Where Is Gold Going In This Market

[Naam]

Don't worry Naam, I m sure you ll get a chance to buy T-Bonds at 15% again...and if you do not want to wait, you could always buy a Greek 10 year at 17%, even better...surely that must be good value...why would anyone want to own Gold when you can get a Greek 10 year at 17%...great value.

i consider commenting on pure refined rubbish, especially when i'm addressed, my duty. but comparing U.S. Treasuries of the 80s with Greek sovereign debt of today is much worse than pure refined rubbish. therefore i decline to comment.

[RedFxTrade]

Don't worry Naam, I m sure you ll get a chance to buy T-Bonds at 15% again...and if you do not want to wait, you could always buy a Greek 10 year at 17%, even better...surely that must be good value...why would anyone want to own Gold when you can get a Greek 10 year at 17%...great value.

i consider commenting on pure refined rubbish, especially when i'm addressed, my duty. but comparing U.S. Treasuries of the 80s with Greek sovereign debt of today is much worse than pure refined rubbish. therefore i decline to comment.

I was being facetious and a little bit sarcastic Naam ...I agree there is no comparison................yet....but I m not talking about US Treasuries of the 80s...I m talking about todays. As I said it is about the facts in the here and now.

But caveat emptor...Britain was a vast nation, with sterling circulating throughout the empire and was the richest country in the world....a few decades later Britain could not sell its bonds...Sterling dropped 80-90% in a few decades against other currencies and has lost more than 98% against silver/gold...

Never underestimate the stupidity and expediency of politicians and countries to burn through capital...and bring about ruination and bankruptcy...It has happened so many times in the past...what makes you so confident that "this time is different"?

[jcon]

After reading the last few posts I'm pretty much convinced that RedFx is sokal.

The problem with sokal was that he thought having 100,000 USD meant that he could go toe-to-toe with seasoned investors and didn't have respect for older people with more experience. I could be wrong, but I'm just sayin'

And if RedFx isn't sokal, then he shouldn't be offended anyway, because sokal was a douche.

[Naam]

The topic is gold. But how did the wealth storage thing work out for the guy who bought his 30 year bonds a few years before that guy?

it worked out quite well for one guy even though the yield was not 15% but 9.5% which he considered quite fair. he held the UST and clipped for 10 years his coupons till his bond was called. his neighbour to the left who "stored his wealth" and bought gold at the same time lost 65% of his capital during the same period.

the other guy was not happy with 9.5% and sold his UST when he realised that Paul Volcker kept on pressing the FED fund rate pedal to the metal. leaning back a couple of years, keeping his useless fiat money at a "meager 6%" overnight rate, he bought UST again when the yield hit 15% and lived happily not ever after but a good number of years.

it goes without saying that both afore-mentioned guys wouldn't touch UST today with a barge pole

to enlighten those who are not familiar with long maturity bonds and who think buying a 30 year bond means holding it for 30 years (i met these kind of uninformed people) it is worthwhile to mention that AAA rated liquid Government debt such as UST, Bunds, JGBs and Gilts can be traded virtually around the clock. and what was bought can be sold again minutes later.

[Naam]

After reading the last few posts I'm pretty much convinced that RedFx is sokal.

The problem with sokal was that he thought having 100,000 USD meant that he could go toe-to-toe with seasoned investors and didn't have respect for older people with more experience. I could be wrong, but I'm just sayin'

And if RedFx isn't sokal, then he shouldn't be offended anyway, because sokal was a douche.

Sokal (as opposed to Red) couldn't form a single coherent english sentence. Red never mentioned the Austrian School of Economics and neither did he curse Keynes.

p.s. Sokal claimed his net worth was 200k dollars and he considered 8% (16k p.a.) sufficient for him to retire in Thailand.

Edited May 25, 2011 by Naam

[RedFxTrade]

After reading the last few posts I'm pretty much convinced that RedFx is sokal.

The problem with sokal was that he thought having 100,000 USD meant that he could go toe-to-toe with seasoned investors and didn't have respect for older people with more experience. I could be wrong, but I'm just sayin'

And if RedFx isn't sokal, then he shouldn't be offended anyway, because sokal was a douche.

I m not Sokal...to be perfectly honest I managed to get my password reset for my old user name...and I have two previous user names dating back to 2004...I m a binge forum'er, hence creating new usernames. I have actually more posts now than my last user name. Last user name was Vedantafxtrader and one before that was Tomyamgoong or something like that...I have been trading for about 8 years, and been successful for coming up on 4 years.

Poor Sokal was obviously over leveraging himself by the sounds of it. But obviously Jcon thinks Redfx does not have respect for more seasoned investors and people with more experience...I m young and building my experience...the first 4 years I burnt a couple of accounts, but progress for me was marked in that it more time to burn the second one,...the next step was not making or losing much,...to become profitable now and then,...to getting more consistency...

[RedFxTrade]

After reading the last few posts I'm pretty much convinced that RedFx is sokal.

The problem with sokal was that he thought having 100,000 USD meant that he could go toe-to-toe with seasoned investors and didn't have respect for older people with more experience. I could be wrong, but I'm just sayin'

And if RedFx isn't sokal, then he shouldn't be offended anyway, because sokal was a douche.

Sokal (as opposed to Red) couldn't form a single coherent english sentence. Red never mentioned the Austrian School of Economics and neither did he curse Keynes.

p.s. Sokal claimed his net worth was 200k dollars and he considered 8% (16k p.a.) sufficient for him to retire in Thailand.

Thanks for the Hat tip Naam...But I do read the Austrian school and do curse Keynes... :lol:Its the only one that has made sense to me, so I guess we all follow what makes sense to us to form our world views in all areas of life

[jcon]

haha ok my bad RedFx - I didn't mean anything by it, I just got a sokal-vibe for a second there. No harm no foul. My apologies to you.

200K @ 8%pa - Naam your memory is excellent!

I do think that the forum could use some new antagonists, though. The apocalyptic-rider shtick is getting long in the tooth!

edit: btw I wasn't putting myself in the ''seasoned investors'' group, I'm young and I've made my fair share (and perhaps more) of mistakes.

Edited May 25, 2011 by jcon

[Naam]

haha ok my bad RedFx - I didn't mean anything by it, I just got a sokal-vibe for a second there. No harm no foul. My apologies to you.

200K @ 8%pa - Naam your memory is excellent!

I do think that the forum could use some new antagonists, though. The apocalyptic-rider shtick is getting long in the tooth!

edit: btw I wasn't putting myself in the ''seasoned investors'' group, I'm young and I've made my fair share (and perhaps more) of mistakes.

let me tell both of you some secrets but please don't tell others!

-a seasoned investor beats you both hands down in number of mistakes made,

-a seasoned investor makes even nowadays continously mistakes and will make mistakes till he stops investing,

-the biggest mistake he makes when he stops investing, gives carte blanche to his banksters and mutates to the rank unseasoned investor,

-the advantage of a successful seasoned investor is that he has faced and dealt with a variety of situations and is not "hungry" anymore. his primary desire is to protect his net worth and achieve an adequate yield in line with prevailing market conditions, if possible above inflation. if the yield is much higher he will accept that mishap like a man

besides this, certain seasoned investors strive to live a comfortable life, clipping a lot of coupons of which they need only a small part to finance their life style, sip a glass of good wine, grab whenever whenever deemed opportune (servants not present) the behind of the passing Old Lady, take the dogs for a drive in a (in Thailand) rare old car and puff a Cuban cigar :jap:

[midas]

Just when those folks are patting themselves on the back and digging up holes for the ''heavy duty trolleys," then begins the shanking. Just like a real shanking, it won't be pretty. Rejoice a pop to 38/oz, then a left-right-center shankfest.

5:55pm 37.98728 - what happened afterward? SHANK FEST.

This trade happened so fast it's just violent. I believe that's as close to 38.x that we're going to get. I could not even make the trade though my bank so I did it on O_da. 6:50pm 100K HKD (equiv) @ 37.30716 10x leverage. Just a small trade but I said I'd do it and I did. This thing (IMO) is so over. It will be 5-handle in no time (35, that is).

When I read this I thought of how Seagoon would respond " What - what - what - what ? "( jcon is the wrong nationality

and is probably too young to know who the Goons were but they were truly classic comedy )

Silver Is On Fire Again!

http://www.businessinsider.com/silver-is-on-fire-again-2011-5

[RedFxTrade]

haha ok my bad RedFx - I didn't mean anything by it, I just got a sokal-vibe for a second there. No harm no foul. My apologies to you.

200K @ 8%pa - Naam your memory is excellent!

I do think that the forum could use some new antagonists, though. The apocalyptic-rider shtick is getting long in the tooth!

edit: btw I wasn't putting myself in the ''seasoned investors'' group, I'm young and I've made my fair share (and perhaps more) of mistakes.

let me tell both of you some secrets but please don't tell others!

-a seasoned investor beats you both hands down in number of mistakes made,

-a seasoned investor makes even nowadays continously mistakes and will make mistakes till he stops investing,

-the biggest mistake he makes when he stops investing, gives carte blanche to his banksters and mutates to the rank unseasoned investor,

-the advantage of a successful seasoned investor is that he has faced and dealt with a variety of situations and is not "hungry" anymore. his primary desire is to protect his net worth and achieve an adequate yield in line with prevailing market conditions, if possible above inflation. if the yield is much higher he will accept that mishap like a man

besides this, certain seasoned investors strive to live a comfortable life, clipping a lot of coupons of which they need only a small part to finance their life style, sip a glass of good wine, grab whenever whenever deemed opportune (servants not present) the behind of the passing Old Lady, take the dogs for a drive in a (in Thailand) rare old car and puff a Cuban cigar :jap:

Hey Jcon totally no offense taken, only messing around anyway...Your right the forum could use a few more antagonists...its not fair poor old Naam having to fight his corner by himself all the time , although fair play he sticks to his guns...

I think you hit a very important point there Naam...its is all about personal circumstances, and over all maintaining a certain lifestyle until death us do part if you like. So whats right for one person is not the same for another....

And yeah everyone gets it wrong,,,,no monopoly on the future...my biggest learning curve over the last few years was learning to take a loss before it gets out of hand....and now I only ever add to a position when the first one is in profit...and start off smallish....

I m glad your at the sipping fine wine stage...I m still at the gulping down the Bia Changs, but in a sophisticated way......as I do a beer chang and chateauneuf de Pape chaser....for balance...

Where are you guys from anyway? I m assuming Churchill is British, Jcon from the states....and Naam either the US, British or German?

[RedFxTrade]

Very Interesting article on Europe and Spain...The Youth Revolution Spreads To Europe

The youth revolution that rocked dictators in the Middle East is now spreading to Europe. Look for more chaotic upheaval in result.

These are momentous times. By some measure, there is as much potential for change and upheaval now as at any time in the past 50 years.

Add in the prospect of war, and the time frame extends back 100 years or more...

The sweep of uncertainty and chaos is evident everywhere you look: America. The Middle East. China. Japan. Europe. Even Africa.

Major trends, both positive and negative, are clashing like titans in multiple "hot spots" all around the globe. And anyone who says smugly that "it's all under control" is only fooling themselves.

Very little is under control right now -- and the answer to "what's next" is far from obvious.

If the 21st century had an animal mascot, it might well be a "black swan" -- the rare bird popularized by Nassim Taleb as a symbol of unexpected fat-tail events.

Except, truth be told, most of the events unfolding now are actually "gray swans" -- surprising in their power and ferocity, but not actually unexpected. Many of today's developments were foreseen in rough shape, only the specific details and calendar timing left out.

These thoughts were brought to my mind by another "gray swan" revelation last week: The youth revolution is spreading to Europe.

In the Middle East it is known as the "Arab Spring." This is appropriate, as the age demographics for the MENA (Middle East/North Africa) region skew extremely young.

So what will they call it when the same thing happens in gray-headed Europe? The below image, gleefully posted anonymously to the Internet, captures the spirit of the latest uprising.

As the U.K.'s The Guardian reported on Friday:

A youth-led rebellion is spreading across southern Europe as a new generation of protesters takes possession of squares and parks in cities around Spain, united by a rejection of mainstream politicians and fury over spending cuts.

Protests are also planned in Italy, where the tag #italianrevolution is a trend on Twitter. Plans have been announced for a piazza occupation in Florenceon Thursday night, and for further protests in Italian cities, including Rome and Milan, on Friday.

In Madrid demonstrators have refused to budge from the central Puerta del Sol despite a police charge that dislodged them temporarily on Tuesday night.

Now they have occupied a quarter of the square, covering it with tarpaulins and tents, setting up kitchens, tapping at laptops and settling down to sleep on sofas and armchairs.

Similar scenes were being played out in Barcelona, where protesters held a midday Argentinian-style pan-bashing protest in the Plaza de Catalunya, and in numerous other cities where protesters raised the banner of what they call "the Spanish revolution".

Notice the "Twitter tactics" -- creating a tag called #italianrevolution -- which was also very evident in the Middle East protests.

So-called "social media" is now being used as a tool to facilitate uprising. From "flash mobs" and "crowd sourcing" to serious gatherings in which citizens challenge governments, communication technology is changing the face of the planet.

Nor is the "revolution" the sole province of youth. They are just the ones who are most comfortable using mediums like Twitter and Facebook as highly efficient mobilization devices.

The adults of Europe -- taxpayers, business owners, despairing workers -- have just as much incentive to revolt as the youth do, if not more.

(Don't forget, you can sign up for Taipan Daily to receive all of my and fellow editor Joseph McBrennan's investment commentary.)

As we have described in these pages, the basic plan of Europe is to rescue the banks at the cost of screwing Europe's taxpayers -- signing up the citizens for decades of indentured servitude. And not just taxpayers, but all European citizens exposed to the burden of deeply unfavorable economic conditions.

The idea that Greece, Portugal or Ireland can move forward without restructuring their debts -- a move the bankers so want to avoid -- is dependent on the notion of forcing those countries to accept deep, deep recession, or even depression-like economic conditions, for years if not decades to come. And all to save reckless banks and bondholders in the same ilk as Goldman Sachs.

As far as the European sovereign debt crisis goes, Spain is the great white whale of Europe. Notice that Spain has not been in the news as of late -- though that may be changing even as this note is written. It has been all "periphery" -- Ireland, Portugal, Greece.

That silence is partly because Spain is just too big to wave off. If the contagion fears truly grip Spain -- and there is every reason to think they will -- then all of hades truly breaks loose.

Look, here's the thing. The wonks at the Federal Reserve are masters of denial. Those who run the European Central Bank (ECB) are also masters of denial, as are Europe's leading politicians.

But all that vigorous denial doesn't solve a dam_n thing. It only postpones the desperate need to find a true solution to the problems at hand... and in so doing makes those problems worse.

For years now your editor has steadfastly maintained, and still maintains, that the eurozone is in a disaster situation, a giant train wreck waiting to happen. It has only been the human miracle of persistent denial and suspended disbelief that has kept that train wreck from happening.

None of this is to deny the problems of the U.S., which we have written about extensively. All the major currencies are bad houses in a bad neighborhood. It happens to be the euro in the major line of fire just now, as a false solution comes close to being outright rejected by angry youth all across Europe. And adults joining in too.

Look for more crisis, more drama, more catastrophe ahead. And deflation too. The dreaded "D" word will return in a big way. Possibly soon...

Editor's Note: The U.S. economy may be recovering, but it's nothing compared to the area some analysts are calling the "Global Wealth Zone." Investors who move their money into the Global Wealth Zone now could more than double their net worth... but only if you know exactly where to look.

[midas]

Look for more crisis, more drama, more catastrophe ahead. And deflation too. The dreaded "D" word will return in a big way. Possibly soon...

I dont agree ! not yet .

" Durable Goods Plummet: -3.6% On Expectations of -2.5%; 8% Monthly Swing From 4.4% Prior Print; Ex Transportation Consensus Missed By 2%"

Place your bets on QE3 coming this way soon

[jcon]

Wine, cars, sausage dogs, a good life, and the opportunity to grab a good wife's bum on occasion, you can't ask for much more Naam!

And yes RedFx, I guess you just keep on learning. All pros were rookies at one point (but not all rookies can become pros....). I was lucky to learn some big lessons early on. I probably hold more cash than I should, though - I'm just uncertain in these times. I do like this part of the forum as there can be some good info from some posters.

Re: deflation, I've said ''bring it on'' before and I still stand by that, but if it results in mass-poverty and demonstrations and hunger and whatever then I don't mind if we don't have it. That's one of my main gripes with the goldbug prophecies - it's as if they want the world to come to an end of sorts just so they can ''use'' their gold or somehow reaffirm themselves... it seems a bit selfish, or something like that. I'm a bit tired so I'm not articulating well.

[12DrinkMore]

Very Interesting article on Europe and Spain...The Youth Revolution Spreads To Europe

They can revolt all they want, but isn't going to generate a single extra EUR to pay off the debt they have incurred.

As we have described in these pages, the basic plan of Europe is to rescue the banks at the cost of screwing Europe's taxpayers -- signing up the citizens for decades of indentured servitude. And not just taxpayers, but all European citizens exposed to the burden of deeply unfavorable economic conditions.The idea that Greece, Portugal or Ireland can move forward without restructuring their debts -- a move the bankers so want to avoid -- is dependent on the notion of forcing those countries to accept deep, deep recession, or even depression-like economic conditions, for years if not decades to come. And all to save reckless banks and bondholders in the same ilk as Goldman Sachs.

I wonder what would have happened to the Greeks if the banks had refused to loan the country the money in the first place? Where would the buggers be today? The rating agencies certainly played a big role by rating the debt as "investment grade" when "crap grade" should have applied.

How much of the loans that the Germans made to the Greeks was, in some way, the German tax payers' money in the first place? I do not know. And now they have to pay to get some of it back again.

But I have to take exception to the phrase "reckless" applied to Goldman Sachs. The bank is certainly not reckless in its dealings, but hugely profitable, however "wrecker" could very apply be applied. I wonder how much they invested in Greek debt after they manipulated Greek's finances to get the bloody country into the Eurozone. Zero, at a guess. Yep, I am fed up with the Greeks and their particular issues. Bad apples and barrels falls into mind.

Maybe the solution is at hand

http://www.cnbc.com/id/43162793

Officials involved in the discussions believe far more than €50 billion could be raised in sales of state-owned assets, with estimates ranging from €250 billion to €300 billion - or almost all of Greece's outstanding debt.

But who is going to buy? Is there any money out there?

[12DrinkMore]

and Naam either the US, British or German?

Naam hails from Switzerland, a land where there is respect for the population, its welfare and currency, and so a "Gruezi, Herr Naam" is in order.

The CHF is almost up to THB 35, having steadily appreciated against all the dross that surrounds it. Just shows that in the end quality and long term planning will win and not piss-poor short term screw the peeps bullshit.

Edited May 25, 2011 by 12DrinkMore

[RedFxTrade]

Very Interesting article on Europe and Spain...The Youth Revolution Spreads To Europe

They can revolt all they want, but isn't going to generate a single extra EUR to pay off the debt they have incurred.

As we have described in these pages, the basic plan of Europe is to rescue the banks at the cost of screwing Europe's taxpayers -- signing up the citizens for decades of indentured servitude. And not just taxpayers, but all European citizens exposed to the burden of deeply unfavorable economic conditions.The idea that Greece, Portugal or Ireland can move forward without restructuring their debts -- a move the bankers so want to avoid -- is dependent on the notion of forcing those countries to accept deep, deep recession, or even depression-like economic conditions, for years if not decades to come. And all to save reckless banks and bondholders in the same ilk as Goldman Sachs.

I wonder what would have happened to the Greeks if the banks had refused to loan the country the money in the first place? Where would the buggers be today? The rating agencies certainly played a big role by rating the debt as "investment grade" when "crap grade" should have applied.

How much of the loans that the Germans made to the Greeks was, in some way, the German tax payers' money in the first place? I do not know. And now they have to pay to get some of it back again.

But I have to take exception to the phrase "reckless" applied to Goldman Sachs. The bank is certainly not reckless in its dealings, but hugely profitable, however "wrecker" could very apply be applied. I wonder how much they invested in Greek debt after they manipulated Greek's finances to get the bloody country into the Eurozone. Zero, at a guess. Yep, I am fed up with the Greeks and their particular issues. Bad apples and barrels falls into mind.

Maybe the solution is at hand

http://www.cnbc.com/id/43162793

Officials involved in the discussions believe far more than €50 billion could be raised in sales of state-owned assets, with estimates ranging from €250 billion to €300 billion - or almost all of Greece's outstanding debt.

But who is going to buy? Is there any money out there?

Not saying I agree with the political sentiments. I m very much a complete non-socialist. I think it is morally bankrupt to borrow the savings of others who have labored for them,squander them all all without building the necessary productive capacity to pay the money back. Its not against the individual people of the country, but the stupid politicians and banks who loan t the money. However, individuals also need to take responsibility, but the world we live in today has led to a world where the general populace put more thought into buying a new pair of shoes or a TV than investing their savings.

I m interested in the political movement and its implications for austerity and governments, and from an investment point of view. However, the Germans paying to get the money back is not going to work. They are just throwing good money after bad.

Ah Naam from Switzerland, great country, beautiful place.

[flying]

Gold / Silver Ratio 40.54

getting back down there G/S ratio wise.....

May be a good time to swap out the rest???....we will see

[cloudhopper]

Look for more crisis, more drama, more catastrophe ahead. And deflation too. The dreaded "D" word will return in a big way. Possibly soon...

I dont agree ! not yet .

" Durable Goods Plummet: -3.6% On Expectations of -2.5%; 8% Monthly Swing From 4.4% Prior Print; Ex Transportation Consensus Missed By 2%"

Place your bets on QE3 coming this way soon

Here's an excellent review IMO

http://globaleconomicanalysis.blogspot.com/2011/05/hyperinflation-nonsense-in-multiple.html

[Naam]

and Naam either the US, British or German?

Naam hails from Switzerland, a land where there is respect for the population, its welfare and currency, and so a "Gruezi, Herr Naam" is in order.

The CHF is almost up to THB 35, having steadily appreciated against all the dross that surrounds it. Just shows that in the end quality and long term planning will win and not piss-poor short term screw the peeps bullshit.

for the record: Naam was born in Switzerland, is half Swiss / half German, grew up in Germany, considers himself to be a German and holds citizenship of both countries.

p.s. Naam him rike CHF too mutt

[badge]

A wealthy German, from Switzerland, in his 70's, who moved to South America, who doesnt like Gold as its too hard to transport in size?

I have to accept your knowledge on this subject.

[RedFxTrade]

Look for more crisis, more drama, more catastrophe ahead. And deflation too. The dreaded "D" word will return in a big way. Possibly soon...

I dont agree ! not yet .

" Durable Goods Plummet: -3.6% On Expectations of -2.5%; 8% Monthly Swing From 4.4% Prior Print; Ex Transportation Consensus Missed By 2%"

Place your bets on QE3 coming this way soon

Here's an excellent review IMO

http://globaleconomi...n-multiple.html

Yes excellent indeed. Mish's blog is fantastic. He avoids hyperbole, is well reasoned and always has an interesting perspective. I send some emails to Mish and he is always receptive and gets back which is good as he gets a lot of emails. The guy is a blogging fanatic. He is on my google chat window, and it is very rare his status is not online. In US (i m in the UK at the moment) time his posts appear in the middle of the night at times...he never seems to sleep...It is hard to disagree with the reasoning behind the deflation idea of credit and money as marked to market and finding a willing borrower as well as a lender, and indeed when you do look at measures of credit they are contracting...I think that is why I have a tendency to go long the USD when the time is right...

I m not in the hyperinflation camp, but own gold and silver, and accumulated more silver in the last couple of weeks, but do not mind going long the USD at the same time. In a severe deflation the real cost of gold should go up.

However, to stick to dogmatically to either premise is risky. I mean the deflationists could very well be right, but the market could move against them for a few years first. Prechter has been calling the top in stocks in September 2009 for instance, and in silver and gold for even longer. To believe wholeheartedly in hyper-inflation without considering the other side of the coin is silly also.

Perhaps the best way to look at it is we will move between large periods of forced liquidity into the system, and periods of contracting liquidity. Trade the swings between the two. Right now long USDCHF, been short AUDUSD.

[Naam]

Yes excellent indeed. Mish's blog is fantastic.

i concur, but the resident gloom&doomers cum gold-soon-$20,000-ounce won't like Mish's rational arguments and those who read Mish will declare him immediately persona non grata

however, whatever the gurus are forecasting, i agreed with Jcon months ago, i.e. "deflation? bring it on! inflation? bring it on!"

[jcon]

That was a good link, cloudhopper thx.

I tend to agree with what Mish had written, but as Naam pointed out I don't really mind either way (as long as it's not ''hyper-xxxation," which I'm guessing won't happen on any meaningful scale). Proper hedges should smooth out anything else in between so it's all rather academic IMO.

I think we could use lower input prices for producers, so a correction of sorts rather than full-on ''deflation.''

[churchill]

Why would central banks now need to sell gold - I would have thought this gives them an added incentive to hold as an asset /

Gold's remonetisation grows as European Committee approves collateral usage

The global acceptance of gold as money has been given another boost as the Economic and Monetary Affairs Committee of the European Parliament has approved it to be used as collateral.

http://www.mineweb.com/mineweb/view/mineweb/en/page34?oid=127947&sn=Detail&pid=102055

[Naam]

Gold's remonetisation grows as European Committee approves collateral usage

the agreement has nothing to do with remonetisation but to facilitate EU loans to the "PIIGS" which are in deep financial shit and of course to bullshit pacify the taxpayer by making him believe that the loans are covered by collateral.

for the record: all Greek gold reserves cover only a fraction of the money that has been already disbursed. if one calculates what amounts will still flow to keep the country afloat or compare the gold reserves with Greece's total external debt then the 3½ million ounces are like a drop in the ocean.

it is of course not surprising that a site like "mineweb" spins another story which fits its agenda.

[midas]

.It is hard to disagree with the reasoning behind the deflation idea of credit and money as marked to market and finding a willing borrower as well as a lender, and indeed when you do look at measures of credit they are contracting...I think that is why I have a tendency to go long the USD when the time is right...

and here on video is a different perspective on things from the renowned Dr Faber

http://www.zerohedge.com/article/marc-faber-shocked-how-many-ferraris-and-bentleys-he-sees-newport-beach-during-his-smoke-bre

Edited May 27, 2011 by midas

[RedFxTrade]

.It is hard to disagree with the reasoning behind the deflation idea of credit and money as marked to market and finding a willing borrower as well as a lender, and indeed when you do look at measures of credit they are contracting...I think that is why I have a tendency to go long the USD when the time is right...

and here on video is a different perspective on things from the renowned Dr Faber

http://www.zerohedge...g-his-smoke-bre

Thanks Midas...It is quite ironic that Mish's favourite analyst is Dr Faber. Total respect for both guys. Love hearing Fabers views. Again its hard to argue. I m going to admit it, without being overly dogmatic, I really have no idea between high inflation and deflation. I find both arguments fascinating. From a theoretical stand point I find the deflation argument slightly more convincing...due to the credit side of the economy and if collectively people do want to borrow then the banks can not increase money supply.

But then I look at the nutters in power, at the FED and some of their ideas to prevent deflation, and what they are trying to do. I guess my not knowing or deciding dogmatically to one side is why I ll try to trade the swings. So basically, own gold, silver, and other commodities that look cheap from fundamental perspective and on a price basis, sugar is one, , but also go long USD at times for technical reasons, as a hedge and short certain stock indexes, options etc...Very interesting times.

[midas]

.It is hard to disagree with the reasoning behind the deflation idea of credit and money as marked to market and finding a willing borrower as well as a lender, and indeed when you do look at measures of credit they are contracting...I think that is why I have a tendency to go long the USD when the time is right...

and here on video is a different perspective on things from the renowned Dr Faber

http://www.zerohedge...g-his-smoke-bre

Thanks Midas...It is quite ironic that Mish's favourite analyst is Dr Faber. Total respect for both guys. Love hearing Fabers views. Again its hard to argue. I m going to admit it, without being overly dogmatic, I really have no idea between high inflation and deflation. I find both arguments fascinating. From a theoretical stand point I find the deflation argument slightly more convincing...due to the credit side of the economy and if collectively people do want to borrow then the banks can not increase money supply.

But then I look at the nutters in power, at the FED and some of their ideas to prevent deflation, and what they are trying to do. I guess my not knowing or deciding dogmatically to one side is why I ll try to trade the swings. So basically, own gold, silver, and other commodities that look cheap from fundamental perspective and on a price basis, sugar is one, , but also go long USD at times for technical reasons, as a hedge and short certain stock indexes, options etc...Very interesting times.

agreed! The only ones who really know are those who are engineering this " grand plan "

like cloudhopper said -we are all speculators now

But the one thing I picked up on in that interview was his comments about the danger of tax revenues plummeting.

and the need for Ben Shalom Bernanke to keep printing even more paper one thing about Marc Faber is

he hasn't changed his position one bit on this prediction over a long period of time.

[RedFxTrade]

.It is hard to disagree with the reasoning behind the deflation idea of credit and money as marked to market and finding a willing borrower as well as a lender, and indeed when you do look at measures of credit they are contracting...I think that is why I have a tendency to go long the USD when the time is right...

and here on video is a different perspective on things from the renowned Dr Faber

http://www.zerohedge...g-his-smoke-bre

Thanks Midas...It is quite ironic that Mish's favourite analyst is Dr Faber. Total respect for both guys. Love hearing Fabers views. Again its hard to argue. I m going to admit it, without being overly dogmatic, I really have no idea between high inflation and deflation. I find both arguments fascinating. From a theoretical stand point I find the deflation argument slightly more convincing...due to the credit side of the economy and if collectively people do want to borrow then the banks can not increase money supply.

But then I look at the nutters in power, at the FED and some of their ideas to prevent deflation, and what they are trying to do. I guess my not knowing or deciding dogmatically to one side is why I ll try to trade the swings. So basically, own gold, silver, and other commodities that look cheap from fundamental perspective and on a price basis, sugar is one, , but also go long USD at times for technical reasons, as a hedge and short certain stock indexes, options etc...Very interesting times.

agreed! The only ones who really know are those who are engineering this " grand plan "

like cloudhopper said -we are all speculators now

But the one thing I picked up on in that interview was his comments about the danger of tax revenues plummeting.

and the need for Ben Shalom Bernanke to keep printing even more paper one thing about Marc Faber is

he hasn't changed his position one bit on this prediction over a long period of time.

Well exactly, Faber has been steadfast in his outlook. He is very prescient, and I dare say they will print and print as Faber has noted in the past it is the only option available. One thought I have been considering;

We have had Qe1 and Qe 2, both have "worked" in so far that they have blown stock prices and risk assets to lofty heights again while keeping bond yields low for between 6-9 months...After the first qe wore off, we saw the slow down start to appear again, and the economy last year was slowing, and probably would have went into a recession without the huge stimulus of Qe2.. We have had qe 2 and the economy seemed to pick up again, with improving data, rising assets etc...Now it is clear that QE has worked in the medium term. I say worked, but it is only an illusion as the growth is not real growth derived from real savings. Now the economy is slumping again by many measures as qe 2 seems to have run its course...my question is this...at what point does the market "say", ok qe is not working, and is it possible that market confidence in the efficacy of QE itself dwindles...and that perhaps by the time we get to the failure of QE 3, and they think about Qe 4 and start qe4, the market says this is not working, and we get a collapse regardless? One option worth considering.