GOLD

[Catflap]

I forgot to include you below, Catflap.

 

 

Add me next month if you will, at the very top 'Catflap predicts 12/18 month mid-cycle gold bear market'

 

I'm bullish for now but I'll let you know when the top is in

 

 

EDIT EDIT EDIT

 

Sorry, just spotted it's the GBP graph - pound is going to tank further so gold priced in GBP could be ok. Maybe slight falls or slight gains after March unlike gold priced in dollars.

[G0ldfinger]

Add me next month if you will, at the very top 'Catflap predicts 12/18 month mid-cycle gold bear market'

 

I'm bullish for now but I'll let you know when the top is in

Okay.

 

Note to everyone: I am NOT buying at the moment. I am just riding this right now. I might buy again in the next correction, but it could be that by then other things (like palladium, silver, oil) still look cheaper.

 

The trend is up, and the fundamentals more than support it.

 

Can someone send a link to RB?

[romans holiday]

1) Gold becomes money (due to hyperinflation e.g. Zimbabwe) via restatment of Bretton Woods or Bancor system - gold holders win.

2) Fiat lives and does not fully die - this will lead to either inflation or deflation - either way gold holders win.

I'd just add that 1] above could hold true in a deflationary environment where fiat along with all paper assets depreciates in real terms.

[Catflap]

With the greatest respect, I would say that you just don't get it...

 

I refer you to Nixon 1971: http://en.wikipedia.org/wiki/Nixon_Shock

 

It has taken 38 years to get this far. Charts are great at telling you where you have been, not where you are going.

 

The thing about money is that it has infinite demand from people - who doesn't want to be rich? The FED and the BoE thought that they could control the supply side. Not too much printing to give the illusion of the fiat holding some value. With the trillions in bank bailouts this illusion has been shattered. Now we are on our way to Harare...

 

By buying and holding gold, you can hedge against two possible outcomes.

 

1) Gold becomes money (due to hyperinflation e.g. Zimbabwe) via restatment of Bretton Woods or Bancor system - gold holders win.

2) Fiat lives and does not fully die - this will lead to either inflation or deflation - either way gold holders win.

 

So there you have it - trading gold is like Goldfinger already said "for people that like steamrollers" or "catching falling knives".

 

Don't trade gold and don't sell your insurance. I am pro gold long term and I am also bullish on stocks when they are at a bottom - I would rather buy an asset at the very bottom than buy into a market that has already risen by a large amount.

 

What you fail to get is that stocks and gold can often move in the opposite direction in the absence of high inflation or safe haven buying which is where we will soon be. Once stocks bottom and are very undervalued with low p/e ratios and high yields then they will become much more attractive than gold - this is what happened at the end of 1974 when the Dow had crashed by 45%. Gold began an 18-month bear market at the end of December 1974 until August 1976 3 weeks after stocks made their final low in early December 1974.

 

Have a look at current yields on the FTSE 100 for today:

 

Old Mutual 14.5%

BT 17.5%

Barclays 36.4%

Aviva 10.8%

 

Stupid people are panic selling these shares and fleeing into cash for 1% - most of these stocks will easily double in the next 12/18 months and also pay you a nice big dividend. Once the panic goes and stocks simply cannot go any lower then the money will go into stocks and not gold - it will come out of cash, treasuries and gold where it's been seeking safety. Watch the VIX - I think once it gets under 30 then a wall of money will come from these safe havens and back into stocks.

[FWIW]

Don't trade gold and don't sell your insurance. I am pro gold long term and I am also bullish on stocks when they are at a bottom - I would rather buy an asset at the very bottom than buy into a market that has already risen by a large amount.

 

What you fail to get is that stocks and gold can often move in the opposite direction in the absence of high inflation or safe haven buying which is where we will soon be. Once stocks bottom and are very undervalued with low p/e ratios and high yields then they will become much more attractive than gold - this is what happened at the end of 1974 when the Dow had crashed by 45%. Gold began an 18-month bear market at the end of December 1974 until August 1976 3 weeks after stocks made their final low in early December 1974.

 

Have a look at current yields on the FTSE 100 for today:

 

Old Mutual 14.5%

BT 17.5%

Barclays 36.4%

Aviva 10.8%

 

Stupid people are panic selling these shares and fleeing into cash for 1% - most of these stocks will easily double in the next 12/18 months and also pay you a nice big dividend. Once the panic goes and stocks simply cannot go any lower then the money will go into stocks and not gold - it will come out of cash, treasuries and gold where it's been seeking safety. Watch the VIX - I think once it gets under 30 then a wall of money will come from these safe havens and back into stocks.

 

Well that is where we disconnect then. You believe things will go back to 'normal' and I believe things will go back to 'normal'. Your timeframe for normal is >1971 and mine is <1971.

 

Who is right? Who is wrong? Only time will tell.

 

[wren]

Can they lease it out?

GLD is a “derivative” because it is a piece of paper that is supposed to move with – or is derived from - the movement of the underlying asset, which is gold. It is also a derivative because unless a shareholder owns 100,000 shares, a GLD shareholder can never take physical possession of any GLD gold.

 

As shown below, the Trust has been legally structured in a way which makes it impossible to determine if the gold in the Trust is being leased. This is a huge problem because, if the Trust is indeed leasing gold, it could become difficult for the Trust to replace the leased gold in the event that the counter-party leasing the gold defaults. Furthermore, in the event that the Custodian becomes insolvent, and the gold has indeed been leased out by the subcustodians, shareholder’s have almost no legal ability to seek recovery from the Trust/Custodian.

http://www.rapidtrends.com/blog/2009/02/13...to-your-wealth/

 

[Steve Netwriter]

On YouTube:

 

From:

 

I love that

 

[ologhai]

This is not 1980. Anyone claiming that should have a look at these charts

 

...

Seeing as when I posted this chart a couple of days ago, no one appeared to notice it at all, I'll post it again!

 

Here's my latest work of pure imagination... I call it Predicting the Peak!

 

 

Like many artists, I'm hoping not to have to die before it becomes worth something!

[confounded]

My source informed me that a co-ordinated intervention is being organized in the gold market.

 

Don't sell. Buy later.

 

This is what I have been anticipating, I think they will try and for a double top for gold so it is the technically most damaging set up. We are going to have some very interesting charts by the time we a done with this bull market.

[Errol]

I forgot to include you below, Catflap.

 

 

Like the chart. I started buying in 2000. I wish it was still as cheap today.

[Errol]

This is what I have been anticipating, I think they will try and for a double top for gold so it is the technically most damaging set up. We are going to have some very interesting charts by the time we a done with this bull market.

 

They can 'try' for anything they want. Even if they surpress if for a year or two they will ultimately fail.

[gwizzie]

http://www.rapidtrends.com/blog/2009/02/13...to-your-wealth/

 

conclusion: its a trading vehicle.

[gwizzie]

Can they lease it out?

 

can they or do they?

[Steve Netwriter]

Seeing as when I posted this chart a couple of days ago, no one appeared to notice it at all, I'll post it again!

 

I did

 

It's similar to the one I did, only you've added an average, but I had the current price on it

 

Now, how about extracting the real inflation numbers from shadowstats somehow, and doing it inflation adjusted :D

 

[confounded]

They can 'try' for anything they want. Even if they surpress if for a year or two they will ultimately fail.

 

 

There are people expecting a pull back, forced sales are coming into the market due to latest leg down on the markets (look at GSK for a stock that exhibits these deleveraging phases) and the $ chart would form a nice double top, this is the perfect time to strike and I think they will be successful in their attempt, as you say they will ultimately fail. I will be going substantially stronger into Silver and Gold if they do beat it down again.

 

I think wee could see lower lows in both Silver and Gold. As someone pointed out on anther thread I read this could be a deflationary tactic to force people into bonds and keep rates down to help manage the debt burden. I think a lot of the quantitative easy talk is a bluff to draw in "smart (read easy come easy go)" money from the sidelines into stock and houses so it can be properly destroyed in the bubble deflation and the remainder of the gap left after this will possible come from quantitative easing.

 

Central banks do not have control of things atm and they are likely very weary of causing runaway inflation, once they gain control of the situation to the downside they are likely to try and re inflate then but I do think we are in for a period of deflation (I have been firmly in the inflation camp for 2 years) but have recently re-evaluated things.

 

 

 

 

 

 

 

[ologhai]

I did

 

It's similar to the one I did, only you've added an average, but I had the current price on it

 

Now, how about extracting the real inflation numbers from shadowstats somehow, and doing it inflation adjusted :D

 

I could do that certainly, but the 'maximum divided by the minimum' calculation (shown by the red line) isn't effected by inflation anyway (as it's a relative calculation). It appears to show that when gold is in a 'mania' phase, 200%+ is entirely possible, whereas now (at below 150% for 2008), we're just in the foothills and not yet in mania territory -- that point being where the smart money (hopefully us lot) will have the good sense to get out.

[azazel]

Brown sold 400 tons of our gold and people say he could have got 2 billion more for it today. Whats 2 billion in the scheme of things? Shows how cheap gold is. When the papers say that foolish Brown could have got 2 trillion more for our gold, thats when ppeople will feel really cheated out of our inheritance.

[romans holiday]

There are people expecting a pull back, forced sales are coming into the market due to latest leg down on the markets (look at GSK for a stock that exhibits these deleveraging phases) and the $ chart would form a nice double top, this is the perfect time to strike and I think they will be successful in their attempt, as you say they will ultimately fail. I will be going substantially stronger into Silver and Gold if they do beat it down again.

 

I think wee could see lower lows in both Silver and Gold. As someone pointed out on anther thread I read this could be a deflationary tactic to force people into bonds and keep rates down to help manage the debt burden. I think a lot of the quantitative easy talk is a bluff to draw in "smart (read easy come easy go)" money from the sidelines into stock and houses so it can be properly destroyed in the bubble deflation and the remainder of the gap left after this will possible come from quantitative easing.

 

Central banks do not have control of things atm and they are likely very weary of causing runaway inflation, once they gain control of the situation to the downside they are likely to try and re inflate then but I do think we are in for a period of deflation (I have been firmly in the inflation camp for 2 years) but have recently re-evaluated things.

Good post. Welcome to the dark side.

[Pixel8r]

Okay.

 

Note to everyone: I am NOT buying at the moment. I am just riding this right now. I might buy again in the next correction, but it could be that by then other things (like palladium, silver, oil) still look cheaper.

 

The trend is up, and the fundamentals more than support it.

 

Can someone send a link to RB?

You should add when RB said that Gold would be produced in particle accelerators.

 

 

[confounded]

Good post. Welcome to the dark side.

 

I am prepaired to be wrong but everything is managed (to the best of their abilities) these days and if you try and think from the point of view of those in charge it seems to be pretty much what happens.

 

See my post on the other dark side yesterday Link

 

By thinking as if I were someone who wanted to protect the markets/system it is remarkably easy to call the intervention. This is not based on chartism/support levels, just my view of the charts at the time and when they seem to be getting out of control.

[jinbal]

Brown sold 400 tons of our gold and people say he could have got 2 billion more for it today. Whats 2 billion in the scheme of things? Shows how cheap gold is. When the papers say that foolish Brown could have got 2 trillion more for our gold, thats when ppeople will feel really cheated out of our inheritance.

+1

 

was thinking the same

 

2 billion? chump change these days

 

[G0ldfinger]

You should add when RB said that Gold would be produced in particle accelerators.

That's what I meant by CERN.

[frizzers]

Gold and silver COT reports show do not indicate an impending top. The traders are not at extreme levels identified with previous tops. Would post charts but imageshack is down.

 

Meanwhile average UK house at c.£150, 000 and gold at c£700 an ounce now 214 ounces.

 

Average London house at c.£260,000 now equals 371 ounces.

 

This ratio is changing rapidly as gold rises, sterling falls and house prices fall. Big differences on just three months ago.

 

Goldfinger's eventual target is 50 ounces for av UK home . Mine is or was 100 ounces. I think we could see 50 though.

 

GF what is your target for London h prices? 1980 peak was just above 100 ounces . I think we could make that.

 

In full scale disaster scenario - not impossible - you'll pick up places at the bottom at below market value.

 

This is unfolding faster than I expected. I think a retrace must happen soon. Hang onto your hats.

[FWIW]

I am prepaired to be wrong but everything is managed (to the best of their abilities) these days and if you try and think from the point of view of those in charge it seems to be pretty much what happens.

 

See my post on the other dark side yesterday Link

 

By thinking as if I were someone who wanted to protect the markets/system it is remarkably easy to call the intervention. This is not based on chartism/support levels, just my view of the charts at the time and when they seem to be getting out of control.

 

I thought I was the only one who thought this. I was starting to doubt my own sanity. Was I seeing conspiracy everywhere? I feel better that we may be 'mad' together!

 

You have hit the nail on the head there(the bit in bold). The way I am looking at this system management is:

 

If I had sole, personal access to the new fiat money, what would I do for maximum profit? Would I be a good citizen and start distributing the money? No way, you would wait. And wait some more. Eventually you would need to start buying up assets for pennies on the pound. You would do it very carefully and slowly. No need to rush, the world is your oyster.

 

The flaw in this plan is that the longer this 'managed deflation' continues, the actual foundations of what money is start to creak. Gold starts to rise as it is 'God's Currency' and always a store of wealth. They tried the ETF route, but I think they have failed. They may try again later, and I fully expect them to but us Ciga's are rightfully obsessive over our family's well being. Bring on the sales I say.

 

Now the problem the 'system manager' has are these pesky derivatives or financial WMD. They are blowing up all over the place. Nobody really knows how much they have. They also seem to go off in a cascade, which just makes the problem worse.

 

The only thing I see these 'system managers' being able to do is to use this new money to go into the Stock Market. I fully expect some share prices to mysteriously start to rise. Fundamentals and failure of doomster's will be the reasons given on Bloomberg. This will be bad for gold, as every new gold etf 'speculator' will be rushing for the exits.

 

Again, we Ciga's can 'play' in this sandbox too. Rather than purchase new gold as soon as the price dips, I will buy certain financial shares. As soon as the gold price drops to a level where the 'system managers' feel that their work is done. They will stop pumping their new fiat into the stock market. I expect the DJIA to be at around 5000 (or lower) at this point. It is at this stage where I will move from shares back into new gold.

 

Here is a chart of where we have been:

http://bigcharts.marketwatch.com/charts/bi...1&rand=3892

 

Your thoughts on this will be appreciated.

[grumpy-old-man]

I thought I was the only one who thought this. I was starting to doubt my own sanity. Was I seeing conspiracy everywhere? I feel better that we may be 'mad' together!

 

confounded is on a one man mission on this one.

 

 

 

 

off topic & pinched from the other side, a bit of light heartedness tonight. Would you sell your best jumper for some ?