romans holiday

Is that code for too much coffee?

Did that a couple of years ago, and put near 60% of my worth into bullion. No more buying gold for me. But it certainly would make sense for dollar holders to buy gold even at these current seemingly lofty prices... that is, if they didn't own any, or much. Dollars are good for a hedge, ie in case you're completely wrong about everything [always possible], or then to trade against the volatility in something like silver in order to keep the hedge balanced against bullion... I'll get it right one day...

Both dollar and gold up. This may continue to confound the "uncorrelationists" in both camps.

You could say that. The free market system is monetizing it... governments may be forced to standardize it in the end. If money increasingly poured into gold, economies would be starved of capital. Here's Hume's theory on the "price-specie-flow mechanism": http://en.wikipedia.org/wiki/Price_specie_flow_mechanism

Dollar rallying, gold coming off a little. Will be interesting to see if the previous pattern holds. On the previous dollar rally, gold first came off a little then turned back up to strengthen along with the dollar. I'm sticking to 1300 support for now.

Kind of seems pointless to trade this. The chart shows the dollar steadily depreciating against gold. Why would you "take profits" by selling a strengthening currency for a weakening one. It makes more sense to trade silver [if you're looking for a serious correction]. Buy and hold gold, trade silver against [or for] dollars.

How could gold become a bubble today? Bubbles are found in assets.... gold is now a currency. edited

I don't think interest rates will be moving up much [if at all] in the US anytime soon.... could well stay low for quite some time similiar to Japan.

Soros Gold Bubble Expanding as ETFs Hold Nine Years of U.S. Mine Supplies http://www.bloomberg.com/news/2010-11-22/s...u-s-output.html Gold an expanding bubble? Soros is a complex character and you never know what the intention of his pronouncements exactly are. And surely they have some intention - to shape perceptions as his writings would suggest. Or should we take him at face value? Or does he think privately one thing and say publicly another? Surely, Soros understands gold as the international currency.....? I'm inclined to be generous towards Soros here and take him at face value [what interest would an old man have in being duplicitous?]... maybe he really does think gold will develop into a bubble.... but then he wouldn't be the intellectual I think he is..... For the record, I don't think gold can become a bubble. Only assets are susceptible to bubbles, and gold is now a currency.

Always room for various interpretations of charts. Personally, I prefer to iron out the extremes, such as the spikes and the massive deleveraging dip, and find the long term average rate of appreciation. Looking at the Aussie dollar price of gold is interesting in regards to volatility. The gold price has been massively volatile in Aussie, but has settled down a bit. Looks due for another spike up... perhaps on the renewal of the "risk off" trade.

Well, I wouldn't say I'm wedded to the idea. It's just a theory after all [capable of being falsified], but seems to me a pretty good one.... the past few years have corroborated it very well. Instability can work both ways [the underlying reason gold is rising imo]: on the risk trade, capital flies in to emerging currencies strengthening them; on the risk off trade, capital flies back into advanced/ central currencies strengthening them in turn [mainly Yen and US dollar].... all the while gold continues to steadily rise in the aggregate with the squeeze on liquid capital. It's this instability rather than a currency collapse that I think is more central..... but then you could say all fiat currencies are "collapsing"/ imploding at around 20%-30% against gold [could this be considering an unconventional hyper-inflation?.... I've called it hyper-deflation]. If this process was left unarrested, at some point things may well go critical... with a hyper-inflationary explosion of certain currencies at the end. But then I think the re-institution of a gold standard will re-stabilze the system. Governments may have no choice. The monetary value of assets looks likely to continue declining against currencies, while effectively collapsing against gold.

Don't see much drama in gold these days. It was due a correction to the trend line....a 20% appreciation against the dollar. Ho hum....

http://www.greenenergyinvestors.com/index....st&p=147745 ......... gold is potentially of a "higher order" than the other currencies, it might make sense to make it your core currency. What I am getting at here is the free floating, increasingly unstable, system of currencies we currently have looks like it might have to be "anchored" in the near future to gold. Some of the problems it would solve: 1] Governments can target the price of gold by effectively capping the price by pegging to gold [Volker targeted gold by other means]. 2] Government can avoid the radical Volkerian solution of sky-high interest rates which would kill the economy. 3] Governments can devalue the dollar against Asian currencies by pegging the currencies at the appropriate levels. 4] Creditor countries would then have the greater part of their reserves guaranteed without the risk of sovereign default. 5] International trade can be restored and rebalanced due to currency revaluations. 6] A fiscal restraint of sorts on governments, and a show of good faith that liabilites will be met , and a rebuilding of trust between government now that government is on the monetary discipline of gold. 7] Securing the value of both debts and savings for whole populations. 8] A renewed international gold standard will alllow capital to remain freely flowing between countries and dampen protectionist policies. 9] The avoidance of war. There are just too many pragmatic solutions to be found in gold today to not seriously consider this outcome as the endgame.

At his speech in Frankfurt, Bernanke mentions the practical stabilizing role gold played in balancing currencies in the past! I don't think this was an accident. .... and China raises by 50 basis points.

Maybe not straight up.

If the short term paper price of gold is irrelevant, why do people get so excited about both immediate rises and falls in the price? First we get the rocket pictures as it breaks to the upside, and then opposite emotions on the downside. If the longer term price of gold was the most relevant, then I reckon the emotional rollercoaster would be smoothed out as the pace/ rate of gold's appreciation was focused on. A further focus could be on why the pace is what it is. So far this has shown to be consistently 20% odd a year [it was due a correction]. Given this rate, paper cash [or what most accept as money] is obviously depreciatng against gold, yet at a pace which is showing it to be a lot more resilient to depreciation than many had expected. I doubt this resilience is due to any "fundamental" properties that the dollar may possess... or lack, but is due instead to the way in which money works and functions practically for the mass of people.

Continued correction to around 1300 looks likely imo. The trend line is near bang on 20% yearly appreciation against the dollar.

Crikey, can't you see that comment about a suspension is tongue in cheek.... with no intention of a suspension. I don't think the issue of log chart for long term is pointless, but crucial [it shows the correct pace of strengthening].... and quite besides the point whether Pixel8r is due credit. Anyway, in regards to saying gold was going to 1400, I've given P credit... but then when was it ever in doubt that gold was going to 1400 at a later date? What was being debated a year ago was the short term. I'd say Pixel8r got it half right. Just my honest opinion.... I've always sought to debate the ideas not the person... though we all get heated at times. Pixel first asks me if his comment gets him another "ban". I then jokingly ask goldfinger [who suspended Pixel last time] what he thinks. Things are being taken too seriously here. edit

Look Pixel8r, if you read my post again, you will see that I'm agreeing with you... that it makes no difference to a short term chart whether it is in log or linear. "Why?" refers to your comment that we should be careful because it's linear..... What do you think goldfinger? Worthy of another suspension?

Why? There's practically no difference between log and linear on short term graphs. I think we both agree it's the long term that's more important? Looking at the long term trend, there's a good chance this short term trend line will be broken.... if not now, soon.

Yeah, it's an interesting chart that one. But the only fiat currency I've ever taken seriously, as a benchmark of sorts for gold, is the dollar.... being the reserve currency. I think it's fair to say that most consider the USD gold price as central to the macro picture. I've always considered the pound a marginal currency compared to the dollar. There's a much greater chance that the UK could face hyper-inflation than the US. There's a lot more volatility of the gold price in non-dollar currencies [Yen is a notable exception]... and also a greater pace of decline. The Aussie and Kiwi charts for example are horrendous. edit: For my core holding, I prefer gold to silver, and then silver to dollars. The dollars are a hedge. I'm more interested in managing risk, volatility and the long term as opposed to maximizing profits in what could turn out to be only paper gains in the present. Also, I think the dollar will retain quite a bit of purchasing power against more peripheral currencies such as my native currency the Kiwi... and certainly the pound. Exter's reverse liquidity triangle doesn't pit gold and the dollar against each-other as hyper-inflation theory does... though it does predict gold will strengthen more.

Exactly. The trend is your friend. Hypothetically speaking, if gold was to correct/ consolidate 50 or $100 at these heights this is really not such a big deal as when gold corrected that much a few years back. The way I look at it is "what is the difference in the actual amount of gold I can buy". When gold was say $700 and corrected to $600 one could then buy another 15% worth of gold on the correction. Now with gold at $1400, a correction of $100 would only enable you to buy an extra 7% odd... a correction of $50 an extra 3.5%. Thus with the volatility decreasing, in real terms, there has to be a point at which you'd have to wonder why you'd wait for such a small [and only possible] gain. The way I see it is the main factor determining whether one should buy or not doesn't depend so much on the present price as on more subjective factors such as, how much liquid wealth do I have, what percentage if any do I have in gold, what is my tolerance for risk, what is my understanding of gold, money, and money illusion etc.

Communication sure is a problem.... not to mention the limitations of communicating on a forum. There is always going to be discussion on the short, medium, and long term of gold for all sorts of reasons..... for those up to the gills in the stuff, and those yet to buy. Recognizing the nature of the discussions and keeping them in context helps communication. Flattening it into two-dimensional polar opposites kills it.