GOLD

[drbubb]

not to mention the counterparty risk. Gold apart from the possible speculative gains that we are all hoping for is first and foremost an insurance policy. If my counter-party has gone tits-skyward by the time my call is in the money, I'm no better off - in fact, I'm $20k down

 

Not me.

I am wanting and expecting my net worth to outpace the falls in the dollar.

I have done so for years, but it hasnt been so easy in 2008, especially with the juniors weak.

 

But I am hopeful that a big move UP in CDNX and juniors has started.

 

A big move would be needed to "catch up" with Gold and major gold shares (HUI)

 

The first important barrier, near CDNX-2600, is now under attack

 

If that goes, then we may see a swift run to CDNX-2,800

[kernull]

Then he makes a specious argument that you are better getting Index calls. Yes, we all know that you can make a pile through leveraging.... if it was that cut and dried everyone would be doing it. He forgets that there is a little word "if" and within that little word there is implied the concept of RISK. And oh, how many discover that too late!

 

If you take an assumption that US is the only country on the planet, the risk for GOLD is the increase in interest rates. And if GOLD/DOW ratio is used to measure gold performance I think DOW may be some kind of substitution for gold as investment. But given global gold trading and coming deflation in the US this does not apply i believe. This is very simple, with no earnings , how much would stock market worth ?? Even not as a toilet paper when electronically traded.

History confirms it. Take a look at this beautiful hyperinflation in Germany and their relation to the US.

http://www.nowandfutures.com/us_weimar.html

November 14, 1923: "The value of the Daimler company was about $980 million and a car cost $3 million - the whole company was only worth 327 of its cars."

check this too:

"Suicides went up 30%"

"A bite to eat"

What if this happens again?

 

I was reading and kinda liked his stuff, but when I found this:

"There are also a number of people who believe, despite all the evidence above, that the government (or "The Fed") will "hyperinflate" to "save the economy" (or at least try.)"

What evidence ??? Dollar lost 40% of its value. The M3 is not longer reported. GDP is going to 0 . Bubble in tech, the bubble in housing, then bubbles in China, bubbles in India, bubbles in England, "bubble" in commodities.... this is US dollar bubble echoed all over the world. How can he not see this??? Also, what is tax on appreciation? I don't know what is this and don't want to. I think main error of this guy is that it focuses only on US as it would be the only country in the world, actually thousands of analysts make this mistake.

 

[lowrentyieldmakessense(honest!)]

http://us.ft.com/ftgateway/superpage.ft?ne...4465&page=1

 

Always keep in mind: central banks often act in an extremely stupid manner.

 

looks promissing - the link posted is wrong though

 

Lower Oil Prices

Gold is near record lows in price versus crude. In fact, this price has only been seen 33 days in fifty years, consider buying it! Thank you, James Turk, for this gem

 

some more truths

 

The G7 has de-industrialized and no longer creates wealth. Instead it prints wealth, drives asset prices higher and misstates inflation, creating the illusion of growth and new wealth. The parasites known as the G7 public servants, elites and government have destroyed the futures of their economies and are firmly in the grip of the “something for nothing” social trend which has been the demise of every great empire. It is reflected in all levels of their societies: individual, municipal, state, and federal levels. All believe they can have something for nothing and live as if they can repeal the law of nature that you must produce more then you consume in order to grow, create wealth and savings. To believe you can create vibrant growing economies based on consuming more then you produce and borrowing to buy it, rather then producing more then you consume is to believe in the Tooth Fairy and Santa Claus.

 

The policies of insolvency are firmly entrenched in the G7 as socialism continues its march to its ultimate destination of barren futures and harvests. Misery is spread in ever widening circles as public servants have regulated (destroying innovation and adding uneconomic costs to production), taxed and spent every dime of the investment seed corn required for future economic harvests. I just returned from the U.K. and it is a basket case. Fees are up over 100% as government cannot raise taxes directly, only indirectly. That source of revenue is now not enough to serve the parasites of the government sectors which take a dollar and spit out a dime.

 

 

In the U.K., a showdown looms between “Sold the gold” Gordon Brown and Chancellor of the Exchequer Alistair Darling (aka no friend of the public and the taxman), versus the public. The expansion of the public sector at the expense of the private sector is reaching a boil. Foolish regulations, fees and the fleecing of London are now at the intolerable stage. In their eyes, government spending is essential and your family’s spending isn’t. I was surprised not to hear the old Beatles song about the Taxman.

 

The regulation of the British economy has become straight jacket, as it is throughout the G7. It destroys innovation and wealth creation and makes government a stealth partner and micromanager in EVERYTHING. With government at the decision-making wheel of EVERYTHING the outcome is certain: disaster. Their solutions don’t solve problems. They make them worse. Of course this is to “protect you” FROM YOURSELF! What a laugh. How the public servants think they can make better decisions then those confronted with them on a daily basis is a testimony to their hubris and contempt for their constituents.

 

Pinocchio’s spin meisters are working overtime as the most recent CPI, GDP and retail sales data were such a joke that even the main stream financial media were embarrassed to hang their hats on them. In the private sector this would be labeled PREMEDITATED fraud and you and I would be charged with disseminating false and misleading information to investors.

[Steve Netwriter]

Attention !!!!

 

Dear CIGAs,

 

50 years of trading markets and building companies combined with outrageous good fortune has given me a reliable sense of timing and value.

 

I suggest that you cancel all sell orders at any price in precious metals immediately so that no orders exist when Asia opens.

 

Sometimes Bert and Jesse trusted their years of experience to guide them free of any tools at major points of change.

 

The hairs on the back of my neck are standing up at attention. Not a pretty sight.

 

That is what happened at $400 in the 70s and $600 recently.

 

http://www.jsmineset.com/ARhome.asp?VAfg=1...amp;T_ARID=6196

 

I wouldn't want to be betting against Jim. Glad to be on his side

 

[Itinerant Wanderer]

OK, here's the deal. I'm making a mess of Gold (though fortunately I'm still well in profit, just not as much as I should be...). I didn't sell out at 1030 as I meant too. I then had my stop losses triggered a while ago in the 870s and was looking to buy back in at 850 the other day but didn't get round to it - busy day job, 3 kids, and I'm three time zones away from my London stockbroker meaning its difficult to make time to trade. I'm now stuck watching gold go up to 900+. I'm about 1/3 of my gold fund invested, the rest is in cash. Should I be biting the bullet and buying back in now? Or should I wait for another correction and risk missing out and buying in again much higher up? Its the old fear-greed thing.... Views?

 

P.S. I may not actually take your advice, so don't be afraid about giving it! I won't sue you....

[Steve Netwriter]

OK, here's the deal. I'm making a mess of Gold (though fortunately I'm still well in profit, just not as much as I should be...). I didn't sell out at 1030 as I meant too. I then had my stop losses triggered a while ago in the 870s and was looking to buy back in at 850 the other day but didn't get round to it - busy day job, 3 kids, and I'm three time zones away from my London stockbroker meaning its difficult to make time to trade. I'm now stuck watching gold go up to 900+. I'm about 1/3 of my gold fund invested, the rest is in cash. Should I be biting the bullet and buying back in now? Or should I wait for another correction and risk missing out and buying in again much higher up? Its the old fear-greed thing.... Views?

 

P.S. I may not actually take your advice, so don't be afraid about giving it! I won't sue you....

 

By chance I was just about to post this. Maybe it will help.

My view - is the same as Jim's - don't buy on margin. Buy physical.

 

This is a great chart from Jim's site:

 

 

http://www.jsmineset.com/ARhome.asp?VAfg=1...amp;T_ARID=6189

 

[ologhai]

 

Is this the parabolic growth that usually comes before a fall so huge it typically only occurs once per generation?

 

It's not much help, Civil Servant, but if gold is going to be higher priced than it is right at this moment, it will almost certainly be lower priced than it is now before it gets there...

 

Well, you know the old saying: 'Ask a stupid bastard, get a stupid answer'...

[Steve Netwriter]

Interestingly, Jim has said that French curves work better on log scales.

That's makes a lot of sense to me, as you'd then be studying the change in growth rate, rather than being duped by the exponential curve created by constant growth.

Presumably the slope of a log chart should roughly equal the money supply growth during times of 'equilibrium', and be above or below that slope during times of people moving away from gold or towards it.

 

[tinecu]

Is this the parabolic growth that usually comes before a fall so huge it typically only occurs once per generation?

 

Or perhaps its just following parabolic/'french curve' money supply.

[tinecu]

looks promissing - the link posted is wrong though

 

Lower Oil Prices

 

 

some more truths

 

Great post.

[G0ldfinger]

Attention !!!!

 

Dear CIGAs,

...

So, he expects a price explosion starting Sunday night? Is this Puru Saxena buying back in then?

 

No problem, my boat is loaded.

[G0ldfinger]

looks promissing - the link posted is wrong though

...

Not sure what you mean by 'wrong' -- the link works for me.

[mattyboy]

I know its not gold but any thoughts on this article on silver from the wsj?

http://online.wsj.com/article/SB1210980877..._we_banner_left

 

its the first thing I've read suggesting a diminishing industrial demand, and not a lot of mention of silver's value as a currency.

 

[lowrentyieldmakessense(honest!)]

Not sure what you mean by 'wrong' -- the link works for me.

 

the link to James Turks quote

 

Gold is near record lows in price versus crude. In fact, this price has only been seen 33 days in fifty years, consider buying it! Thank you, James Turk, for this gem. www.fmgr.com

[TinBrick]

Gold is near record lows in price versus crude. In fact, this price has only been seen 33 days in fifty years, consider buying it! Thank you, James Turk, for this gem. www.fmgr.com

 

Yes, but does this mean gold is underpriced or oil is overpriced? Couldn't it equally well be an indication that one should consider shorting oil?

[drbubb]

OK, here's the deal. I'm making a mess of Gold (though fortunately I'm still well in profit, just not as much as I should be...). I didn't sell out at 1030 as I meant too. I then had my stop losses triggered a while ago in the 870s and was looking to buy back in at 850 the other day but didn't get round to it - busy day job, 3 kids, and I'm three time zones away from my London stockbroker meaning its difficult to make time to trade. I'm now stuck watching gold go up to 900+. I'm about 1/3 of my gold fund invested, the rest is in cash. Should I be biting the bullet and buying back in now? Or should I wait for another correction and risk missing out and buying in again much higher up? Its the old fear-greed thing.... Views?

 

P.S. I may not actually take your advice, so don't be afraid about giving it! I won't sue you....

 

BUY SOME GOOD GOLD SHARES.

 

I have been buying calls on: RGLD, GROW.

Funds that look good: EDV.t, PNP.v... and maybe some in the UK

 

[lowrentyieldmakessense(honest!)]

Yes, but does this mean gold is underpriced or oil is overpriced? Couldn't it equally well be an indication that one should consider shorting oil?

Could be a bit of both

 

but youre a braver man than me if you do

[lowrentyieldmakessense(honest!)]

BUY SOME GOOD GOLD SHARES.

 

I have been buying calls on: RGLD, GROW.

Funds that look good: EDV.t, PNP.v... and maybe some in the UK

 

any knowledge of this one

Seabridge

[electroweak]

ohh err.. excitement from bullionvault.... you can now reserve whole 400 Oz LGD bars...

when you log in under the ACCOUNT SETTINGS, there is a RESERVE BARS option. Pity I don't have the 12.5Kg required!!

 

 

 

[Compounded]

ohh err.. excitement from bullionvault.... you can now reserve whole 400 Oz LGD bars...

when you log in under the ACCOUNT SETTINGS, there is a RESERVE BARS option. Pity I don't have the 12.5Kg required!!

 

Bullish or what they are prepareing for the big buyers.

 

[Magpie]

Yes, but does this mean gold is underpriced or oil is overpriced? Couldn't it equally well be an indication that one should consider shorting oil?

 

Or, just possibly, it could be an indication that the supply and demand conditions have changed for one of those commodities, meaning that their equilibrium comparative value has changed.

 

In other words, oil is running out and there is rapidly increasing demand for it. Basic economic theory suggests that might make it more expensive, whatever you measure the price in, gold, dollars, or bags of nuts.

 

[Bobsta]

Or, just possibly, it could be an indication that the supply and demand conditions have changed for one of those commodities, meaning that their equilibrium comparative value has changed.

 

In other words, oil is running out and there is rapidly increasing demand for it. Basic economic theory suggests that might make it more expensive, whatever you measure the price in, gold, dollars, or bags of nuts.

I completely agree. I think we have to face the fact that the long running gold/oil ratio has changed and will change going forward. There is no logical reason for it to stay the same when the demand and supply of each product are so different.

[Joe90]

I completely agree. I think we have to face the fact that the long running gold/oil ratio has changed and will change going forward. There is no logical reason for it to stay the same when the demand and supply of each product are so different.

 

Hello - This is my first post, although I have been a lurker for a while.

 

Can you expand on why you think this is any different to the past? Gold mining is energy intensive as we know, so if energy costs are rising why would that not impact on the gold price? Even putting aside other issues such as currency movements/inflation/geopolitics.

 

The GOR appears to have bottomed which would suggest it is indeed reverting back towards its historical double digit norms.

 

 

 

[TinBrick]

Could be a bit of both

 

but youre a braver man than me if you do

 

I don't know which is true, though for what it's worth I'm long gold and goldmining shares, albeit not on the basis of the oil/gold price ratio. I'm just making the point that Mr Turk's analysis only looks at one side of the story, where in fact there's a number of conclusions you could draw from the unusually high oil to gold price ratio:

 

(1) Gold is cheap (Mr Turk's thesis)

(2) Oil is dear

(3) The market has concluded that in response to issues such as say, peak oil, oil needs to be fundamentally revalued upward.

(4) Any combination of the above and probably lots of other issues I've missed

 

And of course, with no disrespect to Mr Turk, he is in the business of selling gold investments . . .

[Magpie]

Hello - This is my first post, although I have been a lurker for a while.

 

Can you expand on why you think this is any different to the past? Gold mining is energy intensive as we know, so if energy costs are rising why would that not impact on the gold price? Even putting aside other issues such as currency movements/inflation/geopolitics.

 

Welcome.

 

It's true that there might be some blowback on the cost of mining gold, as with the cost of generating other commodities, but that shouldn't be enough to keep the ratio the same if the demand and supply situation has fundamentally changed. Apart from anything else, a barrel of oil is taken from the ground to be used - whereas gold that was dug up centuries ag is still being traded - a higher proportion of the gold market is unaffected by the cost of mining new gold.

 

Oil is a very different problem to gold in a number of ways. It is a basic necessity, that the global economy relies on. There is still a fair amount of it left, but there is a fear of it becoming depleted, and growing demand from countries such as Chindia. We are fighting wars over oil, not gold. I can see a far better case for the idea that the real price of oil has increased and will continue to do so, than I can for the real price of gold.

 

The GOR appears to have bottomed which would suggest it is indeed reverting back towards its historical double digit norms.

 

I'd say that's a danger of reading charts rather than examining the underlying facts. If the price of oil is going up for long term supply reasons, there's no reason to expect a reversion to the mean, in which case the idea that the ratio is 'bottoming out' doesn't make much sense. If it isn't, then maybe the ratio will go back to the mean. We'll see I guess.