Where Is Gold Going In This Market

[Gambles]

You're probably right about Keynes but you know Keynes really pushed understanding a long way forwards in his day. Yes, he also drew a lot of wrong conclusions that inspired a lot of bad decisions. While I'm no Keynesian a lot of the smart thinkers today have used Keynes as the building blocks of their understanding and then developed much more logical theories of their own (Minsky, Keen etc). Also while much of what Keynes said and wrote may have been wrong, it was plausible based on that little that we empirically knew at the time. So while I recognise the shortcomings, I've a great deal of respect for the role played by Keynes in pushing the debate forwards if not for the theories themselves which haven't generally stood the test of time particularly well.....on the other hand, don't even think of getting me started on Friedman and his monetarists who sadly now somehow dominate US/global positions of power. In the current crisis, Keynesianism is an anachronistic irrelevance whereas monetarism is the clear and present danger that we all face.......

I agree with much of what you have to say but one should remember that (1) Keynes was working under the assumption of monetary inflexibility and (2) that future generations have effectively bastardized Keynes for their own political/economic agenda. I entirely agree about Friedman monetary economics which was not only based on incorrect and virtually falsified work but clearly never really took into account causality.

Unfortunately we dont have much else to go on with unless you are in the 'evolution creates the perfect being' world. I personally believe that a combination of Keynesian and monetarism (aka Bernanke) essentially avoided meltdown. One without the other would have not worked. Unfortunately we are well beyond the limits that either policy is likely to be effective going forward. Monetary policy has been rendered ineffective and Keynesian policy placed on a pedestal of inflation.

Life is dynamic, as is economics. That people might consider Keynesianism anachronistic today does not necessarily mean it was wrong at the time. Simply by observing, measuring and developing theories that change peoples behaviour, this can in the end be the downfall of those theories themselves, and result in a change in the ball game.

Myself I think there's an element of quantum mechanics, Copenhagen Interpretation, Observer Effect, Hawthorne effect, or similar to be thrown in to the mix.

Pretty much like chartists and technical analysis have become self-fulfilling to an extent, until enough people actually realise that, and the ball game changes again - as it will...

We're just scratching the surface...

I would argue that Austrian economics and a good understanding of this basic rule, is enough evidence to give Austrian economics the benefit of the doubt.

Under sound money, the supply of capital is finite the price of capital, the interest rate, must rise as the supply dwindles making it harder for businesses to borrow. This checks credit expansion at a level where the growth in the economy generates enough wealth to at least service said debt. We can then deduce that any further lending of capital beyond this point results in a loss as the growth rate will at some point become smaller than the interest rate.

under sound money (non-interventionist) yes - but we have had increasingly interventionist policies since politicians decided that the economy was their remit towards the end of the 19th century

I have a lot of sympthy with Austrian principles but it seems to me, and I'm no experton matters Austrian, that Austrian principles have done less to evolve than other economic theories. AT the risk of being unfair, Austrians seem to sit around like grumpy old men saying things like

"it were better in my day, lad....could never happen like this under the gold standard....all this unsound money will come home to roost and then they'll be begging us for the gold standard again..."

but of course they won't - I doubt the world will ever return to gold-based sound money (whether it should or not becomes moot if it won't) so I'd like to see Austrians spending their time working on modern equivalents of the RentenMark or some other 21st century basis for sound money. As I say I'm out of touch - not read much Austrian since Richebacher and Rothbard both of whom were excellent writers and I hold them in way higher estimation than Milton Deadhead BUT even causes of The Great Depression, where it is a genuine central relevant theme, makes me want to yell out loud "would you just give up about the gold standard and talk about something else for a change???"

I realize that's probably just me..........

[Naam]

I have a lot of sympthy with Austrian principles but it seems to me, and I'm no experton matters Austrian, that Austrian principles have done less to evolve than other economic theories. AT the risk of being unfair, Austrians seem to sit around like grumpy old men saying things like

"it were better in my day, lad....could never happen like this under the gold standard....all this unsound money will come home to roost and then they'll be begging us for the gold standard again..."

but of course they won't - I doubt the world will ever return to gold-based sound money (whether it should or not becomes moot if it won't) so I'd like to see Austrians spending their time working on modern equivalents of the RentenMark or some other 21st century basis for sound money. As I say I'm out of touch - not read much Austrian since Richebacher and Rothbard both of whom were excellent writers and I hold them in way higher estimation than Milton Deadhead BUT even causes of The Great Depression, where it is a genuine central relevant theme, makes me want to yell out loud "would you just give up about the gold standard and talk about something else for a change???"

I realize that's probably just me..........

i swear all holy oaths, it's not only you!

[churchill]

U.S. Dollar, Gold and Silver

The dollar as expected has mounted a very strong rally, and it just missed its target of closing above 82 on a monthly basis by a few points. It did, however close above 81 on a monthly basis which indicates that it is going to trade higher before a top is in place. As long as it does not close below 78.00 on a weekly basis, the odds of it trading to the 85-86 ranges are rather high. If it manages to close above 82 on a monthly basis, it would move the final targets to the 90-92 ranges. While a lot of noise is being made about the Aid package that the EU members have in place for Greece, the Euro is still not out of the red zone as many members are still facing huge budget shortfalls. Potentially Spain, Portugal or Italy could find themselves in the same place Greece is now in.

Despite the strength in the dollar, the commodity's sector has held up remarkably well and this suggests that the smart money is deploying new funds every time this entire sector pulls back. It also a very ominous warning that inflationary forces are going to unleash with a fury in the years to come. We still believe that individuals all over the world, especially in the developed countries are going to experience a shock in the next 2-3 years. We have spoken of this many times in the past 12 months. The economic pain right now is being masked by the gains in the stock market.

Interest rates are slowly rising and the long term charts are indicating that they have nowhere to go but up. We also believe that the bond market is going to experience a crash as rates soar to eventually match those of the 1980's. For those who have no positions in bullion, use pull backs to establish a position and use strong pull backs to add to your position.

Under normal circumstances Gold would have mounted a stunning correction given that the dollar has mounted a very strong rally over the past few months. This is not the case this time around and Gold has only mounted a mediocre correction and now appears to be putting higher lows instead of lower lows in the face of a strong dollar. A weekly close above $1175 will most likely result in a test of the old highs. A test of the old highs if not confirmed by our technical indicators could then result in a rapid move down to the 990-1040 ranges.

Gold is still expected to consolidate for a few more months. If the consolidation remains in a tight range (1000-1200), then expect Gold to explode upwards once a new weekly buy is generated.

Traders, who want to take advantage of a dollar rally, can use pull backs in the dollar to establish positions In UUP. Consequently, they can also short the Euro via EUO; use rallies in the Euro to open up positions in EUO. For those who want to use ETF's to play the precious metal's sector, the following ETF's should be considered PALL, SLV, and GLD.

http://www.marketoracle.co.uk/Article18822.html

[flying]

We still believe that individuals all over the world, especially in the developed countries are going to experience a shock in the next 2-3 years.

Yep

[Naam]

Gold is still expected to consolidate for a few more months. If the consolidation remains in a tight range (1000-1200), then expect Gold to explode upwards once a new weekly buy is generated.

that's what Mrs Naam is telling me since she started hoarding gold in 2007. however, when i ask her about her purchases of the last few months she pretends to be too busy to answer.

[flying]

[lannarebirth]

Gold is still expected to consolidate for a few more months. If the consolidation remains in a tight range (1000-1200), then expect Gold to explode upwards once a new weekly buy is generated.

that's what Mrs Naam is telling me since she started hoarding gold in 2007. however, when i ask her about her purchases of the last few months she pretends to be too busy to answer.

Maybe something like that:

hel_l, I don't know. I defer to the lady.

[BEENTHEREDONETHAT]

Not really into gold but I found this very informative and also entertaining. Handy info if you are moving gold into, out of or around the US http://www.sovereignman.com/expat/moving-gold-overseas/ interesting stories on going through customs.

[badge]

Shame it doesnt go back further.

[flying]

Up with the $ again today

Dont know why silver is just sitting today....ah well

[lannarebirth]

Up with the $ again today

Dont know why silver is just sitting today....ah well

Nice solid reversal and breakout today. Gold stocks, not.

[flying]

Up with the $ again today

Dont know why silver is just sitting today....ah well

Nice solid reversal and breakout today. Gold stocks, not.

Yes seems miners/stocks are following the market

Hey your up late...working eh?

Must be tough at times although during the hot season maybe nicer

[Gambles]

U.S. Dollar, Gold and Silver

The dollar as expected has mounted a very strong rally, and it just missed its target of closing above 82 on a monthly basis by a few points. It did, however close above 81 on a monthly basis which indicates that it is going to trade higher before a top is in place. As long as it does not close below 78.00 on a weekly basis, the odds of it trading to the 85-86 ranges are rather high. If it manages to close above 82 on a monthly basis, it would move the final targets to the 90-92 ranges. While a lot of noise is being made about the Aid package that the EU members have in place for Greece, the Euro is still not out of the red zone as many members are still facing huge budget shortfalls. Potentially Spain, Portugal or Italy could find themselves in the same place Greece is now in.

Despite the strength in the dollar, the commodity's sector has held up remarkably well and this suggests that the smart money is deploying new funds every time this entire sector pulls back. It also a very ominous warning that inflationary forces are going to unleash with a fury in the years to come. We still believe that individuals all over the world, especially in the developed countries are going to experience a shock in the next 2-3 years. We have spoken of this many times in the past 12 months. The economic pain right now is being masked by the gains in the stock market.

Interest rates are slowly rising and the long term charts are indicating that they have nowhere to go but up. We also believe that the bond market is going to experience a crash as rates soar to eventually match those of the 1980's.

Under normal circumstances Gold would have mounted a stunning correction given that the dollar has mounted a very strong rally over the past few months. This is not the case this time around and Gold has only mounted a mediocre correction and now appears to be putting higher lows instead of lower lows in the face of a strong dollar. A weekly close above $1175 will most likely result in a test of the old highs. A test of the old highs if not confirmed by our technical indicators could then result in a rapid move down to the 990-1040 ranges.

Gold is still expected to consolidate for a few more months. If the consolidation remains in a tight range (1000-1200), then expect Gold to explode upwards once a new weekly buy is generated.

http://www.marketoracle.co.uk/Article18822.html

I'd say that's pretty sensible but remember that the Dollar index is a small basket and that Asian Dollar index has risen against Dollar and that Asia is a large commodity consumer which explains the commodity / Dollar interplay. Also commodities are individually experiencing huge dispersions of return - could it be that the biggest users are stocking up one or 2 commodities at a time buying the cheapest stuff? Inventiry building has favoured the more easily storable commodities whereas the likes of LNG are priced on a consumption basis

[Gambles]

Up with the $ again today

Dont know why silver is just sitting today....ah well

silver isn't a pure leveraged play on gold - it may look like it over certain longer terms but it does have characteristics of its own which are more apparent some days than others....

[Gambles]

I'll just post an extract here as the full article is on a couple of other threads

One of the world’s leading global portfolio managers told The Bangkok Post this week that Thailand might fail to capitalise on its strengths to become one of the best investment markets in Asia if political risk continues to affect the country's economy.

Scott Campbell, an S&P award-winning fund manager, told Post writer Pornnalat Prachyakorn that foreign investors remain bullish on the growth of emerging markets including Asia -

''Asia along with other emerging markets will continue to be the best place for investment for the next 30 to 40 years. Over the past 10 years, the stock market in the west has done nothing while Asian stock markets have grown three-to-fourfold.'','' said Mr. Campbell, Managing Director of award-winning MitonOptimal Guernsey.

Scott Campbell remains bullish on gold as one of the allocated asset classes and based on a number of technical and fundamental factors expects gold prices to ultimately rise to between $2,000 and $2,500 an ounce. Gold has been one of the asset classes that has helped Scott to achieve exceptional outperformance over the last 10 years; a period in which the Dow Jones Industrial average has fallen by around 30% and the gold price has increased almost fivefold from its lowest point to current levels just below $1,200 an ounce.

[flying]

Up with the $ again today

Dont know why silver is just sitting today....ah well

silver isn't a pure leveraged play on gold - it may look like it over certain longer terms but it does have characteristics of its own which are more apparent some days than others....

True & also the silver market is tiny in comparison & can be volatile at times..

Actually though While both Gold & Silver are doing fine.....I am doing better overall in my physical silver so no complaints on Silver from me.

Except of course it is bulky

Edited May 1, 2010 by flying

[Gambles]

Up with the $ again today

Dont know why silver is just sitting today....ah well

silver isn't a pure leveraged play on gold - it may look like it over certain longer terms but it does have characteristics of its own which are more apparent some days than others....

True & also the silver market is tiny in comparison & can be volatile at times..

Actually though While both Gold & Silver are doing fine.....I am doing better overall in my physical silver so no complaints on Silver from me.

Except of course it is bulky

there's an argument that it's a better local physical holding because if the real Armageddonistas are right it's an easier form of money to use than aurum....

[teletiger]

Does silver need it's own thread? Might do soon.

Something to put a smile on Flyings face.

"DOJ Antitrust Division Considering Launching Investigation Into Silver Market Manipulation By JPM"

http://www.zerohedge.com/article/doj-antit...anipulation-jpm

Regards.

[flying]

there's an argument that it's a better local physical holding because if the real Armageddonistas are right it's an easier form of money to use than aurum....

True & easy to see why. Although I do not foresee such a Mad Max scenario.

I do understand why silver would be a better hedge in such a case.

Does silver need it's own thread? Might do soon.

Something to put a smile on Flyings face.

"DOJ Antitrust Division Considering Launching Investigation Into Silver Market Manipulation By JPM"

Regards.

Yes Silver could use its own thread but I do not know how much interest there actually is here...There are many Silver sites already

That aside yes that investigation would put a smile on my face mainly because they need to slap down all that BS manipulation.

Personally I do not really pay it any more mind than I do the stock markets/paper gold markets. Both of which I do not participate in.

For me they are 100% disconnected from reality & although many still do not understand that/ share that belief....many are in fact waking up to it.

When it comes to PM's it is still the old adage that rings true..."If You Don't Hold It You Don't Own It"

[flying]

guess who took delivery of 17 tons of gold from the Comex

Its delivery time for the May Gold contract on the Comex, and the statistics yesterday showed some interesting buying.

Bank of Nova Scotia 'stopped' 699 big contracts, and issued 100 contracts, for a net takedown of roughly 1.7 tons of gold, the bulk of which was supplied by J.P. Morgan.

As you may recall, the Canadian bullion bank Scotia Mocatta is a subsidiary of Bank of Nova Scotia. Socita Mocatta was recently involved in a bit of a scandal when some investors went to visit 'the vault where their gold was stored' and found it to be surprisingly, perhaps shockingly, undersupplied.

Is BNS acting to back up their paper, or are large investors asking for their bullion in advance? Either way, its an act of good faith on the part of BNS to take the delivery, and probably very smart to do it now.

While cash settlement may be an option, it is not ethical, and BNS is known for its high ethical standards towards its customers, unlike some of its more famous American cousins in the gangs of New York.

Nothing to see here, move along. Its all perfectly normal. No one really has to have what they sell and store for you anymore. Unless they are honest.

Also, One for Mrs Naam But I know Mr Naam will ask her...Well what about 1980?

[Naam]

1. guess who took delivery of 17 tons of gold from the Comex

2. Also, One for Mrs Naam But I know Mr Naam will ask her...Well what about 1980?

1. ahmmm... let's take 90% off and make that 1.7 instead of 17 tons of gold

2. Naam is asking his Mrs "where else are you going to store all that stuff?" and "what if you want to sell?"

3. Mrs Naam will answer "i have unlimited storage possibilities in three countries" and "i have no intention to sell!"

[flying]

1. guess who took delivery of 17 tons of gold from the Comex

2. Also, One for Mrs Naam But I know Mr Naam will ask her...Well what about 1980?

1. ahmmm... let's take 90% off and make that 1.7 instead of 17 tons of gold

2. Naam is asking his Mrs "where else are you going to store all that stuff?" and "what if you want to sell?"

3. Mrs Naam will answer "i have unlimited storage possibilities in three countries" and "i have no intention to sell!"

1) Doh !! Sorry about that...I did forget the . between the 1 & the 7 ....my bad

2) The more I hear about Mrs. Naam the more I like her...

3) See what I mean?

They say behind every great man is a great woman.....

Edited May 2, 2010 by flying

[cloudhopper]

Just got back to 18k/B here.

[churchill]

would they ?

“Gold lost out in selling from funds that now worry about the gold holdings of Spain and Portugal as possibly having to be mobilized,” said George Gero, vice-president of global futures at RBC Capital Markets, in Tuesday’s closing market wrap.

http://www.resourceinvestor.com/News/2010/...und-Flight.aspx

[flying]

would they ?

“Gold lost out in selling from funds that now worry about the gold holdings of Spain and Portugal as possibly having to be mobilized,” said George Gero, vice-president of global futures at RBC Capital Markets, in Tuesday’s closing market wrap.

http://www.resourceinvestor.com/News/2010/...und-Flight.aspx

I dont think so

They still confuse a few weak hands that held papers claiming

gold somewhere with the real deal.

Physical is doing fine

[Naam]

would they ?

“Gold lost out in selling from funds that now worry about the gold holdings of Spain and Portugal as possibly having to be mobilized,” said George Gero, vice-president of global futures at RBC Capital Markets, in Tuesday’s closing market wrap.

http://www.resourceinvestor.com/News/2010/...und-Flight.aspx

I dont think so They still confuse a few weak hands that held papers claiming gold somewhere with the real deal.

Physical is doing fine

and Mrs Naam walks around high and mighty as if she solved the problem how to square a circle

[Gambles]

would they ?

"Gold lost out in selling from funds that now worry about the gold holdings of Spain and Portugal as possibly having to be mobilized," said George Gero, vice-president of global futures at RBC Capital Markets, in Tuesday's closing market wrap.

http://www.resourceinvestor.com/News/2010/...und-Flight.aspx

I dont think so

They still confuse a few weak hands that held papers claiming

gold somewhere with the real deal.

Physical is doing fine

very strong short term signals here

[flying]

One thing that really rammed home for me today....

Watching the Euro...watching Greece & the riots waiting for Parliaments decision.... watching the stock market go insane due to who knows what still.....

I realized that the fiats can claim to be all they want. Parliaments/Governments/Senator's/IMF can vote on debts/bailouts...FED's can print/digitize paper wealth till the cows come home.

But at the end of the day.... Who controls the Full Faith & Backing...that gives any of that paper any power?

Thats right

So at the end of the day it will not be parliament/governments/senators/FED/IMF...etc etc etc who decides.

[badge]

Outstanding performance by XAU, EURXAU especially

[souvenirdeparis]

before talking gold first have a look at the pre-first gulf war charts and immediate charts just after and for a year. Then I did have gold( all right, papers on gold mines, not physical, but they were closelyrelated I remember) ; now I don't.

by the second gulf war it hadn't gone up yet so no difference. when there's trouble over the oil output, then people just tramp over gold to buy oil.

sensible real estate is the real thing.

Edited May 7, 2010 by souvenirdeparis