Where Is Gold Going In This Market

[Naam]

Worth a read IMO -

http://guggenheimpar...o-Bretton-Woods

If the Federal Reserve, for instance, announced that it stood ready to purchase gold at $10,000 per ounce, the gold-coverage ratio of the dollar would return to 75%, roughly where it stood at the beginning of Bretton Woods. This could restore confidence in the value of the dollar if its ultimate role as a reserve currency were to be challenged.

if a bankrupt company announced it stood ready to buy a competitor at 5-6 times its prevailing market value it would not restore confidence but cause roaring laughter

Now now that's hardly a decent analogy doc; if this is the worst thing you could find it must be a pretty good thesis. The author is clearly speaking to the case of a currency crisis already well underway, not suggesting they do it tomorrow. You will have long since backed up the Benz and loaded up.

the analogy applies. what kind of money would the FED use to purchase Gold? even loud thinking the idea is (that's of course my personal view) idiotic.

[cloudhopper]

the analogy applies. what kind of money would the FED use to purchase Gold? even loud thinking the idea is (that's of course my personal view) idiotic.

The USD. Unsaid in this brief example was that in this scheme the Fed would also have to agree to sell unlimited amounts of its gold (for the very same USD) at some fixed spread above their peg.

[Naam]

the analogy applies. what kind of money would the FED use to purchase Gold? even loud thinking the idea is (that's of course my personal view) idiotic.

The USD. Unsaid in this brief example was that in this scheme the Fed would also have to agree to sell unlimited amounts of its gold (for the very same USD) at some fixed spread above their peg.

going back to the old fraudulent procedure of empty promises? nobody in his right mind will agree. imagine what would happen if only a fistful of big creditors would do a "de Gaulle 1968"!

[cloudhopper]

the analogy applies. what kind of money would the FED use to purchase Gold? even loud thinking the idea is (that's of course my personal view) idiotic.

The USD. Unsaid in this brief example was that in this scheme the Fed would also have to agree to sell unlimited amounts of its gold (for the very same USD) at some fixed spread above their peg.

going back to the old fraudulent procedure of empty promises? nobody in his right mind will agree. imagine what would happen if only a fistful of big creditors would do a "de Gaulle 1968"!

Nixon flipped off the entire world in '71 and the entire world was happy to eat USTs. Sometimes there's no other choice...

[Jayman]

Hearing rumors today that the new Basel rules might be delayed by 1 year. Bloomberg is quoting that.

[Naam]

Hearing rumors today that the new Basel rules might be delayed by 1 year. Bloomberg is quoting that.

i consider that already a fact. not only the delay of Basel III but also quite some stretching of the 7-year implementation period or shuffling within.

as of today, not even Basel II (agreed upon in 2004) is fully implemented.

[Naam]

[mccw]

Looking at the 5 and ten year charts, it looks to me that if gold does continue the long term uptrend then its currently trading around the bottom of the 2 lines and could go easily to 2600 within the next few months.

I bet inside 5 years we see 6-8000.

I buy more now and when next free some wedge also. Decided no more waiting for any minor dips that may or may not come over short term.

-----

The way the UK banks are having operating problems now I'm not trust I can take what I need when I need any more.

[yoshiwara]

Looking at the 5 and ten year charts, it looks to me that if gold does continue the long term uptrend then its currently trading around the bottom of the 2 lines and could go easily to 2600 within the next few months.

I bet inside 5 years we see 6-8000.

I buy more now and when next free some wedge also. Decided no more waiting for any minor dips that may or may not come over short term.

-----

The way the UK banks are having operating problems now I'm not trust I can take what I need when I need any more.

Don't be silly.

[JSixpack]

http://opinion.financialpost.com/2012/10/12/gold-the-new-asset-class-for-the-confused/

[Naam]

http://opinion.finan...r-the-confused/

Pierre Lassonde, one of the world’s foremost experts on gold, says the only way is up for the shiny stuff. As a director of a gold company, I am fascinated with the shiny stuff.

[JSixpack]

http://opinion.finan...r-the-confused/

Pierre Lassonde, one of the world’s foremost experts on gold, says the only way is up for the shiny stuff. As a director of a gold company, I am fascinated with the shiny stuff.

Yep.

[midas]

http://opinion.finan...r-the-confused/

Pierre Lassonde, one of the world’s foremost experts on gold, says the only way is up for the shiny stuff. As a director of a gold company, I am fascinated with the shiny stuff.

Okay then what about what this fellow has to say……….?

Dr Jens Weidmann President of the Deutsche Bundesbank and Member of the Governing Council of the ECB

Speech at the 18thcolloquium of the Institute for Bank-Historical Research (IBF) in Frankfurt

Money creation and responsibility

Money creation, Goethe, Faust and alchemy

Let me remind you briefly of the “money creation” scene in Act One of the Second Part of Faust. Mephistopheles, disguised as a fool, talks to the Emperor, who is in severe financial distress, and says

“In this world, what isn’t lacking, somewhere, though? Sometimes it’s this, or that: here’s what’s missing’s gold”“

The responsibilities of an independent central bank

If central banks can potentially create an unlimited amount of money out of thin air, how can we ensure that money remains sufficiently scarce to preserve its value?

Indeed, the fact that central banks can create money out of thin air, so to speak, is something that many observers are likely to find surprising and strange, perhaps mystical and dreamlike, too – or even nightmarish.

http://www.bundesban...onsibility.html

Edited October 15, 2012 by midas

[Naam]

Okay then what about what this fellow has to say……….?

this fellow didn't say anything concerning the future of the gold price such as "the only way is up for the shiny stuff."

-he is quoting Goethe “To gold they tend, on gold depend, all things!”, says Margaret in the First Part of Goethe’s Faust.

-and Act One of the Second Part of Faust. Mephistopheles, disguised as a fool, talks to the Emperor, who is in severe financial distress, and says

In this world, what isn’t lacking, somewhere, though? Sometimes it’s this, or that: here’s what’s missing’s gold”

yada yada Goethe yada yada Faust yada yada Margaret yakety-yak Mephistopeles

-he is a political appointee (former Merkel confidante) tiptoes around and asks questions "Did Goethe hit upon a core problem of monetary policy? I could now answer this question..." ...which he can't answer.

-he states one single fact "A great deal of trust was placed in particular in precious and rare metals – gold first and foremost – due to their assumed intrinsic value."

he is quoting and referring

-"The fact that Faust can indeed be interpreted in economic terms has been demonstrated, not least, by Professor Adolf Hüttl, who used to be Vice-President of the former Land Central Bank in Hesse."

-"In the mid-1980s, while teaching in Sankt Gallen, Professor Hans Christoph Binswanger – who I am pleased to say is also here today – took a similar line and brought out a book entitled..."

and then tucks in his tail

-"On that note, I would like to turn over to the other speakers, who will speak about the topic of today’s colloquium in more detail."

[manarak]

Okay then what about what this fellow has to say……….?

this fellow didn't say anything concerning the future of the gold price such as "the only way is up for the shiny stuff."

-he is quoting Goethe “To gold they tend, on gold depend, all things!”, says Margaret in the First Part of Goethe’s Faust.

-and Act One of the Second Part of Faust. Mephistopheles, disguised as a fool, talks to the Emperor, who is in severe financial distress, and says

In this world, what isn’t lacking, somewhere, though? Sometimes it’s this, or that: here’s what’s missing’s gold”

yada yada Goethe yada yada Faust yada yada Margaret yakety-yak Mephistopeles

-he is a political appointee (former Merkel confidante) tiptoes around and asks questions "Did Goethe hit upon a core problem of monetary policy? I could now answer this question..." ...which he can't answer.

-he states one single fact "A great deal of trust was placed in particular in precious and rare metals – gold first and foremost – due to their assumed intrinsic value."

he is quoting and referring

-"The fact that Faust can indeed be interpreted in economic terms has been demonstrated, not least, by Professor Adolf Hüttl, who used to be Vice-President of the former Land Central Bank in Hesse."

-"In the mid-1980s, while teaching in Sankt Gallen, Professor Hans Christoph Binswanger – who I am pleased to say is also here today – took a similar line and brought out a book entitled..."

and then tucks in his tail

-"On that note, I would like to turn over to the other speakers, who will speak about the topic of today’s colloquium in more detail."

in short: for hundreds of years, the value of gold has been going up and down depending on how much it's needed by the market, and it this will also be the case in future...

and probably implying that the price of gold MAY go up short term and WILL come back down in future...

wow, ground breaking news, die Herren Professor-Doktoren

[mccw]

Looking at the 5 and ten year charts, it looks to me that if gold does continue the long term uptrend then its currently trading around the bottom of the 2 lines and could go easily to 2600 within the next few months.

I bet inside 5 years we see 6-8000.

I buy more now and when next free some wedge also. Decided no more waiting for any minor dips that may or may not come over short term.

-----

The way the UK banks are having operating problems now I'm not trust I can take what I need when I need any more.

Don't be silly.

I foresee a tipping point where china moves to a gold backed currency looking for jump to strongest and world no 1 so they can buy up all the worlds dwindling resources they require.

[Naam]

Looking at the 5 and ten year charts, it looks to me that if gold does continue the long term uptrend then its currently trading around the bottom of the 2 lines and could go easily to 2600 within the next few months.

I bet inside 5 years we see 6-8000.

I buy more now and when next free some wedge also. Decided no more waiting for any minor dips that may or may not come over short term.

-----

The way the UK banks are having operating problems now I'm not trust I can take what I need when I need any more.

Don't be silly.

I foresee a tipping point where china moves to a gold backed currency looking for jump to strongest and world no 1 so they can buy up all the worlds dwindling resources they require.

does your foresight tell you when? and did you take into consideration that not only the Cardassians but also the Romulans are preparing to invade planet Earth to steal whatever dwindling resources are left?

source: www.naams-nonsensical-prophecies.org

[cheeryble]

Looking at the 5 and ten year charts, it looks to me that if gold does continue the long term uptrend then its currently trading around the bottom of the 2 lines and could go easily to 2600 within the next few months.

I bet inside 5 years we see 6-8000.

I buy more now and when next free some wedge also. Decided no more waiting for any minor dips that may or may not come over short term.

-----

The way the UK banks are having operating problems now I'm not trust I can take what I need when I need any more.

Don't be silly.

I foresee a tipping point where china moves to a gold backed currency looking for jump to strongest and world no 1 so they can buy up all the worlds dwindling resources they require.

Wow you think they want all the troubles that happened when we had a gold standard? (Take a look at long term stability markers pre 1971)

You better tell them we'll have many more........including deflation.

You really think the Chinese want the price of all the stuff they produce to gradually go down?

Still if you like the Euro, you'll absolutely love the gold standard, because there will likewise be no feedback control on the economy.

I'm afraid the jury's already back on this one....

Edited October 17, 2012 by cheeryble

[mccw]

Looking at the 5 and ten year charts, it looks to me that if gold does continue the long term uptrend then its currently trading around the bottom of the 2 lines and could go easily to 2600 within the next few months.

I bet inside 5 years we see 6-8000.

I buy more now and when next free some wedge also. Decided no more waiting for any minor dips that may or may not come over short term.

-----

The way the UK banks are having operating problems now I'm not trust I can take what I need when I need any more.

Don't be silly.

I foresee a tipping point where china moves to a gold backed currency looking for jump to strongest and world no 1 so they can buy up all the worlds dwindling resources they require.

You really think the Chinese want the price of all the stuff they produce to gradually go down?

When the west is so broke they aren't buying enough stuff to keep up Chinese employment then will be the tipping point. The state system means managing a swift transition to production for the internal market can be possible.

Already Chinese factories for the unskilled labour are moving to places such as Bangladesh while home is moving up in skill, tech and creativity.

The yuan hasn't been "eased" / devalued nearly as much as western currencies and is currently around 20 year highs no? So could be argued the policy of stronger yuan is already in motion.

Maybe gold backed yuan in conjunction with gold itself being declared legal tender at a set rate yuan equivalent. So money supply increased in a jump, plus can be added to yearly from the mines to maintain steady stable growth. (Already all Chinese mined supply's are kept in country aren't they).

Chinese are long term thinkers, acting for National interest. Like the colonial powers once were. Now west nation states have been taken over by the stateless corporations with only interest in their own short term profits and the western world will hence be stuck in stagflation and political constipation until most of the people have little to no disposable income left to buy the Chinese products. I calculate that at current pace it will be around 5 years when the tipping point will be reached. Certainly inside 10. Sooner than 5 if any major catastrophe speeds the western decline- such as war with Iran, Euro break up, US break down etc.

Maybe west will be come to be the factories again. Can see how Germany is happy with this way around; it's what all the western QE is really about, to make exports to china possible. But the average living standards and disposable income will drop massively as the cost of all essentials rocket.

[mccw]

Talking of essentials rocketing. I noted on my shopping today 3liters of veg oil up from £4 in the summer to £6.10 today.

Gas/ ellectric just added another 11% on top of the 30% increase of only 3 months ago.

pack of bog roles blooming almost a tenner!

Maybe your all rich enough not to notice but at this rate it's not long till large swaths of population going to be choosing between heat and eat. (In fact many pensioners face this dilemma already apparently).

[yoshiwara]

When the west is so broke they aren't buying enough stuff to keep up Chinese employment then will be the tipping point. The state system means managing a swift transition to production for the internal market can be possible.

Already Chinese factories for the unskilled labour are moving to places such as Bangladesh while home is moving up in skill, tech and creativity.

The yuan hasn't been "eased" / devalued nearly as much as western currencies and is currently around 20 year highs no? So could be argued the policy of stronger yuan is already in motion.

Maybe gold backed yuan in conjunction with gold itself being declared legal tender at a set rate yuan equivalent. So money supply increased in a jump, plus can be added to yearly from the mines to maintain steady stable growth. (Already all Chinese mined supply's are kept in country aren't they).

Chinese are long term thinkers, acting for National interest. Like the colonial powers once were. Now west nation states have been taken over by the stateless corporations with only interest in their own short term profits and the western world will hence be stuck in stagflation and political constipation until most of the people have little to no disposable income left to buy the Chinese products. I calculate that at current pace it will be around 5 years when the tipping point will be reached. Certainly inside 10. Sooner than 5 if any major catastrophe speeds the western decline- such as war with Iran, Euro break up, US break down etc.

Maybe west will be come to be the factories again. Can see how Germany is happy with this way around; it's what all the western QE is really about, to make exports to china possible. But the average living standards and disposable income will drop massively as the cost of all essentials rocket.

...and I'll bet you haven't done any calculations whatsoever.

[Naam]

Talking of essentials rocketing. I noted on my shopping today 3liters of veg oil up from £4 in the summer to £6.10 today.

Gas/ ellectric just added another 11% on top of the 30% increase of only 3 months ago.

pack of bog roles blooming almost a tenner!

Maybe your all rich enough not to notice but at this rate it's not long till large swaths of population going to be choosing between heat and eat. (In fact many pensioners face this dilemma already apparently).

perhaps you live in the wrong country? in Thailand since many years no increase of electricity rates nor do pensioners face a dilemma as far as heating is concerned. don't know about oil as my cars run on gasoline.

[Jayman]

Talking of essentials rocketing. I noted on my shopping today 3liters of veg oil up from £4 in the summer to £6.10 today.

Gas/ ellectric just added another 11% on top of the 30% increase of only 3 months ago.

pack of bog roles blooming almost a tenner!

Maybe your all rich enough not to notice but at this rate it's not long till large swaths of population going to be choosing between heat and eat. (In fact many pensioners face this dilemma already apparently).

perhaps you live in the wrong country? in Thailand since many years no increase of electricity rates nor do pensioners face a dilemma as far as heating is concerned. don't know about oil as my cars run on gasoline.

I'm fairly certain that you will find pages and pages of complaining by pensioners living in Thailand at how their pensions no longer are enough to pay for the goods/services they need. Or do we not include the cost of living increase due to currency devaluation a legit reason for inflation?

[mccw]

My cars run on diesel or petrol

Price is around £1.40 per litre almost 1.50 for diesel.

For sure much of the price hikes in UK are tax and companies profiteering at the customers expense, especially the energy market. No such government price controls or state supply like Thailand. Another reason why west population will fair worse; its politically untenable to carry out real management of price/ economy.

There are ways we could boost economy such as building infrastructure, power plants etc etc using british companies employing british people; but the consultations, planning permissions etc etc means nothing could happen for years even if the will was there and even then the gov would probably pay a german firm to run it all. Despite critical warnings like this:

http://www.telegraph.co.uk/earth/energy/9590135/Millions-of-British-households-face-blackout-warns-Ofgem.html

I'm not living in wrong country for me right now but for sure if I were retiring I'd move to Thailand or perhaps some where cheaper still if I didn't have the family links I do.

Countries like Thailand where the culture is still based on take care yourself and family will adapt much better than the populous of nanny states of the west. The benefits work shy must learn they must work to survive again. A new concept for some of some of these 3 generations of layabout. This the silver lining of this situation. Back to how society should be. But the spending power of workers won't be able to support Chinese growth.

------------

Lets do some very basic calculations:

Benefits total of £1000pm for a single unemployed person.

Salary for minimum wage earner around £1200

Expenses of:

single room rent £400

Food £400

Spare money = £200-£400 so can see how just increases in these two very basic bills can affect disposable income. Add in transport costs, cloths and things you work out plus 30% a couple of times and nothing left/ cut backs required.

If calculating more complex for higher earners but paying their own energy, mortgage, car costs, kids costs etc etc then effects the same but upper middle classes may have more breathing room depending on personal debt levels etc.

Its not rocket science; work it out for yourselves- unless the outlook changes this is the path we are on.

[midas]

Talking of essentials rocketing. I noted on my shopping today 3liters of veg oil up from £4 in the summer to £6.10 today.

Gas/ ellectric just added another 11% on top of the 30% increase of only 3 months ago.

pack of bog roles blooming almost a tenner!

Maybe your all rich enough not to notice but at this rate it's not long till large swaths of population going to be choosing between heat and eat. (In fact many pensioners face this dilemma already apparently).

perhaps you live in the wrong country? in Thailand since many years no increase of electricity rates nor do pensioners face a dilemma as far as heating is concerned. don't know about oil as my cars run on gasoline.

Well that situation isn't going to last much longer. There was an increase in electricity prices about two or three months ago and I heard there will be yet another increase just before Christmas

Upward trend

Gas, oil prices to hike power rates soon

http://www.nationmul...n-30179409.html

Edited October 18, 2012 by midas

[midas]

Talking of essentials rocketing. I noted on my shopping today 3liters of veg oil up from £4 in the summer to £6.10 today.

Gas/ ellectric just added another 11% on top of the 30% increase of only 3 months ago.

pack of bog roles blooming almost a tenner!

Maybe your all rich enough not to notice but at this rate it's not long till large swaths of population going to be choosing between heat and eat. (In fact many pensioners face this dilemma already apparently).

you haven't seen anything yet

World Food prices will skyrocket in 2013

World food prices are picked to hit record highs next year as the cost of agriculture worldwide skyrockets.

http://www.farmingshow.com/industry/grain/world-food-prices-set-to-skyrocket

[cloudhopper]

Countries like Thailand where the culture is still based on take care yourself and family will adapt much better than the populous of nanny states of the west.

You got that exactly right IMO MCCW. And since this is the gold thread I'll mention this seems like a great place to liquidate it if the time ever comes.

[mccw]

Countries like Thailand where the culture is still based on take care yourself and family will adapt much better than the populous of nanny states of the west.

You got that exactly right IMO MCCW. And since this is the gold thread I'll mention this seems like a great place to liquidate it if the time ever comes.

Hi; yes your right.

Just to point out my posts are all to do with gold and further reasoned support to the statement I made previously regarding price and a possible Chinese gold standard.

Would love to hear some sensible reasoned points of view from others on alternative ideas of how the way forward will develop, global macro picture linking through to gold price.

[Naam]

Talking of essentials rocketing. I noted on my shopping today 3liters of veg oil up from £4 in the summer to £6.10 today.

Gas/ ellectric just added another 11% on top of the 30% increase of only 3 months ago.

pack of bog roles blooming almost a tenner!

Maybe your all rich enough not to notice but at this rate it's not long till large swaths of population going to be choosing between heat and eat. (In fact many pensioners face this dilemma already apparently).

perhaps you live in the wrong country? in Thailand since many years no increase of electricity rates nor do pensioners face a dilemma as far as heating is concerned. don't know about oil as my cars run on gasoline.

Well that situation isn't going to last much longer. There was an increase in electricity prices about two or three months ago and I heard there will be yet another increase just before Christmas

Upward trend

Gas, oil prices to hike power rates soon

http://www.nationmul...n-30179409.html

the recent and the expected increase of electricity rates are far below Thailand's inflation rate of the last decade. most Thais and Expats would be happy if the latter was not higher than the electricity hikes.

Expats are hit additionally with the appreciation of the Thai Baht vs. their "home/income" currencies. but "choosing between heat and eat" is not applicable in Thailand. in some (very rare cases) it might be choosing between "cooling and eating".

Edited October 18, 2012 by Naam

[Jayman]

the recent and the expected increase of electricity rates are far below Thailand's inflation rate of the last decade. most Thais and Expats would be happy if the latter was not higher than the electricity hikes.

Expats are hit additionally with the appreciation of the Thai Baht vs. their "home/income" currencies. but "choosing between heat and eat" is not applicable in Thailand. in some (very rare cases) it might be choosing between "cooling and eating".

I love how you always bias your reasoning. Yes, it's the THB that is "appreciating" as we all know what a great "intrinsic" value it has and how everyone is dying to get their hands on as much THB as possible before the armagedon.

No talk of how the other world currencies are "depreciating".. nah.. never happen... must be the THB and it's dam_n appreciation. dam_n YOU THAIS!!!!! When will this madness end!!!

The fact is there is a world wide currency war going on and has been for some years now. It's a race to the bottom where central banks can't act fast enough to devalue their currency against the others. Thailand just can't keep up with it.

And here, you can quite easily see the effects of Thailand not keeping up with the devaluation process.

Thailand Balance of Trade

Thailand reported a trade deficit equivalent to 1541 Million USD in August of 2012. Historically, from 1991 until 2012, Thailand Balance of Trade averaged a surplus equivalent to 258.47 Million USD reaching the best surplus at 3537.00 Million USD in February of 2009 and the worst deficit at 1997.00 Million USD in April of 1996. The economy of Thailand is heavily export-dependent, with exports accounting for more than two thirds of GDP. Thailand exports mainly: gypsum, rice, shrimps as well as high-technology products like integrated circuits and parts, electrical appliances, and vehicles. Machinery and parts, vehicles, electronic integrated circuits, chemicals, crude oil and fuels, iron and steel are among Thailand's principal imports. Its main trading partners are: European Union, The United States, Japan and China. This page includes a chart with historical data for Thailand Balance of Trade.

Edited October 18, 2012 by Jayman