romans holiday

You are definitely a grumpy old woman!! You seem to be making a habit of calling attention to particular posters on another site.

imo any amount of antipathy towards gold is of no consequence considering that the current global trading system is unravelling. The practicalities of gold will reassert themselves in a new gold exchange standard. You might as well tell the tide not to come in.

I am surprised the author does not envisage another role for gold, that is, outside of an investment or an insurance policy. The second passage above suggests the need for an international currency capable of both stabilizing national currencies and balancing trade [rebuilding the global economy]. This is where the practical and historical role of gold, as an international exchange standard, will be rediscovered. I have my money on gold-backed SDRs.

Corrected. This is what I have called hyper-deflation.

I am looking to buy soon also. Buy on weakness and all that and you know that when the market is 100% against it, it is most likely to reverse.

100% agreed.

FYI all my spare powder is in Yen at the moment which I am perfectly happy with [i do have a solid position in silver though imo it would be silly to be invested 100% in silver here]. This months income will go into dollars... but I might wait 'til they get a bit cheaper. Buy on weakness and all that. Yes, there should be new highs in euro and Sterling at some point. I am not suggesting otherwise. What I am suggesting is it may not be a one way shoot to the moon here. Further dips are likely in the interim.

Quite amazing how far gold is off its highs as priced in Euros. Similiar situation in Sterling suggesting a weak dollar story for the moment.

Coffee grinds? That's how they come in the Korean cafes.

For sure. You really need to know yourself... as psychology [your own] is so central. Perhaps there is a "zen for traders" angle here [not that I am a Buddhist]: Consider your position to be a good one if you are comfortable with the market moving either way.... in the short term. Having a well-hedged position goes a long way as far as the "comfort zone" goes. If you are in the zone, it will be unlikely that you will second guess yourself. Sit back and enjoy the ride, all the twists and turns, while being confident in the final destination. I am not sure whether I want the market to go up or down here. If it went up, I could trade silver for gold. If it went down, I would be buying silver with my cash reserve. My guess is it is going up, with the Dow through 10000 and hopefully the ratio near 50. Now on the 59 handle.

I am persuaded that good trading consists in doing absolutely nothing 99.9% of the time.

Got it. Yes, that's interesting. I think this year will be quite telling..... we should know soon whether we are seeing a re-running of the 70s show or not.

What's this!? Shock, gasp.... GF thinks things are no longer going hyper? PS: Notice I refrained from the deflation word and used deleveraging instead.

The short term trade is very difficult to make profitable, perhaps impossible, too many variables and imponderables. I think it makes sense to wait for the high or low ratio where you think it makes sense to swap.

Answers on this will differ from person to person. Above is a chart showing the ratio over the past ten years. Personally, I will be swapping most of my silver for gold when the ratio nears 50 [it is 60 now]. If the ratio went back to 80 I would consider swapping a small portion of gold to silver. Others think the ratio could go lower. It depends largely on whether you see [hyper] inflation on the horizon or deleveraging.

I have given up trying to time the irrational market. My new strategy is to remain heavily invested in bullion, but to also keep some serious powder dry in the appropriate currencies while also building up with income. Then sit back and wait for the market to crash before buying silver at low prices. The aim being to buy silver when it is weak, and when it is strong trade to gold. This strategy of course only works if you believe reflation will fail and we see "ground hog days" of deleveraging.

But money is only a means of exchange.... just a sign, representing nothing real.

Yes, I think most would agree that it is the sword of debasement hanging over currencies which has pushed gold to these prices. All that remains really is to find out what takes gold to new levels; whether it be excessive liquidity, or liquidation and the "squeezing" of capital. The second outcome would still involve continued volatility in the price of gold, to both the downside and upside as currencies first became the beneficiaries of deleveraging before later devaluing due to the fundamentals.

Dollar 76.88 Getting awfully cheap.

Yes, but this is quite a different situation to the previous one envisaged. We were talking about government trying to keep a perceived "bubble" [whether property or gold] from deflating, or trying to reflate and "fix" the prices. Your scenario here is more like government encouraging a forming bubble and whipping it along. Quite a difference in mass investor psychology is involved between the two. I have suggested before that at some point the US government might encourage/ manipulate a high price in gold [believe it or not] in order to create inflation expectation at some critical moment. Anything is possible. What's up with Yen? Nearing the 90 handle now.

You got the intent.

Are you a grumpy old man or a grumpy old woman!?

I doubt China will have to resort to "price-fixing" or supporting the price of gold in the future. All efforts to artificially support assets prices are doomed to failure. Property will be a case in point. The price of gold will rise "naturally" as it comes to be valued more. Being valued more, it becomes more valuable.... as priced in other currencies. The pace in the rise of price could double if currencies themselves start to devalue. Edit: I see I have made the same point as nicejim... though with more verbiage.

Yes, would be well on the way to coming of age then.

I think gold is only flirting with this level at the mo.