romans holiday

Can we get rid of this spammer mods?

It's a conspiracy. Steve was busy this month. Bubb started the new thread. What exactly is the problem? I think it is a bit silly to have more than one thread... but then maybe it is required given that some bugs have become intolerant to the idea of "trading" and hedging gold.

What I meant was the Romans didn't squabble amongst themselves like a bunch of over-zealous Judaeites. Don't follow anyone is my advice... look at the whole spectrum then follow your own instincts.

Enough to make you want to be a Roman.

-1 The gold bugs took offence at times to the preceived trading [a perjorative term in their vocabulary] going on. Unfortunate but fair enough. The obvious solution is for the gold bugs to have a thread of their own, which caters to their sensibilites... each to their own... and then another thread which continues to deal with broader issues. That does not stop bulls, bugs and bears, investors, traders and hedgers, from posting on all threads... just that they should be aware of which thread they are posting on. imo the other thread should be titled "the gold bugs thread".

If I remember correctly, as long as I have been around the title has had trading in it. I wouldn't worry about it too much.... most who post on this thread are gold bugs and it is good for the bugs and then both the trading and hedging bulls to have some commerce of ideas. Personally, I think you are confusing hedging with trading. Different strokes for different folks and all. Though I think it is useful to distinguish the main character of a thread, whether it be primarily about trading/hedging and thinking about the short/medium term, or whether it be about the long term future of gold, it would be a shame if those interested in the subject of gold "segregated" themselves into one narrowed perspective/ thread.

NZ... there is no tax on overseas earned income. I think I also have it right in regard to my bullion holding. The thing is, if capital/value is being lost in assets and currencies then how could a capital gains tax be justified? A good case could be made out that the increased nominal price only reflects a contracting, depreciating economy. Say gold goes from $1000 to $2000. In all likelihood this just represents a currency devaluing by half. How could capital gains tax be applied to this? It would be ridiculous. Gold is here just another currency holding its value. It has not gone up in value, rather the currency it is priced in has depreciated [gone down in value].

For sure. If you want to hedge against a dip in the price of gold/silver [more silver for me] then buy and hold cheap US dollars. It will be a waste of time sitting in pounds, Aussie dollars or the like as these currnecies will fall faster when/if the dollar strengthens and gold/silver dips. Yen is also good or this... but is expensive at the moment. My brother in law bought a serious chunk of gold with kiwi dollars when that currency had seriously weakened against the dollar last year. He bought at near $2000 an ounce and now it is around $1400 . Even so, the bull market in gold will "rescue" him. This is a good example of why you should be careful about which currency you choose to sit in if wanting to buy gold on the dip. I doubt there would be much of a dip in pounds, better to either buy gold or convert to a better holding currency.

The mathematical geniuses who devised all these instruments for "managing risk" never grappled with uncertainty. In their conceit, they thought they could measure "risk" and thereby control it, manage it, with these financial instruments. What a tangled web they wove. In systematizing the risk, they didn't bother to look beyond the mathematical model, or stop to consider that the whole system itself, in the real world, was thereby put at risk. Ship of fools I say. Ummm, so yes, diversity it is.... in currencies. But the currencies chosen need to hedge each-other. The action in silver pretty much covers the commodity currencies and the inflation/ reflation trade while Yen, and dare I say it, the dollar covers deleveraging. Gold goes without saying of course as the bastion of stability.

Indeed. Guess..... and then hedge.

In the long term yes. But in the short/ medium term it is likely we will continue to see a divergence of sorts between the central and peripheral currencies. I think this reflects the uncertainty in the market and instability in currencies. Think along the lines of capital flow. In this phase of the game we see capital flowing outwards to the periphery economies/currencies thanks to a global reflation trade and a new US dollar carry trade. At some point, when this crisis morphs to the next stage, that capital flow looks likely to savagely reverse, as investors panic to the perceived safety of the reserve currency [the madness of crowds] which would see the dollar spike and commodity/ emerging currencies slump... we have already seen an episode of this last year. I kind of agree that other currencies are the children of the dollar [bretton Woods system] and that they will weaken with the dollar. But the dollar in the end would still remain relatively stronger than peripheral currencies though itself devalued against gold/silver. I just do not see hyper-inflation likely though my opinions could change with the facts. Those facts would be contingent on certain political decisions and events, which are nigh impossible to predict before-hand on a theoretical basis.

Yup. One fun ride.

..... and the Aussie. What I am waiting for is a reversal in the fortunes of the commodity currencies. This should then see new highs in the pog as priced in these currencies. No point waiting in Aussie dollars, or the like, if you are waiting for a dip in price to buy, as the currency is likely to weaken by a larger factor than gold would. Also, it is a bit of a shame if you bought on the peak [as my brother-in-law did in kiwi dollars] but then as the saying goes, "the bull market will rescue you".

Yes, looks like a weak US dollar story........ for now.

As an expat, I don't have to worry about tax.

Gold well off its highs in Yen.

Don't get me wrong... I wouldn't want to jump in and out of silver also. Like you I am very bullish on the long term prospects of silver, but also a little nervous about the short term. Silver looks vulnerable to a manic episode in the market a la Bubb where we could easily see a sell-off in near everything. Given that investors are so confused and divided about the macro outlook, not to mention the state of the real economy, the odds are pretty good for a reversal at some point. My strategy will not be to sell silver [i have a rather large position with about 30% of my worth in silver] but to switch to gold [where I already have an equally large position] if/ when the ratio nears 50. Others have a similiar strategy though I believe some are looking to swap on a more favourable ratio. I like to think of it as bringing in the weaker asset to harbour behind the golden gate. When the storm passes, I would go back out into silver and then at a profit [accumulated ounces] as the ratio would have likely risen to near 80 in the event of a sell-off. I would also put cash reserves into silver if/when the ratio went back to this level. More a case of hedging than trading. 100% uncertain.

Why do you think silver will hold up? Being more of a "commodity currency" don't you think it is more liekly to drop in sympathy with stcoks and commodities? Gold on the other hand should remain relatively strong. As a hedger, I am looking to buy silver cheaply on the correction with cash reserves.

Then maybe we need three threads...... another for the hedgers. But, I think some kind of distinction along these lines would be useful and would facilitate a more constructive discussion of what is after all a very complex issue.

This is an idea. There should be a thread [club] for the gold bugs and then another for the gold bulls [traders/ hedgers]. I am sure that most would post on both, and by separating the threads a certain propriety could be observed whereby one took into account which thread one was posting on.

One more wave up in the inflation trade?

I suspect silver always follows [the yellow brick] road.

Yes, I think you're right. If this move up in the market sticks for a week or two... I reckon we might see a 50 ratio.

The ratio hasn't come down much. Has anyone noticed a "lag effect" before where once gold rises, it takes a bit for silver to catch up and "overshoot" thereby lowering the ratio? Opps. My mistake.. I think it has come down from 61.5 to near 60. Looks like the push to 50 is back on.