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Gold Surges On Reminder It Is The Only Currency Without Liability And Counterparty Risk

Tyler Durden's picture


A few days ago, Erste Bank shared the following spot on description of gold's function in the modern monetary system: "The possession of gold is tantamount to pure ownership without liabilities. This also explains why it does not pay any ongoing interest: it does not contain any counterpart risk. Along with the International Exchange and the Chicago Mercantile Exchange, JPMorgan now also accepts gold as collateral. The European Commission for Economic and Monetary Affairs has also decided to accept the gold reserves of its member states as additionally lodged collateral. We also regard the most recent initiatives in Utah and in numerous other States as well as in Malaysia, and the planned remonaterisation of silver in Mexico as a clear sign of the times. The foundation of a return to “sound money” seems to have been laid." Today, we get a quick reminder of this all too often forgotten truth, after gold has surged by one percent in the span of an hour as the world once again realizes that the best the ECB Titanic (and shortly thereafter, the Fed) can hope for is merely to delay, not prevent, the sinking of the broken monetary system. Furthermore, that this is happening even as China hiked rates for the 3rd time this year may indicate the inflection point in gold has now come and the take out of nominal highs, just $30 higher, is next.


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Wed, 07/06/2011 - 09:14 | 1429242 Robslob
Robslob's picture


It's whats for breakfast!

Wed, 07/06/2011 - 09:24 | 1429287 TheFourthStooge-ing
TheFourthStooge-ing's picture

Gold: it doesn't depend upon the full faith and credit of habitual liars teetering on the edge of bankruptcy.

(Also, unlike equities, it isn't held for you by Cede & Co.)



Wed, 07/06/2011 - 09:35 | 1429322 GetZeeGold
GetZeeGold's picture


Give me some gold.....hold the habitual liars teetering on the edge of bankruptcy.


Wed, 07/06/2011 - 09:50 | 1429386 Thomas
Thomas's picture

I am sooooo long gold that it had better rock 'n' roll.

Wed, 07/06/2011 - 11:05 | 1429682 DosZap
DosZap's picture

IF you do not have it in your hands, your just getting more fiat crap.

Of course unless your using the proceeds to acquire it.


Wed, 07/06/2011 - 16:52 | 1430869 tiger7905
tiger7905's picture

Rob McEwen interview, he notes the ETFs have cannibalized the miners, noted Barrick Gold has dropped from 2.2X NAV before ETFs to 1.1 X after ETFs.

Wed, 07/06/2011 - 11:48 | 1429876 trav7777
trav7777's picture

Gold holds value.  Don't expect to get any richer than you already are

Wed, 07/06/2011 - 11:52 | 1429901 Thomas
Thomas's picture

Only true long term. In the shorter term (decade for example) gold can move either direction. The sixfold gain off its low is anything but just holding its value.

Wed, 07/06/2011 - 12:47 | 1430121 Smiddywesson
Smiddywesson's picture

Yes it holds value, but it also is transferable into more or less goods depending upon the value of everything else, so we might want to ignore the academic and recognize that gold can wax and wane in price.

The central banks have complete control over price when the monetary system is healthy, and near complete short term control when it is sick.  When they have all the gold, are you implying they will continue to hold down the price?  With all their debt, we are lucky if we don't see $60k an ounce gold.

You can argue about the $60k target, but the greed of these people, their power to control the price, the change in their position with respect to price rises, and their utter desperate need to dig themselves out, undermines your assertion that gold won't continue to outperform.  It's the trade of the century.

Wed, 07/06/2011 - 10:11 | 1429474 Urban Roman
Urban Roman's picture

Actually it was Waddell and Reed.

They called up Tulving this morning and orderd three 2008 Krugerrands.

Wed, 07/06/2011 - 11:29 | 1429789 NotApplicable
NotApplicable's picture

Of course, he sent them on to APMEX since his minimum is 20.

Wed, 07/06/2011 - 09:26 | 1429289 Cash_is_Trash
Cash_is_Trash's picture


It's whats for dinner!

Wed, 07/06/2011 - 09:31 | 1429316 Long-John-Silver
Long-John-Silver's picture

If you eat too much you could turn blue.


Real-life ‘Blue Guy’ shrugs off his skin color

Wed, 07/06/2011 - 09:37 | 1429335 john39
john39's picture

that guy is plant to discredit colloidal silver. the silver he took was made poorly, with extremely large silver particles. I have been using colloidal silver for years now. far superior than the useless drugs that big pharma pushes on the people.

Wed, 07/06/2011 - 10:15 | 1429491 I Got Worms
I Got Worms's picture

+1 That dude was making his own stuff with a car battery or something, and drinking gallons of it. I love when people trot this guy out when I recommend colloidial silver when folks I know get sick. The media has folks scared shitless of it now.

Wed, 07/06/2011 - 10:18 | 1429509 pods
pods's picture

I second that!  CS is a fantastic antibacterial, but homemade CS is dangerous as you make a large amounts of ions.  In a pinch it can be used, but better to buy CS.  For the work it does it is cheap.  If you do make your own, a quick test of the ion content is to add a bit of salt water to your solution.  If you see precipitate, you have ions.

Also high doses of Vitamin D in winter will help with viruses, which I have found CS ineffective against.


Wed, 07/06/2011 - 10:29 | 1429553 Pinktip
Pinktip's picture

Best source of Vit D is sunlight.

Solariums were built to sunbath in winter

(to fight  Tuberculosis)


Vit D is what your immune system runs on.

Wed, 07/06/2011 - 13:33 | 1430267 A Nanny Moose
A Nanny Moose's picture


Wed, 07/06/2011 - 17:32 | 1430951 greenbear
greenbear's picture

I didn't know that.  Makes sense.  Thanks for the info!


(The part about the solariums, that is!)

Wed, 07/06/2011 - 11:00 | 1429656 Raymond Reason
Raymond Reason's picture

I have a Romanian ex-pat friend who turned blue from CS.  He drank huge quantities for months.  That was 10 years ago, and he had no other side effects other than zero tooth decay since. 

Wed, 07/06/2011 - 16:57 | 1430875 Diogenes
Diogenes's picture

I know a guy who took colloidal silver for years and turned blue. Well not totally blue but when you get him in the right light he looks like a zombie.

This was commercially made, bought through regular channels not some home made stuff.

Even so I believe it to be a good medicine for certain conditions, just dont take too much of it.

Wed, 07/06/2011 - 10:03 | 1429444 thunderchief
thunderchief's picture

I do not know why you would buy an ounce of gold, when you can buy 40 ounces of silver for the same price.  40 ounces.  That's a couple pounds folks.

Wed, 07/06/2011 - 10:21 | 1429520 pods
pods's picture

The reason is exactly what you stated.  It is a couple of pounds.


Wed, 07/06/2011 - 10:34 | 1429573 thunderchief
thunderchief's picture

You just wait.  You'll be eating those words, and my kitty litter in the morning.

Wed, 07/06/2011 - 10:40 | 1429594 Boxed Merlot
Boxed Merlot's picture

40 ounces...

Some don't want all the carbs.

That's a couple pounds folks...


Wed, 07/06/2011 - 11:02 | 1429671 Raymond Reason
Raymond Reason's picture

The only reason i can think of is smuggling it through customs.  But maybe diamonds sewn in shirt sleeves would be best for that?

Wed, 07/06/2011 - 12:08 | 1429974 FeralSerf
FeralSerf's picture

Thanks to modern technology diamonds can now be made comparatively cheaply that are indistinguishable from natural ones.  If you want to smuggle, get an airplane like the rich white guys have.

Wed, 07/06/2011 - 11:07 | 1429687 SilverRhino
SilverRhino's picture

Portability.  Try carrying a year's worth of income in silver if you ever have a forced relocation.


Wed, 07/06/2011 - 11:55 | 1429916 Thomas
Thomas's picture

About 20% of the population could carry a year's income in their palm.

Wed, 07/06/2011 - 11:10 | 1429700 DosZap
DosZap's picture

Own both, but the reason for Gold over Slvr is volatility, and bulk.

Silver is a LONG term investment, if your in your 30's/early 40's sure, go ahead.

But Gold is money, and CB's hold Gold.......there is a reason.

Wed, 07/06/2011 - 11:46 | 1429869 thunderchief
thunderchief's picture

You Numb-nutters are not getting the point.  Silver is produced at a 15:1  ratio to gold and above ground supply is less than gold.  Wrap your melon heads around that for a few infomercial moments.  When the price of Silver corrects back to its base ratio, it will drive much lower given there is not 15 times as much in above ground supplies, and it is used today for you name it.  It is the second most consumed, and univerally used commodity behind petroleum.  That is why its price is so suppressed.  If it moves to its proper ratio it will become a true monetary metal and It will go into the single digit ratio to gold.  And then you will all be crying with Kitty litter all over you chins.  Sad but true.

Wed, 07/06/2011 - 11:50 | 1429892 trav7777
trav7777's picture

Silverbugz are quite clearly speculators who whine a lot

Wed, 07/06/2011 - 13:06 | 1430166 tmosley
tmosley's picture

Say the ultimate hypocrite who owns silver himself.

Wed, 07/06/2011 - 13:43 | 1430294 malikai
malikai's picture

There are a lot of speculators among us. There are also a lot of weak hands who get burned regularly playing the paper markets.

Wed, 07/06/2011 - 15:52 | 1430739 trav7777
trav7777's picture

you can own shit without being a SPECULATOR, dipshit

Wed, 07/06/2011 - 12:22 | 1430024 JOYFUL
JOYFUL's picture

this is good.  Very Good....just what we need right now!

BBig Balls...lot's of strut n crow!... keep it comin bro!

Wed, 07/06/2011 - 14:37 | 1430482 Troublehoff
Troublehoff's picture

we will see what the real price of silver is when the dwindling metals exchange inventories finally hit zero oz.



Wed, 07/06/2011 - 18:45 | 1431115 barkingbill
barkingbill's picture

hey dude just buy some copper, or hell why not even can get some pounds of that uhm.....hey you know what, buy agriculture....wheat you can get bushels of that stuff man very cheap....or hell....what about water?

Wed, 07/06/2011 - 09:16 | 1429249 qussl3
qussl3's picture

This pop smells.

NFP on friday, markets up on hopium, dollar still weak as shit.


Wed, 07/06/2011 - 09:20 | 1429269 SheepDog-One
SheepDog-One's picture

Every day it gets harder for them to manipulate the no-player Ponzi. Soon Wall St will start devouring each other.

Wed, 07/06/2011 - 09:28 | 1429296 Caviar Emptor
Caviar Emptor's picture

Parents will eat their children

Wed, 07/06/2011 - 09:33 | 1429320 Long-John-Silver
Long-John-Silver's picture

I never understood why animals would sometimes eat their offspring until my Wife and I had one.

Wed, 07/06/2011 - 09:52 | 1429397 tao400
tao400's picture

I have a 16 year old girl and i can't wait till she gets the fuck out!! All I am to her is an ATM machine. Get absolutely nothing back. I can't wait to see her face when she gets to college and she goes to use the debit card and the balance is 0 and I don't take her call.

Wed, 07/06/2011 - 10:00 | 1429434 Abitdodgie
Abitdodgie's picture

You can feel the parental love , do what I did buy a big farm that way they will never find the bodies.Both my children went to live in ,well who cares.

Wed, 07/06/2011 - 10:31 | 1429562 Pinktip
Pinktip's picture

I built a farm so the kids actually work for what

they have. Nothing more humbling the shovelin sh#T...:)

Wed, 07/06/2011 - 10:47 | 1429618 jomama
jomama's picture

Great primer for the job market out there waiting for them, as well.

Wed, 07/06/2011 - 10:01 | 1429439 GetZeeGold
GetZeeGold's picture


Sounds like a Brady Bunch reunion.



Wed, 07/06/2011 - 10:20 | 1429517 CH1
CH1's picture


Let the girl work and get acquainted with the real world. (Yeah, yeah, you pay for food, etc.)

Wed, 07/06/2011 - 10:47 | 1429622 tao400
tao400's picture

I will when she hits college. It is too late now to cut it back. I have put her on notice so she knows her time is coming but doesn't quite get it.

Wed, 07/06/2011 - 11:18 | 1429733 DosZap
DosZap's picture


Stand firm in that resolve.

When my son and daughter were 15, I sat them down and told them, your Mother, and & I are no longer going to support your lifestyle.

We will buy you fashionable clothes, and you will be well dressed.

BUT, if you insist on Air Jordan's, and $100.00 blouses,(v.s a $100.00 complete ensemble) you WILL get a job NOW.

They were not willing to be different so they went and got a job.

My son learned very quickly the value of work, v.s.high dollar BS.

My daughter never did.She is still broke, and married to another broke man(who got used to a 200k a yr lifestyle), no kids.

But now the chickens have come home to roost...........

Some learn, some do not.

So be it.

Wed, 07/06/2011 - 10:28 | 1429547 rodocostarica
rodocostarica's picture

Thanks for reaffirming my decision not to have kids.

No headaches and more money for the gold and silver.


Wed, 07/06/2011 - 10:38 | 1429588 Downtoolong
Downtoolong's picture

Me too, although, these days it does seem a bit like this is just another job we've outsourced to China and India.

Wed, 07/06/2011 - 14:36 | 1430480 Max Hunter
Max Hunter's picture

Thanks for reaffirming my decision not to have kids.

My child is the greatest thing that ever happened to me.. I don't care if we fight when she's 16.. We'll laugh about it when she's 36.. I've never enjoyed anything in my life more than I enjoy watching her grow up..

Wed, 07/06/2011 - 16:32 | 1430838 Raymond Reason
Raymond Reason's picture

yer right.

Wed, 07/06/2011 - 17:05 | 1430898 Diogenes
Diogenes's picture

Let her enjoy herself while she is young and good looking. In a few years she will be grown adult and in deep shit like the rest of us. Her life will be over soon enough.

Wed, 07/06/2011 - 14:17 | 1430430 iLoveMisesToPieces
iLoveMisesToPieces's picture

This really is the case.  We all know for every action, there is an equal an opposite reaction.  They squeeze one place, they expand another.   You can't inflate equities and other assets, monetize debt and keep commodities in check all at the same time.  The unintended consequences will become too much to bare and the entire system will be thrown into chaos.

Wed, 07/06/2011 - 18:53 | 1431133 PhattyBuoy
PhattyBuoy's picture

It is already in chaos ...

What do you think the inflation rate is in: NA, Yemen, Syria, etc. ?

Yemen faces humanitarian crisis: U.N.


Acute global destabilization going forward ... much of it driven by monetizing.

Wed, 07/06/2011 - 16:03 | 1430762 RockyRacoon
RockyRacoon's picture

Ted Butler says:

"If there is one word to describe the changes in this week’s COT for gold and silver, it is spectacular. Make that two words, spectacularly bullish. Rarely do we see the reductions in speculative long/commercial short positions witnessed this week. The total commercial net short position was reduced by 6,400 contracts in silver and by 42,500 in gold. Even for someone who believes (me) that the commercials control and manipulate the price of both silver and gold, I stand somewhat in awe of how brazenly and collusively the commercials pulled off this recent sell-off rig job. I don’t use the word collusively loosely. In both gold and silver, all the commercial categories, the big 4, the big 5 thru 8, and the raptors, seemed to divide evenly the speculative selling they were able to induce. I don’t know how that could be accomplished so efficiently without collusion."

"In silver, the total commercial short position dropped to 29,200 contracts, the lowest level since April 2009, when silver traded at $12. The big 4 shorts (JPMorgan) bought back more than 2,200 short contracts, reducing that concentrated short position to the lowest level since October 2006, when silver traded at $11. The raptors (the smaller commercials apart from the big 8) bought 3,400 of the 6,400 commercial contracts bought during the reporting week, increasing their net long position to 12,400, their largest since last November. The 5 thru 8 largest commercial shorts bought the balance, reducing their net short position to among the lowest in years. The obvious takeaway here (aside from all the commercials behaving collusively) is that the commercials are all buying because they expect the price of silver to be higher in time. That’s what you should expect as well."

"As painful as these deliberate sell-offs may be, they are also setting the stage for a rally of monumental proportions in silver. That’s the essence of the COT. I make a point of telling you what the price of silver was the last time the short position was as low as it is now because I believe you should look at silver as if it is $11 or $12. The beauty of the COT is that it does not consider price; all it is concerned with is structure. If the structure indicates a large speculative long/commercial short position, then the danger of a significant sell-off looms large. If there is a small historical speculative long/commercial short position, a large price rally would seem to be in the cards. Currently, there is a small historical speculative long/commercial short silver position."

Wed, 07/06/2011 - 09:30 | 1429309 EscapeKey
EscapeKey's picture

Lagarde is currently being sworn in. No doubt she's cuddling up next to Bernanke's inkjets while delivering her speech.

Wed, 07/06/2011 - 09:19 | 1429251 fredquimby
fredquimby's picture

Phew! Just bought some physical at lunchtime, about an hour ago....just before this spike hehe go go gadget gold!! ...and who cares if it smells!! haha


Wed, 07/06/2011 - 09:21 | 1429274 Cognitive Dissonance
Cognitive Dissonance's picture

So you were the marginal buyer who pushed the price up.

Thanks bro. :>)

Wed, 07/06/2011 - 09:17 | 1429254 firstdivision
firstdivision's picture

ES. Must. Not. Fall. Below. 1330.

Wed, 07/06/2011 - 09:18 | 1429256 props2009
props2009's picture

Euro is set to soar by year end after debt matures



Wed, 07/06/2011 - 09:26 | 1429291 SheepDog-One
SheepDog-One's picture

Heh, you go bet on that all you like Pocohantas. 'Debt maturing', lol whatever.

Wed, 07/06/2011 - 10:24 | 1429528 GetZeeGold
GetZeeGold's picture


Heh just needs to mature a lil.



Wed, 07/06/2011 - 15:23 | 1430660 nuinut
nuinut's picture

Gold, however, is the "bond that never matures", and this respect we can see why it requires no counter-party. Issued by nature, understood by everyone, the very bedrock upon which monetary systems are built, and after their demise the next system too.

The dollar was originally a claim on gold, but this link was weakened and then broken only to facilitate counterfeiting and the illusion that we can have something for nothing.

To get something for nothing implies that somewhere someone must have received nothing for their something. To consume more value than one has created has a cost which must be felt somewhere by someone.

Wed, 07/06/2011 - 18:23 | 1431068 Diogenes
Diogenes's picture

The dollar was originally silver,

The dollar adopted by the US came from the Spanish silver dollar.

Thu, 07/07/2011 - 02:49 | 1431840 nuinut
nuinut's picture

Indeed it was. I should have not included the term 'originally'.

My bad.

Wed, 07/06/2011 - 09:18 | 1429260 hugovanderbubble
hugovanderbubble's picture

I have to recognise that i have failed in shorting fault

Wed, 07/06/2011 - 09:23 | 1429286 achmachat
achmachat's picture

it's ok, if you thought that it was going to be a short term thing and it didn't work out.

but if you thought that gold had reached its peak for this year, you're kind of disconnected from reality.

Wed, 07/06/2011 - 09:47 | 1429376 Dr. Richard Head
Dr. Richard Head's picture

I would have to agree there.  With the upcoming debt ceiling "deal" on top of renewed "asset" purchases by the Fed one would be ignoring reality of the upcoming blast off of gold and silver.  I know many are professing the summer doldrums and I respect the point of view, but I expect the fuse to be lit on precious metals yet again as the ponzi financing of Amerika will become more prevalent through these upcoming reverse Robin Hood deals, even to those who used to refuse to acknowledge it.

Wed, 07/06/2011 - 09:18 | 1429261 Monedas
Monedas's picture

Paper bitchez......Hoarder princez ! Monedas 2011 Comedy Jihad World Tour

Wed, 07/06/2011 - 12:36 | 1430084 DoChenRollingBearing
DoChenRollingBearing's picture

+ $1525

Monedas is becoming one of my favorites here...

Papel putaz!  Oro principes!

Wed, 07/06/2011 - 09:18 | 1429263 SheepDog-One
SheepDog-One's picture

MomoFader pukin up blood.

Wed, 07/06/2011 - 09:19 | 1429264 tmosley
tmosley's picture

Yup, and according to Brian, it's only $35, because no-one ever once in history defaulted on a paper promise to deliver physical metal.  Certainly not Uncle Sam.

Everyone who bought it for any higher than that is a sucker that got scammed.


Wed, 07/06/2011 - 09:22 | 1429278 SheepDog-One
SheepDog-One's picture

Only a short time ago people were telling me I was an idiot for buying silver at $11, would certainly never see $20 I was told by all the 'experts'.

Now $35 is a 'beat down level'....fine with me looks pretty good from where Im standing including these massive bubble stock markets.

Wed, 07/06/2011 - 09:41 | 1429355 Forward History
Forward History's picture

The chart in the 2011 Red Book of Coins only goes up to $22/ounce. Hopefully they fixed that for '12 (which I haven't yet picked up).

Wed, 07/06/2011 - 16:05 | 1430773 RockyRacoon
RockyRacoon's picture

Red Book is for Nooooobs.

Try this:

The World Coin Price Guide was released on June 1, 2011, and complements the widely praised NGC US Coin Price Guide. Other resources on NGC’s website include a US Coin Encyclopedia, US Coin Variety attribution guide and US Coin Grading Guide.

Wed, 07/06/2011 - 10:55 | 1429646 Whalley World
Whalley World's picture

For those who disparage the p.m.'s:

"As the natives of Arabia and India were contented with their productions and manufactures of their own country, silver, on the side of the Romans, was the principal, if not the only instrument of commerce.

The History of the Decline and Fall of the Roman Empire.  Gibbon

Wed, 07/06/2011 - 09:20 | 1429271 eigenvalue
eigenvalue's picture

I like gold but the surging smells a bit fishy. It's summer when gold is usually range-bound or down. Gold is up but the entire commodity complex is also strong in the face of China's rate hike. On Friday we shall have the NFP numbers. Gold is usually hammered before its release. Is it a big trap for the gold longs?

Wed, 07/06/2011 - 09:23 | 1429283 SheepDog-One
SheepDog-One's picture

Everything smells fishy, here in rotten fish market.

Wed, 07/06/2011 - 12:38 | 1430091 DoChenRollingBearing
DoChenRollingBearing's picture

Rotten indeed.  I'll just take the physical as I have fiats come in...

Wed, 07/06/2011 - 09:30 | 1429303 qussl3
qussl3's picture

Was thinking exactly the same.

Bought half my summer allocation last week, so not miffed, but still waiting for the big drop to pick up the rest.

Chasing this pop in the paper markets doesnt look wise.

Wed, 07/06/2011 - 09:36 | 1429330 eigenvalue
eigenvalue's picture

We need the entire complex, especially gold and silver which are the archrivals of the dollar, to be taken down by 15% or so. Then we shall see QE3. But all the commodities look too strong now.

Wed, 07/06/2011 - 09:41 | 1429352 SheepDog-One
SheepDog-One's picture

Oh, so QE would come when gold is down 15%? What are you on dope? QE has never been about commodities, its only purpose is to slush the free money between banks.

Wed, 07/06/2011 - 09:47 | 1429374 eigenvalue
eigenvalue's picture

But the Fed needs a backdrop of deflation (at least something looks like deflation) to launch QE3. Otherwise they wouldn't have good excuses. The political pressure would be too high for them.

Wed, 07/06/2011 - 09:58 | 1429413 Dr. Richard Head
Dr. Richard Head's picture

However, the sheeple and the MSM do not see dropping PM prices as an indication of deflation (or respective upward movements on a long term trend as inflation), so the past movements of gold and silver are mearly there to shake out the weak hands and nothing more.  The power of suggestion by the MSM complex that gold is in a bubble, along with a couple week long dips is enough to get your momentum traders to shit the bed.  On the other hand, strong hand survivalists will just take the opportunity to gather more. 

The area of "deflation" that scares the people the most is in their 401K and home "values", so a stock market drop is really the only plan, at least in my ignorant opinion, that will allow for a full frontal assualt of QE ^x. 

While the Asain nations are certainly paying attention to the notion of QE3 (see google trends -, many in America are still whistling past the graveyard.

Amerika - #1 in ignorance, exporting inflation, and FUPA.

Wed, 07/06/2011 - 10:37 | 1429587 strannick
strannick's picture

Je concure mon ami. Bernanke's trying to bottom call gold before he cuts the bands on the new 100 buck bales and starts chucking it around like Scrooge McDuck. I think he just missed it.

Wed, 07/06/2011 - 13:29 | 1430254 JOYFUL
JOYFUL's picture

chucking it around like Scrooge McDuck.


how dare thee impute the common cents(nonsic) of McDuck!? 

He never chucks, nor even clucks!...Da Duck jist does da Walk!

Laugh lately?

If'n that's not muzic to yur ears, then git a new earpiece! 



Wed, 07/06/2011 - 09:53 | 1429389 qussl3
qussl3's picture

As long as Gold doesnt make new highs every day in 100 buck increments TPTB dont really care, cos the masses wont either.

Silver even less so.

QE3 will come when stocks, commods and crucially OIL is appropriately priced.

Barring a complete liquidity crunch (everyone is already insolvent anyways), gold isnt going to drop 15%, dont think the leverage to cascade the paper price is in the market, not to mention paper has to answer to the physical markets every other month.

Wed, 07/06/2011 - 09:58 | 1429425 eigenvalue
eigenvalue's picture

But TPTB can borrow gold from central banks to kick the can down the road every other month. As long as there is still gold in the vaults of central banks, the phycial market will not be as powerful as you think.

Wed, 07/06/2011 - 10:07 | 1429461 qussl3
qussl3's picture

True, and thats why im not taking any leverage until a really big washout.

Still i dont think it'll fall 15% but im prepared for 30% lol.

Wed, 07/06/2011 - 10:54 | 1429644 unum mountaineer
unum mountaineer's picture

you're looking at this too yoy..dont you get it yet? qe lite's still on and popping within a backdrop of both EU and usg trouble (and by and large us funding of European banks). Wait till Jackson's hole is not as mope-able..bottom line there are various reasons to start a new easening program. Public in the states won't care about pms until its at a new HIGH record..what that level is..idk..but its gotta be of course has a $50 psych barrier.  

Thu, 07/07/2011 - 18:07 | 1434318 Whalley World
Whalley World's picture

By spending more time researching the fundo's, you might conclude that if it drops temporarily, it will only be a buying opportunity.  With what is going on in the world, what else do you want to own except real money?

Wed, 07/06/2011 - 09:25 | 1429280 Hmm...
Hmm...'s picture

I'm not really sure that Gold is being seen as "the only currency without liability"... instead I think it's being seen as "not the Euro".  There is a difference.

Unless we are to believe that Treasuries are also "the only currency without a liability" given the recent negative prints on Tbills?

No, instead the market is a ping-pong as every fiat makes a race to the bottom, and many assets depreciate in value.

One day the lemmings all run into Gold.  then later they all run into Treasurys, then they all run into stocks.  Then into oil. 

Bingy-boink.  back and forth. 

Using ZH lingo, today seems to be a risk-off day.

Turbulent times, these.

On a side note: I am decidedly NOT saying that Gold isn't a currency without liability, nor am I saying one shouldn't own it.  Just that I highly doubt the retarded investors have figured this out today.  Perhaps they will one day who knows?  You'd think they'd figure out not to invest in BofA or Chinese IPOs, but there it is.  Even worse, you'd think they'd decide that maybe Euro implosion is NOT positive for the Nasdaq (also up around 3/4 to 1%)


edit: oops, NASDAQ up 0.35% not 3/4%)

Wed, 07/06/2011 - 11:47 | 1429870 Bay of Pigs
Bay of Pigs's picture

Look at a ten year chart of any major currency against gold. So no, it isn't about the Euro at all. Nor QE. It is a loss of confidence in all fiat.

The lemmings aren't the ones buying gold. They are the ones holding overpriced stocks and bonds.


Wed, 07/06/2011 - 12:44 | 1430109 DoChenRollingBearing
DoChenRollingBearing's picture

Only two people I know own any real amount pf physical gold.  

BoP is right, we are not the lemmings.  At least we can sleep better, knowing we have at least some protection from the excrement storm heading our way.

Wed, 07/06/2011 - 09:23 | 1429285 kito
kito's picture

Wed, 07/06/2011 - 09:36 | 1429328 MsCreant
MsCreant's picture

Dried goods too. And work them all into your regular diet so that your body is used to them and you rotate your stock.

I use a crock pot a whole lot. When there is a whole lotta crock going on, best to make a good stew.

Wed, 07/06/2011 - 09:49 | 1429383 Fed Supporter
Fed Supporter's picture

I have introduced cat food and dog food as part of my retirement plan, that way when I retire it will not be a shock to my system. :)

Wed, 07/06/2011 - 10:07 | 1429454 Abitdodgie
Abitdodgie's picture

Have you tried the Pedigree chum chunky meat in gravy it is really good

Wed, 07/06/2011 - 16:09 | 1430781 RockyRacoon
RockyRacoon's picture

What is the shelf-life of that epicurean delight?

Wed, 07/06/2011 - 10:14 | 1429487 Jendrzejczyk
Jendrzejczyk's picture

"work them all into your regular diet so that your body is used to them"

Good advice!

All my doomer plans have hit a brick wall the past few months. I tried making a meal for the family just from the stored food and it was hideous, nearly inedible when you are used to fresh food.

Silver got the crap whacked out of it.

My pump shotgun jams and cleaning and oiling hasn't helped.

My giant protective dog (neo mastiff) got bone cancer and now doesn't look quite as scary hopping around on three legs.

I'm the most pathetic doomer EVER!


Wed, 07/06/2011 - 11:18 | 1429735 Anglo in Abitibi
Anglo in Abitibi's picture

Sorry about your dog!

I had a Rem 870 that would jam when racking after about 40 rounds. I complained about it to some hunter co-workers. They thought that the new Rems were too "serré" or tight. Get the biggest shells you can fit (3" or 3.5") of 00 buck and run 15 rounds or so through. Hopefully that`ll work for you too.

That freeze-dried stuff tastes like dryer lint to mee too. I prefer kidney beans and such, pressure cooker really helps. Indian spices seem to be the best for making cheap food taste better. Best of luck with the silver.

Wed, 07/06/2011 - 11:34 | 1429809 Jendrzejczyk
Jendrzejczyk's picture

Thanks for the tips Anglo. Will get the bigger rounds today and try it out.

Wed, 07/06/2011 - 12:23 | 1430028 HungrySeagull
HungrySeagull's picture

Your remmy will probably gag while you force the bigger rounds out. Get them out of there anyway.


If still having trouble, have a Smiff work it over and have it running well.

Wed, 07/06/2011 - 16:11 | 1430787 RockyRacoon
RockyRacoon's picture

My Moss 500 eats everything and anything.....

My Saiga 12 is pretty sweet as well.

Wed, 07/06/2011 - 11:50 | 1429889 MsCreant
MsCreant's picture

*I wrote a whole post that got lost. Glad you have gun input. I have a cop friend who took my Ruger to his gunsmith for me. Couldn't put my Ruger back together (neither could he) because it was so tight. Happens.

*Cooking-shorter version.

Crock pot/stove top/oven Slow cook (6 hour or more) at low temp your favorite/sale meat with 3 big chopped up onions and garlic. This is your base to work from. Also great because you can forget it for a bit and be okay.

Storage foods can include coconut milk, tomato sauces, curry, mexican spices, tamari, and more. I try to make sure the dates on my canned storage stuff is over 2 years out. A secret, most of them are safe two years after the expiration date, many of them way beyond. The food pantry takes donations up to two years after the expiration date.

Storage veggies thrown in, at will, depending on the direction you take your broth or sauce (Asian? Italian? Mexican? Cajun? Etc.)

Alt: Storage meat and all fresh veggies & rice.

Alt: Mix storage meat and fresh meat (pepperoni and fresh ground turkey for instance). Storage veg and fresh. The more storage stuff you use, the stronger flavoring you may want for your sauce.

I rarely do an all storage food meal.

*PMs are doing okay just this minute. I am used to the up and down now. Because of cost averaging, things have to take quite a dive before I start to really panic.

*I wonder if a puppy is in your future.

*I feel doom deficient because my house is destroyed right now. I am using time in this rental to regroup and reorganize. The concept of spring cleaning is useful.

I am finding silver linings in most of my clouds, hope the same will be true for you too.

Wed, 07/06/2011 - 12:24 | 1430032 HungrySeagull
HungrySeagull's picture

Don't panic on the dives, just back the truck up.

Wed, 07/06/2011 - 17:19 | 1430922 Diogenes
Diogenes's picture

While you are stocking for survival dont forget the cast iron cookware. I am not joking or jesting. A good cast iron dutch oven is essential. Make your stew or other dish, heat it to boiling on a fire of wood or charcoal and put it in an insulated wooden box. Your food will cook to perfection in a few hours. The old timers used to take their lunch this way when they were working in the woods cutting firewood in winter or going on a cross country ski journey. It is called a hay box cooker because the original was a box full of hay.

You can also bake bread in it and make many delicious dishes, peach cobbler mmm mmm.

Iron skillets, great for frying eggs and bacon, or fried chicken and for making cornbread.

Thu, 07/07/2011 - 12:15 | 1432859 MsCreant
MsCreant's picture

Thanks, I will look into a dutch oven. Have cast iron skillets already.

Wed, 07/06/2011 - 11:38 | 1429828 Raymond Reason
Raymond Reason's picture

Great script for a comedy film!

Wed, 07/06/2011 - 09:26 | 1429292 The Axe
The Axe's picture

where is the move in silver....strange

Wed, 07/06/2011 - 09:26 | 1429293 oogs66
oogs66's picture

the Morgue accepts gold as collateral?  was JP short of cash after sino-forest and forced them to take it as collateral?  or are they using it against ETF/ETN positions?

Wed, 07/06/2011 - 09:55 | 1429412 qussl3
qussl3's picture

Who the fuck is stupid enough to pledge physical gold as collateral?

Wed, 07/06/2011 - 10:07 | 1429460 Boxed Merlot
Boxed Merlot's picture stupid enough to pledge physical gold as collateral?

Seeking Alpha
Wall Street Breakfast-Must Know News

Obama invites legislators to debt summit.

President Obama invited senior legislators for talks Thursday ...If no agreement is reached, the Fed could buy some of the Treasury's gold reserves, giving it the money to pay its bills.

Any other questions?

Wed, 07/06/2011 - 10:15 | 1429488 tmosley
tmosley's picture

Holy shit.  This will be a great excuse for why Ft. Knox is empty should an audit ever be done.

Wed, 07/06/2011 - 10:19 | 1429514 malikai
malikai's picture

LOL. Good luck Brock. Although there appears to be a large market for tungsten, I'm not so sure people will be interested in paying gold price for it.

Wed, 07/06/2011 - 10:20 | 1429519 qussl3
qussl3's picture


I think i have to revise my stupidity scale.

Wed, 07/06/2011 - 10:36 | 1429579 malikai
malikai's picture

Don't bother. They will blow it out of water every time.

Wed, 07/06/2011 - 11:08 | 1429695 i-dog
i-dog's picture

"the Fed could buy some of the Treasury's gold reserves"

Quelle surprise!! Oil reserves, gold reserves...what next? Garage sale at the White House? Sell them some slaves? Oh, wait........

Wed, 07/06/2011 - 20:52 | 1431394 StychoKiller
StychoKiller's picture

Old joke:  "How do you make a black person nervous?  Take them to an auction!"

Wed, 07/06/2011 - 11:18 | 1429739 SilverRhino
SilverRhino's picture

ahh .. and another piece of the end game appears.

Wed, 07/06/2011 - 12:26 | 1430035 mick_richfield
mick_richfield's picture

The idea of the Fed making up money out of thin air to pay for US gold that has disppeared into thin air has a kind of poetic Doomsday Ballet beauty to it.

I have a sinking certainty that in the future, if there is one, nobody will believe me when I tell them about all this stuff.

Wed, 07/06/2011 - 13:18 | 1430211 Boxed Merlot
Boxed Merlot's picture

a kind of poetic Doomsday Ballet beauty to it...


Ya know, that equally insightful line from yesterday's article cited above, "it is not so much the actual dilution of fiat paper that devalues it: it is the increasingly less valuable available collateral that supports it" plays well in your ballet.


Wed, 07/06/2011 - 16:14 | 1430798 RockyRacoon
RockyRacoon's picture

Here is a proposal by Ron Paul to fix the whole mess!

Wed, 07/06/2011 - 09:27 | 1429294 Long-John-Silver
Long-John-Silver's picture

Gold and Silver manipulators are on vacation this week. They will beat the prices back down with counterfeit paper next week.

Wed, 07/06/2011 - 09:38 | 1429337 Hmm...
Hmm...'s picture

Gold and Silver manipulators are on vacation this week.

is this tongue in cheek?  I see it stated many times both ways (when market is up manipulators are absent, when market down manipulators are present).

why would the manipulators go on vacation ever?  why are manipulators only interested in manipulating gold/silver down?  I, too, believe that JPM has large short silver position but why wouldn't another TBTF entity take the other side of that bet and start taking delivery to crush JPM? 

how long can paper manipulation work?  if the answer is "for decades" then are Gold/Silver really a store of value or just the theoretical backing for another fiat system (gold/silver shares as fiat).

wouldn't a better answer for today simply be "Gold is up because the Euro is under pressure" as opposed to having anything to do with/without manipulation?  my guess is that the manipulation is exactly the same today as it was yesterday, but the difference is that the portuguese downgrade has overwhelmed the constant manipulation.

Wed, 07/06/2011 - 09:41 | 1429354 wandstrasse
wandstrasse's picture

serial margin hike, bitchez.

Wed, 07/06/2011 - 09:43 | 1429363 SheepDog-One
SheepDog-One's picture

No one is ever on vacation in the Great Ponzi. They lose control of something for a fraction of a second, its over.

Wed, 07/06/2011 - 10:35 | 1429576 Long-John-Silver
Long-John-Silver's picture

Watch what happens Sunday evening or when New York opens next Monday. Gold and Silver will get beat down big time.

Wed, 07/06/2011 - 11:42 | 1429843 Raymond Reason
Raymond Reason's picture

Waiting for the day when the world wakes up to the fact that "deposits" on future contracts ARE NOT SALES. 

Wed, 07/06/2011 - 14:44 | 1430522 iLoveMisesToPieces
iLoveMisesToPieces's picture

Manipulators are interesting in manipulating anything down that either exposes the declining value of the dollar and/or offers a practical alternative to the dollar.  TBTF and the TPTB are all playing in the exact same rigged casino.  There is obviously competing interests and parties involved but at the end of the day, they all lose big time if they can't keep confidence game up.  They are all so entrenched and entangled that exposing one exposes all.

The manipulation can only hold up as long as physical supply meets demand.  I'm of the opinion that there is a hell of a lot less supply of physical than there are paper contracts they claim to represent an amount of physical.  Once physical dealers start running out of supply, price discovery hits and PMs skyrocket with that feedback loop.

I think without any manipulation, gold and other PMs would steadily stair step as more and more fiat is printed.  People buy physical metals to hold, not to day trade.  While I'm sure people do, I personally don't know anyone that has sold any amount of physical they've bought.  I believe manipulation is the main factor in the volatility.

Wed, 07/06/2011 - 09:30 | 1429304 MrSteed
MrSteed's picture

Most likely we'll get a paper beat down eventually.


Keep stackin physical.  Sleep easy.

Wed, 07/06/2011 - 09:31 | 1429315 youngman
youngman's picture

Its funny the Asians, Russian, Indians, and emerging countries are buying PM´s as they watch the Western world tank....the EU countries are buying because they see their EU fall apart...The USA is buying as they see their country fall apart while going broke....lots of demand as a "safe" one is buying bonds EXCEPT other banks, central bank, governments just to hide the problem and kick the can.....its not as an investment...its for survival of the elites...

Wed, 07/06/2011 - 09:32 | 1429317 Caviar Emptor
Caviar Emptor's picture

The origin of paper currency: IOU Gold! That was the original meaning of paper. 

Wed, 07/06/2011 - 09:47 | 1429375 Hubbs
Hubbs's picture

Way to boil it down CE! It's a looong way back to this original premise.


Wed, 07/06/2011 - 09:35 | 1429321 Stuart
Stuart's picture

No counterparty risk??   Not in the paper gold market or the futures!  

Wed, 07/06/2011 - 09:38 | 1429341 wandstrasse
wandstrasse's picture

but but but... it takes only 5$ to take it out of the ground!!!

Wed, 07/06/2011 - 09:44 | 1429366 Monedas
Monedas's picture

It cost nothing to wipe your ass with your finger then rub your finger in the they do in Pakistan ! Monedas 2011 Tribal Villages Hygiene Campaign

Wed, 07/06/2011 - 09:57 | 1429420 wandstrasse
wandstrasse's picture

my post was death-serious and you give an answer like this... but, when I think of it... my digestion cycle is in a late stage at the moment, maybe I try....

Wed, 07/06/2011 - 11:53 | 1429902 DosZap
DosZap's picture

It cost nothing to wipe your ass with your finger then rub your finger in the sand


Not until you do the second wipe................

Wed, 07/06/2011 - 09:45 | 1429369 Cognitive Dissonance
Cognitive Dissonance's picture

Last I heard is was $5.23 for Silver.

But who's worried about details?

Wed, 07/06/2011 - 09:41 | 1429348 Monedas
Monedas's picture

A "Hoarder Sucker" is the mother of all oxy-morons ! I give you Monedas 2011 To gloat would be a cardinal sin ?

Wed, 07/06/2011 - 09:41 | 1429351 savagegoose
savagegoose's picture

no thats print a $100 note

Wed, 07/06/2011 - 09:46 | 1429371 Jovil
Jovil's picture

Talk about gold and silver - How to survive a currency devaluation

In 1976 I was managing an American subsidiary of a successful large US Company in Mexico. It had been a financial turnaround for our team. Cash flow had accumulated in our bank in Mexico and corporate didn’t want the money repatriated to the US. Although we had already paid a 35% income tax to the Mexican government, we would have to pay an additional 30% exit tax to repatriate the money. In addition, we would have to pay high fees for the peso/dollar exchange, in order to make the transfer. The company wanted to expand our successful business and so we decided to keep the money in Mexican pesos to be used for further expansion.

One morning, as my wife and I were on a trip driving on the highway, we heard a national message from the President of Mexico, Luis Echevarria, one of the most corrupt presidents in Mexican history. “It is a lie that we are going to devalue the peso,” he said.

Read more

Wed, 07/06/2011 - 10:57 | 1429652 whaletail
whaletail's picture

+1 a classic. PM's: a way to bring your chips into the next game. Period. 

Wed, 07/06/2011 - 17:25 | 1430937 Diogenes
Diogenes's picture

When the president or prime minister says we are not going to devalue that means they are going to devalue within 3O days probably less. The dropped flag in the devaluation derby.

Wed, 07/06/2011 - 09:46 | 1429372 Caviar Emptor
Caviar Emptor's picture

The whole "no interest or dividends" is crap: the same guys buy silly internet stocks with no dividends

Wed, 07/06/2011 - 09:49 | 1429384 Re-Discovery
Re-Discovery's picture

PMs are going through price levels like a hot knife through butter these last two days.  This feels like a broader recognition and allocation to PM trade, not a flash in the pan.  I shoted some levels yesterday and got killed.

Higher prices have been acheieved in very recent history and those price levels will be revisited.

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