Where Is Gold Going In This Market

[Naam]

According to Islamic law, the dinar coin is 4.25 grams of gold, while the dirham is 3grams of pure silver.

= only one of the zillion bullshite claims in the "report" that Churchill quoted.

But it is in the Qu'ran that paper money is 'haram' ie forbidden by law, and true Islamic monetary system should be on physical backed currency (not only PM's but thats the interpretation)..

based on my knowledge of the القرآن i claim that there is no sura like this! anyway, paper money did not exist when it was written, id est there can't be any interpretations.

I am guessing but I suspect it is refering to the fact that payment of interest on money is Haram. Obviously 'paper money' suffers from this problem while PM's are freed from this evil burden. I am oversimplifying because you can get a return - as in a Sukuk - but it cannot be fixed interest payments.

until the mid 80s most islamic scholars agreed that the commandment "no riba" referred to "usury" and that "fa'eda" (fair interest) is not against any commandment. but the fundamentalist hardliners won the case and now we have the window dressing with "suquq".

actually debit interest was always charged and credit interest always paid. it was not called interest but "fees" or "commission". nevertheless you can buy bonds from all islamic states (and that includes Iran as well as Saudi Arabia) which pay fixed interest. suquqs are nothing but lukewarm islamic farts.

[churchill]

Gold Through the Ages—Civilization’s Love Affair with the Yellow Metal

http://www.usfunds.com/interactive/gold-through-the-ages/

[Abrak]

until the mid 80s most islamic scholars agreed that the commandment "no riba" referred to "usury" and that "fa'eda" (fair interest) is not against any commandment. but the fundamentalist hardliners won the case and now we have the window dressing with "suquq".

actually debit interest was always charged and credit interest always paid. it was not called interest but "fees" or "commission". nevertheless you can buy bonds from all islamic states (and that includes Iran as well as Saudi Arabia) which pay fixed interest. suquqs are nothing but lukewarm islamic farts.

Actually most religions certainly Christianity and judaism saw interest as a sin. I think it only became legal in England around the middle ages. 'Usury' comes from Latin and simply means 'interest' and only became considered 'excessive' after interest was legalized.

I think a financial world interest rates on deposits were fixed at 0% would be quite interesting. I guess we are already there almost. Borrowers of course get charged interest.

[cloudhopper]

Interest isn't a sin, but charging it on money created by fractional reserve loans sure is.

[churchill]

Gold looks like it wants to tests $1300 and silver is on a rocket !

Silver Climbs to 30-Year High, Beating Gold With Its 26% Advance This Year

http://www.bloomberg.com/news/2010-09-24/silver-climbs-to-30-year-high-beating-gold-with-its-26-advance-this-year.html

Silvery future

http://www.atimes.com/atimes/Global_Economy/LI25Dj01.html

[churchill]

Is the USD on a slippery slope ?

Gold futures rise to $1,300, extending run

Dollar falls vs. major rivals; euro gains 0.5% to $1.3384

http://www.marketwatch.com/story/gold-futures-climb-to-1300-an-ounce-2010-09-24?reflink=MW_news_stmp

[churchill]

Investors Are Deaf to the Screams of Gold, Cotton

'Most of us own truths too painful to confess. We drink too much. We lust inappropriately. We envy. We covet material goods, when every study shows experiences count for so much more. Confessing them, even just to ourselves in the long, dark teatime of the soul, is too distressing.

The collective subconscious of the financial markets is no different. It knows pension systems are bankrupt, water wars are coming, China will best the West, Keynesian stimulus is a surefire way to stoke inflation, gold is saying something, and the banking community remains as rapacious as it was prior to the credit crisis. Knowing and admitting isn’t the same thing.

The following paragraphs list some of the taboos that should ping our radar harder.'

continued ... http://www.bloomberg.com/news/2010-09-22/investors-are-deaf-to-screams-of-gold-cotton-commentary-by-mark-gilbert.html

[Chunky1]

The point of the gold dinar has little to nothing to do with Islamic law, that is just window dressing.

[teletiger]

Is the USD on a slippery slope ?

Haha....BOJ tried adding some grease by intervening. After an initial 100 bps pop the Yen finishes lower than when it started. How much did that cost them? Central bankers truly are a bunch of <deleted> morons.

Regards.

[flying]

Gold looks like it wants to tests $1300 and silver is on a rocket !

Silver Climbs to 30-Year High, Beating Gold With Its 26% Advance This Year

http://www.bloomberg.com/news/2010-09-24/silver-climbs-to-30-year-high-beating-gold-with-its-26-advance-this-year.html

Silvery future

Yes many times I mentally thank the dealer who drew my attention to the 77/1 gold/silver ratio back when I backed the truck up for physical silver

It has done nicely since then & never looked back.

[flying]

I never post anything bearish on gold

Not that I agree in any way but I thought the comments were fun.

edit: I should explain the comment that if....I had paper gold I may be inclined to stand aside in cash for Oct.

But I do not deal in paper gold or silver for that matter.

Long-Time Gold Bull Yves Lamoureux Says Why He's Quitting The Rally

On the flip side......albeit a PM dealer....

As the U.S. Dollar continued to weaken, Gold hit all time highs on Friday, 9/24/10 in excess of $1,300 per ounce.

Silver also hit 30-year highs during the day as the junior metal moved proportionately alongside Gold at a historically balanced relationship of 62:1 in relative value.

30 year high for silver

Edited September 24, 2010 by flying

[churchill]

FOFOA on Gold and Condoms

'At some point in the future, after the price of gold rockets upward, it will fall like a box of rocks! And right about that time you'll see more of Robert Prechter on CNBC than you ever thought was possible.'

The Shoeshine Boy

http://fofoa.blogspot.com/

[Naam]

30 year high for silver

after generating losses for 20 years (1980-2000)

[Naam]

facts not fiction

let's look at the yield of gold and silver over a period of time in which the older ones of us made money and had money left to invest. i am referring to the last three decades because i deem it nonsensical to compare the cost of a suit which a tailor in Savile Row charged during the rule of the Roman Empire and how much that suit is now.

to be fair, i do not take into consideration the 1980 bubble caused by the Hunt Brothers and Sheikh bin-Mafouz but use as a basis for my calculation 1981 (29 years). moreover, i do not take into consideration the investors who (together with their families) died of starvation because they invested all their savings in precious metals without having additional income to pay for their living expenses. the few who sold their wives and children into slavery to survive are just an exemption to prove my point.

gold: $395 then, 1295 now = average yield p.a. 4.18%

silver: $8.43 then, 21.46 now = average yield p.a. 0.016% p.a.

facit: in my [not so] humble opinion the average combined yield of 2.098% p.a. generated by these two precious metals would have been beaten by lengths if i had consulted one of my (during this period existing) dogs and listened to their investment advice.

naturally the precious metal aficionados will now drop any historical reference, such as "Alexander the Great financed his victories with robbed gold and silver" and come up with "everything has changed. the end of fiat is nigh. prepare for the final judgment and look out for bakeries with a 'for sale' sign!"

[flying]

facts not fiction

let's look at the yield of gold and silver over a period of time

I always thought it goes without saying that timing is everything.

Tons of folks bought at the peak housing bubble too. Now if they do not mail back the keys they too will wait 20 years ( probably ) to see a profit.

Yet that does not discount the fact that many others who sold made a lot of $$$ in a short period of time during that same housing bubble.

Neither case negates the other.

Edited September 26, 2010 by flying

[cloudhopper]

let's look at the yield of gold and silver over a period of time

Why? We are dealing with Darwinian success in a non-linear environment here. We can always analyze what strategy was best over any period in the past but that has no relation whatever to what will prove to be successful in the future. Like predicting the weather more than a few days ahead, both technical and fundamental analysis of past behavior are exercises in futility.

[SiamRose]

gold: $395 then, 1295 now = average yield p.a. 4.18%

silver: $8.43 then, 21.46 now = average yield p.a. 0.016% p.a.

facit: in my [not so] humble opinion the average combined yield of 2.098% p.a. generated by these two precious metals

All of your "yields" are wrong. And that should be Compound Annual Growth Rate, by the way, not yield.

More importantly, both gold and silver have underperformed the main stock market indicees over that period as well.

Edited September 26, 2010 by SiamRose

[Naam]

facts not fiction

let's look at the yield of gold and silver over a period of time

I always thought it goes without saying that timing is everything.

Tons of folks bought at the peak housing bubble too. Now if they do not mail back the keys they too will wait 20 years ( probably ) to see a profit.

Yet that does not discount the fact that many others who sold made a lot of $$$ in a short period of time during that same housing bubble. Neither case negates the other.

nobody denies that because it applies to each and every investment. and for the performance of any precious metal during any given period i can name several dozen investments which have performed better.

what i wrote is meant for those who have been and still are spreading the gospel in their blogspots that precious metals are the Holy Grail and everything else is shullbit.

[Naam]

"that should be Compound Annual Growth Rate"

right or wrong, artsmasses always have to add their two irrelevant Satangs

[Naam]

let's look at the yield of gold and silver over a period of time

Why? We are dealing with Darwinian success in a non-linear environment here. We can always analyze what strategy was best over any period in the past but that has no relation whatever to what will prove to be successful in the future. Like predicting the weather more than a few days ahead, both technical and fundamental analysis of past behavior are exercises in futility.

goldbugs are like weathermen. they deal with the future.

[lannarebirth]

let's look at the yield of gold and silver over a period of time

Why? We are dealing with Darwinian success in a non-linear environment here. We can always analyze what strategy was best over any period in the past but that has no relation whatever to what will prove to be successful in the future. Like predicting the weather more than a few days ahead, both technical and fundamental analysis of past behavior are exercises in futility.

goldbugs are like weathermen. they deal with the future.

Speaking of which, it looks like inflation 4-5 years away:

http://www.barchart.com/commodityfutures/Gold_Futures/GCV10

[flying]

facts not fiction

let's look at the yield of gold and silver over a period of time

I always thought it goes without saying that timing is everything.

Tons of folks bought at the peak housing bubble too. Now if they do not mail back the keys they too will wait 20 years ( probably ) to see a profit.

Yet that does not discount the fact that many others who sold made a lot of $$$ in a short period of time during that same housing bubble. Neither case negates the other.

nobody denies that because it applies to each and every investment. and for the performance of any precious metal during any given period i can name several dozen investments which have performed better.

what i wrote is meant for those who have been and still are spreading the gospel in their blogspots that precious metals are the Holy Grail and everything else is shullbit.

I see....Ok if that is the case carry on

Because while I am happy I do not deny that many others have done far better with their ideas than I.

But at the same time my risk is at a level that i feel good with....for now.

[Chunky1]

My favorite is gold bug's Dow to Gold ratio. Total Nonsense.

**I own gold for purely speculative reasons.

[Naam]

But at the same time my risk is at a level that i feel good with....for now.

i am sure anybody, who invested in precious metals during the last decade and especially that decade's second half, feels good today. but there were times when even the goldhardliners, such as Mrs Naam , had their doubts. i refer to the crisis year 2008 when gold reached 1,033 (Bear Sterns) in march and fell to 725 at the peak of the crisis in october.

[Naam]

Speaking of which, it looks like inflation 4-5 years away:

what about the doom&gloomers (e.g. Marc Faber) who prophesy 'zimbabwean' inflation rates for the U.S. of A. and slightly less for the rest of the world? your personal view on inflation in general and beyond the time span of 4-5 years please LRB. personally i can't reach any conclusion. there is a set of facts which points to deflation and another set which indicates high inflation.

[churchill]

Speaking of which, it looks like inflation 4-5 years away:

what about the doom&gloomers (e.g. Marc Faber) who prophesy 'zimbabwean' inflation rates for the U.S. of A. and slightly less for the rest of the world? your personal view on inflation in general and beyond the time span of 4-5 years please LRB. personally i can't reach any conclusion. there is a set of facts which points to deflation and another set which indicates high inflation.

Inflation here , deflation there - It will get ' there ' in the end with the endless money presses - USD / Euro down Asian currencies up - gold desired by the East ( Nepal now wants to buy ) and needed by the west to protect falling currencies . So conclusion Gold up ?

[churchill]

30 year high for silver

after generating losses for 20 years (1980-2000)

It's not about looking backwards - one can always find prices in the past in certain time frames that fit a theory -

Looking forwards , as best we can - Silver looks like there is more demand than supply and it looks like prices may have been kept artificially low - So perhaps about to rocket - Gold same

PM Stocks are on the verge of a breakout and could rocket -

But anyone's guess - perhaps - we have a housing boom in the US , employment picking up , a usd surge , a dow crash , Bernanke stops prin=ting etc /

[Abrak]

Speaking of which, it looks like inflation 4-5 years away:

what about the doom&gloomers (e.g. Marc Faber) who prophesy 'zimbabwean' inflation rates for the U.S. of A. and slightly less for the rest of the world? your personal view on inflation in general and beyond the time span of 4-5 years please LRB. personally i can't reach any conclusion. there is a set of facts which points to deflation and another set which indicates high inflation.

Inflation here , deflation there - It will get ' there ' in the end with the endless money presses - USD / Euro down Asian currencies up - gold desired by the East ( Nepal now wants to buy ) and needed by the west to protect falling currencies . So conclusion Gold up ?

I think everyone is basically saying the same thing. Surely there will be inflation eventually? Endless money printing? But falling money supply. The reason that Faber sees Hyperinflation is that he knows there is too much debt to raise interest rates high enough to choke off inflation and once inflation expectations get built in, inflation tends to accelerate.

My pet theory at the moment is that we are in for a period of 'stealth' inflation. In fact, I feel it is already here. Namely I just 'feel' there is a lot more inflation around than the numbers suggest (which is about as analytical as saying the economy is bad because the restaurant next door is empty.) It is odd however, how much money US corporates are making and how high their margins are. Commodity prices are going up. And it would be remarkably convenient to inflate away your debt without having inflation or raising rates.

However, if there is inflation why are M2 and M3 aggregates so weak (M3 growth is currently negative). The most obvious answer is disintermediation. Namely that banks have increased their margins by offering negligible interest rates and actually raising lending rates in some cases. When this happens both borrowers and depositors bypass the banks. There have been large inflows into bond funds for instance. M2 and M3 do not capture this as they focus on long term and short term deposits in the banking system. While the banks arent lending there has been substantial corporate bond issuance. So actual 'M' could be quite a lot higher than reported 'M'. This would also explain why M3 has been weaker than M2.

[badge]

So with Gold at new highs Ive ran my ruler over it, and depending on what data I put into my model I get varying Long Term targets, the most poignant of which lie at 1355/65/90, so really anywhere between 1350-1400(!), and then 1575-1600. All rather vague then!

Theres some less potentially significant targets along the way at 1365, 1460 and 1515 too.

In a 'back of fag packet' moment I put Spot AG in too, and came up with Long Term targets around $23.50, 26.30 and 27.50. How that gels with AU or how likely they are to be met I dont know; just a bit of fun

[flying]

My pet theory at the moment is that we are in for a period of 'stealth' inflation. In fact, I feel it is already here. Namely I just 'feel' there is a lot more inflation around than the numbers suggest (which is about as analytical as saying the economy is bad because the restaurant next door is empty.) It is odd however, how much money US corporates are making and how high their margins are. Commodity prices are going up. And it would be remarkably convenient to inflate away your debt without having inflation or raising rates.

Your not alone there. I have actually heard more & more say as much & feel the same myself.