50sQuiff

From:

The levels of ignorance about monetary history is staggering isn't it? It's this attitude that tells me I should continue to accumulate every month. If you look at the 'Investment' section of The Times, that Concrete Jungle posted a link to, you can see where gold currently ranks in the editorial pecking order. Believe me, the press are incredibly perceptive in reflecting the thoughts and fears of their readership. http://www.timesonline.co.uk/tol/money/investment/ 1. Collectibles 2. Equity funds 3. 'Unconventional investing' - which ramps property and stocks 4. Sceptical article about gold

Good to see such scepticism about these price levels - room to run surely? It's so funny that these financial 'experts' are cautioning against an allocation of more than 5% gold, yet at the same time their poor suckers are probably fully invested in stocks, REITs and long-term bonds.

I've been wondering if there was more to the 2008 liquidity driven sell-off than "margin call-induced hedge fund selling as stocks crashed", or some variation thereof. With the US banking system on the brink, and a possible run on money market funds causing wholesale liquidation of assets, it seems likely to me that the funds were following, rather than leading the dash out of gold and in to dollars. Let's call this the 'Rollover' scenario, without the 70s attitude to gold. Note the mind-boggling interview with Rep. Paul Kanjorski: From: My point is, what if it had nothing to do with the equity markets? And why did gold spike during the Flash Crash? If the collapse of 2010 materialises, the trigger will be Europe. Therefore there will be no US bank panic (the Fed/Treasury backstop is a given now), no run on money markets and no need for commercial banks to liquidate assets. This time, the equity markets might crash because they're over-owned and overvalued based on fantasy future earnings and Enron-style balance sheets. Commodities might crash because they're not pricing in a Chinese recession and Great Depression 2.0 in the West. Gold, increasingly monetized, may not be liquidated this time.

I fear it is. Paraphrasing the immortal words of cgnao, "preparations to protect financial holdings of any kind.. are being rushed to completion as soon as possible".

Absolutely nothing has changed. I think we're just seeing a corrective wave in the Dollar index. I'm taking this opportunity to buy a few more ounces and move my cash to Swiss government bonds though!

The thing that worries me, is that Prechter has shown better than anyone else, that he understands how and why financial events and long-term trends will unfold. His timing is absolutely horrible, but the world has basically been unfolding according to his views. More so than any other bearish pundit anyway. However, for someone that apparently prides himself in his understanding of investor and consumer psychology, he seems to have a large gap in his thinking on gold. He seems to think that in a world of paper asset destruction, bank defaults and a crumbling financial system, that people will hoard zeros on a screen, prefixed with $ signs. EWI seem to be getting as stubborn as the bullish stock speculators that they so love to mock. Conquer the Crash was very open minded on gold - Prechter recommends buying some, and admits that he may be missing something that would precipitate a dash to hard assets. But now they get more dogmatic with every upleg of the bull market. Jim Sinclair on the other hand is a victorious veteran of the last Gold War. He has amazing insight into how high the stakes are and how the big players operate. But then there's always the concern, he's an old general fighting yesterday's battles. That said, I'm liking his thinking nowadays, now he's moved on from "the dollar is going to zero in 45 days" and is talking about financial warfare waged against sovereign states using derivatives. Jim is very cognizant of "MOPE" - management of perception economics. What he misses, is that his perceptions are being well managed as the Fed tries to stoke inflationary expectations in the face of massive deflation.

I know you're not dogmatic about this RH, I think your strategy is very pragmatic, especially if you're earning Korean Won! Sterling on the other hand is a much more confusing situation now. A collapse is very possible, yet it's undervalued and no alternative currency looks like a good buy, except perhaps the SFr. Paper sellers meeting some resistance at the moment..

I just can't see it panning out like 2008, RH. I can't see the gold market giving everyone a neat, predictable opportunity to buy ever again. Everyone is looking for this pull back in gold on deleveraging and I think it's just not going to come. This time any fund liquidation will be matched by physical buying, anticipating Bernanke's final QE bombshell and the failure of major banks or sovereigns. It's what Prechter is missing. Investors and wage-earners will see their paper financial assets being vapourised and their digital currency in the bank possibly disappearing completely. Prechter's thesis for gold relies on them responding by hoarding ever more digital and paper assets!

Quite. Today is going to be a huge acid test isn't it? Big gap down for the S&P - what will our favourite re-emerging currency do?

To echo the sentiments elsewhere on the board, we still have to pay close attention to Prechter. I think he's wrong on gold for various reasons, but he's still the only person to call the 2008 financial crisis, exactly as it played out. I can't think of anyone else who came out strongly bullish on the USD in Q3/4 last year either - brilliant call. I think it would be great if we could create some questions for Bob about gold and get Frizzers to put them to him.

Indeed, the scales involved are a bit of a mystery. This is a better chart that illustrates the point more clearly:

That chart looks stunning at first glance. I think the different scales in use may need closer examination though. Tomorrow, when my eyes are less tired..

Interesting chart gleaned from ZeroHedge. Is gold in a bubble? The answer:

I feel slightly sick in my stomach and I'm 40% in gold. There's a distinct feeling that this is getting out of hand. Looking around my office right now, everyone's happily getting on with their job. Maybe they're on to something?

Yes, OTT I think. (ZeroHedge, OTT? Shocking!) What I basically drew from the latest CFTC saga was that the physical metal markets are leveraged about 10-1 and that everyone thinks this is fine. It probably is, until we get a genuine rush for physical metal. I don't think that will happen until another major financial institution fails - probably a bank with huge sovereign exposure.

Just look at that action when the COMEX closed and the paper selling no longer weighed. Strap on your golden jetpacks ladies and gentlemen.. $1230 is on the board.

It's not just you. See my post above on Google Search and News volume. We've been in a steady decline on both fronts since the late 2009 high. The 2010 upleg in gold has not captured the MSM's attention in the same way.

Silver has just gone vertical. May the thrust be with you, silver bugs. Wish I was with you.

Last time it was Volcker that made the key Central Bank 'get religion'. Who is the next Volcker and where is he coming from, in our far less Western-centric world? The only thing that can stop this train is a new global exchange rate system presided over by the IMF. The level of international agreement required means gold can't just be stopped in its tracks, as it was in the 80s. Perhaps the Chinese and Middle East could declare a new gold-backed currency, but they've got a lot of gold to buy first.

Time to buckle up. If today's attempted smack down fails (cf. Jim Sinclair) and we break higher, then we have lift-off. Oh to be a fly on the wall at the JP Morgan prop desk.

Interesting to note that this recent upleg in gold has not been matched by an uptick in Google search or news reference volume: Google Trends: "buying gold" http://www.google.com/trends?q=buying+gold...=all&sort=0 So far we've only had a small spike in this, presumably as we made new highs in Euros and Sterling: Google Trends: "gold price" http://www.google.com/trends?q=gold+price&...=all&sort=0

Well, my dalliance with trading gold is not going well. Not horribly (more of an opportunity loss than a material loss), but not successful either. This has only underlined the importance of building a core position, for which I credit several posters on GEI for their good advice. Gold is my core savings vehicle that I add to every month, and is well and truly separate from any speculative activity. If I'd been trading silver on the other hand, I'd have been doing a lot better! On the subject of gold savings vehicles, did anyone else receive the recent GoldMoney survey about debit cards? They're gauging customer demand for a GoldMoney debit card, for drawing cash and making transactions directly from your holding. Very interesting development, for those looking far into the future and fearing punitive capital gains taxes on gold sales.

Yep, nice call. I took a mini-roasting on Sterling last night and have to hold my hand up. An incredible election really. I knew the polls were wrong. They were, but not quite in the way I thought! Fortunately I went long the dollar last year when it was meant to be toast I still think this is an important day for gold and I'm continuing to sell into it right at the top.

It's getting serious. Is anyone selling into this rally? It seems every time I refresh my GoldMoney balance I make more than my daily wage Imo, this is the blow off to 1200-1220. I think on the next manic swing, we're staying above $1,000 now.