Get Out Of $dollars$ Now!

[VegasVic]

There is something about gold that I gather most here do not know about since it is never mentioned here or in the news or any literature I have come across - but known to those on the inside and also to those that have done their homework.

Also interesting that many of the wealthiest people I know have considerable sums of it in storage. Funny aint it, considering it is such an old relic. I guess it is better to spend millions on a painting since they never fade and are easy to maintain. Try going into any high end store in say Tokyo, or London, or any major city and ask to see the lovely cases of gold bars on sale to investors for hundreds of thousands that many well heeled customers buy. Gee, it couldn't be to protect themselves against something as silly as inflation. Why these people are worth a fortune - why would they want to do that - I mean they have so much money - what is a little inflation to them? Perhaps people who have money they don't need - just want to keep it!

Dear Naam, your comments always amuse me as the simplest words are generally the hardest to achieve and that is why most have heard such phrases many times before but can not for the life of them achieve it. Of course if just anyone could time things right, then it would be of benefit to none. And then how would everyone retire in the Caymen Islands on a compound with a full service staff and a 100 metre yacht.

You by the way from what you have let on regarding your investment choices - you have lost quite a bit of purchasing power in the past few years if we consider the real numbers and not the published numbers. I am sure your investment knowledge affords the luxuries of life such that you have large amounts of surplus funds to squander?

So, are you going to tell us what this revelation is ? I for one am waiting with bated breath. Or is it contained in the rest of your post ? I read it twice, but alas you seem to have moved to other topics after the opening paragraph........don't keep us in suspense.....

Apparently all the wealthy people that sochu knows have "considerable sums" of their wealth tied up in gold (I am guessing that they are wearing it around their neck). In the real world of course wealth is not created nor preserved by hording gold, wealth is created through real estate, equities, the compounding of interest and the formation of busineses. Throughout history gold has been one of the worst possible investments and despite brief periods where it is a good trade, gold continues to be a very poor investment. Anyone putting their money in gold at the currrent level, will not only not be getting any interest, dividend or rent income on their investment but will find that within a year or two their investment in gold will be a net losing proposition. I have stated this before but I guess that it bears repeating: The cost of extracting gold is around $250-$275/ounce (a number that has not changed much since gold was in the upper $300's 6-7 years ago), industrial demand for gold (which only accounts for about 12% of gold) has actually been in a decline, and as the U.S. and Europe enter an economic slowdown gold jewery sales will be in decline very soon, that leaves the goldbugs and the gold hypsters to keep the price afloat. There is a term for an escalating investment vehicle that has no underlying fundamentals for the increase in price, it is called a bubble or better yet the greater fool theory. We all saw it in the late 90's with the dotcom bubble, we have seen it again just recently (to a much lesser degree) in real estate in particular areas of the U.S. and Europe and we will see it again later this year in chinese equities markets. If you must put 5-10% of your portfolio in a gold vehicle then do so, but do so understanding that it is a hedge and not an investment (especially at the current levels), but to expect to actually make any money long term with gold is a game of foolish expectations. By the way good luck to all you guys and gals living over there in the LOS, I hope that when the new government is finally organized it is farang friendly!

[Naam]

Throughout history gold has been one of the worst possible investments and despite brief periods where it is a good trade, gold continues to be a very poor investment.

ssshhhhh....!

you know that and i know that. why should others know what we know? and why not let anybody have dreams? don't we all have dreams?

[Naam]

now waiting to be crucified amongst outcries I TOLD YOU SO! when gold hits 1,000 dollars an ounce

[siamamerican]

You obviously dont live in Thailand!!

i do, since more than three years. why do you ask?

Well simply you ask what has not outperformed US equities.

it was more a rhetoric question as i abhor equities in general and U.S. in particular. anybody living outside Thailand and was for the last 10 years fully invested in U.S. equities has lost a lot of money. those who did not lose a lot of money don't have a lot of money to lose

I don't understand your dislike of equities. It appears you're much wealthier than me and possess a well rounded understanding of investment vehicles. What is wrong with global equities over the long term?

As for gold, I can't understand why someone would put a substantial amount of their portfolio into gold. The negative correlation to equities makes gold a good hedge against against equity bear markets, but I don't hedge. I simply invest in companies I deem will increase in value.

Investing isn't really that difficult for those that know their needs ( preserve wealth, growth, income...) and invest accordingly. Your numerous posts in regards to bonds are interesting, and I intend to start dabling in bond investments in the next few months. Currently, I lack the knowledge.

[BEENTHEREDONETHAT]

I was just reading a thread started by Shouchu back in Dec. 2006 where he was talking about the 1.5 million Baht condo he bought in BKK. Do you suppose that is where he entertains all of his millionaire friends or perhaps that is where he meets them. Were those baht millionaires or dollar millionaires?

[Naam]

I don't understand your dislike of equities. It appears you're much wealthier than me and possess a well rounded understanding of investment vehicles. What is wrong with global equities over the long term?

As for gold, I can't understand why someone would put a substantial amount of their portfolio into gold. The negative correlation to equities makes gold a good hedge against against equity bear markets, but I don't hedge. I simply invest in companies I deem will increase in value.

Investing isn't really that difficult for those that know their needs ( preserve wealth, growth, income...) and invest accordingly. Your numerous posts in regards to bonds are interesting, and I intend to start dabling in bond investments in the next few months. Currently, I lack the knowledge.

-all my life i was a planner SiamAmerican and i still am. but neither me nor the software (written by me) can plan ahead with equities. planning is only possible based on assets which provide an -up to a certain point- calculable return. i am not claiming that all my plans were perfect, au contraire! some of my plans were sh*tty and the results were sh*tty². but (as in a balance sheet) in real life only the bottom line counts!

- basically i am not against investing a certain part of one's holdings in gold. but that is an individual decision. i don't invest in gold because i don't see any necessity. as i mentioned various times before i like gold very much. but only when it is in form of jewelry -designed by me- and my wife wears it.

-investing in bonds is not rocket science. you do more or less the same research on the debtor as you do with equities. the big difference is that you know with bonds what exactly your income is (if the debtor does not default). equities do not provide that advantage. with equities you are at the mercy of irrational markets and you never know what price you achieve when you need money to finance your living expenses. that applies to the value of equities as well as to the dividends they pay. i agree that the chances to make money with equities are much higher than with bonds. but so are the chances to lose money.

my view is from the perspective of a retired person (which is what you have in mind). but even when i was still working and making good money my view was the same.

[siamamerican]

-all my life i was a planner SiamAmerican and i still am. but neither me nor the software (written by me) can plan ahead with equities. planning is only possible based on assets which provide an -up to a certain point- calculable return. i am not claiming that all my plans were perfect, au contraire! some of my plans were sh*tty and the results were sh*tty². but (as in a balance sheet) in real life only the bottom line counts!

- basically i am not against investing a certain part of one's holdings in gold. but that is an individual decision. i don't invest in gold because i don't see any necessity. as i mentioned various times before i like gold very much. but only when it is in form of jewelry -designed by me- and my wife wears it.

-investing in bonds is not rocket science. you do more or less the same research on the debtor as you do with equities. the big difference is that you know with bonds what exactly your income is (if the debtor does not default). equities do not provide that advantage. with equities you are at the mercy of irrational markets and you never know what price you achieve when you need money to finance your living expenses. that applies to the value of equities as well as to the dividends they pay. i agree that the chances to make money with equities are much higher than with bonds. but so are the chances to lose money.

my view is from the perspective of a retired person (which is what you have in mind). but even when i was still working and making good money my view was the same.

Makes complete sense. Unlike yourself, until recently, I lived without planning for the future. Marriage and age has changed my outlook drastically the last 4 years. It's is amazing what a little planning and goals will accomplish.

I have been doing a little research on bonds as of late. I sold most of my stocks on Jan. 2nd and need to find a better investment than the cash investments I'm in now. US taxes make it hard to make a good return on bonds. After moving to Thailand, the tax consequences won't be substantial issue. Right now, I'm looking at tax friendly bonds (munis ... ), but haven't pulled the trigger.

[shochu]

Unfortunately, one has to do some work - can't have everything for free. Sonic, you seem to be quite adept in the market - I'm sure with some time you should be able to figure it out - a hint - it is much easier than you think.

I don't know too many people who put all their money into gold - just that many wealthy people have some of their money in gold. If you actually read my post properly - you would have understood this.

Yes, I bought a 1.5 mil condo - and if you read my post - you would have read that it will be empty most of the time and only used in place of a hotel when I am there for a total of 2/3 months a year. You would have also read I travel a good portion of the year and as I spend the most time in Bangers when I am not at home - I have bought this small place. I am sure if I were to live there and it were my main residence - then I would buy something better. If you read more of my posts, you would have read that I live in one of the most expensive cities in the world where I own property. I am quite pragmatic and have no need to splash out on a nice condo - especially when I feel that the condo market is overpriced in bangers. I would like to see what kind of place you can buy where I live.

Naam, I love the way you like to go on about things and take shots at people - and go on and on about how you live the high life - yet you can't even afford to stay in a decent hotel and must stay in a flea bag motel - ummmm!!!

The work I do puts me into contact with many wealthy people - so I have some insight into their lives. Also a 300% gain in gold proper over 6/7 years is not too bad overall compared to stocks - which are in a sea of red as I write this now. Of course if you can pick the individual stock, as some have then you are laughing as well.

I love it when people make baseless assumptions when info. is available if one reads a bit more carefully!

VIc - i can't even respond to you because you are apparently in another world where any language is futile!

[lannarebirth]

This period won't last forever and markets will charge evr higher eventualy, but now is a time to focus on return of capital rather than return on capital.

[Naam]

Naam, I love the way you like to go on about things and take shots at people - and go on and on about how you live the high life - yet you can't even afford to stay in a decent hotel and must stay in a flea bag motel - ummmm!!!

you have brought that lie up last year Shochu and i challenged you. you tucked in your tail and kept quiet.

for the record: more than a dozen TV-members exist who have been guests in my home which i built for approximately 24 million in 2006.

so either put up or shut up liar!

[Naam]

addendum for Shochu. perhaps you mix me up with "Beentheredonethat" who took a shot at you in this thread. but that still does not justify that you repeatedly spread bullsh*t!

[Naam]

here's one for you Shochu

jimmys post 2008-01-15 16:29:13 post # 57

As for Dr Naam. I have ridden in his chauffeur driven car.....to his rather large house......on a large piece of property being maintained by a gardener ......being served large, great, sandwiches with a good port wine by a friendly maid....having his beautiful wife stop in the den to say hello to me.... hen pecked..I doubt it and what a life.... he must be doing something.

http://www.thaivisa.com/forum/index.php?sh...p;#entry1763108

[mattias33]

The $USD may indeed slide against Gold in future years (not now I don't think), but if there is one currency to be gotten out of "now" IMO it is the Euro. IMO it's the most worthless currency on earth. A very poor replacement for the Deutsche Mark.

IMO you need a economic adviser. If you think yourself and plan your own economy, you will end up very poor. May i suggest you do some google searches before making a fool of yourself in the future?

[lannarebirth]

I sold most of my stocks on Jan. 2nd

Congratulations on your quick response. Now you're in a position to take advantage of opportunities, should they present themselves. Beware of falling knives.

[lannarebirth]

The $USD may indeed slide against Gold in future years (not now I don't think), but if there is one currency to be gotten out of "now" IMO it is the Euro. IMO it's the most worthless currency on earth. A very poor replacement for the Deutsche Mark.

IMO you need a economic adviser. If you think yourself and plan your own economy, you will end up very poor. May i suggest you do some google searches before making a fool of yourself in the future?

I am having such a wonderful day. I hope you are too.

[siamamerican]

I sold most of my stocks on Jan. 2nd

Congratulations on your quick response. Now you're in a position to take advantage of opportunities, should they present themselves. Beware of falling knives.

I'm new to this investing game. Time will tell if I made the right decision. I've read that you are better letting your money ride through market downturns. Now I'm in the possition to pick my re-entry, but, to be honest, don't have a clue when to get back in. Well, I won half the battle and taxes weren't that bad. I held all the stocks with gain over 1 year and will only pay 10% tax in 2009.

[Naam]

The $USD may indeed slide against Gold in future years (not now I don't think), but if there is one currency to be gotten out of "now" IMO it is the Euro. IMO it's the most worthless currency on earth. A very poor replacement for the Deutsche Mark.

IMO you need a economic adviser. If you think yourself and plan your own economy, you will end up very poor. May i suggest you do some google searches before making a fool of yourself in the future?

i agree with LRB that the €UR is a poor replacement for the Deutsche Mark. i still yearn for the good old Mark. the last five years however are proof that it's not a worthless currency. what the future holds with all these former (some are still) Banana Republics joining the EU and sooner or later adopt the €UR i have no idea. i only know it was the right currency to be for the last five years and i hesitated too long (for nearly two years) to be overweight in €UR. USD might gain some strength again, but how much? what alternative currencies do exist for a global investor besides USD and €UR and few tiny bits in high yield like TRY and ISK?

[ClaudeFeller]

The Euro was at 0,80 USD already now it is at 1.47 - we will see parity again, too many unforseen events in political and economical life... just keep cool and dont die young.

[mattias33]

The $USD may indeed slide against Gold in future years (not now I don't think), but if there is one currency to be gotten out of "now" IMO it is the Euro. IMO it's the most worthless currency on earth. A very poor replacement for the Deutsche Mark.

IMO you need a economic adviser. If you think yourself and plan your own economy, you will end up very poor. May i suggest you do some google searches before making a fool of yourself in the future?

i agree with LRB that the €UR is a poor replacement for the Deutsche Mark. i still yearn for the good old Mark. the last five years however are proof that it's not a worthless currency. what the future holds with all these former (some are still) Banana Republics joining the EU and sooner or later adopt the €UR i have no idea. i only know it was the right currency to be for the last five years and i hesitated too long (for nearly two years) to be overweight in €UR. USD might gain some strength again, but how much? what alternative currencies do exist for a global investor besides USD and €UR and few tiny bits in high yield like TRY and ISK?

Agreed. Thats a smarter way to put it than calling euro "the most worthless currency on earth" when infact (at this point) it is one of the strongest (if not even the strongest, difference in what source you read) currencys in the world. I too have second thoughts about what will happen in the future, and yes the german mark was better but times changes. Like it or not.

[lannarebirth]

The $USD may indeed slide against Gold in future years (not now I don't think), but if there is one currency to be gotten out of "now" IMO it is the Euro. IMO it's the most worthless currency on earth. A very poor replacement for the Deutsche Mark.

IMO you need a economic adviser. If you think yourself and plan your own economy, you will end up very poor. May i suggest you do some google searches before making a fool of yourself in the future?

i agree with LRB that the €UR is a poor replacement for the Deutsche Mark. i still yearn for the good old Mark. the last five years however are proof that it's not a worthless currency. what the future holds with all these former (some are still) Banana Republics joining the EU and sooner or later adopt the €UR i have no idea. i only know it was the right currency to be for the last five years and i hesitated too long (for nearly two years) to be overweight in €UR. USD might gain some strength again, but how much? what alternative currencies do exist for a global investor besides USD and €UR and few tiny bits in high yield like TRY and ISK?

Agreed. Thats a smarter way to put it than calling euro "the most worthless currency on earth" when infact (at this point) it is one of the strongest (if not even the strongest, difference in what source you read) currencys in the world. I too have second thoughts about what will happen in the future, and yes the german mark was better but times changes. Like it or not.

dam_n that Search function! I still don't like the Euro, but there's no denying it has traded exceedingly well. I hope you all have benefitted from it.

[Naam]

[i still don't like the Euro...

i used to call the €UR "fictitious hybrid bastard" when they took my beloved Mark away

[Naam]

looks like a Martin-Luther-King-Black-Monday not only in Asia but in Europe too

http://de.finance.yahoo.com/m2

[sonicdragon]

looks like a Martin-Luther-King-Black-Monday not only in Asia but in Europe too

http://de.finance.yahoo.com/m2

Yep, it is looking grim in the markets today ! I imagine that many traders in the US will be relieved that it's a public holiday, and hoping for a little bounce back by this time tomorrow. On the other hand, if things get worse in asia and europe tomorrow, it will be a black tuesday for sure in the US.

Edited January 21, 2008 by sonicdragon

[lannarebirth]

looks like a Martin-Luther-King-Black-Monday not only in Asia but in Europe too

http://de.finance.yahoo.com/m2

Yep, it is looking grim in the markets today ! I imagine that many traders in the US will be relieved that it's a public holiday, and hoping for a little bounce back by this time tomorrow. On the other hand, if things get worse in asia and europe tomorrow, it will be a black tuesday for sure in the US.

It will be really interesting to see what happens to the monoline insurers tomorrow......I came close to shorting AMBAK last week at 23 but didn't have the guts

Nice Bloomberg! Your chart looks like a 3 of 3 unfolding. Ouch!

Edited January 21, 2008 by lannarebirth

[sonicdragon]

looks like a Martin-Luther-King-Black-Monday not only in Asia but in Europe too

http://de.finance.yahoo.com/m2

Yep, it is looking grim in the markets today ! I imagine that many traders in the US will be relieved that it's a public holiday, and hoping for a little bounce back by this time tomorrow. On the other hand, if things get worse in asia and europe tomorrow, it will be a black tuesday for sure in the US.

It will be really interesting to see what happens to the monoline insurers tomorrow......I came close to shorting AMBAK last week at 23 but didn't have the guts

Nice Bloomberg! Your chart looks like a 3 of 3 unfolding. Ouch!

Sorry, posted it in the wrong thread - moved to the Panic thread....

[cclub75]

FED cuts by 0.75 !

It's total panic time.

So you still don't want to get out of USD ?

[lannarebirth]

FED cuts by 0.75 !

It's total panic time.

So you still don't want to get out of USD ?

That the Fed will cut to 3% FFR is a given and already priced into the market. What isn't known is if they will go lower than that and what other central banks need do to keep their own economies humming.

[LivinLOS]

Dollar holding better than I figured.. Actually happy having liquidated equity in a USD money market fund.

[Martin]

This was all about the American dollar, and proved to be not far off what was going to happen to it.

But what about the Canadian dollar, Australian dollar and Singapore dollar?

What do people feel about their prospects?

[Bisto]

Who said the $ will bounce back in the second quarter of 08

Gold Prices must go up! A lot! Why?

Paper money is fraud, and paper money growth has been tremendous. In the Spring of 2006, the Fed stopped publishing numbers for M3 (M3 is the best measure of money in the banks) when M3 was about $10.3 trillion.

The dollar, which is said to be a "unit of account", no longer has any accounting!

But a private company is keeping track of M3, and M3 is soaring past $13.5 trillion, over a 19% increase per year.

True inflation, which is the rate of money creation, is over 15% per year!

The Federal Reserve is accountable to you, but only if you do something about it, such as buy silver and gold!

Central banks are running short on gold, and are starting to buy gold again. Currently, the U.S. "officially" has 261 million ounces of gold. (If they have the gold!)

If U.S. money - $13.5 trillion in M3 - were backed by "U.S. gold", there would be over $51,724 dollars for every one ounce of gold!

The total value of all the paper money and bonds in the world is about $100 trillion, and all the gold ever mined in all of human history is just under about 5 billion ounces. So, world money, divided by world gold, gives a figure of $20,000 per ounce!

World central banks are running out of gold, and some are starting to buy gold, such as Russia, China, South Africa, South Korea, and more! The central banks claim to have about 30,000 tonnes of gold, but they may have less than half of that, as most has been lent or leased into the market over the past ten years.

In sum, at $1000/oz., there is about $5 trillion dollars worth of gold in the world, but there is: $500 trillion in derivatives, $100 trillion worth of bonds and $40 trillion worth of paper money! Therefore, bonds and paper money must go down, and gold must go up!

Why does gold matter?

Especially if we are no longer

on a gold standard?

Even though the U.S. dollar is no longer backed by gold, any holder of dollars could wise up at any time and start buying silver or gold. China, for example, could spend their $1.3 trillion U.S. dollars in bonds and buy gold anywhere in the world, such as Switzerland, Dubai, Tokyo. They could even send agents to buy gold at any of the 4,000 or more coin shops in the U.S. The dollar could drop 50% or more overnight, and there's not a single thing the U.S. government, you or I could do about it.

Annual gold supply from mining is about 2500 tonnes. With 32,151 troy ounces per metric tonne, that's 80,377,500 ounces of gold. I estimate that if China bought that much gold, the price of gold would jump up to about $2,000/oz. At $2000/oz., that would cost about $160 billion, which is just over 10% of China's U.S. dollar bond holdings. A prudent diversification into Gold on China's part could cause the dollar to lose 50% of its value overnight.

When France redeemed U.S. dollars for gold in 1971, it ended the gold standard. This was not the fault of France, it was the fault of the U.S. for printing too much paper money, and the U.S. general public and politicians have not yet learned our lesson.

Greenspan sees dramatic drop in Chinese stocks

(Reuters)

Updated: 2007-05-24 09:11

Former Chairman of the Federal Reserve Alan Greenspan (L) and U.S. Treasury Secretary Henry Paulson attend the Conference on U.S. Capital Market Competitiveness in Washington March 13, 2007. [Reuters]

Former U.S. Federal Reserve Chairman Alan Greenspan said on Wednesday he feared a "dramatic contraction" in Chinese stocks but said the global economy may be able to shrug off a drop in asset prices.

Addressing a meeting in Madrid via teleconference, Greenspan said the recent boom in Chinese stocks could not last.

"It is clearly unsustainable," he said "There's going to be a dramatic contraction at some point."

The main Shanghai index has nearly tripled in past year and is up 56 percent so far in 2007.

Greenspan also said a correction could cause problems for Chinese personal wealth. Some analysts have speculated that the Chinese government could be tempted to dip into its reserves to bail out any stung investors and avoid social unrest.

Greenspan, who stepped down as Fed governor last year, said cheap Chinese imports were one of the elements stoking world growth, along with Eastern European workers and the knock-on effects on lower inflation and rates.

"In the last five years, the world as a whole is a growing faster than at any time in the world's history," he said. "It can't last and it won't last because it's a one-shot adjustment."

Greenspan said asset prices around the world could fall but that the economy may escape unscathed if it were flexible enough to absorb asset price shocks.

"We will get major declines in certain levels but it need not feed back significantly to levels of employment or the real economy," he said.

Earlier this month, Greenspan reiterated that he believed there was a one-third chance the U.S. economy, the world's largest, would slip into recession this year.

On Wednesday, he said the United States had no problem financing its current account deficit.

"I am ... not particularly concerned about the current account deficit per se. I think that is essentially a market force," he said, adding that the budget deficit worried him more.

Asked about oil prices, which rose strongly last year and were around $70 a barrel on Wednesday, Greenspan said: "The problem of crude oil is not that we're peaking or running out of oil, we're not, the problem of oil is access."

He saw difficulties ahead for world energy markets over coming years if geopolitical issues continued to plague major suppliers and investment remained at insufficient levels.

Who is right who is wrong Bear Sterns said it all.