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Gold Below $1,200 As Asset Liquidations Spread Like Wildfire
The European liquidations we discussed earlier courtesy of the ECB MRO and the repo rate spike, which resulted in a massive EURUSD covering squeeze, have followed through into industrial commodities such as oil and lastly into gold. And as liquidations are merely emblematic of a broken liquidity system (as the name implies), the unwind behind the scenes must be fierce. On the other hand, as the only recourse to prevent an all out systemic collapse should the deflationary trend continue, from Ben Bernanke's perspective, is just to print more money and thus solidify the position of the precious metal as undilutable and a currency which can not be backed with toxic MBS and Greek Sov Bonds, today's sell off is a much welcomed respite for the commodity which traded at record highs as recently as this week. Also, our recent disclosure of PM market manipulation via disclosed COMEX-OTC arbing by such former behemoths as AIG then (and presumably JPM now), should only add to your comfort that once the finger on the scales is removed, the natural reaction will be that of a coiled spring.
In the meantime, here is a one year gold price chart.
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Wow, just... wow.
Grammar, spelling, sentence structure. Where to start?
I know, I know, the message transcends the delivery, but still....
Gold could buy you some "skoolin".
Bye! There is way too much misinformation and general word flogging going on here for me to continue. Probably a dozen other ZH articles have been posted while I've been wasting what little is left of my life reading some really goofy comments.
Decisions, decisions. Read some other ZH articles or inventory the gold & silver? Either way, this is fruitless.
Speech is silver, silence is gold.
With FIAT currentseas set to lose huge value I do not see the problem.
I might have it wrong but I think I have read a Quote of J.P. Morgan's that went "Gold and silver are money. Everything else is credit." That would mean in a deflationary collapse gold would soar against paper.
Muir,
How you do it is WAIT,those presses will be kicking ass, and taking names if/when it get's worse.
Serious deflation, will be followed by Inflation, high, or Hyper........only way PM's stay down for duration, is if Gv't doesn't print.
Besides, if it stays that bad, Gld/Slvr have intrinsic value.(that's why PM's(esp Gld) are Insurance.........not an investment.
Retention of buying power.
Fiat has SHIT.
Think there are a few stops right above EU125?
Is just me or when ZeroHedge talks there book it's always Gold positive?
The number of positive gold posts is directly correlated to the number of goldbugs on the site and the number of gold bullion advertisers that advertise here.
You don't go to Boston and say that the Red Sox suck, do you?
ZH does the same thing with the gold posts. This is Boston. Gold is the Red Sox. They don't want to alienate the people here.
Bravo Johnny
JB,
The technical's have shown a major resistance low at $1,070.00 for a while........
While I am good where I am, if it shows any drop close to that, I will be backing up the truck.You can always do better.
Just out of curiosity, what ARE you vested in,that you think will be the best, if the PREDICTIONS come to pass?.
That will be better, and WHY?.
So, you little bastard. Are you going to buy the goddamned gold I'm try to sell you or keep making lame excuses.
I have to make a living. If you're just going to kick the tires, I'll sell this gold to some other sucker. And if I keep having troublemakers like you bothering me, I'll pull all of my 1-800-GOLDBUG ads off this damnable website.
ZH "talking its book" generally means Austrian economics.
Dear Cognitus,
And I thought I had a bad day in CHF.
If Gold went back to $300/oz, ZH will be a ghost town. Gecko wouldn't be around until it climbed again to $1200. Then all the buy buy buy chearleading would return
LOL--so true.
Sort of like the 24 / 7 dumbshow you could find on www.thestreet.com during the Internet bubble.
Deflation will shatter everyone's dreams of safety, even the high-flying Gold-tards.
And you seriously believe that the "powers" that be will allow deflation?
QE "to infinity and beyond".
They won't have a choice. Already the austerity crowd (and I'm part of it) has the upper hand. Hence the bitching and moaning from eCLOWNomists like Paul Krugman.
There are limits to what the "powers" can do. When a tidal wave of popular rage sweeps them all out of power, the appetite for more QE will be pretty thin.
I'll bet you disappear like a fart in a hurricane when Gold rises. Or maybe I'll see you doing a perp walk on TV when the Gold market busts you bitch.
Fuck off, twat.
Gotcha douchebag.
Megatoxic, thank you for your choice in a name here --- it is very appropos.
"Megacolon" would have worked as well:
http://en.wikipedia.org/wiki/Megacolon
I agree with you, that seems to be what made Krugman loose his mind and spout "Great Depression 3." Problem is the damage is already done and Austerity at this point is pointless. Maybe TPTB have decided that it is much too cruel to pretend anymore and want to unleash a bit of pain to get us used to it.
Absolutely. There are real limits to fiscal spending.
Here's the hierarchy the way I see it.
Public Sentiment drives the Bond market which drives the Equity market which drives the Economy. S to the B to the E to the other E.
Karl, is that you?
Yeah, you're right. But how long is this deflation going to last before we print our way out of it? How many of the goldbugs you know are selling off? Enjoy your paper douche.
Here we go again. The Gold Trolls come out of hibernation. Go ahead. Pile on assholes.
Hey, hey give the gold trolls a break. They haven't had a lot to talk about in 10 effin years. Give them their day. They deserve it.
Oh they've had plenty. Every day it's gone up, they've said "You're gonna lose your ass!" and "Gold isn't edible!". Every pullback it's been "I told ya so!!!" All the while, gold has been moving higher and higher in price. These people don't know what they are talking about, and are mostly still children in college. They wouldn't know what money was you you poured it down their throats.
If gold goes back to $300/oz it'll be because they've had to knock a few zeros off the currency and issue a 'New Dollar' with a 100:1 conversion from the old one.
What I want to know is:
Where are all the effin retards saying "gold to 50000" or "let's have a party when it hits 25000" now?
Where was the "Morning Gold Pump" post today?
Better question - where ya been hidin', snot nose?
Right here, jerk-off.
"Where are all the effin retards saying "gold to 50000" or "let's have a party when it hits 25000" now?"
Ans. Why you're right here in front of me Johnny.
Any big girls' blouses that are running home to momma after Thursday's puny pullback would be better off sticking to flipping burgers for their daily bread, IMO.
$100+/- DAYS are likely ahead.
Keep in mind that you have to be at least a certain height to go on the ride.
Regards
SL,
IF it did...........I would be a happy camper, take my dollar losses, hold what I have.
The reason I would be happy, would mean a MAJOR FKIN Miracle happened, and someone threw Fairy Dust on this world that's in total rectal defilade.
Since it's not going back to to $300.00, unless temporarily(what your fiat be worth?, will anyone take it?,which would you rather chance your ass on?......buckle up dude, we are in for a hell of a ride.
Cognitis, is that "inflamation of the cognitive functions?
No disrespect intended, just trying to find some humor (cheap). Sorry for your TEMPORARY loss, I bought last week just around the same. Today I added more, on sale. Hang in there, gold is good!
A grim question I'm sure has been asked somewhere already: if you were a terrorist cell, wouldn't you strike right about now? That front seems quiet, as the military news shifts towards Israel, Iran, Iraq, Afganistan, etc.
The level of terrorist activity is directly proportional to how much attention TPTB need focused away from one of their major power grabs.
Since it looks like we're headed for some kind of nasty action around Iran with our favorite dance partner, the Israelis, we really have to ask: How badly does the U.S./Israeli axis need an excuse to open fire.
If they figure it's going to look bad if we just roll in and start to nuke the Iranian uranium sites, there will most certainly be a terrorist attack either on a U.S. ship in the Middle East or some favored part of the U.S.
Maybe terrorists will attack Walt Disney World this time just to get the kids upset too.
Or they could just say "Fuck It", roll in and save the terrorists for when it really matters.
And that's ALL GOOD for Gold.
I guess that depends on who you think is behind those terrorist cells and what their purpose is.
If it is the CIA or CIA funded you can rest assured it is to topple a democratic government which doesn't enjoy American Hegemony.
Gold is down 5% in Euros today.
If you believe in the debt-deflation spiral there, and that Germany will never try to print their way out, then both the FX and Gold move make sense. All the Gunthers who bought gold and put it under the bed will lose, at least until Merkel's successor finally starts to print.
However in USD, as the USD weakens, today's move has no such sensible basis. If today's data is so indicative of US deflation, why is the SPX flat? IMO it's technical, it's weak stops getting hit - especially those in today's strong currencies like EUR - as well as the asset liquidation Tyler describes.
It's a buying opportunity, is what I'm saying. I may be preaching to the converted on this one ;-)
Sophisto Mephisto
The Fed isn't printing anytime soon... it has to get A LOT worse than this before QE2 comes along. Gold has QE2, QE3 & QE4 priced in... I'm not sure we see those anytime soon
Finally, someone who is not blinded by the precious.
To me its clear there is TONS of paper money out there, more than enough... its just the allocation of it thats the problem. Record cash holdings for companies, record gold & treasury yields. The FED has done enough printing, thats not the problem. Expect them to lean on the governments a bit to provide a better investment landscape for business vs just print. That would help much more
Not sure where you get your info that the Fed isn't going to be printing anytime soon. Housing is in the tank. Unemployment benefits are running out. Elections in 4 months. We'll see......
QE2, QE3, QE4, ...QEinfinity.
QE to inifinity is the safest, leadpipe-cinch wager in history. In fact, QE2 & QE3 are already committed... TPTB have been sending signals for months. The gag order on QE will be lifted the day after the midterm elections.
Four months.
FINALLY, someone who disagrees with us gold bugs, but offers an argument that doesn't begin or end with the word "goldtards."
Having said that, I respectfully disagree. In 1922 it cost 100 Marks in Weimar Germany to buy an ounce of gold. One year later, took a Trillion.
I fully understand the argument about Weimar.
The difference here is that I think the government tries to change course from the money printing for a while... QE #2 isn't coming until things get a lot worse. You'd have a better entry point into gold then or into stocks if gold doesn't dip.
I agree with Gold bugs, but just like Apple fanboys you have to see the other side of your investment.
tuna,
Yes your right, they are being FORCED to hold off....for ONE reason.
November............if they maintain their majority, hide the wimmmens n the chiddren...........
Smeagol: Mustn't go that way! Mustn't hurt the Precious!
It's just unreal you lot harping on about ooooooooh 'deflation' and Gold not benefitting. Point 1. Gold is a hedge against extreme outcomes both inflationary and deflationary. It is not a hedge against inflation per se. Its also the case that inflation and defaltion, like beauty are in the eye of the beholder...tell a debt slave gasping for air as his cost of living continues on up that we are in a deflationary set up. Point 2. You haven't got an ice lolly's chance in hell of deflation being here to stay - when this asset collapse phase gathers speed again the governments will go nuclear -at that point are you gonna hang around in paper cash? Give me a break, give me a Golden Kit-Kat....or a Silver one...or both preferably.
Frodo: You swore! You swore on the Precious!
__
I read your post.
Waht you been smoking son?
First you say that gold is " is a hedge against extreme outcomes both inflationary and deflationary" then you say "You haven't got an ice lolly's chance in hell of deflation being here to stay...the governments will go nuclear...."
Gold has far eclipsed any value of future QEs. It has far outpaced inflation. The price is merely speculative.
The only reason it's been doing so well vis-a-vis deflation lately is because of marginal price increases from bids.
Anybody can bid anything up. It doesn't mean that the price has basis in reality.
Look at oil, or houses, or dot com stocks. All bid up, all beat down.
Another sane voice.
Most want easy solutions, yes/no answers, true/false.
It takes not thinking in binary to see that gold could be either $5000/ounce or $400/ounce in two years, or anything in-between.
But if the end does come and we refer to the 1920s/1930s depression as the "Little Depression," then gold at $400 an ounce is likely.
This.
Everyone should just read this, because it is the entire argument in a nutshell.
Gold-tards think that by tucking away a coin or two here, maybe a nice piece of bullion there, they will be safe while the world burns.
Could they be right? Yeah, sure. Anything is possible.
But I find it interesting that their chest-thumping and grandiosity seems to have risen in direct proportion to the price of the metal.
Now remind me when that has happened in other asset classes throughout history....
"Now remind me when that has happened in other asset classes throughout history...."
They all ended up bursting bubbles? Cool! I'll let you know when Au/Ag starts getting even close to such an event, years from now.
Toilet paper-tards have been screaming for a decade how the USD will be safe while the world burns. Could they still end up being right after being so very wrong for so very long? Yeah, sure. Anything is possible.
But I find it interesting that their chin-to-ball thumping and arrogance seems to rise in direct proportion to the abracadabra'd value of their precious USD when priced in Au.
Now remind me when that has happened in other FIAT currencies throughout history...
Oh right, they all have eventually failed, every last one. So, deflation, inflation, devestation, whatever; physical gold still retains its purchasing power regardless of any hocus-pocus'd bit of paper.
Suits me.
Regards
I've got to thank you all for posting right together (even if the circle jerk is a bit disturbing). It made it a lot easier to junk all of you at once.
Since you can't eat gold, you need to put aside part of your savings in stuff you CAN eat.
PMs are a good hedge against a currency disaster. We need to live while we sort out how we're going to pay each other if the dollars are dead and the ATMs are turned off.
Maybe I'm wrong, but I think most of my fellow goldtards have probably got a few cans of pork and beans in the back of the cupboard. Maybe right in front of the box with the Gold Eagles.
Just investing in Gold or Silver doesn't mean we're too fucking stupid to make other plans as well. Many of us have had actual life experience, lived in homes or apartments that our jobs paid for, maybe even had a sex partner that wasn't inflatable.
On other words, our lives and interests may be a little more multi-dimensional than just the financial things we discuss here.
Muir: With all due respect, how in the fuck do you know what most people want? Sounds like you're as much a slave to your ideology as anyone else on this board, Chief.
I don't.
No ideology.
I do not know the outcome.
That is my point squaw, now shut the fuck up.
I think it's great that you are offering some counter arguments as it forces us to reflect on our reasons and expand our thinking, however, it would be best if you weren't flippant.
"The price is merely speculative."
And the biggest "speculator" is?
Central banks. How's that for reality...
So here is a question then: How do you measure the value of Gold?
Weight.
And here is a chart that shows those bubbles compared to the bull market for gold that is clearly NOT in a bubble.
http://www.businessinsider.com/gold-bubble-casey-research-2010-6
And here is a little info as you consider the "over investment" in gold:
"0.8% of all global financial assets are invested in gold, gold shares, and ETFs. 1932 it was 20%, in the 1980s 26%.
TODAY? .8% POINT 8 Percent!"
http://www.financialsensearchive.com/fsu/editorials/okst/2010/0624.html
Also, neither oil nor houses nor stocks have ever been money/currency. They may call oil black gold but you can't buy something with it and you can use gold to buy many things including luxury vehicles, other PMs, and anything that someone is willing to barter for it. Try storing $2000 of oil v $2000 of silver or gold. Try bringing a stock certificate to anywhere and buying something with it.
When you figure out that gold is money you will be set free of your self-imposed prison.
And Re the QE:
RBS tells clients to prepare for 'monster' money-printing by the Federal Reserve
By Ambrose Evans-Pritchard, International Business Editor
"Andrew Roberts, credit chief at RBS, is advising clients to read the Bernanke text very closely because the Fed is soon going to have to the pull the lever on "monster" quantitative easing (QE)".
We cannot stress enough how strongly we believe that a cliff-edge may be around the corner, for the global banking system (particularly in Europe) and for the global economy. Think the unthinkable," he said in a note to investors. "
http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/785759...
"Gold has far eclipsed any value of future QEs. It has far outpaced inflation. The price is merely speculative"
Wow, wrong wrong and wrong. Amazing. JB, you must be a strong believer in the old adage " Ah been down so long it looks like up to me."
Gold hedges against both inflation and deflation - you sound like a realtor. It's always a good time to buy and it's always a good time to sell, hahaha.
Sounds like gold is an investment that never goes down. Except today.
It is true that gold is usually a good buy when markets are seemingly stable and there isn't massive debt and unfunded liabilities and pensions and welfare and wars. Now people need to buy because all those things and more are happening yet. Many on here have been buying gold in the best of times and are in good shape. If you don't own any, then you should be buying at the point. Put into it what you can before things get increasingly worse. And if you don't see shit getting worse...well then nobody can help you.
My guess is a combo of the above mentioned, some hedge fund(s) have gotten their asses beaten in equities, have to liquidate gold. Also, since EVERYBODYS already long who's gonna be there to buy upp the sell orders (the russians and chinese can't be swallowing all the time)? But I believe it will recover and keep on moving.
In addition to PM's being considered a store of wealth, I would appreciate some input on high quality diamonds as well. Any opinions would be appreciated.
Diamonds...
Too much supply, too much markup. Artificial market to keep prices high.
It's almost the opposite of Gold.
Better to just buy one very nice one for a special lady.
Dr.Sandi,
+10000..................Diamonds are a sorry investment for holding wealth.
Unless you have like a '33 St Gauden..........$20:>)
Diamonds are valuable, until you try and sell one.
Terrible market for anything but huge and rare ones, and that market has wide spreads and is very illiquid.
Unless you're a Jewish diamond merchant in New York or Amsterdam, NO! Stay away from diamonds. The mark up is huge. Plus everyone knows a gold coin, how many people can tell a good diamond from a bad one? The only diamonds that hold their value are over 10 karats.
look here:
http://www.preciousgemstones.com/
all the info you need to know. in brief:
colored diamonds with certificates, for white stick with D, F, 1 ct +
rubies from Burma, sapphires from Kashmire, emeralds from Columbia. get certificates for all stones.
most portable wealth around.
I don't have any opinion; but the facts are extremely easy to find; huge mark-up; poor liquidity; only for chumps.
It is not that precious gems don't have value but they are much harder to determine as one has to know how to value them based on a multitude of factors (clarity, color, weight, etc.), as opposed to precious metals, which are just precentage of metal and weight. If it is pure, 24k or .999, the only other factor is weight.
Additionally gems cannot be divided into smaller quantities with any ease if at all. Precious metals can be divided many many times.
On top of that, diamonds are created synthetically whereas gold or silver, both elements, cannot be created.
So the ease of use with PMs vs gems is why PMs are more universally used as money. Gems will have value always but they are more complicated in the use of exchange of goods and value.
as for terrorist cells, the only terrorist cells worth knowing about are bought and paid for by the global power nexus in order to frighten you like the boogeyman into being a good boy and believing what you are told
The dollar is fucked...its going to get hammered from here on in.
Currencies are relative. With the pound, euro, and yen out there - I wouldn't be too sure the USD will finish bottom of the pack. I'd bet not especially considering the USD has reserve currency strong hand. Before the dollar breaks one or more of those dogs go to hell and rally the USD like nothing we've seen before. No way EM nations will allow significant appreciation against those currencies either otherwise they can't sell to anyone. We are all in the boat together whether we like it or not and while some of pieces are expendable, the USD is not - just how it is and there is no time to change it so everyone row on 3..2...1...
umm, i was just refering to todays particular setup actually...i.e. if its down now, its not going to take much to hammer it further etc.
Ahhh - got it. Weird action today. I'm not sure what to infer other than it looks to be a sign of things changing in the market and repositioning.
Looks like the gold chart can have a pull back to say 1000 to be a normal lookin chart. Silver looks a little less unstandable to me. Any ideas.
Normal?? Ask Jesse if his cup is still holds water with a broken handle.
Disclaimer: Love the Jesse
onlooker,
Yes sir, and it would still be in a BULL MKT............
All you naysayers, have made points, but..please look at the Global Picture.............
As for Reserve?.....folks are planning for that ake down as I type.
It will happen, and God help you if your caught holding lots of FRN's.
Liquidity squeeze? pff.
Liquidity squeeze? pff.
So it's deflation and liquidation bringing every asset class down and smashing UST yields but manipulation when it comes to PM's. Please just stop it.
Excellent response Tyler. Everytime some moron/bankster shill/paperbug tries to deny PM manipulation, I'll just stick this in his/her face.
with all due respect, how do we know the manipulation is on the downside? Maybe they (AIG) have been manipulating it up, no?
It would be very hard to argue that gold prices are down due to manipulation, and then turn around and call it the best performing asset class in the same breath.
I think it has more to do with the control of assets, rather than price fixing.
And maybe Obama really is trying for "hope and change", no?
And maybe Timmy did do an honest mistake while filing his taxes, no?
And maybe Bernanke is not a total moron, no?
And maybe the dog really did eat your homework, no?
Statements like these show us why America DESERVES what it's getting.
Uhhh...does the Strong Dollar Policy ring any bells?
Somebody is a shill for banksters.
Bankster shill? I'm just a schmuck like you with differing opinions (deflationist) on the economic outlook which BTW most people got WRONG.
if you think ZH reflects "most people", then you are the ultimate contrarian.
Correction: You are a "dollar"-deflationist - which is why you are wrong.
http://www.gordongekkosblog.com/2010/05/mr-denninger-and-gold-or-why-dollar.html
from Mr. Gekko's site
"Deflation in Terms of Gold, Hyperinflation in Terms of the Dollar"
Goldilocks gold speculation.
When was the last Great Deflation? And did the gold price rise or fall? Exactly. Of course real deflation this time would destroy the banks so Bernanke will print his way out.
Any thoughts from the hive mind on the influence of the end of H2 and beginning of Q3 on this today?
After a crappy Q2, I would think a bunch of funds wanted to show gold on the books to make up for the losses that they incurred and sold (or stopped out) on these positions to buy fiat for the casino.
I, for one, am cheering this downdraft in the gold price since this is just the paper price and the lower it goes the more likely the implosion of the fake paper Gold market which is pretty much the ONLY restraint on the price of real physical gold. In the meantime, goldbugs can use the downdraft to buy the metal at a discount - till the real metal is available at the fake paper price i.e.
Indeed, took the opportunity to order some more coins. And here I was going to wait till after my vacation, but couldn't pass on the opportunity. Will say that when I called my dealer up the phone was ringing off the hook and sounded like he was doing brisk business. So can't be the only one who thought it was a good idea to stock up.
Just the paper price?? What else are you pricing it in? Chickens and goats? How are your physicals priced?
Honestly, gold is priced in whatever you what it to be. It's up to you. I on the other hand earn and spend dollars so there is no negotiation/delusion/substitution with my trading medium.
What else are you pricing it in? Chickens and goats? How are your physicals priced?
Oil.
http://fofoa.blogspot.com/2008/08/king-and-his-gold.html
You were trying to be ridiculous, but you spoke the truth. Price gold in real things and you will find that all things are deflating against gold, steadily. Fiat paper is inherently unstable so it swings wildly around the price of gold, and real things. You may say you earn and spend in paper, but you spend paper on real things. Therefore the price of real things in paper is inherently unstable.
If you feel better holding your wealth in a highly unstable paper form subject to government whim I for one don't mind. I just prefer to store wealth in the steadily- appreciating-against-all-real things gold.
+1
Actually we are being too generous educating morons like ozziwhatever. When people like him/her don't convert their wealth into metal, it just gets transferred to those of us holding the metal. So really, we should just let them rot in their ignorance and thank them for their (unintended) generosity.
Yes.
Internet tough guy
Now this is a good argument you propose.
Kudos to you my good sir on your logic.
Applause aside (which rest assured is sincere) I wish to test this argument.
Now we all know that a paper dollar has depreciated 98% +- in the past 70 years or so. (Feel free to correct me on the time scale, I didn't verify.)
No argument.
But you propose that "all things are deflating against gold, steadily...."
Now, I believe it was Case-Schiller (could be wrong on this) spotted that about 200 ounces of gold could have bought you a house in many time periods (except two, after WW2 when there was a genuine pent up demand and of course when the bubble 2001-2007)
Of course, one could argue that a modern house offers more (or not)
But, what basket of goods could you have gotten for 200 ounces of gold in different time periods, and in fact, have you consistently been able to fill the basket with more goods for said 200 ounces?
I don't claim that gold always appreciated against real goods in the past. It didn't. The most important timeperiod for us today was after 1971, when the gold window closed. Yes, the price of gold rose, but so did the usage of the dollar. Computers basically allowed the dollar to become the worldwide denominator. IMO the world soaked up dollars from 1971 until about 1999, when the price of gold bottomed out. By that time the world was saturated with dollars, most of the world wealth had passed through dollars as their denominator. But, importantly, wealth passes through dollars, it doesn't stay in them. To keep this post short, I think the world now is maxed out on dollars; they are still the denomiator but they never had demand as wealth storage, only for transactions.
Now the world is stuck with all these dollars, and no way to store wealth. Wealth has to flow back through dollars to gold, not just a little bit. A lot. You decide how much. You decide how many dollars the world will pay to store wealth in gold. I think this is a number that has no connection to mine supply, jewelry demand, etc. This is a number based on wealth, nothing else.
How are zero yield bonds priced? How are negative interest rate bullion leases priced? Are they overpriced or underpriced?
Bonds aren't used to force feed your chickens to produce eggs, but they're an essential part of any economy and their clientele are under the exclusive patronage of the commercial banking sector.
Bullion? Pretty much the same. But you can still buy bullion if you want. And you can't mine bonds out of the rock for yourself after searching for decades.
Date: Sun Oct 05 1997 21:29
ANOTHER ( THOUGHTS! ) ID#60253:
Everyone knows where we have been. Let's see where we are going!
It was once said that "gold and oil can never flow in the same direction". If the current price of oil doesn't change soon we will no doubt run out of gold.
This line of thinking is very real in the world today but it is never discussed openly. You see oil flow is the key to gold flow. It is the movement of gold in the hidden background that has kept oil at these low prices. Not military might, not a strong US dollar, not political pressure, no it was real gold. In very large amounts. Oil is the only commodity in the world that was large enough forgold to hide in. Noone could make the South African / Asian connection when the question was asked, "how could LBMA do so many gold deals and not impact the price". That's because oil is being partially used to pay for gold! We are going to find out that the price of gold, in terms of real money ( oil ) has gone thru the roof over these last few years. People wondered how the physical gold market could be "cornered" when it's currency price wasn't rising and no shortages were showing up? The CBs were becoming the primary suppliers by replacing openly held gold with CB certificates. This action has helped keep gold flowing during a time that trading would have locked up.
(Gold has always been funny in that way. So many people worldwide think of it as money, it tends to dry up as the price rises.) Westerners should not be too upset with the CBs actions, they are buying you time!
So why has this played out this way? In the real world some people know that gold is real wealth no matter what currency price is put on it. Around the world it is traded in huge volumes that never show up on bank statements, govt. stats., or trading graph paper.
The Western governments needed to keep the price of gold down so it could flow where they needed it to flow. The key to free up gold was simple. The Western public will not hold an asset that going nowhere, at least in currency terms. ( if one can only see value in paper currency terms then one cannot see value at all ) The problem for the CBs was that the third world has kept the gold market "bought up" by working thru South Africa! To avoid a spiking oil price the CBs first freed up the publics gold thru the issuance of various types of "paper future gold". As that selling dried up they did the only thing they could, become primary suppliers! And here we are today. In the early 1990s oil went to $30++ for reasons we all know. What isn't known is that it's price didn't drop that much. You see the trading medium changed. Oil went from $30++ to $19 + X amount of gold! Today it costs $19 + XXX amount of gold! Yes, gold has gone up and oil has stayed the same in most eyes.
Now all govts. don't get gold for oil, just a few. That's all it takes. For now! When everyone that has exchanged gold for paper finds out it's real price, in oil terms they will try to get it back. The great scramble that "Big Trader" understood may be very, very close.
Now my friends you know where we are at and with a little thought , where we are going.
Umm, I don't know, I was actually planning to price my Gold (per ounce i.e.) in acres of farmland or blocks of prime commercial real estate or perhaps a few manufacturing facilities, etc - you get the idea. You on the other hand get ready to "spend" your "earned" dollars wiping your ass because that's all they will be good for in the very near future.
I keep hearing Gordon Gekko's voice when i read your posts, its very strange.
+1000
"Umm, I don't know, I was actually planning to price my Gold (per ounce i.e.) in acres of farmland or blocks of prime commercial real estate or perhaps a few manufacturing facilities, etc - you get the idea."
And if the government in whatever Country you are in declares gold fixed at $50 / ounce?
Then you wait for the government to collapse. It won't be long.
That is, unless they are fixing the price of the dollar at 1/50th an ounce of gold, in which case you are good, but you should still hold on to the physical stuff, not the paper.
The price of an ounce of gold when it was last fixed in terms of $US was $42/oz. US in 1971. This fix price has not changed since then.
If currency were fixed to gold @$50/oz. US, then it would cause a hyper-deflation. But then you would be obliged to fix bond prices to gold as well, because bonds are priced in terms of currency.
So the only recourse would be to revise the gold price upwards. The gold price fix would have to be well above $2500/oz. US in order to reflect the price fix during the depression of $20/oz. U.S. So the solution at minimum would be to revalue the gold price upwards to $5000/oz. U.S. in order to partially monetize the debt. Since the U.S. is probably going for debt to GDP ratio of 200%+, that would mean the gold price would have to be valued in excess of $10k/oz. U.S.
The advance of the gold price works as a mitigating factor mopping up excess liquidity, and at the same time devaluing currencies without ushering in any additional systemic risk. Thus it has practical utility in storing value, but also provides a hefty yield to gold mining companies.
OK and I'll be paying you for your produce off your farm, rent for space and your goods from you factories with paper I just wiped my ass with. And if things go my way, they won't even be dollars.
Anyway, good luck to you and everyone here with their business ventures and personal finances. What you do with your money is your business. I just don't agree with your gold theories and outlook but that doesn't make either of us right or wrong. In fact you should be thankful for people like me since we give guy's like you more entry opportunities.
Wow, this is one dumb comment.
He is talking about the price of paper gold, not the price of physical gold.
I presume your avatar is a current portrait?
Real metal for fake paper implying dollars for gold.
Question to you. Have you ever purchased PM's? Noticed how it's always spot + ? Are you saying LBMA, COMEX and GLD don't correlate?
PS that "+" premium is pretty much fixed depending on where you shop. I know because I dealt in a lot of it in the past.
PSS I got out the first time it hit $1200 so it's not sour grapes.
I'm saying LBMA, COMEX, and GLD don't have any physical gold. They only have "paper gold".
REAL gold (physical, in your hand) is much more expensive, and much of the time, when you have crap like this happening in the paper markets, premiums go up. You obviously haven't dealt enough. Back in 2008 when silver disappeared, yet was so cheap by the spot price, you couldn't find any, ANYWHERE, and when you could, the premiums were 2-3 times what they were a few months prior, when the silver price was in the $19-20 range.
so what's this?
http://www.zerohedge.com/article/gld-adds-3-tonnes-gold-overnight-new-re...
LBMA and COMEX (NYMEX) are exchanges. NASDAQ doesn't make computers either.
Premiums are competitive and pretty much fixed either in % or set $'s. My coin dealer was $75 above spot for 1 OZ and $50 for 1/2 OZ. These guy's are pretty much in lockstep with spot out of NYMEX etc.
http://www.monex.com/prods/gold_eagle.html
The bottom line is, the premium you pay is the cost of convenience. Too high, keep trying.
I agree that silver premiums are more volatile. I actually bought Eagle rolls back in 2008 from a guy on Craigslist for $2 above spot. ($15-$16.50/OZ) over a period of 3 months. Ebay premiums are now about 20% and have been known to increase as the spot price drops.
PS I have silver but am not obsessed with it. I'll dump that two timing tramp the second she winks.
Oh...... that was just delicious!
+1
+1...spot on!
In a proabilistic world, there is not necessarily one right answer or one predetermined future that is given to us to know. Long term, if you go back to 1940 with gold at $35/ounce, or 1920 at about $20/ounce, or 1880 at $20/ounce, you can calculate annualized mid to low single digit returns for gold. However, the pace of fiat money/credit creation in excess over population growth and economic output has increased and likely continues to increase. Valued as a multiple of stock prices or as a percent of the monetary base, gold is at average to low valuations. On a fully-costed basis re cost of production, gold mining is nothing special as a business even with gold at $1200/ounce.
So where's the reason for the price of gold to drop in fiatsco terms with a helicopter pilot running the Fed?
Agreed with the point that gold at $1200 per ounce is not a windfall for miners.
In a time where govt's are nationalizing industries, labor unrest, cost escalations and lowered yields, mining is not an easy business. To me, the ultimate refined commodity is the real deal, not subject to any of the potential problems listed.
I disagree with using $20, $35, or $42 US an ounce as a basis for any long term trend. Post Nixon (supposedly) free floating gold pricing should be a basis for any long term comparison of fiat:gold ratios.
SPX 1027. Now it's wait the NFP and see what happens.
Question for the Sacrilege:
Your cache/accelerator is dropping packets right and left. I get Connection: close errors about 1/3 of the time.
Images are not showing up. This article shows no images in the story body, just text unless you call them directly:
http://www.zerohedge.com/sites/default/files/images/user5/imageroot/tric....
The images in the http://www.zerohedge.com/sites/default/files/pictures/ directory show up, just not in the http://www.zerohedge.com/sites/default/files/images/user5/imageroot/trichet directory.
Is this an effort to increase you page view count? If so we should advise Quantcast, halogennetwork, etc..., no? Or is trichet significant?
Usually professionals will thoroughly test their platform upgrades before releasing it into the wild but I realize that you work for an organization that has funding challenges. I'm embarrassed for you.
Love & kisses
Firefox 3.6.4
Actually the reason is that we did not expect the pick up in traffic we have experienced WoW. If we needed more page views (we don't), all our charts would be in slide format like comparable websites. But you bring up a good point - due to our underfunding, we can only request concerned readers such as yourself to minimize their visits to under 100 a day. Does that work for you? Or maybe we just put a hard limit... that would certainly alleviate quantcast, halogen's, etc concerns right?
How did you measure your 'pick up in traffic'? From your pageview count that is a result of a broken web cache server? LoL!
Seems like a deceptive circle-jerk. Ah snap, wait, this is ZH it's all a deceptive circle-jerk isn't it, my hebrew friend?
Ok you win. There is no way a broken web cache could produce such results, or NOT! But you still win cuz you got the graphics and I don't.
Alexa.com should also help you out on your fact-gathering mission.
Tyler,
Thnxs for that post...............I estimated a Mil a day...just pulled out of my ass.
But,with the speed, and lack of load speed,time outs, that you WERE incurring.I knew it was a lot.
Now,we know,it's mind blowing.
You still need to set up some way for people to donate, away from Pay Pal..........I think it would be WELL worthwhile.
I think you have enough asshats now.
+++!
Agenda.
Loads fine for me - and much, much faster now with the new hardware.
Also running Firefox, latest build and updates.
Unlike you, I do this for a living.
They're doing fine. Scaling is a bitch. You don't know what you are talking about.
Here's a possible explanation that falls short of manipulation. Go back and look at the most recent published holdings of John Paulson. Now look at what got hammered this morning (C, JPM, STI, BAC, physical and paper gold). Could be just liquidation of a really horrible position, plus raising some cash on winning positions like gold. He had been holding a lot of homebuilders, too, and has publicly expressed his bullishness on residential RE. Has to be feeling a world of hurt.
For those of you who are fond of gold and can now build up the position at a more attractive price, you might consider sending him a short "Thank You" note. It's simply good manners.
Maybe. Why did he buy GLD? I thought billionaires were smarter than that. GLD is a trap.
Saw Tom Hanks in "Angels and Demons" last night. He plays a Harvard "Symbologist", who is flown to Rome to try to stop a plot against the Vatican. It is fun to watch him speed around Rome, instantly recognizing meaning of differnt texts, statues - really fun. I can imagine a similar scenario, as a "Crack" ZH commenter rapidly tries to comprehend what is going to happen based on snippets of Libor numbers, Gold Price, VIX, mixed in with Hurricane reports , military ship maneuvers, dying Pelicans , phases of the moon, important Holidays. That is what we are all, as a hobby, trying to do. It is fun. Imagine, though, that there really are people out there orchestrating some of this stuff - attack on Iran, contain Oil leak- there are people out there that actually ARE trying to come up with a optimum sequence, optimum timing - how do we choose a date - ok, ok- lets do it on Sept 11- cause then everyone will say "911!"- perfect; okay, now how do we put a whole bunch of shorts on markets taht will be effected. OK, how do we get correct footage? It must be a real challenge to ACTUALLY particpate in these events. Somewhere, there are these Jason Bournes - who, in all probablity look a lot less like MattDamon, and a lot more like Karl Rove.
It is a fun game to try to second guess these moves. What will they pick as their false flag event? Who is gonna be the Fall Guy? God, if we could just take Tom Hnaks, and mix his Saving Private Ryan charcater, with his Angel and Demons - he could figure it out; or maybe he can just do a Forrest Gump thing: "I wouldn't go into those tall buildings, planes could fly into them!"
Matt Damon is an ugly cunt.
I stepped up and went long QQQQ's, and V(isa). We're good for a 1% bounce.
Saw Tom Hanks in "Angels and Demons" last night. He plays a Harvard "Symbologist", who is flown to Rome to try to stop a plot against the Vatican. It is fun to watch him speed around Rome, instantly recognizing meaning of differnt texts, statues - really fun. I can imagine a similar scenario, as a "Crack" ZH commenter rapidly tries to comprehend what is going to happen based on snippets of Libor numbers, Gold Price, VIX, mixed in with Hurricane reports , military ship maneuvers, dying Pelicans , phases of the moon, important Holidays. That is what we are all, as a hobby, trying to do. It is fun. Imagine, though, that there really are people out there orchestrating some of this stuff - attack on Iran, contain Oil leak- there are people out there that actually ARE trying to come up with a optimum sequence, optimum timing - how do we choose a date - ok, ok- lets do it on Sept 11- cause then everyone will say "911!"- perfect; okay, now how do we put a whole bunch of shorts on markets taht will be effected. OK, how do we get correct footage? It must be a real challenge to ACTUALLY particpate in these events. Somewhere, there are these Jason Bournes - who, in all probablity look a lot less like MattDamon, and a lot more like Karl Rove.
It is a fun game to try to second guess these moves. What will they pick as their false flag event? Who is gonna be the Fall Guy? God, if we could just take Tom Hnaks, and mix his Saving Private Ryan charcater, with his Angel and Demons - he could figure it out; or maybe he can just do a Forrest Gump thing: "I wouldn't go into those tall buildings, planes could fly into them!"
Wow. Deja vu!