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BIG QUESTIONS that interest me...

 

1) If gold is meant to be an effective hedge against inflation, why is it outperforming almost all other measures of Inflation ?

 

Romans Holiday has explained this quite elegantly: We are fundamentally in a deflationary environment; in a deflation assets fall relative to currencies; gold is the best currency so assets fall the most against it.

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Romans Holiday has explained this quite elegantly: We are fundamentally in a deflationary environment; in a deflation assets fall relative to currencies; gold is the best currency so assets fall the most against it.

 

 

Many thanks :)

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Romans Holiday has explained this quite elegantly: We are fundamentally in a deflationary environment; in a deflation assets fall relative to currencies; gold is the best currency so assets fall the most against it.

Yes, that Dr Bubb is still asking the same question is due perhaps to a habit of lumping gold in with assets and commodities rather than seeing it as a from of liquidity. The decoupling between commodities and gold is perfectly sensible when you consider gold appreciating against commodities.. or from the other angle, commodities depreciating against gold. It's this idea of appreciation/ depreciation that people have to .... appreciate. Because then you are getting beyond counting and dividing units of money [the essence of money illusion] and thinking instead about what happens to the unit itself. If the unit appreciates, it's best to exit investments and sit in units.

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I THINK WE ARE MAKING PROGRESS...

There's a nice Nuanced discussion about Gold prices and how they relate to FEAR on the new thread :

 

IT IS ABOUT FEAR... and people feeding, and reacting to Fear

 

A large assumption is being made here. You're assuming that gold has risen because of ramping?? Sure, a lot of people ramp gold, but then alot of people ramp against gold. Maybe ramping has next to no affect on the market. Perhaps there are other reasons for the rise in gold. Why not keep an open mind. If gold bugs are dogmatic, does that mean you should be dogmatic in the opposite direction? As I mentioned previously, that is just reactionary.

 

Sure. The ramping (ie tireless promotion of the merits of gold) have helped. People are talking about the risks and dangers of excessive debt and money printing. These fears are real, but are they exaggerated? That makes an interesting question. I think it is fair to say that the risk of governmental destruction of the currency were under-appreciated when Gold was near $300. For instance, no one was interested in Ron Paul's ideas about restraining the power of the Fed. But now many people can see the risk of over-printing. We are getting closer to the day when action to restrain the Fed may come. The CONVERSATION about the risk has increased, and the price of Gold has risen. You might say that the risk is actually lower, in some respects, because there is an increasing possibility that people will actually support an action which would improve the soundness of their currencies.

 

I think there will be a Crescendo in Fear (and probably in Gold prices) before key action is taken, and the Fed is restrained. After we see that, currencies may be sounder for years to come.

 

Meantime, it is interesting to think clearly about the TYPES OF FEARS people are concerned about, and how they impact upon prices. As usual, I thought of a chart that might be drawn to allow us to compare these fears in a visual way. I want to show it, but first let me repeat a comment/ and a reaction from above:

 

 

"Overall, if Gold is not an effective inflation hedge, but rather a refuge for wealth when politics looks dangerous"

 

d2thdr : "I agree 100% with this statement."

DrBubb : "The thing is, there are no bearings inherent in a fear driven Gold rally. Like VIX, it can go wherever it may go. Then, Gold can crash back down after the fear passes through it."

== ==

 

Let's compare the Prices associated with Two Types of Fear:

 

GLD/ Gold versus VIX/ S&P500 Implied Volatility ... update

gldvsvix.png

 

People right now are more worried about what governments are doing to their currencies, than they are about Price Risk in stock markets.

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BTW - We seem to have "chased away" the most-doctrinaire Gold purists - or maybe "frightened them off"

 

The knee-jerk mud-slinging seems to have stopped. (!)

 

Does anyone else think that is a VERY GOOD THING ?

 

(They are certainly welcome here... so long as they join the discussion in a constructive way, rather than just trying to interrupt any intelligent discuss about the merits of Gold.)

 

Meantime, views on some of the more interesting threads seems to be continuing at healthy levels, even increasing.

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I THINK WE ARE MAKING PROGRESS...

There's a nice Nuanced discussion about Gold prices and how they relate to FEAR on the new thread :

 

IT IS ABOUT FEAR... and people feeding, and reacting to Fear

 

 

 

Sure. The ramping (ie tireless promotion of the merits of gold) have helped. People are talking about the risks and dangers of excessive debt and money printing. These fears are real, but are they exaggerated? That makes an interesting question. I think it is fair to say that the risk of governmental destruction of the currency were under-appreciated when Gold was near $300. For instance, no one was interested in Ron Paul's ideas about restraining the power of the Fed. But now many people can see the risk of over-printing. We are getting closer to the day when action to restrain the Fed may come. The CONVERSATION about the risk has increased, and the price of Gold has risen. You might say that the risk is actually lower, in some respects, because there is an increasing possibility that people will actually support an action which would improve the soundness of their currencies.

 

I think there will be a Crescendo in Fear (and probably in Gold prices) before key action is taken, and the Fed is restrained. After we see that, currencies may be sounder for years to come.

 

Meantime, it is interesting to think clearly about the TYPES OF FEARS people are concerned about, and how they impact upon prices. As usual, I thought of a chart that might be drawn to allow us to compare these fears in a visual way. I want to show it, but first let me repeat a comment/ and a reaction from above:

 

 

"Overall, if Gold is not an effective inflation hedge, but rather a refuge for wealth when politics looks dangerous"

 

d2thdr : "I agree 100% with this statement."

DrBubb : "The thing is, there are no bearings inherent in a fear driven Gold rally. Like VIX, it can go wherever it may go. Then, Gold can crash back down after the fear passes through it."

== ==

 

Let's compare the Prices associated with Two Types of Fear:

 

GLD/ Gold versus VIX/ S&P500 Implied Volatility ... update

gldvsvix.png

 

People right now are more worried about what governments are doing to their currencies, than they are about Price Risk in stock markets.

 

 

That was a good post, It has given me a few things to think about while at work today.

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I don't think it's a good thing to have 'got rid' of posters like GoldFinger, Pixel8r, Azazel, Laura, ... Personally it means I come here less and less. :(

(touche ?)

They are all welcome, so long as they post in a constructive way.

 

The discussion here has moved beyond mudslinging, and I think many here know that my calls of "Gold-buying windows" has been as good as anyone on the web. There seems to be an audience for that, whether those who view here post or not.

 

Over time, I would hope to convert Lurkers to posters, now that the (ridiculous) mudslingimg seems to have stopped.

 

How many times do you need to here the same "purist platiudes" repeated? Personally, I prefer some fresh ideas, and a fresh look at things like finding a coming "buying window" on Junior Gold miners.

 

Checkout the new thread on Junior Gold Miners

goldaxez.jpg

 

This is a great time to start RESEARCHING the sector.

But maybe not yet the right time to BUY.

 

Let's see if we can get it right together !

 

Link: http://tinyurl.com/GEI-GDXJ

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Government making foreigners sell mine holdings

 

Indonesia will force foreign firms to sell down stakes in mines by the 10th year of production, with domestic ownership to be at least 51 percent, in a move likely to hurt existing miners and scare off potential investors.

 

The new rule is the latest government move to extract greater domestic profit from the vast mineral wealth in the world's top exporter of thermal coal and tin.

 

The requirement, stated in a regulation on the mining ministry's website, comes as the government is renegotiating contracts with the leading foreign metals miners in the country, Freeport McMoRan Copper & Gold Inc (FCX.N) and Newmont Corp (NEM.N).

 

Southeast Asia's largest economy contains some of the world's richest mineral deposits, such as the Freeport-run Grasberg, the world's largest gold mine, and its fast-growing mining sector accounts for about 11 percent of GDP.

 

It was not clear if the regulation, effective from February 21, will apply only to new investors or also to existing mining investors.

 

more http://uk.finance.yahoo.com/news/indonesia-limit-foreign-ownership-mines-090137499.html

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Yes, that Dr Bubb is still asking the same question is due perhaps to a habit of lumping gold in with assets and commodities rather than seeing it as a from of liquidity. The decoupling between commodities and gold is perfectly sensible when you consider gold appreciating against commodities.. or from the other angle, commodities depreciating against gold. It's this idea of appreciation/ depreciation that people have to .... appreciate. Because then you are getting beyond counting and dividing units of money [the essence of money illusion] and thinking instead about what happens to the unit itself. If the unit appreciates, it's best to exit investments and sit in units.

 

Yep or visually you could think of Sinclairs Angel on Gold price, as liquidity (fresh money printing or excess already printed money) is looking for a home does it go into a dodgy low yield Spanish bond or Gold for example. Gold will be the highest gainer in either a hyperinflationary Faber style meltdown, or in a deflationary stagflationary asset price crash.

 

As a result of this more people in wealth creating economies India China and co, will pile into gold we are still at the very early stages of a very long road? B)

 

Regards

 

ML

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I haven't "chased away" anyone.

Those who have not violated our civility rules are free to post or not post.

 

Good. I have held a gold for a number of years solely down to Goldfinger and Cgnao

 

I post seldomly but I read lots everyday. I try to get a balanced view on all things and keep an open mind. Goldfinger forms one side of the aurguement and it would be a great loss to this site if his views were not aired, whatever they may be.

 

I will die soon so I don't want to spend any time trading stocks, currencies or commodities. I prefer to spend most of my time designing or making things or maybe playing a round of golf.

 

DrB I enjoy your site and I find your posts very interesting but you do come across as rather a control freak.

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DrB I enjoy your site and I find your posts very interesting but you do come across as rather a control freak.

Control freak?

That's not accurate - I have left the door wide open to all constructive comments.

In fact, 18 months ago, the site became almost unreadable, because I was relunct to ban mudslingers.

 

However, I cannot accept others here trying to control what I post. (!)

I am a not-accepting-control freak, perhaps.

 

BTW, why think about "dieing soon."? That sounds very negative. We will all "slip the coil" at some point, and who can know when.

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DrB I enjoy your site and I find your posts very interesting but you do come across as rather a control freak.

 

As the creator and owner of this forum I think DrB deserves a certain amount of control.

 

As a prolific contributor, I think he just wants a bit of respect - like anyone else.

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I know posting some news about gold/mining etc might get in the way of the bickering on here but that Indonesia article I posted is quite interesting - to me anyway being a less argumentative control freak of an antagonistic type person!

 

If other countries started doing that what would be the position of streamers with long term contracts?

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Total madness ! DB have you ever had a psychological profile done, the level of insecurity and persecution complex you display at times on these boards is amazing! You seem to think antagonism is the way to formulate reasoned debate? Why do you behave like this? Example PD is trading on here In a clear and concise manor I eagerly read his posts so good on him ,couldn't wish the guy more luck and success as he never shouts from the roof tops that it is the only way forward in life.

 

RH provides some counter balanced views to some of my own reasoning, in a calm logical way and he is along with a few others the main reason I come here now!

 

Most of your posts have become slanted and written with agendas in mind.As a result your quality has diminshed due to quantity. IMHO you really need to chill out!

 

Maybe you need take a rest?

 

I hope this post does not seem ungrateful as over the early years of this site I found the quality some of the posting exceptional and very educational on many levels both by opinions on subjects debated and the quality of to links of outside research of hedge funds by many excellent posters, it has now become DB crowing shop as unfortunately most of the quality posters have left the building!

 

It seems a future as a lurker is the easiest option perhaps!

 

Regards

 

ML

You are entitled to your opinion. Though I obviously do not agree.

You are welcome to leave, along with anyone else who does not like the way the site is developing.

But I would appreciate it if you STOP COMPLAINING, and start posting something more constructive.

 

I think some will tell you that the quality is now improving, since the mud-sling seems to have eased up in recent days.

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Government making foreigners sell mine holdings

Indonesia will force foreign firms to sell down stakes in mines by the 10th year of production, with domestic ownership to be at least 51 percent, in a move likely to hurt existing miners and scare off potential investors.

 

The new rule is the latest government move to extract greater domestic profit from the vast mineral wealth in the world's top exporter of thermal coal and tin.

 

The requirement, stated in a regulation on the mining ministry's website, comes as the government is renegotiating contracts with the leading foreign metals miners in the country, Freeport McMoRan Copper & Gold Inc (FCX.N) and Newmont Corp (NEM.N).

This could hit the share prices of those miners.

And may get some to leave the country, leaving it others (or no one!) to mine the country's Gold deposits.

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This could hit the share prices of those miners.

And may get some to leave the country

 

Yep that physical gold locked in a big vault looks good now, as the world goes down the route of money printing more taxes and mines will be raised and grabbed !!!!!!!

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I am not asking anyone to depart, I just want the discussion here to be balanced and constructive.

 

Yes you have! By suggesting there are other gold bull websites, you are asking people to leave if that is their investment profile. You want gold to be primarily discussed within your paper boundaries, limiting the spectrum of debate is stifling. The problem is, your gold investment strategy will not stand the test of time when this all comes crashing down. This has been pointed out to you many times and so far I haven't heard a good explanation as to why you think you'll end up with all the paper profits you think you've earned. Your strategy depends on a system that is hanging by a string. If you want to further discussion and provide a balanced and constructive debate, perhaps you could explain why the system won't collapse, why you think you won't be presented by a MF Global style HTTP 404 error in your trading account and that when/if you can extract your profit from a failing/failed bank, that it won't have been debased in to oblivion. Whilst nothing is risk free, that is the argument for buying physical gold and holding it, there is no counter party risk. Being content with the continuous rise in the price of metal given current negative real interest rates, is a sound investment choice for those that don't have 8 hours a day to dedicate to this. If you can answer this critical point, the discussion will move forward.

 

BTW - We seem to have chased away the most-doctrinaire Gold purists.
I haven't "chased away" anyone.

 

The 2 posts above speak for themselves. You haven't chased me away. As far as I'm concerned this is a public forum and unless I'm contravening forum rules, then I'm free to post here. If you don't like my investment portfolio then please put up a credible argument as to why. Denying buying and holding gold through market volatility is not a valid investment decision, is a blinkered view IMO. I sold my house and I can now afford to buy it back without a mortgage, for 99.99% of the people on this forum, that is impressive and should not be dismissed.

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Government making foreigners sell mine holdings

 

 

 

As FOA once said all mines will be nationalised. Its inevitable.

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Good. I have held a gold for a number of years solely down to Goldfinger and Cgnao

 

I post seldomly but I read lots everyday. I try to get a balanced view on all things and keep an open mind. Goldfinger forms one side of the aurguement and it would be a great loss to this site if his views were not aired, whatever they may be.

 

I will die soon so I don't want to spend any time trading stocks, currencies or commodities. I prefer to spend most of my time designing or making things or maybe playing a round of golf.

 

DrB I enjoy your site and I find your posts very interesting but you do come across as rather a control freak.

 

Well said. Control Freak is a bit harsh.

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This could hit the share prices of those miners.

And may get some to leave the country, leaving it others (or no one!) to mine the country's Gold deposits.

 

Just for a minute think what if the price of 1 oz of gold in US dollar terms is 55000....there would be many people willing to mine the local gold. You wont need big companies. Also at that price mining equipment will be paid off by 20 or 30 oz.

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Yes you have! By suggesting there are other gold bull websites, you are asking people to leave if that is their investment profile...

 

 

The 2 posts above speak for themselves.

You haven't chased me away. As far as I'm concerned this is a public forum and unless I'm contravening forum rules, then I'm free to post here. If you don't like my investment portfolio then please put up a credible argument as to why. Denying buying and holding gold through market volatility is not a valid investment decision, is a blinkered view IMO. I sold my house and I can now afford to buy it back without a mortgage, for 99.99% of the people on this forum, that is impressive and should not be dismissed.

I will change that post as follows:

 

"We seem to have chased away the most-doctrinaire Gold purists - or maybe 'frightened them off'"

 

I haven't banned or suspended anyone, as you well know. But I re-state my comment from above that No One is free from constructive criticism, be they Gold bulls or bears, traders or investors. And that includes certain Gold gurus! They are fair game here, like everyone else.

 

Investors are welcome, even if they want to B&H. But they cannot insist that everyone else have the same view and approach as they do. They are free to make arguments in favor or their approach, but not free to sling endless mud at those who want to trade part of their position, or even all of it. There's is no single approach sanctioned on this site.

 

If you disagree, you'd better appeal to the Founder.

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As FOA once said all mines will be nationalised. Its inevitable.

 

I was wondering about that when I did this thread.

http://www.greenenergyinvestors.com/index.php?showtopic=16022

 

I thought streamers might be a better bet because of it. However if governments start limiting the number of years foreigners can hold 100% of a mine if that applies to streamers the model doesn't look as good. If it's applied retrospectively it's a lot worse. Of course this is only Indonesia but is it the start of a trend?

 

I see the silver and gold streamers are slightly down today so far even though the metals and DOW are slightly up.

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Yes you have! By suggesting there are other gold bull websites, you are asking people to leave if that is their investment profile. You want gold to be primarily discussed within your paper boundaries, limiting the spectrum of debate is stifling. The problem is, your gold investment strategy will not stand the test of time when this all comes crashing down. This has been pointed out to you many times and so far I haven't heard a good explanation as to why you think you'll end up with all the paper profits you think you've earned. Your strategy depends on a system that is hanging by a string. If you want to further discussion and provide a balanced and constructive debate, perhaps you could explain why the system won't collapse, why you think you won't be presented by a MF Global style HTTP 404 error in your trading account and that when/if you can extract your profit from a failing/failed bank, that it won't have been debased in to oblivion. Whilst nothing is risk free, that is the argument for buying physical gold and holding it, there is no counter party risk. Being content with the continuous rise in the price of metal given current negative real interest rates, is a sound investment choice for those that don't have 8 hours a day to dedicate to this. If you can answer this critical point, the discussion will move forward.

 

 

 

A most excellent post, IMHO.

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A most excellent post, IMHO.

Except that it is complete nonsense.

I have not limited anyone. Only stopped the B&H purists from stifling discussion about:

 

+ Trading,

+ Buying windows,

+ Deeper motivations of some of the gold gurus

 

Does this sound like it comes from an open-minded person?:

"The problem is, your gold investment strategy will not stand the test of time when this all comes crashing down. This has been pointed out to you many times."

 

I am pushing for an open and balanced discussion, not shutting one down.

Over 10 years of trading the way I do has produced outperformance, well in front of B&H.

At what point does the "test of time" begin and end?

 

"Whilst nothing is risk free, that is the argument for buying physical gold and holding it, there is no counter party risk. Being content with the continuous rise in the price of metal given current negative real interest rates, is a sound investment choice."

 

There is also no counterparty risk if you hold farmland, residential property, pigs, corn, or diamonds. Gold prices seem to have outraced all of those. So which is a better investment?

 

I do NOT want huge amounts of storage risk. I live in a small flat, and am not comfortable parking really serious amounts of physical gold in a bank or with GoldMoney, etc. I have some Gold in both those places, but not really core amounts of my wealth. So what would I do with physical? That's an important part of my dilemma. Meantime, I have shown that I can capture the upside in Gold prices, and protect myself from downside price risk using options. So why should I not go on doing that, and finding places that I am more comfortable using to park wealth.

 

How much farmland do you own? Can you grow a decent proportion of your own food? That might represent even better security, especially if you live in an area where you can rely on your neighbors.

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Me too. Frightened off or not.

Haha.

"Be afraid. Be very afraid."

Just when you thought it was safe to go back into the waters of the Gold thread...

 

http://www.youtube.com/watch?v=3d-ywGEmcIc

 

"I think we may have another shark (trader) problem..."

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