Thai Guru's Gold und Silber ... (Informationen und Vermutungen)

    DERIVATIVES have been the fastest growing area in US> finance over the past 15 years. The numbers involved are truly mind boggling. About 25% of the Derivative instruments in existence are Exchange traded items such as futures and options. The other 75% are Over-the-Counter instruments, privately created and traded between major financial institutions. These tend to be extremely complicated transactions that are often difficult to value. They rely heavily on their counter parties in these transactions actually meeting their obligations when they fall due.


    There is a grave risk of counter party failure in the Over-the-Counter derivative area. If one major counter party goes bankrupt and fails to meet its commitments, it could trigger a domino like collapse of major institutions in the financial markets. The numbers involved are so vast that there is potential to bring down the entire financial system in the event of a major counter party default.


    If this risk is readily discernible to outsiders, then bankers and others involved in the OTC derivatives must be acutely aware of the problem. Bankers are not stupid. They are extremely clever, cautious people. So how could they allow the OTC derivative situation to grow to such a massive extent with all the concomitant risks involved?


    [U]One suspects that they know something we don’t. Do the major players in the market have some assurance that there will be no counter party failure? Without that assurance, the gigantic build up of OTC derivatives over the past decade would surely have been unthinkable. Alternatively, they must have deliberately built up the derivative market without considering the size or risks involved on the assumption that, as with past similar cases, the Federal Reserve and Federal Government would combine and to come to the rescue of a failed major counter party.


    The OTC derivative market looks like an accident waiting to happen. Already some lesser players are showing signs of strain. How do the authorities rescue a problem situation when it occurs? Again by creating electronic US Dollar credits to the extent necessary to prevent a catastrophe.


    The common thread that runs through this brief summary is that when problems emerge in the US> financial system, the authorities will solve them [/U]This is not just a personal opinion. We have been told by no lesser personage than Dr Ben S Bernanke, who is a member of the Board of Governors of the Federal Reserve Board, that the authorities now have a new tool, the electronic printing press, which will be utilised when disasters threaten.


    When the supply of something is increased sharply relative to demand, the value of that commodity will decline. If the supply continues to increase rapidly and indefinitely, then that item will become worth less and less, with the potential to finally become nearly worthless. This is the Developing Disaster facing the US Dollar and the world. This is the factor that could become the single most important criterion in investment allocation decisions and possibly even for individual financial survival.


    When that point is reached, the headline to this article: “The objective of investing is to increase the purchasing power of capital,” will become ever more pertinent.


    We can now return to the final factor, the 7th “D”, which is DEVOLUTION. Dictionary definitions of the word DEVOLUTION include the following:


    A passing down or descent through successive stages of time or a process.
    Transference, as of rights or qualities, to a successor.
    Delegation of authority or duties to a subordinate or substitute.
    A transfer of powers from a central government to local units.
    It is the first definition that is applicable here. Imagine an inverted pyramid of various investment type assets where the least secure (and most prolific assets) are in the very wide top layers. The inverted pyramid then narrows down through layers of increasingly more secure asset classes to the small point at the base which consists of the most secure (and least prolific) assets. This is an idea propagated years ago by John Exter.


    The theory is that in times of financial crisis investors will cause their investments to devolve downwards (hence DEVOLUTION) through the different asset class layers in the inverted pyramid as they search for greater security. DEVOLUTION is thus a movement by investors out of riskier, speculative asset classes into more secure ones. This is what can be expected in the months and years ahead as the creation of electronic US Dollar credits gathers momentum and faith is lost in the US Dollar.


    The assets in the most secure category at the tip of the inverted pyramid are gold and silver bullion, assets that have performed the function of protecting wealth throughout the ages. In the layer above the precious metals lie the companies that mine and hold large deposits of gold and silver. The least secure assets in the envisioned environment, which form the broad layers at the top of the inverted investment pyramid, will be the electronic US Dollar credits and assets or loans that are repayable in US dollars.


    The DEVOLUTION of assets into more secure investments is not just an esoteric theory. It is already happening and can be observed in the actions of thinking investors such as Warren Buffett, possibly the greatest investor of the past century. Buffett has been gradually moving the assets of his investment company, Berkshire Hathaway, into increasingly more secure asset classes. He made headlines last year when he moved over $20 billion out of US Dollar cash assets into foreign currencies.


    Buffett already has a stash of silver bullion, so is clearly aware of the protective power of precious metals. It is only one short further step for Buffett to move out of foreign currencies (which will eventually follow the path of the US Dollar) into gold bullion and precious metal mining company shares, a move that seems logical and inevitable in the circumstances envisioned above.


    A move into precious metals and their associated mining companies by a person like Buffett would instantly change the public perception of this asset class. If it is not Buffett, it will be someone else, as the logic of doing this will become increasingly apparent to investors. Then the devolution of investments down through the asset classes of the inverted pyramid will truly gather momentum. The quantity of precious metals and their associated mining company shares is very limited while the quantity of electronic US Dollar credits is infinite. It will be a question of “first come, first served”. :D



    Alf Field


    28 April 2005

    Gold stocks may be immune to a common stock collapse



    Dr Richard Appel
    April 29, 2005


    April 24, 2005 - The recent one week 450+ Dow Industrials point decline, combined with similarly sharply lower prices for the majority of common stocks, has prompted many commentators to predict an impending resumption of the Bear Market in U.S. equities. This has again drawn attention to the latent fear among many gold followers that such a broad based downturn would similarly ravage the world of gold equities. They believe that gold stocks will be forced to participate in a major, widespread common stock fall. If these gold enthusiasts are correct, a dire fate awaits the gold mining industry when the equity Bear Market finally resumes. However, given the experience of the great 1970's gold Bull Market, I believe that their fears will likely prove to be overblown.


    An increasing number of gold followers believe that when the common stock Bear Market reasserts itself investors will differentiate little between common or gold equities. They posit that a general flight from common stocks will result when it is generally recognized that their Bear Market has not ended. Those possessing this belief are convinced that market players will sell their gold shares just as they would any of their other stock holdings. They anticipate that investors will jettison all shares regardless of the sectors that they represent, for fear of further substantial losses. In fact, this conviction appears to be supported by the severe gold stock price reversals that accompanied the recent general market decline.


    While this widespread fear engulfs many within the gold community, some experts believe that gold mining companies will only initially fall in unison with the resumption of the equity Bear Market. However, they believe that the gold miners will later regain some strength while common stocks continue to be liquidated.


    Their premise initially revolves around that held by the former group. However, many in this faction differ in the outcome. Among other reasons, this is because they are confident that the government will open wide the monetary floodgate causing gold to act as a safe haven and to rise in price. This in turn will carry the companies that mine and explore for it to higher levels. While they believe that gold will not suffer as greatly, in the end, they all believe that gold stocks only represent ownership of gold mines, and as such will not fare as well as the yellow metal.


    The potential for different outcomes arises when one attempts to anticipate the possible price movements of gold equities with a general market decline. This results because it is impossible to predict the duration and magnitude of any Bear Market downturn. We may face a virtual waterfall equity collapse where stocks cascade sharply lower. Or, we might experience a relatively controlled decline where their prices essentially erode over an extended time-frame. In fact, we might experience a combination of both market actions. In each of these scenarios the fashion in which gold equities react may be different! This factor makes a simple description of an equity Bear Market's likely effect upon gold stocks difficult to anticipate. Fortunately, a look into the past might shed some light upon the future, and may help us better prepare for its arrival.


    To me, the best precedent for comparison occurred during the gold Bull Market of the 1970's. Gold rose early in that decade from $35 to its ultimate $875 an ounce peak in February, 1980. Common stocks began that era with prices broadly rising only to suffer a severe Bear Market decline. This was followed in the mid-1970's, by the emergence of a new Bull Market. Significantly, during the equity Bear Market segment, both gold and gold stocks rose sharply in price.


    One could also compare the reaction of gold stocks to that which occurred during the great 1929 stock market crash and its aftermath. This might allow one to get a glimpse of what might transpire if a similar event was to be experienced today. However, a different set of circumstances prevailed during that era: 1. There were paltry few gold equities that investors could purchase, while today there are thousands. Thus, any capital directed towards gold stocks was focused upon the few available companies rather than being dilutive in their impact. 2. Both the government and the Federal Reserve had far less understanding of markets and therefore had less willingness to influence them to prevent any economic hardship. Today, they covertly intervene and possibly actively manage a number of markets. 3. That era's citizens better understood gold's position in the business and financial world. Gold was not only used to back or collateralize the dollar, but was often utilized in legal contracts. Contemporary investors have been convinced to shun gold and gold stocks, and firmly believe that the noble metal is essentially only useful in jewelry and for filling teeth. This prevents them from presently even considering gold investments. Finally, with most prices declining, the yellow metal actually rose substantially in price. Today it remains to be seen whether inflation or deflation are in our immediate future, and the impact upon gold is questioned by even many of its adherents. For these reasons, I believe that the relationship between common and gold equities during that period cannot be compared with those existing today. However, for completeness, I believe that a brief discussion of how gold stocks fared during the Great Crash and the ensuing years is important.


    The few trading gold shares followed closely behind common stocks during their October 1929 crash. However, shortly after the initial price collapse, while equities first rallied and later resumed their Bear Market, the trading pattern of gold stocks separated from that of common shares, and began a substantial advance. You have likely heard stories of the extraordinary price performance of Homestake Mines during that decade; it rose from a low in the $50 price range to over $500 a share before the 1930's decade ended.


    The primary reason for this incredible event was the result of the devaluation of the dollar. From 1920 to early 1934, gold had a fixed price of $20.67 an ounce. However, after making it illegal for Americans to own gold a year earlier, in 1934 President Roosevelt devalued the dollar. This was achieved by officially increasing the gold price to $35 an ounce; it then took 35 paper dollars to purchase an ounce of gold. This presented Homestake and the few other domestic gold producers with an enormous 70% windfall profit on their sales. Further it gave them a guaranteed price and a willing customer in the U.S. government, while the general economy suffered from a depression and generally falling prices. Further, Homestake's production costs actually declined while the economy floundered and the unemployment lines swelled. As you can see, the various conditions and events that accompanied the crash and the Depression's aftermath coalesced to first take Homestake's share price to lower levels, but later fostered its incredible exhibition of strength.


    It is important to understand how and why gold and gold stocks performed in the 1930's. However, I believe that in attempting to predict the fashion in which gold equities will today react to a common stock Bear Market decline, the 1973 to 1974 period offers the best historical comparison. Further, to my mind, studying it will likely give us much insight into what may lie ahead for gold shares when equities ultimately enter their next extended downward leg.


    HOW GOLD STOCKS FARED DURING THE 1973-1974 EQUITY BEAR MARKET


    As I stated earlier, the gold and gold share secular Bull Markets spanned virtually the entire 1970's decade. Equities on the other hand entered that period with stock prices in a broad based advance. This was followed by a devastating Bear Market collapse to its nadir in December, 1974, from which emerged a new Bull Market.


    January, 1973, witnessed the end of the prevailing equities Bull Market. The Dow Industrials peaked at about 1065 before the bear took control. The following two years saw the Industrials enter a period of unrelenting widespread decline. When the Bear Market was finally exhausted many second tier stocks lost upwards of 90% of their former prices, and the Dow Industrials had plummeted nearly 50% before posting its 577 low. Day after day and week after week, the bear pummeled common stocks. It was seldom referred to as a collapse until after it was over. Then, as now, hope sprang eternal!


    The relentless, unending price markdowns continued until the last remaining earlier bullish investors finally gave up and sold their shares. In so doing, they took whatever the market would offer them. By the time that the Bear Market ended in late 1974, the majority of stockholders vowed to never again purchase common stocks.


    Gold on the other hand began its major advance in the late spring or early summer of 1972. This was from the low to mid-$40 range, and after the gold producers had already risen from their earlier 1972 lows. As I recall, when the Dow Industrials peaked in early 1973, gold was trading at about $100 and gold equities had already posted impressive gains.


    During the following nearly two years while common stocks were devastated, the yellow metal simultaneously rose in fits and spurts and posted a temporary top at $200. This occurred at the end of December 1974, about a month after the Dow Industrials bottom. Gold staged repeated new highs despite the equity Bear Market which destroyed common share values throughout virtually the entire 1973-1974 period. Across this era gold equities followed gold higher in price and returned great profits to their investors.


    It is my contention that the effect of the rising gold price upon the profits of the gold producers acted to spare them from the great declines suffered by other stocks. This caused them to be viewed in a different fashion than were most common stocks! While most companies were experiencing smaller profits or severe losses, gold companies amassed substantial profits and their stocks exploded in price.


    It was only the decline in gold from the $200 level that generated a serious secondary correction for gold stocks. This began during the last few days of 1974, just prior to the time when Americans were again allowed to own gold. A terrifying gold correction ensued until the noble metal posted its $103 nadir in the summer of 1976.


    The gold shares had touched their low points a few months before gold struck $103. It was from those thoroughly depressed levels that gold and its shares rose to their final spectacular highs in February, 1980. Interestingly, and importantly, the latter rise of the gold complex was accompanied by common stocks that simultaneously advanced during the early stages of what was to become their greatest Bull Market in U.S. history.


    Given the fact that I believe that gold is in a secular Bull Market, I feel that only in a major financial meltdown, such as which occurred in the 1929 experience, will gold equities be sold along with other paper assets. Barring such an event, it is likely that gold shares will only periodically mirror the fall of common stocks when their Bear Market resumes.


    It is true that a sharp initial equities decline will likely be accompanied by a similar reaction in gold equities. If such a scenario unfolds it will occur because many gold investors are convinced of its inevitability, and will sell in anticipation of it. In essence, their belief and actions will produce a "self-fulfilling prophesy". However, I am confident that even if this occurs, it will be short-lived at worst.


    In the end, it is my belief that the direction of both the major and junior gold stocks will be far more influenced by the price action of the yellow metal, than by a vicious Bear Market in common stocks. As long as gold continues to trend higher, I am confident that gold shares will trade in a like fashion as they did in the 1970's. They will essentially rise and fall along with the gold price. There will be periods when either gold or its stocks will move higher and the other will hesitate. But, it is my contention that the great fears of many gold followers will not come to fruition when equities enter the next segment of their Bear Market decline.


    The above was excerpted from the May 2005 issue of Financial Insights © April 24, 2005.


    Dr Richard Appel

    Ich hoffe die Asiaten und Russen spaeter schmeissen ihnen bald die Fiat Dollars vor die Fuesse als Antwort. Und die T-Bonds hinterher ! :D
    Diese Saubande spielt sich als Weltherrscher auf und moechte jeder so dirigieren dass sie weiter wie der Wurm im Speck leben koennen, auf kosten anderer natuerlich.


    Tick. tick, die bombe geht auch los wenn der Zeiger stehen bleibt. 8o


    XEX 8)

    April 28 – Gold $430.50 down $1.60 – Silver $6.88 down 24 cents


    US Stock Market In Trouble


    "The enemies of truth are always awfully nice." --Christopher Morely


    Gold firmed up in London with the AM and PM Fix coming in at $432.75 and $432.50 respectively. However, the cabal induced raid turned the funds and ETFs into sellers as so often happens after a substantial price drop. The dealers were buyers.


    The huge run-up in open interest on Tuesday, one which only produced a relatively small rally, said it all. The Gold Cartel was not about to let gold take off and create further excitement over inflation. To give you some further idea how concerted the cabal’s efforts were, the open interest rose over 11,000 contracts on a $3 rally. Yesterday, it only fell 3652 contracts on a $5 fall. That explains how aggressive the cartel was with their selling above $436.


    $430 support held again. $429 was the last major resistance point of the cabal. As long as these price levels holds on a closing basis, the gold technicals remain solid. The base formed below this area is strong enough to send the price much higher.


    The dollar rose .26 to 54.36, while the euro lost .48 to 129.07.


    When I get upset at the gold industry CEOs, it is as a group and an industry. Certainly, there are many fine and responsible gold company CEOs out there. We hope to attract as many of them as possible to GR21. We just need more of them (like the ones at Samex and Klondike Star who are responsible for making GR21 a go).


    However, it is a shame to see so much gold shareholder equity disappear. It is astonishing the share prices could go down so much with the price of gold higher than where it was at then end of 2003. Gold shareholders are getting the shaft because of The Gold Cartel price manipulation. Yet, only the GATA camp is making an effort to end the capping. As I have said for a very long time, ending the price rigging is by far the most important issue for the industry. That should be very apparent now to ailing shareholders.


    A good example of how sick this industry is, one only need look at the World Gold Council. With the potential IMF gold sale an overhang on the market to some degree, they should be out there taking the IMF to task by explaining supply is supply and it WOULD have a major effect on the market any way you slice it. They should be touting the impact it would have on employment in the sub-Saharan gold producing countries, etc. Instead they go silent or say they have to ponder the idea. What is there to ponder?


    Silver is on rollover time on the Comex and it seems a number of specs are exiting rather than rolling over. The open interest dropped 5,577 contracts to 106,450.


    I have been asked why I have not dealt with silver much of late. It’s because I have no clue what is going on here. Every time it looks ready to rumble to the upside, it gets bashed. The only input I have is from our STALKER’s source in London, who says the market remains very tight and bullish. He says without the paper traders on the Comex, the price of silver would be sharply higher.


    The John Brimelow Report


    XAU comfort?


    Thursday, April 28, 2005


    Indian premiums: AM $3.91, PM $4.11, with world gold at $432.20 and $432.00. Taking the reporting cities as a whole, ample for legal imports.


    The active TOCOM contract was down 14 yen, and world gold was down 60c from the NY close. Volume equaled 24,768 Comex (+ 37%). Open interest was static. (+26 contracts)


    Yesterday NY traded 58,388 contracts, with open interest dropping only 3,502 lots. This raises the possibility that some of the selling pressure yesterday was shorting. Several commentators note the robust nature of physical buying on the lows; no doubt seen again today.


    An interesting post appeared on Bill Murphy’s LeMetropoleCafe yesterday:


    "I have found that viewing the gold market from an oblique viewpoint (in this case the XAU to GOLD ratio) is often better than looking at the actual metal or the mining shares.


    Today, April 27th, 2005 we find the ratio at 0.1930. All sell-off periods during this bull market going back to November, 2000 have seen this ratio bottom in slightly sub-.19 level numbers, so we are getting close to a bottom again, the evidence suggests. " one can say with absolute confidence that buying gold shares at a ratio of 0.20 XAU:gold substantially reduces one´s risk relative to the price of bullion."


    JB


    CARTEL CAPITULATION WATCH

Schriftgröße:  A A A A A