romans holiday

Explain why you sold Britain's gold, Gordon Brown told http://www.telegraph.co.uk/finance/persona...Brown-told.html

I just take markets as I find them. I've never believed they were perfectly efficient, or could ever be completely free, but likely corrupted in all manner of ways..... whether by human folly or dastardly agencies such as the cartel. These flaws are part of the market, and knowledge of which can also be used to your advantage. Markets will always be about what is and not what ought to be... and should be traded/ invested in on that basis. I guess that means I'm not a "market fundamentalist".... though reform is always welcome. Consider the trade-off here; the more reform and regulation there is, the less "free" [from government] the market becomes.

You're on the right track. But even if I had the cash to buy a farm, I'd hold back as I think farm prices will come down. Better to sit in gold [as a means to the end] and watch asset prices deflate. My brother in law has a small farm, and tells me many of the farmers he knows are struggling with massive debt [from buying/ expanding with mortgages at the peak]. If the Chinese markets crash again....

Gold declines a little and things are starting to sound bearish here. I'm sticking to a revisiting of 3 digit prices... though am also sticking to 900 as a solid floor for gold. Reason being, gold was at 900 when QE was first rolled out. Gold is now one of the better currencies out there. The question to me is whether it will behave here more like a commodity or reserve currency. If a commodity currency then it could go lower in tandem with the Aussie, CAD or silver. If more like a reserve currency it should stay relatively firm against the dollar.

I'd only recommend this to those already with a decent position. Though I have a fair chunk of my worth in dollars besides gold, I'll also be "averaging in" some of that over this year [just bought a few ounces a couple of days ago]. I'd hate to become overly dogmatic about my own views. I'm also looking to hedge shortly for a possible Prechterite collapse [in the market] by buying the dollar denominated VXX.

I don't think there would be such a rupture with the past such as that. Governments will be looking to salvage what they can. imo there would be more of an "organic transition" from the present to the "new monetary regime". And then it wouldn't necessarily be absolutely new but a stabilization of the present one. I posted a bit on this here: http://www.greenenergyinvestors.com/index....st&p=149175

I changed the word to standardized. I think the governments will have no choice and it will be a perfectly natural thing for them to do. They aren't simply going to sit back and watch economies blow up. The old western "market fundamentalist" ideology has had its day, and we'll see a more proactive government from here. I'm a pragmatist and don't see a problem with it per se. Neither does most of the rest of the world. I doubt there will be much ado about "hoarders". Gold and dollars would be interchangeable once currencies are standardized.

But consider, for the sake of argument, that deflation does get the upper hand and plays out. A lot of fictional money will be wiped out. Modern fiat day currencies are highly leveraged, and a collapse in asset prices will mean that existing money... not the anti-money of credit... will become more valuable/ valued against assets. Exeter's inverse liquidity pyramid encapsulates this phenomena well. Capital moves from assets to cash... cash becomes more valued/ valuable. Cash also moves to gold... gold becomes more valuable. Against cash, assets deflate,...against gold, they doubly deflate.

You could say gold would have to be stabilized... as institutional money is swallowed up by it... but then you could also say that currencies themselves would have to be stabilized at this point. By standardizing the price of gold, international monetary authorities would also be stabilzing/ fixing the currency. It depends on which way you look at it. Existing currencies would be stabilized as they once again revert to their original function as a representation of gold. This would also entail the end of a free-floating market system for currencies. When you think of gold as a competing currency, the fact that it is well above $1000 here compared to where it was just a few years ago has to be alarming for central banks. Keeping in mind it is a currency here, this reflects the equal and opposite deterioration of existing currencies. Small wonder CBs are buying. Asset prices are doubly deflating against gold, as the well-know charts of the ratios [posted often by gf] show. My guess is gold will go to 1500 and then 2000 over the course of the next few years. These kinds of moves would no doubt co-incide with havoc in currency markets, and further deterioration of asset prices relative to gold. Though we are accustomed to thinking of inflationary nominal figures, this lower figure, within the context of crashing asset prices, is very much as real in terms of purchasing power.

http://www.bloomberg.com/apps/news?pid=206...id=ag2cRG2_O1Jk http://www.gata.org/node/8385 http://commoditytradealert.com/blog/?p=4092

Well, with CBs net buyers of gold, it should make gold more expensive in the market... more demand from the big boys and less available for investors. I think investors should copy what the CBs are doing. imo the CBs are buying gold in order to recapitalize economies/ currencies in the future. The problem with CBs having supported the weight of private and corporate debt that should deflate, is they have transferred systemic risk to currencies themselves. I think the manouvre towards gold reflects this super systemic risk. Gold is being remonetized.

Have to say I'm on the China bears side, such as Rickards and Chanos, on this one. The whole issue of decoupling is an interesting one. I think we'll eventually see decoupling, but in the short/ medium term China's fate looks tied to the project of globalism. What we are seeing now is an asset inflation/ bubble... yet it might take a while for it to pop. Still, the future of gold looks tied to depreciating currencies, and the demise of "market fundamentalism" where it was assumed currencies could themselves trade freely on the market. China is now showing this model to be defunct. The future with gold is one of remonetization imo, not one where it is just another investment vehicle. A completely revamped monetary system may be required to see economies emerge from K winter to spring. South Korean CB today stated they are starting to buy gold. Previously, they had dissed it.

Interesting post and time-line of events. But I wonder if we will ever see gold go manic. Deflation is a destroyer of middle class worlds and mediocre debt-ridden economies. The retail investor who invested in real estate and stocks might be wiped out by the time we are deep into K winter terror-tory. How can we have an investment mania in the depths of a depression where a lot of wealth has been wiped out and money is scarce? Wouldn't this make a seventies style mania in gold problematic? But then neither would gold get in a bubble, which seems to be a future concern for many buying gold. This leaves institutional money. Once it moves into gold to avoid possible currency depreciation and instability, the CBs would realise the game is up and look to re-boot a new monetary system in which gold would have to play a part. Even if gold only doubled nominally from here, it still would be an excellent "investment" if assets had more than halved in prices. In real terms, the gain is more than four-fold.

I bought my core holding in gold nearly 2 years ago with NZ dollars. The price then was around $1100, it is now near $1600 [and spiked to $2000 briefly to which I think it will soon return]. There would be no point of waiting for lower gold prices if you were sitting in NZ dollars [or Aussie dollars] imo. If one didn't own gold, then the current price is as good a place as any to start I guess. If one had a decent holding, and wanted to hedge for lower prices, then US dollars [perhaps also Yen] would be the currencies to wait in. I'll be averaging in some dollar funds over the course of this year... while keeping some back in reserve should we see a temporary sell-off which could co-incide with a sell-off in all markets. Whether you buy here or not depends more on your own personal circumstances [how much, percentage-wise, do you actually own] than on some technical or objective view on the price of gold imo.

You could say gold is in a bull market. You could also say gold is a strengthening currency. I wouldn't short gold because it is so unpredictable. And I wouldn't be concerned if it dipped to 3 digits again as would just consider it a consolidation before going on to new heights. When you consider gold a measure of value [a currency] rather than a reservoir of value [a commodity, or asset] then dips in prices are no more than fluctuations that are seen in all currencies. Maybe what we should do is price the dollar in terms of gold and watch the dollar fluctuate. As gold becomes increasingly monetized, I imagine that is what we will do, and the price of gold will increasingly be seen as the price of the dollar. This conceptual revolution should culminate in a new gold standard due to currencies becoming increasingly unstable. The fix will be pegging currencies to gold at the appropriate levels.

Which one of these looks like the other...

Early 2008 Early 2010 Could be some good buying ops coming up. Will be interesting to see if we get the spike up first.

Maybe something to do with high market volume on quadruple witching. Could see some buying of dollar denominated assets pushing the dollar up a little. Investors in Euroland must be a little nervous at the mo.

Dollar is showing a bit of strength today [nearing 81] with silver and gold down a little [just funded GM so am hoping for gold to decline a bit here]. I'm just sticking with gold as a buy and hold due to my deflationary outlook. I think gold will hold up a lot better if we do see markets sell off at some point. If my Prechterite hedge for lower prices pays off, I'd be keen to buy some miners as they should do well in the end... though, like silver, a bit speculative in this environment.

. I think Faber over-estimates the power of governments to devalue currencies in a deflation. This causes him to under-estimate currencies and advise people to buy stocks, oil, commodities etc when they should be doing the opposite. Highly doubt US treasuries will be at 20% anytime soon. Agree with him on gold though... investors should be divesting themselves of assets and buying gold, dollars.... and shock horror maybe a few treasuries. Developed economies are in a liquidity trap, and capital will seek to survive by exiting to the most liquid forms; gold, dollars and treasuries. For now, many investors [besides commentators] are fooled by Bernanke's bogeyman of helicopter money. That, and having been habituated to chase a return on money.

Behaving different as in more in tandem with commodity currencies and still within the dollar orbit. Gold imo has pretty much decoupled from this and is starting to behave more like a reserve currency. I'm not so much holding out for a Prechterite collapse as hedging for it. Though I half suspect 3 digit prices sometime this year, I'll start to average in a little each month.... but into gold not silver, which I'd sell at 18/ 18.50. If I get it wrong on silver, I'll still have my gold. I just think silver is more speculative than gold.

I definitely feel that way with gold [though also keeping a reserve]. I'm thinking silver is behaving differently for now and in the short/ medium term we may see this repeating pattern against the dollar.

So many doomsters on this thread. I'm just looking for a good old-fashioned depression... not the end of the world.

Interesting you mention that. Perhaps so. I was just comparing silver to another commodity currency; the Kiwi dollar: Looking at charts like this, I reckon it makes sense to think of silver as a [super] commodity currency. Both the Kiwi and silver have moved up 50%. It's all about capital flows between currencies.

Silver 17.57 Anyone trading silver? I'm looking to sell around 18/ 18.50. Nearing overbought on RSI: