Where Is Gold Going In This Market

[midas]

Another reason...If you dont hold it you dont own it....

‘D-Day’ Near For GLD

On the 11th day, of the 11th month, of the 11th year (November 11, 2011) the self-imposed cap on the rate of dilution for this fund expires. From this point onward, the fund will be diluted by any/all “expenses” incurred while administering the fund. This becomes especially important at this point in time, given one of the specific risks of dilution which the fund warns of in its prospectus:

“The Trust may be required to terminate and liquidate at a time which is disadvantageous to Shareholders.”

I was having such a good day until I read this

I'm depressed that some people were dumb enough to put their money into something like this

[flying]

I was having such a good day until I read this

I'm depressed that some people were dumb enough to put their money into something like this

Musical chairs always looks easy when it starts....

But most should know how it ends.

GLD & SLV types are removing chairs...In the end some will have no chair.

[Naam]

Another reason...If you dont hold it you dont own it....

‘D-Day’ Near For GLD

On the 11th day, of the 11th month, of the 11th year (November 11, 2011) the self-imposed cap on the rate of dilution for this fund expires. From this point onward, the fund will be diluted by any/all “expenses” incurred while administering the fund. This becomes especially important at this point in time, given one of the specific risks of dilution which the fund warns of in its prospectus:

“The Trust may be required to terminate and liquidate at a time which is disadvantageous to Shareholders.”

I was having such a good day until I read this

I'm depressed that some people were dumb enough to put their money into something like this

there is a TV-member who once i a while boasts here and refers to his investment in "Kasgold" which is heavily invested/dependent on GLD.

[midas]

Another reason...If you dont hold it you dont own it....

‘D-Day’ Near For GLD

On the 11th day, of the 11th month, of the 11th year (November 11, 2011) the self-imposed cap on the rate of dilution for this fund expires. From this point onward, the fund will be diluted by any/all “expenses” incurred while administering the fund. This becomes especially important at this point in time, given one of the specific risks of dilution which the fund warns of in its prospectus:

“The Trust may be required to terminate and liquidate at a time which is disadvantageous to Shareholders.”

I was having such a good day until I read this

I'm depressed that some people were dumb enough to put their money into something like this

there is a TV-member who once i a while boasts here and refers to his investment in "Kasgold" which is heavily invested/dependent on GLD.

yes I remember that member it reminds me of that saying to be more concerned about return of

capital rather than return on capital

[BEENTHEREDONETHAT]

Hey Naam

when I went back to Australia a few weeks ago I purchased a gold coin while I was there.

They made it especially for me !

I didn't bring it back to Thailand with me but you can see a picture of it in this video and how it was made for me

Do you like my new Gold coin? much better than carpets Naam

!

Now I know what to get for that tough to shop for person who has everything.

[flying]

Pretty good week for metals

Friday-Friday

Gold up $101 USD per oz

+ 6.14%

Silver up $3.89 USD per oz

+12.34%

[farang000999]

Pretty good week for metals

Friday-Friday

Gold up $101 USD per oz

+ 6.14%

Silver up $3.89 USD per oz

+12.34%

Sounds like it is time for some margin hikes to stem this absurd volatility in pms.

[flying]

spike up in the dollar as Euro/Asian markets get underway

[fletchsmile]

Another reason...If you dont hold it you dont own it....

‘D-Day’ Near For GLD

On the 11th day, of the 11th month, of the 11th year (November 11, 2011) the self-imposed cap on the rate of dilution for this fund expires. From this point onward, the fund will be diluted by any/all “expenses” incurred while administering the fund. This becomes especially important at this point in time, given one of the specific risks of dilution which the fund warns of in its prospectus:

“The Trust may be required to terminate and liquidate at a time which is disadvantageous to Shareholders.”

I was having such a good day until I read this

I'm depressed that some people were dumb enough to put their money into something like this

The paragraph above is an uncertainty I wouldn't like anything other than a short term exposure to - without researching more. In reality I suspect it is being over dramatised and overplayed, as the rest of the article has more holes than a sieve

[fletchsmile]

I was having such a good day until I read this

I'm depressed that some people were dumb enough to put their money into something like this

Musical chairs always looks easy when it starts....

But most should know how it ends.

GLD & SLV types are removing chairs...In the end some will have no chair.

Never mind ETFs, gold itself is just a game of musical chairs that just happens to have gone on longer than others. At the end of the day it's just a chunk of yellow metal, and not much use for anything. How long before a few influential people decide it looks ugly.

There's 2 stories gold always remind me of: 1) The emperor's new clothes 2) the Blackadder sketch where Baldrick discovers "green"

I don't think there's a trade going that doesn't have a link to musical chairs. The key is to be listening to plenty of music, and be playing several games at the same time

Pretty good week for metals

Friday-Friday

Gold up $101 USD per oz

+ 6.14%

Silver up $3.89 USD per oz

+12.34%

Yes nice. Some exposure to gold seems sensible even if the metal itself isn't really sensible or logical.

BTW I hold LBUL and LSIL which are ETCs paying twice the daily gains losses. Really don't fancy playing margins on them, but would like a little leverage without the hassles of storage and actually holidng the stuff

BTW2 Silver is a different story to gold, as it's actually useful too

BTW3 At the risk of actually being on topic compared to many other posts. FWIW I'm targeting around 1,800 for gold and 37-40 for silver - assuming of course I don't lose my chair.

Edited October 31, 2011 by fletchsmile

[flying]

I was having such a good day until I read this

I'm depressed that some people were dumb enough to put their money into something like this

Musical chairs always looks easy when it starts....

But most should know how it ends.

GLD & SLV types are removing chairs...In the end some will have no chair.

Never mind ETFs, gold itself is just a game of musical chairs that just happens to have gone on longer than others. At the end of the day it's just a chunk of yellow metal, and not much use for anything. How long before a few influential people decide it looks ugly.

Physical gold musical chairs? Not in the context I mentioned.

Physical Gold is gold...same as silver.

It is not removed by slight of hand.

As for how long before anyone decides it is ugly?

Well it has been as it is for thousands of years.

The USD? less than 100 years

The Euro? 12 Years?

The GBP? Pretty good run...started around 1694 so 317 years? Then again it was backed by gold till 1914 odd timing eh?

(FED Reserve created 12-23-1913)

So really as compared to the current USD also less than 100 years

I think they reinstated the gold standard in a lesser form for a few years between 1925 & 1931 but let it go at roughly the same time as FDR did.

Anyway...Not to say all that fiat will fail in our lifetime (although most are basically in a failed state already if not for the musical chairs dance)but...They will fail long before gold does.

Edited October 31, 2011 by flying

[fletchsmile]

Physical gold musical chairs? Not in the context I mentioned.

Physical Gold is gold...same as silver.

It is not removed by slight of hand.

As for how long before anyone decides it is ugly?

Well it has been as it is for thousands of years.

The USD? less than 100 years

The Euro? 12 Years?

The GBP? Pretty good run...started around 1694 so 317 years? Then again it was backed by gold till 1914 odd timing eh?

(FED Reserve created 12-23-1913)

So really as compared to the current USD also less than 100 years

I think they reinstated the gold standard in a lesser form for a few years between 1925 & 1931 but let it go at roughly the same time as FDR did.

Anyway...Not to say all that fiat will fail in our lifetime (although most are basically in a failed state already if not for the musical chairs dance)but...They will fail long before gold does.

I hear your point, and there's a good chance that it will outlast the currencies you mention. What you also have to bear in mind with these currencies, eg the Euro, that other currencies simply existed before them, and others before them, and other assets before them. People simply converted one into another.

One problem with your argument is you compare only to currencies, and gold isn't simply a currency. Another is gold has little real intrinsic value. On the other hand, something like water does, and I'm pretty sure using water to exchange for other assets has been around for using longer than gold, to follow thru on your own argument. There's even a movie out at the moment that "time" becomes the ultimate currency At the end of the day, whichever you pick I'd personally prefer more than one, and would prefer not to get too dogmatic on any.

As mentioned I think gold isn't much different to the emperors new clothes. It's worth something because people think it is. And while they do, I'll have some of it, even tho I think it's flawed.

As to the timing of gold's demise I haven't a clue.

I actually think ETFS are one of the possible things that may bring about the downfall of gold sooner than people think rather than the fashion element. When all the leveraging eventually goes pear shaped as physical gold bug purists say it will, what do you think the impact will be on gold? Let's say there's 10 bars of gold for every 100 of "entitlement" because of the leveraging? Now one theory may say physical gold goes up as a scarce resource. I think that's a little naive, as there's obviously not enough to go round and a compromise may be needed (bit like the Greek fiasco). So, on the other hand what happens if a compromise is found, to avoid chaos, and people are paid out or compensated wholly or partly in and take an alternative such as a fiat currency, or water, or time or whatever. It's highly unlikely that the 90% will want to put their money back in the "real asset of gold" both emotionally - as they'll want nothing to do with it - and given that 90% of the demand has now collapsed.

Put simply the irony is that that physical gold and non-physical gold, futrures, options, derivatives, ETF etcare inter-linked, so the demise of one could bring down the demise of the other. People often see the link of gold to say ETF/non-physical prices. Few people think to work it backward, and fewer think of what happens when all those electronic/non- physical pieces of gold suddenly collapse, and work backwards meaning that there's less than a tenth of the real demand there used to be

Extending your time frames. Gold may have been around thousands of years. Gold futures - perhaps hundreds? OTC gold derivatives? ETFs even less. There's a good chance that leveraged instruments kill off gold or drive it down to nearly worthless. Perhaps that's also another point it also becomes unfashionable, as who would want to be foolishly wearing something around there neck, that they once thought fashionable and looked nice, but now is nearly worthless, as demand has collapsed?

So yes you're right that for gold they might not lose their chair, and will still have their gold in their hand. On the other hand, that gold may be virtually worthless as no-one demands it any more, and instead of a solid gold chair you've got a worthless plastic one that looks unfashionable

Edit: just to add a couple of examples. Some of the famous US banks that collapsed had been around much longer than the products that brought them down. The feedback from the derivative products based on properties have helped put hundreds of thousands out of their homes, as a result of spirals and back feed. Thousands of years ago life was much simpler, the pace of change is altering exponentially. Just because gold has been around for thousands of years is not guarantee to the future

Edited October 31, 2011 by fletchsmile

[flying]

I hear your point, and there's a good chance that it will outlast the currencies you mention. What you also have to bear in mind with these currencies, eg the Euro, that other currencies simply existed before them

As mentioned I think gold isn't much different to the emperors new clothes. It's worth something because people think it is. And while they do, I'll have some of it, even tho I think it's flawed.

I actually think ETFS are one of the possible things that may bring about the downfall of gold sooner than people think rather than the fashion element. When all the leveraging eventually goes pear shaped as physical gold bug purists say it will, what do you think the impact will be on gold? Let's say there's 10 bars of gold for every 100 of "entitlement" because of the leveraging? Now one theory may say physical gold goes up as a scarce resource. I think that's a little naive, as there's obviously not enough to go round and a compromise may be needed (bit like the Greek fiasco).

Put simply the irony is that that physical gold and non-physical gold, futrures, options, derivatives, ETF etcare inter-linked, so the demise of one could bring down the demise of the other. People often see the link of gold to say ETF/non-physical prices.

Extending your time frames. Gold may have been around thousands of years. Gold futures - perhaps hundreds? OTC gold derivatives? ETFs even less. There's a good chance that leveraged instruments kill off gold or drive it down to nearly worthless.

So yes you're right that for gold they might not lose their chair, and will still have their gold in their hand. On the other hand, that gold may be virtually worthless as no-one demands it any more, and instead of a solid gold chair you've got a worthless plastic one that looks unfashionable

Edit: just to add a couple of examples. Some of the famous US banks that collapsed had been around much longer than the products that brought them down. The feedback from the derivative products based on properties have helped put hundreds of thousands out of their homes, as a result of spirals and back feed. Thousands of years ago life was much simpler, the pace of change is altering exponentially. Just because gold has been around for thousands of years is not guarantee to the future

Some good points & I snipped it only to save space...

But I will say as far as currencies that were around before those mentioned it has to be pointed out they were backed...

Usually by gold.

Yes it is worth something as long as folks say it is & again look at how long it has been said to be worth something.

There is a reason for that. It cannot be created out of thin air as currencies now are. It cannot be inflated...except of course through the paper IOU's that some put their faith in.

Yes & no it is tied to those paper IOU prices. Yes the renters of the air gold can drive the spot up & yes when that air is found to be nothing more than air the spot will drop. But it never was worth zero so I have no reason to believe it will ever be worth zero.

You say it is worth something as long as people say it is worth something.

That faith based worth is no where more fragile than the faith backed scripts of paper currently thrashing in the world.

After all look at pictures of the Weimar or Zimbabwe & see paper return to its true worth. Many others exist in history.

Take a simple example & compare a pre-1964 dime to now

What is it worth today How many dimes? 30?

Take a dollar from the day it was backed by gold & go buy gas for your car it will fill the tank.

So to which will fail first based on faith even now?

The example you gave that brought down banks were example of air based assets.

Yes nothing is a guarantee yet which has a better track record?

I have always said there will be much thrashing in the next few years & yes gold will swing +/- $100 USD per ounce at some point.

As it disconnects physical from paper & as you said it will have a impact but I do not think it is naive to think it will cause prices to rise. Compromise? I think right after a catastrophic collapse there will not be many willing to compromise yet again for a new IOU having just been through what they came through.

Even now & in recent years paper & physical is not as close as one thinks when premiums & availability is taken into consideration.

Yes numbers on a screen are one thing...To Go & actually attain the physical is another

I understand your arguments that gold like fiat has its worth tied to what folks value it at. But it is the folks/market/barter/availability that determines golds.

Not some FED chairman punching buttons & inflating/deflating at will like fiat.

Again looking at history & any alternatives...yes history is no guarantee of future but as an indicator with a track record as long as golds...Hard to beat.

In fact I cannot name one competitor

Edited October 31, 2011 by flying

[waza]

I hear your point, and there's a good chance that it will outlast the currencies you mention. What you also have to bear in mind with these currencies, eg the Euro, that other currencies simply existed before them

As mentioned I think gold isn't much different to the emperors new clothes. It's worth something because people think it is. And while they do, I'll have some of it, even tho I think it's flawed.

I actually think ETFS are one of the possible things that may bring about the downfall of gold sooner than people think rather than the fashion element. When all the leveraging eventually goes pear shaped as physical gold bug purists say it will, what do you think the impact will be on gold? Let's say there's 10 bars of gold for every 100 of "entitlement" because of the leveraging? Now one theory may say physical gold goes up as a scarce resource. I think that's a little naive, as there's obviously not enough to go round and a compromise may be needed (bit like the Greek fiasco).

Put simply the irony is that that physical gold and non-physical gold, futures, options, derivatives, ETF etcare inter-linked, so the demise of one could bring down the demise of the other. People often see the link of gold to say ETF/non-physical prices.

Extending your time frames. Gold may have been around thousands of years. Gold futures - perhaps hundreds? OTC gold derivatives? ETFs even less. There's a good chance that leveraged instruments kill off gold or drive it down to nearly worthless.

So yes you're right that for gold they might not lose their chair, and will still have their gold in their hand. On the other hand, that gold may be virtually worthless as no-one demands it any more, and instead of a solid gold chair you've got a worthless plastic one that looks unfashionable

Edit: just to add a couple of examples. Some of the famous US banks that collapsed had been around much longer than the products that brought them down. The feedback from the derivative products based on properties have helped put hundreds of thousands out of their homes, as a result of spirals and back feed. Thousands of years ago life was much simpler, the pace of change is altering exponentially. Just because gold has been around for thousands of years is not guarantee to the future

Some good points & I snipped it only to save space...

But I will say as far as currencies that were around before those mentioned it has to be pointed out they were backed...

Usually by gold.

Yes it is worth something as long as folks say it is & again look at how long it has been said to be worth something.

There is a reason for that. It cannot be created out of thin air as currencies now are. It cannot be inflated...except of course through the paper IOU's that some put their faith in.

Yes & no it is tied to those paper IOU prices. Yes the renters of the air gold can drive the spot up & yes when that air is found to be nothing more than air the spot will drop. But it never was worth zero so I have no reason to believe it will ever be worth zero.

You say it is worth something as long as people say it is worth something.

That faith based worth is no where more fragile than the faith backed scripts of paper currently thrashing in the world.

After all look at pictures of the Weimar or Zimbabwe & see paper return to its true worth. Many others exist in history.

Take a simple example & compare a pre-1964 dime to now

What is it worth today How many dimes? 30?

Take a dollar from the day it was backed by gold & go buy gas for your car it will fill the tank.

So to which will fail first based on faith even now?

The example you gave that brought down banks were example of air based assets.

Yes nothing is a guarantee yet which has a better track record?

I have always said there will be much thrashing in the next few years & yes gold will swing +/- $100 USD per ounce at some point.

As it disconnects physical from paper & as you said it will have a impact but I do not think it is naive to think it will cause prices to rise. Compromise? I think right after a catastrophic collapse there will not be many willing to compromise yet again for a new IOU having just been through what they came through.

Even now & in recent years paper & physical is not as close as one thinks when premiums & availability is taken into consideration.

Yes numbers on a screen are one thing...To Go & actually attain the physical is another

I understand your arguments that gold like fiat has its worth tied to what folks value it at. But it is the folks/market/barter/availability that determines golds.

Not some FED chairman punching buttons & inflating/deflating at will like fiat.

Again looking at history & any alternatives...yes history is no guarantee of future but as an indicator with a track record as long as golds...Hard to beat.

In fact I cannot name one competitor

Golds value is based on many factors such as its rarity, consider lead, its far more common, has many uses because it is relatively cheap. Also Golds value is also in its longevity, that is it doesnt rot, rust or dissolve. Lastly Golds value is in its acceptability, that is no matter how dirty, beat up or diluted gold gets its still woth its weight in gold.

Edited October 31, 2011 by waza

[flying]

Lastly Golds value is in its acceptability, that is no matter how dirty, beat up or diluted gold gets its still woth its weight in gold.

True & to simplify....

"The history of fiat money is little more than a register of monetary follies and inflations. Our present age merely affords another entry in this dismal register."

"For more than two thousand years gold's natural qualities made it man's universal medium of exchange. In contrast to political money, gold is honest money that survived the ages and will live on long after the political fiats of today have gone the way of all paper."

Hans F. Sennholz

"All previous attempts to base money solely on intangibles such as credit or government edict or fiat have ended in inflationary panic and disaster."

Donald Hoppe

I am not saying we will see it although there is a strong possibility.

But for the record......

EVERY Fiat currency that ever was has failed at some point.

Gold NEVER has.

Which has better odds?

Edited November 1, 2011 by flying

[edgarfriendly]

any ideas whats causing the 'strengthening' of the USD?

ef

[Naam]

any ideas whats causing the 'strengthening' of the USD?

ef

Papandreou and his proposed referendum.

[Naam]

I am not saying we will see it although there is a strong possibility.

But for the record......

EVERY Fiat currency that ever was has failed at some point.

Gold NEVER has.

Which has better odds?

if you believe in the laws of probability Gold has a better chance to fail. but then... you are not a believer but a heathen

[palm]

any ideas whats causing the 'strengthening' of the USD?

The recent announcement of Greece's Mr Papazoglou.

Edited November 1, 2011 by palm

[fletchsmile]

.....

Yes it is worth something as long as folks say it is & again look at how long it has been said to be worth something.

....

You say it is worth something as long as people say it is worth something.

That faith based worth is no where more fragile than the faith backed scripts of paper currently thrashing in the world.

After all look at pictures of the Weimar or Zimbabwe & see paper return to its true worth. Many others exist in history.

....

The example you gave that brought down banks were example of air based assets.

Yes nothing is a guarantee yet which has a better track record?

....

Even now & in recent years paper & physical is not as close as one thinks when premiums & availability is taken into consideration.

Yes numbers on a screen are one thing...To Go & actually attain the physical is another

....

Again looking at history & any alternatives...yes history is no guarantee of future but as an indicator with a track record as long as golds...Hard to beat.

In fact I cannot name one competitor

Lastly Golds value is in its acceptability......

True & to simplify....

"The history of fiat money is little more than a register of monetary follies and inflations. Our present age merely affords another entry in this dismal register."

"For more than two thousand years gold's natural qualities made it man's universal medium of exchange. In contrast to political money, gold is honest money that survived the ages and will live on long after the political fiats of today have gone the way of all paper."

...

....

I am not saying we will see it although there is a strong possibility.

But for the record......

EVERY Fiat currency that ever was has failed at some point.

Gold NEVER has.

Which has better odds?

There is merit in some of your arguments. At the same time as above they also highlights two crucial themes that always come out when discussing gold, and key attractions relying on either: 1) historical or 2) circular reasoning, for support.

The world moves on though, and for just a couple of examples. eg:

Thousands of years ago there were say 100 mio people, so gold might have been useful as a currency. With 7bio people today it simply isn't practical any more. I doubt that even equates to an ounce per person. Hence some other measure will be needed, as an ounce isn't very big. That's assuming equal distribution too! In reality <1% of the world holds most of the wealth, leaving a small handful of dust. Some other derivative of it is necessary to manage the world

Technology has advanced and continues to do so exponeniently. News equally so. The result? Lifetimes can be destroyed or made in seconds. This will only increase.

Look at today's prices. What do you think is driving (gold) prices? It's certainly not fundamental and historic arguments. It's leverage piled on leverage. Sentiment on sentiment. Old correlation relationships are continually being challenged. Look back how many times USD has moved in line when it shouldn't, or more recently such as today equities are tanking so you'd expect a flight to gold that certainly wasn't happening earlier for several hours today.

It's a new world we live in. Not to say that the old arguments don't exist anymore. Just that I wouldn't want to bank on them. Almost nothing lasts for ever, and the world we live in continually speeds up

Oh and almost never say never

Edited November 1, 2011 by fletchsmile

[midas]

With 7bio people today it simply isn't practical any more.

Look back how many times USD has moved in line when it shouldn't, or more recently such as today equities are tanking so you'd expect a flight to gold that certainly wasn't happening earlier for several hours today.

well I think 2.6 billion of that seven are still unequivocally in love with gold ( China and India ) and they love it every time it tanks so they can buy even more

[fletchsmile]

With 7bio people today it simply isn't practical any more.

Look back how many times USD has moved in line when it shouldn't, or more recently such as today equities are tanking so you'd expect a flight to gold that certainly wasn't happening earlier for several hours today.

well I think 2.6 billion of that seven are still unequivocally in love with gold ( China and India ) and they love it every time it tanks so they can buy even more

Funnily enough that was another potential cause of its demise I nearly wrote of

... You're spot on The Indians and Chinese love it and are key factors in gold's rise, and that China and India are indeed rising powers. Now what happens when these two countries tank, and go thru their own crises again, and all that demand tanks as they need it for other crises, or worse sell they need to sell their gold.... That could be one hell of a catalyst....

There are voices even now raising concerns that while many people are overly focusing on 1) Europe 2) US economy risks, that the real catastrophe waiting to blow is China...

One things for sure, China and India will hit their own crises. It's just a matter of time. They've done it before and will do again. As did the British, The French, The Americans, Romans, Russians, Ancient Greeks, Incas, you name it countries come and go in importance. And the world is changing faster than ever...

Edit: Have to laugh. 5 - 10 mins after writing this. Watching CNBC. China's PMI is the worst since 2009. Some pundit called Cortes + 1 other has just talked of China "imploding". Not saying I agree or not. But I think that highlights the risk to your comfort zone...

Edited November 1, 2011 by fletchsmile

[ExpatJ]

Well, looks like the latest euro deal is failing big time. The final bullet that the euro governments have left (confirmed on bbc today) is coordinated and massive printing of money to save the system- looks like we are heading in that direction and quickly.

Overall this should be excellent news for gold investors (paper money becomes even more ' worthless' relative to gold) and also great for stock investors as all this new cash will need somewhere to flow.

[flying]

you are not a believer but a heathen

You have been speaking with Mrs. Flying again?

[fletchsmile]

Well, looks like the latest euro deal is failing big time. The final bullet that the euro governments have left (confirmed on bbc today) is coordinated and massive printing of money to save the system- looks like we are heading in that direction and quickly.

Overall this should be excellent news for gold investors (paper money becomes even more ' worthless' relative to gold) and also great for stock investors as all this new cash will need somewhere to flow.

"Should be" yet gold has been trading down for the last 12 hours or so I have been watching it today. Times are changing...

Have to admit some disappointment on losing money on my gold exposures today given all that's been happening . Perhaps not enough people pretending it's worth something today

Edited November 1, 2011 by fletchsmile

[ExpatJ]

Well, looks like the latest euro deal is failing big time. The final bullet that the euro governments have left (confirmed on bbc today) is coordinated and massive printing of money to save the system- looks like we are heading in that direction and quickly.

Overall this should be excellent news for gold investors (paper money becomes even more ' worthless' relative to gold) and also great for stock investors as all this new cash will need somewhere to flow.

"Should be" yet gold has been trading down for the last 12 hours or so I have been watching it today. Times are changing...

Have to admit some disappointment on losing money on my gold exposures today given all that's been happening . Perhaps not enough people pretending it's worth something today

My understanding is that a lot of hedge funds are selling gold to take their profits in order to cover their increasing stock market losses- they need to bring some money in to keep their quarterly/annual % returns up otherwise they find it impossible to find new clients and lose existing ones. Makes sense, but not great for us smaller gold investors!

[flying]

Thousands of years ago there were say 100 mio people, so gold might have been useful as a currency. With 7bio people today it simply isn't practical any more. I doubt that even equates to an ounce per person. Hence some other measure will be needed, as an ounce isn't very big. That's assuming equal distribution too! In reality <1% of the world holds most of the wealth, leaving a small handful of dust. Some other derivative of it is necessary to manage the world

Technology has advanced and continues to do so exponeniently. News equally so. The result? Lifetimes can be destroyed or made in seconds. This will only increase.

Look at today's prices. What do you think is driving (gold) prices? It's certainly not fundamental and historic arguments. It's leverage piled on leverage. Sentiment on sentiment. Old correlation relationships are continually being challenged. Look back how many times USD has moved in line when it shouldn't, or more recently such as today equities are tanking so you'd expect a flight to gold that certainly wasn't happening earlier for several hours today.

It's a new world we live in. Not to say that the old arguments don't exist anymore. Just that I wouldn't want to bank on them. Almost nothing lasts for ever, and the world we live in continually speeds up

Oh and almost never say never

Of course anything is possible...

But again the reasons you use are the reasons I hold.

The fact that you tend to look at gold like fiat is why gold is attractive as always.

The first thing backers of fiat say is ...Well gold cannot be used because there is not enough.

So conditioned by the thought they must have an inflatable medium of exchange.

Yet that is exactly what has brought the world to its knees today. If a currency can be inflated &

deflated by whim what good is it ultimately?

Remember also that I have always said I prefer free gold not currency based on it.

But if a country should decide to back their currency with gold that is their choice.

It is not a matter of is there enough gold for each citizen of that country to hold 1 ounce.

It is a matter of the country looking at their gold holding & base their new currency on it.

If 1 gram= 1 dollar/Euro/yen etc so be it.

There is no rule that says it has to be based on 1oz= $X

It is the rule that their money is now backed by what THEY the country holds.

It is that country that will no longer expand their currency/Debt into the stratosphere & ultimately commit suicide.

If they want to expand their currency they have one choice...

Acquire legitimately more of what backs it.

In essence return to life within their means.

As for what is driving gold today? Yes of course fundamental & historic arguments.

That it is veiled from most folks view by the corrupt casino/CME/Central Banks is a given.

OF COURSE !!! Look they have created a gold fiat of sorts & have as always gotten drunk on it

& have always corrupted it & now with lack of regulation they buy/sell more than what actually exists.

Yes of course you see things & wonder what is driving it as it does not seem to add up to what should be happening.

But I tell you this....What should be happening with real physical metals is as expected.

The rest is slight of hand & those who focus on it will miss the boat...Or be one without a

chair if the music stops.

What is driving the price of physical should be the question asked.

That one has an easy answer....Same as always ...Loss OF Faith in Fiat

Edited November 1, 2011 by flying

[Naam]

It is a matter of the country looking at their gold holding & base their new currency on it.

If 1 gram= 1 dollar/Euro/yen etc so be it.

There is no rule that says it has to be based on 1oz= $X

It is the rule that their money is now backed by what THEY the country holds.

It is that country that will no longer expand their currency/Debt into the stratosphere & ultimately commit suicide.

"backed" does not apply Flying. money supply "reigned in", perhaps. but that doesn't mean debt expansion is reigned in too except if debt is linked too to gold holdgings.

but then there are countries who's "gold" is crude oil, natural gas, copper, rare minerals and you name it who might need debt expansion to finance the exploration of these resources. do they have to buy "real" gold first to expand debt? if yes with what money?

[flying]

"backed" does not apply Flying. money supply "reigned in", perhaps. but that doesn't mean debt expansion is reigned in too except if debt is linked too to gold holdgings.

but then there are countries who's "gold" is crude oil, natural gas, copper, rare minerals and you name it who might need debt expansion to finance the exploration of these resources. do they have to buy "real" gold first to expand debt? if yes with what money?

Well it would probably need to be both initially during their *change*

Meaning at some point they will need to forgive certain debts. I am not saying they will

& as long as they can print script & say here I am guessing they wont till the script collapses. But yes they cannot ever catch up with either system to the expanding interest on the expanding debt.

As for a country that wants to finance exploration to find more of what they back/peg their currency to

( that which is held in their reserves ) Well they would need to save their revenues till they can afford it.

If you meant that gold is their standard & crude, nat gas is what they produce...Then of course again

they increase gold by selling their product. Then & only then can they spend more on exploration as the have the *money*

But if you meant peg/back their currency to gas,oil...

I do not really see how the type of backing I am talking about could be crude or nat gas though.

Both of those have a shelf life once in hand & also could be used/burned diminished.

My example in the previous post was more to address the age old statement that a country could not use

gold for instance because there does not exist XYZ Quantity.

I do not think of it in the same way. I think if a country wants to return to a standard...any standard they choose...

They would increase their holdings preceding the change knowing that will be their new direction.

At some point they then switch over to their new system. Perhaps some countries are at this stage now?

It is not an easy pill to swallow for sure.

There is not even a politician who will vote for it knowing their spending will be capped.

That all the pork barrel spending is dead & budgeting will be thoughtful & frugal.

That military empires would need to be reigned in.

That their country will return to having to produce goods & services & not just consume on credit.

While there are no politicians bold enough except on or two that can point out the long term benefits

the rest will never mention it. Instead it will basically be forced down their countries throat by

total collapse at some point.

Too bad because while the change to sound money may be difficult & painful initially if self imposed.

It is nowhere near as painful or devastating as the result of a collapse with its transition period

of total chaos before a plan will be hatched.

Edited November 2, 2011 by flying

[midas]

Well, looks like the latest euro deal is failing big time. The final bullet that the euro governments have left (confirmed on bbc today) is coordinated and massive printing of money to save the system- looks like we are heading in that direction and quickly.

Overall this should be excellent news for gold investors (paper money becomes even more ' worthless' relative to gold) and also great for stock investors as all this new cash will need somewhere to flow.

"Should be" yet gold has been trading down for the last 12 hours or so I have been watching it today. Times are changing...

Have to admit some disappointment on losing money on my gold exposures today given all that's been happening . Perhaps not enough people pretending it's worth something today

ok so with your lack of confidence in gold what do you see as being a strong and viable " currency " for the future?

Edited November 2, 2011 by midas