Hi Airedale
Yes, its annoying.....I've PM'd Vince to ask if he can rectify that problem. On the same forum 'shell' (other forums) it enlarges OK when you 'click to enlarge' - so it should just be a matter of tweaking the software.
rgds - arco
Printable View
Hi Airedale
Yes, its annoying.....I've PM'd Vince to ask if he can rectify that problem. On the same forum 'shell' (other forums) it enlarges OK when you 'click to enlarge' - so it should just be a matter of tweaking the software.
rgds - arco
"Resource Investor's Gene Arensberg discloses tonight that the commercial short positions in gold and silver have gotten even more concentrated in the last reporting period. Three banks or less are responsible for 67 percent of the commercial short position in gold, while one or two banks are responsible for 99 percent of the commercial short position in silver. This data is from the U.S. Commodity Futures Trading Commission itself -- the agency that recently wrote to gold and silver investors, asking them to produce any evidence of market manipulation. As silver market analyst Ted Butler and others have remarked, all the CFTC has to do in regard to market manipulation is explain its own data."
http://www.resourceinvestor.com/pebble.asp?relid=48524
It's the best question CNN has asked in a while . . .
The $7 trillion question
Do expansive federal bailout plans doom Americans to an inflationary future?
By Colin Barr, senior writer
DECEMBER 8, 2008: 12:45 PM ET
NEW YORK (Fortune) -- A billion dollars here, $7 trillion there: How long till Uncle Sam has to cry "uncle?"
For now, frightened investors worldwide continue to gobble up U.S. Treasury bonds, and they aren't much concerned about the impact of all the obligations the U.S. government is taking on to try and head off economic catastrophe.
But the government printing money, lending money to shaky corporations and guaranteeing debt that may never be repaid all could have troubling consequences in the not-too-distant future.
The No. 1 concern: Even if actions taken by the Federal Reserve and the U.S. Treasury succeeds at stabilizing the global financial system, and an economic recovery takes hold, a brutal inflationary spike will be right around the corner.
"Inflation is the 8,000-pound gorilla in the room," said Gary Hager, president of Integrated Wealth Management in New Jersey. "We're sitting in the room with the coffee cups vibrating."
In that environment, long-term interest rates would soar, the value of the U.S. dollar would plummet, policy makers would face a whole new set of challenges.
"Everyone is going to lose something," said Will Hepburn, president and chief investment officer of Hepburn Capital Management in Prescott, Ariz. "The winners will be those who end up losing the least."
Focus on deflation
Even those who have backed the blizzard of emergency spending on the grounds that it's necessary to prevent an economic catastrophe are worried about the size of the tab that will be left to taxpayers.
Hepburn gives federal officials "bonus points" for concocting innovative responses to the credit crunch. The ongoing collapse of U.S. stock market and real estate values, he said, has slashed U.S. household wealth by at least $10 trillion - and those paper losses could go much higher before the swoon ends.
So far, given the eye-popping sums being offered up by government officials, the markets have responded with surprising nonchalance. Yields on Treasury securities have tumbled to historic lows as investors fly to the safety and liquidity of U.S. government bond markets. The dollar has benefited from the move away from risky assets as well, trading at levels last seen earlier this decade.
Hepburn thinks the process of financial institutions and major investors unwinding massive bets may be further along than people believe. But while that could mean less volatility in the markets and a reduced risk of financial calamity, it could also whipsaw people who have moved their money out of stocks and into low-yielding assets like Treasury bonds.
"The capital preservation strategy will work till the recovery sets in," Hepburn said. "But we don't have the resources to pay off all these obligations - so the government's going to have to try to inflate it away."
An inflationary spike may seem unlikely, given that governments around the world are currently doing their best to head off the opposite threat - deflation, with falling price levels that would hamper economic growth by increasing real interest rates. The Bank of England and the European Central Bank slashed interest rates Thursday morning in a bid to bolster economic activity and prevent inflation from turning sharply negative in coming months.
Fast-changing climate
But Hager notes that it was only four months ago that oil cost $100 a barrel more than its recent $47, which shows how quickly market dynamics can change.
What's more, he said, while people are still struggling to figure out the costs tied to starting up and overseeing the government bailouts, no one seems to have put much thought to an equally important endeavor - how the government withdraws the massive support it has offered the markets in the event its efforts start to bear fruit.
While efforts to thaw the credit markets are taking effect slowly, Tom Sowanick, chief investment officer at Clearbrook Financial, sees a risk that they could suddenly become much more effective, leading to a jump in prices and a selloff in the dollar.
"The economy's in a bit of a slingshot," said Sowanick. "We are looking at a high probability of inflation issues ahead."
http://money.cnn.com/2008/12/07/news...ion=2008120812
Nice article. Quite factual for CNN.
http://money.cnn.com/2008/12/08/maga...tune/index.htm
Thanks for the articles Aussie
Good to see you on over on the 'wild' side.
rgds - arco
Why Gold Should Recover Significantly In 2009Here we discuss why gold will recover in 2009, and why gold is resisting the massive deleveraging in all markets better than most anything. Even though gold and the gold stocks especially have taken a hit, we expect them to recover significantly in 09. Here is why.
http://www.gold-eagle.com/images/clear.gif
Christopher Laird
http://www.gold-eagle.com/images/clear.gif
Overview of credit crisis and efforts to combat it
Well, Now that it's been a year and a half since Bear had its initial problems with those two hedge funds back around June 2007, its time to take stock and look at what happened. It's also time to ask what is happening, and what is going to happen in a year.
I think it's pretty clear, looking at the state of the credit markets that even after the US Fed has pledged up to $8 plus trillion fighting it, and the ECB maybe $5T, and all the other central banks are nationalizing their banks to stem bank runs, that things are definitely not working out. You can either look at the total absence of credit for businesses and individuals, the high credit spreads, zero interbank lending, or how about 533,000 US jobs lost in November alone?
I mean, pretty much every economy in the world is hosed. Or consider the Baltic Dry shipping index, which was at 11,000 only a couple of months ago, and now is like 7 hundred something. Meaning that world shipping is literally at a standstill. Without listing 50 pages in bullet form, of every collapsing economic sector, we pause here and ask what is going on overall?
Central banks trying everything but are failing
First of all, it's clear that the central banks have done practically everything they can think up to stem the collapsing economies and get lending going. and it is not happening. Pretty much every nation fears a world depression now, and they are doing anything possible to stop that from happening, and that is not working either. There are going to be millions of jobs lost in every major economy in 09, and this has already started in later 08. The fiscal deficits in every major economy are going to be huge in 09
Since the central banks and world treasuries are trying to stop the markets from deflating, and it's not working, then why are they all keeping up that effort? Surely they know that they will not succeed and are not succeeding. All that is happening is that they are massively increasing their public debts. They are using taxpayer money to bail out everything they can. It's a disaster, and rapidly doubling the national debts of the US, and others including the EU nations.
In fact, I was pondering the US debt increases alone. If you only look at the treasury and like bond indebtedness of the US, starting around July of 07 it was around $9 trillion. Now, in a mere year and a half, the US has added another $8 plus trillion to it with all the various bailout mechanisms. These numbers are added up in an LA Times article last week.
So, the US accumulates $9 trillion of national debt in 240 years, and in a mere year and a half, adds another $ 8 trillion? And for what? The credit markets are still frozen solid.
So, since the Fed and ECB and other central banks cannot be blind, why are they continuing to do more bailouts? All that is happening is they are rapidly heading their treasuries to bankruptcy….if they keep going, which appears to be the case.
Credit Crisis III
And, why are they doing this? In not a long time, the currencies themselves are going to start to be threatened, not just devalued. I suppose if they permit a world cascade of competitive devaluations, they can keep the money flooding out for another year before everything explodes into Credit Crisis III, which would be currency crises after the financial/bank crises.
And, since they seem to be going headlong into that path, saying they have no alternative, then what's next for currencies in 09?
First, if you look overall at what has happened, it's massive world deleveraging and debt deflation driving it. As we mentioned before, over $1000 trillion of leveraged markets are unwinding, and if you add up all the central bank efforts to loosen credit markets and do bank bailouts, it adds up to roughly 15 to 20 $trillion.
Well, $20 trillion is not near enough to stop $1000 trillion of markets deleveraging. So, the efforts are doomed to fail.
Currencies next
Once markets realize this, speculators are going to start attacking currencies. They already are in some cases, such as the Ruble, Won, etc. Even the Swiss Franc is under pressure, as the Swiss don't have quite a lot of foreign reserves, and the UBS debacle alone is wiping out their reserves with the bailouts, for example.
Korea and Russia both have problems coming due this month. Both of them have to roll over hundreds of $billions worth of short term corporate credit. And the trouble is, that market is collapsing too. So, the only solution so far has been using mainly their foreign reserves, and both their currencies are getting killed.
Lenders of last resort for -everything?
So, to get the overall picture, the world central banks are finding themselves to be lenders of last resort - for everything. And, fundamentally, that cannot work. The central banks cannot replace the economy. The economy has to function, or else all that happens is that CB money just gets thrown into a black hole. Just look at the still frozen credit markets for proof. And that proves that the central banks cannot replace the economy. After a year and a half of this bailout and lender of last resort stuff, corporate and private borrowing is still frozen, and the world economy is rapidly coming to a standstill.
US Treasury market nearing its limits
As we said, things are so bad that the currencies themselves are starting to feel it. What I am wondering is when the USD will really start to reflect this. Other major currencies are having problems, take the British pound for example, the Ruble, the Won and others. When the USD starts to reflect this failing bailout reality, it will start to drop. And the only weapon the US Fed seems to have is to offer more debt, to borrow more, and try to keep infusing $500 billion at a pop. This seems to happen every two weeks or so. And Obama is planning on up to another $1 trillion in fiscal stimulus in early 09. How much can the US Treasury market stand?
At some point, the bond markets will balk at buying the new US debt. Then the USD will suffer tremendously. I think we might see the beginnings of this in 2009.
'If you can get it'
A few years ago, we said that at some point gold and silver would not be available at any price. Basically, if the USD was falling drastically, people would not sell their gold or silver for any price. They would hold onto it. This situation has appeared earlier than I thought.
The USD has not collapsed yet, but if you try to get gold or silver, you can't. If you order it online you are told it's a 2 month wait. And you have to pay upfront. If you go to coin stores they are out and say it's a 2 month wait. Financial writers are saying buy gold, 'if you can get it'.
I think the simple answer for this is that gold and silver are already anticipating the currency crises coming in 09. Nominally, the USD is holding up compared to other currencies, and even strengthening. But, as we said, at some point the bond markets are going to do a thumbs down on new US treasury issuance, and when that starts to happen the USD will severely devalue in a couple of months.
I suspect gold and silver are already anticipating this risk, even though the USD is holding up at the moment because there is such a demand for cash in general (year end settlements, cash hoarding, etc.)
The disconnect between paper gold and bullion gold
The paper gold market is much larger than the usual gold bullion sales yearly. I would estimate the paper metal markets well over 100 times the size of the actual physical market. That is all the futures contracts and the many derivatives between banks and financial institutions compared to the actual bullion sales.
Since everything is deleveraging, the paper markets easily dominate the physical gold market. That explains the low spot prices, which are too low to encourage people sell their physical gold coins or whatever. Same for silver.
As long as deleveraging continues, paper gold prices can remain subdued.
But, interestingly, if you compared the gold price and the general commodity and energy complex, both considered inflation havens, gold has done much better in the last months since June 08. This is likely because gold and silver are the havens in currency crises. Here is a chart comparing the CRB commodity basket index and gold:
Since the world stocks have crashed in the last year, the CRB crashed too, and also oil (The CRB commodity basket index is heavily oil weighted). Gold has not crashed nearly as much, why is that? Basically every market is deleveraging.
Again, the answer is that gold is a central bank reserve asset and is money. Since most currencies are going to have trouble in 09, gold is anticipating that. It has even resisted the massive deleveraging forces in the paper gold market. No other market has resisted deleveraging.
In fact, the US Treasury bond market being so high is an example of deleveraging too, because there is flight to safety in US T bonds and such. In fact, the US just issued something like $30 billion of 4 week Ts at Zero this last week! Talk about a measure of the state of the world economy!
The US 3 month Ts are yielding practically zero too. They show the state of flight to financial safety:
Flight to safety will end up eventually in gold
When/if the confidence in the US treasuries starts to fail, flight to safety money will leave Treasuries and gold will skyrocket as the only remaining haven. At that point the US Treasury bond yields will begin rising with a vengeance.
Other currencies are not alternative havens
The other currencies are all going to weaken along with the USD with every central bank in the world desperately trying to stop deleveraging as all world markets collapse. This rules them out as alternative havens to the USD. This has already started in earnest in Oct 08 (actual economic collapse after credit collapse for a year and a half since Oct 07). The next question is when does the USD finally turn south, and T bond yields reverse falling. Again, if the other currencies are ruled out as havens, the only haven left is precious metals. People don't trust banks, US T bonds and maybe German Bunds are havens now but won't be later.
Energy and general commodities
It's doubtful that energy will be a haven like gold. Opec for example is having trouble keeping production limited, and falling oil prices encourage cheating. Russia too needs oil revenue, and energy generates something like 2/3 of their foreign exchange. So Russia will also resist production cuts and oil will stay lower in 09 because of that. A rapidly slowing world economy and layoffs are not going to help oil either.
World economy is hammering commodities
In case you doubt that oil will stay down, consider what this chart of the Baltic Dry shipping index shows about the world economy now:
In case you think oil is going to recover a lot in 2009, maybe you better consider what the BDI is saying-- meaning demand for shipping containers collapsed in the second half of 2008, which means the world economy is falling apart rapidly now. That will definitely put ongoing pressure on oil and commodity prices in 2009.
Gold stocks
Of course in all the deleveraging in stock markets, gold stocks took a big hit. But, as the prices of gold recover in 09, gold stocks should also recover, or even exceed their previous highs in 08. I know it's hard to take the gold stock volatility.
I am not saying this because I'm a blind gold bug. I say gold and gold stocks will recover in 2009 because the world is entering a phase of serious and widespread currency instability. That is going to be the next big story in 09. And, since other markets are not likely havens, such as energy or basic commodities, gold is the only remaining haven. After the US T bond market starts to fall (being a major haven now) then gold will skyrocket. Where else can one find a liquid haven except gold? And remember, gold is a Central bank reserve asset worldwide.
I would also like to point out that we warned subscribers of a general commodity sell off in April 08, because we called a USD bottom then. That has sure borne out as we anticipated. We expect the USD to start to turn in 09, probably by one year or so after it began its upturn. Gold and gold stocks will benefit immensely.
The Prudent Squirrel newsletter is our financial and gold commentary. Subscribers get 44 newsletters a year on Sundays, and also mid week email alerts as needed. The alerts include quick notification of important financial news developments by email. Subscribers tell us that the alerts alone are worth subscribing for.
I had one potential subscriber ask me if the newsletter has much more content than these public articles, ie, if it was worth subscribing. The answer is that the public articles have less than 10% of our research and conclusions that subscribers see, not to mention the subscriber email alerts of important breaking financial news. We have anticipated many significant market moves in the last year, such as imminent drops in world stock markets within days of them happening, and big swings in the gold markets within days of them occurring. We have also made a number of good calls on big currency swings, such as with the USD, the Euro and the Yen.
We invite you to stop by and have a look.
December 11, 2008
Copyright 2008
Christopher Laird
Editor in Chief
www.PrudentSquirrel.com
Disclaimer: Chris Laird is not an investment advisor/professional. This article, and the PrudentSquirrel newsletter and alerts, are general market commentary only. They are not intended as specific advice. You should talk to your own investment professionals for specific advice. Information here is deemed reliable but should be verified by you if you think it's important.
The US dollar index is forming an all too familiar pattern. This is certainly a result of wreckless monetary policy turning deflation in to a potential stagflationary situation. At this point we recommend purchasing commodities (DYY is a good ETF because it is 2x leveraged and well diversified) and other currencies while there are reasonably priced opportunities. We like the Euro and Yen for this trade.
http://mootrades.com/wp-content/uploads/2008/12/usd.png
US dollar index shows head and shoulders pattern
The courageous may consider purchasing commodities stocks as they will likely participate, but the future of the equities market is not necessarily certain as the recession is deepening. Today’s unemployment claims were higher than the expected 525k at 573k. That is a very bad sign that the worst is far from over in terms of how many layoffs we can expect.
Mick, great article... thanks.
Gold This Week.
December 12th, 2008
The Privateer
For no discernible (or announced) reason, the US Federal Reserve recently announced that the last meeting of their Federal Open Market Committee (FOMC) would be streched from a scheduled one-day to a two-day meeting. Originally scheduled for December 16, the meeting is now to take place over December 15-16 with the decision on interest rates to be given on December 16.
Of course, this is the FOMC meeting at which the Fed is universally expected to announce the lowest target Federal Funds Rate in their 95-year history. The current rate is 1.00 percent. For over a month, the Fed has been expected to cut that rate in half to 0.50 percent on December 16. More recently, as the data on the real US economy has steadily worsened, a slowly growing chorus has begun for an even bigger cut. On December 11, futures contracts on the Chicago Board of Trade showed an 84 percent chance that the Fed will actually lower by 0.75 percent to a target Fed Funds Rate of 0.25 percent at the December 15-16 meeting.
Whatever the rate cut, be it 0.50 percent or 0.75 percent, it is clear that the last FOMC meeting of 2008 will also be the Fed's last chance to produce a "headline" rate cut. In 2009, there will no longer be any room for any more big Fed cuts. There is certainly no room for interest rates to fall at the shorter end of the US Treasury's yield curve. This week, rates on three-month Treasury paper actually dipped into NEGATIVE territory. On top of that, the Treasury sold $US 27 Billion in three-month bills this week at a discount rate of 0.005 percent. That is the lowest rate since the US Treasury began debt auctions in 1929. "Investors" are, in effect, paying the US Treasury to retreat into the "safety" of its debt paper.
This situation cannot last for long, and the grotesqueness of it is starting to have effects. The US Dollar dived this week as the trade weighted USDX index fell sharply. As recently as November 21, the USDX closed on a spot future basis at 88.41. This was the highest such close on the index since mid April 2006. Two trading days later, the USDX had slumped to 85.06. Then came the recovery, with the USDX spot future close climbing back to 87.16 by December 3. But this week, the USDX has tumbled again. The major damage was done on December 11 when the yield on three-month Treasury paper went "negative" for the first time ever. By December 12, the USDX had fallen to 83.63, its lowest level since October 20.
Attachment 1095
Much more important, the USDX has now traced out a series of lower highs and lower lows since its 88.41 peak three weeks ago. This is a STRONG indication that the huge US Dollar rally which began back in July, fuelled by US capital repatriation and even more by global debt deleveraging, is over.
The current issue of The Privateer (Number 618 - Published on December 7) includes in the "chart files" a point and figure chart of the USDX up to the close of trading on Friday, December 5. Here is that chart.
Here is the same chart a week later to the close of trading on December 12. Please note that the trading range we laid out on the December 5 chart has now been decisively penetrated - to the DOWNSIDE!
Combine record lows on Treasury debt yields across the curve - the short end now actually having dipped into NEGATIVE territory - with a SERIOUS fall on the US Dollar trade-weighted index. What you have is an exceedingly dangerous situation which could collapse very quickly. In this context, a "collapse" would mean a rapidly falling US Dollar and rapidly RISING US Treasury debt yields. In the current financial and monetary situation, no more potentially "toxic" mixture exists.
Gold has reflected this situation. Last week (December 1 - 5), the $US Gold price fell $US 64.00. This week, (December 8-12), Gold has risen $US 68.30 - and that is after a fall of $US 6.10 on the spot futures market on December 12. More on this in the commentary accompanying the $US 5 x 5 Gold chart below.
Consider the fact that the only thing which "saved" US (and world) stock markets this week was the US Treasury stepping into the breach to temporarily fund the "big three" US auto makers after the Senate baulked at the $US 34 Billion bailout package they were expected to grant. Consider further that despite the crash dive in US consumer spending, the November US trade deficit actually ROSE month on month. Consider in particular the third quarter 2008 borrowing figures for the various sectors in the US economy released on December 11. US mortgage borrowing fell at a 2.4 percent pace after having fallen by 0.1 percent rate in the previous quarter. Total US household borrowing fell by 0.8 percent after having risen by 0.6 percent in the second quarter. State and local government borrowing rose by 2.9 percent.
But US FEDERAL government borrowing surged at a 39 percent pace in the third quarter of 2008 - SIX times its rate for the previous three months! That is totally unsustainable. Even to maintain that level of borrowing in coming "quarters" is all but impossible. To increase it at the pace at which federal government borrowing rose in the third quarter would quickly lead to a "Weimar" or "Zimbabwe" episode of hyperinflation with certain currency distruction at the end of it.
Next week, the Fed will make the last of their significant rate cuts, leaving no more room below. US Treasury yields are at the lowest point in their history while at the same time US federal government borrowing is accelerating at a pace never before approached. The US Dollar has fallen below the bottom of its recent trading range. In US Dollar terms, Gold has risen by 9.1 percent this week.
What happens after December 16? The monetary "authorities" at the US Fed and the Treasury will have to resort to "alternative measures", not only to continue their attempt to "unfreeze" the credit markets, but to merely continue to fund the US government itself. Any move in this direction will put added pressure on the US Dollar. It will also make the present non-existent US Treasury yield curve look transparently absurd and almost guarantee a HUGE jump in yields. The only question is when.
The potential for a HUGE jump in Gold given this situation is obvious. Does "safety" reside in the world's reserve currency (the US Dollar) or in the debt paper of the government which issues that reserve currency? Clearly not. That being the case, it must reside in the alternative to ALL paper moneys based upon debt. And that's Gold. Always has been, probably always will be.
Permission hereby given to
quote short excerpts - provided
full attribution is given:
© 2008 - The Privateer
http://www.the-privateer.com
capt@the-privateer.com
(reproduced with permission)
USD on the way down again . . . gold up US$25 over night.
Attachment 1098
Its very interesting to see that although gold has surghed in us$,it has actually gone down in Kiwi dollars from 1530 to 1478$kiwi oz. Its a complicated game for us kiwis
Gold could go to 1500oz but if the us$ drops enough we could end up getting less kiwi $ if and when we sell!
Comex concentration hints that shorts are all government now
Submitted by cpowell on Wed, 2008-12-17 00:17. Section: Daily Dispatches
7:14p ET Tuesday, December 16, 2008
Dear Friend of GATA and Gold:
Fear of deflation lately has been convulsing world markets, causing liquidation of most assets into dollar cash and government bonds. Unchecked, that sort of thing must lead to the cessation of all industrial and agricultural production, and everybody freezes and starves.
Having triggered the deflationary collapse by stomping on the commodity markets a little too hard a few months ago, central banks now have desperately reversed their policies and are striving to revive prices by devaluing their currencies and inflating debt away with the "helicopter money" Federal Reserve Chairman Ben Bernanke long had promised to unleash.
Central banks have used gold in currency devaluation to avert deflation before, and the growing concentration -- near monopolization -- of the commercial short positions in gold and silver on the New York Commodities Exchange may be a clue that such a scheme is under way again. This growing concentration hints that the gold carry trade is over and that the gold and silver short positions are now almost completely in the hands of the U.S. government through its agent, JPMorganChase, and that the cost of the gold price manipulation -- what appears to be a controlled retreat with gold -- now can be borne entirely by the government with some of the magic money being contrived into existence.
The higher the gold price goes, the less real metal the government will have to produce on the Comex and the more the gold side of the reflationary policy can be sustained with magic money -- and, perhaps, the more suspicions of market manipulation will subside. But not, of course, with any help from GATA.
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
srowe, that may well be true over the immediate short term but I very much doubt it over the long term. Gold is not something you trade. It's something you hold as the core position in your portfolio. At all times and in all situations for last 5,000 years it IS and has ALWAYS been money.
Gold had been rising in all currencies except YEN and USD. However, soon enough in my opinion, it will be rising in ALL currencies as all central banks are drastically lowering interest rates, expanding their money supplies and inflating their economies in race to the bottom of the interest rate scale.
Debt created money CANNOT replace real capital created from savings.
I can guarantee you that central banks can create as much paper money as they want and as we have seen all over the world today - they can even guarantee the saving of depositors; however what they cannot guarantee is the future value of that money and what it will be worth and what it will buy in the future.
Edit: Physical gold (and silver) is almost impossible to acquire in 1 oz coin form at the moment. More than a month ago, the Perth Mint stopped taking orders until the new year . . . physical prices for gold and silver are far about the Comex price. Look on Trade Me and E-Bay. Expect to pay a huge premium IF you can find it. IMVHO, gold (and silver) over the next three to four years will be moving to a price that people today would simply not believe.
...that is correct for now; therefore, it was a prudent move to buy gold in $US when the US/NZ exchange rate was ~82; then you would not have the problem you have now...
...however, in the current climate of 'US nuclear monetary policy options', it is most likely that we will see a worldwide debasement of paper trash taking a ride to the dumb along with the US$
Kind Regards
Richard Russell last night:
Now as the Bernanke-Paulson team open the monetary flood-gates in their desperate effort to halt deflation and bring back inflation. Our creditors (i.e. China) must be getting nervous, and they're beginning to let us know about it. The problem for our creditors -- the dollar is now fading rapidly. There's one obvious way to make the dollar more attractive -- higher interest rates. The choice now -- rising rates or a declining dollar. What I'm most worried about is the US dollar losing reserve status. This would mean that our creditors would refuse to take in more fiat Federal Reserve notes, "money" that we can print as we want.
Gold -- I believe that big money, institutional money, is finally beginning to "get it" about gold. Bonds are in trouble, muni bonds are getting hit, the dollar is in trouble, real estate is getting killed, the world is swimming in debt, and we're facing a monster "margin call" on all debt. Where can you find wealth that is not anchored in debt? Only one place -- gold.
Many people, and not just wealthy people, are thinking in terms of survival. How do you survive in a world that won't lend, in a world where nobody trusts anyone else, in a world, where every asset class is in danger? Only one place -- eternal wealth -- gold. This is the concept that has alluded the public and the wealthy as well. It took a situation (as now) where ALL asset classes are in danger before the smartest people on the planet finally "got it." The "last man standing is gold." When the world's asset classes are crumbling, only gold is left.
You can see it in gold's action. While almost all other assets are sinking, gold on a year-over year basis is up 5.6%. So far, this year, gold is up .01%. Nothing else can match gold's performance. Talk about superior relative strength, you're seeing it in gold.
Gold stocks are common stocks. Up to now, gold shares have acted like typical common stocks -- they've been declining with the Dow and the S&P. I've been saying that once bullion starts moving higher on a steady basis, the beaten down gold shares will start acting like entities that produce gold, rather than ordinary mining stocks that sink with the general stock market.
-Backwardation in gold causes, and is caused by, the cascading contraction of world trade. It is preposterous to suggest that no special event triggered the backwardation in gold last November. The special event was the onset of Great Depression II, just as sabotaging the gold standard by Britain on September 1, 1931, heralded the onset of Great Depression I.
Backward Thinking on Backwardation
Posted Thursday, 18 December 2008 GoldSeek.com
Copyright © 2008
http://news.goldseek.com/GoldSeek/1229620000.php
by Antal E. Fekete
Kind Regards
Great article ananda77. Keep posting 'em. :D
This is another . . . I think it was Henry Ford in the 1930's who once famously said "If the American people knew how their banking system really worked, there would be revolution before dawn . . . ".
Once you read this hard hitting article by Jim Willie you will see the old man's wisdom. Even back then he knew that Wall St., the Fed and the US Treasury were to become a criminal nexus that was all about serving themselves, not the people who's trust they have been given.
A must read . . .
http://www.financialsense.com/fsu/ed.../2008/1216.html
Also, if you want to know what's going to happen in 2009 . . . think about what happened in 2008 and multiply it. This US 60 Minutes story on the coming next stage of the mortgage meltdown will shock you.
http://www.youtube.com/watch?v=iUuROWEMjm0
...after 'Backward Thinking On Backwardation', now this:
-What we are witnessing is a transition that deprives gold of its monetary qualities. Gold in hiding cannot and will not act as money. More to the point, absent gold, nothing else can or will. The disappearance of money, that can be trusted, fatally undermines the legal system, the sanctity of contracts, habeas corpus, any and all provisions of law and order that we take for granted. Under these conditions nobody can operate a gold mine, nobody can run a gold refinery, nobody can guarantee segregated gold deposits, and nobody can prevent the institutionalized theft of ETF holdings. Welcome to the Madoff economy! (See References below: Paul Krugman's column in The New York Times). Jail one Madoff, two others will jump into his shoes.
As a consequence of the permanent backwardation in gold, we shall have a world gone Madoff.-
FORWARD THINKING ON BACKWARDATION
Antal E. Fekete
Gold Standard University Live
http://www.gold-eagle.com/gold_diges...ete122008.html
...Aussie, you may have to re-think your bullishness on gold stocks...
Kind Regards
We'll see . . . in my opinion there is no question that gold is clearly reasserting itself as money - rather than being "just a another commodity".
Gold is likely to be the ONLY asset class that has made ANY gains this year. Personally, I think it will EXPLODE across '09, '10 and '11. If it was just another commodity as many financial "advisors" seem to think, it would be down 40%-50% like copper, aluminum, zinc etc. In USD dollar terms it has held it's ground remarkably. In AUD and NZD terms it's gains have been spectacular . . . or more accurately, the devaluation of our paper currencies has been spectacular.
The way I see it, the investment world is just one step away from the tip of the inverted apex on the debt pyramid. Every other asset class has been compromised by counter party risk including US TREASURY BONDS and the USD because the US Government is broke and there is NOTHING standing behind it. The financial world will soon come to that collective understanding.
Attachment 1105
I'm trying to think of another share-market sector that could be making big profits and paying dividends hand over fist in the near future other than PM stocks . . . and I can't.
If it gets to a total breakdown of law and order, worrying about my share portfolio will take a back seat to survival. Physical gold and silver have been money for over 5,000 years, I don't see that changing anytime soon.
In the meantime here's a more likely scenario that is IMMEDIATELY ahead of us. Bill Holter writes for Le Metropole Cafe and I see that other main stream commentators such as Australia's - "The Privateer" aka: Bill Buckler concur.
Mission Impossible
The Fed and Treasury have now entered the zone of impossibility, by this I am saying that anyone with second grade math or enough sense to look both ways before crossing the street knows that what is, can't be. The Fed has lowered rates to zero while the Treasury is in the process of borrowing every last cent, peso, and crumb of capital left on earth. The global marketplace so far has gone along with this farce. Think about it, the Fed says rates are zero % so the Treasury can borrow for free.
Digging a little deeper it gets even more hilarious, you see, the Treasury has already announced plans to borrow $ trillions and they will pay you back with the same Dollars that you lent them, only they will be worth much less or probably even be worthless.. Well, actually not the same Dollars because between now and when the debt comes due the Fed will have created many $ trillions more of new Dollars so you'll surely get new Dollars with fresh ink. The point is this, if you run scared with the herd into Treasuries for their perceived safety, you are actually moving into the riskiest asset on the planet. I am amazed at how many "smart, veteran, Ivy League degreed" boneheads are all buying into this "safety trade" hook, line, and sinker. They have gotten hooked on a fallacy and are standing in line for Treasuries like they actually have a scarcity value, and SINK they will.
So the "safety trade" is this, you buy Treasuries because you are afraid, and 3 months, a year, or 30 years from now you just want to make sure you get your original Dollars back, you don't care about getting interest or more Dollars because they are so valuable to you today. What about tomorrow? The Fed is exploding their balance sheet and goosing money supply like never before, they have told us that they will use "quantitative easing" to get inflation bubbling again, and what, investors don't believe them? I for one have always been skeptical of government announcements but I think that this time they are surely telling the truth. If they say they are intent on creating inflation and destroying the Dollar, BELIEVE THEM because at this point no matter what anyone does, the Dollar is toast.
We are where we are now because 6 months ago it was decided by the Fed and the Treasury that they "needed more time for a miracle". They knew back in the second quarter where all this was going, they new that they would need to borrow unheard of quantities of capital, so they leaned on commodities, probably bought Dollar futures with freshly printed or newly borrowed Dollars and got the "deflation trade" started. Don't get me wrong, we absolutely have deflation because of the amount of imploding and disappearing debt, BUT with a fiat currency that has no backing whatsoever, NEVER in a bazillion years could that currency become more valuable under any circumstances. It was all an illusion, nothing more, nothing less. All they had to do was get the story started in the pits and by the media, use a small amount of capital and leverage it up through the futures market and PRESTO, commodity crash, Dollar rally, and guess what,..... ZERO PERCENT interest rates as declared by the Fed and unbelievably confirmed and highly sought after by institutions.
When history looks back at the current travesty, no one, and I mean NO ONE, will believe that this 0% interest rate scenario could have actually happened. There are probably less than 10 people on earth that could be convinced individually that the worlds' worst credit could be allowed to pay the worlds' lowest interest rates for virtually unlimited quantities, but, spread the lie and make the rounds and pretty soon almost everyone loses their mind. People will be shocked very shortly when this deflation trade blows up, they certainly shouldn't be, but they will. We are now exiting the biggest mania, biggest bubble, the biggest fraud the world has ever seen. It will end with the bankruptcy of the US Treasury!
The world is lending gobs and gobs of capital at 0% to "guarantee principal repayment" in a currency that has been in a confirmed bear market for 6-7 years now. This will not stand, very shortly you will begin to see hiccups in the Treasury market, it will start slowly at first and then gain speed as more and more foreigners begin to repatriate their capital. This will lead to weak and then weaker auctions until one day the Treasury has a failed auction.
They may not publish it as a failed auction and may even falsify "bids", it won't matter because the big money will know who was present and who wasn't. This is the when the moment of truth occurs, the Treasury will have only one buyer remaining for their debt, the Fed. The entire fiat experiment on a global basis will be over, they tried to accomplish "mission impossible" and took the global capital markets down with them.
When investors take 10 seconds to think this through they will all end up with the same conclusion. If they are so scared that they will accept 0 % interest for a year, or 5 years, or whatever, just to preserve their capital, they will now all strive for "the best currency".
This next event will be the biggest bubble in history, far bigger than the current US Treasury farce. The next bubble will be petrified global capital with nowhere to go and no place to hide, except into the Gold market. "There is not enough Gold in the world for people to buy" is the argument against Gold as a reserve currency. I say, yes you are right at today's current prices, imagine trying to fit Niagara Falls through a garden hose? It can't be done right? Well, it depends on the size of the hose. The only way this would be possible is to increase the size of the hose 1000's of times. The only way the Gold market will be able to accommodate the capital coming its way will be to "revalue", this revaluation will occur alongside the default of the US Treasury and Federal Reserve. In fact, the coming revaluation will be awe inspiring as the Dollar approaches "0", real assets will mathematically approach infinity.
Let me leave you with this thought, if investors are so scared that they "won't get their money back" and are willing to invest in Dollars at 0 %, why not invest in eating utensils, pencils, or even gravel? Spoons, knives, and forks have an actual use, they require more labor and capital to produce than Dollars, and they won't shrink. Dollars are guaranteed to shrink, the gov't has told us as much, and this time I for one am inclined to believe them.
Regards, Bill H….
theres quite a perfect Gartley on the daily on Gold
X= 932 early Oct
D (Sell) = 873
Current price 850.
IPO (Target) = 777
"I'm less concerned about the return ON my investment than the return OF my investment"
MARK TWAIN
Good advice in times like this . . .
Gold up $25 this morning to $870. . . that "barbarous relic" looks like it will likely finish the year with yet another positive another gain over 2007 - that's nine years in a row. And I'm pretty sure it will be the only asset class to show a $US gain and a big gain in AUD and NZD. People who are concerned about gold's lack of income really don't get it.
Anyone in the US who held gold this year will have protected their wealth and achieved a small gain.
Anyone in Australia or NZ who held gold would have protected their wealth against a big currency devaluation.
Attachment 1111
Note the USD nominal high back in Mar equated to about AU$1,080, yet as the AUD was crushed in Oct, the price in AUD hit about $1,370.00 - the gain would be similar in NZD.
In 2009, as the global financial crisis really deepens, I believe the authorities who are "governing" it's paper price on the COMEX will lose control and gold will begin rising in all currencies.
Anyone who doubts that the gold price is manipulated needs to open their eyes and do some research. The manipulation of the gold market by the US Fed and Treasury through their surrogate banks JP Morgan and Goldman Sachs is one of the principal reasons for the global mess. This long-term manipulation has allowed US interest rates to stay far lower and the dollar to stay far higher, far longer (decades) than they otherwise would have in a free market.
http://www.gata.org/node/wallstreetjournal
This has been good for an overspending US government and economy but has created an enormous surplus of dollars - aka as "hot money" which in turn creates economic bubbles and distortions throughout the global economy because the USD is universally held and traded as the world's "Reserve Currency". It will not be able to maintain this status for too much longer.
In addition, the price manipulation has intentionally broken the economic thermometer which has always been gold . . . so that investors now see gold as more risky than dead investments like US Treasuries.
Boy, is there a future shock coming for anyone who thinks that the debt of the US Government is a safe place to be.
Nicely spotted Peat and there is also a not so perfect mini Gartley shape on the 4 hour. All this is occurring at the resistance of the current downtrend line.
So if these patterns play out, (gold being unable break the DT line), the price could certainly ease back and possible form a bullish Gartley/bat/BF with X at 5/12 or 12/12.
Marc Faber on CNBC . . . buy GOLD for 2009!
http://www.cnbc.com/id/28418476
Heres the chart showing potential downside in the near term as mentioned recently
Weekly chart appears interesting with Kumo looking resistant, and Chikou
finding it hard to penetrate the prior PA.
Clearer chart here
http://www.aussiestockforums.com/for...0&d=1230849201
rgds - arco
Interesting chart . . .
Attachment 1128
arco
I think those charts only show if someone has (and logs onto) a login to the aussie stock forums.... they are showing for me only now that I went there and logged in.
arco , here's my rough calculation based on buying 1oz of gold at the start of 2008.
Jan 1, 2008.
NZD = .7740 - Gold price is USD $838 or NZ$1,083.
Jan 1, 2009.
NZD = .5826 - Gold price is USD $882 or NZ$1,514.
That equates to a 40% gain in the NZD price of gold. Obviously the big factor here is the devaluation of the NZD. So it would be fair to say that gold has done a mighty job in preserving a kiwi's purchasing power.
Is there ANY asset class in New Zealand that has performed as well? i think not.
However, one may also argue that if the USD was to devalue and the NZD to strengthen again, then in NZD - gold may actually lose some value. But I actually believe that this is unlikely as the YEN carry trade is dead, interest rates are falling globally and broadly speaking, all currencies will devalue together against gold. Just my opinion though.
[quote=Aussie;238437]arco , here's my rough calculation based on buying 1oz of gold at the start of 2008.
Jan 1, 2008.
NZD = .7740 - Gold price is USD $838 or NZ$1,083.
Jan 1, 2009.
NZD = .5826 - Gold price is USD $882 or NZ$1,514.
That equates to a 40% gain in the NZD price of gold. Obviously the big factor here is the devaluation of the NZD. So it would be fair to say that gold has done a mighty job in preserving a kiwi's purchasing power.
Is there ANY asset class in New Zealand that has performed as well? i think not.
However, one may also argue that if the USD was to devalue and the NZD to strengthen again, then in NZD - gold may actually lose some value. But I actually believe that this is unlikely as the YEN carry trade is dead, interest rates are falling globally and broadly speaking, all currencies will devalue together against gold. Just my opinion though.
~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~* ~*~*
The US economy & dollar won't recover whilst the Feds continue to print money ah la Zimbabwe, they will need some "hard" currency to offset any inflationary effects.
Gold is the one saving grace they have available IMO.
PS, Try buying gold & silver bullion at the moment, not as easy as it was (& btw, Gold/Silver ETF's are buying!).
You'd almost think someone is trying to corner the market...
I don't think so. There is a genuine scarcity of supply. People all over the world are scrambling for the physical metal. Small quantities are hard to find and premiums are often US$100+. I haven't checked with the NZ Mint lately but last time I did there was a wait of a few months, same with the Perth Mint. Dealers like Jaggard's in Sydney are very keen to buy as they have customers on wait lists.
In this environment with mine production declining year over year, central banks sales stalled and central banks rapidly increasing the money supply, it's going to take dramatically higher prices to coax gold from private investors onto the market in exchange for de-valuing paper.
shasta , maybe not. The US gold reserves have not been audited since the Eisenhower administration in the 1950's.
Have you heard of GATA - The Gold Anti-Trust Action Committee?
http://www.gata.org
This is an ad that GATA ran in the Wall Street Journal on January 31st, 2008 at a cost of US$264,000. This is very serious stuff and GATA is not a lightweight organization. GATA has recently acted as a consultant organization to the Chinese government, the Saudi government and their attendant sovereign wealth funds. GATA has also recently met with the new boss of the US CFTC (Commodities and Futures Trading Commission) in Washington and had the opportunity to present their case directly regarding the obvious gold and silver manipulation on the COMEX exchange. The information was very positively received by the new leadership team.
Over the past decade they have gathered an overwhelming body of evidence that points to gold market manipulation by the US Treasury, the Fed and other central banks in order to manipulate currencies and interest rates by suppressing the gold price.
There is very strong evidence that maybe 1/2 of the US gold reserves have been mobilized into the market over the past 15-20 years to prop up the USD and keep US interest rates artificially low. The US government has consistently refused to have ANY auditing on these reserves, even though they are supposedly a public asset. The practice really gained momentum during the Clinton Administration under the financial leadership of Larry Summers and Sec Robert Rubin - who incidentally (earlier in his career) used to run the London gold desk for Goldman Sachs - so he knows the financial side of gold business backwards.
This makes a lot of sense especially when you consider the massive interest rate derivative positions ($10'sTillions) held by JP Morgan. They were able to write these derivatives with the knowledge that rates were "controlled". If however, the US has trouble attracting the $2 Trillion in borrowings that it will need this year then look for US rates to start rising dramatically and JP Morgan's derivative book to explode! When you start to look at all the pieces individually, you can begin to maybe see how they all fit together . . .
GATA has a couple of lawsuits under way to try and find the truth. If things are as they say and 50% or more of the US gold has been leased to bullion banks like JP Morgan and Goldman Sachs who have in turn sold it into the spot market to finance other trades. . . the chances of it being returned now at current prices are slim to none. It's gone!
If this were to be exposed it would be the biggest scam in financial history.
http://www.gata.org/node/wallstreetjournal
Attachment 1132
Gold Climbs Again - Eight Years in a Row
The numbers for 2008 are in. Gold has done it again. Gold is up for the eighth year in a row against the US dollar. Here are gold's rates of appreciation in terms of several major currencies.
Attachment 1138
The appreciation gold has achieved over the past eight years is remarkable. Without any doubt, gold's 16.3% average annual change against the US dollar has made it one of the world's best performing asset classes this decade, but oddly, gold continues to be ignored by many. I expect this inattention to change in the year ahead.
The outlook for the US dollar continues to worsen as the Federal Reserve balloons its balance sheet. What's more, the Fed's zero interest rate policy removes any incentive to hold dollars in an environment where counterparty risk remains an intractable problem and where rapid money growth portends a surge in inflation in the weeks and months ahead.
M3, which measures the total quantity of dollars in circulation, grew by about 10% in 2008, near record highs. Two of its components, M2 and M1, increased over the past year by about 10% and 17% respectively. These rates of growth in the quantity of dollar currency are highly inflationary.
Credit continues to contract, and as a consequence is destroying a large amount of wealth as overvalued assets that were buoyed by easy credit are now being marked down in price to realistic levels that more accurately reflects their actual worth. It is important to note, however, that we are measuring the price decline in these overvalued assets with a currency that is being ever-inflated. Though the Consumer Price Index has dropped a little over the past couple of months principally because of the lower crude oil price, the CPI continues to rise on an annualized basis, even by the federal government's own calculations, which understate the true rate of dollar debasement.
More inflation and more dollar debasement can be expected. The Federal Reserve has thrown away the rule book. It is ignoring three hundred years of central bank practices and putting the dollar on an untried path in an attempt to avoid the consequences of the inevitable bust that always follows the boom created by easy credit. The Federal Reserve's grandiose experiment will I expect eventually destroy the dollar, and I don't hold out much hope for any other national currency. To explain why, take a close look again at the above table.
We can see that gold is rising against every national currency. The reason for this phenomenon is that the dollar is the world's reserve currency, and because of this role, it is held as a reserve by central banks around the world. The dollar provides part of the base upon which other currencies are created. Therefore, as the dollar is debased, other national currencies are also being debased along with it. In other words, the US dollar is now going down a 'black-hole', and its gravitational pull is dragging every other currency down with it as evidenced by the rising gold price this decade in all currencies.
There is one other unique aspect apparent in the above table. The average annual rates of appreciation that gold has achieved against the nine currencies in this table is remarkably consistent. Gold appreciated 13.3% to 13.6% on average for eight years in terms of four of the currencies. Gold gained from 10.6% and 10.8% against the two best currencies, the euro and Swiss franc. The euro and the Swiss franc are the 'best' in the sense that less of their purchasing power has been inflated away compared to the other seven currencies. Against the three worst currencies that have lost the most purchasing power from inflation, the US dollar, Indian rupee and British pound, gold appreciated from 16.3% to 17.1%. Then contrast this consistency in gold's average annual rates of change to gold's annual change against these currencies in any year.
Gold's worst annual performance was the -14.9% it lost this past year against the Japanese yen. It's best annual performance was also achieved this year with gold's 44.3% appreciation in terms of the British pound. Here's my point.
Gold shows remarkable consistency when viewed over the long-term. Thus, it is national currencies that are volatile, not gold. Annual changes in gold are a result of currency fluctuations, not anything inherent to gold itself, and this point is proven by the consistency of gold's average annual appreciation this decade, which smoothes out the annual volatility.
We are in a world of freely floating exchange rates where currencies bob up and down relative to one another. But in reality these currencies are not 'floating'. They are actually sinking when compared to gold. The purchasing power of every national currency is being eroded, but this erosion is sometimes difficult to see when currencies are viewed only against each other. But the true picture clearly emerges when all of the world's currencies are compared to gold.
In an environment where the purchasing power of national currencies is being constantly eroded by bad central bank policies, which has been the case throughout this decade, own gold. Importantly, ignore the month-to-month and even the year-to-year fluctuations in the gold price. These fluctuations are not important from a long-term point of view, and in any case occur from factors that cannot be predicted.
For example, who forecast a year ago the extraordinary strength in the yen this year from the unwinding of the carry trade? It nevertheless happened, and consequently, gold declined -14.9% in terms of yen this year even while gold soared against the British pound. But for the past eight years, gold remarkably is up 13.6% on average in yen and 17.3% in British pounds, which is the important point.
Therefore, continue to follow the same strategy that I have been recommending this entire decade. Continue to accumulate gold using a dollar-cost averaging plan. Some months and even some years you will be accumulating gold at a higher price, and at other times a lower price. But over the long-term your consistent accumulation of gold will be averaged in at a good price.
When you accumulate gold this way, you are saving sound money, which is the prudent thing to do in a world where the purchasing power of all national currencies is being eroded by bad central bank policy. The same conclusion is also true for silver, if you are inclined to take the additional risk that comes with silver because it is more volatile than gold.
The following table presents silver's annual rates of appreciation for the same nine major currencies
Attachment 1137
Silver too has appreciated in terms of each of the above currencies, but its annual changes show much greater volatility than gold. These changes range from -38.8% to 49.3%.
To conclude, gold and silver will probably appreciate in 2009. There is no reason to think otherwise, given the path chosen by central banks in general and the Federal Reserve in particular. After all, who wants to own any national currency when the interest income one can receive is less than the inflation rate? Who wants to own any national currency when counterparty risk makes repayment uncertain? In short, the interest income available today on any national currency does not fully compensate for the risks one takes when holding that currency.
So why lose sleep from worrying about holding national currency and what the Federal Reserve or some other central bank will do to that currency? Own the precious metals instead. But as I repeatedly emphasize, own physical gold and physical silver. Own the real thing, and do not accept paper substitutes.
Published by GoldMoney
Copyright © 2009. All rights reserved.
Edited by James Turk, alert@goldmoney.com
Short term trending/trading possibilities H4 chart
The current move could be an A,B,C correction.
Therefore, we could prepare for a potential reversal pattern in the grey box
which may then form a bullish Gartley, or alternatively keep watching for
a break above current resistance.
Hi all,
Im new in this gold/silver bullion.. and I would like to keep a few physical gold and silver bullion. Where can I get them? Is it cheaper to get from overseas or locally?
From other forum, people recommend http://www.silvertrading.net/.
Thanks
Andrew
newbie trader
check out nzsilver.co.nz - Alec will provide you with silver rounds. I recently got a Austrian Philharmonic 1 oz coin from him
or search for silver or bullion on trademe - not only will you find individuals selling but you will find businesses listing there as well . theres certainly a lot less for sale than there used to be but there is still some.
Acquiring physical metal is a lot more expensive than quoted spot prices so it isnt that suitable for actual trading (as your nick suggests) more appropriate for long term holding.
.
Have I done my calcs correct - those Silver Eagles @ NZ $36.50 are currently nearly double the price of spot (presently 11.58 and falling) :(
I wonder what the buy back price is ?.....makes it expensive both ways, or am I missing something.
I have bought several times from Larry LaBorde at Silver Trading in Louisiana. He is highly reputable, will ship overseas and organizes insurance. There is no GST in NZ on gold and silver as long as it is .999 purity.
You can try The New Zealand Mint. Nice people to deal with - only sell Gold Kiwi's - nice coins though.
http://www.newzealandmint.com/
I've also bought from Jaggard's in Sydney. Again, very reputable but they only source Australian Kangaroos from the Perth Mint.
http://www.jaggards.com.au/
If you buy physical metal you must ask yourself "what am I buying it for".
It is not a vehicle to make you rich, gold is most used to preserve your wealth against inflation and currency devaluations as it would have this year when the Kiwi nosedived. It should be the core position of your portfolio and one of the last assets you are likely to sell, unless the global situation changes dramatically for the better - not likely for some time.
Most financial advisors in the past have recommended no more than about a 5% exposure although right now many are saying 20%, with some of the more conservative types saying 50%.
I would beware of ETF's or pooled accounts since they are mere proxies and if TSHTF and you want to take delivery, you likely will not be able to. The real beauty of gold is that it never carries a liability and is always money - just keep it safe.
If you want to trade the gold market - I would not, and certainly NEVER with margin. The COMEX is so manipulated by the big banks that it's almost impossible to trade unless you trade with them, and they have very deep pockets.
If you want to buy gold stocks they are doing very well right now having jumped up 100% or more off their recent lows and many expect them to outperform in '09 and beyond. But nothing is a sure bet.
Cheers and good luck
A good baseline is APMEX in the US.
http://www.apmex.com/Category/160/Si...09__Prior.aspx
SAE's are selling for US$3.99 over spot a little cheaper if you buy more. So by my calculations they work out about NZ$27 per coin unshipped.
E-Bay buy now prices are US $17.50 each or about NZ$30.00.
yeh I think by the time you include the original cost and shipping (and probably insurance) you're never going to get much under NZ30 which is what I paid for the Austrian oz. Silver is now almost $20 per oz spot based on Oanda Silver and USD/NZD rates. The kiwi Silver Fern coins sometimes go for under $30 on trademe but not always and not too often.
eg these two are at $28/oz but not closed yet
http://www.trademe.co.nz/Antiques-co...-195591700.htm
http://www.trademe.co.nz/Antiques-co...-195682842.htm
heres a nice 10 oz block for similar
http://www.trademe.co.nz/Antiques-co...-195873500.htm
Thanks for your points. I will go long for this one.
cheers
Follow up on post #140
Action has reached the Kumo........and contemplating its next move.
Currently +825
.
One thing one must remember when you buy silver/gold bullion is the fact you are converting your NZ dollars(which is one of the worlds smallest most unknown of currency's)
for the world premium longest lasting strongest most respected hard currency's in the world personal I don't mind paying a small premium for the fact.
currently holding 25kilo's of silver bullion average cost $26NZD(have alot in 1oz rounds)
plan on buying at least a kilo/32oz per month going forward as the wages allow
you can currently buy 1kilo bar's off the NZ mint for between $22oz-$24oz which is very good buying at the mo prob one of the best in the world
Do you guys buy the physical stock or futures?
Whats the best way to get exposure?
Dr Who
I use Oanda for gold or silver trades , and I buy small amounts of physical silver regularly for the long haul.
Whats CMC markets like compare to Oranda and the others?
you can trade gold and silver (and just about everything including two flies walking up a wall :+) ) with CMC but the platform MarketMaker is a pig to use on the computer.... its workable but you need a pretty good computer (which any trader should have anyway) and even then it puts a lot of stress on the machine. I think they reduced their minimum lots on the gold trades a little while back. theres a thread on Market Maker here in the forex forum.
Same as Peat, I found their platform very slow.
Check some reviews here.
http://www.goforex.net/reviews/cmc.htm
or Google for more reviews
GOOD GRIEF, yet another late bombshell in from Dave in Denver...
Subject: Bill, I can't believe this
We accumulated 3 emini contracts on Comex for December delivery and we had been given serial numbers and weights last week for the 3 bars. Today we are informed that Comex, which is now a division of NYSE Liffe, is invoking a rule in which they can deny delivery of individual mini bars (roughly 33 ounces) and issue you only a Warehouse Delivery Receipt (WDR) against your mini-contract unless you have 3 WDR's, and then they'll issue you a 100 oz. bar. Otherwise, if you have only 1 or 2 mini-contracts, you only own a WDR, which you sell by shorting a mini against it. If you own a WDR for a 100 oz., the WDR issuance encourages you to safekeep the gold at the Comex.
CLEARLY, the Comex has run out of the bars that were being delivered to holders of emini contracts. Our back-office guy at RJ O'Brien told us that he's been doing Comex deliveries for 30 years and he's never seen anything like this, and he's never heard of this NYSE Liffe rule on the mini contract. Fortunately we have 3 WDR's and we will be getting delivery of a 100 oz. Comex gold bar.
But this whole episode brings into the question the validity of the Comex gold inventory. Clearly they had so many people taking delivery of mini-bars this year that they ran out of them. Otherwise, there would be no reason to do this. The other point is that, out of nowhere, some obscure rule is invoked and is used to override the terms and conditions of the emini contracts that we purchased over a month ago and fully funded for delivery. More importantly, the Comex is now going to issue WDR's, which are paper claims to gold to those taking delivery of mini-contracts, rather than delivery of physical metal. How long will it be before this happens with the big bars? We have witnessed delivery notices issued for close to 50% of the gold supposedly held in the registered category on the Comex during the month of December, and yet the reported Comex inventory of gold as of 1/2/09 shows almost no physical gold leaving the registered category at the Comex. What is going on? It would appear that they are slowly trying to morph the Comex into a pure paper exchange. Are they becoming a "fractional" reserve depository, where they can issue several WDR's against the same bar of gold/silver, knowing that some of those people will opt to keep storage on Comex? And never require actual physical delivery?
If we had the resources and time, we would absolutely hire a good attorney to look into this and litigate the matter....
we are fortunate to have 3 WDR's - we almost bought a couple mini silvers instead of the 3rd gold. the point is that LAST WEEK we were GIVEN actual serial numbers and weights of the actual bars that were supposed to be delivered to us starting today and now they are not delivering any of them. We will be getting a 100 oz bar, but why would they be doing this unless they are out of mini bars - and what happened to the bars we were told - via the Comex warehouse - that were going to be delivered? So, yes they are refusing delivery in a way. And the other point of highlight is that they may be issuing multiple WDR's against the same bar, expecting that everyone with a WDR will leave the bar at the Comex. I suspect that may have happened here....
It looks like the warehouse delivery receipt is only used for the mini-contracts. However, going over the rules of the NYSE-LIFFE, it looks like a "vault receipt" is issued for delivery against the 100 oz contract. However, if you take delivery of a 100 oz contract and have the Comex safekeep it, what's to prevent the Comex from issuing multiple vault receipts against the same bar? Comex would never run into a delivery problem unless people take actual delivery FROM the Comex.
I am also just informed that our RJ O'Brien guy told us that they had been processing delivery of a lot mini-contract bars until today with our situation. Now Comex is not delivery mini bars. Hmmmm....
Anyone who has gold being safe-kept at the Comex is an idiot. Based on this experience, I would suggest everyone needs to take delivery of their gold FROM the Comex. The best place to keep it if you don't want to hold it at home is First State Depository in Delaware, which is where we have our metal delivered and kept....
Clearly Comex has delivered so many mini bars in the past few months that they no longer have the mini bars to deliver. So in effect, they have defaulted on mini bars, even though there is a NYSE LIFFE rule that let's them out of the default.
Default on the big bars is next.
Check the the shorts from "Industry/Commercial Hedgers" for Silver & Gold
http://www.kitco.com/reports/technic...oct022008.html
http://www.technicalindicators.com/gold.htm
Does owning a 18ct gold rolex valued at over $60k count for being long on gold? :D
On a serious note.... all these rumours about central banks and dealers running out of the physical gold holdings is interesting. Is it a matter of just rumours or are there substance behind those rumours?
disc: i do have a small collection of watches
On a serious note.... all these rumours about central banks and dealers running out of the physical gold holdings is interesting. Is it a matter of just rumours or are there substance behind those rumours?
Well I don't think we'll going have to wait to long before the rumours become hard facts
If you still don't understand whats happening with the USD/Gold it worth first looking at the history here's a doco on utube
-http://www.youtube.com/watch?v=3bTq6gFeIvU
It was interesting to note that Rolex's were very valuable and hot items for trading in Iceland recently as their economy imploded . . . I have a Stainless GMT II that I wear everyday . . . hopefully things won't get that bad in NZ that I'll have to hock it.
Back to gold, I have a mix of physical and mostly Canadian miners.
I thought this was interesting
Have you noticed over the past couple of days that Crude Oil has firmed up off its lows? At the same time, Gold has faltered. What is important to note about this is the fact that the major commodity indexes are due to rebalance their weightings within their respective indexes, as they do annually. This will equate to notable buying and selling of individual commodities, of which is expected to start this week. We came across an article on the web that outlines work done by JP Morgan on the topic. (Source: ft.com/alphaville)
This becomes all the more noteworthy given that these indexes underly different commodity ETF's and ETN's that are now quite popular for asset allocation decisions. JP Morgan estimates that the DJ-AIG Commodity Index [DJAIG] has $25 billion in related funds tracking it, while the S&P Goldman Sachs Commodity Index [GNX/Y] has roughly $50 billion tied to it. The new weightings will take effect during the roll period in January, staring on the 8th and 9th, depending on the index. For example, Crude Oil's market weight in the DJAIG will rise from 9.6% to 13.8%, while Gold's will be dropped from 10.8% to 7.9%. This follows the rebalancing concept of selling what was strong, and buying what was the weakest. The 2008 returns bear this out: Crude Oil fell -55.5%, Gold rose +5.3%.
JP Morgan (and ftalphaville.ft.com) went on to say the following: "In financial terms, we expect the rebalancing to have the greatest impact in gold, COMEX copper, crude oil, and live cattle. We estimate that the rebalancing of the two indices is expected to result in $877 million of selling in gold, $699 million of buying in COMEX copper, $528 million of selling in live cattle, and $523 million of buying in crude oil."
Happy New Year Craig - Nice to see you posting again.
For day traders, there may be a bear Gartley forming on the H1 chart.
rgds -arco
I checked to see if they would ship overseas. Here's their reply
Thank you for your recent inquiry. At this time, due to insurance restrictions, we are unable to ship internationally. We are currently working with different carriers to determine the best fit for our needs. If we are able to find a carrier that fits our needs, notification will be sent out to all account holders. I do apologize for any inconvenience this may cause.
Should you have any questions, or require any further information, please do not hesitate to let me know.
Respectfully
Brandon Stewart
American Precious Metals Exchange
www.APMEX.com
I have found it EXTREMELY difficult to purchase physical from the United States. But I have had success with smaller sellers.
Tulving seems to have extremely competitive pricing and when I've inquired in the past about international sales I was told a firm "no".
Then they recently started doing this:
http://www.tulving.com/New%20Pages/o..._customers.htm
But I'm relucatant to do so for a number of reasons.
I'm finding the purchase of bullion within New Zealand to be more cost competitive against imported bullion than previously....negating much of my rationale for previously doing so.
So physical and bulliondirect for me.....with the odd trade on Oanda.
I just wish bulliondirect would add silver to their lineup...I presume it's part of their longterm plan......but no dice for the time being according to the person who answered my query.....
I rang the NZmint yesterday gold 1oz in stock No silver till at least mid feb
Silver is 77 times cheaper than gold many factors show it shouldn't be more than 10
times
Harder to get without having to pay-up 10%-20% more
I like Gold but for me Silver #1 once investor start to see the facts profits in silver will be large.
Why is it so hard to get the physical gold?
Dr
I posted some links that showed ETF's/commercial hedge funds & the like have stocked up, to cover there shorts in Silver/Gold...
If you cant find tham PM me & i'll send you the links
Like JBMurc i've looked into Silver, in particular 1kg bars & they are hard to get, not to mention pricey...
Means one thing to my mind, silver is due to spike & hard, sometime soon
well currently you can buy small amounts of GOLD BULLION off the NZmint think the price he quoted was 1oz fern $1550+freight straight away so no worries there different story for Silver atm which IMHO will really get out of control later this year like when Paper bullion holders decide they want to convert to the real deal..then It's going be.. I'm sorry but your going to have to wait for along time we've sold 10x more paper than real silver we have in the stock vaults and because the investment world will be paying more an more like they are right now Mr paper bullion will be the first to miss out ......
Sorry Arco, that wasn't meant to be a suggestion for a purchase. I have been down that road as well . . .
I have ordered several times over the past two years from Larry LaBorde at www.silvertrading.net - he's a class act and sent me my delivery insured via FedEx. I had no issues with GST or NZ Customs, it was very easy.
Another good US source that ships down-under is Gainsville Coins in Florida.
http://www.gainesvillecoins.com
Merrill Lynch says rich turning to gold bars for safety
Attachment 1160
By Ambrose Evans-Pritchard
The Telegraph, London
Thursday, January 8, 2009
Merrill Lynch has revealed that some of its richest clients are so alarmed by the state of the financial system and signs of political instability around the world that they are now insisting on the purchase of gold bars, shunning derivatives or "paper" proxies.
Gary Dugan, the chief investment officer for the US bank, said there has been a remarkable change in sentiment. "People are genuinely worried about what the world is going to look like in 2009. It is amazing how many clients want physical gold, not ETFs," he said, referring to exchange trade funds listed in London, New York, and other bourses.
"They are so worried they want a portable asset in their house. I never thought I would be getting calls from clients saying they want a box of krugerrands," he said.
Merrill predicted that gold would soon blast through its all time-high of $1,030 an ounce, and would hit $1,150 by June.
The metal should do well whatever happens. If deflation sets in and rocks the economic system it will serve as a safe-haven, but if massive monetary stimulus gains traction and sets off inflation once again it will also come into its own as a store of value. "It's win-win either way," said Mr Dugan.
He added that deflation may prove the greater risk in coming months. "It's very difficult to get the deflation psychology out of the human brain once prices start falling. People stop buying things because they think it will be cheaper if they wait."
Merrill expects global inflation to hover near zero, with rates of minus 1pc in the industrial economies. This means that yields on AAA sovereign bonds now at 3pc will offer a real return of 4pc a year, which is stellar in this grim climate. "Don't start selling your government bonds," Mr Dugan said, dismissing talk of a bond bubble as misguided.
He warned that the eurozone was likely to come under strain this year as slump deepens. "There is going to be friction as governments in the south start talking politically about coming out of the euro.
I don't see the tensions in Greece as a one-off. It is a sign of social strain in countries that have lost competitiveness."
http://www.telegraph.co.uk/finance/f...or-safety.html
I wouldn't trust anything that JP Morgan or Goldman says . . . they are the two major banks of the criminal cartel that has controlled the markets for decades.
Together they act as proxies for the US Treasury and Fed in daily market interventions in all major markets. They are also the banks that hold massive, seemingly permanent short positions in gold and silver on the CRIMEX yet amazingly never seem to attract the attention of the CFTC. The US markets have been rigged by these big banks from top to bottom and side to side.
They'll prob try sell some paper Gold to cover their asses as there's no-way they have the physical,remember these guys have the backing of the Bush US goverment an now -Obama- which was massively supported by the big banks
What I'm hoping is the demand of physical from outside the US will put so much pressure on the fake short selling they'll have to let the price rise
shasta, from all the info I have gathered, this is the way that I understand it . . .
I don't think they can cover because they are massively naked - they don't really have the gold! Since these short positions are so enormous and held by just two or three banks, you would think any diligent regulatory authority would be vigilant to make sure such positions are real and being managed properly and are not being held for manipulative purposes - which they clearly are.
The easy way for it to be resolved would be for the CFTC to ask the banks for independent audit details or have an inspection of their holdings, but the COMEX is so crooked and the system so bankrupt that it will never happen. It's a self supporting, self reinforcing web of lies and corruption. It cannot be resolved without these major banks losing $100's of billions as the price of gold rises and we know they will not allow that to happen without a huge fight.
The gold suppression scheme is actually one of the root causes of the crisis we face today as it has been (through the early nineties to now) the cornerstone of the US "strong dollar policy", which is to say that it is a policy based on market manipulation and fraud not fundament worth. We can thank Larry Summers and Robert Rubin for this during the Clinton Administration. They have allowed the world's reserve currency to be so horribly mismanaged for the benefit of the policy makers and insiders and to the detriment of the American people, foreign investors and bond holders and now Summers is back in the Obama administration as a "senior advisor", Geithner from the NY fed is running Treasury, Rubin has this morning quit Citi - you know he's going to turn up in the gov't mix somewhere. . . it's all the same players playing the same game. This is compelling evidence that Obama is simply the "new face" of the status quo and ultimately they are ALL working for the same masters of the financial universe . . . who allow them and their "inside" supporters to collectively rort the system and get fabulously rich.
If gold had not been suppressed, interest rates and the money supply in the US would NEVER have been able to reach bubble status and the banks would not have made their $Trillions in the dot com bubble and the real estate bubble with their derivatives and structured "products". In fact, the entire fake financial services industry that is now collapsing would never had grown to such a dangerous size.
By mobilizing the gold reserves of the American people into the market (without their knowledge) and coercing other central banks into 1999's "Washington Accord", they have effectively disconnected the world's financial alarm system by capping gold while making enormous fortunes that have disappeared God knows where and we are now all paying the price - even here in little 'ol NZ.
Now they (the bullion banks) are in real trouble because they cannot re-acquire and return the massive amounts of central bank gold that has been leased to them over the years without driving the price far higher and losing $billions in the process. So the only thing they can do is keep digging that short hole deeper hoping that something will happen to allow them to escape their desperate situation.
The US gold reserves have not been officially audited since the mid 1950's - why is that? If the world was to ever find out that maybe 1/2 of the US's 8,133 tonnes of gold is gone - forever - sold into the market over a period of decades to support an-otherwise insupportable USD, what do you think would happen to the dollar, the credibility of the USA and the entire dollar based financial system? What do you think the American people would do? I shudder to think. Like I've said before, this is as serious as serious gets.
Huge problems are now brewing in the bond market as the US prepares to try and sell an unfathomable amount of debt to a world that is already saturated with American debt and has lost faith in the global dollar system. Think about the arrogance of a government that is not asking, but expecting the world to literally GIVE it money at interest rates that essentially mean FREE, without which (according to them) economic recovery in America will be impossible.
Do we really think the Europeans, Russians, Saudis and Chinese are happy with the way things are at the moment? Do we think they aren't making their own plans right now? Plans that will drastically reduce or eliminate their future financial dependence on America and it's once mighty dollar. This has the potential to produce a very, very dangerous future geo-political situation by a financially cornered USA. Losing it's AAA rating or reserve currency status would be hugely de-stabilizing.
Anyone who invests in longer term US Treasury bonds from now on is virtually flushing their money away. At the very least they will get their principal back in heavily devalued currency receiving a 30 or 40 percent loss for their generosity - at worst they face total loss.
Watch the spreads on the Treasury bond credit default swaps. They are already rising and are higher than those on lot of corporate debt and will likely explode prior to a US default or currency collapse. What a stupid waste of money this is. Are these idiot financial managers really expecting to be made whole by insolvent institutions like AIG for the losses on their "safe" government investment when this event occurs. They will lose twice.
The global interest in gold as an alternative to US gov't debt in a zero interest environment is just starting to gather steam. The gold problem they created is now beginning to really cook them. Once interest rates start rising, as they will have to in order to continue to attract waning capital, the enormous interest rate derivative positions held "off balance sheet" by JP Morgan, Citi and Goldman will explode them all from the inside out. They thought they had interest rates under control, they thought the game was permanently rigged. But it is not. There is much more pain to be endured in the coming 12-36 months. This is why even the herculean reflation efforts of the Fed and Treasury will be seen as miniscule once the $10's and $100's of Trillion in derivatives start to fall.
All I can say is that anyone who has not seriously considered acquiring at least SOME physical gold as part of their portfolio is risking much. Get some while you still can, because (in my opinion) in the not too distant future a loss of confidence in US government debt will create a historic stampede into precious metals that will be so huge that (for the average person) physical gold will simply be . . . unavailable.
World official gold holdings (September 2008) Table
If these facts are still correct US hold 27.3%- worth approximately $241 billion (July 2008)
The IMF gold reserves refers to 3,217 tonnes of gold also held by the International Monetary Fund. It is currently priced at $42 a troy ounce ($1,370/kg) for accounting purposes.
Full table.....................
http://en.wikipedia.org/wiki/Official_gold_reserves
Arco, It's my understanding that the figure for the IMF is subject to some dispute. GATA thinks that gold is being double counted since the IMF's gold may in fact only be a "claim" against the actual gold reserves of it's member nations. This is supported by the fact that IMF gold sales have to be approved by the governments of member nations and the US Congress.
It's interesting to ponder how much debt could be erased from the books of world governments by a large re-valuation of gold. Makes you wonder . . .
Ive been watching gold over the past 2yrs and have noticed a pattern that whenever trading starts on the New York Nymex that the price of gold rockets up or down...
Example the last few days..
http://www.kitco.com/charts/livegold.html
You're onto it ScrappyO. Sometimes they use the London physical market - whatever it takes to get the job done. visit www.gata.org
If the theory is correct that there is a massive short outstanding position in gold, the question begged to be asked is... who has been buying up and storing all the gold that has been shorted?
Do you guys recommend buying gold stocks to take advantage of this possible gold rise?
Merrill Lynch says rich turning to gold bars for safety
Merrill Lynch has revealed that some of its richest clients are so alarmed by the state of the financial system and signs of political instability around the world that they are now insisting on the purchase of gold bars, shunning derivatives or "paper" proxies.
http://www.telegraph.co.uk/finance/f...or-safety.html
...and those TECH people, they just do not get the story until it will be too late...
Kind Regards
Dr. respectfully, I think you may have missed the point. What I said in my previous post and what JBmurc also has hinted at, is these banks which are heavily short (principally JP Morgan and Goldman Sachs) don't actually have the gold they say they do. So they are trading short with gold they don't have. This is what is known as "naked short selling" - or a "failure to deliver". It happens all the time with stocks and it is used by all the big banks and brokers to artificially drive down the price of a company so they can then load up on it at a price that is more to their liking. In effect, they create counterfeit stock positions to sell. I know it sound unbelievable.
http://en.wikipedia.org/wiki/Naked_short_selling
It is a horrible practice that under most all circumstances is illegal but the regulatory authorities do nothing about it. This is where you see the corrupt cogs of government through the SEC and the CFTC, intermeshing with the banks at the expense of the shareholders. The goal of this exercise is to exert market making control over the markets to enrich the banks at the expense of ordinary investors and shareholders.
And this is why there is no transparency in the marketplace. There have been no audits of these banks, no audits of the COMEX because they do not want to be exposed. If people only knew how manipulated the US and Canadian markets were they would be revolt.
Anyone who reads this post and is still scratching their head, I highly recommend you download listen to both of Jim Puplavas absolutely incredible interviews with a man named Bud Burrell. They are entitled "The Greatest Crime In History" and "What's Wrong With This Picture".
http://www.financialsense.com/Experts/2008/Burrell.html
It is both a fascinating and frighting look behind the Wall St. curtain with a man who has spent his life as a trader across 40 years and is now actively engaged in helping fight the corruption. After you listen to this, you will understand naked short selling and why corruption in the financial markets is such a huge problem.
As far as gold stocks are concerned, speaking personally first I made sure that I had a solid, core position of physical metal in my possession. I am also invested in several gold mining companies because I believe gold will rise in value, it follows (hopefully) that the mining companies will provide significant leverage to the price of gold because by buying shares in a mining company, you are purchasing a share in their reserves usually at a heavily discounted price. The risk you take is will they be able to bring that gold to market? And believe me, that is not as easy as one might think.
My principal investments are in Canadian miners such as Goldcorp, Agnico-Eagle, Kinross and Yamana. I also have a smaller spread of Jr miners that I believe will do pretty well.
The thing you have to understand about miners is that they are viewed as being pretty risky - but what in the market today is not? Believe me, an iron stomach and emotional strength combined with a reasonable timeline and strong convictions are required to see the rewards in this sector, but I firmly believe those rewards will be spectacular or I would not be taking the risk.
A lot of people have seen some pretty steep losses in the miners since the commodity rout began last July. However the gold miners are starting to come back very strongly, many with gains of 90% to 165% off their recent lows, and they are still screaming buys in my opinion.
But make sure you do you own due diligence and if you decide to invest, I would advise you to stick with the larger producing companies that have good accelerating growth profiles, low production costs, that are located in countries that are politically stable and have a strong financial position. If all these attributes are present then that is a very good signal that it is also well a managed company.
Cheers & Good luck.
I'm looking to position myself for the upswing in NEM, a 5m+/oz per year producer & unhedged!
Gold price tipped to soar
Economists around the world are tipping the gold price to soar this year, with the most bullish market-watchers predicting the yellow metal could hit more than $2000 an ounce.
ANZ head of commodities research Mark Pervan says the $2000 price forecast is based on speculation of a collapsing US dollar stemming from a "massive injection of US dollars into the system. People will buy gold as an alternative."
Gold is used as a safe haven in times of weak equity markets, bought as a hedge against inflation and currency markets.
It's one of the few investments that has historically produced strong returns in periods of mounting inflation and interest rates, market turbulence and economic uncertainty as exchange trade funds, listed stocks, managed funds and resource companies plummet in value as inventors or speculators dump holdings.
From a base of US$550 an ounce at the start of 2006, the gold price almost doubled to US$1000 in March last year and is hovering at US$845.
The New Zealand price in the corresponding period went from $950 an ounce to reach a high of $1670 in the last week of last year and is now at $1450 and climbing.
During the past five years, gold has risen more than 210 per cent in value, says Robert Jamieson, general manager of Goldsilverbullion.com.au, an Australian website that allows consumers to buy bullion online. This equates to an average return of 42 per cent per year.
Global demand for physical gold has surged 300 per cent since the banking crisis last September, says the New Zealand Mint's head bullion trader Michael O'Kane.
In the US alone, it climbed 900 per cent on the back of the Bear Stearns collapse.
But a supply shortage is developing as production gets "hammered", O'Kane says.
Less gold is being produced as high oil prices drive escalating mining costs, says Pervan, and no one is releasing gold from central banks.
"Supply is incredibly tight. Consumers just can't get the gold - there's just no physical material for them to buy."
The Perth Mint suspended orders in November amid a heavy run on the precious metal. The Royal Canadian Mint, South African Mint and US Mint also took breaks.
A lot of work goes into making bullion and the timeframe for delivery is getting longer,
O'Kane says. "Two years ago, I took two weeks off during January trading. This year, I have had Christmas and New Year's Day off - it's nuts, and has been since Bear Stearns went sideways."
This is all very interesting. I will do more research into. I have exposure to Gold with my holding in IRN which has 15 million ounce of gold reserve.
I do understand naked shorts. Even if you naked short, you still have to have a buyer willing to take it. I am interested to see who has been buying up all the gold that the investment banks have been shorting.
Listen to the Bud Burrell interview . . . he explains how the crooked brokers "bounce" and "borrow" these counterfeit shares between each other so they appear to acquiring them legally but they are not - because they don't exist. Also, if you have a margin account, brokers can illegally "borrow" and promise YOUR shares without your knowledge.
I posted this is the "if the USD collapses" thread but thought it worth posting here as well for those who may be interested. Bill Buckler is one smart guy and sees things in a uniquely clear and insightful way . . . things are way more out of control than anyone in Washington or Wellington would dare let on . . . and the consequences for our local currency are very uncertain since I don't think the RBNZ has much gold and if the value of US Treasuries goes way south, what is underpinning out local Kiwi currency? Nothing else of value other than our future labour and taxes I guess.
A Future U-Turn In A One Way Street
The Federal Reserve has boxed itself into a corner. With official US rates at (effectively) zero, they have only one way to go in future - UP! As a direct consequence of this, US Treasuries are standing on a trap door. The mad stampede over the past two months into Treasuries for “safety” simply means that these holders of US official debt now stand on that trap door. US Treasuries are the main assets held by the rest of the world’s central banks as reserves behind their own national currencies. US yields are certain to climb as the US Treasury tries to borrow more than $US 2 TRILLION this year. When yields climb, bonds - ALL bonds including US Treasury bonds - fall in value.
US Treasuries are the last bubble, following after stocks, real estate and commodities which have already deflated. When the US Treasury bubble bursts, the carnage on the global bond markets will be awesome.
A Now Invalid US Benchmark
In the staircase of ascending risk, government debt paper - bonds, notes etc. - have long been deemed the safest. Only after government debt comes the debt issued by the private civil economy. It is deemed more risky because this debt is exposed to commercial risks which government debts are not. The problem is that government debt is exposed to political risks.
Today, the climbing political risk of US Treasuries is radiating all around the world. Most of the rest of the world’s other central banks hold in their vaults US Treasury and Agency paper “valued” at $US TRILLIONS. When US Treasuries start their fall, this will contract the valuation of the “reserves” of every global central bank. That will in turn contract their reserves, forcing all their own interest rates upwards. Were the US Dollar fall along with Treasuries (an almost certain event), then many foreign central banks would face a double jeopardy situation. As their holdings if US Treasuries fell in market value because of climbing US interest rates, a falling US Dollar would tear their holdings of official reserves apart. These foreign central banks would have to take desperate measures to replenish their reserves. They would have to do so in public in order to “reassure” the public. Any foreign central bank which failed to do this would risk losing their standing as the backstop for their commercial banking sector. At that point, the US political risk would spike up to a global crisis level since, clearly, US Treasures, Agencies or even the US Dollar itself could no longer be valid reserves. In outline, these are the already built-in monetary and financial features of the global situation which is arriving.
The Looming US Debt Default
As things stand economically, the Obama “stimulus” package is woefully too little and too late. It amounts to throwing money into a US deflationary hurricane. But that same “stimulus” package opens the door politically for the later claim that since the rest of the world refused to lend the money to save the US economy, we will no longer service our external debts to the world. From that comes debt default. But even that is only the start because it then becomes critically necessary to stop an immense outflow of foreign funds presently invested in the US. That means US currency controls. Under such controls, an American who wants to make payments offshore will have to justify their action. Foreigners will have to justify why they should be allowed to take some of the US Dollars they own out of the US. Foreigners outside the US who are today holders of US Dollars will have to explain why they want to send some of their US Dollars back inside the US and what they intend to buy there.
Historically, there is not an item in this which has not been done in the many instances of debt default.
The Likely US Triggers
The most likely global trigger event will be when a US Treasury debt issue is under-subscribed (i.e. an issue is left on the counter because it faces a global buyers’ strike) or when US interest rates start their climb, the US Treasury is forced to offer a higher rate because of international fears of a US debt default. An under-subscription or a higher US Treasury offer rate required to sell new US debt paper are really two sides of the same economic coin. Either or both will signal that the US Treasury has reached its global credit limit and can borrow no more. At that point, the Treasury will stand in the same position as any person receiving a letter in the mail that says their credit card has been totally maxed out.
Permission hereby given to quote short excerpts - provided full attribution is given:
© 2009 - The Privateer
http://www.the-privateer.com
capt@the-privateer.com
(reproduced with permission)
Classic orchestrated move on the gold price right at the NY CRIMEX open . . .
Attachment 1168
Dr This is what a gartley looks like - see investopedia.com
http://i.investopedia.com/inv/dictio...dvancedFib.gif
I identified a bearish one occuring recently on the daily
see post #125
http://www.sharetrader.co.nz/showpos...&postcount=125
targets are not defined in that picture but supposedly if you sell (or buy depending on bullish or bearish version) at the D point then target is approx back to C point
we have a thread here in this forum called Gartley/Butterfly (which is a bit difficult to follow ) probably best just to go to investopedia and read. They do require an understanding of fibonacci levels ie percentage retracements.
In further news ABNAmro today report :
Gold tradingenjoyed a bumper year in 2008 as investors
sought a safer place to put their cash as the credit crunch
hit home. The value of gold trading rose 58% to a record
US$20.2 trillion, according to trade body International
Financial Services London. The growth in turnover was
partly due to the rise in gold prices in the early part of the
year. Investors have also been attracted by its appeal as a
relatively safe asset. Gold hit an all-time high of $1,011 per
ounce in March before falling back to end the year at $870.
Silver also fared well as investors warmed to other precious
metals. Trading increased 39% to a record $2.6 trillion
Fearing the "Ghost of Gold".
We read today that Robert Rubin, the famous architect of the "strong dollar policy" under Clinton, the self-same billionaire from Goldman Sachs and latterly CitiGroup, has decided to join the new President’s Administration. Now that his fortune (thanks to the U.S. taxpayers, read "the system") is safely tucked away, and now that the realization has hit him that he has been exposed and "found out", he is suddenly contrite saying "My great regret is that I and so many of us who have been involved in this industry for so long did not recognize the serious possibility of the extreme circumstances that the financial system faces today". This man, who has been instrumental in the organized US led Fed/Central Bank/Treasury suppression and fraudulent manipulation of gold and silver for well over ten years, along with a cast of powerful and familiar characters such as Greenspan, Summers, Clinton, Bushes, Bernanke, and Wall St. Brokers, hedge Funds, media, major gold producers, and many others, rest my Lord, is suddenly contrite. The genie has been out of the bottle for too long and the guilty are circling the wagons. But what if "the people" discover they have no gold? That the Gov. vaults, ETFs, COMEX, Treasury, Fed., Banks and other depositories are mostly depleted of gold (the gold that belonged to US populace) due to criminal activities against the taxpayers; against the constitution of the USA?
Robert Rubin has suddenly found "religion" and has seen the errors of his ways. You don’t suppose he smells the fear of retribution in the air do you? Perhaps he has become paranoid and has nightmares of lynch mobs running wild through the halls of power. Does this admission of guilt pardon him suddenly of his myriad sins? Will he be protected behind the veil of the Presidency yet again? I guess there’s nothing like a good offence. Is Obama recognizing Rubin’s culpability and attempting to offer a pardon as an olive branch to the powerful Cartel culprits in order to "bring them onside"? After all, most of the "new gang" aren’t new at all. (Obama has some tough choices to make and he is in a position of serious compromise.) If so, Zebras will soon be changing/painting over their stripes. The people who have ruined the entire economy of the once great USA, to the extent of threatening the total global economy are being offered a chance to save the day. This is beyond bizarre.
The "ghost" of the gold standard is howling louder every day, threatening to destroy the criminals with whipping blue integrity. It threatens to righteously return the power back to the people. It threatens to make the banks honest again. It threatens to protect the savings of individuals from confiscation by way of currency debasement and inflation. It threatens to make banks and governments honest, restore economic health, protection of property rights, and bring balance to capitalism and freedom to mankind. The roars of the golden "ghost" can no longer be denied as they echo into and from every corner of the earth. They reverberate from the street vendors of Mumbai to the Chinese factory worker, from the mini miners in Africa to the artisans of Asia, from the hushed cocktail parties of the wealthy to the surreptitious operations of money launderers, from the hidden crevices of bureaucracy to the highest office in the land, from palaces of the Mid East to the mandarins of the markets, from the paper printers to the conjurers of derivatives, but always and initially from the silence of the deceitful to the honesty of the protagonists (GATA, LeMetropole Cafe). There will be no denial. Indexes can be "rebalanced", derivatives/leverage can stretched, spin can be spun, Gold Bugs can be anointed with more tinfoil hats, naked shorting can be extended, margins can be raised, some miners can continue complicity, and so on. It is all wearing very thin. Gold can not be printed and the purported death of the law of supply has indeed been highly exaggerated. As the spot price of gold becomes higher than the futures price, mints are overwhelmed, Swiss vaults are full to capacity, coin dealers are depleted and public pronouncements of gold buying blast in to the mainstream media….and even the reluctant, gold bug/GATA nemesis Dennis Gartman increases gold holdings in his portfolio, the dye is cast.
With the newly appointed mastermind of dollar hegemony, Robert Rubin, what will be the plan of the old cadre of crooks? Do they dare to step it up a notch and attempt to continue to hide their sins, grabbing ultimate power by the total subjugation of the electorate? Are they desperate and arrogant enough to attempt to win "at all costs" by "whatever it takes"? Will they ignore the ominous warnings of the howling ghost of gold? Or will they save themselves and all of us by giving rebirth to a new global, gold backed currency system? If not, can gold confiscation be far away, along with hyperinflation, protectionism, depression, homeland militia, marshal law, travel restrictions, food rationing and civil unrest?
Only time will tell. We have no way of knowing the inner thoughts of the above self proclaimed, nefarious masters of the dollar universe, especially since the President Obama has just pronounced that torture will no longer be tolerated the by United States of America.
Regards,
Dennis Oliver
Any chartist on Gold?
Is it time to go long for a trade?
Gold is still in a Broadening Wedge formation
You can read more about that pattern here
http://www.thepatternsite.com/dbw.html
I'd be waiting for a break and test of the DT line.
rgds - arco
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Thanks Arco, some nice upward price action in Asian trading this arvo . . . US dollar down almost a full point on the USDX today, EURO up almost 1% , Kiwi up almost 2%. Tonight's session will be important.
Right, Aussie, will be interesting to see if the Nymex can stifle POG when it opens in about 6 hours.