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

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Industrie-Nachfrage sorgt nach Einbruch für Unterstützung
[Von ftd.de, 19:38, 02.05.04]

Nach den starken Verlusten der letzten beiden Wochen sind die Tiefstände bei den Edelmetallen nach Einschätzung der Experten erreicht. Marktbeobachter erwarten bei Silber und Platin industrielle Nachfrage und gehen beim Gold von einer Konsolidierung zwischen 375 und 400 $ je Unze aus.
Dazu dürfte auch der Wiederanstieg des Euro beitragen, der zuletzt wieder Richtung 1,20 $ gestiegen war. Ebenfalls stützend dürften sich die anstehenden Rückkäufe von Termingeschäften durch die Minengesellschaften auswirken. Im Verlauf der Woche war der Goldpreis zunächst noch um 20 $ je Unze oder 5 Prozent eingebrochen. Er erreichte am Donnerstag mit 377,50 $ das niedrigste Niveau seit dem 7. November, bevor er sich auf 388 $ verbessern konnte.
Anlass für den Preisverfall waren Bemerkungen des chinesischen Premiers Wen, der auf die Gefahren einer Überhitzung der chinesischen Wirtschaft und geplante Gegenmaßnahmen der Regierung hingewiesen hatte. Die Märkte interpretierten diese Äußerungen als negativ für die boomende Rohstoffnachfrage in China.
Während es bei den Zentralbanken ausgesprochen ruhig blieb, gab es bei den Minen einige Quartalsberichte: Anglogold Ashanti, Marktführer in Afrika, musste einen Einbruch des Quartalsgewinns um 21 Prozent verkraften. Begründet wurde dies vor allem mit dem gestiegenen Rand. Unter den Erwartungen blieb auch Newmont Mining. Hier wurden nicht Währungsschwankungen verantwortlich gemacht, sondern gestiegene Rohstoffkosten.

Silber-Preis unter Druck

Das Silber erreichte in der ersten Wochenhälfte zwar noch einmal 6,29 $ je Unze, setzte dann aber seinen Abwärtstrend fort. Es fiel zeitweise auf 5,52 $ je Unze und damit auf den tiefsten Stand seit Mitte Dezember. Gegenüber dem Höchststand von 8,43 $ am 14. April hat das Metall damit fast 35 Prozent seines Werts eingebüßt. Am Freitag konnte es dann wieder auf 6,04 $ je Unze zulegen. Falls das Metall nun auch den Höchstkurs der letzten Woche durchbrechen kann, gibt es die Chance, dass die charttechnische Lücke bei 6,80 $ geschlossen wird.
Wolfgang Wrzesniok-Rossbach ist Produktmanager Edelmetalle und Rohstoffe bei Dresdner Kleinwort Wasserstein in Frankfurt.

Alle Rechte vorbehalten. © FTD
Quelle:http://www.boerse-online.de

Hallo zusammen!

Aktuell im Kitco Forum:
Wochenchart-Gold von Twowave für kommende Woche:
bis Mittwoch Anstieg auf knapp 400,--
dann Absturz auf 380,--,
bis Freitag dann wieder Ansitieg auf 395,--

dürfte also ganz schön durbulent werden

natürlich "Turbulent" , nicht "durbulent", meine Nerven sind scheinbar auch nicht mehr die besten!??!!!?

ThaiGuru:
Wieviele Unzen physischen Silbers hast Du in der Zwischenzeit zu den aktuellen Silberpreisen (Traumpreise) physische Silberpositionen weiter akkumuliert ?

Ich frage dies einerseits in Anlehnung an unsere Diskussion, bei der Du meintest, ich hätte Dir vorgeworfen, nicht danach zu handeln, was Du anderen rätst, was nicht meine Absicht war. Insofern würde mich jetzt nur der Umfang Deiner Käufe interessieren (natürlich nur als prozentualer Anteil des Gesamtvermögens, logo, daß ich nicht erwarte, daß Du uns Deine Vermögensverhältnisse hier offenbarst :]; andererseits frage ich dies mit Hinblick auf den Schluß des nachfolgenden aktuellen Textes

@alle:

Bitte um Beachtung des nachfolgenden Textes: Jeder sollte sich mal ernsthaft fragen, inwieweit der Text auf einen selber zutrifft: ICH fühlte mich mehrfach ertappt:

Taking the emotion out of Precious Metals...
and replacing it with Common Sense and a Greater Purpose
Chris Temple
The National Investor
May 01, 2004

Following the last major bull market peak for precious metals as well as gold (primarily) related shares in mid-2002, I wrote a commentary similar to what follows. The observations contained in that item, I hoped, would be taken by the precious metals community as they were intended; to help one and all, guru and investor alike, better themselves financially. To do so, I said, one needs to approach this sector, as any, with a clear head, common sense and a sound strategy. Unfortunately, those are attributes lacking in most investors; even more (and tragically) so, it seems, when it comes to investors in the precious metals arena.

If I could pick out just one reason why adherents to precious metals in recent years have usually been so wrong in their prognostications, it's due to their using their hearts rather than their heads. I don't think there's a single investment vehicle where more decisions (and usually bad ones at that) have been made by folks using their emotions and beliefs as opposed to common sense than gold (and, most recently, silver.)

Many a time during gold's relentless bear market of the last half of the 1990's, gold bugs threw money at their favorite investment, even as the metal's fundamental and technical behavior both deteriorated. Often, this was prompted by "forecasts" by those with a vested interest in selling precious metals-related products. Just as much, though, these usually doomed forays into metals were encouraged by those who were making forecasts based on how they believed things should be, rather than on the way they really were.

Tragically, the bull market in precious metals that began in 2001 has, for too many investors, not changed their fate as much as it should have. Once more, people have piled willy-nilly-and usually with a grossly disproportionate share of their overall portfolio-into gold and silver shares in particular. On top of this, countless investors did so with increasing enthusiasm (and even larger amounts of money) as expensive stocks became more so, and even as CLEAR danger signs were obvious to one and all.

Just as in mid-2002, most gold investors-and even gold pundits-have for the last few months now either ignored or denied signs every bit as clear as back then that gold (and, this time, silver even more so) were accidents waiting to happen. In particular, excited precious metals aficionados of all stripes fed the recent bubble in mining stocks gleefully, as always seeming to put in the most money when share prices became (at least for the time being) absurd in many cases. It didn't matter that valuations were way too high. It didn't matter that the rebound of the last 10 weeks in the U.S. dollar GUARANTEED that everything (including not only gold and silver, but most other commodities) that had been used to bet against it by hedge funds and others was therefore in BIG TROUBLE.

No Siree-for most people (unfortunately) investing heavily in precious metals is a cause. A quest. It's "proof" that they are one of a precious few who know that, ultimately, our fiat money system is in trouble big time. It's their vote, often with a majority of their entire portfolio and life's savings, that the Founding Fathers were right when they voiced their own distrust of paper money, its many evils, and its eventual doom.

And when the markets, as they have done yet again, don't "see the light," what happens? Precious metals bugs, who have just seen another substantial chunk of their portfolio's value evaporate, often go into tirades-as do some of their gurus. They holler of manipulation, conspiracies and more (much of which I indeed believe in, lest you think otherwise.) Seldom, though, do many of them cool off, take a deep breath, and ponder the possibility that it might have been them that did something wrong, by investing based on their emotions rather than on sound and clear fundamental and technical signs in these markets they love so much (and, in the cases of a few gold and silver gurus, markets they claim to know so well.)This is not to say that our own market calls will ever be perfect. Yours Truly does not pretend to claim that. However, it saddens me on a couple scores that, time and again, so many investors in precious metals take two steps forward (admittedly nice after the long commodities bear market) only to then take two or even three steps backward!"All right, Temple," you're saying. "You've made your point. Don't rub it in any more. What do you suggest we do?"

I'm glad you asked. And, I want to answer that question in two ways, starting with precious metals' investment attributes and character as a crisis hedge:

First, I suggest you come up with a modest, realistic amount of PHYSICAL gold or silver bullion you want to own, which you will hold in your possession. Buy or accumulate it, squirrel it away and forget about it. This is your "mad money" you'll be able to use as money in the event that "Bubbles" Greenspan's skyscraper of cards suddenly does fall. How much you need to have is your decision; but don't go overboard. Better yet, depending on where you live, your neighbors and your circumstances, other things can and should be accumulated for such a possible event as well.
Next, with your investment portfolio, determine how much (as a percentage of the whole) you should have in precious metals. Since the bull market in this sector began, I have advocated for subscribers that they have a "core position" of 10%. When the sector has been cheap, in my view, on BOTH a valuation and technical basis, we've increased that significantly; most recently, we had a third of recommended portfolios in precious metals stocks, cutting back on that position to 15% around December 1 of last year, and further down to our 10% core several weeks ago.

Does this mean those who followed my advice avoided losses entirely? No. In a long term bull market-which I believe we are still in-we always want to have at least this modest core position in carefully-selected individual precious metals shares (or, if you have no choice due to being in a group of mutual funds, in one of them geared toward precious metals stocks.) Indeed, our 10% has become 7 or 8% over just these last few weeks. However, by taking the lion's share off the table before the carnage developed, we're in much better shape to load up again once it's time for the next spurt higher. On the other hand, those "riding" outsized positions in precious metals stocks up and now back down will need to see their positions rise 50% or more from here just to get back to where they were a few months ago.

The foregoing is as much as most people need to be successful investors in the precious metals area. Have your "mad money" in the form of gold and silver bullion. Set up and hold a core position in metals-related stocks. Finally, realize that beyond this you must be a TRADER due to the nature of the precious metals markets.

Now, I want to talk about what really motivates me-and should motivate YOU-when it comes to precious metals as a "cause."

What breaks my heart as much as anything at times like this where "gold bugs" (and especially "silver bugs" this time around) have been bloodied anew is not so much the realization that-once again-this could be seen a mile away, and was therefore preventable. Instead, it's that I see in the kind of people who are most inclined to gravitate toward precious metals a constituency with the potential to change their society for the better. It's a constituency, though, that usually spends its time tossed to and fro by often shoddy advice, lots of hype and-usually-zigs when it should zag. As a result, it's a constituency which spends too much of its time licking its wounds, hunkering down, etc.

It has always struck me that most investors in precious metals have something, as I alluded to above, that the larger universe of investors-nay, even of our fellow citizens-does not. That is, a level of knowledge about the predicament that our nation-and world-are in; one which inevitably comes back to the nature of our "funny money" system. Further, many of these people-and I've met them at various precious metals, preparedness and similar shows down through the years-actually look at the subject of precious metals in a context beyond that merely of their individual financial health. This is good.
I believe the time has come to-in addition to getting the emotion out of our investment decisions in the precious metals area-actually turn our knowledge and even passion into something positive. Something useful. Even a movement toward monetary and, eventually, social reform, if you will.

I was sharing these thoughts this past week with my friend Steve Carr, co-founder of the Honest Money Group and an accomplished author, political activist and media expert (who can be reached for those who would like to do so at lifejourney60010@yahoo.com.) He, too, was decrying the fact that-among other things-gold and silver bugs have for too long been caught up in too much hype and hoopla, whipsawed regularly by market swings and all the rest, and have generally been lacking in any "game plan" that would both bolster their portfolios as well as the "cause" of precious metals.

He detailed for me the example of what has recently occurred in the silver market; one which he and I are both bullish on longer-term. Recently, boosted even more by hedge funds chasing this metal's momentum and, for a time, making "dollar contrary" bets, silver soared. Finally catching up with its big brother gold, silver spiked to a July contract high of $8.49 per ounce; its highest level in many years. On the COMEX, some 120,000 "open interest" contracts were accumulated at one point recently by speculators. Each of these represent 5,000 ounces of silver; doing the math, you come up with leveraged "bets" on some 600 million ounces of the junior precious metal.

After reaching its high, silver plunged on the July contract to well below $6.00 per ounce (it closed today at $6.09 per ounce.)

Rather than playing in the "manipulators' ball park," Steve suggested, what if some of the people out there who got caught up in the SPECULATION over silver-and, in effect, ended up trading paper bets on the underlying metal-had done something different?

On paper, the losses incurred on these contracts from the contract high (which came in early April) to the low of $5.55 per ounce come in at more than $1.7 billion. This would purchase the better part of 300 million ounces of the metal itself, were the price to stay static (it wouldn't, naturally, as such demand would overwhelm the physical market.) The point is, if more people who really believe in precious metals as a cause would to at least some extent be wise and accumulate the physical metal at times like this rather than chasing the futures markets and, as just happened, getting whipsawed, a couple things would happen.First, this activity alone would drive the price of silver dramatically higher; not because speculators are making paper and other derivative bets on the metal, but because it is really in demand. Second, many thousands-and, maybe one day, millions-more people would be in a position to join some of the fledgling efforts already underway to do business in a true free market by using their silver as money.

A rapidly growing segment of the population which understands history, our current monetary predicament and the need to do something pro-active to develop an alternative monetary regimen would be a potent force! Further, as this growing number of people acquired a form of money NOT dependent on debt, NOT dependent on markets, and NOT dependent on whatever manifestation of Greenspan we are treated to this week, a true free market might actually break out! As many are already attempting and even implementing with other forms of trading regimens based on silver, gold and even community currencies not based on precious metals, people of good will can further what I have in the past called a "peaceful monetary revolution" that is way overdue.

This and more will become more likely as the day arrives when the precious metals community approaches the asset classes it is most passionate about with more strategy and sense, and less emotion (meaning, of course, the kind of counterproductive emotion and hysteria that time and again leads to major financial losses during debacles such as we've just seen.) If you want to be emotional, then be passionate-nay, driven-about the kind of portfolio you could have by changing your approach. More so, be driven about the kind of future your children and grandchildren can have if we break out of the mold so many have been in for so long, and look at precious metals as a greater means to an end we all hope for. No conspiracy or manipulations, real or imagined, could stop millions of awakened people who realize that-at the least-they need an alternative to Greenspan's fiat money. Those millions, grounded in truth, sound investment strategies and with a noble purpose even beyond their own investment success, can change society for the better.

Will you be on board?

Chris Temple
May 1, 2004

PLEASE REPLY TO: chris@nationalinvestor.com

http://205.232.90.194/editorials/temple/temple050104.html

Wie gesagt: Jeder sollte mal darübe rnachdenken...

Kleiner Nachtrag: Ich will mal einen Vergleich ziehen:

Ich glaube, mit dem Gold, Manipulationen, Fiat Money etc. verhält es sich sehr ähnlich wie mit dem

HANDY-Markt

In ca. 2 Jahren wird eine Studie der Weltgesundheitsorganisation
herauskommen, die (verbindlich ???) darüber Aufschluß geben soll, inwieweit die Strahlung von Handys schädlich sein kann.

Mal ganz im ernst: Glaubt auch nur irgendeiner hier im Forum daran, daß
Handys NICHT die Gesundheit gefährden können.

Gibt es hier auch nur EINEN, der freiwillig unter einer der tausenden von Strahlungsmasten/Dachantennen leben möchte ???

Aber mal im ernst: Würde nun irgendjemand auf den Gedanken kommen und glauben, die Handys würden aus unserer Welt wieder verschwinden ? Würde irgendjemand darauf Geld "wetten" ???

Nein, die Handys werden uns erhalten bleiben (99 Prozent der Bürger würden vermutlich nicht mal darauf verzichten wollen, 99 Prozent weigern sich, die Risiken mal ins Kalkül zu ziehen, wollen davon gar nichts hören, nach dem Motto: Wird ja schon nicht so schlimm sein oder wenn es schädlich wäre, würde es bestimmt verboten.)

99 Prozent nehmen es so hin, wie es ist... Ein kleiner Teil, ja, der protestiert gegen Antennen, versucht Aufklärung zu betreiben... Aber mit welchem Erfolg ??

Bzgl. der Gesundheitsrisiken bei Handys wird m.E.in extremen Maß manipuliert: Da werden Studien "gekauft", da werden Informationen zurückgehalten, da wird bagatellisiert (denkt mal an die Vergabe der
UMTS Lizenzen, bei denen Eichel MILLIARDEN kassierte - es ist doch
klar, daß nebenbei ein Deal ausgehandelt wurde, daß, wenn die Funknetzbetreiber schon so viel zahlen, sie auch von der Poitik die
Zusage erhalten, in Ruhe weiter verkaufen zu können. Es geht um viel viel Geld, um Arbeitsplätze, um unser aller Kommunikation...

Kann man diese Situation mit dem Thema Fiat Money, Schulden, Gold, Silber, weltweites Finanzsystem vergleichen ?

Ich bin fest überzeugt, daß sowohl die Handy-Gegner wie auch die
Goldbefürworter im recht sind.

Aber bei beiden habe ich echte Zweifel , ob ihnen das in irgendeiner Weise jemals nützen wird.
Ich befürchte, daß es in etwa ebenso wahrscheinlich ist, daß in einigen Jahren die Handys vom Markt verschwunden sind, wie die Annahme,
daß in einigen Jahren Gold eine Rolle im Weltfinanzsystem spielt, die der
nahe kommt, wie viele hier sie sich wünschen.

Ob das gut ist oder nicht, ist nicht die Frage. Die Frage ist: Wie wahrscheinlich ist, daß sich etwas ändert....

meint Spieler

Noch ein kleiner Nachtrag zu Handys und Gold:

Ich habe auch oft gesagt:

WENN nur 1 Prozent aller Deutschen loslaufen würde und ein paar
Unzen Gold kaufen würden, was würde dann auf dem Goldmarkt passieren...

Aber fragen wir uns: Wie wahrscheinlich ist es, daß 1 Prozent aller Deutschen loslaufen und Gold kaufen ??

Für wie wahrscheinlich haltet Ihr es, daß eine nennenswerte Anzahl von Menschen KEINE Handy mehr kauft, daß sie ihre Handys an den Hersteller zurückschicken, abschalten, nicht mehr benutzen, selbst
WENN eine Studie herauskommt, daß
Handytelefonieren schädlich ist ?

Dann guckt einfach mal (Gruß an alle Raucher hier im Board)
wie ungemein wirksam die Warnhinweise auf den
Packungen der Zigarettenschachteln sind.

Macht Euch mal klar:
JEDER weiß, wie schädlich das Rauchen ist.
Aber MILLIONEN kümmern sich einen Dreck darum !

Ich sage: Selbst wenn auf jedem Geldschein der Warnhinweis:
Achtung: Fiat Money gefährdet Ihr Vermögen !
stehen würde, es würden kein Schwein interessieren !Die Masse schläft ! Das war schon immer so.
Und unser Geschreie wird sicherlich die wenigsten aufwecken.
Erwachen ist dann angesagt, wenn es zu spät ist.

Aber für die paar Goldbugs wird der Gesetzgeber dann
auch eine Lösung parat haben...

befürchtet Spieler

USD:
entscheidender Punkt/Spitze jetzt?

Eur/USD

MÜNCHEN (Dow Jones-VWD)--Die Mehrheit der Deutschen plädiert dafür, einen Teil der deutschen Goldreserven zu verkaufen und den Erlös in die Bildung zu investieren. In einer Umfrage des Nachrichtenmagazins " Focus" sprachen sich 62% der Befragten für diesen Vorschlag aus. 27% lehnten ihn ab und 11%machten keine Angaben. Nur 17% der unter 34-Jährigen sind gegen einen Goldverkauf. Bei den über 54-Jährigen sind es 31%. Das Meinungsforschungsinstitut polis/USUMA befragte für Focus 1012 repräsentativ ausgewählte Personen.
Dow Jones Newswires/ddp/3.5.2004/hab

CrowLee:

Zitat

I have read some of the gold forums on the Internet and find an almost 180-degree turn in sentiment from this time last year. Numerous posters were pounding their chests about the end of the bull market and were tossing out numbers like $350 or even $300 that gold would see again. To have any negativity in a forum, which is usually totally dominated by bullish believers, strongly suggests to me that much of the over-enthusiasm that has overhung the metals and mining share markets is now gone. I take that as a very bullish sign.

Swiss financial Report: Spezial Ausgabe Gold

hier

Schuldenuhr

http://www.miprox.de/Schuldenuhr.html

pro Tag kommen ca. 189 Millionen Schulden dazu.

Buffett erwartet Inflation und Dollar-Schwäche

Der amerikanische Investment-Guru Warren Buffett sieht einen unleugbaren Trend zu steigenden Zinsen und einer anziehenden Inflation. Es sei nur noch nicht klar, ob dieser Anstieg sich sprunghaft oder kontinuierlich vollziehen werde; man müsse aber in jedem Fall mit ersterem rechnen. Inflation sei ein schwer zu bewältigendes Phänomen, das sich aus sich selbst nähre, wenn es erst einmal um sich gegriffen habe.

Als bedenklichen Trend sieht Buffett auch das Handelsbilanzdefizit der USA an. Er rechne stark damit, dass es dadurch in näherer Zukunft zu Verwerfungen an den internationalen Finanzmärkten kommen könne. In jedem Fall werde es den US-Dollar weiter unter Druck bringen. Seine eigene Beteiligungsgesellschaft Berkshire Hathaway habe deshalb Fremdwährungspositionen im Umfang von 12 Milliarden Dollar aufgebaut. Investiert worden sei in Währungen von fünf großen Auslandsmärkten. Daneben könne man sich demnächst auch den Kauf eines großen Unternehmens in Deutschland, Frankreich oder Großbritannien vorstellen.

AUSZUG:

manager-magazin.de, 02.05.2004, 18:07 Uhr

http://www.manager-magazin.de/…kel/0,2828,298058,00.html

WARREN BUFFETT

"Last Man Standing"

Von Matthias Kaufmann

Bald schon droht eine schwere Krise des Finanzsystems, orakelt Warren Buffett. Seine Firma, Berkshire Hathaway, werde sie überstehen - und alle, die sich nach seinem Rat richten. Hendrik Leber war dabei, als 20.000 Anleger den Meister feierten.

Omaha - "Die meisten Investoren haben sich jahrelang wie Schafe verhalten. Selbstverständlich wurden sie so auch geschoren."

Es sind Pointen wie diese, für die Tausende von Anlegern nach Omaha pilgern. Bei der Jahreshauptversammlung von Berkshire Hathaway sind - ungewöhnlich genug - Notizblocks ein Standardutensil. Wenn Warren Buffett, der Chef der Investmentgesellschaft die Jünger an seiner Weisheit teilhaben lässt, dann kratzen Tausende von Kugelschreibern wild über die Seiten.

..........

"Aber seine Weisheiten sind noch immer bemerkenswert", so das Resümee. Hendrik Leber wird auch 2005 nach Omaha reisen, das steht schon fest. Nicht nur, dass Buffetts Kommentare eine wichtige Orientierungshilfe für den Fondsmanager sind. So etwa, wenn Buffet die Google-Gründer Sergey Brin und Larry Page lobt - "zwei hochintegre und intelligente Männer" -, weil sie für ihren IPO seine Idee der "Bedienungsanleitung für Anteilseigner" kopiert haben. Es ist auch die Pflege lieb gewonnener Kontakte, die Leber immer wieder zum Woodstock der Kapitalisten führen, das Wiedersehen mit zahlreichen "Gleichgesinnten, die die Dinge sehr entspannt sehen".

Selbst die haben zuweilen Sorgen in der gegenwärtigen weltwirtschaftlichen Lage. Sorgen, denen Buffett mit großer Gelassenheit begegnete. Es habe zu allen Zeiten immer die gleiche Zahl negativer Faktoren gegeben, beruhigt er die Geängstigten, langfristig hätten die positiven Einflüsse aber überwogen. Kein Grund also für die liquiden Berkshire-Gesellschafter, weiche Knie zu bekommen - wenn sie sich an seinen zentralen Rat hielten.

Der einzige Weg, die Krise zu überstehen

Dieser Rat ist simpel: "Keine Schulden!" In den kommenden zehn Jahren werde es nämlich zu tiefen Erschütterungen des Finanzsystems kommen. "Seien Sie unverschuldet, dann können Sie diese Krise gut überstehen." So wie übrigens Berkshire Hathaway, eine der wenigen Gesellschaften, die das alles weitgehend ungeschoren überstehen werde: "We'll be the last man standing!"

Doch nicht nur Rat und Trost hielt er bereit. Buffett holte zur großen Manöverkritik des Kapitalismus aus. Vor allem in der Branche der Investmentfonds sei viel zu lange offensichtliches Fehlverhalten toleriert worden. Es habe erst eines Mannes wie Eliot Spitzer, den Chef der New Yorker Börsenaufsicht, bedurft, damit bei den teils kriminellen Machenschaften aufgeräumt werde.

Wo es ihm besonders gegen den Strich ging, nannte er Ross und Reiter: Royal Dutch/Shell habe die gesamte Finanzwelt jahrelang unter den Augen gestrenger Branchenkenner betrogen. Dass die gefälschten Nachschubschätzungen erst jetzt aufflogen, hat ihn offenbar sehr irritiert.

........

INFLATION AND DEFLATION: THESE STRANGERS
Castrese Tipaldi

Whoever had the misfortune to hold investment money in gold and silver could not be more happy that the last week finally got an end. Indeed, what a week it was!

Silver sank at one point more than 1,5 $ lower in just two days, something of absolutely amazing that has never happened before, except in the post-Hunts era. The action in gold was not much different, except for the magnitude.

This carnage in PM arena was preceded and accompanied by several articles and comments from people who was (and are, I suppose) among the strongest supporters of the precious metals' merits. As such, their latest words, as always, had an enormous impact towards the investors in this category, I guess. And these words, this time, urged caution, with various degrees of authoritativeness.

Dismissing the minor degrees, which could be synthesized with "nothing goes just up, and in 1975-76 gold had a 45% correction" (forgetting to specify that in the few years before gold went up 471%, a not so little difference with the state of art at present), I wish to focus on the remarks from Richard Russell, for the sake of the arguments I want to point out with this article: that is, inflation/deflation and silver. His comments are the following:

"Silver is a chameleon. In a inflation, silver becomes a "precious metal," and a monetary metal, and silver goes up with inflation. But in a deflationary situation silver is viewed as an industrial metal. In a deflationary environment, silver is not, as in the case of gold, viewed as money.

If we're going into a deflationary economic collapse, holding gold doesn't worry me. But holding silver would worry me."

First of all, some clarifications: it's not possible to get a deflationary environment living in a world completely plunged in a fiat-money regime.

I think that inflation and deflation are the most abused words in the economic camp, with a lot of people who use them in an improper way, creating so much confusion.

What is inflation? Inflation is an increase in the supply of money released in the system. Period!

And deflation is the contrary, that is a decrease in the supply of money infused in the system.

From this, I'd be daring to draw the following corollary: in a fiat-money regime a deflation is something that can not exist! At least in the real life. And in fact that's never happened in such a regime, and never it will.

Many refers to Japan to argue the contrary, but again it's just a confusion of terms and concepts. In Japan we have witnessed a collapse in the price of the assets, and a minor retreat in the consumer and producer price. But the release of money in the system has been relentless. And that is inflation!

There were two things a little strange in such a context: a substantial firm yen and the interest rates decreasing. But this can be explained with the fact that Japan had not foreign debt, its citizens had a huge pool of saving and its trade balance showed a chronic surplus. All things that US today can't boast of, and that's the reason why the outcome there will probably be different under this aspect.

So what Mr. Russell really meant with his expression "deflationary environment" was probably just this: an environment where the price of the financial and real assets go down dramatically, an environment where the economy recede and where the untenable debt's level is like a stone tied to the feet of the society.

But even in such an environment, that will not be deflationary in a proper sense, I repeat, because the Fed will keep on doing the only thing it knows and for which it was created, that is to pump ever more money and credit in the system, will the silver be a poor choice of investment, an asset to worry about if you hold it? I don't think so!

Even if people don't realize that silver is money, the only real money with gold, and in fact the most circulated money at all in the mankind history, I would consider it anyway the safest investment to hold also in this scenario.

This scenario would be characterized by a desperate and growing need of cash (rectius: legal tender) for people and corporations to meet their obligations, so that they'd get rid of all their other assets to obtain it, with a dramatic effect on the price of those assets. Mr. Russell talks about something similar with his remark about debt as a "synthetic short position against the dollar". So everybody will dump stocks and bond and real estates and everything under the pressure of the enormous debt. This theory surely has got sense, but will it affect the precious metals? Will the people sell even gold and silver to get an ever more scarce (for them) legal tender? Maybe! Maybe they would, but how much gold and silver American people have now as assets? The answer is very, very, very little! Very, very, very little of gold, and maybe even less of silver. The percentage of those metals in the total of their assets in this moment is absolutely negligible. So we can reasonable conclude that the effect of their hunger for legal tender can't be significant for precious metals.

Things could be different for gold and silver stocks maybe. They are first common stocks, and in a general demise of the stock markets they could certainly suffer. But I'd conclude that finally the public will come to realize why they should buy them: because of their assets! The rule in this camp is that universal one: do your own due diligence, examine the goodness of their reserves and resources and projects, and the competence and trustworthiness of the management, so to avoid the garbage that abounds here as everywhere, the "hot-stories" full of nothing.

Even less significant, I think, that will be for the value of US dollars on the Forex. The foreigner have not obligations denominated in USD, opposite: they have a lot of rights denominated in USD. To talk about an appreciation of the US dollar, therefore, is to go a little astray; the US dollar may appreciate in relation to stocks, bonds, houses, et cetera, but I don't see how that "synthetic short position" could make a case for its appreciation against foreign currencies.

In such a scenario, Mr. Russell warn us that silver would not be perceived as a precious metals, as money, but rather as an industrial metal. And sure, in an economic recession any commodity would suffer, at least according to the common economic thinking. But I confess I'm not so comfortable with this conclusion. In general, I would strongly argue that the monetary affaire should not be eliminate when coming to determine what could be a fair price for the commodities. What do I mean? I mean this:

U.S. Debt - All households, governments, business
1980 $ 4 trillion
2002 $ 31 trillion

Economic expansion of 80's and 90's questionable.
Dow + 1,000% Debt + 700%
Energy Consumption (barrels of oil consumed) only +34% in 20 years

U.S. money supply:
1787 - 1970 2 centuries $600 billion
1971 - 2003 32 years $ 6 trillion

Globally, money being printed at alarming rates. (In last 3 years: Japan +50% (M1); U.S. +25% (M2)

They are just a few quotes to realize the monetary orgy that has happened in the world in the last few decades. I could go on for a long time, but I hope I was able to make my point. But if someone wants some really strong emotions about this, he has just to check the archive of Doug Noland on Prudentbear website. Just, if you are easily affected, avoid it!

At this point, I urge everybody to confrontate the price of gold and silver, but even just that of the other commodities, then and now; after that is done, I think I can save further words.

But in the case of silver that view is even more flawed, as I see it. First, if commodities' prices go up and down just according to economic expansion or recession, could someone please explain me why silver price has been flat at best in the last two decades, a period of time where powerful economic boom took place?

Anyway, even leaving this simple question apart, the major flaw in applying that view in the case of silver, even considering it just an industrial metal, is that it fails completely to consider the paper manipulation going on the Comex, the supply/demand equation with a productive structural deficit lasting by then a decade and half, and known inventories above the ground approaching to zero. I will not dwell on this, because these things have been exposed and examined much better than I could ever do by Ted Butler, and you have just to go on his website to know the details. I'm still waiting to find someone or something contradicting seriously the resulting of Mr. Butler researches. True, a certain individual has appeared recently, trying to do that; unfortunately for him, the only thing he has accomplished is to insult Mr. Butler with no restraint, because nothing supports his conclusions but his apodictic assertions. A lot of silver all around? Just a question, baby: WHERE???

Maybe in the dreams of the Silver Users Association!

So what's happened the last week in gold and silver markets? Nothing special indeed. Just the usual flood of paper gold and paper silver sold on the markets to scare away the public and the brainless technical funds; just the usual avalanche of paper gold and paper silver hurled in the market by the usual subjects to manipulate it, gold and silver which do not exist, which they do not possess, and which in the case of silver the world will not produce in a whole year; just the usual killing of the commodity law with the speculators setting the price, with the paper setting the price for the physical. In a word: just the usual Fraud, exposed in all its glory, shameless and unpunished, under the pleased and benevolent sight of the CFTC and the Comex. Nothing special indeed.

Just the usual ambush! And every time it happens, we get of course "experts" and "economists" ready to rationalize the irrational. This time the gag was on the last CPI release, which showed a monthly increase of 0,5%. You would expect that such a new would boost the precious metals' price, wouldn't you? But alas you are not an "expert", neither an "economist". Because if you were, you'd realize that such increase means that maybe the Fed could be less available to keep the interest rates to the emergency level where they are now, and that would kill tangibles and would make the US dollar a "must own".

With an incommensurable effort to stay serious, I am ready to concede that the Fed will raise the rates of a quarter, half or even a full point in the coming months. I'm not so sure, but I will concede it. Will that mean a reversal in US dollar fortune, and an insuperable shock for gold and silver? If you think so, you could go towards a lot of surprises in the future.

The Fed should increase the rates to 6% just to match the increase in the CPI (CPI is then a joke in itself; I consider it just to show how much I am temperate), 6% just to get zero real return on money. And a zero real return on money is still not a credible challenger for gold and silver. So give me a break here, please.

The true is that any increase in interest rates made just to catch up the increase in producer or consumer prices will not really harm gold or silver. As Jim Siclair points out, that would require a substantial change in the spending habit of the government, and a serious effort of monetary policy, to effectively address and reverse the monstrous deficits which now affect the US dollar system. Do you see something of similar in the near or even intermediate future? If you do, your sight is much, much better than mine!

Therefore, the usual subjects at the Comex can continue to deceive themselves thinking that the fractional reserve way-of-life can be effective even in the gold and silver realm, but time will come when they will be forced to wake up, realizing that it's impossible to inflate gold and silver supply with the simple pressure on a computer keyboard. To achieve that, it's needed a lot of money, a lot of time, a lot of hard work and know-how, sometimes even human lives are required, all along the production chain. And the people, the general public will realize that too. That will be a very interesting time.

I don't know if last week we have seen the last gasp of those usual subject trying to cap gold, and I don't know if we have now the very last possibility to get silver at a price so cheap. I just know that all the above the ground known silver inventories has almost gone by then, and that ever less gold is available to continue the fiction. My only humble conclusion is that in our future ever increasing amount of legal tender will be required to get some weight of real, honest money, to get some real wealth on which you can rely without to depend on the willingness and trustworthiness of nobody, i.e. gold and silver.

CASTRESE TIPALDI
soslettonia@libero.it

30 April 2004