Dispassion

They will approve a bail out of the financials otherwise the state will collapse. The terms under this happens will be the greatest change in US politics for decades, so as you can imagine every congressman wants to use the opportunity to achieve their political objectives and are prepared to let the global economy suffer in a game a political chicken. The most apathetic about the plight of humanity will win, since the others will reach a state of desperation quicker.

who's the actual source for this?

It's too late for that, they've probably stashed many years of dispropotionate annual city bonuses in gold. The free markets determined that these were fair bonuses because they were seen to be very sucessfully performing critical roles in the economy.

If anyone's still in any doubt that the free markets have failed check out this definition of market failure, I'm sure you'll recognise some familar concepts, of particular interest is the definition of moral hazard: http://en.wikipedia.org/wiki/Economics#Market_failure

Solialism is the moral aspect of statism and if the state is to take on massive amounts of failed private debt then it is inveitably a move towards statism. http://www.house.gov/paul/congrec/congrec2008/cr092408h.htm Although Ron Paul is very right to be concerned, I've not seen him present an alternative and any alternative is necessairily interventionist anyway, unless we're talking about liquidating all companies and individuals with debt that they can't immediately repay. Only a sadist or someone who can't accpet that free markets fail, could propose this.

Regardless of the factors contributing to the failure of the free markets, the free markets have failed. http://en.wikipedia.org/wiki/Market_failure Are you advocating bankruptcy for all banks, companies and individuals with a negative balance? If not, how do you expect them to survive without intervention?

If it's a controlled decrease in productivity, then problem isn't as large, but this requires intervention, which is what you argue is counter productive. If it's a massive decrease in productivity due to a failure of the global financial system then it's time to think about which 'necessities' you're prepared to do without and what this means for people who don't have the 'necessities' already. The point is, the free markets have failed, they can't fix themselves or the problems they've caused, it requires people to fix the problem now and this, inevitably, means larger states, or standards of living will seriously suffer.

It much worse than that, it really needs fixing. If no one tries to fix it then where do we end up? A total collapse of the global financial system resulting in a massive decrease in global productivity.

Yep, and I would add Bernanke and Paulson to that. I think this is a little over the top, if Bernanke and Paulson don't, then who does? In my view, the current situation isn't one that wasn't easy to avoid and the problem is as much a political one as one of finance.

I'm not abusing you, and I'm not reading anything but the words and I really do apologise for any offence caused. Whilst I agree that the movement of gold is well correlated with currency movements at the moment, if you check my previous posts you'll see that I've often pointed out this correlation with respect to the gold price. All it takes is look up the definition of currency and commodity to invalite the statements: "gold is a currency" http://dictionary.reference.com/browse/currency http://en.wikipedia.org/wiki/Currency "gold in not a commodity" http://dictionary.reference.com/browse/commodity http://en.wikipedia.org/wiki/Commodity I'm not claiming that you said either of these, only that I've seen these statements paired many times. I'd rather see people discussing correlations, than making assertions, but I really wish that I hadn't posted now, because it's really not worth fighting over.

I've vowed to myself not to respond to "gold is currency" stuff again, but read it back and I'm sure that you'll agree that there is no logic in this post. Since no one rose to the challenge last time, I offer the same challenge to anyone that believes that gold is currency and not a commodity, to define the terms "currency" and "commodity". I really shouldn't be concerned with this, but I don't like to see mis-representation, even if I agree with the motive.

Looks right to me, it largely behaves as leverage on the movement of the gold/silver price. I expect to see both the XAU and HUI close to their peaks in March, if and when gold hits $1000 again.

It's good to break the resistance at $902, looks like a challenge on $1000-$1003 may happen very soon! Oil up by 20% is pretty exciting. It looks like the oil market has decided that it won't be debt that strangles the world economy, but energy prices after all, so let's see how quick the world can restructure, if any of our politicians are interested. Perhaps they're expecting the free markets to think long term and guide the changes in infrastructure, because the financial sector has always been good at that hasn't it...?... oh wait, hold on... It is up to the state, isn't it...? Someone should tell the electorate quick, before they vote in conservative governments again.... I wonder who in the media will help us...? oh crap...

Looks like another challenge at $900 is imminent, I've got a good feeling about this one.

Looks right to me, it largely behaves as leverage on the movement of the gold/silver price. I expect to see both the XAU and HUI close to their peaks in March, if and when gold hits $1000 again.

Are we calling this a win for fp, then? Along the same vein, does anyone think there's merit to a prediction thread, where people can post predictions over a specified timescale, which can be measured and tallied for kudos?

I plan to bail out before the end of the bull run, but I expect it will be before rectal incontinence sets in.

That's a very useful link, thanks!

It was me who posted about borrowing to short, though I'm no expert on gold leasing. This gives as much information as I have: http://www.anglofareast.com/0138.html I think Dr Bubb may understand this in more depth and is of the opinion that the current rise in lease rates is very bullish for gold, but I've not understood his logic. I think the subject can get very complicated and that you may want to try to understand the objectives of GATA, www.gata.org before drawing any conclusions.

My wife's easy going about our 100% investment of STR fund. Perhaps we need a new thread for wives of STR husband that have spunked the fund on PMs! Depending on the price of gold, they could discuss torture methods or tasty cooking. :lol: Perhaps you could make it PC and substitute the word "wife" for "partner". I remember reading a study into the investment strategies of men versus those of women, it found that men took more risks and had more confidence in their own judgement than women and compared the performance of their portfolios. Women's portfolios significantly outperformed those of men, so perhaps the "wife" knows best.

http://www.ft.com/cms/bfba2c48-5588-11dc-b...00779fd2ac.html John Authers on gold. Just the obvious stuff, though I'd go on to suggest that there is good evidence that the gold price may have finally decoupled from the dollar/euro price.

I posted this a while ago, but I'm going to post it again to highlight the volatility of the gold price. Personally I'd say that if you're risk adverse, at the moment, cash is the place to put your money. If you can handle volatility of a factor of 10 and greater and like to take the time to predict markets, then precious metals could be a lot of fun, but whatever you do, don't see them as "safe".

I think the drop is related the UK ban on short selling of financials. I wonder where the panic changes to the the capitalist system will leave us? The theory that installing confidence in the system by not interfering and allowing the free market to determine the outcome seems a long way behind us now. What will it take for people to believe in capitalism the same way they did in the 90s? It's pretty clear that the long held premise that 'capitalism has won' is on very shaky gound, even David Cameron thinks so! http://www.ft.com/cms/s/0/a1248668-84d8-11...00779fd18c.html

Finally some excitement today, I was getting a bit bored of gold.

Back above $866 and climbing... anyone want to take a punt on where this rise will end?