Where Is Gold Going In This Market

[midas]

this plan has only just been implemented this month so how can anyone possibly predict which businesses in Utah will be happy to accept a Krüger Rand or a Maple Leaf in two or three months time ?

anybody with a fair capability of rational thinking can predict that paying with Gold and/or Silver is history and will never be implemented again. that does of course not apply to a few freaks and freaky shop owners in Salt Lake City who might argue for an hour or two how many fractions of an ounce of gold should be exchanged for a selected amount of goods and then find out that it is impossible to make a certain amount of a precious metal available for said goods by cutting a Krüger Rand into many tiny or a Maple Leaf into a few pieces.

And equally anyone with a fair capability of rational thinking must realise by now

it is pure fantasy to believe that pieces of paper backed by the so called " faith "

of utterly corrupt,bankrupted and incompetent governments can continue much longer

[RedFxTrade]

this plan has only just been implemented this month so how can anyone possibly predict which businesses in Utah will be happy to accept a Krüger Rand or a Maple Leaf in two or three months time ?

anybody with a fair capability of rational thinking can predict that paying with Gold and/or Silver is history and will never be implemented again. that does of course not apply to a few freaks and freaky shop owners in Salt Lake City who might argue for an hour or two how many fractions of an ounce of gold should be exchanged for a selected amount of goods and then find out that it is impossible to make a certain amount of a precious metal available for said goods by cutting a Krüger Rand into many tiny or a Maple Leaf into a few pieces.

Big statement Naam. I would already say we are moving towards a De factor gold standard. I converted Silver profits into Sterling, and have bought petrol for my car, clothes, food etc. Prices have went down for me, while the CPI is sitting near 5% in the UK. I tendered in GBP, but money is fungible and convertible and is an indirect medium of exchange. So although I did not hand over physical silver I was paying in GBP equivalent Silver price. SO I was indirectly paying by Silver for my petrol, as the money I was handing over had been backed by silver.

[churchill]

We are certainly living in interesting and historic times ..

I never thought i would see the day that Zimbabwe would turn their noses up

at the US dollar.

But then again i was in Myanmar 2 weeks ago and they

clearly wanted Thai baht from me rather than accept US dollars

RBZ urges gold-backed Zim dollar

http://www.newzimbab...r/business.aspx

long time talked about but perhaps closer than we think - Multi-Billionaire Hugo Salinas Price - Silver to be monetized in Mexico this year /

http://www.kingworld...inas_Price.html

err yeah because Zimbabwe and Mexico are powerhouses....... top tick anyone?

According to 'Max ' on the Financial Thread , Mexico was part the cause of the financial crisis - and If the recycling ! takes places via Silver - may have quite an impact /

and acorns grow ...

[churchill]

A new week is upon us and I m going to offer a technical perspective on the gold market and have a look at some potentialities as a guidance over the coming months.

From an event point of view, problems in the EU and what appears to be weakening economic conditions could see the market anticipate QE 3 by August/September, the ECB ramping up bond buying, and a mis pricing of interest rates globally at this time will mean that rates will stay zero bound keeping real interest rates negative. This IMO opinion will be what is the catalyst for gold to move higher. Add into that a couple of black swans that are not really black swans, examples could be geo political events, Icelandic Ash cloud, terrorist attacks, and civil unrest, political tensions surfacing in the EU and even the US.

Agreed - and Once the Chinese stop tightening - will be another boost for commodities in general ...

and as the Fed tries to stop QE for now .. perhaps the ECB will have to start ..

Edited May 23, 2011 by churchill

[churchill]

This is old local news ...

A Malaysian state introduces Shariah currency, gold and silver coins

ttp://www.asiantribune.com/news/2010/08/14/malaysian-state-introduces-shariah-currency-gold-and-silver-coins

[churchill]

this plan has only just been implemented this month so how can anyone possibly predict which businesses in Utah will be happy to accept a Krüger Rand or a Maple Leaf in two or three months time ?

anybody with a fair capability of rational thinking can predict that paying with Gold and/or Silver is history and will never be implemented again. that does of course not apply to a few freaks and freaky shop owners in Salt Lake City who might argue for an hour or two how many fractions of an ounce of gold should be exchanged for a selected amount of goods and then find out that it is impossible to make a certain amount of a precious metal available for said goods by cutting a Krüger Rand into many tiny or a Maple Leaf into a few pieces.

Ca Commence

'Far from the conflict of interests between the governors of the state, there are ordinary Kelantanese people, for which this new monetary system is appealing. The proof is that a large number of restaurants and shopping centers accept already the new gold and silver coins as means of exchange. Government’s plan is to pay wages in the same way'

http://orajoqu.wordpress.com/2011/05/08/malaysia-and-the-shift-of-currency/

[Naam]

...and then dear children [yawn...] the Utah government will mint gold and silver Mormons (as opposed to the kelantanese sharia Dinars and Dirhams) which will be accepted [insha'allah Joseph Smith, jr. willing] by a "large number of restaurants and shopping centers" all over Utah happily ever after.

honi soi qui mal y pense!

[Naam]

more interesting details from Kelantan:

-The weight of the coins is rigorously analyzed and as far as purity is concerned, they are as safe as a gold bullion coin.

-...in this particular case, knowing that we are talking about an Islamic country, religion had an important word to say. And namely the holy books, like the Quran or the Hadith, where it is described the perfect economic life of a country. These writings inspired religious elites in their attempt to raise Islamism and fight against Capitalism.

-the new gold coins will slowly pay political dividends for the state government and thus help the PAS, the leading party of the state, which is also the first Muslim party to have introduced a Shariah money in the last 100 years.

-The new system is still at a small scale, but should it be accepted and adopted by more and more Islamic countries, it will have a great impact at an international scale.

[midas]

...and then dear children [yawn...] the Utah government will mint gold and silver Mormons (as opposed to the kelantanese sharia Dinars and Dirhams) which will be accepted [insha'allah Joseph Smith, jr. willing] by a "large number of restaurants and shopping centers" all over Utah happily ever after.

honi soi qui mal y pense!

And please don't forget to extend your sarcasm to the more than a dozen other US states that are considering similar measures ,

http://thecomingcrisis.blogspot.com/2011/04/us-states-look-to-bring-gold-standard.html

Edited May 23, 2011 by midas

[RedFxTrade]

this plan has only just been implemented this month so how can anyone possibly predict which businesses in Utah will be happy to accept a Krüger Rand or a Maple Leaf in two or three months time ?

anybody with a fair capability of rational thinking can predict that paying with Gold and/or Silver is history and will never be implemented again. that does of course not apply to a few freaks and freaky shop owners in Salt Lake City who might argue for an hour or two how many fractions of an ounce of gold should be exchanged for a selected amount of goods and then find out that it is impossible to make a certain amount of a precious metal available for said goods by cutting a Krüger Rand into many tiny or a Maple Leaf into a few pieces.

The highlighted sentence in bold Naam is what is actually the problem, with the emphasis on the word "implemented". The free circulation of money in a society is not something that should be implemented. It should be the decision of the market to decide freely what should be used as a medium of exchange. The problem is that the government have implemented through force and coercion what they believe should be legal tender. Money is a commodity like any other, with a couple of subtle but very important differences. The first is that;

Money is not directly consumed like other commodities but is indirectly consumed as an indirect medium of exchange. The second subtle difference can be traced back to the 16th century with Gresham's Law, although Copernicus had stated the law before Gresham, we know it as Greshams law. The law states that bad money drives out good money from a society or economy when the government over value one money and under value another and more importantly when the exchange rate or tender is set by government by law. This is the second subtle difference inherent in money over other commodities.

For instance, take the example of a terribly made laptop computer, always breaking down, not booting up properly, totally unreliable, full of bugs and virus against a quality product that does what it is suppose to do. In a free market the good laptop will drive the bad lap top out and the company that makes them will not survive and go out of business due to the aggregate of individuals choosing the superior product over the bad one. This is the same with any product. However the difference with money as stated by Gresham and evident throughout history and right now today is the opposite happens with money;

Bad money enforced by law drives out good money as people will not want to own the over valued (government) money and instead will hoard the under valued money (gold, silver)The hoarding takes the good money out of circulation as people prefer to hold it, and its value is maintained due to a higher demand for it. Conversely the government money is less in demand and hence the value falls, and it becomes more prevalent in society.

To start of with the premise that money should be "implemented" and the cost of money price fixed by government and that gold and silver will never be implemented again is to start off with the wrong understanding how money becomes money in the first place. What becomes money is that which is in higher demand over other products. Thats what gives money its value. The fact that government have broken down all links with true money through a complete distortion and a forced implementation of their "own" money is where the problem comes from. I do not believe government should be implementing a gold or silver standard, I believe that it should be the choice of the market to decide, and the aggregation of all individuals.

We can see Greshams law at work perfectly today. Gold and silver is being hoarded and increasing in value, and is not in free circulation in society due to government stating it is not legal tender. Lets get government out of the way and allow the people to decide what is money.

It is not a few career politicians and the central bank to decide what people should use in trade and at what value. Lets look at the gold old Bank of England;

The Bank of England Monetary Policy Committee is made up of 9 members, who once a month convene at Threadneedle Street. The responsibility ladened upon these MPC members is to decide what the true cost of money should be. When all members have decided at the end of the two day meeting, they vote on this decision to set the interest rate, and the cost of money.

The concept I struggle to get my head around is how can 9 people know the individual time preferences of money of the collective population. How can they know who wants to save and who doesn’t? The simple answer is they cannot know this. It is disingenuous to believe that they can know the “correct interest” rate. In fact the record of central banks setting the right interest rate has been a disaster. They are serial bubble blowers. They are always quick to get the party going and keep the drink flowing, by the time everyone is intoxicated and ready to crawl into bed in the early hours, the central bankers (encouraged by government) arrive with more booze for the punch bowl, tipping everyone over the edge.

It is important to treat money as a commodity in itself subject to supply and demand, just like other products that exist in a free market. Think about this…

How would you react to proposed government legislation that we will be grouping eight people together in a room for two days, who will decide on the number of Ipods that will circulate in the economy and the price of those Ipods? Does this sound like a feasible idea or a good idea at that?

Or that they will meet to decide how much beer needs to be brewed over the coming month and at what price? Nine people to decide these things for 60 million people in the UK?

Does anyone suspect it might turnout like a supermarket in the old Soviet Union? Too many toothpastes, but no tooth brushes, no toilet rolls, but a glut of laxatives? A potentially dangerous mis-match of supply and demand. How could eight people know these answers for 60 million people? The whole pricing structure of money has been distorted by central banks creating artificially low interest rates, and distorting the true cost of money. Instead of being known as the Monetary Policy Committee, a more apt title would be The Monetary Price-fixing Committee.

[badge]

jeez RedFXtrade, I hope you C 'n' P all that from your coursework!

[flying]

I converted Silver profits into Sterling, and have bought petrol for my car, clothes, food etc. Prices have went down for me,

Not so different than living in Thailand & swapping dollars for Baht

Here in the US you get $35usd for 1 silver ounce....(more actually when considering the premium)

With the dollar breaking the 76 line looks like Euro headed down again.

Funny these currency's they seem most to trade & move up & down on each others weakness not on any real fundamental strengths....Because lets be honest neither one has any...or at least has not had any for years now.

Edited May 23, 2011 by flying

[PCA]

I converted Silver profits into Sterling, and have bought petrol for my car, clothes, food etc. Prices have went down for me,

Not so different than living in Thailand & swapping dollars for Baht

Here in the US you get $35usd for 1 silver ounce....(more actually when considering the premium)

With the dollar breaking the 76 line looks like Euro headed down again.

Funny these currency's they seem most to trade & move up & down on each others weakness not on any real fundamental strengths....Because lets be honest neither one has any...or at least has not had any for years now.

More funny is that if you see it that way then Gold is backing/hedging up nothing (of value) which makes it exactly the same, think about it

Nothing against gold at the moment, holding it is the right approach but buying at these levels is a very risky thing and man it will go down hard in the future - rather sooner than later.

[RedFxTrade]

I converted Silver profits into Sterling, and have bought petrol for my car, clothes, food etc. Prices have went down for me,

Not so different than living in Thailand & swapping dollars for Baht

Here in the US you get $35usd for 1 silver ounce....(more actually when considering the premium)

With the dollar breaking the 76 line looks like Euro headed down again.

Funny these currency's they seem most to trade & move up & down on each others weakness not on any real fundamental strengths....Because lets be honest neither one has any...or at least has not had any for years now.

More funny is that if you see it that way then Gold is backing/hedging up nothing (of value) which makes it exactly the same, think about it

Nothing against gold at the moment, holding it is the right approach but buying at these levels is a very risky thing and man it will go down hard in the future - rather sooner than later.

Yes i thought about that for about two seconds PCA. Paper money costs nothing to print, a machine or digital click can create as much as you want and essentially costs nothing. The marginal cost now to mine a single ounce of Gold is about $650 perhaps more now. So gold is backed by the labor and production that went into bringing to us the gold, all the machines, lorries, people working in the mines, the geologists, the energy etc etc. all these people and skills had to be pooled to bring the gold to us.

What labor and production went into clicking $650 billion Qe2 dollars into existence? None what so ever. In theory the government could decide to stimulate the economy and just double the money in everyones bank account overnight. Would that double everyones wealth? No for the simple fact that there has not been a single change in productive capacity, labor, employment or trade, investment.

Could the same be said that the government could or anyone for that matter could double the amount of gold holdings of everyone who owns gold overnight? Of course not, for the simple reason that it would take a tremendous effort and pulling together of resources, capital, labor and time to double everyones gold holdings.

To say that nothing backs gold is silly. It is backed by the efforts taken to mine it...and even more obvious again is its relative scarcity. Is paper money scarce, and hard to create?

[flying]

Yes I would agree that in *reality* somethings are backed & others are not.

When it comes to paper currencies they are only backed by a future promise of taxation. That may or may not be possible due to employment being available. Even if it is will there be enough to keep pace with the inflating debt?

Then you have real tangibles that have to be worked to produce so yes they are backed by something more.

Lastly regarding price/value I would say they are based on faith.

Gold/Silver can not be physically inflated. It is what it is period. ( Note I am not talking paper metals/ETF's)

Paper currencies on the other hand are limited by the unlimited.They can print digitize till the cows come home if they like. Of course there are tiny speed bumps along the way like debt ceilings ...but lets be real here...does anyone think they will not raise it yet again & again & again?

When they do raise it has your faith backed papers value in purchasing power for the paper that you hold gone up or down? How about your physical metals?

Edited May 23, 2011 by flying

[Naam]

...and then dear children [yawn...] the Utah government will mint gold and silver Mormons (as opposed to the kelantanese sharia Dinars and Dirhams) which will be accepted [insha'allah Joseph Smith, jr. willing] by a "large number of restaurants and shopping centers" all over Utah happily ever after.

honi soi qui mal y pense!

And please don't forget to extend your sarcasm to the more than a dozen other US states that are considering similar measures ,

http://thecomingcrisis.blogspot.com/2011/04/us-states-look-to-bring-gold-standard.html

let them "consider". and don't wake me when they have implemented the use of precious metals. i am not living in a state of the Greatest Nation on Earth™. my wife shops in Foodland, Friendship, Makro and Tesco.

this topic has been and is still discussed ad nauseam in either obscure or gloom&doom websites where any pathetic clown can make ridiculous claims (see "Kelantanese Dinars and Dirhams based on Sharia Law")

[Naam]

To say that nothing backs gold is silly. It is backed by the efforts taken to mine it...and even more obvious again is its relative scarcity. Is paper money scarce, and hard to create?

Plutonium is scarce too. it takes much more effort to extract one ounce of Plutonium than mining a ton of Gold and that ounce of Pu has a much greater value than a ton of AU. does that mean Pu can be used as a tangible back-up of paper currencies?

[flying]

To say that nothing backs gold is silly. It is backed by the efforts taken to mine it...and even more obvious again is its relative scarcity. Is paper money scarce, and hard to create?

Plutonium is scarce too. it takes much more effort to extract one ounce of Plutonium than mining a ton of Gold and that ounce of Pu has a much greater value than a ton of AU. does that mean Pu can be used as a tangible back-up of paper currencies?

Well if it wasn't for that village idiot & his patriot act

These days the Department Of Homeland Security no longer allows us to use the pluto backup :lol:

[Naam]

Yes I would agree that in *reality* somethings are backed & others are not.

When it comes to paper currencies they are only backed by a future promise of taxation. That may or may not be possible due to employment being available. Even if it is will there be enough to keep pace with the inflating debt?

a "back-up" means nothing. what counts is acceptance. presently the acceptance of paper money is higher than the one of precious metals. period!

[Naam]

These days the Department Of Homeland Security no longer allows us to use the pluto backup :lol:

[Naam]

slightly off topic:

i wonder whether some of my learned friends here really read and digest some utmost ridiculous claims or prophecies from brain-amputated authors (e.g. Kelamantan Sharia Monetary System) before they quote them and post links. don't they realise that these claims have a negative effect on their own credibility/standing?

[Naam]

Lastly regarding price/value I would say they are based on faith. Gold/Silver can not be physically inflated. It is what it is period.

a lot of things cannot be physically inflated, are scarce but not valuable. any value, including Gold and precious metals, is based on faith respectively demand. demand depends on circumstances. no demand = no value.

let me refer to my old story (which i posted years ago in this thread): on a remote island in the South Pacific a gun with ample ammunition to shoot wild goats and pigs and a fishing rod with line and hooks are infinitely more valuable than a ton of Gold.

[flying]

let me refer to my old story (which i posted years ago in this thread): on a remote island in the South Pacific a gun with ample ammunition to shoot wild goats and pigs and a fishing rod with line and hooks are infinitely more valuable than a ton of Gold.

But of course my dear Watson.....Which is why I own more guns & ammo than PM's

But the value of the PM's for now still far exceed the value of my munitions & weaponry

[midas]

...and then dear children [yawn...] the Utah government will mint gold and silver Mormons (as opposed to the kelantanese sharia Dinars and Dirhams) which will be accepted [insha'allah Joseph Smith, jr. willing] by a "large number of restaurants and shopping centers" all over Utah happily ever after.

honi soi qui mal y pense!

And please don't forget to extend your sarcasm to the more than a dozen other US states that are considering similar measures ,

http://thecomingcrisis.blogspot.com/2011/04/us-states-look-to-bring-gold-standard.html

let them "consider". and don't wake me when they have implemented the use of precious metals. i am not living in a state of the Greatest Nation on Earth™. my wife shops in Foodland, Friendship, Makro and Tesco.

this topic has been and is still discussed ad nauseam in either obscure or gloom&doom websites where any pathetic clown can make ridiculous claims (see "Kelantanese Dinars and Dirhams based on Sharia Law")

Naam this post this so similar in style to your earlier posts over in the very early stages of the other " fred " ( as Alex Lah used to describe it )and when you used to say things like what financial crisis? It wasn't until halfway through that you came grovelling to ask if you could join the true believers well this time it will cost you more than Kelantanese Dinars and Dirhams when you eventually see the light

Edited May 24, 2011 by midas

[badge]

We are certainly living in interesting and historic times ..

I never thought i would see the day that Zimbabwe would turn their noses up

at the US dollar.

But then again i was in Myanmar 2 weeks ago and they

clearly wanted Thai baht from me rather than accept US dollars

RBZ urges gold-backed Zim dollar

http://www.newzimbab...r/business.aspx

long time talked about but perhaps closer than we think - Multi-Billionaire Hugo Salinas Price - Silver to be monetized in Mexico this year /

http://www.kingworld...inas_Price.html

Well when I read this about Mexico, jcon's prediction that the US dollar

would " shine like a rock star " reminded me of the one hit wonder

rock stars that fell into oblivion after making one single and then ended up on LSD

I think you'll find the LSD comes before the wonderous rock music

[badge]

Once bullish, contrarian Jim Grant likes cash now

Once bullish, famed contrarian Jim Grant sees trouble in rising markets. His advice: Hold cash

http://finance.yahoo.com/news/Once-bullish-contrarian-Jim-apf-265701620.html

[badge]

Im not a fan of chart patterns like H+S and flags and so forth as they are too often obivous, and 'anything obvious is obviously wrong', however fr a bit of fun using some technical mumbo-jumbo, if Spot AU isnt repelled by the upper flag trendline around 1537, the next hurdle may be just prior to the recent high, so between 1565-75, plus hidden -ve divergence on the hourly graph RSI.

[cloudhopper]

Well when I read this about Mexico, jcon's prediction that the US dollar

would " shine like a rock star " reminded me of the one hit wonder

rock stars that fell into oblivion after making one single and then ended up on LSD

I think you'll find the LSD comes before the wonderous rock music

It will be a race to the bottom. The USD just needs to outlast the others on the way down and it well could, until it too is eventually caught and eaten.

A string of hits on this trip before it ends.

http://www.youtube.com/watch?v=HrTS7b028A8&feature=related

[Naam]

Once bullish, contrarian Jim Grant likes cash now

Once bullish, famed contrarian Jim Grant sees trouble in rising markets. His advice: Hold cash

http://finance.yahoo.com/news/Once-bullish-contrarian-Jim-apf-265701620.html

me like Jim Grant too mutt!

[RedFxTrade]

To say that nothing backs gold is silly. It is backed by the efforts taken to mine it...and even more obvious again is its relative scarcity. Is paper money scarce, and hard to create?

Plutonium is scarce too. it takes much more effort to extract one ounce of Plutonium than mining a ton of Gold and that ounce of Pu has a much greater value than a ton of AU. does that mean Pu can be used as a tangible back-up of paper currencies?

I m sure your being facetious Naam, but in answer to your question, there are obvious reasons plutonium has not been used as money. The market and the world have chosen gold and silver, and often both together, bimetallism, and even tobacco. Pepper was called black gold in the past, and the Portuguese risked their life sailing and arriving at the West coast of India in the 15th century to get their hands on pepper.

Plutonium has not been chosen by the market. I refer back to Greshams law is in action today, government implemented tender, over valued money driving out good money from circulation. It does not take a high degree of observation to this happening.

While I m not a fanatic gold bug as I m currently long USD against other currencies, AUD, GBP, CHF I have heard all of these type of arguments ad nausea for 6 or 7 years now; "yes but gold is not backed by anything",,,,gold is expensive...gold is in a bubble....only nutters own gold...gold is high risk....you don't get a yield on it....While the same people have kept calling top after top and have watched their savings in paper dwindle in value.