It's looking grim again. Is gold the would-be saviour?

It's looking grim again. Is gold the would-be saviour?

Author
Discussion

ZeeTacoe

5,444 posts

222 months

Sunday 18th December 2011
quotequote all
DonkeyApple said:
Afterall, what actual use is physical gold? Seriously, what use does it have in our society?
Is it not useful for connectors and other bits in electronics?

Also what do you mean by "synthetic gold"?

DonkeyApple

55,165 posts

169 months

Sunday 18th December 2011
quotequote all
ZeeTacoe said:
DonkeyApple said:
Afterall, what actual use is physical gold? Seriously, what use does it have in our society?
Is it not useful for connectors and other bits in electronics?

Also what do you mean by "synthetic gold"?
It has huge uses in manufacturing, but that can't be what has pushed the price up as economic demand for the products has not grown, probably fallen.

Synthetics are OTC contracts based on the price of gold but not necassarily backed by the physical existence of gold.

Some of these instruments have a deliberate effect of massively increasing demand as they massively increase the number of buyers by just existing. for example, gold traditionally was only available either as spot physical or a forward future based on physical delivery. Most funds such as pension funds and certainly retail investors couldn't really access this market, but if you create something like an ETF, which trades as an equity, then instantly, all the low risk and small portfolio money can invest in gold.

It's quite interesting to read up on the recent creation of the copper ETF by JPM or GS. First of all they had to buy physical to meet initial expected demand and this spiked the price but then as the ETF could be held in equity portfolios and pensions the demand went up.

If I'm honest, I can see a time and already feel we ethically should, prevent the trading of OTCs in commods for speculative purposes and go back to these products only being able to be traded and held by licensed producers and sellers. The level of premium due to sythetics is shocking and causing hideous inflation that all of us are hit by, and in fact, in some corners of the world is contributing to starvation.

AdvocatusD

Original Poster:

2,277 posts

231 months

Tuesday 20th December 2011
quotequote all
That was an interesting youtube link...

Then again, that guy has an ax to grind.

Any famous, neutral commentators got videos out there on gold and the economy?

donna180

627 posts

161 months

Tuesday 20th December 2011
quotequote all

RichyBoy

3,739 posts

217 months

Wednesday 21st December 2011
quotequote all
So talk of losing our triple a, at the present time what other saviour is there?

RichyBoy

3,739 posts

217 months

Wednesday 21st December 2011
quotequote all
Just putting this here to refer back to next year:

2012 Gold Averages: Goldman $1,810/oz, Barclays $2,000/oz and UBS $2,050/oz

Bullion banks remain positive on gold for 2012 with major banks predicting an average gold price of between 13% and 28% above today’s spot at $1,595/oz. It will be interesting to see if these forecasts get as much international media coverage as the poll of 20 hedge fund managers has.

UBS have reiterated their bullish outlook for gold and believe gold will average $2,050/oz in 2012. This is 28% above today’s spot price of $1595/oz.

Goldman Sachs said overnight that gold will average $1,810/oz in 2012 – which is 13% above today’s spot price.

Barclays Capital have said this morning that gold will average $2,000/oz in 2012 – which is 25% above today’s spot price.

Gold will move higher due to “structural pillars of support” in an environment of negative real interest rates and rising inflationary pressures, as well as continued central bank buying.

Given the risks posed to the Eurozone and indeed the UK, gold priced in sterling and euros should experience similar gains - if not more.

The ECB’s Draghi’s warning regarding a Eurozone break up, currency devaluations and the risk of a “big inflation” is a reminder that the price of gold should be considered not solely in dollar terms but also in other currencies –especially were the European single currency to become less single.

Digga

40,295 posts

283 months

Wednesday 21st December 2011
quotequote all
donna180 said:
I think the HSBC vs. MF Global lawsuit has also acused some disturbance and highlighted to inherent danger of 'investing' in synthetic gold.

AdvocatusD

Original Poster:

2,277 posts

231 months

Thursday 22nd December 2011
quotequote all
RichyBoy said:
Just putting this here to refer back to next year:

2012 Gold Averages: Goldman $1,810/oz, Barclays $2,000/oz and UBS $2,050/oz
Excellent. I like the idea of setting a marker and the chance for some of us to say "I told you so"!

What do we predict the value to be in $ per ounce within one week of either side of 1 March 2012?

I'm going for $1760.

Edited by AdvocatusD on Thursday 12th January 14:24

AdvocatusD

Original Poster:

2,277 posts

231 months

Thursday 26th January 2012
quotequote all
Jesus Christ. Did any of you see the way silver and gold spiked yesterday? I think I saw it go up $50 in about as many minutes!

Let's see how long it actually lasts...

DonkeyApple

55,165 posts

169 months

Thursday 26th January 2012
quotequote all
AdvocatusD said:
Jesus Christ. Did any of you see the way silver and gold spiked yesterday? I think I saw it go up $50 in about as many minutes!

Let's see how long it actually lasts...
Italian matress money biggrin

ZeeTacoe

5,444 posts

222 months

Monday 27th February 2012
quotequote all
Warren Buffet said:
Today the world’s gold stock is about 170,000 metric tons. If all of this gold were melded together, it would form a cube of about 68 feet per side. (Picture it fitting comfortably within a baseball infield.) At $1,750 per ounce – gold’s price as I write this – its value would be $9.6 trillion. Call this cube pile A.

Let’s now create a pile B costing an equal amount. For that, we could buy all U.S. cropland (400 million acres with output of about $200 billion annually), plus 16 Exxon Mobils (the world’s most profitable company, one earning more than $40 billion annually). After these purchases, we would have about $1 trillion left over for walking-around money (no sense feeling strapped after this buying binge). Can you imagine an investor with $9.6 trillion selecting pile A over pile B?
Interesting take on the gold market.

From Berkshire Hathaway's 2011 annual report

http://nonchalantrepreneur.com/post/18259699208/wa...

Digga

40,295 posts

283 months

Tuesday 28th February 2012
quotequote all
DonkeyApple said:
AdvocatusD said:
Jesus Christ. Did any of you see the way silver and gold spiked yesterday? I think I saw it go up $50 in about as many minutes!

Let's see how long it actually lasts...
Italian matress money biggrin
More to come still I reckon - I reckon those predictions from last year look to be in the right ballpark.

AdvocatusD's $1760 for March is looking very sound. thumbup

DonkeyApple

55,165 posts

169 months

Tuesday 28th February 2012
quotequote all
Digga said:
More to come still I reckon - I reckon those predictions from last year look to be in the right ballpark.

AdvocatusD's $1760 for March is looking very sound. thumbup
Yup. The levels of money laundering in the EU at the moment is staggering. The southern cultures have always hoarded cash as they have a history of military instability like most slow economies. This cash is desperately trying to convert out of Euros and also evade taxation measures. There are a lot of coach trips to Switzerland at present.

The question is how much more is there to go, what actual weighting does this effect have on the price and if it is significant then what happens when these holders become sellers, as they will.

Or, are the OTC, partly backed contracts that trade in an amount of gold that is greater than all the physical gold in existence a stronger effect?

Personally, I believe that the price would halve overnight if they restricted OTC contracts and reverted to physical trading only.

robm3

4,927 posts

227 months

Tuesday 28th February 2012
quotequote all
Gold or Tungsten from North Korea Mint?

Ayahuasca

27,427 posts

279 months

Tuesday 28th February 2012
quotequote all
DonkeyApple said:
It's just a mechanism to strip the savings of silly, old people and move them to the Caymen.
Who are these Caymen? How do you get to be one?

AdvocatusD

Original Poster:

2,277 posts

231 months

Tuesday 28th February 2012
quotequote all
Ayahuasca said:
Who are these Caymen? How do you get to be one?
He means Cayman. This is PH, so he's talking about the car.



Still not clear what the point of saving money in a car is though? biglaugh

Back on topic!

DonkeyApple

55,165 posts

169 months

Tuesday 28th February 2012
quotequote all
Ayahuasca said:
DonkeyApple said:
It's just a mechanism to strip the savings of silly, old people and move them to the Caymen.
Who are these Caymen? How do you get to be one?
The traditionally preferred islands for running your spank shop winnings via. You'd stick your nominee directors in the Solomons and in the old days hold bearer stock, but that's pretty much been halted by AML legislation so they just run multi jurisdictions to increase confusion and to make it more and more costly for anyone to try and come after the money.

Quite a few have an end in Belize nowadays.

Ayahuasca

27,427 posts

279 months

Tuesday 28th February 2012
quotequote all
DonkeyApple said:
Ayahuasca said:
DonkeyApple said:
It's just a mechanism to strip the savings of silly, old people and move them to the Caymen.
Who are these Caymen? How do you get to be one?
The traditionally preferred islands for running your spank shop winnings via. You'd stick your nominee directors in the Solomons and in the old days hold bearer stock, but that's pretty much been halted by AML legislation so they just run multi jurisdictions to increase confusion and to make it more and more costly for anyone to try and come after the money.

Quite a few have an end in Belize nowadays.
Nah, Panama is the location of choice, where nominee directors / bearer shares are very much alive and well. Cayman is so 1980's. Belize? No thanks.

theaxe

3,559 posts

222 months

Tuesday 28th February 2012
quotequote all
ZeeTacoe said:
Interesting take on the gold market.

From Berkshire Hathaway's 2011 annual report

http://nonchalantrepreneur.com/post/18259699208/wa...
That was interesting!

TheBuffMaster said:
You can fondle the cube, but it will not respond.
laugh

DonkeyApple

55,165 posts

169 months

Tuesday 28th February 2012
quotequote all
theaxe said:
laugh
Warren must have been reading my posts again. wink

Mind you, I do keep warning him that including a Home County or Chelsea Kensington street name in your company name is a sure fire sign of a bucket shop. biggrin