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Eric Sprott Is Not Optimistic

Marla Singer's picture




 

King World News interviews Eric Sprott, who effectively melts the wires with the heat of his pessimism. Alarmingly, it is fairly hard to argue with his reasoning.

"As an individual I have my money in gold and I have my money in silver and I have my money in our hedge fund and it, of course, has most of its money in gold and silver."

Eric Sprott Interview on King World News (39:01 minute .mp3)

 

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Sat, 03/27/2010 - 07:02 | 277995 10044
10044's picture

"gold continues the place to be"

"tremendous shortage of gold"

"who will bail out US"

yep, pretty much a zero hedge community guest.

Sat, 03/27/2010 - 08:31 | 278004 Spitzer
Spitzer's picture

Sprott is becoming a fairly big operator, buying gold from the IMF, like no fucking around.

Sat, 03/27/2010 - 14:26 | 278164 Apocalypse Now
Apocalypse Now's picture

New news: The Gulf sheikh Ahmed bin Zayed al-Nahyan was a big operator, but is missing after a "glider" crash into a lake in Morocco.  He ran the world's biggest sovereign wealth fund and his older brother is the ruler of Abu Dhabi.  I wonder if he was looking for physical gold too.

Sat, 03/27/2010 - 17:07 | 278243 Gordon_Gekko
Gordon_Gekko's picture

Yeah, and I'm pretty sure it was an "accident".

Sat, 03/27/2010 - 17:28 | 278254 MarketTruth
MarketTruth's picture

Sprott 'called' the IMF's bluff and the IMF folded. Sprott would have most certainly weighed and tested the bars plus checked where they came from via their serial numbers. The IMF only wants to sell to banksters/countries who will hide this fraud gold via a ledger notation. The IMF has no actual physical gold for sale and Sprott just proved that to be true.

Sat, 03/27/2010 - 08:53 | 278009 Instant Karma
Instant Karma's picture

I find it hard to be optimistic when Federal, State and Local government taxation and regulation are strangling business, and hence employment. Loss of such reduces tax revenues, drives up deficits, increases borrowing Federally and results in slashed services locally.

Honestly, if we had an economically literate President and Congress, coupled with State Governors and State Legislatures, the problems are fixable.

Cut taxes, reduce regulation, stimulate growth, stimulate employment, increase tax revenues, and reduce deficits.

One reason we're all so pessimistic is that America is going Canadian and European: Oppressive, hyper-regulatory, hyper-tax, socialism with no fiscal discipline.

Basically, you can't trust the Government, Wall Street, your bank....

But we can trust each other, those of us Republican/Tea Party/Libertarian/Don't Tread on Me "kooks" who just want Government to leave us alone to do our work and earn our pay.

We don't want our work and our pay redistrubuted to people who won't work or can't or won't pay. We just don't. A basic safety net? Sure. Are you entitled to a house you can't afford? Not really.

Sat, 03/27/2010 - 09:34 | 278021 Sabremesh
Sabremesh's picture

Like many Americans, your childlike view of government is totally skewed by your only experience of it. The US Congress, the White House and the Supreme Court are zombie institutions controlled by business and financial interests, and the only non-governmental power which could challenge them - the mainstream media - is owned by the same people who own government. It doesn't have to be this way! 

Sat, 03/27/2010 - 09:41 | 278025 Mercury
Mercury's picture

Yeah well, the parasite is about to kill the host.

Sat, 03/27/2010 - 13:32 | 278139 CombustibleAssets
CombustibleAssets's picture

Don't underestimate the host.

Sat, 03/27/2010 - 16:41 | 278235 Fishing Chimps
Fishing Chimps's picture

Or the parasite.

Sat, 03/27/2010 - 13:38 | 278143 CombustibleAssets
CombustibleAssets's picture

The Supreme Court has not yet had it's say on the attempts by congress to rewrite the constitution. And Obama's attempt to lecture to them during his State of the Union Addresss does not indicate that they are on the same side.

Sat, 03/27/2010 - 15:06 | 278179 AnonymousAnarchist
AnonymousAnarchist's picture

The SCOTUS has the same record of fail when it comes to defending the Constitution as do the legislative and executive branches.

Sat, 03/27/2010 - 11:22 | 278061 Mr. Anonymous
Mr. Anonymous's picture

I'm with Sabremesh.  It's not socialism, my friend, it's fascism.  And it's not about left and right, the puppets on the stage, but the puppet masters controlling the strings from above.  As long as people focus on the puppets--- Conservatives, Liberals, Progressives, etc---- on the LABELS, the PTB can operate with impunity from the shadows, behind the curtains, shrouding the stage.  As a life-long Republican, I believe nobody politically carries more water for the PTB than the Right because the right is wholly content, it would appear, to hurl names and labels and generally fall prey to the Left-Right paradigm.  The bullshit PUPPET SHOW.  Until BOTH SIDES wake up and realize Left-Right is a sham and it's Top-Bottom that really divides, we will remain hopelessly divided as a people and incapable of turning our fractious, Highlander clans against the cursed English lords, who would split us, conquer us and rend us unto debt slavery, finally united in our mutual misery.  I say NEVER!  It is time to unite the clans of American Left and Right and FIGHT THE TRUE ENEMY!

"Lower your flags and march straight back to England, stopping at every home you pass by to beg forgiveness for a hundred years of theft, rape, and murder. Do that and your men shall live. Do it not, and every one of you will die today."
BRAVEHEART

 

Sat, 03/27/2010 - 13:33 | 278141 tip e. canoe
tip e. canoe's picture

that little pyramid on the back of the dollar bill tells you all you need to know. 
but don't forget what happened to William Wallace...

Sat, 03/27/2010 - 16:27 | 278225 dark pools of soros
dark pools of soros's picture

the ends justified the means...

 


On Aug 5 1305, Wallace was betrayed by a Scottish knight in service to the English king, and arrested near Glasgow. He was taken to London and denied the status of a captured soldier. He was tried for the wartime murder of civilians (he allegedly spared "neither age nor sex, monk nor nun"). He was condemned as a traitor to the king even though, as he correctly maintained, he had never sworn allegiance to Edward.

On 23rd August 1305, he was executed. At that time (and for the next 550 years), the punishment for the crime of treason was that the convicted traitor was dragged to the place of execution, hanged by the neck (but not until he was dead), and disembowelled (or drawn) while still alive. His entrails were burned before his eyes, he was decapitated and his body was divided into four parts (or quartered). Accordingly, this was Wallace's fate. His head was impaled on a spike and displayed at London Bridge, his right arm on the bridge at Newcastle-upon-Tyne, his left arm at Berwick, his right leg at Perth, and the left leg at Aberdeen. Edward may have believed that with Wallace's capture and execution, he had at last broken the spirit of the Scots. He was wrong. By executing Wallace so barbarically, Edward had martyred a popular Scots military leader and fired the Scottish people's determination to be free.

Almost immediately, Robert I the Bruce revived the national rebellion that was to win independence for Scotland. He succeeded and was crowned king of Scotland in 1306.

On his way to reconquer Scotland, Edward died near Carlisle.


Several hundred years later in the 19th century, statues commemorating Sir William Wallace were erected overlooking the River Tweed and in Lanark. In 1869, the 220-foot high National WallaceMonument was completed on a hill near Stirling. This huge tower now dominates the area where the Scots fought their most decisive battles against the English in the thirteenth and fourteenth centuries at Stirling Bridge and Bannockburn.

Sat, 03/27/2010 - 18:18 | 278278 tip e. canoe
tip e. canoe's picture

touche'.  wonder what WW would think of RBS.

Sat, 03/27/2010 - 19:12 | 278302 Anonymouse
Anonymouse's picture

I visited the monument last year.  A great place to visit, although the statue of Mel Gibson at the base of the hill (at the parking lot) is really cheesy.  Seriously, they have a statue of Mel Gibson

Sat, 03/27/2010 - 12:31 | 278083 milbank
milbank's picture

"Cut taxes, reduce regulation, stimulate growth, stimulate employment, increase tax revenues, and reduce deficits."

Outside of the reduce deificits part, what you listed is exactly what the Republicans did when they were in the majority in Congress and the White House.  They called it the "Contract With America" and look what it got us.  I'm not meaning to imply that the Democrats are better.  I'm pointing out that they are all the same. 

You are at best nieve Instant Karma, at worst, a sheeple those who own Congress want you to be, chasing your own tail over and over again thinking if we just elect the "other guy" it will be different.  Reducing bank regulations IS what was done and it DID stimulate growth. . .  for them, for the construction industry who stimulated employment only, it was employment of non-tax paying illegals which, of course, these flag waving, magnet on truck sticking "patriots" who hired them to build or of those houses, got away with.  Not to mention the non-licenced "Joe The Plumbers" of the world who got away with cash only, transactions as THEY bitch about how bad America is and how the illegals are taking their (illegal cash payment under the table) jobs, yada, yada.

"Reduce taxes" while "increasing tax revenues"  say wha???!!!

Get with reality IK, government isn't going to "get off your back."  It's what the lobbyist pay them to do.  It's why government exists.

You and your nieveness is a great example of why the Teaparty movement will amount to nothing. 

The debt destruction is a done deal.  There is no "fixing it."  There is no going back.  The question for Americans and the world is, how long do you want to draw out the pain?  Do you want to take it all now or meted out over a longer period of time?

When the Republicans controlled congress, there was a bill passed, Gramm, Leach, Bliley, that irradicated Glass-Steagal.  This bill was the pinacle of fifteen years of the deregulation of the banking industry from the early-mid eighties to the turn of the century.  When "conservative" Republican Senator Phil Gramm left congress, his reward for getting this bill passed was a high paying job at an investment bank known in the U.S. as UBS.  In Switzerland it's the Union Bank of Switzerland.  This is a bank that hides the money of ultra-wealthy American citizens from taxes.  They just negotiated a "slap on the wrist" settlement for doing so and are continuing to do so.  They ultra-wealthy pay no taxes so you can pay more.  "Conservative" Republican, Thomas Bliley left the House and his chairmanship of the House Banking Committee to become a "K Street" lobbyist FOR the banks. 

You are either nieve or ignorant of what goes on IK.

 

 

Sat, 03/27/2010 - 13:49 | 278148 gdub53
gdub53's picture

I believe that your knowledge of the construction industry is naive and or ignorant. Having built over 10,000 apartments in my career I speak from experience.  Contrary to popular myths the industry was not dominated by non-taxpaying illegals. On the just completed $140mm project I was overseeing the "illegals" you speak of were non-existant. Every employee had to have "docs". Each was vetted.  Certainly there were many "south of the border" employees, however very, very few in the skilled trades. As for being "non taxpayers" at $10/hr. just how much would they owe?

Sat, 03/27/2010 - 16:23 | 278191 milbank
milbank's picture

I'm not so niave to know that what you are talking about is a residential real estate construction "project" controlled by the unions which are controlled by the Mafia, not the residential real estate construction of individual family homes I, of course, am referring to where the Mafia/unions can't control in the "right to work" southern and western states where most of the build up over the last couple of decades ocurred.  No, between the late ninties and 2006 the slave trade was alive and well below the Mason-Dixon line.  From the size of that project you are a residential outfit in the Northeast where the payoffs to Union/Mafia and local government "officials" abound.  Who are you kidding?  You think that those payoffs are lawful and on the books?  You are ignorant and/or niave to not comprehend that the140MM project you say you were overseeing was only 77MM when the padding and payoffs are subtracted out.

Your mentioning the "$10 an hour" pay supports my point.  Who do you think the construction industry was hiring at $80 a day?  Let me guess, you think that all the illegals in this country during the earlier part of the last decade were here busing tables and picking strawberries. 

Sat, 03/27/2010 - 16:27 | 278226 perchprism
perchprism's picture

 

Yeah, and you're just an asshole punk, Milbank.  Why don't you just crawl into a hole and die?  Instant Karma and millions of others are planning to take back some control over their lives come November and beyond. 

Sat, 03/27/2010 - 17:17 | 278245 milbank
milbank's picture

Via the ballot box?  LOL!  Yeah, of course he is.  You guys crack me up.  You should have had control over your lives to begin with but, you have no idea how.  You still don't.  Enjoy your "tea parties."

Sat, 03/27/2010 - 12:13 | 278093 DoChenRollingBearing
DoChenRollingBearing's picture

+ 106

With luck today, I will pick up my coin dealer's last 3 oz of Pt Eagles.

Sat, 03/27/2010 - 09:22 | 278015 DavosSherman
DavosSherman's picture

The 5 G's of Faith: G*(religious edit for my agnostic friends)d, Gold, Guns, Grub & Government will f*ck it up.

Sat, 03/27/2010 - 10:28 | 278039 Flakmeister
Flakmeister's picture

G** can be freely substituted with Ganga

Flak

Sat, 03/27/2010 - 09:24 | 278017 PhD
PhD's picture

With the comming forced liquidations the value of everything will plummet, including PM.

 

Only pm will respond to the abyss by sky-rocketing however,

 

have patience.....

Sat, 03/27/2010 - 10:28 | 278036 Crime of the Century
Crime of the Century's picture

Correction: the value of PMs won't plummet... only their affordability. Many small hands who are taking steps to remain strong small hands will feed on this opportunity should it arise.

I don't mind small hands, they make my junk look bigger

Sat, 03/27/2010 - 20:58 | 278349 Nikki
Nikki's picture

Small hands... Very clever.

The small hands that control the fed, sec, FBI, FDIC, finance commitee, Potus cos, Budget Director, NY banks etc... ?

Who controls the small hands ?.

That is the real question.

Sat, 03/27/2010 - 09:35 | 278022 Gordon_Gekko
Gordon_Gekko's picture

I, for one, am even more pessimistic than Mr. Sprott.

Sat, 03/27/2010 - 10:27 | 278037 Narcolepzzzzzz
Narcolepzzzzzz's picture

Couldn't you have just posted the link?

My poor little mouse is all tired out after scrolling past that.

Sat, 03/27/2010 - 10:30 | 278040 tip e. canoe
tip e. canoe's picture

come on dude...a link and a couple tasty paragraphs would have sufficed. 
now i just don't give a shit, even if it's relevant.
rule #4 in the art of propaganda: seduction not repulsion.

Sat, 03/27/2010 - 11:33 | 278070 Mr. Anonymous
Mr. Anonymous's picture

+1.  I read for a bit, before discovering how long this was.  Then, feeling fooled, I quit it entirely. 

Mon, 03/29/2010 - 07:13 | 279493 tip e. canoe
tip e. canoe's picture

in case anyone's still reading this thread, my above comment was addressed to a obscenely long comment that no longer appears, not GG's burst of brevity above.

Sat, 03/27/2010 - 10:30 | 278041 Crime of the Century
Crime of the Century's picture

Marla - do you agree this needs to be addressed? Wrong on several levels imo...

Sat, 03/27/2010 - 12:17 | 278096 anony
anony's picture

The Crown Prince to Mozart:

 

"Too many notes. Take some out".

Sat, 03/27/2010 - 19:19 | 278307 Anonymouse
Anonymouse's picture

There are in fact only so many notes the ear can hear in the course of an evening.

Sat, 03/27/2010 - 13:53 | 278150 CombustibleAssets
CombustibleAssets's picture

Russia's attempt to implement this Arctic fantasy would give new meaning to the term Waterloo.

Sat, 03/27/2010 - 15:21 | 278187 AnonymousAnarchist
AnonymousAnarchist's picture

Now I know why there is a "Junk" link. :)

Sat, 03/27/2010 - 15:49 | 278206 Marla Singer
Marla Singer's picture

Post this much crap in a comment again and I will be very disappointed.

Sat, 03/27/2010 - 10:16 | 278030 MarketFox
MarketFox's picture

Well now, there is another side to the equation.

 

Where is the money going to come from to push gold prices to the stratosphere ?

And where is the surprise element going to come from ?

 

Who is now in shock that the more well known currencies of the world are in question ?

 

Who is not aware of the situation with Iran, and the fact that the banks own the US government ?

 

So what would be the next catalyst to make gold move suddenly and dramatically from here ?

 

Particularly since that a good portion of money, equity, and credit has been reduced by more than 30% and is not coming back ?

 

.............................................

 

So Sprott is saying that even though over 30% of the economy is missing in terms of total currency utilized to price all goods and services, that gold could move significantly higher.

...........................................

 

My instinct tells me that "all of the xi's in the total economic equation" have overall downward price pressure as opposed to upward price pressure.

 

 So tell me, now that I have 30% less in my purse, I am going to pay a lot more for gold, after gold has been the number one performer versus its peers for the last decade ?

 

My answer would be sloppy and awkward lateral downtrending prices.

 

99% of the people who have money have already been exposed to the gold story, although I must admit that the Sprott story is a very strong argument even such that my mind begs me to buy gold.

 

This makes me even more suspicious. 

.........................................

 

However there is always a real answer to a real situation.

 

And there is no question that the % of each sovereign economy's workforce is increasing in terms of the number of people that are and will be government dependent.

 

Which means that those that actually have real wealth in terms of savings or real assets with no debt, are going to be tapped for more and more money, thus making the overall wealth of each country actually decrease.

 

The tax equation is getting higher as the percentage of net revenue drops, and one buys less and less of the actual good because a higher and higher % of its price will be the tax portion of price.

 

This also means less wealth chases the same gold.

 

Since gold is universal, this means that some of the economies would have to supercede the other weaker economies by an enormous amount in order to propel the gold prices to much higher levels.

 

And how likely is this given that all countries are now joined at the hip, and everywhere else ?

 

There is going to be a reluctant decrease in overall wealth available to chase higher gold prices.

Sat, 03/27/2010 - 10:36 | 278042 Crime of the Century
Crime of the Century's picture

Enough with the double spacing already!! Lawdy this thread is gone a wantin'. The short answer to ALL your questions...

Exter's Pyramid flows downward in Armstrong's Waterfall

http://commons.wikimedia.org/wiki/File:Inverse_pyramid_of_John_Exter.png

http://fofoa.blogspot.com/2009/08/waterfall-effect.html

Sat, 03/27/2010 - 11:41 | 278077 glenlloyd
glenlloyd's picture

thank you for posting the Exter link, I was headed in that direction myself.

Sat, 03/27/2010 - 11:58 | 278082 Double down
Double down's picture

Why is it that others have already taken all my "ideas" and made a better job?:)  Good post 

Sat, 03/27/2010 - 12:19 | 278100 tmosley
tmosley's picture

When bonds fail, when equity markets tank, when governments worldwide try to print their way to prosperty, when there is no other haven, people will remember gold (and silver) and turn to them.

The markets for both metals right now are so tiny that if people allocated even 5% of their portfolio to gold like they are "supposed" to, the price would explode to double or triple its current price (at least).  This doesn't count the removal of the fraudulent short pressure from JPM that would occur as a part of that epic short squeeze.  Include that, and a 10-fold price increase is more likely than a 3 fold one.

Now, if say, 50% of world wavings were invested in gold, we would be looking at a gold price sitting around $1-2 MILLION dollars per oz.  If demand got that high, silver would explode even further, perhaps even reaching or breaching parity with gold, as the supply has all but vanished from the surface of the earth over these past decades.  And even THAT presumes that there is gold and silver in the inventories of COMEX, GLD, and SLV.  If not...

Sat, 03/27/2010 - 12:20 | 278102 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

What is "money" other than subjective BS?

Sat, 03/27/2010 - 10:44 | 278045 Lionhead
Lionhead's picture

If you want to see the visualization of modern age economics, bubbles, fractional banking & compound interest schemes, leverage & its associated debt, it's on display for all to view in the S&P 500 from its inception. The power of the madness of crowds, human delusions & greed is its manifest. Sprott's reasoning is valid; for when all else blows up, people will return to gold as a store of wealth. The fiat currencies will blow in the wind like yesterday's newspaper.

View the first four charts at the top of the page for the S&P history. The ending parabola is most evident; compare to a normal pattern of growth from 1929 to 1983.

http://tinypic.com/4dukvtyp

What's amazing to me is TPTB actually managed to blow up the parabola a second time & are now going for a triple play. In their minds, parabolas are normal behaviours & of course, you just can't see them until after they blow up.

 

Sat, 03/27/2010 - 12:04 | 278087 equity_momo
equity_momo's picture

Agreed - would advise using logarithmic charts though to show the s+p from 1929.

Sat, 03/27/2010 - 13:08 | 278124 Lionhead
Lionhead's picture

Logarithmic scaled charts cannot be used when using the geometric fans. It creates distortions in viewing the chart not to mention the illusion of flattened growth or decay.

Sat, 03/27/2010 - 10:50 | 278049 zenon
zenon's picture

Yes, the arguement that there is not enough money to push gold up plus the deflationary forces at work... So how much money was there in 1979-80 (compared to now) to push up gold to $800? Even if you consider the peak a fluke, it certainly traded at $400 fo a while and, later, averaged at around $380 for the next 20 years. Meanwhile the Dow went has gone up 10-fold from 1980 and 3-fold from the early 1990's all the while we are in a depression ameliorated by huge government support. If there is enough money in the system to support current stock prices, then yes $1100 gold is probably still cheap, $2000 gold is more like it and $4000 gold is not out of the question.

Sat, 03/27/2010 - 13:06 | 278123 DosZap
DosZap's picture

I disagree there's not enough money to push it up, there's at least 12+ Trillion on the sidelines now, in Americans hands,not in the Market.I'd say that's enough to take every ounce off the market above ground, and then some.

Sat, 03/27/2010 - 10:52 | 278050 Tj99
Tj99's picture

Excellent interview, thanks.

Sat, 03/27/2010 - 11:25 | 278066 Nobody
Nobody's picture

Great interview

Too much drift in comment section

Sat, 03/27/2010 - 12:11 | 278091 mcarthur
mcarthur's picture

I find Sprott to be a one trick pony constantly talking up his position.  The collapse in coin sales clearly demonstrates that the ignorant masses have moved on and the story is tired.  And thats the fundamental problem since the asset does not generate returns.  All the sheep have been rounded up.

Sat, 03/27/2010 - 13:13 | 278113 Millivanilli
Millivanilli's picture

Yeah, well the us dollar doesn't generate returns, either, fucknuts.   In fact, it depreciates like a popsicle in the Jamaica sun.   The dollar has more counter party risk than a Tijuana show girl...

 

Funny how the dow drops Aig, Citi, and Gm and still trades at 12  year ago levels while the dollar is worth 33 percent less than it was in 98...   Let me guess, you are an aspiring janitor at JPM?

Sat, 03/27/2010 - 13:11 | 278126 GoldmanSux
GoldmanSux's picture

Your time horizon is too short. Gold has been in an 8 year uptrend which is still intact. What other asset has produced the return gold has in this time period? Sprott's one trick pony has been the absolutely the best pony and he still believes it is. Buyers of gold coins are at the margin, and basically have no bearing on what gold does from here.

Sun, 03/28/2010 - 12:45 | 278737 trav7777
trav7777's picture

Gold doesn't produce "returns"

Sat, 03/27/2010 - 18:36 | 278285 Pladizow
Pladizow's picture

"And thats the fundamental problem since the asset does not generate returns."

This is the argument of an amateur and not worth responding to.

Go back to You Tube mcarthur.

Sat, 03/27/2010 - 12:12 | 278092 Segestan
Segestan's picture

It is a complex world, globalization has increased the complex nature 10x? The Gold Market is very small and just a small percentage amount of global capital flowing into Gold will revalue gold. Government's fear lost control, due to the bankruptchy of the individual, the loss of control will not be accepted by those who have much to lose, monetary, idealist or religionist, and a global reformation is on the horizon. Reformations are Not a smooth enterprise.

Sat, 03/27/2010 - 12:23 | 278098 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

I agree with Sprott (albeit inflation, this concerns me-too many doelarrs in "existence" not to be worried).
I expect to be **JUNKED** ;)

Sat, 03/27/2010 - 12:31 | 278107 Millivanilli
Millivanilli's picture

Sprott knows the truth.  The US is foooked!

Sat, 03/27/2010 - 14:03 | 278154 CombustibleAssets
CombustibleAssets's picture

Buyers holding paper gold are bitches.

Sat, 03/27/2010 - 12:28 | 278108 MarketFox
MarketFox's picture

Another pertinent question is why were the gold bulls not out in force when gold was $260 ?

One could argue this is another journalistic paradise where eyeball counts are an easy sell when gold is one of the words?

Media/information  saturation when accompanied by price can be very telling.

After all, who is going to provide the liquidity exits ?

 

Sat, 03/27/2010 - 13:03 | 278121 DosZap
DosZap's picture

Where were the Bulls?, quietly buying it in large quanities.

Getting 5oz's, for the cost of ONE now.

Sun, 03/28/2010 - 00:31 | 278498 Big Red
Big Red's picture

"Another pertinent question is why were the gold bulls not out in force when gold was $260 ?"

That seems like a different world, back in '79.

Sat, 03/27/2010 - 12:33 | 278112 eternal_sarcasm
eternal_sarcasm's picture

I see absolutely no reason for pessimism, everything is gonna be just fine. I can't see how we could possibly return to a panic situation. Obama has healed the nation with his charm and pearly white smile, our government makes sound decisions and operates like a well oiled machine, those naughty boys on Wall Street have learned their lesson and wouldn't do anything bad again (they promise this time), our debt problems have been fixed by Bernake and his printing press, and the world in general is adopting the Utopian philosophy and rapidly stabilizing into a blissful harmony. No sir, I see no need to concerned, you are all a bunch of crazies and conspiracy theorists, I'll leave you to your delusional thoughts, I'm going shopping.

Sat, 03/27/2010 - 13:25 | 278132 tip e. canoe
tip e. canoe's picture

"You are disturbing me, I am picking mushrooms." - Grigory Perelman

http://www.newser.com/off-the-grid/post/428/you-are-disturbing-me-i-am-p...

Sat, 03/27/2010 - 14:14 | 278158 CombustibleAssets
CombustibleAssets's picture

Gardening is going to be legal in California come November. No gold required.

Sat, 03/27/2010 - 12:42 | 278115 GoldmanSux
GoldmanSux's picture

It has been nice to see Sprott go from fringe kook to an esteemed investor. Today's stock valuations can only be justified if you discount today's low long term interest rates into perpetuity. Bill Gross this week basically told us that this is no longer operational. Beware.

Sat, 03/27/2010 - 12:43 | 278116 rich_maverick
rich_maverick's picture

Anyone here has a similar problem as myself?

Back in 2003, I bought a chunk of Canadian Gold Maples in the low $300 range.  I made gold 10% of my overall asset base.  After 9/11, I was Bush was following the 1960/1970 path of guns/butter and figured a nice hedge with PMs was a good insurance policy.  But, I was still a stock/options guy, when 90% of my assets were deployed.

        In 2006/2007, I made a killing on Apple options, using a long term leaps + short term collars.  In 2007, I made over 1000% return on my portfolio.  However, even with the collars, I still had big risk.

        In 2008, my collars kicked in, and I took a 50% loss on my options bets.  Still up over 500% in 3 years, I was not crying (just kicking myself) for factoring in a company's fundamentals was irrelevant in a liquidity crisis due to systemic risk.

        On Sept 15th (i.e. first thing Monday morning), I sold all my stocks, my parents stocks, my extended family's stock (I manage most of my extended family's portfolios) and went to cash (thank you Lehman).  I avoided the major fall of the market.  Instead, I took 50% of *my money* and bough more PMs.  Left the other 50% in cash.  My family did not approve of my doing the same for them (too bad, gold was in the $800s back then).  Furthermore, they did not permit me to bet on the fall of the market.  So, I returned all their cash to them.  Their other Financial Advisors told them to stick it out in the market!  So, they thought I was nuts.  

Now, I'm warning them to buy gold/silver.  They tell me it's too late.  They should have bought when I did.  I've upped my own portfolio to much more than 50%.  Most of this in my own possession and some in CEF.  But, even my wife thinks I'm nuts!  She and the rest of my family had no problems with me buying leveraged options going long...  But, the idea of going short or buying precious metals is so repulsive to them, that even if they make money, they would rather not be in it.  What the heck gives?   My wife is concerned that I'm taking crazy risks (but, had no problems with options!).  

Why are people brainwashed to think they making money in stocks in a bull market is good but making money (or protecting money) betting against a company or economy is bad?

Sat, 03/27/2010 - 13:00 | 278120 Segestan
Segestan's picture

It's the naysayers in large numbers, who have been supporting a failing ponzi, that will make You're call good. We have the perfect storm.

Sat, 03/27/2010 - 15:34 | 278192 WaterWings
WaterWings's picture

Good for you, mav.

You see, we humans herd each other, unlike sheep. You are paying attention, they are not - but they will always still think they are right, no matter how clueless they are. A friend of mine just received an inheritance of about 60k dollars. We're close, but she still put some of it in CDs and the rest is sitting in the bank after talking to some advisor somewhere. I wasn't hurt - I'm used to friends/family thinking they know more than me even though they can't name more than two Amendments to the Constitution and think I'm three standard deviations away from reality when I say they should unplug their television.

I told her, half PMs so you have something for your grand-daughter in a few years! You will not go wrong! She does strongly believe we are headed for collapse - but not necessarily this century.

Eh, I did the math with her for her CD and what she'll have after a year @ 2.87% or something like that. Yeah, she wasn't too excited about the return, and even beating historical inflation is somewhat over her head - no way in hell I'd tell her to yank it with the fees - who knows, maybe in a year she'll be telling me, "See!" 

Her partner won't tell me face to face she thinks I'm crazy because I'm helping them put together bugout bags, er, 72-hour kits, as advised by FEMA and other loving Federal alphabet soup agencies.

In an insane world, as sane person must appear insane.

Too bad for them. I tried, never lied, and never asked for anything in return. While everything remains in suspended animation (somehow!) there is still time to gently convert - we're talking about saving lives here people!

Sat, 03/27/2010 - 15:40 | 278199 Gordon_Gekko
Gordon_Gekko's picture

Even at today's prices, PM's are practically free compared to what they will be worth in the near future. 100% Gold is the ONLY strategy.

Sat, 03/27/2010 - 16:40 | 278233 Hulk
Hulk's picture

I moved my wife and her family into MM's in May of 08. Tried to get them into Ag,Au with no luck, even though they are from a country that had a currency collapse and had to use PM's to purchase food in the early 60's. When Au hit 1000,the inlaws practically begged me to sell Au. Very interesting. There is no reasonable price I would sell  Au at this point...

Sat, 03/27/2010 - 23:46 | 278450 DoChenRollingBearing
DoChenRollingBearing's picture

Gordon, Hulk,

Today I was able to buy up my coin dealer's last 3 ozs of Pt Eagles.  $35 premium over spot.  I think that is the lowest I have ever paid for PMs.

You both (and others here) know I will never sell unless forced.  I will want to give it away quietly, preferably to grandchildren!

Sat, 03/27/2010 - 16:40 | 278234 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

It is hard to "buck" the matrix.

Sat, 03/27/2010 - 18:45 | 278289 Pladizow
Pladizow's picture

I'm guessing the reason why they think this way is because they were brainwashed, I'm sorry educated, by the American Fool System, I'm sorry, American School System. The public school system in America is designed to create two things - employees and soldiers.

Sat, 03/27/2010 - 20:32 | 278336 rich_maverick
rich_maverick's picture

This goes beyond gold and PMs.  Many people think it is un-American to bet (and profit) from a company going bankrupt.  I've held my short position on Blockbuster forever.  It's free money as far as I'm concerned.  I've always believed in a portfolio of both long and short positions.  Just today, I don't trust the counter-parties in a systemic event.  So, why I hold such a sizable physical PM position.

Holding gold is the equivalent of being short the US dollar.  People may agree with you in principle that things are bad, but feel emotionally compelled to be included with the other sheep about to be slaughtered.  This is the part that I'm perplexed about.  Why, in the face of all the facts, a human "sheep" who knows that they are being led to slaughter, does not get off the line and protect themselves?  Heck, I did not even ask them to put all their money into PMs, just 5-10%.  This is a small hedge, yet too much for most???  Yet, the very same people had no issues betting long with significant leverage in the past.  So, it's the emotional barriers that I'm wondering about.  

Rich

Sat, 03/27/2010 - 12:49 | 278117 Kayman
Kayman's picture

Gold, like everything else, is priced at the margins.  And there certainly is enough paper (and electronic) money around to spike gold.

For me, history teaches a lot, but IMHO what is new this time:

    1. The worlds largest economy is the worlds largest Debtor (private and public)

    2. The money supply can be increased instantly and electronically; therefore infinitely.

    3. The solution for excess is presented as more excess. The promotion of asset inflation trumps economic output, penalizing hard work.

    4. The politicians and the banksters are completely removed from the general             population (physically and morally).  They watch their press releases on the boob tube and take this as reality in the streets.

    5. The truth that we have an insolvency problem (not a liquidity problem) seems to escape the big brains that govern the country (ies). We need to write down the   Bullshit "assets" instead of trying to inflate them.

We have the wrong leadership, with yesterday's ideas, groping around in the dark, not seeing how close to the economic cliff we are at.

Whatever your opinion of FDR may be, he had the middle class behind him.

I am not a gold bug.  I prefer food and guns.  That will be what prices gold.

 

Sat, 03/27/2010 - 13:35 | 278142 FEDbuster
FEDbuster's picture

Don't forget ammunition which has been going up in price for the past few years and is still hard to come by in most areas.

Sat, 03/27/2010 - 14:24 | 278163 CombustibleAssets
CombustibleAssets's picture

In the event of a collapse ammo is likely to be a more effective medium of exchange than PMs.

The problem with using PMs is that there is no infrastructure for using it as medium of exchage when buying groceries or gas.

Most clerks would have no idea on how to give change for a gold eagle since they can't use dollars.

Sat, 03/27/2010 - 18:47 | 278292 Pladizow
Pladizow's picture

Oh and these clerks that are still around after the collapse would gladly accept your ammo?

Think before you post!

Sat, 03/27/2010 - 20:51 | 278344 CombustibleAssets
CombustibleAssets's picture

"Oh and these clerks that are still around after the collapse would gladly accept your ammo?"

If they have merchandise to defend, absolutely. In fact they may be the largest consumers of ammo outside of militia groups.

 

Sun, 03/28/2010 - 12:54 | 278747 trav7777
trav7777's picture

are you INSANE?

You ACTUALLY think that merchants will be USING ammo frequently enough to be a large consumer?

GFD, this is incredible...everybody thinks their gun is the only one out there and that reality is like Strike Team Bravo

Sun, 03/28/2010 - 12:51 | 278745 trav7777
trav7777's picture

This is the stupidest thing I've ever heard.  Ammo as a freakin currency.

Sun, 03/28/2010 - 15:34 | 278852 WaterWings
WaterWings's picture

I know. It's pretty stupid to actually have what people want when bartering. Nobody will want ammo in/after a system collapse. Everything will be fine. Go back to sleep.

Sat, 03/27/2010 - 15:19 | 278186 WaterWings
WaterWings's picture

Go online and get it shipped. Not all choices are available, but there is still pleeeeeenty to be found online.

Sat, 03/27/2010 - 14:04 | 278155 glenlloyd
glenlloyd's picture

too much posting of full articles in comments...a link and a couple introductory sentences would suffice.

good interview, I'm in the same camp.

Sat, 03/27/2010 - 14:26 | 278165 cognitis
cognitis's picture

If Paulson start to sell his uniquely great GLD position, Sprott's fund should be erased. Cave emptor that Paulson's 13F ever divulge even a minute decrease in its greatest sum, for aggressive specs like I would short gold until complacent great specs like Sprott puked up.

Sat, 03/27/2010 - 15:35 | 278193 non-anon
non-anon's picture

Great post!

Sat, 03/27/2010 - 16:32 | 278228 non-anon
non-anon's picture

O.T. Everyone needs to be concerned about this pending bill!

The McCain-Lieberman Police State Act

"Seamlessly, Obama continues Bush administration practices and added others, including:

-- greater than ever surveillance;

-- ruthless political persecutions;"

http://www.opednews.com/articles/The-McCain-Lieberman-Polic-by-Stephen-L... Change you can hope and  believe in!

Sat, 03/27/2010 - 17:03 | 278241 Yes We Can. But...
Yes We Can. But Lets Not.'s picture

OT - watch for a wild summer in America and DC.  Millions of Americans are supremely pissed with Fed pols.  Big crowd 2 weeks ago here in DC.  Today at gathering in Harry Reid's hometown of Searchlight, NV, said to be 200 Reid supporters and 10s of thousands who hate Reid's guts.....

Sat, 03/27/2010 - 18:01 | 278271 RobotTrader
RobotTrader's picture

Is Eric King a one trick pony?

I heard he is a crack stock trader.

Wonder if he predicted the
2009-2010 meltup in:

Retail stocks

Hotel stocks

Cruise line stocks

Auto company and rental stocks

Restaurant stocks

Furniture stocks

REIT's

Mortgage insurers

Heh, I didn't think so.

To this day, still miffed as to why Eric King doesn't interview the
CEO's of:

Dollar Thrifty

Starbucks

Whole Foods

Green Mountain Coffee

Coach

Nordstrom's

Jones Lang LaSalle

Vornado Properties

Hilton Hotels

Royal Caribbean Cruises

Oh well, maybe next week??

LOL.....

Sat, 03/27/2010 - 18:52 | 278296 Pladizow
Pladizow's picture

If that's what you want, you should stick to CNBC.

The truth needs to be voiced somewhere.

If the bright light hurts your eyes, then simply go back to sleep.

Sat, 03/27/2010 - 21:10 | 278358 GoldmanSux
GoldmanSux's picture

Probably because most of the stocks you list are below the levels they were 3 years ago. Some 5 years ago, a couple 10 years ago.

Sat, 03/27/2010 - 23:53 | 278459 DoChenRollingBearing
DoChenRollingBearing's picture

I certainly missed out on the bulk of 2009 - 2010 rally.  Got some, but not much.

I would never have made the calls on those stocks that went UP, Robo.  I am bad at predicting near and medium term movements.

I feel real good about holding gold and other PMs as a hedge against a bad future.

Maybe Eric King is a specialist, in that he specializes in gold and/or bear topics.  Fair enough.

Sat, 03/27/2010 - 19:07 | 278300 MarketFox
Sat, 03/27/2010 - 19:07 | 278301 lsbumblebee
lsbumblebee's picture

Le Metropole Members,

On March 25th at the CFTC Public Hearing on Precious
Metals GATA made a dramatic revelation of a whistleblower source, Andrew Maguire, who has first hand evidence of
gold and silver market manipulation by JPMorganChase and
who has even tipped off the CFTC in advance of manipulative attacks on gold and silver. Just as in the Madoff case the regulator has done nothing to stop such manipulation.

On March 26th while out shopping with his wife, Mr.
Maguire's car was hit by a car careening out of a side
road. The driver of the vehicle then tried to escape.
When a pedestrian eye-witness attempted to block the
driver's escape he accelerated at him and would have hit
him had the pedestrian not jumped out of the way. The
car then hit two other cars in escaping. The driver was apprehended by the police after police helicopters were
called in and following a high speed chase.

Andrew and his wife were hospitalized with minor injuries.
They were discharged from hospital today and should make
a full recovery.
Cheers
Adrian

Midas note: You have to be kidding me ... Another
Coincidence!
http://www.lemetropolecafe.com/guests.cfm

Sat, 03/27/2010 - 22:16 | 278385 cognitis
cognitis's picture

Learn to read: Maguire testified to only unnamed JPM traders' relations to himself, which such relations are defined by law as hearsay not as "first hand evidence". 

Sat, 03/27/2010 - 22:51 | 278408 Pegasus Muse
Pegasus Muse's picture
Timely piece in today's Daily Bell.

-------------------------------

America is a Republic, Not a Democracy!

Saturday, March 27, 2010 - by  Nelson Hultberg

A democracy cannot exist as a permanent form of government. It can only exist until the voters discover that they can vote themselves largess from the public treasury. From that time on the majority always votes for the candidates promising the most benefits from the public treasury, with the result that a democracy always collapses over loose fiscal policy, always followed by a dictatorship. – Alexander Fraser Tytler, 18th century Historian and Jurist

full article:

http://thedailybell.com/920/Nelson-Hultberg-America-is-a-Republic-Not-a-Democracy.html 

Sun, 03/28/2010 - 00:27 | 278495 Return2Sanity
Return2Sanity's picture

If federal tax revenues keep falling, it will soon become obvious to everyone that the massive US debt can't be serviced. However, if (by some miracle) the economy recovers, investors will flee bonds for better opportunities, driving interest rates up, which will also make it obvious the US debt can't be serviced. Only Japan-style stagnation can perpetuate the illusion of solvency, but with the government now heaping on massive new spending programs even that might not work for very long. The Federal Reserve has repeatedly claimed they won't monetize the debt and if they stand firm, the deflationists will be proven right. That would leave the government only two options: slash government spending in a way Freddy Kreuger would envy, or tell US bondholders they're only getting a fraction of face-value. On the other hand, the Fed might do a 180 under pressure, in which case, the gold bugs will have the last laugh.

Sprott already has his chips on the table, and time may prove him right, but I think it's still too early to call. The May primaries will give us a useful bit of foreshadowing on the level of public outrage. If the incumbents start to get a run for their money from the fiscal responsibility crowd, there may be big changes coming down the line. You know even lemmings run in the right direction sometimes.

Sun, 03/28/2010 - 00:38 | 278505 huckman
huckman's picture

Hey Pladizow, Get your porno icon off the internet.  Now!

Sun, 03/28/2010 - 15:39 | 278856 WaterWings
WaterWings's picture

Hey, yeah. I agree. It will decrease the eyeball count going over the threads - and we want as much opinion as possible. Challenge our beliefs and shock us if you dare! but keep porno out of here. Bikinis are a-okay.

Sun, 03/28/2010 - 20:28 | 279156 excellent
excellent's picture

Oh, I totally thought that was two of those marshmallow chickens kissing.

 

On a more serious note, you really just need to be part of the militia or small private armies that will be formed in case of a collapse.

 

At least things won't be boring anymore.

Tue, 04/13/2010 - 06:02 | 297748 mark456
mark456's picture

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