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Goldman Takes A Stab At Gold Bugs And 'Oil-Peak'ers, Says Dollar Will Flourish
Several observations out of Goldman's Investment Strategy Group which seek to allay fears that even if the Fed were to print another few trillion dollars, the greenback would still reign supreme, never mind that all the currency in circulation now (secondary Fed liability after excess reserves), one could argue, is more than 100% backed by MBS on the asset side of the equation (or in other words, diluted by more than half from solid, and real AAA-rated securities). Goldman is also taking a stab at gold-bugs, claiming that all reports of the dollar's demise are not only premature, but borne out undue fatalism, and in fact are deja vu. Yet is this time really not different?
GS highlights the ever increasing dollar denominated FX reserves. One thing missing on the chart is the Fed and the GSE's intervention, whose public onboarding of assets (through direct purchases and explicit guarantees) far in excess of the $4.6 trillion in estimated global FX reserves is a glaring hole in Goldman's analysis which claims that "the dollar is unlikely to lose its reserve status in the foreseeable future." Every day, it seems, a sucker who underestimates Ben Bernanke, is born.
Blankfein's people point out that panics over the dollar's viability tends to break out regularly. One thing they don't point out is that on none of the previous occasions mentioned, did the Federal Reserve have to expend trillions (at least $2.5 by the time QE 1.0 is over) to transfer the bulk of private risk to the public balance sheet. Maybe, just maybe, this time it is not only different... it is also much, much worse.
Amusingly, Goldman does not miss the opportunity to ridicule those who believe that gold is increasingly more valuable.
Not only that, but "ISG’s view on the dollar, today’s valuation and extended investor interest all imply meaningful potential downside as well. Clients who have a bearish view on the dollar are better off diversifying some equity exposure away from US assets. For clients seeking direct exposure to gold, we recommend structured notes and public or private equity that can manage the downside."
Lastly, Goldman takes on the topic of "peak" oil - in summary, the firm claims, it is not a concern. All you who believe commodities are the safe haven from fiat FRN destruction, well - you are simply naive. Goldman said so.
Goldman's desire of status quo perpetuation is evident and for obvious reasons. Yet, things are now different, because while the financial system did not collapse in September 2008 as it should have in order to get a fresh start, the moment of reckoning has been delayed for as long as the US can churn auction after non-failed treasury auction. In that sense, yes, it is different this time. And with that one can easily assume that all of Goldman's assumptions about a linear future are incorrect. The only question is how long into the future will the current "adjustment" period of pretend reality extend, and what happens when the emperor can not issue another $40 billion in 3 Year Bonds to buy some more non-existent clothing.
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What do you expect from a bucket shop?
Clearly, the squid doubles as a mouthpiece for the Treasury.
Concise and to the pt., could not have said it better. Some see a difference between the big houses and the government, as a gold trader the past ten years, it is clear there is no difference and that is why, among other reasons, there can be no audit.
ZH dearly needs a feature to exclude comments from a list of users. Or a user whitelist for comments could also work.
That's quite ironic, omi. If I were a psychopath, like those that currently govern, I would agree and say that after after posting a comment without substance you will be denied access to posting until you can actually add something, anything! (even a stoopid, unrelated YouTube video!).
Here is my unstoopid YouTube video:
http://www.youtube.com/watch?v=1Xhdy9zBEws
---
Oh, and what I was going to add to the above comments:
GOLD BITCHES!!!
Try that out sometime. It feels real good, omi. It's one of the most concise and meaningful statements in recorded history. Gold is the antithesis of a lie. It is the Nemesis of evil. Manipulating currency called for the death penalty in yesteryear. For crissakes Jesus didn't show them money changers any charity. That's why "BITCHES!!!" is a necessary addition - and also why I'm not surprised the squids don't like it. And because both of my parents, for various, typical reasons, didn't teach me a lot about judging human nature I will pass on something to you that I learned the hard way: Do exactly opposite of what the pathological liar tells you.
They were right about the S&P
http://www.cnbc.com/id/31774313
Getting closer on gold
http://ftalphaville.ft.com/blog/2009/12/03/87006/goldman-sachs-up-12-mth...
Why would you discount the call on the dollar? Sure they made some wrong calls like $200 oil but IMO they are the Market Makers so their forecasts should be treated as self fulfilling prophecies.
If they are the Market Makers, their forecasts should be treated with extreme skepticism.
Good point but it could be their marketing arm adding credibility where it lacks trust. Remember when Obama called the bottom? Now how in hell did that happen?
Boosting credibility, versus manipulation or plain incompetence. Not a risk I'd be willing to take.
"Why would you discount the call on the dollar?"
Because they completely missed calling the implosion of Sep. 2008.
when the dollar becomes temporarily "strong" again (and it will perhaps several times before it finally loses the reserve currency status), i and plenty of others will unload that green Charmin to buy real assets. Mainly gold silver and ag. Guns and ammo just in case.. I welcome those opportunities like a kid in the candy store...And remember ultimately we cant have a strong dollar...If we do we will collapse under our debt. Like TD and others have continuously pointed out the Fed wants the dollar dead dead dead.
that was no wrong call....they were selling into that call
that was no wrong call....they were selling into that call
So GS says KING DOLLAR.
This makes me uneasy.
Perhaps they should change name to DollarMan Sacks.
It is all very simple: be contrair on what GS says. So: short dollar, long gold, oil and commodities.
Show GS how you really feel...
Bank Run Bitches!!!
Bank Run Bitches!!!
Bank Run Bitches!!!
Either the people at GS are stupid, or they think the people reading their stuff are. Either way, not people I would want to be hooked up with. Their clients are turkeys being prepped for Thanksgiving Day. (I figure the TD's have a copy of The Black Swan on their desk next to the computer.)
After that $200/oil call I think they only forecast stuff to move markets and profit from it.
It would suck for GS that, after stealing so many FRNs, they won't be worth jack chit anymore.
the conduit between the vampire squid and its host will die killing both the squid and the host(s)...in due time...
This report is completely consistent with a view of deflation. Why are ppl surprised? Dollars will rise as demand for such will rise since most debt is dollar denominated, gold and other commodities will sink as demand wanes. I'm actually surprised by the criticism I'm seeing in the comments. I think GS has it right and they are warning that the fed and treas are about to run out of bullets and that deflation is going to win.
Not with over $50T of Federal unsecured debt obligations it won't.
As the saying goes, a broken clock is right twice a day!
Not meant to be investment advice, but I follow USD/CAD exchange rates. Based on this comparison I'm NOT seeing a strengthening USD.
Why do I use this comparison? I feel that the CAD is backed by more tangible elements: raw resources; better fiscal control (though the Canadian govt has gotten stupid and followed the same moronic spend-your-way-to-health strategy pushed by the US; to start with their hole, however, was much shallower than that of the US). Canada is, in my opinion, one of the better positioned western countries (all will ultimately fail, but Canada seems to be better set to hold up longer).
It's worked for me... so far.
You're dead on regarding Canada I think. The policy the government has been following is absolutely moronic considering it's basically the US housing playbook.
Canada is taking candy from a stranger.
don't forget about the repatriated dollars, returning, 2/3 of currency is held outside USA. fed, and treasury, will not run out of ability, to QE. plus there has been much more theft, and fraud, than has been revealed, and the dollar isn't worth, half of it's perceived value. this will eventually be realized.
Agree. IMO it all comes down to which horse you put your money on, inflation or deflation. Their piece implies the latter.
Deflation will kill GS and so it is the opposite of what they want. Or do you think they will predict their own death? I am sure the Fed will be too late when deflation arrives, but when it is coming, they'll do any stupid thing to prevent it from happening.
Concur.
Wouldn't it be very squid-like to get everyone crowded in a trade with a very small exit door.
The demand for dollars in 2010 is 'seemingly' going to be huge. People take profits where they have profit. And the speculators - when all is said and done - have settlements linked to the greenback.
Don't worry they already front run their clients, so the downside is therefore limited and they will cover when their clients sell.
Interesting, but convoluted, thinking on oil. By their own admission, they see oil extraction costs rising in some cases to $110, so I guess this is backward way of saying there is all the oil we want - if we want to pay up for that.
I find it amazing that so many believe the fairy tale that the Federal Reserve can pour out trillions more than any other country, yet the dollar will maintain its value none the less. If that happens, we might as well throw away all the economic text books ever written, and just read "Alice in Wonderland" instead to understand what's happening.
"I find it amazing that so many believe the fairy tale that the Federal Reserve can pour out trillions more than any other country, yet the dollar will maintain its value none the less."
Well, for starters, there has been more than 3 trillion in credit losses as a result of this crisis. If you understood the amount of speculative growth that has taken place since 2000 based on margin and leverage, you would begin to understand why the dollar still has, and will have, value. Inflation already happened..... the run on gold since 2002 is evidence, yet Chumba refuses to acknowledge this fact.
Throwing $787 Billion on this fire is chump change compared to the massive losses in credit globally. Deflation will win. GS is right, the dollar will rally in light of the massive credit losses worldwide, and the fact that other currencies / nations will also want to maintain security by flocking to USD as a result of their own misfortune.
Of course "Inflation already happened." It's what precipitates deflation because credit has to expand before there is anything to deflate. Yet market mechanics aren't the only things to which you need to pay attention, policy has a very integral role in the way this will play out. The Fed's mandate of a "stable price level" could very well be the undoing of this whole dog and pony show simply because of the fact that the pool of monetized debt has to expand continually in order to preserve (or as the case may be, lift) nominal values while "real" values are shrinking. So what happens when we are no longer able to ignore the steady erosion of the real economy, the very thing that is necessary to sustain any kind of credit expansion?
...The parasitic drag that debt servicing puts on productive activities during a deflation exceeds the ability of the real economy to service said debt through organic growth. Consequently credit contracts, starving even productive ventures of their lifeblood, the economy shrinks, real values drop out from under us and because a significant portion of debt has already been monetized we're left with a pile of wrinkly green paper that doesn't deflate the way debt does. Throw in some government insolvency, tank the bond market and the only exit policy is cranking the press to 11.
Too true in the short term, I think. However, the US is one country who's currency can only really be valued as a ratio against other currencies. Being the global reserve currency the onus is on them to maintain a stable price level on all goods otherwise the world GDP shrinks. Thus it won't necessarily be a massive increase exclusively in the level of US dollars circulating in the economy that makes the currency "go hyper" (or even just inflate bigtime) but the inability of a single Central Bank to prop up the values of the currencies in numerous other countries. If Bernanke can't keep the rest of the world from deflating then the consequent rise in purchasing power in those currencies is tantamount to a precipitous drop in value for the USD. It is effectively no different than a massive expansion of the US monetary base.
Well done. While there may well be unrealized credit losses worldwide (remember US mortgage losses are spread throughout the world - just ask Iceland) may total $3 trillion, total US credit has not contracted at any time through the current recesssion.
Granted if total credit were truly deflating I might in some way agree with deflationists. But that's not going to happen, since the US government will just issue more debt to counter-balance the private sector. So far new debt issues have been swallowed down - no doubt in part because many blindly think the US dollar is the default investment.
The Fed is committed to increasing the monetary base by whatever amount necessary, and they will back with QE2 before you know it - if they haven't already started.
My best guess is deflation for awhile. In 18 months, an aggressive Fed and .gov will break it with inflation maybe hyperinflation.
2010 is going to be rough. A very dangerous road lies before us.
Moral is... if you have a large bag of gold coins, stay on the shore.
GS is the shepherd of the trade. They lure the sheep into a corner.
Follow GS trade advise with caution and be skeptic. There's money to be made where crowds gather but don't be the last one to believe the propaganda when the masters are starting to slaughter the sheep.
There's always a way to trample yourself free before the stampede. You might get lucky if the dogs don't get you after all.
Didn't they say the same kinda crap during the boom about MBSs to lure in clients, then shorting them at the same time bankrupting all the sheep clients??
"Ouch!"
(Sorry, the truth hurts)
"peak oil is of no concern...in light of technological progress and major discoveries"
Goldman may have influence, but not that kind. Physics and return on energy invested don't lie. Don't matter that we have "forty years left" it's what it takes to get to it.
Goldman may have influence, but not that kind.
Exactly! People have to realize that there ARE limits!
Don't rule out the supernatural - after all they are " doing God's work" !
BTW - another captcha calling for a negative answer and only allowing 2 characters in the field - settling for an incorrect positive answer- c'mon guys; fix it, already! edit - by, cracky - it accepted my correct, negative answer! Way to go, ZH!
I was thinking about captcha, and I actually like that it doesn't like it when I attempt to answer with a two-digit number in the negative. It's kind of the "final test", to see how determined you are. Because anyone that doesn't want to take the time to whip out the calculator probably doesn't have something important to say anyway.
I wish all the anons would just sign up so we could see patterns in comments and have more active discussions because their comments are often delayed for hours! Hours!
yes we discovered, that we have the technology, to invade another country, and steal their resources.
The 'technological progress' they are talking about, is 'new methods to fool us there is more oil then we think'.
+1 http://gailtheactuary.files.wordpress.com/2007/03/oil-discoveries.jpeg
Hypothetically speaking, could one not tell the whole world to invest one way, while doing the opposite and making boatloads of money by steering much of the market to invest opposite of you? (Merely hypothetical, of course.)
Of course! Further, big powers don't even have to do that, all they have to do is to see bets ligning up on one side and, whether they are sound bets is totally immaterial, bet the other side: by sheer weight they can influence and "win" the bet.
Regarding oil prices I used to caution people on this very thing/point.
Yes, eventually market forces will correct, but short-term allows market capture, and once that occurs, those on the wrong side of the bet will be left on the sidelines.
The sheer hubris of these guys is just astounding.
you mean our sheer slavishness is astounding
gs is a fun much of nihilist dancing on the edge of the abyss
you no get an invitation?
They can accomplish anything except for the relatively simple act of being told to fuck off and leaving without getting and staying abusive.
yes-a but hegel say that seeing as an-other requires an-other
this is the slave
the slave sees hubris, it is the other of the other, which is the slave that make that statement
Well, they think they're the Masters of the Universe (tm). So hubris would kinda-sorta come with the job description, no?
Cheers -
Goldman claims that the decreasing hedge-books of gold miners is a bearish sign for gold. This is total non-sense, as the hedge books of the biggest miners, especially Barrick, have been used for the better part of a decade to massively suppress the price of gold. Just look how much the price has risen since Barrick announced the end of their hedging program in september...
Also-
On gold, why would Barrick spend so much buying out their hedges if gold is at the top of a bubble? Is Barrick stupid?
On oil, should we believe the reserve figures quoted, when so much of today's purported reserves are in Saudi Arabia, which won't allow an outside audit, or in deep water with high extraction costs? Should we simply ignore the collapsing production of once major producers like the UK and Mexico, not to mention the US?
I find it amusing that Goldman uses a reserve to demand ratio graph to discuss peak oil when peak oil doesn't have anything to do with reserves or demand. Maybe because a graph of actual oil production does indeed look like a peak has already arrived?
http://www.theoildrum.com/files/World%20Crude%20Oil%20EIA.png
Goldman presents their chart of 2000-2010 oil discoveries. Let's examine that.
First the total of all those finds, 10 years worth, using the largest number for each field they quote, sums to 62.75 billion barrels.
Global annual consumption is about 30 billion barrels a year. So for that 10 year period, the deficit of consumption vs new discoveries was 240 billion barrels. In other words, even if that chart's largest numbers are legit, it's 2 years of oil found.
Their other chart also says it depends on constant consumption, which implies no one drives all those cars the Chinese are buying.
But the most shaky part of their very shallow analysis is their clear embracing of Saudi quotes. The reason their reserves/consumption ratio isn't moving is because the Saudis do not change their quoted reserves. They hold them constant, despite pumping out 3-4 billion barrels a year.
The last weakness in their analysis is a focus on reserves rather than production rates. Those Brazil quotes and the Bakken quote include fields that have shown no capacity to produce at 2 million barrel a day rates. There can be huge quantities underground, but if the pumping rate possible is low, disaster hits.
The bottom line on the whole analysis is a failure to understand Peak Oil, which they chose to quote. It's not about reserves. It's about production. The Brazil fields are hyper deep and haven't shown any sort of flow rate at all yet. Yet they lean on those fields for 14 of the 62 billion barrels (2 years of global consumption) they seem pleased about.
Goldman may want to reconsider this guy's bonus.
It's absolutely stunning that the total reserves of the 10 largest discoveries of the decade will barely supply 2 years worth of oil.
We've definitely reached peak oil discoveries. I would bet everything I have that discovery of new reserves won't even be half as much this coming decade as it was this last. At most 90 billion barrels of reserves in discoveries from 2000-2020. 3 years of supply at current consumption levels.
Peak oil is coming, and soon, very soon.
Yes - but don't count out innovations in the unconventional space. if the scientists and engineers figure out how to cleanly and economically recover deep heavy oil, tar sands, bitumin depsoits, etc -
that would change the game considerably - and drive the price of oil back down to whatever the technology holders / applicators dictate - i'll bet there's a lot more innovation happening in the oil technology sector than people realize.
William Catton calls this belief in technology "cargoism". It is akin to saying "God will save us!". But, rather than that it is "Technology will save us!".
Excellent observations. You know far more about the oil industry than Goldman's analysts. Water pressure makes it difficult to bring deep water oil to the surface in large volumes and many of the most recent finds are in deep water. Not only China is rapidly joining the auto age, but also Brazil, India and many other emerging economies. If the wheels stay on the global economy (ours is a disaster thanks to Goldman Sachs and friends), then global consumption demand will likely accelerate in coming years. Sure there will always be oil, but the cost of extraction and the rate of extraction will change.
and as a taxpayer, I demand a refund on his bonus
I notice they dont estimate the cost of extracting from the Brazilian fields. I hazard to guess that extracting from below 2,000 meters of water and a further 5,000 meters below sand, rocks and salt may be slightly expensive.
I did some internet research: "Tupi ranks as one of the highest extraction costs areas in the world" http://www.glgroup.com/News/Hess-Shell-ExxonMobil-may-contest--this--nov...
I guess listing the extraction cost of Tupi at $70+ per barrel may not look good on their report so they left it out.
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I guess listing the extraction cost of Tupi at $70+ per barrel may not look good on their report so they left it out.
>>
The first temptation of thought in seeing $70 as an extraction cost is to say Yes! Oil is $80 so this will work! But no, that's not how it works. There has to be a payback period analysis on the billions of dollars required to do the drilling. The deals with countries provide the production company with only a few dollars per barrel. The country gets the rest. Iraq is absurdly extreme like this and wants the production company to have only $1.35/barrel.
So the point is, when costs get that high, no one can earn a decent return on the billions required to get started. So they never get started.
Blankfein didn't see the crash coming, so why do we bother with these guys?
-1 for this post dude, sorry. Your still up by 3478923407923 tho.
It's important to not immediately discredit someone's viewpoint just because you don't agree with it, especially when your a pseudo-journalist. I kinda feel like your trying to sell me gold right now.
This article was presented with pretty extreme bias towards a particular viewpoint, and not just towards GS. Even Satan was right about something. In the mid-term, the view presented is of reasonable probability. 10+ years, we all know what the trend is.
All assets except for USD (and... JPY) are in a bubble. Yes, even yellow rocks.
What I want to know is how exactly does this view fit in with GS's constant pimping of BRIC exposure baskets? Long U.S. exporters with a strong currency?
The USD isn't in a bubble?
'Peak oil is not a concern'
It really is too bad I won't get to enjoy my Schradenfrude in say 10 years when we're really feeling the effects of peak oil.
You could get some enjoyment still. Buy a bike, live some place that won't be as badly affected as other places. 20 miles outside Portland OR might be an option.
Obvously, GS closed all their gold positions earlier in the week but will be happy to load back up at lower prices after we all sell in a panic based on their "advice." Figure 2-3 weeks...
Well we all know that GS uses insider trading to make billions. It looks like this time GS is using Pat Robertson.
It is called insider information you knuckle head.
Well a new dog has shown up on the street. Your owner must be using the WSJ to potty train you.
Bite me waterdog, or should I say waterlogged. How sad it must have been when every time your owner shot a duck you swam out and came back with one of his decoys.
Perhaps the two of you should go off alone and try to sniff each others butts (dogs do this, you know), and establish who is dominant and who is subserviant and then come back when you've worked it out.
+1
I second that motion
How many days before Bernankie needs to be renominated? Need a strong Dollar and lower Comodities.
Once he is renominated it will be back to the same old game. Kill the Dollar and pump up Oil.
Maybe I should get another 100 gallons of Oil for my home next week.
Let's SIMPLIFY THIS....
Where does GS get its money ????
Rather....Where does GS have to get its money ????
..............................................
This is what I call CONFLICTIVE ADVISE....
THINK ABOUT IT....
..............................................
Mark this down....
THIS is why the market needs to be slanted more to
RETAIL....and removed further from the HOUSE'S PREY....
FIRST COME, FIRST SERVED DEFRAGMENTED RETAIL EMPHASIZED DIRECT ACCESS WORLDWIDE EXCHANGE WHEREBY THE INFORMATION IS WIKI FORMATTED....
IT IS TIME TO "CLEAN UP" THE SECURITIES BUSINESS....
GS and their side can supply public securities....
BUT CANNOT BE IN CONFLICT WITH THEIR CLIENTS....
AND BANKS MUST BE SEPARATED FROM THE SECURITIES BUSINESS....
SLEEP ON IT....
Ya let's get this big fat fucking lie off the ground. Let's get it at full altitude Monday January 18th so it can be a smoking crashing hole in the fucking ground by friday.
The position of commercials on the COT data is very heavy on the shortside. Non- commercials is still heavily long, though declining last week.
You know who is short, and could use a little disinformaion to freak gold ETF holders. Why Goldman of course. They are short, short, short.
I also recall Goldman saying gold would hit 1200-1300 an ounce. They weren't wrong then.
The dollar moving up is not out of the question, since the amount of dollars swirling around now can't touch the # of dollars swirling around before the crash. That money is credit and the consumer and housing credit system disappeared. So, dollars are still tight as a consumer and that affects GDP, money velocity and money creation through interest. Doesn't mean the dollar is any good- it's fiat trash- but it's scarcer than BEFORE no matter how much money is printed. The stock market alone lost 33 trillion in asset value. And asset value is also money because it ACTs like money.
Get your gold on a big pullback- because Ben will print like mad and that's how inflation and deflation can coexist a the same time. A currency crisis can also happen in a deflation- through bond revulsion
What does the end-game look like?
Like a new currency? Or, a single, global currency?
It seems that if depleting oil reserves no longer stiffen the backbone of the world's reserve fiat currency, than the new peg must link to an abundant medium or basket of energy resources if growth is to endure. Particularly, this should include a peg to renewable energy.
On the other hand, infinite growth as presupposed by Fed creators in 1913 was so envisioned during the early innings of the oil game. We may be in the bottom of the ninth, now.
Therefore, whereas carbon has been postulated as a new, global fiat currency - it has probably been so postulated in anticipation of global economic contraction - which seems inevitable with energy resource depletion being a reality.
Ergo, in a cap-n-trade scenario, the demise of the industrial west bestowes a windfall of carbon credit (currency) to pay the debts of a 100 year orgy of fractional reserve banking and the accumulation of a mighty tab.
Carbon is the currency of contraction. Peg the green back to it, and while wielding the hammer, peg to the renewable electron, too.
I agree with Warren. Gold is stupid. Short it.
Lexington
“If you tell a lie big enough and keep repeating it, people will eventually come to believe it. The lie can be maintained only for such time as the State can shield the people from the political, economic and/or military consequences of the lie. It thus becomes vitally important for the State to use all of its powers to repress dissent, for the truth is the mortal enemy of the lie, and thus by extension, the truth is the greatest enemy of the State.”
–Joseph Goebbels
Goldman Sachs bashing Gold totally comforts me ! It is such another buy signal
All gold bashers bring back this quote from Buffet made in 1998 ! Gold was trading below $300/oz in 1998. No offense Warren but... WRONG TIMING on this one !
Thinking further, there is a lot of things that Warren has been doing over the last 2 years that I absolutely do not understand (but what do I understand anyway?)and I think that he is dead wrong on GOLD
I cannot, absolutely CANNOT comprehend how Warren who is so smart and wise and whose dad made statement like this one below, could make such a statement as the one made at Harvard in 1998 :
“Unless you are willing to surrender your children and your country to galloping inflation, war and slavery, then this cause demands your support. For if human liberty is to survive in America, we must win the battle to restore honest money!”
Congressman Howard Buffett (father of Warren) Washington D.C. 1948
On the other hand... if I was Warren and I wanted to accumulate GOLD in large quantities, I would NEVER praise GOLD. Can you imagine how much its price would Skyrocket if Buffet was talking like a goldbug ?
I bet that one day, we'll learn that Buffet is actually a very large physical precious metals holder !
without the US Gov't/Fed, Warren would have been digging a very large hole to bury his shitty WFC paper.
I still think WFC could be the one.....
The danger is not off-shore, it's here in this country, and GS is threat to all of us.
Goldman Sachs bashing Gold totally comforts me ! It is such another buy signal
All gold bashers bring back this quote from Buffet made in 1998 ! Gold was trading below $300/oz in 1998. No offense Warren but... WRONG TIMING on this one !
Thinking further, there is a lot of things that Warren has been doing over the last 2 years that I absolutely do not understand (but what do I understand anyway?)and I think that he is dead wrong on GOLD
I cannot, absolutely CANNOT comprehend how Warren who is so smart and wise and whose dad made statement like this one below, could make such a statement as the one made at Harvard in 1998 :
“Unless you are willing to surrender your children and your country to galloping inflation, war and slavery, then this cause demands your support. For if human liberty is to survive in America, we must win the battle to restore honest money!”
Congressman Howard Buffett (father of Warren) Washington D.C. 1948
On the other hand... if I was Warren and I wanted to accumulate GOLD in large quantities, I would NEVER praise GOLD. Can you imagine how much its price would Skyrocket if Buffet was talking like a goldbug ?
I bet that one day, we'll learn that Buffet is actually a very large physical precious metals holder !
This squid, not only has numerous tentacles, it has 2 mouths and is spineless. Good luck to its clients, who bought the squid's own prediction oil was heading to $200 in 2008 and $100 in 2009, as forecasted by the squid's own oilman Arjun Murti. Numerous asian airlines like Cathay and JAL are still bleeding billions buying hedges from J Aron following the squid's advice on oil peak. They should learn from the chinese, just walk away from the f#$@ hedge contracts and screw the squid. See you squid in the CCP court :)
This from a moron who thinks f*cking millions of innocent people is doing God's work. A moron who never saw the biggest bubble in the history of the universe.
Some kids you just don't copy their papers because you'll be certain to get an F.
Question from Goldman Sachs job applicant form...
34. (multiple choice) The first time you sold the Brooklyn Bridge to a relative, you were...
A.) 4 years old or younger
B.) 9 years old or younger
C.) 17 years old or younger
D.) 25 years old or younger
E.) Never
(From the answer sheet...
Reject all applicants who did not answer A or B and who did not make a note in margin that once they sold it twice in the same day.
Sole exception to this rule is that you may consider applicants who answered E, provided that they produce a deed to the bridge and offer to sell it to you.)
arent we suppose to do the opposite of whaver government sachs says PUBLICLY anyways?
goldman sayin no peak oil that must mean their buying it like crazy and storing in the ocean out of view. goldman says gold goin down well that must mean they got people in the mines and holding it in their safe under their new buildin that we payed for. dollar gainin strenght that must mean their getting ready to short every single dollar up etf.
GS is a bunch of useless leeches who need to get their dicks slammed in the sand. You know ala Cool Hand Luke, get their mind right.
These guys have every reason in the world to convince you so they can keep the game going....remember when the game is over GS will automatically lose.......do you really think they are every going to say that???
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You could get some enjoyment still. Buy a bike, live some place that won't be as badly affected as other places. 20 miles outside Portland OR might be an option.
>>
You do realize you're talking about living on an active volcano? :)
What relationship, if any, would this have with the US Governments push for the "Cash4Gold" program?
There might be some connection here.
why the CFTC will do nothing.
His Reason? Gary Gensler spent 18 years at Goldman Sachs, a corporation in on the gold manipulation scam.
http://tinyurl.com/ye7stqd
"It gets dug out in Africa or somwhere,then we melt down,dig another whole,bury it again and pay people to stand around and guard it. It has no utility. Any one watching from Mars would be scracthing their heads"
Warren Buffet 1998
Great from GS to qoute their saviour. And while talk is cheap,and people tend to listen when it comes from larger than life gurus,let us look at the numbers:
In 1998 BRK-A (Buffet holding company)traded between 65-77 k.So let us say average of $70000
Also in 1998 gold was trading in a range of $300 an ounce.
So 70000/300= 233 ounces of gold you could have bought instead of one share of BRK-A
Closing prices 1-15-2010
BRK-$97500
or gold
233*1130=$263666. And by the way,this is after the fed saved his and that of Blankfein's behind,with trillions of dollar. While nobody had to spend a dime on those crazy gold bugs.
If you ask me,I think it is Mr. Buffet who is scratching his head now.
"Why would you discount the call on the dollar? Sure they made some wrong calls like $200 oil but IMO they are the Market Makers so their forecasts should be treated as self fulfilling prophecies. "
While there call on gold=$1350 came on DEC 3,gold went down the second day from its top. There was about 80 million shares of GLD traded that day. And that IMO smells like a bear raid arranged by the big guys. So may be here is a reverse phsycology in play. And so would be the dollar call. If they say dollar will decline,then people will jump into gold,and that hurt equities. As to the wrong call on oil,that was arranged to sacre companies into buying their swaps,and not realy a matter of simple economic forecast gone bad. And yeh they in cohorts with other TBTF control a large sum of the market(monopoly if you ask me),so they can influence prices for a while. But are they realy going to tell you what they are buying and selling,when their only business model of no loss,is to take risk that they know beforehand that they can influence that outcome of?
Goldman said this and Goldman said that.
After all we went through, why would somebody take them seriously? Goldman has its own interests and agenda, and they are trying to execute them using all available means. Their ability to swindling and stealing somebody money does not make them experts in future political & economic prognostications.
Their political insensitivity to their own rogue actions speaks volumes about their nearsightedness and even stupidity.
Goldman said this and Goldman said that.
After all we went through, why would somebody take them seriously? Goldman has its own interests and agenda, and they are trying to execute them using all available means.
Their ability to swindling and stealing somebody money does not make them experts in future political & economic prognostications. Their political insensitivity to their own rogue actions speaks volumes about their nearsightedness and even stupidity.
Never trust a GoldmanSucks Anal-ist. They are just lining you up to be on the losing side of one of their trades.
Regarding the U.S. dollar, those FX reserves sure did grow smartly in those nine years that gold's been in a bull market. Yes indeed, those greenbacks really multiplied. Funny how the two seem to go together.
[Still, Goldman could be right on the timing. They were bullish before; I'm sure this shift in the wind will be replaced by a shift in the other direction. The only ones who will care to remember are easily-offended goldbugs and proud GS haters.]
UPDATES:
http://www.zerohedge.com/forum/market-outlook-0
In early 2007 I warned of an impending stockmarket crash.
I confirmed a bottom by April 2009.
In mid 2009 I warned of an impending USD rally.
The uptrend since March 2009 has been a bear market rally contained within a much larger bear cycle that started in 2000.
All markets may be affected.
please tell me more.
Jajaja! I'm still laughing.
...yes, oh warner of impending bottoms!
efsfdsssss
Goldmans list of oil discoveries is a list of newly discovered FIELDS which, on a good day, might partially offset the decline of existing production rates. The last time we had a meaningful addition to global oil reserves, we discovered new oil PROVINCES, namely the North Sea (9 million BOPD) and Prudhoe Bay (2 million BOPD). You could argue that Santos and the Outer Continental Shelf of the Gulf of Mexico are new provinces. But the geology is so complex, and the fields are so deep and remote that the production will come on line slowly. By comparison, the North Sea and Prudhoe Bay have relatively simple geology. The discoveries of the individual fields were done relatively quickly. Production rates came on line relatively quickly. The North Sea is shallow and not as remote. So I think world oil production rates are peaking now.
I think Goldman is just giving us this free advice as their way of thanking us for keeping them out of bankruptcy court, which is where they would be if we practiced actual capitalism instead of corporatism.
CEO of the SOFA
Writing from the Kingdom of Saudi Arabia
Am I crazy in thinking that ALL banks are structually bearish on gold. It makes totally pointless. They want you cash so the can make massive speculative bets. If you hold they gold, they have to take risks with their own money and god knows they aren't gonna do that.
Goldman does have an "uncanny" knack at "prediction." It's easy to predict the future if you can "make" it happen.
Why couldn't gold "get sold" and the US dollar "get bought?"
Big picture though, years and decades, the US is falling back and the rest of the world is catching up. Any "reserve status" the US Dollar enjoys will continue to fade over time.
Without market manipulation and uber-low interest rates, the US won't be able to market and service our debt. Like Japan.
Looking over the past 20 or 40 or 100 years the trends are obvious. This does not even factor in the current devaluation of the US dollar. The US dollar has been steadily losing purchasing power for a century.
Hell, 50 years ago silver coins were circulating because the silver content was worth substantially less than the face value of the coin. Now the silver content is worth about 12 times the face value of the coin.
100 years ago gold coins were circulating because the face value of the coin was worth substantially more than the gold value of the coin. Quick quiz: which is worth more, a $20 dollar bill from 1909, or a $20 gold coin? If you guess they were worth the same you would be wrong. The $20 gold coin is worth $1100, the $20 bill is worth, $20.
Anyway, people buy stuff like gold, because they prefer tangible assets as a store of wealth and value as opposed to paper, especially when the printing of that paper and the financial system and economy that stands behind that paper is suspect. You could store wealth as loves of bread or bags of rice if it were feasible, but for most people precious metals are more convenient.
If interest rates rise world wide, that could, conceivably, increase the benefits of cash. But how high can interest rates go when the US is continuously issuing and re-issuing tens of billions of dollars in debt weekly? We simply can't afford to increase our own APR by increasing interest rates. Service on the debt would become, well, unserviceable.
Like I said, welcome to Japan 2.0.
I don't value Goldman's so called analysis. My guess is that Goldman itself does not care too much about the right and wrong. This firm always bet on both sides. You never know which way is its real belief.
I don't know if Goldman is a treasury minion, or just generates analysis to support their own portfolio choices/positions. I think the latter. I remember when in 2008 they were saying it was imminently reasonable for oil to go to $150-$200 a barrel. When our group (hedging energy for a municipality) looked at the logic, and other available information, our conclusion was that they really just wanted people to go long oil, so they wrote an analysis to support that.
you wonder why the nation tolerates Goldman Suchs until you realize that GS tolerates the nation......
"The USD isn't in a bubble?"
An inverse bubble maybe, if that were possible? The dollar's value has already been stripped out of it for the last 70 years. Anyone remember 5000 dollar cars or 20000 dollar houses? 300 dollar gold? sub dollar gasoline???HELLO! Inflation has ALREADY HAPPENED. History is REPEATING itself. Debt, unemployment and plummeting tax receipts are all inherently deflationary. Have fun with your gold when a whole bar of it won't get you one hot meal because it is useless. Oil? Demand will COLLAPSE. Go long physical paper dollars in low denominations because the ATMs won't work. Go long guns & ammo. But please stop the tin foil hyperinflation gold and oil crap.
Well thank God you got access to your crystal ball, mine has been back and forth to the repair shop, it's been showing me crazy stuff for the last 2 years. I'll rush out and liquidate my gold and tin foil. Dollars you say?
Since I don't know what will happen either, I will keep my gold (and add to it as FRNs come my way) as well as FRNs, to be deployed as soon as it looks like real inflation is upon us.
When is that? Your guesses are as good as (maybe better?) than mine. I like being out of debt, having some gold and over 3 months of living expenses in money NOT in the bank. Got rid of my IRA too...
>>
Oil? Demand will COLLAPSE. Go long physical paper dollars in low denominations because the ATMs won't work. Go long guns & ammo. But please stop the tin foil hyperinflation gold and oil crap.
>>
Dood, has it yet occurred to you that zero demand for oil is the same as having none to burn? In either case, society crumbles.
-10 to the squid!
This presentation shows no respect to the reader, they address us like we are babies, like anyone else in the market is a fool and everyone is concerned about all the wrong things.
The "no peak oil" slide is a joke. What is "long term"? If they mean that some unknown super-duper renewable energy source will be descovered 50 years from now - that's hardly relevant for human beings who have quite a limited life span (where did I see that?). Their "recent discoveries" table is remarkable. The figures given for Jubilee and the 3 Blocks in Uganda, for example, are PRELIMINARY ESTIMATES OF OIL IN THE RESERVOIR, not recoverable oil, however much Heritage and Tullow have been trying to obfuscate this point in their press releases. Or they want to say they can get 80% recovery rate in these places? Ghana and Uganda still don't have a single barrell of officially announced PROVEN RESERVES to date! Even at 150k bpd (and at least for Uganda, I doubt they will ever produce even 1k bpd unless in some parallel reality) promised by some hotheads for these two countries, how are they going to stave off peak oil with 0.17% of world oil production?
I'm sure other guys here can punch many more holes in this "report", but I would say that it was only created as a reference point for all those cramers on TV: "Now f#$k you everybody and good night! Goldman said so! Amen!"
I simply read the headline and concluded that Goldman must be buying gold and oil and shorting the dollar.
It would be great to see all their comments on a given investment matched up to a chart. I seem to remember a call for $200 oil back in 2008 that picked the top nicely, and I'm sure I've forgotten many others.
Edit: Or maybe not. The $200 oil call was in March 2008 and was a rather painful few months early.
http://quotes.ino.com/chart/?s=NYMEX_CL.H10.E&v=dmax
Damn you, Goldman. Outwitted again.
Gold peaked less than 24 hours after Barrick announced that having closed out their hedge book, they were once again sellers, not buyers. The only reason gold didn't peak simultaneously with the news is that plenty of orders were already in the queue. Didn't take long to fill them. Look it up on Reuters, the announcement was on either 12/1 or 12/2.
if even GS is now supporting the dollar, buy it fools!
they didn`t get right in September 2008, yet they are still the most feared voice in markets.
Anyone have this report in full??
Is it more about the dollar remaining the world reserve currency and still get severely beaten, or is it about a dollar rise from the virtual ashes?
Inflation or deflation?
Perhaps I'm simpleminded, but the answer's obvious. Demand drives price. While 1% my own +50% of equities and account for more than half of consumer spending now, I live around a lot of these folks and they're not in a buying mood. We had a good Christmas week up here in ski country, and then the Lear's left to building. "Demand" - in reality and as a state of mind - is down, from the top levels of wealthy down to the rest of us.
The M1 "government-made" money supply may be rising, but not at a rate even close to offset the wipe out of all the "bank-made" money that evaporated in 2008. What were those global total derivative values? $500 trillion? The Treserve - great coin, Marla! - hasn't printed that much yet.
If demand is down and the total money supply is down, and it is when you ignore the nonsensical FASB asset valuation accounting that banks use now, to pretend they have some assets left, but which everybody knows is BS, then you're looking at deflation.
Deflation. Then, international devaluation of dollar's FX value since nobody really knows what dollar assets are worth due to "virtual valuation" practices. Then price inflation, due to rising oil import costs, not Fed printing. Then more job losses. Continued deflation in housing ands real estate values while import costs rise. Local and State government collapse due to declining tax revenues and inability to print money. A brief trip "Back to the USSR," where government owns all risk, as a failed graft of the Chinese model onto the USA ends badly. FUBAR.
Dare I say, "gold, bitches?"
Decreases in valuations do not impact money supply. Only bank defaults do. If TARP wasn't passed, then and only then we would have deflation of money supply like during the Great Depression, but this hasn't happened.
Others think differently
http://www.leap2020.eu/GEAB-N-41-is-available!-The-Decade-2010-2020-Towards-a-knockout-victory-by-gold-over-the-Dollar_a4201.html
I bet G-men will be more correct than most naysayers here in 2010.
They are sharp, intelligent, highly trained and with access to more information (including inside) and statistics than most here combined.
Now, that doesn't mean they can't be corrupt, can't be talking their book, etc.
But it is intellectual self-deception to think that they are morons OR that everything they tell is a lie.
If you want to succeed in this game, drop the attacks, drop the emotions, just see things as what they are.
"I bet G-men will be more correct than most naysayers here in 2010."
Correct on their TRADES or their ANALYSIS?
Goldman are a SELL-SIDE institution, of course, but now it seems they're just taking advantage of their clients. Or maybe that's how natural selection works?
And please stop thinking that GS, or JPM, or anyone else for that purpose, have inside knowledge of everydamnthing. These days they don't even need to. Without any real competition, with a "funny money" counter at the Fed, and all the HFT toys they've got - they beat everyone simply because they ARE the market.
Or so it is until the liquidity party stops)))
I have a couple of concerns about the positions of the gold bugs. I clearly understand the concern of hyperinflation--it is well justified. However, the doomsday scenarios often overlook the likelihood of reenactment gold confiscation by the government. FDR only needed an executive order under the premise of emergency powers. Think Uncle Sam will give you a fair price for your gold coins? Take a look how they fucked everybody when you get a chance. What good will your coins be if they are illegal to possess? If the sky truly falls, we will be a barter economy trading cigarettes, booze, food and bullets.
-Historian Dave
Dear Dave, it is a very, very good point, which had a historic precedent. However, I think there may have been already a good deal of gold accumulated which will make armed population to defend it this time; such scenario has not happened before, but who knows....
Regards
Yes, good point. But to develop it a little further our ancestors were more willing to use their gunz, back then, then we are today. The whole gold confiscation scheme was about control. They never had any goddamn gold raids unless you were stupid enough to talk about yer stash and everyone knew you had gold anyway. Gold just disappeared from the public view, that's all.
Gold became a black market item until the 70's. Think about that. Gold was not legal for 40 some-odd years. WTF? Prohibition doesn't work. The powerz know that the American public isn't really willing to accept a change in the playground rules. The average American knows our situation is totally fucked up, but until it affects them personally there is no reason to go ballistic, if you know what I mean. Lawyerz still have a good point.
People are freaky about gunz these days. It's part of our Goddamn Heritage (you fucking fucks that read this for your fucking job you fuckers jump! already and join us) and somehow they have put it into our minds that gunz shouldn't be around children.
Children are fucking smart. They are so smart that they think they are smarter than you. The really smart children realize they are prisoners and learn how to game the system. If you hide your gunz from children they will call your bluff.
So why own gunz?
Because it's our freaking Heritage! Because we need a society, a community of People, that are willing to say: NO! (enn oh; spell it out, you psychopaths) Who cares about race issues. I want the best brains on my team - the best brains always confirm freedom for all.
The point of a jury is to allow 12 average Joes, with an average of 420 ((35 * 12) Captcha, please confirm this) years of collective experience (each with their own privately-owned bullshit detector) to view the evidence. The mothertrucking evidence - (which is often withheld, distorted, theorized, and generally kept from the view of the average Joe) This is a wonderful gift to the notion of human-freaking rights. Let 12 average Joes decide, with presented evidence, whether or not I am mothertrucking guilty.
FREEDOM BITCHES!!!
so, anywayz, where was i? disclaimer: cheap white wine is uncommonly cheap and deceptive. dammit! if u think i am serious you better mothertrucking believe it. i love this piece of real estate (aka USA) more than my mothertrucking life. get over your gun-a-phobia. we need mothertruckers to reclaim our mutually declared territory. u know hoo yoo are, watching out there. u no hoo u r.
RECLAIM BITCHES!!!
(until then, gold bitches!!!)
If you have ever seen what an italic hyphen looks like you know the importance of letting the stoopidest ones in society speak out about their problemz. If you forget to listen to people that are stoopider than you you have a mothertrucking problem.
(a few more hitz on the keybored, thank you for payshentz)
. (oops)
Marla,
I bow to your excellence, no matter which side you take.
WaterWingz
Yes
I think that Goldman is correct. What we will see is a relative strengthening of the dollar, not because of USG actions, but because it will simply be the best of the worst as other nation's currencies begin to fall apart this year. We've seen Iceland and Dubai, but soon there will be the PIIGS and a great deal of Eastern Europe. A rush to dollars should be expected, but I also see an increase in the price of gold at the same time because there is also California and New York. A total of 40 states in all that are heading towards a budget crisis.
What will set off inflation is not is not necessarily too much money chasing too few goods, but a race to acquire goods because of a collapse in confidence in the currency. Full faith and credit simply won't mean much.
Has Goldman ever traded contrary to their public pronouncements?
Enough said.........
They'll steal billions in haitain relief so they won't have to do those nasty things these next couple months.
The LONG-TERM trend in the USD is clear...and there is NO reason to think that it'll change dramatically any time soon (or even in the distant future). Of course, short-term traders MAY be able to make some money based on Golden Sacks' "predictions" here (sure, they've been "right" on a few calls...but these same analysts have also been horribly WRONG in some of their calls in the recent past, too)
As for gold...I bought a 5% position in the low $800's last year, and I'm NOT selling. I will, however, be eager to add more if these GS jokers happen to be "right" in the near-term. Long-term, gold is going HIGHER....and the dollar will be slowly, painfully whittled away by the political and economic policies of our beloved Fed government. It's what they do.
In all seriousness, sarcasm and snide comparisons between GS and a certain cephalopod are no substitutes for an actual rebuttal.
Their dismissal of peak oil may seem glib, but even before this article I had wondered at the net effect of all the major oil finds that have taken place in the past two years alone, such as the Tupi and Jupiter fields in Brazil.
As for gold, I am quite bullish, but not nearly so naive as to completely ignore the long doldrums that gold floundered in after 1980. The sample quotations from the 70's and 80's that lament the imminent decline of the dollar are a bit disingenuous insofar that they are not accompanied by government debt/GDP ratios or a historical chart that shows the growth in the monetary base over time. In that regard, GS is definitely cherry-picking their datasets, a no-no in my book.
All things considered, although I have my reservations about this particular GS presentation, it would be both arrogant and juvenile to discount the value of anything they have to say with knee-jerk 'squid' jokes.