Carlton

The assumption that I would question here is Average Household size

 

In a severe recession, I reckon it will RISE

That's what happened in the USA.

Households had been getting smaller over the past decades, despite population growth. That was great for housing, because it meant more demand. "A one tenth of a percent increase in people per household would wipe out three years worth of population- and immigration-driven household growth," according to Green Street Advisors. That appears where we're headed.

http://www.cnbc.com/id/44274402/

I am reminded that Jim Rogers has said many times that you wind up making more money owning the underlying asset.

Posted for your inspection:

One day he might even decide to say 'oh and btw we are revaluing gold to 7000/oz. Whatever. It doesn't really alter the big picture one iota as far as I am concerned. As you say, its going to be interesting to watch this pan out over the next few months/years.

I still think the way Nixon announced the end of convertibility "temporarily" to "stabilize the dollar" funny. It wasn't even the first "element," but the third element.

What's the crop?

They look like fruit trees. That's an expensive way to grow some fruit

I don't know what the crop is, but there are many options. Some people love vertical farms.

Imagine a cluster of 30-story towers on Governors Island or in Hudson Yards producing fruit, vegetables, and grains while also generating clean energy and purifying wastewater. Roughly 150 such buildings, Despommier estimates, could feed the entire city of New York for a year. Using current green building systems, a vertical farm could be self-sustaining and even produce a net output of clean water and energy.

 

Despommier began developing the vertical-farming concept six years ago (his research can be found at verticalfarm .com), and he has been contacted by scientists and venture capitalists from the Netherlands to Dubai who are interested in establishing a Center for Urban Sustainable Agriculture, either independently or within Columbia. He estimates it could take a working group of agricultural economists, architects, engineers, agronomists, and urban planners five to ten years to figure out how to marry high-tech agricultural practices with the latest sustainable building technology.

 

What does this have to do with climate change? The professor believes that only by allowing significant portions of the Earth’s farmland to return to forest do we have a real chance of stabilizing climate and weather patterns. Merely reducing energy consumption—the centerpiece of the proposal Al Gore recently presented to Congress—will at best slow global warming. Allowing forests to regrow where crops are now cultivated, he believes, would reduce carbon dioxide in the atmosphere as least as much as more-efficient energy consumption.

 

There is another reason to develop indoor farming: exploding population growth. By 2050, demographers estimate there will be an additional 3 billion people (a global total of 9.2 billion). If current farming practices are maintained, extra landmass as large as Brazil would have to be cultivated to feed them. Yet nearly all the land that can produce food is already being farmed—even without accounting for the possibility of losing more to rising sea levels and climate change (which could turn arable land into dust bowls).

 

Depending on the crops being grown, a single vertical farm could allow thousands of farmland acres to be permanently reforested. For the moment, these calculations remain highly speculative, but a real-life example offers a clue: After a strawberry farm in Florida was wiped out by Hurricane Andrew, the owners built a hydroponic farm. By growing strawberries indoors and stacking layers on top of each other, they now produce on one acre of land what used to require 30 acres.

 

Why build vertical farms in cities? Growing crops in a controlled environment has benefits: no animals to transfer disease through untreated waste; no massive crop failures as a result of weather-related disasters; less likelihood of genetically modified “rogue” strains entering the “natural” plant world. All food could be grown organically, without herbicides, pesticides, or fertilizers, eliminating agricultural runoff. And 80 percent of the world’s population will be living in urban areas by 2050. Cities already have the density and infrastructure needed to support vertical farms, and super-green skyscrapers could supply not just food but energy, creating a truly self-sustaining environment.

 

1. The Solar Panel

Most of the vertical farm’s energy is supplied by the pellet power system (see over). This solar panel rotates to follow the sun and would drive the interior cooling system, which is used most when the sun’s heat is greatest.

 

2. The Wind Spire

An alternative (or a complement) to solar power, conceived by an engineering professor at Cleveland State University. Conventional windmills are too large for cities; the wind spire uses small blades to turn air upward, like a screw.

 

3. The Glass Panels

A clear coating of titanium oxide collects pollutants and prevents rain from beading; the rain slides down the glass, maximizing light and cleaning the pollutants. Troughs collect runoff for filtration.

 

4. The Control Room

The vertical-farm environment is regulated from here, allowing for year-round, 24-hour crop cultivation.

 

5. The Architecture

Inspired by the Capitol Records building in Hollywood. Circular design uses space most efficiently and allows maximum light into the center. Modular floors stack like poker chips for flexibility.

 

6. The Crops

The vertical farm could grow fruits, vegetables, grains, and even fish, poultry, and pigs. Enough, Despommier estimates, to feed 50,000 people annually.

continues: http://nymag.com/news/features/30020/

When do you see the new paradigm emerging?

You mean a reversion to the old paradigm, where money was expected to have intrinsic value, and an abandonment of the this "new paradigm" that we've been living in for forty years.

I think Sinclair, Rickards and Forbes have some good ideas, foreseeing a linkage between gold and the reserve currency in the next 3-5 years.

There's always urban farming.

I've always liked Thompson's no nonsense writing style.

8. You need to look in the mirror and ask yourself why you’re here, as a card-carrying gold community soldier. In the parabola zone, there are going to be the biggest hits on gold yet, and they are impossible to predict. If I blow up some egos, I apologize, but you need to ask yourself if you want to predict what cannot be predicted, or if you want to get richer.

 

9. I believe silver has a head and shoulders base pattern on it that is 30 years in size, and a break-out is imminent. That’s why I’m buying silver every 10 cents down. Not here or there. Every 10 cents down. I’m not looking for “strategic entry points”; I’m mauling the market with buys.

 

10. Click HERE NOW to view the greatest base pattern in the history of markets!

http://www.gracelandupdates.com/images/stories/SON11/2011aug23si1.png

 

11. How high can a 30 year head and shoulders base pattern propel the price of silver? I don’t know, but this price pattern is arguably the largest base pattern in the history of markets, and the question is, are you onside?

 

12. The tactical approach to operating in the parabolic zone is to tone down, substantially, your analysis of where price is going, and tone up your response to what actually happens. In terms of size, you need to sell like a bird on strength, and buy like an elephant on weakness.

 

13. Europe is burning, the dollar is burning, and governments are burning. Elmer Fudd Public Investor won’t have any stock market investments by the time the final bell rings on this, the big show. He’s going to make the people in the 1930’s breadlines look like they were in the party zone! The bottom line is that the big picture is going out of control and ushering in the gold parabola zone.

 

14. Martin Armstrong talks of hedge funds betting on the demise of European “virtual currencies”. He argues that national government bonds are being shorted by the fundsters as though they are national currencies of those nations. He worries that unless national debts are consolidated into a single Eurobond issue, dictators could arise in nations like Greece. These nations can’t devalue their currencies, and the market is devaluing their bonds like they are currencies going off the board!

 

15. I’ll add that the euro horror show playing out before your eyes now, gives you a glimpse into the supreme gulag being planned for you by the banksters, with their one world government/one world currency scheme. They know the horrors it will bring to you, and plan to use those horrors to enrich themselves, all the way to the quadrillionaire zone. Yes, maybe it is a good idea to get your hand off that gold top calling button, now.

 

16. Maybe it’s also time to give the tick chart technical analysis of the gold market a bit of a rest, and enjoy the ride! Don’t do to yourself in silver and gold stocks, what many have done to themselves in gold bullion already, with their failed top calls. While others talk about how low silver and gold stocks might go if the Dow crashes, I’m sucking up silver every 10 cents down, without a single missed buy. Have you missed any buys? Well, please miss some more, because that’s just more silver for me. Thanks!

 

17. The price hits on gold and its blood relatives, in the parabola zone, are going to be ultra-sharp, ultra-short, and ultra-unpredictable. Note that word, “unpredictable” and keep it mind before pressing your gold top call button. Most of you have no idea how fast the gold punisher can leave you in dollar dust, in the parabola zone.

 

18. I expect gold to rise by an average of $100-$200 per day, silver by $3-$5 per day, and GDX by $5 per day, as the OTC derivatives–loaded US T-bond market implodes, in the greatest financial fireball in the history of markets.

 

19. The stratospheric price point implications the base pattern in silver are a direct indication of the size of the interest rate OTC derivatives horror. The bond market is not a safe haven. It’s a time bomb, and the banksters are making their way towards it now, with fuses and lighters. Are you sure you want to play gold top caller here?

 

20. Are you sure that an OTC derivatives interest rate fireball that causes the total destruction of the American government bond market is really a reason to top call gold today? Maybe you can time your way through the coming implosion of the bond market. I say all the timers will look like microscopic glow worms, by the time the banksters finish with them.

 

21. This is it! We’re on the edge of the gold parabola and, horrifically, most investors seem to be trying to top call themselves out of gold, and onto the breadline, alongside Elmer Fudd Public Investor! My suggestion, instead, is to stay strong. Sell like a bird. Don’t plop into silver or gold stocks. Buy consistently like a machine, on all weakness, with risk capital you can reasonably place. Most investors have no clue how bullish for gold the implosion of the bond market is, and the time is near. I think an event in Europe lights the whole interest rate OTC derivatives garbage dump on fire, but it could be any trigger.

http://news.goldseek.com/GoldSeek/1314117196.php

Has the GOLD Begun its CORRECTION ?

 

The size of the Drop, and the Big volume today would suggest so...

 

(Gold was: $1829.60 -68.50, vs. Peak of $1914 yesterday)

GLD: $177.61 -$6.98 : GLD-chart

Open: 182.245 / High: 183.82 / Low: 177.50

Volume: 53,856,087

Percent Change: -3.78%

Do you have a downside target? Hamilton was suggesting $1465, the 200dma.

Size of Gold 'Bubble' Now an 'Absurdity': Analyst

 

Having risen by a third since the beginning of 2011 and nearly fivefold since 2004, one analyst believes the precious metal is now in bubble territory and an "absurdity".

 

"Gold is not money and has no investment yield and in fact incurs carrying/storage costs. With the 10 year US treasury rate at 2 percent and storage cost of 1-1.5 percent this implies an annual opportunity cost of 3-3.5 percent,” said John Wadle, the head of regional banks research at Mirae Asset in Hong Kong in a research note sent to CNBC on Tuesday.

 

With global gold reserves now worth over $9 trillion and the 30 stocks that make up the Dow Jones Industrial Index worth nearly a third of that level combined, Wadle believes gold is now a “bubble compared to US blue chip stocks”.

http://www.cnbc.com/id/44237225

He says global gold reserves, but what he's talking about is all gold ever mined not official reserves.

165,000 tonnes x $60.8 mln = $10.0 trillion

However, the US official reserves are 8133 x $60.8 mln = $494 bln

America's foreign held debt as of June 2011 was $4499 bln, so gold is currently providing about 10% cover.

$4,499,000 mln / 260 mln ozt. = $17,303 (Jim Sinclair's equilibrium price)

100% cover is not necessary. One-third cover would be $5762. I think that remains a realistic target in light of the (official or unofficial) remonitization of gold. However, Waddle's problem is that he doesn't view gold as money. If gold isn't money then maybe he's right.

Size of Gold 'Bubble' Now an 'Absurdity': Analyst

 

Having risen by a third since the beginning of 2011 and nearly fivefold since 2004, one analyst believes the precious metal is now in bubble territory and an "absurdity".

 

"Gold is not money and has no investment yield and in fact incurs carrying/storage costs. With the 10 year US treasury rate at 2 percent and storage cost of 1-1.5 percent this implies an annual opportunity cost of 3-3.5 percent,” said John Wadle, the head of regional banks research at Mirae Asset in Hong Kong in a research note sent to CNBC on Tuesday.

 

With global gold reserves now worth over $9 trillion and the 30 stocks that make up the Dow Jones Industrial Index worth nearly a third of that level combined, Wadle believes gold is now a “bubble compared to US blue chip stocks”.

Party over? (for a while)

$1875.90.

This is quite worrying:

 

http://www.mineweb.com/mineweb/view/mineweb/en/page33?oid=133930&sn=Detail

''A sobering thought too for physical gold holders is that any government legislation aimed at protecting the central banks and their gold holdings from a growing move to take delivery of physical could also be extended to individuals' gold holdings. Could confiscation of gold be a step nearer again?''

 

if other countries also decide to have their gold repatriated. Nixon pt.2 with a twist. 'sorry, we don't have your gold but can pay with our dollar treasuries-which we have aplenty' dastardly snigger...

 

Is it true the UK has 99 tonnes of Venezuela's gold? I wonder which other countries gold we have in 'storage'?

Possibilities like this form one of the best reasons to own mining stocks. I don't expect gold confiscation, but if it happened at least one would have one's miners. (Hopefully the miners are operating in safe jurisdictions.)

Fingers crossed & Good luck! Up she goes for the time being...will it reach 1900?

 

How's that US house price graph looking now? 90 odd? You 'lucky' buggers. I wonder when UK's time will come. Mind you now grinding under 150oz so we are there behind you if not 'shoulder to shoulder'. Lol. I keep having to pinch myself and remind self 'it's far worse this time, far, far worse, so sit back and let the metal do the running' Still it leaves the throat parched and wondering when people will consider piling in, cash buying with gold/silver profits. 80? 70? 50? 40? Much talk about gold 5000 out there now. At the moment, talk, but so it was back in 2005/6/7/8 etc.

All the best!

Yeah, the latest median was $171,900, so the ratio is at 91.5. That looks like a time to buy. However, there is still a glut of foreclosures, the Republicans may get some of their austerity wishes, which will be negative for home prices, and a recovery in employment seems to be non-existent for the time being. Meanwhile, failing confidence should push gold higher in the medium/long term.

And there is this:

NEW YORK (CNNMoney) -- Home prices have taken such a beating and demand for rental units has increased so much that it's now cheaper to buy a two-bedroom home than to rent one in most major U.S. cities.

 

According to real estate web site Trulia, buying was cheaper than renting in 74% of the country's 50 largest cities in July. In just 12% of the cities, including New York, Seattle and San Francisco, renting was cheaper. In the remaining 14% of cities, renting was less expensive but close to the cost of buying.

http://money.cnn.com/2011/08/16/real_estate/buy_rent/index.htm

There are good reasons to buy, but also good reason why the ratio may go lower. My bias is towards waiting. I enjoy being fleet of foot and want to absolutely avoid getting trapped in illiquid property.

Is a man's home his castle or prison?

People's Daily:

"The euro debt crisis has now been going for nearly two years since the end of 2009, and the sovereign debt crisis has spread like the Black Death of the fourteenth century across the euro zone countries," said the commentary, referring to the rodent-borne pandemic that devastated Europe.

http://www.cnbc.com/id/44223534

Jake, I'm hoping for that pullback also. I've decided to add the Sprott Trust (if I can get it with a reasonable premium) to the physical I have in-hand.

If gold is still up when the Western markets open I think this may be a good put buying opportunity.

I am very intrigued by gold miners/explorers that are still plumbing (nominal!) 2008 depths, such as Axmin Inc. and Endeavour Mining, to mention two that John Embry had looked at 2-3 years ago. Do we have a thread that actually discusses why some of these companies are still dirt cheap while others have recovered? I am usually less into the stocks, so I am possibly not quite aware of corresponding discussions on here.

 

Related to this, I will put some money into larger producers sometime soon. Does anyone see a good reason why I should not buy Goldcorp or Yamana? Note that I am talking of larger companies here, so I know there is also less upside potential when compared with juniors.

Many of the poorly performing stocks have had significant dilution. With some of these stocks the market cap goes up while the shares don't (as much).

http://www.kitco.com/ind/Banister/Aug112011.html

 

''Wave 1- 300 to 1030

 

Wave 2- 1030 to 681 (October 2008 lows)

 

Wave 3- 618- 1805 currently, 34 Fibonacci month cycle. *Likely high is 1862-1900*

 

Wave 4- Due up next… a multi month consolidation

 

It is my opinion that at the top of a Major wave 3 in Gold, that everyone should be univerally bullish, that gold radio and TV commercials would be all over the place, and that everyone on CNBC would be talking about and recommending Gold.

 

Sound familiar?

---------------------------------------------

 

Thoughts?

Looking at the chart and at Alf Field, I'm inclined to think we're still in 3 of 3, not 5 of 3. Banister is showing an almost non-existent 4 of 3.

Though, all the talk of gold has me nervous, and these past few days feel like too much too soon.

I'll add, however, that Ben Davies on KWN recently stated that though sentiment for gold is high, participation is narrow; people talk about gold, they don't own it.

 

The debate in Washington is changing, and changing fast - Can you not see that?

Respectfully, I think you're seeing what you want to see: austerity, austerity, austerity. We're Americans. We're used to getting what we want: a big house in the suburbs, an SUV, low taxes, and good government services. There is no majority in both chambers of Congress to either raise taxes or cut spending substantially. The spending will continue and the low taxes will continue, at least through the end of 2012. Approval ratings for the House of Representatives are at historic lows; while Pres. Obama's approval numbers aren't great but (with reference to history) they may allow him to be reelected. A Democratic sweep in 2012 is quite possible.

I'm trying to make the point that if you think of house prices in terms of gold - a young person should buy NOW! But they can't because all they have is money (not gold) and they haven't got enough of it to buy a house. So, the house/gold thing is completely irrelevant.

I bought my first property just after gold went from nearly $800 to $250 - at which point houses suddenly looked expensive compared to gold. If I hadn't bought then, I'd have had to wait 30 years for the same thing to happen again. 30 years in which I've lived my adult life, raised my children, had a roof over our heads etc. You really can't live your life waiting for some relationship between gold and property to occur.

The gold:home ratio is one indicator. Its not the only market indicator to watch when buying or selling gold or property; and it certainly shouldn't be used to dictate when you buy a personal primary residence. However, it would significantly guide my decisions about buying investment property.

Sinclair, a few days ago:

3. The key number in the gold market is $1,764.

Best to use gold as a hedge though, right? Sure, in a hyperinflationary environment you could theoretically do extremely well from your gold stash, although that is by no means guaranteed. Best bet is to have a bit of this, a bit of that, and a bit of the other

This makes sense. However, if you think of gold more as a currency than as a mere hedge it seems logical to own relatively more of it, no?

Carlton, are you not tempted to trade gold for property there in the US? If not, then when ie ratio wise what are you gunning for? 50oz/home? Cheers, jake

Yes, I am tempted and will probably pull the trigger on RE within 12 months. Although, I am facing some psychological impediments to homeownership: feeling married to the local (tax) jurisdiction, and feeling married to my job. The job is good, but I'm a wandering "global citizen" at heart.

We are lucky/cursed that many homes can still be purchased with 3.5% down payments. You could look at this and say that down payments haven't gone up yet, so home prices may still fall. But in our case we've had these low down payment options, FHA loans and Homepath loans, for decades, before the housing bull and now after it.

I'm inclined to think we are near the bottom in home prices. They could spike down to 70 or 50 ounces but anything more is getting into rare/unprecedented territory.

I think Jim Sinclair is correct, that we are entering phase 3 of the gold bull as I can report that my mother is considering buying some gold coins now. When she buys some phase 3 will be official, and I expect her to buy some in september. As Jim said "$1764 has the same significance as $524.90 because it represents phase 3, the point when a runaway price market for gold would gain exponential properties".

My father asked me yesterday if I owned gold. I didn't mention the physical but said I had done okay with gold and silver shares. He's always watched the markets but considered au/ag bugs a bit odd. When he's asking me about au I have to wonder if phase three is here for real.

I hope Sinclair is right when he says there will be no 1980 style collapse.

Faber:

...I just calculated if we take an average gold price of say around $350 in the 1980’s and then we compare that to the average monetary base in the 1980’s, and to the average US government debt in the 1980’s...but if I compare this to the price of gold to these government debts and monetary base, then gold hasn’t gone up at all. It’s gone actually against these monetary aggregates and against debt it has actually gone down. So I could make the case that probably gold is today very inexpensive....Well when the reset comes it will be say a hundred dollar bill will be exchanged for a one dollar bill or something like this. Before we have the Great Reset, the government they will increase the war effort under whatever excuse that will be but I think that is the likely course of action...The wealth destruction will be interesting because...the people that suffer the most before the reset happens are actually the cash holders.

Lassonde:

When you look at the average valuation of gold stocks over the last ten, twenty years and where they are today, they are like one standard to two standard deviations below what they normally trade for. Let alone in the current market they should be trading for, which is one standard deviation above the norm if not more.... Can his prediction for the index (HUI gold shares) double, I think he’s probably low, I think we are going to see more than that. I’m totally convinced because the gold stocks are way undervalued, so I’m looking at a very strong performance of the equities vis a vis the bullion in the next 18 months.

Yamada:

You had a little bit of a consolidation, seasonality would suggest a rise into the fall. The primary support level remains at $1,475...Our next target is $2,000, and we did a gold special in our last piece that suggested from a very long-term perspective...we could see $5,200 on gold. ...I think that one of the observations that one has to take into consideration is that with each of the Euro financial crises and our own financial crisis in 2008 to 2009, the dollar has rallied less!

 

 

In other words you had a rally in 2009 that carried 25%, then in early 2010 the rally was only 19% and the second one in 2010 was only 7% and this time you haven’t even seen 7% with the crisis that has evolved. So that suggests to us that it (the dollar) is becoming less and less considered a really safe haven. Bear in mind that the 80 level for the US dollar is a major 34 year resistance level now having broken down through that in 2006, 2007. So our longer-term declining dollar profile remains in place.

All from Kingworldnews.com

Re: LauraB's quote:

Monetary chaos is not the answer, accounting and fair taxation would be difficult if not impossible under such a scenario. I still prefer goverment-issued or intergovernmentally-issued currency; however, there need to be strong safeguards ensuring monetary stability.

Gold looks well poised for highs, according to this sound article:

http://www.kitco.com/ind/Trendsman/jul112011.html

COT short positions, open interest, public sentiment, and Wall street sentiment indicate a bullish bias.

Bot HL today; will look for an opportunity for more.