aliveandkicking

The following article from ZealIntelligence argues that over the last several years investment in silver rather than industrial demand has been driving the silver bull market.

I think you could argue the same is true of other metals which have fallen in price as this crisis has developed. It is the same kind of thing we see with property where investment houses are bought where there is insufficient underlying demand to support the prices being paid if you take out the investment demand pushing up prices. Once the prices plateau the investment demand also falls away and there is insufficient demand of either type to support the price until lower levels are reached and demand returns.

when silver is rising relative to gold it indicates a willingness on the part of market participants to accept risk, to 'play'

 

I found this comment about the gold/silver ratio interesting:

 

I'm still trying to get by birdbrain around why the ratio moves as it does.

What he seems to be saying is that gold is a safe haven currency so tends to rise in emotionally challenging times and fall when there is not so much to worry about. Silver though is essentially an industrial commodity produced mainly as a by product of copper refining that can only be easily sold if there is an underlying physical demand for copper or silver or aluminium and so forth, so if you buy it you are anticipating higher demand in the future so your risk is that it will not rise in price when you 'play' by buying it.

http://www.coininvestdirect.com/main.php?currate=pound_rate

thanks. Worth keeping an eye on these.

Does anyone know why silver britannias (£13.86/cid) are cheaper than aussie kooks (£15.12/cid) when the brit is a limited issue?

Double-agent

Where are you getting that price from for Britannias? I see 22.5 pounds on the royal mint web site

http://www.royalmint.com/store/BritishSilver/BR09AGN.aspx

Perth mint prices seem equally astronomical from what i can see so far.

Other things being equal perth mint silver is more highly refined and is more valueable than the more impure Royal mint silver

Jim Puplava made a BIG deal on financial sense about having guests with opposing views.

 

Morgan told subscribers to trade out of silver earlier this year!

 

How times have changed. Much more sobriety.

I had not realised that. I got the impression people were saying that Puru Saxena was saying something new on the show.

Um, the cuddly Mr Morgan, the same Mr Morgan that initially predicted silver bottoming out at $14.50/oz during the start of last year's correction, then only to revise his targets downwards once the correction accelerated and legions of hopefuls had been misled. More amusing was his sitting on the fence once the actual bottom had been reached.

 

Still, a whole lot better than the likes of Jason Hommel with his infinite silver prices e.g. "$8,000/oz here we come" or Mr Turk's "+$30/oz by Q3 2008" or Ted Butler's usual mid-correction declarations of "there's never been a better time to buy!" or "this is the last chance you'll ever get before the concentrated silver shorts default."

 

Of course he could be right on this occasion but so could a pinhead be when you blindly shove it into the silver chart. Due diligence as always especially given silver's propensity to disappoint both on the up and downsides...

 

As they say, there's nothing more dangerous in the investment world than a silver bug. Ask Jim Sinclair if you don't believe me...

 

EDIT: Nearly forgot the Jim Puplava one when he proceeded to rant on about how he was gonna buy a tonne of physical bullion silver for every dollar the spot price went down by starting at $12.50/oz. Geeze, no wonder the guy had to wait four months for delivery, he must have taken on half the world's annual production by the time the price had finally bottomed.

I dont think that Jim 'i am backing up the truck to buy at these prices' Puplava is so wrong really. He could be a genuine kind of guy. Almost certainly gold and silver are going to see higher prices but i think these metals are often traders markets. Zignic is correct to say that Silver at 8 pounds is a good price but that does not mean we will not see much lower prices.

Where i would disagree with Zignic is buying coins is good value. If he can get the underlying metal at a good price then no problems but hoping to keep a coin as a collectors item over a period of perhaps years to ensure it can be sold to a fellow collector without going thru a dealer with perhaps 30% markdown could be a problem with just selling the metal as metal.

A phrase of Jim rogers comes to mind when oil was at 140. 'Sure i believe in oil but no i am not buying at these prices - oil is at an all time high - but yes of course i hold oil, oil is going to go much higher.'

The Jims will be right almost 100% gauranteed for sure certain fact.

The only problem i have with the argument though is i think that oil for example is only going to be over 140 again when we have a major economic recovery from where we are now, and in that case property and just about every thing with a price will also be back at all time highs.

And just continuing with that theme, insane oil prices are 100% gauranteed when we get insanely easy credit - how can a person not see this connection? How can teenagers for example, afford to drive around in circles burning oil without easy credit? The word is they are not doing that anymore while money is too tight to mention, and how do you buy stuff without money?

I don’t know TBH. I’m taking the articles at face value.

 

You didn’t answer my question

 

 

 

Here’s a couple more

 

http://www.guardian.co.uk/society/2009/jul...ng-boom-england

"Housebuilding is unprecedentedly low," said Kerslake. "Over the last 20 years completions fluctuated, averaging around 120,000. But even at the peak of the buoyant market we didn't hit the target."

 

http://www.guardian.co.uk/money/2009/jul/0...ent-competition

Wes Streeting, the president of the National Union of Students, said: "As the first generation of students to pay top-up fees leaves university with unprecedented debt levels, we now have confirmation that a quarter of graduate vacancies have disappeared, in direct contrast to the overly optimistic and glib predictions that had previously been issued."

 

EDIT: Sorry. I have to add this one. You can’t say there’s a precedent for this

 

http://www.guardian.co.uk/business/2009/ju...osthumous-sales

Michael Jackson has proved to be bigger than Elvis, according to high street chain HMV, which has reported unprecedented demand for the singer's back catalogue.

What i think is unprecedented is the degree of global cooperation..........so far.

On the other hand you can argue we have unsustainable fascist style corporate style world government that cannot last but on the other hand you can argue there never was any democracy anyway so what difference does it make?

The nuclear deterrent may do its job and deter anyone from starting a war that could lead to the destruction of the world.

 

 

 

 

Are you sure you cannot see any UNPRECEDENTED activity?

 

LONDON (Reuters) - The Bank of England surprised markets on Thursday by keeping its quantitative easing programme unchanged at 125 billion pounds, boosting speculation that it may soon finish its unprecedented asset-buying scheme.

http://uk.reuters.com/article/idUKTRE5682J...me=businessNews

 

Gordon Brown and President Sarkozy made an unprecedented intervention in the global oil market yesterday, using a meeting of the Group of Eight leading economic nations to press for a crackdown on speculators stoking volatility in global crude prices.

http://business.timesonline.co.uk/tol/busi...icle6670238.ece

 

The German government is mulling the "unprecedented" step of lending directly to companies as credit dries up for both Mittlestand family firms and the industrial export giants.

http://www.telegraph.co.uk/finance/finance...ct-lending.html

Do you really think these actions are without precedent?

You're such a pesimist . Why would fiat failiure lead to world wide distruction

Because it will fail either thru deflationary collapse leading to protectionism and the breakdown of globalisation as worker groups demand changes or it will fail via hyperinflationary attempts to escape what cannot be escaped by cheating or getting some kind of currency advantage as a way to repudiate debt that is the advantage now of a trading partner.

Perhaps you can out line the Zignic flower power revolution as the alternate view?

Meanwhile i dont see how it is written that it must fail so i dont see myself as a pessimist. I see you as the pessimist.

I see you as the pessimist because you have such a low opinion of the way the world works today. Personally I dont think it is any different to the way it always was.

This is a good Kondratiev resource. Have a look at this presentation on K-Waves**

 

Make sure your virus scanner is up to date. There was previously a virus on this site. I think the site gets attacked regularly. They’ve changed the URL a few times in the last year

 

http://www.longwavegroup.com/flash_pres.html

 

You can download some of the charts/slides here.

 

http://www.longwavegroup.com/downloads.html

 

 

 

Hyperinflation of fiat currencies = deflation relative to gold (?)

The problem with this argument is that you have to decide the future is the collapse of all fiat currencies and governments, which more or less means war and chaotic world wide distruction.

Meanwhile you have the realities so far of world wide government coordination.

http://www.moscowtimes.ru/article/1016/42/379421.htm

money supply is still increasing

 

no deflation

 

other than in leveraged assets

money supply might be increasing but all assets today are levered assets. Assets were also levered back in 1900 or 1800. Ever since people traded with money rather that assets, assets have been levered to create money.

this cycle seems to make sense

 

but would he have argued differently had he known about the worlds latest fad with paper money

 

and

 

link

 

The Kondratieff Cycle: Real or Fabricated?

by Murray N. Rothbard

If Rothbard dismisses Kontratiev because of 'mystic forces' he not have much credibility with me. It is a stupid thing to say.

I can’t find the thread that first introduced me to k-waves but I have found this one: http://www.greenenergyinvestors.com/index....p;hl=Kondratief

 

This is in the OP of the thread I was looking for http://kondratyev.com/reference/theory_explained.htm

 

BTW, There are several ways to spell Kondratiev (Kondratief, Kondratieff, Kondratyev….)

 

Basically, each season lasts around one generation (15 to 20 years). Winter is said to have started around year 2000 so we should get to the end around 2015-2020

 

I am a believer in this cycle. If this is a human life time cycle then we are in winter for about 78/4 from the beginning of winter. Lets say winter was avoided in 1998 and that is our date anyway, Therefore we enter spring in 2017.

The problem i have with this cycle is i will be 61 at the end of winter. So i might have to just create my own spring and live in that time while i have it. Younger people are better able to enjoy the depression as an investment for later living.

The audio says the goldsmiths fraudulently lent certificates against the depositors gold.

Is that really the case when also the goldsmiths were taking collateral such as family gold or silver or diamonds or other precious possessions that were not wanted to be sold in order to issue a certificate which could be spent in the market place where subsequent claim of gold the families collateral as gold etc was not claimed but instead the gold as money in the vault was claimed?

I have to say that most peoples understanding of gold smith fractional reserve banking seems to be based on an incorrect understanding of the practice.

If you deposit your mothers wedding ring with a goldsmith for safe keeping you cannot then spend the certificate if the certificate claims your mothers wedding ring. The certificates were valueable because they claimed what was deposited. So either we look at the practice as like a pawn shop where in distress certificate holders spent their certificates or we see that depositors either

1. required safe custody of their valueable possessions in return for a certificate for those specific items or

2. they deposited an amount of gold for a certificate promising an equal amount of gold which they could, if they wanted, spend without losing something of greater value to them than an amount of gold.

Also the same applies for property loans where if the borrower defaults the goldsmith can sell the property to cover his losses so that the depositors were not impacted by his losses providing the goldsmith correctly valued the property and correctly obtained the required securities and correctly calculated the appropriate interest rates. It was for many a skill rather than it being a scam run by crooks.

I have the honestly arrived at impression you can construct a fair and reasonable goldsmith banking system using fractional reserve. At the end of the day no system is possible if people are fundamentally dishonest.

And if you manage to construct a case that fractional reserve is fraudulent you can then argue that such a system must collapse and and it is time for a new world order and so forth etc etc.

Can you provide a link to the evidence of people doing very well out of the hyperinflation?

I would be particularly interested in evidence of landlords who did well.

http://www.nowandfutures.com/us_weimar.html

This link suggests some traders did well when people were obliged to sell valueables at fire sale prices when many things in germany were falling in price - presumably because food and basic living was the priority as pointed out by international rockstar where basic living costs were using up over 97% of income.

This link

http://www.mises.org/resources/4016

suggests a certain income earner did very badly. Pensioners and middle classes on some kind of fixed income or state income who did not have the ability or nouce to demand higher wages were forced to sell their capital goods to the 'capitalist classes' creating resentment of these people, whereas poorer people working in factories which were doing ok could strike and get higher wages.

The whole thing reads like a nightmare from what i can see!

I expect ths all has a lot to do with sitting tenants rights to pre-agreed rent increases over many MANY years, so the nflation screwed the Landlords who had agreed long-term tenancies at what would become silly low rental prices.

 

Of course German houses kept their value; I mean they are worth quite a bit now, aren't they?

We need income data for the various years to make sense of this.

Interest rates rose in 1922 from 5% beginning 1921 and since 1914 to 19% january 30% april 90% september. Some people evidently did very well in this period others were crushed and or committed suicide. Evidently incomes must have been rapidly rising for many others. So far this board does not have all the information necessary to figure it out. It appears some of the financially savvy did very well out of this situation which was then later an excuse for aspects of Hitlers policy.

If it comes down to renting your house and having gold or just having your own debt free house which one wins? As i mentioned earlier NZ is not such a good place to be in hyperinflation because of property taxes if you lost your job. Finland has low property taxes and high income taxes.

the fact that they ended up spending 99.7% of their income on just food and clothing makes it pretty f****** obvious that their wages didn't keep up with inflation.

Congratulations you are agreeing with me their income rose massively.

As you know i was answering:

That's exactly right.

You need higher income, or the debt burden is unchanged for the borrower.

It only "erodes" in relation to rising income.

(From HPC's "Inflation Question"):

 

 

 

That's exactly right.

You need higher income, or the debt burden is unchanged for the borrower.

It only "erodes" in relation to rising income.

All i know is i read your data and a poor family begininning paying 10 for food ended up paying 9 trillion on food.

Evidently the income rose.

However there are complications. In New zealand for example if i were debt free i would be paying 100 trillion on property rates on a small property and that could crush me if i was reduced to being a poor person able to get by on 20 living costs.

What about the interest rates being paid?

Weimar wanted hyperinflation i believe to give the finger to the oppressive reparation charges and could do so under the terms of the agreement - that being the case it is not the best example for many other countries..

Weimar: IIRC, many rents were fixed (or got fixed), so they would not keep up with inflation hence ruining landlords who depended on the rental income for living (not for repaying the mortgage, which would be less of a problem since you could simply sell, say, a piece of toilet paper and pay back the mortgage on your house).

 

Houses themselves were of course still houses. I know someone who's German great-grandfather shot himself since he sold his house BEFORE the hyperinflation (and hence lost all his assest since he kept currency).

 

The best durable assets to hold in a hyperinflation are financially liquid ones: gold and silver.

Still hard to see the landlords would be so ruined if they were very quickly effectively mortgage free and presumably could easily get new loans sufficient to pay for their living costs.

I dont see the logic that one set of assets is better than another in hyperinflation. All prices are going up. Buying assets with debt makes the most sense whatever you buy. According to the data so far presented poor people were able to get income increasing from 10 for food to 9 trillion. Having some kind of massive BTL empire might well work out great. But i am not a housing bull and i dont see hyperinflation.

And once you have the kind of wealth where you have say 2 houses carrying around Gold is i think impossible and then you have to leave it some place. I suppose it all depends on how doom and gloom you are about coming events. In Nuclear war for example it makes sense to have gold.

Had a look at this.

Bit confused. The article is talking about housing costs. But seems to be refering to cost of renting because it mentions land lords had no pricing power?

Digging deeper from original source

http://www.foothilltech.org/ceulau/honorsw...tionhandout.pdf

COSTS begin at 10 food 5.5 housing 6 clothing and end at

9.34 trillion food 38 billion housing and 5 trillion clothing for a low income family.

Meanwhile land must have risen in price? Wages? Materials?

This link also mentioned earlier refers to rent costs of low and middle class households but no obvious ownership costs.

http://www.slideshare.net/ccarter333/weimar02web

Other things being equal and of course they never, surely are a person beginning this period with a massive house and massive mortgage would be ending up with a massive house and almost zero mortgage?

why do the purchasing power of the metals cross in the Gold Eagle article?

 

I dont think they do. The graphed version of the table is showing relative changes? The purchasing power of gold did not fall as shown at the end of the graph it just increased more slowly whereas silver increased much more rapidly.

From 1920 to 1979 the table shows the purchasing power of

gold increased 283 times

Silver increased 268 times

http://www.gold-eagle.com/editorials_08/ash061709.html

interesting table. The article show this data is using the British pound to compare to gold and shows 241% rise in gold relative to the british pound from 1920 to 1933.

From Wiki:

As had happened after previous major wars, the UK was returned to the gold standard in 1925, by a somewhat reluctant Winston Churchill. Although a higher gold price and significant inflation had followed the wartime suspension, Churchill followed tradition by resuming conversion payments at the pre-war gold price. For five years prior to 1925 the gold price was managed downward to the pre-war level, causing deflation throughout those countries of the British Empire and Commonwealth using the Pound Sterling. But the rise in demand for gold for conversion payments that followed the similar European resumptions from 1925 to 1928 meant a further rise in demand for gold relative to goods and therefore the need for a lower price of goods because of the fixed rate of conversion from money to goods. In order to attract gold, Britain needed to increase the value of investing in their domestic assets. They needed to increase the demand for the pound. By doing this, Britain attracted gold from the stronger US, which decreased the US money supply as well as depressed Britain’s own economy. Because of these price declines and predictable depressionary effects, the British government finally abandoned the standard September 21, 1931. Sweden abandoned the gold standard in October 1931

if britain chose to increase the value of the pound to get back on the gold standard and then had to continue doing this dispite the collapse in British prices, golds proven record in deflationary periods seems a flawed idea

it was me who offered the grudge bet and a&k bottled it declined

 

proceeds to chariteeee an' all

It was you who decided there was a grudge match to be settled because of your feelings.

It will. But every now and then people come along and write a whole (and lengthy) bunch of nonsense. One has to counter this somewhat, but not too much, because some of them get paid by the number of responses they get to their drivel (that's at least what I heard).

Yes i heard that people talk their book and have websites to promote their positions too.

Jim Sinclair seems to think that the next move will be a big one up.

 

Ignore the noise (also the one on here).

If your case is so good it will speak for itself or does it only work when talked up?

There’s no gain for holding short positions at the moment (and the fees on long positions are reduced). This is because LIBOR has been screwed down.

 

This is how it usually works

 

If you go long; you pay them: LIBOR plus their standard fee

If you go short; they pay you: LIBOR minus their standard fee

 

Standard fees are around 2-3% and LIBOR is less than 2%

Thanks.