Absolutely, also I take into account that, in SLV's case, day traders flooded into SLV as volatility and volume increased.

The entire point. Retail investors were not driving the price of silver up through SLV (and the same goes for gold and GLD).

I agree.

But since we have entered into a hard asset cycle in 2000-2001, rates and gold diverged completely as loose monetary policy was implemented to stave off some of the negative consequences of the tech bubble and 9/11 after that. A great deleveraging must occur at some point, I argue that gov'ts around the world will fight this through money creation (this is exactly what they have done for the most part).

Honestly, I can hardly wait to dump all my PM holdings, options, mining stocks etc. but it is not time yet. The environment gives me all the clues I need. Unrelated, I also hate to see volatility in gold as high as we have recently seen, much of the action was genuine buying and accelerated by short covering, not many were expecting a big rally past $1700 obv. This is merely a sign of things to come and in actuality is representative of the instability of premium stability assets (US t's) and currencies (EUR).

I understand your point and it is indeed valid, I have this in mind.

Father Ben has stated publicly QE2's new time-line is November 2010 - mid 2013.

Growth has picked up, but we are paying $4+ for every $1 in growth, you are right until another safe liquid option presents itself, the run will not be over. If the market forces up rates, I don't believe they offer close to what gold offers. What is the historical average for treasuries 5+% (too lazy to look up now), even if rates normalized you have to imagine what that would do to our budget considering how we roll our debt. Do a little mock US budget with rates at 10% when you get a chance, it gets a little silly.

I would argue there has been a slow methodical increase at almost equal percent gains vs. all major world currencies for a decade. Though it is accelerating (with new phases starting in 05 and early 09). Simple version below.


The liquidity of physical is quite high, I can't click a button and be done, but it is not that much more difficult.

I would argue a steep rise in rates is terrible for the US and if rates weren't negative this doesn't mean all the $ floods into T's.

I appreciated the response. Our opinions are certainly different, but I would say we diverge at the future outlook and level of faith in government and central bank actions worldwide.


well chart didn't load.

ZB DEC 08 -4,475.56
ZB MAR 09 763.9
ZF DEC 08 -11.27
ZN DEC 08 205.02
ZB DEC 09 2,611.16
ZB JUN 09 4,709.88
ZB MAR 09 15,094.36
ZB MAR 10 1,152.79
ZB SEP 09 7,156.36
ZF DEC 09 -89.4
ZF JUN 09 35.6
ZF MAR 09 834.48
ZF SEP 09 -2,651.90
ZG APR 09 -234.8
ZN DEC 09 2,732.70
ZN JUN 09 7,851.22
ZN MAR 09 1,401.22
ZN MAR 10 3,302.12
ZN SEP 09 7,645.98
ZT DEC 09 -6.92
ZT SEP 09 -5,697.88
ZB DEC 10 684.66
ZB JUN 10 -9,272.72
ZB SEP 10 -11,764.20
ZF MAR 10 -2,663.17
ZB SEP 11 -551.33

Total 18,762.30




thought i did better but my timing in 2010 was ridiculously bad

Really, do you read what I wrote or what you wrote? Gold pays interest, not far from US treasuries when credit is loose. DUCY?

Forget how close rates were to lease rates at a certain date, it was an example.


Gold can earn money, just like dollars, there is a quoted rate for this at all times, you just didn't know or consider that. It makes that part of your argument a dead end. Carry on.

Practice what you preach. Not doing so is intellectually dishonest. lol

I have no position long or short in US treasuries, but I am sure you have some or have recently, post all the details now young man.

you're right that i don't know the details of lending gold, but i do know that the vast majority of gold investors don't take advantage of such things. i seriously doubt its equivalent to investing in treasuries in any way, but i'll admit i could be wrong on that. feel free to expand, if you like.

what i do know is that for the vast majority of gold "investors", there is a carrying cost, and they're not making money by lending it out. gold and USD are fundamentally very, very different.

Treasuries typically offer a higher rate, though many times, like now, the difference in return has been quite negligible.

Very true.

sorry for selectively quoting but not much to say on the rest i think and the quote system makes it annoying to try to follow the discussions lol.

the liquidity of physical NOW is quite high. that may dry up when everybody holding large amts of it wants to sell...


i think it does...there's tons of liquidity out there looking for a safe place to park. if that 'safe place' also offered non-negative yields, then all the more attractive.

true and that's what makes a market.

Uhhh, just because you are being paid back more dollars does not mean you are getting paid back "more than your initial investment". Holding onto something that is maintaining it's purchasing power but generating no interest > acquiring more of something as it's losing it's value. Ask the Chinese if they'd prefer more dollars/treasuries or gold.

the same is true for gold.

i actually thought we did like 10 of these trades but i only see three in the sheet:

Closed Positions Date Purchased Shares/contracts Price Sale Price
ZBM9 8-Jan-09 -4 131.52952 124.22048
ZBM9 2-Mar-09 3 126.049 129.28298
ZBM9 28-Apr-09 4 123.58 121.513895
ZN M9 2-Mar-09 -6 121.509 124.392355

line 2 and 4 was a YC narrower trade.

line 1 was a short bond trade.

line 3 was a long bond trade.

lost 2/3 of these trades but made out a net winner.

But how of the $4 is ultimately recouped? Don't we have precedent to this effect?

It reminds me of the $100 trillion of unfunded liabilities that gets cited by the bugs which is an absurd calc.

hope u low stake clowns grew some balls and loaded up in the 30's like u were told too. Maybe in 2012 you can take some shots at higher stakes again with those silver profits. Merry Christmas everyone, mine is gonna be full of good cheer.

Most of the best traders on this forum yowwsers, Najadorf-defense, Dcfirs, boredsocial, aba do not think the precious metals are any good. You are probably a noob like me. You will learn just listen to the good guys.

And what do you say about guys like Einhorn and Klarman who have a large % of their portfolio in gold?

Haha don't put me in with that group. I don't know what the hell I am doing. Very few of my investments do I actually add value. I generally steal some idea from somewhere, do a few hours with of extra research so I feel like I did my due diligence and then go enjoy the great weather.

I say they are dumbies because you cant assign value to gold. Warren Buffet the greatest of ALL TIME says you cant assign value to gold and that it is stupid.

Lol. I know the feeling. I think I'm getting better though.

well we all get ideas from "somewhere" and it's how we learn.

i also love it how it's still like 50/50 whether somebody gets my name...even after a decade on 2p2 lol (for some reason my "reg date" is 2003 but in reality i joined in 2000 while at the dept of labor and using taxpayer dollars to learn poker haha).

keep up learning though brian. just from the few posts i see it seems you've come a ways.

I have traded gold twice this year. I actually posted the first one here even though I rarely post trades here. Got short GLD calls a few days before expiration based on really high vol and gold had already run almost $100. I posted my stop out for a $0.30 loss on GLD. I would make the same bet again under similar circumstances but did not want to be short gold for more than a few days and have of course avoided the nearly $10 of loss.

I shorted GLD again late last week and made $2 - it was the day of the market bounce + higher margin reqs. I covered within hours.

I think gold will crack eventually but I am not inclined at all to short it.

My most recent trade in silver was also posted here where I got long the 35 / 37 spread and ended up trading into 0 cost and I'll make the $2 it appears on half since thats my stub.

I think silver will crack eventually but I am not short it here and am long underneath the market based on my spread but with limited risk.

As soon as I think theres a silver short trade, trust me, I'll make sure to post it here to rub it in all the ******s faces.

In the meantime, I'm basically neutral on both.

this. im neutral on both too. close to shorting gold but not yet. and maybe not at all depending on how this upcoming double dip plays out.

i'm much more inclined to short risky asset prices in general. i think there's definitely a deleveraging coming and it'll play out more on government and personal balance sheets rather than corporate balance sheets.

decipher this?

Aba? Even he wouldn't say that... bored social... (no offense) but you have to be kidding.

Yows, Naj, DcifrThs, b.s. and aba < Einhorn and Klarman

Ahnuld is the best, most detailed and informative trader here imo (fwiw) as far as the readers are concerned.

From the guy who said this...today. Lol.
Earth is this way buddy.

I think he means the abbreviation, everyone always f's it up.

The internet and the quoting system makes it easier for us to misunderstand one another.

Indeed.



Agreed.

How is $4 is new debt issuance per $1 in gdp growth recouped? With taxation and/or devaluation. 2011 and 2012 figures are on track to show more than $5 in new US debt issuance per every $1 in US gdp growth. The devaluation and/or increase in federal revenue required to meet our our discretionary spending needs alone is becoming greater every year. There are currently no plans to recoup this 40%+ increase in federal debt, which was accumulated in three years with the intention of spurring growth.

Yows, at the current rate, we could see 10%+ growth in the US economy this year if the budget deficit was $7 trillion this year... lol. Do you get it.

That is pretty simple. Now imagine we attempt to inflate our way out of the problem, rates would rise and our debt rollovers would be all the more difficult. Etc etc. Hard to believe some people still handwave the liabilities with their magic ability to jump into the theoretical future and force politicians to make the tough decisions before it is too late, we blowing that opportunity of longer term fiscal solvency now. I am wasting my time with you, you are entrenched to no end or simply have not taken a look at the financial state of the US, best of luck.