It's looking grim again. Is gold the would-be saviour?
Discussion
Luke Warm said:
Things don't look good:
http://www.telegraph.co.uk/finance/11805523/Doomsd...
" 7 - Bull market third longest on record
The UK stock market is in its 77th month of a bull market, which began in March 2009. On only two other occasions in history has the market risen for longer. One is in the lead-up to the Great Crash in 1929 and the other before the bursting of the dotcom bubble in the early 2000s.
8 - Overvalued US market
In the US, Professor Robert Shiller’s cyclically adjusted price earnings ratio – or Shiller CAPE – for the S&P 500 stands at 27.2, some 64pc above its historic average of 16.6. On only three occasions since 1882 has it been higher – in 1929, 2000 and 2007. "
So much scare mongering. The article avoids many important facts.http://www.telegraph.co.uk/finance/11805523/Doomsd...
" 7 - Bull market third longest on record
The UK stock market is in its 77th month of a bull market, which began in March 2009. On only two other occasions in history has the market risen for longer. One is in the lead-up to the Great Crash in 1929 and the other before the bursting of the dotcom bubble in the early 2000s.
8 - Overvalued US market
In the US, Professor Robert Shiller’s cyclically adjusted price earnings ratio – or Shiller CAPE – for the S&P 500 stands at 27.2, some 64pc above its historic average of 16.6. On only three occasions since 1882 has it been higher – in 1929, 2000 and 2007. "
On a worldwide basis, the money supply is far better than the 1920's, and there's deposit insurance. Then there's all the QE and trade is much stronger than it was back then. Importantly we don't have the Gold Standard which sucked the life out of world economy (although the EU does have the Euro which does similar
)So my view is that any downturn probably won't be on a scale similar to the Great Depression, but more likely to be a normal recession when it comes but with a few "hotspots" such as the Eurozone.
The gold price-fixing story is back in the media again:
http://uk.reuters.com/article/2015/09/28/uk-precio...
http://uk.reuters.com/article/2015/09/28/uk-precio...
Reuters said:
The Swiss competition regulator has opened an investigation into possible collusion in the precious metals market by several major banks, it said on Monday, the latest in a string of manipulation probes.
Given recent history, LIBOR etc. I cannot say it is a surprise.Digga said:
The gold price-fixing story is back in the media again:
http://uk.reuters.com/article/2015/09/28/uk-precio...
Interesting that every one of these 'attacks' eventually transpires to have originated from the U.S. and is always focussed a market for which a U.S. exchange does not control the dominant flow in. http://uk.reuters.com/article/2015/09/28/uk-precio...
Reuters said:
The Swiss competition regulator has opened an investigation into possible collusion in the precious metals market by several major banks, it said on Monday, the latest in a string of manipulation probes.
Given recent history, LIBOR etc. I cannot say it is a surprise.It's almost as if the U.S. were continuing to destroy the last of the UK exchanges so as to control all flow.
DonkeyApple said:
Interesting that every one of these 'attacks' eventually transpires to have originated from the U.S. and is always focussed a market for which a U.S. exchange does not control the dominant flow in.
It's almost as if the U.S. were continuing to destroy the last of the UK exchanges so as to control all flow.
That and perhaps the one global 'currency' that is competing with an ever weaker and more shaky-looking dollar.It's almost as if the U.S. were continuing to destroy the last of the UK exchanges so as to control all flow.
Digga said:
DonkeyApple said:
Interesting that every one of these 'attacks' eventually transpires to have originated from the U.S. and is always focussed a market for which a U.S. exchange does not control the dominant flow in.
It's almost as if the U.S. were continuing to destroy the last of the UK exchanges so as to control all flow.
That and perhaps the one global 'currency' that is competing with an ever weaker and more shaky-looking dollar.It's almost as if the U.S. were continuing to destroy the last of the UK exchanges so as to control all flow.
DonkeyApple said:
Maybe that also. The U.S. has been in a huge drive to either try and buy or destroy the last remaining, globally dominant UK exchanges. At the same time they've been assaulting through proxies as many UK banking operations as possible so as to make theirs more competitive.
They've also trained the media to dish out a savage kicking to foreign "auto" manufacturers at every opportunity.Interesting run back up to 1300 the last couple of months. Hedging against fears of the global slowdown and seemingly inevitable devaluing of currencies to counter their massive debt problems.
If China starts printing then that's probably enough to break the rebasing trend quite robustly.
If China starts printing then that's probably enough to break the rebasing trend quite robustly.
DonkeyApple said:
Digga said:
Banking problems also loom in the Eurozone, not least Italy.
They never went away. 
I'm also rather perplexed by latest US interest rate policy. I wonder for how long they want, or are able to be for that matter, the top-rated premium currency?
Digga said:
or sure. Was it Soros who said the Troika hasn't so much been kicking a van down the road as trying to kick a football uphill?
I'm also rather perplexed by latest US interest rate policy. I wonder for how long they want, or are able to be for that matter, the top-rated premium currency?
That's an awkward one. They got pulled intimating that hike because they had been talking about it for so long that another meeting without doing it and they felt they would have lost all credibility. So they hiked a little earlier than they wanted. Then the Saudis started an oil war that pushed the commodity sell off even deeper and at the same time the Chinese economy has clearly been slowing. I'm also rather perplexed by latest US interest rate policy. I wonder for how long they want, or are able to be for that matter, the top-rated premium currency?
The simple fact is that there is too much debt and no one has the balls to start restricting it and deal with the reduced spending and all that comes with it. So, they are probably going to have to go printing again, at least the Chinese and Europeans are and that looks to have bought the bear phase in gold to a possible end. Most of the Credit Crunch asset bubbles have stalled this year, prime property, fine art, classic cars. No one has been rushing to buy anything and that has slowly been filtering through to gold as fear has been building.
It'll take a clear change in US action and absolute proof of rising rates now before gold will continue its rebasing to fair value.
Er yes, Gold. A useful engineering material. A fortune is spent digging it out of a hole in the ground, only for it to be transported 1000's of miles somewhere else, and, er, put back in a hole in the ground. Called a bank vault. Done by so called civilsied, intelligent people! Amazing. Same as for small sparkly lumps of Carbon as well !! Gawd help us!!
robinessex said:
Er yes, Gold. A useful engineering material. A fortune is spent digging it out of a hole in the ground, only for it to be transported 1000's of miles somewhere else, and, er, put back in a hole in the ground. Called a bank vault. Done by so called civilsied, intelligent people! Amazing. Same as for small sparkly lumps of Carbon as well !! Gawd help us!!
When the gold is vaulted it has a defined purpose.It can help control the flow of global capital.
It is an inevitable truth of civilisation that capital exists, thus a degree of control will always be exercised over it.
Even Stalin had to aquiesce to this fundamental economic truth.
donkeyApple said:
Then the Saudis started an oil war that pushed the commodity sell off even deeper and at the same time the Chinese economy has clearly been slowing.
The simple fact is that there is too much debt and no one has the balls to start restricting it and deal with the reduced spending and all that comes with it.
It'll take a clear change in US action and absolute proof of rising rates now before gold will continue its rebasing to fair value.
Think the oil war was already well and truly established. There is no way bin Salmam would deal on production without the Iranians. The low oil price has as much to do with demand and supply as geo-politics today. The simple fact is that there is too much debt and no one has the balls to start restricting it and deal with the reduced spending and all that comes with it.
It'll take a clear change in US action and absolute proof of rising rates now before gold will continue its rebasing to fair value.
When your defence minister is also your brightest economic mind chairing economic affairs, historic theories on gulf oil vs. shale don't seem so relevant now. Especially when he gave a hint and then they announced they would start to sell off a chunk of ARAMACO (the stance on production at odds with the sell off).
The SWFs went from net savers to sellers in 2015, the actions of the gulf states certainly ripple out. Especially if the fundamentals look shaky, such left field events have a disproportionately larger impact.
As for debt / leverage, you said it before banks have to correctly price risk or cost of providing leverage. However we're 9 years into a finial crisis caused by excessive leverage build up and reliance on carry trades; and only this year do leverage controls start to feed in. Even then, there is no incentive to early adopt, just kick the can down the road. The time for big balled action was probably a few years ago; now the best we can probably hope for is a controlled landing.
As for the US rates, I'd agree. Seemed to have an air of "sh*t or bust, Rodders", now we're proper in the sh*t.
Everyone was banking on growth - modest growth for the deveped Western economies and more rampant (near double digit %) for China to stave off revolution - and had absolutely no plan B. All governments are spooked, overleveraged and underperforming to an extent. It's a mess and I'd agree with others here who say we're realistically still within crisis.
BlackLabel said:
A good 2016 for those who hold gold, will the price rise last?
Yep, up 20% in one month.The opening of the Shanghai Gold Exchange which trades in physical gold rather than paper promises appears to be the main driver of higher pricing and most indicators suggest it will continue to rise. Brexit and the weak GBP are skewing the figures higher too.
Silver, after slumbering at near 5 year lows, is finally being dragged higher as well, still looks like a very good buy at half the price it was in 2012 and quite possibly the smarter of the two metals to own
BlackLabel said:
We don’t hear much about gold these days - even zero hedge/moneyweek types don’t talk about it as much as they used to. Perhaps they’ve moved on to crypto currencies?
Is investment gold still a thing?
I was thinking that now Zero Hedge have dropped it it will probably go up. The stopped clock that fell off the wall just before finally being right.Is investment gold still a thing?
Sure enough it's up.
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