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Gold Commercial Short Positions Hit All Time High, As Gold Spike Protection Team Keeps Very Busy
In addition to the EUR data in today's CFTC Commitment of Traders report, another data point that caught our eye is the record exposure in outright commercial shorts in gold: this week they hit an all time high of 450,950. It appears that last week the desire to suppress any gold breakouts was at historic highs, even as net commercial exposure hit a 2010 low of -282.6, just slightly higher than that seen in the second week of January. If even with this massive onslaught to keep gold low by the LBMA, the precious metal managed to nearly hit $1,250 today, what will happen to gold when the 450k commercial positions are forced to cover?
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Why ever would we want to carry around our gold in an age of technology made possible by our mastery of the very same metals? When we say gold is or can be a currency or money, we don't mean everyone should stop using computers and return to the dark ages.
I would happily and joyously carry gold and silver coins in my pocket, to the exclusion of ANY filthy paper or plastic cards, if that were even an option.
It is the pernicious manipulation of paper currency that loosened and then cut the ties between money and gold. I feel that it would be a VERY small price to pay for rigid monetary honesty and integrity to carrry a few coins around. Who says they have to weight five pounds in your pocket! Do you realize what the purchasing power of even ONE ounce of gold would be under a real sound-money regime?
Don't ya just get tired of educating the ignorant? There were so many things wrong with the comment by the Rogue Economist that I get a headache. To bolster your argument: Gold used to be circulating currency, as well as silver for "small change". Actually in the pocket kind of currency -- just as the CONSTITUTION lays forth. Fiat currency is unconstitutional. Also, gold comes in different sizes. From 1/10th to the full ounce. Canada makes a 1/20th ounce little bugger. Sure is cute. It comes in its own little sealed Mylar container. I have several sheets of them. They come in perforated sheets from the Canadian Mint. If there was plenty back in the old days to provide for common everyday commerce then there is plenty now -- at the right price of gold. We are not at the right price quite yet.
Yes, the gross economic and monetary ignorance of the average person, and even among the not-so-average, never ceases to astound me.
But that laughable "there's not enough gold!" argument is SO fundamentally and profoundly clueless, I immediately dismiss anyone who uses it as a credible commentator. My newest tact with anyone who beats that dead horse is to turn around and ask them, "Well, then, tell me, just how much gold WOULD be enough?" That NEVER fails to shut them up, LOL!
Correct. The question is not the amount of gold, that is a relatively fixed quantity, the question is the "price". Price in what? Gold-bashers keep using fiat as a standard. They are using the wrong standard, which is gold. How tough is that? Gold sets the rate. As you point out, gold does not change, its exchange rate in fiat is the variable. The "value" of gold? How 'bout let's start with the old saw: a good man's suit!
The last time Gold circulated in any meaningful way as a currency was before the Federal Reserve took over. Back in those days there were less than a billion people on the planet. The supply of gold inthe intervening years has increased, but not nearly so much as the human population. Divide up all the gold in the world, and it comes to about .7oz per person. Its just ridiculous to base all wealth on such small amounts of a metal.
Since its so impractical to have flyspeck size coins, some braniac decides to write Notes on a pile of it called "dollars", and defines said dollar as worth 1/29th of an ounce of the stuff. The moment you do that, and place your "trust" in Banksters to hold the gold while you trade their notes is the moment the system is open for gaming. Do you really KNOW how much gold they have? How much is Tungsten Filled? For argument's purposes, suppose tomorrow in Somalia they find out the entire country is sitting on a Gold Brick 100 cubic kilometers in size. So now Somalia is the Richest Country on Earth? WTF?
So now over in Europe everybody and his brother with some spare Euros is trying to get his grubby little hands on the stuff at the same time. Surprise! There isn't enough to go round here, the Austrian Mint is just Fresh Out. So 1 customer walks away with a Gold Coin, and 99 other people in his comunity walk away disappointed. When the Fiat goes worthless, is said lucky guy going to become the Rich Banker of his community, and issue Notes on his 1 oz of Gold? Is he going to chop it up into teensy little pieces so they can all have some dust in their pockets to use as currency? What?
A few folks with a lot of spare Fiat around are going to exchange it for a pile of gold to put in the Basement Safe, or dig a deep hole in the backyard 50 paces SE of the big Maple Tree. 99 other people living around them are going to have Zero gold. This is not a situation conducive to much commerce. The minute the Gold Hoarder shows up at whatever kind of shops are left here with one of his Gold coins, everybody will know he has it and they don't. Good luck spending this lucre safely in the local Black Market more than once. The second time you show up, 99 Have Nots will pounce on you.
Coining metals isn't going to work here for producing currency for 6B people, and NOBODY is going to trust banksters to be HONEST about how much gold they actually have in the vault. When was the last time they were EVER honest about such a thing?
Anyhow, if you have lots of extra money around and can get a hold of some Gold coins, feel free to do so. You may or may not be able to use it or trade it, it may or may not be valued highly in your locale, it may or may not be confiscated or made illegal for trading purposes. Its not a "risk free" investment, there is PLENTY of risk involved in dumping all your money into a few ounces or pounds of Gold. If you are keeping it offshore in the vault of a Swiss Bank or the Cayman Islands, good luck with getting hold of it when you need it.
In any event, if your local community does not devolve to Mad Max, there is sure to be some form of local currency which evolves. Long as you have a means to earn it some way, you'll make do. Gold may hold some value, but for sure one Gold Coin will not buy a year's worth of food as it will right now. If you want to store Value, Freeze Dried Mountain House Foods with a shelf life of more than a decade have less risk. Plus you don't have to go to the market to buy them.
RE
I seem to disagree with people on both sides of this argument, however, who is correct maybe has to do with whether or not banking has a rebirth.
Also, even if RE is correct, it's one of those things that can be fixed right away. Simply trade down your too precious to carry gold for something more universally traded at that time. Problem solved.
RE, you do pose some interesting questions and food for thought. Thank you for your post.
In regards to gold as money, as much as I personally like the idea of being able to carry around a gold coin in my pocket to use in commerce, I must agree that in an economy without fiat currency, it seems likely that the value of gold would have to be multiples of what it is today to fully back that money. At the same time, you are incorrect in stating that the world's gold supply has not kept pace with world population --- in fact, per capita there is almost as much gold in the world today as there was in 1900, and more than there was in 1800, when paper currency was much less significant than today (35% of the world's existing stock of gold was mined after 1980, for example).
And I agree that it is futile to expect or hope that bankers will ever honor their committments regarding the gold backing of currency. Well, at least central bankers. But I submit that there is another option, one that may avoid the temptation of central bankers to subvert gold backing of the circulating currency: eliminating central banking altogether, and removing government from the issuance of money completely.
In a free market money environment, money would be like any other commodity, subject to market forces and market approval. While the market is not infallible, and the temptation to cheat would always be present, I would argue that the risk of currency debasement would be VASTLY less than it is today, with unaccountable, blatantly corrupt and self-serving central banking elites in charge of issuing our "money" (I know I should say currency here).
Without Central Banking, Gold is just a Barter Item. I agree that the market would determine its actual value with respect to other commodities in such a situation, but IMHO in most communities in most situations the actual value of a Gold Coin is quite small. Its certainly quite a bit smaller than the value of a good pair of Red Fox Fur Mittens in my environment in the winter anyhow. The mittens keep my fingers from freezing off, the Gold does a whole lot of nothing.
Going to way back when, all coinage of whatever metal was DEFINED in value by the State. That goes back at least to the Roman Empire, and well before that I am sure to at least the Babylonians. How much or how little of it there was, how much people wanted it and so forth always was manipulated. IMHO, a mass psychosis developed around Gold, much as a mass psychosis developed around Cowrie Shells in Africa, just this one has lasted a whole lot longer than that. Same problem exists though, it doesn't really have an intrinsic value, it just has the value that the state ascribes to it. If the King values having Cowrie Shells, everybody has to pay the king in Cowrie Shells. If the State values Gold, everybody has to pay the State in Gold. The problems come of course when nobody HAS Cowrie Shells or Gold to pay up for the Protection and Services the State offers. Which eventually happens in ALL economies.
In our economy based on debt, the time has come where most people simply dont HAVE enough Cowrie Shells to pay up. It would not make a difference if it was Gold instead of Cowrie Shells or Dollars. The central control paradigm collapses when eventually in all situations the expanding economy ceases to expand. It does not MATTER what the currency medium is, and changing the medium doesn't resolve the problem of shrinkage. No matter WHAT currency medium we use here, we still have the problem that the economy is going to shrink. It must, because its growth was dependent on easily accessible fossil fuels which aren't so easy or accessible anymore.
For the near future, whatever money there is will be defined in value by the state. A decentralized Gold based economy is simply a fantasy, it cannot happen. There isn't really enough gold to go round to decentralize and use as a currency medium. Even silver would end up being hoarded as well and not circulate if it became the store of value. Hoarded Debt of others is not a good store of value either, as we see now in the case of China and Germany. What good is it to store the debt of others when they will not, CANNOT pay you back? Both countries right now could use all the Debt they have accumulated to buy up every ounce of Gold in the WORLD, as the Chinese seem to be trying to do. Then what? They HAVE all the gold, so what is there to GET anymore?
RE
RE, you have my support. Eloquently said.
Gold is just another item. It is extremely hard to market a new currency to a populace. In Baghdad, many Iraqis continued using the old Dinar for a long period of time. Many perhaps still do. This is because it was fixed-reserve. The new currencies (dollars and others) were printed at will, tossed around from helicopters, etcetera.
Will gold win out on the free market eventually? Most likely. But $1200 is a lot of money. You could spend that on starting up a small business, building professional relationships, and staying with the law.
Never give the Eistenstatzgruppen down there in Washington D.C. an excuse to throw a flashbang in your apartment.
Mittens for an ounce of gold? Are you serious? In the real world, things like food, clothing, crafts, whatever, have an "objective" value that has to do with the amount of real work required to produce the goods. Do you understand how hard it is to find and extract a rare metal from the ground? Go for a walk in the woods, return the next day with mittens and I'm not impressed. Return with a full ounce of gold and... well, that's pretty much impossible.
Plus, the ounce of gold is more useful if you're creative and crafty, depending on your knowledge of metals. How's about warming foil lining powered by a homemade battery and charged by friction? However, even a layman could make some very useful tools and devices out of the gold.
You're thinking like a barbarian and treating gold like a barbarous relic. Consider studying it's physical properties and why it's used in the smallest crafts to spacecrafts and beyond.
You are making some solid points, no doubt. However, you appear a bit fixated on gold being the only store of value.
Obviously, there is silver. Silver could easily be used to make small denomination coins. You could use different percentages of silver to get down to smaller values (an old 90% US dime is worth about $1.30ish right now). Use a 50/50 silver/copper split to get coins under $1.
The logical thing to do is to make a world currency that uses a vast basket of weighted commodities for its value. Obviously, gold could be the largest weighting. Maybe it could include sovereign debt from each of its member countries for diversification. The more diversification the better. They would have to be physical stores of commodities/sovereign debt, not paper promises or derivatives. The sovereign debt would need to hold some sort of super senior status with each member country and they would need to keep a certain tonnage of gold or commodities on lease with the world currency in case they attempt a default.
Each country could then make their own currency for domestic purposes. However, all international trade would have to be conducted in the world currency. You could then devalue your own currency if you got into a little fiscal trouble and export cheaper (but imports would increase).
I agree with you 100% that we cannot just make gold the world reserve. It would eventually be gamed, just like fiat is. Plus, what if some black swan like being able to create gold was discovered (or some super discovery of reserves, like you alluded to). It could destroy the world economy again. Not worth the risk (as slim as it may be).
I definitely think that gold will never become a true currency but continue being what is always has been, a store of wealth. Silver could be used as currency again but it is turning more and more into a commodity every year. Once these bacteria in the hospitals become immune to every antibiotic we throw at them then silver will need to be at least plated onto a ton of surfaces and instruments. Silver has multiple paths of inhibiting/killing bacteria, so the risk of them finding immunity is very slim.
Maybe we can go back to using livestock as currency.
Your arguments are incomprehensible. Cowrie shells? Doesn't begin to approach the definition of real money, which has three characteristics: 1) medium of exchange 2) unit of account 3) store of value. And, by the way, how was gold in the past--the Romans or Babylonians--manipulated by the State? Coinage was debased, eventually, but controlled? Define your terms. Historical references, not just assertions, please.
You say: "For the near future, whatever money there is will be defined in value by the state." Really? How is that? Price controls? A centrally-planned economy with an Amercan Gosplan (look it up) controlling every facet of our economic lives? If not, the government will NOT have defined the value of whatever you think is "money." And anyway, if you think this is likely to be successful, how did that work out for the USSR?
Lastly, you are positing deflation. Fine. In deflation, money becomes more valuable. Because gold is the ultimate form of money, it will become more valueable, measured in purchasing power, not less. There is plenty of gold to function as a monetary reserve--it is only a question of the price in paper or electronic units. Think about it and it will become clear to you eventually.
I'm going to reply to you on a paragraph by paragraph basis. First, so what if there is less than an ounce per person? There is only about 200 billion dolalrs in circulation as well, or $28 per person on Earth. I suppose that that makes it some kind of shit currency? It doesn't. The amount of goods that one can buy with a given amount of gold will depend on the amount of gold per person. If there is less, then you will need less. It's not rocket science.
If that much gold were to appear in Somalia, then gold would cease to be currency almost immediately. So what? If people shit gold bricks twice a day, it wouldn't be a good currency either. But they don't. There aren't any large deposits of gold left on the planet that are easily accessable. There's plenty of paper, ink, and electrons though. For a gold standard to work, you just have to be able to freely exchange your paper for specie. That isn't hard either, in fact, that is EXACTLY how it worked all around the world for most of human history.
99 people walk away disappointed. What does that tell you? THE PRICE IS TOO LOW! Duh! All that has to happen is for hte price to go up. That will solve everything (except for the government's problems, of course). Gold dust is used in Zimbabwe, and it was used in the Old West. This is not much of a problem in the short run, and is inevitably fixed by some smart guy who opens a bank with his gold. Sorry if your brain is too dull to understand how it works, but that's the way it was for the last several some-odd thousand years.
Of course it isn't conductive to commerce NOW. It's because bad money drives out good. Shitty paper money is circulating, and real money is hoarded. Once the crappy money system collapses, and the price of the good money rises, it will come right back into circulation. 99 have nots aren't going to pounce on you when you have an armed escort, befitting your new position as "local rich guy". Things already work this way. Try to give Bill gates a wet willy and see how close you get. Not very.
Banks are dishonest now because we have a controlled market. Free market competition, and free redemption of paper for specie both keep them honest, and did so for THOUSANDS OF YEARS. Most recently, it worked quite well in this very nation up until the suspension of redeemability in 1933.
Having something of real value in your hands is infinitely better than having paper that you are 100% assured will lose 99+% of its purchasing power in your lifetime, IF you can survive the debasement long enough to see it happen. This is a shitty argument, and one used only by cowards.
Basically, you're an idiot. Sorry :(
The moment someone starts calling people "idiots" is the moment you know that person can't make a good case on the merits. Your analysis is so full of holes its like a block of swiss cheese carved in the shape of Nancy Pelosi and dropped in as a Target at the NRA National Convention Firing Range. Its not even worth responding to, sorry. Some folks you just can't reach. Its a Failure to Communicate.
RE
I would rather not have to carry around my fortunes, nor have it all stored in the most obvious place, my home.
You appear to have captured the wrong culprit. There is nothing inherently wrong with paper or digital receipts of deposits and enjoying the benefits of such. I think you should stop seeing "banking" as the enemy and perhaps focus on practices of modern lending facilities that pose as banks.
To me, it's about what is honest and what is deception. A system based on the fabrication of credit to replace receipts is inherently fraudulent pretty much by definition of forgery.
Do away with the fraud (fractional reserve lending is the big one), and banking is a brilliant idea that I hope returns in my lifetime.
Rogue,
thanks for some sensibility on this topic.
when i read a previous post about buying/trading the dips "like clockwork" and Kudlow now recommending it, a top is near.
everyone else, bet against the commercials at your own peril - take at COT fall 2008, seemed to nail move right on. also, you think a few you plebes will end up running the world with a few of your eagles/maple leafs etc. your kidding yourselves.
fiatsco is here to stay just learn to play the game.
I am stunned by your complacency. Stunned. Good luck.
I pity da foo' dat relies on Kudlow to make investment decisions.
Kudlow, TV commerercials, and 2 gold dispensing machines are not good contra indicators.
I think a few folks have been sniffing these:
http://www.talismancoins.com/servlet/Detail?no=1197
You are basing your investing thesis on me trading a few GLD calls on two days? Clockwork referred to the bullies at the top knocking it down it was predictable. They can't have the only real money rise when all other overvalued crud is crashing. You assume too much from one little comment. Good luck!
If you see a tidal wave coming at you, you would run for higher ground no matter how many times you get pushed down by some bully. It's called a self preservation instinct. People are seeing through the charades. I wonder if you can see the top of the trillions of obligations, called dollars, which are not ever going to be paid back, only rolled over and devalued. See you at the bottom when it topples?
Another interesting observation regarding bubbles and tops.. Did you see any bankers knocking down the price of real estate and standing in your way of getting that sub prime mortgage? Yes you sub-prime low life, no you won't get by me! I will naked short the whole neighbourhood so you will be discouraged from taking that loan out! No this didn't happen the way it's happening with precious metals. So I don't think it's wise to make the comparison to a normal bubble where the financials jackals are pumping it, so they can cut you at the knees (just like last Thursday's insta-crash).
I would like to offer you an investment where I steal 60% of it in one minute, up for that game? The games are getting more vicious and the thugs more brazen. You still want to play that game?
What do you call what is happening with fed charging 0.25% on loans, virtually nothing, on money created out of nothing, then given to the banks to buy the treasuries, repoed back for cash chasing inflating assets. Forgery and fraud are the right words.
You want to tell me that I should trust this crud for my kids savings over gold. I don't really care how many of these imaginary bucks one needs to trade, as the bucks came into being from nothing and they in the end will be worth their intrinsic value of nothing. You are blind if you dont see this as a biggest scam ever perpetrated on humanity.
I knew nothing of this in 2008, i was 100% equities until sept 11 when I cashed out with some foresight learned the hardway in 2000 (just before lehman blew up). As the popularity of the blogs like zh shows, there are many waking up and seeing the matrix. We are learning the game. They have gone too far this time... The game is OVER.
Wow - cashed out basically at the top. Good one. What are your thoughts on today? We going back down to 8500?
I don't think it's the main issue now. It's bigger than that. Have you seen the movie Madagascar? I think the masters of the universe are two the monkeys who busted out of the zoo and when caught by the cops one goes to the other "If you got any poop, now would be a good time to fling it". That poop is all they have, and it stinks bad, i rather have PM.
Another movie analogy, and I am not a big movie freak. War Games "The only winning move is not to play".
Somebody posted this link a while back and I have not forgotten it. I can't help but feel that we are about to enter the 2nd phase: realization that greenshoots was all BS and real problems are about to start.
http://www.jolietpubliclibrary.org/digitization%20projects/The%201930s/D.... This is most likely not time to go chasing growth, preserve what you have been allowed to keep this far. Or play the game with limited risks, options etc.
on Fri, 05/14/2010 - 20:28
#353056
There is no fundamental limit to the number of pieces of paper that anything is worth, I never said any such thing. Read for comprehension.
What I said is that RELATIVE to food, Gold or Diamonds or any other source of wealth storage you think is meaningful is quite meaningless when what you want to buy with it is in increasingly short supply.
You can't run commerce in food with a few gold coins shuttling around the economy in one so big as this. When the paper money crashes, which it will, the commerce comes to halt, and that includes the commerce in Gold Coins. They may work for a while longer than the Fiat does, but not much longer because the collapse of the fiat means the collapse of the production. The stuff you might buy with the gold won't be available to buy. At ANY price.
RE
Rogue Economist,
I am in the middle, you are correct... until your not. With that said, better safe than sorry. Cover your bases. Long term, people will not drive around in armored cars filled with Gold to make purchases.. You are correct.. Hedging into physical Gold is about hedging the risks of the world failing, thusly you get a certain type of crowd. Reaching the idiots is not easy, but if you Love your fellow American's you will roll up your sleeves and get too work any way.
Great posts... but as much as they are one sided... so are you. Don't fall vicitm to the trap, you are smarter than that, easily.
Be well, JW
You can't even have sex with gold.
I guess you never saw Goldmember.
I didn't mean it. I'm sorry, gold. I still love you.
But you can have sex with Silver.
Ladies???
Fascinating, such a device would be self-sterilizing given that silverware has this property, making it safer than say plastic devices of the same shape.
LOL. I get what you're saying but I was referring to me ;-)
And you are not getting any from the wife, hanging around here either....
Yours or mine?
Braveheart†
been around for the last 40 weeks, haven't noticed you.
now...... i do.
Your very intellectual lecture is based on wrong premise, my friend. I've lived through situation like that few decades ago. Why you assume that you will go to your supermarket and get the whole cart of goodies even if you have your dollars? What about empty shelves and your pocket full of dollars? Have you ever thought about it? Maybe then you'll have to find some alternative way to get what you want and then maybe your silver will be useful!
This helps me understand your lack of a sense of humor in some other threads. Sorry. I'll pay attention. Ben there done that, huh?
Lived through it myself also my friend, in Brasil in the 1960s when the country was undergoing hyperinflation. Fortunate to be the son of a Bankster with Dollars to spend, so I didn't suffer from the problem, but I saw it myself in action.
To an extent, holding or having access to Dollars in a hyperinflating environment of another currency is a lot like what people IMAGINE having PMs will do for them when Fiat goes worthless. If you were in Argentina in 2001 and had some dollars, you were doing just fine while the rest of your buddies were SOL. Folks here in the FSofA watching the Dollar be driven into worthlessness for a while got the idea they needed to Hedge by having some of their money in Euros. Oops, not a good choice it turns out.
Now that most if not all of the Cogniscenti realize that ALL Fiat currencies are going down the Toilet here and holding none of them will provide you the security that holding Dollars did in Brasil of the 60s or Argentina of 00s, the flight has begun in earnest to the PMs. Thing is, even PMs require fuctioning Goobermints and functioning Taxation systems to value them. Individuals don't value Gold, the State does in its coinage. Between people, a Gold coin is only worth what someone else will barter for it. In a situation of scarcity of basic resources like food, metals will not hold much value betwen people. You can see how this worked in Gold Mining communities in the Old West. LOTS of Gold available, little food. So a Steak Dinner could cost you an ounce or more of the stuff. Rev this one up a few orders of magnitude here in this situation. At a certain point, the metal ceases to have value because the stuff you would buy by trading for it is in such short supply. Compound this with the fact that VERY few people will have any supply of metal to trade with at all, and the market as such collapses. Here in my community, do you really think I would tade you any of my Smoked Salmon for your Gold Coins? If I really wanted Gold, I could just go pan some up, I know a few good streams that are pretty good for panning. I just don't NEED it really though, and the hours spent panning are more productively spent fishing.
I suppose though if the psychosis here continues onward, I'll be well off to go pan for Gold. Hell, if it goes to $5k/oz, at current exchange rates all I will need to find each day is around 1/100th of an ounce, or around .3 grams of gold. That would be $50/day just to find .3 grams. Ridiculous. Its practically DUST, and its worth $50? Panning is tedious work, but if you can't pan up .3 grams a day, you just don't know what you are doing. LOL.
Gold is a Bubble, and its going to collapse along with the rest of the bubbles out there. It may work for a while to secure some of the paper wealth, but it will deflate also as commerce grinds to a halt here. Its NOT a solution.
RE
gold and silver is the solution, not so much for our individual needs but as capital held amongst the masses. Said capital allows for a restart of the new economy. That will happen as long as people need to eat, commerce will develop and a new government will set in place a new currency. That is the time you want to be holding PMs.
Most intelligent and aware folk see whats coming and have often said as i do..Food, seed,ammo and silver and gold. more or less in that order.
I am not counting on silver to see me past this crisis, i am counting on my labor in the garden and the food i have packed away. Sure i am not the only one to figure that out.
double post.
RE, obrigado for sharing your observations.
agree that metals are not THE solution. the video on uboob 'gold for bread' confirmed that for me. and i choose to believe that there are some hidden chains attached to gold that most will not/can not see as of yet. (i.e. watch 'treasure of sierra madre')
however, ever wonder why gold has held such a magical influence on humans since the dawn of western civilization? maybe it's not called a 'transition element' for nothing? perhaps we're being led back into the womb through a golden door...just a crazy thought.
All stock prices are part of the same illusion. Should 100 shares of the maker of maxi-pad players buy a years worth of food. Whether it is 100 shares of equity or 16 grams of gold, it is all relative to your point of view. You might not believe in the illsion of gold but you might believe in the over priced illusion of stocks "earnings potential". Stocks just went parabolic. Maybe its gold's turn.
you named yourself well Rogue Economist. Wrong on all else, i quit reading after the second paragraph. Pointless waste of time. Thanks anyway
Rogue,
I think perhaps you should do a mental reset. My thinking in buying a gold eagle is NOT that I will make a killing on it, and go buy a new home entertainment system. Also, my thinking is not that I will one day take it to the grocery store and buy a year's worth of groceries. My thinking is that one day I will walk over to my neighbors, and trade my gold eagle for one of his fine organic Angus heifers, processed and delivered to my home. It will go in my large freezer, which like the rest of my house is powered by solar panels and a wind turbine.
I understand that I will want to eat more than meat for a year, so in addition to my gold eagle, I have purchased 25 chickens. They produce 20-25 eggs a day. Today, my family eats 4-5 eggs a day. The remainder I give away to neighbors. These neighbors are gardeners and in some cases farmers. I am INVESTING in good will with my neighbors, who themselves produce food. In the future, I will trade the excess eggs for vegetables in season, which I will can or dehydrate in the dehydrator and canning system which I have also purchased.
I am taking the paper profits from investments of the last ten years to make investments that will pay dividends in the next ten years (Local solar/wind capacity, food production, gold, and a well functioning network of people that produce things that are needed)
Gold is a part of the picture, one element of a well balanced portfolio.
Hey Rebel, I am seriously debating a Solar powered well pump.. I already have 2 wells dug and running now on electric..Your thoughts on that?
Silvertrain,
I had been skeptical about whether solar technology was mature enough for practical home use. I have been EXTREMELY happy. Between solar cells and wind turbine, I am producing 150% of my daily use. ROI on solar is about 10X what I am getting on the wind turbine, but the turbine is nice in that it does produce some at night. Solar for a well would be a no-brainer in my mind.
I got a couple of panels for that express purpose. I have yet to wire them up to it, so I'm using them to power my computer and monitor. I'm thinking of getting more.
My advice: get the amorphous Si panels. They are a lot cheaper and they produce in diffuse light, like when it is cloudy. They are a lot bigger than crystalline, so it depends on what your needs are.
Mine are on the ground in front of the house rather than on the roof, so I've got a lot more space for them.
tmosley,
I believe the panels are more efficient when ground mounted. The efficiency of solar panels goes down as their temperature goes up. When ground mounted, on flat ground, there is much greater opportunity for cooling to occur from a breeze. When mounted on a slanted roof, the air space between roof and panel is small, and the obstruction of the roof prevents the panels from effectively cooling in a breeze. Ground mount allows lower temperature operation, and hence higher efficiency.
I think people often misuderstand what I write.
If you have prepped yourself up otherwise and have some extra Fiat around after that, buying some Gold is another Hedge you can afford, which might provide some security. Hell, it might even pay off big time. However, you have to be pretty well off to be going down that route, which of course many of the posters here are.
When you look at the Lemmings running to Gold and playing out what the Austrian Mint has to offer though, its generally not the mega rich. Its J6P Pensioner who goes and takes the $5000 or so he has in the bank and buys 4 Gold coins with it. Now really folks, exactly how much security is 4 Coins going to buy you? If/when the Fiat does go Toast, the trading mechanisms will collapse, and those 4 coins are just a Barter item in your local community.
I live in a small community VERY far out from the center of civilization in Alaska. At most, there probably are only 50,000 people who live within a 30 mile radius. I know a selection of those people, and of all of them, NONE that I know of has a store of Gold Coins. Now suppose I did go ahead and take all my excess cash and buy a bunch of Gold Coins with it. Are they really going to be a valuable item to have around here? Even if I had money to buy 10000 of them (and I don't have quite that much), they don't sprinkle out too well. For these coins to work as a currency around here, there would have to be a large enough pool of said coins, and I am quite certain such a pool does not exist here, despite the fact Alaska produced something like 800,000 oz last year out of the mines.
Anyhow, back to the issue of most people with somewhat more limited means. A few Gold coins will not be sufficient to hire a Personal Armed Guard. Besides, even if you have 10000 of them, your Treasury will eventually run out here paying your Personal Army. This happens to Sovereigns all the time :-) I certainly do not have enough to hire my own personal army. So if I have a few Gold Coins, I will have to Protect them myself, at least if they are worth ridiculous amounts of "money" I will.
If/When the Fiat Dollar goes down, this neighborhood like almost all others will come up with its own currency. Greeks will revert to Drachmas, Italians will revert to Lire, Germans will revert to Deutchmarks, etc. The KEY to remaining solvent is to be able to earn whatever the currency of the day is in your location. Having some Gold if you have just tons of extra Fiat around might help you, it might not, depends on how it structures up in your community. I will say though that at current exchange rates its unlikely that a few grams of Gold in this neighborhood will be worth the food equivalent of $100s. That is preposterous, because then everyone will head to the rivers and start Panning for Gold. Tedious work, but you can pan up a little of the dust in many rivers up here. Everybody will be so busy panning, they won't bother fishing. LOL.
If you are not mega rich, there are many other things to spend your Fiat on now that are a good store of Value. Take your $1250 and instead of buying one Gold Coin, buy 100 Bottles of Stolichnaya :-) Lasts forever, and VERY fungible! Buy a few cases of Ammo. Everybody up here always needs Ammo for Hunting. When it stops getting delivered up here, you'll be in good shape for as long as your store lasts, and it doesn't take up much more room than Gold does.
If you have $Millions, you have another problem, because nobody wants $1M worth of Ammo in the basement. LOL. So go ahead and buy some Gold with it, I got no issue with that idea. Just saying that in a REAL SHTF scenario, in most places it would just be a big Paperweight. You depend on the idea that functioning worldwide markets will continue, and you will have access to them. You might, you might not. Up here where I live, I seriously doubt I would have access to such markets, I sure don't figure a Fed Ex truck will show up at my Cabin to pick up or deliver any Gold. So Gold for me doesn't make much sense. It might for you if you have plenty of extra fiat around though, because I wouldn't hold on to too much of that either. A year's worth maybe, since even in a hyperinflation scenario you could spend it off pretty fast and buy more Ammo, long as its available anyhow.
It all depends on your personal crcumstances, how much you actually have in surplus and exactly where it is you currently live. For most people in most circumstances though, Gold is a fairly risky bet.
RE
Rogue,
I better understand your position. I agree if you have $5,000 and are worried about things, gold is not going to save you. For those that are not somewhat well off, the best thing to be thinking about is tangible skills. Do you know how to do things people really need? Tanning bed salon operator, or Buffalo Wild Wings waiter do not count. Can you build things, fix things, make things? For a person not well off, the best option is to quickly build a skill base of doing things that are needed. If things go poorly, you have a needed service to offer. If things go well, you have a needed skill to offer.
There's so many gold ads because the site gets crawled and the messages get analyzed by a histogram and people keep saying the word gold. All you have to do is change the word from gold to something else and as a replacement and the site would get the replacement word for ads.
Actually, that is one of the three ways google decides what ads to play. In addition to contextual (which you describe), an advertiser can target their google ads to a specific site. So, when you see the ads you have no way of knowing whether google chose them based on context, or whether advertiser targeted this site.
There is a third way . . . google keeps track of search terms an individual user has used, and then feeds ads to that user based on interest. So, the ads you see on this site might be different than the ads someone else sees, based on search terms you have used recently.
One person might be seeing "Physical Gold" ads, and another might see ED ads, depending on recent search terms.
Agree 100%!!!
That is why other banned things like cocaine are ABSOLUTELY WORTHLESS
Travis are you saying that when people are un-happy and if the lights go out Beer, Pills and / or other will have an extreme value even more so than today... so that people can escape the day to day Blues?
God Bless West Virginia Shinne Bitches! Bring your gold, I got Booz!
Rum, if you would prefer.
Bootlegin will make one hell of a come back... econophile that. <--- was not directed at you Travis, I think you know that already but just in case you are having an off day...
so with that long thing lol
are you buying gold ,,or standing in the light like a deer , or like JB standing at a lap top,,
looking in the mirror and twiking zits ,
in a gold argument
either understand austrian econonics
or put down the wallstreet journal , and the sports page
and for heaven sakes do not liken it to something that has value in billions ,
these people against gold and all their reasons ,
probably would faint if they had 50 grand in their account free and clear.
like the most they have ever done in finance is to balance their 50 thousand dollar paycheck each year.
with expenses of 55...
Most i ever had was 300,000.00. hated it . Glad its gone. I despise money
Well, if you ever find yourself with more, I'd be happy to releive you of the thing you hate so much.
I see that Tyler uses the futures-only data whereas the futures and options data perhaps provides a more comprehensive picture. On that basis the commercial net short position reached a new high of 324,388 though it's been higher in Oct, 2009. The commercial net position is inversely related to gold. It pays also to look at open interest of all market participants that reached a new high since 2008 and is directly positively related to gold.
Some evening reading for the Rogue Economist:
http://www.goldsubject.com/freegold-theory-the-massive-revaluation-of-gold-after-the-collapse-of-paper-assets/
Freegold theory: the massive revaluation of gold after the collapse of paper assetshttp://www.goldsubject.com/freegold-arguments-for-and-against/
Freegold: arguments for and againsthttp://www.goldsubject.com/protecting-buying-power-vs-freegold-a-clarification/
Protecting buying power vs. Freegold: a clarificationhttp://www.goldsubject.com/the-bargain-of-the-century-looking-at-freegold-from-another-angle/
The bargain of the century: looking at Freegold from another anglehttp://www.goldsubject.com/the-catastrophic-failure-of-paper-assets/
The catastrophic failure of paper assetsGood links, Rocky.
May I also suggest the following quote, taken from Aristotle (4/19/2000), to further assist in establishing a more fruitful perspective from which to view gold:
I also think the following quote, which was also quoted today in the comments section of Hair of the Dog?, (h/t Costata) should massively clarify why JPM et al can continue to pile on the gold and silver shorts.
Yes, they will make out like the bandits they are. And so will all holders of physical gold. Anyone who does not understand this is not stupid, they simply aren't using the perspective supplied below.
I think both sides of the debate in the comments above need to read the following quote, taken from here, to see that
YOU ARE ALL CORRECT.
Excellent.
They can short paper gold, because paper gold is going to zero. This would be like shorting Fannie & Freddie.
When it becomes clear that physical gold price (manipulated paper gold price + giant increasing premiums) is no longer connected with the paper gold price, paper gold prices should drop approaching zero while physical gold prices soar.
The authorities believe that decreasing gold prices will reduce demand, they are correct with regard to speculators. They do not like physical gold in your posession because it can't be levered up, so the money multiplier becomes the money divider and the velocity of money drops. BUT this doesn't matter right now anyway because these rotten banks are not loaning money, they are sitting on their reserves making money on the spread between their zero interest borrowings and the returns on treasuries and dividend generating equities - risk free returns.
Buy physical, do not buy paper gold.
Excellent. As is the post below. I've been reading from the beginning Another's writings.
It is a bit esoteric at times and a bit cryptic. I wish he had been absolute and unabmiguous. Still great stuff. FOFOA is one of the best of resources.
“”Calm down for a moment and get REAL. Gold is at around $1250 for an OUNCE of
the stuff. What this means is that if you have just ONE Gold Eagle, you can use
it today to buy enough food to last you a Year.””--------------
If there are 52 weeks in your year, your food cost would be $24 a week or $3 or $4 a day. I am not saying that lentils and rice can't be done at $3.50 for one person per day, but forget milk or coffee or fresh fruit/vegies, and your long term health. However, if food purchasing is an issue, silver becomes a more nimble unit.
I base that cost on exactly what I did spend weekly on long term food storage items. Each week I bought around $25 worth of food with a shelf life near a decade. Did that since shortly after Bear Stearns went south. After accumulating a couple of years worth, I stopped. If I really need to live on that for 2 years, society will be completely down the crapper and not much point in continuing onward.
Meanwhile for me, real good food remains very cheap. Why should I eat Rice and Beans when I can eat Smoked Salmon and King Crab produced locally, not to mention Stinky Cheese imported from France, Rack of Lamb imported from Australia, Hearts of Palm imported from Brasil, Avocados imported from Mejico and of course my favorite, Juicy Rib Eye Steaks at $6/lb from the heartland of the FSofA which I BBQ up with a nice Monterrey Dry Rub? Not gonna skimp here on eating the Good Stuff while its available!
Remarkably, eating that well only costs me a few multiples of the $1250 I quoted. My REAL daily food budget is probably around $15/day on average. For most people in the world, that is a lot of money of course, but for me its pretty much chump change. If that price tripled, I'd still be doing fine, except of course for the problem that almost everyone else would NOT be doing so fine.
Enjoy it while you can, but in a few years here, all the Gold in the world will not buy you this stuff. It won't be available at ANY price. Have enough food to make it through the Zero Point, and HOPE that your local community can grow or fish up enough to support said community after that. If not, you all are TOAST anyhow.
For me, this is one long Last Supper, going on since Bear Stearns went to the Great Beyond. I'll eat as well as I can for as long as I can, and when the good stuff goes away, I'll subsist for as long as I can also, and as I eat my rice and beans, remember back to those fine days when I enjoyed Hearts of Palm and Avocado Salads. Wonderful days they were, but not going to last here in perpetuity, sorry to say.
RE
another tasty thought-provoking comment. love the last supper reference.
that is, unless we learn to grow our own locally using imported seeds. avocado trees are growing quite magnificently on LI, for example. gotta try hearts of palm, pretty good with the artichokes so far. if you can get your hands on any good wine grape seeds, send them my way. (hint: those orange traffic cones make awesome planters if you turn em upside down).
maybe it is not a choice between either/or but rather a challenge to find a middle way between the two? i do realize all is impermanent, but don't know about you, but i'm personally tired of being betrayed and dying on the cross over and over and over again.
tip e. canoe,
***** "but don't know about you, but i'm personally tired of being betrayed and dying on the cross over and over and over again." ***** I hope and pray that the lights dont go out, but if they do dying on the cross again and again will be the least of anyones problems. Better get your sword out and clean it, all this we will plant gardens and hug our problems away shit... its funny. If the lights go out, like the war drum here beats to every fucking day... I hope that you that have wished for it so hard get the first taste of life on the wild side. All of you 50 year olds who can fight the mobs who show up at your doors (and windows, dont for get your windows) for hours on end to protect your beans and rice... less we forget those physical PM's?! I have mis-typed almost the entire thought, due to my laughter...
Lights Out Bitches!!!
everyone has their own cross to bear papa. you got yours, i got mine. you choose your battles, i choose mine. you like swords, i like amazonian poison blowdarts. we'll see who wons if we ever get within 30 yards of each other. until then, safe travels and be careful with the thorazine. that shit will rot your brain.
Yo, if any of you fools want to invest in the medical marijuna industry in Colorado, I can get you in with the right people. 100% ROI in 3 months. This is being called the "new gold rush."
Shoot me a line to patrickthepainter@gmail.com
Weed Nigga!
Puff, Puff... Give, you fukin up the rowtaashun!
Seriously? no I mean really? and you wonder how you got fired on your day off?
I asked this question once before, but I'm an idiot and I forgot the thread I asked it in and can't look up the answer. Forgive me for that. But, here's the deal:
The last time gold went crazy folks who bought into that got hurt, bad. Real bad. Also, JPMorgan has gotten into trouble trying to corner the silver market. The Hunt boys did that once before if I recall, and everybody who bought into that ride got hurt bad. Real bad.
Also, we know that the mortal enemy of the central banking cartel is precious metals. The banks will exhaust every means at their disposal to fuck you up the ass at critical times if you are a precious metal investor. To date, they've been very, very successful at smacking the gold and silver bugs around virtually at will.
So, tell me, what's different this time?
Yes, I have a total lack of faith in my own currency of dollars. I perceive dollars to be backed by solely by debt and lies, mostly because the dollar is backed by debt and lies. As are, coincidentally, every single other currency.
So, precious metals look real nice. And I'm open for convincing. So, tell me, what is different this time?
Read the second of the two quotes I posted above your question for your answer.
You should have some... just in case. But going long Gold at close to its highs is not a safe bet, but its a bet! if you want to bet, go to Vegas and if you win Big! then go short gold for free.
Or short Europe this week, and then buy some expensive Gold as a hedge? with your profits from shorting Europe.
Make sure you are prepared for anything, it sounds silly but be a boyscout / Marine.
If you have Guns and Ammo, Food then Gold would be a reasonable hedge. I would encourage you to let the Germans and thier Austerity push pay for the high price Gold once again. Oops, its France this weekend not Germany.
Be well, JW
The March 2009 bear market rally ended last week.
http://tinyurl.com/39ptoac
http://www.zerohedge.com/forum/latest-market-outlook-1
The ZH forums are starting to absolutely reek of desperation...and I aint talkin about the locals.
You noticed that too huh.
this is getting stupid now... there used to be some good discussion on here... now its all panic and emotion. Its like CNBC, but for the bears....
These are not desperate times.
Get gold, get silver - make plans to move near an Amish community - you will do ok...
Finance It Anew Timmeh!
I go with the Zen Solution. Let go of the idea of Wealth. Be the Money. You are what you are, and whatever occurs, be what you are. If you make friends and work together, you have a chance to make it through the Zero Point. If you are an asshole who hoards "money", you have little chance of making it through the Zero Point. For me,when push comes to shove here, I'll just give it all away. Fighting to KEEP it is just pointless. The only point at which I fight with others for what I have and they don't is when my personal survival comes into question. That is a ways off for me. I'm not gonna fight to retain my wealth, its stupid. I should DIE to stay richer than everybody else? Talk about a dumb deal. I'll give it away until I am at the same level as everyone else. Then nobody will want to KILL me for my money.
Not quite there yet of course, and I still do enjoy the BBQ Ribeyes. However, no way no how am i goig to BBQ up one of those when everyoe else around me is STARVING. At that point, you either give it away, or somebody will KILL you.
RE
Good on you RE. Now that makes sense to me.
There is no zero point.
There never has been
There never will be one.
Your basic premise is flawed. Societies have collapsed all over the world thousands of times throughout history and NEVER, not ONCE, has there been a fucking zero point. EVER.
The Sun will STILL freaking COME UP. Even if the almighty FRN collapses in a DAY. Food will still be grown, trade will occur. Just like everywhere else in times of crisis.
Why in the hell would everybody STARVE? This is just apocalyptically ABSURD.
I would hope that the food shortages in high density areas did not or would not ever happen... but, I agree broadly with what you say... save Travis the fact that there will be a shakeout period where people are getting thier footing...
All of this is based on a BIG what if the lights go out.
If you can, get away from the high density areas and go be one with nature for a while... if the shit hits the fan.
I doubt that it will and if it does Marshal Law will be imposed until order can be restored to those in power... yes, I said it... junk away, but its TRUE!
Be away from the madness for 12 months maybe more? I am lucky enough to be able to move my people offshore at a moments notice and run back and forth at will. Thats my answer, but until that day comes.. I keep making more money, FIAT or not someone has to got to work while these Book Club wanna be writters sit around and pontificate about the higher economic moral ground that coulda, shoulda, woulda been in place when they where young men ignoring the problems we still face?!
I feel better now.
Any who, Yes Travis I think you are correct... the lights going out is most likely not going to happen.
Be well, JW
Tungston gold bitches Unite!!!!!!!!!!!!!!!!!!!
Bismuth, bitches!
http://prc.aps.org/abstract/PRC/v23/i3/p1044_1
many sell their soul... given the chance.
As I have been stating for some months now, hyperinflation is going to be a serious issue soon. More than likely within the next 6-9 months tops we will start to see it coming quicker and quicker. That leaves everyone a nice window of opportunity to get into gold and silver. I prefer silver for its current cost, its industrial uses over gold, and the fact is has lagged gold so much. JPM will cease to exist once they have to cover all that silver they have been selling and have never owned. I expect DOJ charges to be filed soon against them, which will start the silver squeeze catalyst.
What's the nuttiest thing the powers that be can do to prevent hyperinflation?
You people that think hyperinflation is an issue have a very very poor understanding of what is happening in the world economy right now. There is a massive deleveraging occurring ... that is NOT inflationary. The policy responses by governments may see some pockets of the economy suffer some inflation, such as in some asset classes, but this is for the most part what they are trying to do (stabilise housing prices, equity prices etc whilst the private sector deleverage runs its course - which will, in the absence of defaults, take years). For the most part, the inflationary impact on a macro level will be offset by the effects of the deleverage. When the private sector deleveraging is done then yeah you may start to see inflation pass through and thats when policy can be adjusted (raise rates, drain liquidity etc). Remember that most of the reserves added to the system are sitting at the fed and have not made their way into the economy.
You guys really need to read some proper professional strategists because your logic and views are based more on irrationality and panic than sane analysis.
You don't understand what hyperinflation is. It has been explained many times in threads like these. It is not simply "really bad inflation", it is a loss of confidence in a currency. As such, it is linked with the state of the economy. When (real) deflation occurs in any fiat currency, there is a very significant chance that hyperinflation is about to begin. Why? Simple, because those who control the printing press will start running it in order to keep politically favored parties happy. This means money is printed to pay for government programs. If you take even a cursory glance around you, you will see that this is exactly what is happening.
In our case, it's even worse, because we have been exporting inflation for decades, and that inflation is NEVER consumed, it just sits in vaults and under mattresses, until one day foreigners wake up and realize that they are losing purchasing power, at which point a trickle of dollar redemptions (for goods and services) becomes a tsunami that wipes the nation clean of anything that is worth the oil to ship it offshore. This means prices on everything that can be exported are bid up to astronomical figures overnight, starting with those things which are easiest to move. These are gold and silver, and the stocks of international companies.
90% of hte people here are professionals, and not panicy by any means. We just see the handwriting on the wall. We also know history. No fiat currency lasts, especially when those with the power of the press fail to understand basic economics. It's astonishing that it has lasted as long as it has (40 years).
I would suggest you make a printout of the liquidity pyramid and tape it up next to your computer. Look at it next time you get the thought to talk about deleveraging.
will that be like the hyperinflation of say, a country thats been doing this a while like, say, Japan?
Thanks for your suggestion but I don't need tips from panic merchants like yourself!
***** "This means money is printed to pay for government programs. If you take even a cursory glance around you, you will see that this is exactly what is happening." *****
Soooooooooooooo?! the United States will never be able to pay off this debt? The United States will never, fucking EVER! have another profitable run? we will be stuck at a 3% growth rate or worse forever? going forward? We have, or most here have pegged the U.S. debt to the U.S. growth rate...
The United States will have good years and bad years... up cycle, downwind cycle... super cycle, Black Swans... But the United States can be profitable and will be profitable, again... sooner than later I would hope but the fact that we shall over come, I am confident. George Washington was out numbered by how many Red Coats? we are a Great Nation filled with Great People, Zero Hedge is proof of that in so many different ways. I am confident that we will over come the corporate cultures of growing market share thru legislation and or R & D is to, too expensive... I am confident we will as a Country lead again... I cannot understand why our Government has given tax breaks for companies to move thier operations offshore, or why our Government paid BalckWater in Bermuda instead of North Carolina? Not that we as a Country needed those tax dollars? We are fucked up, but we shall over come, to what degree of pain? I dont know, I hope for the sake of the broad majority of Americans that it is not much or as little as possible, but who knows? I do know that we as a Country are always ready to shoot someone else in the face and take there shit from them... FUCK THE WORLD! BITCHES!!! we can always get it like Drac! in blood!
********* "No fiat currency lasts, especially when those with the power of the press fail to understand basic economics." **************
Austerity then? http://www.france24.com/en/20100514-german-austerity-everyone-economic-crisis-uk-deficit-euro-zone-merkel-cameron-stability-pact soooooooo? after the Germans fuck up the Euro... with thier Austerity push.... so that a Trillion dollar bailout is needed.... so that the French Fries can keep the instability drama going?
i hope you got paid to write that post.
I think JP Morgan is doing us a great favour by shorting the precious metals market. It is for us to accumulate as much as possible as long as the price is within our affordability. I would love Gold and Silver to go up, but as any sane economist will tell us that the last thing we would want to go up in our portfolio is Gold and Silver.
By the way can anyone help explain to me about who presented their case better in the Gold Debate chaired by Jim Puplava of financialsense.com
Like Rogue Economist, I've been counseling friends who purchased gold - many of whom are below the poverty line - that it's a mistake.
Gold is just another commodity like any other. It has certain qualities that make is useful as currency. But it takes a long time for currency to gain wide adoption. There are many real world test cases to examine for precedent on this.
I recognize that many of you were inculcated into finance by gold marketers. They've been carping on the same sales pitch since the futures markets were instituted, and perhaps before.
In the absence of price signals, you need to live by your balls (or ovaries). Hone your instincts. Get healthy. Cook your own food. Avoid tempestuous, short-lived romances. Get into business. Avoid spooking the natives too much - they will never understand until their lives are on the line.
Never think you have the organizational capability to credibly resist the US Military. They have a superior communications network, experience standing together in combat, joint arms capability, and long desensitization to mass murder.
Maybe you've played a lot of video games, but there are soldiers that have killed many real people in combat conditions. You don't want to fuck with them. Sorry to burst the survivalist bubble, here, but you must be realistic for your own safety and that of the people around you. I'm not hanging around any American White Jihadis.
If the military is attacking your area... you DO NOT stand and fight. Do not behave like a typical Iraqi savage. You get the fuck out of dodge and live to do business another day. If you wanna fight a war, do it on your own time, because I'm not supporting that. There are peaceful means that don't involve hippy dippy bullshit like waving signs (or even voting)that we can use to bring about a sea change in the way we all relate to one another.
I recently asked several food producer friends in my area what they would want for food in the case, for whatever reason, currency were no longer available. The responses, in no particular order:
1) Gold
2) Silver
3) A nice Deer Rifle (not an asault rifle . . . good hunting rifle)
4) Seeds
5) Fuel
6) In kind services of Welding, Water well drilling, electrical work, windmill maintenance, loading hay, fence building, fence maintenance, veterinarian services, concrete work, and dirt work.
There might have been others, but these I heard from more than one person. I am probably too old to be of much use fixing fences, but for those of you not buying gold, you might want to hone up your fence building/mending skills, as apparently these are needed by people we will view as important in the future.
100% agreement.
Guns and ammo are not for the SOCOM wannabes. They are for trading. Like they were with the injuns.
Fuel is useful, seeds, animals, anything people value.
And gold is portable. All paper won't collapse overnight.
Also Guns, Ammo, and Gold have long shelf lives. Gasoline has shelf life of under a year. Seeds are hard to store for long periods.
The people I know buying guns have no thoughts of defending their property nor going out in a blaze of glory. They view guns as an effective store of wealth.
I dont know whether gold is a good investment or not. I am not buying it as an investment, I am buying it as insurance. Insurance is something that you really dont need until you do need it.
6) In kind services of Welding, Water well drilling, electrical work, windmill maintenance, loading hay, fence building, fence maintenance, veterinarian services, concrete work, and dirt work.
Farmers don't need welders. Every small town has a trade embargo against bolts and nuts. It's local public policy to weld everything to everything else. It's the only way things are allowed to be attached.
I did not mean to imply welding is the only way to attach things, just that is the way the people around me with all the food and food production infrastructure like to attach things, and the service they are willing to trade some of their food for. Thats all.
I meant to imply it. Nothing for or against farmers but that's the only way they build things keep things running.
I somehow doubt that you have friends who are buying gold. ONE friend I might beleive, as an abberation.
Hell, half of my family is preparing for an apocolypse, and I can't get more than one of them to drop a hundred bucks on some silver.
Also, nice one calling Iraqis savages. You're pretty dumb if you thnk they are lining up on the field of battle rather than using guerilla tactics. Heres a hint, guerilla tactics were made for America. If they can't win decisivly in three major cities in Iraq, what makes you think they will be able to ferret out reistance across the vast expanse of this country, with its vast hills, mountains, and forests? Hell, they wouldn't even be able to tell the difference between us and their buddies if you wear the same type of clothes. Further, Iraqis had no guns in private hands prior to the war. Americans are armed to the teeth. As Yamamoto said, there is a rifle behind every blade of grass. There are other threats as well, many more subtle and deadly, as we are a very well educated population with access to lots of nasty things, not to mention a key to the backdoor of their industrial base or the fact that we are the ones that make everything that they use for their killing.
Who cares as long as we secure the oil fields? let the SAVAGES blow each other up all day every day...
GOT OIL?!
The idiot masses of Iraq can be properly managed to destroy themselves without taxing existing resources on the gorund.
I could go further than that, but why?
Hmmm counselling against gold would have cost them some gains then. I wouldn't be telling anybody what to do except do their own research. One persons telling another not to buy gold when you have the Soros types buying it in the hunred plus millions is a triffle irresponsbile and reflects more an personal emotional position than a rational one.
I know there are a lot of gold bugs here at Zero Hedge including me. Now do I actually own physical gold?
No. I own shares in gold miners.
Are we headed into Mad Max land?
No I don't think so.
Is gold in a bubble?
No, but it will be in the future.
RE makes totally valid points. If you're buying gold thinking it is going to save your hide down the road, good luck because it probably be more detrimental to your health than not owning it.
If gold goes for a moonshot be prepared to unload and rotate it into blue chips or real estate. Chances are when gold is the stratosphere these assets will be in the dumps. Remember the golden rule, buy low sell high not the other way around.
Also the powers that be will not let things get so out of hand. Before that happens you will see action taken on those that are responsible. Sacrifice middle management so their power stays intact instead of having the peasants walking around with their heads on a stick. Who knows, maybe all the legal action that is going on right now is the start of it.
My father's very keen common sense also tells him that powers at be will not let shit happen. I value his opinion and for all you could be right. But do you really trust them? How do you know what they are planning. If the plan is destruction of current currencies and a world currency replacement? The really rich are not holding majority of their wealth in cash, they will just convert to whatever they come up with. That's why it was so important to re-inflate (no matter how preposterous the claims of green shoots at the cost of currency devaluation).
If they are not trying to crash intentionally, as that maybe be giving them too much credit, they are trying to protect the nominal values of their assets. So they will continue to print in order to save themselves. That's more likey than outright deflation spiral. They don't want be be join the poor. Money of out nothing is infinite, they broke all the rules and unprecedented bailouts were implemented. The fiatscos are getting stinkier and will eventually contaminate everything (h/t to the economic cartoon with the bankster replacing real fish with stuffed carcasses of dead fish, fish was the money of the land. ). A layman's view of the financial world appears that everybody is broke and hiding losses, and fractional banking/leverage wiped out all real capital. Nothing but delayed margin calls as far as they eye can see. They will pump.
So maybe some equities of non-junk stocks, utilities, value stocks with dividends should be added to ones portfolio, there may never be another 2008. I fear doing so but I am getting closer to pulling the trigger myself. The first two weeks of Sept 08 have me still somewhat paralized and it's almost two years later. But cash, on another hand is never going to be a store of value for me. I have learned enough in this short time to see through the fiat charade. I used to get somewhat upset when the wife spend too much money. Now only half-jokingly I tell her :that's great honey while they still give you real stuff for it, go ahead and get it.
On the otherhand, risking a good portion of your capital for a bit of yield in the market which can drop some stocks 60% in a minute doesn't really make sense either. So it's a bitch deciding on what to do.
In the end you can't take with you, but it sure sucks to be defrauded your adult life by the bankster's games. You can't just keep bending over and letting them rape you and continue to steal your life's savings either. I would like to pass on something to my kids, instead contributing to Lord Blankfein fund.
I have come to the realization that the biggest gains in finance are made by faking out and/or defrauding someone else of their money. So once you are aware of that, it's not surprising why we are having bubbles or crashes. Why it normally takes longer for a stock to move up while the pull backs are sharp and fast. It's really that basic premise at work. You sucker them, in and then you slaughter. That's the game of high finance in a nutshell. All the math and sophistication is just a smoke screen. Many can learn the rules/and or the math of finance, the big bucks are made by laying a trap. That was probably always true and will remain true forever. So be nimble as Nic says, as they are out there laying the next big trap. And I hope that enough people wise up, and won't let it be the take down of precious metals. Don't use up all your bullets in the first battle.
Your father is an idiot.
The powers cannot control how much oil the earth yields up.
We passed a point called Peak Oil a few years ago. Nothing the powers do can finagle more oil out of the earth than it yielded during the peak year. It's as simple as that.
Gold peaked in 2000...no amount of ZIRP or cheap money can mine more gold in a year than that year gave up. Helium peaked in 2002. Doesn't matter what you "value" helium at, the year of maximum production rate is passed and production every year going forward will decline.
The powers are impotent. That they are not is a fallacy.
Really??? Actually they can. So I guess the way you think Saudi Arabia was the biggest dinosaur sanctuary ever.
Google abiotic oil and educate yourself. Russia is the leader in deep drilling, number two in production and will probably exceed Saudi Arabia's production shortly. Is it endless? No, but there is no need for you to be paying $3 a gallon for gas.
Oh wait there is.........the powers that be.
http://www.youtube.com/watch?v=wYuLjGQQ-jg&feature=PlayList&p=C1B06538A32767DF&playnext_from=PL&index=132
Peak affordable oil. Not peak oil... sweet light crude verses sour or heavy crude production costs? in the middle of the desert verse under 7,000 feet of water and another 5 miles under the water pumping costs?
The price of oil today is more manipulated that Gold... or anything else you can name.
Oil today should already be $150 a barrel...
Orinoco?
Jubilee?
No matter what you can add in real reserves any real growth of the world economy would cause a catastrophic domino to fall. Until we can alleviate the cost pressures that are pegged to demand we are all FUCKED!
No new energy, no economic growth and the rest of this side show that goes on, is FODDER for the less than to entertain themselves with.
He maybe a simple man, but not an idiot. Most major events that have occurred in this world happened because someone wanted it to happen for their benefit. Especially when it comes to politics/wars and finance.
When there is fear, confusion, uncertainty gold goes up and up. So for that case alone it is worth the buying to sell as fear ramps up.
On the other hand it is insurance against a total SHTF scenario which isn't out of the realms of possibility.
I have 20% in gold and silver for the purpose of insurance - but will sell it off at the height of fear and confusion if it appears that there is going to be a solution to the worlds problems, however long that takes.
And as a back up, despite the assumption of Australia's property bubble, in the country you can buy a olive farm with 1200 trees and 4 bedroom home for AUD$330k with bore and irrigation and associated buildings. Which I am considering at the moment. And 2 hours from a capital city.
At the very least, you can conclude that options expiry is going to be very interesting. Options expiry comes this Friday, 21st May, and the COMEX precious metals expiry comes on the Tuesday right after the weekend:
http://www.optionsclearing.com/about/publications/expiration-calendar-20...
Perhaps by that time, the discount rate will see another decline.
-F6
Nonsense. I have been a retail broker for over 20 years with two major
Wall Street firms. I know what the behavior of retai investors is when they are caught up in a bubble: they call me up an insist on buying, no matter what.
Guess what: the only clients who own gold are the ones I told to buy. This so-called "bubble" you are referring to has not even gotten started. But gold is in a big bull market, so it will eventually end up in a parabolic blowoff.
Just a hint, my friend. If you own gold, you will want to sell when U.S Treasuries are yielding around 15%, U-3 unemployment is reported north of 15%, and the of the phrase "economic depression" to describe our situation no longer draws derision. In other words, when we are facing reality...
I was planning to buy some silver bars just in case and as I was checking out the prices, I was thinking silver takes a pretty large amount of space.
So, I check something more valuable otherwise then gold.
Platina or Palladium
GUESS WHAT!!! ALL SOLD OUT! BOTH!
FORGET SILVER, FORGET GOLD, PLATINA AND PALLADIUM ARE GOING TO BE THE NEXT BEST THING!
And we all missed it!
Platinum and Palladium are a little hard to find here in the USA as well. I only know one dealer who had Pd (last year), I do not know if he stills has it. And his Pd was 100 oz. Russian bars only.
Fortunately, I did not miss it (that is, I bought each metal).
I really like Pt. And having some Pt would partly hedge me if .gov confiscates the gold.
I didn't miss it, I skipped it.
How will they cover them? Easy. It is clear that they are preparing Greece for a default. And when this happens people will realise that the authorities, well, the EU at least, are prepared to destroy some money. And with that gold will probably sail down a couple hundred bucks.
Hey Jonny Bravo,
Did it ever occur to you that gold shorts exist within a larger framework of portfolio hedging? Frequently I am long a fundamental investment idea but accumulate a short position as a trading hedge. Might it be that big picture, many are long physical bullion and short the paper market? Point being, there are parts of the market that are opaque to you, me and almost everyone else, and in these dark corners lie the devil and the details. To assume that because GS and JPM are perfect and they are projecting a short gold position it logically follows gold is headed down belies your ignorance of market structure and the nuance of big boy investing. Frankly, you see what they want you to see, nothing more. Use your brain, and don't assume that a sophisticated entity like GS projecting an investment stance is the whole picture.
...and so once more they threw paper at the fire, hoping for once it would quell the flames.
My bullish USD warnings since 2009 on weekly and monthly charts have not changed and further USD strength and thus EURO weakness is still expected, so USD rally and EURO downtrend will continue.
http://stockmarket618.wordpress.com
http://www.zerohedge.com/forum/latest-market-outlook-1
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