GOLD

[warpig]

How does the bond/gilt market factor in to your thinking?

 

I feared you might ask...

 

Other than gut instinct (which usually works quite well, actually), its

 

A. My future predictions (dangerous, but necessary to create and adapt with time/event) are that the 'recovery' is now in motion, and will continue for a year or so. Of course, its as unreal as the recovery that occured between 2003 and 2007, which was built upon ultra-low interest rates. This current recovery is built upon ultra-low interest rates plus QE. Next time around, they won't be any medicine strong enough to revive the patient!! There's also a very large amount of cash in the system (much directly from the QE) looking for a better home than savings accounts, and so we're creating mini-bubbles in stocks and commodities. So for the next year everyone will start to feel secure and rich(er) again, and gold will struggle. Layer in deflation for a year, and gold doesn't have a chance medium term. Finally, the PPT will keep suppressing golds price until they run out of capacity to do that (because they've spent all of germanys gold, etc). But after the next 12 months, the economic 5hit will really hit the fan, and gold will be the place to be.

 

B. The charts. As shown below, I can interpret the USD price of gold in two ways (and I know which one is prevalent at GEI). The red one is self explanatory. But lets consider the blue curve, which starts rising initially in 2005 as people were throwing their money into everything. But it them extrapolates what might have happened without the credit crunch panic - which itself involved two several month periods of extreme fear, causing gold to shoot up during those periods. But between those time intervals, gold fell right back down to the blue curve. And if we're now enterring a new delusional period of happiness and light for a year (see above), I can see gold dropping right back down to that blue line.

 

But I'll probably cyhange my mind again after I've taken my medicine

 

 

http://hgvbase.bioc.le.ac.uk/temp/GoldsFuture.JPG

[Pixel8r]

I feared you might ask...

 

Other than gut instinct (which usually works quite well, actually), its

 

A. My future predictions (dangerous, but necessary to create and adapt with time/event) are that the 'recovery' is now in motion, and will continue for a year or so. Of course, its as unreal as the recovery that occured between 2003 and 2007, which was built upon ultra-low interest rates. This current recovery is built upon ultra-low interest rates plus QE. Next time around, they won't be any medicine strong enough to revive the patient!! There's also a very large amount of cash in the system (much directly from the QE) looking for a better home than savings accounts, and so we're creating mini-bubbles in stocks and commodities. So for the next year everyone will start to feel secure and rich(er) again, and gold will struggle. Layer in deflation for a year, and gold doesn't have a chance medium term. Finally, the PPT will keep suppressing golds price until they run out of capacity to do that (because they've spent all of germanys gold, etc). But after the next 12 months, the economic 5hit will really hit the fan, and gold will be the place to be.

 

B. The charts. As shown below, I can interpret the USD price of gold in two ways (and I know which one is prevalent at GEI). The red one is self explanatory. But lets consider the blue curve, which starts rising initially in 2005 as people were throwing their money into everything. But it them extrapolates what might have happened without the credit crunch panic - which itself involved two several month periods of extreme fear, causing gold to shoot up during those periods. But between those time intervals, gold fell right back down to the blue curve. And if we're now enterring a new delusional period of happiness and light for a year (see above), I can see gold dropping right back down to that blue line.

 

But I'll probably cyhange my mind again after I've taken my medicine

 

 

http://hgvbase.bioc.le.ac.uk/temp/GoldsFuture.JPG

 

I think that could be wishful think on your part. James Turk's latest commentary mentions how parabolic the GBP gold chart is starting to look, also DrBubb and others are looking for a dollar bounce, which has got to mean the pound getting weaker. Also remember September is historically a very strong month for gold. I see a breakout happening soon, target $1300 from the inverse head and shoulder formation.

 

Gold is not only doing well against the dollar, but looks ready to climb against the euro too. Most astonishing though is the gold chart in terms of British pounds, which looks like it is in the early stages of going parabolic.

 

I am bearish about the outlook for the US dollar, but this chart of the gold price in terms of pounds is making me re-think my view. This chart suggests that the British pound will collapse before the dollar collapses.

 

Silver too is doing well too. It is recovering in dollar and euro terms much of the price decline it suffered in the deluge of selling after the Lehman Brothers collapse.

 

 

http://goldmoney.com/commentary.html

 

[bitbigt]

I feared you might ask...

 

Other than gut instinct (which usually works quite well, actually), its

 

A. My future predictions (dangerous, but necessary to create and adapt with time/event) are that the 'recovery' is now in motion, and will continue for a year or so. Of course, its as unreal as the recovery that occured between 2003 and 2007, which was built upon ultra-low interest rates. This current recovery is built upon ultra-low interest rates plus QE. Next time around, they won't be any medicine strong enough to revive the patient!! There's also a very large amount of cash in the system (much directly from the QE) looking for a better home than savings accounts, and so we're creating mini-bubbles in stocks and commodities. So for the next year everyone will start to feel secure and rich(er) again, and gold will struggle. Layer in deflation for a year, and gold doesn't have a chance medium term. Finally, the PPT will keep suppressing golds price until they run out of capacity to do that (because they've spent all of germanys gold, etc). But after the next 12 months, the economic 5hit will really hit the fan, and gold will be the place to be.

 

B. The charts. As shown below, I can interpret the USD price of gold in two ways (and I know which one is prevalent at GEI). The red one is self explanatory. But lets consider the blue curve, which starts rising initially in 2005 as people were throwing their money into everything. But it them extrapolates what might have happened without the credit crunch panic - which itself involved two several month periods of extreme fear, causing gold to shoot up during those periods. But between those time intervals, gold fell right back down to the blue curve. And if we're now enterring a new delusional period of happiness and light for a year (see above), I can see gold dropping right back down to that blue line.

 

GoldsFuture

 

But I'll probably change my mind again after I've taken my medicine

 

...fluck me, did I just move the market ??

 

[bitbigt]

I think that could be wishful think on your part. James Turk's latest commentary mentions how parabolic the GBP gold chart is starting to look, also DrBubb and others are looking for a dollar bounce, which has got to mean the pound getting weaker. Also remember September is historically a very strong month for gold. I see a breakout happening soon, target $1300 from the inverse head and shoulder formation.

http://goldmoney.com/commentary.html

 

Yep - and when all the signals are pointing in one direction, we know which way the market moves!!!

[Pixel8r]

 

...fluck me, did I just move the market ??

Minor dollar strength off the back of the faked job numbers from Friday....

 

[bitbigt]

How does the bond/gilt market factor in to your thinking?

...when I incorporate the bond/gilt market factor in to my thinking, my head hurts and smoke comes out of my ears.

 

But seriously, CBs will keep buying these things and keep rates low for another year. That won't be sustainable longer term, however, as the joke that is the USD will become clear to the masses, and the newly elected conservatives in the UK will start to act more responsibly with the country's finances. But this does not mean imminent hyper-inflation thereafter, just high inflation and weakened currencies - plus a decade of pain for UK and US citizens. I'd also suspect some blatant devaluation of both currencies, perhaps 30% each ....or even everyone moving over to the AMERO and the EURO. Naturally, as all this transpires, you don't want to be holding government debt.

[bitbigt]

Minor dollar strength off the back of the faked job numbers from Friday....

Oh shush ...let me fantasize

 

But seriously, I think this is more than just a USD strength. Gold and oil falling severely in all currencies.

[TrueNorth]

Thanks for explaining BigT. I appreciate you taking the time to do that.

 

B. The charts. As shown below, I can interpret the USD price of gold in two ways (and I know which one is prevalent at GEI). The red one is self explanatory. But lets consider the blue curve, which starts rising initially in 2005 as people were throwing their money into everything. But it them extrapolates what might have happened without the credit crunch panic - which itself involved two several month periods of extreme fear, causing gold to shoot up during those periods. But between those time intervals, gold fell right back down to the blue curve. And if we're now enterring a new delusional period of happiness and light for a year (see above), I can see gold dropping right back down to that blue line.

 

I guess I don't fundamentally agree that a period of happiness and light will break out. I'd love to be proven wrong, however. My gold's not going anywhere.

[G0ldfinger]

... James Turk's latest commentary mentions how parabolic the GBP gold chart is starting to look, ...

Here in the logarithmic form, not all that parabolic yet, but it's been pretty good since 1999.

 

http://gold.approximity.com/since1968/Gold_GBP_LOG.html

[TrueNorth]

Another good pece hot off the press from Stewart Thompson, Graceland Updates:

 

Dow Fire Starts. Buy Gold & Stay Strong

 

Stewart Thomson on 321gold 11 Aug 2009

 

14. I sense substantial fear coming into the gold market, right now, amongst the technical analysts. Too bad for them. I was a buyer of yesterday's $30 price weakness in gold. If we get more weakness today I buy more than I bought yesterday. I've spoken about what I believe is the ideal 70-30 gold mix, where you allocate 70% of your gold risk capital to longs, 30% to shorts. NEVER let your short position exceed your long position at any point in time. I personally never let it exceed 1/3 of my existing long position and suggest those of you who are playing gold super timer to think hard about what I'm telling you.

 

 

[TrueNorth]

I am watching the Gold:Silver ratio. I dug up an old article by Bob Hoye from last November (Gold Sector Update - NOVEMBER 25, 2008, posted in the archives of 321gold here Bob Hoye on 321gold), about gold in a credit contraction. (. . . .)

 

By my calculations using ££ we're now at 65.75 and turning up as of this morning.

 

A propos of this, found a June 2009 piece by Bob Hoye on the gold:silver ratio -- Institutional Advisors, 22 June 2009

 

Gold/Silver Ratio Warning

"Get Your Kicks On Route Sixty-Six"

 

• The June 11 Pivot included the following on the gold/silver ratio:

"The reversal to rising will signal the resumption of credit

troubles, when silver could again do some big plunges relative

to gold."

• On the expected decline, the momentum became enough to end the

move and getting above the 66 level would lock in the trend change.

 

. . . . At times, the gold/silver ratio behaves somewhat like a credit spread, and over

more than three centuries when it turns up in a maturing speculative climate

the action is close to failing. This appears to be the case today and as this

memo is completed the ratio is at 67.3 and well into "danger" territory.

Aggressive selling of most speculative plays is the natural thing to do.

 

Why such a reliable relation is not included as a guide to policymaking, or in

modern portfolio theory is beyond comprehension.

 

With this afternoon's drop in silver, the ratio now sits at 65.93.

 

[DoctorSolar]

Perhaps the words "all" and "evidence" were a bit strong. Hopefully my last post will clarify my thinking, based upon never taking the market for granted ...and I know you'll all give me loads of stick for it (just as you did when I sold in March), but what if I'm right :o :o

Thanks for taking the time to reply. No stick from me just curious to hear how others are thinking.

 

When you say gold will be the place to be in 12 months time do you think it will get back above these current levels then? If so a buy and hold type investor would come out ok in the end?

[warpig]

I was curious if your opinion had changed. The fundamental difference between our strategies is still there by the sounds of it. You seem to be describing more of a linear event and I feel certain it will be exponential when it comes. We'll see how it goes, but I feel the more intervention and the longer the system is prevented from returning to equilibrium, the more violent the correction will be when it happens. I certainly subscribe to the theory of unintended consequences.

 

...when I incorporate the bond/gilt market factor in to my thinking, my head hurts and smoke comes out of my ears.

 

But seriously, CBs will keep buying these things and keep rates low for another year. That won't be sustainable longer term, however, as the joke that is the USD will become clear to the masses, and the newly elected conservatives in the UK will start to act more responsibly with the country's finances. But this does not mean imminent hyper-inflation thereafter, just high inflation and weakened currencies - plus a decade of pain for UK and US citizens. I'd also suspect some blatant devaluation of both currencies, perhaps 30% each ....or even everyone moving over to the AMERO and the EURO. Naturally, as all this transpires, you don't want to be holding government debt.

[DoctorSolar]

Oh shush ...let me fantasize

 

But seriously, I think this is more than just a USD strength. Gold and oil falling severely in all currencies.

Have you seen this video with a currency trader predicting GBP to fall to parity with USD after the next general election.

 

From: http://www.youtube.com/watch?v=cPTw5ygGccM

 

Now even if gold were to fall too $600 (which I don't think anyone seriously thinks it will) folks buying gold with GBP now would still be ok. Downside risk seems very small with a 12 month time window and the upside potential is huge. I guess you could always just buy USD but I am struggling to add to my position there even when i hold my nose

[warpig]

I can't take anyone seriously who has that bad taste in ties.

 

Have you seen this video with a currency trader predicting GBP to fall to parity with USD after the next general election.

 

From: http://www.youtube.com/watch?v=cPTw5ygGccM

 

Now even if gold were to fall too $600 (which I don't think anyone seriously thinks it will) folks buying gold with GBP now would still be ok. Downside risk seems very small with a 12 month time window and the upside potential is huge. I guess you could always just buy USD but I am struggling to add to my position there even when i hold my nose

[bitbigt]

When you say gold will be the place to be in 12 months time do you think it will get back above these current levels then? If so a buy and hold type investor would come out ok in the end?

I think gold will go down (450) in 12 months, and then double from there (900) over the subsequent 1-3 years. So if I'm right with that prediction, I'd ike to buy near the bottom, and double my money.

But buying and holding from here would only bring a 50% benefit.

 

Of course, we could all be wrong, and gold might only go down from here, and never get above 600 again for many, many years.

 

So I'm taking a calculated gamble... If I get it wrong I don't loose any money, but if I get it right I double my money.

[alexreeve]

the newly elected conservatives in the UK will start to act more responsibly with the country's finances.

1. They are stuck between the anvil and the hammer.

2. They haven't the faintest clue how to get out.

3. Even if they did, they don't have the conviction to take the hit squarely and move on.

 

The above applies to all the significant parties equally.

[Steve Netwriter]

I feared you might ask...

 

Other than gut instinct (which usually works quite well, actually), its

 

A. My future predictions (dangerous, but necessary to create and adapt with time/event) are that the 'recovery' is now in motion, and will continue for a year or so. Of course, its as unreal as the recovery that occured between 2003 and 2007, which was built upon ultra-low interest rates. This current recovery is built upon ultra-low interest rates plus QE. Next time around, they won't be any medicine strong enough to revive the patient!! There's also a very large amount of cash in the system (much directly from the QE) looking for a better home than savings accounts, and so we're creating mini-bubbles in stocks and commodities. So for the next year everyone will start to feel secure and rich(er) again, and gold will struggle. Layer in deflation for a year, and gold doesn't have a chance medium term. Finally, the PPT will keep suppressing golds price until they run out of capacity to do that (because they've spent all of germanys gold, etc). But after the next 12 months, the economic 5hit will really hit the fan, and gold will be the place to be.

 

B. The charts. As shown below, I can interpret the USD price of gold in two ways (and I know which one is prevalent at GEI). The red one is self explanatory. But lets consider the blue curve, which starts rising initially in 2005 as people were throwing their money into everything. But it them extrapolates what might have happened without the credit crunch panic - which itself involved two several month periods of extreme fear, causing gold to shoot up during those periods. But between those time intervals, gold fell right back down to the blue curve. And if we're now enterring a new delusional period of happiness and light for a year (see above), I can see gold dropping right back down to that blue line.

 

GRAPHIC: GoldsFuture

 

But I'll probably change my mind again after I've taken my medicine

 

I think that's a very reasonable point of view.

However, I must ask what you think the eventual price of gold is likely to be. IMO it's simply not worth the risk to get what IMO is only going to be a minuscule improvement.

 

I'm sorry I don't have much time.

I've just written this article about the action from Friday (I should be working ):

 

Manipulation Watch 1 - 12th Aug 2009

 

I'm trying to delve into back-room antics, rather than continue to just watch the show they put on.

 

[drbubb]

I can't take anyone seriously who has that bad taste in ties.

 

Is his track record of market calls any better than his appalling taste in ties?

[drbubb]

Lessons from Argentina

 

A brief inflationary dip became so painful, that the currency was destroyed

 

A 73% drop in the currency in only 5 months.

 

Might the US or the UK see this? Not impossible.

 

Read the argument:

http://www.greenenergyinvestors.com/index.php?showtopic=7455

[drbubb]

From the Gold Holdings Poll:

 

Since 80% of the added votes have been "over 50%", the initial guess that only 5/16 was likely wrong

 

I am therefore changing the tally as follows:

% Holding Quess : Added : Now

Over 50% :: 8 ... : . +4 . = 12

.. 25-50% :: 4 ... : . +0 . = 4

.. 10-25% :: 4 ... : . +1 . = 5

 

If my guess are right, then for the people who voted in the Poll,

 

CLOSE TO HALF have Over 50% of their wealth in Gold !!

 

That surprises me, but is consistent with the ideas posted here, I suppose.

No wonder the Gold thread here is so very popular

I'm wondering if Gold bugs have been attracted to GEI, or whether people became heavily invested

in Gold after coming here - or a bit of both.

 

I am do a separate gold poll on that question eventually.

 

Half of GEI-ers have over half their wealth in Gold?

Is that really possible??

[romans holiday]

From the Gold Holdings Poll:

 

 

 

Half of GEI-ers have over half their wealth in Gold?

Is that really possible??

Yes, it makes perfect sense, if you are wanting to stay liquid at the same time a grand experiment is going on with conventional currencies.

[TrueNorth]

Half of GEI-ers have over half their wealth in Gold?

Is that really possible??

 

Yep.

 

[drbubb]

If it was true...

+ It is probably only amongst the most active on this thread,

+ It would make GEI amongst the most Gold-friendly web communities on the planet

[azazel]

Is his track record of market calls any better than his appalling taste in ties?

All ties are rediculous IMO and one day will finally be unfashionable and then people will look back and see how stupid they look. Its like wearing a hangmans noose round your neck under threat as if you are a slave! Maybe thats why its compulsary to wear one in many workplaces.