Jump to content

Recommended Posts

This is a wonderful discussion :D

 

I just wonder whether there is an online model which allows us to see all of this.

It seems to me each detailed point can be justified, but putting them all together to see how they interact is the tricky part.

I suspect I'm asking the impossible, otherwise there wouldn't be so many experts disagreeing about it :D

 

 

Link to comment
Share on other sites

  • Replies 30.9k
  • Created
  • Last Reply

Top Posters In This Topic

  • G0ldfinger

    2616

  • romans holiday

    2235

  • drbubb

    1478

  • Steve Netwriter

    1449

damn, I missed crude bottom ... :(

 

that's too bad.

It was "flagged" here: (from 2 days ago):

 

"This is what a bottom should look like:

aa3pc4.gif

 

The above is the Oil Holders etf (OIH) - includes shares of Oil Service companies.

It often leads Oil (USO), which has sometimes led Gold (GLD) also.

 

It made a low yesterday on light volume, and then rose on heavier volume.

That's a very positive sign, and now it looks set to break above that downtrend line.

 

If OIH opens higher on big volume, a bottom may be in place, and I think it is then likely

that a Gold bottom will come within a few days also."

UNQUOTE

Link to comment
Share on other sites

This is a wonderful discussion :D

 

I just wonder whether there is an online model which allows us to see all of this.

It seems to me each detailed point can be justified, but putting them all together to see how they interact is the tricky part.

I suspect I'm asking the impossible, otherwise there wouldn't be so many experts disagreeing about it :D

 

I agree on all these points, and your challenging probing has helped me further to understand what I think :)

 

I also just read that last week's orchestrated buying of US gov bonds was the largest ever in history. So that's one small learning step for Me and one giant leap for M3. :)

 

The best we can do towards "putting them all together to see how they interact" would be to just watch the M3 figures at shadowstats.com (gawd bless 'em)

 

EDIT: overall, I guess our main conclusion is that "wealth reduction" is not at all the same as "M3 reduction" (e.g., house prices could fall by 99% without directly affecting M3), and it is the current and the past decade high M3 figures that will lead to inflation

 

Finally, I have a new topic for tomorrow ..can a currency ever realistically and effectively be tied to a gold standard? I feel pretty certain it cannot as it goes against the natural mathematical laws of economics

...anyone take the bait?

Link to comment
Share on other sites

Thanks, but unless I can't find it, neither do gold in anything buy US$ :(

Sylvester was looking for Gold in NZ$, as a live chart.

The only place I know that does gold in other currencies live is BV.

 

I would like to know if there are any more :D

 

Thanks Pixel8r but as Steve says, I was really after live gold / NZD charts. NZ Mint seem to have access through The Bullion Desk but they are very small and hard to read.

 

Maybe I need to get NZ Mint tomake them bigger for all Kiwi Goldbugs!

 

 

Link to comment
Share on other sites

So, as we approach the end of the week, the big question - is the bottom in?

 

I noticed that during the "crashing period" of the past few weeks, Gold and Silver moved quite differently from each other at certain times.

 

This week they are almost in lock-step. Potentially this is due to the heavy USD movement having an impact on the price in $ but potentially could it also signal more measured, sensible, regular trading? (although I'm not quite sure what I mean by that!)

 

G&S graphs from the last three days - you could almost layer them over each other (and I suspect Steve might! :))

goldwrm7.gif

silverwum6.gif

Link to comment
Share on other sites

If the recent massive drops have been due to manipulation, then one thing it does show is the magnitude of how much the manipulators fear the price of precious metals.. interesting thought!

 

They also seem to fear weakness in the USD. There seem to be two distinct manipulations going on in the last week, one to bring down the price of gold and one to increase the value of the USD against just about all currencies.

 

Since the drop Merv the Swerve signalled that GBP was not going to put up much fight against inflation, unsurprisingly the GBP has fallen further.

 

Link to comment
Share on other sites

Finally, I have a new topic for tomorrow ..can a currency ever realistically and effectively be tied to a gold standard? I feel pretty certain it cannot as it goes against the natural mathematical laws of economics

...anyone take the bait?

 

SNAP!

 

Do we need to distinguish between gold bullion used as cash, as against fully-backed noteage issued by an institution?

 

For most of history, precious metals have been the form of exchange amongst the landed and merchant elites (along with slaves and livestock). So on that basis the answer to your question would appear to be potentially "yes".

 

Except that the fossil era, and especially the drastic oil era since 1945, has been a unique period in commercial history during which productivity grew by a factor of about a hundred. This rate of growth, and the ever greater scale of wars that became possible through greater productivity, seems to have been the factor that rendered the Gold Standard impractical. The countries that won wars had the greatest capacity to issue debt and get away with it - these were coal rich or oil rich countries, since these resources can be seen as a sort of currency backing. One could argue that debt issued against oil in place is not real debt, but oil backed currency. Until your oil production peaks and goes into decline. Then debt is real debt and you areforced off the Gold Standard, as the US was soon after its oil production peaked. Is there a connection? I suspect so. We will watch Sterling as we descend the gloomy slopes from the Hubbert's Peak of the North Sea.

 

In Niall Ferguson's The Cash Nexus he discusses Gold Standard versus Fiat, at no great length, despite the great length of this tome, but he does not come off the fence to conclude one is inately better than the other.

 

Link to comment
Share on other sites

...

Except that the fossil era, and especially the drastic oil era since 1945, has been a unique period in commercial history during which productivity grew by a factor of about a hundred. This rate of growth, and the ever greater scale of wars that became possible through greater productivity, seems to have been the factor that rendered the Gold Standard impractical. The countries that won wars had the greatest capacity to issue debt and get away with it - these were coal rich or oil rich countries, since these resources can be seen as a sort of currency backing. One could argue that debt issued against oil in place is not real debt, but oil backed currency. Until your oil production peaks and goes into decline. Then debt is real debt and you areforced off the Gold Standard, as the US was soon after its oil production peaked. Is there a connection? I suspect so. We will watch Sterling as we descend the gloomy slopes from the Hubbert's Peak of the North Sea.

...

 

This makes sense to me as something has backed the debt, if this is the case and is what has happened and oil has peaked then what is it going to be backed by in the future?

 

Link to comment
Share on other sites

So, as we approach the end of the week, the big question - is the bottom in?

 

We wont know until Gold fills that overhead gap,

and we see if it has the muscle to get thru it, and push back up above $850 and higher

 

Link to comment
Share on other sites

This is a wonderful discussion :D

 

I just wonder whether there is an online model which allows us to see all of this.

It seems to me each detailed point can be justified, but putting them all together to see how they interact is the tricky part.

I suspect I'm asking the impossible, otherwise there wouldn't be so many experts disagreeing about it :D

 

Yes - this non-expert would like to thank the more expert posters. I feel quite educated now! These sort of discussions also reveals to me that there is a much wider range of views here than is always apparent in the posts. It sometimes seems that most here are "all in" and cheering for war and disaster so they can buy a whole supermarket with one gold coin :rolleyes: . But this is clearly not the case at all.

 

As for trying to accurately model the global economy - that isn't happening anytime soon, IMHO. That is what is so fascinating to me - I deal with complex, but largely deterministic systems in my job, but the global economy is so complex that it just looks chaotic when you try to model it accurately. i.e a random number generator is likely to be as accurate as a very detailed model.

 

So one has to try to work out which bits are important, which bits can be (relatively) safely ignored, and you can't avoid falling back on instinct and, to some extent, guesswork, at which some are much better than others.

 

This discussion has certainly caused me to somewhat lower my expectations of a deflation, or at least of a deflation that is not preceeded by a inflation. It is also clear how having a chunk in gold (say 5-20%, depending on circumstance, mainly how liquid you are) may protect you from the worst without ruining you if things turn out less bad than expected. Maybe I should be buying this dip....... B)

 

 

Back properly on topic - I see gold is looking a little perkier this morning............ :) (Not that that is really good news, in the overall picture)

 

 

 

Link to comment
Share on other sites

Finally, I have a new topic for tomorrow ..can a currency ever realistically and effectively be tied to a gold standard? I feel pretty certain it cannot as it goes against the natural mathematical laws of economics

...anyone take the bait?

 

Of course! Except that I agree with you! Another thread perhaps?

 

 

 

Link to comment
Share on other sites

Yes - this non-expert would like to thank the more expert posters.

 

Seconded. I have to let it sink in slowly, then return later & see if my head is around it :)

 

May I turn this around into a simple, self-centred question?

 

If you had 150,000 lying in a Euro account, (& it is unlikely you would ever need it), would you not be tempted to stuff the lot in PMs right now?

.... because I am so tempted. All else (apart from Dr Bubb's, too much for my brain, investing) looks a disaster zone.

 

If I ask myself the question will Gold fall in relation to the Euro over 3-5 yrs, then it seems madness not to proceed?

 

If I go any deeper than this the clarity vanishes

 

All comments welcome please............ even 'shut up woman!'

Link to comment
Share on other sites

Seconded. I have to let it sink in slowly, then return later & see if my head is around it :)

 

May I turn this around into a simple, self-centred question?

 

If you had 150,000 lying in a Euro account, (& it is unlikely you would ever need it), would you not be tempted to stuff the lot in PMs right now?

.... because I am so tempted. All else (apart from Dr Bubb's, too much for my brain, investing) looks a disaster zone.

 

If I ask myself the question will Gold fall in relation to the Euro over 3-5 yrs, then it seems madness not to proceed?

 

If I go any deeper than this the clarity vanishes

 

All comments welcome please............ even 'shut up woman!'

 

If you are never likely to need the 150k, then you also don't need it to make you a profit.

 

So have some fun! :P

 

If big, risky bets are your type of fun, then why not? Me - I'd rather see a bit more of the world, or maybe buy an exotic getaway, or a seaworthy boat, but each to their own.

 

 

 

Link to comment
Share on other sites

Seconded. I have to let it sink in slowly, then return later & see if my head is around it :)

 

May I turn this around into a simple, self-centred question?

 

If you had 150,000 lying in a Euro account, (& it is unlikely you would ever need it), would you not be tempted to stuff the lot in PMs right now?

.... because I am so tempted. All else (apart from Dr Bubb's, too much for my brain, investing) looks a disaster zone.

 

If I ask myself the question will Gold fall in relation to the Euro over 3-5 yrs, then it seems madness not to proceed?

 

If I go any deeper than this the clarity vanishes

 

All comments welcome please............ even 'shut up woman!'

 

I'd go for some junior mining stock. Jinshan [JIN] fell to a low of C$1.30 this week. I picked some up at 1.35. Maybe even some oil service stock - Petrofac [PFC] recently fell back to £5.20-ish. I've got enough physical exposure and despite some of the comments from the more dedicated gold bugs, personally, I think another test of $800 may be on the cards.

Link to comment
Share on other sites

Seconded. I have to let it sink in slowly, then return later & see if my head is around it :)

 

May I turn this around into a simple, self-centred question?

 

If you had 150,000 lying in a Euro account, (& it is unlikely you would ever need it), would you not be tempted to stuff the lot in PMs right now?

.... because I am so tempted. All else (apart from Dr Bubb's, too much for my brain, investing) looks a disaster zone.

 

If I ask myself the question will Gold fall in relation to the Euro over 3-5 yrs, then it seems madness not to proceed?

 

If I go any deeper than this the clarity vanishes

 

All comments welcome please............ even 'shut up woman!'

I know it's not my money... but d'ya know what? I would! 40% in Silver, 40% in Gold ... and maybe use the other 20% for trading - it'll give you a new hobby to learn, and if you're disciplined it could help buy you nice little presents for yourself or your family (or hell, a charity!) every now and again.

 

One of the keys to successful trading is to have a big enough "float" (or cash reserve) for the trades you make. 30k (GBP or EUR) should make a nice float and ensure you don't get cornered and wiped out with margin calls.

Link to comment
Share on other sites

"Rather a lot of B. going on at the moment. 'BankA writes off MBS'".

...not sure banks are writing off MBSs generally. They may be taking them onto their books at a reduced assumed value, but that doesn't reduce M3. Only letting the initial borrower off of his/her mortgage debt reduces M3

 

What about when a bank repossess a property and then gets less than the value at auction. Is this not the equivalent of letting the borrower off the mortgage debt?

Link to comment
Share on other sites

Yes - this non-expert would like to thank the more expert posters. I feel quite educated now! These sort of discussions also reveals to me that there is a much wider range of views here than is always apparent in the posts. It sometimes seems that most here are "all in" and cheering for war and disaster so they can buy a whole supermarket with one gold coin :rolleyes: . But this is clearly not the case at all.

.....

Maybe I should be buying this dip....... B)

 

I think it is common for other people to misinterpret some goldbug discussions. I don't think it's a matter of hoping for war, mad max etc. Instead I think it's mainly a matter of being pleased if theories and predictions are proved right. And also considering what most people give no thought at all to. Namely what worst thing could happen.

I think most/all don't want major turmoil I think instead they'd just like to see things go their way. But not at the expense of peace.

 

I think it's more like this. If you can see a multiple car crash is imminent, do you stay on the road and risk getting caught up in it, or do you pull over and avoid the risk, hoping nothing happens, but happier to avoid the risk.

 

Finally, careful now. You're starting to sound like a goldbug :D :D

 

Link to comment
Share on other sites

Thxs for your comments guys.

 

 

I just had a promo email from the Peter Schiff mob.

 

I found this part amusing, hope you do

 

 

"When you buy gold through the Perth Mint Certificate Program, you can invest with confidence. Here are just a few reasons why:

 

* Every ounce you purchase - regardless of storage method - remains under the control of the Perth Mint, which doesn't loan out your metal to third parties.

* Your gold is held by an S&P AAA-rated government facility which is also insured by Lloyd's of London. That's safer than any bank you'll find in the United States!

* The Perth Mint is wholly owned and operated by the Government of Western Australia and as such it is virtually impossible for it to become insolvent. The Mint has been around for 106 years...you're not investing in any Internet-based Johnny-come-lately when you invest with the Perth Mint."

 

Link to comment
Share on other sites

What about when a bank repossess a property and then gets less than the value at auction. Is this not the equivalent of letting the borrower off the mortgage debt?

 

Only if they write off any outstanding debt, which they don't do for years. Instead they hold it against the mortgage holder and often return to pursue it years later. Meanwhile it sits on their books as an asset, albeit a rather distressed one.

 

Link to comment
Share on other sites

Only if they write off any outstanding debt, which they don't do for years. Instead they hold it against the mortgage holder and often return to pursue it years later. Meanwhile it sits on their books as an asset, albeit a rather distressed one.

Writing off debt means that money in circulation that would have been paid back will never be paid back. Ultimately, write-offs mean therefore more monetary inflation (money that got created can not be destroyed anymore).

Link to comment
Share on other sites

...

* The Perth Mint is wholly owned and operated by the Government of Western Australia and as such it is virtually impossible for it to become insolvent. The Mint has been around for 106 years...you're not investing in any Internet-based Johnny-come-lately when you invest with the Perth Mint."

That the part I never understood. What's exactly the problem with imaginating that the Government of Western Australia can go bust. I am sure it can. Maybe we're going to see it some day.

Link to comment
Share on other sites

Only if they write off any outstanding debt, which they don't do for years. Instead they hold it against the mortgage holder and often return to pursue it years later. Meanwhile it sits on their books as an asset, albeit a rather distressed one.

 

That would be in the UK. I have a friend who was caught in the last crash, he never paid any money off his mortgage. The property was repossessed, 7 years later they offered pay half to clear the debt, 3 years later they wrote off the debt.

 

In the US underwater mortgage holders can simply hand back the keys. Yes their credit rating is damaged, but they do not owe the money.

Link to comment
Share on other sites

"When you buy gold through the Perth Mint Certificate Program, you can invest with confidence. Here are just a few reasons why:

 

* Every ounce you purchase - regardless of storage method - remains under the control of the Perth Mint, which doesn't loan out your metal to third parties.

* Your gold is held by an S&P AAA-rated government facility which is also insured by Lloyd's of London. That's safer than any bank you'll find in the United States!

* The Perth Mint is wholly owned and operated by the Government of Western Australia and as such it is virtually impossible for it to become insolvent. The Mint has been around for 106 years...you're not investing in any Internet-based Johnny-come-lately when you invest with the Perth Mint."[/b]

Perth Mint Watch - Jason Hommel

 

Jason has a lot to say about the perth mint program.

 

Link to comment
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now

×
×
  • Create New...