romans holiday

Yes, you missed my point. Here's a suggestion; if you are going to reply to someone's post, why not first read carefully that person's post and try your best to understand what they are saying. Then if you disagree you can give reasons for it, taking the discussion further if you wanted. Seems these days most are talking past each other without understanding the terms of the discussion etc. We have the technical means to communicate like never before, and yet often we're not up to the task... it's like there's no common language and everyone's bunkering down into their own camp, or tribe. Vico [the Italian philosopher] drew attention to this failure of understanding that looks to be a typical predicament for modern minds that operate solely along lines of analysis. He suggested a quality of mind termed "fantasia", which involved a kind of imaginative travel by which mind can communicate with mind even if separated by vast expanses of time and space [through reading... no black arts required]. This kind of travelling also helps you realize how parochial and small-minded our present ideas and concerns often are. but enough waffling.

You've obviously missed my point then. Shall I spell it out. What seems to have come into disrepute today, namely, philosophy [or what some derisively call waffling] is no more than human thought. It's also been termed enlightened scepticism, which sees through all the pretensions and figments of that species of the imagination known as the intellect. The "laws of nature", that supposedly rule our world, are just such figments.... useful hypotheses, but not to be taken too seriously. It's naive in the extreme to believe these laws of our own making actually exist, when all we are doing is "projecting" them onto reality... but then I guess one has to believe in something as evidently [human] nature abhors a vacuum. edit

An abstraction. The world of markets and economies are "ruled" by the vagaries of human nature [not philosophy, ideology, or science]. Losing sight of this can lead to all sorts of deterministic errors... such as assuming prices will move mechanically one way. An internet forum should be a space for thought, not edification. Philosophy is just thought, and teaches people to doubt bad thinking and bad faith. Most people seem to want to believe today rather than exercize critical and rational thought. I think laziness may be involved here.

Gold seeing out the old year with some strength.

God help us when philosophy comes into disrepute [or patronized]. Philosophy asks of science what exactly the nature of scientific knowledge is. Does it portray reality, or is it more about power over our environment? An open-minded enquiring philosophy always reminds us how little we really know, which in turn keeps hubris at bay. Anyone interested in getting beyond a little knowledge in science soon becomes interested in the history and philosophy of science. What it boils down to is the nature of ideas, how they have a power over our [collective] imagination, and how without a philosophic understanding we forget their historic, arbitrary, and hypothetical [as if] nature, or in short, lose our sense of humor, which Sartre termed the "sin of seriousness". I think he was also referring to the dogmatic frame of mind here. A thread on ideas posted a while back: http://www.greenenergyinvestors.com/index....ic=7019&hl= John Maynard Keynes

Interesting consolidating/ holding pattern in gold here over the past few months. One week up then a couple of weeks down:

http://jsmineset.com/2010/12/29/jims-mailbox-611/ Errr.... shouldn't he have said $1450? That date is only 2 weeks away.

Some history on the SPDR Gold Trust [holds more gold than the Swiss central bank], and some mainstream price forecasts: http://www.bloomberg.com/news/2010-12-20/s...e-of-tears.html

Nice consolidating phase shown by gold towards the long term trend line. The trend would see gold going higher on a new leg up in 2011 sometime. It may spike to near 1600 or so on the next crisis before once again consolidating. Extrapolatng the present trend should see gold solidly above 1650 or so in 2012.... with $2000 being reached in 2013. Merry Christmas all.

11 minutes in... and Jim mentions money illusion, and ideas going back to the 20s! Good to see this idea making a comeback, and people thinking outside the box of monetarism, which was built on a denial of this most fundamental of ideas. Those who only see "inflation expectation" do not see that money illusion can cut both ways. Fisher talked about the first way in regard to 20s Weimar, Keynes talked about the second in regard to the wider depression that followed. To make sense of monetary instability today, the idea of money illusion [widely conceived] must be central imo. I'd add the idea of money illusion, combined with remonetization of gold, cuts through the old dry inflation/ deflation debate.... because each of those camps labour under their own distinct forms of money illusion; 1] currency-centric illusion for the deflationists, and 2] monetarist illusion for the [hyper] inflationists. A little light reading here: 1] http://www.greenenergyinvestors.com/index....st&p=176763 2] http://www.greenenergyinvestors.com/index....st&p=176193

Trend Analysis is a useful tool over and above the fundamentals. Even though there is always going to be some interpretation in looking at charts, they help you see things from another more objective perspective. As far as fundamentals go, they can be argued either way. One person focused on their fundamentals might only see silver as going up [if it doesn't, due to manipulation], another focused on a different fundamentals might see instead the likelihood of silver being volatile, with the risk of it going down [in the near term]... before its moonward trajectory at a later date. Looking at charts with their real prices and trends in the real world is crucial; besides offering some objectivity, they will eventually either corroborate or falsify one's particular fundamentals. So perhaps an obvious question is has the recent move up in silver falsified my "fundamentals" on silver? And the answer is no.... because my fundamentals [long term] was never an issue on this trade. My fundamental view on silver is very bullish though I do think it will be volatile. Selling a small amount at 17.90 was a trade. Not a great one, I'll grant that, but [i reckon] there will be other chances. When I sold this trading position, I fully recognized at the time that silver could quite possibly break upwards. What made the trade easy to make, was the idea that silver could easily retrace again: http://www.greenenergyinvestors.com/index....st&p=161244 Let's keep the conversation open. I'd add that the main trading error I made was using a linear chart at the time.

Here's palladium on the log. The log shows that it's retraced most of what it lost since '01, which perhaps puts a different light on it?....:

Nice [but don't you think silver may have peaked here?]. Here's what I'm looking for in my next silver trade. Buy around 17.90 and sell at 54. May take a six month wait and then a couple of years sitting.

Volatility has noticeably died down with gold appreciating against the reserve currency at the same pace but steadier.

Good heavens man! Get a grip!

We obviously don't share the same "logic".... or you're only using one logic, whereas I'm using several: 1] At one level, dollars are an outright hedge in case I'm completely wrong about the remonetization of gold [this is unlikely but possible] 2] At another level, dollars are not just a "hedge", but the second or third strongest form of liquidity [after gold and silver, for the next few years anyway] 3] At another trading level, it makes sense to trade a good portion of the dollar "hedge" against the volatility in silver [or whatever is most volatile] as they will move contrary to each other. By doing this the value of dollars may actually keep up with the value of the bullion. This is starting to feel like ground hog day.

It's a HEDGE. It doesn't really matter if it doesn't perform. If the ETF does blow up, the bullion position will perform extremely well. But what I think more likely is the hedge will keep up in value with, and balance, the other side of the portfolio [bullion]. All the benefits of being fully liquid, and fully in bullion.... without actually being fully in bullion. No certainties [besides the obvious] in this world and all that. I'm guessing you're not getting the desirability of a hedge because you have a 100% certainty in mind. Even so, it's only natural to be plagued by doubts, no-one has a crystal ball, and then those manipulated markets might just really remain utterly manipulated in the end..... evil blighters..... a hedge is also good for peace of mind, which has to be worth giving up a little profit for.

Still missing the point.... this trade is not about increasing bullion. The ETF's a financial instrument in order to increase dollars in order to hedge my real physical position. Are you able to see things from another's perspective/ logic? I'm not interested in buying yet more bullion. But I will scrounge around the Southern Alps for some.....

You're missing the point here P. When I say the silver/ dollar trade is to "rebalance the portfolio", this is about trading say half the dollar position against silver volatility [i'm thinking of piling in and sitting on silver for a couple of years... AGQ double leveraged ETF... once/ if it's retraced]. The idea is to increase the dollar hedge in order for it to keep pace with the appreciation in bullion. This may seem odd to you, but it fits in with my macro views. I'm happy to make such a large trade in silver because obviously I think it will perform well.... and with low risk. Actually, I consider myself completely liquid and uninvested. Exter's triangle is all about being out of investments and in the strongest forms of liquidity [and yes, I think silver is there with gold... but obviously more volatile]. When I speak of being "invested", it's more often than not just a manner of speech. On more theoretical threads, I've mentioned "disinvestment" often.... not to mention talked of gold as a currency ad infinitum [i'm sure you don't read my posts ]. I don't think 50% in gold is too extreme because I consider it the prime currency. I don't have crystal ball, but do have a theory... so I keep it real and keep it hedged. Congrats... but no doubt you also see more risk hanging over those prices there more so than in bullion.

When I first arrived at GEI, like most others I soon became enamoured with silver. As my macro views developed I decided silver was not a straight forward leverage on gold... it would be a lot more volatile [which is hardly a criticism] but might also carry a bit more risk with it in a deleveraging environment. So after the large core silver was sold most of those funds went into gold, though I did also put some into dollars. At an earlier point I also put 10% of my worth into silver kilos [hard to get out of]... this must have been in 2008 [post-crash] because I remember collecting them from the mint when I went back on holiday.... I now refer to this as my core silver [a lesser position relative to core gold]. Having a "larger" core silver position, mentioned above, is relative to the traded silver I sold at 17.90.... which was small fry in context. Bad trade, but big deal, there's a good chance I'll get another go at it. In sum, I have 50% into gold and 10% into silver.... those percentages have been rising with bullion prices, but I hope to "re-balance the portfolio [bullion/ dollars]" on a decent dollar/ silver trade in the near future. Note: I am bullish long term silver, but look to use the volatility in silver to hedge core bullion. The mix I have with gold, silver, dollar suits my own macro views. Edit: I think a lot of confusion arises from posting about the trading of silver on a thread which is mostly centred on long term hold and buy/ investment in silver.

I think that's a poor comment... makes you sound like the thought police.

Do you actually bother to read posts? Read the post again carefully... the one you replied to, and you can see the/ my logic for holding gold, dollars and silver. Also, it really is tiresome having to repeat I sold a smaller trading position in silver for dollars because of perceived risk [with the dollar hedge, dollars are not to be risked]. As far as being "wrong", it was more a bad trade, but not wrong within the context of my investment strategy. I can afford to make the odd bad trade, given my core in bullion. When/ if silver retraces, I will look at trading silver again.... for dollars. Do I have to keep repeating that I have a larger silver bullion position that has been core for a long time? I don't mind risking silver continuing skywards because I have a large enough core in bullion. I'm content both ways because even if volatile silver retraces, I don't doubt it will continue upwards at a later date. A hedge is a hedge, and pretty basic to the concept of investment. One hedges against their major position in case one is wrong! Re-read the post above to my reasons for hedging. You may not agree with the logic, but it's logical and coherent. As far as trading the ratio, yes I can do that with bullion at GM.