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Toto deVeer

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Posts posted by Toto deVeer

  1. You cannot put too much emphasis on the current statistics.

    Selling volume is something like 35,000 units versus 120,000 at peak.

    Additionally, the stats are all over the place, depending upon who you read.

    As I mentioned, the following equation governs, and this is the first time in history it's been done:

    QE == MANIPULATION.

    Brown has total control of the assets, the banks and the printing presses, and isn't afraid to use them.

  2. I had quite a battle with the Nationwide Chief Economist explaining that the assumption behind the trend line is a mathematical impossibility and that it is nonsensical.

    Actually they agreed but would not change it.

    If you notice the curve is based upon a compound rate, that if extrapolated forward implies that a point will be reached where prices increase to infinity at a given point in time.

    In reality, the nonsense of this means that the compound rate must drop with time. If you notice on their last graph it was 2.9% and now it is 2.4% according to the chart supplied by the OP.

    This rate will probably approach 1.5% or so before the bottom is in.

  3. I agree that eventually your case will prove correct. But a sharp rise in interest rates will be required to trigger this process.

    This may occur sooner that we think.

    BBC News just announced that foreign investment dropped last month by more than 50%, and is now the lowest of G20. This against the background of high borrowings (£16.1 billion) and a sharp drop in receipts. If the pound begins to drop sharply, and I think is should, then interest rates may be the only option. However, I believe that attempts will be made to put this off (at all costs) until the next election.

    BNP just came out with a report that Sterling and Euro are heading for parity and Nomura has yesterday stated that the UK economy is "a clear and present danger".

    The knife edge is getting shaper.

  4. Very good graph, but IMHO your analysis is lacking.

    I think that if you check, you will see that each of the previous booms was followed by a sharp rise in the base rate.

    Presently, the opposite has happened, and this will effect your earnings vs price ratio approach.

    On top of this, which you touched upon, are the measures that the government has taken to remove supply from the market, and increase the liquidity.

    In short, the market is being completely manipulated.

  5. Digger,

    I'm not a big fan of seasonal effects, but I have seen a lot of data regarding end of year dollar, gold and oil behaviour. What's playing out right now is within the bounds of seasonal effects. But it could be indicative of something else.

    I suppose it depends upon how one defines a bubble. To me a bubble is when prices are irrationally inflated, by whatever mechanism. Over the last 12 months, gold has varied from about $1000 down to $688 to about $1020. Who knows what the future path will be. I think that this is a bubble geting ready to blow off. But time will tell.

  6. I won't be eating my gold, and you won't be eating your bread then.

    Armageddon isn't going to happen. The world's changing not ending.

    As to this thread, what is your take on the de-hedging going on in the gold mining industry.

    Remember this is a thread not a newspaper, so please, don't post a sheet of wallpaper.

    At the moment there are seasonal effects in the gold and silver markets that are in play, and some momo action, and it is too early to say whether this could be sustained.

    But eventually gold will prove to be just another speculative bubble. Speculative bubbles can go on longer than expected. My personal view is that there is still some upside in gold but that at some point soon the downside is going to be rather large.

    There is an abundance of 'cheer leading' (ie 'The Beijing Put!') and precious little knowledge as to what is going on. Why a central bank would announce in advance that they are going to be big buyers of something is beyond me. Has anyone done a logic exercise on this?

    The role of unwinding etf's is too complex to fathom. The effects of volume and timing are not fully understood. This unwind could be underpinning the market, depending upon how it is executed on whole. Once it is completed though, things could get ugly. There is a confluence of many anomalous events at the moment that may overwhelm the effect of etf's anyway. I think that examining one asset class in isolation is just not valid presently.

    My biggest concern as far as asset prices in general are concerned, is whether China's threats regarding derivatives are serious. If this proves true it would dwarf all other unwinding effects; that is where my eyes are cast at the moment. There are a lot of others out there who would be delighted to escape their derivatives liabilities, and a general unwind could ensue.

  7. You need to read what happened in Argentina when it went from a first world to a third world state. Society broke down and the currency worthless.

    Pretty soon entrepreneurs started up and a market of sorts started to function. If you had something to trade you could buy fuel and food.

    The currency was US dollars and gold. Fancy gold jewelry and rare coins just fetched someway below bullion price but they still have a value.

    Maybe US dollars will still have a value if and when the UK goes the same way but I prefer not to take the risk.

    OK, enough is enough.

    Ray...Renewable and all the other dreamers out there....

    Argentina before accepted, and Zimbabwe today accepts gold because there is a very liquid multi-currency exchange market. They can take that gold and immediately exchange it for Dollars or Euros or Rand and go out and buy more flower and yeast.

    In the case of Armageddon, there will be no national or international currency exchange market. There will be no mechanism to determine the value of gold, or to determine it's value in terms of goods and labour.

    Under the Armageddon scenario, do you think that any government would allow a private gold money to flourish? Of course not. Under this scenario, there will be a return to gold-backed currency, there is no doubt. Your gold will only be worth what your government is prepared to give you for it, which is nothing, as they will take it from you. This is a conclusion that is witnessed countless times in history. Wonder why China advises it's citizens to buy gold? Hmmmm....

    Why is gold of value to central banks? Well in the case of a collapsed international exchange system, it -

    LIMITS THE AMOUNT OF FIAT PRINTING THAT CAN BE DONE, AND FORCES A FAIR RECONCILIATION OF INTERNATIONAL TRADE ACCOUNTS.

    You will still be forced to use a national currency for your transactions, and go to jail if you have gold. That is for sure.

    Those who think that under an Armageddon scenario their gold coins are going to bring then wealth and security are greatly mistaken. The world will never return to the ancient days of Rome, where gold coin was the medium of exchange. And even then gold legal tender had the image of Caesar, as the New Testament tells us.

    Coins for 6,500,000,000 people? Get real.

    So enjoy your speculative activities, for that is exactly what gold is, and ride the bubble while you can. But don't be surprised if you get badly burnt. Gold has no value other than the amount of money that delusional goldbugs are willing to throw at it.

    BTW, those who think that the ETF's are the culprit here are heading for an unpleasant surprise. The rise of ETF's has facilitated demand and made the market much more liquid, just like buying on margin helps facilitate rising share prices. If these vehicles are attacked, you may see a negative move, as these tools are a part of the bubblicious environment surrounding this folly.

    If Armageddon hits, I will eat my bread and you can eat your gold.

  8. No it won't it will mean you have a worthless bit of paper that you will use to flap in peoples faces, despratley trying to convince people you own the gold. Except the computer keeps saying 'noooooo' because the government confiscated it.

    You would have some credence if you had taken physical delivery (which I doubt) but even then they are worthless bars of metal because the people you need to sell it to and the system you need to use to realise its value is run by the authorities and therefore it will be 'CONFISCATED'.

    You could though sit on it for years and wait for the doom to have been sorted out and then you will have either starved because you couldn't trade it meaningfully or its now lost its value because no fecker wants it.

    Gold as a hedge against financial armageddon is a fools gold for joe muggins, it is only a store of wealth for bankers and nation states. Trade it as an investment but to say it is protection against systematic failure is as daft as borrowing 6 x your salary to buy a house.

    Indeed. If Armageddon hits, I will eat my bread whilst you can eat your gold.

  9. As far as it is possible to tell, most, if not all, of their properties are owned directly by themselves or members of their family (I posted some details from a land registry search on another thread that got pulled showing the details of one example). They very definitely can go personally bust, although whether they actually will is anyone's guess given the confusing and contradictory nature of the numbers quoted in the press.

    Just like:

    Imagine,

    Location, Location. oops Dislocation

    + dozens of others

    + some suicides.

    This smells. They bought 180 properties in 2003? Leveraged to the hilt.

  10. Millions of Americans are marching in Washington because they are morons.

    Obama is worse than Bush in that he doesn't have a mandate. At least with W you could hazard a guess to what was coming next.

    That's a pretty moronic statement, mate.

    Those people represent the backbone of the economy. They are upset because they still have a work ethic and do not like being ROBBED by parasitic bureaucrats.

    The President's power base is ACORN and the AFL-CIO.

    ACORN staff have recently been caught at various locations trying to use fraudulent government grants to facilitate prostitution by under-age illegal immigrants. ACORN members in Florida have been recently been prosecuted for voter registration fraud.

    The AFL-CIO got it's payback by from the GM bailout (which makes no economic sense).

    I would metion the Wall St bail outs but they bought off both candidates.

  11. Problem is most of them have no clue what Obamas plan actually is. They just know it's "liberal" so they don't want it. Feckin clueless redneck [email protected] most of em. I am living in the south of the US at the moment and the ignorance even surprises me.

    Ahem

    Are you talking about the people or the Government? I would say that those in government have no clue as to what Obama's plan is. The lobbyists write the legislation, the Congress doesn't bother to read it, the President signs it and then a new army of bureaucrats is hired to try to make sense of it, while the patients die on the stretcher. SO is this what you define as good governance?

    Don't blame the people in this scenario.

    The fact is that government is absolutely, totally out of control and MUST be rolled back by at least 50% in size.

    This is what the American people must accomplish.

    1980 : 300 lobbyists.

    2009: 35000 lobbists.

    Need we say more?

  12. The banks are/have set up subsidiaries to which they can sell portions of their repossession portfolio. There has been some debate as to whether this arrangement allows the bank to artificially establish a false valuation for these properties. I am not aware of the details so I cannot comment. However I see no other reason why this would be done other than to provide a way for the parent to improve it's balance sheet and capital ratio, one way or another.

    The properties that AMG is dealing with may possibly be supplied via the bank property holding subsidiary, rather than the parent. This depends upon the asset management strategy of the bank. It could even be that AMG is involved in assessing which properties could fetch the best price in the market, so as to maximize asset valuations. I am sure that there is a great deal of financial engineering behind this activity.

    I agree that the cost of money will determine the degree of pressure on the market. But this will be determined in the US, not in the UK.

  13. The strong Pound could be due to the expectation that the Conservatives will be returned to power, which I view a difficult proposition. There may not be an overall majority in the next election. That is the most likely outcome, provided that Labour can keep the boat afloat until then.

    In this respect all the UK papers, front and centre and in bold headlines, are declaring the end of the recession today. Manufacturing up, employment up, housing up.

    Strangely, in spite of the strong poll showing, there is a continuing decline in grass-roots membership in the Conservative party. A loss of about 100,000 members, if recent reports are believed.

    Personally, I cannot see how the United Kingdom can claw back the national debt without high taxes, which appears to be David Cameron's leaning. This may crush disposable income and asset values if it comes to fruition.

    The negative sentiment against the dollar is at an all time high. This is another factor that is making Sterling strong for the moment. But, for the dollar, inflation can be used as an exit strategy to reduce debt. As a world currency this inflation can be spread across the world, lessening the impact upon the American people. But Sterling does not occupy this position, and the inflation option, if taken, will still be borne by the British people. Therefore taxes will most likely be employed, provided the UK does not join the Eurozone.

    This is one reason why the Chinese realize the game is up, and are accelerating their diversification away from the dollar. I expect to see the Japanese doing the same under their newly elected officials.

    There will be one last, very powerful run-up of the dollar during the next year or two, then it will be bye bye, probably driven by internal political conflict.

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