GOLD

[G0ldfinger]

The Caucasus is blowing up. Could this develop into a Black Swan? I always thought it would be Pakistan or Iran. But then you always have unknown unknowns.

[sossij]

All I can say is, everyone who is in gold and silver should have some coins at hand. My advice also is, don't only get the old stuff, get some shiny brand new ones. It's good to hold the stuff in your hand so that you actually appreciate a little more what have stored somewhere in Switzerland with BullionVault or GoldMoney. And for the ETF people, it's good if you have some of the real stuff.

 

On a side note: 1oz Maple is 5 Dollars notional, 1oz Eagles is 1 Dollar. Can I see some American hubris here? :lol:

 

Agreed, I have a rather nice set of 1oz silver pandas and they are really, really pretty. Prettier than the gold ones I sometimes think

[darreng1000]

OK, so my package with coins that I ordered from CoinInvestDirect Monday afternoon has arrived. I ordered gold and silver coins. The silver coins (1oz Maples/Eagles/Philharmonikers, all from 2008) have all arrived, no problem. They are very beautiful - I had no idea. Silver is good stuff, not only gold, I have to say. Man, I feel rich now. Forget $15 or $20 for silver. This stuff is worth much more. You can tell from just looking at it.

 

 

does coin invest direct have a shop?

[marmite]

does coin invest direct have a shop?

 

Not as far as i am aware. www.goldline.co.uk, www.atsbullion.co.uk and Chards all do

 

[Pixel8r]

Mystery Solved

 

On July 15th the US Dollar Index closed at 71.87, the lowest close since reaching its record low in April. This index was in the process of breaking down, and in fact it had actually fallen out of its uptrend channel on the following chart.

 

However, rather than continue lower and fall off the edge of the cliff, the Dollar Index suddenly and mysteriously reversed course. It has now risen on 12 of the 17 trading days since reaching that low, and closed today at 74.55, a 5-month high. What caused this index to suddenly pull back from the brink and then reverse course to shoot higher over the past three weeks?

 

The Federal Reserve did not suddenly contract the amount of dollars in circulation. Its latest H.6 report shows that both M1 and M2 expanded in recent weeks, so there was no shortage of supply.

 

The Federal Reserve did not raise interest rates during this period. Consequently, inflation adjusted interest rates remain negative. In other words, the annual inflation rate is higher than the amount of interest one can earn on a 1-year dollar deposit, which is highly inflationary and a major disincentive to holding dollars.

 

There has not been any news exceptionally favorable to the dollar. In fact, the banking problems in the United States continue to mount, while the federal government's deficit continues to soar out of control. On July 28th Reuters reported that "The Bush administration on Monday plans to project the U.S. budget deficit will soar to a new record...because of the slowing economy and an economic stimulus plan approved this year."

 

So what happened to cause the dollar to rally over the past three weeks? In a word, intervention. Central banks have propped up the dollar, and here's the proof.

 

When central banks intervene in the currency markets, they exchange their currency for dollars. Central banks then use the dollars they acquire to buy US government debt instruments so that they can earn interest on their money. The debt instruments central banks acquire are held in custody for them at the Federal Reserve, which reports this amount weekly.

 

On July 16, 2008 (the closest date of the weekly reports to the July 15th low in the Dollar Index), the Federal Reserve reported holding $2,349 million of US government paper in custody for central banks. In its report released today, this amount had grown over the past three weeks to $2,401 million, a 38.4% annual rate of growth. To put this phenomenally high growth rate into perspective, for the twelve months ending this past July 16th, assets in the Federal Reserve's custody account grew by 17.3%, which is less than one-half the growth rate experienced over the past three weeks.

 

So central banks were accumulating dollars over the past three weeks at a rate far above what one would expect as a result of the US trade deficit. The logical conclusion is that they were intervening in currency markets. They were buying dollars for the purpose of propping it up, to keep the dollar from falling off the edge of the cliff.

 

With this intervention, central banks have bought some time. But alas, they have not fixed the problem. Central bank intervention does not make the dollar "as good as gold", the description that once accurately described the dollar.

 

In the final analysis, it is fundamental factors that determine the course of markets and the process of price discovery that results from them. Central bank intervention - like fiat currency itself - is ephemeral. In contrast, gold lasts throughout the ages. So what would you rather own? A sick dollar that it requires central bank intervention to prop it up? Or gold?

 

Published by GoldMoney

Copyright © 2008. All rights reserved.

Edited by James Turk, alert@goldmoney.com

http://goldmoney.com/en/commentary-print.html

[Steve Netwriter]

Wow, very interesting.

 

 

So is this one:

 

Warren Pollock

The Freezing *AUDIO*

 

Mr. Pollock explains that we are seeing a classic liquidity trap, freezing up the world markets. It's Deflationary and it's a disaster.

http://www.howestreet.com/audio/warrenpollock07082008.mp3

 

From: http://www.howestreet.com/audiovideo/index...mediaplayer/922

 

Whether or not you agree, it's an interesting listen, and includes "got gold?"

 

[bitbigt]

Mystery Solved

 

On July 15th the US Dollar Index closed at 71.87, the lowest close since reaching its record low in April. This index was in the process of breaking down, and in fact it had actually fallen out of its uptrend channel on the following chart....

 

I don't doubt there is intervention, and even more so recently, especially in oil and the US dollar

 

However, is an annualised 17% doubling to 38% really a strong piece of evidence?

 

If anything, I'm more surprised that the dollar holdings have been increasing 17% while the dollar was falling during the last year. That seems like intervention, as what sense in their buying more dollars when the dollar is tanking?

 

But when it looks (to some) like the dollar maybe in a rally period, then it would make sense to buy more - just as in indicated by this 17% to 38% change.

 

So which is cause and which is effect ...USDX rising or the increased bond paper in custody for central banks?

 

In either case - the whole show is being rigged, and as the author says, it's all ephemeral and the market forces will eventually win the day.

[Timil]

Weird days indeed its being alleged that Ruskie tanks n' planes in action in Georgia and basically a state of war exists and hardly a peep from Gold, good news Gold goes up bad news and Gold goes down or stays the same.

 

Worlds gone mad.

[marmite]

Wow, very interesting.

 

 

So is this one:

 

Warren Pollock

The Freezing *AUDIO*

 

Mr. Pollock explains that we are seeing a classic liquidity trap, freezing up the world markets. It's Deflationary and it's a disaster.

http://www.howestreet.com/audio/warrenpollock07082008.mp3

 

From: http://www.howestreet.com/audiovideo/index...mediaplayer/922

 

Whether or not you agree, it's an interesting listen, and includes "got gold?"

 

Thanks Steve, very interesting listen.

 

Not sure what the conclusion would be but I suppose hes advocating holding $ longer term ????

 

[cgnao]

Weird days indeed its being alleged that Ruskie tanks n' planes in action in Georgia and basically a state of war exists and hardly a peep from Gold, good news Gold goes up bad news and Gold goes down or stays the same.

 

Worlds gone mad.

 

Have you had a look at the premium Krugerrands and other ounce coins are commanding of late? No? I suggest you do.

 

All this commotion is just a shot of central bank adrenaline in the arm of the dying US dollar.

 

Gold/USD is moving like crazy because USD is moving like crazy. I suggest you monitor Gold/CHF or Gold/EUR.

 

 

[pyewackitt]

Ok folks - get beers, get the cakes, put on the music... I've just joined the PARTY!

 

Seriously though... I've had some gold for about two years now and been watching silver with interest recently. I don't see that any of the fundamentals have changed, money supply is still high, inflation still rampant (and in my opinion still going to push ever stronger) and the only thing i can see supporting the recent drop in metal prices is simple market manipulation.

 

So just got my first 1000 oz of silver at $15.68/£8.19 spot price and compared to the last 6 months I think i've been lucky with my timing. (Although I prefer to think of it in kg... it seems much more visceral to consider it as about 30 bags of sugar).

 

Overall I don't think we're going to see a clearer market until:

 

1) New US president sworn in

2) Olympics are over

3) People realise inflation is rife

4) September when a lot of traders get back from hols (the old maxim about trading over summer etc.)

 

So i fully agree we have a very volitile market situation. It may well be that prices are even cheaper next week... but personally as we're in a 6 months low I can't help but think now is a good time to join the party.

 

Lets be honest though, rough times ahead are expected, some deflation possibilities still out there... but if the dollar continues to tank and inflation continues to keep going strong us metalheads can only be right.

 

My precious.....

 

- Pye

[G0ldfinger]

...

On July 16, 2008 (the closest date of the weekly reports to the July 15th low in the Dollar Index), the Federal Reserve reported holding $2,349 million of US government paper in custody for central banks. In its report released today, this amount had grown over the past three weeks to $2,401 million, a 38.4% annual rate of growth. To put this phenomenally high growth rate into perspective, for the twelve months ending this past July 16th, assets in the Federal Reserve's custody account grew by 17.3%, which is less than one-half the growth rate experienced over the past three weeks.

...

Is this a typo? I mean $52 million, that's what Northern Rock burns per hour.

 

Should it be billion?

 

Edit: typo.

[electroweak]

Should it be billion?

That's happening more and more.. sign of the times..

[Pixel8r]

Is this a typo? I mean $52 million, that's what Northern Rock burns per hour.

 

Should it be billion?

 

Edit: typo.

 

Yes it is a massive error. I have just checked the original article, which can be seen here, and it should have been billion.

 

The error came because I copied the text from kiwi's post on goldismoney.

 

Apologies.. Should learn to proof read!

 

GF - please could you also point this out on goldismoney as I don't have an account.

[G0ldfinger]

http://goldismoney.info/forums/showpost.ph...postcount=15863

It appears the world’s largest gold importer is back in business. This is acknowledged today by UBS, which remarked in its daily metals comment:

 

“Our daily sales to jewellery clients have picked up tremendously over the past week, with Indian and Turkish demand extremely strong. The sales to India have been particularly impressive, and are the highest we have seen since this time last year and much above the extremely poor sales we have seen.”

The Indians really know when to buy!

[wrongmove]

http://goldismoney.info/forums/showpost.ph...postcount=15863

 

The Indians really know when to buy!

 

Alas, they also seem to know when to stop!

 

 

 

[sossij]

Hey check this out - large smackdown to $851 Can't believe this, more cheap gold. Can't charge my BV account fast enough

 

 

Edit: and check out silver - wow!

[G0ldfinger]

 

Weeeeeeeeeehehehehe!!

 

If it goes on like this I will have to max out my credit card to buy more.

 

Last time I bought was $17.30. It's not even on the chart anymore!

[marmite]

Hey check this out - large smackdown to $851 Can't beleive this, more cheap gold. Can't charge my BV account fast enough

 

 

Edit: and check out silver - wow!

 

If it breaks $850 - $845 wheres the next big support $825 ??

[electroweak]

Surely, this has to end sometime?? wow.

[sossij]

If it breaks $850 - $845 wheres the next big support $825 ??

 

Who cares??

[romans holiday]

I look at gold as a barometer. The volatility of it's price reflects the instablity of the money markets. Whether it goes up or down.... and whatever the momentary dollar price is... is irrelevant in the greater scheme of things...... unless you are looking to swap paper for metal in the near future of course.

 

Wow... apparently four Russian planes have been shot down.

[G0ldfinger]

Surely, this has to end sometime?? wow.

Dollar's back in town. Printing trillions does not matter. Deficits don't matter either. Dollar better than gold. War against Russia? No problem. Oil is plentiful around. Let's watch the Olympics.

[Justin Thyme]

If it breaks $850 - $845 wheres the next big support $825 ??

 

Not sure if any of these are really going to apply for the immediate short-term but I reckon when the reversal comes, it'll be with startling ferocity. I'm not selling one gram ! We shall prevail !

 

[marmite]

Just been out for lunch and saw these queues