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_w_

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  1. Be mindful of those insights, on good days they might be 50% right. I'm just learning as I go along like most of us here. I like the big picture better, it is simpler and tells us all we need to know. Globalisation requires a levelling of worker wages throughout the world. I am beginning to think that those who engineered this globalisation expected us to meet halfway but reality I think is worse than that due to the large surplus of labour we are experiencing . It is possible we will meet them 7/8th of the way down for us. Whether this is tackled by inflation or deflation it means our purchasing power will be one seventh of what is used to be in 1980 on aggregate. So whether it is via inflation or deflation (less likely politically) the price of things we need will go up by 700% in terms of wage earnings when we are competing with the rest of the world for those things and supply is relatively constrained. That's over the next 10, 20 or 30 years. Regarding gold, I can see a future in which the 'emerging world' raise the price of gold to $5,000 thanks to increased purchasing power relative to us. Alternatively but much less likely, gold prices can stay put while our wages go down by 4 fifths or 9 tenths or wherever the globalisation adjustment will take us. Also, during such transition phases an informed minority with much greater visibility of the policy landscape (they know what is going to happen before others) tends to benefits enormously. We are seeing that now. That minority's spending/purchasing/investment power will go up my multiple's of the aggregate numbers. Because that 'connected' minority both here and in the 'emerging world' has much greater access to credit, they benefit more in inflationary environments. The question is where will they put their money and gold is I think one of these place. This shouldn't be a linear process though so there will be deflationary scares, recessions in China, etc. but the end result is IMO inevitable. I remember that one being pointed out many times on hpc. I see it as a simple case of motivations. As excess credit leads to eventual deflation someone with control of the printing press will reach breaking point at some stage due to external pressure (popular uprising, banker control of government) and generate inflation. If the quantity of money is increased then the deflation is masked by nominal price stability. Only in real (real) inflation adjusted terms does the picture become clear IMO. I think I have a clear view of the long term picture (10 to 30 years as above) and the utlimate outcome but how we get there on a shorter term basis is to me a matter of speculation. The honest answer is I haven't got a clue. Europe's sovereign issues are stabilising IMO while its banks are in dire trouble, I think they will mildly inflate and kick the can down the road until the sovereigns are strong enough to let their banks go bust. I see US, UK and Asia inflating a lot whenever political and global monetary considerations permit it. There will be recessions in China and India , followed by inflationary booms... However IMO, long term we'll earn as much as the average Chinese man or less (considering the destruction heaped on our economy by our governments). I would buy whatever he will need or want.
  2. Those commodity price rises translate into raised farmers and miners' income. As the new money goes into certain sectors it attracts more investment into those sectors generating more revenue for other sectors like farm machinery. As far as the UK is concerned we should rejoice in the knowledge that Cameron and his masters are doing their utmost to encourage more investment in the estate agency and finance business. The only way the funny money disappears is when we have monetary deflation and we know TPTB will do their utmost to avoid that. So it just stays and as it moves from one sector to another it permeates through the entire economy and all prices rise. Trickle down takes time.
  3. We have paper commodities backed by future claims on commodity production being bought with future claims on money. The whole thing just looks like an artificial mechanism to leverage up the fee extraction power of the finance industry on real world activities. It is potentially unstable IMO but should prevail as long as the resulting price distortions don't affect real production or consumption too negatively. Maybe it works fine? It's something I am still trying to get my head around. On the other hand, those claims of physical shortage have always been wrong in my experience, they're not new and there is always some new reason presented for an imminent shortage. They sound like hype or wishful thinking to me TBH, I don't take them seriously anymore. I've also learned to be particularly weary of the likes of Gerard Celente, Max Kaiser or Nouriel Roubini who are more into show business than investment advice. Life's too short. That's what my experience taught me anyway, for what it's worth. Before we experience shortages, if we do, I would expect to see some more reliable clues than the conjecture that is currently being spread around. IMO, dealers setting up waiting lists would be more relevant than changes in premiums for example.
  4. And as people tear each other apart over a few crumbs on the basis of race, religion, nationality, political ideology and social class, UK bankers are laughing all the way to the Ferrari showroom...
  5. That's what I would have thought too, all this does is enable price falls that are impossible now.
  6. The thing is no amount of ESM, EFSF etc. would solve the problem, that was just a TARP like self-serving banker idea to get somebody to increase their balance sheet so they don't have to reduce theirs. No amount of bailout funds will insure sovereign debts if there is no trust that sovereigns are fiscally responsible; Italy alone has $2 trillion worth of the stuff, the bailout fund would have to buy them all? And the bigger the bailout fund the weaker the sovereigns backing the fund will be. It's not a solution but only a path that saves the banks at the expense of soverign bankruptcy. There is something that strikes me about this paragraph. Do you not see that despite your support for Cameron's actions, it is the European motivations you value more. And do you not think these same motivations also drive their actions WRT bailout funds and all that e.g. they are trying to protect the real economy vs. the financial economy?
  7. ? Reading this something springs to mind, it depends what you call deflation. Your graph supports that but everything else points to a rise in deflation (a.k.a deleveraging) expectations. WRT bank selling gold, there have been reports of it or leasing lately. It doesn't explain the fall in copper (-4.8% today) and other commodities / rise in dollar though.
  8. My wrong, I can't write. Expectations of further inflationary policy to save the banks are being squashed at the moment.When bankers expect to be saved by monetary inflation they foresee the status quo and splash out.
  9. I don't think it would have much of an impact on its own TBH. Deflation in Europe and Angela's strategy leads to banks shrinking and/or going bust over the next two three years IMO. That would spell deflation in Asia as much as in Europe (european banks have 30trillion USD of assets on their books, lots of these are in Asia and South America) and that may have a bigger impact on gold. There's also the whole bank deleveraging process that would impact gold as an asset class in its own right, this plus its anticpation by bank trading desks and hedge funds could push gold down. Asia is what is/was fuelling gold's rise IMO. That's a very interesting chart! I don't think I've seen it before and I'm not sure what to make of it, the correlation is quite striking. The divergence may be due to the different kind of operators that make those indices move: fast / speculative money is moving gold down by anticipating deflation while slower (say pension) money is waiting for CPI confirmation before making their move? This is a weak argument but I can't quite explain it otherwise, I need to think about it more. One anecdote regarding the future: I keep an eye on luxury consumption which IMO is a great indicator of inflation expectations by that segment that also buys gold as an investment. it also reflects expectations of the status quo vis a vis banks and inflationary policy. Luxury shares are taking a beating at the moment, more than the rest of the market, which points to a change in expectations IMO. A small anecdote frmo London: a top luxury brand outfit in London experienced a 30% fall in November business compared to last year. Quite a major change if sustained that would say a lot about the elite's confidence in an inflationary future at present.
  10. It's funny how the dodgiest reasons are always given for price rises when in reality it is due to money printing. Every time, something else is blamed however unlikely. A shortage of trees, a sudden rise in demand from the bankrupt middle class that's cutting down on everything ... What else will they come up with?
  11. They've increased their debt by over 100% of GDP over two years, 2009 and 2010.
  12. http://www.joubert-c...rs/acheter.html These are good ones. The advanrtage of France is its consumer protection laws. You've got much better recourse if you're sold a dud. Even auction houses have to take back what they sell if it turns out not to be as advertised. Not caveat emptor over there. <Edit to add: they fix their prices with the Bourse price at midday every day so if spot prices fall a lot after that it will look like their premium is going up, until the next day's fix. But if the prices rise insted, you can buy it at less than spot, something I like about them :-) > The GTU figure just says that holders of this physical gold ETF are prepared to sell at less than spot. In my (limited) experience of this ETF people always paid a premium to buy gold in this way. All it shows is that physical ETF investors are beginning to panic IMO. I think three factors are predominant: Europe seems to be facing a deflationary future and we are seeing a pavlovian reaction subsequent to what Europe triggered in 08. China is not much in the news because of the current euro hysteria but very much facing a slowdown. China is the biggest driver of gold prices IMO. The Fed seems to be politically unable to do more QE which just adds to the overall deflationary doom and gloom.
  13. I really don't see any kind of physical shortage or stress nor change in premiums. Business as usual here for now. GTU is a physical ETF, a negative premium implies that Mr Market for physical or equivalents is moving from manic to depressive mode. There are some serious fears of deflation out there IMO.
  14. Thanks, I always wondered why they would do that, now I know. I suspect that this may apply to all types of overleveraged businesses that don't lower their prices for fear of being in breach of their loan covernants. Hotels in particular.
  15. GTU at a -1.6% discount to physical today, the first time since I started looking. http://www.gold-trust.com/asset_value.htm
  16. I use dealers in France, consumer protection laws are stricter there. The ones I use update their prices once a day, at the midday fix, so if prices fall a lot p.m. premiums appear to go up but then fall right back down the following day. It's a hedging issue. There must be some dealers n London that handle enough volume to update their prices once a day.
  17. If you use a dealer who doesn't reflect the COMEX prices you did to find a new one I think.
  18. I'd call teh council to ask them if I was you. This claim of central government dictat would be amazing if true. If not the agent could be in trouble with his client which is never a bad thing.
  19. Somtimes I wonder if Koo is not some Keynes on steroids. His suggestion might work in a country with a large enough domestic savings rate to absorb the debt. It might work for the world reserve currency, but I think any other country trying what he suggests would find its currency or sovereign bonds under attack. He says printing is not the solution either IIRC which begs the question of who would buy the deficit country's bonds..
  20. Funny you should mention that, a good friend of mine is a rail buff, complete with train set in the garden! He loves to visit because of the rail bridge that's by my place.
  21. There's one appartment building across the river from Imperial Wharf in Fulham, I think these are appartment buildings, one building site about to start right by Imperial Wharf overground station and I just saw a residents' protest type placard in Chelsea about IIRC an office and/or shops being built by (I think) London Underground in Chelsea. The first one has been going on for a few months and is by a freight track + overground, definitely not the placew you'd want to live in. The last two I just noticed.
  22. I've recently noticed three building sites right by rail / underground tracks in West London. The locations are within a few yards of the tracks so probably quite noisy and not too desirable. I was wondering if anyone had spoted similar works going on in London. Could this be some boost to construction activity off the government books?
  23. The comments are a real pain to sift through but it doesn't lower the quality of the posts. I've always wondered why ZH didn't kick out the most crazed retards that have taken over the comments area. I suppose it's some ideal about free speech or something but it really harms their image.
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