GOLD

[Steve Netwriter]

When you put it like that...... makes me want to buy the real ones!

 

It's funny, when someone says "it's just a gold coin donation" I think "what !!!! do you know how much they are :blink: "

 

[romans holiday]

Just watched this; Faber's take on the strong dollar [uS of course]

 

Faber Says Global Economy in Recession; `Long' on Dollar

http://www.bloomberg.com/avp/avp.htm?N=av&...uf.8Ud9HSYA.asf

[marmite]

Been holding at about $815 now for hours.

 

I wonder if we test $800 again as New York awakes ????

[bitbigt]

Come on then guys, you've got to listen to this.

Warren Pollock

Deflation - a Looming Disaster *AUDIO*

http://www.howestreet.com/audio/warrenpollock12082008.mp3

Warren explains what Keynes' dubbed a 'liquidity trap'. Make no mistake, says Warren - deflation can be worse than inflation.

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

I don't know what you guys think, but I kinda switched off when he said "you can see deflation by things like the price of gold going down"

To me when an 'expert' quotes a normal correction as evidence for a theory, they blow their credibility.

I think we really need to clear away the confusion about increasing money supply, wealth destruction, CB bale outs, inflation, deflation ...as this is the most important stuff to understand when deciding whether PMs should now be bought, held or sold.

 

Please let me point you to the following:

http://www.moneyweek.com/file/5138/m3-0212.html

 

...within which it explains how CBs can create money (several options beyond just lowering base rate to promote borrowing).

 

Additionally, there is massive money creation by companies issuing bonds

 

But perhaps most importantly I'd like to clarify that falling house prices as such do NOT decrease the money supply. This only happens when a house is actually sold and someone suffers a loss. Related to this, the mortgage securities losses also do not much affect M3 as the CBs are taking those of the retail bank's hands in return for sound assets - either real pounds/dollars produced by issuing new government bonds or by crediting the retail banks official reserves (which in both cases actually increases the money supply)

 

Then also remember this is going on globally!

 

Net result... M3 will keep on increasing rapidly, CBs will not (can not dare to) allow it to be any other way with recession looming, and this is extremely inflationary.

[romans holiday]

I do not think it is quite so black and white as that. Remember if we use the Austrian's account of whether we have increasing inflation/ deflation we need to look at both the money supply and credit supply. We have both inflationary and deflationary forces at work. Which will come out on top, for how long, and whether we get a revenge of the other, will in my mind take observation rather than a priori theorizing.

 

Besides my finances, my opinions are hedged these days.

 

Edit to add: If... and a big if I might add... we did have deflation [economic crisis], I suspect that gold will "decouple" from commodities in the sense that it will be viewed more as money. If this "decoupling" eventuated in a possible deflation [where commodities went down] then the price of gold would not decrease... as it would be perceived as money not a commodity. Just a speculation.

[marmite]

Besides my finances, my opinions are hedged these days.

 

The more I read and learn the less I understand the inflation / Deflation / Money supply arguements

 

[electroweak]

Anyone know when this gasoline inventory report is out?

 

Edit: oil -> gasoline

Edit2: ah, it's oil and gasoline.

[kernull]

Anyone know when this gasoline inventory report is out?

 

Edit: oil -> gasoline

Edit2: ah, it's oil and gasoline.

 

crude oil inventories

today 10:35 NY times (http://www.forexfactory.com)

right now we are going to top in oil just before inventories report, then after data release and some spikes we should keep going to 110

 

[Pixel8r]

I don't know of any. You know about stockcharts. Not live

For just the price I use GoldMoney, because you can select a lot of currencies.

 

I don't think we warrant something so sophisticated

 

Here's a couple of live gold charts

 

USA Gold Live

 

LiveCharts.co.uk - Gold

[G0ldfinger]

Sterling = Turdling.

[G0ldfinger]

My car service was less than expected. I see some value in silver here. I think I will sell some Turdling today and go into real cash (silver, in this case).

[bitbigt]

I do not think it is quite so black and white as that. Remember if we use the Austrian's account of whether we have increasing inflation/ deflation we need to look at both the money supply and credit supply. We have both inflationary and deflationary forces at work. Which will come out on top, for how long, and whether we get a revenge of the other, will in my mind take observation rather than a priori theorizing.

 

Besides my finances, my opinions are hedged these days.

 

Edit to add: If... and a big if I might add... we did have deflation, I suspect that gold will "decouple" from commodities in the sense that it will be viewed more as money. If this "decoupling" eventuated in a possible deflation [where commodities went down] then the price of gold would not decrease... as it would be perceived as money not a commodity. Just a speculation.

Hi Romans- I recognise you are very informed about this stuff, and greatly respect your oppinion.

 

However, I see M3 (which is definitely increasing rapidly - just look at shadowstats.com) as the main and fundamental determinant of how much money is in the system. Double that, and the value of each dollar/pound unit halves. That has to mean inflation when all said and done, the only question is whether that inflation hits instantly or after some delay. [and it's perhaps worth mentioning here, that the high M3 increases of the last 15 years have ben a global phenomenon, creating a massive inflationary pendulum which was swung to Asia and is only now starting to swing back to the West)

 

Shorter term, and in a closed economy, credit is a very important factor in determining inflation, I agree. This is exactly why the government and the BoE are arguing that the credit crunch plus unfolding slowdown will kill off inflation in 2009 or 2010. In the best case scenario they're correct, but that will just be a temporary dip in an overall strong 'bull market' for inflation.

 

So perhaps this is how I'd like to summarise my view: a massive money-supply/inflation pendulum was swung to Asia for 10-15 years, and it is now turning and swinging back. Imagine that as the 'share price' of company called 'Western Inflation Plc' and it would look like a flat or decreasing share price for 10 years that is now starting to move upwards. Some are predicting the credit crunch will pull the share price down even further and so the stock is a no hoper. But if you had inside information explaining how this recent price increase is just the leading edge of the pendulum arriving, then you might decide (as I have) that the company's share price is just enterring a major bull phase - even if the credit crunch might cause a slight and temporary dip in the share price sometime next year before the main weight of the pendulum arrives ...or is that analogy just too confusing ?

[G0ldfinger]

4 Reasons to Buy Gold Now

 

GEI and Goldfinger (in a roundabout way!) get a mention over at Money Week.

Do you mean this one here?

This sell-off will have hit precious metals investors in two different ways. Those who hold only physical will have raised a weary eyebrow and observed, "Oh, another August sell-off" before returning to their beach read, possibly Ian Fleming's Goldfinger.

Could be a code and actually mean something!

[romans holiday]

The more I read and learn the less I understand the inflation / Deflation / Money supply arguements

 

Yeah.... I hear what you are saying. It is too easy sometimes to subscribe to some system or position. In my opinion, this whole thing that is unfolding is one long extended huge black swan event which is beyond the parameters of what we have experienced and "known" before. We can use past experiences and narratives and bodies of knowledge based on those experiences in order to aid in analyzing what is coming. They are helpful models but will fall short; we can read the 70's into it... then we can read the 30's into it, one day we are certain of inflation, the next we can't stop seeing deflation. I find it useful to look at the economy as a big jig saw puzzle and try to take account of all the varying phenomena [as far as I can, and through a variety of disciplines] and then in turn seek to make some coherent picture out of it. If we get stuck on just one small part of the jigsaw, I fear we might miss that bigger picture.

[G0ldfinger]

http://www.moneyweek.com/file/52082/four-r...y-gold-now.html

And finally, to add to the mix, just as we had central banks accumulating dollars in late July, we had some significant European Central Bank selling of gold – though whose, we do not yet know. According to Julian Philips of Gold Forecaster it "roughly equates to the sale of just over 30.0 tonnes of gold." That is a big number to be dumped on the market, especially at such a quiet time of year.

Remember, Spain is still on the road to financial Armageddon.

[romans holiday]

Hi Romans- I recognise you are very informed about this stuff, and greatly respect your oppinion.

 

However, I see M3 (which is definitely increasing rapidly - just look at shadowstats.com) as the main and fundamental determinant of how much money is in the system. Double that, and the value of each dollar/pound unit halves. That has to mean inflation when all said and done, the only question is whether that inflation hits instantly or after some delay. [and it's perhaps worth mentioning here, that the high M3 increases of the last 15 years have ben a global phenomenon, creating a massive inflationary pendulum which was swung to Asia and is only now starting to swing back to the West)

 

Shorter term, and in a closed economy, credit is a very important factor in determining inflation, I agree. This is exactly why the government and the BoE are arguing that the credit crunch plus unfolding slowdown will kill off inflation in 2009 or 2010. In the best case scenario they're correct, but that will just be a temporary dip in an overall strong 'bull market' for inflation.

 

So perhaps this is how I'd like to summarise my view: a massive money-supply/inflation pendulum was swung to Asia for 10-15 years, and it is now turning and swing back. Imagine that as the 'share price' of company called 'Western Inflation Plc' and it would look like a flat or decreasing share price for 10 years that is now starting to move upwards. Some are predicting the credit crunch will pull the share price down even further and so the stock is a no hoper. But if you had inside information explaining how this recent price increase is just the leading edge of the pendulum arriving, then you might decide (as I have) that the company's share price is just enterring a major bull phase - even if the credit crunch might cause a slight and temporary dip in the share price sometime next year before the main weight of the pendulum arrives ...or is that analogy just too confusing ?

 

Hi bigt,

 

Yes, I appreciate what you are saying, undoubtedly inflation is a big part of the picture. I just feel that it is not the whole picture and there are other forces also at play. Like the daily show, my opinions are not fully thought through.... the sceptic in me prefers them that way so I can stay on my feet and adapt to the situation as it unfolds. My hope is to avoid, as far as I can, any nasty surprises.

 

By the way, though I have an ear [only one mind you] for deflation, I do not think a possible eventual deflation is negative for gold as I posted earlier.

[Justin Thyme]

Liked what I read in Evans-Pritchard's blog although I've disagreed with some of what he's written in the past. Oil's bubble springs to mind . . .

 

Not much sign of the NY smackdown this session.

[bitbigt]

Not much sign of the NY smackdown this session.

Theyre too busy destroying the value of the pound relative to their precious dollar: ~2% down today

...which means our gold is worth 2% more in sterling

[bitbigt]

DUPLICATE POST REMOVED

[electroweak]

Crude -0.4M.. up we go...

EDIT: thanks, Ker! - that's a great link.

[drbubb]

Oil Service stocks (OIH) are usual a leader for Oil, and Oil has been leading gold

 

Over the past 2-3 days OIH appears to have put in a bottom and is beginning a move up.

This bides well for Gold and Gold shares IMHO

[radge]

I did indeed mean that reference, Goldfinger.

 

Knowing my luck, if I instruct my bank to send some of my beer vouchers to BV, Gold will be > $960 before it gets there. This last week has really been one long hamlet cigar moment!

[Wanderer]

I think we really need to clear away the confusion about increasing money supply, wealth destruction, CB bale outs, inflation, deflation ...as this is the most important stuff to understand when deciding whether PMs should now be bought, held or sold.

 

Please let me point you to the following:

http://www.moneyweek.com/file/5138/m3-0212.html

 

...within which it explains how CBs can create money (several options beyond just lowering base rate to promote borrowing).

 

Additionally, there is massive money creation by companies issuing bonds

 

But perhaps most importantly I'd like to clarify that falling house prices as such do NOT decrease the money supply. This only happens when a house is actually sold and someone suffers a loss. Related to this, the mortgage securities losses also do not much affect M3 as the CBs are taking those of the retail bank's hands in return for sound assets - either real pounds/dollars produced by issuing new government bonds or by crediting the retail banks official reserves (which in both cases actually increases the money supply)

 

Then also remember this is going on globally!

 

Net result... M3 will keep on increasing rapidly, CBs will not (can not dare to) allow it to be any other way with recession looming, and this is extremely inflationary.

 

 

BigbigT - one quibble with what you say. People ARE selling houses even now - when they marry, divorce, die etc. This is reflected in falling prices and people taking losses on sales. This, therefore, DOES translate into reduced money supply in this area and is, potentially, a deflationary push (which may or may not be balanced by inflationary pushes).

[wrongmove]

BigbigT - one quibble with what you say. People ARE selling houses even now - when they marry, divorce, die etc. This is reflected in falling prices and people taking losses on sales. This, therefore, DOES translate into reduced money supply in this area and is, potentially, a deflationary push (which may or may not be balanced by inflationary pushes).

 

Falling prices also inhibit further lending, while the old mortgages still cost the same and have to be paid. So while the falling price itself does not constrict money supply, it maybe gives a hint as to what might happen next.

 

 

 

[Justin Thyme]

Nice to see a positive day for gold but can't help wishing gold would untie the rope to crude. If the fortunes of gold can hinge on a coupla guys in Nigeria with balaclavas and ageing rifles or a possible attack on Iran, we're in for a far more uncomfortable ride than most of us would like.