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A further comment from James Turk regarding paper v physical:

 

 

There're loads of comments around from PM bulls at the moment. Many of them seem to me to be a direct result of the cognitive dissonance engendered by gold and silver's decisive breaches of key supports. Unfortunately I'm resolving my dissonance at the moment by retreating to a pessimistic position (this is my default).

 

I simply asked myself how I would behave if another one of my assets was demonstrating similar performance. The answer is that I would be losing faith in its ability to provide returns over anything except the long term (3-5 years+) and as such it would have become speculative (since it is hard to predict the influence of events on most assets so far into the future).

 

This is fine for me since I still have a strong focus on PM fundamentals in my mind. Over the medium - long term I think that they appreciate in fiat terms - it's just that losing the innocent belief that the dollar is imminenty about to collapse means that I'm not hopeful for the large increases in my purchasing power that I was hoping for over the next year or so. So my greed, and previously misplaced certainty has been frustrated - I need to deal with it.

 

Anyone else doing the psychological tango like this at the moment?

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Forget these little perturbations. Check out this article !

 

Credit crisis II

A world financial Armageddon?

by Christopher Laird, PrudentSquirrel.com

http://www.financialsense.com/fsu/editoria.../2008/0825.html

 

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

 

I don't care what the gold/silver price is. I feel safer than having too much of this fiat stuff.

 

Agreed. Depressing article though :( Time to stock up on tins.

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Seriously folks....

 

I don't think anyone here has anything to worry about with regards to the exchange value of gold...long term.

 

I utterly agree that it must become the universal uinit of exchange....long term

 

I just don't think that many on here (though not all) are considering just how low it might go in the short to medium term

 

As long as you are in it for the long term.

 

For me, it's great that its falling, the more the merrier....

 

I missed the boat first time around. When it finally bottoms out, I wont be missing it a second time...

 

Just an opinion, of course...for what it's worth

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Seriously folks....

 

I don't think anyone here has anything to worry about with regards to the exchange value of gold...long term.

 

I utterly agree that it must become the universal uinit of exchange....long term

 

I just don't think that many on here (though not all) are considering just how low it might go in the short to medium term

 

As long as you are in it for the long term.

 

For me, it's great that its falling, the more the merrier....

 

I missed the boat first time around. When it finally bottoms out, I wont be missing it a second time...

 

Just an opinion, of course...for what it's worth

 

Thanks for the consoling words but most gold bulls know that it will be one wild ride. Sure, if deflation psychology takes hold, POG will take another few dips but as you say, just more opportunities to buy. Mish has a good perspective on POG in my opinion. Then again, maybe POG will only track sideways before taking off. You never can predict these things.

 

http://commoditywatch.podbean.com/2008/08/...flation-part-1/

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you better do. 1 year of canned food & grains supply in a vacuum storage here

 

So, er, how much space does a year's supply of canned food actually take up?

 

Got me some tins of tuna and cup-a-soup under the bed. My girlfriend thinks I'm mad but she'll be sorry when I'm feasting on... er... tuna and cup-a-soup :unsure:

 

In some ways, that's better than having a girlfriend who doesn't think you're mad, because that sort of girlfriend will have already earmarked which flavour cup-a-soups are hers for when the world crisis strikes.

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Probably complete bollocks, but what if the current up leg just started to form an ascending triangle? It's up move (when it really took off) was from ~26200 to ~26600.

Now, if it is an ascending triangle forming, the upside would take us to ~27000; an important resistance level which I think gold wants to test. Now That will be interesting.

 

Of course I could be just going mad over-looking at charts!

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See...i told you all to take another look at 2:30pm....... :lol:

Steve, if you have another few days like that, we'll be crowning you the new Silver Sammy.

Days like today are a day-trader's paradise! Especially when you can even predict the *time* that the bounce-back will occur. Awesome.

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So, er, how much space does a year's supply of canned food actually take up?

 

 

In some ways, that's better than having a girlfriend who doesn't think you're mad, because that sort of girlfriend will have already earmarked which flavour cup-a-soups are hers for when the world crisis strikes.

 

it doesn't take much, about half room. you still have to buy eggs, milk and such, you can only store long lasting food.

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The reason for the sell off in gold and silver?

 

wake up call

Butler’s work shows, as of July 1, 2008, two U.S. banks were short 6,199 contracts of COMEX silver (30,995,000 ounces). As of August 5, 2008, two U.S. banks were short 33,805 contracts of COMEX silver (169,025,000 ounces), an increase of more than five-fold. This is the largest such position by U.S. banks I can find in the data, ever. Between July 14 and August 15th, the price of COMEX silver declined from a peak high of $19.55 (basis September) to a low of $12.22 for a decline of 38%.

 

For gold, 3 U.S. banks held a short position of 7,787 contracts (778,700 ounces) in July, and 3 U.S. banks held a short position of 86,398 contracts (8,639,800 ounces) in August, an eleven-fold increase and coinciding with a gold price decline of more than $150 per ounce. As was the case with silver, this is the largest short position ever by US banks in the data listed on the CFTC’s site. This position was put on and resulted in massive market price collapse as our GLD gold-price proxy shows

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