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Gold strategy in the current economy


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Excluding some form of black swan, I think it's unlikely gold and silver will break the $1,800 and $35 barriers this side of the US presidential election. On Friday the silver market saw 51 million ounces (10,500 contracts or 1.5 years worth of US silver production) dropped on the market in < 5 minutes. Given the advent of QE^∞ you'd have to be a brave man to short the gold and silver markets at the moment, but for now the charts are still being painted.

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2018 could be the year for gold https://www.goldmoney.com/research/goldmoney-insights/popular/2141-2018-could-be-the-year-for-gold

Always my experience as well, so I second your recommendation.

It's entirely  dependant on what you are comfortable with. And obviously how much you would need on hand in the effect of something seriously drastic happening.

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When I was out in China last year, it was common to see the old gathering plastic bottles and cans, because they can be resold for money. They're not sitting at home watching Corrie, no they're pretty fit and pounding the streets. It was cheap to eat and drink. For 10p you can buy a bottle of soft drink, so it was worth picking up scrap materials to resell and buy groceries.

It was a bit of a eye opener when I saw this happen in the UK last week. It was in the area of St. Marys on a wet morning. There was an old couple (70-80s), picking up drinks cans in the road. I don't recall ever seeing that here, only people looking in bins for food.

Thank you for that picture. It is a source of great frustration to me that this sort of recycling is not encouraged in this country. The councils won't allow "totting" (taking their rubbish to recycle it) but when we were kids, you could return pop bottles for the deposit. This is definitively the best answer to litter removal, and oil is too valuable to waste by throwing plastic into landfill. Unfortunately, the elderly couple you saw, were probably just litter-picking to make the place look tidy. They should be able to sell the cans, but sadly I doubt if they were doing it for that reason.

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If people don't mind, I have a metals related anecdote for you.

When I was out in China last year, it was common to see the old gathering plastic bottles and cans, because they can be resold for money. They're not sitting at home watching Corrie, no they're pretty fit and pounding the streets. It was cheap to eat and drink. For 10p you can buy a bottle of soft drink, so it was worth picking up scrap materials to resell and buy groceries.

It was a bit of a eye opener when I saw this happen in the UK last week. It was in the area of St. Marys on a wet morning. There was an old couple (70-80s), picking up drinks cans in the road. I don't recall ever seeing that here, only people looking in bins for food.

I think I will go out and buy a few bars of aluminum (or any other metal for that matter) for that day when I'm old - just in case.

I was talking to a city type the other day (I know I should have throttled him, he was afterall a banker but it would have seemed impolite). I feigned naivete and asked him if rich people were buying Gold and Silver as an investment these days. The reply was 'Oh no, Gold is too expensive, the rich people are buying physical industrial metals like copper, stashing them in warehouses, self hire units etc.'

I found that to be an interesting take on things and reminded me of the anecdote in Michael Lewis' book 'Boomerang' where a hedge fund billionaire has been buying as many pre-1950's nickels as he can because a 5c nickel contains 6c of the metal at todays prices.

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Thank you for that picture. It is a source of great frustration to me that this sort of recycling is not encouraged in this country. The councils won't allow "totting" (taking their rubbish to recycle it) but when we were kids, you could return pop bottles for the deposit. This is definitively the best answer to litter removal, and oil is too valuable to waste by throwing plastic into landfill. Unfortunately, the elderly couple you saw, were probably just litter-picking to make the place look tidy. They should be able to sell the cans, but sadly I doubt if they were doing it for that reason.

Hame you seen this:

Lots of other videos (some more advanced) doing the same sort of thing. Looks like a relatively simple process even to get more refined oils.

Edited by RandomFactor
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I was talking to a city type the other day (I know I should have throttled him, he was afterall a banker but it would have seemed impolite). I feigned naivete and asked him if rich people were buying Gold and Silver as an investment these days. The reply was 'Oh no, Gold is too expensive, the rich people are buying physical industrial metals like copper, stashing them in warehouses, self hire units etc.'

A lot of rich people (George Soros for example) appear to be buying gold. It seems the demand for industrial metals has been driven up by the emerging economies in china and india. A number of analysts seem to be saying that this may decline as china faces its own deflationary pressures (whether that's the case or not I'm not sure - but it's looking increasingly likely that their rate of growth won't be as much as anticipated at least).

If that happens then those people with warehouses full of copper, iron, steel etc. might not do so well in the short to medium term.

Check out some of the charts here:

http://www.indexmundi.com/commodities/?commodity=iron-ore

I really don't know much about industrial metals so may be wrong, but from what I read, it strikes me that it probably wasn't the safe bet that it would have been a few years ago (perhaps nothing is though).

I found that to be an interesting take on things and reminded me of the anecdote in Michael Lewis' book 'Boomerang' where a hedge fund billionaire has been buying as many pre-1950's nickels as he can because a 5c nickel contains 6c of the metal at todays prices.

That's Kyle Bass. He's also heavily invested in gold, and has been telling people to buy gold since the early 2000s (and continues to do so as far as I'm aware). He classifies gold as "a hedge against government inneptitude".

Edited by RandomFactor
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That's Kyle Bass. He's also heavily invested in gold, and has been telling people to buy gold since the early 2000s (and continues to do so as far as I'm aware). He classifies gold as "a hedge against government inneptitude".

Why Kyle Bass Acquired $1 Million Worth Of Nickels - http://articles.businessinsider.com/2011-11-18/wall_street/30413967_1_fund-managers-uk-debt

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Hame you seen this:

[Plastic to Oil videos]

Lots of other videos (some more advanced) doing the same sort of thing. Looks like a relatively simple process even to get more refined oils.

Yes, I saw this a few months ago, and it does seem a very simple process. I am sure this will be done very quickly as soon as the price of oil/petrol rises above the price of this resulting fuel. I am very keen on recycling, I just don't like the Climate Warming/Cooling Lies or the local councils trying to force people to do it. If it gets any more lucrative to do this, it might start to be worth doing on a small scale for home use, replacing diesel like the chip-fat idea. Thanks for the links, I will watch these again.

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A lot of rich people (George Soros for example) appear to be buying gold. It seems the demand for industrial metals has been driven up by the emerging economies in china and india. A number of analysts seem to be saying that this may decline as china faces its own deflationary pressures (whether that's the case or not I'm not sure - but it's looking increasingly likely that their rate of growth won't be as much as anticipated at least).

If that happens then those people with warehouses full of copper, iron, steel etc. might not do so well in the short to medium term.

Check out some of the charts here:

http://www.indexmundi.com/commodities/?commodity=iron-ore

I really don't know much about industrial metals so may be wrong, but from what I read, it strikes me that it probably wasn't the safe bet that it would have been a few years ago (perhaps nothing is though).

That's Kyle Bass. He's also heavily invested in gold, and has been telling people to buy gold since the early 2000s (and continues to do so as far as I'm aware). He classifies gold as "a hedge against government inneptitude".

Yes, I think your analysis is correct. I don't agree with the gold is too expensive viewpoint as I simply see its value as the inverse of currency inflation. There is investment volatility from trading operations, but I believe the long term price move is more in line with a role as an alternate currency. I also feel the source of problems is excess capacity and debt and that the likely trajectory leads to lower consumption in the short to medium term which reduces industrial demand. However in the medium to long term the possibility of a major realignment of economies might mean industrial commodities eventually have the higher value.

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This comment was well worth waiting years for!

I saved it specially!

I'm not a gold troll btw, although one of the reasons I stopped using the site was that at the time there was more about gold than houses. I have traded gold up and down in the past so no problem with discussing it, but back then (when I were lad) the discussion was more along the lines of buy gold because the world was about to end.

Anyway, good to see Errol still here. Time to have a nose and see who else is left.

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I saved it specially!

I'm not a gold troll btw, although one of the reasons I stopped using the site was that at the time there was more about gold than houses. I have traded gold up and down in the past so no problem with discussing it, but back then (when I were lad) the discussion was more along the lines of buy gold because the world was about to end.

Anyway, good to see Errol still here. Time to have a nose and see who else is left.

Still in HG2?

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but back then (when I were lad) the discussion was more along the lines of buy gold because the world was about to end.

You don't see the irony of that statement and your username?

Somethings gonna end and its probably the current financial system so I hope you kept hold of some of that gold you were trading?

Of course, if that bridge in Knaresboro' comes down for a third time, we is all fooked :D

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I was talking to a city type the other day (I know I should have throttled him, he was afterall a banker but it would have seemed impolite). I feigned naivete and asked him if rich people were buying Gold and Silver as an investment these days. The reply was 'Oh no, Gold is too expensive, the rich people are buying physical industrial metals like copper, stashing them in warehouses, self hire units etc.'

I found that to be an interesting take on things and reminded me of the anecdote in Michael Lewis' book 'Boomerang' where a hedge fund billionaire has been buying as many pre-1950's nickels as he can because a 5c nickel contains 6c of the metal at todays prices.

Buying quantity over quality. :lol:

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LOL! :lol:

Did COMEX Gold Futures 'Glitch' Hint At The Future Awaiting Us?

Call it a fat-finger, or a deus ex 'aurum' machina, but during this morning's COMEX gold futures trading, we wonder if the obvious 'glitch' gave us a premonition of things to come?

20121011_gold_0.png

http://www.zerohedge.com/news/2012-10-11/did-comex-gold-futures-glitch-hint-future-awaiting-us

Edited by Errol
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As the Bank of England’s balance sheet tops £400bn here’s why gold is ‘cheaper’ today than when it was £13 in 1967

BoE-balance-sheet-up-of-330-per-cent-a.png

average-annual-price-of-gold-%C2%A3-since-2006.png

per-cent-of-the-UKs-balance-sheet-backed-by-gold.png

So the only way the balance sheet is going to get back to that 25% average is through price.

And how how does the price have to go to get there? An incredible £10,000 to get to 25% and £16,000 per ounce to match the 1980 high.

So the next time you hear someone say that gold is ‘expensive’ or ‘over-valued’ ask them “compared to what?”, because compared to the balance sheet of the BoE (you know, where the money printing comes from so the only thing you really need to compare it to) gold is still woefully UNDERvalued, and in fact on a comparison basis gold is cheaper today than when gold was £13 per ounce in 1967.

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The period of 2015-2016 is when I'm betting the price of gold goes vertical. And the mother of 'reversion to the means' will push silver to a 1:1 ratio with gold around 2017-2019. Yep, I'm not joking. It is going to happen. Literally hundreds of years of manipulation will go up in smoke. So I'm not selling any silver until we are at least 5:1 with gold (my guess in 2016).

Gold is gold, and silver silver. I think there may be an element of 'wish fulfilment' at play here among the silver bugs. Gold is the monetary metal par excellence, silver also has monetary properties and will most likely be pulled along for the ride. But if you look at the charts [ie, the real world], silver doesn't simply leverage gold, but leverages the volatility of gold. And it leverages that volatility to both sides. A sensible approach would be to hedge your silver with gold.

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silver-10.png

Gold looks due for a correction to near the 50 MA. Silver could go below.

Edited by roman holiday
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  • 440 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
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      • Even
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      • up 5%



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