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G0ldfinger

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Everything posted by G0ldfinger

  1. G0ldfinger

    GOLD

    Hi everyone. I am new here. This is my first post and at the same time my first thread. I am sort of looking for a new (internet) home after the environment over at HPC.co.uk got too annoying, with people moving the very popular gold thread around all the time. Maybe information on gold and related matters are more appreciated here. Anyway, should the moderators here deem this thread inappropriate, I would be happy to be moved. The theme of this thread should be general information on gold, gold as a macro-economic variable, and its relationships with other investements/assets, like e.g. houses. Money/credit/debt issues are of course of interest as well. My idea was to put it in the main forum because I like broad discussions. And my main reason for coming here is that the HPC-gold thread was moved from the main forum which reduced the number of posts/posters on it, and just made things much more inconvenient. I hope that is OK with the philosophy on this forum here. Regards, GF PS: I chose the name 'G0ldfinger' since I am/was 'Goldfinger' on HPC. No offense to the holder of the name 'Goldfinger' on this forum here, who seems to exist as well.
  2. This HPC will be much, much worse than 1990. According to this, we are witnessing a once-in-several-lifetimes event. Frontrow seat. http://www.wolseysec...news.php?id=566 QUOTE Activity levels down over 60% from last housing market crash Monday 18th August 2008 Wolsey calls for Government action or face the consequences. While the Government continues to flounder on the sidelines, activity in the housing market has sunk to an unprecedented low level. Wolsey Securities is calling on the Government to take urgent action, as activity falls to a low level that even surpasses the slump during the last housing market crash. With the Bank of England figures showing that only 36,000* mortgage approvals were made in June, the number of housing transactions is currently set to total just over 400,000 this year. This low level represents over a 60% drop in activity on the worst year of the 1990s housing market crash, when transactions ran at around one million. Mike Ratcliffe, chief executive of Wolsey Securities, comments: "Transaction levels have now dropped to dangerously low levels that have not been seen in several lifetimes. The housing industry cannot sustain this level of trade. Housebuilders are on their knees. If there isn't an improvement soon many will fold, as their cashflows will not be able to meet overheads and interest costs. ==== ==== UPDATED - by DrBubb:
  3. G0ldfinger

    OIL

    If this (see chart) happens within the next 5-10 years, and Ben keeps the Dow above $10,000 ("wealth effect", yadda, yadda, rhubarb), then we might see $500 oil. This is a non-hyperinflationary prognosis. (In a HI, the sky would be the limit.) We seem to be not too far from some major resistance level that, once broken, would first bring us back to 2008 levels. I guess we should expect this the latest when/where the upper horizontal line cuts the upper downwards channel line (small green circle). Over time, the channel will possibly prove too conservative and will break to the downside (green arrow; add peak oil to the mix). Bubb, what's your timeline for oil $400? I think it could happen within 5 years, maximum 10.
  4. G0ldfinger

    HYPERINFLATION

    I want this thread here to become the prime place to post facts, charts and opinions on the topic of an impending hyperinflation in the US Dollar, and maybe all Western currencies. Things I would suggest that should be posted here are: - M3/money supply data and charts. - central banks balance sheets/charts, i.e. how bloated is the Fed with toxic assets. - bailouts and their financing (monetization etc.). - breaking news that indicate more inflation ahead, be it commodities prices (oil, gold), bailouts or worse. - historical parallels, e.g. with Weimar 1921-23. I am not quite aware of such a thread on the forum yet. Therefore my attempt here. I hope it will become a useful tool for all of us, even the deflationistas. == == (added): Inflation vs. Deflation chart : Gold-to-TLT Ratio thread
  5. ...original title... The Beginning of the Great Trade Wars As in the Great Depression (DB note: GF, I will change the title back, if the discussion reverts to "trade wars". or if you object to my heavy-handed moderation. No offense was intended !) Blaming 'food price inflation', the Great Trade Wars seem to be starting already, slightly earlier than I would have thought. Countries (like China etc.) don't export grains and fertilizers anymore, governments put prohibitive taxes on it. What will be next? - Oil - Gold - Currencies?
  6. Similarly as the dramatic 1974 sell-off in gold was repeated 2008 in oil (and NOT in gold), the gold confiscation of the 1930s in the US is repeated all over the world today in pensions (NOT in gold): - Argentina has done it. - Ireland is going for it, IIRC. - Hungary, see below. - Now France. - Do we have other examples already? It's the pensions, not gold, stupid! http://www.efinancialnews.com/story/2010-1...-pension-assets http://www.ft.com/cms/s/0/adb04460-fb3e-11...l#ixzz16l3SQTVK
  7. FRAUDCLOSURE Meltdown Alert MERGED THREADS: Chris_ct (Lawyer says nobody knows who owns any property, Foreclosure mess) and GF (Gonzalo Lira article on the mortgage kill-off, The Second Leg Down of America’s Death Spiral) ------------ I am not an expert, but I think the article is quite well-written. I would possibly try to avoid the 4-letter words and references to sexually transmittable diseases. http://www.zerohedge.com/article/gonzalo-l...as-death-spiral QUOTE The Second Leg Down of America’s Death Spiral ... This is a major, major crisis. This makes Lehman’s bankruptcy look like a spring rain, compared to this hurricane. And if this isn’t handled right—and handled right quick, in the next couple of weeks on the outside—this crisis could also spell the end of the mortgage business altogether. Of banking altogether. Hell, of civil society. What do you think happens in a country when the citizens realize they don’t need to pay their debts?
  8. It would be very dangerous to write this woman off. A president is only a front face. And her's is a pretty one.
  9. G0ldfinger

    On DIVERSIFICATION

    People who know the basics should go to (4) or (5) directly. (1) Diversification is the mitigation of risk by the use of "stochastic independence". (2) What is stochastic independence? Throwing a standard dye repeatedly, the outcomes (numbers of eyes) should be stochastically independent as long as the dye is unbiased (= fair) and no other manipulations are taking place. This means, the odds (probabilities) for the outcomes in any round do not depend on the outcome in any of the other rounds. Similarly, the odds of one type of investment to rise or fall might not depend on the fate of another investment, i.e. they might be "independent". (3) How does diversification work? Back to the dice. The odds for each of the possible outcomes are identical (1:6). This is why the average outcome for higher and higher numbers of rounds converges to 3.5 = 1/6 + 2/6 + ...+ 5/6 + 6/6 with a probability of 100%. This is Kolmogorov's Strong Law of Large Numbers, maybe the most important theorem of probability theory. This means that betting on the outcome of one dye is highly risky (wrong in 1 - 1/6 = 83.33% of all cases), while betting on the average outcome of many rounds (e.g. that the average of 1,000,000 rounds lies between 3.4 and 3.6) is very safe (almost 100% correct). Similarly, risk can be mitigated in a financial portfolio by choosing many different (largely) independent constituents. A classic example is insurance. Here, diversification or the Strong Law of Large Numbers is in fact the lone business concept. (4) When diversification doesn't work Diversification of some kind might work in a standard environment, e.g. a large life insurer can assume almost deterministic mortality rates due to its size, and the business model (the premiums) works just fine. However, if a Black Swan comes along, e.g. in the form of an extremely deadly desease (Black Death?), diversification breaks down because stochastic independence breaks down. The odds get distorted. Suddenly, all the clients die within a few weeks, and the business goes bust. Similarly, any hedge fund/bank/insurer/individual making the wrong bets based on independence can go bust. (5) What to be aware of with your personal diversification of risk When you assess your own portfolio, you might want think of the following risk factors (concentration risks) that you might want to diversify: - investment class (You only have fiat money, no gold?) - specific asset (80% of your saving were in HBoS shares?) - agents (You only deal/save with/through Barclays?) - geographic/political concentration (Is all your bullion in one single vault in Zurich? Or: All you own is in the UK?) - ... Certainly fellow GEIers will come up with more that I have forgotten to include here. (6) The risk of overestimating your diversification In general, people greatly overestimate how diversified they are. In several instances I have read on this board (or other boards) that people would want to hold some cash (besides their bullion), maybe in other currencies, to be "diversified". In most cases this must certainly be utter nonsense, because these people completely underestimate their exposure to their home currency. Let's just assume a UK citizen. This person possible has a (mortgage-free) house, say worth 400,000. There is a remaining lifetime income, including the pension, say worth 500,000. Assume now that on top of this the person has savings of 100,000. Assume that 50% of it is in some sort of managed fund invested in shares and bonds in the UK, and the final remaining 50,000 "for diversification" is split into 20,000 gold and silver, and 30,000 foreign currencies, managed by our person herself. Summing up, the person has invested 950,000 in UK houses/bonds/shares, only 30,000 in foreign currencies, and ONLY 20,000 (2% of her net worth!!) in gold and silver. A receipe for complete financial disaster, but the person possibly thinks that she is "diversified". How could this happen? Ignorance towards the huge sums tied up in lifetime income and houses, ignorance towards the huge UK exposure. On a personal note: I sometimes say that I am 100% in gold and silver. When I say this I make the exact mistake as above: I do not take my lifetime income into account. Since I can't force my employer to guarantee me gold or silver wages, I remain heavily underinvested in gold and silver although I put every spare penny into it. So, how bad must it be for other people who "diversify" on top of it? My little essay here can not be exhaustive and I certainly had to leave out and grossly simplify many things. But with regards to "diversification", you better think twice.
  10. Let's start with Richard Russell: http://www.gold-eagle.com/gold_digest_08/russell112509.html I agree with Russel that a deluded majority, the paper/fiat/dollar bugs, believe that a piece of paper constitutes better money than gold or silver. This is an irrational mass movement, like may others. Unlike many others, it is a pretty recent one (since 1971), so maybe there is some hope.
  11. G0ldfinger

    Do Renters Die Poor?

    There was an article on this topic in DER SPIEGEL recently. People remarked that renters might save less but have better lives as they spend their money and have fun, rather than starving themselves to pay off the mortgage and then pass on a huge amount of money (in the form of a house) to some nephew of 2nd degree when they croak. So, maybe richer in monetary terms, but poorer in life experience and satisfaction? Just a thought... (and a German perspective as renting is a much better thing in Germany than in the UK).
  12. G0ldfinger

    GOLD

    Good to see a few familiar avatars around! Still holding all my gold and silver and adding to it every now and then. The wait has been long, so a little up-move in the metals would be nice to see. But I am very patient, and one has to be, it seems.
  13. G0ldfinger

    SILVER

    Interestingly, Dan Norcini is not at all bullish on silver: Agressive Hedge Fund Selling Plagues Silverhttp://traderdannorcini.blogspot.de/2014/08/agressive-hedge-fund-selling-plagues.html
  14. G0ldfinger

    SILVER

    It seems that we are contrarians here: http://www.bloomberg.com/news/2014-08-25/gold-drops-toward-two-month-low-as-silver-slips-to-10-week-low.html
  15. G0ldfinger

    SILVER

    I sorta nailed this one back in the days: I think the jury is still out on this one: These are indicators that silver will outperform gold, and I think gold's resurrection is only a question of time given none of the deeper financial issues in Europe (and elsewhere) have been resolved. Call me Silverfinger!
  16. G0ldfinger

    GOLD

    http://gold.approximity.com/gold_charts.html http://gold.approximity.com/since1885/DJIA-Gold-Ratio_Q_LOG.html http://gold.approximity.com/since1885/Gold-Silver-Ratio_Q.html
  17. G0ldfinger

    Palladium ready to run.

    $860 was the top in Feb 21, 2011 (apart from the 2001 spike). We're over 872 right now. MAJOR outbreak IMHO.
  18. I think it's worth having an own thread for JS's posts. Posted On: Tuesday, October 07, 2008, 2:02:00 PM EST The Federal OTC Derivative Dealers Author: Jim Sinclair Dear Friends, Please understand that the Fed reacts to circumstances rather than acting before potential problems happen. If the Fed hadn't taken the rather strange action they took today by becoming OTC derivative dealers themselves this would have been the day the USA banking system imploded. Watch Libor rates to signal the point of detonation. Circumstances appear as if there were many problem Angels dancing on top of a pin that is being balanced on the nose of just those people who created the problem in the first place. An implosion of the banking system is coming, which means a bank holiday will occur. You now must have enough cash in hand to last a month or two. If you have not distanced yourself from financial agents then you have a financial death wish. If you have NOT made absolutely sure that your custodian account is a real custodial- ship you are probably in for a surprise. I took a call yesterday from a mature lady who told me she feels her money market fund that is only in Treasuries will not pay her out. They did tell her they intend to in seven days. I asked her to call me back in eight days. How does she know that this money market fund is not in OTC derivatives based on the movement of Treasuries? I do not want you to make that call to me. If you can retire from your retirement program at some reasonable discount do it NOW. This is it and it is NOW. Gold is going to $1200 and $1650. The US dollar rally has NO fundamental legs. Why are so many of you sitting there like a deer caught in the headlights? Protect yourself and do it TODAY! Respectfully, Jim ==== His website : http://JSmineset.com
  19. I feel that this deserves its own thread for several reasons: (1) Besides the quake that has caused it, it could take a whole own dimension as Chernobyl has shown. However, it does not necessarily have to get that bad (see Three-Mile-Island). (2) The developments will be highly relevant for Japan's further energy policies (more nuclear, get out of nuclear etc.), and, maybe even more important because of the ongoing discussion there, for Germany. (3) All the above will be highly relevant for investment decisions in the energy sector.
  20. G0ldfinger

    GOLD

    http://gold.approximity.com/gold_charts.html
  21. G0ldfinger

    GOLD

    See you up thereeee!
  22. G0ldfinger

    GOLD

    DOUBLE.
  23. G0ldfinger

    GOLD

    Further to Igglepiggle's growing imbalances and ALK's criticism of my thinking that QE is here to stay. ALK, don't you see how QE is becoming engrained into the system and how we are slowly getting used to it? Those people who bought your NZ house or who are buying houses in the UK, US or Germany right now, they enjoy ridiculously low interest rates. Fine if they're fixed, but most of them are not. They take on a ginormous mortgage fixed for 5 years or so, and then you think they would be able to cope with, say for starters, triple the rates when the Fed stops QE? Also, the deficit in the U.S. has been reduced by sequestering, but this is a drag on the economy. Meanwhile the Fed has until recently monetized that whole deficit! So, do you really think they will start paying down debt soon, or at least keep it constant? No, again, QE will become accustomed to as the new normal. It's like NuLabour made sure that all the UK's debt was paid back during the boom years - oh, wait, it wasn't! Great surprise!! Read that famous book on the French hyperinflation following the revolution. It's appaling how history does not just rhyme, but seemingly repeat itself right here right now. Only, as I said, this thing is big, like a supersized super-tanker, so it will take off slowly.
  24. G0ldfinger

    GOLD

    DOUBLE POST.
  25. G0ldfinger

    GOLD

    What is the inflation rate at the time? What are interest rates doing? Who is the Fed Chair(Wo)man? Is it bail-ins or bail-outs, or both? What is MZM doing? What is money velocity doing? How is the US/Europe/China/Japan doing? How easy is credit? How are commodities like food and energy doing? One way of getting out could be to slowly turn gold into cheaper hard assets at the time (property, general stocks), but (if paper markets are still functioning) to speculate in long options to potentially cover any ridiculous spike-ups in the gold price, while keeping some bullion for SHTF liquidity reasons.
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