Where Is Gold Going In This Market

[flying]

Fully understand your argument but you know as well as me that others are arguing the recovery in the stockmarket is a sign of an 'extreme recovery' of the economy. So one has to be careful here attributing much in the way of fundamentals to either move.

Incidentally the US dollar itself is not expanding both M2 and M3 are growing at annualized rates of less than 5% (of course if you bring China whose money supply is now bigger than the US it looks different.)

My real point being is that the important issue here is that economic policy is to trash cash and render it increasingly worthless - hence all assets based on that cash will appreciate. It is probably wrong to see the gold price movement in excess of dollar decline as a sign of continued recession as it is the stock price movements as a sign of rapid recovery.

I would argue the stock market is nothing more than leverage of the borrowed TARP dollars. No more a sign of recovery than the millions of folks who charged up their credit cards.

I am not mincing words about dollar expansion. The FED can show anything it wants. Whether physically printed or a digital entry wise. But the fact remains the same there are billions if not trillions more in one form or another this year compared to last year.

Lastly for me metals is not 100% all about the dollar. While the price in USD may rise when the dollar falls I have said before I will not be surprised to see both rise this month. Metals are a worldwide safe haven/ store of wealth not just against the dollar.

Edited October 8, 2009 by flying

[flying]

I wish I had bigger positions but I think there will be a pull back and another time to get in. My plan was and still is to go 70 or 80% metal either January or early spring.

Agreed I also think there will of course be another pullback. But a higher low than before is my guess. I am set with what I hold & do not think I will be purchasing more. Of course there are times I wish I went even heavier than the 50% exposure I have but I have a plan & will follow it. I will possibly enter the gold stocks/miners later in Nov. If it gives a green light.

I know many think physical metals are already too high to enter but if it goes to 2000 they will think the same. The reality is many entered at 735/oz gold 9.45/oz silver range & are happy. But those that enter at 930/1030 would be just as happy if gold does in fact go to 2k+

We will see how it all plays out that is certain

Edited October 8, 2009 by flying

[Abrak]

Just the opposite happend actually.

From 1985 to 1996, the baht was pegged at 25 to the US dollar.

On 14 May and 15 May 1997, the Thai baht was hit by massive speculative attacks. On 30 June 1997, Prime Minister Chavalit Yongchaiyudh said that he would not devalue the baht. This was the spark that ignited the Asian financial crisis as the Thai government failed to defend the baht, which was pegged to the U.S. dollar, against international speculators. Thailand's booming economy came to a halt amid massive layoffs in finance, real estate, and construction that resulted in huge numbers of workers returning to their villages in the countryside and 600,000 foreign workers being sent back to their home countries.^[17] The baht devalued swiftly and lost more than half of its value. The baht reached its lowest point of 56 units to the US dollar in January 1998. The Thai stock market dropped 75%. Finance One, the largest Thai finance company until then, collapsed.[1

Look Sokal I dont need to be given a vaguely inaccurate history of Thailand economics.

(I mean Finance One collapsed at least two months before the baht devaluation and Pin wasnt even in the country by January 1998. So 'as a result Fianance One collapsed' is just rubbish whether Wikipedia says it or not.)

We all know that the baht was devalued but your point was that debtor nations who face deflation do not have an appreciating currency. Now you are correct to point out that the baht did reach around Bt55/56:US$1 at the beginning of a year in which its economy fell around 8% in real terms (and at least something in nominal terms) which would imply deflation to me. Actually as you well know the baht has appreciated pretty consistently since in what I would 'vaguely' call deflationary environment. In that growth was below historic averages and asset prices on a trade weighted basis have not increased from highs achieved some 15 years ago.

But at the beginning of 1998 the baht was Bt55:56 it economy shrunk through the year without excessive inflation (this is generally known as deflation) and the currency appreciated. So debtor nations currencies do appreciate during deflations and as I say it used to be IMF policy to impose deflation on a country in order to cause currency appreciation.

If you wish to discuss 1997 you need to consider dollar appreciation, financial mismatch of assets and liabilities, over borrowing by the private sector and overinvestment in underperforming assets.

[Abrak]

Another gold bug is born.

Actually I dont own any.

[Abrak]

Another gold bug is born.

Actually I dont own any.

[cloudhopper]

http://www.zerohedge.com/article/gold-and-...-century-js-kim

[flying]

http://www.zerohedge.com/article/gold-and-...-century-js-kim

Thank for the link good article

In the analogy of apple computers it also reminded me of B Madoff

Seems when teh crash started last year many must have ran to him & said I want out.

As for the article I had read Greenspan's original & it is good too.

Some parts of this article will draw the usual responses

Though gold’s detractors continually spread misinformation about gold having zero intrinsic value and the US dollar as the only valid form of money, this argument is actually backwards. It is the dollar that has zero intrinsic value while the intrinsic value of gold has been well defined for centuries.

[sokal]

Another gold bug is born.

Actually I dont own any.

I didn't think so but you sound pissed off that your hard earned cash is being devalued and that is the first step in becoming a gold bug.

I have only been a gold bug for a year or so. I am really just a dividend collector. I want all this currency risk BS to play out so I can sell my gold and buy some solid dividend yielding stocks.

[churchill]

I think it's all hinging on the $ at this time - If it has a sharp bounce from here gold and stocks could reverse .

According to some it's in the stars !

A few predictions for the coming weeks

http://unbiasedtrading.blogspot.com/

http://www.mahendraprophecy.com/LatestFlas...amp;page=2#year

http://globaleconomicanalysis.blogspot.com...nsus-plays.html

http://www.baminvestor.com/blog/2009/10/ma...g-to-bam-model/

[gregb]

I have only been a gold bug for a year or so. I am really just a dividend collector. I want all this currency risk BS to play out so I can sell my gold and buy some solid dividend yielding stocks.

This is so sad, because this is all any of us want. This is what we've been trained to want. This is what we've been told is possible.

Unfortunately, solid dividend yielding stocks require solid economic growth. Solid economic growth in turn requires increasing energy. Increasing energy is exactly the thing we do not have, nor will ever have again for many, many generations.

All fiat currencies are backed in the end by physically failing industrial economies. Gold may not be perfect, but it is backed by itself. Gold doesn't have to perform. It only needs to stay gold while the industrial economies of the world collapse. I would dump gold and buy stocks in heartbeat if someone could show me the energy problem was resolved.

They can't, therefore except in extremely unusual circumstances (which amounts to speculating and gambling) there will no longer be any solid dividend yielding stocks, and gold is likely to do better than any fiat currencies or stocks over the long run for the foreseeable future. (Nonviolent, net energy exporting economies with their own currency such as Norway might prove an exception to this.)

I feel the same sentiments as you express sokal. In addition, I want to win the lottery and build a time machine. These are all fantasies in the end. Anyone who feels that "they" will find some way around the problems of energy depletion, by all means continue disparaging gold. I will not, and it isn't because I have some love affair with a rock. Should "they" ever actually demonstrably resolve the problem of energy, I will be the first one dumping my gold to reinvest in the industrial economy ready and willing to collect those dividends.

In my opinion, it is so sad that people have been so short sighted to cause us to arrive at this point in history. Still, I won't let my fantasies get in the way of making solid financially sound decisions. If you truly want to know where gold is going in this market, it is going to do nothing more than break even. But that already is better than any other asset class is going to do.

This is all long term of course. Short term...roll the dice.

[AlexLah]

According to some it's in the stars !

It isn't..........

The best way to predict the future is to invent it.

Follow "The mother of crisis threads"

[sokal]

I have only been a gold bug for a year or so. I am really just a dividend collector. I want all this currency risk BS to play out so I can sell my gold and buy some solid dividend yielding stocks.

This is so sad, because this is all any of us want. This is what we've been trained to want. This is what we've been told is possible.

Unfortunately, solid dividend yielding stocks require solid economic growth. Solid economic growth in turn requires increasing energy. Increasing energy is exactly the thing we do not have, nor will ever have again for many, many generations.

All fiat currencies are backed in the end by physically failing industrial economies. Gold may not be perfect, but it is backed by itself. Gold doesn't have to perform. It only needs to stay gold while the industrial economies of the world collapse. I would dump gold and buy stocks in heartbeat if someone could show me the energy problem was resolved.

They can't, therefore except in extremely unusual circumstances (which amounts to speculating and gambling) there will no longer be any solid dividend yielding stocks, and gold is likely to do better than any fiat currencies or stocks over the long run for the foreseeable future. (Nonviolent, net energy exporting economies with their own currency such as Norway might prove an exception to this.)

I feel the same sentiments as you express sokal. In addition, I want to win the lottery and build a time machine. These are all fantasies in the end. Anyone who feels that "they" will find some way around the problems of energy depletion, by all means continue disparaging gold. I will not, and it isn't because I have some love affair with a rock. Should "they" ever actually demonstrably resolve the problem of energy, I will be the first one dumping my gold to reinvest in the industrial economy ready and willing to collect those dividends.

In my opinion, it is so sad that people have been so short sighted to cause us to arrive at this point in history. Still, I won't let my fantasies get in the way of making solid financially sound decisions. If you truly want to know where gold is going in this market, it is going to do nothing more than break even. But that already is better than any other asset class is going to do.

This is all long term of course. Short term...roll the dice.

It is what the smart people want.

Allot of people are actually just day trading idiots looking to make a quick buck. They laugh at us dividend collectors. I would not get too down on the situation, as long as these majority day trading idiots are buying over price stocks with no dividends like Google then that leaves lots of oppertunity on the table. I think the best place to do some real investing is in Canada, Norway and Australia.

Edited October 10, 2009 by sokal

[Abrak]

I have only been a gold bug for a year or so. I am really just a dividend collector. I want all this currency risk BS to play out so I can sell my gold and buy some solid dividend yielding stocks.

This is so sad, because this is all any of us want. This is what we've been trained to want. This is what we've been told is possible.

Unfortunately, solid dividend yielding stocks require solid economic growth. Solid economic growth in turn requires increasing energy. Increasing energy is exactly the thing we do not have, nor will ever have again for many, many generations.

All fiat currencies are backed in the end by physically failing industrial economies. Gold may not be perfect, but it is backed by itself. Gold doesn't have to perform. It only needs to stay gold while the industrial economies of the world collapse. I would dump gold and buy stocks in heartbeat if someone could show me the energy problem was resolved.

They can't, therefore except in extremely unusual circumstances (which amounts to speculating and gambling) there will no longer be any solid dividend yielding stocks, and gold is likely to do better than any fiat currencies or stocks over the long run for the foreseeable future. (Nonviolent, net energy exporting economies with their own currency such as Norway might prove an exception to this.)

I feel the same sentiments as you express sokal. In addition, I want to win the lottery and build a time machine. These are all fantasies in the end. Anyone who feels that "they" will find some way around the problems of energy depletion, by all means continue disparaging gold. I will not, and it isn't because I have some love affair with a rock. Should "they" ever actually demonstrably resolve the problem of energy, I will be the first one dumping my gold to reinvest in the industrial economy ready and willing to collect those dividends.

In my opinion, it is so sad that people have been so short sighted to cause us to arrive at this point in history. Still, I won't let my fantasies get in the way of making solid financially sound decisions. If you truly want to know where gold is going in this market, it is going to do nothing more than break even. But that already is better than any other asset class is going to do.

This is all long term of course. Short term...roll the dice.

It is what the smart people want.

Allot of people are actually just day trading idiots looking to make a quick buck. They laugh at us dividend collectors. I would not get too down on the situation, as long as these majority day trading idiots are buying over price stocks with no dividends like Google then that leaves lots of oppertunity on the table. I think the best place to do some real investing is in Canada, Norway and Australia.

Sokal et al,

I fully understand where you are coming from. But if you think about the decision to invest in a non-producing asset (e.g. gold) must theoretically be something of a decision of 'last resort' (not wrong but simply the right decision in a moment of time.) So dividend collection is very important (somewhat boring) but if used as an investment strategy is likely to give you well above average and safe investment returns.

Personally I think it is a very important strategy at the moment whereby you could either have deflation which would make yields fall or inflation which would make earnings and hence yields rise (at the same price point).

[flying]

Very very fine article!

Thanks again Jake1

http://fofoa.blogspot.com/2009/10/your-own...l-freegold.html

[Naam]

all goldblogbugspotdoomfiatmoney articles are fine in the eyes of the [gold] beholder

[flying]

all goldblogbugspotdoomfiatmoney articles are fine in the eyes of the [gold] beholder

I have a feeling you did not look at the article?

But.....

Yes I thought the info on the ECB was very interesting & also some of the Euro info.

Wow

So in just this latest quarterly report filed on October 7th covering through Oct. 2, 2009, despite selling more gold, the ECB's total gold holdings ROSE another 6 billion Euros through the simple process of marking to market the gold held in reserve

PS: you may actually like that site as it is not a doom fiat type site. In fact it hopes for the opposite.

There are plenty of blogs about what we should do as a society. About how we need to start a new gold standard; a return to honest money. How we must return to a hard, commodity-based currency that will restrain the profligate governments and their greedy bankers from inflating the money supply at will. But what we must understand, what is often difficult to understand, is that there is a big difference between what SHOULD happen and what WILL happen. There is a difference between FIGHTING for something and simply OBSERVING the real world to plan your next move. There is a difference between being an ADVOCATE or PROPONENT and being a PASSIVE OBSERVER of the changes we are actually living through.

This blog takes the latter position in all of these cases. If you would like to be an activist for a better world, this may not be the blog for you. But if you are a hard working producer and a saver worried about how to protect your purchasing power from the hungry collective, this blog may be just what you are looking for!

Edited October 12, 2009 by flying

[flying]

Got thru that new ceiling of 1061

Wonder if we can close above it?

I thought for sure a pull back around this time.

Edited October 13, 2009 by flying

[Naam]

Got thru that new ceiling of 1061 Wonder if we can close above it? I thought for sure a pull back around this time.

no pullback as long as the strong "reserve currency" is much sought after because it is worldwide used to price any asset.

[flying]

no pullback as long as the strong "reserve currency" is much sought after because it is worldwide used to price any asset.

Just the facts maam Talkin Euro's

Today the total ECB reserve assets stand at 428 billion, including foreign currency reserves, IMF reserve positions, SDRs, foreign assets and, of course, gold! 428 billion Euros total. And the gold reserves now total 233 billion Euros. So in the past 10 years, through many liquidations, that 15% has now grown to 54.4% of the total reserves!!

But wait! There's more. Have a look at this news article from last Wednesday, Oct. 7:

ECB-Gold reserves up 6.26 bln euros after repricing

FRANKFURT, Oct 7 (Reuters) - Gold and gold receivables held by euro zone central banks rose by 6.26 billion euros to 238.169 billion euros in the week ending Oct. 2 after a quarterly revaluation, the European Central Bank said on Tuesday...

Gold holdings rose because

the

quarterly revaluation

more than offset the sale of 15 million euros worth of gold

by one euro zone central bank, consistent with the 2004 Central Bank Gold Agreement, the ECB said.

Edited October 13, 2009 by flying

[Naam]

no pullback as long as the strong "reserve currency" is much sought after because it is worldwide used to price any asset.

Just the facts maam Talkin Euro's

that and €UR denominated financials was the place to be for the last six months. sending your dogs with a little note "buy EUR financials!" attached to their tails to the bank would have yielded a multiple of any precious metals yields. of course... i agree that hindsight is always 20/20. but no risk = no reward.

luckily those who bought the above mentioned papers did not heed the expert opinion from Britmaverick (and you) that european banks will fail and fall like dominos and they did not follow the advice of the Right Honourable Sokal, Esq. (graduate of the Austrian School) to buy gold to "preserve wealth". the proverb is right. ignorance is a bliss. now they ("the EUR bank buyers") are counting clink, clink, clink... their cash, sip... sip... sip... a glass of good wine, puff... puff... puff... an expensive Habana and try to figure out how many ricefields they could buy (if they wanted) with the dough they made this year.

ahmmm... did i mention that "they" neither price their assets in "the worlds reserve currency" nor in gold?

[flying]

luckily those who bought the above mentioned papers did not heed the expert opinion from Britmaverick (and you) that european banks will fail and fall like dominos

Actually what I said was....

But in part I agree with you that Euro banks will have a big fail year too.

Some already have & we might all be here to see in the end if in fact they do have a big fail year coming up. Then it will be hindsight.....

All that aside I also did say a few posts back that I will not be surprised to see gold outpace all currencies in November.

That statement is close enough in time that you can rub my nose in it after if it proves to be wrong

Bottom line? Is Gold not doing fine in all currencies except AUD in this point in time?

Very bottom line...Happy to say it is doing very fine in mine

[Naam]

luckily those who bought the above mentioned papers did not heed the expert opinion from Britmaverick (and you) that european banks will fail and fall like dominos

Actually what I said was....

But in part I agree with you that Euro banks will have a big fail year too.

Some already have & we might all be here to see in the end if in fact they do have a big fail year coming up. Then it will be hindsight.....

please let us know your definition of a "bank failure" Flying. and Britmaverick could tell us what it means when "banks fall like dominos". talk is cheap and i repeat that both of you have no bloody idea as far as european banks are concerned. i admit that i have no bloody idea how to grow rice but then i don't advice rice farmers how to do it.

[flying]

please let us know your definition of a "bank failure" Flying. and Britmaverick could tell us what it means when "banks fall like dominos". talk is cheap and i repeat that both of you have no bloody idea as far as european banks are concerned. i admit that i have no bloody idea how to grow rice but then i don't advice rice farmers how to do it.

My definition of a failing bank is one like I posted quotes from yesterday

http://news.my.msn.com/business/article.as...umentid=3635837

DSB account holders withdrew some 600 million euros in recent weeks, DNB president Nout Wellink was quoted as saying by Dutch news agency ANP -- about a sixth of all the savings still with the bank.

I never claimed to advise banks & yes talk is cheap which is why this forum is free ...no?

It is just a forum folks talk & speculate on various possibilities.

As I said we will probably all be here next year & can look back & see how the wager free speculations did. Tis nothing more than free internet forum talk my friend. .....Now if your the owner of the bank & we said something to offend you then Kor Tort Krup

[Lost in LOS]

i know you all called us stupid for keeping gold but my gold is looking real pretty now, up 29.9%. I think it might go to 1,100 and then drop again. I am waiting for 1,500 then sell half : )

I don't know anything about this stuff really, just lucky, I am an uneducated street kid, but anyone on the street knows what is happening in America and to the dollar and Americas Credit Card is maxed out ..................

[flying]

All us street kids should thank Churchill for pointing out the possibility almost exactly a year ago 10-17-08 at the start of this thread.

Thanks Churchill

[Naam]

i know you all called us stupid for keeping gold but my gold is looking real pretty now, up 29.9%.

i don't think anybody called you stupid. a more fitting expression is "uninformed" respectively "inexperienced" because +29.9% in 16 months is nothing to rave about when compared with yields one could achieve with other investments during the "crisis" period. to me it seems Americans can only think in $$$ and don't care what delicacies are served in other denominations and assets besides $$$ and gold.

besides, is it wise to look at a 30% plus in dollars within a rather short period but forget that the Baht (which is the "expense currency" for most of us) strenghtened 21/30% (depending whether percentages are calculated from up or down) vs. the dollar during the last four years? i therefore ask "where's the beef?" and "is it really looking real pretty?"

[Naam]

The ministry said the problems at DSB were not caused by the global credit crisis. "It is about an individual, relatively small bank, that landed in problems through its management, disquiet among clients, unclear communication and the uncertainty this created."

a "peanuts" bank not representative for "european banks".

[Lost in LOS]

i know you all called us stupid for keeping gold but my gold is looking real pretty now, up 29.9%.

i don't think anybody called you stupid. a more fitting expression is "uninformed" respectively "inexperienced" because +29.9% in 16 months is nothing to rave about when compared with yields one could achieve with other investments during the "crisis" period. to me it seems Americans can only think in $$$ and don't care what delicacies are served in other denominations and assets besides $$$ and gold.

besides, is it wise to look at a 30% plus in dollars within a rather short period but forget that the Baht (which is the "expense currency" for most of us) strenghtened 21/30% (depending whether percentages are calculated from up or down) vs. the dollar during the last four years? i therefore ask "where's the beef?" and "is it really looking real pretty?"

yeah Naam, but your a rocket scientist and get those returns.......... I am just trodding along although if it goes to 1,500 will I have done better ?

[flying]

The ministry said the problems at DSB were not caused by the global credit crisis. "It is about an individual, relatively small bank, that landed in problems through its management, disquiet among clients, unclear communication and the uncertainty this created."

a "peanuts" bank not representative for "european banks".

You expect them to say otherwise? Not caused by the global crisis 600 million Euros is peanuts to you perhaps? 1/6th of all their savings? Hmmm 3.6 Billion savings = tiny bank....Also they recorded a 45 million Euro profit in 2008 so yeah tiny bank like the 100+ that failed in the US...I believe you said the same about them. We will see if 100+ tiny banks in Europe amount to peanuts if it goes there

As I said we will see where it goes during this next year

Edited October 14, 2009 by flying

[Naam]

yeah Naam, but your a rocket scientist and get those returns.......... I am just trodding along although if it goes to 1,500 will I have done better ?

i'm not a rocket scientist and i don't know what percentage you have invested in gold. that's why i can't answer your question. but i think you will do well in the long run with your decision "Vegas" which seems to be a solid investment, produces real income and sooner or later most probably capital gains too.