GOLD

[alexreeve]

check this out:

"Orange Juice: Drink It In Last Friday, the June 27 Weekly Wrap-up drew a bold arrow pointing UP on O.J.’s price chart. "

"On July 3, lumber prices soared to their highest level in one week"

"Pork Bellies: The Pig Picture Back when bellies were just below a fresh contract high"

http://www.elliottwave.com/freeupdates/arc...pportunity.aspx

 

Is Orange Juice in high demand? Are Orange trees depleting?? Pork bellies??? (what the heck is a pork bellie, never eat that) Lumber soar in a global housing crash ??? This is the commodities panic, they buy everything that is cheap.

 

I wonder, what should be the price of gold in corn bushels or orange juice.

It just reminds me of the film "trading places"

[warpig]

I would like to see one more dip to $870 and then I will be all in, but I'm not convinced we will see it again this side of the recession/depression.

[cgnao]

This is the commodities panic, they buy everything that is cheap.

 

No. This is the dreaded crack-up boom described by Ludwig von Mises, who wrote

 

"If the credit expansion is not stopped in time, the boom turns into the crack-up boom; the flight into real values begins, and the whole monetary system founders. Continuous inflation (credit expansion) must finally end in the crack-up boom and the complete breakdown of the currency system."

[G0ldfinger]

How can people be THAT stupid?

 

£175,000 flat I bought last year is now worth less than £100,000: Owner's negative equity horror

http://www.dailymail.co.uk/news/article-10...ity-horror.html

 

[G0ldfinger]

Some people just don't get it. So, here we go again:

 

[frizzers]

Ha

[G0ldfinger]

Ha

You know it, Cuthbert.

 

[Compounded]

Some people just don't get it. So, here we go again:

 

 

Dr Bubb posted this (I have added a bit - not much) on the demographics thread

 

Herengracht index

An index of house prices in the Herengracht district of Amsterdam.

1. Has always been a prime canal side area; this makes this study unique as areas usually go in and out of fashion.

2. Index extends over 350 years.

 

The conclusions

1. Over centuries house prices stay the same relative to other prices i.e. there is no long-term house price inflation. Prices in 1979 were much the same as in 1650.

2. Periods of 40 years or more with steady falls and steady rises occur.

3. Economic prosperity and recessions have only a marginal effect on house prices. The real movers are wars and demographics

4. Shocks precipitate dramatic falls – especially wars, but recovery is quite rapid.

5. Falls of 30-40% are common, long term falls seem to need two of these factors – demographic crisis, war, and economic crisis.

6. The writer predicts a long-term falling trend of decades now because we have an absolutely massive demographic problem, which will take prices down by approximately 50%.

7. Every other house price index almost without exception does not extend back earlier than WW2 and most a much shorter time, this is not long enough for the true long-term picture of steady prices to show up. E.g. the Nationwide house price index extends to 1973 and gives a 2%pa long-term price increase. It is erroneous to conclude this is a trend that will continue indefinitely.

 

 

It sums up the property boom - it's a 40+ year 2% gain with an 18 year cycle superimposed the gain is due to demographics, it will revert to mean, probably overshooting - as is usual with all corrections.

[notanewmember]

How can people be THAT stupid?

 

£175,000 flat I bought last year is now worth less than £100,000: Owner's negative equity horror

http://www.dailymail.co.uk/news/article-10...ity-horror.html

 

 

Idiot - thats the problem with easy credit. The value of money is lost. He does not know how much money £175K really is. If he got a job on minimum wage for one year doing hard graft- he'd

find out that even a fraction of that is alot of money. How the mighty have fallen.

[G0ldfinger]

Darling wants to push more people over the PROPERTY CLIFF.

 

This must be criminal!? Someone please do something. Call the police.

 

http://www.telegraph.co.uk/money/main.jhtm...mortgage204.xml

Alistair Darling says first-time buyers could be given a tax break

 

Last Updated: 11:38pm BST 04/07/2008

 

Alistair Darling, the chancellor, has said he wants to help first-time buyers get on the housing ladder by introducing greater tax breaks towards saving for a house, says Harry Wallop, Consumer Affairs Correspondent

[romans holiday]

I would like to see one more dip to $870 and then I will be all in, but I'm not convinced we will see it again this side of the recession/depression.

 

If we do not see gold dip to $870 this side of the recession/depression, how will we see it on the "other side"?

 

Oh... you must be a deflationist.... hmmmm.

[Gatesy]

(what the heck is a pork bellie, never eat that)

 

Oh contraire. Belly of pork slow roasted and served with garlic mash would be one of my all time favourite dishes. Also, what do you think streaky bacon actually is? I suggest you buy the River Cottage Meat Book. Essential reading for any meat lover.

[jinbal]

Gold awareness increasing?

 

Telegraph

Gold: The precious laggard that will hit $2000

 

quotes I liked:

 

"The sharp rise in oil and the relatively low rise in gold has pushed the gold/oil ratio to the lowest levels seen for decades. Either gold is incredibly cheap or oil is incredibly expensive on a relative basis."

 

"Gold hit a peak of $850 in 1980 and to equate that in real terms, ie adjusted for inflation, gold today would have to rise to around $2,500 an ounce at present. A rise of that magnitude would also restore the gold/oil ratio to its historic norm."

 

"Previously it was the sale of gold by central banks that supplied the market and helped keep a lid on the gold price."

 

BUT

 

"this strategy is looking more and more like a busted flush. It is unlikely that the UK will be in a rush to sell any more of the Bank of England's gold, not that it has much left to sell. The same applies to many other central banks such as Holland, Belgium and Canada who have been long-term sellers of gold. They have run out of gold to sell. At the same time the central banks of the emergent economies, have become buyers."

 

I liked this article because it gives sensible and non-sensationalist reasons for being in Gold, i.e that Gold's bull run is merely a set of long term ratio's rebalancing and that when this occurs Gold will be at fair value.

 

Cheers

[ologhai]

How can people be THAT stupid?

 

£175,000 flat I bought last year is now worth less than £100,000: Owner's negative equity horror

http://www.dailymail.co.uk/news/article-10...ity-horror.html

 

 

Well, he's an 'investor'. Investments can go down as well as up. If he'd bought a load of shares in some bank or house builder, he'd also have lost a load of money.

 

What amazes me is that the Daily Mail even considers the story 'Investor Loses Money' worth printing!

[TinBrick]

Well, he's an 'investor'. Investments can go down as well as up. If he'd bought a load of shares in some bank or house builder, he'd also have lost a load of money.

 

What amazes me is that the Daily Mail even considers the story 'Investor Loses Money' worth printing!

 

Did you read the size of the "flat" - 120 sq ft! That's not a flat, it's a broom cupboard!

[warpig]

There is an excellent title to an Acrtic Monkey's album called "Whatever People Say I Am, That's What I'm Not" which is relevent to me here. I refuse to be pigeon holed and I'm nothing more than adaptive. It is clear to me what will happen on the way to the bottom, but I'm not wise enough to know what will happen once all of this passes and it starts to recover, hopefully I will remain informed and adaptive at this point too.

 

I would have to say I'm not convinced we will return to a gold standard (we might I don't know), but at the moment I don't need to worry about that. Is it feasible we could have a platinum (or other PM) standard instead? I have a hard time believing that returning to a gold standard is the only possible outcome.

 

If we do not see gold dip to $870 this side of the recession/depression, how will we see it on the "other side"?

 

Oh... you must be a deflationist.... hmmmm.

 

[warpig]

I think the point I am trying to make and the problem I have with being called an inflationist or a deflationist, is neither noun states a time frame by which you will be categorised, I will no doubt be both of the remainder of my life.

[Oddball]

Oh dear.

One of my clients did the same. Luckily, I persuaded him to buy a few calls.

But he has missed out on a $30,000 gain by selling too soon

 

Too sophisticated for me at the moment Bubb. I'm still learning to walk.

 

My PM holdings are mainly in allocated gold and silver with only a relatively small portion in gold mining shares with no leverage.

 

My outlook overall is buy and hold with the odd trade round opportune points. So far I'm pleased with the returns - entry point on gold $492.

 

Considering this strategy I have some doubt whether at this point it is best for me to be in gold mining shares, if history rhymes this chart posted on Jim Sinclair site by CIGA Eric says not.

 

 

Homestake mining I believe was later absorbed by Barrick.

 

And the comments at the time;

 

Jim Sinclair’s Commentary

 

Posted above is Homestake Mining's chart from 1970 to 1981 demonstrating the better return in gold shares then in gold. All the gold share stockholders, both major and junior, were in the same debilitated mode you are now. As result they bailed just as the rocket ship took off, giving better returns than gold. I am sad to say it, but it looks like a perfect replay of history coming up.

 

Hi Jim,

 

Gold or Gold Stocks?

 

The answer to that depends largely on emotion. In the end the answer is gold stocks provide better returns, assuming all else is equal.

 

Regards,

Eric

 

Love the comment by Eric " The answer to that depends largely on emotion."

 

I believe it was the Volker Fed raising interest rates bringing back positive real interest rates that killed golds parabolic run.

 

It's not hard from there to work out when to be holding bullion or changing to shares.

 

What d'ya reckon?

 

 

 

 

 

[G0ldfinger]

Just for lurkers, newbies to precious metals, or people who do not want to trade in options and want to have a more conservative portfolio:

 

There is nothing wrong with having a portfolio of physical metal (no paper) in gold and silver only. While gold is a bigger market and moves less extremely, your silver percentage determines how much leverage you have (upwards as well as downwards). You do not need options/spreadbetting for leverage, silver might be enough for you.

 

You can store physical metal in safety deposits, bury it in the backyard, or use services like BullionVault or GoldMoney.

 

Once you have a proper core position in bullion, you can slowly start building up additional exposure by buying mining share etc. if you want to.

[Errol]

And on the same note (for new joiners/lurkers) 321gold.com is a great site for the latest gold/silver/economy articles and prices.

[romans holiday]

I think the point I am trying to make and the problem I have with being called an inflationist or a deflationist, is neither noun states a time frame by which you will be categorised, I will no doubt be both of the remainder of my life.

 

Yes, labels can be limiting. The way I see it is that inflation and deflation are two sides of the same coin... pun intended.

 

In the near future, we will no doubt see a period of rampant inflation which may be followed on by deflation. The essential matter is a currency crisis and that is where monetary metals will do extremely well as an alternative currency no matter the flavour of the flation.

[ologhai]

In the near future, we will no doubt see a period of rampant inflation which may be followed on by deflation.

 

My gut feeling is that this is what will happen[1]. Inflation due to commodity prices, then, in due course, an underlying deflation due to the writing off of so much bad debt could start to make its presence known.

 

[1] With the usual caveat that I don't know what I'm talking about...

 

EDIT: Bah! I've just seen a thing on HPC's front page blog thingy mentioning something about 'commodity-led inflation and credit-led deflation' which makes me look like someone who knows nothing (which is true), but has truly mastered the art of copy-and-paste!

[electroweak]

My gut feeling is that this is what will happen[1]. Inflation due to commodity prices, then, in due course, an underlying deflation due to the writing off of so much bad debt could start to make its presence known.

 

[1] With the usual caveat that I don't know what I'm talking about...

 

EDIT: Bah! I've just seen a thing on HPC's front page blog thingy mentioning something about 'commodity-led inflation and credit-led deflation' which makes me look like someone who knows nothing (which is true), but has truly mastered the art of copy-and-paste!

I think CuthbertC has posted here much the same; things bought with credit will deflate, other things will inflate in price. Jury's out on wage in flation for me; thought I think it will happen with a lag as living standards drop.

[frizzers]

 

 

NYMEX To Change Margins For Gold Futures Contracts

02/07/08

 

The New York Mercantile Exchange, Inc. announced today that it will change margins for its gold futures contracts, effective at the close of business tomorrow.

 

Gold futures margins will increase to $3,750 from $3,250 for clearing and non-clearing members and to $5,063 from $4,388 for customers.

 

Margins for the Asian gold futures contract will increase to $1,206 from $1,045 for clearing and non-clearing members and to $1,628 from $1,411 for customers.

 

Margins for the COMEX miNYTM gold futures contract will increase to $1,875 from $1,625 for clearing and non-clearing members and to $2,531 from $2,194 for customers.

 

[G0ldfinger]

...

The New York Mercantile Exchange, Inc. announced today that it will change margins for its gold futures contracts, effective at the close of business tomorrow.

...

Their heating and driving costs are going up too.