Gold and Silver Behaviour in a Market Boom or Bust

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GoldInvestments
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Gold and Silver Behaviour in a Market Boom or Bust

Postby GoldInvestments » 12 September 2016

Many are believing that gold will be saving us in the event of a market bust and collapse. The reality is that there will be nowhere to hide in a broad market bust and collapse scenario. Gold has already shown signs that it's a high beta selloff target as there is plenty of liquidity in gold and silver trading vehicles. Gold and silver is money after all.
gold-and-silver-bullion-items.jpg

The idea of improving or even protecting your living standard by investing in gold is only a guaranteed prospect in the event of inflation. This is evident during the 2003 to 2007 inflationary period. Gold and silver, together with oil and most other commodities benefitted by multiples more than the stock market. In the market bust of the GFC ending by March 2009 we saw gold, silver, and oil behave in multiples on the downside also. Therefore gold and silver should be thought of as a high beta asset.

Where gold and silver is able to perform as the ultimate asset class, is in financial system collapse. Policy consensus by central banks has reduced the risk profile of all the money creation in the last 2 decades of financial largesse. So the possibility of system collapse won't happen too easy when everyone is on the same policy thought page. This means inflation. And it is only inflation when gold and silver will outperform if the financial system is intact. Like in the 70s and that recent period of 2003 to 2007 and 2010 to 2011 with the introduction of QE. I the introduction of QE, Inflation didn't pickup so gold didn't launch even higher.

In the event of a financial system collapse it won't be possible to live the way we do now either. Gold will be a sort item for exchange for a lot of goods. But you would also be a predator target. Property rights will also be challenged when government throws around its confiscatory policies which are meant to protect us. Gold becoming illegal to own for 40 years from 1933 is already a recent case study which has proven to work. Taxation on gold trading is another barrier. So gold will be forced into the black market. A further criminality targeting. So in the brief scenario breakdown, inflation is still the only reason to buy gold which would protect and boost wealth. In a mad max world forget property rights.

It is also becoming a trading consensus to treat gold and the $US as polar opposite related assets. Yes gold is the ultimate money, but as long as the ultimate money is prevented from flourishing then the $US still needs reluctant respect, because the gun carriers (government) pushes it. But it also doesn't mean that you shouldn't own this beautiful yellow and silver metal. Even government can't make this competition and threat to confidence go to $300 and $4 an ounce for silver. The price range where some attitudes value gold and silver in today's $US. At which has lost 95% of is value in a century.

The $US may have lost value but it has lasted longer in is current state versus any competitor in currency. Also, the calls often made for a loss of confidence in the $US and an eventual collapse have no replacement. Is it going to be the growing U.S. debt which unravels the $US? There is no competitor of comparable size. The euro and Asian currencies are also burdened by even greater debt. This is why I think inflation will accelerate, because there is no opposition in increasing debt if everyone else does it. This is why gold is still needed. Inflation is likely to occur before any deflationary implosion or financial system collapse. This is based on the extreme consensus of central banks.

Gold's under performance in the 80s and 90s was due to disinflation. This is the condition we find ourselves in now. But it is in the context of turbo charged money creation, money printing, or credit creation, whatever your flavour of inflation may be called. And we shouldn't be so grandiose to think that gold till go to $3000 by year end. Because there was many thinking the 2011 gold high mark was on its way to $4000 and more. Keep buying gold when you can, and this will be better than buying Facebook stock now.

by Steve Andelkovic
Funds Manager
Gold and Energy Investments
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Re: Gold and Silver Behaviour in a Market Boom or Bust

Postby Golden Bull » 14 September 2016

GoldInvestments wrote:Many are believing that gold will be saving us in the event of a market bust and collapse. The reality is that there will be nowhere to hide in a broad market bust and collapse scenario. Gold has already shown signs that it's a high beta selloff target as there is plenty of liquidity in gold and silver trading vehicles. Gold and silver is money after all.
gold-and-silver-bullion-items.jpg
The idea of improving or even protecting your living standard by investing in gold is only a guaranteed prospect in the event of inflation. This is evident during the 2003 to 2007 inflationary period. Gold and silver, together with oil and most other commodities benefitted by multiples more than the stock market. In the market bust of the GFC ending by March 2009 we saw gold, silver, and oil behave in multiples on the downside also. Therefore gold and silver should be thought of as a high beta asset.

Where gold and silver is able to perform as the ultimate asset class, is in financial system collapse. Policy consensus by central banks has reduced the risk profile of all the money creation in the last 2 decades of financial largesse. So the possibility of system collapse won't happen too easy when everyone is on the same policy thought page. This means inflation. And it is only inflation when gold and silver will outperform if the financial system is intact. Like in the 70s and that recent period of 2003 to 2007 and 2010 to 2011 with the introduction of QE. I the introduction of QE, Inflation didn't pickup so gold didn't launch even higher.

In the event of a financial system collapse it won't be possible to live the way we do now either. Gold will be a sort item for exchange for a lot of goods. But you would also be a predator target. Property rights will also be challenged when government throws around its confiscatory policies which are meant to protect us. Gold becoming illegal to own for 40 years from 1933 is already a recent case study which has proven to work. Taxation on gold trading is another barrier. So gold will be forced into the black market. A further criminality targeting. So in the brief scenario breakdown, inflation is still the only reason to buy gold which would protect and boost wealth. In a mad max world forget property rights.

It is also becoming a trading consensus to treat gold and the $US as polar opposite related assets. Yes gold is the ultimate money, but as long as the ultimate money is prevented from flourishing then the $US still needs reluctant respect, because the gun carriers (government) pushes it. But it also doesn't mean that you shouldn't own this beautiful yellow and silver metal. Even government can't make this competition and threat to confidence go to $300 and $4 an ounce for silver. The price range where some attitudes value gold and silver in today's $US. At which has lost 95% of is value in a century.

The $US may have lost value but it has lasted longer in is current state versus any competitor in currency. Also, the calls often made for a loss of confidence in the $US and an eventual collapse have no replacement. Is it going to be the growing U.S. debt which unravels the $US? There is no competitor of comparable size. The euro and Asian currencies are also burdened by even greater debt. This is why I think inflation will accelerate, because there is no opposition in increasing debt if everyone else does it. This is why gold is still needed. Inflation is likely to occur before any deflationary implosion or financial system collapse. This is based on the extreme consensus of central banks.

Gold's under performance in the 80s and 90s was due to disinflation. This is the condition we find ourselves in now. But it is in the context of turbo charged money creation, money printing, or credit creation, whatever your flavour of inflation may be called. And we shouldn't be so grandiose to think that gold till go to $3000 by year end. Because there was many thinking the 2011 gold high mark was on its way to $4000 and more. Keep buying gold when you can, and this will be better than buying Facebook stock now.

by Steve Andelkovic
Funds Manager
Gold and Energy Investments


@ Steve, good read and info.

I do have a question though about your and other's predictions of the RESULTS of the insane monetary policy implemented these past 8+ years. While everyone explains the causes and effects; I'm not hearing any viable solutions? In other words, how in the hell are we going to get ourselves out of this unprecedented mess of debt??!! Personally, I'm currently at the lowest point financially I've been in my adult life; HOWEVER, I have absolutely NO debt what-so-ever, and not because of bankruptcy. One of the reasons I'm in this position is because I paid off my extreme medical & educational, etc. debt-and learned to live very simply. I just don't understand how major economic powers will deal with the amount of debt they have?

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Re: Gold and Silver Behaviour in a Market Boom or Bust

Postby Freddy » 16 September 2016

An age where extreme poverty at the beginning of the century, and a boom at the end of it. Was it difficult in the between process? Yes, of course. Government or not, it wouldn't have changed a thing. Wealth makes people well off, you cannot mandate that.

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Re: Gold and Silver Behaviour in a Market Boom or Bust

Postby GoldInvestments » 19 September 2016

Replying to the collective debt issues is like solving a drug habit. There is no solving of the perpetual debt growth we are faced with. More heroin (debt) thanks. Even pulling the horse reins of the credit growth as we now know it would be a vacuum depression type collapse. By kicking the horse of credit into a gallop prevent an economic death now. The same must be on the personal circumstance preferences in the question. If debts don't matter for government then individuals should mirror that if they are to have a particular comfortable lifestyle.

This doesn't sound the best advise on paper, but one needs to ride the wave or take in water on living standards. If the economy or financial system breaks, so will everyone else's savings. So one is better off at least using this available credit to have a stake in an asset such as gold or realestate, as possession is 9/10ths of the law. Banks can recall loans indeed but in a systemic scenario the court will take years to get through your cases. Retirement funds would be smash too, so roll out of them if you can.

Timeframe? Who knows. Because people are still wrong from the 70s, and some of the collapse commentators are dead. We all know time is approaching, but the patient is a fighter because they have central banks at the bedside like family members praying for them.
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Re: Gold and Silver Behaviour in a Market Boom or Bust

Postby Bounty » 21 September 2016

GoldInvestments wrote:Replying to the collective debt issues is like solving a drug habit. There is no solving of the perpetual debt growth we are faced with. More heroin (debt) thanks. Even pulling the horse reins of the credit growth as we now know it would be a vacuum depression type collapse. By kicking the horse of credit into a gallop prevent an economic death now. The same must be on the personal circumstance preferences in the question. If debts don't matter for government then individuals should mirror that if they are to have a particular comfortable lifestyle.

This doesn't sound the best advise on paper, but one needs to ride the wave or take in water on living standards. If the economy or financial system breaks, so will everyone else's savings. So one is better off at least using this available credit to have a stake in an asset such as gold or realestate, as possession is 9/10ths of the law. Banks can recall loans indeed but in a systemic scenario the court will take years to get through your cases. Retirement funds would be smash too, so roll out of them if you can.

Timeframe? Who knows. Because people are still wrong from the 70s, and some of the collapse commentators are dead. We all know time is approaching, but the patient is a fighter because they have central banks at the bedside like family members praying for them.


I am bearish for the first time since 2009. I know perma-bears see a collapse every single year, so no wonder nobody believe them anymore, but I'm not one of them, I trade both on short and on the long side of the market and this market looks frightening at the moment.

The Stock market is much too influential and doesn't really represent the true value of the world economies. Its wag the dog. The world economy is the little dog and the stock market is the giant tail. It should be the other way around.

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Re: Gold and Silver Behaviour in a Market Boom or Bust

Postby BullionGhost » 08 November 2016

The only way we can get our financial house in order is NOT the Government NOT the FED not the Banking Scamsters but to do an " ICELAND " on the system. Arrest all Bankers and put them on a sinking island OR send them all packing to ANTARTICA where they can freeze along with their corrupt minds.


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