GOLD

[G0ldfinger]

Any idea what it was worth at its peak?

 

Must have been up at 20/25 ish

 

http://gold.approximity.com/since1968/DJIA-Gold-Ratio.html

 

[ziknik]

My gold bars arrived from Bairds today. I ordered them on Saturday night

 

I’d never seen a gold bar (in real life) before.

 

I’m really surprised at how small they are; they looked much bigger on the website

 

My entire BV holding is probably smaller than one of them small Ipods. I’m note sure why I am bothering with BV now. I can easily find safe places to keep such small volumes.

 

[azazel]

My gold bars arrived from Bairds today. I ordered them on Saturday night

 

I’d never seen a gold bar (in real life) before.

 

I’m really surprised at how small they are; they looked much bigger on the website

 

My entire BV holding is probably smaller than one of them small Ipods. I’m note sure why I am bothering with BV now. I can easily find safe places to keep such small volumes.

What did you get? 1 ounce bars?

[frizzers]

http://globaleconomicanalysis.blogspot.com...oking-good.html

[sideshow]

My gold bars arrived from Bairds today. I ordered them on Saturday night

 

I’d never seen a gold bar (in real life) before.

 

I’m really surprised at how small they are; they looked much bigger on the website

 

My entire BV holding is probably smaller than one of them small Ipods. I’m note sure why I am bothering with BV now. I can easily find safe places to keep such small volumes.

 

Yes, I got my first Pamp 10oz bar this week. I was thinking exactly the same - you can certainly hide away a decent amount in a very small place. Another one on the way next week. What did you get?

 

The other thing is that you don't panic quite as much holding physical on the dips. On the other hand, I tend to be quite trigger happy on Bullion Vault watching the digits move up and down.

 

Gold bars are so much cheaper than coins. It seems a far better way to go.

 

[FWIW]

http://globaleconomicanalysis.blogspot.com...oking-good.html

 

When did Mish convert to our 'precious'. He always had a hard time saying BUY GOLD!

[bleakhouse]

Apologies if this has been posted elsewhere and if its a bit old:

http://jessescrossroadscafe.blogspot.com/

 

ChinaStakes

Survey: Over Two-Thirds of Chinese Economists Favor Gold Over US Bonds

by CSC staff, Shanghai

March 02,2009

 

In a survey of major Chinese economists, more than two-thirds are reportedly bearish on the prospect of China increasing its holdings of US government bonds, and believe instead the nation should putting more of its hard-earned into gold.

 

According to a China Business News survey of 70 Chinese economists (including one foreign economist), the exact figure is 71.4% anti-bonds and pro-gold.

 

The use of China's huge foreign exchange reserve is a topic of concern and controversy. The remaining 28.6% of those polled believe China should continue to buy U.S. Treasury bonds. 38.6% think that China should not continue to buy, but also should not to sell US bonds. 32.8% believe that China should unload the bonds, 22.8% of whom think we should have a slight sell-off, while 10% think China should drop them like a bad habit.

 

All this is against a backdrop of China surpassing Japan to become America's largest US bond holder and of the ever-widening global financial kerfuffle.

 

The survey also brings to light the question of whether China’s gold reserves should be increased. Recent gold futures prices broke through US$1000/ounce, making gold the most outstanding asset in the financial turmoil. One economist thinks China’s current gold reserve of 600 tons is an unnecessary load and that the opportunity should be grasped to sell off a bunch of it at a good price.

 

21.4% of economists said that the gold reserve level was fine and leave it alone.

 

But 75.7% of the economists asked believe that China should increase its holdings of gold, with 48.6% opting for a slight increase while 27.1% think China should pile in.

 

At US$1000 an ounce?![/quote

[Catflap]

Here's another Dow Jones Industrials/Gold Price chart - goes back to 1880's and shows the ratio also hitting 1.0 in 1896. Someone might like to put the chart up as I'm useless at these things.

 

http://www.thelongwaveanalyst.ca/DowGold/DowGold.htm

 

[Steve Netwriter]

This was my last gold chart from 18th Feb:

 

 

and I've just looked at Dan Norcini's latest chart (and Mish's), and realised he didn't spot that we should be drawing curves either !

Hence the slight error.

 

This is my latest:

 

 

 

And to put this into context, with Alf Field's numbers:

 

 

Elliott Wave Gold Update 23

http://www.kitco.com/ind/Field/dec022008.html

 

[Steve Netwriter]

Here's another Dow Jones Industrials/Gold Price chart - goes back to 1880's and shows the ratio also hitting 1.0 in 1896. Someone might like to put the chart up as I'm useless at these things.

 

http://www.thelongwaveanalyst.ca/DowGold/DowGold.htm

 

I'm a little uncomfortable posting this as it's the only thing from that article.

 

So, it is from here, which I'm sure is a great place to visit and check out, judging by this fine chart:

 

http://www.thelongwaveanalyst.ca/DowGold/DowGold.htm

 

[ziknik]

What did you get? 1 ounce bars?

 

What did you get?

...

 

 

2 x 20 grams. I need them to replace some gold jewellery I melted down for cash at Hatton Garden Metals.

 

Hatton Garden Metals are very good btw.

 

[ologhai]

There are no certainties. But there is a model.The model is based on today's data and not tomorrow's maybe hyper-inflated data where gold could go to infinity.

 

Since the late 1800s, the ratio between gold and the DOW has been as low as about 1-2:1 three times. Given that the price of gold in dollars was fixed prior to 1971, it's hard to know how relevant two out of those three occasions were?

 

In order for gold to reach $10k, the ratio would have to go to an unprecedented sub-1:1 level, even if the DOW stayed at the level it is now!

 

Goldfinger's Gold/DOW ratio chart looks like most of the 'action' is behind us, and the low point might not be all that far into the future... However, if 1973/4 is anything to go by, there may be quite a reversal (gold dropping/DOW rising from here) before it finally reaches a low point which might drag it out by quite a bit?

 

Another ratio that seems interesting to me is that between gold (and silver) and houses[1]. When I look at a gold/house-price chart, it seems like less of the 'action' has already happened -- the price of houses in gold (in the UK) peaked in 2004[2] (at around 700:1 or so). We're currently at a ratio of about 230:1 (i.e. 230 ounces to buy an average house), and it was hovering around 100:1 (sometimes a bit below, sometimes a bit above) from around 1980 to about 1984 (again in the UK).

 

So... Taking those two ratios -- 100:1 (for houses) and, say, 1.5:1 (against the DOW) -- could gold really go to $10k (maybe £7k)? That's an awfully big number (or so it feels right now). That would make 100:1 grotesquely too high (average house at £700k?)

 

Or is that just high-inflation for you!

 

I must admit to feel a bit lost, like many here are really expecting us to venture off into the white portions of those old maps ('Here be dragons!').

 

At £7k for an ounce of gold, surely we'd see gold/house ratios of sub-20:1?

 

I'd really be interested to hear where others think the two ratios will end up... (perhaps backed up with where the DOW will be and how much an average house must end up being because of those ratios)...

 

I'll have to stop now -- I'm getting dizzy!

 

[1] I wonder why?

 

[2] Compared to the gold/DOW ration peaking around 2000 (as in the year).

[romans holiday]

imo the ratios will be met as firstly house prices and the Dow continue to fall and as secondly gold continues to rise due to demand for its monetary qualities. There was a thread on these ratios which was put together a few months ago. Looking for it now.

 

http://www.greenenergyinvestors.com/index....t=0&start=0

[romans holiday]

There are no certainties. But there is a model.The model is based on today's data and not tomorrow's maybe hyper-inflated data where gold could go to infinity.

All mathematical models should come with the following warning: "This model is not to be confused with reality."

[G0ldfinger]

... Goldfinger's Gold/DOW ratio chart looks like most of the 'action' is behind us, ...

No way, Jose.

 

http://gold.approximity.com/since1968/DJIA...-Ratio_LOG.html

 

... At £7k for an ounce of gold, surely we'd see gold/house ratios of sub-20:1? ...

Could happen in a pretty bad (i.e. hyper-)inflation. You seem to be very optimistic on Sterling ($10,000=£7,000 ).

[Mr Pipples]

Russian TV interviews GATA director on gold suppression - http://www.gata.org/node/7231

[Rosco]

Since the late 1800s, the ratio between gold and the DOW has been as low as about 1-2:1 three times. Given that the price of gold in dollars was fixed prior to 1971, it's hard to know how relevant two out of those three occasions were?

 

In order for gold to reach $10k, the ratio would have to go to an unprecedented sub-1:1 level, even if the DOW stayed at the level it is now!

 

Goldfinger's Gold/DOW ratio chart looks like most of the 'action' is behind us, and the low point might not be all that far into the future... However, if 1973/4 is anything to go by, there may be quite a reversal (gold dropping/DOW rising from here) before it finally reaches a low point which might drag it out by quite a bit?

 

Another ratio that seems interesting to me is that between gold (and silver) and houses[1]. When I look at a gold/house-price chart, it seems like less of the 'action' has already happened -- the price of houses in gold (in the UK) peaked in 2004[2] (at around 700:1 or so). We're currently at a ratio of about 230:1 (i.e. 230 ounces to buy an average house), and it was hovering around 100:1 (sometimes a bit below, sometimes a bit above) from around 1980 to about 1984 (again in the UK).

 

So... Taking those two ratios -- 100:1 (for houses) and, say, 1.5:1 (against the DOW) -- could gold really go to $10k (maybe £7k)? That's an awfully big number (or so it feels right now). That would make 100:1 grotesquely too high (average house at £700k?)

 

Or is that just high-inflation for you!

 

I must admit to feel a bit lost, like many here are really expecting us to venture off into the white portions of those old maps ('Here be dragons!').

 

At £7k for an ounce of gold, surely we'd see gold/house ratios of sub-20:1?

 

I'd really be interested to hear where others think the two ratios will end up... (perhaps backed up with where the DOW will be and how much an average house must end up being because of those ratios)...

 

I'll have to stop now -- I'm getting dizzy!

 

[1] I wonder why?

 

[2] Compared to the gold/DOW ration peaking around 2000 (as in the year).

 

 

When you say most of the action is behind us it really depends on how you expect the two markets to move.

 

 

 

Moves since ratio at high in 2000,

Gold $250 / Dow 10000 (not sure if these are exact?) , this represents a 277% increase in Gold and only a 34% decrease in Dow to todays levels ie a net profit of 243% if you were long equal amounts of both

 

Let's say you expect the Gold/Dow ratio to move to 1:1 at some point. From todays two levels that ratio can be acheived with many permutations, but jsu looking at two;

 

Gold $5000 / Dow 5000 , this represents a 432% increase in Gold and a 23% decrease in Dow

ie a net profit of 409% if you were long equal amounts of both

 

Gold $2500 / Dow 2500 , this represents a 166% increase in Gold and a 62% decrease in Dow

ie a net profit of 104% if you were long equal amounts of both.

 

 

 

 

[tinecu]

When you say most of the action is behind us it really depends on how you expect the two markets to move.

 

 

 

Moves since ratio at high in 2000,

Gold $250 / Dow 10000 (not sure if these are exact?) , this represents a 277% increase in Gold and only a 34% decrease in Dow to todays levels ie a net profit of 243% if you were long equal amounts of both

 

Let's say you expect the Gold/Dow ratio to move to 1:1 at some point. From todays two levels that ratio can be acheived with many permutations, but jsu looking at two;

 

Gold $5000 / Dow 5000 , this represents a 432% increase in Gold and a 23% decrease in Dow

ie a net profit of 409% if you were long equal amounts of both

 

Gold $2500 / Dow 2500 , this represents a 166% increase in Gold and a 62% decrease in Dow

ie a net profit of 104% if you were long equal amounts of both.

 

Nice illustrations. Given a 1:1 ratio in the future the actually figures depend on how inflationary things become.

Those betting on hyperinflation would do well to be long Dow as well as long Gold, but when do you jump in? Where's the bottom?

 

Deflationistas should be shorting the dow (and long Gold unless they really think that the Dow will go sub 1000!!)

 

Either way gold looks good, except for the ultradeflationist view.

[tinecu]

http://gold.approximity.com/since1968/DJIA...-Ratio_LOG.html

 

 

Would this ratio chart be perhaps better presented with log y-axis?

 

[romans holiday]

Nice illustrations. Given a 1:1 ratio in the future the actually figures depend on how inflationary things become.

Those betting on hyperinflation would do well to be long Dow as well as long Gold, but when do you jump in? Where's the bottom?

 

Deflationistas should be shorting the dow (and long Gold unless they really think that the Dow will go sub 1000!!)

 

Either way gold looks good, except for the ultradeflationist view.

The ultradeflationist view could also be the one where most currencies will lose their efficacy; being themselves financial instruments these days they will also deflate or depreciate. I have termed this position hyper-deflation. Incredible though it may seem, this view suggests that sound money will be scarce in the future and assets comparatively cheap compared to today. Gold and silver being the strongest symbols of money will continue to strengthen and likely become the primary currencies once the US dollar eventually devalues. The conventional deflationist does not envisage a devaluation of the dollar and possibly other major currencies.

 

Though units of currency may appear to be multiplying, in reality money is being destroyed at a phenomenal rate.

 

I think gold will go to around $1500 in present US dollar terms. Once the dollar devalues in a year or so it could well go to $3000 but this price only represents devalued dollars. The beauty of gold will be its ability to buy incredibly cheap assets.. in gold ounce terms.

[ziknik]

The ultradeflationist view could also be the one where most currencies will lose their efficacy; being themselves financial instruments these days they will also deflate or depreciate. I have termed this position hyper-deflation. Incredible though it may seem, this view suggests that sound money will be scarce in the future and assets comparatively cheap to today. Gold and silver being the strongest symbols of money will continue to strengthen and likely become the primary currencies once the US dollar eventually devalues. The conventional deflationist does not envisage a devaluation of the dollar and possibly other major currencies.

 

Though units of currency may be multiplying, money is being destroyed today.

 

What’s the difference between hyperinflation and your hyper-deflation?

[InternationalRockSuperstar]

Would this ratio chart be perhaps better presented with log y-axis?

 

it already has a log y-axis.

[romans holiday]

What’s the difference between hyperinflation and your hyper-deflation?

In a hyper-inflation all prices go through the stratosphere. In a hyper-deflation, once the reserve currency finally devalues say by half [not hyper-inflates] the price of all real assets would double not go to the moon [we should continue to see "shop inflation" in consumables with currencies which are already depreciating]. A currency may survive a hyper-deflation [it just deflates/depreciates] whereas it is obviously destroyed in a hyper-inflation.

 

From another perspective, which focuses on prices, a hyper-deflation is also a biflationary scene. Expect here high inflation not hyper-inflation when it comes to consumable goods. Real assets will inflate while paper assets continue to deflate. The Dow will continue to fall to meet gold and so will houses even when the dollar finally devalues. I can not see nominal prices going up but continuing to decline. Real prices, as priced in say gold, would fall radically. Nominal prices will come down slower due to being priced in a depreciating currency.

 

A hyper-deflation would also entail a massive decline in our standard of living as everyday necessities become more expensive.

[Mr Pipples]

Gold & The Panic Phase by Jim Willie - Gold & The Panic Phase: http://www.financialsense.com/fsu/editoria.../2009/0305.html

 

the response to xxxxx in the gold & silver prices will be profound, with advances to date only a prelude to a march to $2000 gold and $50 silver.

 

etc.

 

[InternationalRockSuperstar]

Gold & The Panic Phase by Jim Willie - Gold & The Panic Phase: http://www.financialsense.com/fsu/editoria.../2009/0305.html

 

he's quite pessimistic about the S&P 500:

 

 

Novices might not recognize the pattern below in the S&P500 index, but experienced analysts surely do. It is a long-term DoubleTop Head & Shoulders reversal pattern. It is a Mother of Reversal Patterns. Its base is roughly at 775, its top at 1550, which indicates a target of nearly zero.