This page has been archived and commenting is disabled.

Future Money Trends On Why Gold Is The Money Of Kings, And Debt Is The Money Of Slaves

Tyler Durden's picture





 

The folks at Future Money Trends have released another comprehensive video clip which summarizes the key aspects of the gold price thesis (which should be all too clear to our readers, who have been following it since $800). At 6 minutes long, virtually anyone can afford to take the time and hear it out, which we certainly urge now that we once again have increasing chatter that QE3 is around the corner (those $4 trillion in deficit funding pieces of paper won't monetize themselves). That alone is sure to send gold again in play: after all the biggest jump in the precious metal last year occurred only after the "incredulous" ones realized that Bernanke was not at all kidding about his infinite dilution quest (yes, the Fed will do anything to save the banking masters).

And for those who wish to perform a deeper dive, below is a video from Nick Barisheff from Bullion Management Group at the Empire Club, presenting a slightly less abridged version of what was said above (link).

 


- advertisements -

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Sat, 02/05/2011 - 15:21 | Link to Comment DoChenRollingBearing
DoChenRollingBearing's picture

Fabulous!  Another gold thread!  I will listen to the piece when I get to my other computer, my antique here does not "do" sound.

I am off to the mall soon, so will have to wait until later to see what is going on in the world and what ZH has to say about it!

Sat, 02/05/2011 - 16:51 | Link to Comment Red Neck Repugnicant
Red Neck Repugnicant's picture

Gold is the money of kings,

silver is the money of gentlemen,

barter is the money of peasants

debt is the money of slaves.

And the blogosphere is a fertile ground for Pump N Dump chop-shops to operate with impunity.

Future Money Trends = NIA = the amazing Jonathan Lebed = newsletter to penny stocks = ass raping

At least they've hired some lawyers to help cover their asses, while they rape yours.  Here's their new disclaimer:

Never invest into a stock, currency, commodity, or any trend related investment discussed on Future Money Trends or our email alerts unless you can afford to lose your entire investment. 

Not sure why Tyler continually promotes these guys..... mysterious.  

Sat, 02/05/2011 - 16:58 | Link to Comment Chappaquiddick
Chappaquiddick's picture

Everyone has an agenda - what's yours?

Sat, 02/05/2011 - 17:37 | Link to Comment Malcolm Tucker
Malcolm Tucker's picture

 

Here is a post comparing Tony Blair (major tool) and George Galloway (consistent thorn in the side of Blair) speeches on Egypt, VIDEOS included:

http://fedupmontrealer.blogspot.com/2011/02/tell-what-politicians-really-think.html

Galloway is ^&*%ing AWESOME

 

Sun, 02/06/2011 - 17:57 | Link to Comment Dismal Scientist
Dismal Scientist's picture

Agree that Blair is a tool. So is Galloway, following his impersonation of a cat in Celebrity Big Brother. No credibility at all.

http://www.youtube.com/watch?v=E-D5XoNWFSQ

Sat, 02/05/2011 - 17:54 | Link to Comment DollarMenu
DollarMenu's picture

Chappaquiddick

He has no agenda, he as a role to play.

He's an off-leash dog today.

He crapped on the lawn and took off.


Sat, 02/05/2011 - 18:07 | Link to Comment Malcolm Tucker
Malcolm Tucker's picture

Video of Mubarak Thugs KILLING a lone unarmed protester in broad daylight!!!

http://fedupmontrealer.blogspot.com/2011/02/mubarak-thugs-kill-lone-unarmed.html

WTF!!!

Sat, 02/05/2011 - 18:28 | Link to Comment I Told YOU So
I Told YOU So's picture

Why are'nt there 2-3 thousand protesters rushing these 3 or 4 thugs and ripping them apart limb by limb????.

Sun, 02/06/2011 - 00:30 | Link to Comment jeff montanye
jeff montanye's picture

that is an excellent question with more than foreign application.  why aren't there? 

 

Sat, 02/05/2011 - 17:14 | Link to Comment tmosley
tmosley's picture

Tyler doesn't deal in ad hominem.  If the facts and arguments check out, he presents them.  

But hey, maybe he's just an evil Republican.

Sat, 02/05/2011 - 17:18 | Link to Comment H. Perowne
H. Perowne's picture

Here, let me help you out: perhaps TD and the rest of the ZH crew actually . . . oh, I dunno . . . believe the points mentioned above? There's a guy named William of Ockham, he's got a sharp object you may want to familiarize yourself with.

Sat, 02/05/2011 - 19:34 | Link to Comment markmotive
markmotive's picture

Our entire western economy is built off the backs of the masses who are effectively indentured servants to their debt:

http://www.planbeconomics.com/2010/09/07/you-are-an-indentured-servant-to-your-debt/

Elitism has always existed and still exists. The elites have simply found a better way to pacify the indebted masses.

Sat, 02/05/2011 - 20:40 | Link to Comment Money Squid
Money Squid's picture

National Inflation Association - Inflation US puts out great videos. Recently I have seen many Youtube videos calling these groups out as frauds and pump and dump scheems. I was surprised at all the negative attention, but am still not clear on how they are all linked, but will keep an eye out and be more sketptical. This long hair rips Lebed http://www.youtube.com/watch?v=MFcgwZ3xjJg

Sat, 02/05/2011 - 21:05 | Link to Comment Bendromeda Strain
Bendromeda Strain's picture

NIA does a great service in putting together slick macroeconomic presentations. There is no need to go any further than that.

Sat, 02/05/2011 - 22:10 | Link to Comment DoChenRollingBearing
DoChenRollingBearing's picture

@ Faux Red Neck

But, you have to admit that those gold bars sure do look yummy!

Sun, 02/06/2011 - 13:38 | Link to Comment RockyRacoon
RockyRacoon's picture

Attacking the messenger.  What have we been warned about that?

Sat, 02/05/2011 - 15:33 | Link to Comment Quixotic_Not
Quixotic_Not's picture

Gold Is The Money Of Kings, And Debt Is The Money Of Slaves

correction:

Gold Is The Money Of Kings, Silver Is The Money Of Free Labor, And Debt Is The Money Of Slaves.

Sat, 02/05/2011 - 16:06 | Link to Comment Quinvarius
Quinvarius's picture

Brass shines as fair to the ignorant as gold to the goldsmiths.
Elizabeth I

Replace brass with paper.

 

Sat, 02/05/2011 - 16:07 | Link to Comment Cyrano de Bivouac
Cyrano de Bivouac's picture

Correction#2. I posted this a couple of weeks ago maybe this version is off too. "Gold is the money of kings, silver is the money of gentlemen, barter is the money of peasants and debt is the money of slaves".

Sat, 02/05/2011 - 16:30 | Link to Comment traderjoe
traderjoe's picture

I believe silver will and should be the money of the people. Gold is a fantastic store of wealth, but silver could rightfully become one of the mediums of exchange in a future monetary system. It's value is more appropriate for everyday transactions - an ounce or two for a dinner out, etc. 

But in order for silver to rise in popularity and become the money of the people, it's value must be widely-accepted. And the more people who own it the better. If it's value rises precipitously in a monetary collapse, if no one owns it, there's a real possibility that silver and gold become the money of the "new elites" and are therefore shunned by the people. 

Hence, among other ZH'ers endeavors, CogDis had his Johnny Silverseed project/article. I too have tried to use silver whenever possible, for tips, payments, or just to show someone the beauty of the coins. 

Anyhow, I've launch a new personal initiative. I finally received a junk silver quarter for change. I now keep the 1945 quarter in my pocket. It's worn, and obviously of no particular collector value (except for the silver content). 

Whenever I'm at a register and the person working has just a bit of time, I pull out the silver coin and ask them if they ever sort through the change in the register looking for silver coins. I tell them any quarter 1964 and earlier is worth $5 and a dime $2. I keep it to these two coins (not dollars and half-dollars) to keep it simple. People are generally surprised that a quarter could actually be worth $5 and a dime $2. 

If the clerk is younger or busy, I keep it to that. I tell them if they collect a few they can go to any coin shop and sell it for $5 or $2. I've just incentivized them to look through their money. Oftentimes, a bit of curiosity has been sparked about why a quarter could actually be worth $5. 

If the clerk is the manager, has a bit more time, or I go there a lot, I might sprinkle in a comment about how our coins and bills don't have any intrinsic value anymore. Or a quick lesson on inflation. Or I make a standing offer to buy all of the quarters and dimes they find for the melt value when I come back next. I make it seem like that won't be too long from now, so they feel like I will be a good/informed customer/neighbor (and then yes, I do go back in). 

It's a really quick way to bring silver to the attention of someone that looks at currency all of the time. I'm not preaching, or requiring any action on their part. I'm simply doing them a favor by bringing to their attention a possible money-making opportunity. 

Hopefully it's a small spark. If we are the only one's that have silver and gold, then it lessens the possibility that they become the people's money. Spread some seeds and at least some of them will grow...cheers...

Sat, 02/05/2011 - 16:41 | Link to Comment Cognitive Dissonance
Cognitive Dissonance's picture

Thank you traderjoe..........for accepting personal responsibility to begin educating your fellow citizens in the concepts of money, precious metals and wealth. You won't reach everyone, but you will reach some. And I think you will be surprised how over a relatively short period of time those you have reached will begin to spread the word themselves.

Changing the world one mind at a time.

For those who didn't read the "Johnny Silverseed" article traderjoe mentioned above, here it is again. I will be updating it in a few weeks.

http://www.zerohedge.com/article/johnny-silverseed

Sat, 02/05/2011 - 17:50 | Link to Comment rocker
rocker's picture

I listened to the whole video from Empire, about 30 minutes. It was worth the time. Very good points and knowledgeable insight on the direction of Gold and the outlook of commodities.

Sat, 02/05/2011 - 18:33 | Link to Comment UGrev
UGrev's picture

I read your post a few days ago and it inspired me. 1 lovely lady who is my 4 year olds' nanny and a good friend of mine who is a contractor. I gave them each 1oz and with a little dialogue borrowed from your post, I was able to introduce the nanny to real money and a promise to buy more even it was one each month.

My friend was wanting to start buying and after giving him one coin and him showing it around to his other friends he came back to me the next day and wanted "in" every time I bought some. He lives out in the country where internet is spotty and it takes a while to get to anyplace significant, so I told him that I would front it and he can just come pick it up and pay me back. He also quit smoking so he could put that money towards silver purchases. 2 more down! and well worth the 2oz. 

Sat, 02/05/2011 - 18:44 | Link to Comment Arius
Arius's picture

quit smoking to buy silver???? is this silver bugs waterboarding?  hahahhhaahhh....let people enjoy their life man

Sat, 02/05/2011 - 18:48 | Link to Comment UGrev
UGrev's picture

I forced no one.. He wanted to start buying silver but just never had the push to do it. I gave him that push and he made his decision. Amazing what a piece of metal can do, eh?

Sat, 02/05/2011 - 22:16 | Link to Comment DoChenRollingBearing
DoChenRollingBearing's picture

Way to go CogDis and traderjoe!

I did something similar when I gave away 1/10th oz Gold Eagles to some nephews & nieces last Christmas.

 

EDIT: I will try the silver thing the next time I go to a Framer's Market or similar.

Sun, 02/06/2011 - 14:19 | Link to Comment RockyRacoon
RockyRacoon's picture

At our local farmer's market a Franklin Half gets me just about everything I need for a bit of fresh stuff for the wife and me.   The ease of trading one with the sellers has gotten easier and easier.  I make it easy on them by accepting whatever fiat they have on hand to make change.   Very few vendors ask the "value" of silver coins -- they are in the ballpark usually.  I have a few copies of the silver content chart in the back pocket on these shopping trips and hand them out as needed.  The coins were once common coinage and they shall be again.

http://www.mountainviewcoins.com/gold-silver-content-us-coins.php
Sun, 02/06/2011 - 16:41 | Link to Comment SilverRhino
SilverRhino's picture

>> It's value is more appropriate for everyday transactions - an ounce or two for a dinner out, etc. 

If it was remonetized and backed the currency a silver dime would be more accurate for the proper value of an evening on the town.    Those previous specie monetary systems were designed for much lower populations.   More people - constant silver = much higher value for the metals themselves.  

>>People are generally surprised that a quarter could actually be worth $5 and a dime $2. 

Mentioned that to a bartender last night and she was stunned.  

 

Sat, 02/05/2011 - 16:31 | Link to Comment traderjoe
traderjoe's picture

dup

Sun, 02/06/2011 - 18:15 | Link to Comment Bay of Pigs
Bay of Pigs's picture

And silver is in backwardation. Super bullish.

https://marketforceanalysis.com/article/latest_article_02511.html

Sat, 02/05/2011 - 15:30 | Link to Comment treasurefish
treasurefish's picture

Lies are the currency of dictators.

Obummer sent former AIG Vice President (you know, the bankrupt company that caused the financial collapse), Frank G. Wisner, to interfere in Egypt. This clown is speaking for the US saying that Mubarak MUST remain in power until September in order to steer the Egyptian sheep in the right direction!!! Obviously, this is against the will of the hundreds of thousands of people calling for his much earlier departure!!!

America's Foreign Policies are so completely pathetic, it isn't even funny anymore.

We have lost all credibility around the world. Sad but true!

Sat, 02/05/2011 - 15:36 | Link to Comment Quixotic_Not
Quixotic_Not's picture

Truth is treason in an empire of lies...

Are you ready to receive the eucharist Pancho?

Caliph Hussein Obama is gonna put a chicklet in every mouth!

Sat, 02/05/2011 - 15:41 | Link to Comment Rodent Freikorps
Rodent Freikorps's picture

During times of universal deceit, telling the truth becomes a revolutionary act.
George Orwell

Sat, 02/05/2011 - 16:01 | Link to Comment Motorhead
Motorhead's picture

"Truth is the enemy in an empire of lies."  -- Ron Paul

Nice job of plagarizing, eh?  (That's why he's a doctor and why we like him, hehe.)

Sun, 02/06/2011 - 00:10 | Link to Comment Lord Koos
Lord Koos's picture

"Truth is the enemy of the lie, and therefore the enemy of the state." -- Joseph Goebbels

Sat, 02/05/2011 - 15:42 | Link to Comment Rodent Freikorps
Rodent Freikorps's picture

How's that Smart Diplomacy working out for you?

Sat, 02/05/2011 - 16:19 | Link to Comment RafterManFMJ
RafterManFMJ's picture

Drudge headline: Obama sells british nuke secrets to ensure Russian arms deal

Sat, 02/05/2011 - 16:38 | Link to Comment UGrev
UGrev's picture

I saw that.. I couldn't believe it!  Someone, please push the eject button on this motherfucker!

Sat, 02/05/2011 - 22:17 | Link to Comment DoChenRollingBearing
DoChenRollingBearing's picture

+ 1 quadrillion

Sat, 02/05/2011 - 23:13 | Link to Comment Translational Lift
Translational Lift's picture

These dumbfucks are a bunch of pikers in so far over their head they don't know which way to push or pull their head to get it out of their collective assholes. They gave away the farm and sold out our best ally in order to get their clock cleaned by the Russians for this new START treaty.  It was US State Dept. wires released by Wikileaks in the Drudge report and Ditto for the aholes that junked you....they obviously can't handle the truth when it is presented.  This is what happens when you don't have adults running things.

Sat, 02/05/2011 - 16:44 | Link to Comment zaknick
zaknick's picture

To see what other little pearls our illustrious Mr Wisner hss been up to (aside from causing the GFC that is) Google:

"the origins of the overclass" "operation mockingbird" cia "frank wisner"

Sun, 02/06/2011 - 18:56 | Link to Comment Translational Lift
Translational Lift's picture

Hahahahahahha........Our State Dept #1 just threw her/State Dept. personal envoy to Egypt Wisner under the bus.  Hillary R. Clinton, stating that he does not represent the US in any conversations he may have had with the reps of the Egyptian govt.  This would be funny if it weren't so fucked up and sad..........

Sat, 02/05/2011 - 15:58 | Link to Comment the rookie cynic
the rookie cynic's picture

Ben Davies suggests 25% gold in your portfolio. Agree? Disagree?

Sat, 02/05/2011 - 16:09 | Link to Comment Motorhead
Motorhead's picture

I agree (long term).  Gold is up ten straight years...gotta go with the trend, particularly as the central planners/banks print more & more moolah.

Sat, 02/05/2011 - 17:36 | Link to Comment DosZap
DosZap's picture

At this juncture, I see that as responsible.

Not counting Silver.

Sat, 02/05/2011 - 22:21 | Link to Comment DoChenRollingBearing
DoChenRollingBearing's picture

I agree, but I am at only 10%.  Of my LIQUID assets that I CAN ACTUALLY GET MY HANDS ON, it is near 40% (total PMs, bulk in gold).

EDIT: guru meditating, now they'll dupe this post...

Sat, 02/05/2011 - 22:23 | Link to Comment DoChenRollingBearing
DoChenRollingBearing's picture

Guess not!

Sat, 02/05/2011 - 23:40 | Link to Comment Sad Sufi
Sad Sufi's picture

Agree, but I subscribe to the wild man Stewart Thompson who today said:

"Gold is good no doubt, but beware that the endless expected money printing, that is in turn pricing most of the world out of food will not stand.  Expect interest rates on US bonds to increase "unexpectedly" as the Feds have a devil's choice between starvation and revolutions in the Developing world, or bread lines in the USA.  Banksters will get your gold as the price drops, as you run desparately looking for shelter."  More or less.  He still, like any sane person, sees gold as the only fundamental money.

Sat, 02/05/2011 - 16:01 | Link to Comment Dr. Gonzo
Dr. Gonzo's picture

Every once and a while when I'm having an internal struggle from watching too much CNBC I start to doubt gold, silver, platinum, and palladium. Then I take out some coins to look at and try to figure what their true worth and future value and scarcity could be. After painful deliberations I conclude there is no way to know for sure. Then I say fuck it. I hate this corrupt lying world it doesn't really matter. Gold might not be a 100% answer to problems in my future but in my present it is my fuck you to the system. That said it may just save my ass from poverty and starvation in my old age. 

Sat, 02/05/2011 - 17:37 | Link to Comment Quixotic_Not
Quixotic_Not's picture

Gold might not be a 100% answer to problems in my future but in my present it is my fuck you to the system. That said it may just save my ass from poverty and starvation in my old age.

+250,000!

My EXACT thoughts...

Fuck the Fraud St. Banksters and their (D) & (R) Henchmen!

Sat, 02/05/2011 - 16:31 | Link to Comment Eric The Red
Eric The Red's picture

Bingo!

You hit that nail right on the head!

 

 

Sat, 02/05/2011 - 16:51 | Link to Comment Chappaquiddick
Chappaquiddick's picture

Dr G - silver is finite and with less than 15yrs of current supply in global reserves (at most) left in the ground this is a long term winner whichever way it goes.

Current commodity inflation is as a result of demand for a safe haven resulting in an exit from fiat, as opposed to traditional economic growth driven demand.  As money is made worthless in an attempt to meet debt through the printing press then silver will continue to benefit and to rise.

I can see only one way in which silvers value vs fiat might be threatened and that is with debt default purging the system of credit derived money which would see people fleeing commods back to paper.  A repeat of the grand crash of 2008.  Total insanity, of course.

But if they debase the dollar enough then that urge to flee back into the burning fiat paper building will abate and PMs will instead be the recipient of these wealth flows.  I would suggest it would be then that the gold standard would be reintroduced.

On the balance of probabilities I'm prepared to go very very long on silver and stay that way until either forced to sell through necessity or confiscation.

Oh and yes - you also get to fuck the system while you're at it.  :-)

Sat, 02/05/2011 - 17:10 | Link to Comment silvertrain
silvertrain's picture

 nice post.. I will part with my silver for Zoned  A-1  Ag land at the right time...I do think however that Silver will be deemed a strategic metal  along with the rare earths and Palladium etc..And thus confiscation will come per national security..

Sat, 02/05/2011 - 17:42 | Link to Comment DosZap
DosZap's picture

Agreed,

Nearly ANYTHING electronic is/has silver in it.

It would be more likely confiscated than Gold.

Only issue I have with it, is I remember it languishing at $3.00,$4.00 oz.

 

Gold takes the stairs up,elevator down.

Silver takes the Elevator up, and the off the cliff down.

Scary as hell, but not more so than FRNs.

Sat, 02/05/2011 - 19:46 | Link to Comment I think I need ...
I think I need to buy a gun's picture

buy silver coins and stay away from the silver stocks problem solved.

Sat, 02/05/2011 - 18:10 | Link to Comment Snidley Whipsnae
Snidley Whipsnae's picture

Doc, I solved that CNBC problem long ago. Turn off the propaganda. If you continue to listen to disinformation you will eventually be swayed and to disbelieve what you feel certain about.

It is true that we should continue to evaluate new information as we get it and alter our plans accordingly... but CNBC does not represent nor broadcast new information.

Sat, 02/05/2011 - 19:54 | Link to Comment I think I need ...
I think I need to buy a gun's picture

yes CNBC can be litterally brainwashing....you can't listen to a thing.....seriously

Sun, 02/06/2011 - 14:35 | Link to Comment RockyRacoon
RockyRacoon's picture

Why are there so many ZH articles with CNBC then?

Sat, 02/05/2011 - 16:17 | Link to Comment danielvisionvic...
danielvisionvictory@yahoo.com's picture

Zerohedge is the best!

Sat, 02/05/2011 - 16:21 | Link to Comment ciscokid
ciscokid's picture

Gold and silver are the real money,paper currency is the ponzi

scheme of bankters.

Sat, 02/05/2011 - 16:25 | Link to Comment Cognitive Dissonance
Cognitive Dissonance's picture

More and more over the last 6 months my clients are listening to me as I insist that we put a portion of their assets into Gold miners and physical Gold. Where as 2 or 3 years ago I was rebuffed by all but 2 clients when I suggested they remove some of their cash currently invested with me and buy physical Gold, now my clients are starting to ask me how they can do so.

People are beginning to understand that the Fed and the government are on the road to insanity and my clients need to protect their "wealth", not just their "money".

 

Sat, 02/05/2011 - 16:33 | Link to Comment traderjoe
traderjoe's picture

CD, along the lines of your silverseed article, I've launched a new initiative (posted above). Spreading the word of silver one person at a time...

Sat, 02/05/2011 - 16:47 | Link to Comment yabyum
yabyum's picture

TJ, Since I have only seen two silver coins in circulatuion in the last five years( one a war nickle) I have taken to showing the nurses at work what a real silver dollar looks like, I find a shiny 1800's Morgan gets more interest going in what is and is not money. When you let them know a dollar of US junk is worth around six gallons of gas, they begin to see the value of money. Silver vs. fiat

Sat, 02/05/2011 - 19:48 | Link to Comment I think I need ...
I think I need to buy a gun's picture

that must mean time is almost off if rgular people sense something is wrong

 

Sat, 02/05/2011 - 16:29 | Link to Comment Math Man
Math Man's picture

Wow. More pathetic fear mongering...

Chinese demand is increasing because of their inflation problems.  As the Chinese tighten monetary policy, that demand will decline.  ETFs are also disappearing as a source of demand.  The Russians CB has announced it is buying less gold this year than last.  There are many signals that demand is decling, but they were all conveniently left out of the video. 

Even Egypt couldn't get the price above where is was 2 weeks ago.  Rallies are being sold... and that is never a good sign.

If we get more resolution on Egypt over the weekend, Gold will continue it's down trend next week.

Sat, 02/05/2011 - 16:47 | Link to Comment bob_dabolina
bob_dabolina's picture

ETFs are also disappearing as a source of demand. Perhaps because supply has become scarce and there is no cheaper way to get physical in bulk. Don't forget, an outflow from one ETF bullion vault is an inflow into an investors hands.

Perhaps you should head over to fofoa.blogspot.com and learn something about gold/silver. You can start here http://fofoa.blogspot.com/2011/01/who-is-draining-gld.html

Sat, 02/05/2011 - 22:26 | Link to Comment DoChenRollingBearing
DoChenRollingBearing's picture

+ my obligatory $55,000

Sun, 02/06/2011 - 01:40 | Link to Comment bob_dabolina
bob_dabolina's picture

lol....$55,000....lol

Sat, 02/05/2011 - 16:51 | Link to Comment Quixotic_Not
Quixotic_Not's picture

I hope Au/Ag drops quick, and hard!

I have several 100K I need to take out of U$D Treasury holdings, before the music stops...

Sat, 02/05/2011 - 16:56 | Link to Comment Hephasteus
Hephasteus's picture

I still think it's got a visit to 1290 in it but I don't buy 1230. Not one bit.

Sat, 02/05/2011 - 22:28 | Link to Comment DoChenRollingBearing
DoChenRollingBearing's picture

Heph, who really knows.  The one bet I would make is that if gold ever reaches the "India Put" of $1040, there will be a TONNE of physical buying so fast our heads will spin right off.

Sun, 02/06/2011 - 07:01 | Link to Comment Hephasteus
Hephasteus's picture

Yup. Chaos is pretty certain right now.

Sat, 02/05/2011 - 17:01 | Link to Comment tmosley
tmosley's picture

For a guy with the moniker "Math Man", you sure don't know much about math.  China's inflation isn't coming from their own inflationary monetary policy, but rather is coming from their dollar peg.  They are importing our inflation.  By "tightening", ie raising rates, all they are going to succeed in doing is attracting funds from abroad.  Normally, this would increase demand for Yuan, and thus drive up the price of the Yuan, cooling inflation.  When there is a peg involved, as there is here, the Chinese PRINT the Yuan and take the incoming dollars and other foreign currencies and add it into their foreign reserves.  As such, tightening interest rates only succeeds in stoking MORE internal inflation, as their domestic money supply is driven through the roof by their dollar peg.

Demand for gold and silver from the Chinese won't end for a long, long time.

Sat, 02/05/2011 - 17:50 | Link to Comment DosZap
DosZap's picture

Demand for gold and silver from the Chinese won't end for a long, long time.

 

Nor the Indians, or any of the PacRims.

It's a MINDSET,and a way of life.

Having been living in the Land of Oz, and never truly suffering with any loss of all we have because of Gvt, we cannot KNOW the fear, they do.

Sat, 02/05/2011 - 21:30 | Link to Comment chindit13
chindit13's picture

"Nor the Indians"

Perhaps ORI will chime in on this.  A few of the Indian major newspapers carried articles late last year that surprised me.  A poll had been done that indicated declining interest in gold as the country develops, its banking system becomes more efficient, and the availability of luxury goods increases.  The articles carried titles such as "Gold Losing its Luster for Increasingly Rich Indians".  Seems they prefer designer fashion, big homes, igadgets and Mahindra Scorpions or Ambassadors, unless there is no order backlog on Toyota Landcruisers.  As for the poor who might have owned a bobble or two in the past, they're buying increasingly more expensive food, up "officially" 18.5% y/y. 

Sat, 02/05/2011 - 17:51 | Link to Comment Math Man
Math Man's picture

Since October, China has announced two rate increases, increased bank reserve requirements, and taken steps to allow increased trading of the yuan.

The writing is on the wall... China is fighting inflation and will do whatever they have to.  

2010 was a one-off scenario for Chinese gold demand driven by inflation.

It's not going to happen again this year.  Beijing won't let it.

Lower inflation will lower demand for Gold in China...

Sat, 02/05/2011 - 17:57 | Link to Comment Quixotic_Not
Quixotic_Not's picture

Okey dokey Comrade MM, you keep making your decisions based on propaganda coming out of Bejing...

Excuse me while I buy some more Ag/Au with both hands.

Sat, 02/05/2011 - 18:04 | Link to Comment Snidley Whipsnae
Snidley Whipsnae's picture

Perhaps you missed the part about the Chinese Gov encouraging their citizens to purchase gold?

Let me know when the Chinese Gov announces that public purchase of gold is prohibited.

I believe that such an announcement would be coming from the US Gov before the one in China.

Sat, 02/05/2011 - 18:06 | Link to Comment tmosley
tmosley's picture

And he didn't read a word of what I said.

Perhaps you should change your ironic moniker to a new one.  "Reading Comprehension Man" perhaps.

Look, either Beijing keeps their dollar peg, and people flee towards gold for protection from inflation, or they drop their peg, and they swarm towards it because the reletive price plummets.

Sat, 02/05/2011 - 18:15 | Link to Comment Snidley Whipsnae
Snidley Whipsnae's picture

Of course he didn't. MM has an agenda and is perhaps paid a stipend to attack anyone or anything that appears favorable to PMs over fiat.

Hey, if the Fed is printing zillions for POMO operations in all asset classes whats a few more bucks to hire trolls?

Sat, 02/05/2011 - 18:22 | Link to Comment Quixotic_Not
Quixotic_Not's picture

The little faggot with the earring and the makeup
Yeah buddy, that's his own hair
That little faggot got his own jet airplane
That little faggot he's a millionaire

Possible it's Karl Dickinger, who is a fiat cheerleader extraordinaire, who hates the thought of REAL money (probably would wipe out him out)...

Sat, 02/05/2011 - 18:45 | Link to Comment Snidley Whipsnae
Snidley Whipsnae's picture

QN... Deninger, like CNBC and the other bobble heads on broadcast 'business tv', is off my reading list.

I read his comments for a couple of years before realizing that he knows two things... How to do a start up computer company and make lots of money prior to the dot.com crash...How to blather on incessently about the exponential function and how few understand it.

Oh, he also seems to have a hang up on using vulgarity while attempting to make a point or in reference to some pol or economist that he disagrees with.

Sat, 02/05/2011 - 18:26 | Link to Comment Math Man
Math Man's picture

Believing that every scenario is positive is a true sign of a top.

Ignoring the signals of declining demand is a big mistake.

I can't wait to change my moniker to "I told you so Man"

Sat, 02/05/2011 - 18:38 | Link to Comment Snidley Whipsnae
Snidley Whipsnae's picture

I can wait. Patience is a virtue...and, 'I told you so' won't win you much of an audience nor few admirers.

Sat, 02/05/2011 - 18:58 | Link to Comment tmosley
tmosley's picture

I never said every scenario is bullish.  I said that Chinese raising interest rates don't have any impact on the price of gold, and laid out the reasons that that was the case.  Which you totally ignored.  I know why, of course.  It's because you can't counter the logic.    

I would further add that blind contrarianism is a sure path to poverty.  "You said X, therefore it must be Y" doesn't exactly hold water in any rational circles.  Rather, it is ad hominem systematized. 

I would say that you would do well with a name like "Top Calling Troll", but alas, that one is already taken.

Sun, 02/06/2011 - 01:33 | Link to Comment chindit13
chindit13's picture

You've prompted an illuminating exchange here, Math Man.  You've drawn out comments illustrative of the mindset of the gold holders, which is that every event is either good or "gooder".

Gold may well go to the moon.  Some of the beliefs espoused in response to your comment, however, will not be the reasons it happens.  I wonder if tmosley has ever tried to move a large sum of capital outside of China?  If he had, he would drop his academic's view of what effect tightening might have, just as most of us would like Bernanke to drop his academic's view of how things should work, and instead appreciate how things really work.  A bug would be wise not to enter the Roach Motel, no matter how nice it looks in there.  Smart roaches already know this, which is why they survive.  When "logic" is based on false assumptions, the conclusions are meaningless.  Of course there's always serendipity.

Another thing that academics often fail to consider is human nature.  Consider what the mindset of rich Chinese or foreigners with capital in China might be if the government was forced to take a dramatic step such as big rate hikes.  The possibility of rising unemployment and subsequently rising anger might lead to social unrest.  Under such circumstances people might prefer to have their capital outside.  High rates on Egyptian Government debt or high rates paid for bank deposits are not exactly creating a tidal wave of capital inflows to that country.

Sun, 02/06/2011 - 02:06 | Link to Comment Red Neck Repugnicant
Red Neck Repugnicant's picture

Chindit

Thanks for another well-written, reasonable and informative post. 

Don't expect much discussion from tmosely.  He usually exits the back door when the discussion reaches Round 2. Like Cliff Clavin on Cheers, he's good for some highly opinionated, yet shallow and often obscure commentary that immediately falls apart under the slightest critique.

http://www.youtube.com/watch?v=k6GTZrcoWEM

 

 

Sun, 02/06/2011 - 02:32 | Link to Comment tmosley
tmosley's picture

How many times do you have to be told that your racist ass isn't wanted around here?

Sun, 02/06/2011 - 02:40 | Link to Comment tmosley
tmosley's picture

So you're saying that rising interest rates don't attract hot money?

Here's a reality check for you.  China has already tightened, and it has had the opposite effect of what Math Man said it would.  Money is flowing INTO China, not out of it, and gold demand is absolutely surging.

But hey, if you guys want to stick your heads in the sand, that's fine by me.  I honestly don't think a lot of people on this board deserve gold, and would in fact actively lobby for them to place 100% of their money in a nice, balanced portfolio consisting of 30 year treasuries, muni bonds, and commercial real estate bonds.

Think with your own head (or don't) and get what you deserve.  No stopping that train.

Sun, 02/06/2011 - 12:57 | Link to Comment Bay of Pigs
Bay of Pigs's picture

You do realize that China will become the biggest gold importer in the world in 2011?

Sat, 02/05/2011 - 21:56 | Link to Comment chindit13
chindit13's picture

Actually there is an intramural battle going on in China right now between Politburo members and the Central Bank.  Politburo members fear unemployment, so are willing to accept inflation.  The Central Bank chief fears inflation and food riots, so he favors tightening.

So far the Central Bank chief is winning this battle, as can be seen by the increases in reserve requirements for the banks.  Whether he continues to win remains to be seen.  You can guess what that would do for Chinese gold demand.  Reflective of the food fears,  government food stores---kind of like the US' Strategic Oil Reserve---have recently been opened in an attempt to keep soaring food costs down.  In the Shanghai area, some staple items have risen 50% up to 100% in the past year.  600,000,000 of China's people are now paying 50% of their pay on food.

As for tmosley's comment on the theoretical effects of "tightening", that is an academic's view that ignores the reality of how capital flows are managed in China.  Capital movement into and especially out of China is not so free and easy.  Think Roach Motel.  Smart roaches and those who are familiar with Darwin know better than to "check-in". 

Sun, 02/06/2011 - 02:49 | Link to Comment tmosley
tmosley's picture

Pardon, but where did I say ANYTHING about capital flowing OUT of China?  I said it was going to flow IN, not OUT as a result of tightening.  Further, there is nothing "academic" about it.  This is empirical observation, as tightening has already been tried, and they got exactly what I said above--hot money flowed in, they printed, and inflation got worse.  It will happen again.  I don't see why anyone other than a jingoistic buffoon like RnR would think that they wouldn't be able to retrieve their capital.  If China didn't allow foreigners to access their funds, they would still look like they did 40 years ago!  This is clearly not the case.  They've got wall-to-wall financial centers.

But hey, don't take my word for it.  Position yourself contrary to what I say will happen, and reap the rewards of your "foresight", "understanding", and xenophobia.  Everyone gets what they deserve when they are playing with their own money, after all.

Sun, 02/06/2011 - 08:25 | Link to Comment chindit13
chindit13's picture

I thought the Roach Motel analogy would make the point, but apparently not. Money that goes in will want to get out someday. Higher yield is useless if the money is trapped. That is the OUT. It is not quite as free and easy as you suggest to move capital out of China. Someone chasing yield is going to look a lot more favorably at a place like Australia.

In the event the CB chief wins this current battle over inflation vs. unemployment, then social unrest is a possibility. The risk premium China would need to attract, or even to keep money inside the country, might well rise. Even if previous rate hikes attracted "hot money", everyone today with money has suddenly been reminded about political and social risk. Things like Egypt do that. In addition, a policy that worked once doesn't necessarily work twice, whether tightening or easing. Look at the bond reaction in the US to QEI vs how it has reacted to QE II. 

Up to date information is difficult to get in China, and at least as suspicious as anything from the BLS.  Figures for gold purchases are from 2009, so “surging“ is old news well priced into the market, and may no longer be descriptive.  Marry a position and you may end up paying alimony.

Sun, 02/06/2011 - 12:04 | Link to Comment tmosley
tmosley's picture

Ok, kid, look.  If China didn't allow foreigners to withdraw their money, it would be the financial equivilent of  of executing tourists in the street.  Financial centers doing get to be financial centers by by allowing their governments to steal their money.

So why don't you stop pretending to be a damned expert on Chinese business and government regulation, because you clearly aren't.  The opinions you have expressed here are contrary to even the most cursory examination of the facts.  Sure, there MIGHT be a problem in the FUTURE, but that scary fantasy is not what is ruling those seeking yeild.  Yeild is what is driving people seeking yeild.  If you let thoughs like that rule your thinking, you might as well invest in physical gold and silver, you paranoid crazy person!

Sat, 02/05/2011 - 17:52 | Link to Comment Savonarola
Savonarola's picture

I have been listing to the likes of you since $860.

Where do you get this stuff - at Business Insider ?

That Joe W. guy has been calling for gold's crash for $500.

I wish gold would correct some more - I want to buy more for my kids.  

Oh, and now that the stupid 1099 reporting gig is pulled you will see stealth buying return.

 

Sat, 02/05/2011 - 19:53 | Link to Comment I think I need ...
I think I need to buy a gun's picture

gold is being held back intentionally.....1500 shows a collapse....after they have got all the bullion banks square the devaluation will happen. any day now!!!!!!!

 

Egypt has nothing to do with what gold will do

Sat, 02/05/2011 - 21:54 | Link to Comment Bastiat
Bastiat's picture

How's the big silver put position doing?

Sun, 02/06/2011 - 03:40 | Link to Comment Bay of Pigs
Bay of Pigs's picture

Instant Junk

I talked to another gold/silver douche just like you today who said "they pay no dividends". When I explained the 10 year bull market at 18% and 24% YOY respectively for both, he said , "Yeah, well......."

Just like you. No fuckin answer. Just a blank "deer in the headlights" stare...

Sun, 02/06/2011 - 07:29 | Link to Comment bigkahuna
bigkahuna's picture

Be nice to that type of person. They truly do not know--but they will come around because the logic is there.

What is it like 375 percent gain over 11 years?--and there is an inflation factor that is difficult to calculate also.

All these guys that get on this board and take a dump on PMs are either a bunch of jokers or worse.

Sun, 02/06/2011 - 08:56 | Link to Comment JonNadler
JonNadler's picture

Math man?

Man, the more the names change the more the kool aid is all the same 

If we get more resolution on Egypt over the weekend, Gold will continue it's down trend next week.

 

and if the national debt and deficit are paid back and balanced, gold will kep on dropping too

 

Sat, 02/05/2011 - 16:36 | Link to Comment Arius
Arius's picture

next week, as the crisis in Egypt begins to settle as a longer term crisis and people get used to the "new normal" fiat bulls will be out in full force...

Sat, 02/05/2011 - 18:08 | Link to Comment Thorny Xi
Thorny Xi's picture

Which people do ya' think are going to get used to it?  ADD Americans, who are way more gassed up over the "Super Bowl"?  It's the Egyptian people who seem to be more relevant, and food prices aren't going down anywhere.

Sat, 02/05/2011 - 18:36 | Link to Comment Arius
Arius's picture

i am talking about the people who dance while music still plays....regular Americans  watching the superbowl - let them sleep...until 2015...then they will be for a rude awakening....

Sun, 02/06/2011 - 07:34 | Link to Comment bigkahuna
bigkahuna's picture

The "oh shit" moment could come anytime. I hope it never does come-but will not be surprised.

Sat, 02/05/2011 - 17:06 | Link to Comment glenlloyd
glenlloyd's picture

Would be nice to see some PM update commentary from FMXconnect, too bad I can't really justify their subscription, but I am interested in hearing what they have to say.

Sat, 02/05/2011 - 18:00 | Link to Comment Snidley Whipsnae
Snidley Whipsnae's picture

Not FMXconnect but some enlightening comments regarding PMs from Jesse's Cafe Americain...

"What is the 'Spot Price' of Gold and Silver And How Is It Set?"

http://jessescrossroadscafe.blogspot.com/2010/03/what-is-spot-price-of-gold-and-silver.html

"there is no centralized and efficient market for the sale of physical bullion in the US at anything resembling a 'spot price.' What is their number, where are their prices and trades posted? Who is buying and selling what, TODAY, with the real delivery of bullion as the primary objective?"

What we have in the US is a paper market driving the price of physical PMs.  Of course it will end in a collapse of the paper PM markets but it can continue for a long time. Be patient, buy the dips, stay out of ALL paper, sleep well at night...and don't be a debt slave.
 

Sun, 02/06/2011 - 02:26 | Link to Comment topcallingtroll
topcallingtroll's picture

Golddealer.com is as close as you get to a centralized market with quoted bid ask spreads. I know this is a stale thread but someone might find this useful. The have the smallest spreads anywhere if you include shipping and insurance in your calculations.

Sat, 02/05/2011 - 18:40 | Link to Comment saulysw
saulysw's picture

The only dodgy thing in this video is a badly photoshopped picture of a highway with 23 lanes on it at 5:08. I don't believe that such a road exists. A quick search makes me think that San Francisco-Oakland Bay Bridge Toll Plaza has the most lanes at 17. See pic here.

 

On saying that, I have no problem with considering ideas, even if the source is suspect. An idea can be valid no matter where it comes from, which is why enemies here suddenly find themselves agreeing with each other, to their shock sometimes. So, despite probably peddling suspect services, the ideas presented in the video largely make sense, IMHO. I do believe that there is gross financial mismanagement in most fiat currencies, and the US is perhaps the worst. Default by inflation seems the most likely outcome at the moment.

Sun, 02/06/2011 - 00:47 | Link to Comment Milestones
Milestones's picture

I have seen several "highways" approaching toll booths that are every bit of 23 lanes wide going into Sao Paulo in Brasil. (appx. 23,000,000 pop.)         milestones

Sat, 02/05/2011 - 18:50 | Link to Comment Lone Mad Minute...
Lone Mad Minute Medic's picture

If AGQ hits 146 next week, expect a run to the old highs in a hurry!

Sat, 02/05/2011 - 19:05 | Link to Comment saulysw
saulysw's picture

It would seem China is still buying, and buying fast.

http://www.mineweb.com/mineweb/view/mineweb/en/page33?oid=119820&sn=Detail

Sat, 02/05/2011 - 21:04 | Link to Comment savagegoose
savagegoose's picture

hey when a bunch of countries, ok uk and australia sold their gold hoard down about half.

did they sell em to the IMF for SDR credits, because i see the imf calcualte their gold at $40 an oz. and if they countries where to claim the credits back would they get the $40 or the current spot price?

Sat, 02/05/2011 - 23:42 | Link to Comment ak_khanna
ak_khanna's picture

One thing I fail to understand is that why most analysts are recommending the purchase of Gold as a safe investment? The problem today is that the price of Gold is not derived by it's physical demand or supply but more by the speculative positions standing long or short on the commodity exchange like any other traded commodity, stock or currency.

The basic mechanism of price discovery (based on demand and supply for actual use) of anything traded on an exchange has been terminally infected by speculators having access to unlimited funds and super fast computers for trading leading to volatile price swings. This has been made worse by the launch of ETFs for anything and everything under the sun by the financial community.

The price of everything including Gold is likely to suffer when the speculators unwind their positions due to some event that they have not anticipated or foreseen.

http://www.marketoracle.co.uk/Article24581.html

Sat, 02/05/2011 - 23:55 | Link to Comment Sad Sufi
Sad Sufi's picture

Yes, gold is already high.  It is a hell of descision to buy at these prices, agreed.  And yet, there is the allure because it seems real-er than all alternatives, except for nice black farmland...

Sun, 02/06/2011 - 05:37 | Link to Comment traderjoe
traderjoe's picture

Entirely possible. But, if this 'event' happens and you want to sell everything, what will you buy? What assets will make it to the other side? T-bills? FRN's?

Mon, 02/07/2011 - 20:02 | Link to Comment honestann
honestann's picture

One thing I fail to understand is that why most analysts are recommending the purchase of fiat paper assets as a safe investment? The problem today is that the price of fiat paper assets is not derived by demand or supply, but more by the speculative positions standing long or short on the stock exchange like any other traded commodity, stock or currency, and by endless pumping by the Federal Reserve.

Would you back the above variation on your first paragraph?  If so, how relevant are the two, comparatively?  Yuck, yuck, yuck.

Sat, 02/05/2011 - 23:48 | Link to Comment Grand Supercycle
Grand Supercycle's picture

Weekly indicators still warn of significant Gold and Silver downside.

http://stockmarket618.wordpress.com

Sun, 02/06/2011 - 03:58 | Link to Comment Bay of Pigs
Bay of Pigs's picture

I junked you for the stupid headline and weak analysis. Gold can and will rise with the USD. Did so from $450 to $710, among other times.

Sun, 02/06/2011 - 05:31 | Link to Comment nontaxpayer
nontaxpayer's picture

Tyler, this link reserves its own story - James Turk especially shines again:

http://www.cheviot.co.uk/sound-money-conference/presentations/gold-price...

Sun, 02/06/2011 - 05:52 | Link to Comment suckerfishzilla
suckerfishzilla's picture

Elementary data for total world production shows that 48 bn ounces of Ag have been mined and 4.3 bn ounces of Gold have been placed in world inventories.  Discounting metal that has been unmined that gives raw data for an Au/Ag ratio of 11.2.  Mob psychology is driving the current market ratio for Au/Ag at 46.  Clearly rough stats show that Silver has more leverage and earnings potential on purchases made now versus Gold. 

Sun, 02/06/2011 - 11:27 | Link to Comment Holden Caulfield
Holden Caulfield's picture

Don't ignore copper and lead.

The future is now. Be prepared.

Sun, 02/06/2011 - 16:08 | Link to Comment mogul rider
mogul rider's picture

Remember that gold is universal money. It's most critical use coming up will be to bribe the concentration camp guards to get you and your family to safety.

You really didn't think this would end nicely did you? The elites schemes of one world government and slavery for us has failed.

The Internet has awakened a shit storm like no other time in history. Tunisia, Egypt, Algeria, etc are manifestations of the Elites worst nightmares. The great model society they wanted to create has been stopped.

But never count them out, They undoubtedly will try another Hitler type. It almost worked last time.

My family was spared from the gas chambers by bribing the right officers at the right time using the ONLY! thing of value.

Gold.

 

Remember - the precious is more than money. I have a bad feeling the above is not tinfoil hat hearsay.

 

Peace

Sun, 02/06/2011 - 16:44 | Link to Comment BernankeHasHemo...
BernankeHasHemorrhoids's picture

Is it enough to read a blog and post comments criticizing the Obama/Bernanke/Geithner fascists? There must be action. If the internet had been around at the time of the American Revolution, no one would have done anything except post comments on blogs. It's not enough. What are the actions we must take to overthrow this regime?

Sun, 02/06/2011 - 22:38 | Link to Comment PulauHantu29
PulauHantu29's picture

The Chinese are beginning to buy gold by the kilograms bars since they fear their RE and stock market are too high. The gold dealers around my area have been extremely busy with people buying gold coins, bars and large silver bars.

 

Everyone sees the serious inflation we have seen now for two years and there is no sign of it stopping. I don't know baout the chrats, technicals, etc but by "looking at my window" it looks to me the PMs will continue rising for a long time.

Do NOT follow this link or you will be banned from the site!