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Widening trade deficit is one possibility, from -£6.5B to -£7.5B

Watching BBC news and especially the interview with Will Hutton from the work foundation you would think yes we have a problem to deal with but it can be dealt with really quite simply and in a few years everything will be just fine as long as you do what he says. What a load of cobblers!

 

The market analysis if you can call it that is risible on the BBC too. Pound plummeting but no lets not mention that lets focus on the FTSE being up a massive 0.9%.

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Gold has increased more in £ and $ terms than as a basket of currencies (USDX weighted). The kitco gold index since 2000:

 

tempm.png

 

PS Record high in $ coming this NY pm by the looks of it

Here is a related asset comparison (first chart) and currency comparison (second chart; incl. interest).

 

http://gold.approximity.com/since1999/Infl...arison_GBP.html

Inflation-adj_asset_comparison_GBP.png

 

http://gold.approximity.com/since1999/Infl...arison_GBP.html

Inflation-adj_currency_comparison_GBP.png

 

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Abu Dhabi ATM swaps cash for gold

 

http://news.bbc.co.uk/1/hi/world/middle_east/8679876.stm

 

An Abu Dhabi hotel has installed an ATM-style gold dispenser to give customers easy access to the precious metal.

It comes as gold prices have reached record highs in recent days.

Iain Smith reports.

 

Apologies if this has already been posted, I couldn't see it.

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Abu Dhabi ATM swaps cash for gold

 

http://news.bbc.co.uk/1/hi/world/middle_east/8679876.stm

 

 

 

Apologies if this has already been posted, I couldn't see it.

 

I saw the news report this morning - what was interesting was the chat that went with it... They were very dismissive of the 10g bar. I suppose they could just be more used to 1kg bars but the tone of the conversation suggested that they weren't that familiar with bullion. I guess when they say that the 10g bar isn't as nice as a krugerrand is when it is time to sell...

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Hadn't checked 'coininvestdirect' for a while, popped in there today and was shocked to see they are buying around the £850 mark. :blink:

 

Sure feels tempting to part with some of the stash I bought below £400 just a few short years ago. I've even turned several pounds profit on each ounce of physical silver, a fact which kind of blew me away to be honest.

 

Make no mistake, prices are at TSHTF levels at the moment. The key question is - is the fear justified, YET?

 

Learner is right, you've got to have an exit strategy or you'll never take a profit. But not one of the many reasons I bought gold and silver in the first place has changed. Until governments start behaving responsibly, I'm not selling anything.

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Clearly what you want to avoid is to average in now. I would be averaging out now as in sterling terms gold is approximately 1.24 x its 200 day moving average. At every peak in gold prices in this gold bull sterling gold has peaked at about 1.28. So yes there is abit more upside, but there is also alot of downside. We are also coming in to the summer doldrums where my guess is gold will fall back to its 200 day moving average. That is the time to reverse the dumper truck and invest heavily.

 

I am planning on selling half my gold stash at 1.28 x 200 day moving average which i think will be at the end of May beginning of June. It won't go much higher. I will then buy back in over the summer near 200 day ma level.

 

Back in December eveyone was panick buying as they saw gold going vertical. These people bought in at the top and are now only just breaking even. This run won't and cannot last. Buying heavily into peaks is the wrong decision. Averaging in is ofcourse a more sensible option, but averageing in around 200 dma levels is the best strategy. Every serious investor knows you have to sell when everyone is being greedy and buy when everyone is scared. Howveer it is amazing that some people who are serious about investing still get this the wrong way round.

 

When gold hits the 200 day ma level which it will and does every 6 months or so (last time back in Feb 2010) everyone is mega bearish, talking about deflation etc. That is the time to ramp up. Also sterling is low and is likely to strengthen from here as the deficit cut measures are announced and put into an accelerated action plan and focus moves to the US deficit.

 

Basically now is the time to be watching you existing stash peak and enjoy the ride but be preparing to sell half your stash into the peak and enjoy seeing the stuff drop knowing you have a big pile of cash waiting to catch it when it hiots the bottom of its run.

 

I have been doing this for 2.5 years and my % gains are very much larger compared to what they would have been if I had just stayed invested in gold and not traded half out at the peaks. The key is understanding the price relative to its 200 day ma not just in nominal terms.

 

See essays on zealllc.com as these are an excellent source and have helped me.

 

ps apologies to all for teaching to suck eggs as I know their are alot of people on here who know much more than me about investing!

Good post and I hear what your saying, but there are some macro factors which might make your strategy problematic.

 

First, gold seems to be replacing Euro as the "second" currency for investors/ CBs next to the dollar. Hence as investors/ CBs swap Euro [and other currencies] for gold, gold should strengthen.

 

Second, is Sterling a good currency to trade against gold? You have gold which looks likely to continue strenghtening in the aggegate, and Sterling which is vulnerable to deteriorating in the aggregate... especially if it finds itself in the cross-hairs of speculators.

 

How's this for a less risky alternative; stay long on a larger core holding of gold while trading a smaller position of silver, which is more volatile. And instead of Sterling use dollar as its trading partner.... taking profits in dollars of course.

 

Gold looks like the prime currency now. Both silver and dollar are still sound, so owning them at alternate times involves little risk. Sterling.....

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Clearly what you want to avoid is to average in now. I would be averaging out now as in sterling terms gold is approximately 1.24 x its 200 day moving average. At every peak in gold prices in this gold bull sterling gold has peaked at about 1.28. So yes there is abit more upside, but there is also alot of downside. We are also coming in to the summer doldrums where my guess is gold will fall back to its 200 day moving average. That is the time to reverse the dumper truck and invest heavily.

 

I am planning on selling half my gold stash at 1.28 x 200 day moving average which i think will be at the end of May beginning of June. It won't go much higher. I will then buy back in over the summer near 200 day ma level.

 

Right or wrong, that almost precisely sums up my position, and (currently at least) my intended strategy.

 

As I've said before, this is essentially what I did starting back in Feb '09 when gold was looking decidedly peaky. (According to my spreadsheet, the 200DMA ratio was around 1.37 then!) I started averaging back in, in retrospect probably starting a little too early, when the ratio was 1.10 (Apr '09) and had completed buying back in with a ratio of 0.98 (Aug '09). (As said elsewhere, this also allowed me to benefit from some CGT allowance.

 

Even if folks are not open to the idea of trading (i.e. selling) any of their stash, keeping an eye on this ratio could help point out when to start averaging in more or less aggressively.

 

Whenever it's looking peaky, some will say that there's no stopping it now. One day they may be correct. Today might be that day. But, if it turns out like it most often does, now doesn't seem all that likely to be a good time to be buying particularly stridently (although Gordon Brown might disagree! :lol:).

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But not one of the many reasons I bought gold and silver in the first place has changed. Until governments start behaving responsibly, I'm not selling anything.

 

+1

 

 

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Right or wrong, that almost precisely sums up my position, and (currently at least) my intended strategy.

 

As I've said before, this is essentially what I did starting back in Feb '09 when gold was looking decidedly peaky. (According to my spreadsheet, the 200DMA ratio was around 1.37 then!) I started averaging back in, in retrospect probably starting a little too early, when the ratio was 1.10 (Apr '09) and had completed buying back in with a ratio of 0.98 (Aug '09). (As said elsewhere, this also allowed me to benefit from some CGT allowance.

 

Even if folks are not open to the idea of trading (i.e. selling) any of their stash, keeping an eye on this ratio could help point out when to start averaging in more or less aggressively.

 

Whenever it's looking peaky, some will say that there's no stopping it now. One day they may be correct. Today might be that day. But, if it turns out like it most often does, now doesn't seem all that likely to be a good time to be buying particularly stridently (although Gordon Brown might disagree! :lol:).

 

 

I think you make a good point about looking at the technicals and adjusting your averaging strategy accordingly, I still have funds to transfer which I'm averaging in in a flexible way i.e. not when its looking oversold, more when it takes a big hit etc.

 

I also find that having policy of always keeping some dry powder ready helps me stick to the wall of worry better

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Balestra Capital: "We View Gold As Potentially The Best Currency"

 

We view gold as potentially the best currency; an ongoing portfolio theme based on the probability that central bankers in the U.S., Europe and Japan will continue their efforts to stimulate their economies with excessive monetary easing (printing money), while ignoring for the time being the dangerous fiscal ramifications.

 

http://www.zerohedge.com/article/balestra-...y-best-currency

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Hadn't checked 'coininvestdirect' for a while, popped in there today and was shocked to see they are buying around the £850 mark. :blink:

 

anyone ever sent anything back to these people? just wondered how easy it was and who you would use to ship and if they offer adequate insurance

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From Jesse's Americain Cafe

 

Greenspan just about sums up how we got to the end-game, and the theft and fraud that led us there.

 

I pity the hardworking lawabiding taxpaying people in the world; luckily they'll not become aware of what's been done to them though the game is rigged for them to end up with nothing....

 

Gold and Economic Freedom

by Alan Greenspan

 

Published in Ayn Rand's "Objectivist" newsletter in 1966, and reprinted in her book, Capitalism: The Unknown Ideal, in 1967.

 

An almost hysterical antagonism toward the gold standard is one issue which unites statists of all persuasions.
They seem to sense - perhaps more clearly and subtly than many consistent defenders of
laissez-faire
- that gold and economic freedom are inseparable, that
the gold standard is an instrument of
laissez-faire
and that each implies and requires the other
.

 

In order to understand the source of their antagonism, it is necessary first to understand the specific role of gold in a free society.

 

Money is the common denominator of all economic transactions. It is that commodity which serves as a medium of exchange, is universally acceptable to all participants in an exchange economy as payment for their goods or services, and can, therefore, be used as a standard of market value and as a store of value, i.e., as a means of saving.

 

The existence of such a commodity is a precondition of a division of labor economy. If men did not have some commodity of objective value which was generally acceptable as money, they would have to resort to primitive barter or be forced to live on self-sufficient farms and forgo the inestimable advantages of specialization. If men had no means to store value, i.e., to save, neither long-range planning nor exchange would be possible.

 

What medium of exchange will be acceptable to all participants in an economy is not determined arbitrarily. First, the medium of exchange should be durable. In a primitive society of meager wealth, wheat might be sufficiently durable to serve as a medium, since all exchanges would occur only during and immediately after the harvest, leaving no value-surplus to store. But where store-of-value considerations are important, as they are in richer, more civilized societies, the medium of exchange must be a durable commodity, usually a metal. A metal is generally chosen because it is homogeneous and divisible: every unit is the same as every other and it can be blended or formed in any quantity. Precious jewels, for example, are neither homogeneous nor divisible. More important, the commodity chosen as a medium must be a luxury. Human desires for luxuries are unlimited and, therefore, luxury goods are always in demand and will always be acceptable. Wheat is a luxury in underfed civilizations, but not in a prosperous society. Cigarettes ordinarily would not serve as money, but they did in post-World War II Europe where they were considered a luxury. The term "luxury good" implies scarcity and high unit value. Having a high unit value, such a good is easily portable; for instance, an ounce of gold is worth a half-ton of pig iron.

 

In the early stages of a developing money economy, several media of exchange might be used, since a wide variety of commodities would fulfill the foregoing conditions. However, one of the commodities will gradually displace all others, by being more widely acceptable. Preferences on what to hold as a store of value will shift to the most widely acceptable commodity, which, in turn, will make it still more acceptable. The shift is progressive until that commodity becomes the sole medium of exchange. The use of a single medium is highly advantageous for the same reasons that a money economy is superior to a barter economy: it makes exchanges possible on an incalculably wider scale.

 

Whether the single medium is gold, silver, seashells, cattle, or tobacco is optional, depending on the context and development of a given economy. In fact, all have been employed, at various times, as media of exchange. Even in the present century, two major commodities, gold and silver, have been used as international media of exchange, with gold becoming the predominant one. Gold, having both artistic and functional uses and being relatively scarce, has significant advantages over all other media of exchange. Since the beginning of World War I, it has been virtually the sole international standard of exchange. If all goods and services were to be paid for in gold, large payments would be difficult to execute and this would tend to limit the extent of a society's divisions of labor and specialization. Thus a logical extension of the creation of a medium of exchange is the development of a banking system and credit instruments (bank notes and deposits) which act as a substitute for, but are convertible into, gold.

 

A free banking system based on gold is able to extend credit and thus to create bank notes (currency) and deposits, according to the production requirements of the economy. Individual owners of gold are induced, by payments of interest, to deposit their gold in a bank (against which they can draw checks). But since it is rarely the case that all depositors want to withdraw all their gold at the same time, the banker need keep only a fraction of his total deposits in gold as reserves. This enables the banker to loan out more than the amount of his gold deposits (which means that he holds claims to gold rather than gold as security of his deposits). But the amount of loans which he can afford to make is not arbitrary: he has to gauge it in relation to his reserves and to the status of his investments.

 

When banks loan money to finance productive and profitable endeavors, the loans are paid off rapidly and bank credit continues to be generally available. But when the business ventures financed by bank credit are less profitable and slow to pay off, bankers soon find that their loans outstanding are excessive relative to their gold reserves, and they begin to curtail new lending, usually by charging higher interest rates. This tends to restrict the financing of new ventures and requires the existing borrowers to improve their profitability before they can obtain credit for further expansion. Thus, under the gold standard, a free banking system stands as the protector of an economy's stability and balanced growth. When gold is accepted as the medium of exchange by most or all nations, an unhampered free international gold standard serves to foster a world-wide division of labor and the broadest international trade. Even though the units of exchange (the dollar, the pound, the franc, etc.) differ from country to country, when all are defined in terms of gold the economies of the different countries act as one — so long as there are no restraints on trade or on the movement of capital. Credit, interest rates, and prices tend to follow similar patterns in all countries. For example, if banks in one country extend credit too liberally, interest rates in that country will tend to fall, inducing depositors to shift their gold to higher-interest paying banks in other countries. This will immediately cause a shortage of bank reserves in the "easy money" country, inducing tighter credit standards and a return to competitively higher interest rates again.

 

A fully free banking system and fully consistent gold standard have not as yet been achieved. But prior to World War I, the banking system in the United States (and in most of the world) was based on gold and even though governments intervened occasionally, banking was more free than controlled. Periodically, as a result of overly rapid credit expansion, banks became loaned up to the limit of their gold reserves, interest rates rose sharply, new credit was cut off, and the economy went into a sharp, but short-lived recession. (Compared with the depressions of 1920 and 1932, the pre-World War I business declines were mild indeed.) It was limited gold reserves that stopped the unbalanced expansions of business activity, before they could develop into the post-World War I type of disaster. The readjustment periods were short and the economies quickly reestablished a sound basis to resume expansion.

 

But the process of cure was misdiagnosed as the disease: if shortage of bank reserves was causing a business decline — argued economic interventionists — why not find a way of supplying increased reserves to the banks so they never need be short! If banks can continue to loan money indefinitely — it was claimed — there need never be any slumps in business. And so the Federal Reserve System was organized in 1913. It consisted of twelve regional Federal Reserve banks nominally owned by private bankers, but in fact government sponsored, controlled, and supported. Credit extended by these banks is in practice (though not legally) backed by the taxing power of the federal government. Technically, we remained on the gold standard; individuals were still free to own gold, and gold continued to be used as bank reserves. But now, in addition to gold, credit extended by the Federal Reserve banks ("paper reserves") could serve as legal tender to pay depositors.

 

When business in the United States underwent a mild contraction in 1927, the Federal Reserve created more paper reserves in the hope of forestalling any possible bank reserve shortage. More disastrous, however, was the Federal Reserve's attempt to assist Great Britain who had been losing gold to us because the Bank of England refused to allow interest rates to rise when market forces dictated (it was politically unpalatable). The reasoning of the authorities involved was as follows: if the Federal Reserve pumped excessive paper reserves into American banks, interest rates in the United States would fall to a level comparable with those in Great Britain; this would act to stop Britain's gold loss and avoid the political embarrassment of having to raise interest rates. The "Fed" succeeded; it stopped the gold loss, but it nearly destroyed the economies of the world, in the process. The excess credit which the Fed pumped into the economy spilled over into the stock market, triggering a fantastic speculative boom. Belatedly, Federal Reserve officials attempted to sop up the excess reserves and finally succeeded in braking the boom. But it was too late: by 1929 the speculative imbalances had become so overwhelming that the attempt precipitated a sharp retrenching and a consequent demoralizing of business confidence. As a result, the American economy collapsed. Great Britain fared even worse, and rather than absorb the full consequences of her previous folly, she abandoned the gold standard completely in 1931, tearing asunder what remained of the fabric of confidence and inducing a world-wide series of bank failures. The world economies plunged into the Great Depression of the 1930's.

 

With a logic reminiscent of a generation earlier, statists argued that the gold standard was largely to blame for the credit debacle which led to the Great Depression. If the gold standard had not existed, they argued, Britain's abandonment of gold payments in 1931 would not have caused the failure of banks all over the world. (The irony was that since 1913, we had been, not on a gold standard, but on what may be termed "a mixed gold standard"; yet it is gold that took the blame.) But the opposition to the gold standard in any form — from a growing number of welfare-state advocates — was prompted by a much subtler insight: the realization that the gold standard is incompatible with chronic deficit spending (the hallmark of the welfare state). Stripped of its academic jargon, the welfare state is nothing more than a mechanism by which governments confiscate the wealth of the productive members of a society to support a wide variety of welfare schemes. A substantial part of the confiscation is effected by taxation. But the welfare statists were quick to recognize that if they wished to retain political power, the amount of taxation had to be limited and they had to resort to programs of massive deficit spending, i.e., they had to borrow money, by issuing government bonds, to finance welfare expenditures on a large scale.

 

Under a gold standard, the amount of credit that an economy can support is determined by the economy's tangible assets, since every credit instrument is ultimately a claim on some tangible asset. But government bonds are not backed by tangible wealth, only by the government's promise to pay out of future tax revenues, and cannot easily be absorbed by the financial markets. A large volume of new government bonds can be sold to the public only at progressively higher interest rates. Thus, government deficit spending under a gold standard is severely limited. The abandonment of the gold standard made it possible for the welfare statists to use the banking system as a means to an unlimited expansion of credit. They have created paper reserves in the form of government bonds which — through a complex series of steps — the banks accept in place of tangible assets and treat as if they were an actual deposit, i.e., as the equivalent of what was formerly a deposit of gold. The holder of a government bond or of a bank deposit created by paper reserves believes that he has a valid claim on a real asset. But the fact is that there are now more claims outstanding than real assets. The law of supply and demand is not to be conned. As the supply of money (of claims) increases relative to the supply of tangible assets in the economy, prices must eventually rise. Thus the earnings saved by the productive members of the society lose value in terms of goods. When the economy's books are finally balanced, one finds that this loss in value represents the goods purchased by the government for welfare or other purposes with the money proceeds of the government bonds financed by bank credit expansion.

 

In the absence of the gold standard, there is no way to protect savings from confiscation through inflation. There is no safe store of value. If there were, the government would have to make its holding illegal, as was done in the case of gold. If everyone decided, for example, to convert all his bank deposits to silver or copper or any other good, and thereafter declined to accept checks as payment for goods, bank deposits would lose their purchasing power and government-created bank credit would be worthless as a claim on goods. The financial policy of the welfare state requires that there be no way for the owners of wealth to protect themselves.

 

This is the shabby secret of the welfare statists' tirades against gold. Deficit spending is simply a scheme for the confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights. If one grasps this, one has no difficulty in understanding the statists' antagonism toward the gold standard.

(Jesse)"Given his Randian audience and the mood at the time, it is interesting that Greenspan defines the culprits in the scheme of fiat monetization as 'welfare statists.' How ironic, that over a period of time there is indeed a group of welfare statists behind the latest debasement of the currency, the US dollar, but the recipients of this welfare are the Banks and the financial elite, who through transfer payments, financial fraud, and federally sanctioned subsidies are systematically stripping the middle class of their wealth. Perhaps they decided that if you cannot beat them, beat them to the trough and take the best for themselves until the system collapses through their abuse."

 

Nick

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I vaguely recalled trying to make a gold-price prediction last year in response to a 'predict the top' post, and just went looking for it to see how wrong I was turning out to be.

 

Here's my post in the Gold thread of the time (dated 2 Dec).

 

To quote:

 

"Gold will go more or less sideways for about a month (although, it may be pretty choppy, so it won't feel like sideways necessarily), then there'll be another jump early in the new year, then a slower climb up to a local top around the end of Q1 -- at which point, I would expect to see £850/oz (I was going to say £900 knowing that what seems like 'wild prices' now can seem almost normal when they arrive, e.g. how wild did $1200-before-year-end seem a couple of weeks ago?). In dollars, it'll be more like $1400 or so by then."

 

My time estimates were pretty hopeless (at least two months too soon), but I wonder how well the peak numbers will turn out to be.

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I vaguely recalled trying to make a gold-price prediction last year in response to a 'predict the top' post, and just went looking for it to see how wrong I was turning out to be.

 

Here's my post in the Gold thread of the time (dated 2 Dec).

 

To quote:

 

"Gold will go more or less sideways for about a month (although, it may be pretty choppy, so it won't feel like sideways necessarily), then there'll be another jump early in the new year, then a slower climb up to a local top around the end of Q1 -- at which point, I would expect to see £850/oz (I was going to say £900 knowing that what seems like 'wild prices' now can seem almost normal when they arrive, e.g. how wild did $1200-before-year-end seem a couple of weeks ago?). In dollars, it'll be more like $1400 or so by then."

 

My time estimates were pretty hopeless (at least two months too soon), but I wonder how well the peak numbers will turn out to be.

Good call... I scrolled through and read a few more posts on that thread. Always interesting to compare what was said in the past to today. Found this prediction of mine, which got the breakdown of the inverse correlation between dollar and gold right:

 

http://www.greenenergyinvestors.com/index....st&p=145738

 

"As for the other currencies, I tend to agree with you. The dollar is the lynch pin of our monetary system, and until that system is changed it should be a major beneficiary as the global economy deflates with money moving from the periphery to the centre. This does not necessarily put gold in an anti-thetical position to the dollar. The way I see it is the inverse correlation between the dollar and gold will break down, and they will both be bought as safe havens in the end."

 

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I think you make a good point about looking at the technicals and adjusting your averaging strategy accordingly, I still have funds to transfer which I'm averaging in in a flexible way i.e. not when its looking oversold, more when it takes a big hit etc.

 

I also find that having policy of always keeping some dry powder ready helps me stick to the wall of worry better

 

Yes it is important to keep powder dry and I would only ever sell 50% at a peak and in exceptional circumstances 75% and if I think we are in the final blow out then I will aim to sell the lot but this will be based on the 200dma of gold from 1980 and I haven't done that anlysis yet.

 

Also remember that this approach involves selling relative to the 200day moving average. Therefore as the price of gold goes up the 200 dma also goes up. Therefore the difference of selling at 1.24 x 200 dma and 1.28 x 200dma could be considerable in nominal terms.

 

I am certainly not selling now as I expect gold to continue upwards supported by weakening £. However, there will come a time when gold peaks and the £ bottoms against the $ and that will be the time to lighten up.

 

I can see that lots of people ie with s2r funds want certainty and don't want to trade and that is fine. However I believe we have at least 7 years left in the bull and this approach I hope will increase my returns.

 

 

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Good call... I scrolled through and read a few more posts on that thread. Always interesting to compare what was said in the past to today. Found this prediction of mine, which got the breakdown of the inverse correlation between dollar and gold right:

 

http://www.greenenergyinvestors.com/index....st&p=145738

 

"As for the other currencies, I tend to agree with you. The dollar is the lynch pin of our monetary system, and until that system is changed it should be a major beneficiary as the global economy deflates with money moving from the periphery to the centre. This does not necessarily put gold in an anti-thetical position to the dollar. The way I see it is the inverse correlation between the dollar and gold will break down, and they will both be bought as safe havens in the end."

 

The way I see it is the inverse correlation between the dollar and gold will break down,

 

Already broken??

 

http://www.bloomberg.com/apps/cbuilder?ticker1=DXY%3AIND

 

(add gld to security) 3 - 6 mths

 

What will the POG be next time $index = 80 ??

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Right or wrong, that almost precisely sums up my position, and (currently at least) my intended strategy.

 

As I've said before, this is essentially what I did starting back in Feb '09 when gold was looking decidedly peaky. (According to my spreadsheet, the 200DMA ratio was around 1.37 then!) I started averaging back in, in retrospect probably starting a little too early, when the ratio was 1.10 (Apr '09) and had completed buying back in with a ratio of 0.98 (Aug '09). (As said elsewhere, this also allowed me to benefit from some CGT allowance.

 

Even if folks are not open to the idea of trading (i.e. selling) any of their stash, keeping an eye on this ratio could help point out when to start averaging in more or less aggressively.

 

Whenever it's looking peaky, some will say that there's no stopping it now. One day they may be correct. Today might be that day. But, if it turns out like it most often does, now doesn't seem all that likely to be a good time to be buying particularly stridently (although Gordon Brown might disagree! :lol:).

 

Question - Was the 1.37 in Feb 09 in gold $ or sterling gold? If sterling, I will double check my numbers. I have this at 1.34

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What will the POG be next time $index = 80 ??

May not see the dollar down through 80 again. Just about through 86 now on its way to 90.

 

As I've been banging on for a while, if you want to hedge/trade volatility, the contra-currency to be in is the dollar.

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The way I see it is the inverse correlation between the dollar and gold will break down,

Already broken??

 

http://www.bloomberg.com/apps/cbuilder?ticker1=DXY%3AIND

 

(add gld to security) 3 - 6 mths

 

What will the POG be next time $index = 80 ??

Yep, that was a quote from last year, when most were thinking that dollar and gold must be inversely correlated.

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CGNAOs call of £900/toz for this leg up is looking a lot more likely suddenly.

Gold could go above 1000 in both Sterling and Euro and stay there, while at the same time going back below 1000 in US dollars.

 

Forced liquidation in the equity/ commodity markets/ peripheral countries later in the year would do it. Interesting times.

 

Why be Euro/anglo-centric in a global monetary crisis.

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