romans holiday

Ah, but you are talking about the dogma of progress here. What came before has to be inferior, even absurd, to what we have now. So we have the common misconception that all thought the earth was flat before modern times. Yet most knew the earth was round before Copernicus and Galileo... it had been around for ages since ancient Greek times. What was new was the idea of heliocentrism, that the earth revolves around the sun... though, if I remember correctly, Aristarchus suggested the hypothesis 2000 years before. Then theory would have become dogma. And people would mistake the figments of their scientific imagination for reality. I think you are onto something here... ours is a profoundly ideological age. Satre called it the [intellectual] sin of seriousness.

The dominant theories today of inflation and deflation are "incommensurable". Equally intelligent people [unless you belong to the other camp] believe in theories which seem to be irreconcilable. In the history of science, this "school dynamic" has usually been resolved by the emergence of a new school and a new theory that can incorporate/ synthesize the insights of the previously exclusive theories into a unified whole [this is not a simple or straight forward rational process as people are often attached to their theories]. A good theory should have both explanatory and predictive power. Kuhn thought good theory should satisfy the following. It suggests that good theory should be outward looking, dynamic, evolving, practical and taken to be only provisionally true...the imaginative and flexible "as if" of hypothesis: http://en.wikipedia.org/wiki/Thomas_Kuhn On incommensurability:

Jim Rickards on China's stealth acquisition of gold: "They don't want really want to buy IMF's 200 tonnes for that would run the price of gold to $1300 odd... and only make it more expensive to acquire the further 3000 tonnes they eventually want, which would take their holdings to half of what the US has." "Whereas China has access to mines, India does not" http://kingworldnews.com/kingworldnews/Bro.../Broadcast.html Another article of CB buying/ bidding for gold: Competition for the IMF’s Gold? http://financialsense.com/editorials/casey/2010/0310.html As Rickards suggests, the Chinese are probably a bit more cunning than setting of a bidding war with India over 200 tonnes.

This further highlights the problems you can face with individual institutions.... whether they be banks or vaults... and why it's a good idea to keep your worth with various institutions. That and have a bit of physical of course.

I think a lot still have Prechter in mind from a fundamentals perspective [the trading, timing, and waves are quite another thing]. Nothing has been resolved, it wouldn't take much to see a renewal of the financial crisis, it is just the timing of it that is proving elusive for many. Doubt gold would go much below 900 if we did see a sell-off.

Indeed. Nice chart. I think silver will just continue to bounce up and down against the dollar in this wide range for the short/ medium term.... reflecting the strength of both currencies. I'm only swing trading silver now. Gold is the one to buy and hold imo.

Gold is showing some weakness here having declined $40 even though the dollar has not shown much strengthand in a consolidation phase. Previously it required the dollar to strengthen for gold to decline a little. Could be some good buying ops soon. Momentum looking on the down side. I'll be averaging in with income this year at the end of each month. I also hope to buy a decent position in VXX shortly as both a hedge and a position trade for lower gold prices should we get a Prechterite collapse in the market.

Well, I expect the next five year chart will look parabolic also in a long term context... which is why I don't trade gold [silver is better]. The idea being to have a good core position but keep reserves for dips.

So far the price action in gold looks remarkably similiar to what was seen in early 2008. Following that precedent, gold should bounce of 1080 odd here, go up to 1180 odd, before turning back down to revisit triple digit prices. This might also co-incide with a general sell-off in the markets [a few months out]. The big price rise in gold would then follow in the latter part of the year on a new spike. Strong dollar today: 80.70

Confounded it will be then.

Yes, I have some silver bars and coins also. It gives me great pleasure to give a silver coin to nieces and nephews when visiting. I just think silver needs to be distinguished from gold... it is not a super version of gold. GF may be right that gold shoudn't be traded. But I'd add that silver should be. And also add, given Goldfinger has been absent lately and won't be listening, that he should change his name to Silverfinger. Perhaps it is inappropriate to discuss the trading of silver on this thread. Perhaps I should confine my thoughts to a trading silver thread.

This sounds about right from a rational perspective. But the market is not [always] rational, investors are nervous, and we are in the midst of a debt deflation. I think reflation will fail. At some point I expect a catalyst to trigger selling and further deleveraging of markets that have seen investors/ funds releveraging up. The next liquidation might be as dramatic, or less, or even more dramatic... who knows. But I am convinced that the markets will sell of, caught up in deflation. I'm also convinced that gold will hold up much better than silver and then go onto new heights [again similiar to last time]. Even if silver sells of dramatically, I think it will bounce back against the dollar. If you are buying and holding, you might as well buy and hold dollars as silver. I'll only buy and hold gold, while trading silver and dollars against each-other. Just my 2 cents worth, and another perspective, not dogmatic about it, and continue to hedge my positions. It's just that I consider silver to be a lot more vulnerable and speculative than gold... a view which I think these past 2 years corroborates.

Yes, I've completely changed my strategy towards silver. I used to buy silver considering it a leveraged play on gold. I was buying it as a gold substitute and as a buy and hold... well, until the ratio dropped to 50 and I could swap to gold anyway. I no longer think the ratio will go that low... not in the next few years anyway. So instead of buying and holding silver, I'll now only buy and hold gold. Changed my view towards silver in Febuary here [was always wary of silver and always looked to jump at 55]: http://www.greenenergyinvestors.com/index....st&p=157288 http://www.greenenergyinvestors.com/index....st&p=158076 That silver is going up a little here does not mean much for a buy and hold approach if the price declines again shortly. I've recently bought silver but only as a trade against dollars now [bV is much better for trading than GM]. I'm hoping silver will go higher to 18/ 19 odd so I can sell. Then re-buy on the dip. I suspect many supposed gold bugs here are in fact silver bugs.

If we see another 2008 style round of deleveraging, silver could go low. I'm only swing trading silver [for dollars] and will be looking to sell at around $18.

Pivotal point here. Will we see the completion of a Cheshire Grin TM [repeating the pattern after the previous parabolic spike 2008] or will gold go on to new heights.

Yep, check out the long term chart on the "Pound is Toast" thread.... could easily go to 1.40.

Probably because it is more of a pound story than a gold story. Gold is in a bit of a stand-off with the dollar at the moment. edited.

You mean this one? http://www.greenenergyinvestors.com/index....0&start=260

Hi ML, I'd advise to steer clear of leverage. There is way too much uncertainty out there. When you buy gold you are buying safety... but gold can also take a hit in the short term, so is better to stay away from leverage which can be a killer. 50% sounds good, but it's really what you are personally comfortable with, and what your convictions are. Diversity in the strongest currencies is the way to go imo.... and gold can certainly be considered a strong currency. Having some physical gold to hand is nice, having some in a vault, and then also some in an allocated account is convenient. Once again, diversity.

I'm not disagreeing with you on the daily/ immediate term. On the daily chart, the dollar will most probably turn down here. But then I'd interpret that as a consolidation within a wider time-frame [repeat of the previous consolidation]. However, after consolidating for a period of weeks, I think the dollar will resume its upward trajectory. It's the weekly chart that looks more bullish in the longer term. Aside from the technicals, I think there is a strong macro reason why the dollar will strengthen this year; investors will take risk off the table as sovereign debt concerns mount. This would see peripheral currencies contract with capital moving to the central dollar. I think the dollar has broken out of it's multi-month decline. http://www.marketoracle.co.uk/Article17397.html Maybe we need a dollar thread for this stuff.

Looking at the previous pattern on a relative chart [2008], even if the gold price in US dollars declined in the next few months, it could easily increase at the same time...when priced in pounds. This chart is saying diversify out of Sterling.... whether into the dollar, gold, or both.

Perhaps... but my "very bullish" comment was referring to the MACD on the weekly chart. On the face of it, the momentum is with the dollar at the moment. Putting it in context, even if the dollar went to 88 over the next six months or so, I doubt gold [in dollars] would go far below 1000 [am sticking to a post QE floor of 900]. If something like this does eventuate, I'll be piling most of my dollar reserve into gold.

From: http://www.youtube.com/watch?v=7i-ZMZJVYxI&feature=related

But this isn't much to write home about. ... just looks to be a consolidation : The weekly chart looks VERY bullish:

Got it. I think the work you've done with the momentum indicators is brill. It's interesting because a lot of this decline has to be as much about a declining pound as it is a story about declining house prices. A similiar chart with the dollar would be perhaps more just a story about declining house prices. As opposed to just being liquid today, the currency you are in is of prime importance. US deflation; dollar stays strong and house prices crash. UK "hyper"-deflation; pound weakens and accordingly house prices [as priced in the local currncy] only themselves weaken instead of crashing [the value of house prices are deceptive - when priced in a local depreciating currency - but from a "third party" currency such as gold or the dollar, prices have crashed... which is what the house/ gold ratio is showing.... here real value is eroding from assets even though nominal prices seem relatively stable] Edit.