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Too many people are making the mistake of judging their (gold) wealth in terms of fiat currency. You should count the number of ounces you have - that will be all that matters.

 

And gold you do not hold in your own possession is NOT YOUR GOLD. People need to understand this. IT IS NOT SAFE.

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Gold is cheap relative to the idea that you could have a life’s fortune on a statement from a clearing agent [your brokerage account] and find out that you don’t have a penny left anywhere. Which should you have had, physical gold or that clearing house statement? Gold is cheap because of the condition of other things

 

- Jim Sinclair www.jsmineset.com

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You could study more perhaps, to learn how to hedge in a way that is comfortable for you. ....

 

....

Also, you can hedge differently than how I do it. I have a friend in HK here who runs a precious metals oriented hedge fund. He parks a good chunk of his fund into silver and gold, and then hedges the price risk using Puts. If the "trading system" blows up, he will have all of his Gold and Silver. He is only risking the money that he has in the puts.

 

"Different strokes for different folks", even when it comes to hedging.

 

For someone who would like to study a bit on hedging, do you have a menu of education that you could recommend.

 

For example, a book or set of books. Or a website and set of websites?

 

What concepts to get a cross first.? Then what concepts to get after that?

 

It may be you have already put this out there somewhere.. Would appreciate a link if that is so

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My comments are no more "shrill" than yours are.

I am pointing out the dangers of complacency - what's wrong with that?

 

The main guys who I am criticizing are the loud Gold Rampers (and those who worship them) and, in a much less intense way, those who say "don't worry, precious metals are in a long term bull market so you need not think about price risk". The first crowd are my main target, as you can see here:

 

 

 

As for the second group : The complacency purveyors, saying "Don't Worry" - Do they need to be criticised at all?

 

Perhaps not. (And they may represent a majority posting recently on this thread. To go on with this thought, I am risking pissing off at least a few of our valued posters here.)

 

GLD WEEKLY ... update : SLV-weekly

goldwk.png

 

Right now, I am expecting something like a repeat of Gold's 2006 pattern

 

=== (IF YOU REALLY ARE COMFORTABLE if Gold falls to $1400, $1200, or $1000 - Please skip what follows) ===

 

But I do wonder, at what point would people start saying to themselves:

Ah oh! Gold has dropped much further than I thought it would, I really wish I had hedged some of (more of?) my price risk. For me, that price level is probably about $1500 in Gold (GLD-$150 on the chart above) and about $25 in Silver, since those are the levels just below where I would have added aggressively to my longs. At levels below that, I would be nursing losses that I could have prevented.

 

Unlike some others here, I actively think about the possibility that "gold will fall further than most people think", and I want to manage my exposure to extreme moves up or down, and think that this is a fair topic for discussion here. It is not something to just be ignored, while people simply hope it will never happen. Or worse yet say: "I am not worried. If prices fall there, I will just buy more."

 

Maybe some will do that (comfortably buy more.) But long experience has taught me that extreme moves are thought of that way until they actually happen. And then when they do come, people instead are filled with fear, and rarely have the courage to pull the trigger. Didn't that happen with many here in 2008? And we could see a bigger percentage move on this drop than we saw back in 2008. I will say one more time : "Anything can happen."

 

Isn't $1000 scaremongering a bit?

 

Anyway, I think $1500 is a pretty reasonable call. This would translate to roughly £1000, which is currently the 200DMA or thereabouts. However, I do think that sterling will be be next to come under pressure so as a UK investor with savings and earnings in sterling I am quite sanguine about a correction to $1500. If for some reason the central banks let us slip into another massive deleveraging cycle and we get a deflation scare, the UK and sterling is toast.

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"In A Broken System, You Must Be Your Own Central Bank",

 

Sinclair Tells King World News

 

My Dear Extended Family:

 

Eric King of King World News was kind enough to interview me today about the growing fears about the stability of our financial system.

 

To listen to the interview click here to visit King World News...

 

http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2011/12/8_Jim_Sinclair_-_Why_Financial_System_is_Imploding_%26_What_to_Do.html

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Getting "stopped out" is trader think. As a B&H, I have never been stopped out, because there is no stop first place. I watch fundamentals to decide whether I buy or sell. And fundamentals change extremely slowly it seems.

Are you in danger of "doing a Bob Chapman" and riding silver prices down all the way to below your average buy cost?

 

Sometimes stops do serve a useful function

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Isn't $1000 scaremongering a bit?

 

Anyway, I think $1500 is a pretty reasonable call. This would translate to roughly £1000, which is currently the 200DMA or thereabouts. However, I do think that sterling will be be next to come under pressure so as a UK investor with savings and earnings in sterling I am quite sanguine about a correction to $1500. If for some reason the central banks let us slip into another massive deleveraging cycle and we get a deflation scare, the UK and sterling is toast.

So do I : At $1500-1600, I would be buying aggressively in all probability.

But do not rule out prices below that - which is exactly my point, because "anything can happen"

 

If/when we crack $1600, I will be telling you about how I am buying, and what I am doing to protect the risk of lower prices

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So do I : At $1500-1600, I would be buying aggressively in all probability.

But do not rule out prices below that - which is exactly my point, because "anything can happen"

 

If/when we crack $1600, I will be telling you about how I am buying, and what I am doing to protect the risk of lower prices

 

Physical or the paper one? It seems like the split from paper gold to physical gold prices is coming soon with the MG Global demise and the consequences that is causing.

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Are you in danger of "doing a Bob Chapman" and riding silver prices down all the way to below your average buy cost?

I have ridden it down two times $21-$9 and $50-$26, and sleep well. And I am still very well in the money. Instead, I could have gotten out at $21 and never gotten back in and would kick my @$$ all day long. It's not going to happen.

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Gold is cheap relative to the idea that you could have a life’s fortune on a statement from a clearing agent [your brokerage account] and find out that you don’t have a penny left anywhere. Which should you have had, physical gold or that clearing house statement? Gold is cheap because of the condition of other things

 

- Jim Sinclair www.jsmineset.com

These are WISE words.

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Physical or the paper one? It seems like the split from paper gold to physical gold prices is coming soon with the MG Global demise and the consequences that is causing.

 

The divergence is inevitable. But many pundits (some of DrBubb's least favourite, I imagine) have been predicting this as imminent for years now. I'm not counting on it happening any time soon. The players involved have a remarkable capacity to keep all the paper plates spinning. You do sense from the action in gold since September that they're losing their firepower somewhat, though.

 

So do I : At $1500-1600, I would be buying aggressively in all probability.

But do not rule out prices below that - which is exactly my point, because "anything can happen"

 

If/when we crack $1600, I will be telling you about how I am buying, and what I am doing to protect the risk of lower prices

 

DrBubb, it's occurred to me that one reason I struggle with your hedging premise is that you're very dollar-centric. The USD is on the other side of the deleveraging see-saw and you therefore have an obvious hedging strategy. But if sterling is your numeraire you're stuck in a very awkward position. Same goes for Europeans and Euros.

 

Corrections in sterling/euro gold are not as deep, plus your currency and banking system could be toast in any given month, so you feel better holding the bullion. What's more, if you're a physical buyer the corrections tend to be shallower still. The cheapest dealers tend to price using the AM fix and it's therefore hard to buy at an intra-day low. Although in the recent correction there was a fantastic opportunity to buy at the previous day's AM fix after gold had rocketed higher, which I used to fill my boots.

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G. on the Gold thread:

"Physical or the paper one? It seems like the split from paper gold to physical gold prices is coming soon with the MG Global demise and the consequences that is causing."

The divergence is inevitable. But many pundits (some of DrBubb's least favourite, I imagine) have been predicting this as imminent for years now. I'm not counting on it happening any time soon. The players involved have a remarkable capacity to keep all the paper plates spinning. You do sense from the action in gold since September that they're losing their firepower somewhat, though.

Listen to Marc Faber:

Mp3: http://www.netcastdaily.com/broadcast/fsn2011-1207-1.mp3

He holds gold, and worries most about a confiscation of gold.

If paper gold "fails", that move may follow soon after.

(The Illuminati-controlled Fed has grabbed the gold once, what makes you think they will not do so again.

If you think you are "safe in Europe", keep an eye on the recent news headlines, and watch and see how much of a role the Fed plays in "the rescue of Europe", if indeed there is a rescue of the Euro.)

 

Faber suggests:

+ 25% - Gold

+ 25% - Cash and bonds

+ 25% - stocks

+ 25% - real estate (but doesnt say where)

 

DrBubb, it's occurred to me that one reason I struggle with your hedging premise is that you're very dollar-centric. The USD is on the other side of the deleveraging see-saw and you therefore have an obvious hedging strategy. But if sterling is your numeraire you're stuck in a very awkward position. Same goes for Europeans and Euros.

Buy boots now (while they are still cheap).

Fill them later with cheap non-boot assets.

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He holds gold, and worries most about a confiscation of gold.

If paper gold "fails", that move may follow soon after.

 

 

If you really hold gold then the FED nor anyone else should know where it is.

I personally forgot, and may even have had a boating accident with it some years ago. ;)

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Getting "stopped out" is trader think. As a B&H, I have never been stopped out, because there is no stop first place. I watch fundamentals to decide whether I buy or sell. And fundamentals change extremely slowly it seems.

Do I sense fear in your faith GF? and more so deflation and the possible future austerity in the Eurozone? As I said long ago on this very thread you should be prepared for the possible threat to loose your gold or the possible sudden devaluation of your precious and you shot me down in flames with powerful confidence it was totally mind blowing; hey no offence taken I admire such faith/gamble/bets/speculations, it reminds of that fellow who sells that rapture story Chuck Missler. Even the host of this web site gave many insights to the shakey nature of this belief without insult, and many here in their arrogance accused the host of heresy for simply presenting alternatives.

 

I ask why are Goldbugs rude know it all wankers? Why are Goldbugs happy to trample down anything that goes against their cheerleaders? When they also speculate regarding future outcomes...................

 

I could be wrong I could be right

I could be wrong I could be right

I could be wrong I could be right

I could be black I could be white

I could be black I could be white

I could be white I could be black

Your time has come your second skin

The cost so high the gain so low

Walk through the valley

The written word is a lie

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I ask why are Goldbugs rude know it all wankers?

 

Oooh. :o

 

I wouldn't go that far myself, but I know what you mean. I would consider myself to be if not a full blown goldbug, at least a gold bull and have observed that gold is treated almost as an article of religious faith. For a lot of goldbugs, anyone who questions the gold bull market is a heretic and anytime that gold falls, it is down to manipulation by some kind of evil empire. Now there was one very clear manipulation made just before the swiss franc devaluation on the 6th of September and then other suspicious looking patters in the days after that,but now any kind of fall is treated as a kind of manifest insult. I think that gold is undervalued, I think it will probably go above 2000 dollars next year and I think it will fall to 1550 before that happens. But why is gold particularly regarded with quasi-religious zeal?

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Oooh. :o

 

I wouldn't go that far myself, but I know what you mean. I would consider myself to be if not a full blown goldbug, at least a gold bull and have observed that gold is treated almost as an article of religious faith. For a lot of goldbugs, anyone who questions the gold bull market is a heretic and anytime that gold falls, it is down to manipulation by some kind of evil empire. Now there was one very clear manipulation made just before the swiss franc devaluation on the 6th of September and then other suspicious looking patters in the days after that,but now any kind of fall is treated as a kind of manifest insult. I think that gold is undervalued, I think it will probably go above 2000 dollars next year and I think it will fall to 1550 before that happens. But why is gold particularly regarded with quasi-religious zeal?

 

And what of those gold 'bulls', who consider themselves that much more cool, cerebral and superior to mere paranoid gold simpletons? Especially those who deem it necessary to make pronouncements to that effect on internet forums?

 

I'd say unbridled egotism and perhaps even narcissism is at play, but I'd just be speculating.

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Precious Metal Pullbacks in Perspective - http://www.zerohedge.com/news/guest-post-precious-metal-pullbacks-perspective

 

The current 15.6% gold decline, while considered a "major" correction, is not out of the ordinary, particularly following the late summer spike. - There have been 16%, 27%, 18%, 15% and 27% corrections during the bull market so far.

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Precious Metal Pullbacks in Perspective - http://www.zerohedge.com/news/guest-post-precious-metal-pullbacks-perspective

 

The current 15.6% gold decline, while considered a "major" correction, is not out of the ordinary, particularly following the late summer spike. - There have been 16%, 27%, 18%, 15% and 27% corrections during the bull market so far.

 

I think intraday we did just over 20% in this last correction so personally I don't think we're going to breach those lows again. I would not be surprised to see gold fall sharply down through this pennant formation to suck in more shorts, who will subsequently get smashed when more printing is announced.

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And what of those gold 'bulls', who consider themselves that much more cool, cerebral and superior to mere paranoid gold simpletons? Especially those who deem it necessary to make pronouncements to that effect on internet forums?

 

I'd say unbridled egotism and perhaps even narcissism is at play, but I'd just be speculating.

 

Well there you go, thankyou for providing a perfect example. What on earth possessed you to write such an arsey little post criticising someone you have never met? 5 internet win points for you. I was actually posing a serious question though, why does gold bring this kind of thing out in people?

 

On my charts gold fell from 1920.75 to 1532.05, a fall of 20.24%

A pleasant Sunday evening to you, I really cannot be bothered with an argument.

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Do I sense fear in your faith GF?

You sense wrong.

 

and more so deflation and the possible future austerity in the Eurozone?

Ouh, yes, the trillion-dollar-deficit kind of austerity. Yes, yes, I fear that indeed.

 

As I said long ago on this very thread you should be prepared for the possible threat to loose your gold or the possible sudden devaluation of your precious and you shot me down in flames with powerful confidence it was totally mind blowing;

...

Why do you think I could loose my gold? Also, do you try to imply I should trust some kind of dirty MF with my savings?

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So do I : At $1500-1600, I would be buying aggressively in all probability.

But do not rule out prices below that - which is exactly my point, because "anything can happen"

 

If/when we crack $1600, I will be telling you about how I am buying, and what I am doing to protect the risk of lower prices

OK, so lets put the fundamentals aside, and focus on the chart. The chart has consistently proven that those who bought gold when the RSI was touching 50, have continued to do well.

 

With this in mind, your target of 1500-1600 looks too low on the face of it. Is it impossible? No, but neither is it likely. For the majority of those wanting to buy gold, a good buying point would be around here... or perhaps around 1650. Sounds high? Gold has never been an "easy buy". But then the earlier you bought, the easier it is to hold.

 

Am I being complacent? No, because even though "overweight" in gold, I am not "100% in", and am hedged for the possibility of forced deleveraging. I imagine most that have bought gold are likewise hedged in cash and other assets. All the talk of complacency is really a "straw man" argument against buy and holders because it's not an argument against the average buy and holder at all but rather against the gold [or should I say silver] bug who is 100% in and 100% certain.... who is in reality probably a fictitious [straw] character.

 

lgggg.png

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Precious Metal Pullbacks in Perspective - http://www.zerohedge.com/news/guest-post-precious-metal-pullbacks-perspective

 

The current 15.6% gold decline, while considered a "major" correction, is not out of the ordinary, particularly following the late summer spike. - There have been 16%, 27%, 18%, 15% and 27% corrections during the bull market so far.

Yes, looking at the long term log chart, it was obvious at the time that the spike would correct. Predictable, and predicted on this thread. In the context of the hum-drum trend, the spikes and corrections are just so many storms in a teacup. :rolleyes:

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Gold down this morning quite a lot - now down to $1680 or £1080.

 

 

Don't worry !

 

If you listen to the likes of James Turk - it will probably be 5,000 tomorrow.

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