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Lepista

Gold strategy in the current economy

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So it's hardly surprising that the movement of gold generates some intrigue. This doesn't mean anything questionable is going on though.

Couldn't disagree more - something has changed in the last 12-24 months. Venezuela, Germany, The Netherlands, now possibly France all wanting gold repatriated.

Frank Veneroso pointed out the supply vs consumption imbalance over a decade ago (was it two?), and that has got worse over the last few years.

Where is all the gold coming from, and how many claims are there on what is left?

Pretty obvious that is the question being asked, and answered with repatriations.

Gold leasing may well involve the loss of physical gold from central bank vaults, and there has sure been a lot of leasing!

http://www.moneymorning.com.au/20130401/on-gold-billionaire-investor-eric-sprott-says-im-in-alex-cowies-camp.html

We’ve seen evidence for example the Austrian finance minister when he was challenged, ‘well where’s our gold’, he foolishly made the comment, ‘Well we’ve only got 13% in the country but the rest of it’s either in New York or London, but we made 300 million of interest on it.’ Well you only make interest because you’ve leased the gold out

http://www.zerohedge.com/news/2013-11-03/guest-post-finlands-gold

The evidence is mounting that Western central banks through the Bank of England have been feeding monetary gold into the market through leasing operations. Indeed, the Finnish blog says as much: "Gold investment activities are common for central banks".

in here one sees:

https://www.ecb.europa.eu/press/pr/wfs/2013/html/fs130109.en.html

Item 1: under ASSETS - "gold and gold receivables".

(--gold in the vault and gold leased out??)

then,

https://www.ecb.europa.eu/press/pr/wfs/html/wfs-userguide.en.html

says:

"Gold and gold receivables forms part of the foreign reserves of the Eurosystem. It consists of physical gold and non-physical gold."

First, aren't you shocked that "gold receivables" are classed as an asset?!

Well, gold leased out ain't coming back if it's in a Chinese vault.

But the accounting procedures allow them to hide that loss, if it occurred..because the count it all in ONE line item under assets.

Edited by weaker

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Is it due for a pullback soon? Or just going higher?

I wonder what RK's thoughts are on why the gold price is now rising?

Seems that a lot of the gold watchers have missed this move just like they did last January. Of course, the goldbugs are back out in force saying that they were right all along.

Bear rally with the downtrend still in place? Or not?

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Seems that a lot of the gold watchers have missed this move just like they did last January. Of course, the goldbugs are back out in force saying that they were right all along.

ehem..

'weaker', on 28 Jun 2013 - 2:50 PM, said:snapback.png

Well, call me a fool but I just bought some french gold at the olde coin shoppe.

Ah, that is why gold just shot up 20 bucks!

Gold PM fix:

2013-06-28 1192.00

2013-07-01 1242.75

and....

Right, committing the other 50% now at 1146.

Meantime you have got in at a four year low point.

Gold AM Fix:

2014-11-07 1145.00

2014-11-10 1172.00

Call me a bottom-picker.

I note the first purchase could have waited until November 2014, but nobody's perfect. Just buy the dips?

Edited by weaker

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I think 2015 could be the year gold takes $2,000. There is no fundamental reason why it should not. A superficial trigger might be Yellen caving in to a faltering U.S. economy, or something bad in oil happening, that would either shake market confidence (faltering investment banks) or shake confidence in the goldilocks situation of being able to print insance amounts of money under benign retail price inflation. Everyone simply seems to be waiting for the next black swan to hit the markets.

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Oh God. The bugs are out. Watch for pullbacks.

Noone was interested at 1150

Harhar, good one. I - and many - have been interested since $600. :D You paper bugs have not learned anything since the Brown Bottom, or have you?

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Ah the old I held at 1900 and didn't care that it fell 40%...

Or stcks fell 70-90%. And I'm as clever as they come.

As I say the bugs were quiet at 1150 and now at 1300 they're popping up. Hmmm...

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Ah the old I held at 1900 and didn't care that it fell 40%...

Or stcks fell 70-90%. And I'm as clever as they come.

As I say the bugs were quiet at 1150 and now at 1300 they're popping up. Hmmm...

A quick look at the long term gold-stocks-cycle would possibly even re-assure you that it has been a better idea to hold gold (rather than stocks) since 1999. Gold is on the rise, it is a long-term thing. It is true that I did not care too much about the drop since 2011, otherwise I would have sold some. And that the people fond of gold write more when a turnaround in nominal $-price might be there is not too surprising either, or is it?

Anyway, what is your point? That everyone should be a gifted short-term trader like (supposedly) you? Patience can be a virtue when you are convinced that you are right.

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I am NO short term trader.

Just keen observer of sentiment.

As you know I've been bullish since c 1300 late 2013 and primarily in jnrs at 80% down on the 2011 highs.

If... can stay above 1300/1350 headed1500/1600 as I've said for a year.

If not can still go to 1000 or 700...

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I believe more in fundamentals than in sentiment, but short-term sentiment can be overriding. Anyway, sentiment can change on a dime, why fundamentals usually won't -- unless you replaced Yellen by R. Paul, Draghi by Weidmann, and let AfD become the majority party in the Bundestag, but even then it would be baked in the cake, since how would you clean up those balance sheets?

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I am NO short term trader.

Just keen observer of sentiment.

As you know I've been bullish since c 1300 late 2013 and primarily in jnrs at 80% down on the 2011 highs.

If... can stay above 1300/1350 headed1500/1600 as I've said for a year.

If not can still go to 1000 or 700...

How could the ECB on Thurs and Greek election affect gold price? Is either a factor in gold price? Any thoughts?

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Is it due for a pullback soon? Or just going higher?

I wonder what RK's thoughts are on why the gold price is now rising?

Seems that a lot of the gold watchers have missed this move just like they did last January. Of course, the goldbugs are back out in force saying that they were right all along.

Bear rally with the downtrend still in place? Or not?

I think the ECB will disappoint on Thursday and we will see a correction in the great run gold has been having (I'm also noting that sliver isn't mirroring the moves gold is currently making). For me, depending how deep this correction is, it will confirm if gold has finished its bear market or not. Of course, I could be wrong! :P

And boy, I'm glad I picked up some gold mining stocks a while back. They have gone up even more than the yellow stuff!

Edited by renting til I die

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I believe more in fundamentals

Too funny.

So why did G fall 40% S by 60% and miners 70-90%?

Fundamentals are very long term. Maybe.

Technicals.

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Why the inflationistas theory of qe has been soundly ridiculed by events, there are now far more plausible reasons to hold gold.

I dont think anything has been soundly riduculed. Ridiculed, yes, but not soundly!

The inflation is baked in, waiting to happen (don't tell me the fed will actually sell bonds in a rising Interest Rate environment!):

https://imgur.com/RISnlba

http://i.imgur.com/RISnlba.png

​I also think personally, that we may hit a short-term top here. If it does turn down a little (wow, what a run so far this year!), I'll be watching the next low, to see if it's a "higher low".

Too funny.

So why did G fall 40% S by 60% and miners 70-90%?

Fundamentals are very long term. Maybe.

Technicals.

But as per the above Monetary Base and MV, it's nice knowing the fundamentals are so, so solid.

​As to the gold fall, I beleive what we we saw was so closely correlated with Obama's bankster meeting, and the *introduction* of the Swiss peg to the Euro, that the western CB's and Bullion banks have definitely had something to do with the carpet-bombing since 2011.

Edited by weaker

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Why the inflationistas theory of qe has been soundly ridiculed by events, there are now far more plausible reasons to hold gold.

Say, you are a Swiss whose Franc has just risen 20% but now you are now being charged a negative rate on your balances.

Low rates and yields reduce the cost of holding gold. It can be a safe haven if you fear your currency will weaken. The most positive reason is if you are charged to hold money inside the system.

In which case all those people looking at their charts, lines, waves, etc, to justify why gold has moved up are merely deluding themselves?

What, for example, if the Euro QE tomorrow results in more banks across Europe charging a negative rate on balances?

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$1300 seems to be the point where people are saying that there will now be a move back down to $1250. GDXJ up about 41% in a matter of weeks.

I mention it only because all the gold bulls are back up saying "I told you so" but, from what I have been reading for several months, most of them didn't see this rise coming - i.e. how could they if it was due to the out of the blue Swiss unpegging and negative IRs?

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Surely the story for holding gold if there is one is the 'black swan', the unforeseeable. People like Errol often speak of the speed of things to come.

In which case, the "I told you so" is entirely apt after an event like the Swiss one outside Switzerland....but if you were Swiss you would be better buying after their event than before it.

In terms of ECB QE, I'm sure many Europeans will be thinking about Euro weakening, negative yields, tax avoidance etc. As KB has stated, there may be many who are surprised if the Euro strengthens instead whcih could happen for a variety of reasons - including everyone being on the same side of the trade (priced to perfection) and the QE disappointing or even, better economic prospects. I'd love to see what stoories they will weave.

I follow loads of financial sites nowadays out of fascination mainly, several of which are sites where people take an interest in gold, (Although I tend to avoid the gold, gold, gold above all else sites.), and several posters I chat with in the US are chuffed about their junior mining stocks rising 100% - but, a week or two back, there was serious risk of these miners going bust.

Some are saying that they pinpointed the low in gold back in November/early December, and reading back through their posts they got it spot on, but surely that is more luck in this regard. It was the Swiss. I am repeating myself.

Anyhow, I mention the above because what you say about the Euro is interesting - everyone and his dog now thinks that tomorrow that the Euro will fall on the back of EU QE. However, there is one chap whose site I read who is warning what you just mentioned - that the Euro will in fact rise and will take most people by surprise.

I look forward to tomorrow from a purely academic interest.

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Why the inflationistas theory of qe has been soundly ridiculed by events.

Not yet it hasn't. Give it time. One might expect massive and catastophic deflation and then massive inflation once the printing presses get going (or continue at a greater pace).

I personally believe in a paper money holocaust. A paper money collapse.

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Weaker's charts send a strong message to our paper bunny: At the time money velocity (presently at record-lows) is mean-reverting, which I certainly hold for true, the central banks will not be able to drain those record amounts of money (or raise interest rates) without creating a planetary financial crisis. This means that the price level will increase at an unprecedented speed without any socio-economically acceptable means to reign it in, which is the stuff paper money nightmares are made of.

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HAHAHAHAHA He's calling me Paper Bunny.

Pathetic

Edited by Killer Bunny

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Not yet it hasn't. Give it time. One might expect massive and catastophic deflation and then massive inflation once the printing presses get going (or continue at a greater pace).

I personally believe in a paper money holocaust. A paper money collapse.

yep. just keep on buying a coin every now and then.

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QE1-9 in Japan and deflation. ..

Slightly different setup in Japan's 1990s, don't you think? Dou you really think the UK, US or EU mirrors Japan in 1990?

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  • 395 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% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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