GOLD

[Errol]

That's because the mid cycle correction that will occur in the next year will be much greater than that correction IMHO.

 

Excellent. When does this happen then? If they want to give me cheap gold I'll take it with both hands.

[Errol]

So do I. I sold all my PMs recently anticipating a very large correction. I can't see this lasting much longer and may go above 1000-1030, but thereafter it will be carnage, and time to re-invest again.

 

I look forward to this. Just how cheap will it get? I'm rather hoping for £200 an ounce. That would be excellent!

[G0ldfinger]

I don't have anything against timing. But if I would anticipate a sell-off of some kind at a certain probability, I would possibly wait with further purchases, but I would not sell any physical bullion.

[headmelter]

The physical stash could be almost impossible to replace unlike the ETFs with their unlimited supply from .... who knows where.

 

Sell physical at your own peril.

 

No intention of selling, just trying to time my next purchase. This discussion just added another variable I hadn't really considered too much.

 

As if there isn't already enough to try and allow for.

[headmelter]

I don't have anything against timing. But if I would anticipate a sell-off of some kind at a certain probability, I would possibly wait with further purchases, but I would not sell any physical bullion.

Missed the opportunity at sub $850 after christmas but cash was not ready. Sods law. Now my cash is in place POG is peaking and I have to control my lack of patience in the face of persistant worrying economic news and continued govt incompetence.

[marmite]

I think some people are missing the point. I am not stating that gold ETFs are frauds and do not contain the amount of gold they claim to. What I am saying is that you cannot assume the government will not go to extreme lengths to protect its script. As I said earlier, in Volcker's memoirs, he stated that the government during the expansion of the money supply in the 70s did not have a good plan to contain the POG which therefore required him to increase interest rates to over 20%. He did not say money supply expansion was a problem; he said not containing the POG was. Bernanke in his 2003 speech stated that to cap the price of gold all that was need was a rumor of alchemy being perfected, the impact would cause the POG to decrease. More recently, central banks have been using rumors to depress the price of gold before their sale. Also during the great depression it was rumors of Gold confiscation that caused bank runs and their collapse - this was mentioned in Hoover's memoirs.

 

So with all this history it is naive to think that the central banks and government do not have a plan in place. So guess what appears on the scene about the same time as the start of this credit expansion: Gold, Silver, Wheat, Oil, etc etc etc ETFs. These ETFs are mopping up cash from investors who think they are hedging from an expansion in credit. You have already seen what can happen with oil and that is what they have in plan for goldbugs.

 

They have control of the lolly in the ETFs via their creators - wall street - do not forget this.

 

I am amazed that the masses continue to hand over their hard earned lolly to the crooks on wall street so they invest on their behalf in derivatives. Once ETFs are exposed they will be something else in place. Remember Mutual Funds? whatever happened to those sure fire money earners. What about endowment mortgages? Lots of suckers around.

 

This article makes me nervous. They are herding the masses into their pen. Remember what I said: "owning gold is not the same as having possesion".

 

 

http://www.reuters.com/article/reutersEdge...E51C3T020090213

 

"More and more generalist money managers are looking at gold. A lot of money mangers find comfort with the idea of owning gold via GLD. It's quite convenient to own the GLD, versus having to pay warehouse costs on your own," said Brian Hicks, co-manager of the $500 million Global Resources Fund at Texas-based U.S. Global Investors.

 

Gold ETFs are listed on stock exchanges and offer investors exposure in bullion without taking physical delivery. Sponsors of the funds buy a matching amount of physical gold and keep it in bank vaults.

 

Excellent points made Pluto.

 

Just to clarify, you are still bullish on Physical bullion long term ???? Or do you see a really longterm correcting of all gold prices back to the 1990's dulldrums.

 

[lowrentyieldmakessense(honest!)]

Missed the opportunity at sub $850 after christmas but cash was not ready. Sods law. Now my cash is in place POG is peaking and I have to control my lack of patience in the face of persistant worrying economic news and continued govt incompetence.

 

i know what you mean

 

but

 

http://www.safehaven.com/article-12604.htm

 

Currencies: Policies of INSOLVENCY, aka Dominoes!

 

When looking at currencies, it is important to note that most masquerade as MONEY but are actually IOU's from morally and fiscally bankrupt public servants and their monopolist companions in the central banks and banking systems. In order to differentiate currency from MONEY, we must first define which is which. So first, let's look at the functions of money:

 

* Medium of Exchange

* Store of Value

* Standard of Value

* Measure of Value

* No one else's liability

 

There are only two currencies which meet this definition and functions as such, and they are the longest running currencies in history: they are Gold and Silver. There are also techniques you can use to restore this definition to G7 currencies, but I won't go into them here. In today's world, currencies only live up to one of the definitions above and one other:

 

*Medium of Exchange

 

*Someone else's liability: in effect, that of the government that issues them, such as the US Dollar, UK Pound, Swiss Franc, Euro, etc.; these are actually IOU's.

 

Functionally, they are a type of BOND and thus are only as good as the creditworthiness of the respective government, the solvency of their respective citizens, tax revenues and most of all, the ability of the respective economies to create wealth by producing more than they consume. They are also known as FAITH BASED or FIAT currency because you place your faith in the government and it's economies and private sectors to pay. When a society no longer creates wealth, its ability to pay is always declining. As wealth creation subsides, they first turn to the credit markets to sustain and expand spending. Then when that avenue becomes closed, they turn to the printing press. The G7 approaches this final destination in a big way this year.

 

 

and another politician talking sense (and its not Ron Paul for a change)

 

Ex PM of Australia taking sense - risk of US default

[Catflap]

Was the whole banking system insolvent inthe 1970's BEFORE any downturn in the economy.

 

Possibly - ever heard of the secondary banking crisis of 1973–1975?

 

http://en.wikipedia.org/wiki/Secondary_ban...73%E2%80%931975

 

The Bank of England bailed out around thirty of these smaller banks, and intervened to assist some thirty others

 

We have been here before.

[lowrentyieldmakessense(honest!)]

Excellent points made Pluto.

 

Just to clarify, you are still bullish on Physical bullion long term ???? Or do you see a really longterm correcting of all gold prices back to the 1990's dulldrums.

 

yeah if either

 

1) governments get real, decide that the reckless should suffer the consequences, balance their budgets and cut the size of government

 

or

 

2) gordon brown becomes the worlds first successful alchemist

 

[Catflap]

So do I. I sold all my PMs recently anticipating a very large correction. I can't see this lasting much longer and may go above 1000-1030, but thereafter it will be carnage, and time to re-invest again.

 

This is the ultimate play if you get it right and it plays out like we both think, but the big question is if - there are no guarantees of course. I would simply say don't buy this latest move if you are going to be a long term holder and sell some at the March peak if you bought recently - as ever it will always be those who bought at the peak that will be the short-term losers. I think silver and platinum are better bets right now and gold will be better value later this year and in 2010.

[lowrentyieldmakessense(honest!)]

YEP

 

plus

 

aint no sustainable earnings coming until this is either written off or inflated away

 

 

 

 

 

not to say there wont be a bear market bouce in stocks though

 

barclays bank bust before the year is out

 

to add

 

looks down hill to me - again there will be some bounces upwards along the way - and when the quantitive easing gains traction who knows

 

http://www.safehaven.com/article-12604.htm

 

In his latest missive, John Mauldin outlines the situation for Earnings, which is a proxy for INCOME for everybody in the G7. It now appears earnings for 2008 have declined to $29.57 (S&P 500 at 865 divided by $29.57 = 29.25 as today's P/E ratio and rally predicated on earnings rise is false); and if earnings decline as they have in previous recessions, they project to $15.90 as of the end of the 2nd quarter. At today's S&P level of 865, that translates into a P/E ratio of 54.

 

This PE level is higher than what was seen AT THE PEAK of the 2000 stock market highs while we are currently sitting near the lows of today's markets. No matter how long and far the current rally may extend due to oversold conditions and fairy tail projections by banks and brokers, when it is done, you can expect a HUGE decline.

 

How many corporations can meet their bond obligations while their earnings are in FREEFALL? Whenever you see monthly job losses of almost 600,000 people, that is 600,000 people who can no longer pay their car, credit card and mortgage debts or pay taxes to insolvent governments on the state, municipal or federal levels. Private sector capital spending is in freefall globally, as are the GDP's of exporters on the Pacific Rim.

[InternationalRockSuperstar]

So do I. I sold all my PMs recently anticipating a very large correction.

 

so you think people will sell PMs and buy what instead?

[lowrentyieldmakessense(honest!)]

This is the ultimate play if you get it right and it plays out like we both think, but the big question is if - there are no guarantees of course. I would simply say don't buy this latest move if you are going to be a long term holder and sell some at the March peak if you bought recently - as ever it will always be those who bought at the peak that will be the short-term losers. I think silver and platinum are better bets right now and gold will be better value later this year and in 2010.

 

would agree with that

 

 

 

but time will tell if alf was right

 

http://jsmineset.com/index.php/2009/02/11/...news-today-111/

 

Jim Sinclair:

Gold will appreciate to $1224 and then to $1650. All this will be history by January 14th 2011

 

Alf Fields:

Major ONE up from $256 to $1,015 (actually 4 times the $255 low);

Major TWO down from $1015 to $699, say $700 (a decline of 31%);

Major THREE up from $700 to $3,500 (a Fibonacci 5 times the $500 low);

Major FOUR down from $3,500 to $2,500 (a 29% decline);

Major FIVE up from $2,500 to $10,000 (also a 4 fold increase, same as ONE)

 

Martin Armstrong:

A major high is possible as early as 2010-2011 with the potential for an exponential rally into 2015 if there is any kind of a low going into 2011

[G0ldfinger]

Possibly - ever heard of the secondary banking crisis of 1973–1975?

 

http://en.wikipedia.org/wiki/Secondary_ban...73%E2%80%931975

 

 

 

We have been here before.

Errh, excuse me? Basically ALL the big banks in the US, Europe and the UK are insolvent. This is UNPRECEDENTED.

 

IMO, only a fool would give gold away at the moment.

 

Catflap, some of your arguments sound reasonable every now and then. But don't delude yourself into thinking that we have been here before. Because one thing is for sure: we haven't.

[G0ldfinger]

...I think silver and platinum are better bets right now and gold will be better value later this year and in 2010.

I have been buying Pd and Ag recently.

[qwertyuiop]

Possibly - ever heard of the secondary banking crisis of 1973–1975?

 

http://en.wikipedia.org/wiki/Secondary_ban...73%E2%80%931975

 

 

 

We have been here before.

Landscape is different. The banks (primay) have already been bailed out and the loses from the home market havent even begun.

 

Consumer debt wasn't the significant factor it is now either. The method of bank funding is also a completely different beast.

 

The government may not be able to take on liabilites for the banking sector this time. The hole is already huge and probably still has a long way to go.

 

Was there a credit crunch after the 70's bank crisis?

 

This comparision is tenuous.

[Catflap]

IMO, only a fool would give gold away at the moment.

 

Gold is insurance - don't get rid of your insurance completely. Sometimes you need more insurance (with rising inflation, before a currency collapse or before a stockmarket crash) and sometimes you need less when these things have already happened. But you always need insurance of some kind to protect yourself.

[Pluto]

Excellent points made Pluto.

 

Just to clarify, you are still bullish on Physical bullion long term ???? Or do you see a really longterm correcting of all gold prices back to the 1990's dulldrums.

 

I have never sold one gram and don't have any plans to - even with corrections. There is no other game in town.

[Pixel8r]

You should team up with Ker. $200 just around the corner.

 

Yes, in the mother of all financial crises, let's sell all our gold because it could be cheaper in a couple of months. Sound advice.

How do we know he is not ker or his buddy already

 

 

[Pluto]

Possibly - ever heard of the secondary banking crisis of 1973–1975?

 

http://en.wikipedia.org/wiki/Secondary_ban...73%E2%80%931975

 

 

 

We have been here before.

 

No we haven't. Nearly every investment bank apart from Morgan and Goldman has collapsed. You can't compare any banking crisis in living memory with what we have going on now.

 

The Bretton Woods agreement is collapsing.

[Catflap]

Landscape is different. The banks (primay) have already been bailed out and the loses from the home market havent even begun.

 

Consumer debt wasn't the significant factor it is now either. The method of bank funding is also a completely different beast.

 

The government may not be able to take on liabilites for the banking sector this time. The hole is already huge and probably still has a long way to go.

 

Was there a credit crunch after the 70's bank crisis?

 

This comparision is tenuous.

 

The 70's were far worse than now when we still had a large manufacturing base and strong unions. There probably was a credit crunch back then and banks were far more ruthless about getting their money back calling in the loans if they needed the money causing businesses to fail and more people to become unemployed.

 

 

[Pluto]

The 70's were far worse than now when we still had a large manufacturing base and strong unions. There probably was a credit crunch back then and banks were far more ruthless about getting their money back calling in the loans if they needed the money causing businesses to fail and more people to become unemployed.

 

No, the 70s were a walk in the park compared to what we have now. Do you realize that General Motors is probably going to go chapter 11 next week? We have banks folding left right and center, most of manufacturing dropping all over the planet, world wide housing collapse, and on and on.

 

General Motors alone will lop 1,000 off the dow.

 

Folk talk about about a housing crash in the UK - it ain't even started yet - most of the masses are still waiting for a spring bounce, they think this is a banking thing and will blow over. Most folk are numb to this and wont panic until it hits them squarely in the face.

[narrowescape]

No we haven't. Nearly every investment bank apart from Morgan and Goldman has collapsed. You can't compare any banking crisis in living memory with what we have going on now.

 

The Bretton Woods agreement is collapsing.

 

Bretton Woods died in 1971, when the US "suspended" gold/USD convertibility. Funny how they never reinstated it.

[ziknik]

...

General Motors alone will lop 1,000 off the dow.

...

 

GM going bust will have very little direct affect on the Dow.

 

The Dow is price weighted.

 

At $2.50, GM is the cheapest stock in the Dow 30, so it will make the least difference to the Dow if it does bust.

 

The FTSE + S&P500 are weighted by market capitalisation

[G0ldfinger]

Gold in Euro since 1968. Just getting started?

 

http://gold.approximity.com/since1968/Gold_EUR_LOG.html