Help . . . Is The £ Going Into Free-fall?

[OriginalPoster]

Would it be a fair guess that your less conservative targets are $1650 for gold and 0.52 for the Dollar Index?

No. Those are Jim Sinclair's forecasts. www.jsmineset.com

Correct

[Marvo]

Would either of you care to quantify what this collapse will look like?

Can't put numbers on it but don't think they'll matter to be honest. You'll see oil and gold soar followed by co-ordinated central bank intervention to prop it up (not to mention a similar effort to make gold look as unattractive as possible to retail investors even though you can't buy physical gold anywhere in the UK and Europe at the moment). Anything denominated (pretty much everything) in dollars will rise in price.

This turmoil has seen some astronomical swings so don't be surprised if eurodollar went back to $1.60+ and gold at $1000+ . . . and that's being conservative.

not correct. my brother in Germany got physical gold handed out today at his bank. he ordered it last thursday afternoon and was told "any amount you want but not smaller than 500 gram units".

So, is Naam advising his brother to put his money into gold.... hmmmmm? That decisively must mean gold has bottomed for sure. Now where did I put that hot-line number to my gold pimp?

[OriginalPoster]

not correct. my brother in Germany got physical gold handed out today at his bank. he ordered it last thursday afternoon and was told "any amount you want but not smaller than 500 gram units".

Then he was fortunate. My sister tried in London at ATS Bullion in Savile Row. Nothing around. She looked on eBay & found it over $1000 an ounce. Personally, I bought mine over a year ago with GoldMoney.com and it's stored in a vault in Zurich.

It's staring everybody in the face. There is a shortage of physical gold which, to even the dumbest person, means that the price should be going UP, right ? WRONG ! http://marketoracle.co.uk/Article6896.html

There are literally THOUSANDS of anecdotes and there is real evidence on the internet attesting to the COMEX's actual gold stockpiles and the value of contracts on their exchange. The difference between their price and the price in the real world cannot be maintained and if I've got to bet on which price will be dominant in the end, I'd be a fool not to go with the real world price.

Is there really a shortage of physical gold or is there just a shortage of gold coins and small bars? It seems like large bars are still available for purchase from some places, so wouldn't now be the time for holders of coins to eBay off their coins and roll the money over into large bars?

Edited October 27, 2008 by OriginalPoster

[lannarebirth]

Would it be a fair guess that your less conservative targets are $1650 for gold and 0.52 for the Dollar Index?

No. Those are Jim Sinclair's forecasts. www.jsmineset.com

Sometimes, all you really have to do is go with your common sense. Does anyone really think the US going to be able to engineer its way out of this ?

The dollar trades inversely to gold and the dollar is going to collapse. Simple really.

Gold does not always trade inversely to the $USD.

[lannarebirth]

not correct. my brother in Germany got physical gold handed out today at his bank. he ordered it last thursday afternoon and was told "any amount you want but not smaller than 500 gram units".

Then he was fortunate. My sister tried in London at ATS Bullion in Savile Row. Nothing around. She looked on eBay & found it over $1000 an ounce. Personally, I bought mine over a year ago with GoldMoney.com and it's stored in a vault in Zurich.

It's staring everybody in the face. There is a shortage of physical gold which, to even the dumbest person, means that the price should be going UP, right ? WRONG ! http://marketoracle.co.uk/Article6896.html

There are literally THOUSANDS of anecdotes and there is real evidence on the internet attesting to the COMEX's actual gold stockpiles and the value of contracts on their exchange. The difference between their price and the price in the real world cannot be maintained and if I've got to bet on which price will be dominant in the end, I'd be a fool not to go with the real world price.

Is there really a shortage of physical gold or is there just a shortage of gold coins and small bars? It seems like large bars are still available for purchase from some places, so wouldn't now be the time for holders of coins to eBay off their coins and roll the money over into large bars?

I'm not sure, but it would certainly seem to be a good time to widen the spread on the buy and sell if you're a gold dealer, as people seem to be willing to pay it.

[VegasVic]

The purpose of Britain is to give taxpayers to foreigns who come to England. Take care and enjoy your money away to new arrivals.

30 Baht to the Pound then 20

That's rubbish. The Baht is going to hel_l in a hand-basket along with the dollar. Sure, sterling's getting whacked at the moment but, like I said, how long will it be before all those new bond issues for the bailouts start to affect treasury bond yields ? how long will it be before the price of oil ratchets back up when the world starts seeing that its price can no longer be determined by demand instead of supply factors ? How long before the US Treasury admits that $700 billion is simply not enough to cover the colossal liabilities of the banking system ? How long before corporate bond defaults start to mount and the banking counterparties can't afford to pay out on all those credit default swap contracts they've sold ?

Before the year is out, I sincerely believe that there'll be a dollar collapse which will take the HK$ and a few others with it . . . including the baht !

30THB to the Pound ??!!

I think that predicting the the Pound will get down to 30 baht is about as unrealistic as your prediction that the Dollar will colapse by years end! This unwinding of the carry trade and derivative instuments has a lot further to go, so as the old saying goes "the trend is your friend"! Expect the Pound to break the 50 baht level before years end, unles the BOT decides to devalue the baht (which looks very unlikely at this time).

[HardenedSoul]

Gold does not always trade inversely to the $USD.

Perhaps but as far as the crisis at hand is concerned, their relationship is a fairly reasonable premise upon which to base one's investments. Should the dollar return to the gold standard at some point, I'll reconsider But i won't hold my breath

There are larger bars available, yes, but I guess most people can't afford to buy kilo bars. Look, I'm not a die-hard gold bull. If the landscape changes, i won't be hanging around, losing money just so I can say I was right but historically, when governments have got themselves into massive debt, they inflate their currencies rather than raise taxes. this time is no different hence the gold play.

[HardenedSoul]

I think that predicting the the Pound will get down to 30 baht is about as unrealistic as your prediction that the Dollar will colapse by years end! This unwinding of the carry trade and derivative instuments has a lot further to go, so as the old saying goes "the trend is your friend"! Expect the Pound to break the 50 baht level before years end, unles the BOT decides to devalue the baht (which looks very unlikely at this time).

I guess we'll soon find out, eh ?

[JimsKnight]

I think I can see myself shorting some £ and opening another thai bank account

[rob1967uk]

I think us Brits might be needing a new banknote for our holidays soon this should do the trick.

[OriginalPoster]

Gold does not always trade inversely to the $USD.

There are larger bars available, yes, but I guess most people can't afford to buy kilo bars. Look, I'm not a die-hard gold bull. If the landscape changes, i won't be hanging around, losing money just so I can say I was right but historically, when governments have got themselves into massive debt, they inflate their currencies rather than raise taxes. this time is no different hence the gold play.

The larger bars are important though since it's probably mostly small investors what buy coins and small bars. For instance, if ETF's such as GLD couldn't buy big bars to back their paper shares that would be a much bigger problem than if you or I am unable to buy Krugerands.

[sendbaht]

"How come no Americas are crying about the dollar?"

We are out of tears my friend.

[Naam]

Would either of you care to quantify what this collapse will look like?

Can't put numbers on it but don't think they'll matter to be honest. You'll see oil and gold soar followed by co-ordinated central bank intervention to prop it up (not to mention a similar effort to make gold look as unattractive as possible to retail investors even though you can't buy physical gold anywhere in the UK and Europe at the moment). Anything denominated (pretty much everything) in dollars will rise in price.

This turmoil has seen some astronomical swings so don't be surprised if eurodollar went back to $1.60+ and gold at $1000+ . . . and that's being conservative.

not correct. my brother in Germany got physical gold handed out today at his bank. he ordered it last thursday afternoon and was told "any amount you want but not smaller than 500 gram units".

So, is Naam advising his brother to put his money into gold.... hmmmmm? That decisively must mean gold has bottomed for sure. Now where did I put that hot-line number to my gold pimp?

no i did not Marvo. my brother's thinking is in each and every respect the opposite of mine and i don't recall that he ever asked me for any advice concerning investments or finance in general. being the older brother my advice is asked quite often and welcome in private or family affairs. but that's it.

[flying]

no i did not Marvo. my brother's thinking is in each and every respect the opposite of mine and i don't recall that he ever asked me for any advice concerning investments or finance in general. being the older brother my advice is asked quite often and welcome in private or family affairs. but that's it.

Sorry as soon as I read about your opposite brother ( I have one too )

I remember this I saw a link to today.

8) "George Costanza Trade"

On Seinfeld, George Costanza realized that every decision he ever made has been wrong. He discovered if he did the exact opposite of what his instincts told him to do, he would be successful. In relation to investing, when everyone believes that a certain trade or investment philosophy is certain to work, oftentimes with uncanny precision the exact opposite happens. This year, a growing number of people began to believe with absolute certainty that gold would move higher. While the opinion was far from universal, was the opinion widespread enough to invoke George Costanza?

no i did not Marvo. my brother's thinking is in each and every respect the opposite of mine and i don't recall that he ever asked me for any advice concerning investments or finance in general. being the older brother my advice is asked quite often and welcome in private or family affairs. but that's it.

http://seekingalpha.com/article/101919-ten...n-t-above-1-000

Edited October 28, 2008 by flying

[chiang mai]

Just want to share some thoughts on what's happening and maybe going to happen:

It looks to me as though the heavily oversold GBP/USD is going to retreat for a while, seemingly because of the threat of intervention to protect/prevent a soaring YEN - that threat does seem to be having the desired effect for the moment but only slightly. I'm looking for GBP/USD to retreat to the low/mid 1.60's and then to reform before continuing its downward track and its destination could/may/should/will be sub 1.50. The impact of this move is that we may see GBP/THB start to improve and I think this is very misleading and potentially very dangerous for holders of GBP because it will make them complacent. The reasons why I believe GBP will continue its decline after the forth coming brief respite are all the same old reasons, Interest rates (current and forecast), borrowings, continued repatriation of funds into USD and hedge fund closures. If those things are true and correct there could be an opportunity to sell GBP and buy USD at say 1.65 (ish) before the reversal begins, I certainly will. The risk is that USD will bounce back at some point and unless I truly don't understand any of this, that must surely happen at some point - sensibly I don't see that happening before December at the earliest. The key will therefore be downstream to detect when the time is right to bail out of USD and back into GBP/baht/mars bars/your choice.

Happy to hear constructive comments on all of this.

[lannarebirth]

Just want to share some thoughts on what's happening and maybe going to happen:

It looks to me as though the heavily oversold GBP/USD is going to retreat for a while, seemingly because of the threat of intervention to protect/prevent a soaring YEN - that threat does seem to be having the desired effect for the moment but only slightly. I'm looking for GBP/USD to retreat to the low/mid 1.60's and then to reform before continuing its downward track and its destination could/may/should/will be sub 1.50. The impact of this move is that we may see GBP/THB start to improve and I think this is very misleading and potentially very dangerous for holders of GBP because it will make them complacent. The reasons why I believe GBP will continue its decline after the forth coming brief respite are all the same old reasons, Interest rates (current and forecast), borrowings, continued repatriation of funds into USD and hedge fund closures. If those things are true and correct there could be an opportunity to sell GBP and buy USD at say 1.65 (ish) before the reversal begins, I certainly will. The risk is that USD will bounce back at some point and unless I truly don't understand any of this, that must surely happen at some point - sensibly I don't see that happening before December at the earliest. The key will therefore be downstream to detect when the time is right to bail out of USD and back into GBP/baht/mars bars/your choice.

Happy to hear constructive comments on all of this.

The approach I've decided to take is, wait to see where it goes and then say "yeah, that's what I thought would happen".

[Naam]

The approach I've decided to take is, wait to see where it goes and then say "yeah, that's what I thought would happen".

[chiang mai]

Well you two are a lot of help, the term "chocolate fireguards" springs to mind!

Well we're at 1.61 this morning so GBP/USD has retreated so that part at least looks correct, fingers crossed that the rest of the story follows my cunning plan.

[DavidOxon]

So . . . I see 56 Bht/GBP on my screen.

I need to change money . . . it will cost me £500 in lost intrest bot this is only about 1bht

How long will the rally last do you think?

David

[bartender100]

Dont underestimate the bank of England. It started the worlds banking system, and will continue to control it. They are not worried about what a few tourists get for the pound. They look at the big picture.

[chiang mai]

So . . . I see 56 Bht/GBP on my screen.

I need to change money . . . it will cost me £500 in lost intrest bot this is only about 1bht

How long will the rally last do you think?

David

Take a look at the attached and you can see how the trades are being played, it doesn't look like anything earth shattering at this stage but this is just from Far East markets so things may change as the day wears on. I'll be surprised however if the overall effect on GBP/THB is anything to write home about so if you need to change money you should probably do it sooner rather than later I would guess. If you needed to change money into USD it would be a different story perhaps.

http://www.fxstreet.com/rates-charts/forex...aspx?id=GBP/USD

Edited October 29, 2008 by chiang mai

[cmsally]

Just want to share some thoughts on what's happening and maybe going to happen:

It looks to me as though the heavily oversold GBP/USD is going to retreat for a while, seemingly because of the threat of intervention to protect/prevent a soaring YEN - that threat does seem to be having the desired effect for the moment but only slightly. I'm looking for GBP/USD to retreat to the low/mid 1.60's and then to reform before continuing its downward track and its destination could/may/should/will be sub 1.50. The impact of this move is that we may see GBP/THB start to improve and I think this is very misleading and potentially very dangerous for holders of GBP because it will make them complacent. The reasons why I believe GBP will continue its decline after the forth coming brief respite are all the same old reasons, Interest rates (current and forecast), borrowings, continued repatriation of funds into USD and hedge fund closures. If those things are true and correct there could be an opportunity to sell GBP and buy USD at say 1.65 (ish) before the reversal begins, I certainly will. The risk is that USD will bounce back at some point and unless I truly don't understand any of this, that must surely happen at some point - sensibly I don't see that happening before December at the earliest. The key will therefore be downstream to detect when the time is right to bail out of USD and back into GBP/baht/mars bars/your choice.

Happy to hear constructive comments on all of this.

I think you might be on to something and today it looks like GBP is creeping up. Gordon and Sarkozy unveiled "Le Plan" which actually was more of a warning E Europe would need a lot of money.

Shares might rally slightly, somehow I can't see currency doing anything dramatic.

[Naam]

Dont underestimate the bank of England. It started the worlds banking system, and will continue to control it. They are not worried about what a few tourists get for the pound. They look at the big picture.

:D

[cmsally]

Interesting to see that the first E Euro rescue plan put forward by Sarkozy goes to Hungary. Sarkozy looking to get back the family estate in Hungary maybe?

[russianrobert]

Am i the only one to notice the falling dollar and the rising Dow?

Is there a correlation there?

[lannarebirth]

Am i the only one to notice the falling dollar and the rising Dow?

Is there a correlation there?

Robert,

There is a correlation between the falling/rising $USD, and every other market on planet Earth. In a sense, the $USD trade is the only trade.

[russianrobert]

Seems to me the US$ is inverted to global equities and it's strength negative for them.

Against the baht i'm reading that there might be resistance at 39 to dollar and perhaps a downturn for the greenback from there.

I'm holding dollars and want to buy sterling. I think i'm going to wait. I believe the US$ has someway to fall yet (against £) after this short lived rally.

Therefore more bad news for equities until the dollar falls.

Any other opinions?

[russianrobert]

Also, I've just been sent this from an investment company that i have used in the past. Their forecasts have been pretty accurate to date.

It might be of help to some.

SterlingSlumpsOct08_1_.pdf

[chiang mai]

The BOT has made it clear that they want USD/THB to remain around 34-35 and they are actively engaged to ensure this remains the case - 39 seems a bit too far out to me unless BOT ceases their involvement.

You say you're holding USD and want to buy GBP and intend to wait, I think that's a smart move although as discussed previously timing in respect of the bounce will be crucial. I hold GBP but have bought USD over a two month period and expect to revert to GBP (or something else) after USD has finished its current run - I guess December may see a retrenchment of USD.

[Bizz]

May bring cheer to some and tears to other's

http://www.oanda.com/convert/fxhistory

€ baht

Average (1834 days): 48.31191

High: 54.14140

Low: 41.05580

£ baht

http://www.oanda.com/convert/fxhistory

Average (1834 days): 69.24513

High: 76.66120

Low: 54.96630