Wednesday, Feb 18, 2009
Gold hits record against euro on fear of Zimbabwean-style response to bank crisis
Telegraph: Off topic, but any thoughts on this? Will gold hit $1000 an ounce?
''Gold has surged to an all-time high against the euro, sterling, and a string of Asian currencies on mounting concerns that global authorities are embarking on a "Zimbabwe-style" debasement of the international monetary system. ''
Posted by hpwatcher @ 07:01 AM (2175 views) Add Comment
112 Comments
- If you do not have an admin password leave the password field blank.
- If you would like to request a password allowing you to add comments and blog news articles without needing each one approved manually, send an e-mail to the webmaster.
- Your email address is required so we can verify that the comment is genuine. It will not be posted anywhere on the site, will be stored confidentially by us and never given out to any third party.
- Please note that any viewpoints published here as comments are user's views and not the views of HousePriceCrash.co.uk.
- Please adhere to the Guidelines
1. quiet guy said...
Hpwatcher,
The future price of gold and the inflation/deflation debate are among the hot topics related to HPC right now but unless you are doing short term trading why worry about short term price movements? I think an argument can be made for hedging against inflation with a bit of gold but I would not have posted this article.
2. Jake said...
Everyone should own some gold. Many fund managers recommend that at least 10% of your wealth should be in gold. If you are nervous about future prospects, then you should buy more - perhaps 30% or even 50% of your total wealth.
Gold is physical. It is finite. It is portable.
Paper money is just a concept. It relies on confidence. Unfortunately, central bankers are taking us for a ride by slashing interest rates and printing money. So it is no wonder that gold is rising and will continue to rise. This depression will be very deep and long. Gold is your insurance policy.
3. Renthusiast said...
Gold is going waay past $1,000 and ounce. The more pertinent question is how quickly will it get there
4. gardeniadotnet said...
"billionaires stashing boxes of krugerrands under the floors of their Swiss chalets (as an emergency fund for total disorder)"
Ambrose has seen the writing on the wall and is being deliberately provocative now.
5. str 2007 said...
A realisation in the mainstream media of what has been discussed here for at least a year.
With regard to HPC big debts in property may not look like such a bad hedge.
Any opinion on here as to how the Euro will perform against Sterling in the short term - Flashman & Bellwether
6. gardeniadotnet said...
Any opinion on here as to how the Euro will perform against Sterling in the short term - Flashman & Bellwether
Their guess is as good as mine.
Higher! Err, no .....Lower!
Play Your Cards Right
7. little professor said...
http://blogs.wsj.com/marketbeat/2009/02/17/the-new-currency-trade-gold-vs-all-else/
8. jackas said...
The confidence in paper money is badly shaken.
The US look at Iceland and think "yeah but that's Iceland - they're not that important rally, it's in Europe somewhere isn't it?"
When the UK, which is in a worse state than Iceland, Ireland, Italy, Spain, and a few emerging market countires that Americans have heard of before start to default on their obligations, that's when the dollar will lose its safe haven premium. That's when Americans will realise it can happen to them. That's when gold will rise so fast it will genuinely shock all but the most hardcore goldbug.
9. flashman said...
gardeniadotnet
My guess is better than yours
10. gardeniadotnet said...
gardeniadotnet: My guess is better than yours
Come on then, I'm all ears.
11. bellwether said...
STR2007 Flashman or Techieman (must have something to do with having man in the name) are your men for short term. Longer term its a battle between 2 very flawed currencies, although if I had to choose long term I'd prefer to hold sterling.
Incidentally I've got the CFD account operating and it is ridiculously easy and incredibly simple. That you can make money in this market by backing a view that things will go down in price (when everything is) feels like it should be illegal.
As I've been boring on lately I don't really think their is much of a debate between deflation and inflation, and the market seems to be agreeing with that, even gold is not reacting as you might expect if the value of currency is about to be wiped out by hyperinflation - if the market were anticipating that the price will be doubling and redoubling in price within very short time frames.
12. hpwatcher said...
@quietguy I would not have posted this article
I was listening to Radio 4 this morning, whilst driving into work, and for the first time I heard someone offering advice on how/where to buy gold...never heard/seen anything like that before!
The attraction of gold seems to be hitting the main stream, expect prices to rocket, when more bad news gets out.
13. debtfree said...
why do some think that gold is only a hedge for inflation ?
japan suffered deflation but the price of gold in yen shot up.
anyway, thats another debate but here's a great piece to read from the respectable William Rees-Mogg
http://www.timesonline.co.uk/tol/comment/columnists/william_rees_mogg/article5740620.ece
14. bellwether said...
Gardeniadotnet, he trades currencies for a livng. I guess you actually like setting yourself up to get fcked.
15. mountain goat said...
From a trading perspective gold and silver are probably over-bought right now, but who knows how far the panic pushes them up before we see a pull-back? Looking at stock markets it is clear there is panic, nearly back to Nov lows.
Reuters - News that the Russian central bank planned to buy more gold in 2009 also boosted interest in the metal, Kempinski said. "The Russian bank said it had bought gold and planned to buy more, which pushed the price up," he said. "This, in combination with the ETFs coming in on the buy side in a very thin market, was enough to push gold higher."
16. flashman said...
gardeniadotnet
Wasn't trying to provoke you. Trading forex is my profession. I have worked on three continents doing what I do. Maybe you didn't know that?
17. str 2007 said...
bellwether
Thanks for that.
Who did you set your CFD account up with in the end ?
18. bellwether said...
Debtfree if price of things are going down against currency, there is really no point in holding gold beyond a lack of imagination.
Land and gold are very similar and the same arguments are used for both - they are both real, and more or less indestructible and incapable of being added to - much. I find it dismaying that a site born as a reaction to the ridiculousness of these sort of arguments in support land prices should see no contradication when it comes to gold.
19. flashman said...
debtfree: Have you considered buying gold and buying oil. It's a multifaceted hedge because oil often moves in the opposite direction to the dollar and gold often moves in the opposite direction to oil. You won't win or lose much whatever happens, which makes it a great hedge.
20. bellwether said...
STR2007 - Barclays.
21. bellwether said...
Flashman I don't understand hedges at all, isn't the net result where you would have been anyway but with trading costs.
22. hpwatcher said...
I find it dismaying that a site born as a reaction to the ridiculousness of these sort of arguments in support land prices should see no contradication when it comes to gold.
@bellwether, 'bubbles' are created by an excess of credit. We are now in a time of credit contraction - as you are so fond of telling us! - the fact that gold is going up has nothing to do with credit, it is to do with buying.
There may be a time when people no longer find it attractive to hold, and prices may drop....but it still isn't a bubble. We are now in a downward spiral that could end anywhere. I can see the Sterling going down, and a large amount of inflation for the Euro and dollar. You hold sterling if you want to, the choice is yours.
23. debtfree said...
@ 18. bellwether - japan suffered deflation yet gold rose in price. look at the charts. the argument for gold declining in price during a deflationary period is flawed.
@19. flashman - holding gold since 2002 but not oil. thanks for the advice but holding out to $1650, sell 80% of holdings and hold the rest for the kids.
24. flashman said...
bellwether, my perception is that many on this site just want to preserve their wealth. Inflation/deflation, low interest rates, FIAT currency etc scares people, so I was suggesting a simple hedge that would preserve peoples wealth. A hedge is designed to protect. Only speculation can gain or lose money. As an aside I’ve always thought that Hedge funds are ludicrously named. They don't hedge, they speculate
25. bellwether said...
Hpwatcher, bubbles are created by a fantasy and facilitated by credit, if the market is relatively small bubbles can be created without credit. That's obvious.
If you are asking me whether gold is a bubble I suspect it is, as I can't value it in any context I understand and a lot of people are rabid. Incidentally I am speculating in gold, I'm not so squeamish as not to want to make out of it. I am open to the possibilty that it has run its course or that it will continue upwards. Overall however prefer investing in things that I find more certain.
26. bellwether said...
You go Debtfree!
27. gardeniadotnet said...
Now look what I've done.
Bad boy, G!
28. flashman said...
debtfree: I speculate for a living so I can’t criticize you for doing the same. One thing that alarms me about holding gold is that the price is still lower than it was last March. Last march the world was a much less scary place so what gives? Please don't take this as a criticism. It's just the thoughts of a weary old trader. You mentioned kids so I went all mother hen
29. str 2007 said...
flashman
Gold is up considerably in Sterling terms compared to March 2008.
Or is that Sterling down ?
30. flashman said...
str 2007. Ah ha, so trading gold is just a cunning disguise for currency trading. Don’t you realize the pernicious evils of FIAT currency and the evil Anglo Dutch conspiracy to create a sixth day?
31. paranoia blue said...
Speculate - Hedge?
I actually do both. I’ve a big lump of gold with Bullion Vault, while I use spot gold contracts to trade in/out. Also, on a secondary level I have a fair exposure to gold companies in shares.
32. hpwatcher said...
Overall however prefer investing in things that I find more certain
Please tell us?
33. stillthinking said...
Looks like a pure gamble on GBs insane plans to me. Gold price in yen here,
34. flashman said...
paranoia: Do you understand the mathematics of “trading in and out of gold while simultaneously holding a big lump of gold with Bullion Vault”. You cannot be speculating and hedging at the same time unless of course you go short in the spot gold contracts at the same time as holding gold with bullion vault??? That's quite some hedge you’ve got going on (buying and selling gold at the same time)). Maybe you don't understand what hedging means and you just occasionally top up your gold holdings by buying more on the spot market? If this is the case then you are only a “long” speculator
35. debtfree said...
@ 28. flashman
We can all agree that gold has responded well to fundamental factors and begins moving sharply higher only to be stopped dead in its tracks. The blame lies directly with the corrupt paper gold market known as the Comex gold futures. Now that large holders are asking for delivery I believe things will change and the physical price will detach from the paper traded price. Hence the drop in price in $.
One question I do have for you, is what websites would you recommend for learning how to trade the forex markets ?
Currently trade sports but time restrictions and liquidity have put restrictions on this.
Thanks
36. str 2007 said...
flashman
I'm looking at Gold rightly or wrongly as a means of perhaps preserving a little value of my savings now interest rates are shot to pieces, over the coming year anyway.
''Don’t you realize the pernicious evils of FIAT currency and the evil Anglo Dutch conspiracy to create a sixth day?''
No, I have no idea what you're talking about but welcome being enlightened.
37. debtfree said...
@ 26. bellwether
The Bank of Japan went beyond zero rates to quantitative easing in March 2001, just seven months after it raised rates in a major blow to its credibility .By that time deflation had already established its grip on an economy battered by the property market crash that began in the mid- 1990s.
Now look at the chart posted by stillthinking @ 33 - take note of the price from 2001.
The US / UK are taking the same measures - quantitative easing
http://news.bbc.co.uk/1/hi/business/7896418.stm
In the released minutes, the Bank hinted that increased quantitative easing was necessary, as cutting rates alone may now not be enough to help the economy out of recession.
Lets see what happens :o)
38. bellwether said...
Hpwatcher don't discount the effects of carry trade when comparing yen v gold. Also @32, I've been pretty explicit bordering on tedious on this, I'm betting on prices of things I view as overvalued (pretty much everything) going down.
39. flashman said...
Debtfree
I think most websites are either trying to sell something or they are too limited in their scope. The consensus of my colleagues is that “Mastering the Trade” and “bird watching in lion country” are pretty good learning aids. “Fooled by randomness” might also help you acquire a healthy dose of cynicism
I would also suggest that you don’t read any technical analysis books. Technical analysis takes many years to learn and by it’s very nature, has a terrible effect on the minds of newbie traders. The patterns that it teaches look different in every time scale and can lead to paralysis or even worse the perception of certainty.
If you have little time available then trade based on your research and instinct. An honest broker and minimal trading costs are also all important. Don’t spread bet either. They have terrible spreads and crap price feeds
40. debtfree said...
@ 39. flashman
Much appreciated, thanks.
41. flashman said...
Earlier in the thread @24 I suggested a simple little oil/gold hedge that would help preserve wealth
''Don’t you realize the pernicious evils of FIAT currency and the evil Anglo Dutch conspiracy to create a sixth day?''
Sorry I was spoofing...it doesn't mean anything
42. inbreda said...
debtfree - i use oanda.com
what do you mean about comex? Can you expand please?
43. paranoia blue said...
It’s my schizophrenic personality.
My Bullion Vault holding is a hedge against the ever-depreciating fiat currency position, particularly sterling. I have - over the last year - sold, a few times, to buy back in at lower level. I would constantly re-assess, if the Au price went well into four figures.
Spot gold, as I said, I buy and sell, frequently with the premise that the general trend is upwards
One the other hand, my general feeling for the stock market is downward, especially certain sectors, - so I short like mad. This has served me very well, over the last year.
Profits are then channelled into various other assets – although, I must admit that most of these are very dodgy, especially property – both, commercial and residential. :) However recently, I decided that my latest safe haven would be an E-type Jaguar 4.2 II Roadster [perhaps, not the best investment, but at least I can enjoy it – although it is sitting in it carcoon, right now, over winter period]
It sometimes helps to have a “split personality” you can “cover both sides of the coin,” and see both sides of the argument, and act accordingly ATB
PS I understand “hedge” to mean - in its wider sense - “protecting against financial loss through future price fluctuations.”
44. titaniccaptain said...
Flashman........direct question for you....where would you advise to preserve wealth for the next 18 months that can be liquidated in a very short timescale? question includes spreading of wealth......or would you advocate a very maneuverable postion and stay with cash in the Bank or Nat savings easy access?........
45. bellwether said...
Debtfree I see gold as something that might go up in price and you see it as something that will go up in price, and even something that is beyond price. It's scepticism v secular belief and there is limited to no scope for discussion.
46. flashman said...
titaniccaptain:
If you just want to preserve wealth then buy gold and oil in equal quantities. As I said @24 it's a nice little hedge and they are both 'liquid'. There are many similar hedges out there
47. bellwether said...
Actually debtfree I was thinking of Hpwatcher when I wrote the last comment, so please ignore.
48. bellwether said...
This comment doesn't work for people who think gold will appreciate in a severe deflationary environment (with no threat of inflation) but an oil/gold hedge would be vulnerable in that scenario.
Incidentally whatever we think the market currently thinks this is deflationary and given the faith the market has put in central banks over the past decade I find that interesting
49. greytornado said...
At the risk of causing total and utter outrage, I would suggest that no one in the investment market actually owns any oil...........they might think they do, but in reality it will only be bits of paper. On the other hand, some of the contributors probably own some physical gold that they actually possess. One doesn't need to be a rocket scientist to work out that anything involving paper can and may probably turn to rats. I have always liked the old adage - only invest in something that you understand. Apologies that my views may be a bit extreme, but I think actual ownership and possession may prove to be important factors in this horrible event that is unfolding. Perhaps a bit off topic - sorry.
50. flashman said...
bellweather; not sure I understand you. If gold appreciates because of a severe deflationary environment then you could assume that this same environment will correspond with a failure of the economy to recover. If that is the case then oil will fall while gold rises. This is a multifaceted hedge because oil usually has an inverse relationship to the dollar so the hedge would also work in an inflationary environment. The purpose of this hedge is to preserve wealth not make or lose any money.
Incidentally a way of hedging this hedge would be to also put some money into the Yen (a producing economy) and some into the Dollar (a consuming economy). You would then have a multi, multi, multi faceted hedge where everything part (gold, oil, dollar yen) opposes the other in a compound way.
Nothing is certain EVER but you would have a very good shot at preserving your wealth (minus trading costs!)
51. debtfree said...
@42 inbreda
COMEX is a division of the New York Mercantile Exchange
Aluminum, Copper, Gold & Silver
52. bellwether said...
Flashman my idea is that gold will fall in price along with oil in a severe deflationary environment. Wondering if a reason gold hasn't fallen this year is because people aren't sure about deflation. That would corelate with the suspended animation of the markets at present, hanging around Nov levels hoping to be saved by central banks.
53. flashman said...
bellweather: The idea that gold prices would collapse in a deflationary environment is not really true these days because of the vast size of the derivatives market. Consumable commodities (like oil) are mostly held in the form of derivatives. The price of derivatives would almost certainly collapse in a deflationary environment leading to a panic scramble for non-consumable commodities (like gold). It is the size of the derivatives market that is different to previous events.
54. bellwether said...
Flashman but surely the raison d etre of gold is as a protection against currency devaluation. Maybe it has another function I'm missing but pointedly it has no yield (beyond commercial/decorative purposes which are dead in deflation) and a lot of risks and costs storage, trading, confiscation etc. Without inflation isn't it pure bubble? Why scamble to it when you can just remain in currency?
55. str 2007 said...
Flashman @ 39
''Don’t spread bet either. They have terrible spreads and crap price feeds''.
I'm in the process of learning about these and so am interested in this comment.
How else would you expose yourself to a hunch the ftse would rise or fall for example.
I was also quite drawn to the fact any profits are tax free (perhaps I'm missing the point).
Today I'm actually trying to work out the difference between a CFD and Spread Betting. I thought the answer would be obvious and easily available but they both appear along side one another without an obvious explanation. A quick answer from someone who knows may save me alot of reading today !
56. flashman said...
Hi str 2007
You can trade indexes like the FTSE and S&P with any broker (the futures market usually provides excellent spreads). I apologies for how hackneyed this saying is but regarding spreadbetting: "there are no taxes on a loss".
The spread is ALL important. I don't know any professional who could reliably make money year in and year out with some of the retail spreads offered.
57. flashman said...
str 2007
spread betting companies are just an alternative to using a traditional broker.
CFD's are a futures contract without an expiry date. you can trade them with spread betting companies or trad brokers
58. titaniccaptain said...
@flashman
Many thanks for the advice.As I have said before I feel the gold debate is a huge one and wealth preservation along with it.......by the way why are we no talking about effective business models tailor made for recession???? like disposable business models with a short shelf life?????
This site will have full debate on gold and wealth preservation
59. bellwether said...
STR 2007, CFD's seem risk free as long as you get the direction right, you don't have to guess the exact number of sweeties in the jar or anything like that. If you speculate that prices go down and they go down you make, and the positon can be held open until that happens - subject to costs which are tolerable as long as your position comes good within a reasonable time frame.
60. quiet guy said...
@hpwatcher
After making my comment this morning, I hopped into my car and turned on the radio just in time listen to the gold article. Not a good sign. This makes gold more vulnerable to bubble behaviour IMHO.
61. bellwether said...
TC I have a professional services Firm (my name here is related to that, its not as much of a claim as it sounds) - set up about 8 months ago and there is an opp for delivering services at discount which is not what has traditionally happened in the area I work - also a lot of labour looking to work for a lot less than they used. So yes there are opportunities - I guess unless you fritter your time on here which I have a tendancy to do!
62. hpwatcher said...
@quietguy
So what? You don't have to buy - find somewhere else to put your money....like under your bed!
Fashman my idea is that gold will fall in price along with oil in a severe deflationary environment. Wondering if a reason gold hasn't fallen this year is because people aren't sure about deflation. That would corelate with the suspended animation of the markets at present, hanging around Nov levels hoping to be saved by central banks.
I am simply not seeing much deflation - apart from the nonsense coming out of BOE - only inflation. Look around.......everything is going up.
63. str 2007 said...
quiet guy
Missed the article, what was the general angle.
I think as S2R1 has expressed Gold will most certainly be a bubble. It appears herd mentallity just takes over. Quite how far it will go no-one knows for sure. I believe S2R1 was predicting the Gold bubble bursting in April 2010.
In retrospect it appears to have been a good hedge against sterling devaluation - however that relies on a position having been taken before sterling devalued.
The future Gold price I guess will depend alot on what happens to the currency in which you've purchased it.
64. titaniccaptain said...
@bellwether...........where ever there is change in a market there must be opportunities for a model to be created to adapt and benefit from those changes.....we (us here and in the world as a whole) need to look at the bright side of all of this and position ourselves accordingly.either act now or wait for the old way to return ..which isnt going to happen....we need that entrepreneurial spirit combined with a community to use this time for great positive change......I am a doom and gllomer in as much as I think the whole current way of life is coming to and end.but I want to make this a change for the good in whatever way i can......lets get our spirits back up and positive........
65. bellwether said...
Yes TC change doesn't necessarily have to be bad, a move towards greater subsisdence and interdependance might make people happier.
Hpwatcher I guess we live in different worlds.
66. flashman said...
bellwether:
"Flashman but surely the raison d etre of gold is as a protection against currency devaluation"
The value of gold is esoteric. You cannot categories it so easily. It is pretty and people crave it for many reasons. It is written about in books and pirates have buried it in haunted caves. Gods have killed for it and Rap stars adorn themselves in the stuff. Coming back to earth for a minute: fear and panic are irrational. The market is the sum of its' participants and its' participants are anything but rational. In a deflationary panic gold could well end up like the dollar (last year nobody expected the dollar to rise but up it went because of the safe haven instinct). Gold has a safe haven vibe whether or not its logical
67. mountain goat said...
In terms of inflation deflation or whatever. I took a decision to put 1/3 of my savings into precious metals some time ago not because of inflation or deflation. After reading on here and market oracle articles about how much leverage banks operated with, how the housing bubble was funded by a huge explosion of credit/debt, basically out of thin air. That is when I realised that when this Ponzi scheme starts crumbling it was going to make an awful mess. I also read how Bernanke (and therefore also our lapdog gov) said many years ago when speaking about the deflation problem in Japan that he would do everything in his power to stop deflation, even throwing cash out of helicopters. That is when I realised that cash would not be king, but instead as Warren Buffett said, cash is trash. So I bought gold and silver. You make a decision and you live with it. Going forward has anything changed? Not much, hp have a long way to go before they are affordable and governments will keep throwing money away. I don't give a monkey's if it is inflation or deflation, they can keep their fiat funny money, adulterate it as much as they like. Governments will do their best to undermine gold, because they fear it will stop their game of making unaffordable promises to greedy short-sighted voters. I will sell my gold when reality hits home that you need to save, not take on my debt. That you buy only what you can afford. In the mean time I can't be smug seeing the money by fiat crashing down on itself because greed didn't regulate itself. I can't be smug because it is such a mess.
68. mountain goat said...
sorry meant to write "not take on more debt" not "not take on my debt" !
69. letthemfall said...
titanic
As greytornado just said, "only invest in something that you understand".
And hedges can break down.
Cash looks okay at present: you can still get 3.5% (set against 0.1% RPI). And if you intend to put it into a house at some point, that looks pretty good, and you don't have to spend time learning all about fancy investment (speculating?) strategies.
If the cataclysm comes, and banks fail and savers lose everything, then gold may make sense, but only in coins kept under your floorboards or similar. That doesn't sound very tempting either.
70. titaniccaptain said...
I dont want to get of this thread.........agggggghhhhh........im wraped up in studio for few hours........Letthem fall if your on this thread later mate would like to chat further same to flashman, belwether,MG etc........If any of you want to contact me titaniccaptain@hotmail.co.uk
71. flashman said...
letthemfall:
"Hedges can break down"
Your thinking is a bit wooly. Hedges can indeed break down but by their very nature they are safer than speculation. By following the "only invest in something that you understand" mantra, you will in effect be speculating. Just because you think you understand something doesn't mean its not speculation. Putting your faith in cash "cash looks okay at present" is speculation
72. rocket robbie said...
Flashy
Techieman said a wee while ago that he expects the ftse to fall to roughly Nov lows then rebound to the high 4's (hope i have not miss quoted you techieman) are you thinkng on similar lines or do you tend to think day to day??
73. letthemfall said...
flashman
We must have a different understanding of the word speculate. My understanding is that it implies considerable risk. I would suggest that cash, even in present circumstances, is not as risky as taking out hedges, especially if you do not understand them well. Still, perhaps your woolly thinking is of a different softness to mine.
74. flashman said...
rocket robbie
I don't really work like that. There is an infinite number of variables that can and will occur an infinite number of times … so its hard to believe in arbitrary pivot points. Years ago I used proprietary indicators, but now I look at my screens without any indicators and work by instinct and experience. I do a bit of research and we have an analyst who drones on every morning (he's generally seen as someone to torture on a night out). From this research we decide on a 'master' direction for the day. My master direction often changes two or three times a day and every day is a new day.
The States is waking up now so adios to everyone. Time to lose some serious cash
75. goweresque said...
I would be very worried if any gold I invested in wasn't in my hand. Anything that relies on bits of paper, or the internet, and where you can't go and get your own bit of gold out, is in my view useless. The whole point with gold is it is independent. It stores value when the world is going to hell in a handcart. But if you can't get hold of it in a crisis, you're stuffed.
76. flashman said...
letthemfall
Speculate means "to engage in the buying or selling of a commodity with an element of risk". The use of the word implies no quantity of risk. The risk can be small or large.
"I would suggest that cash, even in present circumstances, is not as risky as taking out hedges, especially if you do not understand them well"
Obviously if you do not understand hedges then you can't engage in them. Additionally, you should not comment on something you don't understand. A hedge is safe. Taking a stance on any one thing is not.
Got to go
77. letthemfall said...
goweresque:
If gold is really an insurance against breakdown, which at least some of the participants here are half-expecting, then I think that is true. And I imagine large denominations - anything bigger than the smallest coins (whatever they might be) - would be rather awkward to have. But I don't think it will come to that. There is a lot of "advice" here (or shall we say suggestions, some hubristic) on what to do with your money to "preserve" wealth (though it is unclear what this means exactly) which involve doing things that probably few of us know much about. And beware professionals - I stopped seeing IFAs some years ago when I realised they really didn't know all that much.
78. techieman said...
Flashman - i have to kind of agree and disagree with you on the spread betting.... issue. You trade for pips for size no doubt. I posted on Sunday re this current move in the FTSE. Essentially to me it makes no odds if i pay away a couple of points in a spread.
Your advice re not using the spread betting firms flashman can be based on 1. You paying no tax on trading profits as you work for a firm. As for me based on my income the amount of ticks/pips/points i save on the spread is more than offset by the tax. EG for a 2 point spread in the FTSE and looking for a 100 point move - the spread makes no difference. As i said i can understand why YOU say that but its not applicable to everyone.
Rocket - http://www.housepricecrash.co.uk/newsblog/2009/02/blog-cash-is-king-21717.php see 14. I did say that i expected this move to test the lows but i thought that then we would have a more meaningfull rally. I did say the last upmove would be in the 5,000 area (high 4680) but that would then be a shorting opportunity.
I am not saying Flashmans style is wrong its just our styles differ - whatever works for you ... works!
I am sorry but i havent read ALL this thread at the moment.
Letthem - a hedge is not risky as its a hedge - eg. a distribution company hedges against the oil price. If the oil price goes up the hedge makes money but the company loses. Hedge funds generally....... arent!
79. letthemfall said...
flashman:
Holding cash has an element of risk but few people would call that speculation. The word as used in finance does imply at least a fair degree of risk although some words are used so loosely and frequently they take on humpty-dumpty levels of meaning. A hedge is safe only in theory - I understand that much. To use your own example, there have been periods when oil and gold have moved together. A position on one thing may not usually be safe, but cash is pretty low risk and not speculation according to any widely accepted meaning of the word. Certainly a better option then the one you suggest for anyone is who is not well versed in such investing.
"Additionally, you should not comment on something you don't understand."
Well, it hasn't stopped you from doing so.
80. str 2007 said...
Thanks for that techieman
I was looking at spread betting as a relatively 'tidy' way of taking advantages of opportunities. ie no tax or paper to worry about.
The thing that attracts me to the financial markets is that no matter what is happening something always is and therefore there is always an opportunity.
In its most basic form the FTSE generally moves up or down each day (it rarely draws) and that in itself creates an opportunity.
The trick is being on the right side of it which is what I am currently trying to get my head around.
Well done on your Sunday Post by the way. All as you said so far, I watch the FTSE in anticipation (if not position yet).
81. gardeniadotnet said...
5. str 2007 said... Any opinion on here as to how the Euro will perform against Sterling in the short term - Flashman & Bellwether
OOI, did either of you answer the question?
82. letthemfall said...
Hi techieman:
I understand the idea of hedging and the difference between hedges and hedge funds (those are the ones that enrich the managers and lose all their punters' money, aren't they?)
But the professionals' confidence in their strategies often ends up misplaced, whether hedging or following some other path. I think we all recognise that. Sometimes I get the impression that many hpc-ers are putting their hard-earned (or perhaps speculatively acquired) dosh into foreign exchange, gold bars, or whatever, when they lack the experience to guide them. Suggestions to do this make me nervous. We can do what we like with our money but should be wary of trenchant recommendations and single baskets.
83. flashman said...
letthemfall: what do you do for a living?
84. flashman said...
Letthemfall: I didn't think you'd answer. Come on what do you do for a living?
A hedge is the complete opposite of a "trenchant recommendation or a single basket". Think, please think before you type
Why is a dictionary definition of speculation not good enough for you? Arrogant and trenchant maybe?
You thought an IFA was a professional? Poor sod. They are low-level salesmen.
You come across as bitter and angry. What’s up?
85. letthemfall said...
I think troy was right when he suggested where your moniker might come from. What I do for a living is my own business. I don't waste my time on abusive exchanges with people here. I'm happy debating with mature contributors, but not those who run out of arguments and resort to insults.
86. 51ck-6-51x said...
I will now speak up...
A hedge is simply a position which when added to your portfolio removes some risk.
No hedge ever removes all risks. As an example consider the case where I buy a call option, I now have risk directly related to movement in the underlying - I then sell the quantity of the underlying that negates that slope, however to completely eliminate the said risk I have to repeat this process whenever the underlying prices changes as the slope also changes, so I still have the second order risk, known as gamma.
By being a part of the capitalist system, given that your net worth is non-zero you are forced into a speculative position, whether you like it or not, one may attempt to hedge away as much risk as possible if one is risk advese, but one will always end up speculating on something.
87. flashman said...
How many qualifications, how much success and experience does it take for you to recognize someone as a professional? I have worked very hard to secure my future and that of my kids. I’m proud of my achievements and don’t take kindly to people like you sneering at the term ‘professional’.
You were first of the mark with your bitter little digs. What’s the matter, don’t you like it when the big boys talk back?
You offer nothing more than a stream of consciousness. You often contradict what you wrote the day before and sometimes what you wrote earlier in the same post. Riddled with non-sequiturs and contradictions, quasi god bothering, and a load of rehashed quotes from wack-job websites. You even throw in a healthy dollop of schoolboy socialism. Yet despite your espousing of a tortured parody of socialism, I can detect that you are genetically right wing. I find this to be disorientating.
A question: How many of the things you push do you actually make a commitment to? We all know the answer. I put my money where my mouth is for a living and you should believe me when I say that it teaches you caution and balance. It’s oh so easy to confidently predict the future when there isn’t a penny at risk. Might I be so bold as to suggest an exercise… every time you feel the need to authoritatively predict the future, put your hand in your pocket and place a bet on your prediction. I promise you it will cure you of your monomaniacal tendencies. The markets are tailor made to rid you of hubris and certainty
88. flashman said...
51ck-6-51x
"A hedge is simply a position which when added to your portfolio removes some risk".
At last...thank you
89. p. doff said...
Is this the 5 minute argument, or the full half hour?
90. bellwether said...
Come on Letthemfall you are only upset about the suggestion your thinking was wooly about 30 posts ago
If it is of any comfort I kind of understand what you are saying about hedges breaking down. First of all a hedge is only as good as the underlying coorelation chosen and even then no underlying coorelation will be perfect or even fixed in all circumstances. Think 51ck-6-51x, is saying something similarly but in better detail
91. str 2007 said...
Bellwether
I finally got the Financial Spread Trading Simulator into operation on Barclays - loosing at the moment - just.
I blaim the lack of instruction manual myself !
Sorry to dumb down the conversation.
92. techieman said...
bellwether is right re correlation - you can have a perfect or imperfect hedge... but thats a bit boring here (i knew someone that traded an index and arbitraged the index against a few of the underlying shares using a correlation analysis and all sorts of clever stuff).
I have not followed (and actually dont have time to look through this whole thread) Bellwhether - i have independently heard someone say that commercial property may be the next domino to fall - and Land Secs has been a "victim" lately so congrats. (Re Euro / GBP i said we should look to see what Flashman and the boyz would do around the 20DMA and the shape of the retracement from 9000).
Str 2007 - yes i got out of some of the position earlier today, but am still holding most of the folding. I would recommend ig for a small spec - they even have alerts to your mobile if you want and on their tradesense programme you can start trading from 10pence a "point". Although what a point is depends on the market. I wouldnt want to patronise you so i hope you take the 10p comment as informaitional - i obviously know nothing of your time / money constraints.
Do be carefull though - its a tough old game!
93. letthemfall said...
bellwether:
Glad I'm not whistling completely in the dark. Statistics is one of the areas I work in so I have some notion of the fragility of financial instruments, even though I don't claim to be a specialist in financial mathematics. But I take an interest, especially in the failure of certain assumptions (and there have been some big failures out there).
I'm not particularly upset by abusive remarks - I've seen worse here. One can just ignore the perpetrator in future. I note that neither you, techieman or 51ck ever resort to insulting others, even when your arguments are challenged, presumably because you are confident in your own knowledge - and too polite of course.
94. bellwether said...
I'm just feeling sorry for Lettemfall right now posting something as lame as 85 and then getting served at 87.
Fk you've dived right in! Oh just reread its the simulator. I still haven't bought anything yet, and wary bcos tend to go at things like a bull at a gate and then learn the hard way.
95. flashman said...
Hi techieman
I'd be delighted to privately discuss market direction with you and a few of the boyz (IM is good) but I'm sure you know why I'm shy of broadcasting. flashman is the nickname of a despicable trader down the road. I stole it for sport but I'd get rumbled pretty quickly.
96. bellwether said...
Sorry Lettemfall just read 93 and feel I've let you down but in fairness Flashmans put down had the stamp of quality and you should look to learn from these things.
97. 51ck-6-51x said...
Correlation is a hugely misunderstood beast when applied to stochastic processes (e.g. stock prices)
Perfectly correlated stochastic process do not move in tandem as most would imagine (since the process drifts may be different).
Cointegration would be a better tool.
98. mountain goat said...
Techieman - just to mention some time ago you recommended EWI (http://www.elliottwave.com/). I registered with them but found it too expensive to get the paid for service. This week they have a "free week" you can see their stuff normally reserved only for paid customers. I am impressed, even influenced me to make a trade (they called a top in cocoa end of last week based on technical analysis. This together with my own hunch, so I decided to sell). Will see how their forecast goes...
99. titaniccaptain said...
@Flashman
http://www.meetup.com/housepricecrash/ is the meet up group site that you can contact people on.........not sure if Techie is on there alot wish to remain anon like yourself.but if you log on there as flashaman he may contact you
100. titaniccaptain said...
Also I want to be no 100......sad I know :-)
101. bellwether said...
Techieman I actually opened the CFD account with a view to shorting commercial property because they are exposed to all the contagion that has fcked the banks but won't be saved. Share prices have declined upwards of 70% since peak but the next downleg will be on IMO well founded concerns re mass tenant failure and gross oversupply of units .
102. letthemfall said...
Not sure I understand you bellwether. Any fool can slag people off. It's one area I prefer not to participate.
103. quiet guy said...
@hpwatcher
"You don't have to buy"
I an already in a little bit of gold as a hedge against future high infation - that is why I find mainstream gold reporting unwelcome. As soon as gold becomes the next 'sure thing' then it might time to exit i.e. admit I'm wrong. shoving cash under a bed does nothing for my concerns about inflation.
@str 2007
"Missed the article, what was the general angle"
Nothing new to us. Brief discussion about high demand for gold as investment instead of the normal demand for jewellry, which has droppped greatly, followed by quick notes about how to buy coins, bars and ETFs. It was the fact that the radio was talking about gold at all that surprised me.
104. titaniccaptain said...
Well being a genius I always look down at you peasants and tolerate some of the debate whilst being fed grapes and having my feet massaged by the queen on mount olympus........I only blog here for your benefit whilst I put the world to right in my bath time..........
105. letthemfall said...
51ck
A colleague of mine once applied it to horse racing. Made quite a bit of money for a while, but then ....
106. titaniccaptain said...
Anyway...........back on track..........If there is consensus that the herd will plough into gold if there is fear being cultivated about currency value deflation..then surely it will lead to a massive gold bubble.........is there anything big enough to stop that kind of bubble forming?..........I really dont have the technical knowlage about how these hedges and commodities play out in the market but I do have a pretty good insight into human nature having lived with them all my life
107. str 2007 said...
techieman
Yes I can see it is a tough game. Good exercise though, makes you're heart pound without having to move ''mmmmmm my kind of exercise. Thanks for the IG tip I'll check it out. You are right of course, I'll inflict far less damage on myself at 10p a point.
bellwether
Much like youself so I thought I'd try the simulator first. Having spoken to a couple of people today and read some more I now understand the difference between CFD and spread trading. The CFD's aren't tax free though for what it's worth.
Haven't found the Barclay Simulator particularly friendly though - could do with more advise/instruction. I think I'll have a look at a few of the others, there seem to be plenty out there. CMC seem to offer a whole course on loosing money when you sign up with them.
Oh these professionals must be belly aching at me fumbling around in the dark.
Still, you have to start somewhere.
108. titaniccaptain said...
@STR2007
Dont tell me you want the dunces hat off me........im not give it up so easily
109. flashman said...
letthemfall: I think you not understanding Bellwether is part of the problem. You then use the word 'fool' to describe someone else in the same sentence that you complain of abuse. Do you accept no culpability?
nevertheless...i don't think you mean much harm so I apologies for being too hard on you
110. p. doff said...
The full half hour, apparently!
111. 51ck-6-51x said...
Oh no it isn't!
She's behind you
etc...
112. str 2007 said...
Bellwether
The result of my first attempt on the spread betting simulator resulted in a £299.00 tax free profit trading for about 2 hours from 4.30pm. I expected the simulator to stop when the market closed (thought I was playing the real market with pretend money).
Anyway if I'd played for real on day 1 (today) from opening I'd have made £273 tax free based on shorting the ftse at £10.00 per point.
The way I made more in just 2 hours was simply buying and selling when it looked like it was going up or down on the chart, oh and increasing to £30 per point when I felt uber confident (with the pretend money). (wow do things change quickly at £30.00 per point)
Very exciting but nothing more than pure beginners luck I fear.
I'll try again tomorrow and see how I get on.