romans holiday

Well, I am not planning to rush out and buy kiwi dollars tomorrow [like I do when I buy gold] ... in a month or so will buy some. I see some are calling for the kiwi to drop to around .65. Feel I should have at least a few of them.... being a good patriotic kiwi

Kiwi dollars are getting much cheaper these days. I am considering buying some [shock, gasp... horror, I hear]as I am 100% in metals these days. I am not too worried about inflationary erosion as I want to spend these dollars one day on assets which are now deflating in price. Also, deflation is always lurking in the wings. By the way, our friend Ambrose Evans-Pritchard is a deflationist. Edit to add: Certainly will not be buying dollars with my metal but with Korean won that I am earning.

I really do think the best policy towards baiters is to just ignore them, rather than encourage their drivel by responding.

In my opinion the gold bull market has barely began. Wall Street Pschology [WSP] still has gold connected to commodities. We are still waiting for the institutional money to come into gold as the monetary function of gold is increasingly rediscovered. This no doubt would entail some monetary crisis of some kind to unfold, and those looking at the fundamentals argue that the scene is well set for this. Yet this would still be only the second phase of the secular bull market. The final phase is wehen Joe Public gets on board and is known as the manic phase. That is the time to sell and that could be a few years away.

It is well known by most gold holders that a gold bull market is extremely volatile. It is long term play.... the only certainty short term is volatility. As I posted earlier in this thread, just before the drop yesterday, I expected the possiblity of further drops. The 70's bull market is a useful model for comparison. During the seventies’ bull market gold lost about half of its value in a period of two years, just before embarking on an unprecedented run that took the price to $850/oz. http://news.goldseek.com/GoldSeek/1218389880.php I do not pay much attention to the dollar price of gold.

Yes, there are some similarities. Read an interesting article here which made the point that it may take a couple of years for this gold bull to play out. Also, I suspect we may possibly see a repeat of the pattern after gold peaked in August '06... it took a year of consolidation before climbing upwards again. Just as well we are in for the long run right. Of course, there could be any number of swans which would sweep aside any predictions we might make. http://news.goldseek.com/GoldSeek/1218389880.php Unfortunately, this outcome is now quite likely, meaning that the duration of the correction could be extended by an unknown length of time, from a couple of months to as long as a year. One outcome that we feel we have to mention is the worst case scenario. The current commodity correction could extend for a few more months, easily pulling gold to below $800. If gold stabilizes in the $700s, lower $800s would become new resistance levels, causing precious metals to stall for a longer period of time. Although this will in no way cancel the secular gold bull market, it will, however, likely lead to a cyclical bear market. The chart below shows that gold can fall to the lower $600s and still keep the long-run gold bull alive. During the seventies’ bull market gold lost about half of its value in a period of two years, just before embarking on an unprecedented run that took the price to $850/oz.

Yes, I agree. This inflation/deflation debate rests on a false dichotomy; where two concepts are considered mutually exclusive. Rather, we can have both at the same time. What is required first is another look at how we define the money supply. We tend to focus on only the money supply [M3] which is undoubtedly being inflated. Many economists argue that questions of inflation/deflation deal not only with the money supply [M3] but also credit. They use a wider definition of inflation/deflation; increasing/decreasing M3 + credit [debt money]. [i will try to find an article for this] I do not think it has to be an either/or proposition; that either we have inflation or we have deflation. Obviously we have both and the larger definition of the money "supply" accommodates both. What does this mean for gold? I envisage monetary inflation to debase the dollar while deflation [credit "crunch"/the withdrawal of debt money] will make money more scarce. This scarcity will not increase the purchasing power of the dollar as other stronger currencies will compete for goods on a global stage. In this scenario, Gold is doubly good. http://agonist.org/tjfxh/20080422/deflatio...e_mish_shedlock I happen to believe in Austrian economics and the definition I use when I speak of inflation is a net increase in money supply and credit. Deflation is the opposite, a net decrease in money supply and credit Also, I think some kind of time line is useful to keep in mind. Maybe we will have an extended period of inflation as the Fed attempts to reflate. Once this attempt fails we could then have deflation proper.

Heard an interesting comment on Howestreet today. Something to the effect that many are going "long on the dollar"; with the hot money coming out of commodities [and gold... yes, yes I know... it is also money] and sitting in cash. Maybe these players are more concerned with deflation than inflation. http://howestreet.com/audiovideo/index.php...mediaplayer/920 Interesting insight into Wall street psychology I thought.

Most decent people consider the love of money to be the root of all evil. Frankly, to be told you love money is offensive. As for emotion; when I say "whether the gold goes up or down is irrelevant", I do so for rational not emotional reasons. Namely, for perfectly coherent reasons, I see the dollar in serious trouble.

I find your comment rather condescending. I, like many others on this site, have studied long and hard before putting my money where my mouth is. I have a view of the economy which I believe is coherent and have taken a position reflecting this. Of course, there is always a chance I may be wrong, there are no certainties in life, but I would rather use my own intelligence and be proactive rather than sit like some dumb deer in the headlights. You should keep in mind, that many here have invested a lot of time and thought and funds into metals. On this thread, people are not seeking to debate with each other whether gold may or may not be a good postion to be invested in, but are rather looking to gain further insight and offer encouragement to a position already taken. If you want to debate the virtues of gold, then, once again, why don't you open another thread on this topic?

Reason being the dollar will be an irrelevancy. True faith.

Yes, I agree with what he is saying. Whatever the flationary flavour, gold is good. Bugs me to no end that quaint little phrase "credit crunch".... when you consider it is likely to morph into an economic earthquake [ice-storm ] Edit: But I think the dollar will also be worth a shadow of its former self.

I look at gold as a barometer. The volatility of it's price reflects the instablity of the money markets. Whether it goes up or down.... and whatever the momentary dollar price is... is irrelevant in the greater scheme of things...... unless you are looking to swap paper for metal in the near future of course. Wow... apparently four Russian planes have been shot down.

You're asking the wrong person. I am not a chartist... just an artist.

Is that the Vincent Van Gogh version?

Voltaire comes to mind; If the cartel did not exist, it would be necessary to invent it/them.

In complete agreement. Your description reminds me of an article I read a while back [wish I could find it] outlining the three [upward] phases of a bull market. First we have the smart money enter, then the institutional money follows [we may be just about to enter this phase], with lastly the public entering [the dumb money ] at the manic phase. As for the Euro, I imagine it will become less attractive as the European economies falter. But as you suggest, the timeline for all of this could possibly be a good few years. Though that said, some black swan could surprise us all any morning.

Yes, which brings to mind what they say about gold being the anti-dollar. People have to doubt fiat first before they can believe in gold. This psychology will be central to the gold bull in my mind.

Haven't you heard of peak gold? I can be patronizing also.

That would be inflation of the "garden variety" then?

Agreed. Too much is being made out of this inflation/deflation debate [another false dichotomy which has been covered in previous posts]. It is simplistic to ask which flation we will get and then conclude inflation/good for gold or deflation/bad for gold. In reality, we have both of them playing out in different spheres. The essential point, as Steve mentions, is whether we have a crisis. In a crisis, gold is good no matter the flationary flavour.

I gave up trying to predict short term prices with all the volitality. I know investors are supposed to be cold and rational towards their investments. But I consider gold an alternative currency rather than an investment. Also, I am not completely rational. Decided to take the "dollar cost averaging" approach. Which is just another way of saying I can not restrain myself on payday.

What does a few [debased] dollars/pounds matter if your eyes are on the later prize? Just my opinion.... I buy each payday quicker than I can check the spot price.

Wanna sell me a few of your juniors? Seriously, I am hoping to put a smaller percentage of my powder into juniors as a bit of a speculative punt [which could pay out very handsomely]. By the way, I do not often speculate, but invest very conservatively.

Chin up! Remember, you only lose money when you sell. At the moment we are looking at paper prices which are irrelevant in the larger scheme of things. We always knew the bull market was going to be very volatile. Seems to be panning out well to me. Have my eyes on Autumn now. Glad I am not trading gold. If I were to trade, it would be in anything but precious metals.