hello c2
sunday, a bit of fun before starting work
i have for a long time believed that gold is a china wager that usefully also hedges against most if not all other china wagers, and for curiosity i searched back in s.i. time to see when i may have formed my take re gold and china and what the progression might have been
http://www.siliconinvestor.com/readmsg.aspx?msgid=14680519 (oct 28 2000)
<<... Gold
The central banks of Europe are selling gold to reduce its role as reserve and to fund current government spending, simultaneously putting their faith on the success of the Euro and putting off needed socio-econo-political reforms that gets people to work more and government to spend and tax less. An Excel spreadsheet analysis would indicate that the strategy is risky and failure penalty is high.
Should the Euro fail, or is perceived broadly to be able to fail, a self-sustaining momentum may gather strength. At that moment, the interplay between the Euro, Yen, dollar and gold may result in some irrational moves making the sort we have seen in the equity market seem like a meandering gentle river, as the players in currency market includes all nations and all economic participants, enterprises and individuals. I note that America, Japan and China are not selling down their gold reserves, and the Euro states are. One of the camps has to be wrong. Some insurance for the downside seems to be called for.
Precious metal as a store of value is an alternative to the currencies and real estate. The difference is that the metals can be hoarded. Whereas hoarding seems a quaint idea in the developed economies, it is a serious diversification move in the less developed economies, especially as the USD is not immune to crashes whether triggered by relative moves amongst the currencies or by absolute level of US economic policies.
Participating first hand in the Asian Financial Crisis, I note that plenty of gold was released into the market in the crisis countries, and the money thus generated played a part in stabilizing the individual sellers immediate economic crunch. These individuals could of course have held the dollar, yen or euro, and they would have been able to achieve immediate stability as well, but only if they held bags of the paper at home, as their creditors seized their bank deposits.
Bottom line, insurance is called for, but great if not called upon.
The I Feel Defensive Disclosure:
I am living in Hong Kong and have just chanced upon this thread, attracted by the eye-catching thread title. My own trading style seems to be in line with TraderMike’s, opportunistic, momentum based, going both long and, occasionally, short, peppered with plenty of option trades. I only open short Put, and covered call positions, never buy options except to close positions and I do jump in to the market with both feet during crisis periods, limiting myself to the US, Japan, HK, and China markets, and the same securities traded on the Euro exchanges. I am now at 9% equity and 8% bonds.
I am not a raving gold bug, closet or otherwise. I have and do own some gold and a satchel of platinum coins. The platinum coins were purchased over a period of my investment life since 1986, at an average price below USD 350 per troy ounce. The gold coins are mostly of the commemorative variety bought at premium to market price for gold. These metals constitute less than 3% of investment assets ...>>
http://www.siliconinvestor.com/readmsg.aspx?msgid=14876711 (nov 24 2000)
<<... Now, the crisis, should it go as I fear, it may boost US$ initially as folks run blindly to what is the safest at the moment, but may further weaken the US export sector, as well as hurt US domestic producers of many electronic vendors. GOLD may get a bounce as the Chinese populations generally store some wealth in the metals, and GOLD is very liquid in these parts, tradable in most bank offices.
I am making some forward-looking statements here as clearly as I know how. If I am right, how the whole matter plays out will depend of course on how many other issues play out. What comes immediately to mind are Russia, Isreal, Iraq, Japan, CHINA, Argentina, US, debt, equity, oil, and of course what the US president says if cross Taiwan strait relationship gets interesting again. The Europeans with their own problems will not matter much to the coming drama. I probably missed out on many more important issues I am not positioned to fear.
I just do not see the upside until some matters blow up.>>
another note re the future Message 15617885 (april 5 2001)
<<... My interest in these matters is simply part of my financial self-preservation effort. Crisis, when misunderstood by others, is an opportunity, and GOLD is a hedge.
... for this thread, GOLD is an opportunity when CHINA (and the moves are definitely starting) liberalizes its GOLD market (I got the first whiff of a GOLD mine privatization deal to work on) and allows its citizens to own GOLD in its pure monetary form (as opposed to expensive jewelry), the 200-year pent up fever will unleash a wild domestic GOLD party, supplemented by offshore smuggling. CHINA always goes to excess, whether in TV production, or orange growing.>>
just one more note Message 16898478 (jan 11 2002)
<<... In any case, GOLD will not rise because of baubles, dentistry, transistors, or Japanese digestive tract treatment. GOLD will rise because of gathering mania, which we all understand so very well, without any intellectualization or rationalization …
(a) The Japanese must go long on GOLD, short on Yen, and/or repatriate savings that earn no yield …
nni.nikkei.co.jp
“Friday, December 28, 2001
GOLD Selling Briskly Ahead Of Limited Guarantee On Deposits”
(b) The French need to prepare for the possibility of ‘Death of Euro’ …
minesite.com
“January 9, 2002
The French Are Switching Savings Into Precious Metals Rather Than Euros”
(c) The Russians need to HEDGE their reliance on the USD and the NMD …
therussianissues.com
“Duma to Make an Attempt on Russians' Dollar Savings
Duma advocates of GOLD savings are seemingly acting in the interests of those financial structures that wish to broaden the scope of their activities
issued on 14.11.01”
(d) The Chinese need to HEDGE their own government and tax authorities, given that they seem to have a good understanding of something they used to have and is having again …
ex.ac.uk
Chronology of money via links at bottom of page, starting at the earliest time period noted.
And from these reports, the magic is still strong, after 60 years of brutal suppression of the ideas concerning private property, wealth, enterprise, money, and the common good …
www1.chinadaily.com.cn
“Huang Jinbao withdrew 100,000 yuan (US$12,048) from his bank account on November 28 last year to invest in GOLD after China's first GOLD exchange made its debut in Shanghai. …”
www1.chinadaily.com.cn
“… Lu also revealed that the central government has reformed the examination and approval of the registration system for running a GOLD shop, which suggests that individuals with adequate funds will be permitted to operateGOLD shops after the GOLD market is fully opened …”
chinadaily.com.cn
“… According to other countries' experience, a stock market, a futures exchange and a foreign exchange trading centre as well as a GOLD exchange are essential for a city to become a financial hub …
… Experts indicate that the opening of the GOLD exchange will further improve the integrity of China's financial markets …
… GOLD futures and foreign traders will be introduced to the market as CHINA further deregulates its GOLD market.”
www1.chinadaily.com.cn
“The much-heralded national GOLD exchange … landmark in China's … a precious metal once viewed as one of the world's hardest metals and strongest investment tools …”
These communists, they have learnt much and applied plenty with childlike alacrity. So suspiciously capitalist-like.
(e) Islamic bankers … do not even start on their nutsy ideas …
millennium-money.com
(f) The de-leveraging process has be initiated by the mining consolidators, willy-nilly, assuming that the market is free, and if not free, the explosion of short positions will do the de-leveraging in a kaboom second
miningweekly.co.za
“GOLD sector consolidation bad news for bullion banks”
In summary, GOLD is drama, characters cast from Chinese communist politicos, Russian schemers, aggressive consolidators, greedy global dealers, shadowy Central Bankers, Jihadic Islamic lenders, and whatnot. Pure drama.
What, not possible? Or as unbelievable as these words grouped together (Bush Greenspan surplus Enron plunge Social Security disappearance) … which, perhaps not so incredibly, yields this from www.google.com
google.com
Do You see any picture hidden amongst the pixels you are so found of? Maybe an outline? Perhaps if you zoom in to fractal scale down, or maybe zoom out to fractal scale up, and then a recognizable outline emerges.
...>>
okay, that is enough fun for a sunday. back to work.
:0) it is good to see the future play out so aligned w/ expectations |
