aliveandkicking

That really shows how dumbed down the public is, bet he would get a different response in India or China.

Could you tell it was a 50 dollar canadian coin made of pure gold with no special tools while wearing beach shorts?

That is the joy of silver it is always an industrial metal but at times also a monetary metal. That time is coming again, especially with the chinese now promoting it.

 

When there is a short squeeze on silver the industrial users will push it up as they make sure they have stock, the price really isn't that important.

 

Remember that CFTC position limits could be imposed towards the end of November.

The glitter of silver is history i think. When silver was special because it was so silver it was worth something but aluminium is used in many mirrors and stainless steel makes for a more useful shiny cutlery item.

Yes it does have unique properties but its value to humans as something to dream of seems majorly devalued to me with the arrival of other materials. The same devaluation must be also true of gold where goldness is not necessarily gold anymore and plastics can match the maleability and workableness of gold. For investors there are many precious metals.

Only in a total collapse of economies will gold be the king again and if that happens some bugger will steal all of your gold anyway unless you are the meanest SOB in town.

Silver trading almost seems like a scam where coins get minted but you cant sell those same coins back to dealers for anything like what you pay for as far as i know. Perhaps somebody can correct me on that if i am wrong. For example the silver dealer sells you a silver coin and you arrive later with a thing that could be a silver coin. He sees the risk in the trade and marks down accordingly.

On the other hand silver was 5 and it is now 17 but property was 30k and it is now 300k.

In summer I took three whole weeks to check any item that came to my attention in any store I entered in the U.S. They were ALL made in China. It is outright scary, even as a non-U.S. citizen.

 

Good luck with betting on the U.S short to mid term.

Seems we are on similar wavelengths.

Dont forget though other parts of the world are in a similar situation although one thing that surprises me here in Finland is that you can buy a plastic bucket made in Finland and many hand tools made in Finland. But things here are horribly expensive and you get the impression there is some kind of command economy reasons for why you cant get a cheaper bucket. For some reason chicken is on special all of november at only 1.19 per kg and was only 2.25 before that. Otherwise i think some people might be starving to death. Plenty of surveys testify to the cost of living in Finland but many highlight the quality of life - i am not so convinced that many people do live so well. Compared to living in NZ it is much harder to live here. People seem to live in pretty small flats for example. And yet there is no shortage of land.

The fact that the latest (red) dots are far to the right is telling me that gold is actually outperforming - at least on a EUR basis.

 

http://gold.approximity.com/gold-silver_watch.html

Interesting chart but Europe will be broken surely by such a weak exchange rate and the US will be exporting like crazy so it is hard to see that happening

The US is a major manufacturer. It is the worlds largest manufacturing economy

So much for a useless yellow metal. Scrap mobile phones contain a lot more gold per tonne than gold ores.

Wren

For sure my body contains more gold per tonne than gold ores also.

But if gold is useful then the mined amounts of gold seem sufficient for where it is useful and the mined cost of gold is probably half the price. So gold is in a bubble on that basis. Dr Bubbs says gold is underperforming, suggesting not only is it not in a bubble but that it is underpriced as i read that comment. Perhaps he means underperforming relative to expectations? Or does he mean relative to useful materials such as copper?

Goldfinger says that gold is a monetary asset. As far as i know central bank settlements do have some relationship to transfer of gold but how that works exactly i dont know in a world without obvious gold connections between currencies.

By the way can you find the Finland is 'great economicly' or 'is a model of excellence' thread?? I think it needs an update. I cant find it. Finlands september exports fell 36% for the same period last year and imports were down 30% for the period

http://newsroom.finland.fi/stt/showarticle...;group=Business

The production cost of gold is not something that I spend a lot of time thinking about. The market price is what concerns me.

 

If a gold producer wants to spend effort, time and money on finding and digging up gold only to keep it in a warehouse so that he can sell it later, then that is up to them. If they pay their employees in newly minted fiat money from the government so that they can both keep this jig going, then they all deserve whats coming to them.

 

Edit to add: entwine what Bubb says here to get a fuller picture of malinvestment: http://www.greenenergyinvestors.com/index....st&p=139845

FWIW

What you say does not make sense to me. You might have a job and you work and are paid in fiat and you probably store gold. The gold producer does the same. Whats coming to you? i am assuming profits will come to you. Most of us dont hold fiat unless it is useful to hold it - for example property prices have peaked and we are expecting to buy later for lower prices.

Similarly somebody like Jim Rogers is bullish on oil but he says he is 'not going to buy at 140 dollars because oil is at an oil time but sure he holds oil'........he probably sold some at those highs and bought at the recent lows. He and others drive the price up and down by knowing when to sell and when to hold. To get the price to the peaks someobody has to buy off jim rogers at the peaks so he can buy later at the lows. That is his game to at least some degree even if says he is not a market timer. If he knows when not to buy - which is what he told us...then he also knows when to sell dispite 'not being a market timer'

I cant see how buying and selling gold can be anything but mal investment. How does that benefit the world we live in to obsess over that? At least a person lives in a house or creates stuff from trees. Gold? mainly a speculative play surely? The more it goes up and down the bigger the profit for those who understand how to play.

I never read the link but perhaps malinvestment is a kind of central planning communist type of idea that somehow you can plan the future and lead people into better living. To a degree, greed is good. The greedy take risks that the less greedy dont need because somebody else is creating their life for them..........or so they think.

Edit:

I read the link. Debtors = savers. You cant have massive debts without massive savings.

So a massive number want to spend and a massive number want to enable other people to spend.

When that dynamic changes then interest rates will rise to encourage the savers to remain enablers. At the moment the savers are being encouraged to be the spenders because they are not being encouraged to save - instead the spenders are spending less. Net it seems there is still plenty of spending at this point in time.

I think the commercials think that a gold making machine is just around the corner...if they only hang on a bit longer...I'm sure the hadron collider will be able to produce a spec of au.

Back in 2007 or so the production cost of gold was about 300 usd or less?

If the production cost of a house is 100000 today will it rises past the current updated production cost with inflation tomorrow?

I assume the producers are timing release of gold to the market at price peaks and storing it the rest of the time which you would guess most buisinesses would do in the circumstances and shorting the hell out of it the rest of the time if that is something that makes sense to them. When they get the price lower they release the shorts and sell into the rally.

And given the nature of the buisiness you can imagine they finance all manner of gold ramping propoganda web sites commentators and so forth.

The diamond cartels work a similar gig with the value of their minerals. You as customer buy high and you sell low.

The tree growers work the same scene. When prices are high every man and his dog is encouraged to invest in forestry land.......and 30 years later when prices are high the stuff is sold off and if prices are not high the trees can grow a bit bigger.

But maybe i am wrong about the production cost of gold?

Edited.

Edited gold bug seems to be getting closer

That is a good point... and perhaps I have made my point.

 

That said, "Perma Gold Bull" just doesn't quite have the right ring to it. Maybe we can think of another term. Anyone?

Actually to be fair to Romans Holiday he might be right about his definition of Gold bugs. After dealing with one particular anarchist on HPC i can understand his point of view.

If it were me i would guide people who have exstreme views into areas of the board where people who want to converse with that view can do so and expect the mainstream part of the board to avoid these conversations where people just endlessly dilute a discussion with link after link that says 'this person agrees with my opinion' and 'you are wrong' and so forth.

Mercifully that particular person does not seem to be allowed to exist on this board!

Why all this ganging up on RH?

 

He (and everyone) should be allowed to post whatever he likes, so long as it is not rude nor insulting (which he never is!!!).

 

Heck... if people don't like his content or expressed views/arguments, then just discard or ignore his posts. Please don't start telling him or others what style of post/reasoning is acceptable.

RH is fairly ruthless. He finds it funny to mock people and say they are school boy fantasists. I think he should be able to make his points while being polite without relying on Dr Bubb to support his abuse

I agree RH seems to use the Gold Bug label a hell of a lot. Does seem at times that the 'gold bug' phrase is thrown around as a subtle attack to put gold investors down. I usually bite my lip when I read this, but I must agree with Mr P on this particular point.

 

RH - could you let me know your actual definition/meaning of a gold bug?

 

Most on this site are Gold Investors. I myself am a gold bull. I don't know anyone who would call themseleves a gold bug.

RH is a gold bug. Only person i know who believes in hyperdeflation which means a gold rise is automatic. He has to be a bug!

I suggest you go back and read the posts in their context.... I hope that clarifies things.

I just skimmed thru it. So many words and that kind of thing.

Maybe you could guide me to what you wanted me to understand with the quoted text?

I hope that clarifies things

Yes, you should see the logic of the other position. Isn't this an example of that [in regard to the gold bug position]?

Is that your text? If so it seems you are attacking the 'world view' but what is your reason for the attack?

You are saying it makes no sense not to be all in but given the 'world view' it makes sense.

Just my 2 cents worth. That's the idea of a forum such as this isn't it... to voice our opinions and perspectives, rather than think alike, no?

 

As for my post, I think I gave clear reasons for why my opinion differs to S.T.

RH

The idea surely is to attempt to see the other persons point of view as if you were sitting where they sit rather than dominate by force of personality?

if more people understood the issue then the poeple would regulate it

i dont want to regulate nothing - its you who is the fan of regulation

 

i think you have a history of putting words into peoples mouths to help your argument

What i see in you is lack of consistancy in your thinking. You want free markets but you have not thought it thru.

utter tripe

 

i will no longer respond to any other rubbish you spout

who benefits the most from the country being indebted

We can agree that if we take what you just said at face value it is not a good idea. Some people benefit from being able to borrow. Some people cant handle debt and dont benefit. An indebited country does not sound a good idea.

you mean like fannie mae and freddie mac - affordable housing disaster

Which as i understand it was created by people who wanted to help the poor against the better judgements of republicans who felt it was a disaster in the making. the UK also supposedly has a government with an emphasis on helping the poor. When people meddle they create these kinds of disasters. Without meddling there are other kinds of disasters.

i dont want to regulate nothing - its you who is the fan of regulation

Obviously you are seeking to regulate me.

i think you have a history of putting words into peoples mouths to help your argument

What i do either helps my presentation or it does not. You are claiming i am putting words into your mouth and other people claim i put words into their mouths. I claim i observe what i see and report it. I realise people dont like it.

How about focusing on the discussion if you dont like getting personal? If you dont want to regulate nothing then regulate nothing.

What i see in you is lack of consistancy in your thinking. You want free markets but you have not thought it thru. Why do you object to a free market in speech for example? Why do you even begin to want to regulate that market? I have the impression you want to somehow bully me into being different. What kind of free market is that?

strong men

link

Obviously if you have a free and fair system of government you dont want the public to know the intimate details of your market plans and actions so they can speculate against the position you intend to keep to provide stability in difficult times. Instead you want some kind of psi ops to ensure the market does not know the position.

I am not saying we do have free and fair systems. Just pointing out what i think is pretty self evident.

i am promoting a more honest and more stable monetary system whereby the power of bankers to profit from expanding and contracting the currency is vastly reduced and the hidden tax of inflation, so loved by governments, is no more.

 

free markets may never be achieved

 

limited government and freeer markets can be

 

and stop saying what i am or am not saying

A single bank operating in a wilderness type situation far from lines of credit has to go to enormous care to ensure that it manages lending in a way that can keep the bank operating profitably.

Therefore without governments bankers dont have much power over the economy. In a UK or USA type system the private banks cooperate with the government to expand or contract the economy.

And I remember when i was a student and the local insurance rep came around to see me and said i should consider buying a house to protect myself from inflation.....i was only 21 so did not understand what he meant. But by 1983 i was already there expecting inflation to devalue my mortgage.

So from my point of view it is not governments and bankers who love these things. The fact there has just been an enormous housing bubble shows that people love the idea too.

So in your alternate system it seems to me that you need to have a group of people who say what you can and cant do and that is not a free market.

In a free market i am entitled to say what you are or are not saying or are you going to regulate that out of existance too?

why are free markets anarchic

 

if i go to a market and want to buy someones bananas for a price both I and the seller are both prepared to accept without the rules of how straight they are, what colour they are, whether they are priced in lb's or kg, whether he/she has complied with health and safety legislation, paid his business protection money (business rates) and his government protection money (taxes). Anarchy?

 

who are the strong men now

 

governments and the bankers

 

when did i say i was promoting a catastrophic deflationary collapse - tis not me who created currency out of thin air and caused the debt bubble (Greenspan and Bernanke are more to blame than I)

Todays reality has aspects of my kind of anarchy already as you point out. I am then wondering why you think that this thing you are considering called 'free markets' (which to me seems like a never to be achieved theoretical consideration simply because reality and history tells us strongmen are always going to be present) is going to be better?

Because i dont see it as being better, the kind of free for all that i think would follow on from a removal of current systems will lead to a deflationary collapse. To my way of thinking by promoting free markets you are promoting a deflationary collapse.

as i have said before let the free market take care of the banks who want to speculate with FRB (without the central banks support)

 

regulation doesn't work - never has and never will - although i do admit you can have different levels of competence by regulators

Free markets are anarchic. In anarchy people dont need to borrow to get what they want they just take it. And if they cant take it they hope to destroy what the other person possesses.

I think also that in anarchy the worlds population would fall back. But is the nature of anarchy that strongmen emerge who become the local war lords. They then administer and police their areas.

So from my point of view you are promoting a catastrophic deflationary collapse where you might believe you can profit from that chaos. On the other hand another person might think they can just take whatever you accumulate so i dont see it as much of an investment strategy so far. But maybe i dont understand what you have in mind?

if more people understood the issue then the poeple would regulate it

Seems unlikely to me:

1. The people want to have access to finance

2. People like me cannot see that fractional reserve is some kind of evil force to enslave the masses.

3. The issue to my way of thinking about it has been lack of regulation. Why has there been lack of regulation? Partly it is because of anarchic type ideas that laizzez faire capitalism is the best way of organising a market. Prior to 1984 for example it was very very difficult to borrow money for certain property projects in the UK. Then came deregulation and American banks willing to lend on a valuation only - regardless of the condition of the property and the ability to sell it.

As i see it what we need is less government and simple effective regulation. China for example regularly alters their required reserve ratios to force banks to lend less money, whereas the inflation targeting model enables people to chase assets higher because they benefit from inflation and nobody regulates their ability to lend other than via price. That model has been well and truelly shown to be broken but i still think inflation targeting with regulated lending could be a workable system.

So basically its too late to sell to rent in the hope of further falls?

Unless you can rent somewhere for less than your current mortgage?

I am thinking of buying in Finland myself or at least in two minds about it because i can hopefully get a property cheap and do something with it that should work out for me.

Zignics inflation case looks better when the deflationary case is weakened by the fact that even when people are repaying debt of 8.1b in one month? that mortgage lending is still getting bigger. Until it actually falls more and more money must be coming into the market to support prices?

The other thing that bothers me that i dont have sufficient information about is the nature of the house price indexes. In my mums reasonably popular south of england area where we sold her house back in early 2006 i dont see a weakening in advertised prices so far on anything in that kind of 'affordable' 200,000 area. The impression i have formed rightly or wrongly is that quality houses have not softened so much? Whereas appartments and rubbish stuff does not have the buyers. If there is one index it is hard to know what is happening.

Here in Finland dispite many people laid off and plenty of 'permanent' reductions in staff, as far as i can see inventory is falling for units across the country. Why? I am not sure. Are people holding off for the buyers like me? Meanwhile i am still holding off so far in the hope better deals surface. In Europe anyway it appears there is no shortage of very cheap mortgage finance and even the unemployed appeared to be staying put for now.

From my point of view lending finance has to get worse to drive these doom and gloom scenarios. Back in the 1990's UK crash BOE rates were around 10% and peaked at 14% for example. Only if inflation comes back are we going to see a change in the historicly low rates and the ordinary person who thinks he can stay put and tougth it out has protected themself by buying property with debt.

Germany reckons their recession ended already. Hard to believe but if so then we are in a different reality to the one i thought we were living in.

Don't really understand your point. The system of credit you describe seems fine. Couldn't facilitate of war of WW1 proportions though.

You are now agreeing with me that my paper money seems fine.

My point was that it seems unreasonable to theorise about a world without paper money because by what method will you prevent paper money from circulating?

Now this kind of statement from the boe i find truly scary. I extrapolate from this that they will now try and put in place some scheme that achieves this stabilisation. Regardless of any consequences for sterling and savers.

 

Can this be achieved? And if so what would be the mechanism?

 

I don't see how just keeping interest rates low will be enough. Unemployment is rising and wages are falling. BT and BA are asking staff to work for free for goodness sakes!

from their point of view nominal stabilisation with real falls over maybe 10 years or even more is the best outcome.

That will be the reality they work with, so that is the reality you have to factor into whatever plans you have.

Roubini and Kasriel see USA recovery in 2010. Which probably means a bottom of sorts and a grind forwards to a different place with that reality in place.

None of this is particularly inflationary. The juice for inflation is not there. Destroying all savers is not going to achieve much it only creates less demand from the savers who cannot spend now and live later - the old and vulnerable.

The BOE has the power and freedom to do whatever is necessary to support current prices of what they think are important prices and equally in conjunction with central banks and governments the power to frustrate those who only want to speculate and take advantage of the mess these governments have created for themselves

These seem like realities we all now have to deal with

It is not suggested that a gold standard prevents wars. So why are you suggesting it was?

 

It says if gold was money - not paper or gold standard, gold itself - if there is no fractional reserve banking, and govts do not have the ability to issue currency, then wars on the SCALE of WW1 could never have happened.

 

Then say the English came off the gold standard to pay for the Nap wars and then struggled to get back on. That's just the point. If gold was money they could not have even funded that war.

But this sounds like a theory. Who is to enforce this gold money? If i lend you 1000 gold then assuming you are of good character i now have a note that says i lent you, a person of good character who is known to other people in the community 1000 gold. Because you are of good character and lets say i took security of some land you have when i lend that gold i now have a document secured to your land associated with the loan. Effectively what i now have is a valueable tradeable document which is more or less money. I can go to other people and say i want to buy that stuff and i have here this valueable document associated with that man of good character is that something you will trade with me?

By what means is a system to be produced that says my actions are illegal and that i am prevented from lending you my gold?

Who is to be the state here that says that lending of gold is punishable?