Gold......safe or sorry?

[ross]

[quote="CalScot"]
Over Christmas, I will be on a small Caribbean Island that I have rented.
[/quote]

I had to laugh at that Pete - one of the best posts on the forum to date I think

[wattie]

That's very bold, Cal. I think you own Gold for the long term impact....short term at the moment is full of volatility....in all asset classes.

I revert to what I said when I started the thread. I expect Gold to outperform deposit interest rates over the year which is why I'm a buyer/holder.

I'll reiterate these points.

Eurozone- in big big trouble. Politicians are buying time cos they don't know what to do. Promised a solution this weekend...not happening...delayed again. Why? There is no solution. Germany will not relinquish financial  sovereignty and it's independence  to bail out others. rightly so. France wants the bailout fund to be increase from 400 billion by leverage (creating debt to pay debt) which increases everyone's liability, why? French banks are massively exposed to Greek debt and need the protection (that others pay for).
fact- Eurozone in recession so no growth, so things get worse. Ratings agencies cut ratings of France etc so borrowing costs go up. Italy already at 6%, unsustainable....every country at these levels has required a bailout.
For those that still don't understand. Imagine you take your wife out for a romantic meal and at the end of the night the couple on the table opposite stand up that you've never met, hand you their bill and say pay that for us....oh and by the way, we'll be back next week, thanks.

The Euro is fundamentally flawed, you can't kick defaulters out, nor can strong countries leave.....whole union (and there isn't any) falls apart! A solution if there was one can't even be
implemented quickly as it has to be voted in by all countries....takes time.

Don't forget....they are struggling to solve Greece, 3% of Eurozone 2 years later!!!! Italy is something like 5 times more serious.

Gents there is no solution, default controlled or not causes panic. Can't even kick the Greek crap out....everyone then rounds on the rest...and rightly so. Wanna Lend them money?

This is a game changing moment. Look at the civil disorder we've already seen.....imagine it tenfold.

America- strongest economy in the world......but now on verge of recession so no  growth, massive unemployment, housing mainly underwater, hugely in debt more than Europe. Knackered......but it can still pay it's debts.....USA could print a 100 trillion dollar bill tomorrow and repay everything....it will never default but printing money devalues the buying power of every dollar in existence today. It creates inflation.
Problem- American banks lent European banks lots of money......now they're not sure they'll get
what they've lent back....so won't lend anymore. would you?

China- saviour of the world....still has fantastic economic growth at over 9%....the envy of everyone. Trouble is that growth was 14%.....slowing down, so it's using/buying less goods and services from the rest of the world.....and they need it to buy more. Housing in China on verge of subprime crisis.....sky high prices a year ago have tumbled.....negative equity to you and me......remind you of subprime in USA of 2007? most Chinese earn little money and because inflation has driven up the cost of that bill of rice.....many can't afford it. Civil unrest forming.

Uk, closely tied to Europe, banking sector owns much of Euro debt. On verge of recession with massive unemployment problems. Solution, print more money.....knackers pension funds, value of each Gbp you own starts falling as inflation goes higher.

Swiss franc- safe haven qualities but appreciates very quickly as people run from Euro. Solution.....print more Swiss francs to combat the influx of new currency and stabilize the franc.

Outcome- this has all got to hit the fan. Solving one area has an impact on many others. Newton??? To every action there is an equal and opposite force. People will run for USD.....cos it' s perceived as the ultimate safe haven. Commodity prices fall (gold,oil etc) cos they're more expensive if you're buying with your weakened currency to $.....but at some point, I think they'll increase in value as people begin to realize that once the printing presses start running, your pieces of paper that say $20 may not buy you a beer.having said that, if you cannot access your assets via a protected financial system, they're worthless too
More worrying fellas, we could be talking about the breakdown of modern society here.....and no amount of money, gold, assets etc will feed and protect your family

Cheers Wattie

[wattie]

Cal, I've already said I'm a holder of dollars.

I can see the Euro going below 1.20 to $ ......maybe even 1to 1 if there's a sniff it could fall apart.....and I believe it will! Either they all accept fiscal union.....or they separate. If it goes 1 to 1 and looks like it will survive I'll buy back....it won't.

Gbp dollar was below 1.40 to $ in 2008.....converting now looks good to me if you hold sterling.
Funny thing is, many think dollar is weak now...it's not! Was over 2-1 v's sterling so has improved dramatically.

This crisis is off the scale worse......frankly incomprehensible.The volumes of money cannot be understood.

Now I realize why I don't sleep well.

Cheers Wattie

[CalScot]

Wattie,
Your sounding like a politician! Are you going to play or not?

Whats your numbers? 

[maverick1]

I think this map clearly shows which countries are in the worst shape.
http://www.economist.com/content/global_debt_clock
I'm not sure why Greece and may European countries have been singled out as being in very bad shape economically, when the good, old US of A is in the most debt at $8,975,409,041,096.
That's 8 trillion with a "T".
Simply staggering and sickening.
I initially had high hopes for Obama, since Bush was such a disappointment I thought anyone would be better since the bar had been set so low, however he has not only disappointed me but the entire country.
The real bastard in this economic crisis is Richard Nixon, because even since the USA was taken off the gold standard the economy and US dollar has headed into a downward spiral.

[wattie]

[quote="CalScot"]
Wattie,
Your sounding like a politician! Are you going to play or not?

Whats your numbers? 
[/quote]
Yeah you're right ok, forget being Diplomatic.

Today, as of this posting;
DJIA is 11,759......lower.....if it hits the fan and investors wise up.... sub 9700.
Gold is $1,639......depends on euro bluff.....similar....dollar gains, gold falls, but then investors realize no counterpart risk and it rises 2012.
$ to Euro is 1.3885 ......dollar to strengthen as above....break up of Euro...1-1. Us fed prints to stimulate....status quo maintained no action, can kicked down road 1.44.

Think that cover all options and eventualities, oh Hearts to win Scottish premier league, my buggies
auctioned at Christies for $2 mill, Ang jolie the new owner insists on a personal fitting,
new Masarati returns 47 mpg,

Cheers Wattie

[wattie]

[quote="maverick1"]
I think this map clearly shows which countries are in the worst shape.
http://www.economist.com/content/global_debt_clock
I'm not sure why Greece and may European countries have been singled out as being in very bad shape economically, when the good, old US of A is in the most debt at $8,975,409,041,096.
That's 8 trillion with a "T".
Simply staggering and sickening.
I initially had high hopes for Obama, since Bush was such a disappointment I thought anyone would be better since the bar had been set so low, however he has not only disappointed me but the entire country.
The real bastard in this economic crisis is Richard Nixon, because even since the USA was taken off
the gold standard the economy and US dollar has headed into a downward spiral.
[/quote] agreed Mav but the USA can just print money to clear the debt....even if it devalues buying power of $. Greece can't print money cos it devalues, German, French, et al euros..... So no sly alternative. It needs others to give it money.

By the way, the US debt when allowing for off sheet balances....future pensions, welfare is In region of 32trillion.

Given that the US can't count unemployed accurately - circa 400,000 (cos jobless figure keeps getting revised) what hope the figures in our posts are accurat.......could  be 10 times higher.

Cheers Wattie, now off to drink lots!

[wattie]

Wall street just had it's best October for 20 years 

That figures as there's massive global economic growth, plentiful jobs, booming housing and construction sectors, very little private or public debt..... loads of global consumer and government spending, no banks going bust and finally the Eurozone ain't about to implode......bringing everything down with it.

What the f**k? Does it feel like the best October in 20 years.

Very Interestingly, the Greek news wasn't reported on US financial sites last night....Nothing mentioned on Bloomberg, still not on Yahoo finance US today.....more manipulation of the facts???

Seems odd that something as important financially,  so vital to financial decisions isn't reported.

No matter, truth will prevail.

Cheers Wattie

[wattie]

Little update.

Bank of Japan....manipulating currency.
Swiss bank printing,
BoEngland (not Scotland cos we're minted) printing and very likely to do more.
Fed- almost certain to print even more...QE3.

Europe- finding it hard to type cos I'm laughing so much.......china please please give us some cash we're a union, financially solid, trustworthy and together. Message into earpiece.....Greece has done what!!!!!

Next move, European central bank prints Euro's like they're going out of fashion.....it becomes the lender of last resort. In other words, it prints and buys up all that Greek, Italian etc etc Spanish debt out there.THERE IS NO OTHER CHOICE!
Euro tanks,Germany not happy (but who cares) the world is saved....leave if you want Fraulien Merkel.


Fellas, buy some Gold.......can't be printed by politicians.....they can't even trust each other as the last day or two has demonstrated!!!

Cheers Wattie

[AtomMadStew]

http://mobile.reuters.com/article/idUSTRE7A017520111103?irpc=932

gold rises 1.5pc - still going up wattie

[wattie]

Yeah Stew been steadily climbing back.....which is what you want. Slownsteady.

This is a long term debt crisis.The cunning plan solves nothing.

All of the global economic figures are awful....they'll be revised down again...surprise surprise. NO growth!

Look at the farce with Greece......what on earth happens when Italy flares up. Unlimited ECB intervention I reckon. Italian bonds already at record highs.....unsustainable.

Cheers Wattie

[Steve]

Buy low, sell high.

[wattie]

Hindsight may show it's low now.

Cheers Wattie

[wattie]

Interesting little article from "zero hedge".
Guess who's buying lots of printing machines!!!!!!

Four months ago we predicted that in response to the latest round of global economic deterioration, every central bank would very soon join the toner party. Since then we have seen the Fed commence Operation Twist and telegraph another episode of MBS asset purchases; a new QE episode at the Bank of England; a new round of covered bond purchases at the ECB, coupled with an interest rate cut by its latest Goldman Sachs-based president, not to mention the persistent attempts to generate a backstop central bank in the form the EFSF Frankenstein Swiss Army knife; a new round of asset purchases and a massive, several hundred billion snap FX intervention by the Bank of Japan; and last but not least, that stalwart of stability, the Swiss National Bank, went ahead and destroyed the Swiss Franc as the sanest among the fiats by pegging it to that most unstable of currencies, the Euro. In light of the above how gold is not trading north of $2000 is still beyond us, although whether by manipulation or market inefficiency, we can not complain: it is easier to buy gold at $1,750 than at $7,150. Yet not even we could possibly predict just how far the global ponzi cartel would fall to extend the status quo by a few extra months. Because according to Dow Jones, the latest and greatest purchaser of Heidelberg Mainstream 80 machines will be the, drum roll, the IMF! Yes, the same organization that DSK swore would never join the global central banking stupidity, since deposed with a false allegation, and now headed by the woman who brought France to the brink of ruin, will be the marginal printer, now that everyone else is "dodecatuple all in" and sitting all day on the Turbo Print button.

Cheers Wattie

[wattie]

We could be in for a VERY bumpy Monday......once everyone went home on Friday....this was quietly announced....to stop speculators......


"US options & futures holders will be forced to deposit billions in additional capital to the CME to avoid margin calls. This may pressure all asset classes on Monday

There is a liquidity crunch in the options & futures markets for commodities worldwide. CME, the exchange for such transactions in the US, had made the initial margin and maintenance margin equal for every commodity with options and futures. This implies that options and futures holders will be forced to deposit addition capital to the CME in the form of maintenance margin, simply to hold their positions. This will put markets under pressure on Monday. The lack of liquidity and additional margin requirement comes in the aftermath of the bankruptcy of MF Global."

Billions may need to be realized....as investors need to find circa 25%......and they're probably gonna have to sell to find it!!!!

Gonna start drinking now....lots....and lots so I hopefully wake up on Thursday.
Sheeeers Wattie