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geojanes
Dignitary

Tue Sep 22, 2009 9:48 am

Heh. While I hoped I got the absolute peak of the market, I wasn't counting on it. But I will admit, with emotional investments like gold, that are divorced from fundamentals that we see in most other investments, it's impossible to predict with certainty what's going to happen, especially in the short-term. The trick is to be right more than 50% of the time.

But let's follow it. I bought in at $17.69 on 9/17. Let's see how I do.

As of this moment, I see it's at 17.68. I'm essentially even.

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Pigmalia
Dignitary

Tue Sep 22, 2009 10:25 am

geojanes wrote:

Alright I'll go with GLD @ $99.46

_________________
“I enjoy crushing bastards.” Assange

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geojanes
Dignitary

Wed Sep 30, 2009 8:26 am

This article details how gold jewlery is used in India as a kind of mobile bank. There are 15,000 tons of gold in India and 600 tons of that is being held by pawnbrokers, essentially because most Indians do not have access to any other loans.

http://www.nytimes.com/2009/09.....amp;st=cse

India is the great unknown when it comes to real gold demand. To me, this article is long-term bearish for gold. As Indians gain access to more traditional banking services, they won't need gold as the bank of last resort anymore. But I recognize, that's not entirely clear. If India's economy continues to improve and the standard of living is raised considerably, there is a lot of gold demand that could be generated for jewelry. That has the potential to be significant and could suck up a lot of the production.

Nevertheless, I'm sticking with my short. As of today, I'm up about 2%

posts: 1290 | location: New York, NY | joined: 01 Oct 2000 | medals: 2

Pigmalia
Dignitary

Thu Oct 08, 2009 9:44 am

Update:
DZZ 16.33
GLD 103.66

The problem with this prediction going my way means that the Dollar is going down the crapper. Crying or Very sad

Quote:

It’s the biggest mystery in global finance right now: Who conducted a sneak attack on the U.S. dollar this week?

It began with a thinly sourced but highly explosive report Monday in a British newspaper: Arab oil sheikhs are conspiring with the Russians and Chinese to quit using the dollar to set the value of oil trades – a direct threat to the global supremacy of the greenback.

Is it true? Everyone from the head of the Saudi central bank to U.S. officials scrambled to undercut the story, but no matter.

With the U.S. economy on the ropes and America by far the world’s biggest debtor, investors aren’t feeling as secure about the dollar as they used to. And the notion of second-tier economies ganging up on Uncle Sam didn’t sound so far-fetched.

For American officials, the possibility of the dollar losing its long-term dominance in global commerce is a nightmare scenario, because it would likely mean sharply higher interest rates at home, and a declining ability to finance the U.S. debt. No one believes it could really happen right now, but stories like the British report this week make it seem incrementally more likely.

So the piece by Robert Fisk of the Independent shocked currency traders around the world, and almost instantly sent the value of the U.S. dollar spiraling downward and the price of gold skyrocketing to an all-time high, as a hedge against a weakened dollar.

The website Drudgereport.com quickly amplified the impact of the story with a headline atop the site: ARAB STATES LAUNCH SECRET MOVES WITH CHINA, RUSSIA, FRANCE TO STOP USING DOLLAR FOR OIL TRADING...

“You read that story, and you do two things: you sell the hell out of dollars and you buy gold,” said Les Alperstein, president of the financial research firm Washington Analysis. “The story has a lot of credibility, with some caveats.”

So who wanted dollars diving and gold rising? In other words, who is Fisk’s source, and why did he or she want to tank the dollar? It’s the global currency version of the old Washington parlor game of speculating on the real identity of Deep Throat.

No one knows.

But one thing is for certain: with the price of gold jumping to $1,048.20 per ounce, traders who moved early enough stood to make millions.

So in government circles in Washington, speculation immediately centered on gold traders: with the skyrocketing price of gold, they’d be the biggest beneficiaries of the article.

Fisk’s story itself isn’t much help in solving the mystery – it is sourced vaguely to “Gulf Arab and Chinese banking sources in Hong Kong,” and it included one blind quote, attributed to “a prominent Hong Kong broker.” That doesn’t narrow down the pool very much.

The story doesn’t name any officials who had allegedly participated in the secret meetings involving the Arab states. It didn’t say where the meetings occurred, or when. Other than saying the plan is to stop using the dollar by 2018, there was precious little detail to the account.

Around the world, traders turned to Wikipedia to find out more about Fisk himself. There, they learned that Fisk is a legendary British foreign correspondent who has been based in Beirut for more than 30 years and has won a slew of journalism awards. They also learned that he is one of only a few journalists to have interviewed Osama Bin Laden (three times) and that he has expressed doubts that the United States has told the full story about the Sept. 11 attacks.

An analyst’s report from the Royal Bank of Scotland concluded, “Fisk is a veteran of the Middle East ... he is also increasingly associated with more radical theories thus weakening the credibility of the story.”

Beyond the specifics of the story, the geopolitical implications of the report sent shudders from Riyadh to London to Washington: Has the long-dominant American economy has been so humbled by the economic crisis that these nations would mount a frontal attack on the dollar, the underpinning of the world’s biggest economy?

That question is on the minds of global investors, who are keeping a skittish eye on the weakening dollar. And over the past several months there has been a steady drumbeat of Chinese, Russian and other officials who have talked openly about finding a replacement for the dollar as the global economy’s default currency. Any effort to do that would be fraught with difficulty. But, however unlikely, the possibility represents a threat to the American economy, which has come to depend on the significant advantages it reaps from minting the currency most used around the world.

In another era, the dollar could shrug off such a vaguely sourced, thinly detailed story.

But not anymore.

The dollar is weak, and vulnerable to rumor mongering because many traders believe it will only get weaker. “The fundamental reason why this occurred is that after 9.8 percent unemployment on Friday, nobody can say with certainty that the recovery is sustainable,” said one analyst familiar with the situation.

“In years past, when the US economic dominance was more pronounced and emerging markets were marginal players in the global economy,” noted an analyst’s report from HSBC, “the debate on pricing commodities in currencies other than the [U.S. dollar] typically came down to the lack of practicality. ... Today, emerging markets are clearly wielding much more influence in the global economy, and they want more, as will be borne out in this week’s IMF meetings.”

And that means U.S. officials whose job it is to defend the dollar may have their work cut out for them in the months to come.

I hope Obama and his peeps are up to the task.

Measured in euros, U.S. per capita GDP is down 25% since 2000

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Jaundiced Jaffe
Ambassador

Fri Oct 09, 2009 5:12 am

I had also read and was very impressed by the WSJ article to which you link in your last sentence. Here's this morning's lead editorial on the subject which also quotes that article:

http://online.wsj.com/article/.....18150.html

The heart of this morning's editorial:

Quote:

For many in the Washington establishment, alas, the falling dollar is considered a virtue. They believe it will help U.S. exports and therefore reduce the trade deficit and bring back manufacturing jobs. But as David Malpass argued on these pages yesterday, capital flows dwarf trade flows as a source of wealth creation. The only way to build wealth and create more high-paying jobs over time is through the productivity gains that come from greater investment and innovation...

The more immediate danger—in the coming months—would be if the fall of the dollar becomes a rout. This could cause a spike in commodity prices, such as oil, that are traded in dollars and jeopardize the nascent economic recovery.

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Pigmalia
Dignitary

Fri Oct 09, 2009 6:24 am

Is this what you call fiddling as Rome burns?

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geojanes
Dignitary

Fri Oct 09, 2009 7:32 am

Pigmalia wrote:

Is this what you call fiddling as Rome burns?

I think the answer to this question is no. Had the Fed and congress did nothing a year ago, when the financial crisis hit, that would have been fiddling while Rome burns. The issue with the currency and interest rates is more akin to cleaning up the mess the firefighters made putting out the fire, which is not trivial.

All in all, I think we all have to be reasonably pleased with how the Fed handled the crisis and the aftermath thus far. It remains to be seen, though, if they can fully clean up the mess. If they don't, Pig's bet on gold has some traction even at current prices. I'm betting that they'll get it right, though. Fingers crossed.

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Pigmalia
Dignitary

Fri Oct 09, 2009 7:50 am

geojanes wrote:

If they don't, Pig's bet on gold has some traction even at current prices.

When the economic crisis hit in full there was a massive deflation which pushed the dollar up and gold and other commodities down. Since the Fed has taken the position that deflation is the ultimate evil, they initiated a massive increase of the money supply thus inflating the currency and driving up gold and commodities back up.

As long as interest rates are low and the money supply is being dramatically increased gold will necessarily have to increase in price.

posts: 4734 | location: Autonomous Inland Empire - Occupied | joined: 02 Feb 2006

Jaundiced Jaffe
Ambassador

Sat Oct 10, 2009 4:13 pm

If you are still feeling bearing on the $, and don't want to overdo it with Gold, one possibility is UDN. Per Yahoo's profile:

Quote:

The investment seeks to track the price and yield performance, before fees and expenses, of the Deutsche Bank Short US Dollar Futures index. The index is comprised solely of short futures contracts. The futures contract is designed to replicate the performance of being short the US Dollar against the Euro, Japanese Yen, British Pound, Canadian Dollar, Swedish Krona and Swiss Franc.

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Pigmalia
Dignitary

Mon Oct 12, 2009 7:22 am

Jim Rogers interview - short and to the point

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geojanes
Dignitary

Tue Oct 20, 2009 8:47 am

Strange experience:

I went into Chase the other day and actually went to the teller. Yes, that was strange, but not as strange as what I saw next. No one was in line, and I went right up to the teller window. The teller had a big pile of half dollars on her desk and was going through them. She also had a very little pile of very old coins. Liberty dimes, a buffalo head nickel and several silver quarters. Apparently, she was going though big piles of change in her downtime between customers and picking out silver coins (and old, I guess, with the buffalo nickel). When I asked what was she going to do with them she said that she had to "send them in."

Is this somthing banks normally do? Or is it something that is exceptional due to the price of metals/old coins?

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theodorelogan
Emissary

Wed Nov 04, 2009 6:48 am

Gold hitting new record highs...it's now at $1091/oz

That's a 78% return since the start of this thread 3.5 years ago (18% annualized)

_________________
If government is the answer, it's a stupid question.

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Voluntarists do it consensually

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Pigmalia
Dignitary

Sat Nov 07, 2009 8:12 am

Geojanes on 9/17/09 bought DZZ @ $17.69 - It closed Friday @ $15.03 (15% loss)
Pigmalia on 9/22/09 bought GLD @ 99.46 - It closed Friday @ 107.43 (8% gain)

Are you still holding Geojanes?

posts: 4734 | location: Autonomous Inland Empire - Occupied | joined: 02 Feb 2006

geojanes
Dignitary

Sat Nov 07, 2009 11:20 am

Pigmalia wrote:

Geojanes on 9/17/09 bought DZZ @ $17.69 - It closed Friday @ $15.03 (15% loss)
Pigmalia on 9/22/09 bought GLD @ 99.46 - It closed Friday @ 107.43 (8% gain)

Are you still holding Geojanes?

I am. I'm not ready to add to my position yet, but I think you've got to be very brave to buy into a long position now.

The most recent movement was due to India's purchase of 200 tons of gold from the IMF. The IMF still wants to unload another 200 tons. More here:

http://www.reuters.com/article.....03?sp=true

The disposition of the remainder of their inventory should make the markets move, so short-term anything could happen. If China comes in and buys the rest, the price will rise higher. If they sell it on the open market, the price will probably be forced down.

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Pigmalia
Dignitary

Sat Nov 07, 2009 7:36 pm

Well I'm going to side with the printing presses, inflating currencies will necessarily increase gold. Makes it more interesting to observe with a bit of a stake, aye?

posts: 4734 | location: Autonomous Inland Empire - Occupied | joined: 02 Feb 2006

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