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Sorry, should have been more precise. Fiat as in 'through faith'. Gold is not de jure money anywhere and it's use as a money-like store of value is based on culture, history and mainly other non-intrinsic features.

Gold was and is valued primarily for its rarity and desirable physical properties such as fungibility, stability etc.

 

It acquired its history as a store of value because of those properties.

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Gold is going much, much higher than those predictions.

 

$1650 first. Then onwards to $2000+. $5000 will follow in the years to come. And then on to higher levels still.

 

Can you please reveal us your technique for this prediction?

 

How do you arrive at $5000 and higher levels still?

 

Also, would you say the same amount of rise in EUR or CHF or JPY or CNY?

 

Or just USD?

 

Inquiring minds want to know.

 

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See jsmineset.com.

 

As you may know, Jim Sinclair's prediction is based on the numbers from Alf Field -

We are presently in Major Up Move Three.

 

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)

 

Jim wrote the following about these numbers -

 

I recently completed the same mathematics that helped me so much in 1980 to determine the price that would be required to balance the international balance sheet of the US.

 

Balancing the international balance sheet is gold’s mission in times of crisis.

 

I recently did the math again and was sadly shocked to see what the price of gold would have to be to balance the international balance sheet of the USA today. That price for gold is more than twice Alf’s projected maximum gold price.

 

My compliments go to Alf for his work that has been spot on for a good deal of time.

 

All our tools are a crystal ball of sorts; a kind not having 100% input from the adopted discipline. Certainly Alf’s involves more than simple technical analysis talent. It is quite rare for two Gann guys ever to see the same thing in an axiom of TA. What Alf speaks about lately makes me feel God is long gold even if Oliver is short. You might recall it was Alf who correctly called the Uranium market.

 

None of us get it right all the time. For the speculator, you are only as good as your last call.

 

I think Alf has it nailed. Bravo to him.

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Can you please reveal us your technique for this prediction?

 

How do you arrive at $5000 and higher levels still?

 

Also, would you say the same amount of rise in EUR or CHF or JPY or CNY?

 

Or just USD?

 

Inquiring minds want to know.

 

 

I stand in awe of you. Here we are at a time when anyone of average intelligence can see that the un-payable burden of Western debt is teetering like a plate on a stick and you willfully choose to ignore it - or more accurately, demand proof! I can imagine Halconovitch' in Russia in the late eighties - telling anyone that would listen, that the Rouble was sound because it had already lasted 50 years. I have met many elderly Russians living in poverty because they did not understand that their Rouble savings would be rendered almost worthless in a matter of months. I would not wish it on anyone and that is why I feel I have to warn people here what could happen to them if they don't wake up.

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... I have met many elderly Russians living in poverty because they did not understand that their Rouble savings would be rendered almost worthless in a matter of months. I would not wish it on anyone and that is why I feel I have to warn people here what could happen to them if they don't wake up.

On the kitco forum there was an Icelander who put his savings into gold (at GM) before the Icelandic financial crisis.

 

Friends and collegues thought he was a bit of a nutter doing that. Maybe they changed their minds later.

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Gold was and is valued primarily for its rarity and desirable physical properties such as fungibility, stability etc.

It acquired its history as a store of value because of those properties.

 

I recommend you read Gold Standard in Theory and History (Eichengreen, 2005) to find out why gold had more than just 'desirable' properties and why gold-standard was given up on. The actual historical explanation is a bit more straightforward and believable then the global elite-banker conspiracy pushed by most gold-bugs.

 

"Unfortunately, this vision of the gold standard, like the unicorn in James Thurber’s garden, is a mythical

beast. Far from the normal state of affairs prior to the twentieth century, the gold standard prevailed on a

global scale for barely a third of a century. The experience of the industrial economies was more

satisfactory than that of countries specializing in the production of primary products; international creditors

had happier experiences than debtors. The gold standard did not prevent the international transmission of

financial crises, nor did it preclude suspensions of convertibility."

 

A reader turning for the first time to the literature on Bretton Woods might be forgiven for thinking that he

had stumbled upon a forgotten sequel to Paradise Lost. Paradise, in the form of pegged but adjustable

exchange rates, prevailed from the 1950s until 1971. Its pleasures included price stability, full employment,

and effortless balance of payments adjustment. Paradise was lost in 1971-3, the system having been

destroyed by reckless policies, principally in the United States. The world was banished to a purgatory of

fluctuating exchange rates, rapid inflation, and high unemployment.

 

Or so the myth would have it. In fact, conditions were never so heavenly under Bretton Woods. And its

principal achievement, the maintenance of stable exchange rates, was a product not of the agreement

finalized at the Bretton Woods Conference alone but of two exceptional features of the postwar world.

One was the limited international mobility of capital. Governments applied capital controls during World

War II and retained them subsequently. Convertibility for current account transactions was only resumed in

Europe on 31 December 1958. The restoration of convertibility for capital-account transactions had to wait

until years later.

 

The effectiveness of controls was buttressed by restrictions on international banking legislated in

response to the Great Depression and by the fact that international bond markets had not yet recovered from

the sovereign defaults of the 1930s. In this environment, controls could work. Together with quiescent

markets, they limited international financial flows and provided policymakers room for maneuver. "

- Barry Eichengreen

 

This is also why I don't share Romans holiday's notion that we would go back to a gold backed currency. It doesn't work, except in gold-pushers mythologies. It has serious structural issues of it's own (relating to base growth vs. real economy growth for example) and its policy flexibility is far worse than that of paper currencies.

 

And if one is so inclined, one can also look at the golden period of 1913-1939 in Gold Standard Illusion by Kenneth Mouré

 

"Belief in a mythical gold standard promoted policy choices (and arguments to jus-

tify them) that encouraged contraction in the midst of depression. The severity of the

Depression in the 1930s was in good part the price paid for this gold standard illusion.

 

The phrase gold standard illusion captures essential aspects of the influence of the gold

standard in two important regards. First, belief in the gold standard anticipated results that

did not materialize: rather than economic stability and prosperity, policies determined

according to gold standard belief brought instability and the worst depression in history.

Faith in the gold standard substituted for sound analysis, and decisions were based on false

estimations of their outcomes.

 

the rhetoric of the gold standard, with its claims for automatic adjustment and a natural regula-

tion of prices and external balance, is argued to have contributed significantly to

misperceptions of the economic problems of the inter-war period, producing mis-pre-

scriptions in order to resolve them. In this sense, gold standard rhetoric misled inter-war

policy, with the Great Depression of the 1930s part of the price paid for the gold standard

illusion."

- Kenneth Mouré

 

Or let Peter L. Bernstein continue on the folly of gold beliefs throughout the written history in his book The Power of Gold - The History of an Obsession.

 

"[...] from the gorgeous artworks of the Scythians to the

Corichancha of the Incas, from the street markets of Bengal to the financial markets in

the City of London, gold reflects the universal quest for eternal life - the ultimate

certainty and escape from risk.

 

The key to the whole tale is the irony that even gold cannot fulfill that quest. Like

Ruskin's traveler jumping off the boat, people take the symbolism of gold too seriously.

Blinded by its light, they cashier themselves for an illusion.

 

Gold may once again serve as the ultimate hedge, if the

day should come when the dollar or the euro fail in their function as accpetable means of

payment across international borders. Even if gold may appear as a safe haven under such

chaotic condidtions, its return to its historic role as universal money is doubtful.

 

Those who believe that gold is a hedge against the uncertainties of life do not understand

that the pursuit of eternity is not to be satisfied by gold, or by anything else we choose to

replace gold. Gold as an end in itself is meaningless. Hoarding does not create wealth."

- Peter L. Bernstein

 

That's my position, more or less.

 

From now on I try not to care what others think on this anymore.

 

I just understand that the more people believe in the gold mythology pushed by gold-pushing snakeoil salesmen, the better a trading opportunity I have. In fact, potentially one of a lifetime.

 

So if you are a gold-is-money-believer, then please ignore this post and all the scholarly analytical literature on gold standard. I'm sure it's all crap spouted by shoople historians who are in the pocket of the central banks.

 

From now on, I'll stick to discussing gold price moves and everybody who so desires can keep on believing in the gold-tooth fairy :)

 

If this was off-topic, please feel free to move/delete the whole post.

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It looks to me that that the financial crisis is leading to the destabilization of currencies and international trade. I guess you could say I am buying for macro-economic reasons rather than buying gold as a conventional "investment" as such. With the "re-booting" of the macro-economy, it is likely that assets priced in gold will be cheap.

Me too. We won't necessarily have gold in national currencies and we almost certainly won't have all the debt paid off before economies start to grow again, but whilst currencies and share prices fall in value to better represent the size of the economy they represent, gold is the place for the lazy investor to be (TA experts may take other routes). I'm not a bug, I consider myself a gold "opportunist".

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On the kitco forum there was an Icelander who put his savings into gold (at GM) before the Icelandic financial crisis.

 

Friends and collegues thought he was a bit of a nutter doing that. Maybe they changed their minds later.

 

You do understand that he would have achieved the same or a better result by switching his krónur into USD then JPY then CHF, etc.

 

Only value ratios matter. All value is relative, until you have to eat. And then only edible things matter.

 

I'm sure that the people who switched their gold holdings to USD in early 80s and then those USD to houses, cars, stocks and other assets were equally happy campers, when gold plummeted.

 

Let's hope we are all wise to get unstuck on the way down.

 

 

 

 

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That's my position, more or less.

 

From now on I try not to care what others think on this anymore.

 

I just understand that the more people believe in the gold mythology pushed by gold-pushing snakeoil salesmen, the better a trading opportunity I have. In fact, potentially one of a lifetime.

 

So if you are a gold-is-money-believer, then please ignore this post and all the scholarly analytical literature on gold standard. I'm sure it's all crap spouted by shoople historians who are in the pocket of the central banks.

 

From now on, I'll stick to discussing gold price moves and everybody who so desires can keep on believing in the gold-tooth fairy :)

 

If this was off-topic, please feel free to move/delete the whole post.

 

I think you are starting to lose the plot now. Ordinary people blessed with more than average common sense and an open mind will come through what will soon occur, with their wealth intact - and even increase their purchasing power. Foolish academics who apply 'critical thinking' to economics will lose their shirts. It was ever thus.

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I recommend you read Gold Standard in Theory and History (Eichengreen, 2005) to find out why gold had more than just 'desirable' properties and why it was given up on. The actual historical explanation is a bit more straightforward and believable then the global elite-banker conspiracy pushed by most gold-bugs.

Gold was never given up on. Hundreds of millions of people keep it as savings. Central Banks still hold thousands of tons of the stuff.

 

I never mentioned the "gold standard". I never mentioned "global elite-banker conspiracy".

 

Gold is precious primarily because of its rarity and physical properties.

 

 

 

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I recommend you read Gold Standard in Theory and History (Eichengreen, 2005) to find out why gold had more than just 'desirable' properties and why it was given up on. The actual historical explanation is a bit more straightforward and believable then the global elite-banker conspiracy pushed by most gold-bugs.

 

I recommend you read 'Gold Wars' By Fernando Lips. You might learn something. It details, painstakingly, the lengths to which the bankers/governements will go to control gold.

 

You'll have to explain how gold was 'given up on'. Central banks understand the value of the metal. They understand how much of a danger it is to their control. That is why they own it, continue to buy it and, ultimately, will end up having control of the vast majority of ounces - as the sheeple surrender control once more.

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Gold was never given up on.

 

Typo corrected, thanks.

 

Gold is precious primarily because of its rarity and physical properties.

 

Agree.

 

 

 

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I think you are starting to lose the plot now. Ordinary people blessed with more than average common sense and an open mind will come through what will soon occur, with their wealth intact - and even increase their purchasing power. Foolish academics who apply 'critical thinking' to economics will lose their shirts. It was ever thus.

 

 

I just had a glimpse of the future - born again Western 'fiatists' trudging around China and India trying to convert the Heathens away from their gold. Usually given a courteous hearing and, occasionally, a few grams of silver so that they can buy some food :lol:

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DOUBLE POST (from 'my' thread):

...

So if you are a gold-is-money-believer, then please ignore this post and all the scholarly analytical literature on gold standard. I'm sure it's all crap spouted by shoople historians who are in the pocket of the central banks.

 

From now on, I'll stick to discussing gold price moves and everybody who so desires can keep on believing in the gold-tooth fairy :)

...

A great example of an intelligent person making a silly mistake.

 

As someone else said: it's not that it has to be proven that gold is money. Anyone who claims anything else has to prove it (against over 6,000 years of human history). Such an endeavour therefore seems rather in vain to me.

 

Secondly, to say that gold as money doesn't work citing certain historical references is as if one would say that eating healthy doesn't improve health, while not mentioning that the considered group of people are heavy smokers. The point is, even during the "gold standard" times, banks were always running fractional reserve banking. Of course, this doesn't work and it has to collapse periodically. So, the "historical" reference to a gold standard quoted by Halcyon is possibly pretty useless.

 

EDIT: During war times politicians were also always happy to abandon the "gold standard" for a while. Politics and "gold standard" never really like each other. Printing limitless is what politicians really want. :)

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You do understand that he would have achieved the same or a better result by switching his krónur into USD then JPY then CHF, etc.

...

There's a video (I think it is on one of the Iceland Threads) of a woman who moved her money into JPY before the collapse. She'd been phoning her bank every day but nobody answered :unsure:

 

DOUBLE POST (from 'my' thread):

...

Can you change the tittle of this thread and merge all the threads back together?

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More MSM gold

 

http://www.telegraph.co.uk/finance/currenc...our-breath.html

However, unlike other commodities it has relatively few uses other than as an ornament. Copper is used in wiring, iron is used to manufacture steel but gold's main uses are – and always have been – as a store of value and as a way to demonstrate personal wealth. Even if solid gold bathroom taps are not to your taste, they certainly make a point.

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I wish I had the time to participate in this discussion.

There is an obvious divide between "goldbug" and non "goldbug".

 

IMO there are two aspects to this:

 

1. Do the facts support one view or the other, or is there some subjectivity involved?

 

2. I am interested in the reason why people tend to one view or the other.

 

As a "goldbug" I am interested in what I think is an incredibly subtle difference in the way non "goldbugs" think.

It seems to me that the divide means that some view gold as speculation, while others view gold as a haven (and fiat as speculation).

 

As always when there is disagreement, I am interested in the worldview that led each side to that view.

I say this because IMO if there are clear facts to support one of the views, the other view would fall, unless someone's world view enables them to maintain an irrational view.

 

Maybe the most important question is: Has any fiat system ever lasted?

And if not, what happens when they fall?

Or is this time different?

 

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I wish I had the time to participate in this discussion.

There is an obvious divide between "goldbug" and non "goldbug".

I agree, but 'bugs' still like to use trading signals etc. to time buys; which is why i am so disappointed we have split into what seems two communities on two threads. Once again, at the risk of getting repetitive I'd prefer it if we can just have one gold thread, pinned and there for all.

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I got some feeling that GF wanted a thread for keeping long-term charts and other observations without short-term trading stuff. Perhaps like a more expanded version of his GIM thread.

 

That would be a good resource.

 

Apart from that I would prefer if "and Investment" were put into the title of this thread and we could continue the old system where this is the daily gold "chat thread".

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I wish I had the time to participate in this discussion.

There is an obvious divide between "goldbug" and non "goldbug".

 

IMO there are two aspects to this:

 

1. Do the facts support one view or the other, or is there some subjectivity involved?

 

2. I am interested in the reason why people tend to one view or the other.

 

1) All the facts are screaming 'geo-political shift to the East' Can this be measured and quantified? No, and if you try, you will end up mired in data and unable to think clearly - but you do not have to be a Rocket-Scientist to that it is occurring.

 

2) I am not a gold 'bug' - I am not even that enamoured with it and never owned any until a few years ago but I want to preserve my wealth and gold is the only game in town. My observation of anti-gold types is that they tend to be academics - from different disciplines who cannot separate real life from theory. I have some experience of this as my late Father was an academic and I remember having fascinating conversations with him in what could be loosely called 'meta-physics'. He had a first class brain but made series of poor financial decisions which impacted on the entire family.

 

I also believe that arrogance is a factor - that somehow this generation and its theories are better than the past and that 'we won't make the same mistakes as last time'. Greed, corruption and folly are still here in abundance. Place your bets.

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I agree, but 'bugs' still like to use trading signals etc. to time buys; which is why i am so disappointed we have split into what seems two communities on two threads. Once again, at the risk of getting repetitive I'd prefer it if we can just have one gold thread, pinned and there for all.

 

Chris,

I'm not sure how to help you.

Threads on here tend to either prosper or whither depending on there popularity.

I can see both points of view. But it's a matter of freedom to allow people to start whatever thread they want to.

I guess we'll just have to see how things evolve naturally.

 

 

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IFrom now on I try not to care what others think on this anymore.

 

I just understand that the more people believe in the gold mythology pushed by gold-pushing snakeoil salesmen, the better a trading opportunity I have. In fact, potentially one of a lifetime.

 

So if you are a gold-is-money-believer, then please ignore this post and all the scholarly analytical literature on gold standard. I'm sure it's all crap spouted by shoople historians who are in the pocket of the central banks.

 

From now on, I'll stick to discussing gold price moves and everybody who so desires can keep on believing in the gold-tooth fairy :)

 

If this was off-topic, please feel free to move/delete the whole post.

Fair enough. But also consider there can be just as much prejudice against gold as there can be for it... which is why I try to foster a pragmatic approach, as opposed to an ideological one, to both gold and money.

 

I highly recommend Kindleberger's "The World in Depression" which looks at the breakdown of International trade and the gold exchange standard. He is not a gold bug btw... nor an anti gold bug.

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There is an obvious divide between "goldbug" and non "goldbug".

I think the issue is being a little narrowed here.

 

I do not consider myself a gold bug [too emotional] so could be called a non gold-bug. Yet, I think you are getting at something else as I also like gold and invest accordingly. I consider myself a gold bull [a middle way??? :) ].

 

Maybe the term anti gold bug is useful to refer to a prejudice against gold as money. ;)

 

It seems a lot of discussion, whether political, economic or whatever, is reduced to a binary logic and then partisan positions are taken where the twain never meet. I am much more interested in using a logic which can bridge the gap between a thesis and its anti-thesis. I think this kind of logic, though less "certain", reflects more accurately the real world we live in. Binary logic [rationalist] is ideological and more often than not completely divorced from reality.

 

A gold bull can happily think of gold as once again functioning as money [perhaps even formally with the re-institution of an exchange gold standard] without subscribing to some of the less well-thought through ideas of gold bugism.. such as the imminent destruction of the dollar and all fiat.

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Nothing new here, but it is another iteration of Pixel8r's recent chart that put a smile on GF's face and mine I might add. Could we see a 30-35% surge from here?

 

1008_clip_image002.jpg

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