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Gold strategy in the current economy


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HOLA441
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HOLA443
On 10/11/2022 at 13:51, warpig said:

Gold's bottom is in IMO. The DXY looks like it has topped.

image.thumb.png.5979aba811174dd470a83caf21479ace.png

 

  For me, what matters is the ultimate price in GBP as that's the currency I buy it it with and what I will sell it for.

  So if the pound strengthens against the dollar (because of weakening dollar) any resulting Gold price rises as a result of dollar weakening are sort of cancelled out.  In recent times (6-9 months) Gold seems to have been oscillating around the £47k /kg mark.  But it is up £3k /kg vs one year ago.

 

  So definitely a worthwhile investment IMO.

 

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On 11/11/2022 at 15:24, Sour Mash said:

For me, what matters is the ultimate price in GBP as that's the currency I buy it it with and what I will sell it for.

So if the pound strengthens against the dollar (because of weakening dollar) any resulting Gold price rises as a result of dollar weakening are sort of cancelled out.  In recent times (6-9 months) Gold seems to have been oscillating around the £47k /kg mark.  But it is up £3k /kg vs one year ago.

So definitely a worthwhile investment IMO.

Yes of course both GBP and USD matter... one can offset another, a sickly UK economy helped British gold investors weather the rising USD storm. Imagine the price movements in GBP when both GBP and USD head down... it's going to be impressive.

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HOLA445

https://www.reuters.com/markets/commodities/record-central-bank-buying-lifts-global-gold-demand-wgc-says-2022-11-01/

Central banks buy 400 tons of gold in q3 (ytd purchases already higher than any year since 1967!) whilst raging inflation hits 45 year high!

We are in the midst of a reset. Central bankers couldn't be more clear about where things are going. The west is in free fall, the east is rising, and soon they will be dictating global trade rules and gold will take center place once more. The dollar as an international reserve asset will be history.

Isn't it incredible that people think things will go back to normal, that house prices will go up again, interest rates will go down, and their consumer lifestyles will go back to the way they were?

I predict that during the coming year, these trends will accelerate.

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1 hour ago, nero120 said:

https://www.reuters.com/markets/commodities/record-central-bank-buying-lifts-global-gold-demand-wgc-says-2022-11-01/

Central banks buy 400 tons of gold in q3 (ytd purchases already higher than any year since 1967!) whilst raging inflation hits 45 year high!

We are in the midst of a reset. Central bankers couldn't be more clear about where things are going. The west is in free fall, the east is rising, and soon they will be dictating global trade rules and gold will take center place once more. The dollar as an international reserve asset will be history.

Isn't it incredible that people think things will go back to normal, that house prices will go up again, interest rates will go down, and their consumer lifestyles will go back to the way they were?

I predict that during the coming year, these trends will accelerate.

 

Trudeau got a bitch slap from Xi this very afternoon!

Meet the new boss, clown. From now on things are going to be very different.

https://www.msn.com/en-us/news/world/chinas-xi-jinping-lectures-justin-trudeau-over-alleged-leaks

535914?crop=16_9&width=660&relax=1&signa

 

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https://asiatimes.com/2022/11/the-financial-reset-is-near

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The financial reset is near: The world is drowning in a sea of debt

Central banks around the world have been on a gold-buying spree. Gold purchases this year have reached 673 metric tons, more than the total amount purchased in any full year since 1967. Until recently, much of the financial world regarded gold as a ‘barbaric relic” of the past.

Why the renewed interest in gold? The short answer is that the world is drowning in a sea of debt that has passed the US$300 trillion mark. Independent macroeconomists like Luke Gromen and Brent Johnson believe global debt has reached critical levels and they predict a costly and very painful financial reset.

...

 

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39 minutes ago, Arpeggio said:

Better late than never. What are your views on CBDC being backed by Gold as way to get people into accepting CBDC?

IMO CBDCs may be tried domestically, but they will not be used to settle international trade. Domestic CBDCs if tried will quickly fail as the state immediately uses them as a tool to hammer the population, both politically and ideologically. People will reject them (even if they are "backed" by gold, which doesn't really mean much, since they will never be convertible at a fixed rate).

For something to be an effective money it must be:

  • A store of value
  • A means of exchange
  • A unit of account

CBDCs fail on the first two points. If they are forced on unwilling populations then people will simply exchange them for anything else at any given opportunity (i.e. hyperinflation).

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7 hours ago, bodgittandscarper said:

What are people's opinions on the silver vs gold price? Is silver likely to rise alongside gold for once, or will they remain at their historically high divergence?

@azogarwould have a pretty good & well informed opinion on this... If he calls in...

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On 11/26/2022 at 8:11 PM, bodgittandscarper said:

What are people's opinions on the silver vs gold price? Is silver likely to rise alongside gold for once, or will they remain at their historically high divergence?

Again, my silver purchase is going well in AUD terms... and the AUD has strengthened against the USD since then.

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HOLA4417

Zoltan Pozsar's (from CS) latest newsletter, very interesting reading...

https://nitter.net/i/status/1599936367932231680

Quote

The cap of $60 per barrel for Russian oil equals the price of a gram of gold (at current market prices). Let's imagine this set up as a peg. The G7, led by the U.S., effectively pegs the U.S. dollar to Urals at $60 per barrel. In turn, Russia pegs Urals to gold at the same price (a gram of gold for a barrel of Urals). The U.S. dollar effectively gets "revalued" versus Russian oil: "a barrel for less". The Western side is looking for a bargain, effectively forcing a price on the "+" in OPEC+. But if the West is looking for a bargain, Russia can give one the West can't refuse: "a gram for more". If Russia countered the price peg of $60 with offering two barrels of oil at the peg for a gram of gold, gold prices double. Russia won't produce more oil, but would ensure that there is enough demand that production doesn't get shut. And it would also ensure that more oil goes to Europe than to the U.S. through India. And most important, gold going from $1,800 to close to $3,600 would increase the value of Russia's gold reserves and its gold output at home and in a range of countries in Africa. Crazy? Yes. Improbable? No. This was a year of unthinkable macro scenarios and the return of statecraft as the dominant force driving monetary and fiscal decisions.

 

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On 23/11/2022 at 22:19, nero120 said:

IMO CBDCs may be tried domestically, but they will not be used to settle international trade. Domestic CBDCs if tried will quickly fail as the state immediately uses them as a tool to hammer the population, both politically and ideologically. People will reject them (even if they are "backed" by gold, which doesn't really mean much, since they will never be convertible at a fixed rate).

For something to be an effective money it must be:

  • A store of value
  • A means of exchange
  • A unit of account

CBDCs fail on the first two points. If they are forced on unwilling populations then people will simply exchange them for anything else at any given opportunity (i.e. hyperinflation).

Thanks for your input. I see it similarly in that CBDC is entirely "doing" orientated & assets are also "being" and there is no middle ground between the two.

The only suggestion I can find so far: https://www.moneymagpie.com/manage-your-money/jennifer-arcuri-says-you-should-take-your-money-out-of-the-banks#quantum

Jennifer Arcuri, who was Boris Johnson’s mistress from 2012-2016, is a FinTech and cryptocurrency specialist.

She said: “This currency is at the end of its life cycle and the blockchain payment system will be so game changing in many ways. I can see people using XRP as collateral to stake and what they call mining, or yield farming. There will be different ways to earn on your assets in this new system, provided we are using these crypto currencies pegged to hard assets, there could be a huge liberation in the way money moves and how we can get paid. It’s automatic and moves seamlessly on blockchain."

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HOLA4421

https://archive.ph/z7YIu

Quote

Record central bank gold rush triggered by fears of Western sanctions

Central banks snapped up more gold in the first nine months of 2022 than all the annual totals since 1967

A record central bank gold rush has been triggered by fears of Western sanctions after Russia was made a pariah state in the wake of its invasion of Ukraine, according to the World Gold Council.

Gold's day is coming, not long to go now.

Though weird how this much unprecedented demand has almost zero impact on the price. And no one asks why that is...

Edited by nero120
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55 minutes ago, Locke said:

How would one peg a cryptocurrency to a hard asset?

Stablecoins might be an example? https://www.investopedia.com/terms/s/stablecoin.asp

  • Stablecoins may be pegged to a currency like the U.S. dollar or to the price of a commodity such as gold.

Backing CBDC with hard asset seems a way to manoeuvre people onto it.

"Fiat was all wrong, we'll save you!".

China Gold reserves to be revealed in Central Bank Digital Currency announcement that threatens U.S. currency hegemony

"On the State of the Markets podcast, Hunt said he believes all will revealed upon the launch of a new Central Bank Digital Currency.....But could China and its allies be about to surprise the world by backing its digital currency by physical gold?"

Throwing out ideas.

Edited by Arpeggio
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49 minutes ago, Locke said:

How would one peg a cryptocurrency to a hard asset?

The same way that one would peg a fiat currency to a head asset - via TRUST. Which renders the "crypto" part pointless since the entire point of expending the energy to cryptographically secure each transaction in large part is to avoid the need for trusting counter parties.

But most crypto proponents understand neither money or crypto (or tech in general for that matter).

Edited by nero120
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