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Guest Post: Gold Meltdown Or Mania - Batten Down The Hatches
Submitted by Louis James, Senior Editor, Casey’s International Speculator
Gold Meltdown or Mania - Batten Down the Hatches
As Doug Casey said recently,
we expect things to come unglued soon. With the ongoing madness in
Europe, it seems to me that things are starting to look visibly less
well glued already.
In contemplating the possibility of another stock market meltdown, it
seems important to me that in spite of the exuberance with which
investors rushed back into the market over the last year, the memory of
2008 remains vivid, tempering enthusiasm with caution. For example,
the market still has relatively little appetite for early-stage,
grassroots exploration projects; by our latest estimates, Mr. Market is
willing to pay on the order of ten times more for Proven & Probable
ounces in the ground than for less certain resource categories. With
this evidence of caution in mind, and the great unwinding of the
broader credit markets well underway, it seems likely that our sector
is less leveraged than it was before the crash of 2008.
If a panic in the broader markets put liquidity-crunch-induced
pressure on the gold price, the meltdown should be less severe than in
2008 and the eventual rebound could be dramatic, possibly triggering
the mania we’ve been calling for. Remember: the market crash drove gold
almost down to $700 in October ’08, but the same fear drove it almost
back to $1,000 by February ’09. Silver topped that with a 60% rebound
over the same period.
As the debt-glue holding everything together continues to lose its
grip, the ride will only get rougher. As bad as 2008 was, if the Crisis
Creature appears to be coming back when everyone on Main Street
thought it was dead, the fear should be much worse – and that should
drive gold way, way north. It’s possible the fear, coupled with the lack
of any safer alternatives, could prevent gold from melting down at
all, sending it instead straight through the roof into the clear blue
Mania Phase sky.
With its industrial metal aspect, however, another big economic
meltdown could hit silver harder than gold, and it might take longer to
recover, especially if base metals don’t rebound the way they did in
2009. That said, silver has always tracked gold, so when gold heads for
the moon, we expect silver will as well. It could reach even higher,
if supply is cut by reduced base metal demand, as most silver production
is as a by-product of base metal mines.
Either way, I don’t care if gold drops in the weeks and months ahead;
the overall trend is for widespread economic fear and uncertainty to
continue, holding gold prices up and eventually driving them higher.
That makes the current retreat look like a great buying opportunity. In
fact, putting my money where my mouth is, I picked up some more gold
buffaloes just yesterday, when gold dropped to $1158. As I type, it has
rebounded to $1181. I plan to buy more every time I see a sharp drop
like this over the summer.
So, in addition to our multiple recent calls to take profits and go to cash, I want to reiterate that gold is
cash. And it’s a whole lot more attractive than the dollar, the euro,
or any paper money at present – not just as a speculation but for
security as well.
What about the stocks?
Unfortunately, the stampede to safety that drives investors to gold
is not likely to drive them immediately to junior exploration stocks.
“The most volatile stocks on earth” is not what fearful people will be
looking for – not until the panic sufficiently recedes and greed joins
fear in equal measure in the marketplace…or in greater measure, come
the Mania Phase.
If I’m right about fear being the driving force in the markets in
2010, whereas greed drove them in 2009, gold will have to deliver a
serious wake-up call – perhaps holding over $1,500 – to really get the
show on the road again for the gold stocks. If that happens while fear
of a global economic slowdown continues to push oil prices lower, gold
producers should be able to report extraordinary profit increases, even
as other industries are tanking, and finally penetrate deeply into the
awareness of broader pools of investors.
Cashed-up majors won’t have to wait for that to benefit; they may
seize the opportunity created by market weakness to buy successful
explorers, with significant discoveries in hand, while they are on
sale. Well, some of the more nimble ones, like Kinross or Agnico-Eagle,
might. The bigger companies, like Newmont and Barrick, didn’t lift a
finger to pick up any bargains after the crash of 2008 and may be too
cautious to act the next time around as well.
Be that as it may, acquisitions will increase the demand for quality
exploration projects – the pipeline from exploration to development
must be kept full – and good prospectors should at last get their day
in the sun.
Punctuating this sequence will be the occasional big win on a new
discovery. There haven’t been that many this cycle – not enough to
replace all the gold the majors are depleting every year – but there
have been some, and the market always loves a discovery.
After the first quarter of ‘09, greed outpaced fear and great
development stories did phenomenally well; we saw better gains on large
and growing gold stories than we did on the big producers. If fear
retakes predominance in 2010, it’s profitable production that should do
best, and I’d expect the biggest winners overall to be new, emerging,
and highly profitable precious metals production stories. Spectacular
discoveries should also do spectacularly well, but those are harder to
predict. New and rapidly expanding production should be the sweet
spots.
Generally, I think we’ll see our markets trading largely sideways
over the next few months, with great volatility, until the debt-fueled
“growth” in the global economy is exposed for the sugar high that it
is. We’ve been forecasting that scenario for long enough here at Casey
Research.
I expect this to play out by the end of this year, or 2011 at the
latest, depending on how fast fear returns to the broader markets.
What to do
If I’m right about this, the strategy called for is a more
cash-focused version of our “Buy only the Best of the Best” program.
Buy nothing new unless you’re offered a great bargain in a solid
company that can deliver significant new or expanding production.
Nothing less than 50,000 ounces gold-equivalent per year in production
will get much notice, and anything less than 100,000 ounces per year
AuEq will have to struggle for respect. A solid company, of course, has
great people, lots of cash, and the goods in hand.
If you want to speculate on a discovery, make sure you have very good
reason to believe the project has much better than average odds of
delivering a discovery – and it has to have world-class potential. That’s not hundreds of thousands of ounces but millions of ounces of gold, or equivalent.
If things do come truly unglued this year, we may well see 2008-style
bargains on great companies with the staying power to recover and go
on to new highs. Watch for it. Prepare for it.
Buy Low, Sell High – it’s a formula that requires patience but is the only way to go.
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I'm betting $1300 to $1400 by years end. If the fed prints and we don't have another financial lockup - good for gold. If the fed doesn't print and we have another financial lockup, people may very well flee to gold this time around.
Amanda today:
garbage
Robo fucked this thread up. What a fag, I want to talk gold.
I bet Santelli puts his viking helmet on, asks Mandy "What's in your wallet", and knocks the tar out of that thing.
Brains too? Don't know her bio, but that British accent lends her credibility that she may or may not deserve...
A blonde lass prominently displaying big tatas on show discussing world finance with a British accent working for CNBS and we'd questioning whether she may or may not posess credibility?
Shame on us.
Maybe we should ask her to spell her name.
Bah! If CNBC was serious about moving markets the girls would be topless and eating bananas between questions.
"Mr. Rogers please explain your outlook on the developing market, while I deep-throat this banana!"
Or Cramer needs to start dressing like a transvestite and bringing on guests to fight. I need something to justify watching propaganda. Come on CNBC, the viewers need to be entertained, lets not pretend that this is about "news".
Tits + Cross Dressing + Mixed Martial Arts + Financial Propaganda = Ratings Bonanza!
my most sincere hope is that the last show ever aired on CNBC has the dollar sluts in tattered designer clothes hunting down Cramer and Liesman with sharp scissors to roast them on a spit.
They can call it "Mad Hunger."
How do you feel about naked chicks shooting automatic weapons?
Boobs and Bullets? Love it! Sure to make money!
All I ask is if they want me to watch to appeal to my base carnal desires for nudity and violence. I'm not just going to line up for brain killing propaganda without an incentive.
Cramer: That's a great story
Mozillo: Great country
Kudlow: Great great country
Kudlow: And the share price is looking great
Mozillo: Great great country
Cramer: Best in the world
Kudlow: Great country
actually, she's australian. you can tell by the straight teeth. lol
...and by the accent.
The other day "MI5" Drury dropped "peak oil" over and over again. Let it rain Mandy!
http://www.cnbc.com/id/38470762
Simmons, oddly enough, could not be reached for comment.
If you have enough cash to cover your needs, ANYTIME is a good time to buy physical gold. Don't sell it, well, maybe a little at $2000. I would sell more at FOFOA's $55,000. Elsewise, I will give it away.
The power of giving!
Did you have a chance to watch the "Money as Debt" series FOFOA had on his recent post? It is an excellent vehicle for introducing the current situation to a newbie. I sent it to all of my family.
I read FOFOA, but I typically do not watch his videos. I cannot recall if I read "Money as Debt" or not, he is a prolific poster. I have learned a lot from FOFOA.
Consider a contribution to FOFOA! Ask for the "Absentee Ballot" if you like to pay with cash or check.
...
Hope my fellow ZH-ers are going to pull $500 (or your local currency) out of the ATMs on Thursday August 12. Get there early, might be long lines!
If I pull 500 euros out of my bank I will crash the Irish Banking system !
+1
That cracks me up but it may be true. It wouldn't only pertain to the Irish Banking system my friend!
I do have about $20,000 in my safety deposit box, and when someone pays me (under the table, in cash, of course) I just stick that in there too. Why? Well, a)the governments don't know it's there, b)interest income is diddly-shit and taxable anyway and c)IT IS NOT AVAILABLE TO THE PONZI BANKING CREDIT CREATION MACHINE!!!!!!
You are:
a) a carpenter
b) an electrician
c) a plumber
d) a drug dealer
e) all of the above
?
"When banks collapsed in the 1930s, some of the bank presidents opened the Safe Deposit Box vault and looted the contents of some of the deposit boxes. After all, the Deposit Box Companies were then, and are now, completely separate entities housed within the bank building. Few, if any, know this. The vault companies generally carry no theft insurance. And what box holders wants to report to the police or the FBI that some jewels, some gold coins, and other valuables are missing from their deposit box? And can you PROVE what was in the box? Do husbands really want their estranged or legally separated or divorced wives or ex-wives to know what was kept in that deposit box? Do corrupt politicians want tax collectors to know what the public office holder has siphoned off some public agency's funds? Hey, do you think highly corrupt IRS officials want to divulge what is in THEIR safe deposit box? "
http://www.apfn.org/skolnicksreport/straps2.html
State officials are looting safety deposit boxes in California and elsewhere.
http://abcnews.go.com/GMA/story?id=4832471&page=1
don't be so sure
http://www.dailymail.co.uk/home/moslive/article-1222777/The-raid-rocked-...
Thanks, was going to post a link to this as well, but you beat me to it. Remember reading this and having a chill go down my spine.
Another note to Kreditanstalt re the issues with safety deposit boxes is that if we were to have another bank "holiday", you probably wouldn't be able to access your box for some period of time.
Kreditanstalt,
I agree with what you said except provisions in the Patriot Act allow safety deposit box confiscation of guns, PM's and cash during state declared emergencies.
Kred,
You, amigo are living DANGEROUSLY (I do not know where you hail from), but if staeside,,,,,,you would be crazy to hold cash in a Bank saftey deposit box.......pls tell me it ain't so.
Also, if the money dissapears, you have no proof it was there, and you eat the loss........
And thats owed so probably the rest of Western Europe as well .........
There, there now, be of good cheer! You've got austerity for the next generation or two in Ireland. That will make everything better.
Pulled 900 out on Monday since I can't get there on Wednesday. Sorry to be slightly out of sync. The tellers are used to me... They don't ask how I want it and give me all 100s.
"Money as Debt" cartoon explains fractional reserve banking, loan generation and the money supply.
Money As Debt:
http://www.youtube.com/watch?v=vVkFb26u9g8&feature=fvw
http://www.youtube.com/watch?v=sanOXoWl0kc&feature=related
http://www.youtube.com/watch?v=kTv1fo6sKmo&feature=related
http://www.youtube.com/watch?v=3qicabStQkc&feature=related
http://www.youtube.com/watch?v=7kpSbkaD4tM&feature=related
Money As Debt II:
http://www.youtube.com/watch?v=_doYllBk5No&feature=related
http://www.youtube.com/watch?v=pp7tiySCyb4&feature=related
http://www.youtube.com/watch?v=lG7Jjb0cw9o&feature=related
http://www.youtube.com/watch?v=0-O_yGEI_0U&feature=related
http://www.youtube.com/watch?v=6MwHgpFSQMo&feature=related
http://www.youtube.com/watch?v=vH1M1QaM6SY&feature=related
http://www.youtube.com/watch?v=4GH4OElpZtM&feature=related
http://www.youtube.com/watch?v=iqeTComdm5A&feature=related
This was the series that awakened me to THE CRIME (of fractional reserve paper debt money). I love that movie. I sent it to all my relatives - fortunately my parents are paying attention and have some gold now.
There is another one like it - but for Canadians who think their banks have reserves. Interviews with former Prime Minister Paul Martin.
Canada's Monetary System 1 of 6http://www.youtube.com/watch?v=OYRdlegDYwo
http://www.youtube.com/watch?v=A76s2pXVA3o
http://www.youtube.com/watch?v=E1Iv8TfUeIs
http://www.youtube.com/watch?v=d77BFzn_xtk
http://www.youtube.com/watch?v=d77BFzn_xtk
http://www.youtube.com/watch?v=d77BFzn_xtk
Thanks for posting these. I had forgotten about them. While the material has been done a number of times in other documentaries about money, there is a great part in here that stands out. In the beginning of part 5 the interviewer asks Paul Martin about having non debt based currency. Most Americans wouldn't know the name, but Paul Martin was the Finance Minister of Canada for a long time and then, eventually, the Prime Minister. This is the first time I have ever seen a Head of State questioned so bluntly on the matter of debt based fiat currency...by a college kid. Fantastic stuff! His responses to the questions were ridiculous, but you all knew that already without even watching.
Unfortunately Gold is not explored as a solution in the video. Instead we are pointed in the direction of a debt free fiat currency, like in the Money Masters. So ultimately an epic fail.
Time for you to start picking up some Tagish Lake Gold...TLG.V.
The Chinese all all over the Yukon sucking up little miners and properties and shipping the raw ore back to China for processing. Another bulk carrier just left recently.
TLG up from $.01 to $.08 since we last talked.
Give me a call.
I'm new here. I don't know how to contact you. reefman@nathannorma.com
Falcon:
Just a little 'shout out' to one of my favorite IR (investor relations) guys in Vancouver.
He calls once in awhile to give me a 'heads up' on what he thinks are good bets in developing mining plays.
He likes to talk his book... I like to talk mine. Always interesting to chat with him.
The small mining companies have taken a real thrashing but if your interests are in Ag & Au or REEs (rare earth elements) then Howe Street is the centre of much of this activity. High risk/High reward game... but fortunes will be made in companies with metal in the ground and management that can get it out.
You might not want to post your e-mail address in public blogs even if ZH is one of the best ... 'you never know' what might end up in your inbox. Just hang around, you'll learn ....
remember the best ... forget the rest.
Hello sir! Was wondering if I'd bump into you here. I will look you up.
http://www.youtube.com/watch?v=RAKsMnAM8vk
poof! it's gone!
Money as Debt - Good videos, but flawed in some areas.
G. Ed Griffin, author of The Creature from Jekel Island, explains.....
See: http://www.freedomforceinternational.org/freedomcontent.cfm?fuseaction=money_as_debt&refpage=issues
Thank you for that clarification. I love the "Money As Debt" video series and I had heard that there was a "problem" with it, but this clarifies it for me. I still love the video and would recommend it to people to watch (hey, there are still people out there at that believe that fiat money is an A$$ET rather than a liability).
What do you think of the Canadian Banking video?
I listened to part I...his real beef seems to be not that the system and the dollar itself is debt-based instead of commodity-based, but that the banks only have $4bn in their vaults for $50bn outstanding or something..?!?
But what the hell is a "dollar" anyway...? Not much, I submit
Much as I respect the guy, his explanation didn't really make sense. The 900 in interest still had to be loaned into existence (with interest owing) elsewhere in the banking system. It simply represents somebody elses loan.
Pladizow,
Thanks, I like the discourse the more we know and inform the better. I was also disapointed about the gov't fiat solution at the end. I requires trust in your gov't and amoung gov'ts......riiiiiight.
PLease change ur AVATAR....ZH is one of the few sane and Logical places in this world....and i want to stay away from Porn, and Greed, etc etc
you can filter specific images in most browsers.
given that most of the establishment considers ZH "financial porn", the avatar is probably warranted.
viva ZH!
Oops. duplicate post....
Streaming versions...
Money as Debt streaming:
http://freedocumentaries.org/int.php?filmID=214
The Money Masters streaming:
http://freedocumentaries.org/int.php?filmID=243
Seems the freedocumentaries.org site is getting more popular, & so they've restricted the streaming video sizes to conserve bandwidth (my guess). You may have to select medium size rather than large video for it to play...
Pop goes the bubble
by 2012 gold and silver may be in regular circulation as an accepted means of exchange.
one will get more value using it than simply selling it and having to pay tax on the sale.
"You don't buy gold to make money, you buy gold because you have money." - Client of Pierre Lassonde
Crux of the biscuit.
...is the apostrophe.
i remember being in central america with high inflation and not much employment and there was no gold to be found outside the jungle. people just didn't sell.gold was hoarded and considered more precious than dollars.
the canadian mint is selling seconds so there must be strong demand for little product. i think physical will hit a wall before the end of the year and a major ' distraction ' will be required either before or shortly after.
I think he mentioned that "the shit will hit the fan" in September.
In my opinion when Europeans come back from the beech they will propel the price of gold upwards.
Maybe the ECB wants as much gold in Personnel possession within the EU borders so that it can nationalise gold via bidding up the price and zero the debts.
A 500 Euro billion Frankfurt buying spree may get things going nicely.
A note of caution - this is only a gut feeling but they are not stupid in Frankfurt and must realise the debts at its periphery are now unpayable.
Or, to maintain your purchasing power; ie, avoid losing money holding fiat.
Jan 1, 2010, I made a WAG that gold would hit $1,500 before Xmas 2011. Could be off $500 either way...Too many 'seen and unseen hands fiddling with all markets'.
Here is an interesting link re gold that I ran across at Jesse's Cafe Americain...
'Gold Movements Suspect'
http://www.numismaster.com/ta/numis/Article.jsp?ad=article&ArticleId=12482
"If a panic in the broader markets put liquidity-crunch-induced pressure on the gold price, the meltdown should be less severe than in 2008 and the eventual rebound could be dramatic, possibly triggering the mania we’ve been calling for."
But this is the conventional wisdom. Is this trade getting crowded? Absolutely everyone and his dog was expecting the S&P to revisit the March 2009 lows all the rest of that year and some of this as well. Did it happen? No. Will it happen? Who knows? I'm not betting/losing any more money on it.
We'll probably get muddle-through in the gold market. Go nowhere for six months or more.
on inflation and gold.
http://truthingold.blogspot.com/
Imagine a nationalisation plan for gold where the ECB guarantees the price equivalent at the M1.
Each peasant citizen provides his local central bank with his Gold horde with the bait being zero capital gains tax on his stash.
This may sound strange to a average US citizen but could appear acceptable to the average upper middle class European although Swiss accounts will remain untouched.
Given that I believe vast amounts of Gold lie in European personnel possession and maybe the central banks do not have the gold they say they have - this could be a option for European bureaucrats.
France and Germany could then accept losses at the periphery and still remain solvent while keeping some value to the paper euros.
any guesses on how much gold chinese citizens have bought since the state made it a buy?
not as much as they are going to buy in the next few months..these people get it and their govt is pushing them to do it..meanwhile our corrupt fascist govt tells the sheople ..it is a babrbaric relic..in time the ones who do not have it will be the ones living in caves...buy or die...as for the market..if it melts this time..expect gold to go up as it is the last refuge..who will be stupid enough to buy all those treasuries...right now central banks in europe and us are buying now..what does that tell you...
The US tends to prefer the stick to the carrot. Most likely owning gold will become illegal in the US.
Well the stick in Europe could be a 50% capital gains tax - which I could accept if it went into productive utilities but the evidence so far is that the priority is to bail out all risk debt in the banking system.
...from my cold, dead hands.
The LAST Commie took the peoples GOLD coinages, and melted it down..........
FDR,(the sorriest SOB, this side of Wilson, and BHole) 28,000 tons worth, of Double Eagles.
The 20$ Doubs Eagles we have here, migrated BACK to the states from Europe after the prices wen t way up.
What Gold is in Europe is likely European...............
Always simple and readable statistics to follow regarding the Euro money supply published every few months
.www.ecb.int/press/pdf/md/md1006.pdf
Notice the large increase in M1 money supply and the gradual decline of M3.
Also the ratio of M1 to M3 is only roughly 1 to 2 in the Euro area but the ratio is much higher in the States although the definitions of each change in each jurisdiction.
This indicates that the amount of credit money issued in the States was at a criminal level with local central bank mistakes at the periphery of the Euro area the prime catalyst for the Euro area panic.
I think these Euro statistics seem to indicate relative stability in the core Euro area but turmoil in the Periphery - interesting to see how Trichet will square this circle.
deleted
gold is not going to 1400 its going straight to 12000 or higher.....the dollar collapses overnight if QE2 is announced then you have bank runs etc. There should be an official announcement this weekend or next (40 years after nixon) that we are back on some sort of gold standard. Yes our history shows we wait for the crisis then respond. Well bank runs are pretty serious you can't have gold compete with the stock market either they don't want that. A whole new monetary system is immenient,,,,they sent Greenspan out last week to give you the hint that the system is broken. Better August when no one is watching. ITs coming.
You give the masses far to much credit. How many people actually know what QE means? There is a reason why the banksters use bizarre language, and constantly make new words or redefine old. The vast majority don't know what the terms mean, and the media is not telling them. One of my profs would get on me for using their terms in class when explaining things, because as he put it no one but two of us understood what I was saying. I might as well been speaking in Latin.
It may all end with a massive crash overnight but I assure you it will not be on announced QE.
After QE-2, gold will shout QE-D!
(QED = Latin for, "It has been Proven".)
Sounds like I'd better do some panic buying of gold (straight to 12000!). Always my preferred way of trading/investing. Never known it to fail.
8
The Bullion banks have sold a real physical commodity that doesn’t exist.
If their reserve is 50% or more they can probably survive a run. If it is 2.3% (or close to that) they can not.
If Joe Bloggs Bullion dealer sells 1000 ozs he doesn’t have he can be hedged and as along as his counterparties are good he can have call derivatives on 1000ozs. His counterparty coughs up the cash on his derivatives and he goes and buys 1000 ozs for his client. Or alternatively he is hedged with calls on the Comex and he exercises them, takes contracts and then stands for delivery for 1000ozs and delivers to his client.
This all seems fine and dandy and it is.
Joe Bloggs will not go under and the gold market will not blow up.
The problem is we are NOT talking about Joe Bloggs Bullion Dealer we are talking about the major bullion banks who represent 90% of the bullion market and who have sold 50,000 tonnes of gold that doesn’t exist.
It doesn’t matter who has written hedges for them they can never deliver 50,000t of gold because they don’t have that much gold.
Even if the counterparties can pay that much in cash you can’t buy 50,000t of gold in the market place.
This is all the gold reserves left to mined in the world. This is the problem.
There is no way that gold can trade at $1200 an ounce without invoking a massive supply of paper gold that balances the massive supply of paper money.
The financial system blew up in 2008 ...
(or was it really much earlier...Sept.11, 2001)
...the banks are totally over leveraged already in the fiat domain of banking.
There is no way on earth that the very same bankers who juggled with TNT, (Au & Ag), with merely more paper that can and is being created out of thin air, didn’t play fast and loose with paper gold too.
We don't need to debate this further…we are about to find out as the tide goes out.
Listen to the Gold Pros who have called this right for the last decade.
...................................................................................
Gold heading for a parabolic rise - John Embry
"If gold is not between $1,500 and $2,000 in the next 18 months, I'm dead wrong."
Mineweb.com's Gold Weekly podcast
................................................................................
Eric King of King World News writes today that the "Pac Man" phase has descended on the gold mining industry, with the major miners having to acquire juniors to maintain their reserves and being able to do it by using their stock as currency. King's commentary is headlined "Gold Takeovers: Pac Man Phase Upon Us" and you can find it at the King World News Internet site:
http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2010/8/3_Gol...
he goes to jail.
they are encouraged to do so.
Notice a problem here? When does the game end?
Gerald Celente "Revolt Is Ready To Happen"
http://www.bullsource.com/gerald-celente-revolt-is-ready-to-happen/Marc Faber: Fed To Create Final Crisis That Wipes Out Entire System
http://www.bullsource.com/marc-faber-fed-to-create-final-crisis-that-wip...whoever said gold will be illegal in the united states....no not quite....actually china just expanded there banking system today to include more banks to exchange gold. They are already doing it. They may confisicate the GLD thats a big ole mass all at one time. They won't be knocking on on your door. Gold will be quite legal as its our new currency is based on it. You see the banks are buying treasuries thats how they are recapitalizing. That the new currency gold backed treasuries. If they count all money supply out there student loans fannie freddie credit cards etc then gold is going to 50000. But if thats confetti and its worth 30 cents on the current dollar then you may see a currency split on all soverign debt, not treasuries. That will be main street bailout. if they do a 1 for 3 gold will be reset at 12000. Gold will be part of the solution and its the only solution.
Where do you people come up with these numbers? 12000? 55000?
75 bajillion quadrillion?
You must have big asses to pull out numbers that large.
Its evident in the increase in debt you fool.
Senior VP at JP Morgan John Bravo. I can help you out here.
:>)
fofoa.blogspot.com did a wonderful analysis of why gold will go to between $25,000 and $80,000 (+/-, his most probable price on his Price Probability Curve was $55,000) in late 2009. You will have dig for the information, but his take is very interesting.
Recently someone here at ZH also did some calculatin' and came to a very similar number based on the amount of paper gold vs. real gold out there.
JB, I admit that 55K is an extreme number, but I like reading the extreme viewpoints because they expand the mind... The thing that I have learned (and sort of always knew) about gold is that it is the BEST WEALTH PRESERVER in town. That is why most of us want it (physical), not to speculate, but as wealth preservation and insurance vs. .gov and financial system malfeasance.
Of course, all you guys at JPM don't want to hear it, because the only things that will save your $5,000,000 bonuses is if you smack gold down to $900 to keep JPM out of bankruptcy.
...
One last thing JB! I know, that as a big time banker that you will not like this idea, but you may want to participate anyway, you know, just to show you are human!
On Thursday August 12 MANY (I hope) are going to pull $500 (or in their local currency) out of their ATMs to protest .gov and financial industry malfeasance.
Get there early, hope to see you in line waiting to pull out some dough! Of course, since interest rates are so low, there is little opportunity cost in doing so.
Price of gold on Sep. 10th, 2001, the day before Osama bin Subcontractor attacked us because he hates our Freedom Fries: $271.50. Current price of gold: $1,197 - up 341%.
S&P 500 on Sep. 10th, 2001: 1,093. Current S&P 500: 1,126 - up 3%
This does not take into the dividends that one would have gotten from owning the stocks but I doubt that it would make much difference.
Gold up 336% stocks up 3%
Price of hot air unchanged.
Hey Johnny Boyo,
that dxy H&S thing I pointed out to ya has more or less completed. I'll even give you kudos for calling the low pivot (80ish). But guess what! That pattern was a molehill compared to the mountainous H&S top on the go now. Still predicting a rebound?
Regards
Honestly, it's hard for me to say. I think that the break of the 82 level was pretty bearish for dxy, and that it has been making a continuation triangle to the downside. I don't know that I would bet on much upside anytime soon, save an oversold bounce.
My opinion is back to bearish on dollars over the longer term now that these patterns have played out...
JB,
Look for a bounce, it's WAY oversold....won't last long.
But, Beware the Ides of August.
Even if gold were to become "illegal," a massive black market will probably spring up overnight, where the price of entry is either real gold or silver. Either the entire nation collapses into a heap of smoking embers, or the PTB just look the other way while commerce continues. Look at the old Soviet Union. The "official" economy was a massive joke. The black market was where the real economy was.
To Johnny Bravo: the numbers are not hard to figure out. Divide the number of dollars in the M1 number by the amount of gold supposedly held by the UST (8100 tons) and you get approx $12,000 per ounce. If you use the M3 number, the gold value becomes about $55,000. It has nothing to do with having a bubble-butt... Although our friend Bennie B may enjoy trying to ... ahem... reflate that type of bubble... just sayin...
You can leave out the 'probably' in your first sentence.
I am retired and travel to many swap meets, flea mkts, yard sales, etc. What I see is black markets already operating and growing larger by the week. Vendors that bill themselves as 'coin dealers' are really selling/buying more bullion than numismatic coins.
Anecdotal info of the Main St economy.
The gov has turned it's back to Main St...so the gov is irrelevent to Main St...Main St is in the process of creating it's own economy with cash, barter, and gold/silver.
If you don't believe me get out to some swap meets and flea mkts and check out what is happening. Everything from apples to zebra skins and all in between is available and it can definitely be purchased with gold and silver.
Farmers Markets too. In fact, any locally owned business with a saavy shopkeep...
Regards
excellent. not spoken of often here but correct. there is a massive underground economy in the us and i have noticed for the first time this year that neighbors from diverse backgrounds and political stripe are coming together for the common profit, be it legal or not.
this should be the governments biggest fear. that they will become irrelevant to a huge percentage of the population.
after the collapse in russia the state would raid the markets regularly but finally gave up.
breezer,
" be it legal or not. "
The people (not a LOT of the Sheeple), but more and more, are awakening to the fact that their ONCE revered Government is corrupt, and crooked to the core, full of a den of thieves.
And when caught, there is a double standard of NO Justice...compared to a simlilar crime for Joe 6 Pak.
So, they have, and will, increase in numbers, and DETACH from the system that they were raised under to survive............and become like their task masters,SICK and tired of making them make Bricks with NO straw.
My main concern is getting hit with a Nuclear Pre-Emptive strike, WHEN the meltdown hits.
( What better time to take advantage of a CRISIS).
I worked for a bona-fide coin dealer during the PM run-up of 1979-80. Dealing in PMs during the 'rushes' is what finances numismatic dealers through the much longer slow times, during which numismatics sell and PM is reduced to a trickle of scrap purchases and selling 2nd-hand flatware.
It takes years of apprenticeship to make a living on rare coins, but the only barrier to becoming a PM dealer is the ever-present threat of robbery.
But that type of calculation assumes that gold is the only thing that can be purchased with dollars.
To have a scenario where there are X total ounces of gold and Y dollars, so therefore X is worth Y, that would assume that dollars were not able to buy anything else.
Yet, all the dollars on the planet can buy not just gold, but houses, soybeans, etc.
That's the reason we got off the gold standard in the first place. We needed a larger amount of dollars than gold could back because dollars buy a lot more than just gold.
I don't believe that the calculation of X ounces (tonnes) of gold versus Y dollars is correct.
You're ignoring the argument that gold will supplant dollars as money.
Gold would be used to buy houses, soybeans, etc.
And the reason we got off the gold standard was so the government could spend more money without having to raise taxes.
The transference of M3 to gold holdings is entirely correct, if you're talking about gold supplanting FRNs as money--I think that's where you misunderstood the post.
"You're ignoring the argument that gold will supplant dollars as money."
No argument to be had there Geoff. Gold is money, that hasn't changed throughout recorded history, and likely before. Every FIAT's goal has been to usurp Au and all have eventually failed, every single time.
Regards
Good example of using real money in action:
http://www.youtube.com/watch?v=nNtIsSWVJBI&feature=email
What is to stop the federal government from simply pulling another FDR style confiscation of any gold we possess. Even if you managed to keep some, it would be hard to trade. You would then have to fence it on the black market for whatever currency is legal in the future.
http://www.globalcrossroads.us/news_assets/confiscation_order.pdf
i read about the confiscation by fdr and is wasn't as severe as we are led to believe. there were several individual holdouts who were shamed by the media as being unpatriotic for not turning in their gold holdings, but i can't see that happening today. most people were happy to turn in their gold for the new enhanced price offered by the government. this also might not happen today.
when the collapse becomes a part of daily life for the vast majority, everyone will need gold and silver for the money that it is.
i also believe that this time will be much worse than the last great depression and when inflation kills buying power then our precious metals will resume their unique function.
most people were happy to turn in their gold for the new enhanced price offered by the government
You sure about that? My recall is that everyone had to turn it in at the old price of 20.67.
one word:
Canada
Some Cliff Bars, a full Camelback, some gold coins in your fanny pack, and a "hiking trip" across the border to Canada.
Eff you, govt gold thieves...
Logic 101
"Cash is King". "Gold is Cash". Therefore: "Gold is King".
Also, as if to prove his point,
"Cashed-up majors won’t have to wait for that to benefit; they may seize the opportunity created by market weakness to buy successful explorers, with significant discoveries in hand, while they are on sale. Well, some of the more nimble ones, like Kinross or Agnico-Eagle, might."
Didn't Kinross just absorb Red Back Mining?
Regards
A Trifecta of PBOC Announcements Gives Owners of Gold a Winning Ticket
Watershed events have occurred effecting the Gold markets @ http://tinyurl.com/3726ju7
If you really think that gold is so great then go and buy a stash of gold Rolex watches (pre-owned) and throw them in the vault. They will be worth as much or more as your precious yellow metal.
Funny trend here on ZH. When things go Tyler's way the market is rational. When they don't (usually) it's always government manipulation. Good thing I didn't listen to Tyler in February 2009! He's actually a lot more like Ed Norton's character in Fight Club than Pitt's. Ya, the ZH Tyler has none of the conviction and gusto of the real character. He's just a bitter flake.
Hatefullness and mindlessness: so often found walking hand-in-hand.
As in your comment above. Junked as pure blathering bullshit.
http://www.roubini.com/financemarkets-monitor/258514/the_gold_bubble
Read on herd follower.
Hahaha! What a piece of unsubstantiated MOPE that link is! You owe me a minute of my life back Client9.
Speaking of 'herds', now I know which one you spend your time cleaning up after.
Interesting SP500 chart ...
http://stockmarket618.wordpress.com
There are certainly a lot of details like that to take into consideration.I read and understand the entire article and I really enjoyed it to be honest.
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