GOLD

[edgetraderplus]

_{Let me add, a change for higher prices may come Monday, next week, next month, next year. Unless it occurs as a surprise, like a spike volume off the bottom, it takes time to turn a market from down to sideways, then up, and that is my point.}

[aliveandkicking]

Semper ad hominem, numquam ad rem.

 

Your way is the way of ignorance. Anybody who does not fall at your feet in admiration gets the thugs treatment

 

Meanwhile your wife probably wishes you had bought a nice property in a nice town in the USA just as you were discussing two years ago

 

Doom did not come about as you expected.

 

You failed and now apparently you think that failure entitles you to respect?

 

Eventually all the failures will withdraw with lessons learnt and the strong hands will be burnt alive

 

[Errol]

Doom did not come about as you expected.

 

You failed and now apparently you think that failure entitles you to respect?

 

Eh? The crash hasn't happened yet. It's coming. Why are you in such a hurry?

[Errol]

Gold just another commodity? After 30,221 posts on this thread, this is still a topic on here?

 

No wonder I had to essentially stop posting at this joint!

 

It's similar to Hpc forum. You can have endless, circular debates about whether gold is a commodity/money/in a bubble etc. I've stopped bothering, tbh.

[electroweak]

Eh? The crash hasn't happened yet. It's coming. Why are you in such a hurry?

 

ALK is actually an antagonistic dick. Leave him alone, and he'll go away. Unfortunately, it's the fact that he hasn't been banned (or worse) yet, that means people with value or content to add, leave.

[pjohnp]

Hey, come on you lot. The gold thread is one of sanest threads on this board: don't go spoiling it! GF, I'm glad you're back: yours were always some of the posts that encouraged me most in my p/m dabbling. But "No wonder I had to essentially stop posting at this joint!" isn't why you left: that was after a ridiculous spat with Dr B about trading versus holding (a false dichotomy if ever I saw one). So less crowing, please .. and fewer split infinitives if you also choose sometimes to post solely in Latin. Stay with us, join in the conversation like a man, and don't show frustration with those of us who post financially naïve comments ... it may just be that we're busy in the world outside and don't know as much about markets as you do.

[drbubb]

Gold just another commodity? After 30,221 posts on this thread, this is still a topic on here?

 

No wonder I had to essentially stop posting at this joint!

 

The quiet and the questioning at a time of low prices and many Hedge Funds Shorts...

 

- IS VERY BULLISH imho !

[drbubb]

Sanity, like Beauty... ( and what might be really Bullish for a Gold investor )

 

Are in the eyes (and mind) of the beholder.

 

... The gold thread is one of sanest threads on this board ...

 

A pity... that so few here seem unwilling to acknowledge the growing list of things we have had RIGHT on this board.

 

+ Did Snowden's revelations have zero impact on you guys?

 

The long-standing unwillingness to believe government lies (about almost everything by a few active posters here) could be seen as a useful asset by those in search of the truth

 

+ Haven't you noticed the accuracy of my Gold related comments on my Diary over the last few months?

[notanewmember]

As the thread has livened up a bit, I want to hear how people are going act on the next bullish leg of gold when it comes in the future.

 

There are two possibilities gold becomes a new base for money, or it doesn't. If it doesn't and it falls back down, will YOU (asking any reader out there) be holding it as it goes all the way back down? Or will you lock in profits and switch to other assets such as shares of decent companies, property or land?

 

Lets say gold closed weekly at $1800 this coming Friday - that would be a nice breakeven point for a lot of late comers. Now over the coming months it makes new all time highs, $2000, $3500, $4000, the fever pitch is building to a cresendo. $5000. $100 dollar moves in a day are occurring. You hear about George Soros buying on Zero hedge. You hear about central banks running out of ideas as the next debt crisis unfolds. China as always is buying gold. The CRIMEX exchanges are out of gold. The Stock markets are crashing, people are jumping out of windows. Gold advances, first $6000, then $8000 weekly close. The investment banks like JP Marlin(!) concede and say they don't have any gold (that they want to give you). Gold penny shares rise 10, 50 fold as people clamor to get in on the action. The CRB index is making new highs, oil is spiking - there is an oil crisis in the Gulf. A mad evil dictator wants to nuke a neighboring country!

 

Then the momentum eases, we see a weekly close above $9000. Silver trades at $200 an ounce. Could gold make over $10,000? We start seeing news on the mainstream media reports of how gold will be the next gold backed currency for the world over the weekend. The DOW has drifted back to 10,000, as not many people are talking about it, but they are talking about how one gold coin can buy a car.

 

On Monday, the gold market spikes to $10,000 for a brief moment and pulls back. The Katco servers are down for the day as so many look at their 24hr charts. It never gets quite over $10,000. Over the coming days, gold sits at $9600. By Friday, it closes at $8800. The chat rooms talk about this as a pull back and it is time to back up the truck. Long lines form outside bullion dealers. Most are out - people are doing deals in the lines between themselves, as not all customers are waiting to buy.

 

At the Monday open, gold falls back and drifts lower. By the Friday of that week it closes at $7800. A month passes and gold fever starts to die down, at the end of the month it closes at $6800. There is no announcement of gold being a world currency. The FED makes an official statement that gold will not form a base for a new currency. Western forces moves into the Gulf - Western Nation troops move into [insert oil rich country]. Gold slides to $2000.

 

---

 

How will you raise your stop? How much will you cash out?

 

If we don't know if there will be a new gold backed currency, then maybe cash out 50%, and keep the rest in there. Because I will assume there will be a two way bet that gold becomes money or not at that point. If it does, then all cash will pretty much go to zero. But by having plan to rotate into income producing assets straight away that risk is reduced.

[Bosworth]

In my very humble opinion, gold will go to <$50 oz before it goes to $5k oz (ie. it won't ever go super-stratospheric). Once people realise paper-gold is effectively worthless nobody will want to hold it. How one calculates the real value of physical without a functioning market is the interesting philosophical question for me (which may become very practical in the future!).

[drbubb]

In my very humble opinion, gold will go to <$50 oz before it goes to $5k oz (ie. it won't ever go super-stratospheric). Once people realise paper-gold is effectively worthless nobody will want to hold it. How one calculates the real value of physical without a functioning market is the interesting philosophical question for me (which may become very practical in the future!).

 

There's paper Gold and Paper Gold.

 

GLD is shrinking fast, but some other (better backed) Gold etfs are holding strong

[aliveandkicking]

ALK is actually an antagonistic dick. Leave him alone, and he'll go away. Unfortunately, it's the fact that he hasn't been banned (or worse) yet, that means people with value or content to add, leave.

 

Evidently you only want a private club of people who think like you do. Attacking me like you always do only reveals to everybody how narrow minded you are.

 

Gold has a big problem at the moment. There is no big inflationary threat and the deflationary threat is still present.

 

All those who were promising collapse of the dollar and prices to the moon have comprehensively failed to see the future correctly.

 

Attacking me is not going to change that although it might enable you to feel better.

[alexreeve]

All those who were promising collapse of the dollar and prices to the moon have comprehensively failed to see the future correctly.

It's a fair point. I certainly thought the banking crisis would eviscerate both USD and GBP in short order. What I failed to appreciate was the ubiquitous nature of the problem. It did not occur to me that every significant central bank in the world could/would co-ordinate so effectively to prevent catastrophic exchange rate fluctuations.

 

However I still don't see any liquidation of the bad debt (and corresponding credit) that cannot be repaid. I do not see any progress towards a resolution to the financial crisis, just still growing imbalances.

 

Do you feel that the financial crisis is over, and we are seeing the green shoots of healthy recovery?

[aliveandkicking]

It's a fair point. I certainly thought the banking crisis would eviscerate both USD and GBP in short order. What I failed to appreciate was the ubiquitous nature of the problem. It did not occur to me that every significant central bank in the world could/would co-ordinate so effectively to prevent catastrophic exchange rate fluctuations.

 

However I still don't see any liquidation of the bad debt (and corresponding credit) that cannot be repaid. I do not see any progress towards a resolution to the financial crisis, just still growing imbalances.

 

Do you feel that the financial crisis is over, and we are seeing the green shoots of healthy recovery?

 

We are still stuck in the deflation collapse dynamic that is being prevented by government policy

 

There are still years and years left for that to play out, where there are no compellingly easy fixes for the problem.

 

Importantly for the USD price of Gold, the Gold bug community has failed to understand the meaning of QE. The Gold bug community insists on seeing QE as more financial assets added and therefore money devalued and Gold to the moon proportionally. In fact QE is relatively zero sum and only encourages investors to rebalance their portfolios into assets that earn more interest.

 

Most of us were gripped by a mania, where protecting ourselves from inflation created by central bankers was vitally important for our well being. Whereas in reality the central bankers are somewhat impotent to create inflation via QE.

 

Personally i have been very fortunate that when i bought a house in Finland after lehmans went bust, it did actually go up in price. Also i have been fortunate I have now been able to sell my NZ house for much more than seemed possible when the GHPC thugs were beating the crap out of me for me saying that China and world demand for food would protect NZ from big downsides - at least for the time being - where over time there would be some inflation and probably house prices would not fall too much in real terms.

 

Most of the thugs on GHPC have been shown to have been comprehensively wrong from many different directions.

 

In fairness to them, most of them were probably very young when they made many of those statements, whereas i was already relatively old.

[Van]

Gold is an emotive subject, because if you hold gold and believe in gold as money, it says a lot about your social and political beliefs.

 

These days I just look at the charts. I'd prefer if the I could somehow blank the chartnames that I regularly look at and just display the graphs.

[notanewmember]

I dug this out from the depths of my chart folder. This website has removed this price chart as a selectable option now - I wonder why (?!)

 

^This chart is from a website that rhymes with Bimbomine.com

 

Venezuela currency. I take gold is still banned there - but could you trade it on your computer? Who takes the other side of the trade? Who wants the Venezuelan currency? How would that work? What are gold juniors doing there? Are there any gold juniors? Who knows. You could raise your stop at every 1,000 intervals. But don't forget that chart has been divided by 1000. So in actual fact, raise your stop at every 1,000,000 intervals.

 

One ounce of gold is 6,000,000 VEB in September 2010. Maybe the VEB is dead now and you couldn't cash out if you tried - remember the two way bet 50% cash out plan earlier I said about.....

 

The chart could play out like the story I wrote a few posts ago http://www.greenener...220#entry279853

 

Edit - according to WIKI the VEB (bolívares) is dead, and the VEF (bolívares fuertes) replaces it! They give you one VEF for every 1000 VEB. Nice. Long live the new fiat! Well there you go, maybe that is the future for the dollar.

http://en.wikipedia....zuelan_bolívar

 

According to http://www.goldrate2...rica/venezuela/ One Gold Ounce is 8,409 VEF.

 

In old money that is 8,409,000 VEB - wow. How many people on this planet have bothered to do this calculation?

Raise your stop to a figure under 8,000,000 perhaps!

[G0ldfinger]

Here is where I am at:

 

I have been somewhat surprised by the amount of time the central bankers have been able to buy with their hyperinflation of the monetary base (yes, just tripling it nilly-willy is HI in my opinion).

 

On the other hand, as the likes of Prechter or our very own ALK simply do not grasp that the "deflation" they want to see (even ALK's house in the tundra went up in price over the past years - I'd call that INflation...) is there because of historically low money velocity and because of a certain unwillingness of banks to function as multipliers, this makes sense. For now mass psychology still is in favour of deflationary thinking while the fundamentals lean to the opposite. Fundamentals will - as always - win in the end and velocity will go back to normal and potentially way beyond normal, but it might take a while.

 

The recent gold correction has an almost perfect historic blueprint in the 1974-76 sell-off (only, the fundamentals today are so much better for gold). So, people like Prechter or our very own ALK, who now expect gold to drop to USD 200, will most likely have to eat their hats (if they still own any at the time in question). I hope the traders have been able to trade this, and I hope the investors don't worry - just like me: I have not sold one ounce for divesting out of PMs. I still mostly hold physical gold and silver bullion, but increased gold & silver stock investments during the past two years (so far at a loss).

 

As Igglepiggle points out: the imbalances are growing thanks to the printing presses. He is also right in pointing out that all major fiat currency turds are floating in the same bowl at roughly the same speed. That's why the golden life boat seems less necessary, but of course that's an illusion which will sooner or later disappear (and ALK will wake up and try to buy what by then will be unobtainium).

 

Gold, like other assets, is forward looking when things get rough. The greatest increase in actual value might come (just?) before a large currency collapse or price inflation spike. "You got to be in it to win it."

 

Recent developments in the LBM and the COMEX may be signs that the bottom has been reached and that some major players are in the process of repositioning themselves on the other side of the trade. So, Sinclair's prophecy might come true that in the end the former gold dumpers will make the most profit on the upside.

 

Finally, I have never predicted the end of the world. The financial world as we knew it, however, ended in 2007 and we are sliding deeper into some sort of financial doom (which is entirely normal and happens quite often historically). It is so slow, however, that some (like our very own ALK) are not able to see it. This is to be expected. Further, I see no reason why gold could not be beyond USD 10,000 and the supermarket still be (a-okay) stocked. In fact, I sincerely hope that this will be the case.

[G0ldfinger]

How will you raise your stop? How much will you cash out?

 

What is the inflation rate at the time?

What are interest rates doing?

Who is the Fed Chair(Wo)man?

Is it bail-ins or bail-outs, or both?

What is MZM doing?

What is money velocity doing?

How is the US/Europe/China/Japan doing?

How easy is credit?

How are commodities like food and energy doing?

 

One way of getting out could be to slowly turn gold into cheaper hard assets at the time (property, general stocks), but (if paper markets are still functioning) to speculate in long options to potentially cover any ridiculous spike-ups in the gold price, while keeping some bullion for SHTF liquidity reasons.

[G0ldfinger]

DOUBLE POST.

[aliveandkicking]

Here is where I am at:

 

I have been somewhat surprised by the amount of time the central bankers have been able to buy with their hyperinflation of the monetary base (yes, just tripling it nilly-willy is HI in my opinion).

 

On the other hand, as the likes of Prechter or our very own ALK simply do not grasp that the "deflation" they want to see (even ALK's house in the tundra went up in price over the past years - I'd call that INflation...) is there because of historically low money velocity and because of a certain unwillingness of banks to function as multipliers, this makes sense. For now mass psychology still is in favour of deflationary thinking while the fundamentals lean to the opposite. Fundamentals will - as always - win in the end and velocity will go back to normal and potentially way beyond normal, but it might take a while.

 

The recent gold correction has an almost perfect historic blueprint in the 1974-76 sell-off (only, the fundamentals today are so much better for gold). So, people like Prechter or our very own ALK, who now expect gold to drop to USD 200, will most likely have to eat their hats (if they still own any at the time in question). I hope the traders have been able to trade this, and I hope the investors don't worry - just like me: I have not sold one ounce for divesting out of PMs. I still mostly hold physical gold and silver bullion, but increased gold & silver stock investments during the past two years (so far at a loss).

 

As Igglepiggle points out: the imbalances are growing thanks to the printing presses. He is also right in pointing out that all major fiat currency turds are floating in the same bowl at roughly the same speed. That's why the golden life boat seems less necessary, but of course that's an illusion which will sooner or later disappear (and ALK will wake up and try to buy what by then will be unobtainium).

 

Gold, like other assets, is forward looking when things get rough. The greatest increase in actual value might come (just?) before a large currency collapse or price inflation spike. "You got to be in it to win it."

 

Recent developments in the LBM and the COMEX may be signs that the bottom has been reached and that some major players are in the process of repositioning themselves on the other side of the trade. So, Sinclair's prophecy might come true that in the end the former gold dumpers will make the most profit on the upside.

 

Finally, I have never predicted the end of the world. The financial world as we knew it, however, ended in 2007 and we are sliding deeper into some sort of financial doom (which is entirely normal and happens quite often historically). It is so slow, however, that some (like our very own ALK) are not able to see it. This is to be expected. Further, I see no reason why gold could not be beyond USD 10,000 and the supermarket still be (a-okay) stocked. In fact, I sincerely hope that this will be the case.

 

You are revealing the way you think.

 

I said:

 

>>We are still stuck in the deflation collapse dynamic that is being prevented by government policy

 

And nowhere have i indicated that Gold is likely to collapse in price back to usd200.

 

It should be fairly clear that knowledge tends to be gained by listening to what the other person says rather than listening to ourselves.

 

What you seem to be saying to me is that you do not believe that QE can be reduced so that the inflationary outcome you are expecting must happen eventually. I really cannot understand the logic for that. QE is there to lower longer term interest rates and get people to move from safety towards risk, If inflation is rising significantly then we can reason there is less reason to encourage risk taking or have lower longer term interest rates.

 

The US economy is still doing fairly badly so there is not much reason to be thinking about ending QE but it can be done if money starts sloshing around again. We are at least seeing the beginning signs of that already.

 

Even if QE ends and is fully unwound there will still be a very exceptionally accomodative zero short term nterest rate policy in the USA.

[edgetraderplus]

Mr aliveandkicking: [To all, I have not figured out how to get the "enter" tab to start a new paragraph, so I will simply resort to large spaces to designate a new one. I promise this elementary limitation does not reflect on whatever ability I may have to read a chart.] In #30237, you assert, "Gold has a big problem, at the moment." Why? For many, gold has no problem, not at this moment nor at any future moment. An oz of gold today is the same as any yesterday, and it will be the same oz for all future tomorrows. To your earlier point, #30129, gold is not just another commodity like ammo, sugar, or oil. The ammo of the past no longer even functions in the present. Is it still a commodity? Is a comment on sugar or oil really necessary? The fallacy of your logic fails in your first four words. Actually, there is no logic in them. Who, specifically, are "All those who were promising collapse of the 'dollar,' [i will bet you an oz of gold you do not know what a 'dollar' is], "All those" that failed to "see the future correctly?" To my admittedly limited way of thinking, no one, not even you can "see" the future "correctly," whatever "correctly" may mean. Are "All those" massive in number or relatively few? You fail to qualify, and I did not buy into your faulty premise. #30129, "Gold has risen hugely in price since 2008..." What about from 1933? Where does one factually start? In any event, would it not be more accurately expressed that fiat currencies have fallen, instead, for an oz have gold has not changed? I will not address your other comments in that post, for they are merely the product of an individual point of view, and you are certainly entitled to yours, however much you esteem them as a barometer of "All those" others who apparently just don't get it. #30239 is filled with inconsistencies, which seems to be your consistent pattern of expression, especially in regard to your [singular] understanding[?] of QE. Your most prominent expressed opinion, "Most of us were gripped by mania, where protecting ourselves from inflation created by central bankers was vitally important for our well being. Whereas in reality the central bankers are somewhat impotent to create inflation via QE." OMG!!! Are you the chosen spokesman for "Most of us," for surely it did not include me, and a great many others I personally know? You freely opt to your "ourselves" and "our" where it suits your purpose as though you are the proxy for that "mania" group back then. Is it the same "mania" under which "All those" "goldbugs" are currently suffering? Your second sentence is a laughable killer and utterly destroys any credibility you endeavor to exercise. Good for your timing in buying a house in Finland. Where you give yourself a pat on the back, my thought was, even a blind pig finds a kernel of corn every once and a while. We appear to be at opposite ends of the spectrum for that event of personal prescience. I cannot say which of us is more accurate, but it is food for thought, wouldn't you say? Or maybe not... As to those "thugs" who oppose and disagree with you, and "have been comprehensively wrong from many different directions," at least you are consistently singular in yours. I generally dislike engaging in a pissing contest of opinions, but it would be irresponsible of me to not challenge such expressions of thought and let them stand unopposed. Others may think it otherwise credible.... Unfortunately, it caught my attention, and I believe it required an answer from one. "All others" can speak for themselves. Cheers...

[electroweak]

top-tastic summaries from GF and edgetraderplus;

Just to add: I'd bet that "most of us" had sizeable positions in PM's well before QE started, and I too resent the summary use of "us", "our", "ourselves" when talking about inflation, manias and the like. I personally see gold as performing best during deflations!

 

The less you feed the trolls, however, the less they come back!

There really is no argument to be had here.

 

PS - the 'ignore' list is a wonderful thing, but Dr. Bubb- mine is stuck and i cannot change it. I get a page of garbled crud when I go to it.

Oh, well, worse things have happened than AliveAndKicking being STUCK on my IGNORE LIST

[alexreeve]

QE is there to lower longer term interest rates and get people to move from safety towards risk, If inflation is rising significantly then we can reason there is less reason to encourage risk taking or have lower longer term interest rates.

Can the US government keep refinancing their debt, and finance their deficit with interest rates at 5%? What about 10%? What about 20%? What is the point at which elevated interest rates become politically unacceptable? What happens to the Fed's balance sheet if the US government defaults on its debt obligations? I don't know the answer to these questions.

 

I think you have rather misunderstood the primary obligation of the central bank if you think they can completely ignore government funding needs to deal with inflation.

[aliveandkicking]

Can the US government keep refinancing their debt, and finance their deficit with interest rates at 5%? What about 10%? What about 20%? What is the point at which elevated interest rates become politically unacceptable? What happens to the Fed's balance sheet if the US government defaults on its debt obligations? I don't know the answer to these questions.

 

I think you have rather misunderstood the primary obligation of the central bank if you think they can completely ignore government funding needs to deal with inflation.

 

The US debt is and will be a significant problem, but the US has made some significant moves in the right direction.

 

We can argue what ifs and maybe for ever and a day and achieve nothing at all.

 

One of my biggest points on this thread is that Gold bugs seem to misunderstand the nature of QE, where in reality there has not been significant money printing since this crisis began and yet talk of money printing has been hysterically hyped for years on end as if something of significance was about to happen. That suggests a clear misunderstanding and therefore reasons why Goldbugs are not thinking about todays problems in a way that is likely to give them the financial success they want.

 

You can see the Goldbug problem from some of the members here where they find it hard to allow their own ideas to be scrutinised without launching into immature rants and I find it hard to see how such behaviour is going to be very rewarding for these people.

[G0ldfinger]

Further to Igglepiggle's growing imbalances and ALK's criticism of my thinking that QE is here to stay.

 

ALK, don't you see how QE is becoming engrained into the system and how we are slowly getting used to it? Those people who bought your NZ house or who are buying houses in the UK, US or Germany right now, they enjoy ridiculously low interest rates. Fine if they're fixed, but most of them are not. They take on a ginormous mortgage fixed for 5 years or so, and then you think they would be able to cope with, say for starters, triple the rates when the Fed stops QE? Also, the deficit in the U.S. has been reduced by sequestering, but this is a drag on the economy. Meanwhile the Fed has until recently monetized that whole deficit! So, do you really think they will start paying down debt soon, or at least keep it constant? No, again, QE will become accustomed to as the new normal. It's like NuLabour made sure that all the UK's debt was paid back during the boom years - oh, wait, it wasn't! Great surprise!!

 

Read that famous book on the French hyperinflation following the revolution. It's appaling how history does not just rhyme, but seemingly repeat itself right here right now. Only, as I said, this thing is big, like a supersized super-tanker, so it will take off slowly.