GOLD

[frizzers]

Thanks for posting Ben Davies. Always entertaining these CNBC interviews and BD is so well composed. I think a lot of what he says is the FOFOA point of view. The 'endgame ' for gold is that it will endure much longer than paper. Then it will revalue itself much, much higher.

 

Interviewer: 'oh, come on...all bull markets come to an end''

 

Davies: 'maybe not, this time till gold reprices currencies in some form or other.

 

 

Great comments worth reading there, too.

 

Always worth tuning into KWN for the Ben Davies interviews if nothing else. Jim Rikards gave a great interview, particularly part 2 of the most recent recent interview. And Griffiths (Cazenove), too.

 

http://kingworldnews.com/kingworldnews/Bro...s__Part_II.html

Funnily enough the said interviewer's kids go the same school as mine and are in the same class. Although I don't think he was the interviewer, just another pundit.

 

His name is Chris Watling and he writes an economics newsletter Longview Economics.

 

He likes gold.

[d2thdr]

Link

 

On investing in gold: I don't have the slightest interest in gold. I like understanding what works and what doesn't in human systems. To me that's not optional; that's a moral obligation. If you're capable of understanding the world, you have a moral obligation to become rational. And I don't see how you become rational hoarding gold. Even if it works, you're a jerk.

 

If a shill for the fractional reserve wants you to believe he does not like gold, I can not think of anything else (Gold) would be better to buy when it is still affordable?

 

Asked whether stocks should be bought at these levels: Long term I'd rather own common stocks I pick than good government bonds at the present rates. So that's an easy question for me. What you should do with your own life depends on your own opportunity costs; how likely it is that you're going to need the money suddenly at an inconvenient time, and a lot of other subjects.

 

And this is what not to buy.

[romans holiday]

Nice consolidating phase shown by gold towards the long term trend line. The trend would see gold going higher on a new leg up in 2011 sometime. It may spike to near 1600 or so on the next crisis before once again consolidating. Extrapolatng the present trend should see gold solidly above 1650 or so in 2012.... with $2000 being reached in 2013. Merry Christmas all.

 

 

[romans holiday]

Some history on the SPDR Gold Trust [holds more gold than the Swiss central bank], and some mainstream price forecasts:

 

http://www.bloomberg.com/news/2010-12-20/s...e-of-tears.html

‘Enormous’ Impact

 

SPDR Gold is now listed in Japan, Hong Kong, Singapore and Mexico City. Gold prices took off, especially as more funds joined in the fray. Gold rose more than 58 percent in the 18 months after SPDR Gold started trading to more than $700 in May 2006, reaching a 25-year high, without adjusting for inflation.

 

“Big, enormous, large and ongoing” is how Dennis Gartman, an economist and editor of the Gartman Letter in Suffolk, Virginia, characterized the exchange-traded products’ impact on gold prices. Widespread concerns about the dollar, other currencies and monetary policy will continue channeling investor demand to gold for the foreseeable future, Gartman said.

 

Gold’s popularity shows how investors are snapping up hard assets as governments and central banks led by the Federal Reserve pump more than $2 trillion into the world financial system.

 

Goldman Forecast

 

Goldman Sachs analysts including Allison Nathan and Jeffrey Currie forecast in a Dec. 13 report that gold will rise to $1,690 in 12 months. Last year, investment overtook jewelry as the biggest source of demand for the first time in three decades and will retain the top spot this year, according to GFMS Ltd., a London-based research firm.

 

To meet the demand, mining companies pushed global gold production to a seven-year high in the first half of the year, according to GFMS. The industry’s total average cash cost to produce an ounce of gold rose 17 percent in that period as companies pushed to extract ore that would otherwise not make economic sense, GFMS said in a September report.

 

New York-based BlackRock runs one of the fastest growing bullion funds today. It carves roughly 100 shares from every ounce of gold, versus the 10 shares per ounce created by the World Gold Council ETF.

 

In so doing, iShares Gold Trust makes it possible for day traders or college students to play the gold market for about $13.44. That’s less than the cost of a 16-inch pepperoni pizza delivered to a dormitory in Chicago.

 

Day Trader

 

One such day trader is James “Pat” King, a 25-year-old Boston University finance graduate who started working out of the basement in his parents’ home in Lincroft, New Jersey, after he lost his job on Wall Street in August 2009.

 

King had invested in the SPDR Gold fund in April of that year on the advice of his father who was “very leery of the federal government and their ability to make money appear out of thin air,” he says. He’s holding that investment while he trades shares in BlackRock’s iShares Gold Trust more often, hoping to capitalize on the metal’s news-driven price swings.

 

He’s unsure how he’ll know when to sell his main gold holdings.

 

“There’s so much uncertainty in the underlying state of the macro economy,” he said. That translates into “a massive pouring into gold of money from the sidelines, even moms-and- pops and high net-worth individuals want a piece of it.”

 

‘Yellow Elephant’

 

World Bank President Robert Zoellick has suggested that Group of 20 nations should consider using gold as an international reference point of market expectations about inflation, deflation and future currency values as they reform the global monetary system.

 

“Gold is the yellow elephant in the room,” Zoellick said on Nov. 10. “Markets are already using gold as an alternative monetary asset because confidence is low.”

 

Byron Wien, vice chairman of Blackstone Advisory Partners LP, says he’s recommending institutional portfolios put 5 percent of assets in gold. That’s come as a shock to some clients. He says he’s been run out of conference rooms.

 

“People think it’s just another bubble or it isn’t real,” he said.

 

Wien says he sees gold reaching $1,500 within two years, although any potential price gain is less important than having a safety net. “I’m recommending gold as a kind of insurance policy against calamity in financial assets,” Wien, 77, said.

 

While Soros has called gold a bubble, he hasn’t gotten out of the market.

 

SPDR Gold was the Soros Fund’s largest single holding as of Sept. 30, according to a filing with the SEC. The fund acquired 5 million shares in the iShares Gold Trust, the filing shows.

 

‘Where Are You’

 

“It’s all a question of where are you in that bubble,” Soros, 80, said in a speech at a meeting organized by the Canadian International Council in Toronto on Nov. 15. “The current conditions of actual deflationary pressures and fear of inflation is pretty ideal for gold to rise.”

 

“The big negative is that too many people know this and a lot of hedge funds are very heavily exposed,” Soros continued. He declined an interview request for this article.

[warpig]

Gold is off on a mini-tear by the looks of things. Very nearly $1,400/t.oz and it's teetering at the all time high in GBP as well, £903.90/t.oz.

 

2011 is going to be a good year to own gold/silver IMO.

[narrowescape]

Gold is off on a mini-tear by the looks of things. Very nearly $1,400/t.oz and it's teetering at the all time high in GBP as well, £903.90/t.oz.

 

2011 is going to be a good year to own gold/silver IMO.

 

Yep another GBP all time high 910.68

[BelfastBoy]

£914 a late Christmas present for everyone.

 

I know it's now considered bad luck, but it is good fun.

 

 

ho ho ho!!!

[G0ldfinger]

ho ho ho!!!

[G0ldfinger]

Crud. I guess this is all on small volume?

 

I have to buy gold for my SIPP (finally!!) and have bought some already and wanted to average in over the next month or so. But seeing this now...

 

I am used to buying smaller chunks more regularly (often silver anyway), but now that I have slightly more to buy and all at once ...

[warpig]

Don't worry about it, "No fate but what we make..."

 

BTW - You've made my Christmas with that picture, pour yourself another beer, you've earned it!

 

£914 a late Christmas present for everyone.

 

I know it's now considered bad luck, but it is good fun.

 

 

ho ho ho!!!

 

[G0ldfinger]

Just in case we don't reach $1,650 by Jan 14th.

 

http://jsmineset.com/2010/12/29/jims-mailbox-611/

I stand by what I have said recognizing that I may have made a fool out of myself in public. The fact that I said $1650 many years ago is no excuse if I am wrong on January 14th 2011 and gold is at $1550.

 

There is no gray, for a responsible person, in what you say.

 

Jim

[romans holiday]

http://jsmineset.com/2010/12/29/jims-mailbox-611/

I stand by what I have said recognizing that I may have made a fool out of myself in public. The fact that I said $1650 many years ago is no excuse if I am wrong on January 14th 2011 and gold is at $1550.

 

There is no gray, for a responsible person, in what you say.

 

Jim

Errr.... shouldn't he have said $1450?

 

That date is only 2 weeks away.

[G0ldfinger]

 

Jim Sinclair’s Commentary

 

Words of mature wisdom from good Sir Richard (Russell).

 

Dear Friends,

 

December 27, 2010 — I have posted below the year-end price of gold starting with the year 2000, the first up-year of one of the greatest and least appreciated bull markets in history. Take in this series, you may never see it like again.

 

2000 — $273.60

2001 — $279.00

2002 — $348.20

2003 — $416.10

2004 — $438.40

2005 — $518.90

2006 — $638.00

2007 — $838.00

2008 — $889.00

2009 — $1118.40

2010 — ?

 

I’ve been around a long time, and I’ve studied many primary bull markets. And now I want to venture a few of my observations.

 

In markets, I have never seen a series like the above end with a whimper or a fizzle. The end or the wind-up of such a series usually arrives with an upside "explosion," as those who have failed to participate in the series finally rush in to join in the apparent endless advance. This is the wild and wooly speculative phase of a great bull market. Big bull markets don’t end with a sigh, they end in exhaustion.

[romans holiday]

Interesting consolidating/ holding pattern in gold here over the past few months. One week up then a couple of weeks down:

 

 

[Errol]

[azazel]

My Mum has been clearing out a flat of a old lady she worked for, who has now died. She has found 5 sovs with the reciept dated 1974 when they cost £31.50 each. They now cost £228.50 or 7x more.

 

Interestingly, she bought her house in 1978 for £11,150 and now she is trying to sell for £250,000 which is 22x more.

 

I think think this makes gold look very cheap still.

[fitkid]

My Mum has been clearing out a flat of a old lady she worked for, who has now died. She has found 5 sovs with the reciept dated 1974 when they cost £31.50 each. They now cost £228.50 or 7x more.

 

Interestingly, she bought her house in 1978 for £11,150 and now she is trying to sell for £250,000 which is 22x more.

 

I think think this makes gold look very cheap still.

 

A real world post.

interesting comparable and i would concur emphatically.

[Pixel8r]

My Mum has been clearing out a flat of a old lady she worked for, who has now died. She has found 5 sovs with the reciept dated 1974 when they cost £31.50 each. They now cost £228.50 or 7x more.

 

Interestingly, she bought her house in 1978 for £11,150 and now she is trying to sell for £250,000 which is 22x more.

 

I think think this makes gold look very cheap still.

Can anyone add how much the average wage has increased by from 1978 to present? That would give us an interesting comparison of the ridiculous rate of house price inflation.

 

 

[azazel]

Can anyone add how much the average wage has increased by from 1978 to present? That would give us an interesting comparison of the ridiculous rate of house price inflation.

Yes it would. My Dad earnt £2500 a year. If he was still doing the same job he would be on about £18k. Interestingly, that means wages have gone up by 7.2x, the same as gold today (if the price was correct for 1978 not 74)

 

He had a mortgage of 3.5 x and £2500 deposit which is how they afforded the £11,150. Houses have gone up 22 times. She was trying to sell for over £280k and has reduced to £250k. They have been a fantastic investment with a rental income and tax free if you got round the CGT. I cant see how they can continue to be a good investment until there has been a correction in asset prices. I dont think houses are going to crash more than 20% as the banks have an interest in keeping thier values up. The HPC bunch will be dissapointed. Its much more likely to end in very high inflation and gold to £2500 an ounce and the cost of living will go to the moon, followed by wage rises.

[warpig]

I don't see how they can stop it TBH. Look at the US and Ireland and it's getting worse. I still think 50-60% off Q4 '07 prices will happen here in the England within 2-5 years.

 

I dont think houses are going to crash more than 20% as the banks have an interest in keeping thier values up. The HPC bunch will be dissapointed.

 

[Pixel8r]

I don't see how they can stop it TBH. Look at the US and Ireland and it's getting worse. I still think 50-60% off Q4 '07 prices will happen here in the England within 2-5 years.

How they could stop it going down to far is to create loads of inflation, that would mean that even with prices just drifting down they would really crashing against real things. I think that is their aim to stop as many mortgages being defaulted on, let the market drift slowly lower while creating massive inflation.

 

 

[warpig]

I meant in real terms.

 

Happy New Year to all, let's hope for a golden 2011!

 

How they could stop it going down to far is to create loads of inflation, that would mean that even with prices just drifting down they would really crashing against real things. I think that is their aim to stop as many mortgages being defaulted on, let the market drift slowly lower while creating massive inflation.

 

[Pixel8r]

I meant in real terms.

 

Happy New Year to all, let's hope for a golden 2011!

You are completely correct then, there is nothing that will stop it.

 

Happy New Year.

 

 

[azazel]

How they could stop it going down to far is to create loads of inflation, that would mean that even with prices just drifting down they would really crashing against real things. I think that is their aim to stop as many mortgages being defaulted on, let the market drift slowly lower while creating massive inflation.

 

I agree, that is exactly what they are going to do. This is why the crunch point for HPC came when you either accepted the gold arguement or rejected it. They rejected it by moving it off topic. Thanks to goldfinger and cgnao and others I seem to have made the right decision. When the massive inflation hits, there will little that can be done to preserve any wealth you have in currency, as the lifeboats of gold and silver and other commodities left long ago.

 

 

 

A clue. Why are they replacing coins such as 1p, 2p and starting with the 5p, 10p, with steel versions? To save 10 million a year? Rubbish! It will cost much more than that to change the machines and all the copper and nickel in circulation has not been consumed. The copper coins have been harvested from the population by the bank to recall all that copper, so if anything, its been a good investment as the price of copper has gone up since the mint bought the copper to make the coins in the first place. The coins are being made of steel so that people do not hoard them to preserve their wealth as the metal content of the coins will be worth more than the face value.

 

Will they be able to control the inflation, as history shows that many have failed in the past.

[d2thdr]

Will they be able to control the inflation, as history shows that many have failed in the past.

 

What about the tired argument,' This is Britain, We will always be ok?'