romans holiday

http://en.wikipedia.org/wiki/Money_illusion Yes, I think it should be obvious that money illusion persists and "cuts both ways". Inflationary eras have no monopoly on it.

Ah, but then gold itself might be the stabilizer this time round.

Silver back on track and heading towards 60. Not dollars, ratio.

Dislike ties, but I have to admit I regret hats went out of fashion. I heard the reason for this was a president, not sure which, made a public appearance without one and the industry died quicker than you could say "mad hatter".

Meanwhile in NZ the government is getting nervous about a newly levitating housing market. It is no exaggeration that in NZ, housing was the only thing you "invested" in. Besides a hopeless stockmarket, what helped to spur the speculation on was a lack of capital gains tax. The NZ economy is looking shaky at best and the govt now are thinking of finally introducing this tax to dampen down the housing market... and no doubt to help fund the country. Higher taxes are coming. http://www.nzherald.co.nz/business/news/ar...jectid=10590321

Yes, it makes perfect sense, if you are wanting to stay liquid at the same time a grand experiment is going on with conventional currencies.

Yes, peace of mind is priceless.

Nice idea but I see a flaw. Silver acts like a commodity at times so will often track commodity prices. What would be better is to buy and sell sugar in Yen [safety trade currency]. These days, I treat silver as a proxy for commodities [sorry silver-bugs] and would consider selling and buying in Yen/dollars/gold, which can be done at GM.

Just a bounce... a temporary.... "sugar high"...

I doubt we would see $8 again. And I think the long term price is going higher. But I also think we could see so much volatility on the way to those higher prices that there may be the potential to double your bullion position on these swings for those inclined to do so. The following post sketches out my own macro reasons for thinking it will play out this way. http://www.greenenergyinvestors.com/index....st&p=120797

Yes, will be an interesting one. I am hoping for one more wave up in the inflation trade with the Dow maybe through 10000 before I swap.... I am thinking maybe half gold and half Yen at this stage. But definitely out of silver at around 50 if we see it as the markets will be due to go on a deflationary bender at some stage. The plan is to pile back into silver at the lows with near everything, gold, Yen and dollars.

Ziknik, 14.83 Me, $18 Whoops, $16 InSiverWeTrust, $25 [though in 5 months] Pixel8r, $30 And Goldfinger, presumably at $100 plus. I think it would be fair to say that if silver went below 13.80 the current uptrend would be broken. If this happened, Z would be the winner... but then I think this short term current trend is still up.

A bit of dollar strength here. I do not think the uptrend is broken yet.

Yes, especially in pounds. Pounds could easily weaken on the reversal of the risk trade, which would see the gold price back up quickly to where it was. If Ihad pounds I would either buy here, or if I really wanted to want for a dip, swap pounds for another currency such as Yen or dollar.

Looks like you sparked a mad rush to the audio with that post. It is the first time I that I have been unable to access due to "too many listeners". Hoye has been calling for a turn in the markets for a while now. I am hoping [though there may also be a reason] that this call here is again a bit premature as would love to see the silver/gold ratio near 50 at which point I would swap silver for gold and Yen. Then it could be "whiplash" a la Hoye in the markets. Hold onto your hats. reason: http://www.greenenergyinvestors.com/index....st&p=121344

I do not think you have much to fear in regards to the gold price in a deflation. The reason being is that gold is not on a par with other assets. It has not been bought as an "investment" in the super-abundant credit days. Though some have been buying gold as an inflation hedge, the prime reason gold is being bought today, with savvy investors cognizant of deflation, is that it is now being considered a currency proper. With the big investors concerned about the debt burden on certain currencies [which btw can be a completely separate issue to inflation] it has increasingly become "monetized" in the minds of investors. It is now not a commodity/inflation hedge but a currency for them. House prices should continue to come down against the currency. I doubt the price of consumables and durable goods will rise as there are deflationary counter-balancing forces at work. Exporting countires will reduce their prices in the attempt to maintain markets. Another way of looking at this is there will be demand destruction with a fall in consumption as unemployment rises, spending drops off, and savings picks up. Those that saved the currency, might end up doing well against property as it drops in nominal prices. Of course, there is the chance that the real value of the currency also drops, so if you were in a stronger currency such as gold you would do extremely well against property... perhaps twice as better than if you were in pounds.

I do not think you have much to fear in regards to the gold price in a deflation. The reason being is that gold is not on a par with other assets. It has not been bought as an "investment" in the super-abundant credit days. Though some have been buying gold as an inflation hedge, the prime reason gold is being bought today, with savvy investors cognizant of deflation, is that is now being considered a currency proper. With the big investors concerned about the debt burden on certain currencies [which btw can be a completely separate issue to inflation] it has increasingly become "monetized" in the minds of investors. It is now not a commodity/inflation hedge but a currency for them. House prices should continue to come down against the currency. I doubt the price of consumables and durable goods will rise as there are deflationary counter-balancing forces at work. Exporting countires will reduce their prices in the attempt to maintain markets. Another way of looking at this is here will be demand destruction with a fall in consumption as spending drops off and savings picks up. Those that saved the currency, might end up doing well against property as it drops in nominal prices. Of course, there is the chance that the real value of the currency also drops, so if you were in a stronger currency such as gold you would do extremely well against property.

I thought think silver looks super-bullish right here right now. So the question is, how far will this particular recent uptrend go? If the previous two recent peaks are anything to go by... I am thinking $18... before retracement and further buying ops.

Actually, I completely agree that the price could be at $10 within six months. However, we were trying to predict how high this present peak will climb [before it rolls over]. Care to have another go?

Yes, largely agree. We are both bullish and who can be sure what gold will do in the short term. Though that does not keep us from guessing.

Well, many of the "ignorant masses" have been frightened to death and are largely out of the markets now, hunkered down trying to re-save for their retirement. I think the market is being driven now by investors and banks, not such an ignorant lot in the sense that they consider themselves financially savvy. Yet, I would suggest they are still susceptible to the mass behaviour and the madness of crowds. imo, the explanation why market players are buying both commodities and stocks in the midst of a deflation [and here we agree that there is a deflation] is because they are concerned about the potential effects of QE. This portrays both mass behaviour and mass thought; as good monetarists they have been taught to believe that inflation follows increased money supply as surely night follows day. Hence QE and the credible threat of continued QE herds investors into the markets, it is simply an inflation trade on the future, but this is a future that might not eventuate. When/if investors realise this and see the reality of deflation instead they will all head for the doors at the same time. Once again, with the buyers of gold, the ignorant masses will not be the prime mover of the price, the big and informed players have already started moving in.. savvier investors, large institutions and central banks. I reckon we will see steady buying continue as the long term future of major currencies continues to look bleak. Though there is no doubt a lot of people do not "get it", there is also a lot who do get it and that is why I suspect we might not be seeing bargain prices in gold anytime soon. Edit: I was thinking also of the graph P8R has posted above.

The serious buyers of gold have moved on from the old mantra that deflation is bad for gold. And the volatility in gold has settled down because of it. Many investors are not buying gold as an inflation hedge but a currency now that other currencies are being "problematized" with reckless QE. I do not understand why you think people who believe in deflation would buy stocks. When deflation bites next, it will kill the stock market.

Gold has been very stable the last few months, building a base. It is now quietly moving up to all time highs. In the next couple of weeks we might well see it go through $1000 and stay there. I mean, who is going to sell? and there are plenty lined up to buy.

Yep, numbskull monetarists! It is all going to end in tears. Then again, maybe with so much money about we won't have to work!! From: http://www.youtube.com/watch?v=EJ0CFXSh_iY

Why don't they just buy £50bn worth of US dollars if they want to devalue the currency? QE might not do diddly and what a lot of debt. Yep, just notice the pound is taking a hit. Edited