Where Is Gold Going In This Market

[cloudhopper]

Another interesting discussion re gold and geo-political finance.

Don Coxe Dissects Gold, As "The Oldest-Established Store Of Value Moves To Center Stage" | zero hedge

edit- and another more biased one FWIW-

http://www.zerohedge.com/article/guest-post-gold-bubble-what-bubble

Edited June 21, 2010 by cloudhopper

[flying]

Another interesting discussion re gold and geo-political finance.

Don Coxe Dissects Gold, As "The Oldest-Established Store Of Value Moves To Center Stage" | zero hedge

edit- and another more biased one FWIW-

Guest Post: Gold Bubble? What Bubble? | zero hedge

Both good but the 2nd one I liked....When he shows the graph of the Nasdaq & said this was a bubble......

Then said this look like a bubble?

No not at all..............

But that Naz chart did remind me of a bubble that is now occurring that I saw

This one..................Ever see such a hockey stick ... :lol:

Edited June 21, 2010 by flying

[cloudhopper]

Another missive from the venerable AEP - http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/7841961/Gold-reclaims-its-currency-status-as-the-global-system-unravels.html

At the moment gold appears to have hit a new high...

[badge]

[...]

Then said this look like a bubble?

No not at all..............

[...]

Right. Not yet anyway

This is interesting too.

[lannarebirth]

If money goes into circulation through lending in the fractional reserve system. And if lending is being cut back severely, it makes sense that money supply would be down, no?

[Abrak]

If money goes into circulation through lending in the fractional reserve system. And if lending is being cut back severely, it makes sense that money supply would be down, no?

Lanna,

You are going a bit screwy here on your logic.

About 5 posts ago someone effectively posted M0 which is bank reserves (at its simplest). On the basis that it has doubled, then surely 'in the fractional reserve system' either lending has doubled or will double.

Badge posted broader money supply figures which show, at the broadest, that money supply is shrinking. M3 being some 5x MO.

So the point of posting the first graph is that if you believe money supply is determined by fractional reserves we are in for a shed load of inflation. Hence, I suspect gold might go up. Badge's is more along the lines of there is no 'fractional reserve' system in the US and to the extent that you feel that the price of gold might reflect excess monetary growth, it should actually be going down.

I have no idea whether there is fractional reserves system in the US. But if there is it, at best amounts to a push and pull theory, namely with a cart you can pull it with a piece of rope but you cannot push it. And effectively you can ignore pull as a constraint with derivatives.

Actually that chart of a huge increase in reserves, actually does not show the Fed's attempts to affect broad money by the 'addition' of narrow money rather than through a 'multiplier' process. Behind all this is that essentially monetary theory aka. Friedman is probably rubbish because velocity is volatile. And as money or 'money supply' is so 'intangible' noone can control money anyways.

Ultimately, it was incredibly strange that the biggest free marketeers like Maggie based their economic policies on controlling the least tangible of assets. It is historically quite amusing that monetary policy in the UK was determined on the basis of M3 targets, while the Fed has now determined that the cost of calculating M3 is not worth the benefit of people actually knowing what it is.

[cloudhopper]

If money goes into circulation through lending in the fractional reserve system. And if lending is being cut back severely, it makes sense that money supply would be down, no?

Lanna,

You are going a bit screwy here on your logic.

About 5 posts ago someone effectively posted M0 which is bank reserves (at its simplest). On the basis that it has doubled, then surely 'in the fractional reserve system' either lending has doubled or will double.

No Lanna is right. Credit created by bank lending (e.g. when someone uses their credit card) is far more effective than any base money printed by the fed at increasing money velocity and price inflation. "Fractional reserve" is simply a made up limit for banks to create money by lending. Yes they create it, not the fed, when they make a loan they do not deduct that money from anyone's account and the "fractional reserves" are added later by the fed as needed. Now there are few credit-worthy (ie able to service the loan) borrowers to allow much creation of new high power money so as existing debt is defaulted on the money supply is actually shrinking and the world economy is encountering deflation as a result.

The price of gold (in the longer term) does not have anything to do with garden variety inflation or deflation but is a reflection of lack of trust in the fiat monetary system.

[jazzbo]

"Gold is simply an insurance policy that feels good for risk-averse me, who would have had a bomb shelter in the back yard during the cold war had I not been in elementary school at the time..."

'risk averse' as in:

[/url]

[cloudhopper]

I still carry a parachute Jazz...

[jazzbo]

As the old pilots used to say when asked if they had ever gone sky-diving: Why would I want to jump out of a perfectly good airplane?

[flying]

Yeah I know its not gold but .....

Jesse's Café Américain: Silver Leaving the Comex As Investors Want to Get Physical

"On Friday 516,522 ounces of silver were withdrawn from the Comex from Brinks.

Yesterday another 1.6 million ounces were withdrawn from Brink's and HSBC. It all came from the "eligible" category, which is the investor silver being kept at the Comex. This means it wasn't the banks and SLV playing a "shell game" with their "fractional" silver holdings. This was real stuff leaving and going into real hands off-Comex.

This is a lot of silver leaving the Comex and at least the silver leaving HSBC is motivated investors taking physical delivery.

In the context of gold/silver holding up as well as it has so far this week (silver contract roll, options expiry Thurs, 2-day FOMC meeting), it would seem that the demand for actual physical delivery of gold/silver maybe starting to overwhelm the cartel."

[churchill]

Yuan can become alternative reserve currency to US dollar-ADB

Internationalisation of yuan may be rapid process

"The ADB study, entitled "The Future Global Reserve System -- An Asian Perspective", recommended having Asia's vast currency reserves play a more important role in stabilising the global financial system, through swap lines, the International Monetary Fund's Special Drawing Rights (SDRs) and other borrowing.

The global financial crisis, which originated in the U.S. housing market, has sparked a growing discussion among policy makers and academics that the world should no longer rely on a single, dominant currency, such as the dollar, as it has done since the end of the gold standard.

The ADB study also endorsed the use of capital controls as a tool to strengthen management of an economy, with the caveat that they are temporary and coordinated.

"These controls on the flow of capital tend to be more effective when done on a coordinated basis across countries that are targets of rapid capital movements, rather than individual countries reacting unilaterally," the report said."

http://www.reuters.com/article/idUSTOE65N06P20100624

[churchill]

Now China sources newly mined gold from the USA

http://www.mineweb.com/mineweb/view/mineweb/en/page34?oid=106850&sn=Detail&pid=34

[churchill]

For anyone who wants some weekend reading !

http://produkte.erstegroup.com/CorporateCl...l?ID_ENTRY=2150

is a 71 page report on gold just published by Erste Group.

[churchill]

For anyone who wants some weekend reading !

http://produkte.erstegroup.com/CorporateCl...l?ID_ENTRY=2150

is a 71 page report on gold just published by Erste Group.

If that link doesn't work - same report at

"In Gold We Trust" - Special Report On Gold From Erste Bank, Who Has A $1,600 Price Target

http://www.zerohedge.com/article/gold-we-trust-special-report-gold-erste-bank

[flying]

"In Gold We Trust" - Special Report On Gold From Erste Bank, Who Has A $1,600 Price Target

Once it closes above $1250 ( maybe today? ) Then I think we will be moving again.

But I am not in a rush & it has been a nice steady growth for some time now.

[sokal]

I got some silver today, I wanted to buy on the options expiry date but I had to work yesterday. Thats what sucks about buying metal,  cant do it by wire. That was a heavy load for my pocket:D

Edited June 25, 2010 by sokal

[flying]

I got some silver today,

I have said it many times before....I think silver is a very good idea

Congrats on the brick

[Naam]

I have said it many times before....I think silver is a very good idea

and i said many times "too big to store".

[flying]

I have said it many times before....I think silver is a very good idea

and i said many times "too big to store".

Oh I thought that idea about shape changing etc was a goody...Also the the pool floor

[sokal]

I have said it many times before....I think silver is a very good idea

and i said many times "too big to store".

True, I planned on buying gold but I don't like the idea of buying on all time high days so I just bought some silver.

[flying]

I have said it many times before....I think silver is a very good idea

and i said many times "too big to store".

True, I planned on buying gold but I don't like the idea of buying on all time high days so I just bought some silver.

I always joke/suggest folks should try to at least hold their body weight in silver

Wish I could say I hold my weight in gold I do not

Edited June 26, 2010 by flying

[flying]

Gold Daily Chart : The Cup & Handle are now fully formed...Longer Termed projections...

Then we will experience the first major pullback, most likely back down to the 1330 level. And then the market will continue to rally up to the 1455 level.

Hey I said that way back when

[Naam]

Oh I thought that idea about shape changing etc was a goody...Also the the pool floor

in some cases 'shape changing' makes the objects more vulnerable because they look more valuable (which they are indeed). 'pool floor' is a bit tedious but what about window frames?

[flying]

Oh I thought that idea about shape changing etc was a goody...Also the the pool floor

in some cases 'shape changing' makes the objects more vulnerable because they look more valuable (which they are indeed). 'pool floor' is a bit tedious but what about window frames?

I was thinking lawn jockeys or gnomes...nobody wants those

[churchill]

Which precious metal most used in industry, is attracting investors betting on both faster and slower economic growth as prices extend the longest run of quarterly gains in three decades ??

Best of both worlds ? Silver -

http://www.bloomberg.com/news/2010-06-27/silver-posting-best-streak-since-hunts-no-matter-which-way-economy-turns.html

[churchill]

Iran cbank says has sold gold to boost reserves

selling USD , Euros and Gold !

What are they buying ??

http://malaysia.news.yahoo.com/rtrs/20100628/tbs-iran-cenbank-reserves-955c2a1.html

[churchill]

Which precious metal most used in industry, is attracting investors betting on both faster and slower economic growth as prices extend the longest run of quarterly gains in three decades ??

Best of both worlds ? Silver -

http://www.bloomberg.com/news/2010-06-27/silver-posting-best-streak-since-hunts-no-matter-which-way-economy-turns.html

Silver Robin Hood

[flying]

funny at the end of that video they mention the silver to gold ration was 15:1 in days long ago & 50:1 in recent times.

Actually I bought my bulk at 77:1 & almost went again recently when it hit 70:1 again

It is back at roughly 66:1 today.

You could work a small pile by just going back & forth if you dont mind the work.

Edited June 28, 2010 by flying

[churchill]

Fidelity's Greetham Sold Stocks, Expects 2011 Rally

"Better buying opportunities will emerge in the second half of this year ahead of a rally in 2011, said Greetham, London- based director of asset allocation at Fidelity International, which has $215.9 billion under management. Even though leading economic indicators are weakening, the current situation shows "no more than a moderation in recovery," he said"

"Greetham, who manages the Fidelity Funds-Multi Asset Navigator Fund, said he has started buying gold. His funds, which typically do one trade per month and sometimes less often, sold stocks twice in May, he said"

Read more: http://www.sfgate.com/cgi-bin/article.cgi?f=/g/a/2010/06/29/bloomberg1376-L4RQCV07SXKX01-0Q8O757QCIC1JIJDCM08E650C7.DTL#ixzz0sEsHxSGl