Tag Archives: gold

Tips to Survive Hyperinflation..

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Greg at Holy  Cause has actually lived through the infamous Zimbabwean Zaire’s hyperinflationary crisis in the 1990s, so his words carry their weight in…er..gold (dollar-holders, I know that stings).

“Most Americans have not lived in hyper-inflationary environments.  I have, and assure you that your primary protection is to not hold cash. Treat it like a hot potato, let it rot in somebody else’s hands. This is repeated as Rule #1 below, but it bears saying several times.  Never forget it, when you get cash, flee to something else as quickly as possible…..

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Just don’t hold an inflating currency – pass it on to the next guy like a hot potato, let it rot in his hands rather than yours.

Rule #2 – Have some type of business, even a “black market” one. Businesses which survived the inflationary hurricane in Zaire included those which were involved in the supply chain of basic consumer goods….money changing was also a profitable business…..

Rule #3 – Own a house and enough land to farm to feed your family. Houses (a primary residence), well bought and paid in full, served as a good hard asset, and provided a roof over one’s head as well. Having a little land to garden or for raising small animals helped keep a family from starving….

Read the rest of this great post at Holy Cause.

The Muddled Market

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The market is talking out of all sides of its many mouths:

  • USD/JPY is rallying and most currencies strengthened against the dollar, except the pound, suggesting a return to the risk trade.
  • But……the pound sank..suggesting risk aversion
  • But…the stock markets are up, suggesting an increase in risk appetite
  • But……. the bond  market is teetering as long bond yields are soaring, an indication that bond traders are skeptical about the future outlook
  • But…..gold and silver prices are hitting resistance and falling back, suggesting either technical exhaustion or some return of risk appetite
  • But….gold and silver prices are still high, especially for the season, which suggests widespread uncertainty about the economy
  • But….jobless claims are down, which is good news for the economy

What does your earnest blogging-trader do on a day like this? She sits on the sidelines and spends the day printing charts of the indices. She also reviews her most recent trading sins and repents. Here’s her mea culpa.

I repent that I entered a trade with panic rather than reason.

I repent that I entered it on a Friday morning before a long weekend (last week) when the markets were thin and volatility greater than normal.  I also didn’t calculate the spread and bought higher than I should have.

I repent that I forgot about position size and just dumped whatever I could into it

I repent that when the trade moved in my favor, I didn’t sell the whole position but left half in

I repent that I didn’t do the fundamental analysis but did a multicultural trade – picking 12 currencies that sounded good to me.

I came out alright, but it was pure fluke.

Your blogging-trader did not lose money. She made a bit. Enough to pay some pressing bills. She should be thankful, but being a trader, she knows that making money on a bad trade, is not the way to go.

Update: Non-farm payrolls came in at negative 345k after an expected negative 525k – signaling that the recession could have bottomed. This should feed the risk trade, which means my multi-currency trade (Koruna, Nordic currencies, and Singapore dollar) should end up alright (I’m a bit in the red now).  The time frame is one more week or two)

Royal Canadian Mint Missing Gold, Silver, & PM Holdings

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In the news, a Canwest News report notes that the Royal Canadian Mint has been caught with its gold, silver and other precious metals AWOL…

“A significant quantity of gold, silver and other precious metals is unaccounted for at the Royal Canadian Mint.

External auditors are investigating a discrepancy between the mint’s 2008 financial accounting of its precious metals holdings and the physical stockpile at the plant on Sussex Drive in Ottawa.

The mystery raises possibilities from sloppy bookkeeping to a gold heist.

Officials with the commercial Crown corporation are saying little and refuse to confirm the amount and value of the unaccounted for gold, silver and palladium.”