bitbigt

Nice one.

[smugalert] Nevertheless, I'm up 10% (after tax) in same time period! [/smugalert]

...but that's in sterling, which means I have to take off 25% if I want to compare to USD

bigtbigt,

 

>5. Price of oil will rebound up to USD 50, taking silver up with it

 

Interesting.

 

Could you, please, explain this particular correlation between the price of oil and silver here?

First - take all my views with a big pinch of salt!

That said....

Regarding my prediction #5: I suspect oil may see the USD 30 level in next few months, and perhaps even in January (and I'm planning to put a lot more into OILB if that index hits 16-17 [current at ~21, with my breakeven at 29: equating to USD 55]). But I also feel a dead cat bounce is due (15% up). Recent price activity suggests that bounce may start now. As to why it should take silver up with it (probably 15% also), its purely an empirical argument... silver fell precipitously when oil fell, pushing the gold:silver ratio unusually high. So that ratio now needs to correct, and at the same time if oil rises and silver continues to track its price, then we should see a 15-20% pop in price of silver.

...and I'd put the chance of this all unfolding at 2/3

DYOR!!!

Anyone think the £ might regain some ground on the $?

...

Opinions appreciated.

I'll answer this call for a prediction, if I may, by reference to the predictions I made for December one month ago... i.e.;

1. Having fallen to new lows, and risen again, the DOW and FTSE will remain bouyant (at least most of) December - but they are still likely to see far lower new lows over next few months

2. Further emergency base rate cut in UK, down as much as 1% further (at least 0.5%)

3. Sterling will not fall with respect to USD, whilst USDX will fall back to mid or low 80's

4. Price of oil will creep up, just reflecting the weakenning USD. In Q1/2 2009 we will see oil at USD 40 for a brief (intraday?) period

5. Western inflation falling further (cpi at 3.5 - 4%), but it will be transient! Big inflation problems will be with us by mid/end 2009

6. Something big seems likely to happen in PoG: a >$100 move. Either a big smack down, or a big rise as COMEX gets stressed (but not broken) by demands for delivery. My guess is it will be the latter. Weakenning USDX will help this move.

7. More examples of govs bailing out any and all 'too big to fail' companies (finance and US car makers), ensuring a long inflationary rather than a short deflationary recession

8. People will start to realise that Broones ideas for a gobally coordinated wave of fiscal stimulation are not really happening (UK or anywhere), and that such an approach is anyway as effective pushing on a string. This will decrease confidence in Western economies further, and push up government bond yields. That is the start of a massive Western currency depreciation that will put 2009 into the history books.

This couldn't have been more right on points 1, 2, 3, 7 and 8. Almost perfect on the other three points as well... Point 4 was correct, but oil then slid back again as the dollar stabilised. On point 5 I missed the CPI rate by just 0.1%. And on point 6, there was indeed a 100 point change - though both down and up!

I wish I had the balls to trade my predictions

For January:

1. DOW and FTSE again remaining flatish, and probably rising one little bit further once Black Barrack takes the reigns and gives out some more money to Joe Public

2. Even more emergency base rate cut in UK, down as much as 1% further (at least 0.5%)

3. Sterling will stabilise & creep up for a brief period, and then shock everyone by falling to the EURO 0.95 range

4. USD will follow same pattern as GBP, so GBP:USD rate not changing significantly

5. Price of oil will rebound up to USD 50, taking silver up with it

6. Western inflation falling further (UK CPI to 3.7 plus/minus 0.1%)

7. Gold will continue gaining to USD 920

8. 50% chance of War! Israel bombing Iran and/or Indian going into Pakistan. Will create 15% instant jump in PoG and 10% drop in major stock markets (over-ruling my above predictions)

Now that's a price ceiling if ever I saw one, perhaps with a little artex on the right hand side

And just like all artex ceilings, this one deserves to be busted right through - and it will be!!!!!

Looks like there might be a gap in their data feed.

Thanks! Logical!

Happy New Year

You beat me to it.

Big jump between market opennings/closings ...cause?

I guess the PPT were caught napping today.

Probably drowing their sorrows yesterday, and had a hangover today that kept them away from their 'putas

But even more important: let me wish all the community that reads this bb a fantastic new year, and a 'protected' if not a profitable 2009

And thanks and congrats to Dr Bubb, Steve et al who run this truly first rate, informative, and pleasant forum

but, when I listen to the amounts that some people are buying on here, I feel like I'm missing out!

I understand, ...and can only say the following:

- its your life, and so your decisions

- but as 'Romans Holiday' said, might be smart to keep it under control (e.g., 10%) and don't go all in

- in my case I'm after a secure (fully paid up) home, and happy family: I'm not chasing great wealth. So since I moved back to UK only recently and house prices are falling, I'm renting and keeping a big chunk of my 'house-cash' in gold, silver, and oil. I am hoping house prices will fall further, and gold will go up more, so I can then get myself into the enviable position you are in!!! If I were in that position today, the last thing I'd be doing is risking my security to place a 'bet' on golds future ...at least not morethan 10% and then only if I felt my job was secure so I could pay back the loan in any case.

- what I would do in your position is save and invest, not borrow to invest ...there's always something going up in price, so there will always be some things for you to invest in (other than cash, via a bank account) - and some of that is tax free!

Wow, what a smack down

...yes, due to USD strengthenning in last hour or so.

Currencies are on ends of a see-saw, which itself has fallen off a cliff

That question was asked of Jim Puplava in his Q-calls on last weeks show.

 

He gave the answer that he thought it was best to keep your house owned 100%.

I fully agree!!!!!

Gold is a way to help preserve the value of ones cash!

It should not be used as a speculative investment vehicle, especially on leverage (which is what you'd be doing if remortaging, putting it all in gold, and only paying out the mortgage interest).

You could get wiped out, whereas you're currently in a very safe and admirable position.

Dont be greedy!!!

I'm surprised the CRIMEX are able to have the significant effect they're having today given the Fed's stark admission that they're effectively going to throw everything at the reflation effort. Shouldn't this have been the news the gold market's been waiting for ?

My view is that the PPT have so much ammunition and power, compared to the size of the gold paper market, that they can do anything they like with the price of gold.

Fortunately for us, they want gold to be much higher than it is now, as that is an integral part the currency devaluation they need to engineer to bail their nations (governments, businesses, and people) out from the big debt holes they've all fallen into. So we can be sure that gold's price will rise, regardless of money supply, money velocity, credit crunch, or any other consideration.

What they do not want, however, is for gold to rise too quickly - as that would send panick into the broader economy and markets. Hence, the vertical spike that was developing in afternoon trade in the UK, had to be nipped in the bud.

Can I give some to the kids?

I am 100% certain about rules on gifting to spouses, but only 99% certain with rules regarding kids.

That said... My understanding is the the CGT exemption at time of gifting only applies between married couples - but the spouse that receives the gold will have to declare the original purchase price (that the partner paid) when eventually selling and working out CGT. When gifting to any other family member (including kids), I believe the rules state that even if its a gift (i.e., no payment chages hands) then the gifter still has to declare the action as a diposal for CGT purposes, getting hit with the same CGT as you would had you sold on the open market. Kids then declare that same price as buying price when they eventually sell.

Yes that is the case. I think you are allowed £9200 profit per year, then you pay 20% on anything over that.

unless you are non-domiciled - then you loose this 9.2k allowance!

...and the CGT rate is now 18% regardless of your income tax bracket.

Consider gifting half your gold to your spouse (this can be done free of any tax consequences) and then you get 2 lots of 9.2k personal allowances

I'm getting quite dizzy and breathless up here.

Ooh, look out, duck!! An orbiting toolbag!

 

OPEC, of course.

you could be right...

http://news.bbc.co.uk/1/hi/business/7784158.stm

I guess the market is finally waking up to the inflation risk. The Fed really let the cat out of the bag when it started buying Fannie and Freddy debt directly.

I wish they would!!!

The shed-loads of new money that's been created by all the debt and loans that have been issued over the last 15 years has not gone away, its just 'sleeping'. That 'sleeping' is what people call reduced velocity of money, and its only a temporary phenomenon. After which, we can add on top the new money from all this government debt, and its 20% inflation here we come!!!

USD getting a pasting today - even against GBP

Yes indeed! ...and so why the hell are the UK media only harping on about the pound falling against the Euro?

The USD is falling against the pound, and so the USD is falling dramatically against the Euro (which is a large part of the basket behind the USDX). Surely this collapse of the USD is a far bigger story than the demise of turdling?

I would argue that silver fell in last few months principally because oil came down so far and so fast.

Now the latter has found a bottom (or as good as!), So....

W T F just happened ????????? [given that PMs just jumped 2%, and USD/GBP just fell 0.4% in 1/2 hr]

- did Whitehouse decide to bale out the big 3 or something?

I'll keep this short and to the point if I may. I have 6 figures (£) to safeguard and I'm not convinced I have the luxury of averaging in to PM's as I had with my savings, I feel behind the curve. So my questions are at this late stage:

 

1) Would you keep any in cash in any currency?

2) What percentage physical gold would you buy?

3) What percentage physical silver would you buy?

4) What else would you buy to make sure you don't put all of your eggs in one basket? NS&I indexed linked certs?

5) Given the rate of decline and we're at the 11th hour, over what time frame would you average in to be safe?

 

I know these questions have come up time and time again, but on this one I've lost my confidence. This is only 50% of my money and when it comes to safeguarding someone else's future, all of a sudden the waters are muddied and the burden of financial responsibility grows quite heavy, I need a plan.

 

All replies gratefully received...

I'd start by asking myself the following kind of questions...

- in which countries (currencies) are you likely to want to live in the future

- how many years are you likely to be around, and do you want to use your wealth or leave some to others

- since wealth is no use whatsoever if never used by anyone, what do you want this money to be used for and when (as a longer time frame means you can tolerate more risk)

- do you have a fully paid for home, and would it be a good idea to get more than one?

- how soon might you need to get your hands on the money again, for what purpose(s) (don't lock it up or place too risky bets, if you may need it in next year or two)

- are you looking to invest (make profit from) this money, or secure its purchasing power (in which case NS&I is fine)

- are you the type of person who will worry about risky investments every day, and if so, are you OK with imposing that stress on yourself

- what would it do to you if you lost most of the money (or its purchasing power)?

- are you over the inheritance tax limit, and if so perhaps you should give some away now (on the assumption you'll live for >7 more years in the UK, after which the gift falls out of your taxable estate)

...hope that helps!

My prediction

 

I am predicting a major turn within about 1 week.

I think the US$ will start to drop against the EUR.

When this happens I think things are going to look VERY different.

 

US$ down, Yen up, and gold and silver will be going up up up.

 

The tanks are full, and the ignition switch is ready to be pressed.

 

See:

http://www.greenenergyinvestors.com/index....ost&p=82401

for my detailed explanation.

 

Of course I could be wrong. But I am starting to get "that feeling".

Interesting you say that! This very evening I said to my boss (the missus!) something along the lines of "mark my words - something changed today! The dollar has topped out. Oil, silver and gold have started an upswing. People are finally seeing through all the wasted money in the US and UK fiscal stimuli, given the way they are being applied"

Damn glad I doubled up my OILB shares last Friday :-)

Wow, so not that similar at all really.

Oh contraire... I see lots of important messages and relationships in these charts: telling clearly that gold is still in the middle of a long-term steady bull trend, oil suffered excess speculation first to the upside and now to the downside, and silver has been pulled between the two.

Consider:

- silver sat below gold on these charts, until oil started increasing in 2005, so pulling silver up with it

- when the credit crunch hit last autumn, oil started its mega-fall, and that pulled silver way back down again (this also explains why a new zone, parallel to the main one, has appeared on GFs silver vs gold chart)

- it is VERY important to note that in the last month or so silver has started to disconnect from oil, signalling renewed core interest in PMs ...and confirming the fundamental reason for the rise in gold these last few weeks

- since oil now has very little further downside (10-20% max, in next 1 or 2 quarters) then there is little or no reason to expect silver to fall much further

- so all we need now is a growing loss of confidence in Western currencies (a no brainer, all things considered) which will push gold much higher still, taking silver up with it (at probably a faster rate, as is usually the case between these two PMs)

I have been having some fun in photoshop overlaying two of the Approximity logarithmic charts. I thought it may be interesting to see how they compared.

Very nice!

If you add in the price of oil, then everything will become clear. It will show how the credit cruch hit last August and changed the trajectories of gold and silver. And I think silver will be seen as closely tracking oil.

A prediction for October [herein updated for November]...

- DOW and FTSE may have (at best) a small relief rally (due to ramped up bank bale outs, plus many rate cuts globally). But banks are shot as a long term investment theme, and general earnings across many sectors will dissapoint. So by months end DOW and FTSE will be no higher than today, and perhaps as low as (or will have touched) 9500 and 4000 respectively. These numbers are still 10-20% above the absolute bottoms that will be reached briefly during the next 6-12 months.

...that relief rally happened, and has peaked. Watch out below! Probably heading back down most of the way to last months lows again in November.

- 50% chance of a bank holiday week

...didn't happen, and was anyway only a 50:50 option. Now probably won't happen, as the govs have made it clear they will bail out regardless.

- dramatic emergency base rate cuts happen globally (BoE may even announce 0.5% today, 1 day earlier than expected)

...happened, and still far more to come as they race to the bottom. Expect another 0.5-1.0% off UK rates in November.

- Sterling will fall further, reaching 1.65 vs USD. After this month, the dollar will tank.

...I was too optimistic! Looking for 1.40 this month, and the USD then starting to weaken

- I think we'll see oil at 75-80 this month, and over the next 6 months it may even touch 65-70 [and if so, load up!!!!!].

...too optimistic on this one also! Oil now at around 55-60, and I think we'll see 50 before this month ends [bTW: I did load up at 70, and will do so again if/when oil goes below 50]

- Western inflation fails to drop significantly this month, and UK CPI may actually exceed 5%. Longer term they're on there way up [and note: real CPI from shadowstats is already >13%]

...OK, I now accept we'll see something of a fall in inflation (only because oil has come down so much more than I expected), but it will be transient! Big inflation problems will be with us by mid/end 2009

- all the above will cause a ramp up in fear, and gold will rally further (950-1000 in USD, >550 in GBP, by months end)

...right about the fear going up, but the PPT and the deflation concerns have held gold back. There's now now (or very little) further downside in PoG, and as soon as dollar starts to turn South, oil and PMs will shoot up (next month or two). And note, gold did hit 550 in GBP, and still hovers around 500!

- The leadership on banks (amounts and strategy) shown by Alister Darling today is excellent. It will lead the way for countries out of this current pannick

...sure did. But this has now gone to Brown's head, and he thinks he can coordinate a global wave of tax cuts and fiscal stimulation. He will fail to get sufficient universal support , and problems will follow from that failure

I'll give my crystal ball 7/8 on November (...if you want your own, I'll let you have one for just £50, inc P+P), and just look what it's telling me for December...

- Having fallen to new lows, and risen again, the DOW and FTSE will remain bouyant (at least most of) December - but they are still likely to see far lower new lows over next few months

- Further emergency base rate cut in UK, down as much as 1% further (at least 0.5%)

- Sterling will not fall with respect to USD, whilst USDX will fall back to mid or low 80's

- Price of oil will creep up, just reflecting the weakenning USD. In Q1/2 2009 we will see oil at USD 40 for a brief (intraday?) period

- Western inflation falling further (cpi at 3.5 - 4%), but it will be transient! Big inflation problems will be with us by mid/end 2009

- Something big seems likely to happen in PoG: a >$100 move. Either a big smack down, or a big rise as COMEX gets stressed (but not broken) by demands for delivery. My guess is it will be the latter. Weakenning USDX will help this move.

- More examples of govs bailing out any and all 'too big to fail' companies (finance and US car makers), ensuring a long inflationary rather than a short deflationary recession

- People will start to realise that Broones ideas for a gobally coordinated wave of fiscal stimulation are not really happening (UK or anywhere), and that such an approach is anyway as effective pushing on a string. This will decrease confidence in Western economies further, and push up government bond yields. That is the start of a massive Western currency depreciation that will put 2009 into the history books.

Most people are other people. Their thoughts are someone elses opinions, their lives a mimicry, their passions a quotation.

...I'll have some of what you're smoking