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Is APF a bear forum or a bull forum? Which team is winning?
Topic Started: 14 Apr 2012, 05:48 PM (9,477 Views)
miw
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Poontang
15 Dec 2012, 09:26 AM
It may well dip in the next 12 months, the next 3 to 5 years though will more likely see the bull run continue.

Any rise in the Euro will be on the back of USD weakness.

Northern Hemisphere is still for all intent, shot.

The "not as bad as it could be" news is on the back of still more stimulus. Sustainable fundamental growth is on the whole, lacking still in most Euro nations. France and Germany (more so France) are showing the strain the "crisis" is continuing to have on their economies.
Hmm. Problem with Europe is that Germany and the other northern countries are effectively getting stimulus but half their market is shot to pieces.

On the other hand, the places that are really shot to pieces are receiving austerity.

But have a look at what the Greek 10-Year Bond has been quietly doing for the past 6 months or so. It's gone from 30% yield to 13%. Or put another way, it has gone from selling at less than 15c in to dollar up to about 40c in the dollar. That hasn't happened for no reason. The bond guys are typically the smartest and least sentimental guys in the room.
The truth will set you free. But first, it will piss you off.
--Gloria Steinem
AREPS™
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Gossamer
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44th most prolific poster on APF

Q. Is APF a bear forum or a bull forum? Which team is winning?

This is not a competition.
Common sense is a curse - those who have it need to suffer dealing with those who don't have it.

APF idiot list
Nelson
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miw
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Gossamer
15 Dec 2012, 11:20 PM
Q. Is APF a bear forum or a bull forum? Which team is winning?

This is not a competition.
+1. It is an ongoing conversation.

Obviously fuelled by booze, testosterone, mogadon and sometimes even more exotic things (thanks Mel!), but a conversation all the same.
Edited by miw, 16 Dec 2012, 12:08 AM.
The truth will set you free. But first, it will piss you off.
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frankrider
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mel
15 Dec 2012, 03:33 PM
It's been suggested certain coin types would be exempt from confiscation if they reinstated the law again..
Yes that may be the case but I personally would not bank my retirement on actions the government might or might not take. They don't have a very good track record in protecting people in retirement, in anything actually. Our current politicians are just in the right place at the right time but they have very little to do with the wealth we have accumulated here. But lets did a little deeper into this business of gold in some future politically unfriendly Australia.

The problem in the US in 1933 was that the people who had not been trapped in debt and lost everything in the preceeding decade actually had a lot of savings hoarded up for their retirement. A lot of this was in gold coin since gold was a trusted form of money. The government wanted to steal this off the people and give them paper money in exchange so that they could use the gold to pay their own debts and trade overseas. The gold was real and valuable and the paper could be easily printed up at little expense. It was a good deal for the government.

Of course the government was staffed by a lot of rich people with gold who also had a lot of rich friends. You don't get into politics anywhere unless you are rich or have rich backers. So before the order was passed into law all the rich insiders, so to speak, were tipped off and they simply took their gold on ships across the atlantic and deposited it in europe's banks. After all these sort of people would have accounts there already because they commute across the oceans all the time. Then the law was passed and all the American "middleclass" (for lack of a better word) had their gold confiscated (stolen). The government justification for this in the papers of the time was that they were saving the people from the ravages of deflation and banking collapse. But of course since that was a lie there was nosubsequent recovery, and instead the depression meandered along until the second world war began and put everyone back to work again.

Now the people who gave up their gold for paper saw an immediate loss of value because the gold price was re-fixed at $33/oz up from $20/oz. Out in the far boonies though life went on as normal for most folk and they continued to grow their food and trade it for household goods etc etc. This was because they were not very connected to the city money/debt cycle and generally had very little money to begin with. If you had gone out there with a $20 gold coin or a $20 bill you could have bought what you wanted, no questions asked, but the $20 coin would have carried a lot more weight in bargaining value. After all the coin could either be saved or melted down into a lovely token and then sold for it's scrap value to a jewellers. There was no prohabition on gold in jewery form, only in US coin form. Here in Australia pawnbrokers and other merchants take in lots of gold rings etc every week. Some of it (the nicer pieces) are kept for resale and the rest is shipped off for melt. It is a simple matter to beat a gold coin into a medallion, stamp a few lines on it so it looks like art and take it to a reseller. They will easily determine its purity and value, it's not like an ingot that might be drilled and filled.

If you had a bag of gold coins at some future date when a law was passed making them illegal to hold (after all they are very dangerous, a baby could choke on one) And you misplaced the bag in a hole in the ground and forgot about it, would that be illegal. "I had some gold but I buried it and forgot where?" Then perhaps ten years later you might remember where you lost it and by then laws could have changed or a healthy black market could be available. Or you might have bought a cheap mining lease or gold panning licience, get the picture?

There comes certain times in our lives where each one of us takes the law into our own hands for good or for bad and we have to make decisions based on our own best interests. I know property investors who do that all the time, things like buying new laptops for "their business" or taking trips to inspect properties they own but which are in reality tax deductable holidays. These investors thing nothing of it, why? Not just because they feel justified, that is not the real motivation. They do it because they are reasonable certain they can get away with it. I assure you though that if the ATO came knocking and started going through their travel expenses they would be sweating like pigs. If the ATO wants to make a case and they take it to court, don't expect to win because the magistrate will side with them everytime. I had a client who ran an automotive engine repair shop and he lost a case based on the (number) of phone calls received on his phone. Just the number of calls, there was no other evidence. The ATO presented data of other shops incomes tallied beside their incoming call numbers.

Of course you can't keep $400k in coin in holes in your backyard though, that is just asking for trouble. The perth mint will hold it allocated for a small fee, paper trail, taxable. A deposit box at a bank is good, but slightly risky going forward (that's how they trapped most Americans in 33. ) So you have to be creative, very creative indeed.

Negative gearing is a form of leveraged speculation in which a speculator borrows money to buy an asset, but the income generated by that asset does not cover the interest on the loan

A negative gearing strategy can only make a profit if the asset rises so much in price that the capital gain is more than the sum of the ongoing losses over the life of the speculation. http://en.wikipedia.org/wiki/Negative_gearing
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peter fraser
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frankrider
16 Dec 2012, 07:53 AM
Yes that may be the case but I personally would not bank my retirement on actions the government might or might not take. They don't have a very good track record in protecting people in retirement, in anything actually. Our current politicians are just in the right place at the right time but they have very little to do with the wealth we have accumulated here. But lets did a little deeper into this business of gold in some future politically unfriendly Australia.

Why on earth would the government ever care about shiny trinkets made of almost inert metals.
Any expressed market opinion is my own and is not to be taken as financial advice
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NotFooled
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The Bear Whisperer

peter fraser
16 Dec 2012, 10:30 AM
Why on earth would the government ever care about shiny trinkets made of almost inert metals.
The real question is: do those with the wealth and power to lobby the government care about shiny metal trinkets?
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frankrider
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peter fraser
16 Dec 2012, 10:30 AM
Why on earth would the government ever care about shiny trinkets made of almost inert metals.
Of course they wouldn't. As I have said, the government is composed of idiots, stooges, and sellouts. Here was what their rba's decision to sell our gold cost us, or I should say cost you, because I am pretty well detached from them now and have my own gold reserves.

It's interesting to note the huberous of their assertion that we would have no more economic disasters where we would need to access the world's financial markets. Their decision was a complete FAIL for the Australian public but no doubt secured them some powerful friends for when they retired from pubic life.

Quote:
 

http://www.theaustralian.com.au/news/nation/reserve-banks-gold-sale-cost-us-5bn/story-e6frg6nf-1225985231872
Reserve Bank's gold sale cost us $5bn

by: Paul Cleary
From:The Australian
January 11, 201112:00AM

THE Reserve Bank sold most of the nation's gold reserves more than a decade ago because the board believed its price would remain flat. They believed also the commodity would not play a role in a future financial crisis. The decision to sell 167 tonnes of the bank's reserves has cost the nation about $5 billion based on today's soaring price of almost $1400 an ounce.

A board paper recommending the decision to sell conceded that gold served as "insurance against a breakdown in the international financial system", but it then dismissed the need for holding this valuable asset. The paper has been obtained by The Australian under Freedom of Information laws. The paper also said Australia need not worry about selling the assets because it had vast reserves of the commodity, yet the latest figures from Geoscience Australia show that known reserves will be exhausted with 30 years.

The RBA revealed in July 1997 that over a six-month period, it had sold 167 tonnes, reducing Australia's reserves to just 80 tonnes. At this time, the value of its gold assets fell from $3.6bn to about $1.1bn. The RBA's sales pushed the world gold price down to an 11-year low, returning just $2.4bn for the gold that was sold via a single broker engaged without a tender. The same amount of gold would be worth about $7.4bn today.

The decision to sell the reserves was approved by then RBA governor Ian Macfarlane and then treasurer Peter Costello. The paper justified the decision to dramatically reduce the bank's holdings by arguing that gold had been a poor investment, and that Australia need not worry about access to financial markets during another economic crisis. Since this decision, the world financial system has suffered severe stress, first with the dotcom bust in 2000, then the 9/11 attack the following year and, more recently, the near collapse of the global financial system in 2008.

The spectacular rise in the price of gold in recent years shows that it is clearly playing a role in the GFC and its aftermath. The RBA's public statement was co-signed by Ric Battellino, who is now deputy governor of the bank. At the time, he served as assistant governor for financial markets. The RBA paper noted at the time that gold holdings in the US and Europe remained high, with the US holding 75 per cent of its reserve assets in gold.

"Central banks traditionally hold gold because of its ability to be used in the event of a crisis in the international financial system; it is the only reserve asset that is not a claim on some other government, international institution or bank. However, over the past two or three decades, the world has experienced a number of economic 'crises', but gold played no part in coping with them," the paper said. The paper argued that continuing development of financial system meant that circumstances which would require Australia to call upon our gold holdings for economic reasons looked increasingly remote.


Sorry peter, but you missed the boat mate.
Edited by frankrider, 17 Dec 2012, 07:15 AM.

Negative gearing is a form of leveraged speculation in which a speculator borrows money to buy an asset, but the income generated by that asset does not cover the interest on the loan

A negative gearing strategy can only make a profit if the asset rises so much in price that the capital gain is more than the sum of the ongoing losses over the life of the speculation. http://en.wikipedia.org/wiki/Negative_gearing
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carter
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Tasman Vagrant

Bump. How times change! The spruikers have taken over!
frankrider
15 Dec 2012, 12:04 AM
I'm a bear, and just so as people know my motives it's because I have a large position in GOLD. If we see good times and economies rebound etc my assets will fall. I want a true depression and monitary collapse thank you very much.
Good call.
Strindberg
15 Dec 2012, 12:47 PM
Thanks for the anecdote.

So,

- your house has risen in value by 400% whilst providing accommodation for you and your family

- your gold has risen in value between 50% and 250% whilst providing nothing.
It will be a different story after the housing bubble pops.
Edited by carter, 24 Oct 2013, 06:26 PM.
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stinkbug
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carter
24 Oct 2013, 06:16 PM

It will be a different story if the housing bubble ever pops.
Fixed it for you.

I've been hearing about the bubble for 12 years now, and it's as much bullshit now as it was in 2001.
---------------------------------------------------------------

While it's true that those who win never quit, and those who quit never win, those who never win and never quit are idiots.

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Dr Kinetoscope
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miw
16 Dec 2012, 12:08 AM
+1. It is an ongoing conversation.

Obviously fuelled by booze, testosterone, mogadon and sometimes even more exotic things (thanks Mel!), but a conversation all the same.
+ 2

Though Foxbat isn't doing the bulls any favours at the moment
Architecture Porn
ShadBerg's torrid Macrobusiness love affair
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