GOLD

[romans holiday]

opps.

[romans holiday]

The way I see it is gold needs to perform strongly today. If it doesn't I'll be extremely disappointed. What further evidence does the market need that gold is the best safe haven out there?

Yes, makes you wonder why it hasn't rocketed. Hmmm.... let me see.....deflation!

 

Even though gold will not rocket I think it will strengthen as the strongest currency/ safe haven. I reckon it will eventually double from here as the other major currencies devalue though in the meantime could well be wickedly volatile.

[creditcrunch]

I'm in New York at the moment and while having breakfast saw an advert for gold...

 

This gold dealer, was advertising gold coins and said they now take a 25% deposit on any purchase of gold!!!

 

Now, that is clearly the route to mortagage type fueled bubble... As people get blind to the bubble, I can see that as long as

they have this hope of muliplying their cash for a 25% deposit, even fractional coins will rocket in price.

 

!!!WOW

[electroweak]

I'm in New York at the moment and while having breakfast saw an advert for gold...

 

This gold dealer, was advertising gold coins and said they now take a 25% deposit on any purchase of gold!!!

 

Now, that is clearly the route to mortagage type fueled bubble... As people get blind to the bubble, I can see that as long as

they have this hope of muliplying their cash for a 25% deposit, even fractional coins will rocket in price.

 

!!!WOW

makes one wonder if we have learned anything over the last two years, doesn't it?

[creditcrunch]

makes one wonder if we have learned anything over the last two years, doesn't it?

 

As society, the business leaders out there doing this right now - probably nothing moral learnt, only that its a great way to make short term risky money.

 

On a personal level, I will only buy un-leveraged gold.

[Steve Netwriter]

 

From:

 

[lowrentyieldmakessense(honest!)]

 

From:

lets make lots of money

 

gold is money steve

 

you perfected alchemy

[Steve Netwriter]

lets make lots of money

 

gold is money steve

 

you perfected alchemy

 

As you probably know, not my choice of words. If I'd written the song it would have been "Let's make lots of currency" :lol:

That's why I'm not a well known pop group

 

 

[Steve Netwriter]

Review of Gold against major currencies over the last 1 & 5 years - 20 Mar 2009

 

Over the last year, this is the picture of gold versus the major currencies:

 

 

You can see that GoldUS$ and GoldJPY haven't changed from a year ago. I expected the JPY to do well, but like may people I was surprised by the US$. But good investing is about learning.

 

The worst major currency against gold has been the GBP, with GoldGBP up over 40% in the last year.

The GoldCAD$, GoldEUR and GoldCHF rates are all up about 20% in the year.

 

Looking over 5 years:

 

 

shows clearly how the GBP broke lower, and anyone with GBP would have preserved their wealth far better with Gold.

[Steve Netwriter]

I'm trying to cheer myself up. As I recently explained on GHPC:

 

I'm was very disappointed yesterday. I read this news (QE). Then there was a ring on the bell. Great I thought, that'll be Ben Bernanke with a large box of currency for me. That'll go nicely with the free flights to Oz. This credit crunch is working out really well.

Oh the disappointment when it was our next door neighbour....with no currency.

Still haven't got the free flights either. Waiting for those pesky spending conditions to be removed.

 

This is helping, a HQ version:

 

From: http://www.youtube.com/watch?v=B2pKl_Wm4bo

 

:lol:

 

[lowrentyieldmakessense(honest!)]

As you probably know, not my choice of words. If I'd written the song it would have been "Let's make lots of currency" :lol:

That's why I'm not a well known pop group

 

yep paper currencies are going to crash over the next few years - those who own gold will protect their purchasing power but its not going to be fun

 

panic of 08 and collapse of 09

 

U.S. Bonds - the Riskiest Safeguard in Financial History

By Bill Bonner

Paris, France

 

 

It's the waterslide into Hell! Whee!

 

What a day. Under cover of the AIG scandal, the Fed did something foolhardy yesterday.

 

"Fed plan stuns investors," says the headline in the Financial Times this morning.

 

It should stun us all. But we're getting used to expensive bamboozles.

 

In response to the Fed's latest move, the yield on 10-year Treasuries fell more than any time since they started keeping records in 1962. From 3.01% it had fallen to 2.48% when last we looked.

 

Yields fell because the Fed said it would buy $300 billion worth of government debt. Stocks rose - with the Dow up 90 points. And the dollar fell heavily against the euro...down to less than $1.31/euro.

 

Of course, most people have no idea what this means. But here at The Daily Reckoning we weren't born yesterday. And we've been following this story for the last 38 years.

 

Yes, dear reader, when Richard Nixon cut the link between the dollar and gold, the world has been using a money system that is, to put it in its best light, experimental. The last experiments of this sort - on anything like this scale - were conducted in the 18th century. The Banque Generale was set up by that rogue, John Law, to buy up the debt of France - of which there was plenty. And a similar plan was underway in England soon after - later known as the South Sea bubble. It was similar in that the bank substituted pieces of paper - stock in the South Sea Company - for government debt.

 

In the U.S. version, circa 2009, the Fed uses pieces of green paper called 'dollars' to buy up the government debt.

 

Wait a minute...where do the dollars come from? Oh, silly reader, they come from the same place that shares in the South Sea Company...or shares in the Mississippi Company (the French version) came from - they just printed them up!

 

And now, they don't even have to print them up. When the Fed buys U.S. debt, it merely makes an electronic notation...like an IOU that disappears as soon as the power goes out.

 

When those 18th century debt buy-up schemes were put in place, at first their stock rose. John Law's shares were such a hit that ladies would stop him in the street...it was rumored that they offered their most cherished favors in exchange for an opportunity to buy. Shares in the South Sea Company, meanwhile, went up 10 times in a single year.

 

U.S. bonds rose strongly yesterday too; of course, the richest investor in the world just entered the marketplace - announcing he would buy $300 billion.

 

And if that doesn't work...he'll buy more.

 

"Fed to buy $1 trillion in securities to aid economy," reports the New York Times.

 

"The Fed is engaging in massive quantitative easing," said William Poole, former head of the St. Louis Fed.

 

And why not? The central banks of England, Japan and Switzerland are all buying their government bonds. The IMF too.

 

Besides, all the bailouts and stimulus plans so far haven't worked. And at least this latest plan makes a little more sense. The problem is debt, not liquidity. Buying up the securities of Fannie and Freddie, the Fed will lower the cost of mortgage debt. This will give homeowners an opportunity - probably the last one of their lifetimes - to refinance their houses at low interest rates. The target range...we've heard...is between 3% and 4%.

 

In the short run, if the homeowner is able to refinance at such low rates, he reduces his monthly cash-flow burden and frees up cash for other things (such as paying down his credit card debt). In the long run, if he's able to lock-in those low rates, he will almost certainly see the debt burden itself significantly eased - thanks to rising inflation rates.

 

Lenders beware! U.S. Treasury bonds are attractive because they are safe. But they could turn out to be the riskiest safeguard in financial history. This is a moment when it is probably better to be a borrower than a lender. Refinance your house at 5% fixed rate. For the first few years, paying that mortgage may be as painful as marriage counseling. But then, when the marriage finally breaks up...and inflation heads to 10%... think how free and easy you'll feel. In a few years, your mortgage will practically disappear.

 

This is so attractive; we're tempted to do it ourselves. But we haven't had a mortgage in 20 years...we don't want one now.

 

Better to follow the smart money. John Paulson is one of the few hedge fund managers to understand the financial crisis and to make money in it. He made a fortune betting against subprime in 2007. In 2008, his fund was up 37% - while the rest of the world lost trillions.

 

What's he doing now? He was in the news this week, because he bought a big stake in a gold miner - AngloGold Ashanti - for $1.28 billion.

 

Gold went down yesterday...and then bounced back over $930.

 

"The dollar took a major hit after the Fed announced that it will be buying more government bonds and mortgage backed securities - that's another 1.2 trillion in 'new' currency hitting the money supply," writes our intrepid correspondent, Byron King. "The announcement created a frenzy in the gold market. The price of gold shot up $50 per ounce less than 2 hours after the feds meeting."

 

"Precious metals are like fire insurance. You don't wait until you smell smoke to call your agent and buy coverage."

 

Given yesterday's announcement, it's surprising that it is not already over $1,000 an ounce. Perhaps it soon will be...in which case, we urge you to get in now, while the price is still relatively low. We think we're going to see the yellow metal much, much higher. Pad your portfolio with the precious metal by clicking here.

 

Now over to Addison, reporting from Charm City...

 

"In a single breath the Fed committed another $1.15 trillion to the credit quagmire," writes Addison in today's issue of The 5 Min. Forecast.

 

"The dirty details:

 

"* $750 billion for purchasing mortgage backed securities from Fannie Mae and Freddie Mac (on top of the $500 billion the Fed has already promised).

 

"* Another $100 billion directly toward Fannie and Freddie's debt. That's also atop a pre-existing, $100 billion program.

 

"* The knockout blow... the Fed will officially begin buying 'longer term' U.S. treasury notes. The FOMC said they'd spend at least $300 billion over the next six months.

 

"Yesterday's announcement could easily balloon the Fed balance sheet to over $3 trillion," continues Addison. "We expect that to go even higher by the end of 2009. These are 'up to' numbers, mind you. So it may never happen. But the Fed did choose them for dramatic effect. Likewise, we thought we'd show you a chart of the Fed's balance sheet, if it ballooned as dramatically as last fall:

 

http://www.agorafinancial.com/5min/

 

"The Feds statement reads 'the Committee expects that inflation will remain subdued.' Phew."

 

Addison writes every day for The 5 Min Forecast, an executive series e- letter that provides a quick and dirty analysis of daily economic and financial developments - in five minutes or less. It's a free service available only to subscribers of Agora Financial's paid publications, such as Options Hotline. This service has been on such a tear recently, we've decided to allow first-time subscribers to 'test drive' it for 6 months. But this offer ends tonight, at midnight, so you have to act fast. Start raking in triple digit gains now.

 

And back to Bill, reporting from Paris, France...

 

Those poor English. If any people were dumber at finance than Americans, it was the English. While debt in the United States rose to an unprecedented 350% of GDP, in England it went to 500% of GDP. And now joblessness in Britain has risen above 2 million for the first time since 1997.

 

House prices were outrageous in the United Kingdom - but they're becoming less outrageous by the day. One expert says he expects them to fall another 55% before hitting bottom.

[romans holiday]

I'm was very disappointed yesterday. I read this news (QE). Then there was a ring on the bell. Great I thought, that'll be Ben Bernanke with a large box of currency for me. That'll go nicely with the free flights to Oz. This credit crunch is working out really well.

Oh the disappointment when it was our next door neighbour....with no currency.

Still haven't got the free flights either. Waiting for those pesky spending conditions to be removed.

 

No helicopter drops yet.

 

 

[tinecu]

 

yep paper currencies are going to crash over the next few years - those who own gold will protect their purchasing power but its not going to be fun

 

panic of 08 and collapse of 09

 

Those poor English. If any people were dumber at finance than Americans, it was the English. While debt in the United States rose to an unprecedented 350% of GDP, in England it went to 500% of GDP. And now joblessness in Britain has risen above 2 million for the first time since 1997.

 

Says it all really.

[dietcolaaddict]

 

[Pixel8r]

 

More rockets next week.

 

[FWIW]

April Fools Day....

 

I predict a riot!

[grumpy-old-man]

Hi all,

 

anyone heard of theses guys? I am asking for a friend of mine.

 

http://www.goldinvestments.co.uk/

 

cheers

[HPCSucks]

Hi all,

 

anyone heard of theses guys? I am asking for a friend of mine.

 

http://www.goldinvestments.co.uk/

 

cheers

Yes. No problems with them at all.

[Steve Netwriter]

No helicopter drops yet.

 

Just looked out. No signs yet.......

 

 

[notanewmember]

makes one wonder if we have learned anything over the last two years, doesn't it?

Learned what?

 

I'll offer 4 cows, 2 arces of land, a house for one gold ETF please!!!!

[electroweak]

Learned what?

 

I'll offer 4 cows, 2 arces of land, a house for one gold ETF please!!!!

That's probably all there is in the gold etf: a cow called "gold"ie and some land they want to make into a mine.

 

I was sort of shocked at the casual nature of the use of margin to buy coins.

[Fortune]

As if you folks don't know already, this is going to get real ugly. I sincerely hope most of you have some land out in the country by now. Don't think for one second that this coming shit-storm won't affect you. It will. And PMs won't be enough. Me? Land is already there (just a couple of acres) and in the process of building a small house and drilling a water well. I'm going to get me some dobermans as well. I sincerely wish all you fellow gold bugs good luck. We are all going to need it. Peace be with you all.

[lupercal]

As if you folks don't know already, this is going to get real ugly. I sincerely hope most of you have some land out in the country by now. Don't think for one second that this coming shit-storm won't affect you. It will. And PMs won't be enough. Me? Land is already there (just a couple of acres) and in the process of building a small house and drilling a water well. I'm going to get me some dobermans as well. I sincerely wish all you fellow gold bugs good luck. We are all going to need it. Peace be with you all.

 

Nearly there. Can I also suggest buying pigs. Pink Gold.

[Mr Pipples]

As if you folks don't know already, this is going to get real ugly. I sincerely hope most of you have some land out in the country by now. Don't think for one second that this coming shit-storm won't affect you. It will. And PMs won't be enough. Me? Land is already there (just a couple of acres) and in the process of building a small house and drilling a water well. I'm going to get me some dobermans as well. I sincerely wish all you fellow gold bugs good luck. We are all going to need it. Peace be with you all.

 

Is say only a very small percentage of people (in the west) are able/in a position to make this happen - even if they really want to. Of course, this depends on the country you live in, etc. but, taking the UK as an example, unless you have loads of money/a mobile or movable job/already live in the countryside where there's a slim chance a couple of acres of agricultural land will come up for sale (at a fair price) less then a few miles away - you'd have to be extremely lucky to do this (and end up with a fair size plot of reasonable land). I guess the situation in S. Korea is quite different though...

[ziknik]

As if you folks don't know already, this is going to get real ugly. I sincerely hope most of you have some land out in the country by now. Don't think for one second that this coming shit-storm won't affect you. It will. And PMs won't be enough. Me? Land is already there (just a couple of acres) and in the process of building a small house and drilling a water well. I'm going to get me some dobermans as well. I sincerely wish all you fellow gold bugs good luck. We are all going to need it. Peace be with you all.

 

Extra mouths to feed

 

Have you considered getting some rabbits?