GOLD

[wrongmove]

Good contrarian arguments would be good. I just haven't seen any yet. All the points so far are such weak straw men they are not worthy of reply.

And given that replies to such attempts at contrarian replies are met with no proper reply, what's the point.

 

 

 

Maybe a contrarian would like to answer this simple question.

What should someone with NZ$ have done back in Aug 2007, other than buy gold/silver ?

Gold up from NZ$850 to NZ$1200. That's 41% in 1 year.

 

What about April 2006? What about June 2008?

 

No-one is denying that there has been a bull run in commodities (and gold). The big question is, what happens now?

 

The economic wind has changed direction since last year. Then, it was borrow, borrow, borrow to put into "risk free" markets. That illusion of zero/low risk has now been shattered (except here, it seems). Hedge funds are not making loads of money in commodities any more, they are going bust. The "derivative beast" is at work in commodities too, you know. There is still hundred of tons of gold in etfs etc, and speculators are getting cold feet.

 

Is the credit crunch now over? Are big risky bets going to come back into fashion any time soon? Or will the unwind continue for a while yet. The predictions of the 'gurus' are in tatters, but no-one seems to have noticed. These people are still quoted, even though they won't even pick up the phone to their acolytes now. Yet, for many here, it is still business as usual, 2006/2007 style.

 

Maybe this is just a blip, but there is plenty of evidence to the contrary. Gold did exactly what many here said it should - increased in value as high lending pumped up the money supply. But I believe this pumping has seriously wound down and there is a real possibility it will go into reverse, as it already has in the property markets for example. The CBs can try to increase liquidity, and they are, but if punters won't borrow, and retail banks won't lend, there is not a lot they can do.

 

 

 

Steve, I appreciate that my level of debate is beneath you, and not even worthy of a response, but could you at least point out the straw men in my arguments, so I can avoid them in the future?

[Gatesy]

So it's a mess and that sort of mess is bullish for gold.

 

"If it ain't it'll do till the mess get's here"

[azazel]

A new vote on price prediction for the coming months would be interesting now.

[G0ldfinger]

There is a long grinding it must at the time for people with our mindset have been excrutiating 50% correction from late 74 to late/mid 76 it's not pointed out on the graph - I am prepared for that to repeat because I am convinced of the fundamentals.

 

If this repeats we will have a steadily falling price for nearly a year, bottoming at not much above $500 before heading to $4000.

 

This is not going to be easy I think only the most committed will win big.

I agree with this 100%.

[G0ldfinger]

... The CBs can try to increase liquidity, and they are, but if punters won't borrow, and retail banks won't lend, there is not a lot they can do.

...

The BoE begging bowl is now something like $380bn in size I read. So, someone who should NOT have it, has now $380bn. If you think that this won't cause inflation, then buy Sterling bigtime.

 

DISCLAIMER: I get rid of ALL Sterling as soon as it touches my hand/bank account. And in fact I've done so for at least a year.

[wrongmove]

The BoE begging bowl is now something like $380bn in size I read. So, someone who should NOT have it, has now $380bn.

 

Sure, but this was just brought in to try and patch the gap left by the much larger printing exercise of MBSs.

 

This fund has almost exclusively been used by mortgage lenders. Where is the evidience that it has actually boosted mortgage lending, rather than just slightly attenuated the massive drop?

 

 

 

 

[G0ldfinger]

Sure, but this was just brought in to try and patch the gap left by the much larger printing exercise of MBSs.

 

This fund has almost exclusively been used by mortgage lenders. Where is the evidience that it has actually boosted mortgage lending, rather than just slightly attenuated the massive drop?

People who would have had a $380bn hole, now don't have it.

People who wouldn't have been able to put $380bn into commodities now can.

 

EDIT: You have to ask: where does the money go that does not go into mortgages anymore? Where does the money go, that got bailed out and dumped those mortgages?

[drminky]

Great analysis on FS today on the $US bounce by Chris Pupluva:

 

http://www.financialsense.com/Market/cpuplava/2008/0903.html

 

Question is, do we see further weakness in gold and commodities due to this cyclical inflation moderation, or is it all discounted into the price already?

 

Also interesting how he points out that ultimately, this dollar bounce will be self-defeating and kick out the last remaining supports of the US economy..

 

Do all the US traders who are chanting 'U.S.A' as the rest of the world is dragged into recession malaise realise that 'non-decoupling' works in reverse too? ie the rest of the world dragging the US down further into the pit?

[Steve Netwriter]

The predictions of the 'gurus' are in tatters, but no-one seems to have noticed. These people are still quoted, even though they won't even pick up the phone to their acolytes now. Yet, for many here, it is still business as usual, 2006/2007 style.

 

Steve, I appreciate that my level of debate is beneath you, and not even worthy of a response, but could you at least point out the straw men in my arguments, so I can avoid them in the future?

 

I'll give you one tip for nothing. Stop including those little leakage expressions which give you away and you might get a better reception from me.

I have no inclination to offer you free education which I know you will ignore anyway.

 

[headmelter]

QUOTE (Compounded @ Sep 4 2008, 02:13 AM) *

There is a long grinding it must at the time for people with our mindset have been excrutiating 50% correction from late 74 to late/mid 76 it's not pointed out on the graph - I am prepared for that to repeat because I am convinced of the fundamentals.

 

If this repeats we will have a steadily falling price for nearly a year, bottoming at not much above $500 before heading to $4000.

 

This is not going to be easy I think only the most committed will win big.

 

I agree with this 100%.

 

 

GF if you agree with this 100% are you still buying at present? if so, why not wait for the bottom?

[wrongmove]

EDIT: You have to ask: where does the money go that does not go into mortgages anymore? Where does the money go, that got bailed out and dumped those mortgages?

 

So far, it seems the banks have just dumped rather dodgy assets on the BoE to shore up their books. So the taxpayer will eventually get stung, but no new lending to actual customers seems to have occured.

 

 

[wrongmove]

I'll give you one tip for nothing. Stop including those little leakage expressions which give you away and you might get a better reception from me.

I have no inclination to offer you free education which I know you will ignore anyway.

 

Thanks for the tip Steve, but you are going to have to define "leakage expression" to me.

 

You may not want to give a free education, but when point after point I make is not contested in any meaningful way, what am I to assume?

 

 

 

[G0ldfinger]

...The predictions of the 'gurus' are in tatters, but no-one seems to have noticed. These people are still quoted, even though they won't even pick up the phone to their acolytes now. Yet, for many here, it is still business as usual, 2006/2007 style.

Jim Puplava has always believed in a "creamy filling". Maybe this is the creamy filling we're in right now. Commodities inflation abating a little, and the world thinking the crunch is sort of over. Yet, the other even darker and harder shell is coming towards us like a freight train. Eye of the hurricane, right now.

 

Otherwise, many of the 'gurus' have said consistently all along the way that there will be severe corrections. Just a quick look at a historic chart should make it clear to everyone that a particular commodity can correct 50% anytime. Doesn't mean it won't triple some time afterwards.

[wrongmove]

Jim Puplava has always believed in a "creamy filling". Maybe this is the creamy filling we're in right now. Commodities inflation abating a little, and the world thinking the crunch is sort of over. Yet, the other even darker and harder shell is coming towards us like a freight train. Eye of the hurricane, right now.

 

Otherwise, many of the 'gurus' have said consistently all along the way that there will be severe corrections. Just a quick look at a historic chart should make it clear to everyone that a particular commodity can correct 50% anytime. Doesn't mean it won't triple some time afterwards.

 

We are 6 months into this correction, yet gold still needs 25% gains to exceed old highs. Is this typical of earlier bulls?

 

 

 

[G0ldfinger]

So far, it seems the banks have just dumped rather dodgy assets on the BoE to shore up their books. So the taxpayer will eventually get stung, but no new lending to actual customers seems to have occured.

If the large commercials in the US don't go bust and get fed through by the Fed's begging bowl, then this means that they can continue business. Since they're not entirely stupid, they will try to make more business in the commodities area now that everything else is an obvious sucker. Also, many of these banks are in trouble because they gave money back to (bailed out) their clients -- only being possible because the central banks bought at artificially high prices their mortgage bonds etc. Now these people take their money and put it elsewhere. And it won't be mortgages.

[wrongmove]

EDIT: You have to ask: where does the money go that does not go into mortgages anymore? Where does the money go, that got bailed out and dumped those mortgages?

 

 

Emergency funding: Mortgage lenders braced for October 20 as they pencil in another big freeze

 

"Britain's banks are counting the days until October 20, one of the most important dates in their calendar this year, when the Bank of England's emergency lending scheme is due to close.

 

The special liquidity scheme was set up in April to unblock the UK's financial system. By some estimates Britain's mortgage lenders have withdrawn up to £200bn in fresh funds. However the home loans market remains moribund and the City is concerned that the facility will close before it has had much chance to work.

 

The Council of Mortgage Lenders, whose members account for 98% of all Britain's home loans, wrote to the chancellor yesterday urging him to extend the scheme. It was meant to be in place for no more than six months, providing some £50bn in additional funding to the financial system. Mortgage providers may soon need to seek new sources of funding if the central bank pulls down the shutters as scheduled.

 

The true extent of the banks' use of the emergency facility will not be known before it is closed. Analysts at Swiss bank UBS believe it could top £200bn, while other banking industry sources believe the figure could be closer to £70bn.

 

Banks have three years to pay back any funds they borrow under the scheme, but the UBS analysts argue that banks which have used the facility will have to start cutting back on their lending, taking funds out of the mortgage market, if it is not extended.

 

Withdrawing the helping hand, they say, "will create an overhang of funding needs". "At some point liquidity is solvency: an inability to raise funds requires asset sales, or balance sheet reductions," the UBS analysts argue, warning banks could try to cut £200bn of lending.

 

When it was announced in April, the Bank of England estimated initial usage at £50bn but made it clear that it was not going to put a limit on the scheme, which allows lenders to swap mortgage-backed securities for more liquid government paper.

 

Lenders are reluctant to admit they are using the special liquidity scheme, even though they pushed hard for the authorities to introduce a system to help thaw financial markets which had frozen during the credit crisis.

 

Since the onset of the credit crunch in August 2007, the appetite among investors for mortgages packaged up as bonds through a complex process known as securitisation has disappeared. This process had enabled banks to expand their lending dramatically in recent years, often offering 100% and even 125% mortgages to homebuyers...................(cont. in article)

[G0ldfinger]

We are 6 months into this correction, yet gold still needs 25% gains to exceed old highs. Is this typical of earlier bulls?

Oh dear. Do you ever look at any charts? Gold went from $200 in 1974 to $100 in 1976 (and then to $800 in 1980).

 

It could be even worse this time, who knows. The thing is that the fundamentals are at least as clearly in place as in the 70s, if not much more. If gold only corrected 25% and recovered after 6 months already, how bullish would that be? In that case $4,000 by the end of next year if the 70s are any measure.

[G0ldfinger]

...

GF if you agree with this 100% are you still buying at present? if so, why not wait for the bottom?

If I knew where the bottom was, I wouldn't have to post on this page here.

 

Averaging is the thing to do. I buy every month if I can. Don't want to hold fiat if I can avoid it.

[G0ldfinger]

Emergency funding: Mortgage lenders braced for October 20 as they pencil in another big freeze

...

Wrongmove

 

Yes, yes, yes -- houses will totally and utterly implode. Worst housing deflation ever.

 

BUT: There is a huge and constant (and not even in a depression disappearing) stream of money from the industrialized nations to the prodcuing nations (Asia/BRIC) and into pension funds/private investments too.

 

Where will all this money (HUGE amounts every day) go, now that housing and investment banking are complete turds? Even Korea is waking up now, they refuse to buy Merrill's bad loans. What's up with these SWFs? Seems they don't want to burn their billions anymore but invest them into something durable.

[warpig]

I'm starting to think this will happen, but I think the bottom will be around $620. I was going to post this some time ago, but thought it would just be belittled. The question is how much do you believe this and are you prepared to sell to buy back in later, even if it's just a token percentage? Why buy and hold if you are sure you can do better by selling now if even if it isn't buying in to strength?

 

If this repeats we will have a steadily falling price for nearly a year, bottoming at not much above $500 before heading to $4000.

 

[wrongmove]

Oh dear. Do you ever look at any charts? Gold went from $200 in 1974 to $100 in 1976 (and then to $800 in 1980).

 

It could be even worse this time, who knows. The thing is that the fundamentals are at least as clearly in place as in the 70s, if not much more. If gold only corrected 25% and recovered after 6 months already, how bullish would that be? In that case $4,000 by the end of next year if the 70s are any measure.

 

Fair enough. I accept there is a precedent. I would personally call it a bull until 1974, followed by a two year bear, followed by a bubble, but I am prepared to accept your interpretation.

 

 

 

 

 

 

 

 

[wrongmove]

Wrongmove

 

Yes, yes, yes -- houses will totally and utterly implode. Worst housing deflation ever.

 

BUT: There is a huge and constant (and not even in a depression disappearing) stream of money from the industrialized nations to the prodcuing nations (Asia/BRIC) and into pension funds/private investments too.

 

Where will all this money (HUGE amounts every day) go, now that housing and investment banking are complete turds? Even Korea is waking up now, they refuse to buy Merrill's bad loans. What's up with these SWFs? Seems they don't want to burn their billions anymore but invest them into something durable.

 

I am not writing off gold, merely try to show there are two sides to the argument.

 

You say that housing and financials are turds, and I would say that the market agrees (although we may be seeing the start of a cyclical shift from commodities back into finance).

 

But the market could be forgiven for thinking that PMs are pretty turdy too. They have dropped just as far as housing.

 

 

 

[Steve Netwriter]

Thanks for the tip Steve, but you are going to have to define "leakage expression" to me.

 

You may not want to give a free education, but when point after point I make is not contested in any meaningful way, what am I to assume?

 

I'm just too kind to you

 

A Short Guide For Tells and Bluffs

http://www.youtube.com/watch?v=E2iGJXJLuCI...feature=related

 

Your posts are littered with them

 

What is funny is that IMO you have made one good point. Maybe you should check the title of this thread

 

[G0ldfinger]

Fair enough. I accept there is a precedent. I would personally call it a bull until 1974, followed by a two year bear, followed by a bubble, but I am prepared to accept your interpretation.

A quick look at a few charts and I would say at current M3 we could start talking of a bubble in gold somewhere north of $6,000/oz (if the 70s/80s are any measure).

[wrongmove]

I'm just too kind to you

 

A Short Guide For Tells and Bluffs

http://www.youtube.com/watch?v=E2iGJXJLuCI...feature=related

 

Your posts are littered with them

 

What is funny is that IMO you have made one good point. Maybe you should check the title of this thread

 

I haven't got the energy to watch the whole video at the moment, but if you believe I am bluffing, then fair enough. I am not. I am merely enjoying a good debate, and, I thought, bringing some useful angles to the argument. Why on earth I would be bluffing is completely beyond me. I take that as a completely unwarranted slur, and actually just an example of the bad debating you accuse me of.

 

"Argumentum ad hominem (argument directed at the person). This is the error of attacking the character or motives of a person who has stated an idea, rather than the idea itself. The most obvious example of this fallacy is when one debater maligns the character of another debater (e.g, "The members of the opposition are a couple of fascists!"), but this is actually not that common. A more typical manifestation of argumentum ad hominem is attacking a source of information -- for example, responding to a quotation from Richard Nixon on the subject of free trade with China by saying, "We all know Nixon was a liar and a cheat, so why should we believe anything he says?" Argumentum ad hominem also occurs when someone's arguments are discounted merely because they stand to benefit from the policy they advocate -- such as Bill Gates arguing against antitrust, rich people arguing for lower taxes, white people arguing against affirmative action, minorities arguing for affirmative action, etc. In all of these cases, the relevant question is not who makes the argument, but whether the argument is valid.

 

It is always bad form to use the fallacy of argumentum ad hominem. But there are some cases when it is not really a fallacy, such as when one needs to evaluate the truth of factual statements (as opposed to lines of argument or statements of value) made by interested parties. If someone has an incentive to lie about something, then it would be naive to accept his statements about that subject without question. It is also possible to restate many ad hominem arguments so as to redirect them toward ideas rather than people, such as by replacing "My opponents are fascists" with "My opponents' arguments are fascist." "

 

(Logical Fallacies and the Art of Debate)

 

Here's another

 

"Argumentum ad nauseam (argument to the point of disgust; i.e., by repitition). This is the fallacy of trying to prove something by saying it again and again. But no matter how many times you repeat something, it will not become any more or less true than it was in the first place. Of course, it is not a fallacy to state the truth again and again; what is fallacious is to expect the repitition alone to substitute for real arguments.

 

Nonetheless, this is a very popular fallacy in debate, and with good reason: the more times you say something, the more likely it is that the judge will remember it. The first thing they'll teach you in any public speaking course is that you should "Tell 'em what you're gonna tell 'em, then tell 'em, and then tell 'em what you told 'em." Unfortunately, some debaters think that's all there is to it, with no substantiation necessary! The appropriate time to mention argumentum ad nauseam in a debate round is when the other team has made some assertion, failed to justify it, and then stated it again and again. The Latin wording is particularly nice here, since it is evocative of what the opposition's assertions make you want to do: retch. "Sir, our opponents tell us drugs are wrong, drugs are wrong, drugs are wrong, again and again and again. But this argumentum ad nauseam can't and won't win this debate for them, because they've given us no justification for their bald assertions!" "