Demise of the Dollar

In the most profound financial change in recent Middle East history, Gulf Arabs are planning – along with China, Russia, Japan and France – to end dollar dealings for oil, moving instead to a basket of currencies including the Japanese yen and Chinese yuan, the euro, gold and a new, unified currency planned for nations in the Gulf Co-operation Council, including Saudi Arabia, Abu Dhabi, Kuwait and Qatar.

Secret meetings have already been held by finance ministers and central bank governors in Russia, China, Japan and Brazil to work on the scheme, which will mean that oil will no longer be priced in dollars.

http://www.independent.co.uk/news/business/news/the-demise-of-the-dollar-1798175.html

its already happened Rival...


which means it may already be over...as I've said here before I think USD in in for a revival.... note thats not to say it will regain all it has lost but the money has already been made betting against USD.

I'm not sure I understand the significance of your post Peat? A number of significant countries are negotiating a shift away from the US Dollar for trading Oil, despite how the US Dollar is predicted to trend?

Even if it goes up in value (I would expect it to fall with news like this) this still represents a power shift in geo-politics.

I would be very careful with betting on the US Dollar increasing in value Peat. I think Elliot Wave Theory has it's place, but not when a currency is the worlds reserve, America is running huge deficits, countries are decoupling using it for Oil and there is talk of the Fed needing to devalue the dollar by half over the next 14 years in order to service it's debt.

One of the developments to come out of the G20 is the IMF is to be anointed as a global central bank and has just started issuing debt for the first time in many years. The talk is that they intend to displace the US Dollar with SDR's or Special Drawing Rights.

A few are expecting Gold to hit $1500 per ounce.

Dont worry Rival - my risks are always well managed and contained. I dont plan on my losing the shirt off my back in any series of deals.

There are always precious metal bugs who have highly optimistic views , indeed I have my silver horde as well.
I see what you mean though-my post focuses purely on value (my trading bias) whereas your OP is more about structural changes and reserve currency status.

I do think the 21st century will see the transition of global power away from the US but it still has the strongest military and the largest economy by far.

also, I've never quite understood why it matters whether the deals for commodities are done in USD or not. Its just a unit of exchange. Once the deal is done the party receiving the cash is free to move it to any other medium of exchange, Euro, gold, whatever.

It might be overstated, I don't quite understand it's full implications myself, and yeah I was just looking out for ya.

^Just thinking some more about this, if the USD is no longer required during the transaction process, it will mean less demand for the USD and various countries reducing their USD reserves respectively.

I would expect some USD depreciation as a result of this. Will see how it pans out.

yes perhaps this right more than I gave credit for, even though as I said theoretically its easy to move from one currency to another its involves expense and administration to be jumping around too much. But the thing is , theres not really an apparent successor and its not like the USD is going away completely or anything. the pound is still around even though Brittannia no longer rules the waves
So of the fiat currencies which one is heir apparent? The Euro is the obvious choice indeed some of those defectors were already stating a preference for the Euro but to be honest i think theres actually a huge amount of political risk associated with the Euro because of its lacking in the integral sovereignty department. Being a coalition it is easily open to tension and division for the very same reason that NZ is unwilling to join the Aussie Dollar namely that separate economies require distinct monetary policies. Spain and Italy and possbily Ireland are finding this a real problem in dealing with aspects of their economies.
The Yen as a successor was more possible a while back that it is now. The size of China's economy is about to overtake Japan for 2nd place in the next few years making the Yen seem like a has-been already.
And of the yuan/renmiimbi well I dont think anyones ready for that yet... I mean it feels like it might be more appropriate walking around downtown auckland but I havent heard anyone suggesting it is the next world reserve currency
So we're left with these SDR thingy's. A hybrid of fiats with its worth derived from a basket of other currencies. Reminds me of Esperanto - never really caught on did it?


I think i prefer silver or gold huh.

That sounds a lot like the repackaging process that got us into this situation in the first place.

no the analogy doesnt work for me Rips... securitization of debt packages is quite different thing. dont you think?

I am rather skeptical about SDR's, and I hear what you are saying Peat. I have been buying actual gold and silver would you believe, including my favorite addition, a Ludwig Von Mises silver coin.



I don't trust a lot of fiat or the volatility in current world markets. Whether a currency is popular or not, has a lot to do with "requirement". If a lot of trade is going through China these days, then I would expect more central banks to hold this currency over time, just by necessity.

I can't see another currency becoming the reserve though. Who trusts it?

Besides wouldn't you rather have the real thing?

nice

yes its amazing what you can get in silver - theres even soft porn. but I only buy at spot - I wont pay a premium for the pretty stuff.

awesome bro

So today I was walking around north Melbourne and I passed a jewellery store who were having a 'No more gold' sale.

Basically they were selling the rest of their gold jewellery and would not be selling any more due to the increased price.

Never seen that before! A jewellery store without any gold, who would have thought?

That is interesting, must be a lack of sales. The real question is, will the trend continue or is shall we see a reverse soon?

that graph is a zoom in of the one I posted at the top rival. USD index.
note that it doesnt show most of 2008 when (during the GFC) the USD gained signicantly. people were astounded but the fact is that USA was acting as a safe-haven in a time of panic - if panic returns then it may repeat that

I admit tho that its crunch time pretty soon for my prediction that the USD will gain a lot over the next year , even if I did pick up 100 pips off that trade USD/JPY that I sent you privately.

demise of the dollar?
seems more like demise of CA.

there are only so many press release from the libertarian arm of the republican party(tm) that I can handle

Professor Antal Fekete
The Gold Standard is a currency system based around the premise that a paper-note's value is exchangeable for an agreed and predetermined volume of gold. Countries have universally retired this system replacing it with the 'fiat system' of legal tender. Professor Antal Fekete is a world renowned monetary expert and mathematician who believes it's time to bring back the gold as the standard. (duration: 12′46″)
http://podcast.radionz.co.nz/sun/sun-20091025-0945-Professor_Antal_Fekete-048.mp3

has it started
here is a graph showing how things turned around a lot last night...

Sorry, exams and assignments are on like napalm at the moment. Peat, call me a conspiracy theorist, which I know it seems, but I don't trust this at all. I suspect (and I can't prove it) American officials are buying back their own currency with foreign reserves (purchased prior via their embassies) in order to prop their currency back up.

I speculated about this in another thread on here somewhere....

Last exam Friday, post more after...

no I disagree Rival... as it ties in too well with the equity market fall (which has just started in earnest imo)

good luck with your exams

Cheers, equity market fall? Why would that cause an upswing in USD?

Confused

when risk is heightened (equities going down) people crave safety, and like it or not the USD , and US T-Bills are considered a safe-haven.

its a contrarian perspective that when the 'dollar is dead' clamour gets the loudest thats when it will turn.

NB my money is where my mouth is

its true that there are a lot of economic threads recently I guess mainly started by Rival and myself, but it is a public forum and you can create your own areas of interest if you choose.


also (not really on topic but couldnt find the appropriate thread) there is a lecture on at the Maidment tonight


How to stop the money men from taking over the world (or, when will we face another September 200?

http://www.auckland.ac.nz/uoa/home/about/news-events-and-notices/events/template/event_item.jsp?cid=202888
28 October 2009
6.30pm
Venue: Maidment Theatre, 8 Alfred Street

Summary of the lecture :

_____________________



He demonstrated a history of increasing financialisation of the global economy since the early 80's and says the financiers have staged a quiet coup of politics and convinced them financial markets are self-regulating and that Wall St is vital to US interests.

He suggests the re-introduction of Glass Steagall type laws (repealed in 1999), and that without the separation of commercial and investment banking any other regulation is unlikely to succeed.



He offers the notion that "too big to fail = too big to exist"





He believes international capital flows need to be slimmed and lauded the recent Brazillian move to implement a capital inflow tax.



He sees a time of turbulence due to glaring income inequality which he showed reached a peak in 1929 and was reduced from then till 1980 but is now reaching the same levels if not higher. Then and now 1% of the population earns over 22% of the income. I didnt get the exact figure for what is was at the low but it somewhere between 5 and 10%.

I am not having a go at you in particular Peat, but a lot of these arguments by both Antal Fekete and whoever performed the lecture, are just rehashing Austrian economic arguments or not focusing on the route causes.

For instance:



= Austrian Economics? Why is this supposedly anything new?



Increasing financialisation is the same point made by Onehappy on biggie in many other threads, where he sites Giovanni Arrighi's arguments. I will say this again now as I have back then, this problem has a lot to do with abandonment of the gold exchange standard in 1971 and the constant change in fractional reserve ratios, which in many western countries (including New Zealand) are set at zero.

In fact New Zealand was the first country in the world to drop reserve requirement ratios completely.



These kind of regulations would not be required if there was a gold standard and full reserve banking.



Same argument made constantly by Peter Schiff and other Austrian economists?



Only required as a partial solution and wouldn't be required if we move back to a specie backed currency, stop artificially lowering interest rates (causing the carry trade to fire up), reinstate full reserve banking et al.



I.e. The same time of turbulence already espoused in many other books well before this guy, like for instance the Monetary Sin of the West by Jacques Rueff

http://www.amazon.com/Monetary-Sin-West-Jacques-Rueff/dp/B0006DYVOC

ok, so they are Austrian arguments. I'm more interested in the ideas themselves than who made them first.

I know you are, i'm just having a gripe. It grinds my gears, because now all of a sudden, "other" economists are presenting these same arguments, and "seemingly" making out like they are a new and ground breaking?

The Austrians have been considered "loopy" and "nutjob", taking slack for years, due to supporting these positions, so it makes me quite suspicious and critical.

so basically, the austraians had some "good ideas" and now you're pissed off people because other people are agreeing with them?

What exactly annoys you?
that people are agreeing
or is belief not enough, must they also swear an oath to hayek or something?!

No, it's just that now the issue is clearly exposed from the crisis, and debate on the topic is in the lime light; other economists are suddenly coming out in support of the same positions. The lecture is advertised like the propositions being espoused are new, extraordinary and maybe deserving of our attention. Coincidence?

Now maybe I am out of line here, but I bet you they don't even site one reference, towards any Austrian economists; who have been making these same arguments for almost a century before them. By far, the Austrians have the most abundant literature on the subject; and I think it would be shame here, due to political reasons, that others should now take credibility, for adopting the same arguments.

I'm sorry, but I think you're being completely ridiculous

Nothing new there...

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10605760&pnum=0

and I found a graph of it on the web - pretty much exactly the same as he was using

How is the rebound playing out Peat? Do you expect to see this remain steadfast for some time?

okay, i'll make sure I don't ever agree with you... I don't wanna upset you by doing so.

are you referring here to the USD ?
if so I closed all my long positions Wed evening as in forex one must lock in profits.

USD has made a good retracment (fallen) overnite so it may be time to re-enter long again soon.

And yes the equity / USD relationship is pretty solid. because there is ONLY ONE thing you are trading in all of these markets.... not the currency, not the commodity, not the company share... its all just simply whether people are taking on RISK or shying away from it.
EWI call it 'all the same market') which is why even a diversified portfolio didnt save people from getting hammered in the GFC


btw Wade referenced Krugman in an article (which I can post the link to later) - is he Austrian?

Yes sorry, I should be more specific.



Hell no son. Paul Krugman is a Neo Keynesian and quite possibly the biggest numb sack in economics. I can't stand him. This is the guy who was calling for a housing bubble in 2002 to offset the dot com bubble.

Schiff Report

if he predicted a housing bubble he could have done very well given property is so easy to leverage. why is that numb sack?
Or did he want a bubble and have some sort of influence to create it?



this is not the speech exactly from the other evening but its a very recent article by Robert Wade and makes similar points.

http://www.challengemagazine.com/extra/005_024.pdf

He called for a bubble to offset the Nasdaq bubble, then came out a few years later and said it was a problem. Then he claims he predicted it and takes credit for this? and furthermore has the audacity to blame the free market for the crisis (despite promoting artificially low interest rates) and uses it as an opportunity to demand the nationalization of banks and large scale Keynesian stimulus programs, which he argued were not large enough.

Then, and even more recently he did a piece in the New York Times (where he is an editorial) condemning the entire economics profession as being blind to the crisis and acting like a complete jerk. He think's he is holly than thou. Many of us pundits want to see a Peter Schiff vs. Paul Krugman televised debate and watch him get owned, although I doubt it he will understand half of what comes out of Peter's mouth. He is the Austrians major intellectual rival and they occasionally mud sling at each other, although his criticisms mainly reside around an erroneous misinterpretation of Austrian Business Cycle Theory.

Some Austrian economists, have actually dug up and put together a series of articles on his past quotes in 2001/2002, promoting a bubble, including providing the video of Krugman in a Spanish interview stating it's what we need.

More on this here:

http://mises.org/story/3539

Here is the video in Spanish (sorry) of Paul Krugman calling for a housing bubble.

http://www.rtve.es/mediateca/videos/20090502/innovar-para-salir-crisis-informe-semanal/495712.shtml

Now you can still here it in English if you listen carefully, so go straight to the 35 seconds in the interview after minute 2:50. Under the Spanish translation I’m sure you’ll be able to hear the English original.

You will here this:

*hear x 2

funny thing is how the new bubble did provide what I would call a workaround, even if it is deferring the pain.
I'm not agreeing that its a wise strategy but on the other hand it did work.

USD up strongly overnite esp against CAD and CHF ... I only rode it a little - left it a bit late to re-enter long positions

So the USD casket definitely remains unsealed...


As I said if that happened equities would be impacted - stocks were well down. maybe just maybe a small rise next week before more falls , or perhaps just more falls (all imo)

This is exactly what it does, as you say "deferring the pain", which is similar to what many Austrian economists use in their literature, except they often say it "delays the day of reckoning". And sure it can work, but we should resist the temptation to interfere with the bust cycle. The problem is, each time you postpone a recession, the market doesn't clear properly and the bubble can become larger. For instance, over priced assets (inflated during the boom period) don't fall down to where they should be, which encourages politicians to introduce more government programs to intervene and create additional avenues for "moral hazard" in the future.

The market becomes more volatile and unpredictable, causing huge rallys, where people fly out of bonds and into commodities, and then back again, looking for yield, due to the artificially low interest rates. The carry trade fires up, where other central banks increase their interest rates out of sync with the local central banks trying to stimulate their economies. The world has all this hot currency flying around placing pressure on people like Bollard, not to increase their interest rates. The debt window remains open longer. Inequality in wealth increases, which is blamed on capitalism by those ignorant of the economic forces and how they are being encouraged through government and central bank policies.

It sends out bad signals into the economy, which are hard for businesses to read. Should we invest? should we deleverage? Furthermore the 'malinvestments' creating from the artificial boom period are not always purged. We are supposed to liquidate these ill performing assets, they are scarce resources which have been squandered. Instead new artificial stimulus (promoted through deficit spending), keep them in operation, even though they are essentially wealth destroying projects.

Keynesian's and politicians are not interested in any of this though, their main goal is to stimulate "aggregate demand". President Bush even made statements to the effect, one of his greatest feats during his presidency was offsetting the Nasdaq and 911 fall out. The fact is, we aways pay for it later and the consequences are always far greater. Also everyone blames capitalism, including the idiots who caused it, which rally's further support to concentrate government power.

People need to wake up....

Schiff Report

Rothschild leaves gold market

http://news.bbc.co.uk/2/hi/business/3628971.stm

thats a good summary of the days major business news. 200 tonnes = 6 million oz so yeh, BOI has already made a quarter billion in profit. not that you can flick that much so easily.
However saying that because a Central Bank takes a market position it doesnt prove its a good one. The BOE under the stewardship of Gordon Brown sold all its gold at the lows in 1999 somewhere around $300/oz.
I hold silver but as per my deflationary perspective I still think gold and PM's and commodities will fall at some stage when/if bad things happen. but yes at this stage they're showing resilience

Well it all seems to be heating up now on You Tube, with updates coming in from my various subscriptions. My personal view is that gold, silver, oil and some other commodities are going to continue to perform well, over the long term. These occasional drops (which you have predicted well) based on your trend analysis, seem more like short term volatility to me. But I could be wrong as you well know.

I don't have your experience as a stock broker or advantage in looking at constant trend data, enabling you to predict swings based on Elliot Wave Theory. Rather my instinct/suspicions are based more on macroeconomic knowledge and evaluation of M3, on top of observations of geo-political events, such as China banning gold exports and these massive movements in gold transactions between different countries. Never-the-less, while you could be biggies resident "bear" and myself the resident "bull", do still check out the video above for a heated debate on gold. Might be your thing.

gawd I hate those yell-fests....
one does have to aware that gold provides no return so it shouldnt really be too much a % of a portfolio but Schiff's perspective is corroborated by the price action at the moment.

it got rejected at the $1100 barrier last night.

USD showing some weakness again....

Sorry re the yell fest. This one is better.

Peter Schiff is calling $5000 on US Gold.

pretty suire theres been a significant turning point on this now..... the dollar is dead long live the dollar this will impact the stockmarkets as well... as essentially what we are seeing is the return to fear

just wanted to update the thread on the demise of the dollar.
This thread is about three months old and the USD Index is now slightly higher than it was then. I was about a month early calling the turn.

You dont need to be a technical analyst to see the downward trend has been clearly been broken with that final capitulative low in Nov.
Since then December was strongly upward (getting a bit carried away you might say) leading to a corrective pattern in Jan which may correct half or more (but shouldnt be more than 78%) of the rise but once this short term downtrend is broken there could well be a powerful (third wave) rise

another few weeks later and as stated once the corrective trend broke we got into a powerful move upwards.

in the picture above the USD index at bottomed at 72 and was sitting at 80
two months later USD index is at 84 so I will rest my case that the dollar is not dead in fact now its more the Euro thats dying huh.
amazing how popular sentiment as expressed by Rival in the beginning of this thread nearly always gets things perfectly wrong....
by the end of the year I will hopefully be an authorized financial planner and you will have to sit up and listen to what I say hahaha

My post from 6 months ago re the risks associated with the Euro - now fully coming to fruition.

well analysed peat

dunno if anyones still interested but we are getting close to the end of the USDollars rise now as evidenced by this pessimism on the Euro (magazine covers being a contrarian signal)

which doesnt mean - due to aforementioned reasons - that we buy the Euro (tho we could I guess at least for a while) as the Swiss Franc offers a safer long term alternative. Note for Kiwis this means our dollar will proably rise for a while - it has already started and was kicked into life by Bollard raising the OCR.
It also suggests the stock market will keep going down too.

Exams this week. I better pass huh !!

just for the record - a week ago I suggested buying the swiss franc
which means this graph should go down as one sells the USD to buy the CHF

this last weeks movement shown here as daily candles. note how most of them are red for going down down.

another update 10 days later see that constant down trend

the stock market has gone down a lot since my post a few weeks ago too

its as good as having having your own ATM here on Biggie !





Uploaded with ImageShack.us


and I passed my financial planning exams
but note they dont teach me what I am putting in this thread.... almost the opposite in some cases so its kind of hard having to spew all this stuff in the exams that you dont really believe in.

for the record we should be closing this position now
its been a spectacular run and nothing ever moves in a straight line so time to bank
that last red candle shows indecision and the green up candle confirms the change so we dont want to give back too much profit.

well we had our fun shorting the dollar back then
time to long it now.
buy USD

current rates
USD/CHF 10485
EUR/USD 1.3226 (sell this pair)
AUD/USD 91.62 sell
NZD/USD 72.85

the best one is probably the CHF or the Euro as the Kiwi and Oz are supported by our relatively stable economies but that said they could fall as the international economic climate deteriorates.

probably need at least a hundred pips leeway in doing these trades I'm not perfect on picking turning points otherwise I'd be a millionaire. .

13hrs later all trades up +100 pips... now we hold for a week with break even stop losses so no risk remains. <whew>

update
stopped out break even USD/CHF
EUR/USD 1.2673 + 550 pips
AUD/USD 88.48 +314 pips
NZD/USD .7024 +261 pips

we risked 400 pips for 13 hours then risked nothing and wound up with 1000 pips profit
a pip can be as much or as little as you choose

another set of winners from your biggie free money supply

In the arena of world finance, the dominance of the us dollar is likely to disappear, giving way to a multi-currency system. It is obvious that the euro and the yen will become more widely used as mediums of financial accumulation and commodity exchange. The question is whether other currencies will also join the list, and the degree to which the expansion of the number of currencies in real world economic use will unbalance the system, or at least render it extremely volatile. In any case, the decline of the central role of the dollar will create major economic dilemmas for the United States in dealing with its existing national debt, and probably result in a reduction of the standard of living within the United States.

PDF 'The curve of American Power': http://www.iwallerstein.com/articles/

i dont agree Onehappy.
though it depends on your timeframe and your reference point of course. mine , by necessity is short and judged mercilessly by Mr Market.

Its easy to make grandiose statements from an economists perspective and I am wary that one day in the distant future the US $ may explode as may all fiat currencies that are porly managed... but currently ( at least this year and maybe some of next ) I'm a big USD fan
and to be honest I've pulled out enough real time profitable trades and accurate commentary on this forum to be taken seriously on this matter.

In my most immediately prior post we closed all those trades in good profit... if we'd held them we would have given it all back (lost it). u gotta know when to bank.

Wallerstein's timeframe there is probably about 5-40 years

his sense of history seems skewed

Why is that?

it appears very US-centric and assertions made that are not necessarily so such as:

"we can see that the end of the Second World War marked the conclusion of an 80-year struggle between the United
States and Germany to determine which of the two rivals would be the successor to Great Britain"

and

"The culminating phase of this struggle involved a thirty years’ war from 1914-1945"

and

"The US won the war against Germany"

and funny how that by the 70's this would be seen by some as a liability :

"In 1945, the US emerged from the war as the only major industrial power that had preserved its industrial plant intact"

It's US centric simply because Wallerstein is interested in charting the rise and fall of the leading hegemonic capitalist state of our times.

The first three statements are all true, but only as abstractions. They are not literal truths. The first statement, about an 80 year struggle between the US and Germany, describes the scenario which emerged from the Long Depression of 1873-1896 (which ended with the arms race that fuelled WWI). German unification occured on the eve of this depression, in 1871when the German Empire was proclaimed, and France defeated in the Franco-Prussian War. Germany was almost immediately a strong industrial competitor with Great Britain, and on some measures (not profitability) German industry was superior to that of the UK. The intense competition between these powers was one factor in driving down profits and forcing the Long Depression. Anyhow, the Long Depression marked the signal crisis of the British regime of accumulation. The profitability of trade and manufacturing contracted sharply, and capital shifted into financial speculation in search of profits. From that point on the British Empire was in decline, and capitalism was in crisis. The capitalist system could only reconstitute itself by a power of greater strength than the British Empire taking on the role of hegemon. Germany and the USA were the two contenders. It turned out that Germany wrecked itself fighting two costly wars in continental Europe, and the USA, a continent-sized state isolated from war by the Atlantic, reaped the rewards. Since from a World Systems perspective WWI and WWII were essentially the same conflict, over who would rule capitalism after the decline of Great Britain, they are treated simply as one thirty years war (Named after the original 30 years war of the early 17th century which ended with the Peace of Westphalia, the creation of the modern system of nation states, and the end of the maedieval system of rule. The United Provinces of Holland emerged then to become the leading capitalist power of the day. This pattern of roughly 30 years conflict repeated at the end of Dutch rule when the US War of Independence and the Napolonic Wars saw the hegemonic candidate for the Dutch role, France, defeated, and the UK emerge to usher in a period of British hegemony).

I'm not certain of the gist of your last statement, but presumably you refer to the decline of dominance of US manufacturing from 1970. This is an old pattern. Germany and Japan had by this time caught up with the US, marking the signal crisis of the US regime. Profits declined, capital moved into financial speculation. The unusual scenario for us nowadays is that the US has now probably reached its terminal crisis with the events of 2007/8, but a new capitalist power is not waiting in the wings. In fact, contra every previous terminal crisis in the capitalist world system, the decling power is in debt. The usual pattern is that capital flows to the new hegemon, which emerges substantially in debt.

The problem for capitalism now is that no state is big enough to lead the system upon a new cycle of accumulation. We may now see decades of painful adjustment, either as standards of living in the West drop while the rest of world takes a greater share of the wealth, or elites somehow emerge to hog everything for themselves but without having to actually having to produce anything.

Nouriel Roubin who I respect agrees with you Onehappy re the demise of AMerica in this broad sweeping description of the economic woes we face

http://www.institutionalinvestor.com/banking_capital_markets/Articles/2660510/Paradise-Lost-Why-Fallen-Markets-Will-Never-Be-the-Same.html

what I love is the bit where he says


"recent releases frm the G7 suggest that those sages who saw green shoots last spring may actually have been smoking them"

Messy alright.

Am thinking of buying some Gold!

mate you cant be buying gold now....
yes it might go up but its very expensive already
and for most young people its quite a big investment as its minimum purchase of $2k an oz.
yes I still hold the silver I've been bleating about over the years and yes it tracks gold , but it can can be bought in much smaller lots and I didnt pay current prices...
so, seriously - dont jump into buying gold at the top of its cycle....

good to see George Soros agrees with me lol
http://www.reuters.com/news/video/story?videoId=158653924&videoChannel=2602

Ok but if you assume further deterioration of the global economy, that would support gold continuing to rise correct?
PS: I ain't that young plus can afford those volumes without difficulty for a proportion of what i have

not such an easy correlation as you make out.
supposedly gold is an inflation hedge, though also a pure fear factor as you say. (i dont agree that gold correlates to inflation though)
and you could think of it as just another commodity in which case recession will cause weak commodity prices.
so you take your chances really.
nothing wrong with having up to 5% of ones wealth in precious metals as a hedge against systemic failure I suppose but preferably should have been done at lower prices - I personally wouldnt start taking a position in gold at these levels
if you truly believe the end is nigh then tinned food, tobacco and a shotgun would probably be the best investments

LOL ok so i'm not buying gold then

buy silver

silvers beenvery good....but I"m out of holding long trading positions in silver now... sold the last of mine at about $23 /oz.only holding actual physical for the very long term.

my USD optimism has been a bit of a loser lately though.... so I will concede this thread title has come back into play over the last month.
maybe a turning point again now though..... with Euro having a big fall overnight after its meteoric rise to 1.40 from a low of 1.19 about 4 months ago. I predict parity this year or early next - that is the Euro will fall 40 USCents in the next few months. Could be wrong theres some funny games being played in the currency markets at the moment.

Gold has gone up 28% in the year since you posted this comment!

cant win 'em all i guess.
the real point is risk vs reward, and volatility
at one one point gold fell 15 % in three days. how would you be sleeping at night with that sort of jumpin around?

Dunno where you get your numbers from, the worst drop I can find is less than 10% in three weeks - compared to the best rise of about 20% in two weeks. I think i'd be up all night with excitement