DiggerUK's Comments

Gold Consolidates at $1,100 as U.K. Credit Rating Is Under Review

Tue, 10 Nov 2009 12:33:53 -0500

The $US is weakening against all the world's currencies, we don't have to wait for the "reason to become apparent"
The race to debase is like watching re-runs of Wacky Races, the winner to be the one that crashes last, or least.

Even the $Zim is back in the race.
www.oanda.com/convert/...
www.oanda.com/convert/...

India, China and Gold

Thu, 05 Nov 2009 16:52:09 -0500

Aiki,
Not exactly what I have been looking for. Got this from IMF site as well.
It doesn't say a lot.

Did India get 1/2 because it bid highest, was anybody else bidding, has anybody else bought, did anybody else want it, did anybody else get a look in?
It's the politics behind it all I'm trying to get to the bottom of.

The IMF gold sale soap opera, has been running for a long time now. And just like a soap it is at the final episode.
But this ain't soap, it's reality. Much more gripping.

China, Korea Driving East Asia / Pacific Economic Resurgence

Thu, 05 Nov 2009 16:33:24 -0500

Hmm-mm,
Would Mrs.Clinton be happier if S.Korea or China got to buy any of the second tranche of IMF gold.
Interesting info in this article.

India, China and Gold

Thu, 05 Nov 2009 16:20:04 -0500

I have been burning my eyes out on the web for a couple of days now, trying to find the process by which the IMF's gold is sold.

Who decides?
What committees decide?
Were in the IMF site is the sales process outlined?
Were are the minutes?

Anybody got a clue, we woke up a couple of days ago to find out the gold was sold to India, and that's it.

Any bets as to who gets the next tranche.
Australia? Japan? S.Korea? Saudi? Brazil?

Incurious Gold Manipulation Theorists

Tue, 03 Nov 2009 19:22:08 -0500

@ Screwloose,
The trade in the lease is mainly for collateral, not collection of physical.

Once the trade that the leased gold was covering for has served it's purpose, then the lease arrangement ends. Much the same as when you hand back the keys to a property, or a car, you have rented.

As the collateral might only be needed for a few hours, so that someone in India gets paid off someone in Europe that's it. Lease the gold back out as quick as possible. Just like a car rental. Fast turnover = high profits.
Gold is after all the oldest international currency, it just has it's own "forex"

No time for me to pass comment on the 90's carry trade. But I seem to recall that 50 (?) tonnes of India's gold was taken as physical collateral for loans in 1990 (?) by the BOE if memory serves me correct. Now that is what I call drastic. And don't forget that history rhymes.

Late here. See you around.

Why the IMF's Indian Gold Sale Matters

Tue, 03 Nov 2009 18:49:02 -0500

Seeking Alpha is trotting out articles on the IMF sale to India at a rate of knots, all of them failing to answer one question.
By what process was it decided that India gets 200 tonnes?
Dying to know the answer to that one.
(Hillary Clinton been sticking her oar in round the back somewhere ? Who knows.)

"I always thought that some of it would be sold off-market, but it was a bit of a surprise that as much as 200 tons had been sold off-market," Bank of Nova Scotia director of precious metals sales Simon Weeks told Reuters.
And this is someone who works for a bank that does the London Gold Fix twice a day.
www.lbma.org.uk/assocn...

Place your bets on who gets the rest.
Japan? Brazil? Mexico? Saudi? Australia? Iceland?

Incurious Gold Manipulation Theorists

Tue, 03 Nov 2009 18:17:38 -0500

@ Screwloose,
There is a world of difference between physical and paper gold. Paper gold has a third party risk, physical doesn't.
CB's and bullion banks are different entities anyway. They each have their own stack.

They also exist for different reasons. The bullion banks to smooth the path of international trade mainly, the CB's to regulate the states currency.
If a leasing arrangement is entered into by the CB it is just doing it's job of protecting the states currency. But it isn't selling the stack in the national vault, just allowing it to be used as collateral mainly.

As you can see from this link it is leased gold that is traded most, not physical.

www.ifsl.org.uk/output...

Incurious Gold Manipulation Theorists

Tue, 03 Nov 2009 17:52:24 -0500

@nobby73,
The conspiracy theorists argue, that since the London Gold Pool days of the 60's pog has been suppressed by CB selling of gold.
The sums do not add up, there has never been enough gold mined for the theory to stand.
Anyway the communist countries were providing all the gold that was needed for western CB's to sell on.

CB's lease gold mainly to earn a few bob, and facilitate international trade, not manipulate the price.
It has a transitory effect on the price, but that's all.
And after the best part of 50 years, if CB's were seriously over-leasing the secret would have come out by now.

If they have been over leasing then like all conspiracies it will come crashing down. Gold cannot be quantitatively eased into existence, much as you claim it can.

Gold Fever Spreads to India

Tue, 03 Nov 2009 17:28:16 -0500

On Nov 03 05:01 PM Roger Knights wrote:
"The mode of the music has changed."

Hallelujah. Somebody has risen beyond the shell shock of the IMF gold finally being sold with some joined up thinking.

As for me, now I'm at the manipulator and conspiracy theorists funeral, can I just say that I couldn't stand them when they were alive.

Remember this day, a day that will go down in infamy for some , deep joy for others.

India's Gold Grab Boosts Metal's Price

Tue, 03 Nov 2009 17:16:54 -0500

After years of never having the manipulation theory put to a real test, the much talked over IMF gold sales begin.
The first half goes to India, and the price of gold rises.

Be interesting to know who gets the second half of the gold tranche.
Japan ? Saudi ? Australia ? Brazil ? Iceland ?

GATA headquarters must look like the HQ of the party that just lost the election when the final vote has been counted on election night.
Today was the day manipulation theorists lost the argument for good.

Incurious Gold Manipulation Theorists

Tue, 03 Nov 2009 15:50:44 -0500

On Nov 03 03:18 PM frdm45 wrote:
"Central banks stand ready to lease gold in increasing quantities
should the price go up."

They can only lease what they have got.
They can also lease what they haven't got.

What they can't do is sell quantitatively eased gold, it doesn't exist, nor can it be created.
The only way you can take the price of gold down is by supply always being able to outstrip demand, as Mr. Greenspan pointed out in his 1966 article.
Supply, as any bug should know, is very limited for gold.
www.lewrockwell.com/no...

Thanks for your prompt and courteous response, but the manipulation arguments died the death today.

Gold Soars to New Highs

Tue, 03 Nov 2009 14:58:50 -0500

Bespoke Investment Group underplays the dimwits, goldbugs and Gatagoons when they claim that the only comments raised were along the lines of :-
" raising speculation that the planned sale would cause a glut of gold in the market."

They were hysterical in their assertions that the gold price would be collapsed by "manipulation" and have been claiming so for a number of years now.
Well, I'm listening very, very hard, and can't hear a sound from them now.

Can't wait for the rest to be flogged off. Maybe we will get another press statement off the IMF manana.
Maybe it's been sold?

India Gold Buy Sets Record

Tue, 03 Nov 2009 14:36:51 -0500

People have been squawking about IMF gold sales "manipulating" the price of gold down, for as long as any of us can remember. Well, now the first tranche has been sold, and the p.o.g. has gone....hmmm, can't get my Kitco chart to work.

It was argued by many, that it was a non story for a quiet day in the news room. And guess what. They haven't got a story for quiet days in the news room anymore.

Ah well, back to shape shifting lizard stories then.

Incurious Gold Manipulation Theorists

Tue, 03 Nov 2009 14:28:20 -0500

Best not be cruel to the Gatagoons, they can't understand why the IMF selling half it's 400 tonnes to India hasn't manipulated the price of gold down.
Perhaps when the second half of the IMF gold is sold we will have a clearer picture.
Conspiracy theories are perfectly safe so long as you don't have sex with them, or inhale them.

www.imf.org/external/n...

IMF Sells 200 Tonnes of Gold to India for $6.7 Billion

Tue, 03 Nov 2009 14:18:22 -0500

The supporters of manipulation and conspiracy theories, who have been claiming IMF gold sales would lower the pog, seem to be very quiet.

Can we now get back to the serious business of good old fashioned c0ckup and beer.

Who is going to get the next tranche of gold.
Japan? Australia? Saudi? Brazil? Iceland?
Place your bets now ladies an gentlemen.

About Those GDP Numbers

Fri, 30 Oct 2009 08:30:17 -0400

The article shows the correlation between the percentage of GDP as stimulus, and the increase in GDP.

On another forum, a cynic claimed the Chinese increase GDP by getting a million people to dig a thousand holes. Then immediately double the GDP gained, by getting another another million people to fill them in again.

I'm trying to come up with a smart arse comment about when to stop digging, but I'm losing the will to live.

How to Play the Gold / Silver Ratio

Fri, 30 Oct 2009 08:11:11 -0400

30:1, 45:1, 60:1, 85:1.

Always seems to me, that if you compare apples to oranges, you end up with the answer being bananas.

Why I'm Wary of the Gold Trade

Tue, 20 Oct 2009 20:29:41 -0400

A lot of commentators are speculating that gold is in an overpriced situation.
That's nonsense. There is no shortage of supply. All of you could go online and purchase now.
All of you could walk into a coin or bullion dealer in the morning and buy.
When supply is hard to come by, then talk of the possibility of a suckers rally.
Until demand outstrips supply, just buy what you can afford and feel pleased.

Gold's Real Inflation Adjusted High Is $7,150/oz

Tue, 20 Oct 2009 07:50:53 -0400

John Williams $7,150 golden tish tosh.
To say that government inflation figures can be skewed this way and that to the benefit of governments, causes less surprise than telling people that the earth is round, not flat.

What is more outrageous is the way it is now being presented as Bloomberg approved fact.
Were is the William's methodology? it is nowhere to be seen just a headline grabbing quote.
If anybody has the methodology used, as opposed to a pretty graph, please post it.
Another alternative is to stop inhaling conspiracy theories, and go with some facts.

Disclosure.
Long and large physical, 60% of portfolio.

The Dogma of Low Interest Rates Is Wrong

Wed, 07 Oct 2009 08:36:52 -0400

Harry Long quotes from a former article,
"Low interest rates often have the opposite of their intended effect. Extremely low interest rates can vacuum liquidity out of nations."

Reversing that argument shows that high interest rates can flood nations with liquidity via the carry trade.. A liquidity that sucks wealth from the host, with the same concern for the well being of that host, as a leech has for it's host.
It's a sub species of QE that causes the same problems when the time comes to remove the parasite. It can only be seen as QE by the back door.
The rise in $Aus. and $NZ are down to this carry trade, not expanding economies.

Australia and New Zealand are going to have to raise interest rates to dampen inflation at some point, all that will do is pump up the blood volume for the leeches.
Talk about throwing petrol on a fire.

Wall Street Breakfast: Must-Know News

Tue, 06 Oct 2009 15:22:58 -0400

Shooting yourself in one foot is bad enough, but doing it with a JFK magic bullet that punctures both feet at once, is a skill unworthy of praise.

The A$ has risen on the back of the carry trade winging it's way to the outback at a rate of knots. It's QE by the back door, nothing to do with a recovering economy.

And how exactly are they going to get rid of this carry trade, without harming the currency, by lowering rates, especially if they have to raise rates to dampen any future inflation, due to the stimulus packages that have been introduced.

Why We Were Right Not To Nationalize the Banks

Mon, 05 Oct 2009 14:56:02 -0400

There is a mistaken belief that a lot of west european industries were nationalised at the end of WW2.
They weren't. All that happened was a lot of industries vital to national economic recovery following the war, were clapped out, and unfit for purpose.

They were taken under state control, that's all.
The old owners were paid compensation, not taken outside and shot.

If anybody believes, that any western economy can survive today, without the same exercise being repeated, then it is time you read the writing on the wall.

The UK Moves First on Bank Reserves

Mon, 05 Oct 2009 14:23:16 -0400

Trying to equate the economic plot today, with the narrative from the 1930's means you end up losing the plot.

Today, we are living with the consequences of 60 years of ever increasing QE to finance the post war boom.
A "Catch me if you can" plot, that also has as it's central character a printing press operated by a crooked printer.
The 1930's did not follow such a lengthy period of currency debasement.

To entertain the possibility that banks can be recapitalised is a fantasy. They would only do it by printing more, and debasing more.

With unemployment rising around the globe, it is time to realise that without a return to the production of wealth through labour, it's poverty on the menu.

For those of you still counting, this is the third christmas it was all going to be over by.
When have we heard that before.

A123 Increases IPO Price Range

Tue, 22 Sep 2009 11:44:28 -0400

John,
My agwaphobia is as virulent as ever, but hello to you and all your readers.

You give a price spread of $150/250/750 for lead-lithium battery costs.
As a total $ cost per vehicle, what is the pack cost?
Thanks.

Options Trader Tuesday Outlook: Gordon Brown's Booster Shot

Tue, 22 Sep 2009 11:28:27 -0400

There have been unconfirmed reports here in the UK, that Gordon Brown is going to have private talks with Barack Obama to standardise the size of dollar bills and pound notes.

Apparently it has something to do with ensuring they have space for the same number of zero's on each countries notes.

Has there been anything on Fox News, we don't have it on TV over here. I'm sure they would have said something if the rumours were true.

Federal Reserve Balance Sheet Update: Week of August 12, 2009

Fri, 14 Aug 2009 14:33:32 -0400

research.stlouisfed.or...

Federal Reserve Balance Sheet Update: Week of August 12, 2009

Fri, 14 Aug 2009 14:32:24 -0400

Many claim that increases in money supply will only end in tears.
This conclusion is based on an appreciation of debasement of money supply, and consequent inflation.
I don't draw swords with such scenarios.

So we are left with the question, why isn't it happening? and left with no alternative other than to question our judgement.

It does seem that the money supply straw has failed to break the camels back of most currencies
.
This St.Louis Fed Reserve chart shows that money supply can be upped beyond an exponential level without a collapse.
What's happening now is something we have no road map for of course.
It also shows that QE is old wine in re-labeled bottles.

Spooky huh.

research.stlouisfed.or...[1][id]=AMBNS

V-Shaped Revenue Recovery + L-Shaped CapEx Growth = Unstable Economy

Wed, 12 Aug 2009 13:16:10 -0400

In a board room somewhere, there will be a slick presentation, that shows if they reduce staff costs to zero, they can make more profit next fiscal year.

Reminds me of those nature documentaries were animals eat their young.

Preview from Europe: Bulls on Holiday

Wed, 12 Aug 2009 12:59:50 -0400

On Aug 12 06:47 AM manya05 wrote:

< Complete agreement with you in that the Fed announcement
It is not as if they have to do anything to rock the boat anyway, the weather is rough enough already.

Obama Announces List of Grant Recipients, Recognizing Significance of Hybrid Markets

Wed, 12 Aug 2009 11:21:02 -0400

MRTTF, renim and JP.
All comments well received. Thanks.