Richardfromrugby
07 Jun 2018
worth a read Difficult Choices AheadWe've been here before. In the years leading up to 1971, the U.S. government was spending more than it could collect in taxes, but it lacked the ability to issue currency at will, which it enjoys today.Instead, it had to make sure other countries did not turn suspicious as to how it could afford to embark on costly wars, such as South Korea in 1956 and the disastrous Vietnam War.1968, though, foreign governments were beginning to question the accounting of the 35:1 ratio between the USD and gold.Gold covered only a small part of the currency supply.Take a look:Courtesy: Incrementum AGNotice the M0, M1, M2, and M3 coverage ratio to gold from 1971 is eerily similar to today's situation.Gold did then what it has always done – internal accounting.As you can see, at one point in 1980, gold more than covered the entire currency supply – had the U.S. government returned to a gold standard, a price of $850 per ounce would have been the newly fixed ratio, subject to no increases in the money supply or selling of gold ounces.It is next to impossible to always keep a balanced relationship between gold and currency, since the money supply continually ebbs and flows, according to growth in the economy, and of course, more gold is discovered every year as well.Therefore, it is true that a gold standard, in which 100% of the currency is redeemable for gold or silver ounces at all times is quite a challenge, but what we do know is that when it only covers a fraction of the total supply, the situation corrects itself with high likelihood.For the U.S. to return to this magical period in 1980, when it could have pegged the USD to gold again, its price would not be $850 per ounce, but $14,772, as of today.In other words, the most bullish case for gold is a 1,136% move – that's a big move, but it is quite possible, if a decade, such as the 1970s returns.Russia doesn't want to be caught off-guard, in case this occurs.Courtesy: Incrementum AGCanada's government has pushed the envelope in terms of trusting fiat currencies - it has zero gold reserves. Russia is taking the other side of that bet.Think about where you stand when it comes to this equation as well.The best way to do this is to figure out how much cash you have, not assets denominated in dollars, but fiat cash only, by combining all your bank accounts, duffle bags or otherwise, then tallying-up how many ounces you own of gold and silver and coming up with your personal coverage ratio.Personally, I like to keep it around 7% of total net worth (cash + assets), or 30% of total cash.Obviously, an individual doesn't need to back all of his cash with precious metals, but governments should.The problem is that people don't hoard precious metals; in fact, they don't hoard any cash either.Check this out:Courtesy: Incrementum AGAs you can see, whether the savings rate is higher or lower, recessions happen regardless, so when people have less money set aside, the recession, which comes every 5-7 years is sure to create havoc.The next one is approaching, so you need to cash-up.I'm not talking about liquid funds ready to be deployed for the purpose of buying cheap shares, but to have options.You see, not only are the majority of Americans not saving more than $2 for every $100 they earn (I save about $70 for every $100), but they are actually deeply indebted.This is a black hole:Courtesy: Incrementum AGLook over your own finances when it comes to these two things: Debt load: If you have outstanding debts, as most Americans do, immediately research how to close down debt levels fast. There are various ways to pay-off a 30-yr mortgage in less than seven years and to renegotiate interest rates down.
Thomas Tallis
07 Jun 2018
Re: The real re-rate triggers - $700 gold I do not agree with Dent's forecast of $700 gold. I don't think gold will ever again go below $1,100 and maybe not below $1,200.I posted it only to show that for every forecast of $5,000 gold, you can find another forecast of sub-$1,000 gold.$5,000 is fairy tale talk. I was strongly criticised to posting a link to a KWN article, so I don't know how Roco got away with his comment on $5,000 gold - whoops, have I played the victim card again. I forgot - I get criticised for that too.
phil and leggett
07 Jun 2018
Re: The real re-rate triggers Roco...If gold were to go to sub $700 for any length of time global gold production would have to cease, currently a lot of marginal mines are taking the sweet spots to maintain production profitability...The high end value's $5000/10000 are at least based on fiat money expansion...JPM's qoute..." Gold is money nothing else", is often misunderstood....Think of it this way, only gold is money... Regards Phil...
Richardfromrugby
06 Jun 2018
Re: The real re-rate triggers funny that ,i thought it was the other way round,me yanking your chain
pharmajiles
06 Jun 2018
Re: The real re-rate triggers No roco I can't see any logic for gold to fall that far.Unfortunately, that statement makes the ultimate event much more likely to happen as the market is illogical and counter-intuitive.Personally I think gold may rally towards the end of the year.......but ultimately I reckon Harry will be right and gold won't be the space to be long-term.Sorry about the spelling.....and yanking your chains boys.
roco200
06 Jun 2018
Re: The real re-rate triggers Shame you find my name so difficult to spell correctly.I’m not a predictor of anything as far as I know. Not clever enough to have studied & learned how to read tea leaves & charts with much accuracy. I’m happy to comment on the predictions of others, but not sure it will ever go much further than that. Those with bullish views are always easier to accept. I wonder why that is?There are however a number of issues (fundamentals) which could support a much higher gold price all of which have been discussed in here at various times. I can see no logic for gold retracing to $600; can you?
Richardfromrugby
06 Jun 2018
Re: The real re-rate triggers i still have a copy of your post ,where you asked me to stop fighting you and join you shorting
pharmajiles
06 Jun 2018
Re: The real re-rate triggers I could report you and sue for that slanderous remark dic.....you've told us your name and address in the past.But I won't........because you used to be an old soldier...... and of course....because you're simple richard.And more to the point.....i'm not likely to get any pay-off judging by your investment decisions.
Richardfromrugby
06 Jun 2018
Re: The real re-rate triggers that is because we unlike you do not manipulate the market
pharmajiles
06 Jun 2018
Re: The real re-rate triggers Hi ThomasHarry's calls have been good .....but not the best.......PJ's have been that.The worst calls on gold and gold stock performance ?That's easy......batman and robin......aka simple richard and rocco.
Thomas Tallis
06 Jun 2018
Re: The real re-rate triggers $5,000 gold - have you been reading King World News? If so, then you must have missed Egon von Greyerz's prediction of $10,000 gold.For the last six years there have been forecasts of $5,000 gold and I remember this famous call -September 2014 - Harvey Organ said $200 silver in December 2014. $10,000 gold by January 2015.[link] is one from today's news -"Harry Dent says he agrees with 50% of what the Gold Bugs say, but gold is still going much, much lower. Here’s why (plus a rebuttal)…Harry says he has predicted the moves in gold better than anybody.He says that after gold peaked in September of 2011, and then broke through $1525 to the downside three months later, Harry said “gold was done”.Harry has been calling for $400 gold for years, and he recently has changed his forecast to a range, which is between $400 and $700.Harry say that on any rallies here, both for stocks and for gold, to sell and move into safe assets.Harry says cash is the safest."[link]
Richardfromrugby
06 Jun 2018
Re: The real re-rate triggers roco martin Luther king had a dream to unfurchenatly he died before it happened .but it will happen we just have to be-leave in that dream.
roco200
05 Jun 2018
Re: The real re-rate triggers Sorry for a few typos in my last post. Perhaps I should also have made clear, we are of course in a 50/50 JV at Red Rabbit, which I assume everyone knows here, so 50,000ozs would mean 25,000 ozs are ours. But at £4000 an oz profit, based on gold at c. $5000 per ozs and I start to salivate big time!Even without our 100% potential multi million oz resource in the Hot Gold Corridor.Bring it on. Surely the Chairman can’t be the only one to see amazing value at 1.3p?
roco200
05 Jun 2018
Re: The real re-rate triggers I’ve hear it suggested that gold could go to $5000 or even more.That would mean we would be making more £4000 per oz.At 50,000 plus ozs pa the EPS gets very exciting!But hopefully the real elephant in the room is Salinbas. Hot Maden gave us a taste of how much it could be worth, and they only owned a third.Imagine what that would have been if gold was $2000 per oz or $5000 per oz.It’s great to see Michael pointing us in the right direction the best way he knows how.He doesn’t keep buying the shares for amusement. Follow the Chairman I say.
Thomas Tallis
05 Jun 2018
I'm a victim - INJUSTICE Note how simple Richard has listed me as one of those who post negative comments, and possibly even libelous comments, about the company."tt ,pharmajiles ,oohthatscheep,fred53 or what ever you want to call your self"but go back through my posts and I have always praised the company and said positive things about it. My points has been entirely about the share price and not about the operation of the company. My point is basically, don't fight the market. Richard is delusional.Oh, I've just remembered, if I mention this sort thing I am playing the victim card so I'd better not mention it.
