Despite Preemptive Gold Margin Hike In Shanghai, Gold Is Poised To Close May Near Record On Sovereign Risk Worries

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Mon, 05/30/2011 - 15:56 | 1323075 emsolý
emsolý's picture

There's a good talk on gold as a wealth preserver between James Turk and Egon von Greyerz on Goldmoney.com:

http://www.goldmoney.com/video/greyerz-interview.html

Mon, 05/30/2011 - 16:32 | 1323131 JW n FL
JW n FL's picture

if the Fed Printed $3 trillion in debt.. and another $15 Trillion in Loans (this does Not! include swap windows and TARP / TALF and so fucking on...) over three years..

 

$18 Trillion divided by 3 years ='s $6 Trillion in New Supply is Printed a Year!

 

$6 Trillion Dollars divided by 365 days ='s $1,643,835,6164 a Day in in New Supply is Printed a Day!!

 

$1,643,835,6164 Billion a Day divided by 24 hours in a Day ='s $684,931,506 an hour in New Supply is Printed an Hour!!!

 

http://goo.gl/FnxBZ  Treasury Direct $14 Trillion Debt

http://goo.gl/TMl74   $15 Trillion in Loans

http://goo.gl/EXzal  / ='s $29T

Mon, 05/30/2011 - 16:37 | 1323134 JW n FL
JW n FL's picture

http://www.youtube.com/watch?v=CmD0s3us_vA&feature=player_embedded

 

Keiser Report: Gold Stands Rock Hard (E150)

Tue, 05/31/2011 - 00:15 | 1324459 jeff montanye
jeff montanye's picture

as jesse notes, deliverable silver on the comex has fallen from nearly 37 million ounces to barely 31 million in the last month.  july open interest is about ten times that.

Tue, 05/31/2011 - 00:47 | 1324515 AgShaman
AgShaman's picture

Hahaha....I hear the Bullion Banks are contracting the Edmund Fitzgerald to deliver the big bricks of silver about the land. They'll be taking the main routes thru the Great Lakes....so no worries mate!

Mon, 05/30/2011 - 16:02 | 1323088 Bubbles the cat (not verified)
Bubbles the cat's picture

Call me a gold buggin troll but maybe $2000 by Christmas ain't entirely out of the question.

Mon, 05/30/2011 - 16:44 | 1323142 Cynthia
Cynthia's picture

I'd like to know if Gold Bugs think that having gold in your pocket will give you a Heart of Gold:

http://www.youtube.com/watch?v=Eh44QPT1mPE&feature=related

Mon, 05/30/2011 - 19:43 | 1323293 Al Gorerhythm
Al Gorerhythm's picture

Depends upon what criteria you use to measure a golden heart. I didn't junk you but WTF are you on about?

Tue, 05/31/2011 - 04:02 | 1324642 Bubbles the cat (not verified)
Bubbles the cat's picture

I'll ask my broker.

Tue, 05/31/2011 - 09:05 | 1324896 Bubbles the cat (not verified)
Bubbles the cat's picture

OK....back from lunch with my broker. He said Neil Young's already got plenty of precious metal.

http://www.nme.com/news/neil-young/2564

http://www.youtube.com/watch?v=12T95RHGLH8&feature=related

Mon, 05/30/2011 - 16:09 | 1323096 alangreedspank
alangreedspank's picture

 

Can't remember the exact logic behind it, but some gold bug recalled gold and inflation going UP as the interest rate were being increased in the early 80s.

It takes sometimes then for inflation and gold to chill in this high interest rates environment.

 

Mon, 05/30/2011 - 16:12 | 1323103 trav7777
trav7777's picture

depends upon if the banks are charging a higher rate than the background.

That sucks debtmoney out of the system.

The problem we face is that our currency is backed by debt, but the debts are unpayable and defaulted.

Mon, 05/30/2011 - 16:16 | 1323104 HamyWanger
HamyWanger's picture

Actually, the only way to beat inflation is to go ahead of it. Nothing will happen if the FED does a 0.25% hike. 

The nightmare of deflationists, stock market shorters and PM haters is far from over. It has just begun. 

I expect that 100 dollars of 2015 will buy around 20 dollars of now. 

Mon, 05/30/2011 - 16:19 | 1323117 trav7777
trav7777's picture

that would be $500/bbl oil and $7500/oz gold...against wages still paid as if $20 was still $20

Mon, 05/30/2011 - 16:29 | 1323124 HamyWanger
HamyWanger's picture

Yep, and so what? 

If you had said to your great-grandfather that an average car would cost $10,000 in the near future, he would not have believed it. 

Each new generation unconsciously adapts to the new nominal prices. And the wages will surely do it too. 

Nominal prices in Japan and in Italy before the euro did not use to be that ridiculously high. But people have adapted, and begun to consider them normal, with new points of reference. Earnings always follow mild inflation, with a 6-month lag at worst.  

Mon, 05/30/2011 - 17:09 | 1323172 Fiat2Zero
Fiat2Zero's picture

Well other than people can't afford to eat.

"Bringing the Middle East uprising to a US city near you"

Mon, 05/30/2011 - 17:20 | 1323183 topcallingtroll
topcallingtroll's picture

I am going to ballpark that as a sustained inflation rate of forty percent for four years. Not going to happen.

Mon, 05/30/2011 - 17:26 | 1323191 trav7777
trav7777's picture

wages haven't kept up for the past 40 years, dipshit

Mon, 05/30/2011 - 22:12 | 1324127 JW n FL
JW n FL's picture

maybe longer than 40 years.. the American worker bee / debt slave.. has been being slowly boiled for at least 40 years!

 

whomever junked him needs to grow a set and speak up.

Mon, 05/30/2011 - 18:40 | 1323319 Al Gorerhythm
Al Gorerhythm's picture

"Each new generation unconsciously adapts to the new nominal prices. And the wages will surely do it too."

Oh? Just like since the start of this current paper money system, perpetrated on us since 1913? You neglect the destruction of savings in your theory. Each new generation is asked to take up the yolk of indebted servitude, to carry the load for the past generation. The past generation, slipping quietly into retirement, discovers that its saved wages of 40 years, hasn't the purchasing power of yesteryear. Your observations are blinkered. The new generation is born into their situation and know no other normal. The older generation discovers too late, that their normalcy bias anchors them in a romantic period of purchasing power long gone. 

Think back Hamy. Draw on your memory powers. Can you see that guy in front of you holding a fob watch, saying: "You are getting sleepy, you are getting sleepy".

Mon, 05/30/2011 - 19:19 | 1323397 HamyWanger
HamyWanger's picture

I've never said wages were to keep up exactly with inflation. I'm totally aware that inflation disrupts capital allocation. 

There will a few deaths by hunger and some chaos for 2 or 3 years, but in the end it is a small price to pay to avoid a deflationary spiral and a government default. 

Mon, 05/30/2011 - 19:23 | 1323410 Al Gorerhythm
Al Gorerhythm's picture

Oh, yes you did. It's the new normal, you know.

Each new generation unconsciously adapts to the new nominal prices. And the wages will surely do it too. 

Mon, 05/30/2011 - 19:56 | 1323472 Al Gorerhythm
Al Gorerhythm's picture

"There will a few deaths by hunger and some chaos for 2 or 3 years, but in the end it is a small price to pay to avoid a deflationary spiral and a government default." 

May you live in interesting times. What a complete CUNT. As long as you are insulated, huh? May some lucky bastard step over your near-lifeless body and opine "Looks like this guy needs help. Oh look, a rainbow!"

 


Tue, 05/31/2011 - 13:12 | 1325762 Bob Sacamano
Bob Sacamano's picture

So any steps you are taking to "insulate" yourself would be hypocritical?  Ready to distribute "your insulation" equally to all below you?

Mon, 05/30/2011 - 18:44 | 1323335 Muir
Muir's picture

@Hamy

"Yep, and so what? 


If you had said to your great-grandfather that an average car would cost $10,000 in the near future, he would not have believed it. 

Each new generation unconsciously adapts to the new nominal prices. And the wages will surely do it too. 

Nominal prices in Japan and in Italy before the euro did not use to be that ridiculously high. But people have adapted, and begun to consider them normal, with new points of reference. Earnings always follow mild inflation, with a 6-month lag at worst.  "

__

exactly!

and even though some behavioral finance types have dared to call this a bias, others, most notably Gerd Gigerenzer, have pointed out the great survival benefit to such discretionary perceptions.

Mon, 05/30/2011 - 18:37 | 1323309 duo
duo's picture

In the '70s everything essentially tripled in price but wages went along with it. Since 2000 prices have doubled (except by BLS standards) but wages have barely moved.

Expect another 3x-5x increase in prices without wages (except for bankers) increasing this decade.  Vietnam caused the '70's inflation, Iraq/Afghanistan/Libya will cause '10s inflation.

Mon, 05/30/2011 - 18:49 | 1323343 Al Gorerhythm
Al Gorerhythm's picture

Money printing, compound interest mumbo jumbo and credit creation causes inflation. Persistently, insidiously. Hamy World.

Mon, 05/30/2011 - 16:19 | 1323108 Bubbles the cat (not verified)
Bubbles the cat's picture

That was the 80's. Before logic lost it's shine.

Mon, 05/30/2011 - 16:05 | 1323097 legal eagle
legal eagle's picture

Kids should be taught to buy one ounce of silver from every paycheck until they get full time job, then one ounce of gold (or 10 grams if all they can afford) each month. Better than any retirement plan available.

Mon, 05/30/2011 - 16:20 | 1323119 Alpha Monkey
Alpha Monkey's picture

Not sure where you think kids work at part time, earning enough to buy an ounce of gold. Even back in the mid 90's when I was just starting work, my paychecks were only 300 or so every two weeks.  And, I might add, this was working 40hrs+ as a 16y/o at McDonalds. 

So, if minimum wage has roughly doubled since my time, these kids are only working half my hours, and the price of gold has has roughly quadrupaled.... You do the math.

 

Also, wtf is going on in gold?

Mon, 05/30/2011 - 16:40 | 1323140 Jendrzejczyk
Jendrzejczyk's picture

"Kids should be taught to buy one ounce of silver from every paycheck..."

Mon, 05/30/2011 - 19:07 | 1323374 Al Gorerhythm
Al Gorerhythm's picture

Kids should be taught to save from each pay cheque, a portion to be set aside to buy eventually one ounce of silver.

Mon, 05/30/2011 - 19:38 | 1323440 knowless
knowless's picture

the tradition was to give the child a silver coin, and tell them to never spend it, just keep it unless their life depended on it, in the pocket, always, they used to sew it into clothes, when people only had one change of them. it instilled a sense of value, a notion that in times of trouble, you would have a way to avert crisis.

 

Mon, 05/30/2011 - 17:53 | 1323214 knowless
knowless's picture

holding pattern again, last time i saw it was:april 21st right before the fifty sky.  not gonna really predict anything, but maybe a big spike this week?

 

http://www.zerohedge.com/forum/what-gold-chart

http://twabbler.net/images/35340770006840958880.jpg

today:

http://i.imgur.com/6nLK9.jpg

Mon, 05/30/2011 - 16:12 | 1323101 Sudden Debt
Sudden Debt's picture

It's pretty clear they can't keep it under control forever.

Today, while driving to work I was wondering: A average house is worth 10.000 ounces of silver. If you think about it that only 1/10th of a ounce of silver is mined per person on earth, a house is worth the silvermining for 100.000 people.

Put in this calculation the fact that industrial demand is bigger than the mining for year now and that deficit keeps on rising, this will eventually boost silver into the stratosphere.

 

Mon, 05/30/2011 - 18:01 | 1323237 Hansel
Hansel's picture

Same thinking applies to gold.  There is roughly 0.85 oz gold per person on the planet, and also about 0.85 oz gold in America's reserve per American, yet in the U.S. the average price of a new home is $268,900, or 174 oz of gold.  No numbers make sense right now when calculating gold as money.

Mon, 05/30/2011 - 18:06 | 1323247 Misstrial
Misstrial's picture

There are already places in the USA where you can buy a house for one gold coin.

~Misstrial

Mon, 05/30/2011 - 18:53 | 1323345 Manthong
Manthong's picture

You will probably need some guns though, if you plan to move in.

Mon, 05/30/2011 - 16:12 | 1323102 duo
duo's picture

A 1961 quarter bought a gallon of gas.  Today that same quarter is worth about $7, or almost two gallons.  Either silver is overvalued by about 2x, or $7 gas is on the horizon.

Mon, 05/30/2011 - 16:17 | 1323112 trav7777
trav7777's picture

it's possible for you to grasp that production ratios of materials may change, right?

Mon, 05/30/2011 - 16:20 | 1323118 HamyWanger
HamyWanger's picture

Unless there's a big technological advance in one sector and not the other, it is doubtful. 

Mon, 05/30/2011 - 16:52 | 1323149 eisley79
eisley79's picture

Why did you pick 1961, and quarters?  How about dollars, bullion silver, and gasoline, charted for 100 years, see if there is any value in your observation.

 

Also note what the treasury was doing in 1961 'son'

http://www.silverinstitute.org/19601965.php

Mon, 05/30/2011 - 18:34 | 1323301 duo
duo's picture

In Babylon 3000 years ago an ounce of gold bought 350 loaves of bread.  Do the math.

Mon, 05/30/2011 - 19:16 | 1323385 Al Gorerhythm
Al Gorerhythm's picture

Yep. From antiquity to modern times, a half-wit was and is still, a half-wit. They just don't (can't) get it.

Mon, 05/30/2011 - 20:42 | 1323747 duo
duo's picture

It's amazing that prices in gold have stayed almost constant for the duration of human history, yet so many believe that paper can for some reason render history meaningless.

Mon, 05/30/2011 - 17:24 | 1323189 Fiat2Zero
Fiat2Zero's picture

The technological advance is called war. The government has been subsidizing gas prices in a variety of ways for a long time.

The actual cost at the pump is far more when you factor in indirect costs.

Conversely, the government has been suppressing the price of silver for a long fucking time. At least from the 60's with the introduction of the Coinage Act, when Johnson eliminated silver from our coins, threatened that the Treasury would dump silver onto the market and crash the price, and eliminated the final tie of "future exchange" with our currency.

Silver is undervalued by at least 3 times currently.

You can't make solar panels without silver (10% of the cost), a cruise missile has 500 oz of silver in it.

Industrial demand is rising, but nowhere's near as fast as investment demand.

Try telling 1 billion Chinese and 1 billion Indians experiencing super high food inflation that they shouldn't buy silver. They'll tell you silver is real money and that people in the US don't have a fucking clue.

Oh yeah, also, the Chinese and Indian peasantry (who buy the silver) do not read ZH. Therefore the Jedi Mind tricks of paid shills like Hamy Wanger do not affect them.

Mon, 05/30/2011 - 18:25 | 1323287 A_MacLaren
A_MacLaren's picture

a cruise missile has 500 oz of silver in it.

I've heard this "thrown out there" but never seen it documented.  Got a link?

Mon, 05/30/2011 - 19:06 | 1323377 JW n FL
JW n FL's picture

I think last year it was like 20 oz's.. and the number has grown to 500 for sure! LOL!!

 

and I Love metal! so I am no silver hater.. gold is for tungstun lovers! LOL

 

I own Gold so take it and shut it!

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