GOLD

[Aussie]

...Aussie, you may have to re-think your bullishness on gold stocks...

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….

[peat]

theres quite a perfect Gartley on the daily on Gold
X= 932 early Oct
D (Sell) = 873
Current price 850.
IPO (Target) = 777

[Aussie]

"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.

[arco]

theres quite a perfect Gartley on the daily on Gold
X= 932 early Oct
D (Sell) = 873
Current price 850.
IPO (Target) = 777

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.

[Aussie]

Marc Faber on CNBC . . . buy GOLD for 2009!

http://www.cnbc.com/id/28418476

[newbietrader]

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

[peat]

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.

[arco]

.


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.

[Aussie]

.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.

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.

[peat]

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