Fortune

Well good luck to you Roman. My cojones are certainly not as big as yours. I still can't bring myself to trade my savings so I'll just take the wimpy way out - buy and hold.

By the way, are you still in Korea? I've set myself up in the countryside now waiting for the big one (or ones!). Hope you have an exit plan too.

Any takers?

It will go up?

Seriously, those graphs tell me we have a long way to go yet. The fun will really begin when we are in the thousands (USD) and have monsterous take-downs - over 200 bucks in a day. The nervous nellies will really have something to worry about then. Your life (and your savings) will literally flash past your eyes. I'm mentally ready for it. Hope the rest of folks out there are too.

He's only been back for a day and some posters are already wound-up! I'll call it the cgnao effect

On reflection wren, mainly irritation with self I think.

 

The times when I have not been confident & self-assured have been rare this lifetime, but now I'm playing a game with those who have no morality except the one they make up for the moment. They are interfering with my retirement & I resent every second of it.

 

I live a simple life so I don't need the money, but these folk are getting to me & without you guys I'd be lost & I'm just not used to that feeling.

 

I should learn to be a chartist & leave the emotion out of it I guess, but .....

 

 

I keep meaning to study silver more & play this ratio game, but nothing really compares with a cheap hut in the sun & 4 acres to play in for 'survival'.

I'm in a similar position to you - but without the self-doubt! - just try to keep the faith. Forget about PMs for a while; switch off the PC for a week. I guarantee your confidence will come back. All this daily noise drives most people nuts so don't pay attention to it. I'll leave you with a final quote from argubly the greatest of all financial traders Jesse Livermore. Read this, or even better post it on your wall, before pressing the sell button:

“And right here let me say one thing: After spending many years in Wall Street and after making and losing millions of dollars I want to tell you this: It never was my thinking that made the big money for me. It always was my sitting. Got that? My sitting tight! It is no trick at all to be right on the market. You always find lots of early bulls in bull markets and early bears in bear markets. I’ve known many men who were right at exactly the right time, and began buying and selling stocks when prices were at the very level which should show the greatest profit. And their experience invariably matched mine – that is, they made no real money out of it. Men who can both be right and sit tight are uncommon. I found it one of the hardest things to learn. But it is only after a stock operator has firmly grasped this that he can make big money. It is literally true that millions come easier to a trader after he knows how to trade than hundreds did in the days of his ignorance.”

I sent a quick message to GM the other day regarding vault locations in other places besides London and Zurich, and this is their response. FYI.

A GoldMoney Administrator wrote on 2009-May-12 12:03:23 GMT:

 

Dear xx xxxxx,

 

Thank you for your message.

 

I have forwarded your e-mail onto the relevant department and I assure you that we are aware of the advantages of establishing further vault locations to GoldMoney.

 

Thank you for taking the time to contact us and express your ideas, it is appreciated.

 

With kind regards.

 

 

James Mitchell

GoldMoney Support Team

Telephone Number: 011 44 1534 511977

 

----------

 

Holding xx-xx-xx-x wrote on 2009-May-12 00:00:03 GMT:

 

Dear GM,

Although I am very happy with the services that you provide for customer, I would like to make a suggestion: would it be possible for you set up additional vault locations in other countries?

Perhaps this has been suggested to GM before by other customers but it is worth making the point for those who would like to diversify risks (geo-political, economical etc) without leaving the excellent facilities on on offer here at GM. I believe some of your competitiors are offering storage facilities in places other that London or Zurich so it would make sense to maintain your company position as a pioneer in allocated Gold and Silver storage services. Offering vaults in countries in the Middle-East and Asia would be an great step in that direction. I was personally thinking about either Hong-Kong or Shanghai. Anyway I hope you take my suggestion onboard. Thank you for your time.

 

Your faithfully,

xxxxx xxxxx

I reckon they have got at least 5000 tonnes by now, probable more like 7000 tonnes. In fact it wouldn't surprise me if they have the world's biggest gold reserve as of now. Who wants to bet on how much the Americans have in Fort Knox? 500 tonnes?

Is say only a very small percentage of people (in the west) are able/in a position to make this happen - even if they really want to. Of course, this depends on the country you live in, etc. but, taking the UK as an example, unless you have loads of money/a mobile or movable job/already live in the countryside where there's a slim chance a couple of acres of agricultural land will come up for sale (at a fair price) less then a few miles away - you'd have to be extremely lucky to do this (and end up with a fair size plot of reasonable land). I guess the situation in S. Korea is quite different though...

Sure. But it doesn't hurt to have a backup plan, just in case. Besides it is only prudent to prepare the worse in the best way you can. I'm very fortunate to have bought some ridiculously cheap arigcultural land in SK and I'm aware that not many people might have such an opportunity. In those cases, the local community will be your main backup plan: helping each other out together for the things that they don't have or need to protect. Didn't Faber say the other day that he had some land out in Thailand? Even he knows what's coming. Do what you think is best for you and your family.

Extra mouths to feed

 

Have you considered getting some rabbits?

I'll feed them hungry and destitue deflationistas, or the roaming STR zombies

As if you folks don't know already, this is going to get real ugly. I sincerely hope most of you have some land out in the country by now. Don't think for one second that this coming shit-storm won't affect you. It will. And PMs won't be enough. Me? Land is already there (just a couple of acres) and in the process of building a small house and drilling a water well. I'm going to get me some dobermans as well. I sincerely wish all you fellow gold bugs good luck. We are all going to need it. Peace be with you all.

You know what GF, I think you are right. I dabbled in a bit of trading last month. Even though I made a nice healthy profit, I just couldn't shake off that sickening feeling of the price running away from me. I can't think of a worse feeling than watching the price shoot to the sky while holding bits of paper with the queens head on it. The regular smackdowns are nothing compared to this. Sitting tight is best; our sanity isn't worth the pieces of paper we call "profit".

Alf's price targets are based upon the Fibonacci number sequences. And in his article he states that the gains to be made from $3500 to $10000 are understated: 3 times the previous low of $3500 is only to outline the minimum terminal peak price of gold (in USD). To follow the sequence logically, the previous low should be multiplied by 6 (Wave 1 low multiplied by 4, Wave 3 low multiplied by 5, Wave 5 low multiplied by 6). Thus, a final price target of $21,000 can be reached according to the rules of Elliot Waves with Fibonacci sequences. Can this really happen? Who knows? Its definately something to look out for.

The mother of all shake-outs will occur when we hit that $3500 target. This is significant because it gives the US the opportunity to at least moderate the debt liabilities with a rise in Gold and prices. Alf explains more here:

Concentrating on the $3,500 target for Major THREE, which is a five fold increase from the low point of about $700, there is a case advanced in “Crisis Cogitations” for a five fold increase in money and prices in order to arrive at a “Less Hard” economic landing. In the USA, total debt recently exceeded $50 trillion and this is unsustainable given an economy with a GDP of only $14 trillion. The suggestion is that the debt level will reduce through bankruptcies to say $35 trillion while the new money created to save the situation will push up the nominal GDP to $70 trillion. A $35 trillion debt level is manageable with a GDP of $70 trillion.

 

It requires a five fold increase in prices to achieve the above result. Gold has retained its purchasing power over the centuries and will no doubt continue to do so in the current environment. Consequently gold will almost certainly increase five fold (or more) if the level of prices in the USA increases five fold.

It will be at that point when a semblance of confidence is restored that the precious metals will respond accordingly. However, that will not be the end. The price decline from $3500 to $2500 will boot out everybody but the most hardened gold-bugs. Every man and his dog will say that Gold is finished. All the GEI Gold bears will be peeing in your face. Then, and only then, will the soon-to-be legendary vertical warp speed price rise occur. I think everyone will be surprised just how high the price will go. This will be the time to test to the depths of your soul how much you really believe in this bull. That's why trading Gold will be suicidal, except for the unemotional and heartless. Goldfinger said it best: something about picking up nickels in front of steamrollers....

Alf's EW Count:

Hey cgnao - any updates from your source? Today was a real rollercoaster!

 

 

This is from http://www.marketoracle.co.uk/Article9241.html

Gold Quick update ($920)- The trend so far is close to the forecast for 2009 ( Gold Price Forecast 2009 )as illustrated by the original graph below that called for a rally to $960 by early March and a decline to $820 by Mid 2009. Yes gold broke above $960 to above $1000, which on face value is a sign of relative strength. However time wise gold has turned lower a little earlier than originally anticipated this therefore is a sign of weakness, which therefore neutralises the stronger price run and continues to confirm the trend towards the target of $820. However the rate of decline suggests an earlier low probably by late April 09.

 

I don't get Nadeem's EW counts. Correct me if I'm wrong, shouldn't it be 3 impulse waves up and 2 corrective waves down for the bull cycle (e.g. 1-2-3-4-5) followed by 2 corrective waves down and 1 impulse wave up for the bear cycle (e.g. A-B-C), thus completing the whole gold market lifecycle? And in the 2 corrective waves down of the bull cycle, shouldn't they take the form of an A-B-C wave, rather than a 1-2-3-4-5 wave? Seem to me like his counts are mixing-up secular bear and bull lifecycle waves.

Thinking about this UBS client situation and its implications...

So, UBS is forced to handover details of 50000 tax evaders. This has to damage the credibility of the Swiss banking system, IMO.

Add to this the calls from Gordon Brown for concerted 'tax haven' action by the US, Europe, UK etc. and you might have a full-blown panic in the offshore account world.

 

Now, where is that money going to go? Other tax havens are also vulnerable. Any digital security leaves an electronic trail of evidence.

I bet a fair chunk is going into physical gold.

Will the really go after the 'elite' clients in Switzerland? Surely the government insiders and their mates have their stash there as well? And what about the VIAMat gold vaults?

Ah, so its "Sell at the end of Nov and come back Jun next year". Nice chart by the way.

Hmm...interesting. Can we see the old "Sell in May and go away" pattern here?

Just last week, I took some gold profits and swapped some gold for silver using goldmoney (metal-to-metal exchange). I think we won't see such an opportunity for a while, so its time to take the plunge and play the ratios...

Keeping tabs on the 'great beast' - Goldman Sucks:

Bill,

 

I have updated the chart of the Goldman Sachs short position. This position peaked at 52,000 contracts net short in May of 2006 (52 tonnes of gold). The trend has been declining ever since such that today their net short has become a NET LONG position of 842 contracts (0.84 tonnes). This is their largest net long position they have held since I have been keeping track of their positions which is almost 3 years. Goldman Sachs has only been net long on 6 days out of 722 trading days! The way that this position has been steadily reduced is indicative of Goldman Sachs knowing that the profitable days of being net short in gold are over and that the only game in town is to be net long. I estimate this TOCOM account has so far lost GS $180 Million.

 

 

Goldman is not alone in reducing its net short position. The traditional TOCOM large shorts have all reduced their net short position:

 

 

As can be seen the largest traditional shorts on the TOCOM saw it as a real emergency to cover shorts since the credit crisis cranked into high gear in July 2008.

 

The major traditional gold shorts leaving the short side of the gold market makes Rothschild’s decision to quit the London Gold Fix in 2004 rather prescient. They had been a member of the London Gold Fix since 1919 but in 2004 decided they wanted no further part of it. The Rothschild’s are probably the smartest and most well informed of all the investment houses and always keep a low profile. Interestingly AIG also resigned form the London Fix in 2004 but unfortunately for them they didn’t leave the derivatives market also!

 

The common theme is that many important players who have made millions in being either suppliers of gold to the market or playing the short side have got out of the market or reduced shorts, or have become net long. This is NOT a coincidence. When such substantial investment houses have been on the gold supply or short side for decades and then switch sides it is not based on speculation but knowledge. It all points to gold making significant moves to the upside. For such a premeditated MASSIVE exodus of the key short side players one can only speculate that the coming upside move will be truly awe inspiring!

Cheers

Adrian