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The volatilty of gold looks to be settling down compared to previous years. Does this signal a steady strengthening along the trend line? I'd be happy with that... given that currencies might also be strengthening against assets.

 

 

Link to last month's thread:

http://www.greenenergyinvestors.com/index....st&p=177466

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Watch out for the end of the month, it will be the low of the year :lol:

 

 

Excellent post on http://jsmineset.com/

 

Dear CIGAs,

 

If the past three years has taught us anything about markets, it is that they will do what they are set up to do. OTC Derivatives, financial Ponzi schemes (Madoff etc) and gyrating Fed policy are but a few of the machinations determined by the new market Fundamentals… the Fundamentals of government policy.

 

The political and legislative environment creates new Fundamentals that economic realities were supposed to. As government becomes more self-indebted, and politically captured by special interests, the markets reflect these political realities instead of the economic fundamentals they should.

 

None of this is news. It has been going on for years. But it is not as benign as it used to be. At the outset its just favouritism: a (usually no-bid) government contract is awarded and a company share price roars on the back of it. Legislative tweaking portends winners and losers. But then things get out of hand.

 

An early signal was found not only in the insanity of the mortgage backed securities markets and their attendant derivatives, but was also evident in the energy industry. Nobody in their right mind believes that fundamentals had the slightest thing to do with crude oil’s move from 2006 to 2008 – but the shrill cry of “Peak Oil” (Hat Tip Media) sure did help. (Where is it now?) Far more likely is that a couple of market participants decided to clear some competition from the market by running it to ridiculous levels, and make a large amount of money along the way… and enlisted the Media’s help. A natural bull market presented a great opportunity to push the market to unnatural levels and then drop it like a stone. Fundamentals had no role. Not even the first Gulf War when the borders of Kuwait and Saudi Arabia fell, produced a similar event in terms of scale, though the market was overrun with fear. Even before the Algos started ripping markets up and down for fun and profit the game was on.

 

The West Coast electricity market did a similar thing – by creating unscheduled maintenance that somebody had (personally) “scheduled”. $40 million+ people got their eyes gouged out for months on end, but it sure was fun for someone. A similar situation occurred (several times) in the German power market around the turn of the millenium. An American utility or marketer would simply buy every KwH in sight, along the curve, bar none, in a one or two hour space of time, until people who needed the physical power position to meet actual customer demand were forced to follow them, whereupon the relentless buyer would line up every bid in the market and try and unload everything in one shot. Many times it worked. But the US utility industry blew itself up in fraud, and the main German companies refused to trade with them after a while. Deregulation had happened – but the fall back for the near-monopoly German utilities was to say, “I don’t like you as a credit risk. So I can only trade in very, very small size with you.” The gamers were forced out. They killed their own game in the rush for personal glory.

 

The charade of options expiry in the Gold market is similar. Get the market up, knowing that call buyers are the public and liked to go naked, and the put buyers are usually market makers trying to butterfly their position and get short the at-the-money strike in expiry. Just before expiry the market is whipsawed down. The public goes out worthless on the call side and the market makers (volume traders) get expired near or at their long strike (i.e. max. loss) and are forced out. Next time around – spreads are wider. It’s an attractive strategy if you can control the underlying for a few hours at the right time of the month. If you can’t – tough luck. Only a fool would trade in such a game. People should roll out weeks before expiry – but the public never does. They hang right on in there every time because the market gets so close to going in the money. (Like the Bbanks aren’t aware of this psychology!). The professionals have a name for these people: They’re called Screen Jockeys… and in case you didn’t know – it’s a term of derision.

 

A similar situation now exists in that bastion of public interest – the stock market. Trading is simply impossible. Stop-losses can’t be held as orders because they will be used against anyone with a position. As related in M. Lewis’ latest book, the Chinese Walls that supposedly exist in the multiple platforms that trade a single stock should be properly considered as “Bullshit”. Charts are painted to flush people out. What passes for a market is now just a serious of raids up and down the flagpole to shake the hell out of its minor participants. If you aren’t equipped to play “chase the algos” (entry ticket c. $40 million for the technology and servers), your money will simply be taken. The market has for hundreds of years taken money from weak hands, but now anyone without a first class algo can be considered and proven as weak. Fundamental analysis will not help the small trader. It’s simply pointless to participate. Instead of tree-shaking… now the whole damn forest is being shaken. As explained in the book “A Pocketbook of Gold”, any individual with the slightest amount of margin will be destroyed by the hyper-over-leveraged banks that don’t have to mark to market, never have a margin call, and have a government guaranteed, taxpayer funded bailout. These are the NEW fundamentals. You want to participate on the other side of this, so call “trade”? If you do, you need serious help. Do you want to play with the take-down artists, the chart painters and algo-drive market-bashers? (To Mr Sinclair’s “haters” of the past fortnight please recall his relentlessly iterated warning to abandon all Gold trading and margin at $548 per ounce, and hold the core as insurance only.)

 

The result is that retail has had it with the so-called “market”. Outflows are increasing steadily, while liquidity swamps financial institutions unwilling to do anything other than sit on the liquidity. The bail-out looks like a bail-in. Only idiots like the zero-return in a decade (and a lot less if properly numerated against Gold) pension funds are left. The suckers have woken up and are refusing to play. Computer driven markets go from awash with liquidity to zero liquidity and back again in seconds. It’s enough to make a schizophrenic look balanced. Risk is fully on, then fully off, then fully on again several times in a given day, soon to be in a given hour, minute, second, mille and then micro-second. Trade if you have a death wish only. As the public exits, the algos will now attack each other in a macabre pas de deux of death dance.

 

Government, of course, is playing its part too in the death of the markets by destroying the value of fundamental analysis. The capitulation of FASB to a government/Fed dictated policy of suspending the assessment of fair value has, as its corollary, the suspension of even the possibility that ‘fair value’ can still, in fact BE determined. Since the government now determines market outcomes, reading Maoist “Wall Posters” is now all one has. (“If one knows the nuances, the walls tell all” was the nod for Deng Xio Peng’s political destruction. This is what we have been reduced to.) As if analysing Greenspan’s FedSpeak wasn’t enough to live through, we now must be scanning the horizon all day for the QE II, instead of analysing a company’s worth and prospects. Resistance may be futile, but participation is now idiocy. Money supply is viciously ramped up and then completely shut-off, at a whim, and with few but opaque methods for observation. When people are buying the stock market only because they envision a Bernanke money-printing induced melt-up, it’s time to leave. That is no reason to be in the marketplace, it is a reason to avoid it.

 

Previous market participants are sick of trying to decide the level of deceit in Government statistics. No one can anticipate whimsical “on the hoof” policy (like occupying Iraq), so everyone is fearful of investing. Money is going to the mattress like a Spaniard living under Franco. Germans and other Europeans are rushing into the Swiss Franc in outright fear of what politicians might do next. The level of trust from the investing public has never been lower. Government won’t let Fundamentals play out, just like they refused to take a recession ten years ago. The Fed can trump all fundamentals until, of course, they can’t any longer, and they blow up everyone including themselves (i.e. sovereign default). When proper valuation is suspended for as long as possible and seemingly, hopefully, forever, one would be advised to spend their time building a nuclear resistant financial bunker, preferably lined with Gold. It could give a whole new meaning to the old adage that the “Fundamentals always win in the end”. In the new intonation, the emphasis is on the word “end”. An “end” that seems to be in the process of being succinctly arranged.

 

In the search for absent fundamental indicators, “Shadow Stats” became preferred, but that only detracts from confidence. It does nothing to enhance it. Mr. Williams does not sit at the Fed or in Government. Most likely, it will be QE to infinity, because the disastrous outcome of a Treasury market implosion could be even more devastating than perpetuating a depression. QE is a government played trump card that destroys Fundamental analysis by moving the pricing numerator. Desperation is palpable. It’s why the Government is actively destroying any attempt at fundamental analysis. The sustaining of the smoke and mirrors game demands it. If Government continues to spend, they eventually go bust from debt. If they head down the austerity path, you’ll never have enough GDP to SERVICE the debt. They’re cornered. Devaluation de facto or de jure (i.e. default) is the only possible outcome short of waiting for inevitable systemic collapse along with the hyper-inflation which will give you about as much warning as a Tsunami on your visible horizon. As Mr. Sinclair has related, “Gold is financial High Ground, when a Global Tsunami hits.” Prepare accordingly.

 

CIGA Pedro

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longtermtrend.gif

 

 

The volatilty of gold looks to be settling down compared to previous years. Does this signal a steady strengthening along the trend line? I'd be happy with that... given that currencies might also be strengthening against assets.

 

 

Link to last month's thread:

http://www.greenenergyinvestors.com/index....st&p=177466

 

Logarithmic :D :D :D

 

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Parabolic Gold ?

 

We've seen it already - Gold priced in Euros

zzzzg.png

 

Parabolas usually get retraced, and the would mean back to Eur.800 or so.

 

We've already seen a fall from Eur 1,051 to Eur 889 - that's -15.4%

 

A full fall to Eur 800 would be: - 23.9%

 

Over two years, the Gold price DOUBLED from Eur 528 to Eur 1051

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Logarithmic :D :D :D

Yep. I like how it captures the steady strengthening of gold over the long term. It also shows there is not much "excess" to the upside from the trend line.

 

But I still have a question puzzling me; say gold continues to only modestly strengthen against the US dollar [just for arguments sake] at say 20% a year, would it matter that much whether the chart was a logarithmic or a linear scale? I gather logarithmic charts are best for the large exponential moves.

 

Or in other words, say all currencies stay relatively strong against assets, but gold in turn strengthens against currencies... we would be looking at gold/ US dollar in terms of an fx exchange.... and not as a "mop for excess liquidity".

 

I mean, it wouldn't make much sense to map the kiwi dollar against the UD dollar logarithmically right?

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Getting close to back up the truck time. A good shoot of GBP/USD over 1.60 might have me buying.

The fossicking is ok, but slow!! :D (repeat post of the pics from the tools thread.)

SV100684-centre.jpg

SV100686-centre.jpg

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Getting close to back up the truck time. A good shoot of GBP/USD over 1.60 might have me buying.

The fossicking is ok, but slow!! :D (repeat post of the pics from the tools thread.)

SV100686-centre.jpg

 

Is it me or does that look exactly like the UK&Irl?

Incidentally, how many grammes is that?

 

Bos.

 

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Is it me or does that look exactly like the UK&Irl?

Incidentally, how many grammes is that?

 

Bos.

 

 

Its a sign... buy Gold and the uk is yours :P

 

 

May I ask what sign everyone is waiting for , before buying. It is August now

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Is it me or does that look exactly like the UK&Irl?

Incidentally, how many grammes is that?

 

Bos.

Unintentional, honest! - but ironic that all the gold-bearing areas of the UK seem to be larger bits! (Cornwall, Wales, Scotland, Irl.)..or maybe there's a massive deposit on the IoM!?

It weighs just about a gram! - but I found it! - and I'm getting better each time I try. There was basically a bit of gold in every pan this time. I think I know where to look now.

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Besides Eire, Cornwall and the Highlands look pretty solid.

 

Anglesey seems to have ridden-up onto North Wales. Looks like 100 milion years into the future. So, gold indicates the future.

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Its a sign... buy Gold and the uk is yours :P

 

 

May I ask what sign everyone is waiting for , before buying. It is August now

They're waiting for gold to regain $1200, then $1300 for confirmation, and then they'll pull the trigger at $1400. :lol:

 

 

 

But seriously, on some charts you could justify expecting a pullback to $1100 or $1050, and some people are expecting a full-on deflationary blood-letting in which gold sells off.

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Unintentional, honest! - but ironic that all the gold-bearing areas of the UK seem to be larger bits! (Cornwall, Wales, Scotland, Irl.)..or maybe there's a massive deposit on the IoM!?

It weighs just about a gram! - but I found it! - and I'm getting better each time I try. There was basically a bit of gold in every pan this time. I think I know where to look now.

Why don't you set up a sluice box, and let the flow of the water do most of the work. Small pieces you will find in the riffles. You can also collect the "concentrate" [mostly black sand, but where the fine gold is to be found], put in a bucket and set up a "blue bowl" operation at home where you can separate the fine gold a lot more efficiently than with a pan. Most very fine gold is lost when panning.

 

blue_bowl01a.jpg

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Hey all.

 

Been VERY busy for the past few months with housebuilding and I still haven't finished! Hope to complete the bugger before september, so no PM purchases for me at the moment. On the bright side though I sill have time to exchange real assets and labour for pieces of toilet paper with ink on....

 

Anyhow, what's up with the dollar? Are we in the death spiral already? Any significant news?

 

 

usdxdaily08aug10.jpg

 

Uploaded with ImageShack.us

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http://jsmineset.com/2010/08/03/the-lowdow...-to-the-dollar/

The Lowdown On The Euro’s Relation To The Dollar

Posted: Aug 03 2010 By: Dan Norcini Post Edited: August 3, 2010 at 9:53 pm

 

Dear Friends,

 

I have received a fair number of emails asking me what is going on with the Euro in relation to the Dollar, especially considering the fact that a mere few weeks ago it was pronounced dead and the European monetary union with it. ...

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Brilliant pics!

Great stuff chris ct, really impressed and fancy trying this myself sometime!

 

(for recreation, not great monetary reward!)

Me too. I tried a bit of panning in the local stream and found some really tiny gold and silver coloured particles. I dont knowis they were the real stuff but it was fun with the kids. Anyone know a good place in Devon to go panning?

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Me too. I tried a bit of panning in the local stream and found some really tiny gold and silver coloured particles. I dont knowis they were the real stuff but it was fun with the kids. Anyone know a good place in Devon to go panning?

http://devon-gold.blog.co.uk/

???

We finished the day with a quick trip to a favourite spot on the river Dart near Buckfastleigh, which proved pretty unsuccessful, mainly because the river level was too high to allow access to large parts of the usually dry flood channel.

Also I heard Brownstone Farm in Devon was a bit of a hotspot.

 

I can possibly help with the basics if anyone is interested; 3 trips now means i have improved a lot, though I still don't have a sluce I do know where the gold sits in a pan, and how to get it. One tip, keep the tailings when you get down to the last bits in the pan (20g or so?) - then you can go through them in your own time and find the micro bits you might have missed.

Also, I found a hand pump indispensible. Gold sinks to the bedrock, which is often very uneven and has pits where you need to get the sediment out. You just can't do that with a shovel.

 

When you get down to the last bits, wash the sand away slowly and the gold will reveal itself. Iron Pyrites is the biggest risk for misidentifying gold, but it is not as dense and only looks golden from certain angles. also Pyrites has a crystalline structure with faces and a sort of squared-off edges so it is possible to tell the real stuff apart mostly.

 

EDIT: here is a great youtube video, if you watch it to the end he has some good tips you will recognise as soon as you have tried doin' it the hard way!

From:

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Maybe time to buy EUR-Gold. After all, gold has seen one of the biggest sell-offs in over 10 years.

 

http://gold.approximity.com/since1999/Gold_EUR_LOG.html

Gold_EUR_LOG.png

 

You know all of the following GF but just to get it off my chest.... :lol:

 

Could well be. But maybe we go a little lower. No one knows. That's why I have been banging on that your average retail investor should not be attempting to call turns and go in at a single price point plop. Folks need to be buying weakness at fixed points all the way down or simply buy once a month in a disciplined fashion.

 

I remember being told quite forcefully that now was not the time to average in. Well time will tell but buying in to weakness with increasing size has done well for me so far. I have the same feeling now I had at gold 565GBP and gold 680GBP. Heck even our own silver sammy has turned up predicting a crash in gold sometime this year. :lol:

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