wrongmove

Fair enough, assuming the graph is also based on the Nationwide. I'm going to have to agree with you on this one!! Gold is better than housing at the moment! Bit of a back handed compliment, but it's a start!

Today it is, but I would like to see the last few months. I should add that given the option between property and gold at the moment, I would almost certainly go for gold - at least has gold has some potential upside, which unless the hyperinflation argument turns out correct, (UK) housing hasn't, IMHO!

Nice chart. <cheeky mode> Shows that property has done very well compared to gold over the years.</cheeky mode> It would be nice to see an up to date version. I'm guessing house prices and gold (in £) are both dropping at comparable speeds at the moment.

I haven't got the energy to watch the whole video at the moment, but if you believe I am bluffing, then fair enough. I am not. I am merely enjoying a good debate, and, I thought, bringing some useful angles to the argument. Why on earth I would be bluffing is completely beyond me. I take that as a completely unwarranted slur, and actually just an example of the bad debating you accuse me of. "Argumentum ad hominem (argument directed at the person). This is the error of attacking the character or motives of a person who has stated an idea, rather than the idea itself. The most obvious example of this fallacy is when one debater maligns the character of another debater (e.g, "The members of the opposition are a couple of fascists!"), but this is actually not that common. A more typical manifestation of argumentum ad hominem is attacking a source of information -- for example, responding to a quotation from Richard Nixon on the subject of free trade with China by saying, "We all know Nixon was a liar and a cheat, so why should we believe anything he says?" Argumentum ad hominem also occurs when someone's arguments are discounted merely because they stand to benefit from the policy they advocate -- such as Bill Gates arguing against antitrust, rich people arguing for lower taxes, white people arguing against affirmative action, minorities arguing for affirmative action, etc. In all of these cases, the relevant question is not who makes the argument, but whether the argument is valid. It is always bad form to use the fallacy of argumentum ad hominem. But there are some cases when it is not really a fallacy, such as when one needs to evaluate the truth of factual statements (as opposed to lines of argument or statements of value) made by interested parties. If someone has an incentive to lie about something, then it would be naive to accept his statements about that subject without question. It is also possible to restate many ad hominem arguments so as to redirect them toward ideas rather than people, such as by replacing "My opponents are fascists" with "My opponents' arguments are fascist." " (Logical Fallacies and the Art of Debate) Here's another "Argumentum ad nauseam (argument to the point of disgust; i.e., by repitition). This is the fallacy of trying to prove something by saying it again and again. But no matter how many times you repeat something, it will not become any more or less true than it was in the first place. Of course, it is not a fallacy to state the truth again and again; what is fallacious is to expect the repitition alone to substitute for real arguments. Nonetheless, this is a very popular fallacy in debate, and with good reason: the more times you say something, the more likely it is that the judge will remember it. The first thing they'll teach you in any public speaking course is that you should "Tell 'em what you're gonna tell 'em, then tell 'em, and then tell 'em what you told 'em." Unfortunately, some debaters think that's all there is to it, with no substantiation necessary! The appropriate time to mention argumentum ad nauseam in a debate round is when the other team has made some assertion, failed to justify it, and then stated it again and again. The Latin wording is particularly nice here, since it is evocative of what the opposition's assertions make you want to do: retch. "Sir, our opponents tell us drugs are wrong, drugs are wrong, drugs are wrong, again and again and again. But this argumentum ad nauseam can't and won't win this debate for them, because they've given us no justification for their bald assertions!" "

I am not writing off gold, merely try to show there are two sides to the argument. You say that housing and financials are turds, and I would say that the market agrees (although we may be seeing the start of a cyclical shift from commodities back into finance). But the market could be forgiven for thinking that PMs are pretty turdy too. They have dropped just as far as housing.

Fair enough. I accept there is a precedent. I would personally call it a bull until 1974, followed by a two year bear, followed by a bubble, but I am prepared to accept your interpretation.

Emergency funding: Mortgage lenders braced for October 20 as they pencil in another big freeze "Britain's banks are counting the days until October 20, one of the most important dates in their calendar this year, when the Bank of England's emergency lending scheme is due to close. The special liquidity scheme was set up in April to unblock the UK's financial system. By some estimates Britain's mortgage lenders have withdrawn up to £200bn in fresh funds. However the home loans market remains moribund and the City is concerned that the facility will close before it has had much chance to work. The Council of Mortgage Lenders, whose members account for 98% of all Britain's home loans, wrote to the chancellor yesterday urging him to extend the scheme. It was meant to be in place for no more than six months, providing some £50bn in additional funding to the financial system. Mortgage providers may soon need to seek new sources of funding if the central bank pulls down the shutters as scheduled. The true extent of the banks' use of the emergency facility will not be known before it is closed. Analysts at Swiss bank UBS believe it could top £200bn, while other banking industry sources believe the figure could be closer to £70bn. Banks have three years to pay back any funds they borrow under the scheme, but the UBS analysts argue that banks which have used the facility will have to start cutting back on their lending, taking funds out of the mortgage market, if it is not extended. Withdrawing the helping hand, they say, "will create an overhang of funding needs". "At some point liquidity is solvency: an inability to raise funds requires asset sales, or balance sheet reductions," the UBS analysts argue, warning banks could try to cut £200bn of lending. When it was announced in April, the Bank of England estimated initial usage at £50bn but made it clear that it was not going to put a limit on the scheme, which allows lenders to swap mortgage-backed securities for more liquid government paper. Lenders are reluctant to admit they are using the special liquidity scheme, even though they pushed hard for the authorities to introduce a system to help thaw financial markets which had frozen during the credit crisis. Since the onset of the credit crunch in August 2007, the appetite among investors for mortgages packaged up as bonds through a complex process known as securitisation has disappeared. This process had enabled banks to expand their lending dramatically in recent years, often offering 100% and even 125% mortgages to homebuyers...................(cont. in article)

We are 6 months into this correction, yet gold still needs 25% gains to exceed old highs. Is this typical of earlier bulls?

Thanks for the tip Steve, but you are going to have to define "leakage expression" to me. You may not want to give a free education, but when point after point I make is not contested in any meaningful way, what am I to assume?

So far, it seems the banks have just dumped rather dodgy assets on the BoE to shore up their books. So the taxpayer will eventually get stung, but no new lending to actual customers seems to have occured.

Sure, but this was just brought in to try and patch the gap left by the much larger printing exercise of MBSs. This fund has almost exclusively been used by mortgage lenders. Where is the evidience that it has actually boosted mortgage lending, rather than just slightly attenuated the massive drop?

What about April 2006? What about June 2008? No-one is denying that there has been a bull run in commodities (and gold). The big question is, what happens now? The economic wind has changed direction since last year. Then, it was borrow, borrow, borrow to put into "risk free" markets. That illusion of zero/low risk has now been shattered (except here, it seems). Hedge funds are not making loads of money in commodities any more, they are going bust. The "derivative beast" is at work in commodities too, you know. There is still hundred of tons of gold in etfs etc, and speculators are getting cold feet. Is the credit crunch now over? Are big risky bets going to come back into fashion any time soon? Or will the unwind continue for a while yet. The predictions of the 'gurus' are in tatters, but no-one seems to have noticed. These people are still quoted, even though they won't even pick up the phone to their acolytes now. Yet, for many here, it is still business as usual, 2006/2007 style. Maybe this is just a blip, but there is plenty of evidence to the contrary. Gold did exactly what many here said it should - increased in value as high lending pumped up the money supply. But I believe this pumping has seriously wound down and there is a real possibility it will go into reverse, as it already has in the property markets for example. The CBs can try to increase liquidity, and they are, but if punters won't borrow, and retail banks won't lend, there is not a lot they can do. Steve, I appreciate that my level of debate is beneath you, and not even worthy of a response, but could you at least point out the straw men in my arguments, so I can avoid them in the future?

I like the irony of gold being used as a cable hedge. Buy gold. It protects you from a rising dollar!!

Come on dude! If you can't work that one out for yourself, you probably shouldn't be allowed a cheque book!! ;)

Posted on July 30, 2008

IIRC, JS "guarenteed" $1200 by end of 2008? He also made predictions about the dollar which have been proved wrong. He has been calling the bottom and saying "back up the truck" since at least $900. So, in my humble opinion, just cos Jim sez it, doesn't make it so.

Hi Dr B. I certainly don't feel unwelcome here. I was just wondering if I was sometimes attempting to debate with what you might call "fundamentalists". I am not a gold bear, as such, well not at $800. I just don't see any good reason why gold will suddenly reverse this trend and "shoot to the moon". I accept a manic bubble is always a possibility, but not something that can be predicted.

Would you class me as an anti-goldbug? I came to the debate with an open mind, and respect for the gains made by those who invested early. I learnt all I know about gold from these forums. I just don't agree with some of the basic premises of "gold buggery". I am prepared to back up my opinions with arguments and debate, and change my mind. I also accept that gold may "go to the moon", I simply don't accept that the probability is high enough to justify the downside risk. I am asking, because it is pointless to debate if I am pigeon holed into a prejudged corner. That isn't debate, it just becomes a slanging match, and of no interest to me at all.

Of course it doesn't say everything. UK property would be a contrarian investment at the moment - huge pessimism. Are you buying houses as well?

When markets are irrational, only the irrational make money. Best to get used to it, I guess.

Where is your evidence for this? BoE are shutting down SLS, for example. There is no evidence of Zimbabwe style printed cash to pay wages, just the usual monetary expansion through debt. And apetite for debt has fallen of a cliff in many sectors. People are deleveraging, it seems to me. Selling assets, generating cash. Much simpler explanation, so in the absence of compelling evidence for some sort of global, leak-free conspiracy, by Occam's razor, the one I am choosing.

Are the CBs capable of moving the worlds biggest currency by 10%? I somehow doubt it. Why hasn't the market "done a Soros"? Surely a simpler explanation that fits the facts (i.e. assets down, dollar up) is that people have been selling assets to generate cash?

What do you mean by that - that there is no other possible outcome? What if....... .....after years of profligacy and pointless expensive wars which drove the dollar to all time lows against both other currencies and gold..............the US began to wake up. Military efforts were scaled down and the responsibility spread to other countries, the house market collapsed, massively reducing lending and hence monetary inflation, and making the public 'smell the coffee' of the reality of last few years. i.e. is it utterly inconceivable that the dollar has put in a bottom after years of decline? It wouldn't be the first time the US have turned a situation like this around (e.g. post Reagan/Bush)

You're certainly optimistic! Looks to my untrained eye that during the NY session, silver dropped, went sideways, then rose back to just below where it started?

They are probably all checking how to claim on their "gold guarentee".