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Old 10-24-2008, 12:52 PM   #51
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Originally Posted by Oric View Post
US Treasury bills are (for the moment) percieved as better investment than volatile precious metals, that is why gold loses value ...
And treasury bills DON'T?

For the herd, the simple question is what has gone down lately.. Then they like the other.

But the bottom for gold is restricted because there is a limited amount of it. The bottom for paper is unrestrained because there is a virtually infinite supply.
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Old 10-24-2008, 01:14 PM   #52
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In a system failure Gold will go to $1 before it is worth anything.
The $1 of value you speak of, is that in American dollars, new american dollars after the devaluation, or Amero's.

Gold is being liquidated as the long commodity short dollar trade gets unwound, and to make margin calls.

There still was a flight too safety this morning as gold was down 1% and the s&p was down 6%.

I'm not expecting gold and silver to beat the markets everyday they won't, until they do , and that move will be explosive.
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Old 10-24-2008, 01:29 PM   #53
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Default Why 'Safe Haven' Gold Has Been Heading Lower

Friday, October 24, 2008
Why 'Safe Haven' Gold Has Been Heading Lower

For weeks, gold has been viewed as a safe haven as pretty much every other market plummeted -- but the price has been down on a lot of down days lately, which on the surface doesn't seem to make sense.

The price of gold was recently down 1.2% to $713.50 an ounce as hedge funds and mutual funds were being forced to redeem their holdings of gold, and concerns abounded that there could be a slowing of price inflation.

“There is a mad dash for cash,” said Mark Hansen, director at commodities research company CPM Group. “People are selling anything” including precious metals. Hedge funds and mutual fund that have had their credit lines cut have been forced to sell anything of value to raise capital and that includes gold.

“Nobody wants to be holding anything but the Japanese Yen or the U.S. dollar,” added John Doody, editor of the Gold Stock Analyst newsletter.

Adding to the woes, John Lonski, U.S. Chief Economist at Moody’s Investors Services, said expectations of a global economic contraction and deflation is also permeating in the markets, weighing on the price of gold.

“Gold benefits from environments where there are fears of price inflation and it’s hurt whenever that inflation slows,” said Lonski. Lonski cited a deceleration of global financial activity as the main reason there are concerns of deflation.

Still while pessimism abounds, some gold watchers think now is a buying opportunity. They argue the government’s action to pump liquidity into the financial markets will prevent a deflationary situation.

“Gold is selling like its going out of business,” said Doody. “Everything done of late in the bailout arenas is inflationary.” Doody noted that the current Federal Reserve Chairman Ben Bernanke has studied the mistakes during the great depression and would be reticent to let the U.S. fall into a deflationary situation. He said it will stake some time to see the inflation, but that the government won’t led interest rates fall too low.

“You can cure inflation. You can’t cure deflation,” said Doody. “Once there is a deflationary spiral monetary policy can’t get you out of it.”

http://www.foxbusiness.com/story/mar...tion-concerns/
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Old 10-24-2008, 02:04 PM   #54
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Every action the Fed has taken has been inflationary. Every action the Fed will take will be inflationary. The only way gold goes down is if we go into a deflationary death spiral, and then cash is king.

The people cheering on the stock market, and sneering as gold goes nowhere, better be careful what they wish for. At least if gold screams higher, then the Fed has been effective in avoiding deflation, equities are going to suck either way.
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Old 10-24-2008, 02:11 PM   #55
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that the government won’t led interest rates fall too low.
Uh, yeah, Sure. Right.

Negative Fed rates for years this decade, and negative Fed rates now makes this a little bit incredulous.

I'd say we can count on inflation. Lots of it.
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Old 10-24-2008, 02:54 PM   #56
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Arrow Silver

For most of us, silver is probably a good choice. It is down around $9.20-9.30/ounce at the moment. It was getting close to $20/ounce not too long ago. Just about all of us can afford to get a few one ounce silver rounds now and then, but even the smallest gold coins (1/10th ounce) are the better part of a C-note each.

One thing to keep in mind: As most of you know, PMs are measured in troy ounces, not regular ounces. A troy ounce is about 10% more than a regular ounce (1 troy ounce = 1.097 regular ounces), and there are only twelve troy ounces to a troy pound. So when you are talking about ounces of silver, gold, or other PMs, it may be a little heavier than you think.
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Old 10-24-2008, 04:27 PM   #57
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Where can you buy silver coin for spot, or close to? On ebay they are going for $20+ per oz. If you have a source, I'll buy.
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Old 10-24-2008, 06:13 PM   #58
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I am going after work to buy some at a local coin shop. They told me they are expecting a shipment in by tomorrow, and I can lock in the price today if I drop by and prepay. Silver is at 9.37 today, and I do not expect a markup of much more than 5% for the coins.

Are you sure you are not looking at U.S. Mint Silver Eagles? They are lot more expensive than generic one ounce silver rounds. Or perhaps 'junk' silver coins?
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Old 10-24-2008, 06:26 PM   #59
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Are you sure you are not looking at U.S. Mint Silver Eagles? They are lot more expensive than generic one ounce silver rounds. Or perhaps 'junk' silver coins?
What's currently a fair retail price for various silver coins? A couple of weeks ago at a coin show, I bought a 2006 U.S. silver dollar for $20. I suspect I paid a premium for not bothering to haggle. IIRC, the last time I bought one, about 3 years ago, it was $10.
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Old 10-24-2008, 06:30 PM   #60
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People who are selling right now are trying to recoup the higher price they bought into. If these prices stay depressed or get worse, you'll see a lot of folks liqudate their holdings and prices will come down. It will also put further pressure on paper metals prices driving them down further.

O6 gives and example himself...

Quote:
They told me they are expecting a shipment in by tomorrow
Where did that shipment come from? They didn't just grow it. Somebody sold their silver.

If you're in PM's for the long run cost averaging is your friend.
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Old 10-24-2008, 06:30 PM   #61
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um.

Last edited by mordan; 10-24-2008 at 06:59 PM.
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Old 10-24-2008, 06:32 PM   #62
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I can't wait.

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Old 10-24-2008, 06:32 PM   #63
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J:
Quote:
"Where did that shipment come from? They didn't just grow it. Somebody sold their silver."
These are newly-minted bullion coins. I presume that is actually newly mined silver. They sold all the silver bullions coins they bought from customers rather quickly, and have none of those left.
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Old 10-24-2008, 06:33 PM   #64
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Then demand is being met and prices will fall.
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Old 10-24-2008, 06:35 PM   #65
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We the people.
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Old 10-24-2008, 06:37 PM   #66
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J:

Since they are selling off everything coming in rather quickly, and expect to sell off this new shipment in a day or two, demand is strong and prices will rise.

But in reality, we are considering oinly a small subset of the market. It is industrial demand and what the big traders and governments are doing that really causes the big shifts in the silver commodity market.
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Old 10-24-2008, 08:03 PM   #67
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They are self reporting selling off everything coming in quickly...they are salesmen.

There are many things out of their control. Hell look at the dollar! I just heard a convincing argument that because the dollar was down for so long and now heading back up the US was the first to enter this downturn and is now heading out.

How about $30 oil?

That will cause a lot of weak hands to get sheared...

If the markets stabilize silver and gold are in for a big fall.

(personal disclosure...we convert a % of out monthly income to silver. I have bought silver in the $5-6 range all the way up to $19.)
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Old 10-24-2008, 08:36 PM   #68
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06, anything... 1 oz of .999 silver is 1 oz of .999 silver.
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Old 10-24-2008, 11:03 PM   #69
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All commodities are dropping...This meltdown makes nothing safe.
World dairy prices are falling fast, suggesting that the dairy bubble is the latest in a line of commodity bubbles to burst. World prices are now almost back to where they were before the dairy price boom began in mid-2006, about half of what they were at the boom’s height.

Data from agridata.co.nz shows that world dairy prices have been falling steadily since the last quarter of 2007, with the exception of butter prices, which have only recently in the last few months fallen by almost a third.

The average price of skim milk powder has fallen by more than 50% from its August 2007 peak of US$5,200 per tonne. In the last week the price has fallen to US$2,400/t. The price of skim milk powder had been hovering just above US$2,000/t until it began to rise in mid-2006. It has fallen steadily since its peak.

Whole milk powder prices were the next to fall. From their peak of US$5,050/t in October 2007, the average price this week fell to US$2,850/t. However, whole milk powder may see a brief resurgence following the recent melamine scare in China, as authorities there try to restore consumer confidence in the local milk supply.

Cheddar cheese prices are now sitting at an average of US$3,875/t. They began to fall from their height of US$5,500/t in early January this year.

Butter prices have been the latest to fall. Prices held out at their peak of just over US$4,000/t until as recently as August, but have fallen steadily in the last few months to US$2,850 this week.

Only 13 dairy farms sold in New Zealand in September, following a steady decline from 57 sold in February 2008. Total farm sales in September reached their second lowest monthly figure since agridata.co.nz began recording sales figures.

An increase in credit available to the rural sector underlined the dairy price boom. The fall in commodity prices will make it even more difficult borrowers to meet debt servicing requirements. In September the National Bank reported that debt servicing costs as a percentage of gross revenue had risen to 25% from 15% for dairy farms.

The fall in dairy prices is the latest in a line of commodity bubbles that have burst, including iron ore and oil. Petrol prices in New Zealand have just fallen further to NZ$1.74/litre.
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Old 10-25-2008, 08:23 AM   #70
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Originally Posted by Glenn 50 View Post
All commodities are dropping...This meltdown makes nothing safe.
World dairy prices are falling fast, suggesting that the dairy bubble is the latest in a line of commodity bubbles to burst. World prices are now almost back to where they were before the dairy price boom began in mid-2006, about half of what they were at the boom’s height.....
The price of dairy products may fall with a falling economy, but dairy producing assets will allows have value.

At the end of the day, someone is going to be buying dairy. Even if we envision a scenario where civilization has collapsed and we are hunkered down in caves ... people are going to want that dairy. But only a fool is going to want that gold, unless he can find a bigger fool who thinks the gold is is somehow precious not-withstanding the condition of mankind.

The picture posted by Jason says it all (although people don't really see it). 100 Billion Zimbabwe dollars for 3 eggs because Zimbabwe dollars are not tied to [high value] human productivity. I wonder how many eggs one could buy in Zimbabwe with a gold Rolex watch?



Last edited by caonacl; 10-25-2008 at 09:36 AM. Reason: clarification [high value]
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Old 10-25-2008, 09:08 AM   #71
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I wonder how many eggs one could buy in Zimbabwe with a gold Rolex watch?
You would probably be surprised....
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Old 10-25-2008, 09:39 AM   #72
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You would probably be surprised....
it probably aint a good idea to attempt to determine if the local war lord wants a gold watch
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Old 10-25-2008, 09:46 AM   #73
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Default The road to Hell is paved in gold.

The gold market is based on human misery. Consider why you keep hearing that gold is a safe-harbor investment. What's not being said is that those who have gold, will be anointed as wealthy, no matter how wretched the conditions of their fellow man; or, no matter how hollow their ability to produce anything that anyone would want.

Gold is a Doomers get out of Hell free card. My question is: Why do the people of Zimbabwe toil under the yoke of their gold economy?

Remember your answer when you hear Americans who advocate a return to the gold standard.
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Pillage and Patronage: Human rights abuses in Zimbabwe's informal gold-mining sector

Sokwanele Article: January 27th, 2007



Gold panning


The international press is currently swamped with reports of the arrests of over 25 000 gold panners in Zimbabwe. Operation Chikorokoza Chapera ("No Illegal Panning") was launched in November last year, ostensibly to bring gold panning activities under control. With the implosion of the economy, this sector had been burgeoning, albeit illegally in most cases, as poverty-stricken Zimbabweans endlessly struggle to provide for themselves and their families. Make no mistake, this loss of livelihood is not an incidental side-effect of the operation, but it is its very raison d'etre. Just as they did with Operation Murambatsvina (Clean Out Filth) in 2005, the regime has purposely set out to destroy this activity, and with it, the lives of those involved.

This brutal operation is tantamount to genocide with constructive intent - the authors knew in advance that their actions would lead to death by starvation, depriving the poorest of the poor of their only - and last - means of feeding themselves and their families.

Not only have livelihoods been eliminated, but lives too. Since the beginning of January, the press - muzzled as it is - has still been able to report deaths as disused mines collapse on miners who are tear-gassed as they hide, seeking to evade arrest and others who have been shot by a police force bent on serving its despotic leader. By far the most appalling case is of three miners in Inyathi district who died from hunger and exhaustion after the police forced them to work for six days, filling up trenches left open by other gold panners, beating them and denying them food at the same time. They had been complaining of dizziness and hunger before they collapsed and died on December 24th.

Once again it is the poorest of Zimbabweans who are being victimized and used as pawns to hide the culpability of the big players, government ministers and zanupf apologists, who are allowed to continue the rape of the country's precious resources with impunity.

The facts are there, but the intention behind these widespread arrests stand veiled by layers of conspiracy and malice.

A not so glittering history
One has to look back a decade to understand the regime's haphazard stance on gold panning, which has left the desperate panners confused and now threatened with violence and starvation.

The early 90's saw Zimbabwe reeling under its disastrous Economic Structural Adjustment Programme (ESAP). With the devaluation of the Zimbabwe dollar and the subsequent high gold price in Zimbabwe dollar terms, more people began to join the informal gold panning trade as retrenchment caused by the structural adjustment programme began to bite.

In 1992 gold panning along the country's streams was legalised and actively encouraged, provided the panners obtained the necessary permits and deposited their gold with the Reserve Bank or its agents. The panners were also required to rehabilitate their operations by backfilling. In those days environmental policing took place regularly.

The then Mines Minister, Chris Anderson, said it was high time the panners were recognised as part of the informal sector. Instead of hunting them down, he said they should be encouraged to sell their gold to the reserve bank. He even suggested that small-scale miners should be paid a higher price than the market rate to prevent them from selling to the black market. Prospective panners were able to apply for permits to exploit the gold deposits from their respective councils.

There is a common belief that small scale gold mining and panning, which mainly took place on commercial farms, was encouraged by government then not only to control this informal sector, but also as a means of harassing white farmers and precipitating conflict with the farmers who later suffered under the most severe form of intimidation.

From 1999 to 2000, following the violent seizure of land from commercial farmers, Zimbabwe's mineral production declined between 17%-60% in nine major commodities with the gold sector hardest hit - three major mines and several small operations closed and gold production declined for the first time in 20 years. Output was 22,070 kg, down from 27,666 in 1999. The "land reform programme" did not only affect agriculture, the mining industry was severely impacted by government's madness on the farms.

Gold mining previously accounted for the highest income of the precious foreign currency earned by Zimbabwe; that was before the ruinous policies of the Mugabe regime started to decimate our economy. Since 2000 the Zimbabwean government policy towards formal and large scale mining has been executed with the customary myopic ineptitude expected from mugabe's cabinet. This sector has been hamstrung by foreign exchange shortages which have prevented it from buying new equipment and the supplies essential to this industry. With threatened take overs and the severe recession in the country Zanupf has successfully inhibited foreign investment in this vital sector and brought many previously productive mines to a grinding halt.

The gap in production left by the near collapse of formal mining was replaced by the precious metal being brought in from the informal sector, with the Reserve Bank buying much of its gold from illegal panners. However, the panners today sell their gold on the black market as the Reserve Bank pay well under the true market value.

http://www.sokwanele.com/articles/so...27jan2007.html

Last edited by caonacl; 10-25-2008 at 09:55 AM.
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Old 10-25-2008, 09:56 AM   #74
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I was surprised by the high price of silver. The markup was over 40% from spot. See my new thread on this.

The coin dealer here is selling one ounce silver rounds for $14.10 each as of yesterday. I am sure he would be willing to ship. They are going fast, even at that price.

Here is his contact info:

Ralph Solomon
Rare Coins, Inc.
12411 NE 124th St.
Kirkland, WA 98034
425-823-2646

I think he will be open today (Saturday).
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Old 10-25-2008, 10:04 AM   #75
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it probably aint a good idea to attempt to determine if the local war lord wants a gold watch
actually, that's who you want to give one to first! But you need several watches first off as there are more than one chief in a given village. But you need one watch to be a nicer model than the other. That is the one you give to the head chief. And to really ingratiate yourself to him you give him a goat along with it.
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