Wednesday, November 16, 2011

Getting Used to the Noise

There's so much 'noise' in the markets at present. The problem is, there so much that we could now be attuned to it and actually be adapting to it in order to survive.

Dan Norcini is harsh critic of the current market mechanisms. He decries the way markets are now reacting to news and events rather than to fundamentals. But this type of reaction is born out of disfunctional market forces. Noise that isn't worth listening to usually, but now has markets all abuzz.

The strange thing about noise, whether wierd or loud, or sudden, is that humans can get used to it. They adapt to survive.

Perhaps this is what we are seeing in these crazy times. Volatility is becoming the investor's friend. For example, if you admit that the COMEX is rigged and manipulated, then you look for the signs and trade accordingly. You may have more of a chance of losing your shirt, but what's a trader to do? Just buy gold? Probably not, as most traders don't get the commissions they need to survive from those yellow bricks.

Here is some of the noise:

European Crisis Accelerating
Fear Over Eurozone Future
Bank of England set to downgrade UK growth
IMF says Chinese banks face risks
etc, there are just too many to list

Noise this may all be, but the silent, quiet-type, the one that always seems to get it right, almost eerily so, just happily, knowingly sits and waits for it's time to come.

When the noise is switched off, gold will be the last one sounding out. It is best preserver of value, it is money, the best money, and historically proven to be so. All the listed noises in the markets are good for the price of gold. There may be a small correction coming (according to some), but looking at the long term trend is always a good idea. And the trend is quietly upwards.

Note: gold is still showing record prices in New Zealand dollars today.

Gold in New Zealand dollars: $2309.22 per oz
Previous all time high: $2284.16 per oz (19 Aug, 2011)

Silver in New Zealand dollars: $44.78 per oz
Previous all time high: $59.19
per oz (30 Apr, 2011)

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