lowrentyieldmakessense(honest!) Posted February 22, 2009 Report Share Posted February 22, 2009 It was a collapse in economic activity that undermined the mark that led to the hyperinflation in Weimar Republic. The government had to print money to pay for social welfare. The Bank of England is likely to buy government bonds to fund social welfare in the QE about to take place. I know its amazing how many cant see this hyperinflation (if it happens - and it probably will) will be a currency event - not one caused by a pick up in economic activity. just who is going to fund the future US and UK bonds/gilts - unless they can manage to circulate the newly printed money between themselves without anyone outside of the central banks realising whats happening. Link to comment Share on other sites More sharing options...
The Traveller Posted February 22, 2009 Report Share Posted February 22, 2009 Can someone paste whole article if they can as I have used my 10 free article limit. You have to register to gain free access to 10 articles per month. I thought this item was encouraging for both gold and silver. A workaround to this is to clear your cache and cookies in your browser. The limit gets reset back to zero after that... as it does with most sites with similar reading 'limits'. Link to comment Share on other sites More sharing options...
confounded Posted February 22, 2009 Report Share Posted February 22, 2009 It was a collapse in economic activity that undermined the mark that led to the hyperinflation in Weimar Republic. The government had to print money to pay for social welfare. The Bank of England is likely to buy government bonds to fund social welfare in the QE about to take place. Not dismissing this as a possible outcome, hyperinflation through currency collapse, I just don't think we are at that stage now, but given the speed things can happen I may regret taking my current stance. In the 1970 to 1980 period, gold made big moves. Is this because they allowed it or had no control over it? I suspect that they allow gold to go up. How do you explain the rise in Sept to March 2007? I'm sure they could have defended the price to keep it below $700. If there's going to be a gold rush they dont want to give it away too cheap to foreigners. What other PMs do they defend the price of? My View on the 1970-80's spike is it got away from them, it is not possible to beat the market they can only chose the best possible times to have maximum effect and the cause the appearance they want. Also they would have learnt from it and probably know now more than ever the effect high gold price has on a the confidence in a fiat system. If I was them I would be striking on gold soon. I actually think the run up in 2007 was manipulated I think it would have been a lot higher than the $1000 it got to. Banking institution that had been around for 130 years collapsing and gold did not even reach an inflation adjusted high from a relatively minor in comparison crisis. I remember the regular 1:30 and 3:30 smack downs which we have not seen for a while now and which is making me feel uneasy currently. Whilst I share your worries to some extent, I dont feel safe with GBP or government debt. They wont trick me out of my gold. If gold is going to $2000 or $10,000 how many times do I jump in and out on the way up there. Many of you guys were informed enough to buy physical at the right time, If I owned physical gold at £350/oz or less then there is no way I would be selling it. I absolutely do not feel this is the end of the bull market for gold, however I believe this is the picture they will try and paint. There is still a chance the market could get away from them and we see the highs you quote, I don't see those figures as crazy but I stand by my view this may not be the time for that rally. Circumstance change rapidly and I reserve the right to change my mind again Link to comment Share on other sites More sharing options...
electroweak Posted February 22, 2009 Report Share Posted February 22, 2009 http://www.ft.com/cms/s/0/eff64394-fdd7-11...0077b07658.html Can someone paste whole article if they can as I have used my 10 free article limit. You have to register to gain free access to 10 articles per month. I thought this item was encouraging for both gold and silver. Insight: Gold primed to be ‘mania asset’ By Steve Ellis Published: February 18 2009 16:26 | Last updated: February 18 2009 23:32 Gold is exhibiting all the classic signs of being in a structural bull market. On fears of inflation in early 2008, it rallied. Then, on fears of deflation in late 2008, it rallied again. So does gold perform better during inflation or deflation? EDITOR’S CHOICE Investors rush into gold coins - Feb-18 Fund amasses bullion holding - Feb-18 World Gold Council statement - Feb-18 In depth: Gold - Jan-03 In our view, that question is the wrong starting point. On the contrary, the rationale for owning gold, as it once again approaches the $1,000 an ounce level, is the prospect of mounting monetary disorder. The US Federal Reserve, having flooded the market with liquidity by more than doubling its balance sheet in less than six months, may be unable or unwilling to withdraw it in time for fear of precipitating a secondary relapse in economic activity. Other central bankers will also face intense pressures to “support” their domestic economy by weakening the currency, leading to competitive currency devaluations. The race to the bottom in fiat currencies has begun and hard assets, particularly gold and silver, should be the primary beneficiaries. Gold is a prime candidate to become a “mania asset” once its demand becomes chiefly financially driven as opposed to jewellery and/or industrial demand driven where its upside could be capped by “sticker shock”. In fact, gold is currently one of the few remaining major asset classes where a case could be made for it to rise in a parabolic fashion. Once the psychologically significant $1,000 an ounce is breached convincingly, the speed of the move beyond that level could accelerate sharply. One precondition for a mania is there must be uncertainty about how the asset is properly valued which allows “new era” thinking to take hold. This is very true for gold. Price explosion might not be imminent, however. Gold is experiencing unprecedented buying by exchange-traded funds, offset by substantially reduced jewellery demand. The fall in the Indian rupee has meant Indian gold prices have reached record levels. This is causing a slowdown in jewellery purchases (even though rupee expenditure levels are holding up, the tonnage of gold imports is suffering). The long-term story for gold, however, is as a remonetisation play as investors lose faith in fiat currencies. Keep an eye on gold lease rates; a spike would be a good lead indicator that gold is about to punch higher as this would reflect a shortage of lendable bullion. Rising lease rates will cause gold to go into backwardation as holders of gold may not want to sell their gold forward under any circumstances a trend currently evidenced by the high physical premium being paid for gold coins. Rising lease rates prefigured the last big move in gold back in the spring of 2007 just as the two Bear Stearns hedge funds were blowing up. Central Banks feared counterparty risk for the first time in 20 years and substantially curtailed gold lending and sales. This led to a 40 per cent rally in gold from $700 to over $1,000. How high can gold ultimately go? A Dow Jones Industrial Average/gold ratio of 2:1 would be a good sign the bull market in gold is getting well advanced. We saw this in 1932 and 1980. Only nine years ago in 2000, however, this ratio reached over 40:1. Arriving at 2:1 again does not necessarily mean the Dow must decline significantly from here; more likely gold prices surge and the Dow stays range-bound but volatile. Investors are looking for good risk/reward investments. I cannot say with any confidence that gold will not be without risk and volatility but at least it offers early participants plenty of upside reward to compensate them for the wild ride. Speaking to central bankers, this is the first time I can recall them actually favouring a high gold price. Normally they see high gold prices as a lack of trust in the financial system (not to mention their ability as central bankers). Alan Greenspan, the former Fed chairman, for example used to target a gold price of around $400 to $500 an ounce. Recently, the central bankers have become more enamoured of higher gold prices as it would suggest that their attempts to stave off deflation were starting to work. Central bankers in favour of higher gold prices? Things really have changed. The writer is manager of the RAB Gold Strategy Link to comment Share on other sites More sharing options...
G0ldfinger Posted February 22, 2009 Author Report Share Posted February 22, 2009 How high can gold ultimately go? A Dow Jones Industrial Average/gold ratio of 2:1 would be a good sign the bull market in gold is getting well advanced. We saw this in 1932 and 1980. Only nine years ago in 2000, however, this ratio reached over 40:1. Clearly reads too much GEI this guy. Link to comment Share on other sites More sharing options...
electroweak Posted February 22, 2009 Report Share Posted February 22, 2009 Clearly reads too much GEI this guy. I was just thinking who here was Steve Ellis! Link to comment Share on other sites More sharing options...
G0ldfinger Posted February 22, 2009 Author Report Share Posted February 22, 2009 SWRichmond on GIM: http://goldismoney.info/forums/showpost.ph...postcount=25715 We are so far from the time to sell gold (unless you are a trader) that it's almost stupid to talk about it. These assholes are going to destroy the currency. We may have already crossed the line, in fact. I am no investment adviser, DYODD, but my conviction is absolute now. Absolute. I still hold a substantial cash reserve, but as I've stated before its purpose is to defend my PM position and be able to avoid a stressed forced liquidation of the PM's. ... "There is no means of avoiding the final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as the result of a voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved." - Ludwig vonMises, Human Action Link to comment Share on other sites More sharing options...
Steve Netwriter Posted February 22, 2009 Report Share Posted February 22, 2009 I still hold a substantial cash reserve, but as I've stated before its purpose is to defend my PM position and be able to avoid a stressed forced liquidation of the PM's. Gets back up off floor :blink: :blink: Link to comment Share on other sites More sharing options...
electroweak Posted February 22, 2009 Report Share Posted February 22, 2009 Gets back up off floor :blink: :blink: I guess to use to buy necessities until gold becomes the defacto currency? Link to comment Share on other sites More sharing options...
G0ldfinger Posted February 22, 2009 Author Report Share Posted February 22, 2009 Have been waiting on a Goldline/Bairds delivery for almost three weeks now. These guys seem to be busy. I guess towards end of this week I will send them a reminder if the precious does not arrive meanwhile. Link to comment Share on other sites More sharing options...
frizzers Posted February 22, 2009 Report Share Posted February 22, 2009 It will come. DOn't worry. They are reliable. Hey, silver is almost at all time highs in sterling - just under £10 an ounce. The Dow Jones to gold ratio is around 7 . (Dow 7000 , gold 1000). Listening to the very clever Frank Barbera he sees a big stock sell off coming and was ambivalent about gold. But if we get cgnao's Dow 3000 , well we're nearly there. I'm convinced gold s going to be hit this week or next. But there are so many others convinced of it that it makes me slightly bullish. Link to comment Share on other sites More sharing options...
G0ldfinger Posted February 22, 2009 Author Report Share Posted February 22, 2009 It will come. DOn't worry. They are reliable. Yes, I am not really worried. But this is the longest ever that I had to wait for bullion. Hey, silver is almost at all time highs in sterling - just under £10 an ounce. Not if you go back far enough, of course. http://gold.approximity.com/since1968/Silver_GBP.html The Dow Jones to gold ratio is around 7 . (Dow 7000 , gold 1000). Listening to the very clever Frank Barbera he sees a big stock sell off coming and was ambivalent about gold. But if we get cgnao's Dow 3000 , well we're nearly there. Yes, Barbera down in his cave is super-bearish. Hard to believe that we could see such a massive slump, but the economy is really tanking. The consequences (pension funds, private pensions) will be horrible. People are still so into this 'stocks' thinking. From 1960-80 people where much less interested in stocks. Someone once said on one of these radio shows that back in 1980 if you asked anyone in any larger city in Europe where the stock exchange was, they wouldn't know it. Today, everyone knows. The stock market bull hasn't died in all investors' minds yet. But it will come. Gold will rule once again. I'm convinced gold s going to be hit this week or next. But there are so many others convinced of it that it makes me slightly bullish. I really don't know. As a long term investor I don't sell a gram and let others try to trade this. I wouldn't be suprised about a $200 move within short time in any direction. Link to comment Share on other sites More sharing options...
Pixel8r Posted February 22, 2009 Report Share Posted February 22, 2009 I'm convinced gold s going to be hit this week or next. But there are so many others convinced of it that it makes me slightly bullish. For the record I think we will push to $1250 before the end of March then go back to retest $1000. Link to comment Share on other sites More sharing options...
G0ldfinger Posted February 22, 2009 Author Report Share Posted February 22, 2009 For the record I think we will push to $1250 before the end of March then go back to retest $1000. I have to say that this is the scenario I give the highest chance as well. $1,000 will be the new support. There is no way they can get away with this amount of money printing. Everyone knows this, but the big guys are afraid that the Fed will slap their fingers when they touch gold. I think in the same way as the economy and the financial crisis are already out of control, the price of gold will get out of control later. The profits to be made will be amazing. Link to comment Share on other sites More sharing options...
romans holiday Posted February 22, 2009 Report Share Posted February 22, 2009 Great chart here. Dow/Gold Ratio 40year Cycle and the Secular Depreciation of Fiat Currencies: http://www.marketoracle.co.uk/Article8992.html Excellent chart. Though the I think the commentary is a little inconsistent: A return in the equity/gold ratio towards the cyclical lows of 1980 is highly plausible. Rather than simply arguing this point on the basis of further declines in equities (see yesterdays note in my website on long term equity cycles), the prospects for prolonged gold rallies are emboldened by the refuge towards the metal as a yield substitute resulting from emerging depreciation in the secular value of currencies. And as we have seen in 2005-7, returning rate hikes pose no challenge to gold. Instead, higher rates are accompanied by improved global growth, resurging demand for industrial commodities and a broader backdrop for the precious metal. The all time lows of 1980 in the Dow/gold and S&P500/gold ratios stood at 1.33 and 0.18 respectively, compared to the current levels of 7.8 and 0.81. Assuming a return in the ratios to their 1980 lows, these would have to fall by another 75%-80%. Taking a more conservative scenario of a 50% decline in the equity/gold ratio and a target gold price of $1,250-1,300/ounce, the implied value of the Dow and the S&P500 would stand at 4,500-5000 and 500-520 respectively. Firstly, the author makes the correct point that investors are going into gold as currencies depreciate. However, we have not even started to see currency depreciation in the US dollar yet. If it depreciates something like 50% we should see gold at around $2000 and the Dow remaining around these prices maybe a little lower [loss of real value due to currency depreciation though nominal price could remain roughly the same]. If the gold/Dow ratio went lower gold would most probably go a little higher with the Dow coming down below 6000. Link to comment Share on other sites More sharing options...
Catflap Posted February 22, 2009 Report Share Posted February 22, 2009 This is good - Philip Manduca on Gold: Link to comment Share on other sites More sharing options...
Steve Netwriter Posted February 23, 2009 Report Share Posted February 23, 2009 I guess to use to buy necessities until gold becomes the defacto currency? Could be, but he says "substantial" & "defend" It sounded more like leveraged gold Link to comment Share on other sites More sharing options...
electroweak Posted February 23, 2009 Report Share Posted February 23, 2009 Could be, but he says "substantial" & "defend" It sounded more like leveraged gold Nah, I think he means simply to stave off having to use his PMs for subsistence before their true worth is realised. Ps- gold is ludicrously cheap! Shiseido, Kao Beat Recession With Creams Priced as Much as Gold http://www.bloomberg.com/apps/news?pid=206...&refer=home Link to comment Share on other sites More sharing options...
ologhai Posted February 23, 2009 Report Share Posted February 23, 2009 I was just wondering what gold was up to today... but my favourite gold chart (BullionVault) isn't working for me. Is it just me, or is anyone else having any trouble with it? Link to comment Share on other sites More sharing options...
ziknik Posted February 23, 2009 Report Share Posted February 23, 2009 I was just wondering what gold was up to today... but my favourite gold chart (BullionVault) isn't working for me. Is it just me, or is anyone else having any trouble with it? Try gold price. It’s live and you can overlay gold in a different currency or silver, oil, forex http://goldprice.org/live-gold-price.html Link to comment Share on other sites More sharing options...
electroweak Posted February 23, 2009 Report Share Posted February 23, 2009 I was just wondering what gold was up to today... but my favourite gold chart (BullionVault) isn't working for me. Is it just me, or is anyone else having any trouble with it? works ok for me. Link to comment Share on other sites More sharing options...
marmite Posted February 23, 2009 Report Share Posted February 23, 2009 Unfortunately I need to sell a bit of the yellow stuff for Sterling ( yehhhh yehhhhh, I know dont sell, keep stacking etc etc ) . Its only some of the stack and needs must for cashflow I need to sell either Tuesday or Friday, what do you guys think. Is it worth holding out till Friday ??? Not sure what big economic indicators are out this week. I have already put the sale off for a month, so gained in Sterling terms Link to comment Share on other sites More sharing options...
grumpy-old-man Posted February 23, 2009 Report Share Posted February 23, 2009 watching bloomberg, analyst/commentator woman says 'a big decline in gold today' (in dollars that is)......I look at the trading screen behind her & it say's .98%. So let me get this right. A less than 1% drop is now classed as a BIG drop eh. they must be sh1tting themselves. I also see gold coin output is at a 23 year high......h'mmm, I wonder why that is then. Link to comment Share on other sites More sharing options...
ologhai Posted February 23, 2009 Report Share Posted February 23, 2009 watching bloomberg, analyst/commentator woman says 'a big decline in gold today' (in dollars that is)......I look at the trading screen behind her & it say's .98%. So let me get this right. A less than 1% drop is now classed as a BIG drop eh. they must be sh1tting themselves. I also see gold coin output is at a 23 year high......h'mmm, I wonder why that is then. I wonder what they'll say when it goes through $1k again before the end of the day? Link to comment Share on other sites More sharing options...
azazel Posted February 23, 2009 Report Share Posted February 23, 2009 I wonder what they'll say when it goes through $1k again before the end of the day? Seat belts on, here we go (I think) Link to comment Share on other sites More sharing options...
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