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This is a nice easy to read article, with a well made point.

 

When ‘cash’ becomes confetti, inflation/deflation becomes irrelevant

http://cij.inspiriting.com/?p=548

 

The financial and economic events of this month is amazing and history will one day judge September 2008 as one of the major turning points.

Today, if you follow the inflation/deflation debate on the Internet forums, blogsphere, etc, you will find this issue to be a highly divisive, polarising and at times, rather emotional debate. No wonder it is a highly confusing time for investors and traders.

 

For investors, it will be a big mistake to take sides in this debate. You may have certain inclination towards one or the other side of the fence, but do not dig in and get permanently committed to an opinion/idea. From our observations, some people have become too religious and emotionally involved to one side of the debate. They have become so religious that whoever belongs to the other side is regarded as an infidel. Such loss of objectivity will cloud your judgement.

....

The point we are trying to make is that by the time the situation becomes that bad, all talks about inflation or deflation is irrelevant because, ‘cash’ no longer function as money for practical purposes. They become as good as confetti. Who cares about the inflation or deflation in the supply of confetti?

 

Austrian school :D

 

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A Dangerous and Deceptive Gold Market

 

http://www.marketoracle.co.uk/Article6416.html

 

 

Is this current gold rally the last before a 40%-50% recession induced commodity mid-cycle pullback?

 

It is very important to recognise where we are at this juncture, the 74-76 mid cycle low hit where debt levels and desperation were not at critical levels, the low was allowed to happen quite easily.

 

We are entering a once in a lifetime, 1 in 100 year event which CANNOT be controlled as easily, this commodity cycle i feel will behave a lot differently than the last.

 

 

 

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I hope you are right but you could draw all sorts of lines on that chart and come up with any thing you like. Gold goes up and down and seems unaffected by resistance and support levels.

 

I agree with this to an extent; i.e. this applies very much at the moment as I commented on Saturday. Until we know what's going to happen with the bail-out, everything else is on hold. Once this uncertainty has been removed from the market, ta may play a greater role but until then it's just p1ssing in the wind imho.

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I think this is a great post:

 

But look at it this way. Gold is really cheap. Why do I say that? Let's compare with 1979-1980 period, which was like now a period of high and increasing inflation, a recognized energy crisis, and widely viewed failure of political leadership. But there are great differences between then and now. What was perceived then as an insurmountable crisis proved itself, thanks to Paul Volcker (and the President who appointed him, Jimmy Carter) to be quite manageable. Raise interest rates through the roof, strengthen the dollar and kill consumption demand for commodities and you're home free. Negative effects of said policy? Severe recession with the pain being salved by FEEL GOOD Master, Ronald Reagan.

 

... Anybody think that would all work again?

 

... I can't hear you!

 

...Of course not. I think such a course of action now would send the vast majority of Americans into bankruptcy within a couple years time ... including myself.

 

OK. So what was the price of Gold back then, when everybody thought there was in insolvable crisis. Well we know it peaked at $850, but let's throw out the high, and look and see where there was extensive trading, or "congestion" as the techies call it. That level would be about $600 in 1979 dollars. How much was a house worth? A very fair comparison as both periods are clearly defined real estate peaks.Well in 1980 I bought my own house (an old one in a semi-industrial neighborhood) for $28,000 which by the way I still live in. I just paid taxes on its recent valuation of $118,000. So that's more than 4 times my 1980 dollars. How about the price of oil. That's a fair comparison as both periods are acknowledged as being a period of energy crisis. As I recall, (someone correct me if I am wrong) oil then peaked at about $34/barrel. Oil's recent peak was $148/barrel. So oil also is now more than 4 times 1979-80 dollars.

 

So a fair price for gold might be though of a s being $2400/oz. However that can't really be the right price because (in my opinion) today's crisis has no remedy (defined as being an acceptably tolerable way out), whereas the previous "crisis" was taken care of rather handily. So gold should really be valued at more than $2400. In my opinion way more. $3000/oz. sounds like a good deal to me with the news that has been goin' down recently. Wish I had more FRNs so I could dump 'em tomorrow.

Spun

 

http://goldismoney.info/forums/showpost.ph...postcount=19213

 

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Where gold is headed in the next 6 months

 

Marketclub video on what they think the action in gold will be for the next 6 months.

 

Very good. Now that's where I got the $1250 from. I'm just not sure on the basis for that. Does it move up the same amount as it moved down ?

 

 

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Gold lease rates tumbling on Kitco. Rising leaserates appeared to prefigure this latest rally. Given that lease rates are now falling is it time for a pullback and profit taking for the brave? [i.e. for Goldbulls not goldbugs....]

 

I did some small selling of gold & gold shares yesterday,

and will continue today

 

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Gold lease rates tumbling on Kitco. Rising leaserates appeared to prefigure this latest rally. Given that lease rates are now falling is it time for a pullback and profit taking for the brave? [i.e. for Goldbulls not goldbugs....]

 

I am not a trader but I will consider selling and buying back a very small portion of my holding if we see gold go on another parabolic move up shortly [i am not saying it will go up... it may go down... who knows... the markets are crazy these days. Also, I am talking short term here.... long term it is only going one way in my opinion].

 

If POG does not dip down after a possible parabolic move, and after selling a little... no harm done... I have pocketed a little cash [i am mostly in metal now]... or can just re-buy at a similiar price. Of course, there is the chance that POG will keep going up... that is why I would only do this with a small portion.... it's essentially a gamble.

 

I wonder given all the confusion and nutty behaviour of the markets whether we might not continue to see huge corrections and parabolic moves all over the place. My core holding is a long term gold bull... but I will start to consider selling a small proportion of my holding at the height of a possible fishing line in order to add more to my position on a possible dip.

 

The massive volatility could be used to our advantage but I do not really consider the above trading and would sell any of my metal with much trepidation... hence only a little.

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I'm looking for the right opportunity to get out of paper gold. If I think the POG's going to dip for a little while – something I'd welcome, having sold my ETFs during the AIG scare, a day before the fireworks – then I can dump the ETFs I re-bought when I was worried the price might skyrocket even higher.

 

Or I could learn to stop worrying and embrace a possible financial Armageddon, which, according to the BBC, would be a nice, mild one anyway.

 

http://news.bbc.co.uk/1/hi/business/7631281.stm

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I am not a trader but I will consider selling and buying back a very small portion of my holding if we see gold go on another parabolic move up shortly [i am not saying it will go up... it may go down... who knows... the market are crazy these days. Also, I am talking short term here.... long term it is only going one way in my opinion].

 

If POG does not dip down after a possible parabolic move and after selling a little... no harm done... I have pocketed a little cash [i am mostly in metal now]... or can just re-buy at a similiar price. Of course, there is the chance that POG will keep going up... that is why I would only do this with a small portion.... it's essentially a gamble.

 

I wonder given all the confusion and nutty behaviour of the markets whether we might not continue to see huge corrections and parabolic moves all over the place. My core holding is a long term gold bull... but I will start to consider selling a small proportion of my holding at the height of a possible fishing line in order to add more to my position at the bottom.

 

The massive volatility could be used to our advantage but I do not really consider the above trading and would sell any of my metal with much trepidation... hence only a little.

 

I sold a bit (like 10%) on the massive spike last week when I realised that my account was above water (due to the fallen £) with the intention of buying back on a big fall.

 

One benefit i've felt is that the price movements don't worry me so much as I have some dry powder with which it add if there are any large falls - if it doesn't - nevermind - I didn't sell a lot so it's no biggie

 

I feel much better balanced this way - and more relaxed - if it falls buy a bit if not - great, core holding doing well.

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I'm looking for the right opportunity to get out of paper gold. If I think the POG's going to dip for a little while – something I'd welcome, having sold my ETFs during the AIG scare, a day before the fireworks – then I can dump the ETFs I re-bought when I was worried the price might skyrocket even higher.

 

If you buy physical in your hands, you are less likely to panic-sell or trade, IMO. (You can also appreciate how pretty gold is!)

 

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Sounds like the Paulson Plan is being steam-rollered through tonight. :o

 

alright barney!

 

http://biz.yahoo.com/cnnm/080924/092408_bush_speech.html

 

Bush may give a speech about the bailout tonight

Wednesday September 24, 10:33 am ET

 

President Bush may make a prime-time speech as early as Wednesday night to put pressure on Congress to approve a $700 billion plan to bail out Wall Street, a senior administration official told CNN.

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