romans holiday

Oh right... on the 5 year... from 07....08 to the present looks pretty disparate to me. Gold goes from $1000 to 1200 [20%] while from 500 pounds to 800 [60%]. Wouldn't you agree that shows a lot more "instability in the pound? And that given it went up so much against the pound, a decent correction similiar to last time wouldn't be unusual.

Touche! But what happens in the market action of one day doesn't really translate into longer term trends.

The gold price is a lot more volatile in pounds. This is more about the pound than gold. Gold priced in Yen and US dollar shows these currencies to be more stable... though still depreciating against gold.

Until this upward trend is broken, why would you even begin to think about selling your core position in gold? Gold has carried on upwards consistently and solidly. The odds are it will continue to do so. The commentators may disagree on the explanations of why this is so, and will continue to do so. One thing is for sure, the interminable swings between inflation and deflation discourse, and the crude equation of inflation/ good for gold, and deflation/ bad for gold, are based on outdated simplifications and antiquated thinking. Rather than basing your gold investment decisions on this noise, you should be comtemplating the long term chart.

Well, Bernanke comes out and says the economy is "unusually uncertain". Crikey, that's why we've all been buying and sitting on gold..... isn't he supposed to be trying to jawbone gold down? Going back through 1200........

The sword of Damocles is hanging over the market. Can you imagine the anxiety heavily indebted homeowners face. Better to sit in cash without the risk. My plan's to live in a 4WD camper on returning home... what I would pay in rent will pay the mobile home/ box off in a year or so.

Telling point for silver here. Will be interesting how well it holds up. Could see a good trading range here. Have to say, it's holding up better than I thought it would.

Yes, looks to me, it may consolidate and then bounce of the median line [1100] over the course of this year, and next year go onto new highs.

Just to put things in perspective.

What's up with silver? Both the 50 and 200 moving averages are flat-lining, threatening to roll over. Could be a buying op coming up. I'll be using the a gold/ silver ratio at about 80 to time my buying. Now 67.

yes, ther's a growing group of liquidationists. Even apart from the political difficulties of rolling out another round of QE, it wouldn't achieve anything anyway.... not with collateral values on bank balance sheets continuing to erode. The deflationary tide is going out faster than they could pump money in. Maybe they could try.... I don't know... helicopter drops or something.

In a year, gold has strengthened against the Euro 35%... even with this latest correction of the recent parabolic rise in the Euro price. This parabolic rise only reflected instability in the Euro, a herding out then a herding back in. This sort of volatilty is more about the fickleness of particular currencies, or should I say investors, and will continue to benefit the medium/ long gold term trend. Euro still down 7% against the dollar. To put it in perpsective, here's the performance of gold, over two years, against two of the strongest currencies, Yen and US dollar. Looks like a good solid trend to me.

Hurry up and short it then.

There is a process. Last time Paulson had to go begging cap in hand for his bazooka. What is Geithner to ask for this time? A tank? And at a time political opposition is effectively mobilized. This is why there is only talk of QE2 [jaw-boning the market], but the Fed knows they're on thin political ice. There would be one hell of a fight in Congress over it. Edit

Well, that was the assumption that hyper-inflationists were making. I'd recommend Richard Koo's "The Holy Grail of Macro-economics; Lessons from Japan's Great Recession". Koo's argument is that developed countries are facing a "balance sheet recession", very similiar to Fisher's debt deflation. This is the primary over-riding factor. Demand for debt evaporates as corporates in the case of Japan, and consumers in the case of the west, restore their balance sheets [destruction of demand for debt..... yet another plank of monetarism goes by the wayside] in this kind of recession/ depression. What happens in the demand side completely negates what goes on in the supply side [of money]. The main point of the book is to draw parallels between Japan's experience and what western countries are now going into.

Sterling price looked due a pullback. More volatile in pounds these days than in dollars. You should look at the crazy swings in Aussie and Kiwi. imo this reflects instability between currencies more than anything else.

There are things such as political realities. Here is Obama today on FinReg: "Because of this bill there will be no more tax-funded bailouts! Because of this bill the American people will no longer bail out the banks! Period!" Looks like they've painted themselves into a corner. The government will be ripped to pieces [at the polls] by a very angry populist movement if they went against this.

Well, last serious purchase to add to an already ridiculously large [percentage wise] core position. After that, I doubt my ongoing income is going to be able to buy much for much longer; my earning currency is depreciating against the dollar even while gold is appreciating against the dollar... a double whammy hyper-deflation of my currency. It actually makes more economic sense for me throw my job in [be satisfied with the money I have... I mean, you have to ask yourself when enough is enough right] and live the good life.... a more self-determined one. Part of that will be a bit of recreational fossicking [hence my stating I will not purchase anymore gold]. But I think I might end up taking it a little more seriously than the weekenders.... I feel the gold fever coming on. Interesting chart that.

If your "averaging in" with some funds for the year, you'd want to be buying gold wouldn't you? Silver is a better buy on the big dips should they come. This coming purchase, in the next couple of months, will be my last purchase of gold. Henceforth, if I want more, I'll go fossicking for it.

There seems some ambiguity towards gold here. You say you're long [is that a token long?] yet elsewhere are looking for a drop to 1000/ 1100 before presumably loading up a core position? I'm just sitting on the same core position of 50/ 50 gold and dollars. I don't think the two have to be anti-thetical.... they may just be the two best currencies which continue to strengthen in a renewal of the global liquidity/ solvency crisis. I'll spare you from my posting Exter's reverse triangle yet again. Yes, the way I see it, the reason why investors are so confusd about inflation or deflation is they remain "price-centric". This made sense as long as you had one currency operating within an economy [it's also the abstract view of an economy]. Today it's actually quite different, you not only have open economies, but "open" currencies.... currencies freely exchanging in the market. In this brave new world of floating currencies, the investor needs to retreat to a "value-centric" approach. Though this is more nebulous, it is necessary as otherwise you'd be trapped in money illusion where money units are equated with the real value of money. I think gold is performing well today because of this confusion and uncertainty towards the value and stability of money today. It provides the basis for the "value-centric" approach that savvy investors [not to mention CBS] are looking for. If this is the case, then gold may be relatively unaffected by large swings that may be seen in other markets.

Sure, politics always impinges on economics, it's a politcal economy afterall. But the politics can cut both ways and you have to ask not what's politically possible, but what is most plausible or probable... and then also keep some time hoizon in mind. There could be years of "tea party austerity" before some backlash. Then again, sanity could eventually prevail in a new Bretton Woods. Anyway, the status quo is all looking very deflationary.

It's not "cash", its capital.... recapitalization of banks. It is really just rearranging the deck chairs on a sinking/ deflating ship; capital is being destroyed faster in the banks as collateral values erode than can be replaced by Fed injections of capital. The capital is not going to be turned/ multiplied into cash in the economy as banks will continue to restore their balance sheets. With further downturns in residential and commercial property this process is only going to worsen. As Turk says, nothing like Weimar.... so you better start studying Argentina instead, and see if there are parallels. But frankly, I think your time would be better spent studying Japan.

Adam Fergusson's book on Weimar is pretty good. When Money Dies: The Nightmare of the Weimar Collapse http://www.wolf1168.us/misc/Articles%20of%...oney%20Dies.pdf

You're pulling my leg right?