romans holiday

IMO currencies not to hold at all are:

 

US$, GBP, Euro, NZ$, AUS$ (I may have missed some) - basically those in debt !

 

Currencies to hold:

 

gold, silver, Yen, Swiss Francs (I may have missed some) - either real money or not in debt

 

 

I think it's tricky to know which out of the GBP and US$ will fall most

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.

This from John Nadler neatly sums up the (currently small) 'sell/set a stop-loss' angel on my left shoulder.

 

"Perma-bulls continue to live in denial about the dollar and about the commodities sector. Every drop is a buying opportunity, every rise the start of a new era. But what if - this time - the turn is actually the real thing?

 

Speculative funds poured hundreds of billions into commodities over the past couple of years. Sensing that they had pushed the envelope well past the breaking point, the hedgies are leaving the complex as they perceive that the Fed is not joking about inflation combat, and that regulators are also not joking about oversight of what had become a giant casino - one where "the house" never won. In casino terms, "the die is cast." Rien ne va plus"

 

Most on this site have explained well the 'don't panic' angel on my right shoulder....

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.

I am trying to find out if there is a price level of gold which could create a sentiment of uncomfort, malaise, disbelief and panick among gold holders.

If you could answer some of my questions, this would really be helpful as you are a gold holder.

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.

This is a perfect re-run of the 70's but on a gobal scale in a globalised economic system, with everything enlarged in size and intensity. The charts tell us clearly what happened to stocks, commodities, house prices and gold during that decade ...and I think we should learn from history

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.

I think a dangerous misunderstanding is developing... about whether we're experiencing inflation or deflation.

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.

I've seen various indications of this kind of buying this last week, showing that many people are diving in at this discount prices.

 

However, I can't rationalise that with the fact that the price has fallen steadily - at a faster rate than the dollar has been strengthening.

 

Anyone got any explanation for this contradiction? ..is there some major CB selling also taking place?

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.

Hi Romans - I agree that many of us spend loads of (too much??) time reading, analysing, and debating - in order to make the most rational investments we can

 

...but little friendly digs from the likes of 'wrongmove' are no bad thing in reminding us to keep emotions out of it?

 

(S)He probably also sees the wisdom in owning gold

 

I suspect the market volatility may be getting to us all at the moment, and so now is precisely the time we must remain objective and focussed on the bigger reality!

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.

This is not a comment on gold BTW.

 

 

You can be in love with a beautiful, witty, intelligent girl, or in love with a moaning, manipulative minger.

 

Either way, you will exagerate their good points and be blind to their bad points.

 

It's the love I am talking about, not the girl.

 

But it is why business and emotion don't mix well, in the opinion of many, including me.

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?

Let's face it. Gold up is good, gold down is good, gold sideways is good. True love indeed.

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

Wow, very interesting.

 

 

So is this one:

 

Warren Pollock

The Freezing *AUDIO*

 

Mr. Pollock explains that we are seeing a classic liquidity trap, freezing up the world markets. It's Deflationary and it's a disaster.

http://www.howestreet.com/audio/warrenpollock07082008.mp3

 

From: http://www.howestreet.com/audiovideo/index...mediaplayer/922

 

Whether or not you agree, it's an interesting listen, and includes "got gold?"

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.

 

Pardon my ignorance, but what do the colours represent - I assume time?

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

Is that the Vincent Van Gogh version?

I believe in the bogey man up to a point, and don't dismiss all of GATA's arguments. But I think the interventions are more likely to be occasional and focussed and that any cartel with any sense would avoiding trying to hold gold at 50% of its natural market value for a period of decades. The alternative theory, that the gold price is completely manipulated and has been throughout the last two and half decades, I find implausible. Markets are pretty hard to buck indefinitely.

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

I would add that I think the run up in the gold price we have seen is down to it 'commoditiness'. i.e. its perception as an inflation hedge, a protector of wealth - but no different to other commodities at this stage. However, I do believe this is a necessary first stage if it is to be followed by a repudiation (or partial repudiation) of the $ - indeed this will be a process where it will be difficult to discern when it is one thing or another - and will only become clear when it has happened i.e. people finally don't want to accept your dollars any more.

 

EDIT: but it also assumes that people will choose gold instead of other forms of exchange - such as the Euro say. Such a decision may be based on confidence, ease of use, availability etc.

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.

I think the only time it makes sense to compare the price level of gold with its previous peak is when similar circumstances occur. i.e. when there is a repudiation or even a partial repudiation of the $ and gold assumes its money role. Until enough people look at it that way, the price will simply be largely based on its gold use or commodity role.

 

Of course, if you think the $ is on its last legs as successive waves of default occur in the US housing market requiring wholesale bailout of the banking, mortgage, investment, insurance and housing industries (at the same time as dealing with a general recession) - then gold could be a good substitute for $.

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.

And why is all this news, here of all places? Ten minutes with Google.....

Haven't you heard of peak gold?

I can be patronizing also.

I've read this in a number of places.

Interestingly, they all also argued that gold doesn't, historically, perform very well at times of inflation. Which would seem contrary to the most commonly held view that I see on gold forums.

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.

They probably don't, but I am just trying to have discipline.

 

I try to only buy at a pre determined price. That stops me getting too carried away with the trigger when the rockets come out

 

Not sure if it really works

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.

Very wise words indeed. Jim has also been advocating margin free for some time.

 

I leave the trading to others.

 

Although I do fall into the trap of trying to time the market for physicall purchases

 

I have had a price goal of £450 on Krugs / eagles for some time and have been waiting on the sidelines for months hoping to hit that price. I wonder if I will be learning another lesson soon

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.

I'm with Bob and Justin - I got a bunch of gold earlier on but loaded up again in March at 980 which took my average in to about where it is now. I am wearing +50% losses on more than 50k of Juniors - my silver is above water but that's about it.

I'm getting my confidence shaken a bit atm - more so than the big drop in March - today was a total bloodbath for the Aussie juniors with -10% and more across the board! Double baggers required everywhere just to break even for me - I need a virtual group hug and some reassurance please!

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.

I'm glad most of you seem to be enjoying this dip in G & S. No, really! Personally I prefer not to lose money in something I've already invested in so that I can buy at a lower price. But hey, at least some of you are happy, even if I'm pretty miserable!

 

 

Somehow this seems quite apt right now:

http://uk.youtube.com/watch?v=5n6chxpEINs

 

Roll on September!

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.

US Dollar-bull Liz CapoMcCormick and Momtchil Pojarliev do not think so, clearly...

http://www.bloomberg.com/apps/news?pid=206...&refer=home

 

[Canadian Dollar] It's one of five of the 16 most-widely traded currencies to drop against the U.S. greenback, joining the New Zealand dollar, South Korean won, South African rand and British pound.

 

My currency is still not at BV. hmph.

Haven't these guys heard of relativity?

All fiat currencies could be weakening.... the one that may be weakening the least at any one moment will appear to other fiat currencies as strengthening.