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Guest Steve Cook

For Those Among Us Who Take The View It's Deflation All The Way

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Guest Steve Cook
But isn't gold overvalued? It too is governed by the herd mentality though traditionally it's thought of as a safe haven.

Personally, i find it far too volitile to invest more than a cowardly amount in it. myself.... :lol:

Nontheless, while every else is running around shouting deflation, that historical hedge againts inflation, gold, is shouting otherwise....

Edited by Steve Cook

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But isn't gold overvalued? It too is governed by the herd mentality though traditionally it's thought of as a safe haven.

no. compared to its previous 1982 peak its about 60% undervalued.

but its catching up. and since this one going to be bigger and more global than the 80s recession.

id expect the gold peak to be incredible.

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And other commodities too, despite atrocious demand-supply fundamentals.

We're seeing the flight to tangibles in action today. I hope it doesn't last.

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Guest Steve Cook
no. compared to its previous 1982 peak its about 60% undervalued.

but its catching up. and since this one going to be bigger and more global than the 80s recession.

id expect the gold peak to be incredible.

and that peak is operating on ther inflationary assumptions of pre-credit crunch. given the massive inflation of the money supply that has been recently baked in to the system. One might posulate that the inflation adjusted distance from the 80s peak is far more the 40% below

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Personally, i find it far too volitile to invest more than a cowardly amount in it. myself.... :lol:

Nontheless, while every else is running around shouting deflation, that historical hedge againts inflation, gold, is shouting otherwise....

Unless of course it's shouting default.

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Guest Steve Cook
Unless of course it's shouting default.

well....yes.....there is that aswell

it's probably my latent fear of defualt as being the reason and my lack of understanding of the it's broader implication when compared to the imlications of straighforward inflation, that is casuing me to fear to tread to heavily in the gold market

actually...

scratch the above

the reason I am afraid of buying more than a modest amount of gold is the same reason I am fearful of where to put my STR fund in general

That reason is basically due to the fact that the whole world has gone to hell in a handcart. As such, I am quite simply a rabbiot in the headlight, not knowing which way to turn

The trouble is.....there is no such thing as a neutral position the way things are headed

Edited by Steve Cook

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Unless of course it's shouting sucker

Has anyone seen copper and Platinum prices? Once demad starts to pick up, I will be putting my pile into both.

I reckon the writedowns will stop pretty rapidly in around mid 2011. To that end, demand should pick up but due to suppressed supplies (the mines will have been shut down for 2 years) it ill mean prices are going to go through the roof.

If I am going to get shafted by inflation, I will want to hedge around 50% of my wadge this way to protect my net wealth.

As for gold, where else do peeps flock to when they think their currency isnt safe?

This is deflation baby! :lol:

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Unless of course it's shouting sucker

well quite. You could also say that gilts are pointing to inflation as well given the jump in yields, but in the 1930s, it was a jump in yields (bond market crash) that really kicked off the depression (debt service became too high). If China turn their back on the DMO auctions, we are toast (unless you naively believe that the BOE actually have control of the rates).

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That reason is basically due to the fact that the whole world has gone to hell in a handcart. As such, I am quite simply a rabbiot in the headlight, not knowing which way to turn

The trouble is.....there is no such thing as a neutral position the way things are headed

Buy some silver then...... :D

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Guest Steve Cook

You know what, I'm almost tempted to go out and buy bulk quantities of houshold consumables (detergent, washing up liquid, bleach etc) and hold onto them for a year. I will get them at vey healthy whoiesale/import prices due to the volume.

If the inlfation goes up in the next 12 months, go and hawk the bugger door to door and on the markets. Each week s that passes it get cheaper compared to the competition. also, One way or another, inflationary or deflationary scenareo, jowe pulic will be looking ofr ever more cheap ways to sewrvice his life. I have personalyl noticed that there are more basic consumables for sale in the markets around our area recently. This will probably continue and accelerate.

If deflation is the outcome, though, I guess I have the same problem as with gold. Just a bit less day to day volitile

Edited by Steve Cook

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You know what, I'm almost tempted to go out and buy bulk quantities of houshold consumables (detergent, washing up liquid, bleach etc) and hold onto them for a year. I will get them at vey healthy whoiesale/import prices due to the volume.

If the inlfation goes up in the next 12 months, go and hawk the bugger door to door and on the markets. Each week s that passes it get cheaper compared to the competition. also, One way or another, inflationary or deflationary scenareo, jowe pulic will be looking ofr ever more cheap ways to sewrvice his life. I have personalyl noticed that there are more basic consumables for sale in the markets around our area recently. This will probably continue and accelerate.

If deflation is the outcome, though, I guess I have the same problem as with gold. Just a bit less day to day volitile

Food prices are about to drop, no inflation this year.

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That reason is basically due to the fact that the whole world has gone to hell in a handcart. As such, I am quite simply a rabbiot in the headlight, not knowing which way to turn

The trouble is.....there is no such thing as a neutral position the way things are headed

If you think things are getting that bad then go with physical gold in your hand. If you don't believe gold has intrinsic value then don't invest, if you truly believed in gold's value you wouldn't care about the volatility which is actually no less volatile than currencies right now.

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its different this time?

since 1971 it is.

why?

some people will tell you all about the 1980 peak and how becasue of it gold is a bad investment however they do not know the reason for the spike as if they did then they would realise gold performed perfectly at the time as a warning signal that the dollar could default and a gold standard return as the peak price was all the dollars in the world divided by all the gold that america claims to have.

what would that figure be per OZ today....it depends on how you allow for the USA debt load but somewhere above £20,000 an OZ is one fairly low estimate....

the reasons for the spike into gold in 1980 was the iran crisis and the afganistan crisis and a severe recession on the horizon......does that remind you of any time in history at all ?

once the people holding dollars wake up to the negative interest rate they are getting by being in dollar debt instruments the tidal wave into gold will be spectacular NOT because it is a great investment vehicle but because it is insurance against fiat collapse....just like it always has been (4000+ years and counting)

bull markets are violent and you should never commit more that you are likely to need in the medium term the old adage of put 10% of your money in gold and hope it never pays off is terribly relevent to this situation i feel.

personally im on 80% now as the geopolitical situation (likleyhood of war) has not been this bad since 1980....

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Guest Steve Cook
If you think things are getting that bad then go with physical gold in your hand. If you don't believe gold has intrinsic value then don't invest, if you truly believed in gold's value you wouldn't care about the volatility which is actually no less volatile than currencies right now.

I do actually believe in the extremely good qualities gold has in terms of its use as money (lack of degradability, rarity, relative lack of functional usefulness)

The prolem lies in the fact that as long as we have a global system run by power elites who have control over the type of money we all have use (e.g. fiat), gold will remain very volitile. There is also the not little matter of the historical precedent of the confiscation of gold.

When our industrial civilisation finally falls apart and goes into the night, gold will have its day once more.

Between now and then it could go to $2000 and beyond.

It could also fall to $200.

Edited by Steve Cook

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