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The Gold Bull is DEAD. Long Live The Gold Bull.; It ain't over yet flyboy.
Topic Started: 18 Jul 2013, 12:53 AM (16,417 Views)
Blondie girl
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goldbug
22 Jul 2013, 08:10 PM
While the rest of you have been debating house prices, gold has been slowly creeping back up. Today it is $1430 aussie, only $370 shy of it's all time peak here at $1800. Paper manipulation of the gold price has a dramatic effect on the public mind and I am sure it has scared a lot of the paper investors out. But for us holding onto the yellow metal itself, these little pullbacks are irrelevant in the context of a long term bull market.
Oooohhh
Goldbug congrats in deciding to be member.... You gold faithful.... ;)

I ponder this
Will we see gold reclaim the high values it reached post GfC....hmmm

Yeah...

Cycles ....it requires the suckers of
New blood of die hard buyers who have not suffered to get into the temptation of gold.
Newjerk? can you try harder than dig up another person's blog. My first promo was with Billabong and my name in English is modified with a T, am Perth born but also lived in Sydney to make my $$
It's Absolutely Fabulous if it includes brilliant locations, & high calibre tenants..what more does one want? Understand the power of the two "P"" or be financially challenged
Even better when there is family who are property mad and one is born in some entitlements.....Understand that beautiful women are the exhibitionists we crave attention, whilst hot blooded men are the voyeurs ... A stunning woman can command and takes pleasure in being noticed. Seems not too many understand what it means to hold and own props and get threatened by those who do.
Banks are considered to be law abiding and & rather boring places yeah not true . A bank balance sheet will show capital is dwarfed by their liabilities this means when a portions of loans is falling its problems for the bank.
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goldbug
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Blondie girl
23 Jul 2013, 12:15 AM


Cycles ....it requires the suckers of
New blood of die hard buyers who have not suffered to get into the temptation of gold.
Or residential houses...

The trick with cycles :)
is to see their beginning... and then logically predict their...........END!

In markets the end is obvious, and was written about over 100 years ago.
"Extraordinary Popular Delusions and the Madness of Crowds"
Or
John Galbraith’s: A Short History of Financial Euphoria.

One salient indicator is always there, the crowd....
The crowd rushes in, and it is over. Now if I look back over the decade of the 2000's do I see everyone in Australia buying Gold and raving about it on TV and at every dinner party??? No.

That was the decade of the "Investment Property Mania", the end of a 35 year bubble. The decade of the 2010's is Gold's decade. So don't miss the boat.. toot toot.
Shadow was hopelessly wrong about the Gold Bull Market.
What else is he wrong about?
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propertymogul
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miw
19 Jul 2013, 07:19 PM
Not quite. Setting a reserve fraction is a blunt instrument that is no longer used in the more advanced economies. Even in the US, where (I believe - someone correct me if I am wrong) there is still a reserve requirement as a fraction of deposits, the banks are not reserve constrained because regulation has moved onto the BASEL model, where banks are constrained by:

a) Tier I capital as a percentage of risk-weighted assets (note assets, not liabilities as in the case of the fractional system)
b) Tier I + Tier II capital as a percentage of of risk-weighted assets
c) (Basel III) Liquidity requirement as a percentage of deposits (liabilities come back into the equation)

and of course there are local non-Basel requirements such as APRA requiring the banks to have a certain term of of funding, and on top of that the requirement from their shareholders that they be profitable.

All of these constraints constrain the amount of lending a bank can do.

This is why people tend to hit the skip key when someone throws in "fractional reserve" as if it is a meaningful thing. The author is either centuries behind the times or they are decades behind the time or (far more likely) they are just throwing in random epithets to confuse and scare the punters. In any case there is no need to read on. Nothing to see here.

Once again, not quite. Under Basel the amount a bank can lend is constrained by deposits (liquidity requirement - but note that if the bank had no deposits there would be no liquidity constraint!) but much more importantly by their Tier I Capital (essentially equity plus preferred shares) as a percentage of their risk-weighted assets (essentially the amount of their loan book which would be at risk in a bad crisis).

It really is a different way of looking at things from the old reserve-constrained model, but actually also more onerous unless the reserve fraction was very high (as it is in China, for example.)



Bloody good question which I have never seen a good answer to. Hopefully somebody can enlighten us both on this one. There are of course lenders who are not deposit-taking institutions.
Thanks Sydneyite, PF, Strindberg and MIW for the information around the banking system. Gen X also did a great post on a separate thread which explains a lot.

It is quite a complicated system (at least for my intellect), probably more so because the general public is definitely not educated on how it works, for something so central to the economy the operation of it is not taught in detail at school or even university (I did a BCom). My new understanding of the role deposits play is that they are actually one of the sources of funding for banks (i.e. they loan these deposits out). The reason most banks want deposits is that they are generally a cheaper source of funds than from other banks. On the flip side this creates a big risk that a substantial proportion of depositors suddenly want their funds back it exposes the bank to having to refinance from more expensive sources. Very much a confidence game if I understand that correctly.

Definitely bookmarking this thread for future reference.
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Count du Monet
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propertymogul
23 Jul 2013, 10:47 AM
. On the flip side this creates a big risk that a substantial proportion of depositors suddenly want their funds back it exposes the bank to having to refinance from more expensive sources. Very much a confidence game if I understand that correctly.



Actually more the opposite is true. Regular savers such as depositors are more reliable. It's the money market funds that will turn on a knife edge because they are looking immediate advantage. Originally retail banks where banned from directly accessing market funds due the instability they create.
The retail depositors are the last resort to maintain system stability, if they pull out then the entire game is over.

Money is the unit of account, and that is why it is real article. MMT is patent nonsense, without cash there is no accounting that is highly liquid for investing surplus. They tried it in Soviet Russia and it didn't work.
The next trick of our glorious banks will be to charge us a fee for using net bank!!!
You are no longer customer, you are property!!!

Don't be SAUCY with me Bernaisse
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Admin
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Gold holds at one-month highs

July 23, 2013 - 11:41AM

Gold was trading near its highest in a month this morning after gaining 3 per cent the session before and breaking through key resistance at the $US1300 level.

A weaker US dollar supported bullion prices, but stricter Indian import rules and continued outflows from exchange-traded gold funds could cap gains.

Spot gold was flat at $US1335 an ounce after hitting a one-month high of $US1338.91 on Monday, as speculators fearing a reversal of the recent downward price trend rushed to buy back bearish bets.

It was gold's heftiest one-day gain in 13 months and its three-day rally is the biggest in almost two years. Also contributing was heavy short covering as futures investors anticipating the start of delivery period on August contracts rolled positions from August to December. The first day for delivery notices is July 31.

Gold has now rallied of 4.6 per cent since Thursday, its biggest three-day gain since October 27, 2011.

"With more shorts being built over the last couple of months, it's not surprising to see that the shorts have to cover their positions with the increase of prices," said Carlos Sanchez, director of commodities and asset management at CPM Group.

Technical buying helped bullion to hold onto its gain after spot gold ended above its 50-day moving average for the first time since November 2012.

However, possible renewed bearish bets by funds combined with India's tightening gold import rules suggest bullion prices could come under pressure, analysts said.

As well as the unwinding of short positions, weaker-than-expected US housing data overnight has also been a factor, said Jordan Eliseo, chief economist at precious metal supplier ABC Bullion.

Read more: http://www.smh.com.au/business/markets/gold-holds-at-onemonth-highs-20130723-2qfe7.html
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Admin
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Gold miners sparkle as precious metal rallies

July 23, 2013 - 1:52PM
Glenda Kwek

Gold mining stocks are rallying for the second straight day as the precious metal recorded its biggest gain this year.

Gold soared more than 3 per cent overnight, boosted by an unwinding of short positions and weaker-than-expected US housing data. The weaker data also saw the dollar fall against its major counterparts, lifting the gold price. Gold is sold in the US currency.

Gold was trading 2.5 per cent higher, at $US1337.60, about noon.

"Yesterday we saw nice gains broadly across the sector and that will carry on today I think," Leyland Asset Management senior portfolio manager Rohan Schmidt said.

Gold companies the best gainers on the market

Australian gold companies made up eight of the top 10 gainers in early trading on the stock market today. Sirius Resources, an exploration company focusing on gold, nickel and base metals, was the early leader on the ASX200 and was up 11.11 per cent at midday.

The second best performer was Evolution Mining with a lift of 6.88 per cent. Newcrest Mining recorded a 6.44 per cent rise and Cudeco a gain of 5.28 per cent.

Kingsgate Consolidated had a 4.80 per cent rise, Paladin Energy a 4.33 per cent gain and Panaust Ltd a 3.97 per cent lift. Oceangold rose by 3.92 per cent.

"They have been bashed about of late and you'll probably want to look at the companies that don't have any management or issues that have hurt them in the past such as Newcrest, and you want to look at companies that are the lowest-cost producers," Mr Schmidt said.

Gold miners were also among the best performing members on the Australian stock market on Monday. Medusa Mining had the most gains on the ASX200, rising 15 per cent. St Barbara lifted by 7.63 per cent, Evolution Mining by 7.5 per cent and Perseus Mining by 7.4 per cent.

Oceangold, Silver Lake Resources, Kingsgate Consolidated, Beadell Resources and Newcrest Mining were also among the top 10 gainers.

Read more: http://www.smh.com.au/business/markets/gold-miners-sparkle-as-precious-metal-rallies-20130723-2qgfc.html
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goldbug
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Gold Surges 3% - COMEX Default May Lead To Over $3,500/oz

Gold surged over 3% yesterday due to what appears to be have been significant short covering due to concerns about gold backwardation and the continual haemorrhaging of gold inventories from the COMEX.

Concerns about a default on the COMEX, once the preserve of a few observant market watchers, are becoming more widespread as we appear to be witnessing a run on the highly leveraged bullion banking system.

Very robust physical demand from the Middle East, Asia and particularly China and a decline in the dollar also helped prices log their biggest one-day gain in over a year and their first close above $1,300 an ounce in nearly five weeks.

Gains in silver futures, meanwhile, outpaced gold’s rise, with silver surging 5%.

Gold may have been higher also due to the weak U.S. dollar which is under pressure from poor U.S. home sales and comments from Bill Gross, PIMCO co-chief investment officer, who said he expected the Fed won't tighten policy before 2016.

Gold has recovered nearly $150 or more than 12% in less than a month since hitting a three-year low of $1,180/oz on June 28th. Gold has made the strong gains due to robust physical demand as seen in the still high premiums in Asia.

Respected investor and precious metals guru, Jim Sinclair has again warned of a risk of a default on the COMEX and said that gold prices will rise to $3,500/oz and that gold at $50,000/oz is “not out of the question.”

“The cause of today’s spectacular rise in the gold price is the reality that with Friday continues large drops in the Comex warehouse gold inventory. No cogent argument can be formed against the reality that because of the continued fall in gold inventory that within in 90 days or sooner the Comex must change its delivery mechanism.”

Sinclair, said that the COMEX would have to move to cash settlement as they do not have nearly enough gold bullion to make deliveries and warned that owners of futures may be forced to accept payment in the form of the SPDR GLD ETF. This which would make them unsecured creditors of the bullion banks who are the custodians and sub custodians of the SPDR GLD.

He said that this could lead to the GLD ETF being “destroyed” and said that “it is a truism in gold that which is convertible into gold will in fact be converted over time.”
http://tinyurl.com/l8dsgag
Shadow was hopelessly wrong about the Gold Bull Market.
What else is he wrong about?
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miw
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goldbug
24 Jul 2013, 05:19 AM
Gold Surges 3% - COMEX Default May Lead To Over $3,500/oz

Gold surged over 3% yesterday due to what appears to be have been significant short covering due to concerns about gold backwardation and the continual haemorrhaging of gold inventories from the COMEX.

Concerns about a default on the COMEX, once the preserve of a few observant market watchers, are becoming more widespread as we appear to be witnessing a run on the highly leveraged bullion banking system.

Very robust physical demand from the Middle East, Asia and particularly China and a decline in the dollar also helped prices log their biggest one-day gain in over a year and their first close above $1,300 an ounce in nearly five weeks.

Gains in silver futures, meanwhile, outpaced gold’s rise, with silver surging 5%.

Gold may have been higher also due to the weak U.S. dollar which is under pressure from poor U.S. home sales and comments from Bill Gross, PIMCO co-chief investment officer, who said he expected the Fed won't tighten policy before 2016.

Gold has recovered nearly $150 or more than 12% in less than a month since hitting a three-year low of $1,180/oz on June 28th. Gold has made the strong gains due to robust physical demand as seen in the still high premiums in Asia.

Respected investor and precious metals guru, Jim Sinclair has again warned of a risk of a default on the COMEX and said that gold prices will rise to $3,500/oz and that gold at $50,000/oz is “not out of the question.”

“The cause of today’s spectacular rise in the gold price is the reality that with Friday continues large drops in the Comex warehouse gold inventory. No cogent argument can be formed against the reality that because of the continued fall in gold inventory that within in 90 days or sooner the Comex must change its delivery mechanism.”

Sinclair, said that the COMEX would have to move to cash settlement as they do not have nearly enough gold bullion to make deliveries and warned that owners of futures may be forced to accept payment in the form of the SPDR GLD ETF. This which would make them unsecured creditors of the bullion banks who are the custodians and sub custodians of the SPDR GLD.

He said that this could lead to the GLD ETF being “destroyed” and said that “it is a truism in gold that which is convertible into gold will in fact be converted over time.”
http://tinyurl.com/l8dsgag
Gold certainly has had a nice pop over the past little while, but you'd be hard put to find a higher density of wild-eyed speculation and outright untruth than in these few paragraphs.
The truth will set you free. But first, it will piss you off.
--Gloria Steinem
AREPS™
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Trojan
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miw
24 Jul 2013, 01:43 PM
Gold certainly has had a nice pop over the past little while, but you'd be hard put to find a higher density of wild-eyed speculation and outright untruth than in these few paragraphs.
Are you sure?
I was about to sell the family home and put it all into gold. And when it does go up to $50,000 per ounce, I can buy 50 houses back (or 90 if house prices crash more than 40% in the meantime).
I put trolls and time wasters on my ignore list so if I don't respond to you, you are probably on it ....
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Count du Monet
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Quote:
 
Gold surged over 3% yesterday due to what appears to be have been significant short covering due to concerns about gold backwardation and the continual haemorrhaging of gold inventories from the COMEX.


It depends what they mean by "default". Technically Comex has defaulted before by not delivering metal to pure speculators and giving scarce supplies to industry. However they did pay them 125 cents in the dollar, so the speculators were well compensated. In other words if speculators are satisfied with a payout in paper dollars, the FED press will accommodate them and there is no great shortage of gold. However gold did rise steeply for the 3 years after the last "default".
The next trick of our glorious banks will be to charge us a fee for using net bank!!!
You are no longer customer, you are property!!!

Don't be SAUCY with me Bernaisse
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