romans holiday

You're braver than me.

Tom O'Brien is making a good point, but I reckon he's stating the case too strongly by shorting gold. I agree with him that gold could come back down to a 3 digit dollar price BUT I reckon this is next to impossible to time... gold could easily carry up to 1300 or so before coming back down. And then the problem is how far will it come down... if investors are buying for safe haven liquidity and not an asset then probably not far. But then we still have the hot money that jumps in... maybe if we see a parabolic rise to 1350.....yet, the risk/ reward ratio just doesn't seem worth it. Now silver on the other hand....... What is the volume/ RSI/ MACD etc looking like on the dollar? Would you want to short the dollar here? From the link above. Why don't they call them SHIPS.... as in sinking ones. [Greece has already sunk]

That was a big call by T O'Brien. It didn't really make sense to me that he was saying sell gold [maybe I got that wrong, and he was only suggesting trading a litlle... but still]. The risk/ reward ratio just doesn't make it worthwhile. Or just sideways for the summer..... ... while both gold and dollar strengthen against all else.

Scary chart of the day. The Aussie dollar is once again collapsing against the US dollar. If the Aussie declines 25%, revisiting its low to 60 odd [and gold stays relatively stable against US dollar], gold priced in Aussie could very likely go ballistic to $2000 odd over the next few months. So much for summer doldrums. Same applies to those holding kiwi dollars.... only worse... gold is now nearly NZD $2000 I believe, and won't take much to see it go to 2500. Ouch. Two options... buy gold or dollars... or both.

... experiencing momentary delays.

And the scared money from Europe no doubt.

Half way to my target of $15. Might start buying with dollars at the end of the month. Jeff Christian, recently on FSN, was calling for over $20 towards the end of the year... where I'll be selling. Had a look at the silver chart in sterling and it looked terrible. No wonder many sterling buyers are just buying silver willy nilly to get out of pounds.

If markets start imploding, fiddling around the edges isn't going to achieve anything.

Prechter recognises gold as money, but I think his dollar vortex thesis rides a bit rough-shod over how gold is actually behaving here. Gold is becoming a de facto currency, and as such is considered by the market less a commodity to be caught up in a deleveraging vortex, and more a safe haven form of liquidity. imo gold is showing itself to be the achilles heel of market fundamentalism where currencies are supposed to float freely in the market. As the free market currency system becomes increasingly unstable, money will go into into gold and away from economies. This process if unchecked would obviously be fatal to economies. The only way to check the process, and stabilize both currencies and economies would be for governments to renounce market fundamentalism and go back onto a gold standard thereby formalizing and stabilizing a process which the free market itself precipitated. The fatal flaw in market fundamentalism is its inability to provide a sound and balanced monetary system.... both domestically and internationally. First we saw money piling into assets, and now we'll see money fleeing assets for liquidity. The same applies in the international arena where money will flee peripheral currencies back to the central funding ones. The role of a renewed gold standard will be to once again provide "ballast" to money where money is considered valuable and worth saving, with no necessity to speculate. Sound money should also lead to sound investment and growth, with no necessity to hoard. Any interpretation of gold purely through the prism of market fundamentalism will be limited. Edit

Well, more likely that than 50. I'm considering trading a little bit of gold for silver when the ratio hits 80/ 85 odd then back to gold at 60/ 65 odd.

A repeat of 2008 in unnecessary for silver to go lower.... it went to $15 in Febuary this year. The kind of deleveraging panic seen in 2008 would probably take silver back to $10 briefly. But to capitalize on these dips, it would be best to be in dollars [the Euro price is kind of irrelevant since the Euro has depreciated so much recently]. I value my dollars quite highly these days... and would only swap them for silver at a lower price. My core bullion holding is in gold. Sounds like you are having some success in trading silver. My strategy may be quite different to yours and hence my tactics towards silver. I only trade silver against US dollars to increase my dollar holding [confident to make the trade because I think silver will stay volatile and relatively strong]. My rather large dollar holding serves as a hedge [for lower gold prices] against an equally large gold holding.

Waiting to buy bullion? Sitting in the dollar is the way to go.

Check out the late reversal in silver that was not reflected in gold. Is this little hiccup signalling a decoupling of silver from gold where gold becomes bought solely for safety? It's an interesting stage of the game here... and no doubt the relative behaviour of gold, dollar and silver will change as events develop. I'm targeting the $15 dollar area.

i agree, good honest labour, enjoying the fruits of nature. Have you considered getting a small sluice box... you can run a lot more material through it.... and then pan off the "concentrate" at your leisure. There is also an instrument called the "blue bowl" which can do this for you. My plan is to sluice, and maybe do some dredging. All just a hobby of course. Roll on six months!

Or gold is priceless. Seriously, if stuff is valued/ priced in terms of gold... then gold is not itself priced, or is priceless. Habituated to modern currency, a Copernican revolution in thought is required. The most priceless thing is our leisure.... it's criminal how debt has made everyone so productive!

Post of the month. AAA+ for effort. What's your mode of attack? Panning, sluicing, dredging, crushing, snorkeling, detecting or crevicing?

Link to last month's thread: http://www.greenenergyinvestors.com/index....st&p=169907 I read somewhere the great Ghengis Khan hoarded all the precious gold in the kingdom in his own palace. Script was issued to the population for money which Marco polo observed worked remarkably well. Today we have had China hoarding dollars and issuing script to its citizens against it. How long before they start treating gold the way they have been treating dollars? Perhaps it will be a process, already underway, rather than a sudden tipping point.

Maybe so... but the market is not always rational. If the market deteriorates badly enough, we could see a rout taking everything down. This is where gold should be demarcated from silver... gold should hold up a lot better. The two should behave differently.... and that's without tea-leaves.

I agree that silver could be a very good buy and hold. Different strokes for different folks. Silver bugs, who have most of their bullion in silver, no doubt will weather a storm pretty well if it comes because they will focus on those fundamentals. For myself, I just see gold as safer/ less volatile. I still have some silver kilo bars back home.

Yep, I'd much rather be sitting in gold than silver when the holocaust strikes... but will still look to buy silver with my dollar holding once it does. Maybe this thread should be re-titled, "Watch out for silver". http://news.goldseek.com/CliveMaund/1275325200.php

Money is not primarily a theoretical concept. It performs a real function in people's everyday lives. Debt [created by the extension of credit/ negative money.... and in turn creating positive money in the economy] has the function of making people work in order to acquire money [postive money] so debt can be paid down. This is what is meant when I said credit affects the existing stock of money. If you consider that money primarily performs a practical function then it makes perfect sense to think of credit as anti-money... or negative money. The monetary system can in principle fold in on itself given it is entered on two sides of a balance sheet. It is this phenomenon that balances the existing stock of cash [just one side of the balance sheet] with debt. But a tipping point can be reached where newly issued credit and money fails to keep up with, or supercede, the existing rate at which credit and money is contracting, or being paid down. This is what we are seeing now. I'll repeat again; if credit is not a monetary phenomenon then what is it? Now you can keep repeating your axiomatic definitions of money... and they can remain as true in your own mind as 2 + 2 = 4, but it will not help you understand the way in which money and people actually behave in the real world.

I noticed John Exter's reverse lquidity triangle in the article. The lesson to be learnt from this triangle is that each tier becomes more valuable as you move down the triangle. Thus, it is all relative. For example, currencies may become more valuable against properties [a fall in nominal prices], reserve currencies may become more valuable against peripheral ones, and then gold in turn more valuable against reserve currencies. To put it another way, whereas assets depreciate against currencies, they will doubly depreciate against gold. In regards to the dollar it is not black and white, that it must rule everything or hyper-inflate into nothing. Unfortunately, this false dichotomy just won't be put to bed... I think the reason for this is we've been habituated to think in analytical terms and binary opposites; something must be true or false, black or white. What's lacking is an imaginative synthesis which can co-ordinate the separate parts into a coherent whole. This is what the triangle represents. The triangle supercedes the inflation/deflation debate. A debate which was usually captive to what I call "state-centric" money illusion, where participants are asking whether there will be inflation or deflation in terms of prices... as priced by a local currency. This just doesn't make sense when currencies today are traded globally on the fx market... their value being at the whim of investors. Accordingly, prices [which were central to the debate] have to be superceded by the notion of monetary value.

The problem I found with trying to trade a smaller percentage of silver around a core position in silver was that it seemed to involve being both bullish and bearish on silver at the same time... and though you can distinguish between long term and short term in your mind, it still becomes muddied with your core view on silver overshadowing your trading decisions on a part of that silver. To remedy this, I decided to only buy and hold gold, while only trading silver. That way the two approaches are completely demarcated between the metals. I also think the fundamentals might lend themselves to this as the price of gold has shown itself to be a lot "stickier" [but more fundamentally, it suits my own psychology]. This approach also allows me to be not so bullish towards silver and accordingly bullish on dollar.... as a hedge for being so bullish on gold. I'm more comfortable sitting on the sidelines in regard to silver, given that my core postion in gold picks up gains in bullion prices.

Time to consider gold your core currency? Many are wondering where to park their cash these days, and have often suggested the Aussie dollar. Yet comparing gold and the Aussie [against US dollar] gold has shown not only a lot more stability, but also a steady strengthening against the US dollar. The beauty of having gold as your core position, is you're remaining liquid while seeing that liquidity strengthen against assets. The old rules of seeking out nominal gains in whatever currency perhaps no longer apply.