GOLD

[romans holiday]

Can there be a Right price for linking the Dollar to Gold? How would it be determined?

The question is almost non-sensical given we live with free markets. We don't have a philosopher-king who can one day say this is the way our money will be [mind you, Friedman gave it a good try with an attempt at scientific currency]. The reality is the market will determine the worth of gold. However, should capital one day, in the free market, start absolutely pouring into gold and abandoning economies then government will most probably then have a say out of a perceived necessity... that would be the end of the free market with currencies then somehow fixed to gold. Notice, none of this is about what ought to happen, but what is, and what perhaps could happen.

[G0ldfinger]

DOUBLE POST

The problem facing thinkers today is how to reconcile the rise in gold with an on-going debt deflation.

No problem: gold is forward looking and for now seems to react more to money supply (which is increasing to replace private debt) than to (more stagnant) nominal GDP. This is no contradiction as money velocity is low. The key for understanding the forward looking aspect is that velocity (and also private credit growth) lags money supply growth, and therefore retail price inflation follows with a delay. The delay at the moment is pretty long, however, the coming calamity can be seen already in stubbornly growing prices in necessities.

[romans holiday]

DOUBLE POST

 

No problem: gold is forward looking and for now seems to react more to money supply (which is increasing to replace private debt) than to (more stagnant) nominal GDP. This is no contradiction as money velocity is low. The key for understanding the forward looking aspect is that velocity (and also private credit growth) lags money supply growth, and therefore retail price inflation follows with a delay. The delay at the moment is pretty long, however, the coming calamity can be seen already in stubbornly growing prices in necessities.

That's is one way of meeting it. Though it is hardly falsifiable which is generally considered a virtue of a theory. I mean it could always be just next year before 'velocity' [what an abstraction that is] picks up.

 

But the problem is more a problem with those who see a problem specifically in the rise of gold comparable to commodities. I don't think you've ever had a problem with the rise of gold... unless it hasn't risen fast enough.

[drbubb]

Sure, sure. But what they sold was the Bernank's news, and not the ECB news.

 

Anyway, huge storm in the water glas for that little blip. Sinclair was right, is right, and will be right (on the price of gold), even if I don't agree with all that he says and can't make myself believe in Sai Baba.

Have you consider that every BUYing window I have signalled here has represented a very favorable time to buy. The one at the beginning of 2012 was only the latest.

 

Sinclair has never signalled a selling window as far as I know, so his whole thesis is based on Buy and Hold and Hold and the notion that there are Angels out there holding magnets that attract the price ever higher.

 

I could have taken $1 million off him by betting against the timing of his $1650 target... Yet you call high "right"? How can he be so one-note wrong, and inspire such loyalty? It is a mystery to me

[drbubb]

The question is almost non-sensical given we live with free markets. We don't have a philosopher-king who can one day say this is the way our money will be [mind you, Friedman gave it a good try with an attempt at scientific currency]. The reality is the market will determine the worth of gold. However, should capital one day start absolutely pouring into gold and abandoning economies then government will most probably then have a say out of a perceived necessity... that would be the end of the free market with currencies then somehow fixed to gold. Notice, none of this is about what ought to happen, but what is, and what perhaps could happen.

People may be asked to make decisions on this. Especially if the Gold Bugs can get enough public support for a Gold backed currency.

 

Personally, I am against a Gold backed currency, for a number of reasons. But the well-financed Gold Bulls will keep pushing for it.

[romans holiday]

People may be asked to make decisions on this. Especially if the Gold Bugs can get enough public support for a Gold backed currency.

 

Personally, I am against a Gold backed currency, for a number of reasons. But the well-financed Gold Bulls will keep pushing for it.

Well, I guess that I'm neutral or agnostic on it. The monetary system is quite an arbitrary thing... money itself for that matter. Dare I say your bias is getting the better of you here?

[Manual labourer]

Have you consider that every BUYing window I have signalled here has represented a very favorable time to buy.

 

The one at the beginning of 2012 was only the latest.

 

Sinclair has never signalled a selling window as far as I know, so his whole thesis is based on Buy and Hold and Hold and the notion that there are Angels out there holding magnets that attract the price higher.

 

I could have taken $1 million off him by betting against the timing of his $1650 target... Yet you call high "right"? How can he be so one-note wrong, and inspire such loyalty? It is a mystery to me

 

 

Hi DB,

 

"I could have taken $1 million off him by betting against the timing of his $1650 target... Yet you call high "right"? How can he be so one-note wrong, and inspire such loyalty? It is a mystery to me"

 

 

I thought you were an educated speculator not a Gambler ?

 

DB you are a great bloke for putting this site up and the posts you make, however I have never read any of JS words or works so whether he is right or wrong is of no concern to me, and really shouldn't be to you, as an independent focused trader you should form your own opinions and constantly review them. To keep bleating on about some guy is constantly wrong when he blatantly is not, is pointless.

 

Especially as it aggravates people who follow him, as the Guy does not come on here so can't defend himself! We all know your opinion of JS and the responses you provoke when you constantly attack him.

 

The test for madness is somebody who does the same thing repeatedly and expects a different result each time!

 

Move on it is getting boring! If in the end run you are proved right and as I have said before nobody knows what will happen in the future, we all just have our personal slant on it, then if you are right that is the time to bang on about things!

 

 

Regards

 

ML

[Manual labourer]

That's is one way of meeting it. Though it is hardly falsifiable which is generally considered a virtue of a theory. I mean it could always be just next year before 'velocity' [what an abstraction that is] picks up.

 

But the problem is more a problem with those who see a problem specifically in the rise of gold comparable to commodities. I don't think you've ever had a problem with the rise of gold... unless it hasn't risen fast enough.

 

Hi RH,

 

FWIW,

 

This is my slant on how things will pan out and why Gold is the thing to hold for the time being!!

 

 

Maybe just maybe when the Sh&t finally hits the fan a real asset revaluation will take place, as it is the first time to my knowledge the whole world has been on a Fiat currency credit binge so it is a bit of an unknown !

 

1. Solution one, high real inflation huge injections of cash/printed cash into banks all assets retain value/increase in fiat value the further from the bottom of Exeters inverted pyramid, the less inflation of value, of each of the asset class ! Private Debt is erradicated from the system, which is what is happenning now, debts ratios reduded, ministers make noises they want further lendng publicly to the people but then at the same time enforce stricter lending ratios on the banks, resulting in mortgage debt reduction as we are seeing now without a headline crash in values, hoping at the same time growth will appear from somewhere!

 

(Cash held cash could do well in this senario as people with high personal debt ratios are squeezed by rising interest rates and real falling incomes stagfltion occurs)

 

2. “Paper money eventually returns to its intrinsic value – ZERO” Voltaire 1729

 

The worlds nightmare happens the sheeple see Fiats true value!!!!!!!! A huge deflation of all assets takes place again using Exeters inverted pryamid the items furthest away from the bottom of the Pyramid deflate the most against gold!

 

(With the excepition of fiat cash whch will burn as in Weirmar Germany in this senario!)

 

Regards

 

ML

[drbubb]

...it agravates people who follow him as the Guy does not come on here so can't defend himself! We all know your opinion of JS and the responces you provoke when you constantly attack him.

I would put it very differently.

 

JS doesn't defend himself against charges of ramping gold, and he SHOULD be made to do so.

 

I read and respond to the many comments here from people, most of which are unfair IMHO.

 

(I would appreciate it greatly, if there are any others reading this, who are also suspicious about the motives of Mr Sinclair, if those others we see that dangers of his ranmping would now give me some support. I am tired of fighting the apparent forces of darkness on my own.)

 

I think I have fought hard to bring light and debate to points and dangers that the liars and exaggerators (like GATA) have done their best to hide. GATA and others paint themselves as "the good guys" in the great gold debate, but I think that is far from true. they will not answer debate points (and strong ones) that I am fight hard to bring to the surface.

 

Here it is in a nutshell:

"Who owns the bulk of the Gold on this planet, and is a gold price soaring ahead of the rate of inflation something that ordinary investors should be supporting or not?"

[Manual labourer]

Old proverb!

 

Nail that stands proud always gets hammered down!

 

 

That is life my friend!

 

Regards

 

ML

[Carlton]

I would put it very differently.

 

JS doesn't defend himself against charges of ramping gold, and he SHOULD be made to do so.

 

I read and respond to the many comments here from people, most of which are unfair IMHO.

 

(I would appreciate it greatly, if there are any others reading this, who are also suspicious about the motives of Mr Sinclair, if those others we see that dangers of his ranmping would now give me some support. I am tired of fighting the apparent forces of darkness on my own.)

 

I think I have fought hard to bring light and debate to points and dangers that the liars and exaggerators (like GATA) have done their best to hide. GATA and others paint themselves as "the good guys" in the great gold debate, but I think that is far from true. they will not answer debate points (and strong ones) that I am fight hard to bring to the surface.

 

Here it is in a nutshell:

"Who owns the bulk of the Gold on this planet, and is a gold price soaring ahead of the rate of inflation something that ordinary investors should be supporting or not?"

 

You need a vacation - seriously. "Forces of darkness?" LMAO.

 

I will also point out that I could easily call you a liar for suggesting that Obama was not born in Hawaii, which he obviously was.

[Perishabull]

[drbubb]

Old proverb!

Nail that stands proud always gets hammered down!

That is life my friend!

Regards

ML

Nonsense.

I am not "proud" - I am merely battling bullshite.

Can you not see the difference?

I presume you do not like it, because my truth-telling threatens to puncture the dreams of much higher gold prices, if owners of the metal can hold on in a time of rising demand. This is the essence of ramping. You hold and and get your friends to hold on, while talking the price up, at every opportunity.

[drbubb]

GOLD images

The potentially tight supply only matters, if there is a sudden surge in Gold demand. (Almost all the gold produced in the course of history is still around, and capable of being sold somewhere, somehow.) We may see a demand surge, if people are persuaded somehow that Precious Metals are the only true Safe Haven money.

 

That's the story the many, many Gold Bulls are trying to sell to you.

They all have a vested interest of course.

 

I am long gold, not short it. But I value truth more than bullshit and so will not join in this hoary game of constantly "talking one's book." Does no one posting on this Purist thread, have any personal integrity to admit there is at least some element of truth in the process and motivations that I have described?

 

(I am really tempted to move this thread to the Fringe Section for a day or two, to make the point that many people posting here seem to have become infected with some sort of bullish virus that makes it so hard for them to comprehend other points of view.)

[alexreeve]

Proud in the context of that axiom just means sticking out enough to snag things moving past, not as in prideful.

 

I'm not a fan of JS messianic imagery and rather culty language like CIGA. Still it is obviously popular with plenty of people. However he is just one of many gold based websites/newsletters that have a similar MO.

[drbubb]

You need a vacation - seriously. "Forces of darkness?" LMAO.

 

I will also point out that I could easily call you a liar for suggesting that Obama was not born in Hawaii, which he obviously was.

?? That point makes no sense at all !

I do not know exactly where he was born - so I can hardly be called a liar.

There is increasing evidence that his Birth Certificate is forged, or doctored.

All he needs to do is get Hawaii to send a copy of a genuine certificate to the Electorial boards of 50 states. Instead he spends millions fighting various court cases. Why?

[Manual labourer]

Nonsense.

I am not "proud" - I am merely battling bullshite.

Can you not see the difference?

I presume you do not like it, because my truth-telling threatens to puncture your dreams of much higher gold prices, if owners of the metal can hold on in a time of rising demand.

 

 

Quote DB

 

""(I would appreciate it greatly, if there are any others reading this, who are also suspicious about the motives of Mr Sinclair, if those others we see that dangers of his ranmping would now give me some support. I am tired of fighting the apparent forces of darkness on my own.)""

 

 

I see the whole picture, however you only see what you want to see!

 

The proverb was only in response to the above quote, if you stand tall/proud expect sh$t to fly your way as you constantly snag things as they pass you, life will be a painful journey. I like you but I like oddballs and all sorts of different interesting people! You scream and shout you are right without any consideration or acceptance you could be wrong! That type of attitude relates to the proverb, NOTHING PERSONAL, just an opinion!

 

I don't have dreams of higher gold prices I have the security of history of the fact Gold holds its value over time. Fiat/paper money history shows constantly goes up in smoke!

 

Regards

 

ML

[drbubb]

I see the whole picture, however you only see what you want to see!

 

The proverb was only in response to the above quote, if you stand tall/proud expect sh$t to fly your way and it will be a painful journey, I like you but I like oddballs and all sorts of different interesting people! You scream and shout you are right without any consideration or acceptance you could be wrong! That type of attitude relates to the proverb, NOTHING PERSONAL, just an opinion!

 

I don't have dreams of higher gold prices I have the security of history of the fact Gold holds its value over time. Fiat history shows constantly goes up in smoke!

 

Regards

 

ML

Should I drop my argument, simply because there are other points of view here? And there is in fact a dominant point of view different from mine?

Of course not.

 

"Gold holds its value over time".

Hmm. Well it fell from $850 to $250. How does that price move fit in with your view on its value as a Safe Haven?

[drbubb]

Proud in the context of that axiom just means sticking out enough to snag things moving past, not as in prideful.

 

I'm not a fan of JS messianic imagery and rather culty language like CIGA. Still it is obviously popular with plenty of people. However he is just one of many gold based websites/newsletters that have a similar MO.

I see the difference. I reacted to the more common meaning, just in case it was intended that way.

But your meaning is probably accurate.

 

So with that thought, you think I am "stuck with a lonely cause" here. Or perhaps instead, I am just early in presently a fresh view on the motivations of Gold Bullis, and so catch flack for being different by being early. It will not be the first time that has happened.

 

"Sinclair was right, is right, and will be right (on the price of gold)," - GF.

No one jumps in the attack this comment. (!!) Were more complacent words ever spoken in this debate ?

[Manual labourer]

Should I drop my argument, simply because there are other points of view here?

Of course not.

 

"Gold holds its value over time".

Hmm. Well it fell from $850 to $250. How does that price move fit in with your view on its value as a Safe Haven?

 

Yeah but it was at its low of $250 it was approx five times higher than its low $50 tens years previous to its high of 1980's high.

 

So it is all relative ?

 

Perhaps you should put across you thoughts in a less antaganostic way ?

 

ML

[Manual labourer]

I see the difference. I reacted to the more common meaning, just in case it was intended that way.

But your meaning is probably accurate.

 

So with that thought, you think I am "stuck with a lonely cause" here. Or perhaps I am just early in presently a fresh view on the motivations of Gold Bullis, and so catch flack for being different by being early. It will not be the first time that happened.

 

"Sinclair was right, is right, and will be right (on the price of gold)," - GF.

No one jumps in the attack this comment. (!!) Were more complacent words ever spoken in this debate ?

 

 

 

I know our friend GF is German, but even he is not Perfect!

 

 

But if Carlsberg made gold trading advisors !!!!!!!!

 

Regards

 

ML

[pjohnp]

The only undeniable gold-price statistic that I've noticed is the correlation between downward movements in the price of gold on the one hand, and the grumpiness of this thread on the other. The price has just suffered its biggest ever drop that I can remember ... and I've never known this thread to be tetchier, with nervous gold-holders being quite rude to Dr B.

 

I'm reminded of the observation of Dr Johnson in Edinburgh, hearing two women arguing across the street, from the upper storey of one house to another: "They'll never agree, because they're arguing from different premises".

 

Of course Dr B is right, that you can make more money trading than holding gold, if you get the timing right: that's just a mathematical certainty. But it takes time and skill -- and most of us haven't got much of either. And of course he's right, that those who only predict rises in the gold price are in danger of doing a disservice to their readers: we need to know (in good time!) when to sell ... and no-one's telling us that. Will they still be saying "hold", or even "buy" at and beyond the eventual peak?

 

It seems to me that "buy & hold" is only half a strategy. For what purpose, and for how long, should I hold it? (I expect to be dead in the next thirty or forty years.) I'd like to hear more about exit strategies and timing: neither traders like Dr B nor hoarders lke GF give me quite what I need. When they dissatisfy me good-naturedly it's one thing ... but when this thread is both unhelpful and bad-tempered, I can do without it.

[drbubb]

Thanks. Wise words.

 

It seems to me that "buy & hold" is only half a strategy. For what purpose, and for how long, should I hold it? (I expect to be dead in the next thirty or forty years.) I'd like to hear more about exit strategies and timing: neither traders like Dr B nor hoarders lke GF give me quite what I need. When they dissatisfy me good-naturedly it's one thing ... but when this thread is both unhelpful and bad-tempered, I can do without it.

You are right.

B&H, should ideally be: Buy and Hold and Hold... then, Sell at the Top.

 

When is THE Top? I cannot tell you that.

 

But maybe you do not even need to know that. In 2001, I sold my London property. I sold it "too early", as many have told me over the years. My reaction did set some property bulls off, because I said:

 

"I do not care if I sold too soon. The main thing to know is: How much profit I made (4X my cost), and what I did with the proceeds: I bought Gold shares! I subsequently made something like 6X my investment in Gold shares, and then I sold those "too soon" too, in order to buy many properties in Hong Kong. I still hold the most valuable one of those, after having sold the other 9 properties "too soon." Do you see a pattern here?

 

My overall point is this: Selling too soon is not really a problem, provided you use the money to buy something else that is good value. You may then find - as I often have - that the new "cheaper" investment rises in vaue faster than if you had held onto the old one. What is wrong with that?

 

I tend to think in terms of relative value, and use Ratios to assess that. And I wind up exiting too early to please the purists/

 

If you want to exit Gold at the right time, you should keep a watchful eye on the alternatives.

[Manual labourer]

The only undeniable gold-price statistic that I've noticed is the correlation between downward movements in the price of gold on the one hand, and the grumpiness of this thread on the other. The price has just suffered its biggest ever drop that I can remember ... and I've never known this thread to be tetchier, with nervous gold-holders being quite rude to Dr B.

 

I'm reminded of the observation of Dr Johnson in Edinburgh, hearing two women arguing across the street, from the upper storey of one house to another: "They'll never agree, because they're arguing from different premises".

 

Of course Dr B is right, that you can make more money trading than holding gold, if you get the timing right: that's just a mathematical certainty. But it takes time and skill -- and most of us haven't got much of either. And of course he's right, that those who only predict rises in the gold price are in danger of doing a disservice to their readers: we need to know (in good time!) when to sell ... and no-one's telling us that. Will they still be saying "hold", or even "buy" at and beyond the eventual peak?

 

It seems to me that "buy & hold" is only half a strategy. For what purpose, and for how long, should I hold it? (I expect to be dead in the next thirty or forty years.) I'd like to hear more about exit strategies and timing: neither traders like Dr B nor hoarders lke GF give me quite what I need. When they dissatisfy me good-naturedly it's one thing ... but when this thread is both unhelpful and bad-tempered, I can do without it.

 

 

How you can call GF a hoarder is beyond me!!!!!!!!!

 

He has repeatedly said when he views the time is right he will swap gold for other assets!

 

Just because someone trades longer timeframe than 5 min bars, don't mean they are not trading !

 

 

That is what some forget on here.

 

The only people getting grumpy as I can see are weak leveraged hands. Not strong buy and hold !!

 

But I do agree lets talk strategy !!!!!!!!!

[stunlee]

The only undeniable gold-price statistic that I've noticed is the correlation between downward movements in the price of gold on the one hand, and the grumpiness of this thread on the other.

 

Very true!

 

Personally I love it when we get one of these big corrections, quite like it when the price goes up and only really get angry when the price doesn't move.

 

Share the love everyone!