GOLD

[G0ldfinger]

Approximity: Fortune gets it wrong on gold

http://gold.approximity.com/Fortune_gets_i...ong_on_gold.htm

[fitkid]

 

I think its time

 

NOPE NOT BIG ENOUGH.

[nicejim]

The value of the house in the example was fairly small compared to the lifetime income. So, I am not sure why you are picking on the house. Eroded income is a bigger risk IMHO.

Perhaps because I agree with the idea of insuring future income (though not necessarily against 100% loss) but not of insuring the house, it appears that I'm picking on the smaller issue.

 

When the crisis was beginning someone said to me "I don't get all this - if you've got an apple tree it still produces apples, right..?" So, the closer something is to an apple tree, the less you need to insure it against financial collapse; the closer something is to a bond, the more you need to insure it. Unlike bonds, labour will never go to zero. You don't need to calculate the tree's value as a Collateralised Apple Obligation and buy insurance for that amount.

[G0ldfinger]

Perhaps because I agree with the idea of insuring future income (though not necessarily against 100% loss) but not of insuring the house, it appears that I'm picking on the smaller issue.

 

When the crisis was beginning someone said to me "I don't get all this - if you've got an apple tree it still produces apples, right..?" The closer something is to an apple tree, the less you need to insure it against financial collapse. The closer something is to a bond, the more you need to insure it. Unlike bonds, labour will never go to zero. You don't need to calculate the tree's value as a Collateralised Apple Obligation and buy insurance for that amount.

With the apple tree part I am fine - in fact, long term, I would value an apple tree much higher than for instance a fancy (petrol) car. In the coming oil crises, the apple tree will still feed me.

 

With labour it is different, especially as a state employee. While the job might be safe, the real level of income is not. Given the state of finances of most western states, how can we be sure that state employees won't earn 30%-50% less in real terms within the next 10 years? If so, don't you think economic affairs would be such that gold could go up 3 to 5 times in real terms during this time?

 

I think so.

[nicejim]

With the apple tree part I am fine - in fact, long term, I would value an apple tree much higher than for instance a fancy (petrol) car. In the coming oil crises, the apple tree will still feed me.

 

With labour it is different, especially as a state employee. While the job might be safe, the real level of income is not. Given the state of finances of most western states, how can we be sure that state employees won't earn 30%-50% less in real terms within the next 10 years? If so, don't you think economic affairs would be such that gold could go up 3 to 5 times in real terms during this time?

 

I think so.

In your first example you compared gold holdings relative to a person's total income until retirement, which implied that holding less than enough gold to cover 25 years of zero income would be considered insufficient. I would expect some loss of income and have no problem with comparing gold holdings to 30% of income for 10 years if that is the value at risk.

[Fortune]

Gold AM fix 1/2/10 = $1082

Gold AM fix 25/8/10 = $1237.50

 

$1237.50 - $1082 / $1082 x 100 = +14.37% (Value - Cost / Cost X 100 = gain/loss %)

 

I am very glad that I bought gold over dollars as a safe haven investment, a 14% return over the fiat "safe haven" is an extremely good return.

 

Silver Fix 1/2/10 = $16.23

Silver Fix 25/8/10 = $18.63

 

$18.63 - $16.23 / $16.23 x 100 = +14.78%

 

Even better from silver, which doesn't make sense as it was supposed to deflate.

I was under the impression that RH believed hold both gold and dollars was the best hedge instead of either gold or dollars. Gold forming the core of your wealth, while remaining liquid in dollars (and silver as a gamble). It's a bit disingenuous to suggest otherwise, to say the least.

[romans holiday]

Gold AM fix 1/2/10 = $1082

Gold AM fix 25/8/10 = $1237.50

 

$1237.50 - $1082 / $1082 x 100 = +14.37% (Value - Cost / Cost X 100 = gain/loss %)

 

I am very glad that I bought gold over dollars as a safe haven investment, a 14% return over the fiat "safe haven" is an extremely good return.

 

Silver Fix 1/2/10 = $16.23

Silver Fix 25/8/10 = $18.63

 

$18.63 - $16.23 / $16.23 x 100 = +14.78%

 

Even better from silver, which doesn't make sense as it was supposed to deflate.

This is just silly. Completely misses the points of context and strategy.

 

Not to mention the cherry picking of price..... just yesterday silver was at 17.90.

 

 

 

Here's a decent long term perspective. Silver was quick out of the blocks pre-2008 but since then hasn't really gone anywhere. Gold, on the other hand, has.

 

I own some silver [and yes, they are even physical kilo bars!]. I just consider gold more core than silver in this environment, where the price of gold is a lot "stickier" and doesn't give up its gains as easily as silver. If we do see another crash in commodities, I'll be topping up on silver.... as I think gold will "pull her up". I don't think silver is a leverage on gold, though it should still perform relatively well.

 

Gold/ silver ratio still not that great... in the mid-60s. Good time to swap a bit of that silver for gold.

[Steve Netwriter]

Hi Steve,

 

As a (longtimeago) philosophy graduate I feel vaguely compelled to defend philosophy. I read the link and did enjoy it, and you're right that philosophers can be a bit too detached from scientific inputs - though there is some value in that also as science is subject to its own myths and prejudices and occasionally a philosophical perspective can be valuable.

 

But my main feeling reading your views was that you aren't really attacking modern philosophy, but a dated version of what it consists of - very few philosophers bother to ask "what is the meaning of life" or "where did we come from". Whereas there is a lot of discussion of how neural networks relate to thought and whether the sensation of free will arises from (chaotic or deterministic) brain processes. You have recent schools of thought like functionalism and neural darwinism and the work of Dennett which has a lot of interesting stuff to say on these topics. Your answers to the questions are fine and would probably be all a scientist needs to bother with, but one can see potential problems in them and it is in those problems that a lot of modern philosophy resides.

 

Hi magpie,

I'm glad you enjoyed my vent

I'll tell you what annoys the hell out of me. I watched so many programmes in which philosophers/thinkers/experts are talking about the thought processes etc.

And NOT ONCE did they mention neural networks, or explain the basics of how the brain actually works. They just talked in generalities. It gives the majority who don't bother to research that the thinking is some mystical magical process, when in fact, it's the way the brain manages to do it that's amazing. They consistently miss the main point, and fail to pass on to people the real wonder of what biology has managed.

 

I think most people should at least have a reasonable grasp of how their own brain actually works!!!!!

Don't you? It would for example help them to understand how their kids are developing. And it would prevent stupid myths and silly ideas from being accepted.

 

Yes, there are people doing some real sensible and exciting work, although I'm a little behind on recent research

 

[romans holiday]

I was under the impression that RH believed hold both gold and dollars was the best hedge instead of either gold or dollars. Gold forming the core of your wealth, while remaining liquid in dollars (and silver as a gamble). It's a bit disingenuous to suggest otherwise, to say the least.

Yes, different strokes for different folks. I'm not a gold-bug hyper-inflationist, but a gold-bull deflationist. This puts quite a different perspective on currencies, and their relation to bullion.

[Catflap]

me too.....

 

I would love to see a few of the good 'ol posters on here again, Pluto, cgnao & of course swampy.

 

on a seperate note......

 

Ron Paul asks for Audit of US gold reserves....

 

"Texas (Kitco News) -- U.S. Rep. Ron Paul , R-Tex., plans to introduce a new bill next year that will allow for an audit of US gold reserves, he told Kitco News in an exclusive interview."

 

"Though Paul did not say whether there is any truth to claims that there is no gold in Fort Knox or the New York Federal Reserve, he said, “I think it is a possibility.''

 

ok it's not exactly 'breaking news' but if the right people keep pluggin away. You would think the FED would commision an 'expose' live to show/prove all the naysayers wrong wouldn't you?

 

 

They are enjoying their lifes not messing about trading they have secured their wealth how many times can you say PURCHASE PHYSICAL GOLD TO PROTECT YOUR FINANCIAL FUTURE.

Thats far to difficult for some to grasp by some of the posts over the last few days.

 

Oh yes we would ALL like to see your little chum Swampy back on here, especially DrBubb - been to see him recently have you?.

 

I must say, it's quite a double act you two have going - you both timed your return to GEI at the same time with perfection. I'm really looking forward to reading more of your posts and taking my knowledge of gold to new levels.

 

[Catflap]

Hi Crashman begins & thanks for the welcome back.....I forgot to reply to your post & can't find it now.

 

Someone pass me the sick bag, I'm going to puke......

[grumpy-old-man]

for those who got caught with their pants down last year & lost a lot of money try to understand the importance of Legatus

 

some text from the link:

 

"Many of you will remember Reinhardt in 2008 who developed a cult following on the internet.

 

He first appeared several months prior to the '08 crash on the google finance forums stating -

 

"Crash is in September...

 

and the negative news that will move the market downward should occur

Sept 15

 

this organization below.. runs the show

 

www.legatus.org...

 

the money laundering occurs just prior to the pilgrimage to rome and

the checks are written during the pilgrimage and the checks clear by

September 14 and the negative news leaks out (something along the

lines of "insider trading on a mass scale at a major brokerage) then

they start crossing the "t"s and dotting the "i"s on Sarbanes-Oxley II"

 

This discussion can all be viewed here - finance.google.com...

 

He was banned from google finance forums, and he was dead on with his prediction and now runs a subscription service at www.enterprisecorruption.com "

 

 

 

obviously there are many other factors that try to predict market patterns but once you understand that markets are crashed on purpose, then it all starts falling into place. Looking from just one angle can leave posters very blind. Quite often people only look at what they are told to look at, almost like a 'mind conditioning' of sorts, so they miss the bleedin obvious......in fact so obvious it's quite often in front of their very eyes

 

ps - he never gets it 100% right, but I do believe he has called all the major turns, both up & down.

[grumpy-old-man]

one of the replies from that other link had this on:

 

"The budget should be balanced, the Treasury should be refilled, public debt should be reduced, the arrogance of officialdom should be tempered and controlled, and the assistance to foreign lands should be curtailed lest Rome become bankrupt. People must again learn to work, instead of living on public assistance."

- Cicero - 55 BC"

 

wow, so it appears that history really does repeat.

 

'those that fail to learn from history, are doomed to repeat it' very apt quote & one of my favourites.

 

gold doing well today

 

[alexreeve]

one of the replies from that other link had this on:

 

"The budget should be balanced, the Treasury should be refilled, public debt should be reduced, the arrogance of officialdom should be tempered and controlled, and the assistance to foreign lands should be curtailed lest Rome become bankrupt. People must again learn to work, instead of living on public assistance."

- Cicero - 55 BC"

 

wow, so it appears that history really does repeat.

 

'those that fail to learn from history, are doomed to repeat it' very apt quote & one of my favourites.

 

gold doing well today

 

They didn't follow Cicero though and the republic collapsed. The followed the populist demagogues and ended up with imperial rome where wealth inequality was probably the greatest ever known by mankind.

[grumpy-old-man]

They didn't follow Cicero though and the republic collapsed. The followed the populist demagogues and ended up with imperial rome where wealth inequality was probably the greatest ever known by mankind.

 

I think the UK & US are the current modern day Romans. It's not good.

[Magpie]

Hi magpie,

I'm glad you enjoyed my vent

I'll tell you what annoys the hell out of me. I watched so many programmes in which philosophers/thinkers/experts are talking about the thought processes etc.

And NOT ONCE did they mention neural networks, or explain the basics of how the brain actually works. They just talked in generalities. It gives the majority who don't bother to research that the thinking is some mystical magical process, when in fact, it's the way the brain manages to do it that's amazing. They consistently miss the main point, and fail to pass on to people the real wonder of what biology has managed.

 

I think most people should at least have a reasonable grasp of how their own brain actually works!!!!!

Don't you? It would for example help them to understand how their kids are developing. And it would prevent stupid myths and silly ideas from being accepted.

 

I think that's a fair point, although there is a distinction between questions like "how does the brain work", and "how do neural networks recognise patterns" and questions like "why does the result of brain activity feel like 'me thinking' " and "why do we have such a strong sense of being a 'person' and of having free will". For the latter questions it is still important to know how the brain works, but knowing that doesn't necessarily resolve those problems satisfactorily.

 

For me, something that always bugs me about philosophers is how unwilling they are to recognise and account for irrationality. For instance while reading your rant I was interested in the part about patterns - it's always seemed to me that a lot of what the human brain does is to look for patterns and narratives in the objective world. It is indeed good at doing this, but also many cases of irrationality arise from projecting patterns that aren't genuine (for instance numerology, if you think of the way it affected medieval thought in particular) and from clinging to previously observed patterns and narratives and then interpreting new facts in the light of them (for instance when you get two opposing religious/national narratives you find the two sides of the argument interpret all facts in the light of their previous assumptions).

 

Philosophers tend to think they are extremely rational and that all problems have an ultrarational solution so they are uncomfortable with irrational thought.

 

That also leads me to question your last paragraph. Does knowing how the brain works necessarily teach us how to prevent silly ideas and myths? Perhaps it just explains why we are prone to such irrational behaviour?

 

[romans holiday]

Philosophers tend to think they are extremely rational and that all problems have an ultrarational solution so they are uncomfortable with irrational thought.

I think there is plenty of irrationalism [and unreason, which is maybe a less loaded word] to be found in western thought... just that the Anglo-Saxon stuff has been, unfortunately, so dominant.

 

Here's my argument for personal free will: rationality presupposes it. I mean, it would be absurd otherwise to ask someone to judge whether something was true or false.

 

Bringing this back to gold, the reason it is doing so well has to do with human instincts/ behavior that lie beyond pure rational analysis. So much for rationalism.

[dietcolaaddict]

I've completed my averaging in for 2010 doldrums season - now over 80% PMs in my portfolio.

 

Things looking quite bullish for PMs in the months ahead IMHO, including silver, something I have not always been keen on.

 

[Magpie]

I think there is plenty of irrationalism [and unreason, which is maybe a less loaded word] to be found in western thought... just that the Anglo-Saxon stuff has been, unfortunately, so dominant.

 

Here's my argument for personal free will: rationality presupposes it. I mean, it would be absurd otherwise to ask someone to judge whether something was true or false.

 

Bringing this back to gold, the reason it is doing so well has to do with human instincts/ behavior that lie beyond pure rational analysis. So much for rationalism.

 

Yes, I was talking more about the Anglo-Saxon tradition. Someone like Derrida or Nietzsche doesn't have the same problem with identifying irrationality.

 

[romans holiday]

Yes, I was talking more about the Anglo-Saxon tradition. Someone like Derrida or Nietzsche doesn't have the same problem with identifying irrationality.

"Post-modern" irrationalism is just one book-end of modern rationalism. There is plenty of philosophy preceding/ overlapping modernity at the other end. To name a couple; Kant and Burke. Thinkers of this calibre went to great lengths [in very different ways] to keep a balance between the authority of analytical reason and that of other instincts by juxtaposing practical reason to pure reason. They also recognised a philosophic scepticism, which was unfortunately a little too subtle for the enlightened enthusiasm that followed.

 

Perhaps we should start a philosophy thread. There is this one... buried in the fringe section.

 

http://www.greenenergyinvestors.com/index....t=0&start=0

 

 

What most don't get today [especially modern economists], with their rationalist analysis of money, is that money is not about pure reason at all but rather about practical reason. Money performs a practical function, therefore should be looked at practically. Thus, concrete experience and behavior are more significant than the rationally perceived abstract "fundamentals".

[romans holiday]

I've completed my averaging in for 2010 doldrums season - now over 80% PMs in my portfolio.

 

Things looking quite bullish for PMs in the months ahead IMHO, including silver, something I have not always been keen on.

Gold may seem expensive, but it looks as good a time as any to average in. Makes a lot of sense when you consider that all you're doing is swapping a weakening currency for a strengthening one.

 

 

[carbon junkie]

Stellar peformance in gold, but silver is shouting LIQUIDITY! very loudly its got to be a warning not to be ignored.

 

I guess gold won't be going to the 900 "handle" then and I don't see any pied piper threads on here these days.

 

I hope at least some people loaded up when it was way cheaper as some of us urged.

 

 

[romans holiday]

Stellar peformance in gold, but silver is shouting LIQUIDITY! very loudly its got to be a warning not to be ignored.

 

I guess gold won't be going to the 900 "handle" then and I don't see any pied piper threads on here these days.

 

I hope at least some people loaded up when it was way cheaper as some of us urged.

It looks less likely, but not impossible. More likely now, given the passage of time, is the 1000 handle. But I've always advocated buying into gold if one didn't already have a decent holding because there are no certainties. It is for those already hugely overweight in gold that it makes/ made sense to keep some powder dry..... for a double dip. Is it so difficult to keep this distinction in mind?

 

[neither has gold gone parabolic towards the 1650 that Jim Sinclair and his accolades were certain of for January next year]

 

 

Gold has done exactly as I though it would; steadily strengthen as a currency in a deflationary environment. Deleveraging is a risk... then as now, but that risk diminishes over time as gold is increasingly monetized.

 

edit

[carbon junkie]

[neither has gold gone parabolic towards the 1650 that Sinclair was betting on for January next year]

How can you call a prediction wrong when the timescale hasn't been met?

 

I would say his timing is looking bang on at the mo.

[romans holiday]

How can you call a prediction wrong when the timescale hasn't been met?

 

I would say his timing is looking bang on at the mo.

We'll see.... but if you extrapolate the current trend it only gets to 1300 odd by January. You would have to see some special fireworks to get to 1650.... but then there are better than even odds at the moment of double dip deleveraging... just to keep things interesting.