Wednesday, Aug 13, 2008
New world currency disorder.
Telegraph: Stage two of the gold bull market is just beginning
A war breaks out in the Caucasus, pitting Russia against a close ally of the United States. Inflation reaches a new peak in the euro-zone. The CPI reaches the highest in Britain since Bank of England independence. Rampant inflation sweeps the developing world.
Yet gold crashes. It has failed to deliver on its core promises as a safe-haven and inflation hedge, at least for now. Why?
Posted by sold out @ 07:34 AM (1145 views) Add Comment
21 Comments
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1. cyril said...
Does gold have any intrinsic value? I know it's used in electronics and some medicines but otherwise it seems to be a fairly useless material. Could that be the reason why people aren't buying it?
2. stillthinking said...
Unbelievable to see gold ramping in the Telegraph of all places.
3. sold 2 rent 1 said...
cyril,
"Does gold have any intrinsic value"
Oh yes
Read this:
Gold's Underlying Truth and Dow Jones Potential to Fall by 75%
http://www.marketoracle.co.uk/Article5389.html
and this
Orbitally Rearranged Monoatomic Elements (ORMEs)
http://www.rexresearch.com/ormes/ormes.htm
and watch this
Lost Secrets of the Ark;The Real Power of GOLD
http://video.google.com/videoplay?docid=2129165010048711403
4. rickyb said...
I have to agree with Cyril, that gold has little intrinsic value. If gold mining were to add 4% annually to the total worldwide gold reserves (which was the case in the late 19th century), would this actually have any effect on the global population's average standard of living. My feeling is that the answer is no.
5. Papabear said...
I think it was Warren Buffet who said (about gold): "We pay a fortune to have it dug out of the ground and then we bury it into a vault and pay a fortune to guard it". He never invested in gold. He is the world's most successful investor.
6. sold 2 rent 1 said...
David Hudson owns the British Patent # GB 2,219,995 A
Non-Metallic, Monoatomic Forms of Transitional Elements
Here are some more articles about his work on monatomic gold
http://www.asc-alchemy.com/mono.html
http://www.asc-alchemy.com/hudson.html
7. stillthinking said...
Perhaps Bernanke has been correct all along. Gold is down and the dollar is up. But if Bernanke has done the right thing by reflating in advance , then poor old King has done the -wrong- thing and we will be chasing inflation down to below zero soon.
8. rickyb said...
Google on monatomic gold and a David Icke link comes near the top, so not a promising start.
An interesting discussion on monatomic gold at http://richarddawkins.net/forum/viewtopic.php?f=5&p=1030976
It sounds to me that you can spend a lot of money buying a little heavy yellow metal that looks nice, but has no real value, or you can buy it in its monoatomic form as a white powder, which also has no real value.
Incidentally if anyone wants to buy some monoatomic gold from me, it's £1000/oz. It may only look like white powder, but it is gold .... honest :-)
9. inbreda said...
I think warren buffet hasn't invested in gold because gold is a store of wealth, not an investment (in that sense). Warren Buffett is successful because if you transferred all of his possessions, money, property etc into gold, he'd have a lot of it. If, many years ago, when he was just starting out and everything he had in the world was only worth an ounce of gold, if he had "invested" in that ounce of gold, all he would have today is an ounce of gold. The point of investing is arguably to increase the amount of gold you have / could buy.
I don't think gold has an intrinsic value - that's what makes it so good as a store/measure of wealth. I'm not sure what your argument is rickyb - you seem to be extolling the virtues of gold.
10. beartil2010 said...
Gold has lots of uses - it is extremely dense and unreactive, making it an excellent conductor of electricity, and it also exceptionally malleable. Thus it is used in lots of electronics areas where extremely high quality components are required; the only reason it is not used more is because it is so expensive, and that is because of both the colour and the malleability, which thirdly have led to the use of it as a monetary standard.
It will never be valueless, but trying to predict its future value is nigh on impossible - hence why Warren Buffett doesn't invest in it.
The cost of production being what it is, that provides an actual floor to the value, unlike many other investments. Still doesn't mean you can predict if it's going to go up or down though.
11. mountain goat said...
Value of gold is just another place to put my savings instead of keeping it as an ever-devaluing GBP in the bank. GBP, USD and other currencies have value based on faith. We can see how quickly faith can turn just by looking at the housing market. Since the financial system is cracking up at the moment seems to make sense to own some gold money.
12. debtfree said...
@Papabear ,
Cheers for that quote : "We pay a fortune to have it dug out of the ground and then we bury it into a vault and pay a fortune to guard it".
Coming from the world's most successful investor confirms that gold is No1 store wealth.
Otherwise, why would you pay fotunes to dig it out the ground and then more to protect it ?
13. Kruador said...
Gold futures make up one of the larger weights in the indexes that speculators have been using to apportion their 'investment' income - 6.2% in the Dow Jones-AIG Commodity Index and 1.8% in the Standard&Poors-Goldman Sachs Commodity Index. As these investors pull out of the indexes, the prices are being affected according to their weights. Oil is the largest weight - S&P-GSCI has 14.5% in Brent crude, 31.3% in West Texas Intermediate crude, while DJ-AIG has 12.8% in WTI - and so has been most affected, both up and down. Natural gas is another large weight, 10.6% and 12.3% respectively.
You only actually own gold if you've taken physical delivery of it. Otherwise you're just paper trading.
14. Kruador said...
@Papabear: because of the structure of commodity futures markets, most gold contracts traded are paper gold. It's never dug up and never delivered, because the contract is either rolled to a future delivery date or cashed in at the index value.
15. mountain goat said...
Gold Down Eight Days in a Row
For the eighth day in a row, gold finished the day down. Since 1975, this is the sixth time that the commodity has had an eight-day losing streak. Just as eight hasn't been a lucky number for Chinese investors, eight-day losing streaks for gold haven't a turnaround point either. Looking at the five prior eight-day declines, gold has finished the ninth day with a gain three out of five times, but the average return has been a decline of 0.2%. Looking out over the next week, gold has finished lower three out of five times for an average decline of 0.8%.
16. mountain goat said...
It's all about the dollar. Good look at the issues here Is the Buck Back?
17. layers said...
@11 MountainG - Totally agree. Gold shouldn't be viewed as an investment, but as a hedge against our declining currencies - ultimately it's a plan B incase everything goes 't*ts-up' - which is looking ever more likely.
And as for the dollar - surely evidence of manipulation - who would buy USD currently, or anytime soon?!
18. techieman said...
Layers - i would! or did or have... anyway the "news" is already in the market, yes the Us is in the proverbial but then again so is everyone else (and they werent perceived to be before). Said that a break of £/$ 1.94 was significant. Still think the Euro / £ reverses after a final spikey top to around 8150 but we will see.
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