GOLD

[id5]

Great charts id5.

 

I wonder if the patterns seen in the POG will hold over the next few years. I think that we may reach a time soon when it is just going up all the time and not having the usual seasonal movements.

 

As Yoda says "Hard to see the dark side is"

[Pixel8r]

As Yoda says "Hard to see the dark side is"

 

 

Just wanted to make sure that people consider all options. Trying to trade this bull could be dangerous, I already know of two people how sold earlier in the year, based on the dollar price, and missed the UK currency devaluation benefit of holding gold.

[marmite]

Wow, gold in GBP up 44.3% in 2008 !!!!!! But I dont understand all the mainstream press have been bashing it

 

 

http://goldmoney.com/en/commentary.php

 

Gold Climbs Again - Eight Years in a Row

 

The numbers for 2008 are in. Gold has done it again. Gold is up for the eighth year in a row against the US dollar. Here are gold's rates of appreciation in terms of several major currencies.

 

Gold % Annual Change

USD AUD CAD CNY EUR INR JPY CHF GBP

2001 2.5% 11.3% 8.8% 2.5% 8.1% 5.8% 17.4% 5.0% 5.4%

2002 24.7% 13.5% 23.7% 24.8% 5.9% 24.0% 13.0% 3.9% 12.7%

2003 19.6% -10.5% -2.2% 19.5% -0.5% 13.5% 7.9% 7.0% 7.9%

2004 5.2% 1.4% -2.0% 5.2% -2.1% 0.0% 0.9% -3.0% -2.0%

2005 18.2% 25.6% 14.5% 15.2% 35.1% 22.8% 35.7% 36.2% 31.8%

2006 22.8% 14.4% 22.8% 18.8% 10.2% 20.5% 24.0% 13.9% 7.8%

2007 31.4% 18.6% 10.4% 23.0% 17.9% 17.5% 24.7% 21.5% 29.2%

2008 5.8% 32.5% 32.4% -1.1% 11.9% 30.4% -14.9% 0.2% 44.3%

Average 16.3% 13.3% 13.6% 13.5% 10.8% 16.8% 13.6% 10.6% 17.1%

 

The appreciation gold has achieved over the past eight years is remarkable. Without any doubt, gold's 16.3% average annual change against the US dollar has made it one of the world's best performing asset classes this decade, but oddly, gold continues to be ignored by many. I expect this inattention to change in the year ahead.

 

The outlook for the US dollar continues to worsen as the Federal Reserve balloons its balance sheet. What's more, the Fed's zero interest rate policy removes any incentive to hold dollars in an environment where counterparty risk remains an intractable problem and where rapid money growth portends a surge in inflation in the weeks and months ahead.

 

M3, which measures the total quantity of dollars in circulation, grew by about 10% in 2008, near record highs. Two of its components, M2 and M1, increased over the past year by about 10% and 17% respectively. These rates of growth in the quantity of dollar currency are highly inflationary.

 

Credit continues to contract, and as a consequence is destroying a large amount of wealth as overvalued assets that were buoyed by easy credit are now being marked down in price to realistic levels that more accurately reflects their actual worth. It is important to note, however, that we are measuring the price decline in these overvalued assets with a currency that is being ever-inflated. Though the Consumer Price Index has dropped a little over the past couple of months principally because of the lower crude oil price, the CPI continues to rise on an annualized basis, even by the federal government's own calculations, which understate the true rate of dollar debasement.

 

More inflation and more dollar debasement can be expected. The Federal Reserve has thrown away the rule book. It is ignoring three hundred years of central bank practices and putting the dollar on an untried path in an attempt to avoid the consequences of the inevitable bust that always follows the boom created by easy credit. The Federal Reserve's grandiose experiment will I expect eventually destroy the dollar, and I don't hold out much hope for any other national currency. To explain why, take a close look again at the above table.

 

We can see that gold is rising against every national currency. The reason for this phenomenon is that the dollar is the world's reserve currency, and because of this role, it is held as a reserve by central banks around the world. The dollar provides part of the base upon which other currencies are created. Therefore, as the dollar is debased, other national currencies are also being debased along with it. In other words, the US dollar is now going down a 'black-hole', and its gravitational pull is dragging every other currency down with it as evidenced by the rising gold price this decade in all currencies.

 

There is one other unique aspect apparent in the above table. The average annual rates of appreciation that gold has achieved against the nine currencies in this table is remarkably consistent. Gold appreciated 13.3% to 13.6% on average for eight years in terms of four of the currencies. Gold gained from 10.6% and 10.8% against the two best currencies, the euro and Swiss franc. The euro and the Swiss franc are the 'best' in the sense that less of their purchasing power has been inflated away compared to the other seven currencies. Against the three worst currencies that have lost the most purchasing power from inflation, the US dollar, Indian rupee and British pound, gold appreciated from 16.3% to 17.1%. Then contrast this consistency in gold's average annual rates of change to gold's annual change against these currencies in any year.

 

Gold's worst annual performance was the -14.9% it lost this past year against the Japanese yen. It's best annual performance was also achieved this year with gold's 44.3% appreciation in terms of the British pound. Here's my point.

 

Gold shows remarkable consistency when viewed over the long-term. Thus, it is national currencies that are volatile, not gold. Annual changes in gold are a result of currency fluctuations, not anything inherent to gold itself, and this point is proven by the consistency of gold's average annual appreciation this decade, which smoothes out the annual volatility.

 

We are in a world of freely floating exchange rates where currencies bob up and down relative to one another. But in reality these currencies are not 'floating'. They are actually sinking when compared to gold. The purchasing power of every national currency is being eroded, but this erosion is sometimes difficult to see when currencies are viewed only against each other. But the true picture clearly emerges when all of the world's currencies are compared to gold.

 

In an environment where the purchasing power of national currencies is being constantly eroded by bad central bank policies, which has been the case throughout this decade, own gold. Importantly, ignore the month-to-month and even the year-to-year fluctuations in the gold price. These fluctuations are not important from a long-term point of view, and in any case occur from factors that cannot be predicted.

 

For example, who forecast a year ago the extraordinary strength in the yen this year from the unwinding of the carry trade? It nevertheless happened, and consequently, gold declined -14.9% in terms of yen this year even while gold soared against the British pound. But for the past eight years, gold remarkably is up 13.6% on average in yen and 17.3% in British pounds, which is the important point.

 

Therefore, continue to follow the same strategy that I have been recommending this entire decade. Continue to accumulate gold using a dollar-cost averaging plan. Some months and even some years you will be accumulating gold at a higher price, and at other times a lower price. But over the long-term your consistent accumulation of gold will be averaged in at a good price.

 

When you accumulate gold this way, you are saving sound money, which is the prudent thing to do in a world where the purchasing power of all national currencies is being eroded by bad central bank policy. The same conclusion is also true for silver, if you are inclined to take the additional risk that comes with silver because it is more volatile than gold.

 

The following table presents silver's annual rates of appreciation for the same nine major currencies.

 

Silver % Annual Change

USD AUD CAD CNY EUR INR JPY CHF GBP

2001 -0.1% 8.5% 6.1% -0.1% 5.3% 3.1% 14.4% 2.3% 2.7%

2002 4.8% -4.6% 4.0% 4.9% -11.0% 4.3% -5.0% -12.6% -5.3%

2003 24.0% -7.3% 1.4% 23.9% 3.2% 17.7% 11.9% 11.0% 11.9%

2004 14.3% 10.2% 6.5% 14.3% 6.4% 8.6% 9.6% 5.4% 6.5%

2005 29.6% 37.7% 25.5% 26.3% 48.1% 34.6% 48.8% 49.3% 44.4%

2006 45.3% 35.3% 45.3% 40.5% 30.4% 42.6% 46.7% 34.8% 27.5%

2007 15.4% 4.1% -3.1% 8.0% 3.5% 3.2% 9.5% 6.7% 13.5%

2008 -23.8% -4.7% -4.7% -28.9% -19.5% -6.2% -38.8% -27.9% 3.8%

Average 13.7% 9.9% 10.1% 11.1% 8.3% 13.5% 12.1% 8.6% 13.1%

 

Silver too has appreciated in terms of each of the above currencies, but its annual changes show much greater volatility than gold. These changes range from -38.8% to 49.3%.

 

To conclude, gold and silver will probably appreciate in 2009. There is no reason to think otherwise, given the path chosen by central banks in general and the Federal Reserve in particular. After all, who wants to own any national currency when the interest income one can receive is less than the inflation rate? Who wants to own any national currency when counterparty risk makes repayment uncertain? In short, the interest income available today on any national currency does not fully compensate for the risks one takes when holding that currency.

 

So why lose sleep from worrying about holding national currency and what the Federal Reserve or some other central bank will do to that currency? Own the precious metals instead. But as I repeatedly emphasize, own physical gold and physical silver. Own the real thing, and do not accept paper substitutes.

[GatheringStorm]

Gold's worst annual performance was the -14.9% it lost this past year against the Japanese yen.

 

I wouldn't mind betting the price of bullion coins on Japanese eBay has gone up in the last year! Anyone know for a fact if this is the case?

 

 

 

[safebetter]

About as positive as the BBC get on Gold:

 

Commodity price movements (Solid gold returns?)

 

Text in brackets was the link from the main Business section.

 

Interesting they are planning to chart this to June 2009, what do they/know expect?

 

SafeBetter

[Steve Netwriter]

 

 

 

id5,

Interesting pattern in those charts. Has anyone noticed each year line is above the previous one :lol:

 

As always, great charts

 

[wren]

About as positive as the BBC get on Gold:

And the British Broadcasting Corporation can't deign to provide a graph of the price gold in GBP.

[Pixel8r]

Don't Miss the Coming Gold Bull

 

With the massive monetary expansion experienced in recent months and the promise for unprecedented levels of money and credit supply increase in coming months, the United States Federal Reserve looks on paper to be sending America straight into hyperinflation. Germany's post-World War I Weimar Republic, post-World War II Hungary, 2001 Argentina, and present day Zimbabwe are all analogous examples of massive debt monetization, which all led to hyperinflationary disaster. Never before has the entire world's economy been linked to one nation's, however, as is the case today with the United States.

 

In a case of economic mutually assured destruction, foreign creditor nations and their central banks can't afford to spark a run on the US Dollar, because it would kill their own export-based economies, as well as devalue their debt repayments and foreign exchange reserves. But the United States has been financing consumption through debt for decades and has resorted to monetary expansion to finance its debt and deficit spending, which is only going to increase with Barack Obama's infrastructure and social programs. The Troubled Assets Relief Program (TARP) itself amounts to $700B, all of which will essentially be "printed." Foreign demand for US debt is all but gone, as creditor nations are now attempting to unwind their USD positions. Huge creditor nations like China and Iran were net sellers of US Treasuries in recent months, attesting to the weakening of the American debt bubble. So where's all this excess liquidity go?

 

more

[marmite]

I dont know what can be read into this, but whilist at work flicking through a copy of Fridays Sun Newspaper, came accross the Sun City section and " Six Sun Share Tips for 2009 " http://www.thesun.co.uk/sol/homepage/news/...icle2090516.ece

 

GlaxoSmithKline

Pice

888

Carillion

Vatukoula Gold Mines

BAT

 

Shoe shine boy moment ????

 

Although last years tips are interesting http://www.thesun.co.uk/sol/homepage/news/...ticle642837.ece

 

RBS 444p 52.50p

BT 272.75p 141p

Synchronica 5.25p 3.75p

Ascribe 31p 27.85p

Premier Foods 204.75p 33.25p

UK Coal 462p 112.75p

[Steve Netwriter]

The more I read, the more of a grumpy old man I become

 

I now object to the expressions "monetary inflation" or "monetary policy" etc

 

As Mike Maloney explains, we have two forms of money, gold & silver. All the fiat stuff is currency.

 

So it should really be "currency inflation" etc.

 

It's fascinating when you start being really nit picking about words because you start to notice when a central bank article uses the word currency. I bet most people never notice these little things.

 

I guess that makes me a "money bug" :D

 

[wren]

So it should really be "currency inflation" etc.

An inordinate increase in the amount of toilet paper currency always makes me worry what it's for that's increasing.

 

[FWIW]

I have started to hate the word inflation for similar reasons. I now just say to myself currency debasement everytime I see it!

[GatheringStorm]

 

I notice that Krugerrands are now getting bids over £720.00 now on eBay. I've been a bug since 2005 (thanks to Doc Bubb as it happens) but surely "little guy's" gold is getting a bit overbought now?

 

It seems only yesterday I was buying Krugs for £245.00. I'm surprised these prices aren't liberating more dusty old bullion coins from "deep storage" and onto the market.

 

I only wish this kind of mania would hit the gold stocks!

 

 

[Steve Netwriter]

An inordinate increase in the amount of toilet paper currency always makes me worry what it's for that's increasing.

 

Perhaps they are expecting a worldwide case of food poisoning :lol:

 

Oh dear, that's not a happy thought

 

[needmorespace]

I notice that Krugerrands are now getting bids over £720.00 now on eBay. I've been a bug since 2005 (thanks to Doc Bubb as it happens) but surely "little guy's" gold is getting a bit overbought now?

 

It seems only yesterday I was buying Krugs for £245.00. I'm surprised these prices aren't liberating more dusty old bullion coins from "deep storage" and onto the market.

 

I only wish this kind of mania would hit the gold stocks!

My thinking exactly! I bought 5 Krugerrands from CID for £505 each in their 'sale' a couple of months ago and at the time I was worried that I'd made a rash decision. I'm tempted to flog them on eBay and put the proceeds in my brokerage account while I look for opportunities...

 

[Pixel8r]

I only wish this kind of mania would hit the gold stocks!

 

I think that it already starting to happen, just not to all in a mania yet. Take a look at SLW (+110%) RGLD (+105%) AUY (+60%) in the last month or so. All the gold stocks got massively oversold, the true gems are starting to move, the rest will follow soon.

 

 

[wren]

I notice that Krugerrands are now getting bids over £720.00 now on eBay. I've been a bug since 2005 (thanks to Doc Bubb as it happens) but surely "little guy's" gold is getting a bit overbought now?

I suppose some bidders on Ebay are a bit out of touch.

 

But as some say "a bird in the hand is worth two in the bush".

 

And I should know: there's some element of truth in it.

 

(Being a wren .)

 

[GatheringStorm]

 

I think that it already starting to happen, just not to all in a mania yet. Take a look at SLW (+110%) RGLD (+105%) AUY (+60%) in the last month or so. All the gold stocks got massively oversold, the true gems are starting to move, the rest will follow soon.

 

the CDNX has looked very perky these last four trading days but it could be that the manipulators are on their hols.!

 

It looks like the HUI/CDNX are capable of decoupling from a sideways DJIA but I still doubt whether they could shrug off another broad market sell off.

 

I wish I'd had the fortitude to buy the HUI when it was below 160 recently! On a historical chart, trades look like no brainers, the TA is screaming out at you but move over to the right hand edge and all of a sudden, nothing is quite so obvious!

 

 

[safebetter]

Nice balanced article:

 

Highest Gold Value Ever

 

Nice way of charting golds price value also:

 

MOREAU Index

 

SafeBetter

[Mr Pipples]

Nice balanced article:

 

Highest Gold Value Ever

 

Nice way of charting golds price value also:

 

MOREAU Index

 

SafeBetter

 

Ha! Just came to this thread to post that very link! Like what it says about silver...

 

Last paragraph:

Buying food and improving security now will be a great investment – Bullish as I am about the prospects for precious metals, I continue to view them as only the second best investment that one can make. This is an excellent time for everyone to review their personal security posture, and to increase the amount of food they have available for emergencies. I hope that readers will not need either improved personal security or increased storage of emergency food, just like I hope that they will not need to collect on fire insurance. In troubled times, it is less important to worry about what we hope we will need, and more important to insure our families against risks that could be severe. Best of luck to everyone throughout 2009. Cheers!

 

I'd suggest that, although some emergency scran is a good idea, thinking more about growing your own, allotments, etc. would make sense too.

[Mr Pipples]

Gold is selling at all-time highs - http://www.ft.com/cms/s/0/c52952b0-d937-11...0077b07658.html

From Mr Peter Munk.

 

Sir, With reference to Lex and “All fall down” (December 27): Well, not quite all! Your column talks about stocks, bonds, real estate – even art – but never mentions gold. Yet, until very recently, gold was not only considered the global currency, but its price was a measure of the strength of a country's economic health, currency and fiscal responsibility.

 

Your omission of gold is even more surprising considering that gold – in contrast to all other investments – not only has not fallen, but is selling at all-time highs in the currencies of those countries in which its largest buyers are domiciled. It sells at nearly all-time highs in Indian rupees, Russian roubles, Japanese yen, Turkish lire, and British pounds – maybe even the euro. When considering the current global conditions and the desperate need for liquidity by all forced to de-lever, and gold being the sole asset that can be turned into cash at a profit, its performance is nothing but astounding!

 

Lex’s failure to mention gold at all is somewhat hard to understand. Your newspaper – one of the leading voices of global finance – should focus on and try to explain gold's re-emerging role as a true store of value, especially at times like these.

 

Peter Munk,

Chairman,

Barrick Gold Corporation,

Toronto, ONT, Canada

[Catflap]

I dont know what can be read into this, but whilist at work flicking through a copy of Fridays Sun Newspaper, came accross the Sun City section and " Six Sun Share Tips for 2009 " http://www.thesun.co.uk/sol/homepage/news/...icle2090516.ece

 

GlaxoSmithKline

Pice

888

Carillion

Vatukoula Gold Mines

BAT

 

Shoe shine boy moment ????

 

 

I saw there was a lot of interest/trading on iii.co.uk regarding Vatukoula so I had a look - it's made a loss every year for the past 6 years .... I wouldn't touch this share with a bargepole!.

[Mr Pipples]

John Rubino - Gold, Silver (and Green Tech) Going Up *AUDIO* - http://www.howestreet.com/audio/johnrubino_2008_1231.mp3

[Pixel8r]

United States Treasuries Are The Biggest Bubble Of All By: Trace Mayer, J.D.

 

There is no doubt that the current environment is a deflationary credit contraction in contrast to an inflationary credit expansion. The inflationary credit expansion lasted for at least 60 years and perhaps even as long as 100-600 years. Change is here and change is now. I will speaking on this topic Jan. 25-26 in Vancouver, BC at the notable Cambridge House Investment Conference.

The zenith was reached and a few years ago the deflationary credit contraction began. 2008 was simply the aroma of the appetizers being prepared. Soon we will get our first course of at least a nine course meal. Oh the anticipation.

 

TREASURIES ARE THE BUBBLE

 

During 2008 one of the better asset classes to have capital in was the Treasury Bond. During 2008 gold in FRN$ was up about 6%, gold in £ was up 44% while gold in ¥ was down about 15%. This is because the FRN$ and ¥ are considered by many to be ’safe’ and ‘liquid’. During an inflationary credit expansion capital moves up the liquidity pyramid. During a deflationary credit contraction capital moves down the liquidity pyramid.

Because the FRN$ is the world reserve currency and because Treasury Bonds are considered ’safe’ and ‘liquid’ therefore it is predictable that capital would flow into the Treasury Bond and it would perform well during 2008. But the Treasury Bond is fraught with R-I-S-K and that R-I-S-K will eventually be made apparent. At the same time gold’s purchasing power is increasing as revealed by gold to oil and gold to DOW being near highs.

The FRN$ in its current form is the largest bubble and Ponzi scam of them all. This fiat currency bubble has swollen for 60, 100 and perhaps even 600 years. The FRN$ bubble is in search of a golden pin and is going to find one.

 

full article

 

[G0ldfinger]

Nice one.