romans holiday

Yeah, but $50. If it was me, I'd consider that a good risk/ reward transaction with what looks and feels like a Maple in my hand.

The video goes to show that the average local knows nothing about gold. All it would take, for someone who knew just a little, would be to look at it, feel the weight of it, and ping it to know it was the real McCoy. I wonder if he would really have accepted $50 though. I think he was relying on the fact that most are ignorant of gold and instinctively wary of strangers trying to sell something.

From a very broad perspective, I think silver will remain conjoined to gold... in an elastic bungy jump kind of way.... Anyone but Parmenides.

Silver does look relatively weak here and is perhaps signalling that the "flood of easy money liquidity" narrative is limited. I am sticking with my 30% because even though it could dip shortly, all is flux in the short term and who "knows" what it will do. That said, I don't see silver as a gamble, as I have a larger macro [meta] view of where it is going. Heraclitus meet Plato.

All is flux. There is no order. Hmmm... then again maybe you could go back and read Heraclitus.

Silver is a real wildcard... and I wouldn't want to be without any, but being so wild I wonder if we might see low prices around the corner on a dollar reversal. For the record, I have 30% in silver.

They would say that. The IMF largely represents US interests. It is in interests of the US to have investors believe the dollar will continue lower, and that the carry trade into stocks, commodities and markets in general therefore makes sound economic/ speculative sense. They want a lower dollar, but you don't always get what you want. [Edited for this thread, there are other arguments for gold besides this apparent flood of liquidity.]

Drink and be merry for tomorrow we deflate.

One wants to be liquid and not "invested" in a contractionary period where wealth is slowly evaporating. I see gold as my core currency... and have 40% of my worth in it. I have another 30% in silver at the moment but I consider this a commodity currency and a lot more speculative. Which leaves something like 30% as a hedge in reserve "risk averse" currencies such as the Yen and dollar. The hedge is against lower prices in gold/ silver where I'd buy silver on the dip and swap silver for both gold and cash at the top [in order to rebuild a hedging cash reserve]. This strategy is based on the idea that currencies will continue to be volatile as capital flows between risk trade currencies [peripheral/ commodity ones] and risk averse currencies. Neither does this hedging involve trying to chase or time markets, or trade them, but waits for the markets to come to previously staked positions where currencies were bought cheaply, and look likely to strengthen at a later date due to reversed capital flows. I like the idea of a thread on international gold miners [i have no gold equities yet]. I am thinking of starting a thread focusing on Gold and how it might perform in deflation.

Yes, I think the more rational commentators on gold are advocating having a good position in gold without going in 100%. Does Bill Bonner advocate "all in"? That would surprise me. If someone was in 100% GBP, they should consider that any currency can buckle under debt loads and capital flight [even if they are not concerned about inflation]. If they had no gold, they shouldn't be waiting for a dip... or be a "perma gold dip waiter" but should buy [a percentage] as the risk for them is the gold price could just keep going up. If somebody else had say one solid foot in gold but was not "all in", perhaps it would be best to convert some pounds to dollars of Yen to cover the risk of a dip [the idea here is to eventually be in 100% - hat tip to Bill Bonner - but only at the best price.... the obvious risk here is that gold continues to the upside and doesn't dip[unlikely but possible imo].... which is why you should already have a very solid position in gold. I trust you can appreciate that I am not bearish on gold but am saying that whether or not one buys here depends on the position they currently have, or do not have. It also depends, to some extent, on the macro beliefs one is persuaded by.

So I'd be right to assume you are not 100% "all in" and keeping some serious powder dry in the event of a dip? Also, would you agree that keeping dry powder is [in the right currency] is not trading? I mean, wouldn't you agree it is fair to say that only gold bugs perma gold bulls would be 100% in bullion now ...most likely due to the belief that all fiat will soon be toasted?

Kerr [he never reads this thread right?] the anti-goldbug.

I agree on the long run. As you are aware, in the medium term though gold is likely to get caught up in the "currency wars" as first the risk trade dominates, where the peripheral currencies will do well, and then the risk aversion trade dominates where the central reserve currencies will do well on the deflationary swing back. Roubini provides the macro scenario for why this is likely to happen at some point, and our own Bubb provides a "phenomenlogical" approach to the market and how to both protect yourself and benefit from these swings. Anyway, this might be besides the point for the die-hard gold bug [no offence intended] as they will keep the faith and weather the storm, though this might not be so easy to newbies to the game. Roubini's is doing what he is best at and once again beating the doom and gloom drum. I think his macro outlook is pretty good and a very real risk to this market. As a conventional deflationist, I think he might be surprised at how well gold holds up on a reversal. I am not keeping cash reserves in reserve currencies in order to buy gold on a reversal, but in order to buy silver, which should dip much lower. I think it is futile to delay gold purchases [if you want/need to buy], but as I already have a decent gold position, I will only increase it by buying silver cheaply, then swapping to gold once the ratio is once again favorable. Call me a very fussy buyer.

So what you saying, if I am hearing you right, is that CB buying of gold essentially amounts to their diversifying their currencies [and hedging risk].... something a few of the investors here are also doing. The point that gold prices may go both up and down similtaneously, depending on the currency, is an important one and has not been much discussed here.

I always like to listen to what Roubini has to say. I think that he could be right about a coming "snap-back in the mother of all carry trades", but I do not think that gold will be as affected as other investment vehicles which have benefitted from loose monetary policy and the reflation trade. The way I see it gold could dip to US 900 or so [while at the same time exploding to new highs in other currencies] on credit crisis 2, and then recover to new highs in the dollar on further economic and currency instability.

Well, I am trying. I do realise I spend an inordinate amount of time on this site but... well, we do live in interesting times to say the least. And if we get it right, well, we might really be able to "get a life". Personally, I don't want to work for someone else for the rest of my life. Ahhh, a life consisting of fishing in the morning, then reading in the afternoon , with the odd gold-panning expedition thrown in of course.... that would be the life. A life of leisure. Right, of to the cafe to read Paul Krugman's The Return of Depression Economics. A study in the popular psychology of mainstream economics economists of course.

There is no order.

Gold behaving as a commodity currency at the moment.

Edited.

That is a good point... and perhaps I have made my point. That said, "Perma Gold Bull" just doesn't quite have the right ring to it. Maybe we can think of another term. Anyone? Edit: I do not think "gold bug" is necessarily a derogative term, but just defines those typical beliefs as outlined in the previous post. One either agrees or disagrees with them. I think it is fair to say they are fringe beliefs... but then if this is a fringe site... perhaps that makes them the "norm".

Thank you kind Sir! I do not mind genuine questions... but thought a separate thread would be more appropriate.... why clutter up this fine thread with what can turn into verbal ping pong.

I use the term gold bug because it draws a distinction between gold bulls and gold bugs. Gold bugs can consider themselves also gold bulls, but not all gold bulls are gold bugs. I do not consider myself a gold bug because typically they have the following beliefs: 1] A belief that the primary ordering principle for society is laissez faire markets, with the politcal position which is often anti-government/ anarchist. 2] Governments, being all powerful and corrupt, will continue to print the currency into oblivion. A belief in the certainty of hyper-inflation. 3] The belief that gold, and only gold is money, and also an overly emotional attachment to that form of money which tends to color all thought and argument about the topic.. Given these typical beliefs of gold bugs, I can not consider myself one. Rather, gold is bigger than gold bugism and the bull market it is in can be explained in other ways than by what tend to be the "dogmas/ certainties" of the gold bug worldview. Maybe a new thread should be started for these cans of worms... as our gold thread for analysing the bull market in gold is getting a bit cluttered here.

Looking at the coherency of the world view of hyper-inflation combined with waiting for lower prices.... within the context of risk. I suggest you go back and read the posts in their context.... I hope that clarifies things. Edited.

Yes, you should see the logic of the other position. Isn't this an example of that [in regard to the gold bug position]?

The only point I really agreed with him on in that article, was at the end where he said something about how the Fed is trying to shepherd money into stocks. Though on the surface we might have something in common [possible lower prices], I have a fundamentally different view and approach to him [as you must know if you've read my posts this past year]. I do not see hyper-inflation, I think it is nuts to trade gold [hat tip to gf here.... though I will "trade" - hedge actually - silver]. I do not consider [real] profits to be taken in any currency besides gold. I like to share my opinion, in order to see it rationally criticized so that I might add and improve to it, or reject something.... I consider it a work in progress. Knives sharpening knives kind of thing... perhaps an unfortunate analogy. If we all had the same opinion here, wouldn't this forum be the poorer for it?