and limited access to internet)
I suspect it might tell us something interesting
-
Looking a little different today isn't it
IMO there is far too much talk of a dead cat bounce for this to have much staying power (again the markets being up).
...not really
-
I think we've already hit the tradeable bounce at $874 (just above the 200dma). I missed the trade and won't enter now, if we break through $870 gold could be in a lot of trouble and I don't see much support below. I also can't help but feel we're going to see one of those monster 'fishing lines' at some point.
Sentiment is not good - and at the moment sentiment is everything.
Fully agree!
This fall could be in the process of accelerating, and if so it would need to get down to below USD 700 (GBP 450) before I'd be prepared to step back in big time.
But I'm perhaps an exception, in that my risk tolerance is very low as the money is needed for a house purchase in next year or so.
-
Jim: Frank what about the gold market? Are the gold stocks telling us something about the future price of gold here?
Frank: Jim I think they are leading, prior to a good move up in bullion you see a good move up in the gold stocks. We could see a good buying opportunity over the very short term, for people how aren't in already. It just a matter of time before prices break out, but when they do I expect them to BUST out, in a way that really gets peoples attention. It will be something we remember for quite some time. I see the whole area gold & silver bullion and miners as the best place to make money now and is my favorite area right now.
Or...
...gold mining stocks have simply started trading like any other stock these last few years, since ETFs now exist for those wanting liquid exposure to gold. Therefore, the recent rise in gold miners is just reflecting the recent rise in stocks generally
-
...All they have to do is keep the price of gold under control until the worst of the recession is past...
They will be outflanked by a collapsing economy and a crashing stock market. Control? It is has got beyond that... think fingers/dams.
If the economic world is coming to an end, then you're right.
But if we're all still alive, working, spending, saving, investing, eating, and posting on GEI in 5-10 years time, then perhaps they'll be quite able to suppress the gold price for as long as they need to
-
They are riding trying to hold down one big bull.
...on this point I fully agree, but...
And before cg can say it, yes they will fail...are we sure about this?
The money required to manipulate the gold market is small compared to amount the PPT has at its disposal for such manipulations!
All they have to do is keep the price of gold under control until the worst of the recession is past. After that, certainly gold will over the years/decades maintain its value. But that might not imply a significantly higher price than todays price for many years to come - especially in Sterling which is very weak just now.
-
bigt - i think all of that freshly acquired sterling is going to your head a bit!
LOL !
...but actually, its not gone to my head but into Mrs Bigt's bank account in Switzerland
She's waiting for the Swiss Franc to drop so we can exchange the Sterling winnings and pay off her Swiss flats. In return, she's promised to pay the annual school fees from the rent she'll then clear each year.
So now I'm still lumbered with needing a big mortgage to buy a house back here in Blighty in next 12 months, ...but that's OK, because when high inflation hits the debt will be diluted rapidly.
In the meantime, I'm saving to buy gold again - but not until much cheaper! ...and the next set of winnings are MINE, or I'll visit the divorce lawyer
-
yep agree with that
stocks rallying
gold selling
maybe for a few weeks methinks
...or a few months, or even a year or more ??
It was this turn of events that I feared, and which caused me to sell.
The last few weeks has seen an emergence of hope on stock markets and the economy, and that confidence seems to be strengthenning not weakenning.
I'll buy back in at GBP 350, as the next decade will see some terribly high inflation - globally!
-
Approximity's graph of gold vs average GBP wage would be a better measure of affordability / fair value, and where we might be in the relatively overvalued/undervalued cyle, than RPI adjusted price of gold in GBP i'd have thought:
http://gold.approximity.com/UK_wages_manuf...g_since1963.pdf (page 2)
yes, it would be good. But that chart is not on a log axis, and so one can't directly compare the slope (salary inflation rate) over different parts of the chart. A logbased chart would like very much like the RPI chart.
-
But that uses the official fiddled inflation figures right ?
....
Using the Real CPI numbers for the US gives a very different picture.
It was about 1993 when the real fiddling of the inflation stats began in America, but regardless, my focus was on UK/Sterling. I'm not sure if or how much inflation stats fiddling hapened in the UK.
My point was simply that in Sterling, gold is now at or near to its real historical peak, especially so if you consider
a. we're not (yet) in a high inflation environment, and so compare with equivalent periods
b. the actual historical peak was due to an anomalous jump in silvers price
c. the PPT exists now, and easily has the resources to keep gold down (in USD)
d. the stock market will bottom 6-9 months before the economy turns, and so we may be about there
-
Many of us are buying/selling gold in Sterling. Its therefore worth looking at Sterling charts, and I've found an excellent set at http://gold.approximity.com
I strongly suggest you all look at these 3 in particular that run from 1968 to this week:
http://gold.approximity.com/since1968/UK%20RPI_LOG.html ...shows RPI effect on currency value (actually shows how much more money you'd need each year to keep the same value), wherein a greater slope indicates a higher rate of inflation
http://gold.approximity.com/since1968/Gold_GBP_RPI-adj.html ...shows gold adjusted for RPI, and revealing a scary similarity between the last 3 years gold price and the early years of the 70's - when inflation was NOT high. Note a 50% drop in price then occured from current levels, over about a 2 year period, until inflation started to emerge as a real problem
http://gold.approximity.com/since1968/Silv...BP_RPI-adj.html ...shows how, in late 70's, the silver price skyrocketed due to an attempt to corner the market. Key point is, it was this event in the silver market that pulled the price of gold up significantly further, without which gold probaby would not have ever reached a much higher level that it has today - even with the inflation problems that were then being experienced.
...draw your own conclusions!
-
Not a crazy idea - but probably one that would make most sense when someone plans to withdraw in ~12 months (as I would need to for house purchase) whilst believing there is a very, very chance of significant further price increase in that time frame and yet fearing a short term dip in price. My current view, however, is that the further major upside may be several years away, whilst a plateau or even a leg down could last for at 10-20 months.
Of course, for all you goldbugs, I hope I'm wrong, and the inevitable upside does come much sooner.
I'd like to clarify that bit in bold...
- up to spring 2008, the several year price increase in gold was due to inflation becoming an increasingly tanglible problem
- but gold then fell significantly for 7 months from March 2008 onwards, due to a growing realisation that inflation was not going to be high over next year or two, and deflation may even kick in (e.g., illustrated by oil falling precipitously)
- gold then turned up again, as soon as the stock market crashed terribly last October, i.e., as the severity of the credit crunch became apparent ...so this buying was driven purely by fear and due to the fact that all other asset prices were dropping rapidly
Looking at the next 12 months (my time frame for needing to withdraw) I suspect
- high inflation will not return to the USA (though it will over next several years!), and its only there that matters (as we've had our currency collapse in GBP)
- bail out funds and QE money will start to kick in (e.g., yields have dropped on bonds by >1% these last few days)
- so, confidence will return to many other asset classes, and stock market will start to rise
- so, the current fear-based support for golds price may weaken
-
BigT, I was thinking re your gold sale: did you consider buying an in the money put option in GBP (if such a thing exists?)
The only reason I ask is to possibly educate myself. It seems like the perfect case for an option but not the obligation to sell at a price.
You'd have limited the GBP loss whilst still being able to benefit from any upside.
Probably wouldn't have cost you too much if it was in the money?
Not a crazy idea - but probably one that would make most sense when someone plans to withdraw in ~12 months (as I would need to for house purchase) whilst believing there is a very, very high chance of significant further price increase in that time frame and yet fearing a short term dip in price. My current view, however, is that the further major upside may be several years away, whilst a plateau or even a leg down could last for perhaps 10-20 months.
Of course, for all you goldbugs, I hope I'm wrong, and the inevitable upside does come much sooner.
-
We've all seen charts of the last century's gold price in USD, corrected for inflation
But has anyone got (or could anyone approximate) the same chart for GBP?
-
I honestly think this is a very short term correction and the next uptick is imminent/3 weeks away. This in my mind is not a replay of last year when you look at the fundamentals. Personally I think if there is a stock market bounce it will only last a few weeks at best, you have to remind yourself what's on the horizon:
1) Continuous onslaught of CDO/CDS exposure
2) Further worldwide bank nationalisation
3) Soaring unemployment and commercial/retail bankruptcies
4) International currency devaluations
5) Soaring food inflation
6) Collapse of hedge and pension funds
7) The IMF is out of money
8) QE and the systemic inflationary kickback
9) Civil unrest
10) Sovereign default
11) Eastern EU sovereign default wipes out Western Europe financial markets
I could go on.... Simply there is nothing positive to say about anything at the moment. In short they will have to let gold go at some point, so the interim volatility doesn't bother me. Excluding hyperinflation (HI), I think a safe estimate would be $2,700/t oz, but it could be anywhere up to $6,000 and if HI hits, the sky's the limit. I am also expecting parity with the dollar in the next 5-6 months.
...or is much of that already in the price - explaining why gold has rise to 900-1000 even in a disinflationary environment? If so, people may now be starting to look beyond those problems, and seeing a light at the end of the tunnel. Only when the more extreme items in your list come to pass (e.g., painfully high inflation 2-4 years from now, civil unrest) will fear rise and confidence in fiat plummet the way it should.
GOLD
in Gold, FX, Stocks / Diaries & Blogs
Posted
China has played in important role in sucking fiat out of the Western economy for the last decade or more, and that has counteracted the inflationary pressure that would normally be expected given this increase in money supply. Additionally, as we all know, they've made cheap stuff, which also keeps inflation down.
I am now starting to feel that these anti-inflationary pressures are far greater than I've given them credit for in the past.
Add in the deflationary influence of a global slowdown, and it starts to look like it'll be quite some time until inflation really takes off in the West.
In summary: I am sure we will have massive inflationary problems in the future, but that future may be quite a few years away, and not just a few months.