warpig Posted March 24, 2009 Report Share Posted March 24, 2009 What does it matter? Gold will do well in either environment. When I think about how confident I am with my PM holdings, all I have to think about is the bond market and it puts my mind at ease. We are in the middle of a psychological dead cat bounce, even the hairiest bears are turning in to bulls, hmmm isn't there a saying about this....? Personally I couldn't care less about medium term profit, I am after long term financial safety. It is all about deflation at the moment. Most inflationists are ideologically driven. In the real world and for all pragmatic purposes, deflation is in the driver's seat for now. Link to comment Share on other sites More sharing options...
romans holiday Posted March 24, 2009 Report Share Posted March 24, 2009 buy it, and hope it doesn't perform at least to some extent (that must sound a bit crazy!). I am still fairly young and the rest of my life I'd like my earnings to be worth something. Gold is my hedge. I am not in this for a quick profit. EDIT and I still dont have by far enough gold - can one ever? Yep, the way I see it is we are in a period of wealth destruction akin to the thirties. This is deflationary. What is really crazy is that the amount of printing might be just drops in a very leaky bucket. At best zero sum game. Looks likely that currencies are caught up in the deflation this time round as unbacked by anything real. They will depreciate. I see gold as the strongest currency and the strongest symbol of money. I would definitely want a decent proportion of my worth in it... and silver.. and perhaps a couple of other fiat currencies for that matter to hedge against my hedge. Diversity in currencies not diversity in assets. If you manage to preserve your capital, buy assets after they have deflated and the storm is over. Link to comment Share on other sites More sharing options...
lupercal Posted March 24, 2009 Report Share Posted March 24, 2009 Yep, the way I see it is we are in a period of wealth destruction akin to the thirties. This is deflationary. What is really crazy is that the amount of printing might be just drops in a very leaky bucket. At best zero sum game. Looks likely that currencies are caught up in the deflation this time round as unbacked by anything real. They will depreciate. I see gold as the strongest currency and the strongest symbol of money. I would definitely want a decent proportion of my worth in it... and silver.. and perhaps a couple of other fiat currencies for that matter to hedge against my hedge. Diversity in currencies not diversity in assets. If you manage to preserve your capital, buy assets after they have deflated and the storm is over. China has announced a plan to reduce the dollars reserve status. The credit fuelled expansion of the last few years is unwinding. It's Spring people feel good and Governments are throwing everything and the kitchen sink at the problem. Markets never go straight down or up. Link to comment Share on other sites More sharing options...
romans holiday Posted March 24, 2009 Report Share Posted March 24, 2009 What does it matter? Gold will do well in either environment. When I think about how confident I am with my PM holdings, all I have to think about is the bond market and it puts my mind at ease. We are in the middle of a psychological dead cat bounce, even the hairiest bears are turning in to bulls, hmmm isn't there a saying about this....? Personally I couldn't care less about medium term profit, I am after long term financial safety. It matters if you have false expectations. To psychologically weather the vagaries of pog in the future, it would be best to have realistic expectations and a theory which can account for reality... as reflected by investors in the market. A more pragmatic view would also help in predicting the behaviour of that market. Link to comment Share on other sites More sharing options...
FWIW Posted March 24, 2009 Report Share Posted March 24, 2009 Yep, the way I see it is we are in a period of wealth destruction akin to the thirties. This is deflationary. What is really crazy is that the amount of printing might be just drops in a very leaky bucket. At best zero sum game. Looks likely that currencies are caught up in the deflation this time round as unbacked by anything real. They will depreciate. I see gold as the strongest currency and the strongest symbol of money. I would definitely want a decent proportion of my worth in it... and silver.. and perhaps a couple of other fiat currencies for that matter to hedge against my hedge. Diversity in currencies not diversity in assets. If you manage to preserve your capital, buy assets after they have deflated and the storm is over. This is where you and I differ. I beleive that fiat currencies exist because the elite want to be able to control the money supply and to ensure that are always on top. With fiat and the required will, there will always be enough paper to go round. There will also be enough 'elite' helpers that will crush the pog or even the 'price of fish' if they so wish. The issue at the moment is which brand of 'elite' are we going to end up with? The 3rd world 'elites' want to buy into this global theft... Gold is the only way the common man can protect themselves, even that on it's own may not be enough. Link to comment Share on other sites More sharing options...
romans holiday Posted March 24, 2009 Report Share Posted March 24, 2009 China has announced a plan to reduce the dollars reserve status. The credit fuelled expansion of the last few years is unwinding. It's Spring people feel good and Governments are throwing everything and the kitchen sink at the problem. Markets never go straight down or up. My view has been the same for a year or so.... that the gold market will be incredibly volatile within a range for quite some time until the dollar finally rolls over. The dollar could well strengthen before it finally rolls over. This may take a year or two. The crux of the matter is not the fundamentals but the timing. Link to comment Share on other sites More sharing options...
warpig Posted March 24, 2009 Report Share Posted March 24, 2009 Maybe this is where we differ, I have no emotional response to short term trends. I don't mind it going down because fundamentally I know it's going up later. The UK is facing sovereign default, there are only 2 possible outcomes to this scenario, both favour holding gold and silver. It matters if you have false expectations. To psychologically weather the vagaries of pog in the future, it would be best to have realistic expectations and a theory which can account for reality as reflected by investors in the market. A more pragmatic view would also help in predicting the behaviour of that market. Link to comment Share on other sites More sharing options...
romans holiday Posted March 24, 2009 Report Share Posted March 24, 2009 Maybe this is where we differ, I have no emotional response to short term trends. I don't mind it going down because fundamentally I know it's going up later. The UK is facing sovereign default, there are only 2 possible outcomes to this scenario, both favour holding gold and silver. This is exactly my position. I am also a long term investor. My point is that in so far as we try to justify our belief [that gold will ultimately perform for fundamental reasons] with theory, the standard [hyper] inflationary story, which focuses solely on money supply, is frankly hopeless. It has not predicted pog nor been able to explain it. Any theory or justification for holding gold should be more comprehensive than just being solely fixated on money supply. Some have a gut feeling and are sceptical of all reasons which is just fine... but most of us do employ theory to bolster our investment decisions and if that theory is inadequate it could potentially lead to disillusionment. A theory which can explain massive volatility and predict ultimate performance is required for many to buy and hold gold for the long run. Link to comment Share on other sites More sharing options...
aardvark Posted March 24, 2009 Report Share Posted March 24, 2009 This is exactly my position. I am also a long term investor. My point is that in so far as we try to justify our belief [that gold will ultimately perform for fundamental reasons] with theory, the standard [hyper] inflationary story, which focuses solely on money supply, is frankly hopeless. It has not predicted pog nor been able to explain it. Any theory or justification for holding gold should be more comprehensive than just being solely fixated on money supply. Some have a gut feeling and are sceptical of all reasons which is just fine... but most of us do employ theory to bolster our investment decisions and if that theory is inadequate it will lead to disillusionment. A theory which can explain massive volatility and predict ultimate performance is required for many to buy and hold gold for the long run. not just money supply. look to the actions of the BoE and of the politicians - look at the prime minister of this country - do you think these people can get us out of this mess? or that they have any idea what they are doing? buying gold in the UK is a no-brainer for me. Link to comment Share on other sites More sharing options...
romans holiday Posted March 24, 2009 Report Share Posted March 24, 2009 not just money supply. look to the actions of the BoE and of the politicians - look at the prime minister of this country - do you think these people can get us out of this mess? or that they have any idea what they are doing? buying gold in the UK is a no-brainer for me. No, they can't. I agree, buy gold. But consider you are not buying it as an inflation hedge, but as a currency to preserve your capital. Link to comment Share on other sites More sharing options...
warpig Posted March 24, 2009 Report Share Posted March 24, 2009 I agree with most of what you say, but I think there is a risk associated with trading at the moment which I am not comfortable with. The possibility of a systemic incident still looms. The money supply in isolation is probably manageable, but this isn't a closed system and I fear we will reach a point of critical mass in the context of contributory elements in the near term. This after all has not been a linear crisis, so you have to ask yourself where on the curve are we... My instincts have been correct so far, I think others will instinctively make the right choice when the time comes. This is exactly my position. I am also a long term investor. My point is that in so far as we try to justify our belief [that gold will ultimately perform for fundamental reasons] with theory, the standard [hyper] inflationary story, which focuses solely on money supply, is frankly hopeless. It has not predicted pog nor been able to explain it. Any theory or justification for holding gold should be more comprehensive than just being solely fixated on money supply. Some have a gut feeling and are sceptical of all reasons which is just fine... but most of us do employ theory to bolster our investment decisions and if that theory is inadequate it will lead to disillusionment. A theory which can explain massive volatility and predict ultimate performance is required for many to buy and hold gold for the long run. Link to comment Share on other sites More sharing options...
romans holiday Posted March 24, 2009 Report Share Posted March 24, 2009 I agree with most of what you say, but I think there is a risk associated with trading at the moment which I am not comfortable with. The possibility of a systemic incident still looms. The money supply in isolation is probably manageable, but this isn't a closed system and I fear we will reach a point of critical mass in the context of contributory elements in the near term. This after all has not been a linear crisis, so you have to ask yourself where on the curve are we... My instincts have been correct so far, I think others will instinctively make the right choice when the time comes. I do not see it as an either/or situation. I am invested in metals. I also have a "trading" account. I interrogate the word because I wonder if it is really trading. Not wanting to be in one single currency [gold] it makes sense to be in a few currencies. One of those other currencies is US dollars. If pog tanks, I have another currency in order to buy it. Once gold again peaks, it makes perfect sense to diversify some of it into another currency. The practicality is that fully buying into the pending hyperinflationary scenario may limit a lucrative option. As for instincts, I agree they are important. They should always trump ideology anyway. Link to comment Share on other sites More sharing options...
warpig Posted March 24, 2009 Report Share Posted March 24, 2009 Good luck with your trading. I do not see it as an either/or situation. I am invested in metals. I also have a "trading" account. I interrogate the word because I wonder if it is really trading. Not wanting to be in one single currency [gold] it makes sense to be in a few currencies. One of those other currencies is US dollars. If pog tanks, I have another currency in order to buy it. Once gold again peaks, it makes perfect sense to diversify some of it into another currency. The practicality is that fully buying into the pending hyperinflationary scenario may limit a lucrative option. Link to comment Share on other sites More sharing options...
romans holiday Posted March 24, 2009 Report Share Posted March 24, 2009 Good luck with your trading. Did you even consider the post?? Why would I put all my money into gold now if most probably I could buy more of it at a later date. Also, would it not be prudent to keep some money in another currency as a hedge? You know, no certainties in life and all that. Edit: on second thoughts, perhaps you were being sincere. If so, thanks. Link to comment Share on other sites More sharing options...
G0ldfinger Posted March 24, 2009 Author Report Share Posted March 24, 2009 We are still within the current uptrend, why are all you longtime goldbugs so bearish? The PPT and Goldman Sacs must have completed their mission in my view. ... Do you mean the traders? Link to comment Share on other sites More sharing options...
drbubb Posted March 24, 2009 Report Share Posted March 24, 2009 Larry Pesavento: "Gold's in trouble." "If it falls below $920, it could fall much further." "Too many people are loaded up with gold, expecting the end of the world." "The 'Buy level' could be (as lows as) $700." A bit of a "hit" on the opening. Gold down $15 to $923, and GLD is near $90.50 Link to comment Share on other sites More sharing options...
romans holiday Posted March 24, 2009 Report Share Posted March 24, 2009 A contrarian's view might notice that commodities are stirring now. Investors are starting to move into them. Considering pog was driven up in large part by fear, it might be a little vulnerable to a temporary return of investor confidence. So where might pog go? Investors might look at the gold/oil ratio which historically averages around 14:1 I believe. With oil at around 55 that would put pog at 770. Link to comment Share on other sites More sharing options...
G0ldfinger Posted March 24, 2009 Author Report Share Posted March 24, 2009 ...The crux of the matter is not the fundamentals but the timing. I think timing doesn't matter much yet, because it is early days. Link to comment Share on other sites More sharing options...
warpig Posted March 24, 2009 Report Share Posted March 24, 2009 You're right, as long as you can continue to buy gold then your strategy is correct, I fear that at some point gold wont be easy to find so I'm keeping hold of mine. I was being sincere, I wish you luck. Did you even consider the post?? Why would I put all my money into gold now if most probably I could buy more of it at a later date. Also, would it not be prudent to keep some money in another currency as a hedge? You know, no certainties in life and all that. Edit: on second thoughts, perhaps you were being sincere. If so, thanks. Link to comment Share on other sites More sharing options...
G0ldfinger Posted March 24, 2009 Author Report Share Posted March 24, 2009 Merv the swerve's letter here: http://www.bankofengland.co.uk/monetarypol...etter090324.pdf ... 3.2% - no f***ing deflation, eh? :lol: Link to comment Share on other sites More sharing options...
lowrentyieldmakessense(honest!) Posted March 24, 2009 Report Share Posted March 24, 2009 3.2% - no f***ing deflation, eh? :lol: you just dont understand what deflation is only joking Link to comment Share on other sites More sharing options...
FWIW Posted March 24, 2009 Report Share Posted March 24, 2009 3.2% - no f***ing deflation, eh? :lol: i'm glad you read it - some deflationista's have totally ignored that post! and some more here: http://ftalphaville.ft.com/blog/2009/03/24...n-avoided-phew/ Link to comment Share on other sites More sharing options...
romans holiday Posted March 24, 2009 Report Share Posted March 24, 2009 I think timing doesn't matter much yet, because it is early days. That is kind of my point....that it is early days. But because of this timing is important. Most here are agreed on the fundamentals for gold so it goes without saying that gold will perform. Of more importance is the question of when it will perform. If it fails to perform in these early days all the better for us as we accumulate it. Most agree on this also. Where people do not agree is on the imminent hyperinflationary destruction story.... which I would add panics people into buying as much as they can now, leaving no powder for later. Link to comment Share on other sites More sharing options...
romans holiday Posted March 24, 2009 Report Share Posted March 24, 2009 i'm glad you read it - some deflationista's have totally ignored that post! and some more here: http://ftalphaville.ft.com/blog/2009/03/24...n-avoided-phew/ most inflationists are always banging on about ignoring prices and looking solely at money supply.... until it suits them to do otherwise. fwiw, shop inflation just reflects a depreciated currency. Link to comment Share on other sites More sharing options...
electroweak Posted March 24, 2009 Report Share Posted March 24, 2009 A bit of a "hit" on the opening. Gold down $15 to $923, and GLD is near $90.50 Bubb, I think the 'answer' (if there is one!) to this action is quite simple. If you accept that the authorities are in any way involved in POG manipulation, then you can bet your bottom dollar they'd be manipulating the hell out of the dollar and POG right now. What seems to be happening is that the dollar is diving vs EUR, GBP, but gold is not performing. Now, why is that? Well, it could be the US wants a bit of that competitive devaluation action vs EUR etc., but also want to keep a lid on POG. Could all be very simple.. All I know is the stakes are very high right now and the US don't want the system to fall apart, so I think they will have stepped up their efforts. Link to comment Share on other sites More sharing options...
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