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filipo

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  • Bottom In Gold Likely To Be Below $770 [View article]
    Reel,
    "They don't rush out and calculate the purchasing power of their money."
    Well, I do.

    "In fact, it has depreciated, after adjusting for purchasing power."
    That is correct. Someone on this forum with the name of "Tao Jaxx" pointed out that the "Armageddon premium" has vanished, meaning that the price of $1,900 apparently was a bit too steep and taking into account a global financial meltdown and that he come down to more reasonable levels when that sword of Damocles vanished. The market is apparently efficient enough to know what exactly should be the value of that Armageddon premium that has to be subtracted from $1,900, with a little help of the manipulators of course.

    However, that does not affect me much, since I bought the bulk of my gold in 2006 at an average price of hardly $600. It is like with stocks: one day you win, one day you lose. Only JPM managed to win every day in 2013.
    You'd say I should have sold in 2009 when gold was at 1,900, but that is easy to say in retrospect. When I look back at 2009, I saw lots of reasons not to trust the eurosystem, eurobanks... and these reasons did not completely dissipate in 2014.

    "It is also worth taking note, that the people most inclined to beat-up the dollar are gold/silver-bugs or similar people touting physical store."
    You have to admit that is a rather reciprocal stance, and I guess that's how wars start.

    I appreciate your civilized way of discussing.
    Feb 28, 2014. 09:05 AM | Likes Like |Link to Comment
  • Bottom In Gold Likely To Be Below $770 [View article]
    Reel,
    In fact, you (willingly ?) confound two notions:
    When dealing with cash money there is facial or nominative value
    and
    there is relative or real value.
    The facial or nominative value tells you what's printed on the face of the paper bill.
    The relative or real value tells you how much your paper bill is worth or valued versus other assets.

    When a currency is devalued, as happens all the time, the relative value gets decreased.
    The word "devaluation" is an indication since it consists of 2 separate words: "de-" and "valuation", meaning that the valuation or given value of a currency is lowered versus other assets.

    As a realist, I'm not interested in facial value, only in real value.
    Only surrealists fancy the facial value of a paper bill.
    Feb 28, 2014. 03:50 AM | 2 Likes Like |Link to Comment
  • Bottom In Gold Likely To Be Below $770 [View article]
    Reel,
    I go back to your previous statement:

    "A $5 dollar bill may be worth only 10cents in future purchasing power, but it is still worth $5 dollars and a store of value."

    That is correct, but my point is that I'd rather have something as a store of value that keeps its purchasing power, like gold, than something, like paper money, that loses its purchasing power overtime.
    So, if you would ask me to describe the kind of (store of) value that cash money offers, I cannot find a better way of describing it than as "dire value".
    Some would call it deflated value.
    Since "value" and "deflated value" obviously are not the same -an important adjective has been added- you can't possibly claim that the $1 bill overtime hasn't lost his value vs other assets.
    Consider f.i. an athlete vs a crippled athlete. You can't say that the crippled athlete is still an athlete because he once was an athlete. Right after his accident people might still call him an athlete to do him a favor, but overtime, he'll just be an ordinary cripple and only those who have known him in his better years will remember him as a former athlete.
    I think the USD once was an athlete with lots of value. Nowadays it's just a crippled currency with limited value, like so many others.
    Feb 28, 2014. 12:40 AM | 3 Likes Like |Link to Comment
  • SPDR Gold Trust on track for rare monthly inflow [View news story]
    ddear,
    Yes, and those numbers look so futile compared to what the big boys trade:
    http://bit.ly/NBaXGd
    Feb 28, 2014. 12:10 AM | Likes Like |Link to Comment
  • The Gold And Silver Smack-Down Cometh [View article]
    Quantum,
    "however if you read further back than last Sunday you would seen that Avi doesn't trash Gold."
    I must have missed that.

    "I hope you followed it as well. "
    Yeah, I did. Not sure though whether the recent gold price "plunge" wasn't self fulfilling prophecy: lots of people seem to admire and follow blindfolded what Avi preaches and when he says "sell because I detect a reversed head-shoulders pattern", people sell and send the price south.
    Eventually vice versa too, although, as I said, I haven't noticed that yet from his part.
    And I must say that the "plunge" was rather limited: from $1,340 to $1,330. That's just daily routine and volatility as usual.
    Feb 27, 2014. 03:45 PM | Likes Like |Link to Comment
  • Bottom In Gold Likely To Be Below $770 [View article]
    kertch,
    "Just like gold, the real value of a dollar is not the number printed on the bill"
    That is irrelevant in the opinion of Avi.
    What is relevant according to him is the number that is printed on the bill.
    So a $1 bill is worth $1 and the more often that $1 is printed on the bill, the more convinced he is that its value lies in the fact that it's actually worth $1, even if it doesn't buy him the same basket of goods as 50 years ago.
    There must be more people reasoning like that. I Always found it weird that a $1 bill bears at least 8 times (4 times each side) the number $1 as to convince people it sure still is the $1 bill, not to be confounded with the $5 cent.
    I think Avi must have been mesmerized by the many numbers on these bills.
    Feb 27, 2014. 03:29 PM | 3 Likes Like |Link to Comment
  • Gold And Its Guaranteed Role In Our Lifetime [View article]
    Aaron,
    "I have yet to meet a client in person who had failed issues withdrawing cash from a bank during times of crisis when the funds was placed in a cash only account."
    Here is your client:
    http://yhoo.it/1hsYy1x
    and
    http://bit.ly/1hsYzTf
    and foremost:
    http://bit.ly/1hsYA9u
    Feb 27, 2014. 03:17 PM | Likes Like |Link to Comment
  • The Gold And Silver Smack-Down Cometh [View article]
    Quantum,
    "That rich guy was the father of President John F Kennedy"
    Yes, I was aware of that.

    "I sold all my stocks last year "
    That's what I call reckless.
    I only sold 30% of my stocks in December 2013 and I already regret it... for some.

    "down 70% or more for the next two years as per Elliott Wave."
    You seem to have solid faith in EW and in Avi as its messiah.

    "I figure the swings this year could bring in over 100%"
    I certainly wish you good luck and I start to understand the doggedly obstination with which you try to talk the gold price down.

    "Avi knows that and will make a ton money with the killing of the bulls then bears"
    From what I have seen from Avi over the years is that he unilaterally has been using his killing instinct to bash the gold bulls, never the bears.
    Feb 27, 2014. 06:40 AM | Likes Like |Link to Comment
  • Gold And Its Guaranteed Role In Our Lifetime [View article]
    Aaron,
    "Banks rarely if ever, cause problems when clients put money for custody that excludes investment decisions"
    Well, over here, a bank only reimburses if clients have not been taking "unreasonably large" risks. That includes being exceedingly credulous and giving name, address, banking account number to people who claim to be working for that bank via fraudulous internet sites.
    In that case, it's the clients' responsibility and the bank does not reimburse at all. There have been justice cases on this issue and most drag on for years. The outcome depends on the Judge but is never predictable.

    "Banks rarely if ever, cause problems when clients put money for custody that excludes investment decisions."
    I recall you what happened in 2008-2009 when bank defaults (Lehman Bros among others) caused bank runs and people lost quite a bit of money. In most cases however bank bailouts by governments reimbursed the savers. The investors-shareholders lost everything. In Cyprus there wasn't even a bank bailout, but a bailin instead: people lost all of there savings over €100,000.
    And that seems to be the rule now in Europe: the Commission has agreed on putting $100,000 for State Guarantee as a limit. Over that number you lose everything.
    For some $100,000 may seem a large sum, but for a large number of people it's just pocket money. Treathening to take the surplus of that pocket money away and you'll get a lot of angry people willing to protect their savings by buying gold.

    "But the common notion that the economy will go bank to using physical gold to exchange has fundamental fallacy."
    Well, it depends on how you define "exchange".
    If I take my gold savings that I kept for years as a store of value to the bank and change it for dollars and finally go to a garage and buy the newest edition of the Chevrolet Corvette, I use that gold as an exchange, be it not directly, but indirectly.
    Feb 27, 2014. 06:19 AM | 1 Like Like |Link to Comment
  • Gold And Its Guaranteed Role In Our Lifetime [View article]
    Aaron,
    "It isn't 24,6582.
    0.7954 oz x 1 oz = 24.66 grams"
    You must be kidding ?

    "Would gold be able to allow individuals to be paid online?"
    No, that's why I added:
    "So PM's for daily use are perfectly usable as a currency, along with electronic cash which has its own advantages and disadvantages. "
    However, I see PM's perfectly suitable as a store of value. The disadvantages of electronic cash I was pointing to being that it can easily be stolen. Bitcoin's recent adventures proves such. In Europe there's no day that passes without bank clients losing millions of euros due to internet robbers.
    PM's can be stolen too of course, but if one choses the right bank safe, risks are limited.
    As a store of value, PM's can be kept for years and be used at the right time when needed. Overtime their value keeps track with inflation. Due to chronic inflation and ZIRP that can not be said of paper cash or electronic cash.
    Feb 27, 2014. 02:54 AM | Likes Like |Link to Comment
  • Bottom In Gold Likely To Be Below $770 [View article]
    Robert,
    "Gold bought a basket of goods worth $1,900 in 2009, it buys a basket of goods worth $1,350,"
    That's utterly untrue.
    1/ Even if one considers that the gold price went down from 2009 to 2014, the average price of gold in 2009 was $972.35/oz:
    http://bit.ly/wYunOO
    You presume everyone who bought gold in 2009 paid the maximum price of $1,900 which is a false presumption.

    2/ You must have changed the content of your basket to get the same value even in dollar terms. Or else you forgot to discount inflation on your goods between 2009 and now. Inflation ate part of your basket which means you get less for your money now than in 2009.
    Feb 26, 2014. 02:53 PM | 4 Likes Like |Link to Comment
  • Gold And Its Guaranteed Role In Our Lifetime [View article]
    Aaron,
    There's something fundamentally wrong with your calculations.
    Today's mined gold supply is not 1.5 mil tonnes as you say.
    It is barely 174,000 tonnes = 174,000,000 kilograms.
    There are appr. 32 ounces in 1 kilogram, which means global mined gold supply equals 174,000,000 x 32 = 5,568,000,000 ounces.
    If we take world population at 7 billion, that accounts for 5,568,000,000 / 7,000,000,000 = 0.7954 oz per person.
    Since 1 oz equals 31 grammes, that means that there are 24,6582 grammes of pure 99,999 gold at the disposal of each individual, childern included.
    That's quite a lot imo, especially if one considers there is also silver that can be used for the smaller entities.
    Only for gold that would make $5,000 x 0.7954 = $3,977 worth of gold per person. Consider that 40% of world population nowadays owns close to nothing at all, it would result in an average wealth of the other 60% of $3,977 + 60% = $6,363.
    If that still seems not enough to you, be my guest and double the value of gold to $10,000/oz.
    So PM's for daily use are perfectly usable as a currency, along with electronic cash which has its own advantages and disadvantages.
    Feb 26, 2014. 02:48 PM | Likes Like |Link to Comment
  • Gold And Its Guaranteed Role In Our Lifetime [View article]
    Aaron,
    "However, in a macro view, the system of fiat currencies works better to address the big changes we have in today's system."
    Yeah, sure, we've been seeing that since 2007 !

    "All hell will break loose if 6 billion people suddenly decide to stick with only gold and trade with gold. "
    Not if you value gold at its fair price, something like $5,000/oz and divide the bigger lumps of 1kg and plus into smaller more manageable pieces like 1 oz.
    Feb 25, 2014. 11:54 PM | Likes Like |Link to Comment
  • The Gold And Silver Smack-Down Cometh [View article]
    Ken,
    Maybe Quantum read the tea leaves wrong.
    That can happen easily since reading those lines and patterns is more for expert fortune tellers than for the better traders.
    Feb 25, 2014. 05:09 PM | Likes Like |Link to Comment
  • Bottom In Gold Likely To Be Below $770 [View article]
    dnorm,
    "But the collective balance sheet of the nation is strong, and we aren't really near crisis mode."
    But capitalism can only survive with strong GDP, not with strong assets (= collective balance sheet).
    Take Italy for instance: with all these works of art Italy certainly is one of the richest nations on earth, if not the richest. But if there is less turnover, less GDP, less taxes are collected, hence the State makes debts to fulfill its duties, hence that same State has to save on expenses and raise tax percentages and hence interest rates have a tendency to rise.
    So, the collective balance sheet really cannot settle the economic problems, unless of course we start selling these assets, which is a possibility Cameron suggested and that I also strongly advocate.
    Why do you think JPM sold NY Chase Manhattan Plaza to the Chinese?
    Feb 25, 2014. 02:20 PM | 1 Like Like |Link to Comment
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