Where Is Gold Going In This Market

[AnnyLing]

You are unfair Abrak. Who will Sokal ask to translate what you wrote ?

[Abrak]

You are unfair Abrak. Who will Sokal ask to translate what you wrote ?

BTW you should know that I do think you have a very good speculative argument as long as you realize exactly what it is.

Please understand that the very worst potential investment I think you can possibly make is cash. It essentially has risk and zero return and is defined as the risk free rate of zero. Now if you think that an absolute guaranteed yield of zero from gold because of the better fundamentals of gold in terms of fixed fundamentals is better value than you are 100% wrong because if I consider the very definition of zero is cash the concept that anyone would actually invest in a better concept of zero because zero is guaranteed simply is a statement that you believe that the absolute guaranteed certainty of nothing is better value than nothing. We all know that the very concept of gold is absolute certainty of zero which is worth absolutely nothing theoretically but is worth something which means that its value at whatever price you can imagine will always be worth above zero. So if you wish to invest in the certain guarantee of zero you are essentially investing in what you consider the most worthless asset in the world. Because the whole point of its price is the uncertainty of its price when you know that its value is based on the certainty of zero returns it will be priced quite highly it can never be worth zero.

Look everything is relative, we are all swapping assets around. If you value cash at zero and believe that gold is better value than cash you are simply betting on the most highly speculative argument that gold could possibly be worth less than zero which is simply not true, you are simply stating that gold is the worst investment in the world given that its inherent worth is zero. If you wish to state that cash currently by very definition is worthless then gold against the risk free zero rate which it is very risky and worthless worst investment is simply implying that the highest value of zero is worth more than the lowest which is wrong as a value argument but quite a good speculative argument.

I would admit though that the concept that something is worth less than cash and can therefore be the guaranteed most overpriced asset is an interesting concept. Because I can guarantee you that nobody invests on the basis of the concept of zero. So the very fact that gold isnt worth zero and you assume cash is worth zero will guarantee that the concept of gold actually ever been worth less than zero is an admission that the highest value of zero is in fact gold when the lowest possible price of an investment that anyone makes is zero on a risk weighted basis.

So please understand anyone who believes that cash isnt the worse possible actual investment is simply betting that a worse possible investment is possible so I know 100% for sure that gold is worth more than nothing so the idea on betting against the very concept of the theoretical value of nothing being worth less is an interesting argument on the basis that I do not consider it possible. To the extent I consider cash zero clearly it can only go up but you cannot claim something is worth less than zero, you are merely speculating that something is more worthless than fiat currency at zero percent on the basis that zero will go to zero. I do admit gold might go up on the basis that it is worth more than zero but given my definition of cash as zero you are essentially claiming that the guarantee of zero returns in any asset is worth more than zero which it obviously is so please understand if you wish to make a speculative investment on something being considered worth less than zero other than cash which has other uses, you are going to get horribly burnt at some stage. Because the guarantee of zero is made by cash and if you wish to argue that gold is better value against cash, you have to assume gold is the very derivation of zero which it isnt, as it has worth something.

So please if anyone wishes to claim that something is worth less than cash they are obviously right but when we all come to swap assets the assumption that every investment you make is worth more than cash while clearly not being true is better than any assumption that anything is worth less than cash which is simply an assumption that it will be perceived as worth more when cash as the worst possible investment I can think of other than gold. Given that gold cannot be worth less than cash inherently is the assumption that it might be worth more and go up is a very good one as a speculative idea but very brave. So please understand that gregb's guarantee that cash is worth zero eventually is assuming that gold is actually worth less than zero which we absolutely 100% know it isnt.

The speculative idea that gold is essentially worth a guarantee of zero on the basis that it is not worth zero might be a very good one but against fiat cash assumption of zero it certainly isnt a theoretical investment concept So please accept your guarantee that zero will go zero is simply not a good assumption against zero. The assumption that risk free rate of zero on cash is the worst theoretical investment given there is no yield and risk. So my assumption that cash is worth zero will be a bad one because it is the worst, I know and I would never bet against the possibility of someone thinking that gold will be a better investment because I know for certainty he is investing in the very concept of creating a new zero simply by finding something that anyone who thinks is worth zero like Sokal thinks that I do is really not betting against fiat currency but for it. Please understand that zero returns on zero worth of cash is very speculative to bet against as zero, so it is far more likely that gold is the worst investment than the best because it requires an assumption that the very essence of zero is worth less than zero which simply is not possible as an investment argument.

So as I regard fiat cash risk free at zero percent as the worst possible investment the idea that I would invest in anything that you consider more is setting the bar incredibly low. As I consider gold potentially the most ridiculous overvalued, value of zero which would be impossible, it is very possible but is incredibly speculative because you are already assuming that the risk of a risk free rate of zero with inherent worth of zero is more than zero which it is but not theoretically possible. And I do admit it might work but if you think anyone is going to rationally invest against the theoretical value of zero going up ultimately it will go wrong.

So please understand Sokal my assumption is that fiat currency yielding risk free is zero so if you genuinely believe that I think gold is worth zero you are so mistaken because I believe that gold is the most expensive asset in the world due to an argument that you believe the guarantee of zero is worth zero against the theoretical value of zero. As everything is worth anything against the theoretical value of zero than the price of gold is essentially worth infinity and your assumption that gold will go up on the guarantee of being worth less is simply a statement that is totally untrue and merely an admission that gold is worth more than fiat which if anyone disagrees with as a concept of gold ever being worth zero theoretically they are totally wrong.

And this is a very important concept I have the very definition of the theoretical price of zero being valued at zero and you have the very definition of theory of something actually being worth less as your speculation. So please accept that cash is my very definition of zero and so I will not buy your asset on your theory that a guarantee of zero is worth more than my theoretical valuation of zero because the idea of gold being priced at zero is ridiculous and your concept that gold is worth less than zero is ridiculous. So please understand just because I assume that fiat is worth zero and you think the guarantee of being worth is zero is worth more than zero my downside is zero while your upside is infinity.

So if anyone wants to argue that gold isnt a very speculative investment you are simply arguing that the theoretical value of zero makes the potential guarantee of zero a better investment on the basis that the theoretical of zero is worthless while the guaranteed value of zero is worth more. So please, just because I think gold is potentially the worst investment you could possibly make does not mean I think it is worth less. It is a very speculative investment on the basis that you have thought of a more worth less investment than the theoretical most valueless one while all you are is betting potentially the worst investment is worth more than the worst which if anyone thinks is an investment idea other than your concept of zero being actually worthless than my concept of zero just seems so incredibly optimistic. And I guarantee that at the end of the day it will go very wrong even if it goes incredibly right imbetween.

And just because I will not invest in gold does not mean it wont go up or is worth less. But it seems just such a stupid concept given that the theoretical value of zero is established I suspect it isnt worth zero while your concept is that by guaranteeing a theoretical concept of zero your asset will go up because it is worth less than zero. And once I am clear in my mind what I consider the theoretical value of zero then everything is basically worth infinity so just because you think you are cleverer than me in creating a more worthless potential asset than me, I already have an asset that is theoretically worthless and I value at zero, so your concept having a potentially more worthless asset than the very concept of why you invested in it in the first place. So I promise you that as a speculation you idea that something can go up because of the guarantee of being worth more than the theoretical value of nothing is simply a totally crazy assumption.

And I fully accept your underlying theory that a risk weighted guarantee of absolutely nothing is a better concept of having an a risk asset worth less than the risk free rate of nothing. So you do have a very good concept, which I would never bet against at any price on the basis that it has a theoretical perceived value of infinity.

Edited July 28, 2010 by Abrak

[sokal]

Back to where is gold going then?

Chok Dee !!

Down it would appear.

That looks deflationary too.

Everyone in the gold community knows that July is the lowest month of the year for gold. Casey Research has been saying it all year, I have been loading up.

[sokal]

Sokal I absolutely do not value gold at nothing. But you have to understand we are all just swapping assets here. If you see two different fundamental values of the risk free rate of 0 it is either gold or the US$ risk free rate of return which I would perfectly agree is very fair. Unless you are confident that gold will become the currency you have admit that your assumption that gold will go up based on the value of cash does not mean a real appreciation of the price of gold. Its guarantee and absolute appreciation. One 100% agree with people who argue that risk free rate of return in say the dollar significantly negative and if I priced everything off the value of gold being the risk free rate of zero, it does not lead me to buy gold at this point.

I agree with FOFOA on all of this. Gold is a durable wealth reserve asset that is also a currency. That is allot different then just a circulating currency that every working man makes and spends to feed his family. Also, other wealth reserve assets are not as liquid or as portable and divisible as gold. Try trading in real estate, fine art, antiques,collectibles,gemstones or rare classic cars in for a circulating currency at your local bank and see what they will tell you.

One of the points you should consider is what happens at the end of the day. Obvious gold will have gone up but everything will be worth absolutely more. And please understand this basing your returns on a -3% return on the risk free rate of the dollar that is defined as 100 and you believe will go to zero does not inherently lead you to buy an asset that is guaranteed in terms or actual yield to produce less. You are the only asset that in cashflow terms actually produces a return less than the dollar.

How could anything be worth absolutely more ? That would mean gold didn't go up. Gold is the only currency in the world that can only be diluted any more then the speed that they can discover it and mine it out of the ground. Again, your dollars have no yield either unless you lend them out.

Clearly someone like me that sees no particular store in value in the US$ does not have any on that basis. I do have some as cash. If we are strictly talking value we have to consider the value of gold. It is based on the perceived value of nothing but nobody buys anything as a store of value of nothing (although you can clearly say they do). If you see gold and cash as the very different but inherent rate of nothing. Given the defined value of nothing is the risk free rate actual valuation of gold may or may not lead to you to buy it. It is the perception of the asset value of zero. Given that we both know that the absolute guaranteed return on gold is zero you have to admit on a fundamental basis we both know that the nominal value of cash is higher. This is important because we can both value assets on both same basis. And this creates an absolute certainty your certainty we both know that cash and gold are worth nothing is a view that cash is not an assumption of nothing while you think that my value of gold is nothing. If I want to invest in nothing gold is clearly better value in that it is absolutely guaranteed to generate no yields on better fixed fundamentals.

You didn't respond to my last answer on this. Nobody ever decided what the purchasing power of a unit of paper currency should be. It is evolutionary, the only thing that gives a dollar value is what you remember it purchased the day before.

Gold evolved through the barter system as the most marketable good. The US dollar is not the best of all the flawed fiat currencies like everyone in the media says, its just the only fiat currency that happened to be backed by gold at one point in time. If would have never gained its reputation if it was never backed by gold. If that was not true then why didn't the continental become the world reserve currency ?

[sokal]

You are unfair Abrak. Who will Sokal ask to translate what you wrote ?

"Annyling" that would make a good ladyboy nick name. Are you a ladyboy ?

[AnnyLing]

You are unfair Abrak. Who will Sokal ask to translate what you wrote ?

"Annyling" that would make a good ladyboy nick name. Are you a ladyboy ?

I am the continental currency you mentioned above. Which continent did you mean ? Antarctica ?

[churchill]

Is the USD about to restart its downward path ( and gold its upward path ) as

Moody’s Analyst US Review Seen If Debt Forecast Realised ( Perhaps they have taken the hint from the new Chinese ratings agency !)

http://www.forexlive.com/122166/all/dj-moodys-analyst-us-review-seen-if-debt-forecast-realised?utm_source=twitterfeed&utm_medium=twitter

[churchill]

Gold is in a bubble imo and will explode higher - For how long and how high i think depends on the USD and outcome of this phase in the economic cycle / Until there is some certainty many including pension funds will invest in gold as a hedge- and until anyone can see light through the trees I think gold will go higher .

George Soros’ gold ownership is a classic hedge

http://www.commodityonline.com/news/George-Soros’-gold-ownership-is-a-classic-hedge-30426-3-1.html

[edgarfriendly]

so at the end of july, everyone knows that july is a low month...

cheers coq fags!

ef

[Abrak]

Please I understand the concept of gold as a hedge against the potential value to different perceived values of risk free rates of return on very fixed fundamentals of cash make it very derivation of the risk free rate of return the basis that we all know it has risk and absolutely no worth. As an investment it is not a concept other than that risk free rate, so essentially it is the very derivation of value of zero but you say discount the value. Still you need cash. Given that I know its returns are fixed at zero, it is actually worth, I know I have to put a discount rate of at least 10% which way too low for the perception of certainty against know returns.

Gold is essentially the very definition of uncertainty and speculation against that in I literally have no idea what it will be worth although do know that it will reflect the absolute uncertainty I have cash giving x% while its worth is zero. While gold is absolutely guaranteed to have know returns apart from its perceived value when I sell it which is inherently much much higher than any price it could possibly be worth as a store of value. I know if anyone values it on a risk of zero %, zero returns and zero risk it would be worth nothing as an investment but would at least give me price based on perceived price of two different zero risk assets. It actually reflects the difference between my perceived rate of returns on both risk free assets. But please accept that they reflect to a measure the difference between my perceived risk rates and the concept that fiat is known to be worth something while its inherent worth is known to absolutely nothing at all as an investment.

So please accept the certainty of anyone hold cash at 0% risk free is not an investment concept apart from the absolute certainty that we will get 0% and if we maybe but I can value assets with returns against it. And gold is the assumption that is a reflection of my uncertainty of the certainty in cash. So it relfects the difference between your known absolute value of zero, your perceived value and your perceived return cash zero your inherent knowledge that it is fundamentally zero but is always assumed to be a valuation of that anyone has to base a degree of very high certainty on. It is the very definition of zero and a worth of zero and gold is the very certainty that on the guarantee of zero it is will always have a price. So gold is the very essence of speculation. It is guaranteed to yield zero, will yield zero but will be very volatile against certainty of the uncertainty of cash. Which is why say China is buying it because to the extent valued its is because the very definition of zero is the risk free, risk free rate of return of the Central reserve currency and while the faith in fiat was based on gold being zero, zero it is now based on zero, zero and zero. So the idea that gold could possibly be based much on the basis that it risky free is very much based on the value of the of the values of the uncertainty your difference. Which of course is why it is volatile while fairly constant over time.

To the extent the US$ to the extent the Central Reserve currency the absolute worth of cash is absolute nothing based on a certainty of nothing and gold reflects the uncertainty of nothing being risk free but a certainty of return of something and anyone who believes that the worth of zero returns based on uncertainty must realize that the uncertain returns of perceived returns will have a very high based on the fact that it has a value. That their is a lot of absolute value as a store of worth based on certainty and uncertainty of cash and gold very little certainty of the value of either.

The risk free rate of absolutely nothing is the very derivation of nothing and the perceived future value of nothing which is nothing to the extent a currency was somehow based on the very non volatility of receiving nothing its very value is only based on the value that a rate of return that will be considered risk free the certainty that gold can store value when everyone knows it doesnt produce any value is absolutely certainty, so the risk free rate of return will inherently be risk free and any wealth attributed to it is inherently a risk free option to rate less risky returns on returns on the riskiest asset on earth that is defined as risk free. The value in cash is that it is totally worthless and the value in gold is that is 100% sure that know it is worthless but cannot be debased.

I hope you understand that store value is inherently worth the cost and risk of owning it. To the extent it is risk free and cannot be debased will make it infinitely less valuable than cash because its very value will inherently be because it will be a very good store of the value of no risk. The value that it stores is inherently not value. Because the value will be the cost rather than the certainty of no risk. Inherently gold as very little cost in terms of future perception of its cost. It is value will be pretty much guaranteed in the risks will not be high. Its value as an actual store of value will be the costs of not creating any which in my view is would be the risk free rate of return on a fairly fixed valuation based the fact that it doesnt create value. So if you value the perception of getting nothing but the risk free rate of return that will be its store of value.

So please understand how the only store of value in gold will be in that fact that it has very little risk so as actual value it really is just the cost of nothing which is worth something. So please be certain that it is very valuable now because you see as the reflection of the very high risk of holding fiat which as you believe is worth zero is very high.

So please understand that I now vaguely get the concept. So just because you guys never explain things and have no desire too. As I see things, while I am looking at things in one way correct I have also missed the point. The fact that Sokal has 100% faith in gold is how the reserve currency was created. The fact that inherently their two different risk rates means that although neither is actually a store of any value they are perceived as one. The risk in holding one is essentially equal to the risk of not holding one. So essentially if I attribute minus 10% to holding cash then clear I should have a risk weighting of not holding any gold.

And I clear do not as it hasnt been volatile. While attributing absolute value of any sort to any one perception the concept of risk of riskness will just get increasingly volatile which why you guys know that China has to buy anyway as a cost of it not holding it. And the fact that owning cash has significant is valued at -10% and you clearly dont hold gold which therefore should have a risk weighting at say 50% clearly indicates that although there is massive potential risk in gold the differential can only be reflected in extreme volatility.

BTW the risk free rate of return of perceived risk is the riak free rate of the central reserve currency the fact that it was based on fiat could potentially lead to a total faith in gold which would indicate it was virtually totally worthless. And please understand Sokal the very faith you put in gold is I believe based on the concept of two different risk rates. Just because fiat was create by gold doesnt mean their will be a new one because the value reflects risk of one against the other. Given that the gold price indicates a massive belief in gold the volatility of neither does not indicate the inherent volatility of prices of the lack of faith in one or other. Neither has China realized that its holdings in bonds are clearly generating negative return while its holdings in gold's return are not high enough to indicate the risk of not holding it. And the fact that that USA is the central reserve currency will never change if it keeps a risk weighted value of gold. And so you cant stop buying our useless bonds because a lack of faith in our currency will still be a clear indication that yours is worth even less. And we have to keep on leveraging fiat so that any faith in it is maintained until it is perceived not to at which point in time fiat will be worth zero and gold will be zero. So obviously until something shows a belief the absolute value of each merely reflects risk and while there is massive potential risk in gold and absolutely negative risk in cash given their is tow different risk rates the very value of gold reflects that fact that the perceived is not in its value.

So arguably while I pointed out that I am absolutely certain that the risk rate in any fiat must be be too high and I am absolutely certain that holding gold is a very risky concept I am merely stating that as I do not know the perceived concepts your faith in the value of cash have a -10% weighting clearly indicates that when you say noone can hold it as a risk asset you clear havent put enough risk in not holding it. Because while neither is actually value you will see we have the potential to be. And as their is infinitely more risk in not holding one and 100% risk in not holding the other all the value deemed to perceived lost in one must be reflected in a in the other. So all you are saying is the knowledge that the risk free rate gold is not reflected in the fact you are 90% certain that gold will go up. So the fact that one is the riskiest investment and the other is the worst risk free investment is actually a statement of the bleeding obvious and is based on the fact that by derivation they are. And as we are so risky the value as a store of holding both must be reflected at its peak in the risk weighted returns of one or other being reflected in one or other and must be equivalent to the value infinitely greater than not holding either. So gold does not reflect a store of value but the risk of not holding which as you can guarantee is way too high clearly reflects your perception of risk being totally wrong. Because the fact that there is so much risk in gold is simply a risk free relationship of two different concepts of risk free and the fact that noone can no neither we know we are the combined risk free rates of not holding both and we know the combined risk free rates of not holding both will reach a point that our valuation indicates more than not holding gold rather than any perception of any risk you think is holding it.

So theoretically, if you have absolute certainty that one is the risk free rate of one and know for sure the other is a the riskiest investment you can make you are merely suggesting that even if you put 50% risk weighting on our returns you know that you know for absolute certainty that you absolutely cannot have any certainty of the golds risk weighting and you also know that you need two only risk weight riskiness.

And at some point you have to own so little of one to terms of risk that you can pretty much guarantee that the value one you are assuming you are 90% certain that they reflect a combined rate infinitely than holding the other because the combined differential risk weighting should a value of risk massively higher than the actual risk rather than the actual value reflecting anything like your perceived value of the risk free rate of nothing. I do think you know that I have stated that I have never understood gold and why it is clearly such a speculative investment and so volatile. So as theory this makes sense. In that the absolute value of two risk free rates of return on to different concepts of a risk return clear must indicate the risk free perceived value of owning either as a concept. As neither is actually a store of value but a reflection of the perceived risk until you can reconcile the fact that they clearly do not reflect that you clearly cannot reconcile the inherent value and therefore you can workout the percieved amount you should own in each to reconcile some sort of reflection of the fact that owning one the rate of gold will reflect a risk that it is possible to say something like it is inconcei. So while the risk of owning are so inconceivable that they dont reflect a risk rate of any sort it is because the value of gold is the very definition of the risk of not owning a worthless asset that will always be priced at something and is inherently worth more than something. Which inherently a risk rate of infinity at which point you would understand the concept of inconceivable against zero.

[Abrak]

Please I understand the concept of gold as a hedge against the potential value to different perceived values of risk free rates of return on very fixed fundamentals of cash make it very derivation of the risk free rate of return the basis that we all know it has risk and absolutely no worth. As an investment it is not a concept other than that risk free rate, so essentially it is the very derivation of value of zero but you say discount the value. Still you need cash. Given that I know its returns are fixed at zero, it is actually worth, I know I have to put a discount rate of at least 10% which way too low for the perception of certainty against know returns.

Gold is essentially the very definition of uncertainty and speculation against that in I literally have no idea what it will be worth although do know that it will reflect the absolute uncertainty I have cash giving x% while its worth is zero. While gold is absolutely guaranteed to have know returns apart from its perceived value when I sell it which is inherently much much higher than any price it could possibly be worth as a store of value. I know if anyone values it on a risk of zero %, zero returns and zero risk it would be worth nothing as an investment but would at least give me price based on perceived price of two different zero risk assets. It actually reflects the difference between my perceived rate of returns on both risk free assets. But please accept that they reflect to a measure the difference between my perceived risk rates and the concept that fiat is known to be worth something while its inherent worth is known to absolutely nothing at all as an investment.

So please accept the certainty of anyone hold cash at 0% risk free is not an investment concept apart from the absolute certainty that we will get 0% and if we maybe but I can value assets with returns against it. And gold is the assumption that is a reflection of my uncertainty of the certainty in cash. So it relfects the difference between your known absolute value of zero, your perceived value and your perceived return cash zero your inherent knowledge that it is fundamentally zero but is always assumed to be a valuation of that anyone has to base a degree of very high certainty on. It is the very definition of zero and a worth of zero and gold is the very certainty that on the guarantee of zero it is will always have a price. So gold is the very essence of speculation. It is guaranteed to yield zero, will yield zero but will be very volatile against certainty of the uncertainty of cash. Which is why say China is buying it because to the extent valued its is because the very definition of zero is the risk free, risk free rate of return of the Central reserve currency and while the faith in fiat was based on gold being zero, zero it is now based on zero, zero and zero. So the idea that gold could possibly be based much on the basis that it risky free is very much based on the value of the of the values of the uncertainty your difference. Which of course is why it is volatile while fairly constant over time.

To the extent the US$ to the extent the Central Reserve currency the absolute worth of cash is absolute nothing based on a certainty of nothing and gold reflects the uncertainty of nothing being risk free but a certainty of return of something and anyone who believes that the worth of zero returns based on uncertainty must realize that the uncertain returns of perceived returns will have a very high based on the fact that it has a value. That their is a lot of absolute value as a store of worth based on certainty and uncertainty of cash and gold very little certainty of the value of either.

The risk free rate of absolutely nothing is the very derivation of nothing and the perceived future value of nothing which is nothing to the extent a currency was somehow based on the very non volatility of receiving nothing its very value is only based on the value that a rate of return that will be considered risk free the certainty that gold can store value when everyone knows it doesnt produce any value is absolutely certainty, so the risk free rate of return will inherently be risk free and any wealth attributed to it is inherently a risk free option to rate less risky returns on returns on the riskiest asset on earth that is defined as risk free. The value in cash is that it is totally worthless and the value in gold is that is 100% sure that know it is worthless but cannot be debased.

I hope you understand that store value is inherently worth the cost and risk of owning it. To the extent it is risk free and cannot be debased will make it infinitely less valuable than cash because its very value will inherently be because it will be a very good store of the value of no risk. The value that it stores is inherently not value. Because the value will be the cost rather than the certainty of no risk. Inherently gold as very little cost in terms of future perception of its cost. It is value will be pretty much guaranteed in the risks will not be high. Its value as an actual store of value will be the costs of not creating any which in my view is would be the risk free rate of return on a fairly fixed valuation based the fact that it doesnt create value. So if you value the perception of getting nothing but the risk free rate of return that will be its store of value.

So please understand how the only store of value in gold will be in that fact that it has very little risk so as actual value it really is just the cost of nothing which is worth something. So please be certain that it is very valuable now because you see as the reflection of the very high risk of holding fiat which as you believe is worth zero is very high.

So please understand that I now vaguely get the concept. So just because you guys never explain things and have no desire too. As I see things, while I am looking at things in one way correct I have also missed the point. The fact that Sokal has 100% faith in gold is how the reserve currency was created. The fact that inherently their two different risk rates means that although neither is actually a store of any value they are perceived as one. The risk in holding one is essentially equal to the risk of not holding one. So essentially if I attribute minus 10% to holding cash then clear I should have a risk weighting of not holding any gold.

And I clear do not as it hasnt been volatile. While attributing absolute value of any sort to any one perception the concept of risk of riskness will just get increasingly volatile which why you guys know that China has to buy anyway as a cost of it not holding it. And the fact that owning cash has significant is valued at -10% and you clearly dont hold gold which therefore should have a risk weighting at say 50% clearly indicates that although there is massive potential risk in gold the differential can only be reflected in extreme volatility.

BTW the risk free rate of return of perceived risk is the riak free rate of the central reserve currency the fact that it was based on fiat could potentially lead to a total faith in gold which would indicate it was virtually totally worthless. And please understand Sokal the very faith you put in gold is I believe based on the concept of two different risk rates. Just because fiat was create by gold doesnt mean their will be a new one because the value reflects risk of one against the other. Given that the gold price indicates a massive belief in gold the volatility of neither does not indicate the inherent volatility of prices of the lack of faith in one or other. Neither has China realized that its holdings in bonds are clearly generating negative return while its holdings in gold's return are not high enough to indicate the risk of not holding it. And the fact that that USA is the central reserve currency will never change if it keeps a risk weighted value of gold. And so you cant stop buying our useless bonds because a lack of faith in our currency will still be a clear indication that yours is worth even less. And we have to keep on leveraging fiat so that any faith in it is maintained until it is perceived not to at which point in time fiat will be worth zero and gold will be zero. So obviously until something shows a belief the absolute value of each merely reflects risk and while there is massive potential risk in gold and absolutely negative risk in cash given their is tow different risk rates the very value of gold reflects that fact that the perceived is not in its value.

So arguably while I pointed out that I am absolutely certain that the risk rate in any fiat must be be too high and I am absolutely certain that holding gold is a very risky concept I am merely stating that as I do not know the perceived concepts your faith in the value of cash have a -10% weighting clearly indicates that when you say noone can hold it as a risk asset you clear havent put enough risk in not holding it. Because while neither is actually value you will see we have the potential to be. And as their is infinitely more risk in not holding one and 100% risk in not holding the other all the value deemed to perceived lost in one must be reflected in a in the other. So all you are saying is the knowledge that the risk free rate gold is not reflected in the fact you are 90% certain that gold will go up. So the fact that one is the riskiest investment and the other is the worst risk free investment is actually a statement of the bleeding obvious and is based on the fact that by derivation they are. And as we are so risky the value as a store of holding both must be reflected at its peak in the risk weighted returns of one or other being reflected in one or other and must be equivalent to the value infinitely greater than not holding either. So gold does not reflect a store of value but the risk of not holding which as you can guarantee is way too high clearly reflects your perception of risk being totally wrong. Because the fact that there is so much risk in gold is simply a risk free relationship of two different concepts of risk free and the fact that noone can no neither we know we are the combined risk free rates of not holding both and we know the combined risk free rates of not holding both will reach a point that our valuation indicates more than not holding gold rather than any perception of any risk you think is holding it.

So theoretically, if you have absolute certainty that one is the risk free rate of one and know for sure the other is a the riskiest investment you can make you are merely suggesting that even if you put 50% risk weighting on our returns you know that you know for absolute certainty that you absolutely cannot have any certainty of the golds risk weighting and you also know that you need two only risk weight riskiness.

And at some point you have to own so little of one to terms of risk that you can pretty much guarantee that the value one you are assuming you are 90% certain that they reflect a combined rate infinitely than holding the other because the combined differential risk weighting should a value of risk massively higher than the actual risk rather than the actual value reflecting anything like your perceived value of the risk free rate of nothing. I do think you know that I have stated that I have never understood gold and why it is clearly such a speculative investment and so volatile. So as theory this makes sense. In that the absolute value of two risk free rates of return on to different concepts of a risk return clear must indicate the risk free perceived value of owning either as a concept. As neither is actually a store of value but a reflection of the perceived risk until you can reconcile the fact that they clearly do not reflect that you clearly cannot reconcile the inherent value and therefore you can workout the percieved amount you should own in each to reconcile some sort of reflection of the fact that owning one the rate of gold will reflect a risk that it is possible to say something like it is inconcei. So while the risk of owning are so inconceivable that they dont reflect a risk rate of any sort it is because the value of gold is the very definition of the risk of not owning a worthless asset that will always be priced at something and is inherently worth more than something. Which inherently a risk rate of infinity at which point you would understand the concept of inconceivable against zero.

So please be clear just because I know the value is an inconcievable value you would put on gold. I can reconcile its inherent volatility. And Naam will understand why people think of it as a good investment rather than a bad one and why people think it is bad cash while others think it is good cash and I can explain why although you can never predict one you simply dont need to own say 50% of one and 50% of another to guarantee better return on both and that certainty of good value in gold doesnt end up in years of disappointment because it cannot.

[flying]

This poor thread has become a soapbox blog Harmonica is that you?

[AlexLah]

Yep Abrak now reply to his own post.

Abrak can you please shut off your speech to text software and just reply in a few lines?

We already know you not like Gold, thats it, so please stop your lengthly bla bla.

[SiamRose]

Abrak you sure do like the sound of your own keyboard.

[flying]

so at the end of july, everyone knows that july is a low month...

cheers coq fags!

ef

Actually the cycle types are calling for the 3rd week of August as the lows for both silver & gold...maybe something to watch for those who wanted to re-enter either the physical or paper markets?

While I do not base any buying or selling of metals on charts/cycles/talking heads....

I do enjoy reading them & watching. Sort of like horoscopes...I like to read those a day late & see if my day was anything like predicted

PS: just curious but.... cheers coq fags!??

I understand the cheers I guess & I think fag is a smoke but what is coq

Edited July 30, 2010 by flying

[churchill]

BIS gold swaps mystery is unravelled

http://www.ft.com/cms/s/0/3e659ed0-9b39-11df-baaf-00144feab49a.html?ftcamp=rss

[AnnyLing]

BIS gold swaps mystery is unravelled

http://www.ft.com/cms/s/0/3e659ed0-9b39-11df-baaf-00144feab49a.html?ftcamp=rss

No conspiracy ? How boring !

[churchill]

Who knows what the future holds but ...

Gold best performing asset class over 6 months, 1, 3, 5 and 10 years

Over the past ten years gold's annual return has been 14.3% in sterling terms, compared with 5.9% pa from bonds, 1.6% in cash and just 1.2% in real estate. Equity returns were negative

http://www.mineweb.com/mineweb/view/mineweb/en/page33?oid=108861&sn=Detail&pid=102055

Edited July 30, 2010 by churchill

[flying]

Gold Promises and Currency Lies

[churchill]

Could we see a crash in gold prices when those holders of paper gold realise that the same ton of gold has been resold many times and that they only have a promise from a bank , which if all suddenly demand their gold could not find it - Therefore could we see panic sales of paper gold ? but at the same time with physical gold in short supply could the price of physical gold and therefore gold miners shoot up ?

As with the latest BIS Gold Swap where it seems commercial banks lent out their customers gold !

There seem to be shortages in the gold and silver markets with reports of JPM covering many silver shorts -

and see this

Looking at the silver bid-ask spread

While all eyes have been focused on gold perhaps the market has overlooked some strange goings-on in the silver market.

We noted on Friday, for example, how the forward curve in gold flipped into backwardation at the same time as silver went into a steep contango.

And given that one of the first to warn about such backwardated goings on was goldbug extraordinaire Antal E. Fekete, we decided it was probably worth following up the professors latest market challenge.

The task comes in response to his observation that via the BIS gold swap, its quite clear as FT Alphaville has noted already that gold may be bidding for dollars, rather than the other way around.

As he outlines with reference to the FOFOA blog :

In the meantime, here is a hint to whet your appetite. Fofoa should refine his indicator GOFO as follows. GOFO = LIBOR GLBR, where GLBR = gold lease bid rate, i.e., the rate which bidders are willing to pay for leased gold to the bullion bank. It should be somewhat greater than GOFO as it has been defined up to now. (Why?) It is true that GLBR is not publicly quoted, but a little bit of sleuthing should be able to produce a proxy. Then GOFO will tell you how profitable the gold carry trade is, or is getting.

The gold carry trade, by the way, can be seen as very similar to that of the contango and curve flattener trades.

Looking at the Bloomberg gold and forward data, we note that while bid-ask spreads do widen the further out you go on the gold curve, its nothing beyond what might naturally be expected due to longer-dated illiquidity.

But whats really interesting are the bid-ask patterns in silver which have changed measurably even in the last few days.

This for example was how the spread looked on Friday.

First the outright bid-ask:

continued .. http://ftalphaville.ft.com/blog/2010/08/02/303546/looking-at-the-silver-bid-ask-spread/

Edited August 2, 2010 by churchill

[AnnyLing]

but at the same time with physical gold in short supply could the price of physical gold and therefore gold miners shoot up ?

Physical gold is surely in short supply. That is why the price shot up from 1,265 to presently 1,177 Dollars an ounce. One should also take into consideration that the Dollar weakened against virtually every currency. We goldbugs are therefore getting ritchier with every day that passes. My husband says i am wrong. Could he be right ?

[flying]

Physical gold is surely in short supply. That is why the price shot up from 1,265 to presently 1,177 Dollars an ounce. One should also take into consideration that the Dollar weakened against virtually every currency. We goldbugs are therefore getting ritchier with every day that passes. My husband says i am wrong. Could he be right ?

If your hands are that weak then you are surely in the wrong place & so I agree with your husband

[churchill]

but at the same time with physical gold in short supply could the price of physical gold and therefore gold miners shoot up ?

Physical gold is surely in short supply. That is why the price shot up from 1,265 to presently 1,177 Dollars an ounce. One should also take into consideration that the Dollar weakened against virtually every currency. We goldbugs are therefore getting ritchier with every day that passes. My husband says i am wrong. Could he be right ?

What I meant better explained here

Monday, August 2, 2010

Relativity: What is Physical Gold REALLY Worth?

http://fofoa.blogspot.com/

[AnnyLing]

Physical gold is surely in short supply. That is why the price shot up from 1,265 to presently 1,177 Dollars an ounce. One should also take into consideration that the Dollar weakened against virtually every currency. We goldbugs are therefore getting ritchier with every day that passes. My husband says i am wrong. Could he be right ?

If your hands are that weak then you are surely in the wrong place & so I agree with your husband

Please explain why you think my hands are weak.

[AnnyLing]

but at the same time with physical gold in short supply could the price of physical gold and therefore gold miners shoot up ?

Physical gold is surely in short supply. That is why the price shot up from 1,265 to presently 1,177 Dollars an ounce. One should also take into consideration that the Dollar weakened against virtually every currency. We goldbugs are therefore getting ritchier with every day that passes. My husband says i am wrong. Could he be right ?

What I meant better explained here

Monday, August 2, 2010

Relativity: What is Physical Gold REALLY Worth?

http://fofoa.blogspot.com/

I googled for a definition of "really worth" as well as "real worth". No result.

[flying]

Physical gold is surely in short supply. That is why the price shot up from 1,265 to presently 1,177 Dollars an ounce. One should also take into consideration that the Dollar weakened against virtually every currency. We goldbugs are therefore getting ritchier with every day that passes. My husband says i am wrong. Could he be right ?

If your hands are that weak then you are surely in the wrong place & so I agree with your husband

Please explain why you think my hands are weak.

Kor Tort if I misread your post.... But your concern over the price change of gold

Edited August 3, 2010 by flying

[churchill]

A few of today's stories

China vows to develop gold market as demand rises

http://malaysia.news.yahoo.com/rtrs/20100803/tbs-china-economy-gold-21231dd.html

Thailand launches 10-baht weight gold futures

http://community.nasdaq.com/news/2010-08/thailand-launches-10baht-weight-gold-futures.aspx?storyid=30990

The gold market and the BIS

http://www.financeandeconomics.org/Articles%20archive/2010.08.02%20GoldBIS.htm

Time to Accumulate metals and mining stocks-UBS

http://www.mineweb.co.za/mineweb/view/mineweb/en/page67?oid=108588&sn=Detail&pid=102055

and

[churchill]

Continuing the China Story

Beware the Dragon's gold teeth

China is putting itself in a position where dominance of the gold market, of which it is capable, could lead to it exerting global financial hegemony

http://www.mineweb.com/mineweb/view/mineweb/en/page89154?oid=109182&sn=Detail&pid=89154

and

China Plans to Help Bullion Producers Expand Overseas, Central Bank Says

http://www.bloomberg.com/news/2010-08-03/china-plans-to-help-bullion-producers-expand-overseas-central-bank-says.html

[cloudhopper]

China is putting itself in a position where dominance of the gold market, of which it is capable, could lead to it exerting global financial hegemony

China is simply not capable of "dominating the gold market".

Or global financial hegemony.

Please. The two most wildly irresponsible conclusions I've seen on this thread.

China was capable however of blowing a humongous RE bubble which is about to explode in their commie faces. Maybe they can try to unload their 2 tril in USTs and find out what they're really worth...

[churchill]

China is putting itself in a position where dominance of the gold market, of which it is capable, could lead to it exerting global financial hegemony

China is simply not capable of "dominating the gold market".

Or global financial hegemony.

Please. The two most wildly irresponsible conclusions I've seen on this thread.

China was capable however of blowing a humongous RE bubble which is about to explode in their commie faces. Maybe they can try to unload their 2 tril in USTs and find out what they're really worth...

Did you mean the US re Bubble ? IMF: U.S. Real Estate Sectors Could Bring Banking Crisis 2.0

http://www.zerohedge.com/article/imf-us-real-estate-sectors-could-bring-banking-crisis-20

Yesterday's Thinking: China Is Going To Crash. Today's Thinking: China Is Handling Its Problems

Read more: http://www.businessinsider.com/china-tightens-mortgage-rules-2010-8#ixzz0vjARJCkK

'humongous RE bubble which is about to explode in their commie faces. Maybe they can try to unload their 2 tril in USTs and find out what they're really worth...' Nice !

don't tempt fate ! Treasuries Lack Safety, Liquidity for China, Yu Yongding Says http://www.blogcatalog.com/blog/eric-de-groots-insights

China unveils plan to further develop gold market

http://english.people.com.cn/90001/90778/90862/7094426.html

Forget the US. China is now your stock market leader.

Citi analysts Geoffrey Dennis and Jason Press have just declared it so:

China is the biggest emerging market in the world, currently accounting for 18.6% of the MSCI GEMs index. We have noticed how, since the end of the last bull market in 2007, the Chinese market has often seemed to reach an inflexion point before other leading global market indices. As equity markets should act as a leading indicator of broader economic growth trends, it seems, therefore, that the Chinese equity market has recently become ‘the leading indicator of the leading indicators’. Given that the local Shanghai Composite index and MSCI China have both rebounded by 13-15% from their recent lows and our China strategist, Minggao Shen, has just turned more bullish on the market1, these events are a positive mix for global emerging markets as a whole. This is, therefore, a good time to consider the Chinese market’s role as a signaling mechanism for GEMs as a whole.

http://ftalphaville.ft.com/blog/2010/08/05/307566/following-the-great-stock-market-leader-china/