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79 Protons Meltup Counter: $1,224/Oz
Gold is now the primary beneficiary of any and all dollar weakness (much more so than stocks or any other asset class) and any and all incremental excess liquidity. We hope members of Senate who read this post present the charts below and ask the Fed Chairman at what point will his debasement of America end.
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Hah wait til I do the article on COMEX.
Tease.
Can't wait.
As for the "price" of gold (as measured in lousy USD), I have a feeling TD will have a lot of posts in the coming months, as it climbs above $2,000.
Just wait until March, when the "fix" for Fannie/Freddie is supposed to be announced. It's gonna be a gold jubilee. I predict $100 per day increases then.
Ghost.. any thoughts on what hits 2,000 first? Gold or the S&P?
Gold, hands down.
They will both rise, but eventually though gold is going to just go ballistic and shoot by the S&P, reason being is that not all companies will benefit from the destruction of the dollar (i.e. those that sell mostly to poor Americans).
End of 2010 my prediction is 5000 gold, 2000 S&P.
Understand your theory - and I've been nothing but wrong, wrong, wrong this year.
But which companies benefit from a weaker dollar? Producers of raw materials, perhaps - but any company producing a manufactured item is subject to commodity pricing equivalent regardless of currency, wouldn't it?
Unless I'm way off, wouldn't a weaker dollar help a company be competitive in regard to inventory and labor? Commodities are the great equalizer.
Nonsense, you still have to buy most of things overseas. Weaker currency means your production is more expensive as you use items made overseas.
Even if they are produced domestically, the price will still reflect the increased purchasing power if foreign based competitors.
In which case equilibrium will bring production and manufacturing back to the States. No, not by government initiative, but by entrepreneurs, i.e. the people who the politicians always talk about who make this country great, and whom they repeatedly stab in the back at every given opportunity, and every moment in between. Those fucking whores.
I am Chumbawamba.
It's not everyday I'd admit it, but you have a couple good points there! Ok, Three including the bit about whores.
It's already happening. I see smart people around me acquiring skills that during the past couple decades have come to be known as passe undesirable blue collar gigs, and enjoying it immensely, this Chumbawamba included.
It'll be a long and difficult road, but this country will be rebuilt by simple folks with good ideas and sharp minds.
I see a bright and shiny future ahead, just beyond the fierce and drawn-out storm in between. The trick is surviving the storm.
I am Chumbawamba.
i hope you are right chumba. i pray that you are right. but i am afraid that capital as each day goes by, gets into the hands of fewer and fewer people and since venture capital comes from banks, i really see not much progress in reigniting the american manufacturing sector for the duration. another words, it has been decreed on high, that america will become another third world country. and so it has. our government is under deep capture. our financial systems are under deep capture. our courts are under deep capture. there is only one thing left to do. but no one wants to see that or admit it. for too long americans have worn their chains and not really worried about it. for too long.
Only problem with that is once everything goes down, the part about getting back to equilibrium is just about impossible.
There can be a trend. Similar to the, slightly getting less worse trend...except the opposite way.
But the level from which that starts will depend upon how far we go down between now and then. My guess is very far down.
Thus we might get down to the say 10-25 percent level we currently have, and then grow at 1 percent, which in any case is a generation or two to get back.
Why? Well lots of problems. If we're broke, other countries swoop in an pick up cash cow assets for A penny on the dollar, maybe two. Then when they control things, it's low wages, and all profits outflowed overseas.
So even if you produce it, you only profit it from working there producing the things on the assembly line. We all know how everyone feels about these type of blue collar workers and love to bash them. You know how much the Chinese pay their own factory workers, how much do you think they'll pay you?
Also you need capital. If people are broke, the banks are broke, the IMF or other entities are bearing down on your country forcing austerity (which we've looked the other way when it dictates it to other countries), china debt so on and so forth, and you don't have an American Credit System, but rather the same monetary system, you won't have the capital to rebuild our economy.
Best case scenario if we keep on this current course, then default, but keep the same system is probably along the lines I speak of, it could be much worse than that, or if we switch to the credit system sooner, lots of pain can be avoided.
But when things go down, we won't be 'in control', the whole thing is about a broken market is that it is 'out of control'. Even the powers that be don't exactly know what will happen when they push the button.
When it happens, if you don't have the recovery plans in place, good luck scrambling afterwords to do so. What could take hours to pass before could take years after.
Once the factories are closed, the people laid off, the machines sold as scrap metal, they're closed, they're gone. It's alot harder to re-open than it is to close. Think of it like this, would it take longer to paint the Sistine chapel, or to bulldoze it?
Well what we have going in terms of complexity in the U.S. and world markets is the equivalent of the Sistine chapel.
If the wrecking ball comes, no way is it put back together in my lifetime (i'm 31, rhetorically speaking, how old are you?).
Markets can stay irrational longer than you can stay in business. The hand of the market is a vacuum idea, one whose glass will be shattered when UPS can't deliver your inventory, or the railways don't work very well. You need running water right? Electricity? Food? People just don't understand how fragile things are, and once they go, even if EVERY ENTREPRENEUR in the USA was worthy of ENTREPRENEUR of the YEAR award, it would take a generation or two to get back some semblance of what we currently have in 'comfort'.
The market fooled so many people into prosperity these last 40 years when all it was, was a glorified shell game. You have to think of it like the Titanic captain.
As the story goes he felt anything small would be crushed when hit by the full speed Titanic, and anything big enough would be seen in time to turn. However there was a new paradigm, an outlier, an unseen force that completely changed things.....the rudder was too small, and the ship cornered like crap. Everything this professional, well-respected captain knew and believed, all of his experience, was wrong and working against him.
Right now, what I see in the mainstream, are a lot of Titanic captains who know not that the paradigm shift which occurred in the summer of 2007 has greatly altered things, and EVERY and ANY decision they make based off their experience can be extremely wrong.
I want this over as much as anyone, but wanting the fall to happen is not the key. You want the breaking point to come as soon as possible down that long road, rather than 20 miles down it. Again because you want as much of society to remain, and less to rebuild once you fix our floating exchange, debt based monetary system problem.
A functioning system allows the fake equilibrium hand to move faster, however a broken down 3rd world country economy will have that hand move much slower, or maybe not at all. Look around, the 'not at all' is possible, it's happening across the world in various countries we usually ignore.
So you have a paradox, how does equilibrium hand move when nothing functions? It doesn't (as we would consider it from our viewpoint). How do you do it when no one has capital, or access to goods? When the infrastructure is crumbled? How do you do it when the Land and buildings are owned by foreigners or those who wish to hold onto closed factories rather than opening them?
Remember the fed won't just print money for THESE REAL things. Only for the toxic waste of NO value.
Thus why you don't want things to break down. You don't want to scrap metal your machines, you don't want the factory buildings to degrade, you don't want roads/bridges/ports to crumble, you don't want your machine tools industry to rot away. (don't forget the machine tools, or else you'll be producing goods 5-10 years behind your competitors, good luck entrepreneurs with that ADDITIONAL checkmark against you)
Don't forget when foreign currencies are worth more, they'll get our natural resources BEFORE you. Our produce, our meat, exported for more money, rather than sold here for our dollars.
Much of our foreign born talent, will leave. Many of our best and brightest, will flee to wherever they can find work.
If the fed was acting in 'our interests', they would of said, ok banks, fail, we'll provide the credit you cannot to businesses. If there is a legitimate need for business loans, there is no reason why it shouldn't be created out of thin air for THAT purpose. Rather than this 100x leverage for no reason at all, using all the 'created money' for their own benefit rather than providing the service they became a business for. *Unless of course the idea of banks was always to screw people over lol*
Again, you don't want the BIG crash (and it's after effects) to happen, because it'll be for the rest of your life, and probably your children.
You want to switch to the American Credit System developed by our own Alexander Hamilton before things get too bad. But alas, if things aren't bad, what is the impetus to change? I guess you start by understanding the risks, knowing all the various solutions, and actually thinking about it. Which at this point is more than we can expect from people.
It's just so sad when the solutions to the majority of our problems are already drafted into legislation, and some even introduced into Congress, but nary is heard about. (example of bill sitting there - HBPA of 2007, yes that's the YEAR it was introduced not a coincidental number - Homeowners Banker's Protection Act of 2007)
You do obviously hear about the Fed audit. But that's not a solution, that's just data gathering. (something we don't really need - since we already know the truth, but hey might as well get as much evidence as you can, right?)
The solution comes after you've felt pain, and sadly, because our country, and by human nature, is so self-absorbed with our own individual or family reality, the macro takes the back seat, and a higher threshold for aggregate pain is absorbed by the American public. Which when I think about it makes us just about the stupidest people ever. Generations before us would kill to have the insight we have everywhere around us, and we just ignore it. (well, not specifically us here at ZH)
We have all the info out there, yet no one cares to read. As long as someone tells me I'm fine, psychologically I'll spend more. Behavioral economics= crock of Schmidt. You can't fool people into prosperity. In a sense this past 40 years has been a journey down that road as well. It didn't work, duh. But behavioral economics is all the rage - (see again Titanic captain's experience working against him).
Outsourcing won't work, tax cuts won't work, consolidation won't work, stripping and selling off (Gecko) companies won't work, and simply waiting for the market to 'work it's magic' won't work. (remember much of the market's working their magic over the past 4 decades hasn't been magic, it's been slight of hand by the powers that be-thus while prosperity seemed to appear, it was really just a magician's illusion). Just like a magic act, you paid to get in to see it as well.
Since I haven't seen enough frustration, enough anger, enough marching, enough civil disobedience and the like from our populace, I know the powers that be will continue to have free reign, and take advantage of that free reign, to continue their onslaught of pain upon us to save their skin.
Again how far must we as a society degrade before that pain threshold limit is passed? Well we've already lost a lot, and I really don't think we're even 1/3rd there. Then again, remember as a guesstimate guide, every one percent we lose, tack on another YEAR to the time line to recovery once we get our head straightened on...at least that's what the impact will be by the time our congress/president get's the message and enacts real reform.
Until then I'm quite ready to see gold 2000, gold 500, gold 3000, gold 1000, gold 10,000 - and the like type volatility. Why? Because as each country, or sector has it's dubai style problems, these sorts of outliers - Greece, Switz, U.K. - any of these popping off will rally the dollar the other way, meaning even though you know the direction of gold, there are going to be major squeeze events ocurring because of these outliers. I see major problems of this sort, all ocurring on different days, thus there are multiple hyper volatile days being set up. We also have to actually stop QE, and once that punch bowl is away, the dollar is going springboard back up, stocks are going to tank, and things will crash again. These are all events that will again, catch any Titanic ship captain with his pants down lewinsky style.
Have a good one everyone :)
Good post. I wonder though about the idea of other countries owning and stripping us. Maybe a little at first. But you have to be here to enforce your so called ownership rights. I think if things go down hard, they may be in the kind of shape we are, or worse.
I wonder if it will be a hybrid of what you have described here, that even as some of our best and brightest leave, some of theirs come over here seeking opportunity. Take China for a nemisis. They have so much more pollution and population to contend with than we do. If they own a lot over here, they may want to just be here and, be American.
I think we need to contract. People have a low quality of life chasing a so called high standard of living. Food, decent medical care, heating and cooling, those things would be awesome if we could keep them.
But overtly owning and planning for it would be such a relief.
Again, thought provoking post.
Definitely a good post, and while I don't agree with everything you said, I think in general you make excellent points. However, it will be the most crafty amongst us who will rebuild this country. Expect robber baron type activity...at least that's certainly where I'm going with this. I've been building my own base of resources, including capital (in the form of gold and silver), tools, raw materials (to an extent), defensive implements to protect it all, and most importantly a network of other like-minded folks who, toegther with me, will rebuild our little corners of the world in our own image, and we will do this without government involvement or intervention. And in fact if any government, domestic or foreign, tries to get in my way, they'll have a small scale war on their hands.
I know what's best for MY country and I'm going to set about making it so. I realize there will be extreme challenges but a life unfettered by the heavy hand of government with warts and all is much better than one spent under that crushing and stifling hand. I thrive on chaos. Bring it.
I am Chumbawamba.
A couple of years ago, I bought a hand made backgammon set, marquetry style in several different colors of wood. I bought it from a guy in California and it cost about $400. I could have bought a $10 set made in China, but I wanted something that was beautifully made, that would last and that would last not just my lifetime, but I could hand down to my children. Every time I use it, I think of the guy that made it and I feel good to know that I paid a far price for something that must taken hours to make.
There's a good book, called Affluenza, by Oliver James, that talks about why people are so miserable and one of the main causes he cites is our belief that material objects and consumption will make us happy, but the reality is, a material object on its own will not. However, when I know the direct link between the object and the creator, be it food or durable goods, I feel better about it and have more respect for the labor involved. Buying something made in a factory half way round the world and dumped out of a container, will never feel as good as buying something made locally, by someone you have met. I am all for Adam Smith's belief in the division of labor, but there needs to be an emotional link to between the producer and consumer. If you have ever taken your children to a farm shop, you will know what I mean - big supermarkets seem to make children slightly mad, farm shops often change their attitude to food.
Anyway, I know most people on this website have trader mentalities and believe that the only think that matters is getting the best price, but I see a difference in the choices you make when you are making money and spending it.
Or to make it more simple - homemade cookies always seem to taste best.
That was beautiful, thank you. Buying local is very important to me as well. I particularly liked your insight into happiness and the emotional link of knowing the producer - it grounds you.
I concur. On moving from Toronto to Halifax my wife and I fell in love withe the farmer's market there and have focused on trying to buy as much of our food as we can from producers in a 100km radius.
Toronto to Halifax -
Good move . With talk of leaving the States if/when all h... breaks loose , N.S. is the place I want to be . I Love it there . Spent 10 days there quite a while ago staying in B&B's . Met the real folk and talked alot . Why they even have their own little bohemia , Lunenburg . Again imho good choice of place to live .
This comment and the the previous by jmc888 will be printed and shared with my friends and family this weekand. Thanks to both commentators. Thank you ZH !!
By the way, there is the website...
http://www.davidlevycreations.com/the_product/game_boards_p2.html
Very nice!
And don't forget that making stuff yourself brings 100 times that level of satisfaction that you described from buying something from the original cratfsman.
We might not all be blessed with making and manufacturing skills but god damn it at least try. It makes you smarter and more self-confident. Especially when you stick to it and get good.
I am Chumbawamba.
@Jeff
Know it well. Been wrong wrong wrong... wish I was straight cash or cash/metals at this point.
No one care about the lies it seems.
I am cash metals and I'm only up about 10% this year so it isn't so huge. Perhaps because I'm two thirds CDN$ paper, 1/3 PM where the gains are good for my bullion but the miners are just now finally breaking their peaks from last year.
Being wrong is starting to hurt, though. None of it make sense to me and my shorts are really pinching me.
There's no shame in being wrong in an irrational market. None of the "bounce" is due to fundamentals, it's all a Rorschach test, with everyone seeing what they want and no right answers.
I'm with you Loki. I've made the mistake of
1. SRS
2. Emotion
3. Lack of stop-loss.
It appears that I need to be hit on the head several times to come to the conclusion that it hurts.
In regard to my comments much further above... Being knee-deep in manufacturing - scrap steel, pig iron, copper - just like gold - all have a universal spot price, whether in dollars, Euros, or Yen. In other words, commodities are truly a world currency.
The raw material cost for the item transcends currency line making the only variable the labor/value added process. We'll have to kill the dollar much more efficiently if we intend to make wages in China/India at such a point as to make exporting (and thereby expansion of manufacturing in the US) financially viable and creation of jobs.
I've been 100% in metals this year (actually much more if you include the leveraged positions). Metals are the real "cash". This is a deflationary depression in terms of real money i.e. Gold, not the dollar. This is what the Prechterites have wrong.
You...100% PMs...really....no really..get out... LOL
And how are you going to deal with the tax implication of those PM holdings once it comes time to sell??
Taxes? HAHAHAHAHAHAHAHAHAHAHAHA!
We don't pay no stinking taxes! It's all cash, baby!
You know why the government wants to take us to a "cashless society"? All digital transactions? Databases? Tracking? Press a button and you're entire financial history is there for someone to examine and then decide on a tax rate for you? Get it?
This is the fundamental reason why modern government does not like real money like gold and silver: GOLD AND SILVER DO NOT LEAVE A RECORD WHEN YOU US THEM. Neither does cash.
I am Chumbawamba.
You got that right. Another handy advantage to bullion.
I'm still waiting for the people at Comex to get back to me. I'll give em another day or so. Today they told me they were inquiring at the New York office so we'll see
got a link thatll fill me/us in on what your talkin about?
what are you doing it on? or should i just shut up and wait? =)
trying to figure out what the heck is going on with this
http://jessescrossroadscafe.blogspot.com/2009/12/gold-comex-and-exchange-for-physical.html
I would suggest that we really already know what's going on, but in this case a confirmation would be in order.
It was only a matter of time IMO.
Is that a recent change from this? Which was from last December
http://jessescrossroadscafe.blogspot.com/2009/01/is-comex-doing-fraction...
Today we are informed that Comex is invoking a rule in which they can deny delivery of individual mini bars (roughly 33 ounces) and issue you only a Warehouse Delivery Receipt (WDR) against your mini-contract unless you have 3 WDR's, and then they'll issue you a 100 oz. bar.
Otherwise, if you have only 1 or 2 mini-contracts, you only own a WDR, which you sell by shorting a mini against it. If you own a WDR for a 100 oz., they encourage you to safekeep the gold at the Comex and hold a vault receipt.
Face it COMEX ... the jig is up!
They sound like politicians, don't they?
also:
"Apparently the contract holders who took delivery today agreed to a cash settlement but we aren't told how much cash traded hands. The OI for December is still 12,041 contracts according to the place I get this data. That still leaves a potential of 1.2m oz of gold to be demanded instead of cash. We shall see what happens during the rest of the month. So far, no gold has traded hands this month on a supposedly gold market."
http://goldismoney.info/forums/showthread.php?s=44d6541e254f0cb317fd74a197278256&t=428468&page=2
Remember gold is rife with manipulation and virtually all players except the biggest are trading in the dark.
However, also remember the Fisk/Gould scandal.
http://en.wikipedia.org/wiki/Black_Friday_(1869)
Where gold eventually hit $160 in the 1860's.
Compare prices then and now.
http://en.wikipedia.org/wiki/Black_Friday_(1869)
While this may have been an isolated event, price comparisons between then and now, reveal prices have risen by about a factor of 100. Conceivably that put AU at $16K.
But remember too our recent chart behavior. Low to highs have in the last two instances in the gold wave been +/- $400 from temporary bottom to top.
We've exceeded that. But imagine trying to trade a temporary setback just as the trigger is pulled on a currency run or a step devaluation.
Sovereigns are beginning to crumble aka North Korea, Dubai, and Venezuela.
Guidotti and Greenspan rule says we can't roll short term debt EXCEPT by massive, open printing. That will further spook the debt markets and debase the currency.
Just an ugly situation.
Ooooh! Can't wait for that one! ETA?
How many protons?
I think it's 74 if you go right through to the middle of the bar.
Looking forward to it PM- Not sure if you've seen this one from Jim Willie just out:
http://www.marketoracle.co.uk/Article15513.html
Dewd, somebody freaking junked you. Bitches.
I only huff quality - always a captivating read at the least!
Here's a couple of excellent links on Gold and the Comex...
http://www.youtube.com/watch?v=AdPUV57eblk
http://www.youtube.com/watch?v=B-6-R9SPTLg
Senator Bennett doing that very thing citing the Carter years.
BB response was they will stop inflation, but not
rising real rates.
That, after all, is what rising gold prices indicate.
After gold going parabolic from 252 to 1225 in a decade,
we think defaults may make a market adjustment despite/
because of BB's assurances that Fed models show
assets are properly priced. (Wow, BB just cited Willie
Sutton on robbing banks.)
GS upping their gold forecast from 960 to 1350 gold may
be the frosting on the cake. No wonder the Big4 are short
gold...
Ala Harriet Beecher Stowe?
Audit the fed. Make it ENTIRELY IRRELEVANT. Either one works.
Everything already becomes IRRELEVANT. They are noise. The future path was defined long time ago. It only became apparent lately.
I seriously hate most of the people running my country, except for Ron Paul of course.
I second that. They obviously have little to no concern for the people that put them in office. The middle class, at least what is left of it, is being completely gutted. Talk about killing the goose that laid the golden egg. How more people have not caught onto this fact boggles the mind.
I seriously hate Libertarians who wank off to Atlas Shrugged as though it were an erotic tale from the bible.
Why did you get cum on your dress?
roflmao, wiping tears from my eyes laughing so hard...thanks! I needed a good laugh tonight.
Libertarians are the only people who dont want to tell you what to do or how to live your life. How can you hate me?
Nor whom nor how to fuck.
Conservatives, Socialists and Libertarians....
Conservatives want to tell everybody else how to live.
Socialists want everybody to live the same way.
Libertarians only want to live their own lives.
The problem with Libertarians is that most of them who call themselves one actually aren't.
I am Chumbawamba.
unfortunately, true.
did you even read Atlas Shrugged?
I doubt it, but then judging from the histrionic comment and the name "DormRoom", I doubt just about anything said.
"DormRoom" ...Classic!
Winston Churchill said:
"Any man who is under 30 and is not a liberal has no heart; and any man who is over 30 and is not a conservative has no brains"
"DormRoom" must be pursuing his third PhD.
i tried once. i used to see advertising circulars posted all over the place at university. so i got curious. i am sorry. it didn't do anything for me.....
I laugh uncontrollably at ignorant wanker haters who unwittingly embarass themselves by asserting naive and foolish nonesense like "OMG Ayn Rand."
Are you metally handicapped? Do you think people read your post and think anything other than, wow, he has no idea what he is talking about.
"He may not always be right but he is never uncertain"
Libertarians are not randians, but randians might be libertarians.
Ron Paul = Mises and Rothbard
I'm glad someone clarified that for everyone. Thank you.
RON PAUL BITCHES!!!
I am Chumbawamba.
Ayn Rand was an objectivist, not a libertarian.
But she did need an editor with a stronger ego than hers, though. As many times as I have read Atlas Shrugged, I can find about 200-300 pages of writings that could/should be cut (don't get me wrong, I love the book and it changed my premises forever).
I knew you'd wanked off to that erotic bible atleast once in your life.
more than you know...the upside is that it taught me ejaculation control (it is a LONG book afterall), so I don't leave my partner...unsatisfied...like dormroomers...:P
What's wrong with whacking off to the bible? Hmm? May I be struck down before I finish the captcha question!
I believe the obviously over- and too-often stated points she made in the book were done that way on purpose, to make the reader dread the words they know would be coming (again!) from the mouths of the statists.
Edit: AND, I'm libertarian.
agreed...
Its just that I am old and long in tooth now and not too fond of 2X4s making sharp contact with my cranium anymore...libertarianism, objectivism, each have there positive points, and failings
I am not any political/ideological persuasion now (though have influences from them), what's the point?
Like I said, I am old and long in tooth now, a curmudgeon.
Rand blasted libertarianism with acid from time to time.
That wasn't even creative.
Sure is moving through $1200 fast. How long before we hit $1300... I'm scared!
I'm ecstatic! Bring on the pain!!
I am Chumbawamba.
I always thought for a long time that gold bugs are smart people.
Bond guys are smart too.
The squid's fingerprints are all over this. They don't have any deposits, which in of itself would be a short position on gold, so they have nothing to lose. And don't get me wrong I love the gold play long term, but this is getting hilarious. This seems eerily similar to peak oil last year, although for different reasons obviously. Will it end the same? Doubtful, but who knows.
That all said, without having the cahones to short gold outright, I like GDX as a short with equities at least short term overbought.
That's a good point, but I also kind of wonder with all the scandals (Royal Canadian Mint, etc) . I got an email today from an investor in Europe, conducting due dilligence, who suspects fraud in LBMA. Anyway , as for Goldman's $145 crude bubble, there is a good argument that can be made that the oil price crash was caused by swapping sweet for sour crude out of SPR...
so maybe the analogy here is "Gold is to WTI as Tungsten is to Brent".
On the other hand, what happens to gold if the equity markets lock up? Hard to say...
"who suspects fraud in LBMA..."
I suspect the Pope is catholic...
PM,
The oil / currency simile holds a lot of water. In that light it makes perfect sense, for example, to have the world's most powerful army guarding the world's biggest "oil bank", where nations borrow oil and return blood and treasure as interest. I imagine an "oil forward rate" could be synthesized from available trading data. If the purpose of currency is to buy useful commodities, then the value of USD can be directly seen in how much oil it buys, and so the SPR can be seen as a reserve available to support USD directly by shorting oil.
im a perma bull on gold long term, but if GS called for a $2500 target on spot then id get nervous short term and youre prolly right.
John, I believe that is an ignorant statement. There is a wholly different fundamental set of variables in play here. This is not a repeat of the oil or any other bubble. This is not a bubble. This is a paradigm shift of finance and power from one part of the globe to another, and it's going to be long and messy, and people sense it, and in times like these historically it is best to be in gold. It may not seem like it from your neck of the woods, but give it time. It's happening, on a massive scale, but perceptible only over great periods of passing time.
This is a long term secular move. It is not another head fake. If you want to believe that you would have to believe that China and India and a whole host of other gold-acquiring countries are in on the scam, or that they are perhaps the targets of one, and that if they get screwed on gold AND QE that they're going to take it lightly. No.
Gold currently is tell you that something is about to pop. It will be a useful signpost to look for from here on out.
I am Chumbawamba.
your post can be summed up as "it's different this time!" Where have we heard that before? The arguments coming from gold bugs for the price of gold in our current environment are reminiscent of any bulls argument in any of the previous bubbles.
oh, jesus. how many of those previous bubbles were hard currency bubbles? let me see. none.
does it matter anymore? with electronic trading, etfs, etc anything can be a bubble very quickly and easily.
I'm not saying I'm right. You're free to front your own idea of what's going on. In lieu of any viable alternative, I can't see how I can be wrong. Someone make the case already. I can be convinced.
I am Chumbawamba.
All you dollarbugs are yapping in the street!
http://www.gwoltal.myfastmail.com/files/Mack%20Truck
Yeah, it's just saying, until one time it's actually true. Beware the boy who cries "Wolf!"
I am Chumbawamba.
O mighty Chumba, thou art 100% true.
In other news, the Nikkei is melting up, as the Japs feel renewed confidence in their govt's ability to fight the currency wars.
Zimbabwe Ben will smack them down soon enough. They think their gonna import those Sony's and Lexus Hybrid's into the country so easily? Think again.
let the tarriff wars begin. so obvious thats whats next.
(im assuming thats what youre talking bout)
I like that one... Zimbabwe Ben... heh.
I'm claiming the domain name, hahahahaha!!!!
As an extension to my comment above, I look for the Euro Zone to explode in the next 6-12 months when EUR/USD hits 1.55. GS is doing God's work as we know. It's hard for ECB to manipulate everything like the Fed because there are too many governments to be bought, and therefore its a less efficient blood sucking operation. Why keep a less efficient operation around when you have the well oiled wealth destruction machine in America?
Congress-critters and other wealthy Americans are heavily invested in gold.
What's the problem?
Question..
at what stage of the race of "who can lower their currency the most" are we at?
Seriously, how about some discussion of how far it can go, in terms of numbers as well as the war of words. seems to me the war of words hasn't really started because all the leaders are still doing the nicey nice "we don't believe in protectionism" crap and that lying phuck Geithner still proclaims the "strong 2 plyed toilet paper" nonsense.
When are we going to see the verbal sparks fly? What are some of the things that are going to be said?
thanks.
I hear ya; it is THE question right now. I don't post frequently but ZH is home page for me, and I do recall Bruce Krasting commenting on this recently, stating that the Yen would be a sideshow and the real pain would start at Au = $1500 and I think he mentioned EUR/USD = 1.53. Funny thing, there were some comments out of European leaders when EUR/USD hit 1.5, someone saying it was a "disaster for Europe." So we are already at 1.51 plus and things are eerily quiet. I look for riots next year when the UK goes bankrupt, and the other european countries disgress into chaos one by one.
saw Bruce's column as well (think he had eur/usd at 1.55 but i gotta think anything at 1.50+ is pissing the euros off big time).
i have parts of Europe high on my list as the start of implosion time....then again, Dubai snuck in there so who knows....
maybe a combined Cali/NY will get some action going.
you're right it was 1.55; the numbers are just blending in after a while. I like Cali to drive the federal picture, but look out for Illinois, who apparently is feeling left out in the race for bk. Then something like an interest rate swap trigger on a failed auction in the UK. I could see state owned RBS owing GS like $300 billion on a swap from a failed auction where the Bank of England was attempting monetize another 100 billion of UK debt.
I'm going to play the outlier and say it will be North Carolina.
I mean the whole state will need a bailout. If it doesn't get one and state agencies start to fail, it will stoke fear. And if it does get a bailout, it will stoke some fear, but less so, and then all the problem states will line up for their bailouts, and there will start to be loud chatter about everything from mass cramdowns to outright jubilee. All of which will be ugly for the fiat.
I'm somewhat serious.
That's funny because I lived in NC for almost 11 years and I'll be god damned if I could tell you where all the fucking taxes they collected went. They had a damn tax on everything and the most idiotic people in charge at every level. I could never figure out what they spent most of the money on, though. Welfare?
I'm in North Carolina now and I can't tell you where all the fucking taxes are going either! I knew it was over when we got the "Education Lottery" last year. I left New Jersey 5 years ago...out of the frying pan and into the fire. (funny that Frying Pan Shoals is right off the coast)
Nowhere to hide...not that it matters now that all the exits are blocked, except gold (I hope).
Frying Pan
i would second that. part of the untold story is how much of a cut was made to medicare/medicade and home health care, which is going to shift the patients already on the edge (and can afford it) into the already overcrowded/underfunded system of nursing homes. and thats leaving out what they're having to do to the education system here. also, having a situation where teachers are having to change catheters and other CNA type work doesnt help for morale when they arent paid enough as it is.
on a side note, i think NC has a high degree of apocalypse survivability.
-quasinagy
out of how many?
nice to see you around friend....hope all is well!
Well the low on the DXY was 70.70 in March 2008 and its 74.64 today.
The high in FXE was ~160 and today its 151.27.
So we have not made it back to the lows last March yet. If the trend stays intact, we will get back to DXY 71 in about 3-4 months.
The question is if (when) the DXY gets to 71, will they buy support, or panic and dump it? A break below 70.70 would not be good.
It's in a descending wedge pattern so there is also the chance the it will break out upwards before 71 (if there is some trigger event).
My complete guess is that DXY gets a bounce sooner rather than later, then resumes final descent into hell. Equities look like a big rolling top to me, in spite of the hysteria suggesting otherwise.
Well it's kind of funny. I have a book called On Size and Life. And it basically is just your typical engineering, structural analysis of lifeforms and the rules of construction they follow that we follow as well. Like when you go from rhino to elephant size you have to increase leg size by 4x per mass increase etc etc.
But it seems if you drop a mouse down a 1000 mine shaft it lands scampers off and doesn't care.
If you drop a cat down the same shaft it could hurt itself, die, or be alright maybe with minor injuries.
If you drop a person down it they bounce. Same thing with parchute jumpers if their shoot doesn't open they hit the ground bounce up a foot or two and then land again.
If you drop a horse down the shaft it splashes. The solid masses are liquified and torn up enough to create a spalsh that is nearly exactly like a water splash if not a bit higher on the viscosity scale.
So we got dead cat bounce after dead cat bounce during the great depression.
What if the US empire ran too long. Created too much bullcrap. Got too out of hand especially since it didn't have a global super power helping to keep it good for the last 10 years. What if it became a giant elephant that just won't bounce again.
Interesting.
I am Chumbawamba.
It might decide to fap all over your face and break downwards.
I am Chumbawamba.
It could, but I'll bet it continues the trend downward as Bernanke's right arm is furiously working the cash pump to ease the descent.
Of course this means a steady stream of gold momentum.
Mr T. is yelling Gold Bitches! as his net worth doubles every 2 years.
Looks like the dollar did bounce.
I am John Connor
At that time the POG was about 846.40, DXY was 70.70.
Now POG is 1215, DXY 74.64 It seems that gold is
decoupling US$ in a hurry.
We hope members of Senate who read this post present the charts below and ask the Fed Chairman at what point will his debasement of America end.
Schumer reads this site.
He will NOT present said chart.
He will NOT question the Fed Chairman's behavior.
Seriously? Does that puss-filled douchebag read the comments also?
I am Chumbawamba.
Breakout City:
Yeah I was about to say, I just looked at your charts , and the first word I heard in my head was
"Breakout!"
Where are the babes?
None needed, those charts create their own boners.
Yeah, no excuses!
we know there's another $450 bil in agency & MBS purchases. That is outright monetization, so money gets printed, those securities go on the fed balance sheet, & the cash the Fed pays for that ends up in excess reserves. This monetization has been known by the market. Anyone have an opinion on the primary forces behind the continued run up in gold? & its expectation that it will go parabolic? is it mainly due to the fact that more people are waking to the fact that govt's around the world are going to end up in a ccy debasement race to stimulate economic activity, inflate away debts, & for the US pay for the 40+ trillion of unfunded liabilities? so is much more QE expected in the US? & if not QE, are their other ways the Fed can print huge amounts of money? they cant take nominal rates negative(then again who knows Zimbabwe Ben is pretty slick). obviously Japan is whetting their lips w/ QE.
I'm ready to pile into gold, but I too remember crude @ 150, though this is different. I'm wondering if ZB's re-appointment gets much push back if that wouldn't shock the markets to the scent of US monetary responsibility as opposed to the orgy thats been going on. Though I'm sure it'd be a temporary suspension of disbelief.
don't know what the market thinks, but my personal bet is the MBS buying doesn't stop until at least mid-2011. that alone drives gold to $5000, imho.
ghost, what does "imho" mean?
It is definitely something altogether new:
http://www.zerohedge.com/article/79-protons-meltup-counter-1224oz#commen...
I am Chumbawamba.
Tyler, you do not miss a beat. Been watching gold ramp up, now at 1,223. I have an inflation adjusted gold chart since as of today it has no resistance and has reached all time highs in All currencies. IMO a close over 1,200 on Friday with 19+ in silver gives us a green light. 1,200 is the 61.8% retracement level, inflation adjusted and it is passed that now of course.
A close this week anywhere near this level and there is nothing but air until 1,700. What a govt. what an administration. And I thought when barry got in that we had someone who had some intelligence and could speak in full sentences.
What an idiot I am.
Great analysis, couldn't agree more
But not the idiot thing.
haha yeah somehow I skipped over that
I think so too, but I'm also thinking (hoping maybe) of a substantial pullback before or around end-of-January.
Maybe a combination of post-holiday credit woes flushing late-buyers back into cash and massive demand destruction hitting oil (consider China's expected oil use is being downgraded, the common Americashcow is broke--holiday shopping is now down 25% YOY for fucks sake!--and the only way those shelves are going to empty is with massive discounts, so tell me who's going to want to invest in all that new production--and shipping--to fill the shelves again? Add to that looming tax hikes for individuals and for companies to re-fund empty state unemployment black holes, and where is the demand for 2010? I just don't see it.)
Yes, the dollar is going to continue is well-earned perception of weakness as each note looks more and more like evidence of the fraud that it is, but I'm just not sure that loss can outpace the massive demand destruction I'm seeing. The only people I personally know spending money are the people who don't pay attention to anything. Everyone else is saving.
Besides, when I open USA Today or other worthless rags and see full page full color BUY GOLD NOW YOU MOTHERFUCKERS ads, I feel like we're in bubble territory. I'm not saying long term I'm down on gold--anything but! I've been buying since 300 USD/oz, believe me I like seeing it up. I'm just saying I can see a nice dip, sooner than later.
The real wild card, I think, is the when-not-if of Obama Admin enabling or participating in a strike on Iran. I think at that point it's hard to call. Sending 30K more trigger pullers after 100 guys in Afghanistan seems like just the ticket to forestall a strike on Iran, but then again I think this President has no mental grasp of force projection or logistical chains (being fueled as he is by Hope).
DISCLAIMER: I reserve the right to be wrong on all this and blame my predecessor (just like The Hopester does).
Speaking of logistics, look at Iran on the map, and see who are neighbors to the left and right. The map alone will explain what is going on more than anything you see in the media.
Dips into what? What is the viable alernative to gold at this point? The Battle Royale is basically over at this point and gold has proved it is the Hulk Hogan (when he wasn't a heal) safe haven as it has endured throughout the past 7 years and has basically gone up.
Dips & corrections, sure, but I believe for the time being and for the foreseeable future, mild and shallow.
Yeah, I could be wrong, too, but I don't see it (the alternative). Of course, the alternative is human stupidity, something you can always bet on, and that's always the wild card.
I am Chumbawamba.
The only thing can stop gold marching is extremely
high 30 yrs T-bond yield, say above 10% or higher. Do you see it's
coming?
Yes, that's about it in normal circumstances. But what would the burden on the U.S. be, paying out billions more a day in interest at 10%+ rates on their debt, locked in for 30 years?
Where would the U.S. get the money to make the interest payments at higher rates? Don't forget the other side of the equation, looking at it from the debtor's side. Would the price paid be worth it to the powers that be? So ask yourself these questions and act accordingly.
Based on my analysis of the debt picture the U.S. can't afford to pay another point on interest, let alone 6%. If rates go up it would force even more monetization.
They could offer higher rates for a while and then default I suppose. Either way some see gold $6,500 by 2016.
Look at the bright side. If that senile old prick McCain had won, things would have played out essentially the same way but we would have wasted another four years just grousing about how different things would have been if only Obama had been elected. Instead, it should now be clear to Jane and Joe Main Street that nobody gives a rat's ass about them and the bankers really do run the show. What, if anything, they will do about it is another matter but at least Obama provided a wake up call.
+1. Who really thinks Obama actually wants more troops in Afghanistan? Where is the change? The change is which puppet the puppeteers are using at the moment.
1980 gold top (rough numbers) = $850.00/oz. Per Minneapolis Fed "official" inflation calculator, to equal the 1980 high, gold would need to be $2199.27...add in "real" inflation and it should be even higher...just sayin'...:)
That's the chart from Dan Norcini right? I'm not really wild about that one because it is based on fictional inflation data manufactured by the government, real inflation was a lot higher. As John Williams of ShadowStats says, inflation-adjusted gold reached a peak of $7,150 in 1980.
!
I am Chumbawamba.
AIG, Bear,Lehman, Goldman, CITI, BOA, 200 local banks, FNMA, etc all bust and bankrupt. There is no equivalent to this in europe.
exactly, the japs and euros aren't polluting their central bank balance sheets with fannie/freddie mbs.
they are going to have to figure out something else to dilute their currency with.
Just wait and see..
Superman = U.S. avec Global Reserve Confetti
Kryptonite = GOLD
I have to get this off my chest.
Here's the original article:
Gold GC-FT prices are currently high and markets should be careful of a potential asset bubble forming, a senior official at China's central bank said on Wednesday, as prices for the precious metal hit a record high.
http://www.theglobeandmail.com/globe-investor/chinese-central-bank-warns...
Here's Jon Nadler's version:
None other than the soon-to-be-winner- of the "new darling" central bank contest of the bullion bulls, China, uttered the "B" word overnight. Just as bullion set new price records near $1018 per ounce. "Gold prices are currently high and markets should be careful of a potential asset bubble forming" a senior official at China's central bank said on Wednesday, as prices for the precious metal hit a record high. This is the China that is supposed to be getting ready to go on a gold shopping spree that some have estimated to range from 2 to 10 thousand tonnes?
http://www.kitco.com/ind/nadler/dec022009.html
Magical quotations!
1) Put yourself in Chinese slippers. China does not want gold going up too fast or USD falling too fast. They will continue to buy the dips.
2) Jon Nadler is a tool and a fool.
Nadler is losing his mind...he was quoting Keith Olbermann the other day as a voice of reason!
He always tries to make people feel dumb for buying gold, always talking about 'Indians with Wry Smiles' as they wait for lower prices.
How would you characterize the smiles of the Indians now, Jon?
Nervous smiles? Really, fucking nervous smiles? Stunningly confused, I'm about to shit myself smiles?
I quit reading Nadler over a year ago...
Also quit reading all the other morons
listed in Willie's latest article,
and I stopped reading Willie for a few months too!
Also, I hate the term Gold Bug...
I own gold because its a performing asset
and disaster hedge.
Once it stops performing, I am out.
This I don't expect for several more years.
they are trying to do a squid.
1. jawbone that gold is a bubble.
2. try to drive down price.
3. if price goes lower, china buys all gold.
4. china puts aside one ingot to shove up Geithner's ass next time he comes around peddling the two ply paper.
But if you read the original article the Chinese official was never quoted as referring to gold. Nadler and his slippery keyboard makes it appear so.