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Stock Market Spanked
Topic Started: 18 May 2012, 01:43 PM (1,928 Views)
justin007
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TED BULLPIT
18 May 2012, 03:34 PM
Sums it up quite well, good work Doubtful ;)
isn't there is a hell of a lot of leverage in the gold market though?
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miw
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Doubtful
18 May 2012, 03:23 PM
nope. gold is. then cash.

Or any invesment option that isn't inflated by cheap credit.
Well, "cash" really means forex or bonds, so I had that covered.

Gold is a commodity, so had that covered too.

They both have their problems as well though.
The truth will set you free. But first, it will piss you off.
--Gloria Steinem
AREPS™
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MOFO
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Future
18 May 2012, 01:43 PM
But house prices are as solid as a rock. The experts are saying more cheap loans so shit's going to go ballistic.
Despite what we see from the RP data "daily index" - house prices are somewhat more illiquid than stocks... the feedback loop is slower - and of course not as related to Europe issues.. it is a secondary affect, based on ease of credit and then the local market (stocks, employment) which will impact housing.
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justin007
18 May 2012, 03:37 PM
isn't there is a hell of a lot of leverage in the gold market though?
Yes all commods are traded on high leverage, if your going to invest in either of these take physical possession. Paper gold and silver in any form really exposes you to the same counterparty risks as investing in any "financial asset", and bugger all gold or silver actually backs these paper ounces. If you want exposure to cold hard assets buy cold hard assets, not a paper mirage.



Enjoy The Ride!
Enjoy The Ride!

The case for individual freedom rests chiefly on the recognition of the inevitable and universal ignorance of all of us concerning a great many of the factors on which the achievement of our ends and welfare depend. It is because every individual knows so little and, in particular, because we rarely know which of us knows best that we trust the independent and competitive efforts of many to induce the emergence of what we shall want when we see it. Humiliating to human pride as it may be, we must recognize that the advance and even the preservation of civilization are dependent upon a maximum of opportunity for accidents to happen.”
― Friedrich A. von Hayek


"I, on the other hand, am a fully rounded human being with a degree from the university of life, a diploma from the school of hard knocks, and three gold stars from the kindergarten of getting the shit kicked out of me." Blackadder.


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miw
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Enjoy The Ride
18 May 2012, 06:35 PM
Yes all commods are traded on high leverage, if your going to invest in either of these take physical possession. Paper gold and silver in any form really exposes you to the same counterparty risks as investing in any "financial asset", and bugger all gold or silver actually backs these paper ounces. If you want exposure to cold hard assets buy cold hard assets, not a paper mirage.
The products vary widely. Looking at the prospectus for GLD for example, the portfolio is "100% Gold Bullion". In other words, they have their NAV in gold bullion and manageent fees pay storage charges. On the other hand, there are products that just own futures and no actual metal (so you own some percentage of a futures position), and there are even ETNs that promise to "track" the price but you own no no assets at all - you essentially have an unsecured note with the issuer of the ETN.

Caveat Emptor.
The truth will set you free. But first, it will piss you off.
--Gloria Steinem
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raveswei
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NotFooled
18 May 2012, 03:04 PM
But is property the investment of least suckiness at our current period in history?
no

during periods of debt deflation cash is the king (not even gold)
somebody with cash can buy a better house, more shares or gold than than6 months or a year ago,


what we will see for some time is rise in prices of necessities (food, energy, ...) and fall in other assets (shares, properties, ...)
http://popping-bubble.blogspot.com/

Thinking of an Australian property speculator (PI):
Inaction = missing opportunities.
Missing opportunities = losing.
Too much thinking = inaction.
Thinking = missing opportunities.
Therefore thinking = losing.

disgraceful little man Frank Castle owes a house to Salvation Army

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justin007
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Enjoy The Ride
18 May 2012, 06:35 PM
Yes all commods are traded on high leverage, if your going to invest in either of these take physical possession. Paper gold and silver in any form really exposes you to the same counterparty risks as investing in any "financial asset", and bugger all gold or silver actually backs these paper ounces. If you want exposure to cold hard assets buy cold hard assets, not a paper mirage.



Enjoy The Ride!
I 100% agree with you on taking physical delivery over buying contracts..

The problem is that under the current system the paper price transpires to spot price of physical metal. The paper market is leveraged up to its eyeballs and can be liquidated for any reason at any time.. look at what happened in 2008.

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justin007
18 May 2012, 08:29 PM
I 100% agree with you on taking physical delivery over buying contracts..

The problem is that under the current system the paper price transpires to spot price of physical metal. The paper market is leveraged up to its eyeballs and can be liquidated for any reason at any time.. look at what happened in 2008.
By taking possesion of the physical metal, you detach yourself from the highly leveraged paper casino. Sooner or later the price of the physical will reflect its scarcity and desirability. Over time precious metals will always retain their purchasing power unlike fiat currencies which are willingly and purposefully devalued by central bank inflation targeting.




Enjoy The Ride!
Enjoy The Ride!

The case for individual freedom rests chiefly on the recognition of the inevitable and universal ignorance of all of us concerning a great many of the factors on which the achievement of our ends and welfare depend. It is because every individual knows so little and, in particular, because we rarely know which of us knows best that we trust the independent and competitive efforts of many to induce the emergence of what we shall want when we see it. Humiliating to human pride as it may be, we must recognize that the advance and even the preservation of civilization are dependent upon a maximum of opportunity for accidents to happen.”
― Friedrich A. von Hayek


"I, on the other hand, am a fully rounded human being with a degree from the university of life, a diploma from the school of hard knocks, and three gold stars from the kindergarten of getting the shit kicked out of me." Blackadder.


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miw
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raveswei
18 May 2012, 07:53 PM
no

during periods of debt deflation cash is the king (not even gold)
somebody with cash can buy a better house, more shares or gold than than6 months or a year ago,


what we will see for some time is rise in prices of necessities (food, energy, ...) and fall in other assets (shares, properties, ...)
The AUD would have to be just about the worst and riskiest asset to hold right now. Even the Euro is safer. OK. Australian shares might be worse.
Edited by miw, 19 May 2012, 02:32 AM.
The truth will set you free. But first, it will piss you off.
--Gloria Steinem
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NotFooled
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The Bear Whisperer

miw
19 May 2012, 02:31 AM
The AUD would have to be just about the worst and riskiest asset to hold right now. Even the Euro is safer. OK. Australian shares might be worse.
The AUD may have a largish downside, but surely there are far riskier assets?
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