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A nice analysis. Personally I think that hyperinflation is the only way for the US because of the exact consequences of a default Lynch describes

 

http://www.glgroup.com/News/Dollar-destine...blic-42857.html

 

 

I don't disagree with this analysis but it worries me a little. Does a nation that has near greater military spending than the rest of the world combined really just roll over and fade into the background?

 

 

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I don't disagree with this analysis but it worries me a little. Does a nation that has near greater military spending than the rest of the world combined really just roll over and fade into the background?

Of course not. They default by inflation, but at the same time there will be confiscation (e.g. of European national gold treasures stored in the US). It's going to be interesting indeed.

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Could this really be possible ? : $650 Au before $1007 Au (so close and yet so far)

Possible but highly unlikely. Gold rebounded quickly after the crash last year and has maintained these levels. A dip is of course possible but I'm with RH and think the floor is now in at around 900USD. Those like me holding sterling have probably already seen the low at 562 GBP. I very much doubt it will go below that now given the dreadful state of the UK.

 

My strategy of buying each and every month regardless of price over the summer has done well so far. I didn't have a big enough position to feel secure so didn't want to wait for the big crash in case it didn't materialise. I would advise those in sterling that dont have decent position in gold to average in asap.

 

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The other side:

 

Green Day ''21st Century Breakdown'' (CD VERSION) - Lyrics

http://www.youtube.com/watch?v=7PcyQe3gmuw

 

Born into Nixon, I was raised in Hell.

A welfare child where the teamsters dwelled.

The last one born and the first one to run.

My town was blind from Refinery sun.

 

My generation is zero.

I never made it as a working class hero.

 

21st century breakdown.

I once was lost but never was found.

I think I'm losing what's left of my mind.

To the 20th century deadline.

 

I was made of poison and blood.

Condemnation is what I understood.

Videogames to the Tower's fall.

Homeland Security could kill us all.

 

My generation is zero.

I never made it as a working class hero.

 

21st century breakdown.

I once was lost but never was found.

I think I'm losing what's left of my mind.

To the 20th century deadline.

 

We are the cries of the Class of 13.

Born in the Era of Humility.

We are the desperate in the decline.

Raised by the bastards of 1969.

 

My name is no one.

The long lost son.

Born of the 4th of July.

 

Raised in an era of heroes and cons.

That left me for dead or alive.

 

I am a nation.

A worker of pride.

My debt to the Status Quo.

 

The scars on my hands.

And the means to an end.

Is all that I have to show.

 

I swallowed my pride.

And I choked on my faith.

I've given my heart and my soul.

I've broken my fingers.

And lied through my teeth.

The Pillar of damage control.

 

I've been to the edge.

And I've thrown the bouquet.

Of flowers left over the grave.

 

I sat in the waiting room.

Wasting my time.

And waiting for judgement day.

 

I praise Liberty.

The "Freedom to obey".

Is the song that strangles me.

Well don't cross the line.

 

Oh dream, America dream.

I can't even sleep.

From the lights early dawn.

Oh scream, America scream.

Believe what you see.

From heroes and cons?

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Gold Daily Technical Outlook - http://www.oilngold.com/ong-focus/technica...k-200909028542/

 

Intraday bias in Gold remains neutral for the moment. We'd expect some more consolidation between 931.3 and 974.3 and will stay neutral as long as Gold stays in this range. Though, a break of 931.3 will indicate that another fall is indeed underway for 904.8 support.

 

In the bigger picture, price actions in gold remains choppily bounded in converging range between 865 and 1007.7. While there are some possible developments inside such range, there is no change in the preferred view that it's merely consolidation to larger rise from 681, and should be near to completion. On the downside, in case of another fall, strong support should be seen at 904.8 support level and the case of deep fall to 865 is not likely. On the upside, break of 974.3/992.1 resistance zone will be the first alert that rise from 681 is resuming and will turn focus to 1007.7 key resistance level for confirmation.

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What about a break out in the upper direction, gold is currently 975.8.

 

On the upside, break of 974.3/992.1 resistance zone will be the first alert that rise from 681 is resuming and will turn focus to 1007.7 key resistance level for confirmation.

 

Follow the link for some graphs.

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Tung Chung and Tai Kok Tsui (HONG KONG) - Both Good for traders

 

So which is better, Kowloon or Lantau?

 

Lantau has alot going for it, but I like living in Kowloon too.

 

We still own the larger 3BR flat in Lantau, it is rented out now. But we have been selling some of the others with the objective of reducing total debt to zero. Once we sell another 1-2 flats we should get there.

 

The main advantage of the Kowloon location is the 30-40 minutes saved each time we travel to HK Island. Actually, even though Kowloon is called "the dark side" by some who live on HK Island, it is actually easier to get to Central from here than most places people live on HK side. Sure, there's less to do here within walking distance, but with the money one saves by living here, the commuting cost by MTR and even by taxicab is insignificant. As more expats come to realise that, I think this area will become more and more popular. As it is, I see more non-Chinese faces here all the time. The next good thing would be some nightlife, and a some good Western restaurants in Tai Kok Tsui. And maybe some more schools, for those who have kids of that age.

 

1c7b4dfd0.jpg

 

Some day, I will get round to taking some photos of the facilities in this building (Long Beach). They are really superb. The clubhouse was voted one of the Top 5 in all of Hong Kong, and indeed that is one important reason that I live here. Another is that rents fell by the time this flat was ready for move-in, and I did not want to "give it away" cheaply. when it offered so many advantages. So I ahd to convince my partner to downsize seriously from 1200 sf to 750 sf, so that we could squeeze in here. The great clubhouse facilities mad that downsizing much less painful. We both like it now, and she would like us to buy a larger flat here someday.

 

abitnh1.png

(Photo taken from our high floor flat in Tung Chung)

 

Caribbean Coast has a nice clubhouse and environment too, and some good shopping at City Gate. For those who flight out of the airport often, and do not need to be in Central everyday, CC provides unbeatable value-for-money. You can still rent a 1,200sf 3BR flat there for about HK$13,000 (that's about Pds 1,000 per month.) I think that is streets better value than you can get in London, and it comes with far lower taxes. Maybe one day the Day Traders will discover it, and they will be moving there from all over the world.

 

For those who want to live here permanently, there's a Investor's Scheme, where if you invest a minimum of HK$6.8 Million in property or HK financial assets, you can gain the right of permanent abode. I plan to apply for this soon, since as it is, I must leave HK within 90 days, to restart the clock. And I do not have the right to work here, and "take a job away from a HK citizen."

 

For Gold traders, here's a little item that appeared in today's paper:

Precious metal depository opens

 

200809040434371664.jpg

 

The precious metal depository at Hong Kong International Airport opened today and was appointed by the Mercantile Exchange as a gold storage and physical settlement venue for its members and market participants.

 

Unveiled by Financial Secretary John Tsang at a ceremony today, the 340-square-metre depository will enhance Hong Kong's position as a trading and logistics hub for precious metals by providing secure storage and physical settlement services to central banks, commodity exchanges, bullion banks, precious metal refineries and issuers of exchange traded funds.

 

Mr Tsang said: "The depository will help tap into opportunities from the growing demand for gold and other commodities in the region." He added this ties in with the Government's policy to enhance Hong Kong's position as an international financial and logistics centre.

 

/more: http://www.news.gov.hk/en/category/busines...e8714991e12.htm

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For Gold traders, here's a little item that appeared in today's paper:

Precious metal depository opens

 

The precious metal depository at Hong Kong International Airport opened today and was appointed by the Mercantile Exchange as a gold storage and physical settlement venue for its members and market participants.

 

Singapore, Bangkok may be new gold trade centres - http://economictimes.indiatimes.com/Singap...how/4949614.cms

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Gold panic on Zerohedge

 

I don't follow gold much, not being a goldbug and finding a lot of the gold commentary at the fringe of financial sensibility. And the ads for buying gold on talk radio are almost as annoying as the Technorati 'teeth' ads you see on a lot of low-traffic web/blog sites.

 

Gold%20panic.gif

 

Sure, a return to a gold-back currency would right a lot of what is wrong with the economic ship of state, but it is not in the cards right now, despite a push by China and the BRIC nations for it, and the rumors of a November deadline looming for China to continue to buy Treasuries. (If I were Bernanke, I would call their bluff on that.)

 

But sometimes gold as a trade gets interesting, and we may be at such a moment. Yves sent me the attached chart with a few comments. His fundamental view is gold should drop due to deflation. If you doubt deflation is with us, check out the second chart in this recent post.

 

Yves' chart suggests a wave 3 UP is upon us, gold having run up a bit already today. Similarly, the Prechter view is a serious drop in gold as deflation picks up, but their wave count also suggest an UP wave right now. The STU on Monday showed a chart of an ABC correction in gold with an alt count of ending a triangle B wave, and now starting a sharp spike up in wave C. A break of $972 confirms that gold will run fast towards $1050-1100/oz. We got to $955 spot today, but over $978 in Dec gold futures. Neely has had his aggressive traders in gold, and is now lightening up a bit, but also expects the run to continue in a gold panic, a "feeding frenzy" as the goldbugs rush in to avoid missing the big move.

 

(Note: in markets, there is not fear and greed, only fear; greed is fear of falling behind. A buying panic is a moment of fear.)

 

Now, normally the USD and Gold are inversely related, and the USD has been in a bottoming process rather than a fall, with an upwards bias; yet gold is spiking. Question is where is it coming from? Sentiment for gold remains essentially neutral.

 

Let me speculate that it is coming out of Asia. The China Bubble has burst and the SSEE is down around 25% in a month, with apparently more to go (at least below 2000 if not down to 1000, where the parabolic rise began). The Chinese government has been buying gold for the past six months (at least), and I suspect the middle class in China is rushing in for a safe haven against the equities collapse and likely real estate crash to follow. The recent rise in Copper may also have the same roots, of China rolling its long-term Treasuries into shorter terms, and then stockpiling commodities, including gold.

 

Whatever the cause, the wave structure is predicting a gold buying panic that will drive gold over $1000. Watch and see if it is correctly gauging the psychology of a buying panic.

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Possible but highly unlikely. Gold rebounded quickly after the crash last year and has maintained these levels. A dip is of course possible but I'm with RH and think the floor is now in at around 900USD. Those like me holding sterling have probably already seen the low at 562 GBP. I very much doubt it will go below that now given the dreadful state of the UK.

 

My strategy of buying each and every month regardless of price over the summer has done well so far. I didn't have a big enough position to feel secure so didn't want to wait for the big crash in case it didn't materialise. I would advise those in sterling that dont have decent position in gold to average in asap.

Yes, good advice. If I didn't already have 50% of my liquid worth in gold/silver, I wouldn't be trying to find a lower buying point with the other 50%. This also acts as a hedge against such a large position in metal. If the price of gold just keeps on climbing not much harm done. I doubt it will keep climbing here though and at some point draw back. Silver should draw back more and present a good buying op.

 

Gold could go through 1000 and dip back to 950. Hard to imagine gold could go below 900 now.

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I'm going to remember you said that ;)

I guess stranger things have happened, but I have been saying for quite a while now - since we first saw QE - that QE had effectively put a floor under gold at 900 by "monetizing" it. Gold is the go to currency of choice now and I think the only thing that could set it back a little would be a full-on deflation scare in the market where absolutely everything goes down. Even then I can't see gold going below 900... before recovering. :rolleyes:

 

Keeping some powder dry in Yen in order to buy silver should the big one occur.

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Gold could go through 1000 and dip back to 950. Hard to imagine gold could go below 900 now.

I think this next time we go through $1000 will be the last time the price is below it. Below $1000 will look very cheap in a year from now.

 

As I have been saying for a while, I think when this inverse head and shoulders completes, we will be on our way to between $1300 & $1400. I expect when we get there we will get a pullback, but not below $1000, maybe to $1100. I would imagine this pull back will start around April next year.

 

The graph Steve posted recently explains things best, I think. Which showed we should be on for a 47% rise now from £950 = $1400.

 

All the reasons people bought gold for are still there, we just need to stay strong and stay the course.

 

GoldUS_090727pred.gif

 

 

 

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I think this next time we go through $1000 will be the last time the price is below it. Below $1000 will look very cheap in a year from now.

...

I agree 100%. Everytime gold will only go near $1,000, people will fall into a buying frenzy. I mean, I will, that's for sure. The USD is dead in the water - and everyone knows it.

 

http://www.spiegel.de/international/german...41758-2,00.html

By the time German Foreign Minister Walter Rathenau was assassinated by right-wing extremists on June 22, 1922, all hope of a return to economic stability had been lost. And yet the exchange rate didn't go into freefall until the early summer of the following year. The mark had now forfeited all three of the functions that characterized a currency: It served as neither a mathematical unit nor a form of payment -- let alone as a tool for preserving value. "The mark was already dead in the water in October 1922," observed historian Helmut Kerstingjohänner.

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Highlighting is from me.

 

Hong Kong panics first.

 

The jig is up.

 

http://www.marketwatch.com/story/hong-kong...ndon-2009-09-03

Sep 3, 2009, 6:22 a.m. EST

Hong Kong recalls gold reserves, touts high-security vault

In a challenge to London, Asian states invited to store bullion closer to home

 

 

HONG KONG (MarketWatch) -- Hong Kong is pulling all its physical gold holdings from depositories in London, transferring them to a high-security depository newly built at the city's airport, in a move that won praise from local traders Thursday.

 

The facility, industry professionals said, would support Hong Kong's emergence as a Swiss-style trading hub for bullion and would lessen London's status as a key settlement-and-storage center.

 

When the German/Swiss/Italian will try to do the same with their gold in the US, they will get a nice paper promise in return. :lol:

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http://www.mineweb.com/mineweb/view/minewe...2&sn=Detail

 

 

If the chinese are encouring their people to invest I am sure the goverment is buying more .

 

Unfortuately I sold out 2 weeks ago thinking a stock market correction would cause a $ rally and a gold fall - Perhaps I am still right ?

 

Think this is worth quoting in full... To me, with silver being historically (I think) used as money more so than gold in China, this makes me feel more confident towards it (silver). Hmmm...

 

China pushes silver and gold investment to the masses

A report suggests that the Chinese government is pushing the general public into buying gold and silver bullion, which could have a dramatic effect on the markets.

 

Author: Lawrence Williams

Posted: Thursday , 03 Sep 2009

LONDON -

 

We are indebted again to Paul Mylchreest's Thunder Road Report for news that will bring big smiles to gold and silver investors everywhere. Apparently China is pushing the idea of buying gold and silver for investment purposes to the general population in the way that Western television sells soap powder. If 1.3 billion Chinese citizens start buying gold and silver, even in tiny quantities, imagine what that will do to the market!

 

The report notes that China's Central Television, the main state-owned television company, has run a news programme letting the public know how easy it is to buy precious metals as an investment. On silver investment the announcer is quoted as saying " China has introduced its first ever investment opportunity for silver bullion. The bars are available in 500g, 1kg, 2kg and 5kg with a purity of 99.9%. Figures show that gold was fifty times more expensive than silver in 2007, but now that figure has reached over seventy times. Analysts say that silver has been undervalued in recent years. They add that the metal is the right investment for individual investors and could be a good way to cash in."

 

What appears to have happened in China is a total relaxation of strictures on holding precious metals by the individual with the government pushing gold and silver as an investment option, seemingly at every opportunity. This is a far cry from the situation only a few years ago where the distribution of gold and silver was strictly controlled. Now, the Thunder Road Report notes that every bank will sell gold and silver bullion bars in four different sizes to individuals and gold related investments are said to be soaring in popularity.

 

Around a year ago, Leyshon Resources managing director, Paul Atherley, in an investor presentation in London - and no doubt delivered elsewhere in the world too - commented that some employees at the company's gold mining project in northern China would, on pay day, go to the local bank and buy a small gold bar as an investment and wealth protector. To an extent we put this down at the time to mining company hype - but this seems to be exactly the same phenomenon noted by Thunder Road. The Chinese are being converted from being the lowest per capita gold consumers in the world to a nation of small precious metals investors. Now, by next year, Chinese consumption of gold is likely to exceed that of India, which has been for years the world's biggest gold market. And one suspects that the potential for gold purchasing by individuals is only in its earliest stages. As more and more Chinese move into the cities and individual wealth grows, this trend is only likely to accelerate.

 

Paul ends the piece on Chinese gold and silver potential with the following comment: "Simply put, the Chinese government is trying to trigger a national gold craze...and it's working. The Chinese public now has gold trading platforms on steroids.... ...Also, for the first time in history, Chinese investors can even trade gold abroad (in London) with the swipe of a ‘Lucky Gold' card. I can't even get Bank of America to open a foreign currency account."

 

This may be an overstatement of the case from a precious metals bull - or it may not! Certainly if China is indeed pushing the public to buy gold then there may well be a hidden agenda here. It's unlikely they are doing it and will suddenly pull the rug out from under millions of investors. A cynic (or a raging gold bull) would suggest that this will precede a move to switch a good proportion of the country's reserves into gold which would have a huge effect on the global gold price and could prove disastrous for the dollar. Maybe it's not in China's interests to drive the dollar down too much until it has managed to divest itself of the huge dollar overhang (see the article on Chinese Sovereign Wealth Funds we published yesterday - Chinese sovereign wealth fund dumping dollars for strategic investments like gold ). The country may well already be, of course, surreptitiously building its gold reserves without reporting the build-up.

 

If the Chinese are indeed beginning to buy gold and silver as the quoted report suggests then this has to be a strong signal that prices are going to rise, and perhaps rise dramatically, in the relatively near future. We await comment from other China watchers for confirmation of the gold and silver buying spree, but with global gold production at best flat and probably in decline, even a small increase in Chinese buying could have a substantial impact on gold and silver prices.

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China pushes silver and gold investment to the masses

Shoot, that's not good. I wish they would wait a little longer. I really don't have enough yet. If now "our" "elite" wakes up, then even more shoot.

 

Got to be in it to win it.

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I think this next time we go through $1000 will be the last time the price is below it. Below $1000 will look very cheap in a year from now.

There is nothing magic about the 1000 line. Gold could easily breeze through it and fall below it again. Good to see the fanciful figures of 10000... 50000 are being dropped and the more reasonable ones of 1400... 2000 being envisaged.

 

imo these prices will be reached within a couple of years as capital flows from weakened currencies into gold. The price will remain meaningful because the weakened currencies will remain valuable to newly impoverished consumers. This is the inexorable logic of deflation. :)

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Bundesbank confirms Germany's gold is in play

 

While contending that Keiser's assertion was "not correct," the Bundesbank's reply to Kirby acknowledged that at least some German gold reserves indeed are held outside the country, maintained that this is common practice among central banks, and implied that the Bundesbank is trading gold despite its long-held position that it is not selling the gold it has been entitled to sell under the European central bank gold agreement.

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