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If you were that bullish you'd be a heavy buyer. Surely you'd want to pay as little as possible?

 

What difference does £10-20 in a buy price make if the gold is for insurance in the event of total collapse and reintroduction of gold as part of a currency system?

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This fund is about $20Bn so they actually have 5% in physical gold!

Now, we watch: Calpers? Pimco Total Return? .....If they all got in 5% gold would be in 5 figures per ounce.

 

http://noir.bloomberg.com/apps/news?pid=20601087&sid=ak19r.iSm4M8&pos=4

April 16 (Bloomberg) -- The University of Texas Investment Management Co., the second-largest U.S. academic endowment, took delivery of almost $1 billion in gold bullion and is storing the bars in a New York vault, according to the fund’s board.

 

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What difference does £10-20 in a buy price make if the gold is for insurance in the event of total collapse and reintroduction of gold as part of a currency system?

 

None, if the insurance pays out.

 

Same as if my house burns down, it doesn't matter how much I paid for the insurance, BUT until that fateful day, I will carry on using home insurance price comparison websites, because until that uncertain day, it all just seems like a cost to be minimized.

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Not uncertain. The damage has already been done. We are on the track to total implosion - it's not avoidable now.

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What difference does £10-20 in a buy price make if the gold is for insurance in the event of total collapse and reintroduction of gold as part of a currency system?

 

Well since you ask it's £2k on every £100k bought. And about £12k if invested in gold and your price projection comes true.

 

But anyway it's not in my nature to throw money away, never will be either.

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Simply finding the cheapest dealer is not always the best policy in any event. A good track record, customer service and merchandise you can trust is worth paying a little extra for ~(imo).

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Not uncertain. The damage has already been done. We are on the track to total implosion - it's not avoidable now.

 

 

Even so, I fail to comprehend why one would want to put money in the pockets of brokers. If you consider the knowledge deployed by a bullion dealer, one would be hard pressed to say a 3% spread represents value for money. They make a big deal about their expertise, yet the chemistry they deploy is sub o-level. It's gold for heaven's sake. We aren't asking them to identify the steric hindrances in RNA!

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Simply finding the cheapest dealer is not always the best policy in any event. A good track record, customer service and merchandise you can trust is worth paying a little extra for ~(imo).

 

 

with respect Errol, that is clearly rubbish. If you were big on trusting a man's word, you wouldn't feel the need to take physical delivery. You know as well as I do: gold is not about fiduciary obligations. It's about gold.

 

As for the customer service, well, they can call me a dumbass as long as they deliver the stuff for the right price.

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with respect Errol, that is clearly rubbish. If you were big on trusting a man's word, you wouldn't feel the need to take physical delivery. You know as well as I do: gold is not about fiduciary obligations. It's about gold.

 

As for the customer service, well, they can call me a dumbass as long as they deliver the stuff for the right price.

It's also about integrity too. I wouldn't want to spread my details round too many dealers to save a few quid here and there, and in the process multiply my chances of getting a visit in the night by a factor of X.

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Well........... As I'm going through a messy divorce and my investment assets will be valued and divided up in June a big drop would suit me well........ :)

 

Then a massive rally would really make my year !

 

Mind you that would make Acton Girl even more grumpy....................:unsure:

 

I'm not selling anything before I face the 'contempt of court' threat !

 

You may have had alternatives, depending upon the specific circumstances. I will say no more.

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"The University of Texas Investment Management Co., the second-largest U.S. academic endowment, took delivery of almost $1 billion in gold bullion and is storing the bars in a New York vault, according to the fund’s board."

 

The decision to turn the fund’s investment into gold bars was influenced by Kyle Bass, a Dallas hedge fund manager and member of the endowment’s board, Zimmerman said at its annual meeting on April 14. Bass made $500 million on the U.S. subprime-mortgage collapse.

 

“Central banks are printing more money than they ever have, so what’s the value of money in terms of purchases of goods and services,” Bass said yesterday in a telephone interview. “I look at gold as just another currency that they can’t print any more of.”

http://www.zerohedge.com/article/golden-tipping-point-university-texas-takes-delivery-1-billion-physical-gold

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It's also about integrity too. I wouldn't want to spread my details round too many dealers to save a few quid here and there, and in the process multiply my chances of getting a visit in the night by a factor of X.

 

Well, that cuts both ways.

 

If I take physical delivery of a couple of kilos from one dealer, that dealer knows I have something worth turning up for at 4am. If I buy small quantities from separate dealers, they might be wondering whether it's worth it.

 

Besides, we weren't talking about quantity of dealers, we were talking about price. Given the propensity of big city banks to expose their clients to total wipeout, can you hand on heart say that big commissions mean big integrity? So why trust a dealer that charges you a bigger spread?

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In defense of Errols strategy, I will say that a good dealer will often give you a discount if you are a regular customer. If you ask,and if you you have " relationship" over time they will even cut you special deals and offer you something not usually for sale. At least mine do. I would rather shop at the local grocers than go down the chain supermarket. If you want to sell, you'll also pick up good deals. Regulars also queue jump/ getpriority.

No, I not going to say...

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"The University of Texas Investment Management Co., the second-largest U.S. academic endowment, took delivery of almost $1 billion in gold bullion and is storing the bars in a New York vault, according to the fund’s board."

http://www.zerohedge.com/article/golden-tipping-point-university-texas-takes-delivery-1-billion-physical-gold

 

I passed that article to a friend of mine who analyses the gold/oil/currency markets.

 

He said that will prove to be a BIG mistake and told me to read this article instead

http://www.businessinsider.com/mike-maloney-deflation-2011-4

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If you want to sell, you'll also pick up good deals. Regulars also queue jump/ getpriority.

 

 

And just to counter that, in a worldwide fiat system collapse, I see no hurry in off-loading. In that scenario I see no shortage of buyers.

 

I'm also curious how this queue jumping might work. If you phone up, don't they just quote you a sell price like any broker? I can't imagine them phoning prefered clients up asking them whether they would care to deal ahead of a "stranger". How long would the list be they'd have to phone every time a stranger called to sell? Aren't people selling currently anyhow? Do you get calls asking whether you'd like to put in a sell before these strangers do?

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I passed that article to a friend of mine who analyses the gold/oil/currency markets.

 

He said that will prove to be a BIG mistake and told me to read this article instead

http://www.businessinsider.com/mike-maloney-deflation-2011-4

 

Stoneleigh and I can't see how the price of gold -and silver- can hold up, let alone go up, if and when the very rounds of never-before-seen deleveraging and deflation Mike predicts come to pass. We think that it will force a huge amount of people who hold gold, to sell it into a buyers market. And those left standing afterwards will not be numerous enough to hold up the price either. It's not that gold can't reach $20,000, but that it can't do so in today's dollars. A subtle difference.

 

By then, however, and I've talked about this before, the number of people who could be called "investors" according to the definition of the term we use today, will of course plummet, by at least the same 90% that asset prices will. The revulsion will be widespread. And this is nothing new. There never was a time until quite recently when every mom and pop were investors. So we’ll only get back to normal, not away from it.

 

Still, that does not bode well for the price of gold and silver, a point Mike Maloney somewhat hesitantly tries to ignore. If, as we both expect, the vast majority of people lose the vast majority of their wealth, there will be a lot of gold for sale in "the market" (whatever it may look like by then). That means a huge amount of sellers, forced to sell by investment losses and other predicaments, and an ever shrinking number of potential buyers. Who might just be wise enough to wait for the price to come down further. It seems obvious where that leads.

 

Neophyte mode: The temporary deleveraging/reserve currency argument, I think I can almost understand, but the rest of it? - The sheer number of losers overwhelms PM buying ability worldwide??? Oh really?

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I passed that article to a friend of mine who analyses the gold/oil/currency markets.

 

He said that will prove to be a BIG mistake and told me to read this article instead

http://www.businessinsider.com/mike-maloney-deflation-2011-4

 

Automatic Earth loves deflation. Now here they are wrong on a few points.

 

Oil will get very cheap, no doubt about it. The only thing will be it wont be as cheap in USD. Never can, never will (until US becomes a very productive country).

 

For people living in the west, it makes the most sense to buy gold. Now. As much as they can. Period.

 

Oil wont be priced globally in USD in the future. Once you accept this, the argument put forth by Automatic Earth falls flat on its face.

 

Among the most important thing this forum has taught me - DO NOT TRUST A DEFLATIONIST. Especially the one who thinks he/she are clued up.

 

Also I back Errol's assertion on gold, its price and its dealers.

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Automatic Earth loves deflation. ...

 

- DO NOT TRUST A DEFLATIONIST. Especially the one who thinks he/she are clued up.

 

Well, I'm not sure about not trusting deflationists per se, but you'd be wise to wonder about these Automatic Earth guys judging by the quote:

 

Ilargi: ... Markets, according to him [Maloney], and it's a great metaphor, are a voting machine in the short term (the whole crowd rushes in to one side, they all want paper assets), but they're a weighing machine in the long term

 

If these guys really do think they are "clued up", as you put it, they ought to be able to spot a Benjamin Graham metaphor, especially on ethat famous, when the see it. I'm also amazed at the idea of a guy lecturing bankers on such widely understood concepts as Fed open market operations, fractional resrve banking, money supply figures and (gawd help us) PE ratios and head and shoulders formations. The Maloney acolytes who lap that stuff up must be thinking Rocky is this season's block-buster movie.

 

Also I back Errol's assertion on ...its dealers.

 

That's fine by me, but bear in mind this is a discussion forum, not a poll.

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http://www.marketwatch.com/story/brics-make-move-to-shove-dollar-aside-2011-04-17?siteid=rss&rss=1

 

BRICS make move to shove dollar aside

Commentary: Beijing won’t push the renminbi too fast.

 

BOAO, China — China and four other leading high-growth economies have taken landmark steps toward lowering the importance of the dollar in international financial transactions — part of a seminal shift in the move towards a multicurrency reserve and trading system.

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Closing in on $1500.

 

yep, 1625 looks like the consolidation move - if you like TA - Maloney certainly does, though his ideas of H&S are a step or two removed from anything I've read / witnessed.

 

 

More on the paper / physical issue that the Texas Endowment Fund produced much publicity for:

 

[FSB chairman] Mario Draghi also used the IMF meeting to restate concerns about exchange traded funds (ETFs) - stand-alone investment vehicles that typically track the performance of a single asset class such as gold or copper. Retail investors as well as institutions have used ETFs as a proxy for the commodities they back and have invested $1.4 trillion in them, according to BlackRock. However, many are highly leveraged.

 

In some of his strongest words yet about ETFs, Mr Draghi likened them to the derivatives that triggered the financial crisis.

 

He said: "It is reminiscent of what happened in the securitisation market before the crisis." - Telegraph

 

... drawing more parallels with sub-prime / CDOs etc:

 

Many ETFs have “physical” traits meaning they buy the securities underlying the index. The FSB said this type was prevalent in the US and in offerings by large independent asset managers.

 

But almost half the ETFs in Europe are ”synthetic,” meaning they use derivatives and swaps instead of actually buying the constituents of the index for which it is a proxy.

 

According to the FSB, they are generally provided by asset management arms of banks, and one reason they may be growing is that they create synergies by serving as a counterparty to derivatives trading desks at the parent banks.

 

Remember securitised subprime mortgages? Those AAA bonds were available in thousands of types, unlike the mini-menu of similarly-rated US Treasuries, which varied only by maturity duration. As later became evident, the sheer diversity boosted their opacity, as did complicated collateral schemes that ultimately depended on cheap short-term liquidity for support.

 

Could the proliferation of ETFs—the FSB noted you can now buy “leveraged ETFs, inverse ETFs, and leveraged-inverse ETFs”—be a sign of something similarly untoward?

 

Investors in ETFs may like the asset their fund proxies, but if what they really own are a set of swaps with a bank and that bank defaults, their savvy will be for naught.

 

The FSB even notes that synthetic ETFs may belie incentives that are not properly aligned, and that “conflicts of interest can arise from the dual role of some banks as ETF provider and derivative counterparty.”

 

Now that would be shocking… - WSJ

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