Gold, Bitches - $1,200

Tyler Durden's picture

$1,200 - Check. Sideshow gold preparing to turn the lights out at the printers.

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trav777's picture

Reserve shift away from fiat.

We're at the end of a multi-century era here, guys.

Peak energy means that.  There's no growth future to borrow against.  Transition will be from paper promises backstopped by ASSUMED future growth to effective barter

Mr. Mandelbrot's picture

Even Sir Alan Greenspan has concurred recently

Ivanovich's picture

I certainly hope so.  That spike down served up an awesome place to get more long.

LoneStarHog's picture

Uh, you need to do some serious research and stop reading Denninger.  Over the nine years of this Gold Bull Market, gold has had its largest advances while the DXY did basically nothing.

Go do some serious research with the charts.

B9K9's picture

These kinds of debates merely confirm that speciation takes place even in micro-environments. What we can observe in the financial blogging community are two divergent opinions:

* Hopeful optimists (Denninger, et al) - "Gosh darn it, we're 'Mericans. We can do it!"

* Realistic observers (B9K9, et al) - "Human nature always dictates the final debasement."

If you were examing a foreign country that no longer had any productive basis, yet still possessed a mentality of its former glory days, one that was rapidly expanding social spending while engaged in multiple wars, and was busily replacing the last of its productive class via importation/subsidization of low-IQ "voters", would you want to hold either its currency and/or sovereign debt?

Now do you understand why those with financial means have bugout abodes located overseas?

chumbawamba's picture

+FUCKING UNBELIEVABLY AWESOME

I am Chumbawamba.

WaterWings's picture

More comedy from this wiseguy:

* Hopeful optimists (Denninger, et al) - "Gosh darn it, we're 'Mericans. We can do it!"

* Realistic observers (B9K9, et al) - "Human nature always dictates the final debasement."

 

B9K9's picture

So which one are you? One of those mindless, "We're number one!" 'Mericans, or one of those who understand what Jared Diamond & Richard Lynn are saying? (Ironically, even though Diamond professes to disagree, his books actually disprove his main points.)

A lot of people @ZH tend to dismiss the notion that GS is populated by the "smartest guys on the block", yet who more than others have carefully prepared their exit strategies?

WaterWings's picture

Well, I'm here, ain't I?

But I love your logic that I'm either an idiot or on your team. Just about every single one of your posts has either an insult or references a book for the 'enlightened ones'.

trav777's picture

Incidentally, I have noticed the same thing about Diamond; his evidence and recitation thereof actually disprove what he is trying to assert.

The most interesting was when he explained lack of civilization in Africa as a selective adaptation caused by malaria's propensity to strike down concentrations of people.  IOW, "blacks evolved away from civilization behaviors."

As for Douchinger; he was warned.  But he's not that bright.  He hasn't yet figured out - nobody did - what FUKD meant when I was posting on his forum a month ago.  LOL

I argued the realist case on TF a couple of years ago...everything I said would happen did happen.  He was wrong over and over again.  But the cult these people surround themselves with is unassailable with reason. 

Anonymous's picture

yea Denninger runs a pretty tight lil Jonestown over there...there have been purges of dissenting voices at TF etc....BUT, if there were even but 10 oh Lord, of our legislators with an ounce of patriotism and a true sense of public service, Karl's prescriptions for the financial system would be spot on for a fix....

His problem has been his ongoing mindset of "they wouldn't dare, that would wreck the country"..."the bond market vigilantes won't allow BB to..." and "gold is just a paperweight"....
We all have our blindspots don't we? No one expects the spanish inquisition.

B9K9's picture

No one expects the spanish inquisition.

Only in our common era. (Boy, did I enjoy those early episodes!) This thread is getting ready to die, and I've mentioned this before, but grab a copy of Robinson Crusoe and quickly (re)read the first few chapters.

What is immediately striking is the pervasive, overriding concern for personal safety and awareness that at any time, in any place, if someone could harm, capture/enslave or kill you, they would do so without the slightest compunction.

Take a look at Boswell's journal (he was the author of Life of Samuel Johnson);  right out of the box, he's fearful of highway robbery and murder. I mean, this shit happened every day.

If our schools only taught two things, we'd be a much better country:

* law of exponents (h/t KD);

* the philosphical underpinnings of the state (ie promises of "protection" in exchange for servitude)

We were once free men but are no longer. When everyone expected "the spanish inquisition" at any time/place, there wasn't any room for shenanigans. The long knives came out at the first hint of trouble, especially if it came from the direction of "city slickers".

D.O.D.'s picture

I'm moving down under... bye bye miss americxn  pie, this'll be the day the dxllar died...

Anonymous's picture

don't do it DOD...they have poisonous snakes, fish, insects and BIRDS

AvoidingTaxation's picture

If you were examing a foreign country that no longer had any productive basis, yet still possessed a mentality of its former glory days, one that was rapidly expanding social spending while engaged in multiple wars, and was busily replacing the last of its productive class via importation/subsidization of low-IQ "voters", would you want to hold either its currency and/or sovereign debt?

best picture of america       &    UK

Anonymous's picture

what lamb meat and sheepskins are not productive resources enough for you?

Anonymous's picture

Plot GLD against UDN in relative terms and you'll see that over the last six months GLD has outperformed UDN by 15%. For the last 12 months, its outperformed by 23%.

While it is true that the ups and downs correlate, the two are still diverging.

Anonymous's picture

"if u are long gold here, u are speculating on dollar-carry"
er, no, we're speculating on Obamadolla DROP!

Guy Fawkes's picture

Just getting started on second leg

TumblingDice's picture

The all time high (and resistance) of gold in euros is 800, no?

Seeing this technical indicator and the large collection of 1200 calls, if a stand is to be made, it would be here.

Anonymous's picture

I think gold will put a floor irrelevant of all other events. China will probably keep converting its excess currency into gold,simply because it won't trust any of its trading partner's money. But what about equities?what about the general public cacthing the trade and cashing their retirement funds and converting them into gold?Me think that this would be a nice subject for questioning in the confirmation hearings. I bet you that many people are scared now including congress,probably more so than the Lehman crises. It is not about retirement's fund value,rather it is about a way of life.

Anonymous's picture

Look at the dollar in terms of gold....72 broke over a month ago...

$USD:$gold (Not against other Fiat currencies)

also

$SPX:$gold (what rally?)

in stockcharts..

Jim ODonnell's picture

Correct, USD is a fake-out and doesn't measure anything except itself.

All are beginning to learn that Gold Is The Measure Of Value.

Thaisleeze's picture
Thaisleeze (not verified) Dec 1, 2009 1:20 PM

Chinese New Year; look for some Asian central banks to announce transfer of gold to the new repository in Hong Kong from NY & London. reason; stay in Peking's good books.

 

Result???

genieous's picture

Lotsa assay certs required-61

uno's picture

Gold, the Comex and Exchange For Physical

This report comes via John Cheney.

We would not conclude that you cannot get gold from the Comex in the exercise of your futures contract. "Cash settled" is nothing new, and we ourselves have done this in the past. But we also have taken delivery, and have been speaking with other traders and funds, and many are spotting a trend.

Comex is putting forward the offer of paper in the form of money or ETF positions very aggressively, and making it the much easier alternative. Delivery of physical gold from the Comex is no longer as straightforward or even as semi-convenient as it had been in the past. In fact, it is difficult, and one must be very persistent and wait long periods of time.

We would like to know if there has been a recent independent audit of the Comex stores, with a clean sheet of bar numbers and the status of same. From what we hear it is a mess, as bad or worse as the recent scandal in Canada and the missing bullion.

Some months ago a chap described changes in the comex rules for futures contract deliveries. Therein it was described that the EFP, exchange for physical, rules were amended to allow for delivery of GLD shares in lieu of bullion.

Well take a look at something new, at least for me, in Monday’s comex preliminary volume and open interest report. On page 3 of the attachment, notice that in addition to futures contracts listed under the EFP category, a new category is listed: “Delivery Cash Settled” = 2866 december gold contracts. Just so happens 2866 was exactly the number of delivery notices issued on FND as reported in the Nov 27 vol and op int report.

Conclusion: guess you can no longer get bullion via using comex contracts. This apparently is the next step in the evolution of gold trading.

The conclusion we reach for now is that if one is counting on the ability to receive delivery of physical gold from the Comex for whatever purposes, then don't. You will wait and fight and stand in queue to obtain the goods from Enron nation.

The theme of the day is 'appearance versus reality' in the lair of the vampire squid.

 

SWRichmond's picture

If any of us read and understand anything today in the context of gold and this revelation about COMEX, please make it this:

http://www.professorfekete.com/articles%5CAEFTheVanishingOfTheGoldBasis.pdf

Anonymous's picture

Excellent post, and THANK YOU.

The FED hamsters are on the wheel, trying to prevent the exposure of Madoff II on a much grander scale.

Good GAWD--this is getting scary.

Project Mayhem's picture

Great article, thanks, I might do a follow-up on this

Jim ODonnell's picture

This second leg of the gold rally will really take off when GLD starts trading at a sizeable discount to physical gold. The COMEX will then evaporate into thin air.

Who will make markets in physical gold? Probably the Chinese I guess.

Project Mayhem's picture

I think there is a realistic risk of GLD  (the ETF, not the physical stuff)  getting seized by the government in order to 'protect financial stability' or other b.s.,  but this authoritarian move could definitely only happen under 'emergency' conditions  like a banking system crisis or a big war in Pakistan or something along those lines.

 

If that happens though they will separate shortly before the nationalization or crisis I think and there would be all sorts of wierd insider trading signals ala Bear Stearns.

 

Jim ODonnell's picture

I was not refering to a possible nationalization which may also happen. Since GLD can be used for delivery against COMEX a large portion of the "gold" they are supposed to have in physical form is not there any longer.

This is the reason many of the large "players" have left GLD to take delivery of their physical gold. This created a "hole" in GLD to fill in the "hole" in the COMEX.

When these holes are discovered by the market it will trade both of these at a discount to the actual physical price of gold.

In the event of an actual nationalization of gold then all ETF's are neaningless as well as the COMEX which accomplishes the same thing but the "discount" to physical gold is now 100%.

In this case you had better have your gold either out of the country or in actual physical form in your possession. A somewhat similiar thing happened when gold was trading in various countries at prices much higher than the US prior to Nixon going off gold in 1971.

Bet there will be a real physical market in gold trading in Asia somewhere, probably in China.

WaterWings's picture

Feels good, don't it. And to OWN it. 

Mr. Mandelbrot's picture

If only my gold were a bit warmer and wetter . . . ; )

Gordon_Gekko's picture

I would absolutely LOVE to hear from Karl Denninger and Robert Prechter right now.

Internet Tough Guy's picture

or Nic 'Dollar Rally' Lenoir? Good luck trading, Nic.

ghostfaceinvestah's picture

I am going to start referring to people like that as "dollar bugs".

chumbawamba's picture

I prefer "dollar fags", but then some might get offended.  To those who do, don't: I suck cock all the time.

I am Chumbawamba.

Anonymous's picture

you and barney f?

Gordon_Gekko's picture

I already did. Great minds etc., you know.

chumbawamba's picture

I wouldn't.  Fuck those two flaming ass hats.

I am Chumbawamba.

Anonymous's picture

Karl Denninger never likes gold in his lifetime.

Project Mayhem's picture

Denninger is a good guy, but if he thinks hallucinated computer pixels will be useful during a 'hard stop' he is mistaken.

Hephasteus's picture

Don't have to agree wtih everything Denningers says to respect when he i in fact being very brilliant and perceptive.

I don't believe the bonds are as real of a thing as the bond guys make them out to be. I think the people who own most of them just burn them once in a while to keep the image of the debt alive.

And I don't believe in deflation lasting for very long but I'm not going to stop listening to the people who worry about it. If belief makes things real then hallucinated computer pixels are as hard as a lexan riot shield.

chumbawamba's picture

Brilliant and perceptive?  Hardly.  He's smart, no doubt, smart enough to see the fractures in the system, but too dumb to figure out what's causing them.  In the end, he's a fiat monkey who loves to bathe in paper assets and thinks the game can be fair if only it weren't so rigged.

What a douche.  And I'm speaking for everyone who's ever been kicked off his forum for besting him in an argument.  Which is to say, many.

I am Chumbawamba.

Anonymous's picture

Yes, he does kick out people, who is gold bug or in disagreement with him. A narrow mind guy, he is.

Hephasteus's picture

It's detail orientation. I am balanced on big picture and detail. I go enough into detail to keep myself from looking like a complete ass but not to deep into detail to make it a mud pit to wallow in. He's too deep into the details. But he finds some neat stuff there.

Never argue with a facist. Which highly detailed people ultimately become.

trav777's picture

B

I

N

G

O

 

I got banned after I cornered him in a Peak Oil discussion.  I was TravIsGod then.  Yeah, this was AFTER Cantarell peaked.  Now he mentions Cantarell but still can't accept that oil has peaked.  I argued inflation, got banned.  Ghostwrote some shit on synthetic debt and what was "causing" things, and he moved the fucking posts to his Gold forum.  Then my verbiage started showing up in his freaking tickers. 

Went back as "FUKD" and got posting restrictions for laughing at him over STILL refusing to accept Peak..he calls it a religion.  Fucking religion?  After he acknowledged the then 34% drop in Cantarell production?  This ain't no religion mfer.

The dude wants the paper economy to continue; all his cult does.  They want to be the vultures with cash who get to buy up everyone else when the "reset" comes. 

He thinks the problem is we're in a con game with fraud; no, the flaw is SYSTEMIC, like in the Matrix.  Can't accept peak energy because the consequence is that everything he knows as far as "capital markets" and fiat paper has just got blowed up.  Who's gonna pay to listen to his blather in a post-peak world where real things matter and fictitious hallucinated pixels don't?

Gordon_Gekko's picture

They want to be the vultures with cash who get to buy up everyone else when the "reset" comes. 

Except the "cash" he thinks he'll use to buy stuff up will be worth dog poo. Mr. Denninger will himself be getting reset - into BANKRUPTCY.