GOLD

BlackPepper · April 18, 2012

Well to keep the balance there also needs to some counter debate, as for so long gold has done well since 2001. But now I think its time to revisit the reasons for investing in GOLD.

Gold is not an investment but a speculative asset! Yes totally agree, yes I know there are many supporting arguments regarding Gold, but time and time over I look at gold at face value and I really cannot see merit other than jewelry and high end electronic components . If I purchase gold, then whats next? Oh I hold it like some hoarder. I think shit, it needs to be stored in a safe secure location.Does that come at a cost? In my way of thinking hoarding is almost criminal like, its like some dam holding back water preventing those downstream from the benefits and opportunities. Then to add the speculation.

below is excerpt from http://www.getmoneyrich.com/gold-is-not-an-investment-but-a-speculative-asset/ There are some compelling counter debate/s there for consideration.

So for all those gold fanatics, have a watchful eye on the recovery process of America. The dollar gets stronger (with increase of risk free rates) the gold prices would tumble. At that time you will no other option than either to sell or hoard. In case you sell it is ok but in case you decode to hold, remember what we told you, gold generates not cash flows like stocks, real estate…

As gold does not produce any cash flow, hence it is not possible to estimate a right value of gold. But gold for sure generates a negative cash flow in terms of its storage cost. The value of gold can only be determined by that value that a buyer is agreeing to pay at the time of buying. This is the reason why we call gold as a speculative investment.

There are some compelling counter debate at the above link

jinbal · April 18, 2012

below is excerpt from http://www.getmoneyrich.com/gold-is-not-an-investment-but-a-speculative-asset/ There are some compelling counter debate/s there for consideration.

Nothing surprising in that article - my understanding is that he is saying that negative real interest rates cause gold to rise and positive real interest rates cause gold to fall - when real interest rates go +ve I and I have no doubt others will look for better "yield" perhaps away from gold.

The question is when that will be - According to his table, based on official UK CPI figure (if you believe that) interest rates would need to be above around 5-6% nominal to start affecting gold. Do you genuinely believe that IR's are going back to anything like that soon, given the BOE (and the Fed) seem committed to use thin money printing to surpress them as long as need be and if they did rise that high it would almost certainly cause property prices to fall, thereby creating new "yielding" opportunities.

If and when there is a genuine "recovery" (i.e. debt paid or written off to allow productive investment) I hope I'm smart enough to be amongst the first to start looking for new opportunities - sadly I dont see that happening anytime soon given the debt problems and the appetite for bailouts.

BlackPepper · April 18, 2012

Nothing surprising in that article - my understanding is that he is saying that negative real interest rates cause gold to rise and positive real interest rates cause gold to fall - when real interest rates go +ve I and I have no doubt others will look for better "yield" perhaps away from gold.

The question is when that will be - According to his table, based on official UK CPI figure (if you believe that) interest rates would need to be above around 5-6% nominal to start affecting gold. Do you genuinely believe that IR's are going back to anything like that soon, given the BOE (and the Fed) seem committed to use thin money printing to surpress them as long as need be and if they did rise that high it would almost certainly cause property prices to fall, thereby creating new "yielding" opportunities.

If and when there is a genuine "recovery" (i.e. debt paid or written off to allow productive investment) I hope I'm smart enough to be amongst the first to start looking for new opportunities - sadly I dont see that happening anytime soon given the debt problems and the appetite for bailouts.

That is the golden question will interest rates rise? I believe eventually interest rates will have no choice but to rise. When you say a "genuine recovery" do you mean reinstating the credit party? Economic recoveries can come in many forms perhaps more so through direct investing rather that speculative investing.

For example http://www.zerohedge.com/news/birth-barter-how-one-greek-town-dropped-euro-and-moved there is a video how a small town in Greece has moved on beyond the Euro.

drbubb · April 19, 2012

BIX WEIR AND DRAKE - are now "on the same page"

—————————————————————————

Take Down of the Federal Reserve System Begins, by Bix Weir

In an interview last weekend the “Good Guy Insider” gave a brief update on the pending take down of the Bad Guys. In this interview Drake said to expect something to be leaked out of the Federal Reserve sometime midway through the week. Here’s the interview and the Drake conversation is right at the beginning:

http://www.blogtalkradio.com/freedomizerradio/2012/04/15/freedom-reigns [KP note: go here to download MP3s of this program from this blog]

So I was watching for something related to the Federal Reserve and AS IF RIGHT ON CUE revelations came out about the Fed hiding massive amounts of information on their meetings during the 2008 financial crisis. Here’s Dylan Ratigan (part of the Good Guys) exposing the info.

I will address this further in this weeks Friday Road Trip.

Take Down of the Federal Reserve System Begins, posted with vodpod

EVERYTHING is exploding for the Bad Guys.

It may seem a bit confusing that the Road to Roota Theory shows the Federal Reserve working to take down the Banking Cabal and yet, on the surface, they seem to be working with the Bad Guys.

My take: We have come to the time when the Federal Reserve falls on their own sword.

/source: http://www.roadtoroota.com/public/873.cfm?awt_l=5khcU&awt_m=3Y6pERGuSpAZ85B

Errol · April 19, 2012

Just reading 'The Golden Revolution' by John Butler -

A great read and provides some good ideas about how the coming gold standard might work.

Amazon.co.uk link - http://www.amazon.co.uk/The-Golden-Revolution-Prepare-Standard/dp/1118136489

drbubb · April 19, 2012

Anything to add to the "New Currency" thread ?:

http://www.greenenergyinvestors.com/index.php?showtopic=16303

My comments on Gold were:

The Main advantages of using precious metals:

+ There is something "hard" backing the currency.

+ Precious metals are in limited supply, which is increasing slowly: a few % per annum

So that may limit money printing.

The Big Disadvantage is:

+ Precious metals are a STERILE PLACE to store wealth

By which I mean that wealth parked there does not generate a cash return.

Errol · April 19, 2012

Note the debt is now going up again and at all time highs.

Errol · April 20, 2012

Right now gold and silver are not trending, they are consolidating and winding up before they begin another move. I can argue the reasons for a move either way

http://jessescrossroadscafe.blogspot.co.uk/2012/04/gold-daily-and-silver-weekly-charts_19.html

drbubb · April 20, 2012

Right now gold and silver are not trending, they are consolidating and winding up before they begin another move. I can argue the reasons for a move either way

http://jessescrossroadscafe.blogspot.co.uk/2012/04/gold-daily-and-silver-weekly-charts_19.html

Indeed.

And how many posting here one year ago would have predicted that? Or even considered that?

I like to be aware on contrarian thinking on those things that I invest in.

Here's a guy with a view on why not to link money to Gold. I reckon his view is as valid as a certain gold guru (with initials JS), who may be in the employ of an Illuminati group which owns loads of gold and wants to create a strong market for it, so they can offload their gold (at a high price) into the hands of willing buyers.

Maybe you should listen to his view before rejecting it:

Joseph Farrell

Errol · April 20, 2012

Indeed.

And how many posting here one year ago would have predicted that? Or even considered that?

Erm, most of the posters on the gold thread?

Nothing would surprise me. Gold could just as easily drop to $500 as rise to $2000. The central banks are working to cap it below $1650.

halight · April 20, 2012

Nixon, Gold and Oil

http://news.goldseek.com/GoldSeek/1334941968.php

By Richard (Rick) Mills

In July 1944, delegates from 44 nations met at Bretton Woods, New Hampshire - the United Nations Monetary and Financial Conference - and agreed to “peg” their currencies to the U.S. dollar, the only currency strong enough to meet the rising demands for international currency transactions.

Member nations were required to establish a parity of their national currencies in terms of the US dollar, the "peg", and to maintain exchange rates within plus or minus one percent of parity, the "band."

What made the dollar so attractive to use as an international currency was each US dollar was based on 1/35th of an ounce of gold, and the gold was to held in the US Treasury. The value of gold being fixed by law at 35 US dollars an ounce made the value of each dollar very stable.

More on link:

http://www.caseyresearch.com/cdd/ditching-dollar

Snip

In fact, they are doing more than pondering. Over the past few years China and other emerging powers such as Russia have been quietly making agreements to move away from the US dollar in international trade. Several major oil-producing nations have begun selling oil in currencies other than the dollar, and both the United Nations and the International Monetary Fund (IMF) have issued reports arguing for the need to create a new global reserve currency independent of the dollar.

The supremacy of the dollar is not nearly as solid as most Americans believe it to be. More generally, the United States is not the global superpower it once was. These trends are very much connected, as demonstrated by the world's response to US sanctions against Iran.

US allies, including much of Europe and parts of Asia, fell into line quickly, reducing imports of Iranian oil. But a good number of Iran's clients do not feel the need to toe America's party line, and Iran certainly doesn't feel any need to take orders from the US. Some countries have objected to America's sanctions on Iran vocally, adamantly refusing to be ordered around. Others are being more discreet, choosing instead to simply trade with Iran through avenues that get around the sanctions.

=== ===

I will be watching Casey,

to see if he is willing to investigate "the amount of Gold that exists",

as Bix Weir is doing

Garincho · April 21, 2012

Interesting.

Bix comes up with a figure of 1.5 Million tonnes - about 10X the "official" figure.

That's what my research said, and I wrote here and elsewhere, that it might be important.

And that Jim Sinclair could be a paid ramper, controlled by the Illuminati.

It is interesting to see that Bix is now backing up the first point.

Will others come to back up the second possibility ?

Supposing there was 10x the amount of gold that is officially accounted for and this came onto the market and caused the price to crash, do you think it would also cause the price of silver to rocket? With people fleeing to it as the safe haven instead of gold?

drbubb · April 21, 2012

Supposing there was 10x the amount of gold that is officially accounted for and this came onto the market and caused the price to crash, do you think it would also cause the price of silver to rocket? With people fleeing to it as the safe haven instead of gold?

An interesting thought.

I doubt it somehow. I think a lower gold price, would initially drag silver lower too.

Maybe over time the Ratio would return to 15:1 or so.

fexx · April 21, 2012

I haven't been here for a while, so I've had a quick look to see what's been going on.

In summary:

For most of human civilisation, from Ancient Egypt to Rome, Gold has always acted as money. With the entire world now on the verge of massive financial armageddon, the only historical safe store of wealth, will not increase in value, but instead collapse.

The reason for this is that the illuminati 'might' have some of yamashitas gold, which they are going to dump on the market so they can exchange it for some more of the paper that they themselves print.

They have a cunning plan to do this. By utilising their control of the media, they persuade everyone to actually *sell* all their gold for "cash" instead. It's probably some clever reverse psychology. Or something.

Meanwhile, it's trading as usual in the Silver market as paper to the value of 80% of the entire world's mined supply of Silver gets dumped on the market in less than an hour, indicative of the healthy, manipulation-free market this has become. This is 100% guaranteed because somebody once met someone, who's brothers monkey knows Blythe's dog. Andrew Macguire doesn't exist, and neither does anyone else who has presented actual, real evidence to the contrary.

The resonant frequency for tungsten is an arbitrary 666Hz, which means that this metal is inherently evil, and Nazi aliens are trying to dispose of it by cleverly hiding it in 1Kg gold bars which the gullible public are now buying in their droves because they've been told to sell it.

Anything I've missed?

stunlee · April 21, 2012

I haven't been here for a while, so I've had a quick look to see what's been going on.

In summary:

For most of human civilisation, from Ancient Egypt to Rome, Gold has always acted as money. With the entire world now on the verge of massive financial armageddon, the only historical safe store of wealth, will not increase in value, but instead collapse.

The reason for this is that the illuminati 'might' have some of yamashitas gold, which they are going to dump on the market so they can exchange it for some more of the paper that they themselves print.

They have a cunning plan to do this. By utilising their control of the media, they persuade everyone to actually *sell* all their gold for "cash" instead. It's probably some clever reverse psychology. Or something.

Meanwhile, it's trading as usual in the Silver market as paper to the value of 80% of the entire world's mined supply of Silver gets dumped on the market in less than an hour, indicative of the healthy, manipulation-free market this has become. This is 100% guaranteed because somebody once met someone, who's brothers monkey knows Blythe's dog. Andrew Macguire doesn't exist, and neither does anyone else who has presented actual, real evidence to the contrary.

The resonant frequency for tungsten is an arbitrary 666Hz, which means that this metal is inherently evil, and Nazi aliens are trying to dispose of it by cleverly hiding it in 1Kg gold bars which the gullible public are now buying in their droves because they've been told to sell it.

Anything I've missed?

:lol: That's the best post of the month on here!

I am also convinced that James Cameron has been burying hundreds of thousands of tons of gold in the Marianas Trench

http://news.nationalgeographic.com/news/2012/03/120325-james-cameron-mariana-trench-challenger-deepest-returns-science-sub/

He decided to do this after discovering that the Titanic had been sunk with 50000 tons of gold in it that would magically refloat after the Golden Dragon pact come to power in the forthcoming Pentagon war which will happen in the next 30 days.

Perishabull · April 21, 2012

Google search activity over the last few years for "Gold bullion";

halight · April 22, 2012

Buying gold at discount

http://www.stockopedia.co.uk/content/buying-gold-at-discount-65444/

pondlife · April 23, 2012

http://ftalphaville.ft.com/blog/2012/04/23/970271/the-unwitting-move-towards-a-global-gold-standard/'>http://ftalphaville.ft.com/blog/2012/04/23/970271/the-unwitting-move-towards-a-global-gold-standard/

think you need a login so c and p below:

The unwitting move towards a global gold standard

Posted by Izabella Kaminska on Apr 23 12:39.

Professor Lew Spellman, from the McCombs School of Business at the University of Texas at Austin, has an interesting new post out on the changing role of gold in the global economy.

It relates to the notion that a shortage of safe assets may be driving an epic hunt for “safe collateral” — driving down yields on traditional fixed-income investments — because there are more debt liabilities/obligations than safe collateral in the system.

In a zero-yielding environment like this, he believes gold begins to look remarkably attractive. This is especially the case if gold remains a liquid store of value, which is widely accepted as collateral across the system. What’s more, there’s little to differentiate it from a zero-yielding Treasury bond. In fact, the Treasury bond eventually expires, while gold doesn’t.

As Spellman explains:

Hence, the great corollary of over indebtedness is the relative scarcity of good collateral to support the debt load outstanding. This imbalance of debt to collateral is impacting the ability of banks to make loans to their customers, for central banks to make loans to commercial banks, and for shadow banks to be funded by the overnight Repo market. Hence the growth of gold as a collateral asset to debt heavy markets is inevitably in the cards and is de facto occurring. Gold is stepping up to the plate as “good” collateral in a world of bad collateral.

What does this tell us about what’s happening to the global financial system?

In Spellman’s opinion, it seems to indicate that the market may unwittingly be moving towards a collateral-backed global currency (of its own accord). Possibly, even, a new gold standard altogether:

What we are witnessing is a sea change in which market forces are driving a de facto return to the gold standard. All that is missing for this to be a de jure gold standard is some regulatory and legal recognition and one has been proposed. The Basel Committee for Bank Supervision, the maker of global capital requirements is studying making gold a bank capital Tier 1 asset.

Which foretells the following for gold:

The world has gravitated from one gold-backed paper currency to another before, and it likely is happening again. It would depend on whether investors in liquid, default-free, inflation-free paper prefer gold-backed Chinese Yuan to Swiss warehouse receipts or deposits from large international banks with large gold positions that operate with lots of leverage. This is a market choice that will determine the gold linked paper store of value, but the point is that all the paper contenders derive value from the gold backing, and thereby expands the demand for the shiny metal. This is the new calculus of gold. This state of affairs is likely to remain until developed world governments no longer reach for the unreachable and pressure their central banks to finance it.

At FT Alphaville we’ve played around with the idea of a global mind-meld towards the re-collateralisation of the system’s liabilities before. It’s a theory that we would say explains a lot. Though the best way to think about it really is like a giant game of musical chairs. While the music is playing, nobody cares about there being a lack of chairs. Probability wise, the impression is that almost everyone will be able to get a chair if and when the music stops.

But what happens when the music stops and there are far fewer chairs than anyone expected…? (And when the probability of winding up with no chair next time round is much higher than originally expected?) In that scenario participants begin to “eye” their potential seats ever more closely. Anyone with a stake in the game might even choose to reserve a seat by paying off fellow participants.

That process of reserving a seat thus echoes the collateralisation that’s going on today. Collateralisation equals the location and identification of real-world assets against which existing financial claims can be satisfied. If there’s a lack of acceptable assets in the system versus outstanding claims — the stakes in the financial version of musical chairs rise significantly. As does the cost of reserving a seat, a fact which manifests in the real world as negative yields.

See why ‘the debt-to-safe asset ratio’ may be worth paying attention to?

GOLD

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