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My next buying target is £7.50 if it gets there ($14.5 at current exchange rate), whereupon I'll double up my investment. My existing wadge averages out at £8.56, so that'll bring my overall average down to todays price range. If it doesn't drop that far (and I don't actually think its likely to) then I'm still very comfortable with my existing holdings.

well, 1 euro is 1.5000 right now, 15.25 / 1.5000 is 10.16 euros , however, 2 weeks ago it was 15.25/1.5900 = 9.59 , but... how did you get it at 7.50 ?

 

btw, you just gave me an idea for gold&silver to pull up despite this dollar rally, as europeans will see their currency to depreciate against the dollar, they may rush into gold, so .... you see it from all the sides and thats why gold is gold.

 

todays close left me with thougths that today was not the bottom, they bottom probably will be at 14.80 , when oil hits 110, yes, definitely all the traders wait this milestone to enter the market

 

But I'm planning to invest a lot more in oil if/when it falls to 110, then double up at 100, then again at 90, and then again at 80. I have reserved the funds accordingly. If all those buys happen, I'll be in big time with a break-even of below 90 ...and I'm damn sure oil is going a long way above 90 in future years - so a 'risk free' investment! (and possibly a way to make a lot of money)

 

good strategy!

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Well, my wealth has not been preserved particularly well going down the route of PM's (But that is more to do with my terrible timing, for which I slowly learning to improve!) The thing is I understand the arguments, I know what challenges they face and there only route out but they have bouncers on the fire exits!

 

This volatility is exaclty why I, unpopularly, argue that gold is not a preserve of wealth but a speculative investment.

 

Although the long term trend holds, you really wouldn't consider your wealth to have been preserved if you bought at any of the troughs in this chart and sold at the subsequent peak.

http://en.wikipedia.org/wiki/Image:Longter...ldlogtr1800.png

 

Relative to stocks, volatility of 300% is common and 4,000% in the extreme. Over lifetimes purchasing power may be relatively constant for a quantity of gold, over the time scale of years to a decade, the story is very different.

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well, 1 euro is 1.5000 right now, 15.25 / 1.5000 is 10.16 euros , however, 2 weeks ago it was 15.25/1.5900 = 9.59 , but... how did you get it at 7.50 ?

Pounds not Euros :) GBP 7.50 is the price at which I will double up my silver investment

 

todays close left me with thougths that today was not the bottom, they bottom probably will be at 14.80 , when oil hits 110, yes, definitely all the traders wait this milestone to enter the market

Gold may have bottomed (at least in pounds), silver may have a little more downside as its more of an industrial commodity than gold. I see so many clues around indicating that this rally in the dollar is artificial and temporary, and increasingly recognised as so by the masses.

 

What's more, I think the pound will collapse in next few weeks/months. Many others are predicting the EURO will be the next big faller, but I think that honour will go to the pound. So even more reason to put ones pounds into PMs and oil sooner rather than later.

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Although the long term trend holds, you really wouldn't consider your wealth to have been preserved if you bought at any of the troughs in this chart and sold at the subsequent peak.

http://en.wikipedia.org/wiki/Image:Longter...ldlogtr1800.png

 

Brilliant chart - thanks!

 

Its an exponential scale - WOW!!!!

...and current ratio is already down to 12-13

 

Not sure I'd believe in the long term straight line though...

- up to 1970s, it had to rise linearly since there was a gold standard

- after that, you could make a case for various slopes, but most likely it should be a flat line at a ratio of about 10. If so, the last 40 years have involved a 10-year massive overshoot to the downside due to 70s inflation, a 20-year major overshoot upwards due to excessively loose monetary policy, and now we're starting down the final inflationary payback slope for those last 20 years of decadence. That implies a possible drop back down to the low single digits: e.g., DOW falling to 8 or 9 thousand, and gold rallying to a few thousand. ...all in the next few years.

 

It all depends upon the inflation monster - watch this space.... :)

 

...and think "70's style inflation, happening across the whole of Asia, being exported back to the West"

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Yes, lets remind ourselves of that DOW/Gold chart :D

 

Longtermdowgoldlogtr1800_prid.png

 

 

I envy those who haven't bought much yet.

You have such a great buying opportunity in front of you.

 

SilverUS_080809_daily.gif

 

 

Does the gold chart suggest there is room for a little more negative movement ?

 

GoldUS_080809_daily.gif

 

 

Of course everything is fixed.

 

Dear Mr. Sinclair,

 

This morning a representative from a large builder's hardware company with which I do business informed me that they will be raising prices effective next month by 12.9%. This is a national company with manufacturing facilities in both the United States and China. I was also informed that the MSRP or suggested retail pricing will maintain the current margin ratio so effectively unless retailers choose to do otherwise this could create pricing at the retail level that is roughly double the price increase of 12.9%. We continue to see continued upward price momentum across most business categories and the trend does not appear to be stabilizing, actually I would say it's accelerating. In my estimation most of the recently announced price increases will begin to end up at the end user sometime towards the end of September or early October. However some retailers have already begin raising prices in preparation for the increases and to offset the decreased business activity.

 

Best Regards,

 

CIGA Marc

 

And a timely reminder from Jim:

 

My Dear Extended Family:

 

It is time to regroup, recognizing that nothing has changed. What we saw today in the seven trillion dollar a day global marketplace were hedge funds, black boxes and terrified longs all heading through the same door at the exact same time.

 

The door is big enough but can seem awfully narrow when panicked participants head for the exits at the same time. Like the entrance way to a good rock concert, however, the traffic can be equally as heavy in both directions.

 

Fear is an anomaly to witness. It appears as a stampede, with people kicking and shoving to get out of the same burning building. The awful truth is that there really was no fire - although perception is often worse than reality.

 

Ask yourself the following questions:

 

1. Are US banks more trustworthy today than they were on Monday?

 

2. Are you aware of a new problem called Auction Rate Bonds which are estimated at between $400 to $500 Billion? The Fed will have to pony this money up as the problem is focused on just those institutions that are already at the Fed Begging Bowl window. Logically, if they are borrowing to retain wiggling room, it is simple logic to understand the new problem is very much the Fed’s problem, which in turn is another problem for your kids to bear.

 

3. Do you really believe that because technicals are presently supporting the dollar it will regain its prior position as the universal Reserve Currency of choice?

 

4. Do you really believe that your retirement funds will regain the value that has been stripped away by all forms of Securitized Investment Vehicles?

 

5. Do you really believe that there is such a thing as global demand destruction in the energy sector as Asia keeps ticking at high economic levels?

 

6. Do you really believe that after the Olympics are over that China will collapse?

 

7. Do you really believe that Europe's economic situation will be more severe that the USA's? Have you noted that the USA had a rather good head start towards a severe recession?

 

8. Do you really believe that any currency is a better storehouse of value than gold?

 

9. Do you really believe that all the OTC derivative problems are now behind us?

 

10. Do you really believe that the credit market is loosening up enough to benefit credit-starved businesses?

 

11. Do you really believe that the public entities whose entire business involves insuring the value of debt instruments can really make good as bankruptcies increase?

 

12. Do you really believe that present inflation is demand driven?

 

13. Do you not know that the price increases now being witnessed are a product of monetary inflation for which increased interest rates render no effect?

 

14. Do you not know that the ECB’s action of leaving rates unchanged favors the euro over the dollar?

 

15. Do you really believe that the next move of rates in the US is up?

 

16. Do you really believe that all those central banks seeking to diversify out of the US dollar have changed their minds?

 

17. Do you feel certain that Israel will permit Iran to reach that point where a push of a button can incinerate its citizens?

 

18. Are you sure that Pakistan holds no challenge to life as we know it on this planet?

 

If the answer to all the above is yes then buy some cheap financials, sell all your non-dollar currencies and go long the good old greenback.

 

If you do not accept all the above as reality then be calm. As long as you are not on margin you have no problem.

 

The only result of this week’s market action may be to postpone gold's ascent to $1,200 by 90 days. That is a big maybe, however.

 

I accept the responsibility of my words offered to you in truth to reinforce what is correct. Today was made difficult through the din of fear and the bullying of hedge fund fiends.

 

Respectfully,

 

Jim

 

 

IMO, the bigger the intervention, the bigger the problem must be.

 

This must be a whopper !!!!

 

Now if only I could win the lottery, so I could buy lots more gold & silver :D :D

 

But then I'd have to find better transport:

 

heavy_load.jpg

 

:lol: :lol: :lol:

 

Maybe this would be more suitable:

 

goldandsilverlorry.jpg

 

:D :D

 

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The coins I received earlier today contained in value as much silver coins as gold coins. I have to say, the amount of silver I got in comparison to the amount of gold I got seems perversely high.

 

The gold:silver ratio went up to 56:1 today. I think we are now seeing an upward spike in the ratio (as in 1997, when it went from 70:1 to 75:1, before exploding down to below 40:1, see also chart below), that will be followed by an immense downward explosion later this year when gold and silver will leave the station for good. History seems to be repeating itself.

 

Note that this chart is a feew weeks old and the coil pattern is shorter in the chart than it is by now.

 

Gold-Silver-Ratio_310508.png

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Yes, lets remind ourselves of that DOW/Gold chart :D

...

A chart I posted many, many times on HPC, but also here, with some additions by myself. I hope it is clear what all this means.*

 

djiagoldlongtermlh3.png

 

* Ever since the Fed came into life, the bubbles (i.e. the highs and lows) have become more and more extreme. There is no reason why DJIA:gold could not fall below 1. Think DJIA at 10,000, and gold at $15,000/oz. Fun stuff.

 

BTW, Steve, I like your 'transportation'. Today, I almost felt like this with my mother lode of silver on board. :lol:

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Yes, you need the right transport for precious stuff :lol:

 

I agree with you. Time for a chart blizt :D

 

 

As they say, "A picture paints 2.18 Trillion words":

 

US_Foreign_Debt_2001to2007.gif

 

From: http://www.itulip.com/forums/showthread.ph...42087#post42087

 

Who holds the debt? Holdings of US Treasuries by Japan peaked in Nov. 2004 at $693 billion and by May 2008 were down 16% to $579 billion. Over the same period, China’s holdings increased 130% from $220 billion to $507, oil exporters 164% from $62B to $164B, and Caribbean Banking Centers up 111% from $51 billion to $108 billion. Of the 28 holders of $10 billion or more in US Treasury debt, the four above account for 40% of the total.

 

----------

 

OutOfStock_080808.gif

 

OutOfStock_080808b.gif

 

----------

 

GrossFederalDebt_1940to2010.gif

 

------------

 

Reserve Currencies:

 

CurrencyCompositionOfForeignExchang.gif

 

http://en.wikipedia.org/wiki/Reserve_currency

 

I think that shows how important the US$ is.

 

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Mystery Solved

...

Published by GoldMoney

Copyright © 2008. All rights reserved.

Edited by James Turk, alert@goldmoney.com

http://goldmoney.com/en/commentary-print.html

Repeat after me:

There is no manipulation in the US-Dollar. There is no manipulation in the US-Dollar. There is no manipulation in the US-Dollar. There is no manipulation in the US-Dollar. There is no manipulation in the US-Dollar. There is no manipulation in the US-Dollar. ...

 

custodialholdingsdo7.png

 

Getting closer to a hyperinflationary blow-off here, IMHO.

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By the way, I agree with you about how ridiculous the price of silver is.

It's too easy to just think in terms of numbers on the screen.

 

One 1oz gold coin, costing ~ US$880, £440, JPY94,000, NZ$1200:

 

Gold_Kiwi.gif

 

For the same amount of fiat money, roughly 55 1oz silver coins ($16/oz):

 

NZMint_SilverFern.jpg

 

That is 5x stacks of 11x coins.

 

That's 1.7 kg of silver versus 1oz of gold !!!

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There is no manipulation in the US-Dollar.

There is no manipulation in the US-Dollar.

There is no manipulation in the US-Dollar.

There is no manipulation in the US-Dollar.

There is no manipulation in the US-Dollar.

There is manipulation in the US-Dollar. ...

There is manipulation in the US-Dollar. ...

There is manipulation in the US-Dollar. ...

 

Oh damn.....

 

There is no manipulation in the US-Dollar.

There is no manipulation in the US-Dollar.

There is no manipulation in the US-Dollar.

There is no manipulation in the US-Dollar.

There is no manipulation in the US-Dollar.

There is manipulation in the gold market...

There is manipulation in the gold market...

There is manipulation in the gold market...

 

Oh damn.....

 

There is no manipulation in the US-Dollar.

There is no manipulation in the US-Dollar.

There is no manipulation in the US-Dollar.

There is no manipulation in the US-Dollar.

There is no manipulation in the US-Dollar.

There is manipulation in the silver market...

There is manipulation in the silver market...

There is manipulation in the silver market...

 

Oh I give up. I'm no good at this.

 

:D :D

 

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http://goldismoney.info/forums/showpost.ph...postcount=15924

HERE IS WHY YOU SHOULD ALL SELL YOUR GOLD.........TO ME.

 

1. The US dollar doesn't have a debt overhang of between $60 and $100 Trillion USD, depending on who you ask.

2. Banking systems and fiat currencies don't require the support of legions of central bankers, counterfeiting laws, government regulations, special "hide the losses" escape clauses, massive government bailouts at taxpayer expense.

3. Global credit writedowns of $460 Biillion thus far have not resulted in $11 Trillion of realized equity losses globally.

4. Respected international economists and financiers have not estimated that the total writedowns will be between $1 and $2 Trillion before all is said and done.

5. One of the aforementioned economists didn't say on Bloomberg the other day that this would "wipe out most of the capital base of the United States".

6. Markets aren't manipulated; there is no collusion between ECB, Fed, Saudis, etc. to keep this sham going for another few months (or even years). The dollar is the darling of the planet.

7. Banks aren't failing, and you can trust in the full faith and credit of the US Government. Remember, they're here to help you.

8. The US Government didn't just send out a few hundred Billion dollars in free money; nope, they're not worried!

9. The US Democrats aren't already talking about "infrastructure" projects to put Americans to work building roads and bridges.

10. Nonborrowed Reserves at US banks reported by the Fed isn't negative for the first time in history, and by more than $100 Billion. No worries here!

11. The Fed hasn't loaned out Treasuries at the TSLF in exchange for degraded MBS paper in order to keep major banks afloat.

12. Home prices have turned around and are headed back up, so the trouble has passed and we can all go back to buying Hummers with our HELOC's.

13. Merrill didn't just sell some of these MBS's for 22 cents on the dollar and have to finance the sale with callback provisions.

14. Speaking of Merrill, Thain doesn't repeatedly say he won't be raising capital, only to raise more capital. I trust him implicitly!

15. It's contained.

 

So please, belly up to your nearest coin shop and dump all your PM's, cause you don't need them anymore.

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Repeat after me:

There is no manipulation in the US-Dollar. There is no manipulation in the US-Dollar. There is no manipulation in the US-Dollar. There is no manipulation in the US-Dollar. There is no manipulation in the US-Dollar. There is no manipulation in the US-Dollar. ...

Thanks for that chart.

 

This makes it clear - the orchestrated buying came first in order to cause the dollar strengthening (i.e., manipulation), not the other way around (reactionary buying a rising market)

 

I am fully convinced, and withdraw the doubts I posted earlier.

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'A seasonal low is likely in the coming days, and the length of the consolidation since March should see a very sharp rally in gold's favored Autumn months.'

— Mark O'Byrne, Gold and Silver Investments Ltd.

 

/see: http://www.marketwatch.com/news/story/gold...D&dist=news

 

Mystery Solved:

"...rather than continue lower and fall off the edge of the cliff, the Dollar Index suddenly and mysteriously reversed course. It has now risen on 12 of the 17 trading days since reaching that low, and closed today at 74.55, a 5-month high. What caused this index to suddenly pull back from the brink and then reverse course to shoot higher over the past three weeks?"

/see: http://goldmoney.com/en/commentary-print.html

 

Why the dollar rally?

Perhaps the Chinese agreed to withstrain themselves from selling dollars until the Olympics started,

and the manipulators realised they had their chance to push the dollar up

 

I bought over $500,000 worth of Gold yesterday (thru calls on GLD).

That's my most ever, at least in one day.

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http://www.kitco.com/ind/nadler/aug082008B.html

 

Today's parting words from gold market analyst Ned Schmidt.

He tenders an explanation for the dollar's rally that may not make the conventional headlines, but it is one you might want to take note of. "As is readily evident, the US$ has staged an incredible rally. That rally is one of the strongest to occur without some underlying causal event. In short, nothing readily apparent is happening around the world to cause such a move. Now, consider the weekly purchases of U.S. debt by official institutions, essentially central banks around the world. These numbers are reported weekly by the Federal Reserve, the depository for these bond holdings. In the week ending Wednesday, official institutions made the largest net purchase of U.S. debt ever recorded. They bought the annualized equivalent of $1.457 trillion. Those purchases created a shortage of dollars which created a massive short covering rally in the dollar. That buying pushed the dollar up almost 3% in the past week, or at a 320% annual rate."

 

pjun533l.jpg

 

- he hasnt noticed that the Olympics started today - in Beijing?

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Some real danger here, as this chart shows:

 

aug082008_2.gif

 

source: http://www.kitco.com/ind/Wiegand/aug082008.html

 

Still, I was buying GLD calls

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Well, yesterday surprised me.

 

A couple of days ago, I suggested we wouldn't see $850 or below, and I thought $850 was a substantial under-estimate to be on the safe side. We got closer to it than I thought we would.

 

This is more or less what I based that view on:

 

post-1176-1218264261_thumb.jpg

 

Now I have no idea where we're heading! :unsure:

 

There's a huge white bit on the right side of the chart that I cut off where it says, "Here be dragons!" :lol:

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I got in with 800 call (Dec) warrants at 880, two days too early it would seem as I wrongly gauged there would be some serious support at that level.

 

Some points to consider;

 

"Be courageous when everyone else is getting fearful" - I think these are Buffetts words

 

Market manipulation - How long? How far? How much?

 

The first point gave me the courage to go for it however what about the second? My gut feeling is that those that pull the levers took advantage of gold's decline to blow through positions, in gold, certainly the dollar, possibly other markets. I'm no expert but the move in the Euro/Dollar looked exceptionally unnatural and the DJIA daily chart on Friday just doesn't look right.

 

Sir Isaac Newtons words;

 

"Actioni contrariam semper et æqualem esse reactionem: sive corporum duorum actiones in se mutuo semper esse æquales et in partes contrarias dirigi."

 

Or for those of us that don't speak latin - All forces occur in pairs, and these two forces are equal in magnitude and opposite in direction.

 

In other words "For every action there is an equal, but opposite, reaction".

 

I believe that if you push a spring hard enough and let it go, it might just fly back in your face and give you a bloody nose, or if you give it a hard enough push then it might knock you out.

 

I also believe in the law of unintended consequences, the failure of man to recognise that his actions are contributing to problems rather than mitgating them is a widespread problem, I believe.

 

What are your thoughts?

 

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........

The first point gave me the courage to go for it however what about the second? My gut feeling is that those that pull the levers took advantage of gold's decline to blow through positions, in gold, certainly the dollar, possibly other markets. I'm no expert but the move in the Euro/Dollar looked exceptionally unnatural and the DJIA daily chart on Friday just doesn't look right.

.....

 

I'm not quite sure what you mean here, but you seem to be implying that movement in gold has driven movements in the USD/EUR, rather than the other way around?

 

The straight forward explanation (usually a good place to start) is that weak data from Europe (and Asia) has shown that the US, in relative terms, is not the basket case it was a year ago. i.e Europe and Asia are dropping down to the same level, so it no longer makes sense to simply punish the dollar. In fact USA is only G7 country showing growth at the moment (or so I have read).

 

If the above is true, you would expect gold to do well, i.e. all "fiat" should devalue together against gold. Clearly this hasn't happened, as of now.

 

However, some of the optimism is being driven by falling commodity prices, in particluar oil. This is considered "good" for everyone.

 

It is puzzling that gold has gone the way of commodities/EUR (at this point in time), rather than decoupled as it "should". Early days, I guess.

 

 

 

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In fact USA is only G7 country showing growth at the moment (or so I have read).

 

I've got to cross-examine you on that one !

 

US growth is below REAL inflation I believe, and has been for quite a while. Therefore the US has been in recession for quite a while.

 

It all depends whether you take the fiddled numbers, or the real ones :D

 

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