Where Is Gold Going In This Market

[Naam]

I presume for both gains in gold and perhaps more as a hedge against the SNB managing to lower the current enthusiasm level for the CHF.

Possibly a shrewd move.

actually a more logical than shrewd move however in no way connected to potential SNB actions. CHF had an excellent performance but... trees don't grow sky high. there is a limit even for CHF. one also has to take into consideration what part of appreciation was caused by safe haven seekers. once the tide turns... we touched parity with EUR day before yesterday but today we are at 104.20

disclaimer: i still hold some 8.5% of my portfolio in CHF denominated bonds and cash. but i don't mind that an AAA rated debtor yields 6.45% in CHF.

there... there... calm down... don't get too excited asking me which AAA rated debtor

CHF minus 7% vs USD and 8% vs EUR in 2 trading days!

[badge]

All the talk of Burgers is based on the infamous (but apparently not to this thread?) Economist Big Mac Index.

i'd like to hear your personal opinion on this Badge.

I think its a lighthearted attempt to gauge how far currencies are from their fair value, and is fully worthy of the 80 seconds in takes to read.

[Lost in LOS]

last night on CNBC they said gold will take a drop right now because they increased the margin amount today and many are worried they wont be able to cover it.

If it dips alot I will buy more

[gregb]

Gold does generate cash flow if you want to treat it that way. You simply sell a portion every time it exceeds your purchase point. Your amount of gold goes down, but the value of that gold in fiat remains constant and you continually receive money. No different than your other investments.

i can only shake my head in sorrow

As opposed to explaining mathematically why the statement is wrong? You can shake your head in sorrow, but unless you can prove to me 2+2 does not equal 4 I find it hard to believe you can refute the statement.

Explain why an asset why selling 16.7% of an asset that is originally worth $1000 and appreciates in value to $1200, so that you have $200 in your pocket and an asset worth $1000, is substantively any different than an asset worth $1000 and generates a $200 dividend without capital appreciation. The only difference is in trading fees and tax ramifications, if any.

In both cases you have $1000 in the asset and $200 in your pocket.

Mathematically there is no difference between assets that pay dividends and assets that rely on capital appreciation. The difference is simply how we choose to perceive them, tax reasons in some jurisdictions and possibly some other relatively small second order effects that have to do with quantization of shares.

Once we can agree that dividend payments are irrelevant, only then can anyone have a coherent conversation about the reasons why gold's appreciation should outclass the average asset based in the collapsing economy.

that's what the gold aficionados did in the 80s and 90s till they died of starvation.

Obviously. If you want to claim that gold could decrease in value, that is a different story. One could say the same thing about any asset. But here we are discussing whether or not an asset with capital appreciation can be viewed in exactly the same light as an asset which pays a dividend. And mathematically they are identical.

An asset that is losing money all the time can't possibly return a revenue stream. A company constantly losing money couldn't pay a dividend either. Gold was a bad investment during the 80's and 90's. That does not mean it is a bad investment today. I can equally argue a hammer is a completely useless tool when my task is jewelry repair. You have to look at the bigger picture and choose the right tool for the right job.

Gold is the right investment tool during the economic decline that is in our future.

[cloudhopper]

Gold is the right investment tool during the economic decline that is in our future.

In order to generate the cash dividend a portion of the gold must be liquidated. If gold is appreciating in price then we can assume that the cash prices for goods and services has also risen by about the same percentage and you will need to liquidate more gold to receive the increasing amounts of cash needed to maintain purchasing power. Likewise if gold drops in price the cost of goods and services will drop and you will need to liquidate proportionately less gold. However in all cases we see that gold is being exchanged at a roughly even pace for goods and services regardless of the inflation or deflation at hand, currency crisis, etc. - pretty much what us gold bugs are asking for. But it is always being liquidated as you consume goods and services.

A capital investment in a productive factory or farm however will yield cash dividends for consumption while the capital generating it is not being liquidated.

Gregb the economic decline that is in our future could be very deflationary, and IMO gold should be viewed as a superb storer of capital, but a lousy investment tool.

Edited August 12, 2011 by cloudhopper

[Naam]

...the economic decline that is in our future could be very deflationary, and IMO gold should be viewed as a superb storer of capital, but a lousy investment tool.

as i'm not a prophet i refrain from making any statements concerning the future.

reason: forecasts are quite difficult... especially when they concern the future

[Naam]

Explain why an asset why selling 16.7% of an asset that is originally worth $1000 and appreciates in value to $1200, so that you have $200 in your pocket and an asset worth $1000, is substantively any different than an asset worth $1000 and generates a $200 dividend without capital appreciation.

in my [not so] humble opinion it is "milkmaid" mathematics based on "rubbersheet" calculations to expect an asset that appreciates x% p.a. and these x% are skimmed off each year will go on producing x% ad infinitum (e.g. like a perpetual bond) although its potential basic "value mass" is going down continously.

but then... to each his own :jap:

[Naam]

I presume for both gains in gold and perhaps more as a hedge against the SNB managing to lower the current enthusiasm level for the CHF.

Possibly a shrewd move.

actually a more logical than shrewd move however in no way connected to potential SNB actions. CHF had an excellent performance but... trees don't grow sky high. there is a limit even for CHF. one also has to take into consideration what part of appreciation was caused by safe haven seekers. once the tide turns... we touched parity with EUR day before yesterday but today we are at 104.20

disclaimer: i still hold some 8.5% of my portfolio in CHF denominated bonds and cash. but i don't mind that an AAA rated debtor yields 6.45% in CHF.

there... there... calm down... don't get too excited asking me which AAA rated debtor

CHF minus 7% vs USD and 8% vs EUR in 2 trading days!

correction! as of 25 minutes ago i am not holding any CHF except what i might find in my travelling wallet

[churchill]

I presume for both gains in gold and perhaps more as a hedge against the SNB managing to lower the current enthusiasm level for the CHF.

Possibly a shrewd move.

actually a more logical than shrewd move however in no way connected to potential SNB actions. CHF had an excellent performance but... trees don't grow sky high. there is a limit even for CHF. one also has to take into consideration what part of appreciation was caused by safe haven seekers. once the tide turns... we touched parity with EUR day before yesterday but today we are at 104.20

disclaimer: i still hold some 8.5% of my portfolio in CHF denominated bonds and cash. but i don't mind that an AAA rated debtor yields 6.45% in CHF.

there... there... calm down... don't get too excited asking me which AAA rated debtor

CHF minus 7% vs USD and 8% vs EUR in 2 trading days!

correction! as of 25 minutes ago i am not holding any CHF except what i might find in my travelling wallet

So that why it just dropped

Careful where you put it ..

Edited August 12, 2011 by churchill

[ExpatJ]

For those interested in gold AND cash dividends- KBANKs gold fund (bloomberg name: KASGOLD) pays @6 % per year in dividends - the fund invests 80% in the US Gold SPDR and 20% in gold related equities e.g. mining companies (which are whose equity prices have not yet reflected the increase in gold prices).

[12DrinkMore]

ACHTUNG!

Naam has seen the light!

Two just short days ago in the Financial Crisis

i agree with your "...bound to give way" but i'm not selling one single "Fränkli" as long i don't see some light at the end of the €U-ClubMed bailout tunnel.

And today...

as of 25 minutes ago i am not holding any CHF except what i might find in my travelling wallet

High Cubes all around

Edited August 12, 2011 by 12DrinkMore

[Naam]

ACHTUNG!

Naam has seen the light!

Two just short days ago in the Financial Crisis

i agree with your "...bound to give way" but i'm not selling one single "Fränkli" as long i don't see some light at the end of the €U-ClubMed bailout tunnel.

And today...

as of 25 minutes ago i am not holding any CHF except what i might find in my travelling wallet

High Cubes all around

an investor who is not able to change his mind, if need arises within minutes and new facts prove he is wrong, won't be successful. exceptions prove the rule.

for the record:

both my actions during the last few days secured that an accumulated profit was not reduced by ~$ 84k. perhaps an insignificant for rich TV-members but equivalent to nearly 10 months of my expenses in Thailand.

:jap:

Edited August 12, 2011 by Naam

[flying]

an investor who is not able to change his mind, if need arises within minutes and new facts prove he is wrong, won't be successful. exceptions prove the rule.

for the record:

both my actions during the last few days secured that an accumulated profit was not reduced by ~$ 84k. perhaps an insignificant for rich TV-members but equivalent to nearly 10 months of my expenses in Thailand.

:jap:

Agreed...... an investor without a premise for why he entered will not know when to exit & surely lose.

As for $84K lasting 10 months......It could last me closer to 24 months

[Naam]

As for $84K lasting 10 months......It could last me closer to 24 months

you have the advantage not needing airconditioning, i.e. you save a lot on electricity

p.s. most probably you don't have any dogs and save on dog food too.

[Lost in LOS]

...the economic decline that is in our future could be very deflationary, and IMO gold should be viewed as a superb storer of capital, but a lousy investment tool.

as i'm not a prophet i refrain from making any statements concerning the future.

reason: forecasts are quite difficult... especially when they concern the future

Naam, your my friend, maybe I can help

What do you want to know?

[Naam]

Naam, your my friend, maybe I can help

What do you want to know?

will my wife approve that i keep a mia noi (or two) after my next reincarnation?

i'd also like to know whether Khun Tom (aircon/electrician) is still around. need him badly.

Edited August 13, 2011 by Naam

[flying]

As for $84K lasting 10 months......It could last me closer to 24 months

you have the advantage not needing airconditioning, i.e. you save a lot on electricity

p.s. most probably you don't have any dogs and save on dog food too.

Correct you are on those two

Although electricity is expensive here & I run $200 average per month electric bill

I also dont have a pool or very nice cars by most standards.

I also do most maintenance on them myself.

[Naam]

I also dont have a pool or very nice cars by most standards. I also do most maintenance on them myself.

you mean you did not pay recently 201,563.45 + VAT 14,109.44 = THB 215,682.89 for some repairs of your vintage BMW?

if that is the case i know the reason why you shuffle your physical gold around with a wheel barrow

[flying]

you mean you did not pay recently 201,563.45 + VAT 14,109.44 = THB 215,682.89 for some repairs of your vintage BMW?

if that is the case i know the reason why you shuffle your physical gold around with a wheel barrow

:lol:

[Lost in LOS]

Naam, your my friend, maybe I can help

What do you want to know?

will my wife approve that i keep a mia noi (or two) after my next reincarnation? she will approve it next week if you buy more gold and carpets

i'd also like to know whether Khun Tom (aircon/electrician) is still around. need him badly. yes, he is

how did I do?

[cloudhopper]

This might be of interest to gold bugs sound money advocates.

http://www.zerohedge.com/news/too-much-good-thing-not-good-thing

[flying]

This might be of interest to gold bugs sound money advocates.

http://www.zerohedge.com/news/too-much-good-thing-not-good-thing

That was a pretty good read thanks

Nothing new but good to see others interpret similarly what many of us see.

[Naam]

Naam, your my friend, maybe I can help

What do you want to know?

will my wife approve that i keep a mia noi (or two) after my next reincarnation? she will approve it next week if you buy more gold and carpets

i'd also like to know whether Khun Tom (aircon/electrician) is still around. need him badly. yes, he is

how did I do?

you did quite well! thanks!

[Naam]

The Euro-Stone. Despite all the bailouts and bluster flying about Europe, the yields in the wounded “piiglets” of Greece, Portugal, etc. have failed to soften to more tolerable levels. Worse, yields in the fatter PIIGS of Spain and Italy are hardening. This is of no small import to the German and French banks, which together are owed something like US$2 trillion by the porkers. At this point, it is becoming clear that the eurozone’s systematic flaws doom the euro to continue trending down until it ultimately takes its place in the pantheon of failed monies.

as so often Dyler Turd, instead of doing some homework, is quoting people who don't state facts but defecate rubbish

facts:

-$ 2tr debt to banks = pure rubbish,

-benchmark yields of Spain and Italy fell,

-EUR strengthening or stable vs. most currencies.

[cloudhopper]

-$ 2tr debt to banks = pure rubbish,

Maybe but according to a recent NYT story, as of May last year the PIIGS owed Germany 911B, France 704B and the UK 418B according to the BIS. I doubt that has improved any since then with all the rescues but don't claim to know the figure.

[Naam]

-$ 2tr debt to banks = pure rubbish,

Maybe but according to a recent NYT story, as of May last year the PIIGS owed Germany 911B, France 704B and the UK 418B according to the BIS. I doubt that has improved any since then with all the rescues but don't claim to know the figure.

no diversion please, facts only! Dyler Turd quoted a reference to Italy and Spain and the debt of these two countries owed to German and French banks.

turd case closed.

next!

[Naam]

ACHTUNG!

Naam has seen the light! Two just short days ago in the Financial Crisis

i agree with your "...bound to give way" but i'm not selling one single "Fränkli" as long i don't see some light at the end of the €U-ClubMed bailout tunnel.

And today...

as of 25 minutes ago i am not holding any CHF except what i might find in my travelling wallet

High Cubes all around

an investor who is not able to change his mind, if need arises within minutes and new facts prove he is wrong, won't be successful. exceptions prove the rule.

for the record: both my actions during the last few days secured that an accumulated profit was not reduced by ~$ 84k. perhaps an insignificant for rich TV-members but equivalent to nearly 10 months of my expenses in Thailand.

:jap:

and today Naam smiles has a big grin on his face. CHF down vs EUR nearly 14%, down vs USD 11.5% but the Anglo clowns on both sides of the Atlantic keep on spreading their EUR doom&gloom to divert from their domestic problems.

[churchill]

Central banks polish gold’s shine

http://www.ft.com/intl/cms/s/0/7cf047b8-c70c-11e0-a9ef-00144feabdc0.html?ftcamp=rss#axzz1V5Sp0xo6

[Naam]

Central banks polish gold’s shine

http://www.ft.com/intl/cms/s/0/7cf047b8-c70c-11e0-a9ef-00144feabdc0.html?ftcamp=rss#axzz1V5Sp0xo6

it was about time for your cheer leading Churchill. people might have second thoughts seeing gold going down

[churchill]

Facts Naam