romans holiday

Oh well, KWN well have to do instead. Jim Rickards is always a good listen. Don't quite get his possible hyper-inflation before deflation. You'd think if we had to have both, it would be the other way round.

Wanting to build a core position in gold, but concerned it's too expensive? Will it get cheaper? How's this for a strategy; buy silver instead once the ratio hits 75-80 [on a market sell-off at some point], swap silver to gold when the ratio recovers to 60. This way you could end up with a good discount, and 30% more gold than had you bought without using the ratio.

Uncertainty and volatility are the two most central notions informing my investment views. I'm not sure if we will see a slide to the down side here, but I have to admit I'd love to see it because I'm positioned in a large cash holding to take advantage of it..... and because I think gold would recover relatively quickly as I think it's in a long term bull market. The [provisional] theory I hold for a gold bull market has nothing to do with "money printing" and an excess of liquidity, but more to do with a lack of liquidity.

Then it is a set of dogmas... rather than rational theory, which is open to being falsified. Perhaps this the difference between gold bugs and gold bulls?

I don't think JS's views need to be focussed on too much by reasonable gold investors as there is a lot more cool-headed analysis on gold about. The risk is that investors might fall into the trap of being either "for or against" a certain position, namely JS's [dare I say, JS's position is proving to be a "straw-man"]. I think there is a common flaw here of certainty; either you are certain that gold is going to the moon [or 1650 by January as in JS case] or, you are certain it will collapse well below current levels. Two extremes, neither of which allow for a more likely middle way. I've all along thought JS's target was way too optimistic, and that gold should just steadily strengthen in the aggregate at a more modest pace. Obviously, in the gold market, corrections and consolidations are to be expected. Yet, I wouldn't be too certain that the price will decline too much in this uncertain monetary, economic and political environment. I don't think anything is obvious in the short term gold market. The bears shorting gold were sure it would decline a couple of months back, yet it kept climbing. Now it is declining, and the bears are sure it will go a lot further. One thing is sure, there is no certainty here. The odds are the bears will get it right at some point, with gold being so volatile. But then it is all a matter of degree, how right will the bears be? I mean, how low will gold go? You might be proven right here, then you might be proven wrong as gold fails to slide and instead once again flies in the face of perceived reason. If it does continue higher, at what point does the investor just buy in order to establish a decent position? The policy that has paid of best in the past few years has been one of steady accumulation and a building of a core position. In my opinion this crucial position should then be balanced/ hedged with an equally large cash position.... in case we do see another round of deleveraging. My hedge for lower gold prices will be to trade dollars against silver, which should even go lower. Once it recovers, back to dollars, or gold... or both. imo the reasonable and pragmatic approach to gold is to have a core position, and remain hedged. So if I'm so uncertain, why am I invested in gold? Because gold is being largely bought, by investors and CBs, as a hedge against uncertainty. Edit.

1202. Nothing too unusual about POG going a little lower, which was overdue. Wouldn't call it a slide. Will be interesting to see if support around 1200 holds.. If it does go lower, will look to both buy silver with dollars, and swap a little gold to silver. Then reverse those trades on gold's resurgence.

Mind-altering substances unrequired.... just a bit of levity. No point in being too...... austere.

IMF’s Gold Assets Shrank in April as Russia’s Rose http://www.businessweek.com/news/2010-06-3...sia-s-rose.html

From:

This is the dawning of the age of austerity....... cue music….or maybe not, doesn’t quite sound the same. Looks like the world's moving on from the generation of baby boomers which embraced the self-centred, care-free “Age of Aquarius”. The new new age looks to be an “Age of Austerity”… and nothing is more austere, solid and perennial than gold. http://en.wikipedia.org/wiki/Age_of_Aquarius From: Link to previous thread: http://www.greenenergyinvestors.com/index....0&start=360

Silver/ gold ratio looks like it wants to head back to 80. Will look to trade gold for silver at 80 and back again at 60. 50, or less, looks too optimistic.

http://www.bloomberg.com/news/2010-06-29/g...ic-concern.html It should be becoming obvious that higher gold prices are not dependent on continued "money printing" and stimulus. There are other more fundamental reasons/ justifications for investing in gold, such as economic uncertainty and currency instability. Is gold becoming all things to all investors? Those waiting on the sidelines, without a solid core position in gold yet, have to be more nervous than those that have already built such a position.

A few possible supports:

Gold may act as a hedge against inflation. It is a non-sequitor that it does not act as a hedge against deflation. The reason being in deflation this time round currencies are themselves under pressure. The same thing happened in the '30s. Currency [reserve] holders were worried governments would depreciate their currency against gold, so they swapped for gold. CBs/ investors are doing the same today, swapping currency for gold, but not necessarily because they think governments will devalue the currency [by inflation] but because they think the market will [by capital flight]. Gold is primarily bought on economic uncertainty. As long as investors/ CBs are uncertain, they'll be buying gold. Yen getting strong against the dollar [on the 88 handle]...everything else down.... i wonder if another market sell-off is brewing. Batten down the hatches.

The Swiss Central Bank are buying Euros to keep their currency from appreciating too much against the Euro.

So austerity it is. That means the government won't be printing right? Ergo no inflation right?. But then the economy might suffer... and the currency with it. Does that mean capital flight to the centre? Hell, who knows...too many unknowable unknowables..... I'm sticking with gold. Thus spake the uncertain investor. Gold up, 1260.

"Most people" is besides the point. Most CBs are now buying, the rationale being to diversify some of their reserves into gold. When most investors get this, they will be doing the same.

OK, so we have here all the makings of a William Golding novel. In "Lord of the Flies" the stranded school children had a choice between upholding decent civilized values or devolving into tribal barbarism. So given that apples are the only source of sustenance, and the money is worthless, you would either have a government formed which would allocate to everyone a share, or the collapse of all rules and regulation, where might became right. There is no economy on this island, and therefore no currency. The original question is in need of no solution, and thus "dissolved".

Showing real resilience here. Too much unease and uncertainty in the market for it to sell off much. I've always been hedged against a deleveraging sell off... but am seeing it less likely in this "post-Euro" era. More likely is a slow but sure climb in this new upward trend. To break the upward trend, gold would have to go below 1180 odd. So plenty of leeway.

They have a business to run, and will appeal to mainstream money. Let's face it, some of the concerns here are on the fringe. This is not to say these fringe concerns might not one day go mainstream.

I'll continue to hold some funds/ gold with BV. It's a very useful and convenient service. Don't forget the tin hat while on the internet people.

Or is this a trick question? If the island is isolated, then the apples would be "priceless"... the dollars would only be paper, and nowhere near as valuable for the sustenance of life as fresh or dried apple.... or apple juice. These things could be bartered for more valuable items like clothes etc. A gold coin would buy an apple... because it could be used for a sinker in order to catch fish..... and beaten into a reflector device to attract the attention of passing aircraft.

$500?

A new post-Euro debacle trend-line? 1350 odd by the end of the year if it held.