GOLD

[nicejim]

Strong words from Tom Stevenson (a market and investment commentator at Fidelity International) in the Telegraph:

 

Hard assets, the king of which is gold, and the shares of companies that produce them are a must for anyone looking to survive this institutionalised generational theft.

 

But platinum could be better.

 

http://www.telegraph.co.uk/finance/comment...to-economy.html

[allyjcambo]

Considering the review was done at the Value investing congress in October, I assume it has to be one of these:

 

* Julian Robertson, Tiger Management

* Joel Greenblatt, Gotham Capital

* Bill Ackman, Pershing Square, L.P.

* David Einhorn, Greenlight Capital

* Alexander Roepers, Atlantic Investment Management

* Eric Sprott, Sprott Asset Management

* Sean Dobson, Amherst Securities

* Lloyd Khaner, Khaner Capital

* David Nierenberg, The D3 Family Funds

* Paul Isaac, Cadogan Management

* Candace King Weir & Amelia F. Weir, Paradigm Capital Management

* Jason A. Stock & William C. Waller, M3 Funds

* Zeke Ashton, Centaur Capital Partners

* Kian Ghazi, Hawkshaw Capital Management

* Whitney Tilson & Glenn Tongue, T2 Partners

 

My bet is David Einhorn of Greenlight. They have had a strong Gold ETF position, but have transferred that to physical gold due to efficiency. They also have largish (4%) position on Gold miners ETF.

 

Einhorn's position on gold in his VIC 09 speech.

 

In short, he believes gold is a good hedge against bad monetary/fiscal policies and will probably do well in future, esp. if there is a sovereign default. Better than holding cash - both at zero interest currently. If sound policies are reinstated, he will exit gold. He also has a twist on Robertson's CMS bond trick - buying higher yield options on JAP/US bonds. That may prove to be a very clever me and me thinks it should be copied

 

Thanks Halcyon - that's some detailed knowledge from someone who says he's not that into gold!

Appreciate it though.

The more I think about it, the more gold shares seem to be a good bet. In terms of the market in general, timing is of course vital but whether it's deflation or inflation I think gold stocks should perform well. I'm dripping money into a gold fund at present, but if we get Bob Hoye's heavy liquidation, I hope I'll be brave enough to load up on gold stocks.

[G0ldfinger]

If sound policies are reinstated, he will exit gold.

Me too. I give it 5 years or so. But maybe I am naive given that all the Boomers have to get worked through.

[romans holiday]

Me too. I give it 5 years or so. But maybe I am naive given that all the Boomers have to get worked through.

No need to worry about bubbles and exits if a new gold exchange standard is required in order to stabilize currencies and restore trade.

[Errol]

As Sinclair says, there is no way to undo what has been done. They can't withdraw the stimulus and they can't undo the currency debasement.

 

The game is over. It's too late.

 

Gold will hit previously unthought of highs and stay there. It won't come down this time.

[Pixel8r]

As Sinclair says, there is no way to undo what has been done. They can't withdraw the stimulus and they can't undo the currency debasement.

 

The game is over. It's too late.

 

Gold will hit previously unthought of highs and stay there. It won't come down this time.

I know that Jim says the price will go to the high and then stay within 5%-10% of it, but I don't think I will be happy to hold. I think when we hit the mania stage I will be gradually averaging out, especially with silver. I guess it totally depends on what I can see going on at the time though, if we start to go back to some sort of gold/asset backed currency maybe not.

 

Is that also your plan?

 

 

[id5]

although i'm not an expert i would think 1000 degrees is doubtful in a house fire - maybe in isolated hot spots but you have to be unlucky for it to be in the same place as your gold.

...

It would as you say aardvark be unlucky if your gold was in one of those spots. This data was taken from one of the engineering manuals that I have and maybe of interest to some. Essentially, if you put you coin under the floor the chances of damage are even less.

Solid floor temperature above 180°

Hot gas layer 600°-1000°

Glowing smouldering combustion up to 600°

Flashover above 600°

Glowing coals up to 1300°

[fitkid]

My bet is David Einhorn of Greenlight. They have had a strong Gold ETF position, but have transferred that to physical gold due to efficiency. They also have largish (4%) position on Gold miners ETF.

 

Einhorn's position on gold in his VIC 09 speech.

 

In short, he believes gold is a good hedge against bad monetary/fiscal policies and will probably do well in future, esp. if there is a sovereign default. Better than holding cash - both at zero interest currently. If sound policies are reinstated, he will exit gold.

 

I wonder how much his renumeration is for that.TALK ABOUT DEGREES IN THE BLEEDIN OBVIOUS.!!!I dont think anyone is buying holding gold for any other reason other than the OBVIOUSLY STATED ABOVE.I for one will be heading for the exit sharpish when i see the final play out on the horizon.The 22 million dollar i mean GOLD question is how it is going to play out i have no doubt that the ptb already know the final strategy and the endgame but we cant be 100% sure what that is at the momment. But sitting on gold certainly looks alot brighter than anything else and the 2 questions i am seeking the answers for is how much of a role will AU have in the future world currency basket ?will it be a return to 100 %gold backed toilet paper and "HONEST MONEY".

IF ANYONE KNOWS PM ME I PROMISE I CAN KEEP IT A SECRET

[halcyon]

Thanks Halcyon - that's some detailed knowledge from someone who says he's not that into gold!

 

Heh, like I have said on numerous occasions, my position is NOT dichotomous. It's not either "GOLD, YEAH!! GIVE ME UNDERPANTS OF GOLD!" or "Excuse me, gold will never mount up to anything."

 

I'm agnostic, but willing to overweight on either side, depending on situation and how things are developing.

 

If it goes up, I try to ride it. If it goes down, I try to exit it. Just like ANY other asset. No special status given over the long term, but only in certain contexts. No 'once and future money' or any silly mythologies about it. Just a ticket with a price and market to resell it. That's my stance, I don't claim it's 100% true or best for everybody else or that I won't change my opinion in the future, if information changes.

 

As for when to exit gold, there seem to be several camps about it (not exhaustive):

 

1) sound fiscal/monetary policy is reinstated (in most OECD countries), meaning: drawing back liquidity succesfully, hiking up rates, letting overlevered/over-indebted players go bankrupt, basing gdp growth on real economy growth and not funny money, deflating asset bubbles. I give this a fairly high probability to *start* in the next 2-5 years (it's a process, not an event). Not guaranteed and we can go in the opposite direction as well.

 

2) when gold-standard is re-instated. Personally I give this a very very very low probability, something in the order of 10E-3%. Also, if it happens, I think it might be through such a hardship (war, breakdown of nations, multi-decade chaos) that it might be the least of my problems. If this was to happen, I hope I'd still own some physical at the right moment, which I can then transfer to other more mundane property (like cultivated land, clean water source, forest, etc).

 

3) after gold as an asset/store-of-value/whatever hits the final mania phase and starts to go through the roof and it's relative price becomes so obnoxiously overpriced that all the seasoned investors start exiting. I.e. a pure relative-price based crash.

 

4) if a real economic growth starts in other investment classes that gives better risk adjusted annual returns - after correcting for inflation and costs. I cannot know what this could be, perhaps theoretically an OECD-wide Apollo-style green tech program to wean us off oil/goal/GHG and into renewables/electricity with very hefty tax breaks and other incentives (i.e. transfer of wealth from one place to another). Never underestimate the power of governments to make (distort) markets, if enough profit potential is cleverly attached.

 

5) something else I can't even dream of - i.e. a black swan. It just starts to drop precipitously and I have no idea of the reason at all. That's what worries me the most with any asset I own. Because I will be unprepared at least for a while.

 

Personally I try to keep my eyes open to different contingencies. Hope I'll catch some of them before they unravel completely.

[fitkid]

Heh, like I have said on numerous occasions, my position is NOT dichotomous. It's not either "GOLD, YEAH!! GIVE ME UNDERPANTS OF GOLD!" or "Excuse me, gold will never mount up to anything.

 

Personally I try to keep my eyes open to different contingencies. Hope I'll catch some of them before they unravel completely.

 

Halcyon (pronounced /ˈhælsiən/), a term that originates from the Greek myth of Alcyone, is used most often to mean golden or marked by peace and prosperity.

 

WHO ARE YOU TRYING TO KID GOLDEN BOY

[G0ldfinger]

Halcyon (pronounced /ˈhælsiən/), a term that originates from the Greek myth of Alcyone, is used most often to mean golden or marked by peace and prosperity.

 

WHO ARE YOU TRYING TO KID GOLDEN BOY

It's also a name of a fund as far as I know.

[creditcrunch]

More main stream media attention.

 

 

http://www.telegraph.co.uk/finance/comment...to-economy.html

 

 

Gold is a certainty and king of stability---apparently

[romans holiday]

Gold is a certainty and king of stability---apparently

Excerpt

What's happening is that gold is pushing higher in the face of things that history says should push it lower. Gold rises with inflation but it has strengthened in recent months despite easing price pressures and lower inflation expectations. The other tail risk that investors use gold to hedge against – rising defaults and deflation – has also faded into the background

 

Gold's rise is due primarily to uncertainty and with it instability. Investors/ nations are just plain confused as to whether there will be an inflationary or deflationary outcome. Valuation in assets prices and currencies have been problematized by first a deflationary collapse in assets, and then an inflation in currencies and public debt with QE and stimulus. Investors are left scratching their heads as to whether reflation will stick or not. Bull market or bear?

 

Gold is the solution to the increasingly perceived problem of valuation, where everything is now on shifting sand.

[warpig]

It's articles like this that will change people's perception of gold. Good article IMO.

 

Printing money remains the time-honoured way out – and it will end as messily as it always has. Hard assets, the king of which is gold, and the shares of companies that produce them are a must for anyone looking to survive this institutionalised generational theft.

 

 

More main stream media attention.

 

 

http://www.telegraph.co.uk/finance/comment...to-economy.html

 

 

Gold is a certainty and king of stability---apparently

[huntergatherer]

Sell gold or hold till February

 

Either way investors in an enviable position

 

What to do Investors holding gold bullion are in an enviable position. Should they take profits during the current period of seasonal strength that started in July or should they wait until the end of the next period of seasonal strength from the end of November to the beginning of February?

 

Holding between now and the end of November implies downside risk of about 10%. On the other hand, holding until next February offers intriguing upside potential. Investors will make the decision this week based on their personal investment circumstances and ability to take risk.

 

http://www.financialpost.com/story.html?id=2139502

 

[romans holiday]

I think the more uncertain and unstable markets and currencies become, the more stable the price of gold [in dollars] will be. What looks a paradox isn't really when you consider that gold thrives on uncertainty.

 

If one wants to trade, silver looks to be a much better bet than gold as being a commodity it will move much more violently with the market.

[TrueNorth]

Sell gold or hold till February

 

Either way investors in an enviable position

 

What to do Investors holding gold bullion are in an enviable position. Should they take profits during the current period of seasonal strength that started in July or should they wait until the end of the next period of seasonal strength from the end of November to the beginning of February?

 

Holding between now and the end of November implies downside risk of about 10%. On the other hand, holding until next February offers intriguing upside potential. Investors will make the decision this week based on their personal investment circumstances and ability to take risk.

 

http://www.financialpost.com/story.html?id=2139502

 

 

"intriguing upside potential" = new term for "financial salvation"

[warpig]

Gold Big Secret by Adrian Ash@bullionvault.com

 

No one's actually buying gold right now. Not the physical metal (and not the exchange-traded trusts either)...not at anything like the rate they were buying a year or six months ago. Instead, this rush differs in kind from the surge of autumn '07 or the panic of late '08. Because it's a rush solely in leverage. Hedge funds and prop desks have been buying gold futures and options with virtually free finance. Hence the surge in stocks, bonds and commodities too, of course. Because anything traded on margin looks a safe bet when finance costs you 1% or less per year. And especially when your major funding currency – the long mighty but now tired and emotional Dollar – is universally condemned to fall further

 

"Thing is," as a professional wholesale dealer here in London's bullion market told me today, "the ETFs still don't show any signs of shrinking when the price takes a dip. They're as sticky as ever. But no, overall, physical flows at the moment are nowhere as strong as they were. The action's very much in the futures."

 

[Pixel8r]

Gold Big Secret by Adrian Ash@bullionvault.com

 

No one's actually buying gold right now. Not the physical metal.

I wouldn't be so sure, there is a lot of talk on lemetropolecafe.com about very large physical buyers (not the sort of buyers who would use bullionvault) currently finding it really hard to fulfil orders. I think things will change as we move in to the futures expiry date in 2 days time, the cartel must be very busy at the moment.

 

I would recommend trying the 2 week free trial to lemetropolecafe.com, I think you would find it very interesting, I recently did and have subscribed. The daily news articles I find worth the $199 alone, the forum doesn't seem that good though.

 

 

[warpig]

I posted it more because I was surprised at the quality of the article, especially as it was written by Adrian Ash. If it was written by anyone else I would have taken it on board and moved on. It's quite shallow analysis IMO.

 

Thanks for the tip I'll take a look, I didn't know they did a 2 week free trial.

 

I wouldn't be so sure, there is a lot of talk on lemetropolecafe.com about very large physical buyers (not the sort of buyers who would use bullionvault) currently finding it really hard to fulfil orders. I think things will change as we move in to the futures expiry date in 2 days time, the cartel must be very busy at the moment.

 

I would recommend trying the 2 week free trial to lemetropolecafe.com, I think you would find it very interesting, I recently did and have subscribed. The daily news articles I find worth the $199 alone, the forum doesn't seem that good though.

[drbubb]

Okay, Boys, here it comes ...

(you may have to soon throw away your Jim Sinclair bibles - haha):

 

THE BIG TEST FOR GOLD, the strength of its rally, may be dead ahead

 

It looks like the US Dollar has turned up, and there may now be some selling pressure on:

 

Stocks, Commodities (including Gold), Property

 

Here's the DXY /US Dollar chart ... Chart : 6 months

 

Here's the comment by one of the more Bearish analysts, who has been expecting the Turn and weakness in the Dollar since the beginning of October:

 

BAM / on Twitter:

INVESTORS-US Dollar Index melt-up has started and we're positioned to profit from the coming stock market crash. We remain in BMP positions

about 10 hours ago from web

 

Here's what Yelnick has to say:

 

Dollar May Have Bottomed - Let the Melt-up Begin!

 

...A bottom in the Dollar signals a top in everything else

 

 

Major bottoms or tops are often not coincident but sloppy, so it does not necessitate all markets turning together. Indeed, that would be unusual; but we are in unusual times, once-in-a-lifetime times of the deflationary depression that follows a huge credit bubble. We had them in 1929, 1873 and 1837, and although many have read about the Great Crash in 1929, few remain who really experienced it. The rules-of-thimb in the investing world have really grown out of the experiences post WWII, indeed post the 1949 end to the trading range of the Great Depression and the beginnings of great bull runs of 1950-66 and 1982-00 that mark the American Century.

 

We have been in a rare Currency Market since 2002, a market driven primarily by the Greenspan Indian Summer of reflation to stave off the deflation of Kondratieff WInter (which he explicitly acknowledged in a paean to Kondratieff). The reflation policy of the Greenspan Put has been continued by "Helicopter" Ben Bernanke. Hence, we should see almost all markets turn on the Dollar.

 

This means lighten up on gold, get out of oil (quickly, it is a volatile market), back off those Carry Trade perennials like the AUD and Loonie, and get out of equities. Bonds may be on a spike to higher rates, which is bearish; more on that as it unfolds. If we are truly in a return of risk aversion, after the spike Treasuries should rise (and rates fall) as money rushes there in the vacuum of a fall in everything else.

 

A Dollar Bottom also signifies an over-turning of the assumptions that have fueled the Obama Hope Rally, and a return to risk aversion after a summer of hope. Watch the DX closely. Until it bifurcates above the wedge trendline, it could be a false break. The sharpness of today's move suggests a short squeeze is on, against those who have been betting on the Dollar going excessively lower.

 

/more: http://yelnick.typepad.com/yelnick/2009/10...ltup-begin.html

[Pixel8r]

Okay, Boys, here it comes ...

(you may have to soon throw away your Jim Sinclair bibles - haha):

 

THE BIG TEST FOR GOLD, the strength of its rally, may be dead ahead

 

It looks like the US Dollar has turned up, and there may now be some selling pressure on:

Oh no, DrBubb is saying "Gold May be Done Here" again (we all know what happened last time - haha)

 

As I have been explaining for the last couple of days, it is the november option expiry day at the moment so the cartel is now throwing everything at try to get the price down. I actually believe this week will be a big test for the dollar on Thursday and Friday.

 

The world and its dog is looking for a dollar bounce based on what, a falling wedge pattern on a chart. Ignoring the fundamentals completely, like the fact that they will sell the most treasuries ever this week with over $100 billion being sold. I wonder how many the fed will be buying of those it's self with newly printed dollars. How is printing lots more dollars supposed to make the value of the dollar increase?

 

The pressure is on this week for the dollar really not gold, the dollar is very close to its all time low and about to break lower, while gold is very close to its all time high and about to break higher.

 

Have you got your charts the wrong way up again DrB?

 

 

[ologhai]

As Sinclair says, there is no way to undo what has been done. They can't withdraw the stimulus and they can't undo the currency debasement.

 

The game is over. It's too late.

 

Gold will hit previously unthought of highs and stay there. It won't come down this time.

 

That sounds uncomfortably like 'it's different this time'.

[G0ldfinger]

That sounds uncomfortably like 'it's different this time'.

Sometimes it is, sometimes it isn't.

 

What Sinclair means is that all the Bretton Woods II chickens are now coming home to roost. This is indeed unprecedented.

[Jake]

Oh no, DrBubb is saying "Gold May be Done Here" again (we all know what happened last time - haha)

 

The pressure is on this week for the dollar really not gold, the dollar is very close to its all time low and about to break lower, while gold is very close to its all time high and about to break higher.

 

Have you got your charts the wrong way up again DrB?

 

DOUBLE POST

 

FYI (though I'm sure you already know) Prechter sees silver as signalling that gold will fall as it is 'overvalued'. Dollar will bottom as gold tops out and wave three down will bring us the biggest falls in stocks for THREE CENTURIES.

So basically stocks crash massively any time soon, dollar rally for a year or so, gold and silver down as another round of deleveraging beginneth. Deflation, thanks to social mood, will turn any recovery on its head.

 

It will be interesting to see what is going to happen. Will gold/silver become the safe haven/flight to safety or will the dollar once again become the major beneficiary for the time being?

I suspect, in this scenario, gold will go down like last time, so not so bad, then bounce back up. Silver same. I also think that gold will still look good (or better) in your eyes ie Dow/gold, Houses/gold by the time wave 3 ends, this despite the fiat price per oz falling. Perhaps even your (GF). price ratios could be met if we see Prechters wave 3 down being the worst in 3 Centuries.

We live in interesting times

 

So what is it to be? Dollar up, Gold down or Gold up, Dollar down? The next few weeks could be worth watching very closely. Personally I see both trends reversing a bit so I'm going with Dollar up and gold down. It's about time Prechter got it right on Gold. Not too sure about 700 though.