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  • How Often Does S&P 500 Have 10% And 20% Negative Price Moves? [View article]
    that's good, always loved a mystery
    Mar 20, 2013. 06:32 PM | Likes Like |Link to Comment
  • How Often Does S&P 500 Have 10% And 20% Negative Price Moves? [View article]
    Is there something relevant about your comment that escapes me?
    Mar 19, 2013. 08:36 PM | 1 Like Like |Link to Comment
  • Market Conditions For Gold [View article]
    Bottom line, this fund and others like it are not insured. The custody banks have fidelity insurance that pays in the event of bad acts by employees, but those policies have minimal limits compared to the value of the gold that could be potentially stolen. There is probably not an insurance company in the world that could cover a total loss -- those assets are essentially uninsured.

    If a bank employee steels a few million dollars worth, there is probably a reimbursement means (if they discover the loss), but if the vaults were emptied by some scheme or looted in a civil war or other war, for example, good-bye assets
    Feb 13, 2013. 04:12 PM | Likes Like |Link to Comment
  • Market Conditions For Gold [View article]
    Fishfyer, that was my point -- it took 30 years to heal when were were on top and not we are not, and then we just had the debt, so now our problem is several times larger with less ability to deal with it
    Feb 13, 2013. 04:07 PM | Likes Like |Link to Comment
  • Market Conditions For Gold [View article]
    That is why I said "approximately" 10%. Your are correct that it was 9.7% yesterday, but if you chart the daily OHLC bars, you will see that as of late the ratio varies between 10.5% and 9.5%
    Feb 13, 2013. 11:02 AM | Likes Like |Link to Comment
  • Market Conditions For Gold [View article]
    Yes, the debt problem is horrible, and when interest rates rise it will be so much worse. The debt is small compared to the unfunded promises.

    For the debt alone, here is a link to our blog where we have a chart showing the size of the federal debt to the size of the federal receipts since 1947.

    We are not at the levels we had coming out of WW II and that took 30 years to work off -- and that was when we were top dog, and did not have all these unfunded promises.

    It would be a major leap however, to predict when and how that will all be unwound, and just how that results in deflation or inflation, and how gold will be viewed in that context. I'll leave that one for people with better crystal balls than mine.
    Feb 13, 2013. 08:51 AM | 3 Likes Like |Link to Comment
  • Regression And Volatility-Based 1-Year GLD Price Projections [View article]
    Stu -- in this case we are not discussing the merits of gold or a gold ETF versus physical gold -- we are just discussing the past and probable price behavior of the gold ETF as a trading vehicle.
    Nov 5, 2012. 11:10 AM | Likes Like |Link to Comment
  • An Argument For Gold 'Value' Of $1100 [View article]
    Then I suggest you stop reading SA articles. Who is the greater fool, the authors who you say know nothing, or you who spend your precious time on earth reading what you consider to be worthless content.
    Nov 3, 2012. 02:02 PM | 3 Likes Like |Link to Comment
  • An Argument For Gold 'Value' Of $1100 [View article]
    I have no idea what you are talking about. What is the wrong data your reference.
    Nov 3, 2012. 02:01 PM | 2 Likes Like |Link to Comment
  • An Argument For Gold 'Value' Of $1100 [View article]
    That is certainly a reasonable thing to say.
    More directly to the question might be to eliminate just look at the main currencies which also have the largest central bank holdings and related those to see where it goes. I think comes out around $1,800 to $4,000 depending on a few different assumptions. Your $2,500 is in that range.

    If you care to see how I arrived at those two numbers, its in my recent blog post.

    There no right number, of course, and no perfect way to set a metric, but trying them all on for size can help create a comfort range for prices.

    In the end they are all just educated guesses, but an educated guess is better than a just rolling the dice.
    Nov 2, 2012. 05:04 PM | Likes Like |Link to Comment
  • An Argument For Gold 'Value' Of $1100 [View article]
    If you can get me the old data, I would be pleased to chart it for you.
    Nov 2, 2012. 02:14 PM | Likes Like |Link to Comment
  • An Argument For Gold 'Value' Of $1100 [View article]
    To be clear, neither article says what gold is worth. Each article attempts to quantify arguments that others make about worth, in an effort to bracket the range of opinions outside of which prices are less likely to occur. Just as a technician seeks support and resistance lines, these studies are seeking forms of value support and resistance. As Eric Peterson said in a reply, study of questions is never meaningless. What may be pointless, however, is attempting to share the exploration of ideas with people who already "know" all they need to know and react badly to information that does not conform to their preset beliefs.
    Nov 2, 2012. 10:52 AM | 2 Likes Like |Link to Comment
  • An Argument For Gold 'Value' $4000 Plus [View article]
    I see your point, but I am not propagating a myth, but rather attempting to analyze behavior to understand why and where prices are and might be.

    Take technical analysis. Are support and resistance lines real - No they are just ideas. Are there a sufficient number of people who pay attention to them that they impact behavior - Yes. So in that case is studying a not real thing that really impacts behavior silly -- No, not if you want to know what the other guy is likely to do.

    Remember the scene in the movie Patton, where the George C Scot as the general is looking through binoculars at the battle field as his tanks are defeating Rommel's tank. In that scene he says, " I read your book you son of bitch."

    I try to find the other guy's book and be aware of what makes him tick.

    I think that for those investors who believe that gold is real money and that fiat currency should be tied to gold (I am not saying where I am on that), the ratio of currency to gold quantity creates support and resistance lines for them (however weak or strong) the same way that peaks and valleys create trendlines and support and resistance for technical chart readers.

    Sometimes they work and sometimes they don't. This exploration is looking for something that might create some level of support or resistance for the price of gold.

    It makes sense to me, and doesn't make sense to you, but that is what makes a market. So far I am ahead of the game with gold, having been in, having been out, and trading Puts and Calls around it.

    I am not attempting to talk gold up or down (and would be really ridiculous to think anything I have to say could accomplish that), nor talking my book, because I don't say what my net position is, and my net position varies from long to short, and I am not attempting propagate a myth, but am trying to understand motivations whether based on myth or science.

    Sorry it has caused so much stress to expose my exploration to public view. However, I'll trudge on.
    Nov 2, 2012. 10:43 AM | 3 Likes Like |Link to Comment
  • An Argument For Gold 'Value' $4000 Plus [View article]
    The "let's assume ..." is part of this hypothetical exploration. To the extent that was not clear to you in the body of the article, please note that is is stated and repeated several times in my comments.

    But there is a valid reason to consider that convertibility assumption: (1) central banks hold gold and report them in their monetary reserves, giving rise and support in some people's minds that somehow convertibility is still a potential; and (2) many investors hold to the believe that gold is real money and either should or will become legal tender again some day, whether in the normal course of business or when economies collapse. That makes is reasonable to evaluate what that would mean in terms of pricing the central bank gold such that if the paper currency were fully convertible and redemption of all currency exactly depleted the central bank holdings. It is "an argument" not the only argument. It is an exploration of an angle of view. I am personally comfortable discussing a variety of angles of view, of which this is one, even if the angles are divergent or even contradictory in their outcomes. However, with respect to gold and some other assets, such as Apple stock, there are those who are so wound up in their belief system about the asset, that they become angry or hostile at the mere existence of discussion of views that to not conform to our support their beliefs. That is evident in many gold articles. If I had said that gold is a unique thing unto itself that has no limit as to how high it could go and would not be anchored to any other financial consideration, I might have gotten many cheers, but I sought to present some data that has some plausible basis for influencing the worth evaluation, and have sent some people through the rough, including in another article someone who said the idea is so ridiculous that he wouldn't read the article -- now there is a real intellect -- title not appealing so article wrong and not worth reading.

    While going back to the gold standard may be highly unlikely to ever come back, that does not prevent people from holding to that hope or expectation, and therefore to act upon it.

    Let me ask you though, if convertibility is impossible as a future world, why to any central banks hold and report gold in their reserves? Why doe the IMF hold gold and report is as part of their reserves and issue special drawing rights for use by nations against which their report some element of the IMF and separate nation gold holdings? Why do some nations still accumulate gold for their central banks? If they did so only as an investment, why then don't they also holding corporate stocks and real property as investments -- because they don't consider those assets to be money would be the answer.

    Anyway, I will continue to explore inter-market and inter-asset relationships to find anchors and markers for value for gold as I do for a spectrum of assets.

    Having shed enough of my own blood in this thread so far, I will sign off this discussion, as I have nothing further that I can possibly say about the matter.

    As for the possible visual correlation (note correlation, not causation) relationship of gold to other financial dimensions, you might find this post on my blog interesting. It charts the long-term (in many cases back to 1968) relationship between the London gold fix to things like US government debt, cost of living, M0, M1 and M2, GDP, S&P 500, West Texas Crude, Copper, Silver, Corn & Soybeans, 10-Year Treasury Yields, and the Dow Jones AIG Commodities index.

    It's just the pursuit of curiosity. Read it if your are curious, but please don't read it if open ended exploration could be upsetting. I still hold to the money in circulation thesis as being as good as any other method, but that none have a perfect correlation -- that is because price fluctuates around value.
    Nov 2, 2012. 08:52 AM | 1 Like Like |Link to Comment
  • An Argument For Gold 'Value' $4000 Plus [View article]

    First, I did not say it is the best way. I said it a way. These articles are explorations of ideas, not final conclusions or statements declarations of ultimate truths.

    Second, you are missing the entire point. I realize that gold is worth what it is worth, but what does that mean? That is not a stupid question.

    If a convertibility standard existed, as it has in the past, such that all paper currency of the US and Europe, for example, was fully convertible, then how may units of those currencies would be required to liquidate the central bank holdings. That is the simple question that is posed and answered here.

    So long as central banks hold gold, one can assume that at some level they see it as a form of money. And, so long as a significant number of investors think of gold as the "real" money, then there has to be some relationship between the fiat money that is currently used to represent the "money" in the world, and the gold that others believe should be the "money" of the world.

    Is that not a worthy exploration?

    It is a simple mental exercise, that you may not find interesting or useful in your work, but that does not make the question "stupid" as Charles Price says.

    The ratio is one of probably several indicators one might chose to consider when going beyond what Mike Eberhardt says, which is that price does not matter and that gold is a philosophy and insurance against government foolishness -- but how to measure the foolishness.

    I think one way (not the only way) is to keep an eye on the the ratio of the total issued paper currency to the quantity of gold held by the issuing government over time.

    I seek something more tangible than a philosophy to risk my money, and I desire some form of yardstick to help me decide if and when any investment, including gold, is overpriced or underpriced.

    No, I do not think you are stupid, but neither am I. We just don't see things the same way.
    Nov 2, 2012. 01:33 AM | 1 Like Like |Link to Comment